PS5 Land Acquisition and Involuntary Resettlement, PS7 Indigenous People and PS8 Cultural Heritage are not expected to apply to this project for the following reasons: although the company leases land for sugar cane plantations and also owns land, no involuntary resettlement was identified during appraisal and all future land leasing for sugarcane plantations will be under market based transactions on existing agriculture or pastureland areas. No Indigenous People areas or cultural heritage were encountered during the course of appraisal as most of the company’s facilities and plantations are located on existing consolidated areas of agricultural production.

This Project has been classified as Category B according to IFC’s Policy on Environmental and Social (E&S) Sustainability. The Project’s principal E&S risks and impacts are associated with existing sugar, ethanol and energy production activities in Brazil. Key E&S risks and impacts from this project are: biodiversity loss and offset for their own production and 3rd party suppliers (requiring compliance with Brazilian Legal Reservation and Permanent Protected Areas requirements); supply chain management; occupational health & safety for employees and health issues for communities related to agrochemical exposure and the prevention and management thereof; and community engagement. These risks and impacts can be readily addressed through well-established mitigation measures.

Environmental and Social Assessment and Management System (ESMS): During the 2018/2019 harvest season Cocal started developing an integrated ESMS following the DuPont Process Safety Management approach based on DuPont’s global best practices. It is expected to be fully operational in the 2022/2023 harvest season. It covers quality, environment, occupational health and safety for both its agricultural and industrial operations. Cocal only produces raw sugar or very high polarity (VHP) sugar that will be further refined to food grade by their customers. While Cocal has sanitary procedures and practices in place they are not as stringent as food safety measures (e.g. HACCP). The system is based on the international framework of ISO 9001. The operational ESMS will be in line with the PS 1 requirements. The company is preparing to obtain Bonsucro certification (certification to promote sustainable sugar cane products) for their agricultural and industrial operations. This certification will become part of the ESMS. On its website, the company presents their environmental and social policy and an overview of their environmental and social responsibility programs (http://www.cocal.com.br).

Policy: Cocal has a written policy stating its commitment to produce sugar, ethanol and electricity in a responsible and sustainable manner while preserving the environment, valuing life, generating profit for its shareholders, recognizing the importance of its employees and contributing to the social and economic development of the regions where it operates. As part of their values they state that safety comes first, ethics and transparency, responsibility and commitment appreciation and respect for people.

Identification of Risks and Impacts: The company identifies material impacts and risks from its operations, including air emissions, effluents, solids waste and main OHS risks under a Risk Prevention Plan (Plano de Prevenção de Riscos Ambientais – PPRA) required under Brazilian regulations. For the biogas plant with a proposed capacity of 5MW, no Environmental Impact Assessment is required as the capacity is below the threshold of 10 MW (CONAMA Resolution nº 001/86, Art. 2). However, as part of the three required permits (project approval; construction permit; operational permit) the company provided the design and underlying technical information including expected emissions, pollution abatement and safety equipment. Currently, they hold the approval and construction permit, which allows the company to start construction.

Management Programs: Cocal develops Environmental and Social Management Programs to avoid, control and mitigate identified impacts of their operations, per the environmental licenses and ESMS under development with a focus on continuous improvement. These plans include monitoring and management programs for waste streams; air quality monitoring, vinasse application program, aerial spraying, traffic safety and control, environmental monitoring of field/agricultural activities; monitoring of erosion process, among others. The company has adopted policies and procedures to manage human resources and OHS matters related to its own activities and contracted works including, among others, OHS programs required under Brazilian law, such as a the aforementioned PPRA, an Occupational Health Monitoring including medical surveillance tailored to different functions

Organizational Capacity and Competency: E&S policy and procedure development and implementation is the responsibility of Cocal’s Human Resources Director with a dedicated team consisting of an ESMS Coordinator, an OHS Coordinator with 10 OHS Technicians, 2 Nurses and 4 Nurse Technicians, 2 Social Assistants, an Environmental Coordinator with 3 Environmental Technicians and 3 Environmental Experts. In both the agricultural and industrial operations, there are so-called CIPAs, employees who have received basic firefighting and first aid training. The CIPAs provide onsite EHS support to the EHS team. Adherence to all E&S policies and procedures in the operations is the responsibility of line management in both operations. For the construction of the biogas plant the supervisors will keep oversight of the contractors who will have to adhere to all Cocal’s E&S requirements applicable to the construction. This will be supported by the E&S team. Weekly safety meetings will be held with all contractors by the supervisors.

Cocal has training programs that include an EHS induction for new employees and contractors, as well as periodically repeated job-specific and regulatory trainings such as working at heights, working in confined spaces, electrical and pressure vessel safety, work as machine or boiler operators, handling and use of pesticides, etc. Specific procedures and the associated training program for hazardous work are part of the company's mandated procedure for approving hazardous work activities.

Monitoring and Reporting: Cocal monitors the main aspects and impacts from its operations included in mandatory monitoring programs as part of provided licenses (water intake, fauna and flora, air emissions, social development, solid wastes generation and disposal, etc.) as well as for internal indicators such as work-related injuries, water use, and fuel and pesticide consumption. The E&S team conducts scheduled inspections of all operations. Findings, corrective measures and closure rates are reported to the senior management. The company has an internal audit team as part of their Corporate Governance development which will also include E&S aspects. The company also reports environmental compliance information to the relevant authorities. Information provided to environmental authorities includes the completion of required actions under the conditions of respective environmental licenses to operate, such as air emissions monitoring from boilers and the transport fleet, wastewater quality and disposal, surface water quality monitoring data, water use permits, compliance with Brazilian biodiversity set asides (reserva legal, in Portuguese), and solid and hazardous wastes management, among others.

Working Conditions and Management of Worker Relationship: Cocal workforce comprises approximately 4,900 permanent workers. As part of the new biogas plant, an increase of 18 employees is expected. With the mechanization harvesting process only manual labor is required for planting. Cocal annually hires 400 people to do manual planting for a period of 5 to 8 months depending on the amount of planting needed. Approximately 90% of workforce is male and 10% female. Female employees work predominantly in the administration, but there are some female drivers, and pesticide applicators. Cocal has an internal training program for employees who wish to work in the company as drivers and tractor drivers. In the class of 2019, 14 female employees completed the training (out of 109). The company actively advertises to attract more female employees, but it remains a challenge given the nature of the work.

The human resources policies included in the labor manual and practices, clearly articulated and readily available to workers, adhere to all Brazilian legal requirements regarding working conditions and management of the employer-worker relationship. Employees are hired on the basis of clearly communicated contracts, they undergo an induction and training process, and end-of-employment formalities are carried out in a transparent and orderly fashion. Time clocks are biometric and readily accessible to the workforce, and overtime is calculated and paid using this information. Cocal reported paying all employer social security taxes and other legally mandated benefits. In 2019, the company held an employee satisfaction survey for the first time which had an overall 89% satisfaction score, which will be repeated every two years. The results are communicated to all employees and includes a sector benchmark. Cocal score ranked them 5th of the 300 companies that participated.

Workers’ Organizations: Labor rights in Brazil are enshrined in the constitution and the consolidated labor laws (known as Consolidação das Leis do Trabalho, or CLT, in Portuguese), 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. In Cocal’s case, the workforce can belong to one of eight unions depending on the nature of the job (e.g., industry unit, or agriculture). Annually, Cocal negotiates collective bargaining agreements with the unions and this includes economic and social aspects. There are union representatives working at all sites, and they organize internal workers’ committees to participate in the collective bargaining process. 

Human Resources Policies and Procedures: As mentioned above, Cocal has a Labor Manual which references HR specific policy. These policies include workers’ rights and obligations, remuneration, working hours, disciplinary actions, career development, Travel Benefits Policy, Social Responsibility Policy, internal and external communications, including workers’ grievances, training and education, etc. Employees have to pay for their own health insurance to enter a private insurance scheme or they use the free national health insurance.

Working Conditions and Terms of Employment: Many aspects of the work contract (such as working period, rest period, overtime, annual, sick and maternity leave) are defined by law and under collective bargaining agreements with worker’s unions. The standard working period is 44 hours per week and the daily working period cannot exceed 10hs (overtime included). There are mandatory 1-hour breaks for meals (lunch or dinner) during the day and also 15 minutes breaks. Sick leave is granted but requires a physician assessment/request, and after 15 days of absence, workers are covered by mandatory social security program, while the first 15 days are covered by the company. Overtime paid is at a 50% premium and Sundays and holiday overtime is paid at a 100% premium. The company pays non-skilled workers (approximately 10% of the total workforce) a minimum wage that is above the regulatory minimum wage (R$1,045). In addition, bonuses are paid based on production performance and wearing PPE. Transportation time is paid in addition to their regular salary, although this payment is not a legal obligation anymore.

Non-discrimination and Equal Opportunity: Although forced/child labor, harassment and discrimination are treated as crimes under Brazilian law, the company also states its views and commitments against such practices in its Ethical Code. Both the hiring process and the approach to promotion follow well established policies and procedures and are based on merit and competencies; no evidence of discrimination was found during appraisal. Cocal does not have a gender pay gap and pays male and female equally for the same job. In completing the IFC’s Gender Based Violence assessment tool, no high risks were identified based on the company’s processes in place, i.e. Ethical Code and internal grievance mechanism. All staff in leadership positions receive training on moral behavior and handling any form of harassment.

Grievance Mechanism: Cocal’s worker grievance system is part of the HR policy as well as the company's Ethical Code, which applies to all employees. There are three channels for workers to raise complaints: through the external Hotline, through HR personnel, or through email. The system allows for anonymous complaints through external Hotline. Complaints regarding managers will be investigated by the Union representatives and recommendations are sent to the Board. The Directors’ Committee receives a weekly overview of the complaints received. Cocal keeps formal records and consolidated data from all complaints, including follow up actions and resolutions.

Protecting the Workforce: Cocal follows Brazil's legislation regarding minimum age required for employment (18 years old.) The company checks the worker's age at time of application, recruitment, and contracting. The company does engage trainees of 16-17 years of age under the Brazilian government's Jovem Aprendiz training program, but it follows all requirements of the program, including limited work hours to allow for participants' schooling and prohibitions against exposing trainees to any forms of hazardous labor. In addition, the company has a program to train and retain people with disabilities seeking to meet mandatory quota of 5% from Ministry of Labor in Brazil. The industrial operations meet the quota, but for the agricultural division this is more challenging given the nature of the work.

Occupational Health and Safety: Cocal has a well-structured team managing OHS hazards and risks facing the workforce, in line with Brazilian labor requirements. As mentioned under PS1, Cocal has mandatory OHS programs in place, such as risk prevention plans, health monitoring plans, accident prevention committees, and emergency response plans. As part of the integrated ESMS following the DuPont Process Safety Management approach, the company has introduced the STOP program. STOP stands for Safety Training Observation Program. Every Cocal employee is encouraged to address unsafe working conditions through a STOP intervention and to record this. They are then discussed in team meetings by not blaming the individual(s), but for the team to learn and improve safe working. All Cocal employees are empowered to refuse a task that may put them at harm.

The company has appropriate preventative safety measures in place, which were observed during the site visit, machine guarding, emergency stops, handrails, emergency signing, etc. In addition, under Brazilian safety standard NR10, the industrial sites are classified according to their risk of explosion, and in those areas considered to be of high risk (e.g. distilleries, sugar storage and warehouses), they have access control systems, explosion relief systems and intrinsically safe electrical equipment. The company provides the necessary appropriate Personal Protective Equipment (PPE). Adherence to wearing the required PPE was observed during the site visits for both employees and contractors. Visitors are required to wear the provided appropriate PPE. It was noted that not all visitors were logged upon entering the mills nor did they receive a safety induction. However, there is a procedure that requires logging of visitors as well as an obligatory safety induction for those visitors accessing the plant.

Accident lost time (LT) rates have dropped significantly in the past years and are well below the international reference values (i.e. 7 LT accidents for sugar production and 8 LT accidents for crop production per million hours worked in the U.S.). In 2019, company-wide 6 LT accidents occurred with 6704 lost days and in 2018 9 LT accidents with 2690 lost days. This corresponds to an LT accident rate of respectively 0.7 and 1 per million hours worked. It should be noted that due to the increase in lost days the severity rate went up from 299 average days/ injury to 1117. In 2019 during the harvest period, a fatality occurred at the Paraguaçu mill. A maintenance employee was conducting electrical works in a confined space. A working permit was issued, and the confined space procedure was followed with a second person outside the confined space. However, the equipment under repair was still live, and an electrical explosion occurred causing fatal burns. The accident was reported to the Ministry of Labor and the cause was not following electrical safety procedures. As set forth in ESAP item #1, in order to also establish a sustainable reduction of LT accidents and severity rates, an assessment of all accidents in relation to the severity (by experience, age, time of day/night, kind of job, risks involved, location, root cause, etc.) as well as the corrective measures taken, and training effectiveness of the past 3 years will be completed. Actions will be included in the overall OHS prevention program.

Cocal has automated many industrial processes which results in a limited number of workers being inside the operational area thereby reducing the exposure of workers to inherent risks typically found in a sugar and ethanol mill operation. Cocal has identified all confined spaces, which are identified with warning signs and workers must follow safety rules for working inside them consistent with Brazilian safety requirements (Normas Regulamentadoras (NR), NR33) and WBG’s EHS general guidelines. Review of records showed that Cocal undertakes annual inspections of all pressure vessels ensuring compliance with national safety requirements (NR13) including preventative maintenance and training of employees. At the sugar mills, it was visible that Cocal has invested in machinery protection, deploying appropriate protection to exposed moving parts and pinch points. Fall prevention measures for working at heights such as guardrails, lifelines and platforms were found in place. Regarding the assessment of its electrical circuits (Relatório Técnico de Inspeção das Instalações Elétricas) according to Brazilian safety standard NR10, necessary investments are made for identified issues. When repair or maintenance is undertaken a Lock-out, Tag-out (LOTO) procedure is applied. This procedure has been strengthened with further training and monitoring after the fatal accident in 2019.

Cocal conducts mandatory pre-hiring, periodic and contract termination health assessments of all employees that include basic clinical assessment and additional tests, such as audiometry, diabetes, high blood pressure, and blood tests cholinesterase and leucocytes counts, depending on an individual’s job function and exposure to identified risks. Cocal monitors worker’s exposure to hazards in the workplace under its mandatory workplace risk prevention program (PPRA) and has conducted a formal hazard/risk assessment of its operations. Cocal provides water to all workers in the fields during harvesting and workers take breaks. Manual cane cutting is limited to 2% of the areas where mechanical harvesting is not possible. Cocal reported that there are no recorded cases of chronic kidney disease among their workers. Where applicable, the company completed an ergonomic assessment of the workplace, according to the requirements of Brazil's NR17 worker safety standard and implemented required corrective actions and a management program to prevent such injuries. This was noted in the nursery where seedling preparation requires manual and repetitive handling with job rotation and adjustable work benches. Basic infrastructure is provided for workers in the fields including safe transportation, mobile trailers with toilets, appropriate space for meals and break rests, fresh water supply in accordance with Brazilian labor standard NR31.

Workers Engaged by Third Parties: Cocal hires external companies for aerial spraying as well as maintenance and repair work. For its contractors, Cocal has a procedure and checklist system to ensure that they are fully observing legal requirements with regards to their own workforce. Procurement, which manages contracting, EHS (the safety, health, and environment team), and HR are all involved in applying the checklist, requesting necessary documentation, and checking compliance. Third-party workers undergo an EHS induction process upon their arrival to the site, and permission is granted for third-party workers engaged in hazardous work activities through the same procedures as applicable for its own workforce. During the appraisal, the mills were undergoing scheduled maintenance with approximately 300 contractors on site. Safe working conditions were noted by IFC. The Supervisors for each section of the mill hold weekly safety meetings with the contractors and they are supervised during their works. Cocal will hire a company to do the civil engineering and construction of the biogas plant at Narandiba mill and retains a specialized company to review the correct installation of the technology. Equipment will be procured by Cocal who complete control and oversight of the project will have, including for safety aspects as described above.

Supply Chain: Approximately, 780,000 tons of sugar cane processed (9% of the total processed) is sourced from 8 third party producers and 559,000 tons are bought on the spot market (6% of the total processed). With the 8 third party suppliers, the contract includes clauses on labor in line with the Brazilian labor regulatory requirements and the company’s own labor policies. When contracts are going to be renewed, the company will include the expectation that suppliers meet the regulatory requirement of setting aside 20% of their land as biodiversity conservation areas through the CAR registration. Currently, the company does not check compliance of these contractual expectations. As set forth in ESAP item #2, Cocal shall develop a program to monitor the 8 third party suppliers periodically to ensure that they meet the contractual clauses regarding child and forced labor, OHS management as well as completing the CAR registration for the 20% biodiversity offsets. Going forward, the company shall provide an annual update on the compliance performance of their suppliers, including proposed mitigation measures and follow-up.

Energy: Cocal self-generates all its energy needs from sustainable resources through co-generation of electricity from two thermal power plants fed with sugarcane bagasse. Cocal’s sugar mills have a power generation capacity of respectively 59 MW (Paraguaçu) and 132 MW (Narandiba). Of the total electricity generated at the two mills in 18/19, 86% was delivered to the grid. The proposed Biogas plant at Narandiba will generate 8.9 million m3 of biomethane of which 4.5 million m3 is supplied to households and manufacturing plants. The remaining 4.4. million m3 is used to partially replace the company’s diesel consumption (currently 30 million m³/year).

Air emissions: The bagasse fueled boilers are the largest source of air emissions from Cocal’s operations; there are 6 boilers in total (4 at Paraguaçu of which one is not operational and 2 at Narandiba) with a power capacity of ranging between 40 and 350MWth. The company monitors emissions on an annual basis, achieving compliance with Brazilian requirements, which are less stringent than the World Bank EHS guidelines, i.e. Particulate Matter (PM) 150 mg/NM3 and NOX 650 mg/Nm3. Review of the 2019 monitoring reports show that the boilers meet the regulatory requirements. Although currently not foreseen, Cocal would have to deploy emission control systems for any new or reconditioned boiler consistent with the national legislated standards (Resolução CONAMA 382/2006). In the event of procurement of new boilers or reconditioning of old equipment with increase of power capacity, in addition to compliance to local emissions legal requirements, Cocal will conduct pollution emission dispersion models prior to de construction/remodel of new boilers and demonstrate that air emissions will not result in pollutant concentrations that reach or exceed relevant ambient quality guidelines and standards by applying national legislated standards.

Effluents: wastewater is derived from: (i) process wastewater from ethanol production (vinasse), (ii) wet scrubber blow down from stack gas scrubbing, and (iii) miscellaneous wastewaters. Cocal does not discharge industrial wastewater into rivers or surface water bodies. The vinasse, industrial waste water and filter cake are used as a fertilizer in the sugarcane plantations, in compliance with local permits. Vinasse is stored in tanks to prevent groundwater contamination. The amount of wastewater applied in the plantations is determined by the soil characteristics and the nutrient needs of the crop. With the proposed biogas plant, there will be an intermediate step to use the vinasse and filter cake for biogas production and afterwards it will be collected and used for fertigation

Resource efficiency: Sugarcane cultivation in Cocal’s operations relies fully on rainfall and fertigation. Average annual rainfall over the last 10 years is 1,650 mm in Paraguaçu and 1,734 mm in Narandiba. Near the Narandiba mill, Cocal has a 5,000 ha field for seedlings where they apply pivot irrigation reusing water from the mill. Process water for the mills, sanitary and truck wash use is captured from rivers (978 m3/h) and groundwater wells (196.63m3/h) at both locations, treated, and used within a closed system and reused to ensure efficient use. Currently 90% of the water is reused. In 2019, the total industrial process water use was 3.1m3/ton-cane. The water usage for the milling process 0.87 m3/ton-cane is consistent with the sector benchmark of 0.5 – 0.9 m3/ton-cane. Water is extracted from groundwater wells (25m3/h) for sanitary use and truck washing. The water is pre-treated (chlorination) and tested for bacteria weekly in the company’s internal lab and every 6 months by an external laboratory. Cocal reports to have all required permits from the Sao Paulo State Authorities to extract water. Reviewing the area where Cocal operates in the World Resources Institute Aqueduct Water and Food Analyzer reveals that there is a low risk of water stress between today and 2030 in the production area.

Greenhouse Gas Emissions: The main source of CO2 is the use of diesel for transport which resulted in 2019 in a figure of 87,508 tons of CO2eq being generated by Cocal. The mills’ GHG CO2 emissions are naturally offset as they are captured from the atmosphere by growing sugarcane plants. The annual emission will reduce when the diesel is being replaced by the biogas. Cocal participated in the 2019 United Nations Climate Change Conference (COP 25) in the Brazil Day organized by the Brazilian Sugarcane Industry Association (UNICA), aimed at presenting the positive results of the use of ethanol in Brazil to reduce CO2 emissions and improve air quality. Cocal joined this program, which is still in the process of being structured. Going forward Cocal will annually report on the CO2 emissions resulting from replacing diesel by biogas. Electricity use (scope 2) results in 227 tons of CO2eq/year. Part of the ethanol that Cocal produces is used as a renewable fuel and the biogas produced will reduce the use of diesel for their fleet significantly. Therefore, although Cocal generates high volumes of gross GHG emissions, net emissions from the company's operations can be considered negative (as they are sequestrated in the sugar cane plantations, off-set in the ethanol that replaces use of fossil fuels and biogas replacing diesel).

Integrated Pest Management: Integrated Pest Management, a well-established practice in the sector, is applied in all plantations. Cocal uses biological control techniques to control the sugarcane borer population with the Cotesia flavipes parasite. Only approved chemicals, which a review showed that they do not include WHO Class 1a and 1b pesticides, and fertilizers are used. Application rates and methods are adapted to minimize consumption and handling, storage and use of agricultural chemicals follow national regulations.

Hazardous Materials: Cocal uses and stores significant amounts of chemicals such as soda, sulfur acid, chlorine, cyclohexane, pesticides and, of course, ethanol. A variety of storage arrangements can be found at different areas, but the majority have secondary containment, risk identification, warning signs, access control and emergency kits and showers. Currently, the company is in process to complete sufficient secondary containment (110% of the volume stored) of all liquid hazardous materials. This includes fire prevention measures: area fenced off, safety signs, instruction for truck filling and training for workers as well as fire-fighting equipment in place.

Solid Wastes: Sugar mills produce significant amount of organic wastes (filter cake and ashes from boilers). The filter cake is used in fertigation and the ashes as fertilizer. Metal scrap is segregated, stored outdoors and sold for recycling. Cocal collects all empty pesticide containers and delivers them to certified recycling companies. The solid non-recyclable waste from offices and dining halls is collected and disposed of through licensed companies.

Cocal verifies the final disposal sites of their wastes upon entering the contract. For each waste shipment Cocal, the waste company and the Authorities receive a certificate. No further control on the waste treatment and final destination is done by Cocal. As set forth in ESAP item #3, Cocal shall conduct an audit of the waste treatment facilities (hazardous and solid waste) to ascertain whether the licensed processing and disposal sites are being operated to acceptable standards, Cocal will retain chain of custody documentation to the final destination, and as needed a corrective action plan should be agreed. Going forward the company will conduct these audits periodically in accordance with a set audit plan.

Community Health and Safety: Although both sugar mills and agricultural production are located in a rural area, there are communities around their operations. Potential impacts to communities from Cocal’s operations could arise primarily from the explosions of ethanol tanks, from the distillery or from sugar warehouses. Air emissions from boilers, fugitive air emissions from trucks (dust) and drifts from aerial application of pesticides, can negatively affect communities as well.

Cocal conducts aerial spraying of crops by contracted companies using crop-spraying airplanes. A specific procedure is in place to avoid the risks and impacts to health and other crops associated with aerial spraying of chemicals. This entails monitoring weather conditions during aerial spraying and safety exclusion buffer zones to protect towns, small villages or households and neighboring fields.

The company relies on a large number of owned trucks to transport the sugarcane from the field to the plant. All trucks are maintained in Cocal workshops and during the harvest season there is a so-call pitstop station for instant repairs. All drivers receive driver safety training and annual medical checks. In the harvest season 20/21 the trucks will be fitted with cameras to monitor driving behavior. The average distance of sugarcane plantations is about 35km from the processing operations. Transport over public roads cannot be avoided and a risk assessment as per the ESMS under development has been completed and necessary measures and practices are put in place. For example, recently a bypass road was created to avoid going through the center of Narandiba town bringing the sugar cane to the mill.

Infrastructure and Equipment Design and Safety: Equipment utilized at Cocal meets regulatory NR requirements regarding use of safety devices (relief valves, ATEX certified equipment, integrity testing of tanks, earthing, etc.); such equipment is annually inspected and included in a comprehensive preventative maintenance program. Quantitative risks assessments for all operations have been completed and the risk management plan covers maintenance and integrity of critical processes, operational procedures, training program, investigation of accidents, emergency response and periodic audits of the risk management plan. This will also be done for the proposed biogas plant. Safety measures included in the design of the biogas plant include: engineering controls flame proof equipment, gas warning devices, mechanical ventilation, protective covers for rotating parts and enclosed metering station for process additives. Organizational controls include: work instructions, briefing on procedures, emergency plan, inspections and tests and requirements for lone working. Lastly, appropriate PPE will be required for all people entering the gas plant. Cocal will complete a Hazard and Operability Analysis (HAZOP) assessment, in line with the Dupont Process Safety Management approach, will be completed and required measures will be implemented before the biogas plant will be taken into operation. A 68 km underground pipeline will be constructed under the responsibility of the offtaker GasBrasiliano which will follow public domain land transporting the gas to Presidente Prudente for further distribution via the public gas network to residential houses.

Emergency Preparedness and Response: Cocal has a mandatory emergency response plan covering all emergency scenarios such as fires, explosions and environmental leaks as well as a fire brigade, evacuation and communication plans. Drills are conducted as per an annual schedule and cover different shifts as well as both the industrial and agricultural operations. A review confirmed that Cocal is in process to obtain the fire certifications (AVISO) from the State of Sao Paulo authorities. The company obtained approval for their investment plans for firefighting equipment which for Narandiba mill has been completed at 70% covering all critical operations and will be completed for Paraguaçu mill at 70% in December 2020. After this the company will receive partial AVISO’s. For the remainder 30 % covering non-critical operations (maintenance department, offices, non-hazardous material storage, etc.) the Board decides by March 2021 on the budget and timeline. Going forward, Cocal will report to IFC annually on the completion of the remaining 30%. For the past 10 years there have been no fires in the industrial operations. For 2 years, firebreaks are present in the fields with a minimum distance of 3m between the planted areas to contain any fires. Near communities and the industrial operations 15m firebreaks are observed. The last fire in the agricultural fields occurred 2 years ago. The fields are controlled via satellite as well as by people present in the fields.

Security Personnel: Cocal employs their own security guards to control access to the mills. Security guards are trained on how to conduct and they are not armed. In case of a security incident the local police will be called. No incidences regarding the conduct of the security personnel were reported by the company, which can be reported and recorded through the existing grievance mechanism.

Protection and Conservation of Habitats: The company’s sugar cane plantations are located exclusively in areas traditionally used for agriculture, and no direct conversion of natural habitats to croplands or significant loss of biodiversity is expected from this project. Depending on the region of the country (determined by biome), Brazilian farmers are required to set aside 20% to 80% of their lands as biodiversity conservation areas and to protect buffer zones along rivers and around water bodies. For the State of Sao Paulo, this is set at 20%. If deficient, riparian buffer zones should be reconstituted, and biodiversity conservation areas can be offset through the protection of intact areas in the same region. For the owned plantations as well as the 8 third party suppliers all offsets have been completed, but for the latter the company will check compliance (see ESAP item # 2).

Cocal conducts environmental assessments of their own sugarcane fields and excludes the mandatory riparian areas from the sugarcane plantations. Of the land owned by Cocal, 100% of the sugar cane plantation areas are in compliance with the mandatory environmental and rural cadaster (CAR) registration. This means Cocal has registered their proposal to implement the regulatory requirements (offsets are either established on the farm or compensated in another area). Rehabilitation or compensation of biodiversity set asides must follow regulatory timeframe for completion which is 20 years. Once the CAR registration has been validated by the State of Sao Paulo Authorities, Cocal has to develop at least a cumulative 1% legal reserve every year under the requirements established in Act 12.651/2012. Currently, it is not known when the CAR registrations will be validated due to a lack of resources with the State of Sao Paulo Authorities. For the land leased this is done for 97%, Cocal is in discussion with the landowners to complete the CAR registration for the remainder 3%. Going forward, Cocal will provide an update on the CAR registration of the land they cultivate, receiving CAR validations and implementing offsets to reach the 20% overtime.

Sustainable Management of Living Natural Resources: As mentioned above, sugarcane plantations are located on already-converted land and consolidated areas of crop plantations in the State of Sao Paulo. The frequent hydraulic failures of conservation structures, observed in recent years as a result of changes in the intensification of the mechanization of planting and harvesting sugarcane, motivated the development of the indicated concepts, which suggest the replacement of damming and infiltration techniques with drainage techniques. The system known as Diffuse Superficial Runoff (ESD in Portuguese) leads to flooding in a controlled and safe manner, associated with low flow speed. The ESD is formed by strategies and structures that distribute the flood in a planned way, so that there is no concentration, either by impounding or interception, and the flood, concentrated in the natural thawed lines, is conducted by Vegetable Drainage Channels for the water network. In addition to environmental gains, the system promotes important economic gains, due to improvements in layout, traffic control and the preservation of physical soil conditions by decreasing erosion, trampling on planting lines, which results in increased productivity and reduced costs.

To continue the implementation of good management practices in their sugar cane production, the company will obtain Bonsucro certification. As set forth in ESAP item #4, Cocal will provide the certification audit report. Any measures and procedures as required by the Bonsucro standard will be managed as part of the integrated management system as mentioned under PS1.

Cocal takes advantage of all possibilities to use organic wastes from ethanol production, including vinasse mixed together with filter cake and industrial process water, in the plantation fields to reduce the need for chemical fertilizers. When such chemical fertilizers are applied, the prescription is based on soil fertility analysis and plantation extraction needs. As mentioned above, Cocal monitors pests, which it seeks first to control through biological agents. When used, agrochemical products are prescribed by a qualified agronomist based on pest infestation and economical level of control. The pesticides (fungicides, herbicides and insecticides) applied by the company fall into the WHO classes of II, III and U. 98% of the sugar cane is harvested mechanically, and no pre-harvesting burns of sugarcane fields is allowed. The straw is partly left on the fields to better protect the soil from erosion effects. Straw is also used as biomass for the boilers.

Supply Chain: Cocal has 8 third party suppliers from whom its sources sugar cane annually. As part of the current supplier contracts they need to have the CAR registration in place (see ESAP action item #2).

Grievance mechanism: On their website Cocal provides a formal channel “The Ombudsman” for receiving, forwarding and processing requests for information, praise, suggestions, criticisms, and complaints about ethical violations involving the Cocal Group's stakeholders, with justice, balance and in accordance with the company's values. Confidential treatment in relation to the identification of the complaintive is guaranteed, as laid down in the Code of Ethics.

Cocal has channels of communication available for the general public, some of which the company has disclosed at their website, including an email address. The system has the means to receive, record, forward, treat and provide feedback to all complaints from the general public, and the company keeps records and shares results internally on managerial meetings.

On-going Reporting to Affected Communities: Although impacts from sugarcane plantations are diffuse, it is expected that some rural villages or nearby farmers could be possibly affected by noise and dust emissions from trucks on the unpaved roads or unintentional agrochemical spraying drifts, especially from air spraying. Cocal has mapped villages and potentially impacted communities. Although the aerial spraying procedure should prevent any impact, the company does not inform neighboring farms and nearby communities when aerial spraying takes place. Also, there is no external communication on truck traffic schedules and mitigation measures proposed. 

As set forth in ESAP item #5 based on the community mapping and issues identification, Cocal will develop a specific communication and engagement program designed for affected neighboring farmers and communities that includes communication on the mechanism to respond to specific issues that arise from consultations and facilitate resolutions of affected farmers and communities’ concerns. Furthermore, Cocal will communicate to affected neighboring farms and adjacent communities their aerial spraying activities and truck traffic schedule.

Contact Person: Ailton Leite dos Santos

Company Name: Cocal Comércio Indústria Canaã Açúcar e Álcool Ltda.

Address: Dr. Camilo de Calazans de Magalhães Industrial Park no number, Paraguaçu Paulista, SP, CEP:19729-899

Phone: 55 18 3361-8888