While all Performance Standards are applicable to this investment, IFC’s 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.

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 

PS 4 - Community Health, Safety and Security 

All plants and facilities are in areas of converted land, zoned for industrial and commercial use, and are wholly and privately owned by Molca, thus PS 5 on Land Acquisition and Involuntary Resettlement is not applicable. The company has hired the independent third party services of a consultant to undertake geo-referencing mapping of origination activities and has confirmed through this process that none of its suppliers are located in areas of sensitive or critical biodiversity, thus PS6 on Biodiversity Conservation and Sustainable Management of Living Natural Resource is not applicable. PS 7 on Indigenous Peoples and PS 8 on Cultural Heritage are also not applicable as there are no indigenous peoples or territories within the direct or indirect area of influence of the project, nor areas of cultural or historical significance. Per Molca policy and host country laws, chance find procedures are required for new facilities where the use of heavy machinery and digging are required during construction. 

IFC’s appraisal considered environmental and social management plans for the project and gaps if any between these plans and IFC requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period, are summarized in the paragraphs that follow and in the agreed ESAP disclosed in this review summary. Through implementation of these management plans and the ESAP the project is expected to be designed and operated in accordance with Performance Standards objectives.

This is a Category B project. The client’s industrial plants are in areas designated for industrial land use. Molca sector specific activities (flour mills, dry food products and cooking oils) have moderate impacts on the environment and the community, which can be managed through good industry practices. Origination activities are screened for child and forced labor, and its environmental impacts to key biodiversity areas. 

Typical EHS risks of this type of operation include workers’ exposure to noise, vibration and particulate matter, physical hazards (electrical hazards, confined spaces, slippery surfaces, particulate matter, risk of fire and explosion, collision with moving equipment, ergonomic, exposure to chemical hazards, etc.), atmospheric emissions, high energy consumption, generation of solid waste and liquid effluents, among others. The client has operated its facilities for several decades, allowing it to have an in-depth understanding of the EHS risks and impacts of its operations, and the ability to prioritize the corrective actions identified through internal and independent audits.

Environmental and Social Assessment and Management System  - In alignment with good industry practices, the client has developed and implemented an integrated management system to manage the environmental, social, health and safety (ESHS) risks associated with its operations.  Molca is the largest producer of wheat flour in Argentina, processing 28.5% of the wheat in Argentina in 2016. Operations include 21 production facilities located in Argentina, Uruguay, and Brazil., including the new Spegazzini Plant, which started operations in the first semester of 2015. Origination activities include 19 facilities across the country. Apart from Spegazzini, the facilities hold certifications for ISO 9001, ISO 14001, OHSAS 18001 and ISO 22000. At present, the Cañuelas Plant also has the GMP+ Certification. At the Corporate level, the client has implemented ISO 27001 and is in the process of seeking certification for ISO 50001. 

In 2015, Molca began carrying out internal and external audits to test and verify its systems compliance with IFC requirements. The client has a robust program for assessing and managing ESHS risks, which includes frequent inspections, internal audits, external audits, certification audits and inter-plant audits and reviews by upper management. Along with the various certifications it has obtained over the past couple of years, the client has developed an action plan to implement corrective actions identified by the various internal and independent auditors. To strengthen and improve implementation of the new ESMS, Molca will scale up the size of its teams across all industrial plants and facilities as necessary, whilst ensuring continued training and cross-coordination with relevant departments. An action plan detailing the objectives, timeframes and details, such as budget, qualifications, training, roles and responsibilities, of the proposed expansion leading up to 2016 were submitted to IFC and deemed appropriate and sufficient to ensure continued and consistent good performance from the client in respect to day to day compliance with environmental, health and safety, and quality (EHSQ) responsibilities. 

EHS risks of manufacturing activities include workers’ exposure to noise, vibration and particulate matter, physical hazards (electrical hazards, confined spaces, slippery surfaces, particulate matter, risk of fire and explosion, collision with moving equipment, ergonomic, exposure to chemical hazards, etc.), generation of Greenhouse Gas emissions, high energy and water consumption, generation of solid waste and liquid effluents, among others. Risks associated with origination activities involve supply chain issues and worker occupational health and safety. A similar assessment of environmental risks and impacts exists for all origination activities, and an action plan is currently being implemented for each facility, audited annually. 

To ensure compliance with statutory requirements, the client relies on the services of a consulting firm who stays abreast of all regulations that apply to the operations at each facility, and ensures that the Company remains compliant with applicable regulations. This consulting firm verifies compliances with existing and emerging regulations. The client maintains a system to ensure that required permits and authorizations are obtained and maintained current. The client will continue to coordinate with local authorities to expedite, to the extent possible, the issuance of all permits and authorizations by municipal, provincial and federal agencies. At each facility, results of environmental and health and safety monitoring programs are reviewed by various department and reported to the EHS manager and reported to authorities. In addition, at some facilities (e.g. Cañuelas Plant and Spagezzini Plant), environmental authorities also conduct independent monitoring of effluent quality to ensure that the treated effluents do not degrade the quality of surface water bodies. 

Policy  - Molca is guided by a high-level vision and mission statements establishing the key objectives and pillars of credo of the organization. The EHS Policy covers overarching environmental, health, safety and quality principles and commitments that apply to all industrial processes of the business. The policy considers achieving sustainability and maintaining employee and customer satisfaction, core to its success. The policy is aligned to GIIP, including policy requirements in the IFC Performance Standards.  

Molca also has a Ethical Supply Policy that prohibits the use of forced and child labor in its supply chain, and promotes a process for mapping and ensuring that these are not located in key biodiversity or sensitive areas. In recent years, Molca has hired the services of a third party independent consultant based in Brazil to map and geo-reference its supply chain to make sure these are not sited in high risk areas, in line with its policy.

Identification of Risks and Impacts  - The client has a process for periodically identifying, assessing and reviewing ESHS risks and impacts of its industrial and origination activities, including those resulting from the work done by contractors and its supply chain. The risk assessment is maintained by the EHS team, who in turn, is responsible for liaising and communicating with the production, operations and maintenance teams, to ensure all risks and impacts are mitigated in a phased manner. 

For new projects, the client has an internal requirement to prepare environmental and social impact assessments (ESIAs) describing the environmental and social conditions at the site(s), identifying ESHS risks and impacts and providing preventive and mitigating measures, as well as an appropriate management plan. For example, the newly built (2014) Spagezzini Plant underwent the ESIA process, and was designed with state of the art production equipment, following GIIP. In older operations like its flagship location Cañuelas Plant and Pigue, where ESIA’s were not required since they were existing plants when they were acquired, the client used a process of internal and independent inspections and audits to verify workplace conditions as well as conditions of key equipment. The Cañuelas Plant is the largest and most complex of all plants, as it is not only the oldest but it also includes cooking oil production which is a process that requires large volumes of water and generates oily smoke and mist emissions as well as large volumes of effluents. At this plant, the client has rightly identified EHS risks associated with the old electrical system and chemical storage tanks and has developed an action plan to upgrade these systems. Molca has conducted audits to verify the conditions of all systems and equipment (e.g. electrical systems, surface drainage system around areas that store chemicals and fuels, boilers, chemical storage tanks, fire protection pumps, etc.) at older facilities and has developed action plans to improve conditions or upgrade systems and equipment in a phased manner, following a hierarchical mitigation strategy based on prioritization of issues. 

While Molca has several controls in place to manage environmental and social risks and impacts of its supply chain (origination activities), it lacks an integrated supply chain management policy and plan. Molca will develop a supply chain management policy and plan compliant with IFC PS 2, supply chain requirements in the EHS Guidelines on Annual Crops, and aligned with the PS2 Handbook for Labor and Working Conditions, “Measure and Improve Your Labor Standards Performance”. ( ESAP Condition 1)  The Plan will include a supply chain screening questionnaire for all new producers being considered by Molca. The questionnaire will include questions around the producer’s own supply chain, making sure these are also subject to Molca’s Ethical Policy requirements. ( ESAP Condition 2)

Management Programs  - In alignment with GIIP and the requirements of the various ESHS management systems that the client has already implemented, Molca implemented the following key management programs: (a) Solid Waste Management; (b) Water Quality Monitoring; (c) Fire Protection System; (d) Emergency Preparedness and Response; (e) Effluent Treatment and Effluent Quality Monitoring; (f) Air Emission Monitoring; (g) Hazardous Material Management; (h) Pest Control Management; (i) Work Place Conditions (noise, vibration, temperature, illumination); (j) Worker’s health/medical surveillance; (k) Traffic Management Plan; and (l) Community Engagement Program.

These programs, along with others, are managed in a systematic manner, aligned to GIIP and the IFC PS requirements. Implementation of these programs is through a combination of various departments at each plant, including production, quality control, laboratory, maintenance, environmental, and health and safety. Verification is done through the series of internal, inter-plant and independent audits. Management programs are consistent with the nature and scale of risks and impacts at each plant.

For origination activities, Molca will carry out a gap analysis analyzing its alignment with the new EHS Guidelines on Annual Crops, which includes specific activities for the supply chain, and will enhance its management programs to fill any gaps between these. ( ESAP Condition 3)

Organizational Capacity and Competency –  Molca is managed and operated in accordance to the terms and conditions set out in its Corporate Governance Manual. The manual establishes the current organizational structure of the business, and publicly defines each person’s roles and responsibilities. Molca is headed by an Executive Team, in turn supported and guided by four executive committees (i) management, (ii) internal audit, (iii) risk management, and (iv) sustainability. The General Manager assumes responsibility for managers at the plant (operational) level. The Company has proven experience and track record in the industry, demonstrating that its business approach is balanced, keeping with sustainability principles accepted by GIIP and the IFC PS. 

In 2013, with support from top management and the President of the Group, the EHS manager made a strategic decision to align its integrated EHS management system to the IFC Performance Standards (PS), thus going above and beyond requirements of its international certifications andlocal regulatory requirements in respect to management of ESHS. Teams of EHS specialists were hired at each of the industrial plants and facilities, allowing for Molca to begin implementing the new IFC PS compliant ESMS in 2014. Engagement with internal and external stakeholders is managed by the Communications Team, in coordination with the HR and EHS Teams. 

Emergency Preparedness and Response  - Over the past three years, as the client developed and implemented its integrated ESHS management system and sought certifications, the client improved previous procedures and processes to identify EHS risks at its facilities. Emergency Preparedness and Response (EPR) plans have been developed for each facility and improvements are ongoing. Consistent with good practices, the EPR plans were developed based on the identification of occupational health and safety hazards at each plant. At the Spagezzini and Cañuelas plants, where ammonia is used in the refrigeration system, the client has developed specific EPR procedures and conducts drills related to ammonia leaks. Molca has employed good practices to prevent potential leaks, including scheduled maintenance of the system by qualified contractors and continuous air quality monitoring in the areas where ammonia is used. At all plants, the client has trained brigades and EPR personal protective equipment (PPE) for the specific emergencies (e.g., firefighting PPE, ammonia leak PPE, first-aid, personal meters to measure ammonia concentrations in the air, oxygen concentrations, etc.). In most plants, drills are conducted in coordination with local fire departments, but the client is working toward having drills in coordination with local fire department at every location. Where communities are near the plants, Cañuelas has developed procedures to communicate with communities to ensure their safety in the event of a major emergency. As part of continuous improvement practices, Molca has conducted additional evaluations of EPR procedures, personnel qualification and training needs, equipment and PPE and has developed an action plan to improve ERP at each facility, along with a detailed and rigorous schedule for drills.

Monitoring and Review  - With the objective of understanding EHS performance indicators at each facility, the client has implemented EHS monitoring programs that are tailored to the operations at each plant. EHS performance indicators are reviewed by several departments including Quality Control, onsite laboratory, plant maintenance, and onsite EHS personnel. The EHS performance indicators are reported to the corporate EHS manager who shares the key information with the Company’s directors. The audit program that evaluates the monitoring programs include: (a) Annual internal audits; (b) Annual inter-plant audits; (c) Regulatory compliance conducted by Estrucplan every six months; (d) Certification audits conducted by SGS; (e) Medical surveillance conducted by the insurance company; (f) SEDEX (ethical trade audits); (g) Audits by the local environmental agency to ensure compliance of treated effluent quality: and (h) Non-compliance matrix used to monitor implementation of corrective action plan. 

Overall, the client has developed and implemented a monitoring and review program that is consistent with good international practices.

Human Resources Policies and Procedures  –  Molca has a human resources (HR) policy that applies to workers involved in all business operations, including subcontractors. The HR Policy covers all principles in IFC’s PS 2 on Labor and Working Conditions, based on the core labor principles of the International Labor Organization (ILO), and specific procedures on management and evaluation of suppliers, and combating fraud and corruption. To further strengthen compliance with PS2 requirements, Molca hired an independent service (‘Linea Direct’) that allows workers to personally write or phone in grievances, directly or anonymously, to management. The service ensures that all grievances are managed and resolved in accordance to the grievance mechanism (GM) procedures, with serious concerns escalated to a special committee for immediate and specialized action as needed. HR related communications with internal and external stakeholders, including suppliers and third parties, is further defined and reinforced in Molca’s procedure on ‘Internal, External Communication, Participation and Consultation’.

Working Conditions and Terms of Employment  –  Molca has a central HR Team located in the Cañuelas Industrial Plant, supported by 1-2 team members at each of the other sites. Molca currently employs over 3,100 people of which 83% are permanent employees and 17% % are female. Molca carries out its own recruitment without the use of brokers or intermediaries. Molca’s recruitment is focused on attracting local talent through partnerships with local institutions. Recruiting the right profile has been key to its historically high retention rate across the organization. All terms and conditions of employment are aligned to host country labor laws and the principles in the HR Policy, documented and defined in worker contracts and agreements. The following documents/supplies are shared with new employees at the time of induction: (i) objectives, (ii) mission and credo, (iii) organizational chart, (iv) list of processes, clients, products and services; (v) key performance areas; (vi) HR Policy, (vii) processes for preparing for and responding to emergencies; (viii) manual on quality, safety, security, occupational health and safety, and environment, and (iv) personal protective equipment (PPE). A standard work week at Molca is 48 hours. Industrial plants operate on 3 shifts of 8 hours. Molca frequently monitors the number of overtime hours worked by each employee, occupational health and safety risks and (incident) rates/frequencies in the workplace and consistently reevaluates training needs to ensure workers health, safety and wellbeing is maximized and protected. 

Workers Organizations  –  As is common in Argentina, Molca has collective bargaining agreements with 7 worker organization groups. Over 65% of workers are members of a collective bargaining agreement. All relationships between HR and the groups were said to be amicable and efficient. Each sector/industry has its own collective agreement. Terms and conditions of the collective bargaining agreements are made public, defined and regulated by the Ministry of Labor in Argentina and negotiated thereafter personally (within the designed framework) between the Company and the worker organization. Molca holds meetings with the committees of each group every 15 days. Salaries are revised against inflation per collective agreement every 6 months.  

Occupational Health and Safety –   Molca has an Occupational Health and Safety (OHS) department that is integrated with the environmental department. The OHS policy, procedures, plans and programs are based on requirements of the OHSAS 18001, IFC Performance Standards and the World Bank Group EHS Guidelines. To develop the OHS programs, the client conducts evaluations of risks and hazards at each plant.  To the extent possible, engineering controls were implemented to minimize hazards, prevent accidents and protect workers’ health. Engineering controls include abatement of noise sources with acoustic insulation, insulation of heat sources, protection of equipment moving parts, enclosure of silos and containers used for bulk storage of powders and fine materials to minimize emissions of particulate matter, among others. For hazards that cannot be prevented through engineering controls, the client has developed procedures for personnel training, PPE program, emergency preparedness and response, fire protection system, onsite emergency brigade, and emergency drills. The client has implemented a “Comité Mixto” which is a committee composed of representatives from the workers and the management team. These committees meet once a week to discuss EHS issues. A medical surveillance program is developed for each worker, based on his/her duties and potential exposure to physical and chemical hazards. Annually, workers are submitted to medical examination that include, among others health aspects, hearing, respiratory capacity and repetitive motion injuries. The results of the annual medical tests are reviewed by the insurance company that is responsible for workers’ compensation and by the Company’s occupational physician. Overall, the client has developed OHS policies and programs that are aligned with good international practices and IFC Performance Standards. Through the implementation of OHS aligned with OHSAS 18001 and IFC requirements, there was a reduction in the number of OHS accidents in 2014 as compared to previous years. 

Since acquiring Cargill plants, Molca has been implementing the International Sustainability Rating System (ISRS), which is a global management system designed to evaluate, improve and denominate the health of commercial processes in an organization. The use of ISRS provides OHS assurance. It includes flexible instruments to train, develop, implement and audit the safety and sustainability management in an organization. Its objective is to reduce risks and losses associated with damage to persons, equipment, materials and environment, with measurable objectives of continuous improvement as part of a management strategy. The system has 20 elements, with leaders appointed to each of these elements, who must ensure their implementation. OHS accidents and incidents, and their severity, have reduced an additional 40% in 2016, since the start of its implementation in 2015. 

One opportunity for improvement regarding workers’ workplace conditions relates to indoor air quality. Organic particulate matter (PM) is generated from grains handling and processing and flour milling and emissions from vegetable oil processing include PM, hexane, and volatile organic compounds (VOCs). Moving forward, the client will conduct evaluations of indoor air quality, and, as needed, improve existing air emission controls and its air quality monitoring program for protection of workers’ health. ( ESAP Condition 4)

Workers Engaged by Third Parties  –  Molca contractors undergo a thorough evaluation prior to their selection and throughout their contractual relationship with the company. Upon selection, contractors are required to sign and uphold Molca relevant HR and EHS policies and procedures and undergo induction training. Molca routinely evaluates and categorizes their contractors per their level of compliance with legal requirements and fulfillment of their contractual obligations. Contractors who do not meet basic standards are taken off the list of service providers. 

Supply Chain – Molca secures a consistent supply of products through partnerships with farmers where they act as a one-stop supplier of all services and products they need. The sourcing network spreads across the most productive agricultural areas in ARG, providing Molca access to over 8,000 farmers and lands with world class yields and top product quality. Other supplies include finished, refined and value added products like sugar, cocoa, salt, packaging, additives, and others. Molca suppliers are evaluated against thorough environmental, social and quality parameters and audited annually for compliance with legal requirements. Molca developed an Ethics Policy that defines under what terms and conditions the company will engage with contractors and third parties. The Policy establishes the standards and acceptable behaviors the company expects compliance from contractors and third parties, the means for annual performance evaluation, and potential reasons for disbarment from the list of approved contractors and third parties. The team works annually on improving the working conditions of suppliersMolca works with suppliers to help them meet the requirements and criteria of US and European ethical soy supply chains. To date, 1,000 suppliers have been certified against the US scheme and Molca intends to continue working with others in expanding the number of certified producers. 

In 2017, Molca created a new department that provides technical assistance to its supply chain. Assistance is provided in the form of: - cereals, - consulting services, - equipment, - access to an external market, - a forward market, and fuel. Other services include: -insurance, -livestock, - logistics, - supplies, and technology.  This one stop shop approach allows Molca to establish long-term commercial partnerships with farmers, whilst ensuring consistent supply of top quality raw materials for their operations.

Energy and Material Efficiency Projects –  The client has started a program to obtain certification of ISO 50001 (Energy Management System) and has identified main processes and equipment that consume energy. As the Company implements ISO 50001, it will establish, implement, maintain and improve an energy management system that will enable the company to achieve a continuous improvement of its energy performance, including energy efficiency, energy use and consumption. In doing so, the client is expected to fully align with IFC requirements for energy efficiency. Moving forward, the client will present the schedule for implementation of ISO 50001. 

Water Consumption –  The eight plants use groundwater wells for all processes, fire protection and other purposes. Groundwater is stored in tanks and treated to become potable. Water treatments include filtration, softening, reverse osmosis. Some parameters such as residual chlorine and pH are monitored daily while others are monitored at different frequency, in accordance with in-country requirements. Water supply wells have permits or are in the process of obtaining permits. All wells are equipped with flow meters; thus, overall water intake is measured and reported. The two largest plants, Cañuelas and Spegazzini, have the most consumption of water and have developed measures to minimize water use, such as reuse of treated effluent for dust control and for the cooling systems. The Company states that there is an effort to develop detailed water balances for each plant. Following the assessment of the water balance, moving forward, the Company will develop long-term plans for water efficiency and reduction of consumption. ( ESAP Condition 5 )

GHG Emissions  – As part of the process to obtain the ISO 50001 certification, the client has identified greenhouse gas (GHG) emission sources and has calculated the preliminary carbon footprint of each plant. Based on 2014 data, the plant with the highest GHG emissions is the Cañuelas Plant, which is the largest flour producer and includes the processing of sunflower and olive oil. The client has secured the services of a third party to verify and approve the methodologies applied. Preliminary GHG emissions from the Cañuelas Plants are 18,376 tons of CO2eq. The other plants have lower GHG emissions. Beginning in 2015, the client will include GHG emissions on its sustainability reports. The results of the GHG inventory will be used for a future long-term GHG emission reduction plan. 

Pollution Prevention –  The client’s plants produce and store large volumes of grains and flour, and at the Cañuelas Plant, large volumes of vegetable oil. The plants use, handle and store chemical substances such acids, caustic soda and fuels (natural gas and diesel). The plants also generate solid and liquid wastes. To prevent environmental pollution and to protect human health, client implements good practices such as secondary containment around tanks with chemical substances, air emission controls, waste management, effluent treatment, as described in the paragraphs that follow. However, some of the plants, such as the Cañuelas Plant, have been in operation for decades and secondary containment of acid and caustic soda tanks, for instance, show signs of wear and tear. Also at Cañuelas, drainage systems that direct surface drainage from chemical and fuel storage areas to the wastewater treatment plant require more frequent maintenance to ensure proper drainage. Moving forward, the client will improve conditions of secondary tanks and surface drainage systems, and improve maintenance of all pollution prevention measures, controls and technologies to ensure proper operation and full alignment with requirements of IFC PS3. (ESAP Condition 6)

Air Emissions and Ambient Air Quality –  Air emissions at wheat mills consist mostly of particulate matter (PM), which may be generated at various steps (e.g., (1) grain reception, preliminary cleaning, and storage; (2) grain cleaning; (3) tempering or conditioning; (4) milling the grain into flour and its byproducts; and (5) storage and/or shipment of finished product). To reduce the generation of PM, the client has implemented some control technologies, including covered conveyor belts, cyclones, fabric filters, and air aspiration (purifiers). The Cañuelas Plant also processes sunflower and olive oil. Emissions from vegetable oil processing include PM, hexane, and volatile organic compounds (VOCs). Results of regulatory-driven air quality emissions and ambient quality indicate compliance with in-country requirements and WBG guidance values. 

Wastewater Treatment –  The Cañuelas and the Spegazzini Plants are the largest facilities, which manufacture products other than wheat flour. At these facilities, the consumption of water and generation of wastewater are greater than at the other facilities, thus, these facilities require larger wastewater treatment plants that are designed to treat wastewater to concentrations compliant with in-country requirements. Parameters such as pH, temperature, total dissolved solids, chemical oxygen demand (COB), total phosphorus, ammonia nitrogen, and total nitrogen are monitored to demonstrate compliance with the Buenos Aires Province requirements for facilities discharging treated effluents to the Matanza Creek Basin. Due to the importance of the Matanza Creek Basin, local authorities also conduct independent treated wastewater quality monitoring to confirm compliance with local regulations.  A review of the treated effluent monitoring results indicates that Molca complies with Argentine standards and with the applicable WBG EHS guideline values. It is noted that the Company currently does not monitor concentrations of total coliforms and total suspended solids.  Moving forward, Molca will monitor the concentrations of total coliforms and total suspended solids to ensure that treated effluents comply with in-country standards as well as with applicable WBG EHS guideline values. 

Solid Waste Management –  The plants generate various types of wastes such as packaging, recyclables (mainly paper and cardboard, plastics, plastic drums, metal drums, pallets and production waste) and wheat grain chaff. The waste is properly labeled and stored at designated storage areas. Domestic waste is disposed of in landfills, recyclable wastes (paper and cardboard packages and plastic packages) are sent to recycling centers and wheat chaff is used as animal feed. Hazardous wastes are properly labeled, stored and transferred to facilities licensed by local authorities. Manifests are kept to document the onsite generation of wastes and the disposal at authorized facilities. The Cañuelas Plant also processes sunflower and olive oils. A main byproduct generated from the oil process is oleína. Molca is currently conducting feasibilities studies to use oleína as a fuel at the boilers, which use natural gas. This initiative would reduce disposal of oleína at local landfills and reduce GHG emissions, since oleína is a biofuel. If the oleína is used in the boilers at Cañuelas Plant, this would represent 5% of the fuel used in the generation of steam. Overall, the Company has developed and implemented a waste management program that is consistent with good practices.

Hazardous Materials –  The client has prepared a preliminary hazardous materials management plan that consists of the identification of hazardous materials used at the plants and training of personnel handling such materials. An inventory of chemicals used at each facility exists and material safety data sheets (MSDS) are maintained in the areas where hazardous materials are stored and handled. The client does not use or handle hazardous materials subject to international bans. 

Pesticide Use and Management –  Due to the nature of the client’s operations, the pesticide management plan takes into consideration GIIP. Within the production area, pest management is done using traps to prevent use of pesticides where products are processed or stored. Pesticides that are used are low in human toxicity (i.e., excludes World Health Organization (WHO) Hazard Class Ia (extremely hazardous) and Ib (highly hazardous) chemicals).

Infrastructure and Equipment Design and Safety –   The flour mills and vegetable oil processing plants are industrial facilities that are not accessed by the public; thus, the public is not exposed to potential routine operations or accidents within the plants. However, since some flour mills are located within or near towns and communities, the client has employed good practices to minimize potential risks to community health. For instance, at each plant there is a traffic plan that aims at minimizing heavy truck traffic through main roads used by the community. Where trucks access roads used by the communities, the client has included provisions to prevent truck traffic during school hours and at busy times.  Where residential receptors are near the client’s plants, noise abatement measures have been applied to reduce noise levels. Such noise abatement measures include installation of walls and, in some cases, use of noise abatement materials in and around major equipment. PM emission controls have been utilized at various locations to minimize potential impacts on nearby receptors. 

Hazardous Materials Management and Safety –   Hazardous materials are stored and handled within each plant. Potential spills of chemicals used at the facility would be limited to the facility’s grounds. For each facility, the client has developed specific traffic plans that aim at minimizing potential impacts to local communities that could result from heavy truck traffic through main access roads. 

Ecosystem Services   –   The client’s flour mills and vegetable oil processing facilities do not adversely impact provisioning or regulating ecosystem services. The volume of water used at the facilities does not result in significant adverse impacts on the quantity or quality of water available to the communities or other businesses. Effluents generated at the facilities are treated prior to their discharge to the environment and do not adversely impact surface water resources. Origination activities are assessed to ensure that they do not adversely impact sensitive or key biodiversity areas that may have a community function. Nonetheless, these activities are ongoing as Molca continues to strengthen the implementation of supply chain management measures. Effectiveness of these measures will be assessed and audited annually and reviewed by IFC during supervision visits. 

Community Exposure to Disease –   The client’s flour mills and vegetable oil processing facilities do not include operations or activities that could expose local communities to diseases. There is virtually no potential for transmission of communicable diseases by migrating workers since the workforce is small and consists of members of the local communities. The client has implemented control technologies at each facility to minimize emissions of PM and to treat effluents to minimize impacts to the environment and to community health.

Emergency Preparedness and Response –   Coordination with local communities for potential emergencies situations at the flour mills and vegetable oil processing facilities are not required. Potential emergencies, such as chemical spills, fire or explosions, would involve the onsite brigade and support from local fire departments. The local communities would not be involved in emergency response efforts since potential emergencies would be expected to be within the facilities’ property limits. 

Security Personnel –   Security is outsourced at all Molca’s industrial plants and facilities. Security companies are screened for legal compliance and provided with relevant training upon recruitment. Each industrial site is equipped with security cameras at key points of ingress, egress and operations. Guards man the main entrances to log and report external visitors and patrol the site and facilities routinely for unusual activity. Security guards are provided with induction training and required to comply with the company’s relevant HR policies, a code of ethics and a security procedure, which is integrated into the EPR Plan. No major security risks or potential concerns were made apparent during the appraisal.

As a prominent employer and visible neighbor in the communities it works in, Molca promotes an open door and proactive policy to engaging and addressing issues and concerns of its stakeholders. Molca openly believes that maintaining good relations with the communities it works in is key to ensuring the success, continuity, longevity and sustainability of its business, primarily because a large portion of its workforce come from those communities. Molca currently has good relations in all communities where it works in, and maintains that through open dialogue and support to local programs. 

In 2014, Molca undertook an internal mapping exercise of key stakeholders to its business, consistent with guidance provided in IFC PS 1. Stakeholders are rated on a scale of 1 – 7 (max.), depending on their level of influence and interest (materiality) to the operation. The rating forms the baseline for its communications and engagement plan and strategy, which identifies, among other things, the frequency and methods for maintaining dialogue with each group. In the event of a specific incident that needs priority attention, Molca has a process for escalating issues to the attention of senior management for immediate action. 

In addition to employing local talent, Molca works with (local) institutions to support local causes important to each (local) community. Procedures for engaging and consulting with local communities are detailed in the company’s procedure on ‘Internal, External Communication, Participation and Consultation’. This process includes access to a grievance process where community members can direct concerns or complaints directly / anonymously to the company, either in person or in writing. Molca appropriately logs, records, and provides transparent follow through when resolving grievances. A formal written procedure describing the process is being drafted, in alignment with IFC PS 1 requirements and other guidance. 

www.molinocañuelas.com.ar

Molino Canuelas S.A.C.I.F.I.A

Carlos Pellegrini y Ruta 3 S/N

Canuelas-Pcia de Bs As-Argentina

CP:1814

Tel: 02226-432885