PS 5: Land acquisition and Involuntary Resettlement does not apply to the current investment as Zalar Agri owns 443 ha of land and has followed the national law for obtaining lease agreements for 928 hectares of land. The procedure was managed and monitored by the Ministry of the Interior and did not involve any physical or economic resettlement. Most of the land is community-held and through the land lease process, community representatives give their written consent to lease the land. Communities receive their lease payment from the government and the amount per ha is market value. Zalar Agri also recently secured an additional 1,437 hectares (with an expected planted area of 1,220 hectares by 2022) through the acquisition of the Agricole Center project which is not subject to IFC financing.

PS7: Indigenous Peoples is not applicable as no Indigenous Peoples have been identified within the Company’s operational footprint.

PS8: Cultural Heritage is not applicable as there are no cultural sites within the Company’s operational footprint and no cultural heritage has been identified. In the event that issues anticipated by these Performance Standards arise, Zalar Agri will promptly inform IFC. Screening and assessment of these issues against Performance Standards requirements will be done through the existing environmental and social management system.

 The key E&S risks considered during appraisal were: (i) Zalar Agri’s EHS management system and technical capacity for its effective implementation, monitoring and performance to date in terms of EHS and social management; (ii) water and energy use and efficiency; (iii) solid and liquid waste management, and wastewater treatment; (iv) pesticides and fertilizer management; (v) labor and working conditions of both permanent and seasonal workers; (vi) life and fire safety; and (vii) certification to sustainable management practices. Land acquisition and impacts to biodiversity were also considered as part of the due diligence process.

The project is categorized as category B according to IFC’s 2012 Policy on Environmental and Social Sustainability because it has limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible and readily addressed through the application of good international industry practice (GIIP); and, specific mitigation measures. In this case, completion of the actions in the IFC Environmental and Social Action Plan (ESAP) will ensure the Project is in line with the applicable national laws and regulations, IFC’s Performance Standards and World Bank Group (“WBG”) general and sector-specific Environmental, Health and Safety (“EHS”) Guidelines. Gaps and mitigation measures are described in the following paragraphs and in the attached Environmental and Social Action Plan.                                                  

 Environmental and Social Assessment: An environmental and social impact assessment is not required for the Zalar Agri projects according to Moroccan law; however, the Moroccan government controls the allocation of agricultural land and carries out prior verification of the proposed project including environmental impacts such as water needs compared to water availability in the project location. Land is not allocated in water stress areas. Land belongs to the government, communities or individuals and an allocation process is in place for each type of land which involves the submission of a proposal including details of technical, financial, social and environmental impacts of the proposed project. Community consultation takes place prior to the allocation of community lands. Zalar Agri has completed the process for all of its allocated land and has obtained the necessary leases. Leases are renewable, and their duration range is between 5 to 40 years depending on the region. They are signed between the community representatives and the Ministry of Interior.

E&S Assessment and Management System: Zalar Agri has implemented an environmental and social management system (ESMS) which is based on Global GAP and ISO. Zalar Agri is certified for its apples and citrus farms located in Fès and Taroudant’s areas, respectively. Zalar Agri intends to certify the rest of the farms in the coming months as per ESAP action item # 1. Global GAP includes most of the E&S aspects of the operations and for other E&S aspects which are not covered by Global GAP, such as labor practices, they have developed their own policies procedures and plans which comply with the Performance Standards. They are also in the process of becoming ISO 9001 (Quality Management System) and ISO 22000 (Food Safety Management System) certified. The apple farms and packing facility operate to a full food safety and traceability regime with the ability to trace any product back to the lot on which it was produced. Internal audits are conducted annually. An external audit is conducted annually by SYGMA CERT to monitor the compliance of Zalar Agri with the requirements of Global GAP. The last audit was completed in September 2018 and identified a number of minor conformities which were all addressed. The Food Safety Agency also conducts quarterly visits to Zalar Agri’s apple packing and storage facilities, with the last one completed in March 2019.

The specific elements of the management system are described in further detail in each of the sections below and by addressing the action items as outlined in the ESAP, the management system can be expected to be in compliance with this Performance Standard.

Policy: Zalar Agri has an overarching charter defining environmental and social objectives that guide the Company in achieving sound environmental and social performance aligned with the Performance Standards. The charter includes reference to food quality, which reflects the Company’s commitment to provide products that meet the quality expectations of clients. The charter also stresses the importance of gender equality. The charter, which is aligned with the Performance Standards and has been approved by the CEO, is posted in various locations around the facility and covers all E&S aspects of Zalar Agri’s operations.

Identification of Risks and Impacts: For the orchards which are Global GAP certified, Zalar Agri has assessed the environmental, occupational health and safety, and social risks and impacts of its operations and has developed the necessary corrective actions to mitigate these risks and impacts through implementation of management programs and E&S procedures. Going forward, the remaining orchards will undergo the same risk assessment as they become Global GAP certified, as per ESAP action item # 2.

Management Programs: Zalar Agri has developed management programs for addressing E&S risks and impacts in its operations as part of the Global GAP certification process and their own management program outside of Global GAP. Procedures are in place regarding OHS, quality and environmental management. Implementation is verified on a regular basis through an internal and external audit processes to identify non-compliances with procedures and develop corrective actions for follow-up. As per ESAP action item #1, Zalar Agri will adopt the management programs at each of its orchards as they become Global GAP certified.  

Organizational Capacity and Competency: Zalar Agri has a number of dedicated staff who are responsible for environmental and social performance starting at the head of the organization throughout the management team. The CEO has established the OHS policy and strategy and facilitated the implementation of procedures by providing the necessary human, financial and technical resources. The quality manager assesses the risks related to health and safety at work, raises employee awareness of good OHS practices, communicates the action plans which need to be implemented and ensures information is reported to the site manager. The human resources manager is responsible for developing the OHS training program and monitors its implementation. At each orchard, the site manager is responsible for implementing the environmental management plans, procedures and good working conditions.

OHS, EHS and quality meetings are held at the senior management level where performance is reviewed and immediate and long-term goals are set. During IFC’s site visit and based on discussions with key individuals, staff were found to be knowledgeable of health and safety aspects, quality and environmental management of operations.

Training: In order to support the effective development and implementation of the ESMS, training programs have been defined for all staff. A needs assessment is carried out for each staff based on performance review. Comprehensive training workshops have been provided over the last year on a range of issues including life and fire safety, risk assessment, first aid, emergency preparedness and response, fire drills, good hygiene practices and food safety including traceability. Delivery of the annual training program is under the overall responsibility of the project’s quality manager and includes all aspects related to Global GAP and those outside the Global GAP certification such as machinery and equipment safety and reporting of accidents.

Emergency Preparedness and Response: The Zalar Agri farms are located in rural areas surrounded by agriculture land and very few residences. Emergency preparedness and response (EPR) is governed by national legislation and the Company’s commitment to safe working practices. Fire hazards are the main concern, particularly in the packing station. In order to reduce all the risks associated with fire for both its employees and the facilities, the Company has installed several fire extinguishers, fire hydrants and water tower, as well as an evacuation plan guaranteeing the safety of its employees. Fire extinguishers are checked regularly by a specialized service provider. In addition, the Group uses an external company to provide fire hazard prevention and first aid training to its personnel. Zalar Agri is subject to firefighting controls carried out by the Global GAP Certification Body. Since the risk of fire is lower at the orchards, fire extinguishers are put in place to deal with emergency situations. Emergency drills are carried out at least once per year. Meetings are held to discuss the issues of OHS and fire hazards with an action plan developed to address areas of concern.

Monitoring and Review: Zalar Agri has a comprehensive monitoring system in place including key performance indicators for water and energy use, lost time injuries, employment numbers, volume of raw material and finished product. Monitoring and review also occurs through internal audits, the Global GAP audit process and monitoring by the food safety agency (ONSSA). Independent audits, as per the certification schemes, are used to provide assurance of acceptable E&S performance. A committee including senior management regularly reviews the results of all monitorings and management plans are revised as necessary, based on the review.

Stakeholder Engagement: As noted above, the Zalar Agri orchards are located in rural areas surrounded by agriculture land and very few residences. A stakeholder engagement plan is in place and communities within one kilometer of the orchards are consulted regarding activities of the operations. The stakeholder engagement plan has the following components: i) undertake and record stakeholder engagement activities; ii) receive and register external communications from the general public and potentially affected communities; iii) screen and assess concerns raised and determine how to address them; iv) provide, track and document responses, if any; and v) adjust aspects, as appropriate, of Company’s operations. To date, very few complaints were raised and those which were (related to dust as a result of vehicles passing close to houses during the dry season), were resolved in a timely and successful manner. As stated by ESAP action item # 3, in order to improve the community grievance and mechanism, boxes will be located at each orchard so that grievances can be submitted in writing and anonymously if required                                                  

 Working Conditions and Management of Worker Relationship: As of May 2019, Zalar Agri employed 708 workers (425 male and 283 female) at the orchards and packing station. 76 are permanent, 423 are seasonal (temporary contracts) and 209 are permanent staff paid on an hourly basis (same benefits and employment security as permanent staff paid on a monthly basis). All staff have employment contracts. None are employed by third party agencies. Throughout the year, seasonal staff are employed to work on orchard management, carrying out such activities as pruning and harvesting.

Human Resource Policies and Procedures: Protection of the workforce in Morocco is specified in the national Labor Law which specifies core rights and responsibilities of an employer and employees, prohibits discrimination in employment based on gender, race, age, ethnicity, religion or nationality, and describes basic terms of employment including minimum age (18 for full-time work). Zalar Agri has a human resources policy and manual which is communicated to all workers. The policy is in line with the labor law and was developed in consultation with employees and union delegates and is formally approved by the Ministry of Labor. Human resources management is under the responsibility of the HR manager who harmonizes HR procedures across all Zalar Agri enterprises.

Working Conditions and Terms of Employment: These are explained fully in the human resources policy and manual. All workers are provided with employment specific information that documents their rights, hours of work, benefits and other employment aspects in their contracts.  New recruits enter on probationary periods at the farm: 15 days for workers, 1.5 months for employees and 3 months for managers. Salaries are competency based and above minimum wage for Morocco. Zalar Agri does not provide accommodation for its staff who mainly live in the surrounding villages. In accordance with the Moroccan law, all the workers benefit from the Moroccan social security. At their request, they can benefit from additional health coverage. Zalar Agri deducts from the salary the required contribution to the national insurance and pension fund for all workers and provides paid and maternity leave in accordance with national law. All workers are paid at least the national minimum wage. Zalar Agri workers work in different types of shifts depending on the business area in which they work (administration, sales and production). According to the law, any workday beyond 8 hours in duration is considered to be overtime. By law, the maximum hours of overtime are 12 hours per week and workers are required to have a day off after 6 consecutive days of work. There are on-site bathrooms with changing room and lockers, separated for men and women in line with Global GAP requirements. Zalar Agri complies with all terms of employment aspects.

Workers Organizations: As stipulated by law, Zalar Agri employees have the opportunity to be represented by unions, three of which are represented, including the UMT (Worker’s union), UGTM (General Union of Moroccan Workers) and CDT (Democratic Federation of Work). Depending on the importance of the claims, the union office requests an appointment with Corporate Management to discuss any issues raised or outstanding.

Non-Discrimination and Equal Opportunity: Gender balance in the workforce is 40% women and 60% men. Woman are eligible to apply for all roles/tasks and Zalar Agri operates on the policy of nondiscrimination and equal opportunities. As per ESAP action item # 4, the HR policy will be adapted to include language on the client’s approach to sexual harassment and gender-based violence.

Grievance Mechanism: There is a formal Grievance Mechanism in place and staff have a number of options for submitting grievances, including through meetings with supervisors or with union representatives and submitting a grievance form. This mechanism allows for anonymous grievances to be raised and dealt with. Issues are then dealt with by management. Management also communicates regularly with staff regarding activities of the Company such as through a bulletin board. Employees’ internal satisfaction is assessed during one-on-one meetings with senior management.

Protecting the Workforce: The minimum work age is eighteen. No child or forced labor is associated with Zalar Agri operations.

Occupational Health and Safety: An Occupational Health and Safety (OHS) Policy has been developed and is included in all work contracts. It is also displayed throughout the processing plant. OHS roles and responsibilities are determined by the quality manager. An OHS risk assessment has been completed. OHS training is provided to all workers (permanent, contracted and seasonal) upon induction and thereafter on a monthly/refresher basis. A training plan is in place. All employees are provided appropriate personal protective equipment (PPE) which is used consistently. The Company tracks accidents and incidents. Zalar Agri indicated that in 2018 there was one accident which resulted in 30 days absence from work. Lost time Injury Frequency rate (LTIFR) is 1.2 which is lower than the US LTIFR for this sector. There are a number of trained first aiders at the site and sufficient first aid kits are provided. Health centers are located approximately 30 minutes from the farms in case of more serious injuries. Regular checks are conducted by the Ministry of Labor and have not resulted in any non-compliances.

The current legislation in Morocco recommends the presence of an occupational doctor for any agricultural company with at least 50 people. Zalar Agri complies with the legislation and has a doctor under a service contract who visits the farms once a week to carry out medical follow-up of employees. Consultation rooms with all the necessary equipment and sufficient medicines to deal with emergencies are available at the orchards. The doctor is also responsible for monitoring OHS risks such as noise and dust exposure. An annual report on activities is produced and used to review processes and procedures.

Regarding the apple packing and sorting facility, sufficient signage is displayed throughout the packing station to guide employees on health, safety and hygiene at work. This is further supported by regular internal inspections to verify the cleanliness and good functioning of the work environment so that any potential risks related to the quality of the product as well as to workers can be addressed right away.

The Company established a committee for health and safety which consists of the CEO, the quality manager and the Human resources manager. This committee meets on a regular basis (at least every quarter) with the site managers, in case it is required. The committee is headed by a senior management representative who presents to the committee an annual health and safety plan for implementation. The roles and responsibilities of the committee are reflected in an internal code of conduct and include: i) preparing a health and safety plan; ii) coordinating all health and safety activities across Company operations; iii) improving awareness and understanding health and safety issues; iv) ensuring proper use of PPE; and v) preventing physical risks (for example due to slipping or heavy lifting), working at heights, and those due to chemical exposure.

Supply Chain: The Zalar Agri supply chain is not considered to be at risk from child labor, forced labor or significant safety issues, given that the primary product is produced in Zalar Agri’s own farms.

Workers engaged by Third Parties and contractors: When selecting third party contractors such as security guards and maintenance workers, the Company monitors they are in compliance with labor laws and regulations and have management systems in place with respect to occupational health and safety and environmental protection. Zalar Agri monitors third party practices through a questionnaire and will strengthen its monitoring procedure and update the questionnaire in line with the Performance Standards as per ESAP (action # 5).

 Three World Bank Group (WBG) guidelines are referenced in relation to this investment: Perennial Crop Production (farms), Food Processing (apples packing station) and the General EHS guideline (all operations). The activities that have a risk of polluting the environment are related to the application of agrichemicals, including fertilizers, and management of refrigerant chemicals and oxygen used in the storage facility. These impacts are being mitigated through effective implementation of management programs. Additional impacts with regards to extraction and consumption of natural resources are addressed through water efficiency measures and compliance with government extraction permits, and efficiency in the use of energy.

Resource Efficiency: Zalar Agri maintains records of energy, water and other resource use for the facility as a whole and per production unit. The main energy source is electricity from the National Office for Electricity (ONEE) which amounts to 7,338,732 KWh per year for all facilities, which is 522 kw/Ton produced (expected in 2019). The main electrical energy consumers in Zalar Agri’s operations include irrigation pumps, lighting, machinery and refrigeration at the plant. The annual greenhouse gas emissions associated with Zalar Agri’s operations are estimated at 3,680 tons CO2eq/yr. A number of initiatives are in place to reduce energy consumption such as ensuring the refrigeration units insulation is in good condition, good storage management to reduce the number of times the doors are open, and the use of LED lighting; however, energy usage will increase by about 45% when new orchards come on board. 

Raw water for the orchards and packing facility is sourced from wells located at each orchard. Water extraction is strictly controlled by the Hydrology Basin Agency of the government which has conducted extensive hydrology studies throughout Morocco. Before permission is granted to establish a farm, a well-established process is in place which must be followed including obtaining drilling authorization, conducting pumping tests, obtaining pumping authorization and developing a technical study in conjunction with an accredited irrigation supplier. The study is then submitted to the Ministry of Agriculture which determines if an irrigation license should be granted dependent on the water needs of the concerned crop and the availability of water resources in the area. Zalar Agri always targets zones where groundwater is abundant and in line with the agency’s forecast. Drip irrigation is used at all orchards and an irrigation optimization and management system is in place including the use of tensiometers which enables better water management and waste avoidance. All wells are fitted with probes which record the ground water. The probes are monitored by the water agency. Reservoirs are also established on all orchards to allow for the stabilization of water availability.

Pollution Prevention: Sources for air emissions are limited at the Zalar Agri operations and include a generator at one orchard, dust during cultivations in dry months and pollution linked to vehicles and farm equipment. The generator is only used during black-outs which are rare. As most of the crops are perennial and most of the orchards are already planted, cultivations only take place when new orchards are planted. If dust is generated by the movement of farm equipment and vehicles, water is sprinkled to reduce the impact. Agrochemical products are the main hazardous materials used on the project’s facilities. They are packaged, labelled and housed appropriately (locked in designated areas with access controlled by authorized personnel) in compliance with the existing regulations and Global GAP. Training is provided on safe handling and the necessary personal protective equipment (PPE) is provided along with showers in case of exposure.

Soil conservation and management: Soil erosion related to agriculture activities is kept to a minimum as the project employs zero tillage and cultivation is limited as all crops are perennial. Soil testing is carried out to monitor structure and properties. A nutrient management plan is in place and fertilizers are applied though the drip irrigation system which is constantly monitored to ensure the correct applications are applied with zero waste.

Liquid and solid waste management: Waste management plans are in place. Cardboard boxes are returned to the supplier for recycling, and discarded fruit is either sent to landfill or given to farmers as animal feed. Any biological waste for example from pruning is chipped and used on the farms as mulch. The current apple processing plant produces approximately 10 m3 per day and liquid waste is released into septic tanks of 800 m3 which are emptied every quarter by a certified company. Waste water from administrative offices is connected to the public sanitation networks.

Hazardous wastes: A hazardous waste management plan is in place in line with regulations and Global GAP. Hazardous wastes primarily associated with the farms include pesticides, fertilizers and empty containers. Pesticides and fertilizers are used on demand and limited amounts stored on the farm. No banned products on the WHO 1a or 1b list are used. Any excess is managed in a “phytobac” system to allow biological breakdown. Empty containers are triple rinsed, punctured, stored securely and collected by a certified service provider. The main refrigeration system at the apple packing and storage facility uses propylene glycol cooled by a DX system using L-40 refrigerant (a low-GWP A2L alternative for R-404A which is managed as specified). Current operations use 288,903 liters of fuel per year. The majority of vehicles are maintained off site, however a vehicle management unit (VMU) is located at the apple packing and storage facility where vehicles are maintained, and minor issues repaired. The VMU requires upgrading to comply with the Performance Standards as per ESAP action item # 6 and includes the safe storage of empty oil drums and hazardous waste such as used oil filters, safe storage of used parts, equipment and old tires, cleaning up of oil spills, secondary containment of fuel pump and general good housekeeping  

Integrated pest management: The project has developed an integrated pest management program which excludes using World Health Organization (WHO) Class Ia and Ib chemicals. The use of integrated pest management, and the use of pest-resistant crop varieties (as allowed under Moroccan law) reduces the need to use excessive amounts of agrochemicals and hence reduce the risk of potential pollution. The integrated program leans heavily on prevention, use of non-chemical control means and scouting to provide early identification of issues before they become serious. Continuous research into biological controls is carried out and new methods adopted as soon as they are effective. Storage facilities are protected by pest traps as needed and controlled by an external company                                                  

Community Health and Safety. As noted above, The Zalar Agri farms are located in rural areas surrounded by agriculture land and very few residences. Zalar Agri ensures that the infrastructure elements at the farm are designed, constructed, operated, and decommissioned in accordance with good international industry practice (GIIP), taking into consideration safety risks to third parties or affected communities.

Zalar Agri has a biosecurity plan in place to safeguard the crop from plagues, and the public and employees from the spraying of pesticides. Microbiol analyses of product samples are made through certified Moroccan laboratories. The Company has procedures for product coding and traceability to quickly identify and recall a product in case it does not comply with Company’s standards. A code is assigned to each orchard lot and displayed on the final product so that the origin can be traced, should there be a complaint or quality problem later on.

Transportation Safety: Vehicle traffic to and from the apple packaging facility involves the daily movement of Zalar Agri’s own trucks (four) as well as those of contractors to transport fruit. Zalar Agri has written contracts in place with contractors that include the code of conduct and trucks used by contractors are visually inspected for safety functions (condition of tires) and cleanliness (condition of truck bed). If the trucks are deemed unsuitable for transporting the product, the contractor is notified, and the trucks are turned away. Zalar Agri has a procedure in place for ensuring the safe operation of vehicles (for example, screening drivers and providing formal training on safe driving) and for documenting incidents and accidents. The procedure includes a process for screening drivers prior to hiring including verification of valid driver license and past driving record; providing driver safety training to respect speed limits, not use a cell phone while driving, use of a fire extinguisher, and vehicle maneuvering skills; procedures for limiting trip duration, duty roster to avoid overtiredness, avoiding dangerous routes and times of day to reduce the risks of accidents, use of speed control devices on vehicles; inspection of vehicles at the processing facility after each delivery for any evidence of having been in an accident; and overall truck maintenance to ensure good working conditions. The same requirements apply to contracted drivers. As a complaint was received from communities related to dust as a result of vehicles passing close to houses during the dry season, a procedure is in place and drivers are instructed to slow down when driving near houses.

Security: The Zalar Agri orchards and packaging facility are all secured by security personnel which is hired through an external company. Guards are not armed, and their security protocols are verified by both Zalar Agri and the local police. Guards undergo training before being mobilized to the farms. They are usually not from the local communities in order to avoid any conflicts of interest .

Protection and Conservation of Biodiversity: Zalar Agri operations have been established on modified (agricultural) land in accordance with Moroccan laws. No areas of natural habitat, critical habitat or those subject to international recognition or legal protection are known to be or have been adversely affected by Zalar Agri operations. Similarly, no adverse impacts to priority ecosystem services for affected communities have been identified. As noted above, the project follows sustainable agricultural practices, using drip irrigation and reducing the amount of agrochemicals used at the orchards. Strict regulations are followed, especially around crops such as mandarin which are controlled to avoid cross contamination. The project is Global GAP-certified, a globally recognized standard for sustainable management .

  Local project documents (Community Grievance Mechanism and E&S Policy) can be found at each farm in hard copy. In addition, E&S Policy will be shared on our website as part of the vision and values of the Group 

Mr. Idriss Bajeddoub

Directeur General

+ 212 535 72 81 75

idriss.bajeddoub@zalaragri.ma

Rue 801, Ex. Usine El Alf, Quartier Industriel

Sidi Brahim Fès, Morocco

http://zalaragri.ma/