This project does not trigger PS 5: Land Acquisition and Involuntary Resettlement and PS 8: Cultural Heritage as no land acquisition or expansion of Omarsa direct operations (processing and primary production) or third-party sourcing are envisioned. Puná Island was an important center of the Pre-Incan Huancavilca culture (500 – 1530 AD). Some proportion of Puná’s populations are descendants from the Huancavilca but 2010 census data indicates that less than 2% identify themselves “indigenous”. The interspersed populations across the Island have lost the linguistic and cultural elements that would characterize them as distinct indigenous group. El Zapote, the closest community to the project area has a communal title over 2,140 hectares. Cattle grazing, the primary land-use practiced on the communally owned property, is not an ancestral practice. Therefore PS-7 – Indigenous People – was not triggered. The company’s engagement with the two Affected Communities in its area of influence is described under Stakeholder Engagement.                                                   

This is category B project based on IFC’s 2012 Policy on Environmental and Social Sustainability. Based on information reviewed by IFC, the proposed business activities are considered to involve limited adverse E&S risks and impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. Key E&S risks of Omarsa’s operations are the location of shrimp farms in areas with key biodiversity values, management of solid waste and wastewater from processing plants, use of ammonia and nitrogen in refrigeration systems, workers’ occupational injuries and illnesses, and abuses from private security forces.                                                    

Environmental and Social Policies. While Omarsa’s E&S policies are largely prescribed through adherence to internationally recognized sustainability standards, Omarsa needs to enhance a comprehensive set of E&S policies in line with IFC’s Performance Standards. As part of ESAP #1 - ESMS, Omarsa will review and consolidate its corporate E&S policies framework applicable to all its operations to ensure that these policies commit Omarsa in meeting performance-based requirements of IFC PSs, WBG EHS Guidelines (i.e., General, Aquaculture, Fish Processing, and Food and Beverage Processing), applicable legal and regulatory requirements in Ecuador, and voluntary standards’ Principles and Criteria. A communication and training plan will be developed to socialize these Policies with its employees, contractors, service providers, third-party suppliers, and off-takers, including local translation, display at Omarsa’s operations and website and briefing at staff induction training. The effective implementation of the E&S Policies will be monitored and reported quarterly to its Board of Directors and IFC. Omarsa management will approve an OPEX/CAPEX for the timely implementation of the abovementioned E&S policy objectives in 2021-2022.

Identification of risks and impacts. The company has conducted Environmental Impact Assessments (EIA) to obtain the environmental licenses for all its operations (i.e., hatcheries, shrimp farms, processing plants). In addition, the company has developed environmental and OHS risk assessment matrices for shrimp farms and processing plants. Deficiencies detected in the OHS risk assessment matrices are discussed in section PS2 – Occupational Health and Safety. As part of ESAP # 1 - ESMS, Omarsa will revise and consolidate these matrices to ensure that the identification of risks has covered all the areas of risks as described in the applicable IFC PSs. Risk matrices will be revised and updated at least annually, and this process will be informed by an analysis of key-performance indicators (KPI), monitoring results, non-conformities, accidents, incidents, and grievances occurred throughout the year.

Omarsa established a consolidated legal registry for applicable EHS and labor requirements for its operations. Copies of environmental licenses and permits (e.g., environmental license for processing plants Abel Gilbert and Las Brisas, shrimp farms Chongon and Puna, and hatcheries Mar Bravo, Tabasca, Punta Carnero, approved EIA for Cachugran) were shared with IFC during this appraisal for direct operations and third-party suppliers. Omarsa has not incurred any penalties of fines for legal, economic, environmental, and social issues over the last three years. 

Environmental and Social Management System (ESMS) and Programs. OMARSA’s management objective is to be a global leader in sustainable shrimp farming. For the past 20 years it has established the policies, procedures, employee training, internal control systems, and organizational capacity and competence to meet this objective. Quality, environmental and food safety controls and monitoring systems are applied across all segments of the company’s operations and audited by internal and external teams. Based on the recommendations of IFC’s first appraisal in 2015, the company consolidated the requirements of the good-manufacturing practices (GMP), food safety and sustainability voluntary standards to which the company adheres (i.e., ASC, BAP, Naturland Organic, BRC, and GlobalGAP) into one set of standard operating procedures (SOP) and internal audit controls, eliminating redundancies and overlaps.

As part of ESAP # 1 - ESMS, Omarsa will regularly revise, update, and/or develop new procedures based on the results of the risk matrices (i.e., identification of significant risks that need to be controlled).

Organizational Capacity and Competency. The Certifications Director (Chemical Engineer) with the support of two coordinators (also Chemical Engineers), are responsible to establish the quality and environmental management practices, working closely with the farm management staff to ensure implementation, and measure compliance with regulatory requirements and conformity to international standards and certification schemes. The Certifications Director is also responsible for stakeholder engagement and overseeing third-party suppliers. The OHS Department (“Seguridad Industrial”) continues to be comprised of the Safety Manager (Industrial Engineer), a supervisor (Industrial Engineer), and an assistant (OHS Technician). An assessment of the capacity and competency to the team is described under PS2 – Occupational Health and Safety. The HR Department is headed by the HR Manager with the support of 27-staff, which is less than one HR employee per 300 workers.  Considering that this is a multi-site organization with a broad range of processes and hazards, and that there is a high rate of employee turnover (more than 50% of the workers have less than one year in the company), which requires constant training of new staff on the company’s policies and procedures, the level of staffing is insufficient. As part of ESAP #1 - ESMS, Omarsa will reinforce its organizational capacity to assess and manage its environmental and social risks through the hiring of additional competent staff in the areas of environment, OHS, stakeholder engagement, and HR.

EHS Training. The Certifications and OHS Departments plan, together with the HR Department, the annual EHS training plan based on the EHS procedures and the workplace risk assessment. EHS training include topics such as handling of hazardous materials, handling of loads, active pauses, first aid, and response to emergencies. In 2019 (2020 was not analyzed due to the impacts of Covid-19), the number of man hours dedicated to EHS training was 10,860, which is less than 2 hours per employee (not considering employee turnover). The emergency brigade received only 9.5 hours of training throughout 2019.

Emergency Preparedness and Response. As part of its occupational health and safety (OHS) program, the company has developed a comprehensive general Emergency Preparedness and Response Plan which identifies and addresses potential threats to life and property, such as explosions, fire and ammonia leakages. Catastrophic natural events including seismic, severe weather, and floods are also well covered and tested during the April 2016 earthquake. Considering the elevated risks in the processing plants due to storage of large quantities of industrial gases – such as anhydrous ammonia and nitrogen – and fuels, and the presence of large number of workers, IFC requested Omarsa to reinforce the training of its emergency brigades. As part of ESAP #1- ESMS and ESAP #10 - Refrigeration systems, Omarsa will develop an emergency plan specific for the prevention and response to ammonia leakages in line with the guidance of the International Institute of Ammonia Refrigeration (IIAR) and the Ammonia Safety Training Institute (ASTI), and will regularly train the emergency brigade in the emergency response procedures.

A doctor and a nurse are present at the plants both during day and night shifts. No doctors are present at the farms, but farms are equipped with first aid kits and the company maintains several speed boats and a helicopter for evacuation needs. Communications between the farms and the base headquarters operations are good and guaranteed by radio and cellular service. Marine transport of workers and staff is on licensed boats equipped with radios, and personal floatation devices of proper size and number.

COVID-19 Impact. The Government of Ecuador has designated the food and agriculture sector as a critical sector whose assets, systems, and networks are considered vital. Omarsa’s operations have not stopped due to Covid-19 and, as of July 2021, all workers in Omarsa are fully vaccinated against the disease. Omarsa developed a biosafety contingency protocol and continues to strictly enforce precautionary measures (temperature check at entrance, mask wearing, social distancing, regular antibody or PCR testing, and increased sanitation measures). Omarsa has been following the GoE on maximum occupancy during transportation. Medical leave for ten days is granted to any person who has tested positive for Covid19 or with Covid symptoms.  As of August 2021, the company had detected 94 positive Covid-19 cases out of which 51 were detected through contact tracing. There has been one Covid19 related fatality (helicopter pilot), which occurred at the beginning of the pandemic and whose contagion was determined to have occurred outside the company.

Monitoring and Review. Despite having consolidated certification requirements into one set of standard operating procedures (SOP) and internal audit controls, the company is still managing corrective action plans (CAPs) from certification and client audits in separate Excel files. Likewise, information derived from internal audits, inspections, workplace monitoring, etc. have different formats and are managed separately. Consequently, this information is not consolidated which makes it difficult to ensure the adequate closing of corrective actions and to learn from the system. As a result, Omarsa has a management system that is still reactive instead of preventative. As part of ESAP #1 - ESMS, the company will integrate all its quality, environmental, health and safety, and social (QEHSS) corrective action plans into one IT system that facilitates analysis of information and that provides for automatic notification and escalation of actions that have not been closed.

Omarsa collects information on E&S key performance indicators (e.g., energy consumption, lost-time injury rate, employee turnover, absenteeism), which is reviewed monthly by senior management. As part of the ESAP #1 - ESMS, Omarsa will benchmark its E&S KPI with good industry practice and set up annual and long-term corporate targets.

Omarsa was the first shrimp producer worldwide to be ASC certified. To continue in its journey towards sustainability and strengthen communication with external stakeholders and offtakers, IFC strongly recommends Omarsa to publicly disclose information of the company’s E&S performance through an annual sustainability report in accordance with internationally recognized standards, such as the Global Reporting Initiative (GRI).      

Supply chain. More than 1,000 shrimp farms are currently authorized by the Ecuadorian Ministry of Aquaculture and Fisheries, most of them located in the Gulf of Guayaquil. The company purchases up to 70 percent of its process throughput in the spot market from 300 pre-approved third-party medium and large shrimp farmers (from 200 up to 3,000 ha). The ten largest shrimp producers represent more than 50% of Omarsa’s supply. Currently, only 30 sites in Ecuador are ASC certified and 8 sites have gone through an initial audit. Despite the low rate of ASC adoption, 40% of Omarsa’s exports in 2020 were ASC certified (50% including farms that have gone through a first audit). The management of risks related to Omarsa’s supply chain, including its traceability system, are described under PS2 – Child Labor and Forced Labor, and PS6 – Supply chain.                                              

As of June 2021, Omarsa employs 5,250 direct employees, about 3,700 work in the packaging plants (3,000 in Abel Gilbert and 700 in Las Brisas) and 1,200 in the shrimp farms. In addition, Omarsa relies on 200 temporary workers for shrimp harvesting activities (about 10 days per month). Women represent 36% of the workforce and are mostly dedicated to product processing in packaging plants; most supervisors in the packaging plant are also women. Women are practically absent in shrimp farms and hatcheries. At managerial level, women represent 25% of the workforce. Employee turnover is persistently high (above 100%) and more than 50% of the workforce has less than a year in the company (not including temporary workers dedicated to shrimp harvesting activities).

Human Resources Policies and Procedures. Omarsa has documented HR policies and procedures (i.e., recruitment, hiring, training, management of grievances, disciplinary, termination) and a one-page non-discrimination and freedom of association policy. In 2021, the company adopted a Code of Conduct and Ethics (CoC), which includes aspects such as integrity and respectful workplace.  Workers’ rights and responsibilities are also documented in the internal work regulations (“Reglamento Interno de Trabajo”) approved by the Ministry of Labor.

The non-discrimination and freedom of association policy, CoC, and internal work regulations are introduced to workers during the mandatory induction training. Hard copies of the documents are also provided to workers (HR handbook) and/or posted in communication boards. These documents, however, do not include all the requirements of Performance Standard 2 (i.e., prohibition of child labor and forced labor, prevention of sexual harassment, provision of safe working conditions). In addition, the induction training only introduces the policies to workers but does not explain what each concept means in a language that is clear to them. As part of ESAP #2, Omarsa will revise its labor policies to include all PS2 requirements and how the company fulfils the intent of these policies. Omarsa will also update its induction and refresher trainings to explain the content of the updated labor policies in a language that is clear and understandable to workers. The induction and refresher trainings will, at a minimum, include: (i) workers’ rights (i.e., workhours, overtime, leave, safe working conditions, etc.), (ii) what constitutes discrimination, forced labor, harassment, and sexual harassment, and (iii) how can they raise confidential and anonymous grievances without fear of retaliation.

Working Conditions and Terms of Employment. Terms of employment are documented in the internal work regulations and contracts. As part of workers’ contracts, the company provides in/out transportation, meals, and lodging (in shrimp farms) at no charge to all workers. According to these documents, the company operates in two eight-hour shifts: a day shift from 8 am to 5 pm, and a night shift from 8 pm to 5 am (8 hours per day and 1-hour non-paid lunch/dinner break) for a total of 40 statutory hours per week. Workers are entitled two days off per week. Workers in shrimp farms work 10-day-on and 4-day-off shifts. Overtime in packaging plants (about 2 hours/day) is commonly required during shrimp harvesting days (approximately ten days per month). The company tracks working hours using biometric fingerprint scanners both in the packaging plants and shrimp farms. Workers paid hourly wages and by piece-rate receive overtime compensation for work performed during overtime and during days off or holidays, as mandated by law. Payrolls of piece-rate workers include the quantity of product paid at standard and overtime rate but do not include information on workhours. It is therefore difficult for piece-rate workers to verify that their payment is equal or above the corresponding mandatory minimum monthly wage for the number of hours worked. As part of ESAP #3, Omarsa will revise the format of piece-rate payrolls to include the number of statutory and overtime hours worked. The payroll will allow piece-rate workers to compare the payment received versus the amount they would have received if paid by the hour at the minimum wage rate. Likewise, Omarsa will revise the format of hourly-rate payrolls to include the unit of measurement (month, day, hours) and the rate paid per unit.

Permanent employees have indefinite contracts (after a 90-day probation period). In Ecuador, permanent workers receive a severance payment corresponding to one month per year worked if laid off. In addition to permanent employees, Omarsa relies on temporary workers for shrimp harvesting activities (approximately ten days per month). These temporary workers are hired directly by Omarsa and receive social security benefits. In June 2020, the Government of Ecuador approved a law due to the Covid-19 emergency allowing companies to hire workers on an annual contract (renewable once) in specific cases, such as new investments, expansions, an increment in production due to increasing demand (Ley Organica de Apoyo Humanitario). Omarsa has been relying on such contracts (“contratos de trabajo emergente”) for all new hires.

Workers’ Organizations. Ecuador’s labor laws allow for worker’s organizations and protects labor leaders against discriminatory actions by employers but less than 4% of workers in Ecuador belong to unions. Omarsa has a freedom of association policy that is communicated to workers during induction training. However, workers in Omarsa do not belong to any union and the company has confirmed that there has been no initiative by employees to create a workers’ organization.

Non-Discrimination and Equal Opportunity. Omarsa has a one-page non-discrimination and freedom of association policy committing not to discriminate on the basis of sex, race, color, age, nationality, religion, creed, disability, gender identity, pregnancy, marital status, sexual orientation, political views, physical appearance, and to provide equal opportunities. The policy is introduced to workers during induction training. As mentioned in the section above, Human Resources Policies and Procedures, Omarsa will revise its labor policies to include all IFC PS 2 requirements, such as harassment and sexual harassment, and update its induction and refresher training to ensure these concepts are understood by workers (see ESAP #2).

Workers/Contractor Grievance Mechanism. Workers can submit complaints through suggestion boxes located in the cafeterias and through a dedicated email and phone number. In addition, the company has a Department of Social Well-Being (DSWB) staffed with three social workers (two for the packaging plants and one rotating among the three shrimp farms). Despite the existing communication channels, the number of recorded complaints is low. According to records, only 22 complaints were presented in 2020 through the suggestion boxes almost exclusively referring to food and transportation (no complaints were recorded through other communication channels). There are no records of serious complaints such as unsafe working conditions, harassment and sexual harassment. Due to the large number of workers (more than 5,000) and high employee turnover, it is unlikely that complaints do not exist. It is possible that workers do not trust the mechanism and/or are not aware of what type of situations and behaviors can be reported. As part of ESAP #4, Omarsa will revise its workers’ grievance mechanism to ensure this is in line with PS2 requirements. The grievance mechanism will allow for confidential and anonymous complaints to be raised and addressed. The grievance mechanism will involve an appropriate level of management, and concerns will be addressed promptly.

Workers’ accommodations. About 1,200 workers lodge in the shrimp farms. The quality of lodging is variable and deficiencies have been regularly identified by IFC during the previous appraisals and supervisions. As part of ESAP #5, Omarsa will conduct an external audit of workers’ accommodations in its shrimp farms using the Executive Decree 2393 (Decreto ejecutivo 2393 reglamento de seguridad y salud de los trabajadores y mejoramiento del medio ambiente de trabajo), and Part II of the IFC EBRD Guidance Note on Workers’ Accommodations, as standards. Omarsa will agree on a budgeted timebound plan to implement the required corrective actions. As a minimum, rooms will have adequate ventilation, a separate bed for each worker, a minimal volume of 10 cubic meters or floor space of 4 square meters per resident, sanitary and toilet facilities will be built in materials that are easily cleanable and will provide adequate privacy, 180 liters of water per person per day will be available, drinking water will meet WHO drinking water standards, and facilities will comply with national fire safety standards. Omarsa will also assign one person in each farm solely responsible for accommodations and will allocate a yearly budget to ensure that facilities are kept in good repair and clean at all times.

Workers engaged by Third Parties. Omarsa relies on one (1) contractor for the provision of catering services, seven (7) contractors for physical security, 60 contractors for maintenance services, and finally 70 contractors for the transportation of goods and personnel. Every month, Omarsa verifies labor compliance of catering, physical security contractors (i.e., contracts, payroll, payments to social security), and logistics contractors for the transportation of goods and personnel (i.e. affiliation and payment to social security). Biometric entry systems are used to control access of catering workers, security guards, and drivers into the company’s facilities. Maintenance contractors must provide evidence that their workers are affiliated to social security and payments are up to date before they are given a credential allowing them to access to the site.

Occupational Health and Safety. During the appraisal conducted in 2015, IFC identified that poorly designed boat landings where responsible for elevated levels of feet and ankle injuries. As per corrective action agreed upon in the 2015 ESAP, Omarsa installed several floating gangplanks at their farms which have reduced such type of accidents. In 2015, the Abel Gilbert processing plant appeared to be largely well organized. During the appraisal conducted in 2017, IFC noted that the company had constructed a second flash chilling line, which disturbed the original process flow and caused congestion points in process paths resulting in an increase in traumatic injuries. Hazards were expected to decrease once the expansion of the Abel Gilbert plant was completed by the end of 2017. Despite the expansion, the plant continues to be congested as the number of workers increased from 1,800 in 2016 to 3,000 in 2020, and there has not been a clear decrease in traumatic injuries. 

Elements of an OHS management system – risk assessment and determination of controls, management programs, safe work permits, inspections, joint management-worker committees, training, records of accidents, emergency preparedness and response, and management review – are in place. However, a detailed analysis of the existing documentation, identified the following deficiencies:

a)                   The hazard identification, risk assessment and control (HIERAC) matrices do not consider the hierarchy of controls (elimination, substitution, engineering controls, administrative controls, PPE). Controls rely on the behavior of people (training), administrative controls (inspections), use of PPE, or the results of studies (which are not controls per se).

b)                   The EHS inspection program is not detecting important information on unsafe conditions and behaviors, consequently limiting its input into a continuous improvement process. As an example, the following non-conformities were detected during IFC’s livestream site visit of the Abel Gilbert plant: laboratory worker not using safety glasses; use of improvised electrical extensions; incorrect use and storage of mask cartridges; slippery elevated metallic surfaces; missing evacuation signage; no warning of the presence of UV light in disinfection tunnel; no Ground Fault Circuit Interrupters (GFCI) outlets in wet and damp locations; ladders without lifeline; soil contaminated with oil spills; inadequate secondary containment in the hazardous waste storage area.

c)                   Corrective action plan (CAP) without escalation clauses for actions that have not been closed, which increase the probability that critical items remain unresolved.

d)                   No record of injuries without lost time and near misses. No formal record of occupational illness in the ambulatory. Important information is lost to determine if the visits to the ambulatory are related to working conditions (e.g., ergonomic disorders due to repetitive movements, dermatitis due to exposure to chemicals, headache due to noise).

e)                   Most lost time injuries incorrectly attributed to unsafe behaviors (instead of unsafe conditions) limiting the possibility of conducting a proper root-cause analysis to prevent recurrences.

f)                    No management of change procedure. EHS parameters are not formally included in new projects, expansions or any other activity that represents a change. Consequently, the organization needs to react to adopt controls at a second stage instead of integrating them in the planning stage. For example, there has been no consideration of the capacity of emergency exits when expanding the processing capacity of the Abel Gilbert plant.

g)                   Risk of serious injuries/fatalities due to lack of lockout/tagout (LOTO) procedure and the possibility of unintentional energization of machinery during maintenance.

h)                   A workplace noise monitoring report commissioned in 2018 identified that in several parts of the processes, workers are exposed for 8 or more hours per day to noise levels that exceed 85 dBA. Management implemented some controls at the source (encapsulating engines) to reduce noise levels, however, there was not a new measurement after the implementation of the controls to confirm that the noise exposure of the employees reached safe levels. In the meantime, employees have not received hearing protection.

i)                     Ergonomics-related disorders are identified as important safety hazards in the operations, there are reports of injuries in wrists and hands; however, the facility has not updated the ergonomics survey that was performed back in June 2015.

j)                     There is a disconnection between OHS and Occupational Health. The organization has been relying on the Ecuadorian Social Security (IESS) to perform the health checks of the workforce, but they have only covered general medicine. So far, occupational health has not been included. Consequently, there is no medical surveillance program (e.g., audiometry employees working in high noise areas). The required EPIs, as a control in the individuals to lower the risks in certain areas, are not part of a joint effort between OHS and Occupational Health towards the prevention of incidents, injuries and occupational illnesses.

k)                   Omarsa uses large amounts of ammonia (above 10,000 kg in each plant) and nitrogen for refrigeration and freezing. Reports of service providers in 2018 and 2021 have already detected deficiencies in the safety features of the ammonia and nitrogen refrigeration systems, such as the absence or inadequate location of ammonia and oxygen sensors, leakages of nitrogen and identification of areas deficient of oxygen, the need of predictive maintenance to prevent leakages of ammonia from pipes and valves, but no corrective action has been implemented.

l)                     Presence of an office without noise insulation nor forced ventilation inside the ammonia compressor room.

Despite the company’s growth in the last five years, the OHS Department (“Seguridad Industrial”) continues to be comprised of the safety manager (Industrial Engineer), a supervisor (Industrial Engineer), and an assistant (OHS Technician). Considering that this is a multi-site organization with a broad range of processes and hazards, the presence of OHS is very limited to overview all the sites and operations. As part of ESAP #1- ESMS, Omarsa will increase the specialized human resources available to coordinate the OHS programs and activities in all the processing and farming operations. At the same time, Omarsa will ensure that the competences of the personnel working in the OHS Department, are improved and that the employees at the Department are kept updated with technical information and trainings.

To address the deficiencies identified, Omarsa will also implement a (i) management of change procedure (ESAP  #6); (ii) LOTO procedure (ESAP #7); (iii) medical surveillance program (ESAP #8); and (iv) hearing protection program (ESAP #9).

Finally, as part of ESAP #10 - Refrigeration Systems, Omarsa will immediately remove the office located inside the ammonia compressor room and will perform a risk assessment for the refrigeration systems by retaining an independent safety consulting company with experience and accreditations wherever applicable, in the application of IIAR standards and Process Safety Management of highly hazardous chemicals standards (PSM) or other internationally recognized techniques. The audit will include reviewing and updating the emergency response plan to ensure that the company is aware, ready and prepared to control accidental releases or leaks of ammonia and nitrogen. As a result of the audit, Omarsa will agree on a budgeted timebound plan to implement the required corrective actions.

Life and Fire Safety. Both packaging plants have received authorization from the Duran’s Fire Department. Fire hoses and extinguishers are ubiquitous around the plant and tested monthly. Sprinklers are installed in the warehouse containing packaging material (combustible). Emergency drills are performed twice per year; the evacuation time is yet above the recommended evacuation time of 3 minutes. As part of the ESAP #1 - ESMS, Omarsa will revise the capacity of evacuation routes in Abel Gilbert and Las Brisas to ensure workers can safely evacuate under 3 minutes in the case of an emergency.

Child Labor and Forced Labor. Omarsa does not hire people under 18 years old; age is verified through the person’s ID and recorded in the worker’s file. The US Department of Labor (USDOL) 2019 report does not identify the production and processing of shrimps as an activity at risk of child labor, and the decision by the Government of Ecuador to allow the use of temporary contracts (contrato de obra cierta) for shrimp harvesting activities, reduces labor informality in the sector and the consequent risk of forced labor.  Currently the company purchases up to 70% of its processing throughput from about 300 third-party medium and large shrimp farmers through purchase orders. Shrimp farming is a highly regulated sector in Ecuador, and purchase orders in Omarsa are emitted only for suppliers who have obtained all the required authorizations, including a certification by the Ecuadorian Social Security Institute (IESS) that payments are up to date. In addition, in 2019, Omarsa developed a Code of Conduct for Suppliers which includes the prohibition of child labor and forced labor, and protections for young workers. Shrimp suppliers must sign the code every year as part of their approval.  Omarsa supervises the shrimp harvesting activities in suppliers and can therefore detect any major non-compliance.                                                   

Resource efficiency. Shrimp production and long-term profitability are determined by efficient resource use, including avoidance or minimization of mortality in hatchery operations and careful control of efficient feeding during grow-out. Feed expenses often represent more than one third of total aquaculture costs thus Feed Conversion Rates (”FCRs”) are a determinant of financial success as well as sustainable production systems. FCR’s are, in turn, dependent several factors, including the quality and protein content of the feed, the quality of fry stock, and the water management on each farm. Similar to other “precision farming” systems providing the correct feed at the correct time and correct location is critical. Overfeeding shrimp can result in toxic conditions which can stress the growing stock and usher in pathogens while underfeeding them results in slower growth and higher costs. Similar to other precision farming systems, the company has developed management systems to integrate and calibrate its information on fertilization, feeding, aeration, and water exchange in order to identify, and scale as appropriate, those practices which have the best results in terms of FCR and total productivity. As part of this IFC’s investment, Omarsa will further expand the installation of solar-powered automatic feeders equipped with sensors (hydrophones) that allow to optimize feeding regimes to maximize growth and reduce FCR.  

Water Consumption and Water Quality. On farms, water is pumped from the estuaries of the Golf of Guayaquil and retained in a sedimentation area prior to release into the shrimp ponds through a central canal. Water is returned by gravity to the estuaries through large expanses of native mangroves. Water use in farming is insignificant relative to the total amount of water available. Water quality (i.e., pH, temperature, BOD5, COD, TSS, Oil and Grease, Phosphorus, Nitrogen, and Coliforms) is tested at the intake and outfall of the shrimp farms by an accredited external laboratory at regular intervals. Results indicate compliance with national discharge requirements and with WBG EHS Guidelines for Aquaculture Table 1.

At the processing facilities, approximately 4,000 m3/day of brackish water is abstracted directly from the Guayas River and subject to primary treatment prior to rinsing use or ice making. Processing water (approximately 9 m3/ton of finished product) is recycled within the various chilling and washing lines and then treated through a sedimentation/clarification system that passes then to an activated aerobic system (“MBBR”) prior to discharge to the Guayas River. Only kitchen facilities use fresh water which is trucked into the facility and discharged through the municipal sewage system. Concentration of pollutants in treated effluents are analyzed every six months by an external licensed laboratory. Results indicate compliance with national discharge requirements and WBG EHS Guidelines for Fish Processing Table 1, but Omarsa needs to include Total Phosphorus among the parameters to be tested.

Greenhouse Gases and Energy Efficiency. Omarsa estimates its scope 1 and scope 2 GHG emissions using an accredited methodology. In 2019, GHG emissions were estimated at 70,000 tCO2e/year. The primary source of Omarsa’s GHG emissions stem from diesel use in the pumping of brackish water into outgrowing systems (system requires a 10% of daily water exchange). Each farm has two or more pumping stations with a total of twelve large diesel generators operating. Information provided by the client in terms of production and diesel use indicate that its energy efficiency has been improving in the last three years thanks to an increase in productivity and replacement of water pumps. Today, energy efficiency in Chongon and Chupadores is approximately 4.5 MWh per ton of shrimp produced which is within industry norms, while opportunities for improvement still remain in Puna (7 MWh per ton). In 2020, the total consumption of diesel was 4.5 million gallons (about 45,000 tCO2e/year). Processing facilities purchase all their electricity from the national grid. Energy efficiency in plants has been variable in the last three years (no downward trend) and it is well above guideline values in WBG EHS Guidelines for Fish Processing Table 3. In 2020, the total consumption of electricity was 47 million kWh (about 9,000 tCO2e/year). Freon is used in the refrigeration system (R134, R404-A, R409, R 410-A, R507 and R22); the estimated GEI emissions due to leakages in the refrigeration system was estimated at 8,500 tCO2e/year in 2019.  IFC is currently discussing a potential advisory program with the company to improve the energy efficiency of the company’s refrigeration system. As part of the ESAP #11, Omarsa will conduct a cleaner production audit and will establish energy consumption reduction targets going forward, including the reduction of ozone depleting substances and GHG emissions from refrigerants.

Pesticide Use and Management. Omarsa makes no use of antibiotics, pesticides or chemical additives in its farming operations. The use of low stocking rates and disease resistant shrimp are key pillars of the company’s strategy to prevent disease outbreaks, including the White Spot virus disease. These practices are complemented by breeding for vigor and resistance to disease and provision of probiotic supplements to enhance the capacity of shrimp populations to resist harmful viruses and bacteria. Regular monitoring of outgoing water ensures that water quality parameters are well within national limits and established industry standards. Rodent populations at the farms and processing mill are controlled by physical devices monitored by a specialty contractor.

Hazardous Materials Management. On farms, the most dangerous substances used by Omarsa are petroleum derived products: diesel and lubricants used in pumps, generators and vehicles. While present, the risk of significant spills is minimized by Omarsa’s use of specialized petroleum product transporters and handlers monitored by the Government of Ecuador’s Directorate of Hydrocarbons and the storage of diesel in stilled tanks with secondary containment. Risk of minor spillages and leakages requires constant attention by the company due to the large number of water pumps and generators (i.e., aerators) distributed across the farms. Used oil and oil filters are temporarily stored on site in areas with secondary containment and then transported to Duran for processing and/or disposal by companies licensed to provide these services.

The other chemical largely used by the company is sodium metabisulfite added to the shrimps at the time of harvesting to keep shrimp shells from undergoing melanosis (also called black spots). To minimize the impact of sodium bisulfite on Dissolved Oxygen in the receiving water body, the sodium bisulfite solution is deactivated with lime before its discharge. To ensure that the procedure is effectively implemented, random checks are done to verify that pH is between 6 and 9 and Dissolved Oxygen is greater than 4.                                                    

Ecosystem services. The three shrimp farms, of approximately 1,000 – 1,500 ha each, are in areas populated with few villages or enclaves. One community (El Zapote) is within one kilometer of the Puna shrimp farm hosting around 350 people, and one community (Cerro Los Morritos) is within one kilometer of the Cachugran shrimp farm hosting around 100 people. No communities are found nearby to the Chongon shrimp farm. Community members at these villages are mainly fisherman, engaging in a variety of “wild caught” fishing or other harvesting of marine animals, including conch, crab, shrimp, mussels, scallops and demi dorsal fish. The most important ecosystem service to local communities is the production of fish, mollusks and crustaceans by mangrove ecosystems. Mangroves have been minimally impacted by Omarsa’s operations (see Performance Standard 6 for more details). Shrimp farms have limited impacts on services beyond pumping brackish water from the estuaries into the shrimp ponds, which then returns to the estuaries by gravity (see Performance Standard 3 – Water Consumption and Water Quality for more details).

Emergency Preparedness and Response. The Abel Gilbert processing plant in Duran has been operating for more than 20 years and the neighborhood has been increasingly densified and is now surrounded (50 m) by residential areas. The Las Brisas new processing plant was installed in an area declared as industrial zone by the Municipality of Duran and the closest residences to the facility are beyond a radius of one kilometer. The potential risks to neighbors include accidents associated with transportation of materials (about 30-70 trips by medium sized trucks per day) and personnel, and ammonia leakages. To mitigate the risks of vehicular accidents, IFC has recommended Omarsa to include maintenance, defensive driving training and third-party liability insurance among the requirements to approve transportation providers. Mitigation of risks of ammonia leakages are handled under ESAP #10 - Refrigeration systems.

Security Personnel. Armed robbery of shrimp cargoes continue to be a serious problem in the country and the company has agreements with seven professional security firms – licensed by the Government of Ecuador – for protection against theft on the farms and during transportation to mill and export area. Omarsa’s own security personnel – two Security Managers and 16 field-level coordinators – ensure good coordination and communication with security firms through daily work assignment meetings with security guards and monthly coordination meetings with security firms’ managers. Omarsa verifies labor legal compliance by security firms and reviews the criminal records of security guards monthly.  As described in previous ESRS, Omarsa’s security approach  includes the following: 1) it works closely with the National Federation of Fishing Cooperatives of Ecuador to engage with local fishermen; 2) it helps local artisanal fishermen maintain their fishing licenses and improve visibility of their boat’s registration; 3) it has installed infrared detection and video cameras on its farms to deter theft and monitor the movement of vessels and vehicles; and 4) it has engaged specialty security contractors for rapid response and recovery of assets in the event of an assault. The overall goal is to deter illegal activities before they take place, and thus avoid confrontation.

In Ecuador, security guards must undergo a 120-hour government-approved training program before they are deployed, which includes topics such as Human Rights and public safety. Nevertheless, it is important that Omarsa reinforces the expected behavior of security guards in the event of an armed confrontation. Currently, Omarsa’s Security Policy and Code of Conduct for Security Guards do not include topics such as the proportional and progressive use of force and the respect of Human Rights, and the security risk matrix only identifies the risk of cargo contamination with illicit drugs as a significant risk despite the threat of armed robberies. In addition, Omarsa has only a procedure for access control (to prevent inside theft) and has not documented protocols for the response to security incidents. Each security firm has therefore their own protocols (e.g., management of firearms, response and management of incidents, detention of alleged criminals), which may not be aligned with the requirements of PS 4. As part of ESAP #12, Omarsa will retain a qualified consultant with knowledge on the Voluntary Principles on Security and Human Rights (the Voluntary Principles) and/or the International Code of Conduct Association for Private Security Providers (ICOCA) to undertake a security risk assessment and develop a security management plan in line with the guidance provided in IFC Good Practice Handbook: Use of Security Forces found at www.ifc.org/securityforces. The security management plan will reflect appropriate measures (i.e., company security policy, a written code of conduct, vetting of personnel, training, procedures in the event of an incident or alleged violation, etc.) to ensure effective oversight and accountability for the guard force. In addition, as part of ESAP #13, Omarsa will assess the risks posed by public security forces when requested to intervene and will document the engagement process with public security forces keeping a log of interactions, including date, type of communication (e.g., email, phone, in-person meeting), individuals involved, and topics discussed.                                                  

No expansion or new construction of shrimp ponds or processing plants are envisioned as part of this investment limiting the risk of any natural or critical habitat conversion. As part of this appraisal, IFC confirmed the conclusions of previous investments: satellite images dated since 1969 show no change in the areas covered by mangroves both in Cachugran and Puna. Satellite images of the Chongon shrimp farm showed that an area of about 80 ha of mangroves was converted in 2007 by the previous owners. To obtain the environmental license, the company reforested the area with mangroves; a satellite image of 2016 shows that the area is under restoration. The expansion of shrimp ponds in Puna – financed with IFC’s first investment – took place in elevated areas devoid of mangroves and heavily degraded due to grazing activities. A biodiversity and environmental and social impact assessment (B-EIA) was completed in 2014 by a team of biologists to meet ASC requirements. This supplement the EIA required by Ecuadorian law for the expansion project in Puná Island. The BEIA identified three bird species (Rostramus Sociabilis, Forpus Coelestis, Buteogallus meridionalis), two mammal species (Lonntra longicaudis, Leopardu tigrinus) and one reptile (Boa constrictor) in the vulnerable category of IUCN’s Red List. The B-EIA concluded that OMARSA’s activities would not increase the threat of conversion of the island’s remaining vegetation which is significantly modified but still important habitat for bird species. Finally, the shrimp species (Litopenaeus vannamei) is a native species so there is no risk of introducing invasive species into native habitats.

All three shrimp farms are located inside a Key Biodiversity Area (KBA) of regional importance for migratory shorebirds, and it has been documented that appropriately managed shrimp farms have become alternative habitat for these birds. IFC has recommended Omarsa to engage with the Ecuadorian chapter of Birdlife International to mitigate any potential impact on these species, in particular the use of non-lethal methods (firecrackers) to deter shrimp predators (Egretta thula, Alaia ajaja, Eudodimus albus).

Supply chain – shrimp. Mangroves ecosystems are legally protected in Ecuador since 1994. Conversion of mangroves is prohibited, and the fine is US$83,000 per hectare converted. In addition, to obtain the environmental license, shrimp farms must restore any mangrove converted after that date. Mangroves are giving into concession to association of local fishermen for their management and protection. The main risk for packaging plants is the introduction of shrimps from illegal shrimp farms (that could have been established in areas converted after 1994) in their supply chain. To prevent this, Omarsa sources shrimps only from authorized suppliers (environmental license is required to obtain the authorization from the Ministry of Fisheries and Aquaculture) and has a food safety traceability system in place, which prevents contamination of their supply with illegal sources. Each purchase order must be authorized by the Certifications Coordinator who verifies that the Omarsa has valid copies of the supplier’s legal authorizations and checks the website of the Ministry of Fisheries and Aquaculture to verify that the authorization has not been recently rescinded (www.acuaculturaypesca.gob.ec/sci). Supplies sent to the farm for the transportation of shrimps (i.e., bins, ice, metabisulphite) is determined based on the quantity included in the purchase order. Bins are sealed before they leave the farms. Omarsa’s procurement staff (‘tratadores’) are on site for most purchases controlling the process.

Supply chain – feed. To obtain ASC certification fishmeal and fish oil and soy components must originate from fisheries and farms (respectively) under sustainable management as recognized by international organizations. Omarsa’s feed suppliers – Vitapro and Ibalnor – comply with ASC requirements. The current percentage of fishmeal/fishoil is between 10 to 16% and originates only from fish classified as least concern (LC) by IUCN (Chuchueco / Caballa / Barrilete / Perúvian Anchovy) or from the subproduct of fish use for human consumption (Atlantic Salmon / Pacific Salmon / Trout / Yellowfin Tuna). Fisheries suppling Vitapro and Ibalnor are certified by FishSource, an organization which assesses fisheries management to determine if they have achieved or are on the path to achieve Marine Stewardship Council (MSC) certification. Feed suppliers also buy Roundtable for Responsible Soy (RTRS) credits for the feed supplied to Omarsa. Feed does not contain palm oil.