Environmental and Social Assessment and Management System:
The Company is implementing an Integrated Management System (IMS) comprising of E&S policy; E&S legislation & Standards; E&S Risks & Impacts and Mitigation; Capacity & Training; Operational Control; Emergency Preparedness & Response; Monitoring & Audits; Document Control & Records; Communication and Reporting; Corrective Action; and Management Review. The IMS guides the management of environmental, social and quality (ESQ) risks associated with EC operations in line with national and good international industry best practices (GIIPs). To operationalize the IMS, the company has developed an Implementation Plan, including an Environmental and Social Management System (ESMS) Manual. In addition, the Company has developed standard operating procedures (SOPs) covering all key risk EHS areas (e.g. labor and working conditions, life and fire safety, occupational safety and health, grievance management, violence and harassment, disaster response, communication, procurement and medical aid). These SOPs are implemented at each facility. The Company has also developed internal E&S risk audit and monitoring procedures and schedules that apply to each facility.
In the EC E&S Policy, the management commits to ensure and maintain a safe work environment and mitigate risks to employees and all other stakeholders. The Policy scope covers all employees, contractors, clients, suppliers and regulators during their interaction with the company. The management recognizes the centrality of occupational safety and health, biosafety, animal welfare, and mitigation of impacts to the environment, to the sustainable success of the business. Based on this policy review, IFC confirmed the alignment and consistency with EthioChicken’ EHS policy framework applying to its operations with the requirement of IFC Performance Standards.
Identification of Risks and Impacts:
EC has developed a corporate level E&S risk assessment procedure which is an integral part of the overarching Environmental and Social Management System (ESMS) and is aligned to the commitments contained in its Environmental and Social Policies. It describes, in detail, the mechanism by which EC identify, assess and evaluate E&S risks associated with existing and proposed new facilities. The procedure has been developed in consideration of the operational risk profile, relevant local, national and aligned to international requirements such as those of the International Finance Corporation (IFC) and Global GAP. The scope of the procedure which includes E&S risks associated with the company’s key third party suppliers as well as contractors address OHS, environmental, community health & safety, land acquisition and community livelihoods; and animal welfare. The procedure provides requirements for assessment of E&S risks prior to the development of a new greenfield or brownfield projects.
The Ethiopian Environmental Impact Assessment (EIA) Proclamation (No. 299/2002), requires entities to conduct ESIA process for all greenfield and brownfield operations. EC has prepared Environmental and Social Impact Assessments (ESIAs) for all its current facilities and has commissioned an ESIA for Sodo II farm and conducted high-level risk assessment for Blue Nile. As part of this project, EC will finalize the Sodo II ESIA and commission ESIAs for Blue Nile site and implement the Environmental and Social Management Plan resulting from these assessments (ESAP #1). The ESIA reports will be disclosed locally as per national and the EC’s Stakeholder Engagement Plan requirements.
Management Program:
The management of E&S risks is hinged primarily on implementing the existing SOPs. For each risk identified across EC’s operations, including each class of assets (feed mill, breeder farms, hatcheries), an SOP has been developed. The main E&S risk areas covered by the SOPs include; human resources management; fire safety, emergency management, waste management, water and energy efficiency, security, transport and procurement. The SOPs are filed at each facility and all facility managers and SHE committees are trained on the specific procedures. Breeder farms, hatcheries and feed mills are either certified or will be certified to Global GAP standards. At appraisal, four farms, one hatchery and one feed mill were already certified. Global GAP standards have equivalence with IFC animal welfare guidelines, as defined in its Good Practices Note (2014) on mainstreaming animal welfare into livestock operations, including World Organization for Animal Health (OIE) Code/Manual and European Union Animal Welfare Directives. Certifications were due for renewal in March 2020. The renewal process is delayed due to the COVID 19 pandemic and a 12 months extension has been granted. Based on the above, EC’ EHS management system and programs are well under implementation in its direct operations. IFC’s appraisal concluded that the design and implementation of EC’ EHS management practices for its feed mills, poultry farms and hatchery operations are well aligned with global international industry practices (GIIPs).
Organizational Capacity and Competency:
The overall responsibility for EHS matters in EC lies with the Environment, Health, Safety and Social (EHSS) Director, who reports to the Managing Director, and assisted by Managers on Environmental Health and Environment projects; Health, Safety and Quality Control, Corporate Social Responsibility and Community and Customer Insights and Innovation. The EHSS Director coordinates the implementation of EHSS-related SOPs, EHS training and EHS monitoring and reporting across all class of assets. He works closely with the facility-level SHE committees, led by the farm HSES delegate. At each facility, the SHE committees are trained and empowered to undertake audits and monitor EHS performance, led by the Facility Managers who are ultimately accountable at this level. The company develops and implements an EHS training program for each financial year, applied across all class of assets. The training topics are informed by risk assessments, changes in law, findings of internal/external audits, and company policy timelines. Site visits confirmed varying degrees of organisational capacity and E&S management system functionality at facility level. For example, the EHSS directorate management positions for Health, Safety and Quality Control and Corporate Social Responsibility & Community are currently open and covered by the rest of the trained and competent team. As part of the proposed expansion, EC will engage two (2) qualified and competent professionals for these management positions. (ESAP #2).
Emergency preparedness and response plan:
Potential EHS incidents that could result in emergencies have been identified at all EC operations and include grain dust explosions at feed mills, poultry disease break-out at farms, leakage and spillage of fuels at all sites, fires, fatal or serious workplace accident, traffic accident and strike/riots civil unrests and bio-security emergency. In order to enable rapid and effective response to emergency situations, EC has developed and maintains site specific Emergency Preparedness and Response Plan (EPRP) for the construction or expansion, operation and decommissioning phases for each facility and is applicable to all employees, contractors and visitors. There is an E&S risk register for each facility and reviewed periodically.
Scheduled emergency drills are conducted once a year in all operational facilities and involving local fire brigades. Records of the fire drills are documented. In addition, internally assigned staff on emergency teams at all facilities are well identified and their roles and responsibilities explicitly defined. The emergency teams are led by an Emergency Response Controller (ERC). There is an on-going agreement with Ethiopian Government’ Emergency Services and neighbouring communities on emergency response. All employees and contractors are responsible for reporting any emergency incident to the HSES delegate for assessment and actioning by the ERC.
Monitoring and Reporting:
EC has developed and maintained comprehensive corporate and individual facility-level Environmental, Social and Quality (ESQ) monitoring plans. The monitoring plans have defined Key Performance Indicators (KPIs) on compliance with legal and regulatory requirements, EHS management system progress report and certification, energy and water consumption and efficiency; noise levels and management, solid and hazardous waste management and disposal, effluent discharges, compliance with national OHS requirements, including accident rates (lost-time accidents); customers and community complaints, supplier performance and community engagement activities in line with WBG’s General and Poultry Production EHS Guidelines. The Company uses small generators and boilers (less than 3 MWh) and hence do not measure point source air emissions. EC’s Environmental, Health, Safety and Social Manager, has the overall responsibility for the development and implementation of the ESQ monitoring plans, review and analyse monitoring data and preparation of ESQ monitoring reports. The EHSS Director prepares and reports a corporate level weekly EHSS performance reports against KPIs on OHS, Environment, Social Community and Global GAP. Going forward, the Company will also report annually to relevant Ethiopian authorities, other lenders and IFC, as part of the Annual Monitoring Report (AMR).
Through its existing ESQ management systems, internal EHS inspections are performed monthly while external audits (regular and follow-up certification audit) are performed annually and every two years respectively by registered and accredited Global Gap consultants. The audit reports, incorporating corrective actions, if appropriate, are submitted to relevant senior operations teams who are responsible for the effective and timely implementation of the corrective actions. Ethiopian authorities (OHS inspectors, Environment, Forest and Climate Change Commission (EFCC), etc.) receive annual updates on EC’s EHS performance as well as undertake unannounced inspection visits in order to grant renewal of operational licenses, based on agreed upon Terms and Conditions, as defined in original license. Based on information provided during appraisal, EC did not incur over the last three years any material regulatory penalties, fines or sanctions for contraventions or non-compliance with statutory obligations, as well as not reported any fatalities on sites at any of its operations. In 2019, the company reported a fatal road traffic accident involving a hired vehicle with a third-party contractor staff.
Supply chain:
There are three main suppliers for the parent stock of the DOC; Sasso in France and Gramado hatchery in Brazil and Hendrix genetics from Netherlands. Hatchery equipment is sourced from Chick Master Incubators from the USA and Petersime Incubators from Belgium. All feed raw materials are sourced locally except for vitamin/mineral premixes that are imported. The main feed ingredients represent around 83% of feed purchases. The balance would consist of ingredients such as maize, limestone and other protein meals as they become available. Maize is generally sourced from 2-3 suppliers that have procurement networks which buy from smallholders, cooperatives and larger farm producers. Soybean meal is sourced directly from soybean oil extraction plants and wheat bran directly from flour millers. All premixes are imported from reputable global nutrition companies such as Nuetrico. As part of this project, EC will develop and maintain a sustainable supply chain policy that addresses (i) Child labor: the supplier will endeavor to ensure that there is no child labor in its activity and in its own supply chain. Any action taken will be carried out considering the interests of the child, in accordance with the provisions of ILO Convention 138 and must be consistent with the UN Rights of the Child; (ii) Environmental criteria: the supplier must act at all times in compliance with national environmental legislation, especially regarding waste, emissions, noise, consumption of resources or dangerous substances, as well as compliance with the law regarding the execution of activities in areas that are part of the National System of Protected Areas, determined by the Ministry of the Environment; and (iii) Climate change: the supplier will take measures to minimize the impact on climate change derived from its activity. The policy will form part of the contractual agreement and should include a copy of the government issued certificate of competence (ESAP#3).
Stakeholder Engagement:
EC has developed a corporate level Stakeholder Engagement Plan (SEP) and a Community Relations Plan (CRP) as part of its ESMS to formalize the process of stakeholder engagement, to ensure that it is effective and to facilitate the development of good long-term relationships with all internal and external stakeholders. The plans are cascaded to each operational site for implementation. Both the SEP and CRP are developed based on international best practices and are in line with national and IFC requirements.
The EC’s farm and hatchery operations are, for bio-security reasons, isolated from communities in rural areas with buffer zone of 1-2 kilometers depending on location and the size of the land for the operation. The two feed mills are in industrial zone. As such for EC operations, the main E&S issues for surrounding communities could include induced traffic.