PS5 Land Acquisition and Involuntary Resettlement, PS7 Indigenous People and PS8 Cultural Heritage are not expected to apply to this project for the following reasons: although the company leases land for sugar cane plantations and also owns land, no involuntary resettlement was identified during appraisal and all future land leasing for sugarcane plantations will be under market based transactions on existing agriculture or pastureland areas. A first go/no go check is applied to determine whether the owner or lessee holds the land title deed; only when this has been established does the transaction proceed. No Indigenous People areas or cultural heritage was encountered during the course of appraisal and assessment of this project as most of the company’s facilities and plantations are located on existing consolidated areas of agriculture production.

This Project has been classified as Category B according to IFC’s E&S Sustainability Policy. The Project’s principal E&S risks and impacts are associated with existing sugar, ethanol and energy production activities in Brazil.  Key E&S risks and impacts from this project are: biodiversity loss and offset (requiring compliance with Brazilian Legal Reservation and Permanent Protected Areas requirements); wastewater (vinasse) treatment and discharge; air emissions from boilers; health (employees and communities) issues related to agrichemical exposure; OHS risk prevention and management; life and fire safety; neighboring and community engagement. These risks and impacts can be readily addressed through well-established mitigation measures.

Environmental and Social Assessment and Management System: Jalles Machado has an integrated management system covering quality, environment, fair trade, food security, logistics, labor and occupational health aspects of its agricultural and industrial operations. The system is based on the international framework of ISO 9001, and ISO 14001 for which the company also holds the certifications. In addition, Jalles Machado holds the following certifications: Good Management Practices B2 Plus: Production of Feed Ingredients (GMP + B2 Plus); Food Safety System Certification 22000 (FSSC22000); KOSHER; HALAL; Fair Trade; non-Genetically Modified Organism (non-GMO); several organic certifications and a national certification of no child labor (Abrinq Foundation). The company is in the process of obtaining the Bonsucro (certification to promote sustainable sugar cane products) and ISO 45001 (which is replacing the occupational health and safety standard known as OHSAS 18001) certification. Both will become part of the integrated management system. On its website, the company presents their environmental and social policy, an overview of their environmental and social responsibility programs and all certifications it holds (http://www.jallesmachado.com/en/home/).

Policy: Jalles Machado has a written policy as part of the integrated management system stating its commitment to ensure the satisfaction of shareholders and their clients; to value people by promoting and integrating them; respect the environment, prevent pollution; to comply with current legislation and applicable regulatory requirements; and to seek continuous improvement of performance. In addition, a Director’s commitment is included stating that management of Jalles Machado is committed to development and improvement, ensuring that there is communication at all levels, on the importance of meeting the requirements of the customer, as well as regulatory and legal requirements; the establishment of the policies on quality, food safety, security in the value chain, logistics, environment, occupational health and safety at work and its objectives and goals by conducting critical analyzes; and provision of the necessary resources. The integrated ESMS policy is linked to specific objectives and targets with respective performance indicators.

Identification of Risks and Impacts: the company identifies material impacts and risks from its operations, including air emissions, effluents, solids waste and main OHS risks under a Risk Prevention Plan (Plano de Prevenção de Riscos Ambientais – PPRA) required under Brazilian regulations. The Jalles Machado sugar mill was built in 1981 before the existence of environmental regulations and ESIA requirements in Brazil, but for the Otavio Lage plant, operational since 2011, a full ESIA process according to Brazilian environmental licensing requirements was completed. For the proposed increase of capacity of the aforementioned project at Otavio Lage and plantations, an ESIA is not required as the regulatory threshold of 30% is not exceeded (the proposed capacity increase being no more than 20%.)

Management Programs: Jalles Machado develops Environmental and Social Management Programs to avoid, control and mitigate identified impacts of their operations, per the environmental licenses and integrated ESMS with a focus on continuous improvement.  These plans include monitoring and management programs for waste streams; air quality monitoring, vinasse application program, fauna and flora monitoring, traffic safety and control, environmental monitoring of field/agricultural activities; monitoring of erosion process, among others. The company has adopted policies and procedures to manage human resources and OHS matters related to its own activities and contracted works including, among others, OHS programs required under Brazilian law, such as a Risk Prevention Plan (Plano de Prevenção de Riscos Ambientais – PPRA), an Occupational Health Monitoring including medical surveillance tailored to different functions

Organizational Capacity and Competency: At the corporate level, Jalles Machado’s two managers are responsible for sustainability; one for the ESMS, certifications and operational environmental and quality matters and another for OHS matters. While the sustainability manager reports to the COO, OHS comes under the HR manager. Under their supervision there is a dedicated team of staff at each site including an ESMS analyst, environmental analysts, safety engineers, OHS coordinators, nurses and physicians.

Training:  Jalles Machado has training programs that include an EHS induction for new employees and contractors, as well as periodically repeated job-specific and regulatory trainings such as working at heights, working in confined spaces, electrical and pressure vessel safety, work as machine or boiler operators, handling and use of pesticides, etc. Specific procedures and the associated training program for hazardous work are part of the company's mandated procedure for approving hazardous work activities. 

Monitoring and Reporting:  Jalles Machado monitors the main aspects and impacts from its operations included in mandatory monitoring programs as part of provided licenses (surface water quality, fauna and flora, air emissions, aquatic ecosystem, social development, solid wastes generation and disposal, etc.)  as well as for internal indicators such as work-related injuries, water use, and fuel and pesticide consumption. The company has an internal audit team consisting of 75 management system auditors from different functions. They perform cross-audits of the different operations on a monthly basis on 17 different aspects, including regulatory requirements (requisitos legais), as covered by the integrated ESMS. Conformity is reached at a score of 80%. Findings, corrective measures and closure rates are reported to the senior management and are a performance indicator for all management.

Under the mandatory PPRA, OHS exposure to hazardous agents such as noise, dust and heat is monitored annually. The company also has mandatory occupational health monitoring programs in place (PCMSO, or Plano Médico de Controle da Saúde Ocupacional), which include periodic medical surveillance (such as audiometry, eye testing, blood pressure, diabetes and urine and blood testing) to detect any exposure to workplace contaminants or other risks.

On a monthly basis, key EHS performance indicators (resource efficiency, OHS, emergency preparedness, environmental incidents, waste generation, etc.)  are reported to management, which are then discussed during periodic meetings of the Sustainability Committee. The committee consists of directors, the HR manager and Sustainability manager. An analysis of the internal audit findings and corrective measures are also discussed in these meetings of the Sustainability Committee. The company also reports environmental compliance information to the relevant authorities.  Information provided to environmental authorities includes the completion of required actions under the conditions of respective environmental licenses to operate, such as air emissions monitoring from boilers and the transport fleet, wastewater quality and disposal, surface water quality monitoring data, water use permits, compliance with Brazilian biodiversity set asides (reserva legal, in Portuguese), and solid and hazardous wastes management, among others details. 

Working Conditions and Management of Worker Relationship: Jalles Machado workforce comprises approximately 3260 permanent workers. With the mechanization of the planting and harvesting process, cane cutters and other workers involved in heavy manual labor are no longer needed in significant numbers. When the company started to harvest mechanically, cane harvesters were offered a job in the company’s rubber tree plantations. The majority of workforce is hired locally in the city of Goianésia. Approximately 83% of workforce is male and 17% female, which is consistent with this industry/sector. As part of the project, no significant increase of the workforce is expected.

The human resources policies included in the labor manual and practices, clearly articulated and readily available to workers, adhere to all Brazilian legal requirements regarding working conditions and management of the employer-worker relationship. Employees are hired on the basis of clearly communicated contracts, they undergo an induction and training process, and end-of-employment formalities are carried out in a transparent and orderly fashion. Time clocks are biometric and readily accessible to the workforce, and overtime is calculated and paid using this information. Jalles Machado reported paying all employer social security taxes and other legally mandated benefits.

In addition, the company provides a series of benefits that go beyond Brazilian legal requirements including additional health insurance, complementary pension plan, life insurance and dental care. Subsidized meals are provided for all plant workers during working periods, vouchers are provided to rural workers, who bring their own meals to the field. Every two years, the company undertakes an employee satisfaction survey. The results are communicated to all employees and includes a sector benchmark. The following benefits received a high rating: health plan, harvest bonus and pharmacy, the benefits of the provided meals and social club were rated the lowest. Jalles Machado overall scores higher when benchmarked against other companies in Brazil. On identification and commitment with the company they score very high: 95% vs 77%.

Workers’ Organization: Labor rights in Brazil are enshrined in the constitution and the consolidated labor laws (known as Consolidação das Leis do Trabalho, or CLT, in Portuguese), and labor relations are highly regulated under the country's laws and labor practices, including the requirement for most categories of workers to belong to a union. In Jalles Machado’s case, the workforce can belong to one of two unions at each work place depending the nature of the job (e.g., Union of industry/administration or agriculture). Jalles Machado negotiates collective bargaining agreements with the local unions and includes salary increases, profit sharing, overtime bank, and benefits. There are union representatives working at all sites, and they organize internal workers’ committees to participate in the collective bargaining process. 

Human Resources Policies and Procedures: As mentioned above, Jalles Machado has a Labor Manual which references HR specific policies. These policies include workers’ rights and obligations, remuneration, working hours, disciplinary actions, career development, travel benefits Policy, Social Responsibility Policy, internal and external communications, including workers’ grievances, training and education, etc.

Working Conditions and Terms of Employment: Many aspects of the work contract (such as working period, rest period, overtime, annual, sick and maternity leave) are defined by law and under collective bargaining agreements with worker’s unions. The standard working period is 44 hours per week and the daily working period cannot exceed 10hs (overtime included). There are mandatory 1 hour breaks for meals (lunch or dinner) during the day and also 15 minutes breaks. Sick leave is granted but requires a physician assessment/request, and after 15 days of absence, workers are covered by mandatory social security program. There is a national social security system in which both company and workers make monthly mandatory deposits.

Non-discrimination and Equal Opportunity: Although forced/child labor, harassment and discrimination are treated as crimes under Brazilian law, the company also states its views and commitments against such practices in its Code of Conduct. Both the hiring process and the approach to promotion follow well established policies and procedures and are based on merit and competencies; no evidence of discrimination were found during appraisal.

Retrenchment: In November 2016, the company had to lay off 253 employees when droughts resulted in low yields of cane. Brazilian law includes a series of regulations to protect workers in case of retrenchment. This includes National lump-sum program, one-month prior communication of the need to lay someone off, negotiation with unions, and state sponsored unemployment security.   These regulations were followed and comply with the retrenchment requirements of PS 2.  In spring 2017, after conditions had improved, 90% of those laid off were rehired.

Grievance Mechanism: Jalles Machado’s worker grievance system is part of the HR policy as well as the company's Code of Conduct, which applies to all employees. There are three channels for workers to raise complaints: with their line managers, directly through HR personnel, or through email in case there is the need of anonymous complaints.  Complaints raised through this latter channel addressed by the company’s Ombudsperson pass through a fully confidential process under HR supervision/coordination that meets on an as-needed basis and has considerable internal authority to take corrective actions. Jalles Machado has formal records and consolidated data from all complaints, including follow up actions and resolutions.

Protecting the Workforce: Jalles Machado follows Brazil's legislation regarding minimum age required for employment (18 years old.) The company checks the worker's age at time of application, recruitment, and contracting. The company does engage trainees of 16-17 years of age under the Brazilian government's Jovem Aprendiz training program, but it follows all requirements of the program, including limited work hours to allow for participants' schooling and prohibitions against exposing trainees to any forms of hazardous labor. In addition, the company has a program to train and retain people with disabilities seeking to meet mandatory quota from Ministry of Labor in Brazil: AGODEFE (Association of disabled people of Goianésia) registry; APAE (Association of Parents and Friends of disabled people) registry; INSS (National Institute of Social Security) registry;  MTE (Ministry of Labor and Employment) registry; Professional courses; Disclosure of vacancies in Radio and Newspaper; Leadership Training for Hiring People with Disabilities. Currently, 38 people with a disability work at the company.

Occupational Health and Safety: Jalles Machado has a well-structured team managing OHS hazards and risks facing the workforce, in line with Brazilian labor requirements. As mentioned under PS 1, Jalles Machado has mandatory OHS programs in place, such as risk prevention plans, health monitoring plans, accident prevention committees, and emergency response plans. There are appropriate collective prevention measures, and the company provides the necessary appropriate Personal Protective Equipment (PPE). Adherence to wearing the required PPE was observed during the site visits.

Visitors are required to wear the provided appropriate PPE. It was noted that not all visitors were logged upon entering the mills nor did they receive a safety induction. However, there is a procedure that requires logging of visitors as well as an obligatory safety induction. Going forward, Jalles Machado will enforce this procedure for all visitors.  Furthermore, it was noted that walk ways for visitors and employees are not visibly separated from the drives ways. The company will clearly define them at both sugar mills (see ESAP items #1).

Accident rates have dropped significantly in the past years, but are still relatively high when comparing them to international reference values (i.e. 7 lost time accidents for sugar production and 8 lost time accidents for crop production per million hours worked in the U.S.). The company annually organizes an accident prevention week and pays a lot of attention to workers’ safety. In 2015, 84 lost time (LT) accidents occurred with 742 lost days and in 2016 64 LT accidents with 440 lost days. This corresponds with an LT accident rate of respectively 19.6 and 14.9 per million hours worked. To date, no accidents occurred at the construction site of the sugar mill in Otavio Lage. Early June, a fatality occurred during harvesting at the farm near to the Jalles Machado mill. It has been reported to the Ministry of Labor and the local police and is currently under investigation. In order to establish a meaningful reduction of accident rates, a thorough risk assessment of all accidents, corrective measures taken as well training effectiveness of the past 3 years will be completed in order to develop a prevention program (see ESAP item #2).

Jalles Machado has automated many industrial processes which results in only a small number of workers being inside the operational area, significantly reducing the exposure of workers to inherent risks typically found in a sugar and ethanol mill operation.  Jalles Machado has identified all confined spaces, which are identified with warning signs and workers must follow safety rules for working inside them consistent with Brazilian safety requirements (NR33) and WBG’s EHS general guidelines.  Review of records showed that Jalles Machado undertakes annual inspections of all pressure vessels ensuring compliance with national safety requirements (NR13) including preventative maintenance using SAP and training of staff. At the sugar mills, it was clear that Jalles Machado has also invested in machinery protection, deploying appropriate protection to exposed moving parts and pinch points. Fall prevention measures for working at heights such as guardrails, lifelines and platforms were found in place. Regarding the assessment of its electrical circuits (Relatório Técnico de Insepeção das Instalações Elétricas) according to Brazilian safety standard NR10, necessary investments are made for identified issues. When repair or maintenance is undertaken a Lock-out, Tag-out (LOTO) procedure is applied.

Jalles Machado conducts mandatory pre-hiring, periodic and contract termination health assessments of all employees that include basic clinical assessment and additional tests, such as audiometry, diabetes, high blood pressure, and blood tests cholinesterase and leucocytes counts, depending on an individual’s job function and exposure to identified risks. Jalles Machado monitors worker’s exposure to hazards in the workplace under its mandatory workplace risk prevention program (PPRA Programa de Prevenção de Riscos Ambientais) and has conducted a formal hazard/risk assessment of its operations.

Jalles Machado completed mandatory respiratory protection plan and ergonomic assessment of the workplace, according to the requirements of Brazil's NR17 worker safety standard, and implemented required corrective actions and a management program to prevent such injuries.

Basic infrastructure is provided for workers in the fields including safe transportation, mobile trailers with toilets, appropriate space for meals and break rests, fresh water supply in accordance with Brazilian labor standard NR31. Since all field activities have been mechanized, field jobs are now mainly filled with qualified machine operators. Harvesting operations are run 24hs in three shifts of 8hs periods. There is one hour of mandatory breaks for meals and two other mandatory breaks for personal needs in between.  

Workers Engaged by Third Parties: Jalles Machado hires external companies for transport, aerial spraying as well as maintenance and repair works. For its contractors, Jalles Machado has a procedure and checklist system to ensure that they are fully observing legal requirements with regard to their own workforce. Procurement, which manages contracting, EHS (the safety, health, and environment team), and HR are all involved in applying the checklist, requesting necessary documentation, and checking compliance before payments are authorized. Third-party workers undergo an EHS induction process upon their arrival to the site, and permission is granted for third-party workers engaged in hazardous work activities through the same procedures used by Jalles Machado for its own workforce.

Supply Chain: All sugar cane processed by the company comes from their own agricultural production. 

Energy: Jalles Machado self-generates all its energy needs from sustainable resources through co-generation of electricity from two thermal power plants fed with sugarcane bagasse.  Jalles Machado’s sugar mill has a power generation capacity of 40 MW and Otavio Lage a capacity of 48 MW. The thermal power plant at the Otavio Lage mill is a joint venture with the power company Albioma Participações do Brasil (“Albioma”). Jalles Machado sold a 65% stake to Albioma in 2015 and retained the remaining 35%. The plant is managed and operated by Albioma. Of the total electricity generated at the two mills, 61% is delivered to the grid.

Air emissions:  The biomass boilers are the largest source of air emissions from Jalles Machado’s operations; there are 2 boilers with a power capacity of 100 MWth each. The company monitors emissions on an annual basis, achieving compliance with Brazilian requirements, which are less stringent than the World Bank EHS guidelines, i.e. Particulate Matter (PM) 390 mg/NM3 and NO_X 350 mg/Nm³. The company reported that the boilers of the thermal plant at Otavio Lage, management by Albioma, are monitored annually. Review of the 2016 report show that the boilers meet the regulatory requirements. Although currently not foreseen, Jalles Machado will deploy emission control systems for any new boilers it might purchase consistent with the requirements of the World Bank/ IFC EHS Guidelines (specifically, the EHS General guidelines requirements for small combustion facilities <50MWth and EHS guidelines for thermal power units for boilers with thermal power capacity > 50MWth). As set forth in ESAP action #3, in the event of procurement of new boilers or reconditioning of old equipment with increase of power capacity, in addition to compliance to local emissions legal requirements, Jalles Machado will conduct pollution emission dispersion models prior to de construction/remodel of new boilers and demonstrate that air emissions will not result in pollutant concentrations that reach or exceed relevant ambient quality guidelines and standards by applying national legislated standards.

Effluents: wastewater is derived from: (i) process wastewater from ethanol production (vinasse), (ii) wet scrubber blow down from stack gas scrubbing, and (iii) miscellaneous wastewaters. Jalles Machado does not discharge industrial wastewater into rivers or surface water bodies. The vinasse, industrial waste water and filter cake are used as a fertilizer in the sugarcane plantations. Vinasse is stored in tanks to prevent groundwater contamination. The amount of wastewater applied in the plantations is determined by the soil characteristics and the nutrient needs of the crop. 

Resource efficiency: Sugarcane cultivation in Jalles Machado’s operations relies on rainfall, fertigation and irrigation (pivot). Irrigation water is abstracted from rivers in the area of the plantations and also from rain fed dams with the appropriate environmental licenses. There is currently some 7000 ha under irrigation. Jalles Machado has an automated control system to control water use in irrigation and subject to a KPI; amounts to be applied are set by assessing soil moisture first. The KPI of 5.20 m³/ton-cane was not met in 2016 (11.51 m³/ton-cane) due to the earlier mentioned drought. In earlier years, the water consumption for irrigation was below the KPI. Water is extracted from groundwater wells for use in the restaurant and as drinking water. The water is pre-treaded (chlorination) and tested for bacteria weekly in the company’s internal lab and every 6 months by an external laboratory. Process water is captured from rivers and dams at both locations, treated, and used within a closed system and reused to ensure efficient use which is monitored and also subject to a KPI. In 2016, the total industrial process water use was 3.03 m³/ton-cane exceeds the KPI of 2.73 m³/ton-cane. The water usage for the milling process (0.56 m³/ton-cane) is consistent with the sector benchmark of 0.5 – 0.9 m³/ton-cane.

Jalles Machado reports to have all required permits from state governments to extract water. For the expansion of irrigation, a hydrological study was completed on the company’s own initiative to assess the availability of water for irrigation from nearby rivers. If the environmental flow of the river could be impacted the company will install a reservoir for which first an environmental assessment will be completed. The study will be submitted to the competent authorities as part of the permit application. The company is planning to increase its irrigation system over the next five years in 10,000 ha, consisting of pivot and subsurface drip irrigation. The project considers the irrigation investments for the first two years.

Greenhouse Gas Emissions: Jalles Machado was the first company of the sugar-ethanol industry in Brazil to sell carbon credits under the Clean Development Mechanism of the UN. Annually, the company completes an inventory of CO₂ emissions from its operations, which resulted for 2016 in a figure of 2,686,974 tons of CO₂eq/year being generated. This figure far exceeds IFC threshold of 25,000 tons annually, but considering that this is renewable energy from sugarcane plantations the mills’ GHG CO₂ emissions are naturally offset as they are captured from the atmosphere by growing sugarcane plants. In addition, part of the ethanol that Jalles Machado produces is used as a renewable fuel. Therefore, although Jalles Machado generates high volumes of gross GHG emissions, net emissions from the company's operations can be considered negative (as they are sequestrated in the sugar cane plantations and off-set in the ethanol that replaces use of fossil fuels). This is illustrated by the following: assuming an area of 32,794 ha for sugar cane corresponds to an absorption of 3,935,280 tons of CO₂, resulting in a 3,935,280 - 2,686,974 = 1,248,306 ton of CO₂eq emission reduction.

Integrated Pest Management: Integrated Pest Management, a well-established practice in the sector, is applied at all plantations and not only for organic sugar cane production. Jalles Machado uses biological control techniques to control the sugarcane borer population with the Cotesia flavipes parasite. Only approved chemicals, which a review showed that they do not include WHO Class 1a and 1b pesticides, and fertilizers are used.  Application rates and methods are adapted to minimize consumption. Jalles Machado only uses closed tractors equipped with cabinets for spraying operations, and handling, storage and use of agricultural chemicals follow national regulations and can be considered best practice.

Hazardous Materials: Jalles Machado uses and stores significant amounts of chemicals such as soda, sulfur acid, chlorine, cyclohexane, pesticides and, of course, ethanol. A variety of storage arrangements can be found at different areas, but all of them have secondary containment, risk identification, warning signs, access control and emergency kits and showers.

Solid Wastes: Sugar mills produce significant amount of organic wastes (filter cake and ashes from boilers). The filter cake is used in fertigation and the ashes as fertilizer. Metal scrap is segregated, stored outdoors and sold for recycling. Jalles Machado collects all empty pesticide containers and delivers them to certified recycling companies. The solid non-recyclable waste from offices and dining halls is collected and disposed at the company’s landfills which holds a license from the State Environmental Secretary. Both sugar mills have their own landfill and are required to monitor groundwater quality twice a year. Results are reported to the authorities.  To date, no impact was identified. 

Community Health and Safety: Although both sugar mills and agricultural production are located in a rural area, there are communities around their operations. Potential impacts to communities from Jalles Machado’s operations could arise primarily from the explosions of ethanol tanks, from the distillery or from sugar warehouses. Air emissions from boilers, fugitive air emissions from trucks (dust) and drifts from aerial application of pesticides, can negatively affect communities as well.

Jalles Machado conducts aerial spraying of crops by contracted companies using crop-spraying airplanes. A specific procedure is in place to avoid the risks and impacts to health and other crops associated with aerial spraying of chemicals. This entails monitoring weather conditions during aerial spraying, prior communication with neighbors to advise them of spraying schedules and safety exclusion buffer zones to protect towns, small villages or households.

The company relies on a large number of third-party operated trucks to transport the sugarcane from the field to the plant. The average distance of sugarcane plantations is about 20km from the processing operation. All sugar cane is transported to the sugar mills via an internal road system thus avoiding the public road and communities. This approach is expected to be used for the cane expansion project as well.  In cases where transport over public roads cannot be avoided a risk assessment as per their ESMS will be completed and necessary measures and practices will be put in place.

Infrastructure and Equipment Design and Safety: Equipment utilized at Jalles Machado meets regulatory requirements regarding use of safety devices; such equipment is annually inspected and included in a comprehensive preventative maintenance program managed using SAP. Quantitative risks assessments for all operations have been completed and the risk management plan covers maintenance and integrity of critical processes, operational procedures, training program, investigation of accidents, emergency response and periodic audits of the risk management plan.

Emergency Preparedness and Response: Jalles Machado has a mandatory emergency response plan covering all emergency scenarios such as fires, explosions and environmental leaks as well as a fire brigade, evacuation and communication plans. Drills are conducted as per an annual schedule and cover different shifts as well as both the industrial and agricultural operations. Jalles Machado has the L&F safety certifications from the State of Goiás authority for both mills.

Security Personnel:   Jalles Machado employs their own security guards to control access to the mills. Security guards are trained in-house by a third party, which included appropriate use of force. No incidences were reported by the company, which can be reported and recorded through the existing grievance mechanism.

Protection and Conservation of Habitats: The company’s sugar cane plantations are located exclusively in areas traditionally used for agriculture, and no direct conversion of natural habitats to croplands or significant loss of biodiversity is expected from this project. Depending on the region of the country (determined by biome), Brazilian farmers are required to set aside 20% to 80% of their lands as biodiversity conservation areas and to protect buffer zones along rivers and around water bodies. For the State of Goiás, this is 20%.  If deficient, riparian buffer zones should be reconstituted, and biodiversity conversation areas can be offset through the protection of intact areas in the same region. For the current plantations, all offsets have been completed. In addition, the company manages a 16,374 ha of native forests of Cerrado biome in Cavalcante in the state of Goiás.

Jalles Machado conducts environmental assessments of the sugarcane fields and excludes the mandatory riparian areas and legal biodiversity offsets from the sugarcane plantations. All sugar cane plantation areas are in compliance with the mandatory environmental and rural cadaster (CAR) to implement the regulatory requirements (offsets are either established on the farm or compensated in another area).  Rehabilitation or compensation of biodiversity set asides must follow regulatory timeframe for completion. For the additional land needed, Jalles Machado requires the owner/lessor to meet the biodiversity conservation requirements as part of the contract. If the owner/lessor cannot finance the offsets, the company will cover these costs and this will be reflected in the land price.

Sustainable Management of Living Natural Resources: As mentioned above, sugarcane plantations are located on already-converted land and consolidated areas of crop plantations in the State of Goiás. Soil conservation techniques are applied in the fields including contour planting, terracing and planting design to avoid run-off. In order to demonstrate good management practices in their sugar cane production, the company is in process of obtaining of Bonsucro certification and as part of ESAP #4 will provide the certification audit report.  Any measures and procedures as required by the Bonsucro standard will be managed as part of the integrated management system as mentioned under PS 1.

Jalles Machado takes advantage of all possibilities to use organic wastes from ethanol production, including vinasse mixed together with filter cake and industrial process water, in the plantation fields to reduce the need for chemical fertilizers. When such chemical fertilizers are applied, the prescription is based on soil fertility analysis and plantation extraction needs. As mentioned above, Jalles Machado monitors pests, which it seeks first to control through biological agents.  When used, agrochemical products are prescribed by qualified agronomists based on pest infestation and economical level of control. The pesticides (fungicides, herbicides and insecticides) applied by the company fall into the WHO classes of II, III and U.  All sugar cane is harvested mechanically so there is no need of pre-harvesting burns of sugarcane fields, and the straw is partly left on the fields to better protect the soil from erosion effects. Straw is also used as biomass for the boilers.

Supply Chain: All sugar cane processed by the company comes from their own agricultural production.

External Communications and Grievance Mechanisms: The company uses a number of channels of external communications such as folders and brochures, a local radio programme “ Minuto Jalles”, their website and via social media. Public hearings were also conducted when the company had to present to the audience all the relevant conclusions from the ESIA for Otavio Lage sugar mill as well as all the measures that would have to be implemented to mitigate and control the impacts associated with the project.

Grievance mechanism: Jalles Machado has channels of communication available for the general public, some which the company has disclosed at their website, including an email address and mail information: https://ouvidoria.jallesmachado.com/ There is no toll free number provided. The system has the means to receive, record, forward, treat and provide feedback to all complaints from the general public, and the company keeps records and shares results internally on managerial meetings.

On-going Reporting to Affected Communities: Although impacts from sugarcane plantations are diffuse, it is expected that some rural villages or nearby farmers could be possibly affected by noise and dust emissions from trucks on the unpaved roads or unintentional agrichemical spraying drifts, especially from air spraying.  Jalles Machado will map villages and potentially impacted communities, and ensure they are informed about aerial spraying and truck traffic schedules and all mitigation measures. 

As set forth in ESAP #5 Jalles Machado will undertake an assessment of interested parties in the development of the ISO 45001 requirements as well as meeting the ISO 9001:2015 and ISO 14001: 2015 (stakeholder engagement process in IFC PS terminology), Jalles Machado will map all key stakeholders from around the sugar mills and plantations and will conduct periodic consultations with critical ones. Interviews are made and all the issues are documented in a “matrix of materiality”.

Going forward as set forth in ESAP #6, Jalles Machado, based on the stakeholder mapping and issues identification, will develop a specific communication and engagement program designed for affected communities that includes mechanisms to respond to specific issues that arise from consultations and facilitate resolutions of affected communities concerns.

Contact Person: Rodrigo Penna de Siqueira

Company Name: Jalles Machado S.A.

Address: Rodovia GO 080 Km 75,1 – Fazenda São Pedro s/n – Zona Rural – Goianésia – GO – CEP. 76.388-899 - Brasil

Phone: +55 (62) 3389-9000

Facsimile: +55 (62) 3389-9099