Policy
Netafim has developed a global environmental policy that applies to all aspects of the company’s operations; product design, inputs to the manufacturing process, interactions with suppliers in the company’s supply chain and waste management of wastes resulting from manufacturing. That policy references compliance with national legislation and regulation wherever the company’s operations are located. The policy is written by the Global EHS Officer and is approved by the CEO, Senior VP Operations, and corporate level management. The company maintains a Sustainability Action Plan aligned with the United Nation’s Agenda for Sustainable Development; specifically, the strategy targets SDGs related to poverty, hunger, gender, availability of water, economic growth, industry and innovation, climate, and biodiversity. In addition to the above, India operations are subject to two policies; a Quality and Environmental policy and an Occupational Health and Safety (OHS) policy. Both are signed by the Managing Director of Netafim’s India manufacturing operations. These policies are displayed in prominent locations; for example, in the plant located in Chennai they are posted in all departments and at the entrance to the shop floor. The combination of the policies provides for the overall management framework required to address E&S risks and impacts associated with such project.
Identification of Risks and Impacts
Netafim conducts environmental and occupational health and safety risk assessments of its operations, either as part of its management system (the company is certified in India (for both locations) to ISO 14001:2015 and ISO 9001:2015 with a scope that covers production, supply, installation and servicing of smart irrigation solution systems including micro irrigation (drip and sprinklers), automation and fertigation equipment) or in response to corporate requirements or those stemming from regulatory agencies, such as the Pollution Control Board within the Indian state where the operation is located. For example, when new equipment is received, and new practices are required, these are subject to risk assessments before being put into service or operations changed. Example environmental and OHS risk assessments for operations in India were shared with IFC during appraisal, along with documents and records that demonstrate active management of Environmental and OHS risks and impacts. As was previously seen during the appraisal in Israel (Nov 2018), the hierarchy of risk elimination, risk reduction, engineering control, procedure change and production safety management is also followed in India. When needed, PPE is provided to employees and contracted workers.
With regard to the large-scale irrigation and community irrigation projects in India that the company participates in as an equipment service provider, IFC understands that such participation is characterized as follows:
There are different models depending on the nature of the project. The retail model involves Indian states appointing an agency that manages irrigation programs. Subsidies are paid directly to farmers/suppliers (and can be up to 90% of expected costs). When farmers get the subsidy directly, they deposit money, using dealers, with equipment providers such as Netafim. Transactions are transparent with details regarding the process readily available on-line. If Netafim is the equipment supplier, they will provide the necessary equipment and install it. Once complete, installation is inspected by regulators.
The second model in existence is that of large-scale or community irrigation. This has been driven by the national government and has ambitious targets which can only be achieved using large scale projects. The process involves governments (at the state level) planning for which land is to be irrigated. Netafim, along with other recognized technology leaders such as Jain, provide technical inputs to possible projects such as what types of land would be best served by irrigation, which types of crops should be grown, etc. A public tendering process is followed with companies invited to bid, of which Netafim is usually one. Netafim, being an equipment/technology provider partners with an established engineering company. If successful, project execution begins with the engineering company engaged in civil works (bringing the water from the source, pipe laying, etc.). Netafim’s involvement is typically 30-40% of project costs and acts as a subcontractor to the civil company; the company supplies irrigation equipment and technological inputs. IFC understands that E&S impact assessments, obtaining permits and licenses, etc. and other upstream project approvals are handled by the state entity that manages the irrigation program. Land for these large-scale projects is reported to be a mixture of government owned and some owned by the farmer who will be the ultimate beneficiary of the irrigation scheme. Netafim evaluates possible participation in such schemes using a dedicated strategic business unit (SBU). A credit committee is involved and a risk assessment (fundamentally looking at financial and legal aspects) is conducted. An internal audit team reviews the tender. If it is approved by the Netafim India Credit Committee (NICC) the project is reviewed in Israel by the corporate credit committee (CCC), involving the CEO, CFO, legal and operational heads. A project requires CCC approval in order to proceed. To date, 4 projects are already underway; 3 in Karnataka, and 1 in Andhra Pradesh. A first project has already been commissioned in Karnataka and is under O&M. In total, 70,000 farmers, on 68,000ha of irrigated land are participating in these projects.
Based on this understanding of the process and practice of large scale/community irrigation in India, and Netafim’s role as a downstream service provider of drip technology products and know-how, the risks and impacts associated with this element of Netafim’s commercial practice in India is beyond the scope of this review, aside from OHS issues of those who might work on installation of equipment in support of such projects.
Supply chains
Inputs required to assemble drip irrigation components (e.g., drippers and dripper lines) are predominantly plastics (e.g. HDPE for the extrusion lines) and packing materials (such as stretch film and cardboard). As noted above, the drippers themselves are manufactured at Netafim manufacturing plants in Israel and shipped to plants worldwide (including those in India) to be inserted in extruded lines. Materials used in this process are obtained from reputable companies and thus do not pose risks such as those contemplated by the Performance Standards with regards to supply chains.
Management Programs
Netafim has established management programs that describe mitigation and performance improvement measures and actions that address the identified environmental and social risks and impacts of its operations. Implementation can be demonstrated by compliance with applicable national laws and regulations (e.g. permits and licenses), such as by successfully complying with requirements from relevant ministries, departments and agencies in India. Summary of operational performance at manufacturing operations around the world, and that are displayed real time on overhead monitors, were seen during appraisal of manufacturing plants in Israel; these project boards as they are known are also summarized on mobile devices. Such were used by managers at HQ to oversee compliance with program targets in real time. Data was compared with pre-determined limits thereby showing real time compliance (or not) with many and varied key performance indicators (KPIs) for each production area (such as incident rates, severity indices, electrical consumption, water consumed per product manufactured, amount of waste recycled etc.). See below description of the EHS management practices in India around collection and review of data as part of this global system of EHS management oversight.
Organizational Capacity and Competency
Netafim has established and maintains an organizational structure that defines roles, responsibilities, and authority to implement the management of environmental, OHS and social matters, as identified above. Specific personnel have been so designated to fulfill those roles. For example, the structure in India is headed by the position of General Manager of Netafim India Factories. Under this person, a safety manager and a plant engineering manager are responsible for environmental matters for the Vadodara operation. Reporting to the Chennai plant manager are the OPEX/Lean Manager who has management responsibility for OHS and the plant engineering manager who oversees environmental management. Specific duties and responsibilities of these individuals are varied and include matters related to certification, corporate initiatives and regulatory compliance. Example duties include inputs to management information systems, preparation and reporting to Global EHS representative, preparation and implementation of the training plan, implementation of specific practices such as safety observation, work permits for high hazard jobs, including hot work, lock out tag out, and change of management systems practices, PPE identification and ensuring it is available for use, following up with line managers should issues around PPE compliance arise, liaison with third parties regarding equipment inspection (e.g. inspection of Fire Hydrant & Fire Extinguisher by external vendor),etc.
As noted above, the Indian manufacturing plants have training programs to build and maintain EHS capacity. Training needs are determined by the job profiles. Classroom and on-the-job training are utilized. Contractors receive tool-box trainings. See details in PS 2 below regarding lost-time accident rates; an important measure of the efficacy of such programs. In addition to job training, employees receive training on first aid, firefighting, awareness of noise induced hearing loss and how to properly handle heavy goods, etc. These courses are provided by an outside service provider.
Emergency Preparedness and Response
Each plant acts according to the measures described in a procedure for emergency preparedness and response developed within the corporate ESMS framework. Implementation of the procedure requires compliance with local regulations; an example from Indian operations also described inputs and views of senior management, outside parties (such as consultants) and emergency situations as listed in the significant aspects for the operation. Details on actions and protocols to follow are contained therein, including around communication in the event of an emergency. The plan is tested according to a defined schedule and results of drills are recorded and, where needed, additional training and awareness measures are developed and implemented. The review of one such drill was shared with IFC. In total, there are four emergency teams in the manufacturing plants in India; firefighting, evacuation, first aid and communications. The register showing membership of these teams (with 76 individuals involved at Vadodara and 49 at Chennai) was shared with IFC during appraisal.
Monitoring and Review
Netafim has established procedures to monitor and measure the effectiveness of the EHS management programs, as well as compliance with related regulatory requirements (such as those found in the Consent to Operate or CTO issued by the relevant Pollution Control Board). A monthly report is compiled and reviewed at the plant level (and submitted to HQ in Israel). Internal audits are performed quarterly; third party audits are performed annually. Regulatory audits also take place, often in conjunction with an application for a CTO, for example. As per the certification of the EHS management systems, an annual management review meeting is held and covers the scope of certification. IFC reviewed the minutes from the management meeting in April 2020 that reviewed CY2019 performance and set out corrective measures for 2020. The meeting involved the plant manager and a variety of deputy and assistant managers from operational departments. Issues discussed included EMS objectives for all departments, a six-sigma program, process performance and conformity of product, compliance with regulatory requirements, changes in significant aspects and risks, adequacy of resources provided to manage risks, any relevant communication received, and any opportunities for improvement. Reviews of all the above showed very few issues discovered by audit or other review; any issues raised are subject to a timebound corrective plan to close them out.
