The proposed expansion will be located within the existing Renova site, therefore PS5 – Land Acquisition and Involuntary Resettlement is not applicable to the project. During the appraisal, it was confirmed that the land was acquired by OMHSA in 2008 through a willing seller / willing buyer situation and following the regulatory requirements in Argentina. As the facility is located in an area zoned as industrial and agricultural, PS6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources is also not applicable. PS7 – Indigenous Peoples and PS8 – Cultural Heritage have also not been identified at the project site and are therefore not applicable either. In the event that issues anticipated by these Performance Standards arise, Renova will promptly inform IFC.                                          

           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).

The main environmental and social risks and impacts associated with this project include food safety management; solvent and dust emissions; resource efficiency; assurance of fair, safe and healthy working conditions for all workers during construction and operations; and management of community health and safety due to intensive road traffic movements.

Environmental and Social Assessment and Management System: The facility has developed an integrated management system covering environmental, health and safety, food safety, social responsibility and quality aspects of its operations. The system is based on the international framework of ISO 9001, ISO 14001, OHSAS 18001 as well as SA 8000, and is certified for OHSAS 18001. In addition, Renova holds the following certifications: SENASA (Argentine regulator on food safety); International Port Security Standard; GMP +; HACCP; KOSHER; HALAL.

Policy: The Company has established an overarching policy that defines its environmental and social objectives and provides a framework for the assessment and management of risks and impacts as part of their integrated management system. The Policy will be available on its website (http://www.renova.com.ar/planta.php) and is posted throughout its operations.

Identification of Risks and Impacts: An identification and classification of environmental, and occupational health and safety risks was completed in line with Argentine regulations. Renova has documented procedures to address risks associated with internal operations, and actions are designed to prioritize avoidance rather than risk minimization or mitigation. Internal risk identification is reviewed annually and when introducing a new technology or expansion. Concerns raised in the risk identification process are assessed to develop plans for compliance either through mitigation measures such as contracting external staff to oversee EHS during construction, engineering controls, or use of Personal Protection Equipment (PPE). However, the risk management system requires better identification of risks and impacts that could extend beyond the site perimeter. These assessments are planned and will be completed in the next two months; regardless, it is addressed in the ESAP. For the expansion two Environmental Impact Assessments (EIA) need to be developed: one for the port and storage expansion (completed) and one for the third production line. For the EIA covering the port and storage expansion a provisional permit has been granted based on the environmental management plan (EMP) included in the EIA.  The authorities undertake regular inspections to check that the EMP is followed during construction. The EIA for the third production line is currently being developed and will be submitted to the authorities in March 2017.

Management Programs: The regulatory required EIAs include the development of an EMP to manage impacts during construction and these plans are made part of the integrated management system. For the operational phase the existing risk assessments will be updated to include the expansion and any new activities.

Organizational Capacity and Competency: Renova has specialized and experienced staff covering environment, occupational health and safety, and quality who are responsible for managing EHS at the facility. There are regular meetings with management on the EHS performance against set KPIs and budgets are allocated where needed.

Training: Training employees in the company’s EHS values, policies and procedures is an integral part of Renova operations. It includes mandatory EHS induction for all staff and contractor’s before starting work at the facility.

Emergency Preparedness and Response: Renova has developed and implemented emergency preparedness and response plans, in accordance with local OHS legal standards and OHSAS 18001 requirements, which cover risks due to fire and explosion as well numerous other hazards. Drills are being held six times a year and include different shifts and parts of the operations. However, the emergency preparedness and response planning accounts only for within-the-site emergencies and does not include provision for external emergency management, external communication channels (with local emergency agencies, for example), or training plans, or continuous improvement of these. Furthermore, construction contractors on site are not participating in the drills. Renova will update the procedure to ensure that contractors are included in the next drill and for the duration of the construction period. The provision for external emergency management, external communication channels (with local emergency agencies, for example), or training plans; and the procedure for drills to be updated are addressed in the ESAP.

Stakeholder Engagement: The company does not have a stakeholder engagement program as per Performance Standard 1, but interacts with the neighboring crushing facilities and power plant as well as with communities where and when needed in a pro-active manner. Visitors from the communities (the nearest being approximately 7 km from the plant) are welcome and the company  also receives school and college excursions. There is a documented procedure on this in relation to Renova’s social responsibility activities. 

External Communications and Grievance Mechanisms: The company has a website that includes contact details for third parties. They receive on average ten requests a year concerning commercial and job enquiries. The website does not include a reference how to lodge any grievances. It has been agreed that a section will be added inviting the public to share any concerns they may have with the company and how these will be dealt with.

Monitoring and Review:  Environmental and social parameters such as noise and air emissions, wastes, effluent quality and OHS incidents are monitored by Renova as per regulatory requirements and in conformance to their self-imposed integrated management system. Monitoring thresholds were found to be consistent with those referenced in the IFC EHS Guidelines for vegetable oil production and processing. Periodic reporting of progress and monitoring results are made to and reviewed by senior management.  Concerning OHS issues, a joint health and safety committee (required by provincial legislation), meets monthly with the HR manager and managers from different departments. The committee examines, evaluates and approves proposals for improving working conditions, effectively improving the quality of the working environment and the safety of operations In addition, an annual monitoring report will be submitted to IFC to enable on-going review of performance.

        Supply Chain:    With regard to soybeans supply chain Renova receives soybeans from farming operations in Argentina, but will also be able to receive soybeans from Paraguay, via the barge terminal, as of 2018. The shareholders OMHSA and Vicentin deliver their soybeans to Renova for crushing under a tolling agreement. This means that Renova has no control or influence over the origin of the soybeans. Therefore it was concluded that the supply chain requirements of PS 6 and PS 2 do not apply to the Renova operations. However given the known risks in the soybean supply chain in Latin America, the procurement process of both shareholders were reviewed to assess traceability of their soybeans and whether these soybeans are certified for both biomass and biofuel when exported to the EU and US. For the EU this will be done under the ISCC certification and for the US under the US EPA certification.

In general, soybeans procured in Argentina originate mainly from the region called "Zona Nucleo", which has soy production systems characterized by large farming enterprises (Estancias), no forests (no risk of deforestation), fully mechanized (no risk of child labor), and using the best available agricultural technologies. Soybean procurement origins comprise also the Chaco region at large where significant deforestation takes place (Chaco region includes: Central and West of Formosa, West of Chaco (Province), East Salta, and North East of Santiago del Estero Province/Department of Moreno).  Soybean procurement origins in Paraguay could come from the Western Chaco that is also under threat of deforestation.

With the proposed lowering of the taxes on soy export in Argentina to 18% by the end of 2019, it is expected that total production of home-grown soybeans will increase to 60-70 million MT/year. It is expected that this increase will be reached through yield increases and using existing agricultural land, rather than more land conversion.

Both shareholders indicated that as a rule they only source their soybeans from three provinces: Santa Fe, Cordoba and Buenos Aires in the so-called “Zona Nucleo”. If other areas serve as origins, the percentage of supply from these areas is very small (e.g. reference was made to sourcing 2% of the supply from northern Argentina in 2016.) Furthermore, they both request the soybeans they source to be certified and therefore traceable. This has to be proven with documents that include photos from the farms. In 2016, a law was introduced in Argentina that requires all soybeans to be traceable whether certified or not.

With regards to soybeans from Paraguay, a ‘roundtable’ was recently organized involving the largest crushers, SENASA (Argentine regulator on food safety) and Control Union (involved in certification of commodities) to discuss traceability of sustainable beans. It was agreed that as of the 2018 harvest (February – March), SENASA will control the import of soybeans from Paraguay not only for phyto-sanitation purposes, but also on sustainability i.e. traceability. The rules are expected to be very strict.

Human Resources Policies and Procedures: Currently, Renova has approximately 390 employees; after the expansion they plan to have 240 employees more. There are four shifts per day and the facility operates seven days a week.

The Corporate Human Resources (HR) department is run by HR professionals and the HR policies and procedures include those that define work ethics, training needs, provision of medical services, medical insurance, transport, provision of meals and a food basket once a month. As the HR policies and procedures are also based on the SA 8000 requirements they address child and forced labor, OHS, non-discrimination and equal opportunity and remuneration. The minimum employment age is 18 and child labor and forced labor are forbidden within their direct operations and those of suppliers and/or contractors. Salaries paid are above the average for the different categories as defined by the national labor law. Written contracts provided to permanent staff define terms of employment consistent with national labor law, including hours of work, wages and benefits, leave for illness, maternity, vacation or holiday, etc. Freedom of association to join a trade union (i.e. San Lorenzo oil union (SOEA)) is guaranteed at the Renova operations, following Argentina’s national labor law. The company actively engages workers representatives in HR matters as well as EHS. The Company does not envisage any retrenchment in the near future.  Currently the turnover rate is <1%.

Grievance Mechanism: The Renova HR Manual includes a procedure for reporting and resolving grievances. The grievance mechanism (GM) is accessible to all staff members. Contractors should have their own GM, but if needed the company could interfere. For this Renova will make the GM available to contractor employees. During appraisal it was established that the procedure does not include the option of anonymous reporting of grievances. It was agreed that this will be added and communicated to all staff members and third parties. This is addressed in the ESAP.

Occupational Health and Safety: OHS plans and procedures are part of the integrated management system and are based on Argentine OHS regulations, Glencore OHS procedures and OHSAS 18001 requirements.  A high level of safety awareness and compliance with the procedures was observed during the site visit by both Renova employees and construction contractors. This was confirmed by workers interviews, which included a union representative. It was stated that they receive proper safety training for both regular operations as well emergency situations and that they are actively involved in continuously OHS improvements at the facility. Renova tracks all accidents and incidents, including near misses and undertakes root cause analysis involving supervisors and workers to define corrective actions. Where needed procedures are updated and employees retrained. The Lost Time Injury Frequency Rate (LTIFR) based on one million hours worked for 2016 is 12.5, which is above the US benchmark for the sector with an LTIFR of 5.5. Comparing the company’s LTIFR to the 2015 Argentine benchmark of 75.6 it is well below. The lost time days are based on one serious lost time accident which occurred in 2011 for which adequate measures have been taken to prevent reoccurrence. However, the worker still has medical issues due to this accident. 

Workers Engaged by Third Parties: During construction the number of contractors will fluctuate. Currently, there about 600 contractor workers from 30 different companies on site. For the construction of the third production line there will be between 1,000 and 1,500 contractor workers onsite.  All contractors will have to meet the Renova safety rules and have to demonstrate that their employees are trained as per Argentine OHS regulations. A high safety awareness visible in wearing PPE and safety measures taken in the construction areas were noted during the site visit. Renova has hired a third party (5 people) to oversee the construction works from an OHS perspective. They report to the Renova OHS manager.

Supply Chain: Given the fact that Renova provides a tolling service for the shareholders they have no control or influence over the suppliers of their shareholders. Supply chain is addressed as a  contextual risk under PS 1.

The main environmental risks associated with the Renova operations are related to use of solvent (to extract oils), dust and noise emissions from the crushing and road and water transport of raw materials and finished goods. The expansion of the port does not require dredging of the river. No maintenance dredging has been undertaken since the construction of the port in 2013. Dust can either cause a nuisance to close-by neighbors or create the risk of explosions or fires if allowed to build up in an uncontrolled way. The Renova facility is built to state-of-the-art standards for dust emission control through filtered ventilation and transport systems; these are well maintained and cleaned regularly to prevent any of the potential dust related problems. For the onsite transport of beans and grains from the barge terminal a new system of a pipe belt will be introduced.  This is a closed system that does not require dust filters and as an added feature it saves energy. To avoid exposure to noise levels above 80 dBA all equipment is, and will be, placed inside the production building.

Resource Efficiency:  Energy is used for the crushing processes as well as the running of the administrative offices and auxiliary facilities. This is generated onsite by a co-generation power plant.  There are two boilers that generate 140 ton steam/hour each and a turbine of 30 MWh. The fuel source is natural gas mostly and light fuel oil (with max 0.5% content of Sulphur) as a backup. On the south side of the Renova facility the Albanesi Group (a private energy company) is building a 170 MW power plant. High energy exhaust gases will be generated as part of that facility; these will be channeled to the Renova facility where they will be used to generate steam and electricity. Some additional steam will still have to be generated by Renova for the third line for which the company will continue to use their own co-generation power plant.

Water: The water is taken from the river and used in the crushing process, sanitary use and for firefighting. The process water is pretreated in two steps: clarification and demineralization. Renova abstracts 2.1 million m³/month and this is metered. No abstraction permits are required.

Pollution Prevention:  Air emissions and noise emissions are generated primarily by the boilers, traffic movements, unloading raw materials and the crushing process. Emissions are monitored as part of Renova’s monitoring and review process. Measured emissions meet the regulatory standards and limits and the IFC EHS Guidelines for vegetable oil production and processing. 

Wastewater Treatment: There is an on-site treatment facility with a capacity of 50 - 60 m³/hour. The treatment consists of a biological component and sedimentation tanks. The effluent is discharged to the river. The following parameters are monitored: BOD, COD, temperature, pH and TSS. Monthly reports are being sent to the Provincial authorities. Review of the reports demonstrated compliance with the regulatory limits as well as the IFC EHS Guidelines for vegetable oil production and processing.

Solid Waste Management: Domestic waste – waste such as plastic and paper is collected in separate containers and are disposed of in line with the Argentine regulations. There is no waste from the crushing process as all parts have a value; meal, oil and the hulls which are pelletized and sold as animal feed.

Community Health and Safety: As previously mentioned, the closest community is approximately 7 km away. The potential community health and safety impacts associated with Renova’s operations include emergency preparedness and road traffic management.  The vessel traffic on the river is strictly controlled by the National Directorate for Harbours and Navigable Ways. As indicated under Performance Standard 1, the emergency preparedness and response plan will included any emergencies that could go beyond the facility perimeter.

The road transport of raw materials (with on average 1,500 trucks/day after the expansion) is a safety risk to communities located on ruta N11 (the closest main road to the facility.) After leaving ruta N11, the last 3 km consists of an unpaved dusty road.  Renova, in cooperation with the other adjacent crushing plants, had this road built and are now in discussion with the national and provincial authorities to tarmac the road and have a connection directly from ruta N11 which will bypass communities. This is part of a masterplan for the Santa Fe province, which also include the development of a railway line to the Renova facility. With the completion of such a railway line, 10 - 20% of the crushing capacity of the plant will arrive by rail.

Security Personnel: Renova has its own security staff (9 guards) to control access as well a contractor that controls (23 guards) the perimeter of the facility. None of the security staff carry weapons. In case of an incident the police is called to the site.

External Communications and Grievance Mechanisms

The EIAs do not cover communication/ stakeholder engagement undertaken during the study as this was not a requirement. Furthermore, Renova stated that the EIAs are confidential documents as they contain business sensitive information.

As part of the ESMS, the company will develop and implement a grievance mechanism commensurate to the risks and adverse impacts of its operations to receive, record and when appropriate facilitate resolution of identified concerns and grievances. The Renova website will include a reference on to whom and how concerns and grievances can be submitted to the Renova.

Contact Person: Gastón Suarez

Company Name: Renova S.A.

Address: Brigadier López 10500 – 2204 Timbúes – Santa Fe - Argentina

Email: gsuarez@renova.com.ar

Phone: +54 (03476) 686900