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
PS5: Land Acquisition and Involuntary Resettlement does not apply because GLG does not own farmland for grain production, but rather leases assets that are owned by third parties and GLG provides services and inputs to them. These lands are lands long used for agricultural purposes, i.e. they are not inhabited, and those having title to them willingly enter in lease agreements with GLG under prevailing market conditions and prices.

PS6-PS8 do not apply as GLG leases farmlands located in areas that were converted to farmland many decades ago and are considered traditional agricultural land in Argentina. Prior to entering into lease agreements, GLG conducts E&S screening of properties to ensure that the lands are not in legally protected areas, indigenous lands or near cultural heritage sites.

According to IFC’s Policy on Social and Environmental Sustainability, this is a category B project because potential adverse environmental and social risks are few in number, generally site specific and can be addressed through mitigation measures.

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. According to IFC’s Policy on Social and Environmental Sustainability, this is a category B project because potential adverse environmental and social risks are few in number, generally site specific and can be addressed through mitigation measures. Potential E&S risks and impacts may include use of natural resources (especially water and soil), generation of solid and liquid wastes, hazardous material management, and both physical and chemical occupational health and safety hazards.

Environmental and Social Assessment and Management System

GLG operates two main business divisions, AgFood and Agrofina. AgFood is responsible for all operations related to agricultural production, grain storage, trading, agricultural inputs distribution and milling. Agrofina operates a facility crop protection synthesis / formulation and a research and development (R&D) laboratory. Both divisions have implemented environmental and social management systems (ESMS) that are based on ISO 14001, which allow the companies to identify and manage E&S risks and impacts. The companies have external support of specialized consultants who ensure their operations remain current with regard to legal, environmental, health and safety requirements. Existing facilities have valid licenses and authorizations or have applied for the necessary permits and authorizations. Environmental and social impact assessments (ESIA) have been prepared and submitted to agencies in accordance with local requirements. E&S policies and procedures are readily available through the divisions’ intranet and procedures and plans are updated on an annual basis, or as needed, to reflect new and emerging regulatory requirements.



Policy

GLG has implemented a comprehensive corporate social responsibility policy that defines the environmental and social objectives and principles that guide the group to achieve sound environmental and social performance. This corporate E&S policy applies to all divisions of the group, employees, contractors and suppliers. The implementation of the corporate E&S policy is supported by many other policies, procedures and international initiatives, including: Global Compact, code of ethics, conflict resolution policy, sustainability reporting, quality policy, training and career development policy, community relation policy; environmental policy, occupational health and safety policy, among other corporate policies.



Identification of Risks and Impacts

The identification process of E&S risks and impacts has been primarily driven by regulatory requirements, but over the past two years Agrofina and AgFood have also included risks associated with emerging issues, including efficient use of natural resources. Identification of risks and impacts is conducted by the integrated E&S team, which consists of E&S staff and qualified external consultants who have supported the companies for many years. The companies have conducted evaluation of facilities’ regulatory compliance and have developed corrective action plans to achieve full regulatory compliance with in-country requirements. Prior to entry into new lease agreements, an environmental screening is conducted to ensure that the property is not located within legally protected areas or in sensitive habitat. For facilities that were acquired, such as the Chivilcoy mill, the company identified impacts on the adjacent communities, such as noise and traffic impacts, and implemented measures to address these i
mpacts. As part of this IFC investment, ESAP item #1 will require that the process of identification of risks and impacts be improved to identify, if any, potential E&S liabilities, risks and impacts associated with older facilities. The process will focus on potential E&S liabilities, risks and impacts, which may include contaminated soils/groundwater, the presence of asbestos-containing materials, indoor air quality, truck traffic, among others. If environmental E&S liabilities, risks or impacts are identified, the company will agree upon a time-bound plan with IFC to address the findings.



Management Programs

The divisions of GLG have developed and implemented ESMS consistent with ISO 14001, which include E&S policies, plans and procedures for the proper management and monitoring of risks and impacts inherent to GLG’s operations. Social and environmental performance indicators have been developed and are compiled, analyzed and shared with senior management. Main environmental management programs include solid waste management, air emissions and ambient air quality, ambient noise levels, soil quality, energy and water consumption, groundwater monitoring, and hazardous material management.



Organizational Capacity and Competency

There are designated E&S teams at Agrofina and AgFood who are responsible for the overall implementation of the E&S management programs and reporting to Argentine authorities and to senior management at each division. Each E&S team is supported by external consultants who serve as extension of the E&S teams. The external consultants are responsible for the monitoring programs and for the compilation of results that are used to assess the companies’ E&S performance and in-country compliance. The agricultural activities conducted on leased properties by contractors are managed by a team of field supervisors, technicians and internal auditors who work in close coordination with contractors to ensure the implementation of good practices. Overall, the companies’ E&S teams and respective external consultants were considered competent and committed to their functions.



Emergency Preparedness and Response

At each facility, there are emergency response and contingency plans that are implemented by emergency response brigades. The companies conduct annual drills in coordination with local fire departments and use observations to improve their emergency response practices. Agrofina reports that the company is in the first stage of execution of the three-year plan (2017/18 to 2019/20) of investments to adapt its fire protection system at the Zarate Plant to comply with the codes and requirements of the Argentine Republic. Agrofina has a trained emergency brigade, personal protective equipment and fire extinguishers. A budget has been allocated for the construction of the fire protection system. The Chivilcoy mill and the grain storage facilities hold permits from the local fire department and conduct annual drills in c
onjunction with the local fire department. The divisions of GLG hold contracts with emergency response during transport of hazardous materials. As part of this IFC investment, included in ESAP item #2, the fire protection systems of all facilities shall be audited/inspected to ensure full compliance with in-country requirements and alignment with IFC Performance Standards. If gaps with in-country regulations or with requirements of the IFC Performance Standards are identified, the company will agree upon a time-bound plan with IFC to address such gaps.



Monitoring and Review

Environmental monitoring programs include stationary sources of air emissions, fugitive air emissions, soil quality, effluent quality, groundwater quality, and ambient noise. Results are compiled, analyzed and reviewed by the senior management. In addition, in accordance with Argentine requirements, results of environmental monitoring programs are compiled and submitted to local authorities at frequencies established by regulations and conditions of the environmental licenses and authorizations.

Working Conditions and Management of Worker Relationship

GLG’s direct employees include 250 workers at Agrofina and 450 at AgFood. At the corporate level, GLG has many HR policies that cover information regarding salary and benefits (e.g., medical, death and disability insurances, vacation, bonuses, etc.), induction and training, recruiting criteria, performance evaluation, among others. The Group also has a corporate Code of Ethics that is based on the Global Compact ten principles, including protection of human rights, freedom of association, and elimination of forced labor, child labor and discrimination. GLG has a worker’s grievance mechanism that include various means for workers and contractors to report grievances, including phone number, email (mailto:reports@resguarda.com) and a web-based third party grievance mechanism set up through http://www.resguarda.com. Additionally, GLG has a manual on workers’ conflict resolution, which details how to register and resolve workplace grievances.



Workers’ Organization

In alignment with Argentine labor laws that guarantees workers’ rights to freedom of association, GLG’s workers join unions that pertain to the nature of their jobs. The companies negotiate collective bargaining agreements, which are reviewed once a year mostly regarding salary increases. Representatives from the unions are part of committees that meet regularly to review workplace conditions, training requirements, and occupational health and safety requirements.



Protecting the Work Force

Agrofina does not hire employees under the age of 18 due to the inherent occupational risks associated with the formulation of crop protection products. Other GLG companies, in alignment with Argentine labor laws, provide limited trainee opportunities to youth under the age of 18, who perform non-hazardous activities.



Occupational Health and Safety

GLG’s approach to occupational health and safety (OHS) is similar to the adopted environmental practices, that is, the company conducts regulatory reviews to ensure compliance with in-country regulations, followed by adoption of good industry practices. The companies have OHS management systems that include plans and procedures for the identification and management of occupational risks. Main OHS programs include identification of occupational hazards, engineering controls (e.g., dust control, noise abatement), use of personal protective equipment (PPE), and procedures governing work at heights, confined spaces, ergonomics, and hazardous materials management. Agrofina has adopted the Occupational Safety and Health Organization (OSHA) 3132 procedure for Process Safety Management and has been conducting Hazard and Operability Studies (HAZOP) for most of the processes at the synthesis/formulation plant. The results of the HAZOP are used to improve equipment controls and OHS procedures. The HAZOP work at Agrofina is ongoing. Audits and inspections are conducted by OHS management committees
for the verification of workplace conditions and corrective actions are developed to address identified risks. Similar procedures were observed at the Chivilcoy Mill, where over the past 9 years, efforts have been made to minimize noise level and dust at the workplace as well as ergonomic risks through mechanization of loading/unloading practices, and changes in the size/weight of packages.



Workers Engaged by Third Parties

Grain production in Argentina is not labor intensive since current practices are mechanized and supported by state-of-the-art GIS tools, which result in a small workforce at the farms. GLG has developed contractual clauses that require contractors to comply with Argentine labor laws and has procedures for verification of contractors’ compliance of such requirements. For instance, GLG conducts supervision visits to talk with contractors’ workers and requires evidence of workers’ payment of salary and benefits guaranteed by Argentina labor laws.



Supply Chain

Grains production in Argentina is supervised by GLG as the company works in close coordination with contractors at the leased farms. Potential supply chain risks, as it pertains to labor issues (child or forced labor) and occupational health and safety of workers that might exist in association with primary supply of crop protection manufactured outside of Argentina will be assessed by GLG. In accordance with Action #3 of the ESAP, The company will develop a procedure to assess the current and future absence of forced and child labor and compliance of OHS practices with in-country regulations for top crop protection suppliers and phase out suppliers that are found non-compliant with these requirements. The company will report the results of the assessment through the annual monitoring report (AMR).

Resource Efficiency

Over the past decade, GLG has adopted good industry practices to promote more sustainable crop operations. For instance, GLG is a pioneer and leader in no/low-till agriculture, for which there is consensus of being an efficient farming practice for crop production in Argentina. In Argentina, no-till based farming is recognized to deliver many benefits, including: i) improvement in soil quality and productivity through higher concentration of organic matter (measured as organic carbon) near the soil surface (also minimizing soil erosion risk), ii) higher retention of water in soil for use by crops, iii) higher preservation of micro-biodiversity, iii) reduction in the use of pesticides, fertilizers, and fuel per hectare, and iv) reduction of CO2 emissions. GLG’s farming operations do not include irrigation systems and the company applies crop rotation.



GLG applies AgroEcoIndex, which is a tool for the assessment of environmental indicators in productive fields in the Pampa region of Argentina. This tool was created by the National Institute of Agricultural Technology (INTA in Spanish). Key AgroEcoIndex environmental indicators include nitrogen and phosphorus concentrations, risk of pesticide contamination, risk of soil erosion by water and wind, efficient water consumption, and efficient fossil fuel consumption. GLG also applies GIS-based tools to monitor crop conditions and to optimize production.



Pollution Prevention

In general, IFC observed standard pollution prevention procedures at the GLG facilities visited as part of this project review. Pollution prevention controls such as scrubbers and fabric filters to minimize air pollutants, secondary containment around chemical storage tanks, wastewater treatment, and solid waste management were in evidence. IFC understands that Agrofina is currently constructing a large warehouse with 691 square meters (m2) that will store all raw materials consumed at the plant as well as all the products. This new warehouse will include a fire protection system consistent with in-country codes and IFC Performance Standards. However, until this warehouse is fully constructed and operational, IFC observed that temporary hazardous materials storage practices presented opportunities for improvement. Potential exists for stormwater in the area of temporary storage to overflow onto surrounding areas leading to potential soil and groundwater contamination in the event of a chemical spill coincide with abnormally severe climatic condition (severe rainfall). In addition, the current stormwater drainage system results in any soil erosion around the plant. As part of this IFC investment, included in the ESAP #4 item, GLG will evaluate existing conditions of hazardous material storage areas at Agrofina and at the distribution warehouses to ensure good and consistent hazardous material management in the interim. Agrofina will also evaluate alternatives to improve the stormwater drainage system.



A
ir Emissions and GHG Emissions

Due to the diversified operations by GLG, air emissions are generated from various sources, including grain storage facilities (fugitive particulate matter from grains) and regulated air pollutants from gas-fired dryers and boilers, manufacturing processes at Agrofina, effluent treatment at Agrofina, and from vehicles. As required by Argentine regulations, stationary sources are subjected to annual air emission monitoring. As per conditions of the environmental license, Agrofina monitors the following parameters: sulfuric acid, sulfur dioxide, chloridric acid, benzene, volatile organic compounds, nitrogen oxides, hydrogen sulfide, ammonia, and cyanide. Monitoring results indicate compliance with in-country regulations. Moving forward, as part of this IFC investment, included in ESAP item #5 Agrofina will broaden its existing air emission monitoring activities so as to include all of the parameters presented in the World Bank Group’s Environmental, Health and Safety Guidelines for Pesticide Manufacturing, Formulation and Packaging.



Since 2004, GLG prepares and publishes a sustainability report consistent with the requirements of the Global Reporting Initiative (GRI). Recent total annual GHG emissions are reported at 14.516 tons of CO2eq.



Wastewater Treatment

The generation of wastewater at most facilities (e.g., grain elevators, distribution warehouses, flour mill, and commercial branches) consists mostly of sanitary effluents, which are treated prior to discharge to the environment or discharged to municipal sewer systems. The industrial wastewater stream produced at Agrofina undergoes a spray-dry treatment, which results in the generation of dry wastes that are disposed of at authorized facilities. The air emissions from the spray-dry system are monitored annually, in accordance with local requirements. The uniforms used by staff responsible for formulation and handling of crop protection products are transported to industrial cleaners who have authorization and facilities to handle such uniforms.



Solid Waste Management

GLG manages hazardous and non-hazardous solid wastes in accordance with in-country requirements and good practices. Common non-hazardous solid wastes generated by GLG operations include packaging materials (empty bags of seeds, used silo bags (ground silo), wood pallets and crates, empty bag/containers of fertilizers), paper and cardboard, plastic containers and other domestic wastes. Hazardous wastes include empty containers of pesticides, used oil, rags/soil contaminated with hydrocarbon or other hazardous materials, etc. Solid wastes are segregated and recycled, incinerated, disposed at municipal landfills, or at industrial landfills, in accordance with their properties. Records are maintained of solid waste generated and reported to local authorities.



Hazardous Materials

GLG’s operations include formulation, packing and distribution of crop protection products. At the Agrofi
na plant, temporary hazardous materials storage (outside proper storage areas) and temporary stormwater drainage practices (stormwater drains were temporarily plugged to prevent migration of potentially contaminated stormwater that is in contact with products) could lead to environmental contamination. As described under the “Pollution Prevention” section above, Agrofina is currently building a large warehouse to store all hazardous materials (raw materials and products), which is expected to be completed and operational during 2017. Field observations made during a recent independent audit at the distribution centers indicated opportunities for improvement regarding hazardous materials storage. Thus, as part of this IFC investment, included in ESAP # 4 item, GLG will evaluate the temporary storage conditions of hazardous material storage areas at Agrofina while the warehouse is under construction and will evaluate existing conditions at the distribution warehouses to ensure good and consistent hazardous material management at all facilities operated by GLG.



Pesticide Use and Management

GLG practices integrated pest management (IPM) and uses a combination of techniques to ensure that pesticides are used only after pest monitoring results indicate the need for application, which is then tailored to target the specific organism. GLG’s good IPM practices include pest monitoring prior to targeted application of crop protection products, which is conducted by qualified contractors who undergo training and wear PPE, only use well-maintained equipment and are required to ensure proper handling and disposal of empty containers. Workers undergo annual medical examination for blood cholinesterase to demonstrate no exposure to crop protection products.

GLG has conducted evaluation of crop protection products in accordance with the World Health Organization (WHO) classification and has phased out the use of class Ia (extremely hazardous), and Ib (highly hazardous) crop protection products. During the 2015-2016 harvest season, 36% of the crop protection products used were class IV (unlikely to present acute hazard), 32% were class III (slightly hazardous) and 32% were class II (moderately hazardous). GLG’s soy production is Round Table on Responsible Soy (RTRS) certified and the company reports that the good practices adopted under the RTRS initiative are applied to the production of other crops such as wheat, corn and sunflower. The company will maintain its certification to RTRS or equivalent globally, regionally, or nationally recognized standards that are demonstrated by independent verification or certification.

Community Health and Safety

Of the GLG’s operations, Agrofina is the facility that handles, formulates and store large volumes of hazardous materials. However, the Agrofina facility is located within an industrial district and there are no immediate sensitive receptors nearby. In addition, the Agrofina facility is fenced off so access to the facility is restricted. Stationary and fugitive air emissions are monitored annually to ensure that air pollutants are within national standards. Potential emergency situation such as chemical fire or explosion, would be contained within the limits of the industrial facility. Agrofina as well as the other GLG facilities have trained emergency response brigades and conduct annual drills in coordination with local fire departments and use observations to improve their emergency response practices.

At the AgFood facilities (grain elevators, distribution centers and the Chivilcoy mill), scrubbers and fabric filters area used to control emission of particulate matter and to minimize the potential for fire and explosion. At these facilities, GLG has fire protection systems and conducts drills in coordination with local fire departments. Ambient noise levels are monitored to ensure that nearby residential receptors are not adversely affected by the company’s operations. At the Chivilcoy mill, which was acquired in 2007, AgFood has invested in noise abatement to reduce ambient noise levels. Also at the Chivilcoy mill, the company has developed a traffic plan to minimize truck traffic during peak hours since the facility is adjacent to a middle school and located in the center of the town.



Community Exposure to Disease

GLG employ a relatively small number of workers, 250 at Agrofina and 450 at AgFood, and the majority of the workforce is recruited from the communities where the facilities are located. There is no significant influx of migrant workers. Thus, the risks of community exposure to disease from potential influx of migrant workforce are small.



Security Personnel

Qualified companies are contracted to provide security services at all Agrofina and Ag Foods facilities. Security personnel are unarmed and no conflicts have been reported.

Since 2004, through the Los Grobo Foundation, GLG has focused on initiatives that foster collaboration between private and public entities to promote social investment programs in the fields of education, arts and small business. Such programs are located in the communities where GLG operates. The Foundation has become successful in liaising between private companies, government institutions and communities and provides its services to many national and international companies throughout Argentina.

The Los Grobo Foundation provides a variety of means for external communication with stakeholders, including toll-free number, office address, e-mail address, website links and social media. Similarly, The Los Grobo Group website also offers means for stakeholders report grievances via the http://www.resguarda.com. At the Chivilcoy Mill, which is located in the center of the town and in close proximity to a school, and commercial and residential receptors, the plant manager purports to have an open relationship with the affected community and to monitor noise levels at various residences and establishments. However, IFC was not able to identify a formal stakeholder engagement plan to guide community relations and coordination in case of an emergency. As part of this IFC investment, included in ESAP # 6 item, GLG will map all stakeholders at/near each of its sites, including an identification of how the company’s operations might affect each group and develop a Stakeholder Engagement Plan (SEP) for each facility.

Grupo Los Grobo
Ruta 5 km. 309,
Casillla de Correo 188, B6530CFD,
Carlos Casares, Provincia de Buenos Aires, Argentina
Telephone: +54-2395-45-9000
Email: mailto:losgrobo@losgrobo.com
http://www.losgrobo.com.ar

Broad Community Support is not applicable for this project

Los Grobo Equity(38193) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
1.0 - Identification of Risks and Impacts: Improve process to identify potential environmental liabilities (e.g. contaminated soils/groundwater, the presence of asbestos-containing materials, indoor air quality, noise, truck traffic etcetera), specifically but not solely associated with older facilities. Share the results of the liabilities, risk and impact identification evaluations with IFC. The company will subsequently agree upon a time-bound plan with IFC to address identified environmental liabilities.	30-Sep-2017	Completed	Completed	2/15/2021
2.0 - Emergency Preparedness and Response Audit/inspect the fire protection systems of all facilities –undertaken by qualified auditors - to ensure full compliance with in-country requirements and alignment with IFC Performancel standards.	31-Jul-2019	Completed	Completed	6/30/2022
3 - Supply Chain: The company will develop a procedure to assess the current and future absence of forced and child labor and compliance of OHS practices with in-country regulations for top crop protection suppliers and phase out suppliers that are found non-compliant with these requirements. The company will report the results of the assessment through the annual monitoring report (AMR).	31-Oct-2017	Completed	Completed	3/31/2023
4.0 - Pollution Prevention: Evaluate and improve hazardous material storage areas at Agrofina and at the distribution warehouses to ensure good and consistent hazardous material management. Evaluate and potentially Improve the storm water drainage system for Agrofina	31-Aug-2017	Completed	Completed	6/30/2022
5.0 Air Emissions: Improve air emission monitoring at Agrofina by including all of the parameters presented in the World Bank Group’s Environmental, Health and Safety Guidelines for Pesticide Manufacturing, Formulation and Packaging	31-Aug-2017	Completed	Completed	12/29/2017
6.0 - Stakeholder Mapping/Analysis and Stakeholder Engagement Plans: Map all stakeholders at/near each of its sites, including an identification of how its operations might affect each group and develop a Stakeholder Engagement Plan (SEP) for each facility	30-Sep-2017	Completed	Completed	1/31/2019