While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
PSs 4-8 were not found of direct relevance to the project for the following reasons. Direct impacts on soil, land, or water resources in use by communities delineated under PS4 are readily addressed through mitigation measures and actions taken under PS1, PS 3 and previous ESAP. In addition, land acquisition was undertaken via willing seller/ willing buyer negotiations within existing industrial/ agricultural zones where no presence of natural and critical habitats, indigenous peoples or cultural heritage.

This repeat investment remains a Category B project according to IFC’s Environmental and Social Sustainability Policy because IFC’s review and supervision of the company’s activities indicates no material changes in the associated E&S risks and impacts that are few in number, generally site-specific and readily addressed through mitigation measures. Given the fact that Bayer commissioned reliable contractors for transportation and storage of crop protection products (CPPs), supervised their operations regularly, developed procedures for collection of CPP’s empty containers, arranged sessions for farmers on safe use of CPPs, the Project’s limited environmental and social adverse impacts and risks were readily addressed. Therefore, a new action plan is not needed for this project.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. Main E&S aspects for this new investment are essentially the same as those previously identified under projects ID # 30595, ID # 31647: i) Local QHSE Management System capacity to address E&S impacts associated with crop protection products (CPPs) transportation, storage and waste disposal; ii) Compliance with national laws, the International Code of Conduct on the Distribution and Use of Pesticides and the World Health Organization (WHO) Recommended Classification of Pesticides by Hazard; iii) Human Resources policy and procedures; iv) Working conditions and terms of employment, including OHS; v) Awareness and training of farmers on implementation of Integrated Pest and Disease Management Plans.

A new action plan is not needed since E&S risks and impacts associated with the Project are readily addressed through mitigation measures which Bayer implemented during the previous projects and will continue with their implementation for this project.

Environmental and Social Management System



Bayer Ltd. Ukraine developed and maintains an integral management system covering quality, health, safety and environment (QHSE) matters. The system aligns with the Global Bayer CropScience QHSE principles and is consistent with PS1 requirements.



The system incorporates an overarching policy, identification of risks and impacts, management programs, organizational capacity, emergency preparedness and response, monitoring and review to measure its effectiveness and compliance with relevant legal frameworks, international good industry practices and guidelines.



Updated in 2014, QHSE Policy defines E&S objectives and principles which are outlined in more details in QHSE local brochures, Product Stewardship Policy, Manual for Safe Use of CPPs distributed in Ukraine as provided in the local language. Qualified QHSE manager reports to senior management, QHSE functions are implemented at all levels of operations. Improvements have been reflected in the revised organizational chart. Also, continuous improvement process included review of local procedures for incident investigation and reporting; emergency communications; compliant CPPs handling and response; emergency plans for the office; safety training materials for personnel and farmers, including Integrated Pest Management/Integrated Disease Management (IPM/IDS) and safe use of PPCs.



Monthly and annual reports are provided to senior management and Global QHSE for review and planning of future actions. Global QHSE audit guidelines, modified for local conditions, describe planning, implementation and monitoring activities. The company coordinates with Global Bayer QHSE and carries out the QHSE audit in line with QHSE audit schedule. Implementation of improvement actions are reviewed by QHSE manager annually.



In 2014 QHSE management system improvements focused on warehouse management, driving safety program and increase of employees and clients HSE awareness. New key performance indicators and relevant targets were established to measure effectiveness.



Bayer’s manufacturing sites that supply CPPs to Ukraine hold certificates of compliance with ISO 9001, ISO 14001 and OHSAS 18001.



Environmental and Social Assessment and Identification of Risks and Impacts



CPPs imported to Ukraine have been tested in compliance with the principles of Good Laboratory Practice to guarantee product safety for people and ecosystems. Additionally, in Ukraine, imported CPPs being new or experimental for local market are subjected to field-testing, including toxicity study and identification of maximum residue limits (MRLs) in vegetation tissues of tested crops and food products. Also, residue concentrations in soils, water, and air are required to meet national limits before the product can be launched to the market. Products are passed through a multistage registration process in order to obtain certificates. Bayer strictly follows local requirements a
nd keeps relevant licenses for CPPs import and trade in place.



Capacity of Bayer QHSE system is sufficient for launching and conducting of E&S assessments of new business activities, including those beyond IFC’s proposed project. E&S assessment is commensurate to the type and scale of business operations including site selection, design criteria, and pollution prevention standards. Such assessment of a seed treatment plant was completed in line with good international practices. Mitigation measures were implemented to address identified impacts including air emissions, wastewater treatment and handling and disposal of solid waste. Relevant permits were issued by local authorities for facilities renovation and operation.



External Communications and Grievance Mechanism



Bayer established continuous communications with farmers and broader group of stakeholders through publishing and distribution of local language materials on safe and effective use of products, information on handling and disposal of empty containers, identification of fake products. Contact details of Bayer Ltd., Ukraine are posted on local website and promotion brochures for receiving communities’ inquiries, comments and concerns which are recorded and responded depending on nature of requests. The company has established and maintains grievance mechanism procedures for receiving, documenting, and responding to any concerns raised by any external interested parties.



In addition, trainings in agrochemical use for clients are provided by Bayer’s crop managers and technical experts during public events called Field Days and Winter Conferences held in May-August and January-February 2014 respectively.

Human Resources (HR) Policies and Procedures, Non-discrimination and Equal Opportunity



The company enforces the implementation of corporate HR standards based on equal opportunities, non-discrimination principles and worker rights to participate in professional associations and trade unions and adheres to local labour laws that are generally consistent with the core requirements of the International Labour Organisation (ILO).



Working Conditions and Terms of Employment



Working conditions, including salary, working time, annual leave, obligatory and voluntary medical insurance are outlined in the internal regulations. The collective agreement defines terms of employment through stipulation of employee’s and management’s rights and responsibilities. Also, the company offers additional social benefits, including life insurance.



Grievance Mechanism



The company developed different communication ways for employees to raise their concerns on workplace and labour issues. An existing grievance process, consistent with IFC’s Performance Standard 2, provides protection of the confidentiality of the employee, raising concerns other than to immediate supervisors.



Occupational Health and Safety



Bayer Ltd. Ukraine employs 497 staff; around 2% of total staff could be considered as “field personnel” that have direct contact with CPPs. To address occupational health and safety risks a procedure for risk reduction and control measures was developed and implemented. Also, regular mandatory medical examinations, rotation policy and adequate personal protection equipment (PPE) are in place.

Field staff was given specific training in specialized training centers. In 2014 Bayer continued safety training of staff handling CPPs on the use of adequate PPE on the basis of Material Safety Data Sheets (MSDSs) information for relevant chemical formulations. Bayer enforces procedures related to incident recording, investigation, reporting and corrective actions. Safety records indicate zero incidents since 2008.

Pollution prevention



Bayer CropScience products are supplied from Bayer AG manufacturing sites in Europe to local distributors that deliver products to farms. CPPs are transported and stored by contractors using their own truck fleet and warehouses. Therefore, the project does not directly generate greenhouse gas emissions. Bayer Ukraine controls compliance of CPPs’ transportation and storage with international and local regulations. Local regulations stipulate specific safety requirements to prevent potential pollution including transport safety measures; special permit for vehicles for transportation of chemicals; authorization for a driver. Concerning storage of chemicals, local regulations require exhaust ventilation at warehouses, temperature control, limited access to the areas for hazard products, specialized fire safety; availability of emergency plans for warehouses.



The company has enhanced the QHSE requirements for contractors to ensure product safety and quality throughout CPPs’ transportation and storage in terms of prevention of potential pollution due to accidental leakage. Bayer Ukraine included HSE requirements in the agreements with contractors and distributors, where applicable, including availability of Material Safety Data Sheets for distributors and regular audits of distributor’s facilities. In 2014 Bayer conducted audits of warehouses of distributors and logistics service providers. Corrective actions were defined and implemented.



Hazardous Materials



Bayer CropScience Stewardship Policy communicates the principle to make reasonable effort to develop formulations, which are the least hazardous. Enforcing the stewardship principles, Bayer AG committed to gradual replacement of WHO class I pesticides. Bayer Ukraine adheres to Bayer commitments and does not distribute products that fall in the World Health Organization Recommended Classification of Pesticides by Hazard Classes Ia (extremely hazardous) and Ib (highly hazardous). Currently, the company has in its portfolio WHO Class II (moderately hazardous) and Class III (slightly hazardous). The company only distributes products registered and certified by the local authorities and follows the local requirements for its distribution. Moreover, in 2010 Bayer Ukraine adopted a Corporate Memorandum committing the company to not supply WHO Ia/Ib pesticide chemical formulations to the Ukrainian market.



Waste management



The company signed an agreement with a local licensed company for proper utilization of empty CPPs’ containers in line with the International Code of Conduct on the Distribution and Use of Pesticides. Distributors were contractually obliged to include data on collection points and collector’s contact details in distributors’ contracts with customers/users. Direct clients were informed on terms of containers’ disposal through contracts as well. Thus 12 tons of containers was collected and processed by the contractor in 2014. Empty containers af
ter rinsing and deactivation have been crushed and sold for recycling of plastics.



Pesticide Use and Management



Bayer Ukraine enforces and promotes the use of Integrated Pest/Disease Control Programs amongst its clients through a variety of means. For example, they conduct sessions for farmers, distributors and other interested parties on safe use of PPCs and principles of integrated pest/disease management (IPM/IDM) programs including crop management practices, insect/disease monitoring, control components, and use of pesticide chemical formulations to avoid unacceptable economical levels of pest or disease damage. The company undertakes feasible efforts to help keep its clients aware of safety precautions and provides regular technical assistance to customers on how to apply the products, including the use of personal protective equipment (PPE).



In addition to that, the company offers to farmers and the end users practical training consistent with the FAO’s International Code of Conduct on the Distribution and Use of Pesticides that among other measures include appropriate pesticide storage handling in the field, and safe disposal of empty containers and residuals to prevent pollution risks to soil, groundwater, wildlife or livestock. The product catalogue posted on the local web site allows copying MSDSs for products and a product registration certificate. To ensure the use of Bayer’s original products the company issues a catalogue of product packages. Package labelling consistent with requirements of the International Code of Conduct on the Distribution and Use of Pesticides is translated in Ukrainian; this contains essential safety instructions for users.



The company provided emergency response training to its employees to react properly in case of accidental spills and minimize adverse impacts on soil, water, and other natural resources in use by communities. All external accidents occurred with end users or throughout storage and transportation are reported to the company’s designated managers directly or through distributors; comprehensive response and support measures are undertaken immediately. No accidents were registered in 2014.

Owing to the nature of Bayer’s business, local communities are not directly affected by import and distribution activities. Any community-related risks and impacts associated with CPPs import and distribution are the responsibility of transportation or distribution contractors as described above. As a result, information dissemination included publications about existing business projects on the local website and public bulletin boards available for any external interested parties. Nonetheless, Bayer established continuous communications with farmers and broader group of stakeholders through publishing and distribution of local language materials on safe and effective use of products, information on handling and disposal of empty containers, identification of fake products. The company continues organization of social events for farmers, end-users and visitors attending Field Days in May-August, Winter Conferences in January-February held on BayerAgroArena demonstration facilities. In addition, E&S information on this proposed Project will be disclosed locally.

For more information about the project and local access of documentation, please contact:
Bayer Ltd.,
Mr. Andreas Loechel
Head of Bayer CropScience Northern Black Sea Countries
Telephone Number: +38-044-220-33-87
Fax Number: +38-044-220-3301
Website: http://www.bayer.ua
Address: Bayer Ltd., 4-B Verkhniy Val St., Kyiv, 04071, Ukraine

Broad Community Support is not applicable for this project