Performance Standard 5: Land acquisition and involuntary resettlement (PS5) is not applicable due to the following points. Soufflet will be leasing the land as part of Bole Lemi II Industrial Zone which is operational since 2016. The development of Bole Lemi II involved expropriation of 186 hectares leading to a total displacement of 191 households. Site specific Resettlement Action Plans were prepared and implemented by the Industrial Parks Development Corporation (IPDC) on behalf of the Government of Ethiopia (GoE). Compensation paid was based on local regulations. In addition, a Livelihood Restoration Plan (LRP) for the resettled people has been prepared and is now under implementation. The people are now living in the same area were also the people resettled as part of Bole Lemi I are living, approximately 3 km away. Implementation of the LRP is monitored by the WBG as part of an IBRD/IDA finance (Ethiopia Competitiveness and Job Creation Project - P143302) to the GoE to finalize the Bole Lemi II Industrial Zone. From the meeting with the WBG no legacy land issues were identified, and it was noted that the WBG will be monitoring the resettled people for the next two years.  Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources (PS 6) is not applicable. The main input required by Soufflet Ethiopia is malt barley and water. Soufflet Ethiopia is not involved in primary production of agricultural commodities, it will buy its barley from cooperatives, farmers and traders. Due to deforestation, that occurred in the previous century much of the highlands are now under cultivation or are covered with wooded grasslands in which secondary tree species grow. Performance Standard 7: Indigenous Peoples (PS 7) is not applicable. No indigenous peoples are found within the project’s area of influence. A lack of impacts related to matters contemplated under Performance Standard 8: Cultural Heritage (PS 8) are confirmed by the findings of the Environmental Impact Assessment developed prior to the construction of the malting plant as per national regulations.

  This is a category B project according to IFC’s Environmental and Social Sustainability Policy because the project is expected to generate limited and site-specific E&S impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Material E&S risks and impacts include the following: (i) working, labor and OHS conditions of the malting facility specifically in the construction phase; (ii) need for raw water for the malting production and resource efficiency; iii) solid waste, air emission and wastewater management; (iv) emergency planning & response and traffic management, and (v) stakeholder engagement, reporting to affected people and community grievance mechanism.

   Environmental and Social Assessment and Management System

Soufflet has effectively developed and implemented a Corporate, Integrated Quality, Environmental, Safety (QSE) or E&S management system (ESMS) compliant with international standards such as ISO 9001:2015, ISO 14001:2015 and OHSAS 18001 (soon to be replaced by ISO 45001:2018) and ISO 50001:2014.  Given the reviews of earlier IFC investments the ESMS is robust and includes all elements of PS 1. The scope of the ESMS applies to all its core businesses, including the malting division. A HACCP framework has been developed for all malting facilities and comes under the responsibility of the Malting Division Food Safety Manager. The ESMS will be rolled out for the new malting facility in the first year of operation under the responsibility of the QSE Director and with the support of a QSE Manager to be hired when operations start. The roll-out of the ESMS and the hiring of the QSE Manager are addressed as an ESAP item. It is Soufflet’s goal that the ISO certifications will be obtained within two years of the start of operation.

Policy

Soufflet has adopted an overarching corporate Quality, Safety and Environmental (QSE) policy that is translated into all local languages and posted at the facilities. Training on the policy is conducted annually for all employees. The policy defines goals in three key areas: staff safety; environmental performance and resource efficiency; and quality, hygiene and health.

Soufflet’s Corporate Social Responsibility (CSR) policy addresses most aspects of food quality and food safety, environmental protection, occupational health and safety (OHS), resource efficiency, greenhouse gas emissions, social and ethical values and other labor aspects.

Identification of Risks and Impacts

The company undertook an Environmental Impact Assessment study (EIA), including an Environmental Management and Monitoring Plan (EMMP) for the construction and operation of the malting facility in 2017 according to the requirements of the EIA proclamation (No. 299/2002), among others, of the Government of Ethiopia, which was approved by the Addis Ababa Environmental Protection Authority through an Environmental Clearance Certificate.

As included in the Corporate ESMS, at all operational Soufflet facilities EHS risks and impacts are identified according to procedures developed within the QSE management system of the malting division. EHS risk assessment is the foundation on which management programs are established and reviewed annually. Soufflet’s scope of risk assessment also covers contractors’ operations, including development of corrective measures, audits of Soufflet requirements implementation and enforcement by contractors performing work at company sites. For new facilities the company conducts a gap analysis against national regulations and international standards. As a rule, the stricter standard will be applied for E&S management. Assessments considering the requirements of IFC’s Performance Standards and the WBG Environment, Health and Safety (EHS) guidelines are carried out through the existing QSE management system followed by development of corrective Action Plans, for all deficiencies identified during the assessments. 

Being that a malting facility is a significant consumer of water, there was a need to understand whether enough water could be provided to support the operation before it was constructed. For this the company engaged in discussions with the Industrial Park Development Corporation (IPDC) prior to selecting the location and entering into a lease agreement. In developing the Industrial Zone, IPDC conducted an assessment on the water availability. Other matters related to consumptive use of water and water efficiency measures are summarized in the section on PS 3 below.

Management Programs

Management programs and plans of the current malting facilities are based on QSE policy commitments, outcomes of risk identification process, overall E&S performance, and findings of internal audits and authorities’ inspections. Plans are developed or updated annually. Moreover, Soufflet adopted corporate plans and programs for environmental protection, reduction of greenhouse gas emissions, energy efficiency, and waste management. Currently, Soufflet applies key performance indicators which are reported in the Company’s annual CSR report including water and energy consumption, solid waste recycling or reuse, and lost time accidents.

Organizational Capacity and Competency

The company has established and maintains an organizational structure that defines roles, responsibilities, and authority to implement the management of environmental, OHS and social matters as identified above. The malting division has a QSE Director, 20 QSE managers managing the 27 malting facilities, one Safety Manager and one Food Safety Manager. In addition, there is one central laboratory with 12 lab technicians. The malting facility in Ethiopia will have its own QSE Manager, in place when operations start. This is addressed as an ESAP item.

During construction the company will have an EHS company in place who will make available EHS officers to monitor construction in line with local regulatory and Soufflet’s requirements for construction. The selection process was ongoing during IFCs visit, but the EHS officers will be in place when 2 or more contractors will work on site as it will be otherwise managed by the Site Supervisor. This is addressed as an ESAP item.

During the appraisal, IFC held conversations with the QSE Director, Technical Director, and the Country Manager; such conversations provided IFC with assurance that the staff in Ethiopia to be hired will be experienced in all aspects of malting and will be competent with respect to management of relevant E&S aspects of the project as contemplated by the Performance Standards. Observations made during the tour of the malting facility in Nogent sur Seine confirmed that opinion.

Training

Soufflet Group has a training program that encompasses an induction on EHS for new workers and discussion with workers on main environmental health and safety issues. Soufflet implemented a job coaching program, in which local EHS teams are supervised by senior specialists from its headquarters to share the existing expertise across the company. An annual plan for OHS training is developed as per local requirements and outcome of risk assessments to be agreed with the QSE Director. Soufflet also has an Environmental and OHS prevention plan for all contractors, which will be extended to the selected contractors in Ethiopia. The company will expand the scope of OHS management (to include considerations of E&S performance during procurement of such companies and services and then the oversight of their work, to include hazard and risk assessment, avoidance, minimization or management of residual risk, and the monitoring and review of required actions) to ensure that contractors (especially, but not limited to those engaged in construction) apply the necessary resources (personnel and otherwise) and conduct themselves in accordance with good international industry practice so as to avoid, manage or minimize hazards and risks to their workers. This is addressed as an ESAP item.

Emergency Preparedness and Response

Soufflet develops Emergency Response Plans (ERPs) for all its malting facilities appropriate to potential risks, including life and fire safety. These are documented and maintained in accordance with local law. ERPs are, typically, a combination of procedures for using, inspecting, and maintaining emergency response equipment; notification of the public and emergency response agencies; and, training programs. Specific training on requirements of the EU (ATEX) directives, describing equipment and safe work operations for a potentially explosive atmosphere, is also scheduled. The silos will be equipped with dedusting systems and safety devices; life and fire (L&FS) equipment, including fire alarm systems, fire hoses, fire extinguishers and one common water tank for fire system and production. Silos will be inspected on a regular basis including aspiration systems. In the Bole Lemi II Industrial Zone a fire brigade station is present.

Furthermore, the malting facilities use ammonia (< 1 ton) for refrigeration purposes, requires chemicals to keep equipment clean, utilizes combustible substances and employs pressurized vessels.  As such, emergency preparedness and response activities are required to ensure that workers are protected and understand what measures are to be taken in the event of an emergency. A standard requirement will be clearly marked evacuation routes and lighting throughout the facility. Trained on-site firefighting team along with a ring main for fighting fires will be in place. The separately planned area of the plant for the ammonia storage and the refrigeration equipment will be supplied with leak detectors, alarms and signage, and will have entry restricted to only authorized personnel. IFC reviewed the cooling room safety inspection checklist in Nogent sur Seine which is adequate and will be implemented in the Ethiopia facility.

Monitoring and Review

There are various types of internal QSE audits conducted at Soufflet’s malting facilities. Soufflet Senior Management and QSE Managers conduct equipment and staff safety audits of selected facilities. Further responsibility for these annual audits has been delegated to the Plant Managers. Hygiene, cleanness and safety audits are conducted by Soufflet’s audit department depending on site performance and corrective actions implementation are monitored for compliance with an agreed upon schedule outlined in the QSE management system framework. The company has installed a document control software. All Group documents and processes are stored in this software and are at the disposition of all QSE managers of all divisions, countries and sites.  All events (human or material incident/accidents/complaints) are registered and classified by the site as minor or important. Management at the Group level has access to all events, and can make interventions, and follow up on every event they consider important, or upgrade specific events from minor to important if deemed necessary. Statistics of events are shared in and analyzed by technical committees, and quality committees among others. 

The Company continues further enhancement of the monitoring and reporting systems by focusing on key performance indicators related to resources efficiency, environmental protection, reduction of greenhouse gas emissions, and waste management. Senior Management of the malting division reviews EHS performance of all facilities on a quarterly and annual basis. Actions are decided depending on performance and measures included in management programs. The external reporting of individual facilities is carried out in accordance with local legal EHS requirements. Since 2012, Soufflet publishes a Sustainable Development report covering all the group’s operations. Reporting to IFC on continuous improvement of E&S performance, ESAP items and the E&S management system is provided through Annual Monitoring Reports (AMR).

Monitoring of the construction will be done by the Deputy Technical Director and/or QSE Director through quarterly reports and calls and periodical visits. For this a prevention plan including E&S requirements, responsibilities and reporting requirements shall be developed by the QSE team of the malting division prior to the start of construction. This is addressed as an ESAP item. IFC shall require quarterly updates on the construction. 

Supply Chain

Crops such as barley, teff, wheat, and beans are grown in the higher altitudes. Mixed farming dominates the highlands, with crop and livestock farming practiced in the same management unit. The production system is mainly rain fed (1,000 - 2,000 mm per year), subsistence based, and smallholder oriented. Despite Ethiopia being one of the major producers of barley in sub-Saharan African, low yields (<2 ton/ha) ensure that there is not enough barely available to satisfy the needs of the country, nor malted barley for that of the malting and subsequently brewing industry. To ensure enough barley for the full capacity of the malting facility (i.e. 110k tpa), the company’s procurement staff will engage directly with farmer groups and cooperatives. The company’s procurement staff which has an agronomy background work with model farmers to train farmers groups in best agricultural practices as well as providing inputs and seeds. New imported variety seeds (non-GMO) provided by the company could increase the yield to 6 ton/ha. As part of their interactions with farmers they will also consider, and address where needed, any labor and biodiversity impacts identified as part of Soufflet’s policies. Going forward, the company will develop their suppliers’ database to secure their supply in the main barley growing areas. As part of developing commercial contracts with their suppliers, Soufflet Ethiopia will develop a supplier’s code of conduct, including E&S requirements as part of the procurement process, monitoring compliance and a mitigation process when issues are identified. This is addressed as an ESAP item. (Labor issues related to supply chain are summarized in the section on PS 2 below.).   

  Working Conditions and Management of Worker Relationship

Human Resources Policies and Procedures

Soufflet Ethiopia will put in place an HR policy and procedures manual and a code of conduct based on the Group policies and procedures and including the Ethiopian regulatory requirements. As per the Group policy the contents are shared with new employees during their induction process.  The manual contains information on terms of employment and working conditions, covering employment, recruitment, probation period, transfers, promotion, and termination.  It provides details on work schedule, remuneration including overtime pay, public holidays and leave, health insurance, pension fund, training and development, staff relations and communications (including a grievance mechanism or GM), occupational health and safety, workplace rules, code of conduct and disciplinary actions that could be taken. Sexual harassment stipulations are addressed in the Group Subsidiaries according to local laws and will be extended to Ethiopia.

During construction of the malting facility there will be around 200 workers. The company will employ around 50 permanent staff in the malting facility, which will be automated, and around 12 permanent field staff for procurement. Females will be encouraged to apply. In total around 35 positions are outsourced.

Working Conditions and Terms of Employment

Office staff work 48 hours per week in accordance with the labor law. There will be three shifts per day in the malting facility. There is no minimum wage stipulated for this sector of employment in Ethiopia. The company will offer salaries based on market practice for similar industry.

Workers’ Organizations

The company will allow for labor unions to be present within the organization once operational. The minimum number of employees needed to have labor unions present in accordance with the labor law is 10 employees. This number will be reached with the required number of employees as provided above. 

Grievance Mechanism

As noted above, the company will put in place a worker’s grievance mechanism at the Ethiopian malting facility as in place in other countries, including expertise to manage sexual harassment cases. The mechanism allows for the processing of anonymous grievances.

Protecting the Work Force

Neither child labor or forced labor will be or is utilized by the Soufflet Ethiopia as per the Group requirements. Age of potential employees is confirmed before any offer of employment is made.

Occupational Health and Safety

Safety KPIs include number of lost time accidents for employees and contractors; training completion and safety misfunctioning. These are reported via the dashboards for each facility and also published in the facilities. When an incident or accident occurs a flash-card is developed showing the incident or accident, the root causes and measures taken. The flash-cards are published in all malting facilities.

Soufflet has put in place practices to ensure a safe working environment. Those jobs that have inherent hazards and risks (such as working at height, in confined spaces, with energized equipment, or with hazardous materials, i.e. ammonia) have been assessed and safe working measures developed and implemented. For example, a lock-out-tag (LOTO) practice ensures that workers engaged with energized equipment are protected from exposure to electricity, pressurized liquids, etc. while they complete their tasks.

In the past years, Soufflet has given a lot of attention to safe working and improving the safety culture at their operations. For example, in addition to their training program, Soufflet implemented “Near Machine Meeting” in 2017. They consist of a short meeting around a working operator during which an action is analyzed. The aim is to make operators aware of risks resulting from inappropriate behavior at work. A division wide target incident has been set in parallel with further concrete incident reduction actions. This compares favorably to the US benchmark rate in food manufacturing of 5. For the malting facilities included in the current IFC investments zero accidents were reported in the last three years. The company will calculate the LTIFR for temporary/casual laborers and contractors and report performance of such in the Annual Monitoring Report (AMR) alongside that of their own employees.

Supply Chain

Barley production in Ethiopia is not known to be associated with the types of social risks and impacts contemplated by the Performance Standards (child labor, forced labor, and significant safety issues) according to the current edition of the US Department of Labor List of Goods Produced by Child Labor or Forced Labor. The IFC Advisory barley value chain project targeting increasing yields for small holder barley growers and professionalizing the supply chain does include social aspects and monitoring of improved livelihoods. Soufflet Ethiopia is in discussion with IFC Advisory to become part of this project.

    Resource Efficiency

Soufflet Ethiopia will implement technically and financially feasible and cost-effective measures to ensure efficiency of energy and water consumption. The main utilities required by the malting facility are electricity, water, heat, compressed air and cooling system. Electricity shall be obtained from the national grid (i.e. hydro power); water supply comes from boreholes managed by IPDC. Details are provided below.

Availability of groundwater around the Bole Lemi I and II Industrial Zone has been well studied in the past, as noted in the introduction to this document. According to previous studies for developing the Industrial Zone indicated that, the geology and recharge allows for the extraction levels as defined for Bole Lemi I and II”. The area experiences good infiltration of rainfall and the underlying geology provides for good storage of this water; hence, there is good recharge – and thus availability – of groundwater. As part of the Bole Lemi II industrial park development project, four water wells have been constructed to meet the water requirements of all the proposed projects. The yield of drilled wells (depth > 150m) in these aquifers in most cases is over 10 L/sec (ibid). Soufflet Ethiopia confirmed that the consumption in phase 2 does not exceed the combined yield communicated by the Ethiopian Industrial Park Development Corporation for the boreholes dedicated for Bole Lemi 2. A usage permit has been granted to IPDC accordance with article 8 of the Ethiopian water resources management proclamation (No. 197/2009). The company has an agreement with IPDC for the use of water. All incoming water will be metered. Once at full capacity the projected consumption will be less than 495,000m3/year, which is in line with the industry benchmark. The water is of good quality and will not need any specific filtration prior to use.

In absence of gas, electricity is the main energy supplier. Heat will be generated by heat pumps. Electricity saving equipment such as glass tube and heat pump will be installed. This is a technology applied in the malting facilities in France. The energy consumption will be efficient and is expected to be in line with the industry benchmark.

Pollution Prevention

It is anticipated that waste water will be generated from the industrial processing, and sanitation facilities. The company will build their own biological treatment plant with a continuous aeration (nitrification/denitrification). A static screen is installed before entering the biological reactor to eliminate part of the suspended solids. Aerobic excess sludge will be dewatered in a belt press. The proposed treatment will have to meet the French regulatory effluent limits as per Soufflet’s requirements. Review of the design provided IFC comfort that the effluent will meet the WBG EHS Guideline limits for food waste water which are in line with the French limits. Treated liquid effluent is either discharged in the Industrial Zone drainage system or to the nearby surface waters. This is to be decided in cooperation with the IPDC.

Once the Industrial Zone is completed there will be only light industries such as textile fabric and finished leather manufacturers. For these industries a central waste water treatment is under construction.

Dust poses risk of explosions or fires if allowed to build up in an uncontrolled way within the facility.  To avoid either of these situations, the malting facility, in line with Group requirements, will be constructed to meet state-of-the-art standards for dust control, utilizing filtered ventilation and enclosed transport systems.  Furthermore, these systems will be well maintained and cleaned regularly to prevent any potential dust related problems. The equipment will be coming from a German company.

Solid Wastes

The main process’ solid wastes are the dust collected in the cyclones or filters from the dust suppression systems, and the sludge from on-site wastewater treatment stations. The dust of barley will be used as feed. The sludge may be used as a fertilizer which will be further investigated as well as a potential use of the collected dust. Office wastes will be collected and disposed by the local public systems. Construction debris will be sent to the landfill.

Hazardous Materials

Hazardous materials as in ammonia for refrigeration and diesel for the generators will be properly and separately stored and marked with appropriate warning signs. Soufflet Ethiopia is not involved in primary production; as such pesticides are not used directly by Soufflet. Rodent and cockroach control at the malting facility will be undertaken by a licensed company.

Greenhouse gas emissions

The malting facility will use electricity as its main energy source which will come from hydro power plants, which is considered a sustainable energy source. As a back-up a diesel generator will be used. In the AMR, the company will report on their diesel consumption and associated CO2 emissions. Assuming an intermittent use of the diesel generator for 10% of the time, the estimated CO2 emissions are expected to be well below the threshold of 25,000 tonnes CO2 eq/year.

  Community Health and Safety

The company has evaluated the risks and impacts to the health and safety of members of the public that may be impacted by company operations. The main risks are those associated with security and ammonia leaks, dust and noise hindrance during construction and operation. The Industrial Zone is located in a seismic 4 zone, which requires no adjustments in the construction of the facility. However, wind speeds in the area are relatively high 22m/s, which has been considered in the design of the facility, i.e. round silos and maximum height of the handling tower being 36m. The design is in accordance with the Eurocode for construction. The facility is located in an Industrial Zone with some dwellings to the south/south west approximately 500m away which are not considered at risk due to the proposed designed safety equipment described above. It is the company’s understanding that the Government in the near future (no exact dates) will relocate these households as the whole area will be further developed. Further to the east, apartment buildings are being constructed with a buffer zone observed between the residential area and the Industrial Zone.

Issues associated with inputs, equipment and processes at the Soufflet’s malting facilities are assessed through a variety of means. For example, the company undertakes safety audits, and assessments with respect to explosions and the design includes features to avoid explosions and leaks. For example, barley present a risk of explosion due to the dust that they can generate when being moved. Measures are in place to ensure particulate concentrations do not pose a risk. The risk of ammonia leaks, that could also present a risk, are also assessed, and the equipment used for refrigeration will be regularly tested and, as noted above, a leak detection system will be in place to warn of any irregularity.

Possible impacts due to the transport of raw materials and product to and from the malting facility are relatively minimal as the trucks will come from the main road when entering the Industrial Zone. For the transport the company will make use of third parties. To ensure that the trucks used by these third parties are well-maintained trucks, driven by trained drivers whose location and speed is preferably tracked using GPS technologies the contracts will have include requirements to address these matters.  Furthermore, the company will ensure that the drivers of those trucks have access to appropriate sanitary facilities either in the designated truck holding area of the Industrial Zone or when at the malting facility. These two items are addressed in the ESAP.

Food/Product Safety

As stated above the company has a HACCP framework in place based on the ISO 22000 food safety standard, which is annually checked by Bureau Veritas. The new malting facility’s ESMS will also include HACCP requirements. The malting facility will have a laboratory for quality testing.  

Security Personnel

IFC observed that the perimeter of the Bole Lemi II Industrial Zone is walled and access is controlled by unarmed guards. Visitors need to be pre-announced and provided with an entrance number.

Security services will be provided by the general contractor. Prior to the start of the construction the company and the General Contractor will develop a Security Management Plan that will be reviewed by Soufflet and the Project Manager of the General Contractor. This is addressed as an ESAP item. The scope of the plan will be the protection of people, product and property and is based on a risk assessment, current legislation. The plan includes descriptions of security duties (including checking visitors, patrolling buildings and the greater facility, etc.), the roles of the various actors involved in security, including company management, the security service provider and company employees. As part of Soufflet’s annual supplier review the performance of the security provider will be reviewed and mitigation measures will be developed as needed. The company indicated that the security providers will not carry firearms.

The contract with the security provider should include the number of security personnel to be deployed at the facility, the need for the security provider to have appropriate licenses to provide security as required by law, that the security company provides skilled and experienced security guards the need to provide a company representative to manage the security guards, etc. As such, the security arrangements will be in accordance with the objectives and requirements of this PS.

  Stakeholder engagement was covered in the EIA, but only for public organizations. It was concluded by the consultant that because the project location is within an Industrial Zone there were no communities to consult with. The company shall have, in cooperation with IPDC an initial engagement meeting with adjacent villagers (at a convenient location) to give information about the project, the benefits and potential nuisance during construction and actions that will avoid or if not feasible minimize and/or control these nuisances. In addition, the company will communicate and explain the channels for affected person to lodge grievances during construction. At this meeting, the company shall provide for ongoing communication with local communities; the first point of contact for any issues, including grievances, will be the Country Manager who is responsible for addressing relevant issues brought to their attention.

Soufflet has developed a stakeholder engagement approach to strengthen its consultation and communication processes with affected communities on environmental and social risks, that may include traffic, noise and dust emissions, and ensures stakeholder engagement is an ongoing process. The approach is consistent with PS1 provisions and good international practices. Furthermore, Soufflet also developed and implemented a grievance mechanism to receive and respond to communities’ concerns. Going forward, the company will adapt its engagement practices with relevant stakeholders, especially those communities in proximity to the malting facility operations, including a formal community grievance mechanism. This is addressed as an ESAP item.

    Company: Malteries Soufflet

Point of Contact: Jean-Francois Fevre

Title: Overseas Countries Manager - Malting

Telephone Number: + 33 (0) 3 25 39 41 11

Email: communication@soufflet.com