PS5 (Land Acquisition and Involuntary Resettlement) is not applicable for this investment as land required for processing facilities is already in possession of the company and these have been acquired from previous companies which have been operational for over 20 years. Land for the research centre at Kadoma has been transferred to the company owing to acquisition of previous company which owned the land since 2008. The company has not been involved in any land purchase in Africa and demonstration farms are organized on farmers land itself for which an agreement is signed with farmers. The research farms at Kadoma are owned by government entity (Seed Co.) and given on lease to the company for conduct of trails and for which an agreement is in place. No land parcel is owned by the company in South-East Asia.

Preliminary screening using Integrated Biodiversity Assessment Tool (IBAT) did not identify any potential impacts on biodiversity either from company or supply chain operations; the risks and impacts envisaged under PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not present and hence PS6-PS8 do not apply to this investment.                                                 

 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 and guidelines.

The key E&S risks and issues include: a) company’s overall E&S capacity and implementation of management systems to ensure compliance with national standards, IFC Performance Standards (PSs) and World Bank Group (WBG) Environment, Health and Safety (EHS) Guidelines for crop production; (b) assurance of fair, safe and reasonable working conditions for all workers in line with IFC PS2 requirements (including permanent employees, contract workers and supply chain labor;(c) management of dust emissions; and (d) pesticide management and food safety.                                                  

 Environmental and Social Assessment and Management System:

The company has all necessary EHS related regulatory approvals in place for all its processing facilities including registration certificate, fire certificate and permission for storage of flammable liquids (Liquified Petroleum Gas). The company will ensure that requisite approvals are obtained for the new facilities to be developed as well.

The processing facilities at South Africa and Zimbabwe have an Integrated Management System (IMS) in place (developed by Mahyco Grow and Quton respectively) and have developed environmental management and quality assurance manual which includes procedures for identification of environmental aspects and impacts, rating of significant aspects, preparation of legal aspect register, environmental management programme, emergency preparedness and monitoring procedure. There are standard operating procedures for hazard identification, risk assessment and job safety analysis for various operations such as seed cleaning, treating foundation seed and operation of various equipment which is included as part of IMS manual.

Going forward as included in ESAP item#1, Mahyco International shall develop a corporate Environmental and Social Management System (ESMS) building upon the existing IMS and develop a standard set of procedures which could be adopted for all processing facilities (existing as well as proposed). The ESMS would be appropriate to the nature and scale of the operations and commensurate with the level of the environmental, Occupational Health and Safety (OHS) and social risks and impacts. This ESMS will be consistent with the requirements of PS 1(and may also align with ISO 14001,OHSAS 18001and Good Agricultural Practices (GAP) requirements).The ESMS shall include: overarching EHSS/sustainability policy; identification of risks and impacts; manual of procedures and work instructions related to the management of OHS, social and environment issues; management programs; organizational capacity and competency; responsibilities and approach to EHS management (inclusive of monitoring and supervision of out growers);training requirements to facilitate the implementation of the ESMS; emergency preparedness and response; monitoring and reporting on EHS performance, including OHS; stakeholder engagement plan; and community grievance mechanism.

Policy:

Mahyco International does not have a formal E&S policy although the subsidiary companies have been following the relevant EHS policy of the previous company. Going forward, as part of the ESMS implementation (ESAP item#1), the company will develop and implement an overarching EHSS/sustainability policy defining its environmental and social objectives and targets to cover the scope of Mahyco International and its operations, including its commitment to comply with the applicable laws and regulations, compliance with IFC Performance Standards and adoption of agricultural best practices such as Global GAP.

Organizational Capacity and Competency:

The E&S responsibilities of the company are overlooked by plant managers at each processing facility and demonstration farms. There is a HR corporate head and corporate head of communications both of whom report to the Chairman based in India. Going forward, as included in ESAP item#2, in order to strengthen the management of EHS risks and impacts, the company will appoint a qualified EHS professional with the responsibility for environmental, health & safety and social management within the company. This EHS manager will have a corporate function and should report to the head of Africa operations and the head of South Asia operations. This function will be responsible to follow up with operations on the implementing of the E&S Action Plan (ESAP), oversee EHS performance at all operations, consolidate EHS monitoring data and report to senior management on EHS matters. The EHS manager will also be responsible to monitor compliance with IFC Performance Standards (PSs) requirements for existing and future operations and any gaps will be reported and addressed by senior management. The EHS manager will co-ordinate with designated staff at each processing facility and manage EHS issues at corporate level.

Emergency Preparedness and Response:

The seed processing facilities have identified risks associated with storage of, and use of fuels, chemicals (sulphuric acid), operation of processing equipment and manual handling of heavy loads. The processing facilities have developed an emergency response plan based on identified risks that includes how: (i) to respond to accidents and injuries; (ii) prevent and, if needed, deal with fire; and, (iii) address chemical spills. Accordingly, evacuation routes and assembly points have been designated and marked. The ERP also includes the requirement of conducting emergency response drills, including evacuation drills and fire drills.

Fire protection systems have been provided at processing facilities including portable fire extinguishers, fire hydrant systems (with dedicated fire water storage), manual fire alarms, emergency exits and marking of evacuation routes. Fire certificate is required to be obtained from regulatory authorities which has been done. There has not been any incident at any of the processing facilities involving any employee nor contract worker in the last 10 years.

Monitoring and Review:

Monitoring of E&S aspects, including stack emissions from cyclonic burners, occupational dust exposure, industrial hygiene exposure and industrial hygiene survey (covering indoor air quality, noise and illumination) are conducted by qualified third party consultants.

Regular workplace monitoring is done for key hazards such as noise and chemical exposure to ensure the respective engineering controls are appropriate and occupational exposure limits were observed to be within the values as specified in the national guidelines.

Regular EHS trainings are conducted on various aspects including on process safety management, transport safety, firefighting, first aid, emergency response, behavioural based safety and Hazard Identification and Risk Assessment (HIRA).

Supply Chain:

~500,000 farmers across Zimbabwe, Tanzania, Malawi, Uganda, Mozambique, South Africa and Zambia are presently purchasing seeds from the company. There are about 35,000 production farmers across Zimbabwe, Tanzania, Malawi and South Africa who are growing cotton using seeds procured from the company. ~32 Ginners across Zimbabwe, Tanzania, Malawi, Zambia, Nigeria and Burkina Faso are associated with the company and supply seed for further processing at seed processing facilities operated by the company. There are about 3,250 demonstration plots across Africa where the company has an agreement with the farmer and trains them on good practices for crop production using seeds supplied by the company and which serves as demonstration operations for other farmers.

There are no processing facilities owned by the company in South-East Asia and company has about 84 demonstration plots in Vietnam and Philippines with over 400 production farmers in Vietnam.

No potential impacts on biodiversity is expected either from company or supply chain operations based on preliminary screening done using IBAT.

The company has a dedicated supply chain team largely based in Mahyco India. Supply chain team for Africa is yet to be set-up. As included in ESAP #3, going forward the company will develop procedures on supply chain management for all operations and include specific requirements on EHS including compliance with applicable legal requirements, prevention of child labor, forced labor and ensuring safety of workers in the contracts.                                                                

 Mahyco international has a total workforce of 38employees (including 9 females) as of May 2019 and employs an additional 63contract workers (including 12female workers) deployed in Africa at various processing facilities and research center. In addition, there are upto 300 contract workers in Africa engaged at processing facilities during peak season and who also work in demonstration farms in training farmers. These workers are hired directly by the company through permanent or temporary contracts, or through a third-party contractor. The total workforce in South-East Asia includes 16 males and 3 females as of May 2019 and an additional 3 contract workers.

Human Resources Policies and Procedures, Working Conditions and Terms of Employment:

The company has in place a code for business ethics for its India operations which is provided to every employee and includes the company’s commitment on Health, Safety and Environment, equal employment opportunity, ethical conduct and prevention of harassment and discrimination. The code for business ethics also includes code for employees for dealing with customers, protecting company assets, restrictive trade practices, communication protocol and conflict and dealing with proprietary and confidential information.

For Africa operations, the company has adopted the HR policies of the acquired company(eg Mahyco Grow and Quton) which are aligned with national labour legislation. At the facilities visited, it was informed that working conditions and terms of employment are aligned with the host country requirements and display of extracts from relevant labour legislations was observed at the facilities. The employees and contract workers are provided all the legal benefits including pension fund (PF), social security allowance, health insurance, gratuity, and, leave. The hiring and employment practices recognize the principles of non-discrimination and equal opportunity. The company does not have any explicit policy on non-deployment of child or forced labor in the workforce, but only workers above the age of 18 are employed which is aligned with host country requirement and awareness on ills of child labour employment is made during the periodic meeting with contractors and growers.

For its subsidiary in Vietnam, Mahyco has developed internal labour rules covering aspects such as working hours and rest interval, employment contract provisions, safety, environment, health and security.

Going forward as included in ESAP item#4, Mahyco International shall develop and implement a HR policy document (applicable to both Africa and SEA operations and meeting host county labour law requirements) and supporting procedures covering: (i) freedom of association;(ii) commitment to avoid use of forced or child labor; (iii) equal rights and equal pay; (iv)nondiscrimination based on gender, age, or sexual orientation, (v) protection of rights of migrant workers; (vi) retrenchment, and (vii)grievance mechanism (including the ability to post grievances anonymously) and ensure that these updated policies are publicized and communicated to all workers in various subsidiary companies.

Freedom of Association and Grievance Mechanism:

There is no existing staff/workers’ association at any of the processing facilities as these facilities operate seasonally only and largely contract workers are deployed. Going forward as included in ESAP item#4, the company will develop a HR policy and include: (a) explicit policy on freedom of association; and (b) grievance redressal mechanism meeting PS2 requirements covering both permanent and temporary workers directly hired by the company, and contract workers hired through third-parties, including the provisions on anonymously raising grievances.

Occupational Health and Safety:

The company has developed incident reporting mechanism to record all reportable injuries, first aid cases, near misses, lost time injury frequency rate, and lost time accidents along with cause of accident, immediate action taken, and corrective action required. The mechanism is however developed at processing facility level and there is no corporate monitoring and reporting procedure in place. As included in ESAP item#1, and as part of the implementation of a corporate ESMS, the company will include specific key OHS performance indicators and include an incident reporting mechanism to be implemented at all processing facilities.

Industrial hygiene exposure assessment has been done for processing facilities and industrial hygiene survey is undertaken on periodic basis covering indoor air quality, noise and illumination. Regular workplace monitoring is done for key hazards such as noise and chemical exposure to ensure the respective engineering controls are appropriate and occupational exposure limits were observed to be within the values as specified in the national guidelines.

Overall the OHS performance at the sites visited is adequate. Lost time injury frequency rate at operations is in average better than the benchmark for this type of operation.

Workers Engaged by Third Parties:

The company hires contract workers through manpower supply firms and which are engaged seasonally in processing plants (June-September mostly) for seed processing and for providing training to farmers in demonstration farms (again on a seasonal basis). The contract workers are provided the minimum wages and benefits as stipulated under host country requirement. Going forward as included in ESAP item#5, the company will ensure that contract agreement with manpower supply firm includes specific requirements for compliance with applicable labour laws including for minimum wages, PF, health and social security related benefits and leave provisions, non-deployment of child and forced labour, alignment of working hours and overtime payment (including provision for weekly off) with statutory requirements, occupational health and safety guidelines for the workers. The corporate HR and plant HR department will monitor the contractor compliance with various statutory requirements on providing wages, working hours, overtime, OHS, and benefits to their workers. The first audit report will be provided to IFC for review and comment.

Supply chain:

Agreement with ginners includes provisions of HSE requirements and compliance with applicable labour requirements at their facilities. The company has limited interaction with the ginners and buys a sub-product from them which limits its leverage and control over the ginners’ performance.                                                  

 Resource Efficiency:

Power at all processing facilities is provided by the national grid and Liquified Petroleum Gas (LPG) is used as primary fuel for seed processing operations. LPG consumption is estimated to be around 120-130 tonne/year at each processing facility and is estimated as 0.422 litres/kg of gin seeds processed. Diesel-based backup generators are provided for emergency use.

The company has taken some initiatives for energy efficiency at the processing facility in Glendale and has provided heat exchanger where dust in cyclonic settler is burnt to generate heat which is the supplied back to the process thereby reducing energy consumption by about 50%.

Water consumption: Water consumption is very limited for processing facilities and is largely met from municipal source/bore wells for which requisite permission is obtained. Results show that average water consumption (for processing facility) is around 40-50 m3/day during the peak season. Water in demonstration farms is essentially procured by the farmer as company’s role is only in advising and training on good practices for cultivation of seeds.

Air Emissions and Ambient Air Quality:

There is no direct source of emission from processing facilities and limited emission is only from back-up power generator. Dust generated due to seed de-linting process is controlled by passing through cyclonic settlers which is then burnt in a cyclonic burner. Emissions from cyclonic burners are monitored and observed to be compliant with IFC General EHS guidelines. At some processing plants, heat generated from cyclonic burner is absorbed by heat exchanger which is then re-used in the process.

Wastewater Discharges:

Wastewater generation is very limited as the process involves washing the seeds with sulphuric acid followed by neutralization with calcium carbonate. Wastewater in minimal quantity (30-40 litres/day at each processing facility) if generated is tested for pH (followed by neutralization) and then discharged into municipal sewage line. Permission for discharge is taken from local authorities and records of pH measurement are maintained.

Waste Management:

The major streams of waste include redundant seeds, redundant seed bags and kitchen waste which are disposed off to municipal landfill facilities. Hazardous waste generated include used oil from diesel generator sets which is sent to government licensed service providers for disposal. Authorization for hazardous waste handling is obtained from the regulators as applicable.

The non-hazardous waste streams like packaging waste are segregated and sold to external agencies for further recycling. The company will ensure that empty/discarded containers are stored in designated hazardous waste storage area and sent to government licensed service providers for disposal.

Mahyco International shall prevent WHO listed Class1a (extremely hazardous) and 1b (highly hazardous) chemicals from entering its production processes. As included in ESAP item#6, the company shall develop a list of chemicals to be prohibited for use by its own research facilities and its out-growers and shall monitor to ensure compliance.

GHG emissions:

Primary energy requirement is that of electricity which is supplied from the national grid. Diesel fueled generators are installed on site as backup generators and are in use in case of power failure. Current GHG emissions (Scope 1 and Scope 2) are estimated to be around 2000 tons of CO2 equivalents annually.                                                   

 All the processing facilities are located near highways to allow ease of transportation. As mentioned above under PS1, site emergency plan is developed, and mock drills conducted on a regular basis. Transport of seeds is by truck however the volume of this traffic is not likely to have impacts on nearby communities as the facilities are located in the vicinity of good transportation networks.

Unarmed security personnel are employed through security contractors. The company briefs security personnel about EHS policies and provides training on basic safety, first-aid, fire safety and emergency response aspects.                                                                                                     

 Mahyco India has been implementing several Corporate Social Responsibility (CSR) initiatives in the thematic areas of education, health and nutrition and sustainable agriculture. Company’s efforts in the thematic areas are being executed under two spearhead programs: (i) Program SHARE: Sustainable Harvests – Agriculture, Resources and Environment and programs focus on sustainable agriculture practices by increasing agricultural yields sustainably, through input- output capacity building of the farmers, imparting best package of practices and facilitating market linkages for improving household incomes for small and marginal farmers; and (ii) Program DISHA which covers efforts in the health, nutrition and education areas focused on women and children in the rural communities. The program focuses on providing access to clean drinking water and sanitation facilities apart from women empowerment, facilitating additional livelihood opportunities for enhancing rural household income.

Mahyco Research Foundation Trust has been running an eye hospital and three schools in Jalna, Maharashtra. Company has also partnered with ISAP (Indian Society of Agribusiness Professionals) to improve on-farm productivity for the farmers by training them on GAP and farming techniques, building infrastructure for water conservation and management and demonstrating integrated farming systems. The company has reached out to over 40,000 farmers across 400 villages in Maharashtra and Telangana.

Mahyco International has plans to implement CSR initiatives in Africa and SEA as well.

Going forward as included in ESAP item#1, the ESMS developed will include community grievance mechanism.                                                  

 The company will locally disclose this ESRS and the ESAP at the following address:

Mahyco Grow South Africa, 24 Bank Street, Groblersdal 0470, Limpopo, South Africa

Any queries and/or comments about the project may be directed to:

Phone: +9122 67573000

Email: subbarao.appemane@mahyco.com