While all Performance Standards are applicable to this investment, IFC’s 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

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

ETC Agro Pulses milling operations are situated on land that is leased from the Port of Kolkata, which was formerly used for government property storage. The project did not result in any involuntary economic or physical displacement. Moreover, the proposed project operations are located in an industrial zone within the larger area of the Port Authority surrounded by other similar industrial units and away from any residential communities. The company’s pulses milling operations pose minimal E&S risks to the surroundings. As such, impacts related to PS4: Community Health Safety and Security; PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected for this investment.

This is a Category B project according to IFC’s Environmental and Social Sustainability Policy because the project may result in limited potential environmental and social (E&S) risks or impacts that are few in number, site specific and largely reversible and readily addressed through the application of Good International Industry Practices.  It is a low risk operation taking place in an existing industrial polygon. 

Key E&S issues evaluated during appraisal included evaluation of permits for construction and operation; management systems; human resources management; occupational health and safety (OHS) practices; and, limited stakeholder engagement.

Environmental and Social Assessment and Management System:  For this expansion of milling operations in a dedicated space at Kolkata Port, ETC Agro commissioned an Environmental Impact Assessment; ETC pulses was granted an authority to construct the plant expansion. Once plant construction has been completed, the company will be required to petition WBPCB for the authority to operate (Consent to Operate).  Required licenses for water usage and discharge of air emissions and effluents were granted by the WBPCB for the construction phase, and operational phase.  As per ESAP item #1, three months after achieving full processing capacity, the company will use an external consultant to conduct an audit of operations, using the applicable Performance Standards and conditions associated with the Consent to Operate, and associated licenses and permits as granted by the WBPCB, as audit criteria and submit the results to IFC. The audit will also assess the efficacy of the stakeholder engagement plan as required under ESAP item #2. (see below)

In addition to the above, ETC Agro, in coordination with ETG, is working toward institutionalizing operations management in accordance with the United Nations’ 17 Sustainable Development Goals (SDGs). These goals address sensible development and the parent’s pledge to achieve constructive change through supply chains, partnerships and knowledge sharing. Accordingly, each operation is reporting on SDG goals of Good Health and Wellbeing; Quality Education; Gender Equality and empowerment for all women and girls; Decent Work and Economic Growth; Reduced Inequalities; Sustainable cities and communities; and Responsible Consumption and Growth. Progress on achieving such is reported by all entities to ETG Corporate and will be reviewed as part of the Annual Monitoring Report already provided to IFC as a requirement of existing investments.   

1. Policy. 

ETG has an overarching environmental and social and other affairs policy applicable to all its operations including ETC Agro. This policy addresses its business: viz. “value chain manager of agricultural products to customers with a mission of making a difference for society through creation of value, enhancing growth through effective marketing of locally produced agricultural products and related materials”.  As articulated in this policy, “ETG’S Integrated Management System (ETGMS) was introduced in 2011; it standardizes all Group operational processes and practices in line with applicable ISO, IFC standards and (“AfDB”) Operational Safeguards (OS)….” (http://www.etgworld.com/files/ETGMS%20Compliance%20Policy.pdf),

Organizational Capacity and Competency.  The E&S function is appropriate at ETC Agro to ensure regulatory compliance (e.g. application for permits, submission of monitoring data, oversight of construction activity at Kolkata) and to respond to the requests and requirements made of ETC Agro by the Sustainability Team at ETG (e.g., periodic reporting on EHS performance by existing operations) stemming from the adoption of voluntary standards and other non-regulatory commitments by ETG. Responsibilities for EHS management predominantly lie at the plant level at ETC Agro with plant managers utilizing their line managers to oversee operations and ensure compliance with rules and regulations pertaining to the limited number of requirements/risks and impacts and ETG corporate initiatives and requirements. Performance on E&S matters is reported to HQ in Mumbai on a monthly basis along with business information/production efficiencies, etc.

Whereas the formal position of E&S manager does not exist in the ETC Agro organizational structure in India, plant managers are judged to be experienced individuals who are familiar with the risks and impacts of their operations as they pertain to environmental, labor, and OHS matters. For example, when a new production line was to be added at Khopoli, prior to that happening the General Manager engaged his manager of maintenance (and his fitters and welders) and the senior electrical engineer (and his electrical operators and electricians) to design the job, scope the materials needed, conduct a risk assessment of the jobs required to complete the installation (e.g., hot work, working at heights, working with energized equipment, need for waste management, etc.) and incorporate that into the work to be undertaken  Evidence of such an approach was seen during site visits to the existing operation at Khopoli in Maharashtra State (where equipment was being installed). Visual aids such as posted instructions and warning signs support the efforts of management and supervisors in this endeavor. In particular, the ongoing (but now limited) construction at the Kolkata plant was seen to be subject to such appropriate review and oversight with ETC Agro personnel working closely with contractor staff and management (e.g., morning meetings are held to discuss the work to be undertaken and its inherent hazards) to ensure an overall safe working environment.  

Management Programs. ETG’s corporate E&S management requirements are broad in their scope (covering environmental, OHS, energy, social responsibility, food safety, and quality management, etc.). Not all have been formally adopted by ETC Agro operations however; those principles contained within the management requirements have been adopted and adapted by ETC Agro and are manifested in adherence to locally-based requirements (such as the requirements of the Food Safety and Standards Authority of India, or FSSAI.)

HR and other related E&S functions (procurement/supply chain, production/efficiency reviews and innovations) are centered at ETC Agro HQ in Mumbai. Production/plant managers, based at each plant, are responsible for implementation of these shared practices and procedures, and therefore the safe and compliant operation of their plants along with counterpart, such as those from HR, who are on-site resources to address issue related to human resources, grievances, etc. Internal reporting structures have plant managers reporting to senior management at HQ. During interviews, senior management exhibited comprehensive knowledge of plant operations, including but not limited to matters of human resources, production efficiencies (designed to decrease consumption of material and energy inputs within existing operations) and the ongoing construction of the Kolkata plant which provides evidence of the efficacy of the organizational and reporting structure.

Assessing and Managing E&S Risks in Supply Chain: ETG is the primary supplier of inputs to ETC Agro operations in India. Through IFC’s previous investments, ETG has developed management systems to ensure that it’s sourcing of commodities is as free as possible from typical risks associated with agri-business supply chains. Other suppliers are reputable global agri-business suppliers and many products are sourced from countries (e.g. Canada, Australia) where supply chain issues as envisaged by IFC (e.g., child and forced labor, significant OHS impacts and impacts upon biodiversity) are largely absent. 

Emergency Preparedness and Response: Milling operations are relatively simple operations that pose limited hazards and risks; one of the more important, however, is the generation and possible accumulation of dust. This project entails completion of a mostly-built new project which is well equipped with dust extraction systems so as to prevent dust levels from reaching dangerous amounts/concentrations. In addition, ETC Agro has developed a site-specific emergency response plan, using the ETGMS emergency preparedness requirement as a basis for plan development. The plan lists primary and secondary contacts, emergency contact information, lists the other kinds of emergencies that could occur (fires, falling from height, earthquakes, electric shocks, etc.), location of emergency equipment, and the types of training required of (listed) employees with emergency duties. Drills are required to be conducted monthly. Installation of the alarm system, referenced in the emergency plan, is currently being finalized as part of finishing the build out of the electrical equipment at Kolkata.

Monitoring and Review:  Periodic monitoring and review of operations and effluents is required by the WBPCB as part of permits for the operations; results from existing operations indicated compliance with such requirements. Compliance with requirements to be included in Consent to Operate for Kolkata is addressed above as part of the audit (see ESAP item #1). ETC Agro, as part of the larger ETG Group reports on a monthly basis to the Head of Sustainability at ETG. Reports detail matters of compliance to local and national regulatory requirements and matters related to ETG’s own, voluntary, standards adopted as part of the suite of management certifications held by ETG corporate.                                              

A Group HR policy, signed by the Chairman of ETG, was seen in all operations. In addition, local HR policies, specific to Indian operations, have been adopted and posted in ETC Agro facilities; in total some 20 policies have been so developed. The corporate HR policy articulates ETG’s commitment to non-discrimination, no child or forced labor, compliance with applicable labor law, respecting freedom of association of its employees and ensuring safety of all the employees and visitors to the company’s facilities.

As per Indian employment law, employment contracts at ETC Agro are transparent and fully informative about working conditions and terms of employment and include information on benefits and payments as well as defining employee behavior requirements.  For example, information on a particular job’s minimum wage (as per Indian law) was seen posted in common areas of the mills visited by IFC. 

The expected workforce for the Kolkata operation, when all production lines are in place and running will be approximately 280. Of those, 120 will be permanent employees. The balance (160) will be contracted from third party labor contractors. These contract workers are involved in more manual labor type work, such as loading and unloading trucks, bagging finished products and stacking products in warehouses. The majority of women (overall 95) working at the company are in leadership & administrative support positions in the corporate office. 

The minimum age for workers at ETC Agro operations is 18; picture identification (government issued Aadhar cards) are required and are checked to ensure nobody under this age is employed. The company complies with other tenets of Indian labor law such as non-preclusion of unions or collective bargaining; as such, it is deemed to be in overall compliance with the requirements of this Performance Standard.

The rules regarding contractors are strict in India; responsibility for their OHS and ensuring that they are properly compensated lies with ETC Agro. ETC Agro has put in place systems to ensure compliance with requirements, for example, payments for work completed are made directly to the bank of the contracted worker and the action of payment is routinely observed. 

Grievance Mechanism. Provision is made to receive grievances from workers, using traditional reporting structures (local HR representative, Director of HR in Mumbai, Senior Management, if needed) including those submitted anonymously. It was stated to IFC that this facility is also available to contracted workers.  

Freedom of Association / Collective Bargaining is provided for under Indian law; there is no discrimination against unions at the company.

Occupational Health and Safety: The milling operation presents limited OHS related risks which are managed by plant management, with responsibilities delegated to line management and supervisors. As noted above, risks assessments are incorporated into work plans. Ongoing hazards (noise, dust, moving parts) and their associated risks (loss of hearing, respiratory impacts, pinched fingers or more severe physical impacts to hands, arms, etc.) are eliminated (using engineering for example) or, if they cannot be eliminated, they are managed or mitigated. For instance, workers who were performing hot work in the Khopoli plant were overseen by a supervisor, who was responsible for ensuring documented practices and procedures were being followed (e.g. use of a work permit system allowing the work to be undertaken), appropriate signage and/or demarcations were in place, that proper equipment was being used and that PPE was being worn.

It is the responsibility of management to ensure those conducting potentially hazardous work are first trained and deemed competent in that work. The company operates an apprentice-style program that exposes workers to methods and practices that allow them to develop new skills and progress along a career path. Workers are trained by experience personnel as part of this program.

The OHS of contracted workers is also the responsibility of ETC Agro; those seen bagging products and stacking bags during the site visit (jobs typically performed by contracted labor) were provided with appropriate PPE. Two workers were lifting the bags of finished products, an appropriate practice given their weight (30kg.) 

Reporting on OHS performance is routine at ETC Agro, even for non-routine matters, such as construction; daily summary performance reports, including matters related to OHS, that are sent to ETC Agro senior management were shared with IFC as evidence of the hands-on approach to management. 

OHS statistics are collected and overall results in the ETG Group show material improvements from a high several years ago to 0 incidents in many operations during the most recent reporting cycle. Corporate accounting for fatalities has been reduced to 0 for the past two years.  ETC Pulses has reported no fatalities over many years. Nine (first aid) accidents have been reported in Khopoli operations in the last three years (one in 2014 and 8 in 2015); 2 (first aid) accidents were reported at Kolkata operations in 2016. Senior management reported to IFC that construction activities in Kolkata have been carried out without any major accidents (with an average construction workforce of 150 over many months).

The main inputs to the processing operation are electrical power and the raw food materials (lentils and other pulses) themselves.

The mill consumes electric power to move pulses around the facility so they can be cleaned, processed, sorted, graded, etc. Equipment is new and efficient and data from processes used at other plants have been used as a baseline to drive better performance at the Kolkata operation. For example, one of the main consumers of resources are the dryers. At the new plant in Kolkata, electric dryers with a capacity of three (3) tonnes/hour are utilized. These are 66% more economical than diesel/kerosene powered dryers typically in use in other mills (including at Khopoli). Data on production rates and efficiencies such as this are constantly collected and reported to HQ where they are analyzed and used as a basis for proposing new approaches. An additional upside to the use of electrical dryers at Kolkata is avoidance of use of backup generators (and thereby avoiding emissions from those generators) and also not needing to store diesel on site (in either above or underground storage tanks) to power generators as local electricity supply in Kolkata is reliable.  Very little water is used as pulses processing is mainly a dry process. The water that is used, is used for softening the husks prior to their removal. Water used in the process is not required to be treated; there is no process effluent as moisture is retained and ultimately lost to evaporation through the drying process.  The primary water consumption on site is for the use in the cafeteria and for domestic use. The domestic sewage is drained into the municipal sewer system for further treatment. Water for drinking is supplied via a drinking water supply company in Khopoli; drinking water for the Kolkata operations is supplied via the municipality and treated using reverse osmosis to ensure it is potable.

Milling and allied processing operations, except for leaves and extraneous materials separated from raw materials during pre-cleaning and cleaning steps, generate minimal (and only organic) waste.  One consistent surplus are the bags used for transporting raw materials to the mill; bulk transport at Kolkata (from barges) will eventually eliminate the need for such bags. Currently, these bags are recycled and used for packaging of cattle feed products; or, sold to local informal sector mills. There are no waste streams per se as all of the raw materials are used, either for product or second-tier quality product.  Husks from pulse milling are sold for cattle feed. 

ETC Agro’s ’ modern milling equipment is designed to collect all dust emanating from processes to avoid air emissions discharges and to protect mill employees.  Processing equipment includes dust management technology including extraction fans and bag filters and collected particulate matter is incorporated into cattle feed that are packaged for sale.   

The low levels of GHGs or CO₂ equivalents generated by the project, and any associated remedial measures to reduce them will be managed through ETG’s corporate ISO 50001 standard implementation. 

Onsite laboratories are responsible for monitoring physical and quality aspects such as moisture, foreign particles, husks, and grain damage.  Although infrequent, if long-term storage is required due to market demands, the pulses are fumigated but only after eight (8) months of residence time.  Fumigation services are subcontracted to a licensed pest control company that also provides routine pest control around milling operations.  Fumigation chemicals are approved for food products.  No World Health Organization (WHO) Class Ia, Ib, or II products, which are prohibited by PS3, are employed in these operations.                                                  

 Vinod Nair –GM Factory Operations- ETC Agro Processing (I) Pvt. Ltd- Kolkata

Beside Kolkata Port Trust Gate No.13,Plot Opposite 27, 28 & 29 KPD, Kantapukur, Remount Road, Kolkata-700023

Email : vinod.nair@etgworld.com,