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
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
PS1: Assessment and Management of Environmental and Social Risks and Impacts
PS2: Labor and Working Conditions
PS3: Resource Efficiency and Pollution Prevention
PS4: Community Health, Safety and Security
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

Impacts related to PS5, Land Acquisition and Involuntary Resettlement, PS7: Indigenous Peoples and PS8: Cultural Heritage were not found of direct relevance due the nature of the project to finance working capital needs of existing operations. Astarta’s ongoing operations are within existing locations, found within consolidated industrial zoned areas and also on existing farming land with no conversion of natural/critical habitats; there is no presence of indigenous peoples or cultural artifacts within either of these land uses.

The project is categorized as a category B project according to IFC’s Environmental and Social Sustainability Policy as the IFC’s review of the project activities indicates that the associated E&S risks and impacts are few in number, generally site-specific and readily addressable through mitigation measures.
Key environmental and social (E&S) issues associated with this project include: efficient implementation of EHS management systems; assurance of safe and healthy labor and working conditions in compliance with local regulatory requirements and relevant Performance Standards; implementation of good and safe practices of agricultural activities; further implementation of modernization and BAT programs to reduce water consumption; improve energy efficiency and minimize hazardous material use.

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.

Environmental and Social Management System:

Astarta has in place a corporate integrated environmental and occupational, health and safety (EHS) policy applied to all its operations in Ukraine. The EHS policy states the environmental, health and safety objectives, outlines the company’s commitments and adherence to the IFC’s PSs and WBG’s EHS Guidelines as applicable E&S requirements. Astarta also has a standalone policy committing to the voluntary agro-commodity initiative on responsible soy production (RTRS).

The company has developed and implemented its management systems in line with the international standards ISO 14001 (environment), OHSAS 18001 (occupational, health and safety), FSSC 22000 (food safety) and IFC’s PSs. Currently the following Astarta’s facilities hold certificates in accordance with international standards: ISO 14001 standard – head office and 5 sugar plants; OHSAS 18001 – head office and 1 sugar plants; FSSC 22000 – 3 sugar plants. The Globino processing plant is certified according to ISO 14001, OHSAS 18001, FSSC 22000 and ISO 9001. The other facilities, even they have not been certified in accordance with international standards follow the corporate principles and EHS management system. Astarta plans to certify all production plants to OHSAS 18001 by 2017. The company has launched a pilot project of one sugar plant certification in accordance with international standard ISO 50001 (energy management). Astarta’s management system is largely consistent with IFC PS requirements in providing adequate oversight, comprehensive risk assessment, monitoring, reporting and staff training. Going forward Astarta will complete EHS management system implementation at its agricultural facilities in accordance with the plan developed under action #5 of ESAP (project #30830).

Organizational Capacity and Competency:

The EHS responsibilities and authorities are defined and communicated throughout the headquarters, core business functions and individual facilities. Astarta has assigned a competent professional environmental manager and health and safety manager at the corporate level. The head of the EHS department controls the implementation and effectiveness of the EHS management system and reports directly to Astarta senior management who are responsible for the review and determination of further actions for improvement, as applicable.

Astarta carries out training needs analysis and develops professional and EHS training programs to ensure up-to-date skills needed for specific work responsibilities. 592 training events were conducted in total in 2015 resulting in 1675 employees being trained, including: (i) trainings required in accordance with national requirements for all workers; (ii) trainings on OHSAS – implementing and assessing the risks for occupational health and safety specialists and heads/managers of production units; and, (iii) first aid and fire safety trainings for all workers.

Emergency Preparedness and Response
:

The facilities are equipped with life and fire safety (L&FS) equipment commensurate with types of L&FS risks and hazards. Electrical grounding, filtration and venting and spark detection systems are installed at areas of sugar dust generation to reduce the combustion hazard. Equipment includes fire extinguishers and detached fire water tanks and hydrants/hose-reels. L&FS drills are carried out by the state fire service jointly with the company staff. Emergency response plans are prepared at each Astarta individual operations in line with local laws. Also emergency response plans are developed for the soybean crashing in accordance with requirements of local legislation.

Monitoring and reporting:

Astarta and its operations submit annual reports on air emissions, wastewater tests and amount of generated wastes to authorities that supervise compliance with Ukrainian limits. In addition, they report to IFC using the annual monitoring report which includes reference to WBG’s EHS Guidelines limits. Internal reporting about EHS issues is provided to the company management within the framework of EHS management systems implementation. Astarta regularly assesses its compliance to the social and environmental standards of its corporate clients (e.g., Coca-Cola, Nestle, Mondelez and еtc.). Compliance with IFC Performance standards and integration of their requirements into company’s management system is reviewed annually and evaluated by independent experts, engaged on behalf of international lenders.

Human Resources Policy, Social Responsibility, Non-Discrimination and Equal Opportunity

The company’s human resource policy is consistent with local labor laws and PS2 and includes non-discrimination commitment in employment. Astarta follows social responsibility principles, being a member of United Nations Global Compact (UNGP) since 2008, and is committed to aligning its operations and strategies with principles of human rights, labor, environment and anti-corruption. Motivation schemes, performance evaluation programs, and comprehensive training programs contribute to retaining of personnel in the company. The scope of these policies and procedures is applicable to all permanent employees.

Working conditions and terms of employment

As of 31 December 2015, the company employed 8,462 people, of which about 84% are permanent employees. In the autumn, the season of sugar production, the number of employees increases to more than 13,000. Astarta keeps written contracts with permanent and seasonal staff. Contracts with employees reference comprehensive terms of employment, including hours of work, wages and benefits, leave for illness, maternity, vacation or holiday, employees’ rights for labor protection, including right /freedom for professional associations, trade unions. Astarta offers a social package to employees, including financial aid and social benefits.

Working conditions at Astarta’s facilities comply with national labor laws and IFC’s PS2. Ukrainian legislation prohibits employment of children below the age of 16 years; those below 18 years are not employed in dangerous, night or overtime work; forced labor is not employed.

Workers’ Organizations

About 80% of Astarta employees are members of trade unions; workers’ councils cooperate with management within individual operations where employees don’t belong to a trade unions. Collective agreements provide for additional terms and benefits for employees and their families.

Grievance Mechanism

Astarta has developed and implements a formal internal grievance process consistent with IFC’s PS2 which allows grievances to be presented without the risk of oppression. All employees are informed about the grievance procedure upon employment. Additionally, the corporate code of conduct actively encourages employees and managers to openly discuss and resolve internal concerns.

Occupational health and safety:

As part of its EHS management system Astarta takes actions to ensure safe and healthy labor conditions in accordance with applicable national legislation and IFC requirements. The EHS management system is supported by corporate standards, a package of organizational and technical safety measures embedded into the technical design of facilities as well as rules, instructions, and operational procedures. The management system provides for the identification of potential hazards, provision of preventive and protective measures, and recording and reporting of occupational accidents, dise
ases, and incidents. Regular OHS trainings and instructions are conducted for permanent and temporary personnel according to the training program.

Occupational health and safety (OHS) procedures are developed for each type of operations and employees are trained to their application. Working clothes and personal protective equipment are provided to employees in accordance with the type of performed work. The company provides regular assessment of hazardous factors at working places (chemical, physical, ergonomic and etc.) and implements measures to improve working conditions. According to the latest annual report the number of workplaces with hazardous working conditions was reduced from 63% to 48% during the period of 2013-2015 mainly due to modernization of equipment and automatization of processes. The company carries out medical examination of employees at the time of entry on job and after that repeats the health examinations on a regular basis scheduled according to specific working conditions.

In compliance with the requirements of previous investments Astarta enhanced its management of risks associated with pesticide and fertilizer handling by development of pest management procedures, training employees to safely use pesticides using the information contained within MSDS (material safety data sheet) and/or ICSCs (international chemical safety cards). Staff involved in operations with specific pesticides undergo regular medical examination and their rotation is ensured to avoid chronic exposures.

Incidents in relation to the company activities are recorded, investigated and reported. In 2015 two fatalities occurred at Astarta’s agrifirms: one fatality occurred due to unauthorized use of lifting boom during autoloader repairing works; and the another case occurred due angioedema caused by hornet`s bite. Investigations reports have been shared with IFC and corrective actions have been implemented. OHS safety performance showed 7, 11 and 11 Lost Day Accidents (LDA) in 2013, 2014 and 2015 respectively. In order to improve incidents statistics the company has undertaken the following measures: a facility’s OHS performance was set as KPI for plant managers; a series of events aimed to enhance staff capacity and OHS culture and strengthen OHS control have been planned for 2016, such as OHS training, communication of lessons learnt to all Astarta’s facilities (accident description, measures to prevent similar accidents in the future, control of implemented measures) and etc. Going forward, the company will continue improvement of its OHS management system and practices. Particularly, Astarta will incorporate root cause analysis into its incident investigation procedure as per ESAP #1.

Resource Efficiency and Energy and Material Efficiency Projects

Since 2013 Astarta has implemented a modernization and best available technologies (BAT) program (2013-2016) aimed at reducing resource and energy consumption and introducing BATs. The modernization and BAT program covers the following aspects: reduction of fresh water use; energy efficiency; waste minimization; emissions reduction and pollution prevention; and biodiversity protection. As a result of this program reduction of water, electricity and gas consumption per ton of sugar produced has been achieved. Significant improvements were made at Narkevychi (reduction of water consumption of 50%) and Zhdanovka (20% reduction in water use) sugar plants. Consumption of natural gas per ton of sugar beet processed reduced by 7% in 2015 owing to modernization and energy saving programs, as well as the utilization of alternative energy sources, including biogas.

As a part of IFC’s previous investment the bioenergy complex was constructed and put into operation in Globino. In 2015, biogas replaced 50% and 90% of total gas consumption at the Globino sugar plant and the Soybean processing plant, respectively.

Going forward Astarta plans to develop the modernization and BAT program for the next period of 2016-2020 and to continue implementing E&S improvements.

Air Emissions

Impacts from air emissions are mitigated by capturing dust in the aspiration system and cyclones. Solvent vapors from the oil extraction process are absorbed in a mineral oil scrubber, condensed and returned to the process. According to provided monitoring data air emissions from production facilities are compliant to national and WBG limits.

Wastewater Treatment

Effluents with high concentrations of organics from agrifarms are collected in closed drainage systems and discharged to sedimentation ponds. The solid residue is temporary stockpiled on the special on-site concrete-enveloped area and then is used as organic fertilizer depending on seasonal conditions. Manure spreading is carried out when the plants can utilize the fertilizer value, therefore run off risk associated with the animal waste is unlikely.

Liquid effluents from sugar plant’s go through on-site treatment facilities and discharge to drainage fields, without discharge to surface waters. The company conducts wastewater monitoring and monitoring of surface water near sugar plants on a regular basis and their quality is compliant to the national limits and the WBG EHS Guidelines.

The company, as a part of the ESAP for IFC project #35536, will develop a corrective action plan for improvement of sugar plants’ wastewater systems to increase efficiency of water resources consumption and reduce areas occupied by drainage fields. The company has already conducted research to investigate opportunities to improve water consumption at Globino facilities (sugar plant, soybean processing plant and bioenergy production plant) and started developing the conce
pt for implementation of closed-loop water-recycling system, that will allow them to reduce fresh water consumption (target -50%), increase wastewater reuse and reduce water discharge.

Solid Waste Management

Solid wastes are delivered to a local landfill; the granulated soya coat is used as animal feed or burned in the boiler of the biogas facility. Organic wastes from crop cultivation are used for cattle feeding and by turn cattle manure is used for soil fertilizing. Hazardous wastes (used luminescent lamps and chemicals from a laboratory) are segregated and removed from the site by licensed and authorized contractors for further recycling and disposal. Hexane solvent is unloaded to a specially designed station and stored in underground tanks designed for safe storage of flammable petroleum products.

Hazardous Materials

As a part of previous IFC investment Astarta adopted a program for gradual replacement of asbestos containing materials (ACMs) by 2020 and polychlorinated biphenyls (PCBs) and ozone depleting substances (ODSs) by 2018 at all its facilities. The company consistently implements the developed program. The risks associated with handling of ACMs and its disposal were addressed through ESAP developed for the previous IFC project #30830 and included: development of safety procedures and training programs for personnel handling ACMs; provision of adequate PPE to employees and ensuring of proper disposal of dismantled ACMs .

Pesticide Use and Management



Astarta has integrated pest management program (IPM) developed as a part of ESAP for the previous project #30830. The IPM program includes crop management practices, insect/disease monitoring, pest/disease ecology, biological control, and other control components. The special scientific unit is responsible for IPM implementation and ongoing investigation of efficient measures for pest control, such as selection of pest resistant seeds, combination of agro-technical methods (crop rotation, soil pest control and etc.), as well as alternatives to pesticides use (such as introduction of less toxic and more effective crop protection chemicals and etc).

Astarta follows its Policy statement committing to not using WHO Class Ia/Ib chemical formulations. Norms for pesticides application, routine monitoring and agriproduct’s quality control is conducted regularly by Astarta’s specialized laboratories.

Astarta has implemented a management system in accordance with the international standard FSSC 22000 (food safety). As a part of the ESAP for IFC’s project #35536 the company is conducting studies of drug and pesticide residues in milk to assess their compliance to maximum residue limits (MRLs) for veterinary drugs and pesticides recommended by the World Health Organization (WHO) and Food and Agriculture Organization of the United Nations (FAO). Corrective action plan will be developed based on the obtained results.

Security Personnel

Security to Astarta’s offices and facilities is provided by a private security agency which is licensed and has staff trained according to the relevant national legal requirements. Moreover, security guards are trained to act in case of emergency and in aiding and do not carry fire arms.

Astarta follows its commitment to voluntary international initiative for Round Table on Responsible Soy (RTRS) aimed to sustainable use of natural resources for soybean growing. A plan for gradual implementation of RTRS principles covers measures for cultivation on areas, which are not native forest, conservation of high conservation value areas, maintaining and safeguarding of biodiversity and ecosystem services, and other matters.

Communications with stakeholders are covered by the corporate standard “Management of external relation of Astarta” which includes identification of stakeholders and various ways of communications, handling and response to enquiries in line with PS1. Consultations and meetings with local authorities and small land owners to introduce Astarta plans and discuss land owner concerns are arranged by the company’s representatives. The company maintains this approach in the areas of its operations through regular community consultations and meetings. Disclosure of E&S information about new projects and developments is carried out by the company through publications in local newspapers and public consultations and as a part of the EIA process. Also EHS information available on Astarta-Visnik newspaper and local newspapers of the Agro firms. The company discloses general information on business activities, E&S performance and plans through its web sites: http://www.astartakiev.com/en/slaider-na-glavnoi/vysokaja-socialnaja-otvetstvennost.htm.
Grievance mechanism for affected communities is represented by the tools: the boxes for proposals, “hot line”, feedback option on corporate website. Grievance mechanism is a part of the corporate standard “Management of external relations”. The standard covers the following procedures: stakeholder engagement, the order of reporting and informing, state inspections and audits, relations with the community, grievances redress, propositions and requests. As per information provided, no grievances regarding EHS issues were obtained during the last year.

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Upgrade corporate incidents investigation procedure by incorporating of root cause analysis in accordance with internationally recognized standards aimed to reveal the origin of incidents causes and to improve risk management.	04/30/2017
Perform studies to confirm that drug and pesticide residues in milk meet maximum residue limits (MRLs) for veterinary drugs and pesticides recommended by the World Health Organization (WHO) and Food and Agriculture Organization of the United Nations (FAO) and undertake corrective actions, if needed to comply with MRLs.	07/30/2016
Develop an Action Plan to achieve MRLs for veterinary drugs and pesticides in milk	07/30/2017