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 OHS management and accident prevention and resource efficiency management for all operations, waste water treatment at Ricardone plant, and management of the soybean supply chain in Argentina and Paraguay. 

Environmental and Social Management System (ESMS): Vicentin has developed a Corporate 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 and OHSAS 18001. Vicentin has obtained corporate certification for OHSAS 18001, ISO 14001 and ISO 9001.  Five out of the ten plants have the three certifications and five more are in process of obtaining these certifications. In the past years Vicentin has enhanced their ESMS by incorporating the nine elements of PS 1. 

Policy: Vicentin has developed an overarching E&S and Health & Safety (ESHS) policy statement that describes the company’s corporate commitments to continuous improvement of its ESHS performance, and that the project will comply with all applicable laws and regulations of Argentina. It further describes its obligations under international law, such as guarantee of good labor and working conditions without child labor in direct operations, prevention of pollution and minimizing the environmental impacts of its operation, prevent damage to health to employees, and improving the relationships with stakeholders. In 2015, Vicentin updated the policy to align it with the 2012 IFC Performance Standards to include: a) reduce risks associated with operations (e.g., explosions, fire and/or spills of hazardous substances). In addition, Vicentin developed a sustainable sourcing policy in compliance with PS2 and PS6 objectives. The ESHS policy is shared internally and with contractors and third parties working for Vicentin. The sustainable sourcing policy has been shared with all suppliers via brokers and cooperatives.   Both policies are published on the website:  https://www.vicentin.com.ar/index.php/sustentabilidad 

Identification of Risks and Impacts:   Identification and classification is carried out for environmental, and occupational health and safety risks. Vicentin 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 management measures, either through mitigation measures such as contracting external staff for EHS management, engineering controls, or use of Personal Protection Equipment (PPE). Following the updates of the policies, the risk assessment procedure was improved to expand the risks and impacts identification process to labor conditions, and supply chain operations. In addition, it now also includes risks and impacts to surrounding communities.  

Management Programs: Vicentin has implemented a Corporate Management Program. It includes objectives to mitigate E&S risks and impacts and annual reviews for continual improvement. Action plans to manage risks are prepared by supervisors from various departments, in consultation with workers and external expertise when needed, defining targets, timelines, resources, and responsibilities. In 2015, the management program was updated to include the formalization of management procedures for contractors, supply chain management, and for community engagement including on-going reporting to communities. The company also formalized a community grievance mechanism. 

Organizational Capacity and Competency: At Corporate level, Vicentin has implemented an EHS Committee, which includes senior level managerial staff, to manage E&S issues. E&S roles have been clearly defined and assigned. This Committee includes a team of competent professional engineering staff from several divisions of the company that have time and duties allocated to the EHS role, including a consolidated monitoring framework and quarterly progress report to the company’s senior management. A Corporate EHS Manager, a Coordinator, and two EHS Regional Managers have been appointed for the operations at Avellaneda/Reconquista (North) and San Lorenzo/Ricardone (South). Each region has an Environmental Management Unit, a Health and Safety Management Unit, and a Quality and Food Safety Management Unit. EHS staff is routinely trained, including in root-cause analysis. 

Following the implementation of the sustainable sourcing policy dedicated procurement staff is in place to manage E&S issues in procurement of soy and communicating Vicentin’s expectations in line with the policy via brokers and cooperatives to their suppliers.   

Training: Training employees in corporate EHS values, policies, and procedures is an integral part of Vicentin operations. It includes mandatory EHS induction for all staff and contractors before starting to work at Vicentin’s facilities. As part of the ESMS aligning with the PS1 requirements, Vicentin further developed E&S trainings including information about stakeholder engagement, internal and external grievance mechanisms. Training programs are reviewed regularly and if necessary updated to adjust to changing scenarios arising from new acquisitions or expansions, technological changes to operations, and dynamics of surrounding communities. As included in the OHS section of PS2, Vicentin will review its training effectiveness in relation to accident prevention.        

Emergency Preparedness and Response: The company has a corporate emergency preparedness procedure. All plants have 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. In 2015, Vicentin’s emergency preparedness and response planning was updated to include provision for external emergency management, external communication channels, training plans, continuous improvement of these, and emergency planning with respect to nearby communities that may be affected by company operations.  

Monitoring and Review:  Vicentin undertakes monitoring and reporting on E&S performance of direct and supply chain operations to senior management and to the Provincial Governments of Santa Fe and Rosario. Procedures require the involvement of the EHS Committee, and monitoring activities take place with the participation of employees.  Internal environmental and OHS audits are performed, including cross-audits.  Audit reports are reviewed by senior management to evaluate the effectiveness of the ESMS in supporting the general E&S performance of Vicentin. Since January 2017, integrated audits are being undertaken in San Lorenzo and Ricardone.  Audit aspects include environment, OHS and quality. As set forth in the ESAP, performing integrated audits shall be expanded to all operations. 

At all plants KPIs have been set for the following parameters a) Safety – Lost Time Incident Frequency Rate (LTIFR - Number of lost time incidents per million hours worked); Accident Free Days ( Number of Days since last Lost Time Incident); b) Sustainability – Greenhouse gases (kg CO2 emitted / tons produced); Water Usage (m3/ton processed) and Energy Efficiency (kWh/ton processed) - Energy consumed/produced; Wastewater monitoring effluents and air emissions parameters; c) E&S Staff retention and number of training days provided to new and existing employees. These KPIs are included in the sustainability report, based on GRI G4, that Vicentin prepares since 2014. The report is not yet publicly available, but is shared upon request.  

The KPIs are reported and discussed during the management review. Subsequently, the results of monitoring are used by Vicentin in the development of improvement plans. In support of continual improvement, Vicentin shall set targets to identify the need of mitigation actions when KPI performance is not in line with the set target.  

E&S performance indicators are not currently used as performance targets for operations level management.   To derive full benefit from the use of KPIs in performance monitoring and review, as set forth in the ESAP, the EHS Committee in cooperation with the human resources department shall set E&S performance indicators and targets for all management levels to be reviewed on an annual basis.

Human Resources Policies and Procedures: The Corporate human resources (HR) department has procedures on work ethics, training needs, provision of medical services and, in general, making efforts to ensure a safe and respectful working environment. All HR principles are equally applicable to Vicentin’s contractors. The minimum employment age at Vicentin is 18 and child labor and forced labor are forbidden within the company’s direct operations and those of suppliers and/or contractors. Vicentin is a non-discriminatory and equal opportunity employer. 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.. No retrenchment is expected as a result of the project operations. Freedom of association to join a trade union of the employee’s choice is guaranteed at all Vicentin operations, following Argentina’s national labor law. The company has procedures in place on how to effectively engage workers’ representatives.

Grievance Mechanism: A formal worker Grievance Mechanism (GM) was introduced in 2015, involving an appropriate level of management and subject to a timetable for completion of consideration of grievances, using an understandable and transparent process that allows also for anonymous complaints, and provides feedback to those concerned.

Occupational Health and Safety: In compliance with Provincial legislation, Health and Safety Committees have been implemented at each Vicentin plant. Each committee is composed of workers and company supervisors/managers. Committees meet monthly to address health, safety, contractors, payroll, etc. All workers undergo mandatory pre-occupational medical examination. Also, the national labor legislation requires annual mandatory medical examinations performed by the insurance companies (Aseguradora de Riesgos del Trabajo – ART). This procedure is established to ensure that employees are fit for duty and capable of performing essential job functions. 

Vicentin has an Occupational Health and Safety (OHS) Unit, equipped with professionals that have reporting lines and responsibilities in the EHS Committee. The company conducts workplace job hazard analysis and behavioral based safety observation which are used to prioritize preventive actions needed to eliminate or reduce the sources of accidents. This includes use of engineering controls with subsequent employee training focused on understanding workplace hazards and actions employees can take (such as using appropriate personal protective equipment–PPE, to minimize hazards. Annually, the company participates in the National Safety Week with thematic OHS training and prevention measures.  

The lost time incident frequency rates (LTIFR) for the operations in Avellaneda/Reconquista and San Lorenzo/Ricardone were higher in 2016 than in 2015.    Vicentin’s LTIFR (between 15 and 30 lost time incidents per million hours worked) is variable between facilities and high when compared with international reference values (i.e. 5.5 LTI/ million hours worked for grain and oilseed milling), but low compared with the Argentine 2015 reference value for agriculture (i.e. 75.6 LTIs/million hours worked). As set forth in the ESAP, in order to establish a meaningful reduction of accident rates, a thorough review of all accidents, corrective measures taken as well as training effectiveness of the past 2 years will be completed in order to develop an accident prevention program. Based on the review the accident prevention program will be developed to be launched during the 2018 National Safety Week. An improvement target will be set against which reduction of accidents rates will be benchmarked as part of the annual reporting. However, the goal of the program will be: “Nuestra meta es cero accidentes.” 

During the site visits it was noted that not all visitors were logged upon entering the plants nor did they receive a safety induction. Visitors are required to wear provided appropriate PPE. Vicentin has a procedure that requires logging of visitors as well as an obligatory safety induction and providing required PPE. Going forward, Vicentin shall enforce this procedure for all visitors.

Vicentin has significantly upgraded the Life and Fire Safety (L&FS) fire equipment and the L&FS plan includes periodic fire drills with participation of the local fire department as external auditor, and a system to ensure that corrective measures are implemented.

The main environmental risks associated with the Vicentin 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. Dust can either cause a nuisance to close-by neighbors or amplify the risk of explosions or fires if allowed to build up in an uncontrolled way.

Resource Efficiency:  Vicentin pays attention to resource efficiency through continuous improvement of their processes, selection of equipment and energy source, and awareness programs with employees to reduce consumption. Careful attention is given during routine plant maintenance to prevent and control leaks and spills. Vicentin monitors at all locations the electricity, steam, fuel source (biomass, natural gas or fuel oil), water and solvent consumption. In Avellaneda, targets have been set and other plants are in process of setting targets for the same consumptions relevant for their processes. Vicentin shall report on the rate of consumption benchmarked against targets set for the KPIs for all operations as well as measures proposed to enhance resource efficiency. 

All industrial plants have co-generation of electricity and thermal energy for process needs. Electricity consumption at all operations is in line with industry norms. As result of an eco-efficiency project, two of the Ricardone boilers can operate with biomass (sunflower husk), while the other three boilers are fed with up to 5 tons per day of glycerin waste tanks (fatty acids and biodiesel). Fuel oil is only used when there is a gas restriction in the country, usually during winter. In the North, around 75% of the generated steam returns to the boilers as condensate. Firewood is used as fuel, as well as the wood waste from sawmills. The wood comes from certified eucalyptus plantations only. Wood from local suppliers will be bought only if it can be demonstrated that it was logged legally. A premium will then be paid. Recently, husk pellets from the South were brought to the North as a fuel source which has resulted in a 22% reduction of firewood use. 

Water: The company conserves water, through recycling and re-use of condensate during the crushing process. Water use, sourced from condensed steam, is 240 l/ton of soy. Use of water with plants does not impact its availability to local communities.

Pollution Prevention:  Vicentin operates a series of substantial boilers, some for cogeneration and others for process heating needs that warrant emissions monitoring. The company has an air emissions protocol to obtain reliable monitoring, reporting all parameters required by IFC for each of the boilers. Vicentin conducts boiler stack emissions monitoring at all its operations. Results show that the point source emissions are in compliance with local regulations and applicable WBG EHS Guidelines (General EHS Guidelines or Thermal Power Guidelines according to boiler size). 

Wastewater Treatment: Vicentin has a total of five effluent treatment plants between its South and North operations. Sanitary wastewater from all locations is sent to the local municipal sewage system. In the past two years, Vicentin has undertaken comprehensive monitoring to fully understand effluent characteristics and has implemented where needed cleaner production practices to address effluent volume and contaminant reduction through resource efficiency measures.  Comparing the monitoring results against local regulatory standards and applicable WBG EHS Guidelines show that all treatment plants are in compliance, except at Ricardone. The Ricardone processing plant was put back into operation in December 2015 and has an outdated waste water treatment plant. After treatment, the effluent is discharged into the  Paraná  river. Monitoring of the effluent shows exceedance for BOD and COD against local regulatory standards and applicable Worldbank Group (WBG) EHS Guidelines. As set forth in the ESAP, remedial measures shall be taken to ensure that the discharges will meet the regulatory limits and WBG EHS Guidelines.   

Solid Waste Management: Solid waste at Vicentin is managed in line with best practices (reuse, recycling, treatment, disposal, and monitoring) to reduce environmental impact. Solid waste collection is separated into domestic wastes, paper and cardboard, plastic, metal and glass. Domestic wastes are send to final disposal, while paper, cardboard, plastic, metal and glass are recycled. Records of solid waste by categories are kept, as well as receipts of final disposal from government authorized waste management and recycling contractors. Workers handling waste are trained on proper waste handling, and the appropriate use of PPE.

 Hazardous Materials: The hazardous materials present at Vicentin consist of hexane, caustic soda, hydrochloric acid, sulfuric acid. All these are kept under controlled locked storage equipped with fire control equipment, and PPE and a safety protocol is provided to workers handling these materials. Vicentin monitors regularly hexane concentration in the air. Other materials include oil, light tubes, and packing materials. All these are handled separately and labelled in accordance with acceptable practices. 

Community Health and Safety: Communities are not immediate neighbors of Vicentin plants in the South, but are located at 4 – 6 km away from the limits of company operations. Any risk of fire and fire safety is expected to be minimal. However, potential impacts could be caused by plant-induced truck and rail traffic carrying raw material and in some cases hazardous chemicals (e.g. hexane, hydrochloric acid, etc.). In the North operations, communities are near to Vicentin and could be directly impacted by the company operations in case of fire, explosion, noise, etc. To manage these risks, Vicentin has safety guidelines at each industrial plant, and implemented safety guidelines adhered to by all contracted transport to avoid accidents to members of the public, as well as to ensure safety of transport of raw materials and hazardous chemicals. The company also cooperates with the local government agencies and local fire departments to respond to emergencies due to their operations. Recent complaints from neighbors near to the San Lorenzo plants were lodged via the grievance mechanism put in place by Vicentin. These related to dust nuisance caused by loading railcars. The company will be putting measures in place to avoid dust releases.  

Security Personnel: The company has developed a Security Management Plan (Seguridad Patrimonal). The plan was reviewed by IFC and it references the required paragraphs of PS 4 and Voluntary Principles (VPs) on Security Forces and Human Rights of the United Nations. The security provider has been trained, as per the security management plan upon implementation in 2015. The training is included in the formal training schedule to be repeated annually to new security staff and as a refresher training.

In general, soybeans procured by Vicentin 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.  However, soybean procurement origins also include 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 from 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. 

As part of the supply chain component of the ESMS, the company developed and implemented a sustainability sourcing policy (“Supply Chain Policy”). This policy prohibits sourcing of soybeans known to be produced breaching national environmental and social legislation (i.e. illegal land clearing, harmful child / forced labor) and/or violation of IFC Performance Standards. As part of this policy implementation, Vicentin has developed a supplier database to facilitate collection and management of supplier E&S information in soybeans.

As a rule, and as noted above, Vicentin only sources 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.)  Soybeans sourced by the company from the different areas in Argentina are all traceable and therefore certifiable when exporting processed soybeans as biomass and biofuel to the EU and US. For the EU, this will be done under the “Biomass, Biofuels, Sustainability Voluntary Scheme” (2BSVS) certification/ISCC certification and for the US under the US EPA certification. Actual certification under these schemes depends on the market. Traceability is based on obtaining information on the farms through brokers and cooperatives on the dates of establishment (i.e. before 2008 which is the cut of date for deforestation) and location coordinates. Vicentin has been keeping records of their suppliers since 2009 and they meet these requirements. During the 2015 – 2016 season, of the total volume processed 51.7% were certified soybeans under the EPA certification scheme. There was no export of certified biomass and biofuel to the EU in this period. 

Soybeans sourced from Paraguay also meet the sustainability sourcing policy. A ‘roundtable’ was organized in 2016 involving the largest crushers, SENASA (Argentine regulator on food safety) and Control Union (involved in certification of commodities) to discuss traceability of soybeans. It was agreed that 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 very strict and currently in place. In case SENASA cannot verify the origin of the soybeans and establishment of the farms, to ensure there was no deforestation after the regulated 2004 cut of date, it will not allow the import into Argentina.

External Communications and Grievance Mechanisms

Vicentin has developed a comprehensive stakeholder engagement plan for its operations. Elements such as stakeholder mapping, and impact zoning to identify potential affected communities are included. 

External communications and a formalized community grievance mechanism are in place to ensure a publicly available channel with external stakeholders and affected communities.

1.Region San Lorenzo: 

Ruta A012 km 64, San Lorenzo, Santa Fe, Argentina

Tel: 03476- 423930/424148

Contactos:

Ing. Pedro Vicentin: mailto:pedro.vicentin@vicentin.com.ar

Ing. Carolina Zurcher: mailto:carolina.zurcher@vicentin.com.ar

2.Region Avellaneda: 

Planta algodon hidrofilo Av. Circunvalacion S/N Avellaneda, Santa Fe, Argentina

CP (3561)

Tel: 03482-480300/480101

Contactos:

Ing. Lino Degiusti: mailto:lino.degiusti@vicentin.com.ar

Ing. Gustavo Feuillade: mailto:gustavo.feuillade@vicentin.com.ar