PS5 on Land Acquisition and Involuntary Resettlement does not apply as the project is planned on land already owned by Bauducco and obtained through willing-buyer willing-seller transactions. PS6 on Biodiversity Conservation and Sustainable Management of Living Natural Resource is not considered applicable as the projects are being developed in a peri-urban area of modified habitat with no significant biodiversity values. PS7 on Indigenous People does not apply because no indigenous people, as identified by IFC Performance Standards, have been identified in the area of influence of the project. PS8 on Cultural Heritage does not apply as there is no planned expansion in known cultural heritage areas.

 This is a category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Specific key environmental and social issues reviewed for the project include: (i) client’s corporate environmental and social management capacity to build the project in a manner consistent with IFC Performance Standards; (ii) working conditions for employees; (iii) management of occupational health and safety (OHS) risks; (iv) efficient use of energy and water; (v) waste and wastewater management; and (vi) construction contractor’s environment and social management systems (ESMS).

  Environmental and Social Assessment and Management System: Pandurata Alimentos/ Bauducco’s key E&S aspects have been adequately managed under the Brazilian regulatory framework. As result of previous environmental and social action plans (ESAPs) related to IFC investments, Pandurata Alimentos/Bauducco has been working to implement an integrated ESMS (IMS) based on international standards (ISO14000; OHSAS 18000 and SA 8000). Pandurata Alimentos/Bauducco most recently hired an organization with the relevant experience and qualifications (SENAI) to support them on the implementation of the IMS and that is expected to be completed in December 2018 for Bonsucesso, and rolled out for the remaining factories following an agreed schedule with IFC. The client is currently working on a draft of its E&S policy, to be agreed to by the board of the company and which will be disclosed on the company’s website. As part of the ESAP, the company will provide a schedule for the implementation of the environmental and occupational health and safety management systems in all Bauducco manufacturing plants, agreed with IFC, and will have a certified independent fir to assess Bonsucesso and extrema facilities to ensure that ESMS implementation is adequate and up to the level of a recognized environmental and occupational health and safety certification acceptable to IFC.

Environmental and Social Assessment: This proposed IFC investment will support the expansion of the existing operations in Extrema and Bonsucesso, which will include a new building on each site and new production lines. The plant in Extrema currently has production lines manufacturing of wafers, salty biscuits, sandwich cookies and buttery biscuits, besides extruded goods (bars and cookies) and panettone. The plant already has an environmental license that was issued after the completion of an impact assessment back in 2000 (EIA, in Portuguese), and is following local regulatory licensing requirements. Pandurata Alimentos/Bauducco will request the authorities grant an extension of the existing license to cover the expansion in production capacity. As part of the ESAP, the company will complete a Rapid Impact Assessment for the expansion, to include a description of the expansion project (infrastructure, equipment, project layout, production, facilities etc.); schedule of construction; identification of impacts and mitigation measures (from both construction and operations); and proposed management programs associated with these impacts. Pandurata Alimentos/Bauducco will also present to IFC all the three applicable Environmental licenses for the expansion in both sites.

Under the implementation of the ESMS, Pandurata Alimentos/Bauducco is conducting a formal identification of hazards/risks and aspects/impacts from all sites and, in addition, Pandurata Alimentos/Bauducco will conduct a legal EHS gap analysis in all five sites. As set forth in ESAP, the company will complete the respective corrective action plans to close the regulatory gaps and reduce identified operational risks/impacts from existing operations.

Management Programs: Following the local, social and environmental regulations, Pandurata Alimentos/Bauducco has a set of mandatory OHS programs described in PS2 OHS section below. Bauducco also has all required licenses and permits and it treats and monitors its wastewater discharges as required by its environmental licenses.

Pandurata Alimentos/Bauducco defined the following management programs, which now will be consolidated under the ongoing ESMS development and implementation, and consistent with IFC requirements: environmental noise monitoring consistent with NBR 10151 standard and IFC EHS Guidelines, wastewater monitoring and control, waste management (segregation, storage and disposal of conventional and hazardous waste), internal grievance mechanism, community engagement and external grievance mechanism consistent with IFC PS1 requirements, OHS safety procedures, OHS job observation and inspection program, and OHS external audits covering PPRA implementation and local regulations compliance.

Organizational Capacity: Pandurata Alimentos/Bauducco has a qualified E&S manager with proven experience in the food industry; the manager is supported by a team that includes an OHS Engineer and EHS coordinator at the corporate level, wastewater plant operators and an EHS technician at each plant. Each factory has a nurse and a part-time physician. The company has a comprehensive training program for new and existing employees and provides periodic training on a variety of E&S issues, such as emergency response, first aid, behavioral safety, management of waste and efficient use of resources. Each site identifies training needs through a managerial annual assessment and observation in the field. All operational workers have specific training on existing workplace risks, on required prevention measures, and on the results of the workplace monitoring assessments.

Monitoring and Review: Pandurata Alimentos/Bauducco has an OHS monitoring system under the nationally required Workplace Risk Prevention Program (PPRA) and Occupational Health Monitoring Program (PCMSO). They conduct periodic workplace noise monitoring, ergonomic assessments, safety of electrical facilities assessments and OHS workplace inspection programs. All workers are subject to periodical medical examinations including at admission and upon leaving the company. The company monitors its wastewater discharges and solid waste production, treatment and disposal as well as water, gas and energy consumption. As part of the ongoing ESMS implementation program, the company will formalize a set of monitoring procedures defining annual internal system audits and periodic external verification of the monitoring program. It will also define key E&S Indicators, frequency of monitoring and appropriate sampling techniques.

 Working Conditions and Management of Worker Relationship: Pandurata Alimentos/Bauducco employs approximately 4,529 permanent staff and 730 seasonal workers, making a total of 5,259 people working for the company; of these, 46% are female. The company has a program in place to comply with the regulatory requirement concerning the employment of a minimum number of handicapped employees, agreed with the Department of Labor. As part of this plan, the company has adapted its workplace environment to facilitate access to work areas; also, job opportunities are first advertised and offered to disabled people. The client has a human resources (HR) policy and follows Brazilian labor regulations, which are consistent with ILO standards. Terms of employment, such as: wages and benefits, hours of work, overtime arrangements and overtime compensation, annual and sick live, maternity, vacation or holiday leave are established by local labor regulations.

The company informs new employees about the specific terms of the job position and additional benefits. Labor rights in Brazil are enshrined in the constitution and the consolidated labor laws (known as Consolidação das Leis do Trabalho, or CLT), 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. The Company respects the employee’s union’s collective bargaining agreements and the company pays a wage bargained with the Union. Bauducco hires unionized workers and unions representatives. There is no evidence that Pandurata Alimentos/Bauducco restricts the freedom of workers to associate.

Protecting the Workforce: The minimum workers age is 16 years, but under a national part time training program in cooperation of technical schools (Programa Novo Aprendiz), and underage workers are not allowed to handle or work with hazardous materials or activities. For all other workers the minimum age is 18 years old, as defined by law.

Internal Grievance Mechanism: Pandurata Alimentos/Bauducco has several internal mechanisms that handle worker grievances and provide different avenues for the expression and resolution of worker grievances. These activities include periodic open chats between managers and workers; private and direct access to HR analysts; and access to Union representatives in cases where workers want to remain anonymous or where they feel they have not received acceptable feedback from the company. There is an internal communication channel for their employees called ETHICALL, designed to cover/treat corruption and/or report unethical behavior in the work environment. This too allows for anonymous complaints to be posted, and accepts communications related to the following: moral/sexual harassment; employees/suppliers/clients conduct; discrimination; fraud; theft; environmental issues; work safety; complaints and suggestions. The claims are received through an email or phone number and the system is managed by a credible third party, which receives the complaint and duly forwards the issue to the right people in Pandurata Alimentos/Bauducco for assessment, corrective action(s) and feedback.

Occupational Health and Safety: Pandurata Alimentos/Bauducco has an OHS department developing mandatory programs on a variety of programs. These include: Work Environment Risk Prevention, Occupational Health Medical Control, Ergonomics, Internal Commission for Accident Prevention and Personal Protection Equipment (PPE).  The company has an OHS monitoring system under the nationally required Workplace Risk Prevention Program (PPRA) and Occupational Health Monitoring Program (PCMSO). As noted above, they have a periodic workplace noise monitoring, ergonomic assessments, Safety of Electrical Facilities assessment and daily OHS workplace inspections. All workers are subject to an admission and periodic medical examinations. Pandurata Alimentos/Bauducco reported a total of 67 accidents with lost time and 9.00 million worked hours, resulting in an accident frequency rate of 7.4 accidents per million worked hours, which is considered acceptable and comparable to industry benchmarks.

The company is implementing an ESMS based on the OHSAS 18001 standard and is conducting both hazard/risk assessment and legal requirements gap analysis for all plants, consistent with IFC requirements. Going forward, Bauducco will provide to IFC a corrective action plan to meet Brazilian OHS regulatory requirements including the NR-10 (OHS Regulatory standard safety requirement of electrical equipment/circuits and electrician works, including a review of security systems/measures for electrical panels and circuits and implementation of appropriate safety measures e.g. a formal LOTO procedure when working on energized equipment); NR12 (machinery protection); NR33 (confined Spaces); NR35 (working at heights) and so forth.

As set forth in ESAP, for the expansion in both plants, the company will contractually require construction contractors to have an OHS Management Plan that will encompass regulatory norms, such as: Risk Prevention Plan (PPRA); PCMSO (Occupational Health Medical Control Program); CIPA (Internal Commission for Accident Prevention); PPE (Personal Protection Equipment); Fall Prevention Program; Construction Workplace Conditions Program (NR18); Safety in handling; lifting of cargo and daily inspections. In addition, Bauducco will conduct monthly EHS inspections over the construction period to check contractors’ Occupational Health and Safety performance and compliance with national regulations.

Supply Chain: Although there is no evidence of use of child/forced labor in its supply chain, the company audits and ranks its suppliers according to technical aspects and they have included social aspects in the contracts, particularly related to child labor and forced labor.

 Pollution Prevention: Wastewater is one of Pandurata Alimentos/Bauducco’s main environmental aspects. Effluents consist of sanitary and industrial effluent (emanating from manufacturing processes and from cleaning equipment and facilities washing), and are pre-treated and discharged to public sanitary sewer systems (for post treatment). They are periodically monitored and meet local regulatory requirements and IFC Standards, except from effluents form the Guarulhos plants. All existing plants treat their effluents according to the local environmental regulations. The Company monitors treated effluents for biochemical oxygen demand (BOD), chemical oxygen demand (COD), pH, temperature, oils and greases and total suspended solids.

At Extrema there is a waste-water treatment plant with primary treatment with static strainer and physical-chemical separation processes (flotation), secondary treatment with biological treatment (activated sludge), extended aeration mode, osmosis filtration and anaerobic reactor and tertiary treatment before discharge with UV disinfection and equalization lagoon. The existing treatment capacity is 20M3/h with 98% efficiency of BOD and QOD reduction. This plant does not discharge to the municipal sewage network, thus, the company will ensure that effluent quality is compliance with IFC’s guideline for food and beverage processing.In the Bonsucesso plant, the company will install a new wastewater treatment plant, adequate to the expanded capacity and in compliance with local requirements as part of the ESAP.

Air Emissions: Pandurata Alimentos/Bauducco’s operations utilize ovens which are fired with natural gas and which therefore do not emit significant levels of hazardous air pollutants. The main issue associated with their use are possible nuisance odors. All oven stacks have filters to prevent odor emissions and there are no reports of community complaints at existing facilities. The company presented the monitoring reports from air emissions carried out in compliance with the Environmental License and conditions to operate, consistent with local threshold requirements.

Solid Waste Management: The client has an environmental procedure for solid waste management, including segregation and volume monitoring. The existing plants generate various types of residues such as organic and food processing wastes, as well as wastes directly related to production (packaging, recyclables: paper and cardboard, plastics, plastic drums, metal drums, pallets and production waste). Solid waste is properly stored and disposed of in landfills (sludge, green waste and food), recycled (paper and cardboard packages and plastic packages) and/or used as animal feed. A report is periodically sent to the environmental agency containing detailed data and information about waste generation, transportation, storage and disposal. All storage areas are licensed or regulated and the company relies on a centralized waste facility in both Extrema and Bonsucesso covered with a roof, sealed floor, waste segregation areas and warning signs.

  Emergency Preparedness and Response: The company has an established emergency response plan, adequate to the risks of each facility. There is an emergency brigade at each facility, regularly trained by officials and professional firefighters, and integrated with the local Fire authority that can be triggered on a mutual emergency response with other industries in the region. Fire brigade personal are trained in the following: prevention and firefighting (composition, means of propagation, extinguishing methods and general practices); basic first-aid (analysis, cardiopulmonary resuscitation, fractures, burns, transport); evacuation and isolation of areas (training monitors to coordinate evacuation); and environmental impact mitigation. Training sessions are periodically held in compliance with regulations.

Going forward, as part of the expansion project at both sites, and as set forth in ESAP, Pandurata Alimentos/Bauducco will elaborate an updated firefighting project design to include all new areas of production, in accordance to relevant State requirements, and will submit it to the fire authority for approval. Subsequently, the company must implement all required system upgrades, subject themselves to a post-construction inspection, and obtain a final fire authority permit or AVCB (Auto de vistoria do corpos de Bombeiros, in Portuguese).

Community Health and Safety: The project poses minimal health and safety risks to the surrounding communities. Potential risks that could arise are: noise, dust, and traffic disruptions due to construction activities and operation. Brazilian law requires a Neighborhood Impact Assessment (Estudo de Impacto de Vizinhança, in Portuguese). These studies typically involve an analysis of basic environmental considerations, impacts from noise and traffic, and effects on local property valuations. Nevertheless, as part of the ESAP, the company will undertake a Neighborhood Impact Assessment to ensure that risks to the community are identified and adequately address on each location. In regard to food safety, the company has implemented food safety management systems based upon HACCP and GMP in all their factories.

  Pandurata Alimentos/Bauducco engages with communities on an ongoing basis through the implementation of different social programs. These programs include proactive community engagement / communication activities such as contact and invitations to neighbors already identified and contacted by the Social Assistance Unit in relation to the current expansion. The program includes periodic contact and invitations for chats to help establish open channels of communication. The company’s impacts to local communities are limited to nuisance resulting from truck traffic and eventual noise emissions. Community engagement practices are consistent with these impacts and aligned with IFC PS1 requirements.

Pandurata Alimentos/Bauducco has a Consumer Services Center (SAC) system in place that can be accessed through the internet: http://www.bauducco.com.br/bauducco.html , by phone via a toll-free line at: 0800 7011599, or by post: Caixa Postal 11039, CEP 05422-970. These contact options are widely announced through the Company’s consumer products. The SAC is consistent with Brazilian consumers’ rights regulations and most of the complaints that come through the SAC are related to product quality. All claims are registered and a product replacement is offered. The defective products are analyzed and a monthly report of products claims is shared with managers and directors, who decide if any corrective action is needed.

Pandurata Alimentos/Bauducco has a Social Investment Program that includes support for local organizations that assist poor children and mentally disabled people. They actively support a Bakery Training Center at the organization to assist mentally disabled people (APAE) where they prepare and hire trainees for their social inclusion program. Pandurata Alimentos/Bauducco has an Open Factory program for the community interested in visiting its plants, mainly targeting school-age students.                                                 

 Contact Person: Mr. Leandro Gomes, Administrative Director

Company Name: Pandurata Alimentos Ltda. 

Address: Rua Fritz Reiman, 628, 3rd floor, Guarulhos, SP, Brazil, CEP 07044-020

Email: leandrogo@bauducco.com.br

Phone: 55.11.2573.9790