38083 - Soufflet LT

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Environmental & Social Review Summary

Project Number

38083

Company Name

SOUFFLET FINANCES

Date ESRS Disclosed

Apr 29, 2016

Country

Eastern Europe Subregion

Region

Europe

Last Updated Date

Jun 12, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : May 31, 2016
Signed : Jun 17, 2016
Invested : Oct 7, 2016

Sector

Grain Processing (Milling, Starch, Flour, Malt)

Industry

Agribusiness and Forestry

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

IFC has been supporting the growth of Soufflet’s operations since 2009 and this would be IFC’s fourth project with the Group. IFC’s investment entails provision of €30 million loan to support Groupe Soufflet’s long-term investment plan of in Kazakhstan, Ukraine, Romania, and Poland (the Project Countries). An existing, strategic IFC client, Soufflet is an established mid-size global originator, trader, and processor of grains (primarily wheat and barley). In 2015, Soufflet employed 7,500 staff and reached more than 17,500 farmers in the EU and ECA regions. IFC’s current exposure to the Group amounts to ~€60 million in the form of 2 parallel revolving credit facilities committed in 2014 and that will mature in 2019.

Today, the Company operates in nine countries in the ECA region, including the six that are currently financed by IFC (Kazakhstan, Ukraine, Russia, Serbia, Romania, and Poland). Soufflet has 9 silos and 6 malting plants in these six countries and their share represents about 15% of the grain originated by the Group, and 27% of its malt production. For this Project, Soufflet requested IFC’s support for its investment plan in 4 countries of ECA, a region where agribusiness has great potential and is a strategic priority for IFC. The Group plans to (i) expand grain origination thereby increasing its farmers’ reach; (ii) invest in grain logistics infrastructure, one of the main impediments to faster development of the agribusiness sector in ECA; and (iii) investments in capacity expansion and food safety at its ECA malting plants.

Overview of IFC's Scope of Review

IFC’s environmental and social review comprised a visit to the Soufflet’s malting facility in Buzau, Romania, and a video conference meeting with senior management and key specialists at Soufflet headquarters in Nogent. The malting facility in Buzau, in operation since 2009, was built as a turn-key project on 10 ha site outside the city of Buzau. The equipment was supplied by Bühler Germany. It operates at a capacity of 365 batches/year producing 350 tons of barley; and 290 tons of malt/day. The facility includes barley and malt silos; 6 steeping vessels; 1 steeping tank; 5 germination boxes; 2 double deck kilns; chemical and water storage; an office building; wastewater treatment; maintenance department and laboratory.

Appraisal included a review of technical documentation provided during the visited site, internal and external environmental and occupational health and safety audits/inspection reports, review of human resources procedures, life and fire safety systems, resource efficiency (water, energy), emergency preparedness and response, and social performance. Also, available information on the Company’s Environmental, Health and Safety (EHS) performance including agricultural and malting facilities in Kazakhstan, Ukraine, Russia, Serbia, Romania, and Poland, was evaluated from the previous IFC investment and given full consideration during this appraisal. Soufflet stated its commitment to continuous improvement of E&S performance and near term finalization of the ESAP for the current investment.

E & S Project Categorization and Applicable Standard

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
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
IFC’s due diligence did not identify issues related to by PS 5 - 8. The land for the Buzau facility was obtained through a willing buyer/willing seller transaction and followed Romanian regulatory requirements. There are no expected land acquisitions or associated economic or physical displacement, involuntary resettlement. Similarly there are no conversions of natural and/or critical habitats leading to biodiversity loss from direct operations or in the supply chain. There are no known indigenous populations or cultural artifacts in Soufflet’s area of operations, which will continue within the footprint of the existing facility.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The environmental and social risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

Main environmental and social risks associated with Soufflet operations are: (i) viability of the corporate environmental and social management system and assigned professionals and coordinators to identify and successfully correct environmental, social, occupational health and safety issues throughout all its facilities; (ii) internal technical capacity and competence and access to senior management to enforce the Group''s environmental due diligence procedures within its subsidiaries; (iii) Human Resource Policy, including working conditions and terms of employment, occupational health and safety, labor issues; and grievance mechanisms; (iv) scientific selection and sourcing, storage and application agricultural inputs including fertilizers and pesticides; sustainable solid waste and wastewater management practices; non-impacting air emissions from the malt processing plants; and sustainable, efficient energy and water use; (v) adequacy of contingency planning and emergency response capabilities, including safety and health issues related to agricultural chemical exposures; life and fire safety provisions for employees; traffic and transport management; and, (vi) stakeholder engagement, continuous reporting to affected communities and operation of a robust community grievance mechanism.

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan

Soufflet LT(38083) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
1. Provide Tekeli Malting Plant, Kazakhstan, Ambient Air Emissions Measurements. Submit either regualotory air emissions monitoring results at the border of sanitary protection zone (the buffer zone established by law between plant and residential zone to ensure appropriate air quality) or air emissions modeling data using actual stack emissions at full load and current local air-meteorological data to illustrate that air emissions concentration in ambient air at sensitive receptors and for affected stakeholders do not exceed National ambient air limits or in the absence of National ambient air quality standards, WHO ambient air quality standards in the IFC General EHS Guideline.	30-Sep-2016	Completed	Completed	6/30/2017
2. Provide Tekeli Malting Plant, Kazakhstan, Stack Air Emissions Measurements. Upon connection of the Tekeli malting plant to the natural gas pipeline, Soufflet will provide monitoring data to illustrate that stack emissions have been reduced to comply with IFC General EHS Guideline limits.	30-Sep-2016	In progress	Due date revised as agreed with IFC Client

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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Environmental & Social Review Summary

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E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

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Environmental & Social Review Summary

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Overview of IFC's Scope of Review

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Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

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