As per the existing investment (#36202), issues related to PS5: Land Acquisition and Involuntary Resettlement have not occurred to date and are not expected as a result of this repeat investment. Lands used for expansion of activities in the last 5 years (such as increasing processing capacity and enlarging the area under olive cultivation) have been undertaken on land already owned by CHO (i.e., new facilities were constructed alongside existing operations on company property; farm expansions took place alongside existing plantations on CHO-owned farm property). Issues related to PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected with this investment for the following reasons: there is no presence of Indigenous Peoples or known cultural artefacts within the Company’s operational footprint. If issues contemplated by these PSs arise, CHO will promptly inform IFC. Screening and assessment of these issues against PSs requirements have been, and will continue to be, done through the Company’s E&S management system (ESMS).

 This proposed investment is expected to have limited environmental and social impacts which are expected to be site-specific and none is expected to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s 2012 Environmental and Social Sustainability Policy. The project is designed to avoid, minimize and manage E&S risks and impacts of the Company’s operations in compliance with Tunisian legal and regulatory requirements, IFC’s Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Vegetable Oil Production and Processing) Environmental, Health and Safety (EHS) Guidelines .

 In accordance with the 2015 E&S  due diligence of existing investment and subsequent SSVs, this virtual appraisal validates that CHO effectively manages the environmental and social aspects of its operations through the application of an integrated and independently certified quality, occupational health, safety and environment (QHSE) management system. First established in April 2006 and continuously updated thereafter to respond to new and or/changing operations, including in response to the 2015 ESAP and ongoing supervision, the current iteration of the management system is described in each of the relevant PS1 sections below. The scope of the QHSE management system and the elements and associated actions conducted in response to the requirements of such, from creation of and adherence to an overarching policy, identification of aspects and impacts and hazards and risks, design and implementation of management programs to address key/significant issues, ensuring competency of those charged with its operations, monitoring and measurement of key issues and reporting to senior management on its effectiveness are considered to be in compliance with the requirements of this Performance Standard .

Policy. CHO has adopted a global QHSE policy which is the governing document of the management system and that sets the Group sustainability strategy and overall expectations regarding QHSE performance. A version of the policy dated 22 April 2019 and signed by the President/Director General was provided to IFC during its appraisal. The scope of the policy includes the requirements of the applicable management standards (e.g. ISO 9001, 14001, 22000 and 45001; IFS (a Global Food Safety Initiative recognized standard) and the BRC food safety standard, and other legal, regulatory and contractual applicable requirements (e.g. Tunisian law and regulation including those pertaining to bio/organic farming requirements, the organic agricultural product requirements of Japan and Brazil, those of USDA organic farming regulations, and IFC’s Performance Standards, etc.) and customer requirements as they apply to the company’s operations to ensure the quality and safety of the Group’s products, the protection of the environment and the preservation of the health and safety of company workers.

In addition to the Group-level QHSE Policy, every operational site (such as the extraction plant, soap plant, cosmetic plant, bottling plant, etc.) has a QHSE policy that describes the most relevant risks at that specific operation and includes objectives specific to those operations. These plant-level documents describe the actions to be taken to either avoid, manage or mitigate those risks and include key performance indicators (KPIs) to measure performance and drive improvement; these documents are aligned to the global QEHS policy but target plant/operational level issues and describe measures to address them.

In addition to the above, the company has developed a Sustainable Sourcing Policy in 2017 which references a Supplier Code of Conduct. Details on these can be found in relevant PS1 sections below.

Identification of risks and impacts. The identification of risks and impacts is undertaken as part of the integrated QEHS management system (MS). Considering the scope of the MS – which includes the growing of (olive tree) crops, extraction, filtration and packaging (using glass bottles, metal cans and plastic pouches) and blending of aromatic olive oils – the required and independently audited practices therein are sufficient to identify and assess relevant risks in a manner expected under this Performance Standard. Risks are listed in a risk register, an example of which was shared with IFC. Work zones, activities within those work zones that have been assessed for risk and personnel responsible for those work areas are used to organize the risk register. Example of locations include the boiler rooms, dewaxing areas, olive oil storage areas, activities around olein, stores, areas used to deodorize and neutralize, bleaching earth storage areas, offices and control rooms, maintenance workshops, subcontracting activities, roads and guard operations. For each location, the types of risks that may be found there are assessed. For example, OHS risks associated with jobs involving handling materials and movements within the facility that may be associated with possible slips, trips and falls, working from heights, manual handling, use of machinery, falling objects, are listed. Also, those related to exposure to chemical and biological risks, working with electricity, machines and tools, the ambient environment (considering noise, vibration, lighting, temperature, radiation and dust – monitoring data reviewed by IFC showed compliance to norms in the EHS Guidelines and Tunisian regulatory requirements), how work is conducted (including ergonomics, etc.) and stress levels and possibly working alone are identified. Significance of risks are assessed, existing management measures and residual risks remaining after such are implemented and other possible ameliorations are presented.

Risk assessments are also carried out for primary suppliers in CHO olive oil supply chain, including those engaged in farming and processing. This is governed by a procedure with an emphasis on food safety and good manufacturing/production processes. An initial assessment determines the level of risk of a supplier; low, medium or high. For example, currently regarding third-party mills, 60% are judged to be low risk suppliers in that they have their own compliant management systems regarding quality and food safety matters; 38% are thought of as medium risk suppliers in that they have already setup and are applying food safety and GMP procedures; lastly, 2% of third-party millers are deemed high-risk suppliers in that whereas they are willing to setup food safety measures and GMP procedures they have yet to do so. 

In addition to the specifics outlined above around food safety and GMP, all these suppliers adhere to CHO’s code of conduct which requires compliance to CHO’s environmental, health and safety and social strategy, itself referencing compliance with applicable laws and regulations.

For those deemed low risk, a Supplier Code of Conduct is required to be filled out by the supplier (see the section on PS1 Supply Chain below for details). Medium risk suppliers are subject to the same plus monitoring measures. For high risk suppliers, it is the same as medium risk entities plus CHO commits to audit them within a specific period along with ongoing monitoring. Audits are carried out by internal auditors, supported by personnel from procurement. These audits have a commercial focus and are broad in their scope. For example, the type of the supplier is recorded (family owned, larger commercial enterprise, etc.) as are observations about its financial stability, ability to invest in itself to improvement EHS/labor performance as needed, its compliance with expected laws/regulations (including those regarding food safety and environmental compliance), as well as other important commercial aspects such as the suppliers own supply chain, its materials management, logistics, workshops, equipment, etc. Further details on quality management (traceability, nonconformities, allergen management, food safety impacts upon CHO products, and raw material impacts) are assessed. See below for more details on the company’s supply chain. 

Lastly, risk assessments are also conducted of those providing external services (service providers) to CHO; this is governed by a procedure as part of the integrated management system. These services can include those providing transport, chemical and microbiological analyzes, maintenance activities, manufacturing process, waste disposal, pest control, training, audits, etc. Selection of service providers must take into consideration the degree of compliance with internal CHO requirements around hygiene, environment and health and safety at work (and other matters around labor and working conditions) in accordance with CHO’s QEHS’ selection checklist for subcontractors. QEHS performance is monitored and recorded in a monitoring register as is surveillance and monitoring of labor and safe working conditions.

Management Programs. As required by the company’s certified QEHS management system, management programs are used to drive improvements and enhanced performance in those areas that have significant aspects/risk elements that pose more risk to workers, the environment or the safety and quality of the company’s products using objectives, targets and new KPIs. Programs are determined based on discussions at senior management reviews, which themselves are based upon data and information from assessments, audits, results against existing key performance indicators, etc. As part of its integrated management system, following IFC’s appraisal in 2015, CHO developed and implemented management programs to successfully complete the 10 ESAP items agreed upon for this investment.

The company is currently working towards consolidating its efforts to retain certification to the recognized management system standards described above. This will result in one integrated certification that covers all aspects of QHSE for all its operations. This will provide a more streamlined and efficient approach to overall management of QHSE at CHO. Standardized management programs will apply across the board; individual plants and operations will comply with those programs while adding in those that are specific to their operations. As is noted in the section above on QEHS policy, this approach has already been adopted in part to drive QHSE performance. This approach will allow a more efficient use of internal auditors and reduce the time needed for external or surveillance audits.

Organizational Capacity and Competency. The integrated QHSE function is led by the Head of the Department (the QHSE Director) who reports to the deputy Director General of CHO. Reporting to the QHSE Head are eight managers; one for Health, Safety and Environment, and one each for the cosmetic operation, the extraction plants, the Soccohuile unit, the bottling plant and refinery, the La Gazelle (bottling) operation, the laboratory who have HSE responsibilities depending on the nature of the operation they oversee. In addition, there are additional 10 individuals responsible for the quality elements of the integrated QHSE MS. Human Resources (HR) are managed as part of the administration function. Farming operations fall under the responsibility of the QHSE Director who oversees individuals responsible for the organic certification programs; see the PS6 section below for details in specific certifications.

Training. An annual training plan is developed based on data and information collected through on-going observations of workplace practices, any comments or suggestions made by workers, and the outcomes of the internal audits (and when conducted, the external certification audits) which are reported to senior management who then determine training needs for the coming year. Some training events are conducted in-house; others using external or third-party trainers. Sometimes a train-the-trainer approach is used which promotes institutional knowledge retention in-house. Subjects listed in the current training plan include matters around security (conducted by the local civil protection force), knowledge retrieval and improvement elements of the cosmetic products management system, training on the latest food safety management system version, the BRC food standard, QMS, EMS, first aid, firefighting, emergency evacuations, and training of forklift operators.  The importance of the training program is described in the HR policy (see below for more details on the PS2 section). Currently, the company spends approximately 4% of its total payroll on training for its employees; a total of 81 days (648 hours) of training was provided last calendar year.

Emergency Preparedness and Response. All CHO facilities have an emergency preparedness measures in place; such are required in the certified management system. The company provided information/data to IFC on the number of fire drills conducted, the inspection and certification of fire detection and suppression electrical and mechanical systems and the inspection, refill/recharge of portable fire extinguishers. Management of hexane is subject to additional requirements. For example, a closed loop is used to minimize (or prevent) releases; multiple detectors are used to monitor the concentration of hexane in the air at the Chararda facility (the only site where hexane is used); a central control center (equipped with visible and audible alarms) is used to warn of higher than expected levels. Annual reports of levels are provided to IFC in the AMR; see below for further discussion on compliance with such limits.

Monitoring and Review. A key element of the company’s QEHS monitoring and review activity is the internal audit program. The 2020 internal audit program was shared with IFC. Audits are conducted during the year for the quality management system requirements, and for the environmental, occupational health and safety, food safety (ISO 22000, IFS and BRC), and Halal requirements as well as for the laboratory (against the requirements of ISO 17025) and specifically for cosmetic products (against the GMP requirements of ISO 22716). Any non-conformities against the norms and requirements of the integrated management system are subject to corrective and preventive action plans.

Each CHO operation has developed its own set of KPIs. These are determined based on commitments made in the various plant-level policies. The policy commitment leads to an SOP or program which is required to have an indicator. Actions, review and scoring against the indicators then take place. Indicators may relate to regulatory requirements, customer requirements or other measures designed to drive performance and are subject to specifics around frequency of occurrence, performance levels, etc. Significant aspects, such as water use, waste management, matters pertaining to HR, etc. have KPIs. IFC’s AMR requirements are considered as KPIs; likewise, customer requirements around food safety are used to indicate performance. KPIs are reviewed annually for continued relevance and are discussed as part of the quarterly management board meeting.

An example list of objectives/KPIs for the cosmetic operation was shared with IFC. There are objectives/KPIs around several key areas; such as OHS regarding the number, severity and frequency of accidents that lead to lost work days, compliance with use of PPE and other OHS requirements/rules and working conditions on site; regarding the environment, KPIs target a reduction in the consumption of electricity (for example, by 7% from the previous year) and water (9% reduction from the previous year), generation of wastes and hazardous wastes, and amount of effluents produced; also with respect to HR, such as the integration of new recruits, resignation rate,  absenteeism, overtime hours, number of female employees (e.g., greater than or equal to 50%), hiring rate of people from local communities, number of strikes, number of employees with specific needs (i.e. less than fully able-bodied), completion of planned training, increasing skill levels of employees, increasing supervision efforts, efforts to increase the well-being of the community and complaints raised by interested parties.  

Supply Chain Risk Assessment and Management. CHO has adopted a Sustainable Sourcing Policy that references the use of a Supplier Code of Conduct. This policy, the Supplier CoC and the associated risk assessment of third-party suppliers provides the framework for the company’s oversight of risks and impacts within its supply chain. Whereas the overall number of suppliers of olive oil to CHO (i.e. mills) is large (approximately 500), 350 of these are deemed to be regular/long term suppliers. Each one of those 350 suppliers is subject to CHO risk assessments that determines high, medium or low risk (as is described above).  All suppliers to the company are registered in the external suppliers control procedure.

IFC reviewed two signed CoCs; one for an Italian company that supplies glass bottles to CHO and the other a mill in Tunisia that supplies olive oil. The Code of Conduct covers the following: General Provisions (reference to UN Guiding Principles on Business and Human Rights, Core Conventions of the ILO and the 10 Principles of the UN Global Compact); Human Rights (reference to compliance with labor laws, prohibition of child and forced labor, no discrimination, equal opportunity and freedom of association); OHS (emphasizing a management approach, use of risk analysis, provision of resources, training, etc.); the environment (analysis of risks and impacts with an objective to minimize them, continuous improvement, legal compliance and pollution prevention), and Integrity and Confidentiality.

In addition to the above requirements, those supplying CHO with organic olive oil are subject to audit against food safety, quality and environmental and health and safety matters as pertain to specific organic standards to which the company is certified. The Sustainable Sourcing Policy contains aspirations with respect to promotion of organic olive oil farming/production. For example, the company committed to improving their overall sustainable supply of their priority ingredients (more only 15% organic olives and more than 50% of organic oils) by 2020, representing more than 70% of their annual raw material purchases. During appraisal, the company reported that since 2017, certified organic olive farms have represented 25% of total olive farmlands of CHO Group, thereby surpassing the commitment. With respect to organic olive oils, the company reached the goal of more than 50% of bottled organic olive oil production and export with 8303 tons of organic olive oils out of 15772 tons of total bottled olive oils.

An innovative approach to traceability within its supply chain has recently been undertaken by CHO with regards to is premium olive oil product, Terra Delyssa. Using blockchain technology, which is based on the IBM Food Trust platform, a customer buying a Terra Delyssa olive oil product can scan a QR code on the product to see the farm where the olives were grown, which mill crushed them and where it was bottled. The Terra Delyssa product is grown without pesticides, first cold pressed, and made from a single source; all of that can now be verified by the customer prior to making a purchase. Distributors and retailers can access even more information such as the laboratory test results for the product. 

 CHO employed in 2020 a total of 798 employees, of which 326 were women (41% of the workforce) in Tunisia. Of the total workforce, 615 were employed in the processing of oil and other products; the remaining 183 were employed in the growing and harvesting olives in the agricultural division.                                             

Human Resources Policies and Procedures. The company has developed an HR policy (July 2017). The policy states its commitments to the application of the requirements of national and international standards, such as the United Nations Guiding Principles on Business and Human Rights, the core conventions of the International Labor Organization (ILO) - which are reflected in IFC’s PS 2 - the 10 principles of the United Nations Global Compact, as well as the Tunisian labor code and collective agreements applicable to their activities. The HR policy is applicable to all employees and contractors. In order to support the implementation of the objectives of the HR policy, a series of HR procedures has been developed. Details of and scope of such procedures are presented in the relevant sections below. The implementation of these collective measures leads to performance that is judged to be in compliance with the requirements of this Performance Standard.

Working Conditions and Terms of Employment. New hires are provided with written contracts, training in OHS, and are provided with information on their rights and responsibilities of the employee, referring to the Tunisian legal and regulatory inclusions in the HR policy, including disciplinary measures in the event of non-compliance with their contract. They are provided with a welcome booklet (that highlights environmental protection, safety instructions required hygiene measures, roles and responsibilities, etc.) and are assigned to a manager or an employee with seniority in the same line of work as the new hire, undertake integration seminars, tutoring and mini internships in departments other than the assignment department to learn more about CHO overall business.

The working conditions and organization in all CHO operations are subject to collective bargaining agreements CBAs). These collective agreements are defined according to the main activity of each site. As an example, collective agreement for the packaging of olive oils, one for the refining of vegetable oils, etc. Each collective agreement specifies in details the terms and conditions of employment, including wages and social benefits; payroll deductions; work hours; overtime arrangements and their remuneration; the breaks; days of rest and sick leave; maternity leave; vacations and public holidays. As noted above, anyone joining CHO Group is informed of all these conditions following a direct interview with the HR Director and/or the director of the site concerned, as well as through their employment contract. The plant manager of each CHO Group site is responsible to implement and abide by the working conditions and methods described in the collective agreement applicable to their site. The HR Director is ultimately responsible to ensure compliance with these conditions and the well-being of all CHO Group staff.

Worker Organizations. CHO has a specific procedure entitled ‘Freedom of Expression’ which provides for worker organizations at CHO Group. A workers' organization is defined as any organization representing workers whose objective is to support and defend the interests of workers regarding working conditions and terms of employment. At CHO, the organization of workers is presented in the form of a union. The union within CHO is freely chosen by the workers through elections. The access of union representatives to the workers they represent is freely guaranteed. Workers are free to meet and discuss workplace issues on site during scheduled breaks and before and after work. The workers are then free to choose representatives empowered to meet with the management of each site, to check the working conditions, and to carry out any other activity concerning the union. Collective negotiations are conducted during meetings between the management of each site and union representatives in order to determine working conditions and terms of employment by joint decision. They also include the implementation and administration of any possible agreement that may result from collective bargaining as well as the resolution of other matters arising in the context of the employment relationship concerning the workers represented by the union. Currently, 138 employees are members of the trade union Union Générale Tunisienne du Travail (UGTT).

Non-Discrimination and Equal Opportunity. The HR policy includes reference to the implementation of the recruitment procedure which utilizes a selection mechanism free from all forms of discrimination. A detailed definition of what could constitute discrimination is referred within the procedure.  Beyond prohibitive actions, the procedure also aims to promote diversity, including promotion of gender equality, thereby setting the framework for such to occur, noting that this is also subject to a KPI (see elsewhere in this ESRS document).

Grievance Mechanism. An HR procedure describes how complaints and suggestions are managed at CHO. The procedure allows for the receipt and follow up of both external complaints and suggestions (i.e. raised by members of the community) and those internally derived complaints and suggestions (i.e. from workers). See Stakeholder Engagement below for a brief description around handling externally derived complaints. Internal complaints are also to be deposited, again allowing for anonymous submittal, into staff suggestion boxes. The submissions received at each site are collected weekly from the staff suggestion box and recorded in a register. An example of the form used to record such was provided to IFC. Each communication is examined by the HRD of CHO Group and the director of the site concerned. Follow-up is then carried out depending on the nature and seriousness of the complaint/suggestion.

Protecting the Workforce. The HR policy contains references to the prohibition of child labor and the minimum age of labor is 18 years old, as provided for by the Tunisian labour code and international laws and codes. The company does have an apprentice program which allows those between 16 and 18 to be hired as an apprentice for certain jobs. There is a detailed definition of child labor in the procedure.

Occupational Health and Safety. As described above, CHO uses its QEHS integrated management system to identify and assess occupational health and safety hazards and risks at all its operations. The key driver to understanding and ultimately avoiding, managing or mitigating job risks is the CHO corporate-level OHS policy and its performance requirement to assess activities for inherent risk. Elements regarding assessment of hazards and risk, identification of control measures, determination of residual risk, definition of roles and responsibilities with respect to OHS, reference to legal compliance, conduct of root cause analysis, corrective and preventive actions, and the involvement of those most impacted by hazards and risks, etc. are all performed/conducted as part of this independently certified management system. See above PS1 risk assessment section for further details around hazard and risk identification. The company reported its Lost Time Incident Frequency Rate (LTIFR) for CY 2019 as 10 (based on the sub-set of 579 employees involved in manufacturing). Manufacturing at CHO involves not only food products, but also pomace oil extraction and manufacturing cosmetics. As there are different LTIFR reference rates for different economic activities – for example, tree nut farming (relatively comparable to olive tree production) is 11, oil seed farming is 9 and speciality food manufacturing is 6 – the direct comparison of the aggregated LTIFR number is not straightforward. Therefore, as part of the AMR, the company will report LTIFR rates for respective activities to allow for more direct comparisons with published benchmark rates for different activities.

Workers Engaged by Third Parties. Temporary or seasonal workers may be employed by CHO (such as during the harvest). Any third-party provider of such labor is subject to the requirements of the Code of Conduct and can also be audited to ensure that labor and safe working conditions meet the requirements of applicable Tunisian labor law and regulation and, as such, will meet the objectives of this Performance Standard. Supply Chain. See PS1 section on supply chain risk assessment and management for a review of CHO management practices designed to avoid or mitigate OHS risks in the CHO supply chain. In addition to that discussion on risk, it is important to note that the above referenced within the HR manual states the following with regards to child and/or forced labor in the supply chain: When there is a high risk of child labor or forced labor in the primary supply chain, especially for olive fields, appropriate measures are taken by the managers of the fields under the responsibility of CHO Group to prevent children to work in activities related to olive fields. For olive fields that do not belong to CHO Group, a Supplier Code of Conduct has been drawn up and communicated to suppliers to encourage them to adhere to our values ??and principles concerning child labour and the preservation of their rights by identifying the foreseeable risks in their workplaces and the measures applied for managing these risks. Each CHO Group site follows its primary supply chain on an ongoing basis in order to identify any significant changes that may occur. If new risks of child labor and / or forced labor are identified, the client (i.e. supplier) will take appropriate measures to address them. The CHO Group also undertakes to avoid and eliminate any risk constituting human trafficking such as the recruitment, transport, transfer, accommodation or reception of persons by means of threats or the use of force or other forms of coercion, kidnapping, fraud, deception, and abuse of power.

Covid-19 Situation and CHO Response. Tunisia experienced two months of general confinement imposed by Tunisian local authorities to prevent the spread of COVID over the period April / May 2020. The CHO Group, determined to be an operator in a sector of primary necessity, was required to continue to operate. As a result, despite a slowdown in the pace of exports due to port constraints, the Group's units continued their activities with the exception of Chararda’s pomace oil extraction plant. Following resumption of its economy, all the Group's units have returned to normal operations. For the agricultural operation, the state of general containment has no influence except for the Sidi Yaich site which experienced slight disturbances in its fertilization and irrigation program. Despite the temporary halt at Chararda site, there have been no workforce reductions in the CHO Group.

Given the nature of the CHO business – and the importance of hygiene therein - the existing emergency preparedness plan already contemplated measures applicable to those required in the face of Covid-19; where needed, additional measures were added to the company’s response. For example, specific measures taken to prevent the spread of Covid-19 included CHO encouraging teleworking for those posts that do not require a regular presence and promoting video conferencing to reduce the number of face-to-face meetings, etc. The company reorganized the working schedule for those on site into three shifts to minimize the number of people in the workspaces and to guarantee respect for social distancing. Free and safe transportation to work was provided. Specific ongoing OHS measures include the wearing of protective masks at all workspaces, provision of hand sanitizers at all work stations, sanitizing those work areas and other common surfaces on a regular basis, temporarily switching to disposable items in the canteen to prevent cross-contamination, systematic temperature monitoring at the entrance of the workplace (and recording details on any visitors to the operations) and verification if there are any other symptoms being displayed by workers or others, provision of disposable hand tissues and bins in every hand wash station and spreading awareness on good practices to be undertaken to fight against the spread of COVID-19. CHO reported that the psychology and mental health of their employees was their first concern. Although, the company was obliged by the law to continue to operate, every employee could decide for themselves whether to work. Decisions made were done so without pressure nor inducing difficulty or embarrassment. With regards to the financial impacts to employees, the company reports making exceptional COVID bonuses to staff. The company suspended personal loan repayments (one of the benefits provided to workers) for two months. Paid sick leave is available to any worker who may feel the need to not come to work. Lastly, the company maintains regular communications with the workforce, using interviews to listen to their needs and issues, putting up posters showing best practice to halt transmission of the virus and suggestion boxes (part of the grievance mechanism) remain available to all workers.   

 Resource Efficiency. Most of the power supplied to the CHO Group operations is in the form of electricity from the national grid. In addition, LPG and heavy fuel oil is used. Biomass, a by-product of the processing operation, is utilized to offset some of these inputs. Water is consumed in both the process and in irrigating the olive trees.

The operational practices that consume the most natural resources are monitored and subject to KPIs (as noted in PS1 section above). For example, water to irrigate the olive trees, that is drawn from licensed boreholes (an example license was shared with IFC for review) is metered. Assessed for quality prior to application, the water consumed in 2019 to irrigate 3,000 ha amounted to 4,440,000 m3. This water is applied to closely spaced trees to minimize the amount of land required to supply enough olives. The trees are irrigated at night to limit losses due to evaporation. Soil moisture is monitored in all fields/orchards to ensure only that water that is required is applied; most of Tunisia’s agriculture relies solely on rainfall which is taken into consideration in CHO fields to ensure only appropriate supplemental irrigation is conducted. Conversion to sub-surface drip irrigation from above ground drip is being undertaken in existing fields as part of maintenance of the irrigation system; such practices have led to a 30% reduction in the amount of water required. New fields utilize this method of application as standard. Electricity to power the pumps to obtain and distribute the water in the irrigation network is now partly supplied by solar energy; pumps fill tanks during the day (when the sun is shining) and the tanks supply the water used during the night  .

Water used in the industrial processes is obtained from the municipal system. That is also metered, and the company is charged based on usage. Efficiency is promoted through specific management programs (such as process engineering) for this and other consumption, and opportunities for reductions and/or cleaner production are assessed using these programs and when planned upgrades of equipment are to take place. For example, a water audit in the refinery led to process improvements and water savings. Specific actions undertaken included treated waste water from boilers being made available for use in firefighting equipment instead of being discharged; process engineering that resulted in clean water used in the cold water process circuit (coming from the separation step) is now reused in the hot water circuit for the olive oil washing operation instead of being discharged. Likewise, changing from a three-phase to a more efficient two-phase extraction process in the oil mill and extraction unit has reduced water use. All the above initiatives have led to a reduction in water use of around 30%.

Effluent from all but one of the operations is discharged to the municipal system. The one operation not tied into the sewer network – Chararda – treats its effluent on-site and re-uses it in the processing operation. Redesigning the process in 2018 has reduced the volumes produced – up to 95% is now able to be reused (such as in the boilers). The small amounts of effluent that cannot be re-used (such as have high salinity that can corrode equipment) are collected from the site and taken to a municipal plant for final disposal. Amounts are small requiring only 1 or 2 pick-ups per year.

Biomass – by-products of the processing operation – are used to fire the company’s boilers and reduce the need for additional fuel sources. Such residues from the pomace oil operation and olive cake is used in this manner.

Air emissions from the company’s boilers are subject to Tunisian regulation as well as those found in the IFC’s EHS Guideline limits. Regular maintenance is performed upon these boilers. IFC reviewed the latest monitoring data that showed compliance with both, except for one result that exceed IFC’s limits for particulates. The company responded to that event, putting in place pollution control measures including wet scrubbers to reduce particulates resulting from burning biomass. This practice generates sediment laden wash. This is treated on site and the organic residue/sediment is then land applied in the olive orchards to improve soil quality. The company is adding in analysis of this sediment in for the 2020/2021 crop.  Ambient emissions associated with the use of hexane in the extraction plant are monitored and are following IFC’s EHS Guideline limits. Other considerations regarding the workplace ambient environment such as those related to noise, vibration, lighting, temperature, radiation and dust are monitored; data reviewed by IFC showed compliance to norms in the EHS Guidelines and Tunisian regulatory requirements.

Solid and hazardous wastes are subject to management and monitoring and measurement. Amounts generated are tracked and subject to KPIs (see reference under PS 1, ref. Monitoring and Review section).  Likewise, for the types and amounts of Hazardous Waste (HW) that are generated.

Greenhouse Gas Emissions. Based on energy consumption data provided regarding use of LPG, heavy fuel oil and biomass (as used in the boilers), Scope 1 total of 49,047 tonnes of CO2 equivalent is emitted on an annual basis for all industrial activities. Scope 2 emissions – from consumption of electricity – amount to 5,297 tonnes of equivalent CO2. The company will continue to measure its GHG emissions, reporting them to IFC, along with initiatives designed to reduce consumption of inputs driving emissions (and the use of benchmarks to compare efficiencies), the likes of which are described in the section above. 

Pesticides Use and Management. The company still uses the Integrated Pest Management Program (IPM) for its farming operations as was seen during appraisal in 2015. In addition, CHO’s farming production in organic is raising progressively year by year. Those supplying to the company are required to comply with the regulations pertaining to the type and use of pesticides; compliance is checked by assessing pesticide residues in CHO laboratory. As was reported in 2015, application of pesticides is rarely required; insect pests that may occur in Tunisia are limited to infrequent outbreaks due to the arid growing conditions required by olive trees. Application, when needed, is therefore limited and targeted. All crop protection products (CPPs) that may be used remain approved by the Tunisian Ministry of Agriculture (and therefore by association to the standards of the FAO/WHO Codex Alimentarius, or Codex). IFC reviewed a list of pesticides that are authorized for use by CHO and benchmarked them to The WHO Recommended Classification of Pesticides by Hazard, 2019. Of the total number authorized, 4 are unclassified (U), 8 are Class III and 14 are classified as Class II. Two (2) however were shown to be Class Ib which are not allowed to be purchased, stored or used per IFC PS3. Following discussion during appraisal regarding these two products, the company has amended its allowable pesticide list which was presented to IFC for review; the updated list now shows those two products as not being authorized for use.  

CHO uses external contractors for pest control (rats, insects, etc.) in its processing operations as per the requirements of its food safety management system. These services are approved by the Ministry of Health.

Monthly inspections continue along with the use of UV lights and traps to control such pests. The company maintains the MSDS of any pesticides used in these practices

 Community Health and Safety. CHO maintains certification to recognized international standards (ISO 22000, IFS, BRC) regarding food safety management system. Likewise, its largest and most important suppliers (approximately 20 of the aforementioned 350) are subject to audit against such standards; this number changes based on the application of the risk assessment (which is applied to all suppliers, as described in the PS1 section above). Certification to such provides a good level of assurance that CHO’s products are safe for consumption and will not impact community health. In addition to certifications, the transparency found within the blockchain technology recently adopted by CHO for one of its premium products provides further assurance and confidence to consumers regarding the use of these CHO products.

The location of company operations in industrial zones or away from human settlements greatly reduces the chance of community health and safety risks and impacts to such operations. Each operation has undertaken an assessment of risk as part of its integrated management system. As noted in PS1, emergency preparedness plans are in place should an incident occur; each is available to local communities in keeping with the requirements of the integrated management system.

Use of Security forces. CHO has traditionally used its own employees for the protection of the company assets. However, starting in 2019, they supplemented their own personnel with the services of a third-party provider for 2 of their processing sites (the bottling and cosmetic units); all other sites still only utilize CHO employees. The company believes that the addition of a professional security company will bring new ideas and approaches to the provision of security for all operations. The premise of security at CHO remains, however, limiting access to company property and provision of support should an emergency (such as a fire) occur. As such, security personnel receive training in dealing with such possible events, including first aid. Such training is provided by another external service provider along with how personnel can and should react to all situations, what is acceptable behavior in terms of response, etc. The company does have an extensive network of CCTV and utilizes other technology in providing a safe workplace, such as fire detection systems and unauthorized entry detection systems. Security personnel are not armed                                                  

 CHO is involved in primary production on its own land. It currently farms olive trees on 3,000 hectares of land that was previously utilized for agricultural purposes and is located within an agriculturally zoned area.

As was reported during the appraisal for the first investment in CHO, and presented here to put CHO’s activities into context, Tunisia’s olive resources are found on approximately 34% of Tunisia’s total cultivated land, with some 75,000 ha being dedicated to certified organic crops. Close to 90% of cultivated olive acreage is located in the central and southern regions of Tunisia. Olive plantations in Tunisia are located on consolidated agricultural lands and agricultural zoning; cultivation of olive trees is strictly regulated under Tunisian law. Tunisia’s ongoing agricultural expansion strategy is based on the following priorities: renewal of unproductive, senescent plantations; changes in the tree density of plantations under rainfall watering regime; increase in the share of irrigated plantations; and introduction of new, more productive local varieties adapted to soil and climactic conditions. Additional expansion of olive plantations is to take place on existing agricultural and/or degraded lands rather than into natural/critical habitats, which are managed and protected under Tunisian law.

As per the requirements of this Performance Standard, and in alignment with the overall approach to olive tree cultivation as described above, CHO has located its cultivation on suitable agricultural land, avoiding impacts upon biodiversity. They manage their living natural resources in a sustainable manner, by applying industry-specific good management practices, independently certifying their farming operations to globally, regionally, or nationally recognized standards. For example, sustainable agricultural practices applied at the CHO-owned farms (Alaitha and UDA) have led to organic farming certification in accordance with the requirements of various organic standards by ECOCERT, including BIO-TN (Tunisian/European equivalent Organic Standard), NOP (US and Canadian organic standard), BIO-BR (Brazil organic standard) and JAS (Japanese Agricultural Standard for organic).

As a Group, CHO currently holds certifications for organic olive oil production at its industrial sites as well. CHO company holds BRC Food certification, IFS Food standard and Organic certification by ECOCERT for 100% organic virgin olive oil and Pomace oil. Socohuile holds Organic certification by ECOCERT for 100% organic virgin olive oil. The bottling company holds Organic certification by ECOCERT for its range of products including virgin olive oil, flavored olive oil, pomace oil, exhausted pomace and residues. UAI for its preparation, packing and export activities holds the Organic certification by ECOCERT for bottled virgin olive oil sourced from at least 95% original ingredients farmed organically. These companies also passed EcoCert biological inspection of olive oil which is held regularly to maintain certification.

In addition to the above mentioned organic standards, CHO applies a mix between ISO 9001 standards for traceability purposes, Food safety standards as well as Environmental and Social standards they follow in order to cover the requirements of their own QHSE managements system in terms of water quality, waste and pest control . 

 The company continues to implement a previously developed External Communication Plan. This plan identifies stakeholders such as clients, suppliers, contractors, regulatory and government agencies, and certification organizations. It also describes who within the company is responsible for carrying out the plan’s requirements. Given the location of the company’s operations – away from communities and in land designated for industrial use – this level of interaction/engagement is limited, as commensurate to the risks and impacts of CHO operations.

As noted above, the company has a procedure that governs management of external complaints. These are complaints that are deposited (anonymously if desired) into the suggestion boxes available at the gate of each operation. These are collected weekly, entered into a register, examined by the HRD and the Head of the plant in question, with follow up then occurring dependent on the nature, severity of the issues at hand. 

The CHO Group has a community development strategy based on two pillars: the development of the region and that of the sector. CHO Group operations, be they processing/industrial or agricultural in nature are located in different regional development zones within Tunisia; e.g. Sfax (Amra, Aithat Chleya and Noual), Sidi Bouzid (Ouled Brahim and Meknassi), Kasserine (Feriana), Tataouine (Rmeda) and Kairouan (Chararda and Ouesletia). The Group has put in place a whole community development strategy aimed at supporting the community at large in the region of each production site. For example, recruitment of local labor from the region concerned is promoted; regional schools are supported by helping cover their expenses. Small hospitals in the region receive assistance and various sports clubs. The sponsor of cultural academies in the region and support of pupils and students through internships with the company is undertaken. Financial support of non-profit associations is also provided to aid disadvantaged members of society. The company has also played a key role in their respective regions in the fight against COVID19. It has organized the distribution of aid in kind to more than 1,500 families in need in those regions in addition to aid for hospital equipment.

CHO also provide support to the Tunisian olive oil sector through training of Tunisian millers and farmers in relation to good production and quality practices. An example of this support was the seminar organized by the Group in October 2019 which brought together 500 farmers to discuss and promote good practices, quality, etc. In addition, the company supports young olive oil exporters by making CHO Group laboratory available to them. Ongoing active participation of the CHO Group in research and scientific studies focusing on Tunisian olive oils helps to drive the sector’s performance and standing in international markets                                                  

  Mohamed WALHA / QHSE director for CHO Group/ CHO Company, Mahdia road km 18, Sfax Tunisia Walha.mohamed@cho.com.tn