The operational Nagpur AI Plant proposed to be developed under the project will involve a brownfield expansion within existing premises of the facility occupying a 10-acre land parcel; the lease for the site was transferred to the company when the facility was acquired in March 2018.  The Nagpur Plant is located inside the Butibori Industrial Area in Nagpur Maharashtra which has been developed and maintained by Maharashtra Industrial Development Corporation (MIDC) since 1990s

The Dahej AI Plant is a greenfield development on a 7.4-acre land parcel located inside an industrial estate developed and maintained by Gujarat Industrial Development Corporation (GIDC) at Dahej in Gujarat. The company purchased the industrial land plot from GIDC in 2011 and had constructed a warehouse in 2017. There is no requirement of additional lands for the Project. The company's other facilities are all located within or near to well established industrial areas and no resettlement was required due to their development. 

Given that the company’s industrial facilities are in notified industrial areas or brownfield facility at Nathupur in operation since 1995, there are no risk and impacts on forest resources, sensitive biodiversity areas, Indigenous People and cultural heritage sites identified and documented in individual, facility level ESIA documents. Hence, it is assessed that no risks and impacts are anticipated for this project which must be managed in accordance with PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS7: Indigenous Peoples and PS8: Cultural Heritage.

This is a Category A project as per IFC’s Policy on Environmental and Social Sustainability as the company's business operations have the potential to cause significant adverse E&S risks and/or impacts that are diverse, irreversible, or unprecedented. Specifically, any catastrophic failure event in handling and storage of hazardous chemicals such as chlorine and bromine proposed at Nagpur and Dahej facilities respectively, could have potentially irreversible or unprecedented impact on neighborhood village communities that are located within the impact zone. Key E&S risks and issues associated with this project include: (a) the company’s capacity to formulate and implement an integrated environment, health and safety management systems (ESMS) that meets: IFC PS 1 requirements, and cover the entire business operations spanning from the corporate level to the various manufacturing plants and the product distribution chain; (b) assurance of fair, safe and healthy working conditions including occupational health and safety (OHS) in compliance with local regulatory requirements, current good management practices (cGMPs) applicable to pesticide sector, and relevant PSs; (c) resource efficiency; (d) compliance of the company’s business operations with all international conventions, international agreements, Food and Agricultural Organization (FAO) standards and host country regulations that are applicable to pesticide industry sector, permit conditions and host country E&S regulations and assure compliance; (e) hazardous chemicals and materials management systems and pollution prevention strategies aligned to good international industry practices (GIIP) that are outlined in the World Bank Group (WBG) EHS Guidelines for pesticide manufacturing industries. Company’s management capacity to assess and avoid the risks and impacts on neighborhood communities due to onsite storage and handling of multiple hazardous and toxic chemicals as raw materials; (f) life and fire safety infrastructure and onsite & off-site emergency preparedness and response systems; (g) community health, safety and security including exposure to catastrophic accidents, instituting effective stakeholder engagement and community grievance redress mechanism; (h) cumulative impacts; and (i) pollution issues such as potential contamination risks in older plants (e.g Nathupur and Nagpur) that are in operation for more than a decade.

Environmental and Social Assessment and Management Systems (ESMS):

The company has established independent, plant-level ESMS’s certified against ISO 14001:2015 in 4 of its 7 plants (3 formulation plants located at Nathupur, CCPL Jammu, Modern Paper Jammu; and 1 Active Ingredients (AI) manufacturing plant at Nathupur). As the business operations expanded in the last 4 years with the addition of 2 more AI manufacturing plants (at Nagpur and Dahej), in February 2021 the company retained an independent ESMS Consultant (M/s Corporate Governance Advisory Services) to formulate and implement an Integrated Management System (IMS).  The vision and objective of IMS is to bring E&S risk management in all the plants of the company under a standardized corporate management system wherein the company will formulate common apex manual and guidelines while each plant will develop and implement their respective standard operating procedures (SOPs), work instructions and reporting formats based on corporate guidelines. Currently, the E&S risks in the product distribution chain such as distribution warehouses are managed through periodic checklist-based audit systems and these operational assets are not covered by any ESMS.

As part of IFC investment requirement and agreed environmental and social action plan (ESAP) #1, the company will finalize development and implementation of the integrated ESMS which will be appropriate to the nature and scale of its business operations and commensurate with the level of the associated environmental and social risks and impacts. The scope of the integrated ESMS currently in development will cover the entire business operations of the company in India including the 3 AI manufacturing plants, 4 formulations plants, 4 regional distribution centres (RDC), 29 distribution warehouses, ~5,000 distribution partners and seed business division. The integrated ESMS shall comply with the requirements of PS: 1 and in so doing incorporate the following elements: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review.

To effectively implement ESAP#1 requirements, the company shall continue to engage the existing ESMS Consultant by modifying the ongoing contract to include IFC requirements as outlined above.  The terms of reference and scope of work for ESMS Consultant shall be agreed with IFC to assist the company in planning, designing, formulating, implementing a corporate-wide ESMS such that by end of consultant’s contract, the company shall have a fully functional ESMS aligned with PS1 and Good International Industry Practice for this sector. Design of the integrated ESMS shall allow institution and operation of: an occupational health and safety management systems (OHSMS), Emergency Management and Response Systems including Life and fire safety management systems (LFS), and Hazardous chemicals/materials management systems (HMMS) that are compliant to IFC’s PS’s and WBG EHS Guidelines as applicable to the pesticide sector.  The ESMS Consultant shall periodically audit and supervise ESMS implementation across the company’s entire business operations (corporate, facility level, supply chain, warehouses, distribution centers, and retail stores etc) for at least first 3 years (or till ESMS matures) of IFC investment. 

Policy: The Company has promulgated a corporate level EHS policy on March 5, 2018 which stipulate the guiding principles for sound EHS performance. The EHS policy commits to prevention, elimination of all undesirable incidents which may result in loss of lives/injuries to personnel and damage to property and the environment throughout the company’s operations.  The policy states that this will be achieved through: continual improvement of the ESMS; integration of all business processes with EHS aspects and proactive implementation of actions to eliminate risk; high priority to EHS considerations in all business decisions; ensuring that the environment is not adversely impacted; training, knowledge and skill development of employees; full compliance to applicable statutory requirements; and communicating EHS policy to all stakeholders and interested parties.

As part of IFC investment requirement and as per agreed ESAP #1, the company will review and update its existing corporate EHS policy as part of integrated ESMS development by expanding its vision to undertake pesticide manufacturing, formulation, packaging and distribution in compliance with applicable international standards including the following: i) Stockholm Convention on Persistent Organic Pollutants (POPs), which bans or restricts the manufacture and trade of intentionally produced POPs, including some pesticides; ii) World Health Organization (WHO) Recommended Classification of Pesticides by Hazard, which lists active ingredients considered to be obsolete or discontinued for use as pesticides; iii) Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade; iv) Food and Agriculture Organization’s (FAO) International Code of Conduct, which includes requirements on the application of the life-cycle concept in the production, management, packaging, labeling, distribution, handling, application, use, and control, including post registration activities and disposal of all types of pesticides, including used pesticide containers; and v) FAO’s Revised Guidelines on Good Labeling Practice for Pesticides.

Identification of Risks and Impacts: As per the Indian EIA Notification, 2006 requirements, environmental impact assessment (EIA) studies are required for greenfield development or brownfield expansion of pesticides industry and pesticide specific intermediates excluding formulations. Accordingly, the company has prepared EIA reports through independent third-party consultants for all the 3 AI/Technical manufacturing plants viz. at Nathupur (EIA Report, Nov 2008), Nagpur (EIA Report, Nov 2018) and Dahej (EIA Report, May 2017). For Dahej and Nagpur plants, the ESIA consultants engaged by the company were accredited by Quality Council of India (QCI) for undertaking pesticide sector ESIA studies. The EIA reports were prepared based on a project specific terms of reference issued by the regulatory authority and evaluated the E&S risks and impacts within a 10 km radius study area from the project site. The scope and coverage of EIA studies is consistent with good international industry practice (GIIP). EIA reports included air quality modelling analysis, cumulative impact analysis, quantitative risk assessment (QRA) and on-site disaster management plan (DMP). Air quality modelling was limited to few parameters and does not cover all the parameters specified in local regulatory standards applicable for pesticide industries and WBG EHS Guidelines for Pesticide Sector. Air pollutant parameters such as: Total Organic Carbon, VOC, Chloride, Cyanides (as HCN), Fluorines (as HF), Hydrogen Sulfide, Chlorine, and Ammonia have not been analyzed in the air quality modelling studies in ESIA reports. In order to mitigate the risk, company commits to review and update the existing air emissions monitoring program discussed under PS 3.

Review of EIA reports indicate that all the processes in AI Manufacturing Plants are final esterification, amination, organic acid-base, or other mild reactions with multiple pre-synthesized raw materials. The reaction conditions are mild with normal or relative low pressures/temperatures. All the reactions are batch reactions The company completed a hazard and operability (HAZOP) study for its Nathupur plant in Jan 2017 covering 3 products each in AI/Technical and Formulation plants. HAZOP studies for Nagpur and Dahej plants are yet to be commissioned. Due to small amount of each chemical used onsite, the impact ranges from the QRAs are mainly within the plant sites. However, chlorine storage at Nagpur site can have 1,200+ meter impact range and Bromine tank catastrophic failure at Dahej could have an impact range of 1400m+. Please refer to PS3 for details.

At Nathupur, the product range was expanded to include 32 more AI/Technical products in the AI/Technical manufacturing plant in April 2018 and the QRA and HAZOP studies needs to be updated, though this has not occurred yet. Thus, as per the agreed ESAP #2, company commits to revise and update the QRA and HAZOP studies for all 3 AI/Technical manufacturing plants viz. at Nathupur, Nagpur and Dahej within 6 months of IFC investment.

The E&S risks and impacts in the 4 formulation plants are being managed by application and adherence to local regulatory requirements and permit conditions. Out of the 6 operational plants, 5 have current and valid permits and the lone formulation plant (Modern Papers, Jammu) had initiated the process of renewing the expired permits. As a condition of IFC investment and as per agreed ESAP #3, company will share annually with IFC, the copies of current and valid E&S related consents, permits and licenses covering all its 3 AI/Technical manufacturing plants (Nathupur, Nagpur and Dahej) and 4 formulation plants (CCPL Jammu, Modern Papers Jammu, Nathupur and Anand). Additionally, company will institute an electronic permit registry and legal E&S compliance management & monitoring system covering the entire business operations to streamline current and future permits.

Management Programs: In the plants that have an ISO 14001 certified ESMS there are documented ESMS manuals and procedures. For example, at the Nathupur plant, there is an ESMS manual and standard operating procedures (SOPs) on key E&S aspects such as effluent management, hazardous material management and waste management. However, the scope and coverage of the ESMS manual is assessed to be generic and inadequate. Important aspects such as procedure for identification and evaluation of environmental aspects, environmental objectives, various operational control procedures, monitoring performance as per ISO 14001 standards has not been covered in the manual. Training and capacity building of workers on work procedures and practices based on SOPs is also assessed to be inadequate. In other plants that are operating without an ISO 14001 standard certified ESMS, plant management have developed site specific EHS procedures that do not cover all operational risks. For example at Nagpur, the plant management had developed and implemented procedures covering aspects such as: effluent treatment; mock drills; handling of inflammable and toxic hazardous materials; process for handling, storage and disposal of all waste generation; management of effluents, emissions, and hazardous waste; SOP on waste management; procedure for safe handling of drums; emergency preparedness and response; SOP on lock out-tag out; and SOP on injury, illness, incident, accident reporting.

E&S risks in the product distribution chain assets such as RDC and warehouses are managed through documented warehouse manual. The manual provides for SOPs covering aspects such as: warehouse storage guidelines; transport vehicle checklist; health and safety measures, including electrical safety, fire safety, first aid and incident reporting; cleanliness, housekeeping, and general hygiene. E&S risk aspects such as: waste management, indoor workplace environmental quality, E&S training, personal protective equipments (PPE) protocols, emergency response plan (ERP), and community health & safety are not covered in the manual. In the absence of corporate level monitoring and review of E&S performance in adherence to the manual, it is observed that asset management has not maintained a copy of the warehouse manual onsite in one of the appraised locations.

Taking into account the above and as per agreed ESAP #1, the company commits to review and update its existing management programs as part of integrated ESMS development by developing an integrated and documented suite of operational manuals, procedures, practices, plans, and related supporting documents that are appropriate to the nature and scale of its business operations and commensurate with the level of the associated E&S risks and impacts. The management programs shall apply across the company’s organization, including contractors and primary suppliers over which the company has control or influence. The documented management programs will follow a mitigation hierarchy that will favor the avoidance of impacts over minimization, and, where residual impacts remain, effective mitigation measures will be defined. Structured training and capacity building of employees and external stakeholders, where applicable, (e.g., for emergency response) will be a critical component and key performance indicator (KPI) of the updated management program. The management program will integrate the following components:

1)      the requirements of FAO codes as required in the WBG EHS Guidelines for the Pesticide sector:

• FAOs International Code of Conduct, which includes requirements on the application of the life-cycle concept in the production, management, packaging, labeling, distribution, handling, application, use, and control, including post registration activities and disposal of all types of pesticides, including used pesticide containers.
• FAO’s Revised Guidelines on Good Labeling Practice for Pesticides.

2)      Framework contractor management plan inclusive of contractor selection/evaluation procedures and a methodology for contractor labor audits.

3)      Framework security management plan inclusive of security contractor selection/evaluation procedures and training program.

4)      Framework Covid-19 procedure and site level arrangements.

Organizational Capacity and Competency: At the corporate level, the entire manufacturing business operation is divided into Formulation and AI/Technicals manufacturing divisions each headed by a Director level staff member who reports to the Managing Director of the company. Each of the 7 manufacturing plants/facilities are headed by Unit Heads who report to the respective Manufacturing Heads in the Corporate. Currently, the company does not have a corporate E&S organizational structure and is making efforts to establish one within the existing corporate management structure. The company has shortlisted few candidates for an EHS Head position and the recruitment process is expected to be completed before December 2021.

At the plant level, there is an EHS Manager who reports to the respective Unit Heads, though 2 formulation plants (located at Anand and CCPL Jammu) do not have such representatives currently. The E&S organization structure at the plant level typically consists of EHS Manager, EHS officer, EHS supervisor and a medical assistant, though the structuring is not uniform across all plants. A safety committee under the Unit Head comprising of the EHS Manager, fireman, worker representative, contractor representative and medical attendant has been formulated in compliance to factory regulations. The committee is to meet on a quarterly basis and minutes documented as per factory regulations, however not all the plants maintain the meeting frequency (e.g Nagpur).

The assets in product distribution chain (RDC and warehouses) do not have dedicated E&S management staff or structure and the Depot Manager is entrusted with the responsibility of managing E&S issues. The dispatch in-charge, attendant and contractor heads report to the depot manager. The Depot Manager is responsible for EHS aspects at the warehouse and has been trained on management and handling of pesticides & fertilizers, management of leaks and spills, and handling of any injuries resulting from exposure to chemicals/fertilizers. The Depot Manager reports to company's Cluster Head for Warehouse and Distribution operations.

As per the agreed ESAP #1, the company commits to review, establish, maintain, and strengthen as necessary a corporate and consistent plant level organizational structure that defines roles, responsibilities, and authority to implement the ESMS across all its plants and product distribution chain assets.  Key environmental and social responsibilities shall be well defined and communicated to the relevant personnel and to the rest of the organization. Sufficient management commitment and human and financial resources shall be provided on an ongoing basis to achieve effective and continuous environmental and social performance. Personnel within the E&S organization with direct responsibility for the project’s environmental and social performance will have the knowledge, skills, and experience necessary to perform their work, including knowledge of the regulatory requirements and the applicable requirements of IFC Performance Standards. As the company's business operations pose potentially significant adverse impacts and are technically complex issues, the company will also retain independent, third party experts and competent professionals to assist in the E&S risks & impacts identification, assessment, and management process.

As part of ESAP#1 actions, the company will specifically:

1)      Establish a Corporate E&S department and recruit an appropriately qualified and experienced EHS professional as Corporate EHS Head. The EHS Head shall have demonstrable experience in the development and managing of an ESMS, Occupational Health and Safety Management Systems (OHS), life and fire safety (LFS) and Process Safety Management System in chemical industries, in addition to having a good working knowledge of international conventions on hazardous substances; national regulations; good international industry practices (GIIP); current good manufacturing practices (cGMP), IFC EHS guidelines.

2)      Entrust the Corporate EHS Head along with ESMS Consultant to review the existing EHS capacity, operational policies & procedures and risk management at plant level and product distribution chain assets, and to provide an improvement plan to strengthen EHS capacity and safe operations within 3 months of IFC investment. The improvement plan shall include but not limited to the following aspects: environmental management, occupational health & safety, life & fire safety, process safety, hazardous materials, and wastes management, and, emergency response management.

3)      Establish an E&S sub-committee to the Management Board and an E&S Management Steering Committee to improve senior leadership oversight including implementation and compliance with safe work procedures and applicable international safety standards.

Emergency Preparedness and Response: The individual plants have prepared site-specific onsite emergency preparedness and response plans (ERP) covering various emergency scenarios that are as applicable in respective sites such as fire, explosion in the storage tank, dust explosion, spills of chemicals, medical emergencies, natural calamities, fire due to static charges, chemical/solvent fire in plant, asphyxiation due to nitrogen and sodium cyanide exposure. The ERP details the response mechanisms, fire and mock drill protocols, marking of safe assembly areas, emergency evacuation routes, emergency control organisation and communication protocols. However, there are areas for improvement and required to strengthen the plant level ERP systems as identified via the appraisal.  Key in this regard is the need for uniform implementation across all the plants, periodical reviews and updates to the ERP systems, regular audits covering ERP aspects, periodical ERP performance review and monitoring by senior management.

LFS infrastructure in accordance with Part 4 of National Building Code has been provided across all the plants. This comprises of fire hydrant systems, hose reels, foam monitors, different types of fire extinguishers installed at multiple and appropriate locations, sand buckets, sprinklers and fire alarms audible up to a range of 3 km distance. Fire related regulatory permits have been obtained however the renewal process is not effectively managed resulting in expired permits (example Modern Papers, Jammu and Nagpur plants) which are currently being renewed. In addition, LFS infrastructure management and maintenance are not consistent with the requirements of the National Building Code at some plants (example Nagpur) and periodic operation & maintenance of LFS infrastructure can be improved. 

In the warehouses and RDCs, documented and site-specific ERPs have not been formulated and implemented. As required under local fire regulations and permit conditions, LFS related systems including fire extinguishers, safe assembly area for emergencies, emergency exits have been provided, however the ERP and LFS related training, maintenance of emergency infrastructure such as evacuation routes without any obstruction can be improved and strengthened.  Few minor fire incidents or events have been reported in the past 3-5 years without any loss of life or damage to neighborhood communities in Nathupur Plant and product distribution chain assets (e.g Kundli and Hyderabad warehouses).

As per agreed ESAP #1, as part of overall ESMS development, both the on-site and off-site ERP will be revised and updated at each of the company operational sites such as AI/Technicals manufacturing plants, Formulation plants, product distribution chain operations including transport, warehouse and regional distribution centres. The updated ERP shall meet IFC PS and Section 3.7 of the WBG General EHS Guideline requirements and in a manner appropriate to prevent and mitigate any harm to people and/or the environment. The ESMS will include appropriate provisions to periodically review, revise and audit ERP systems, as necessary, to reflect changing conditions.

Monitoring and Review: Integrated corporate level E&S performance monitoring and review management systems are yet to be implemented covering all the Plants and business operations. Currently, E&S monitoring and performance review is the responsibility of individual plant management. At the plant level, while monitoring and review of management elements such as:: periodic safety review by nominated members of the Safety Team; cross-facility internal audits; annual, independent/ external 3rd party audits; and monthly inspections and reporting by the plant EHS Manager are being practiced, however the implementation of such elements is not uniformly followed or applied across all the plants. The audit observations are followed-up during plant level management meetings and are closed as per agreed time schedule. However, the required frequency of such external audits and monthly inspections is not being duly applied across the plants. Mandatory regulatory reporting and environmental quality monitoring (ambient, point source emissions and effluent discharge et al) as required under permit conditions are being implemented across all the manufacturing and formulation plants though effective compliance assurance to permit conditions and regulatory requirements needs to be achieved (e.g Nagpur Plant).

At the product distribution chain assets (warehouses and RDCs), there is no system of monitoring and reporting to company corporate management. Labor and human resource management aspects are monitored with an enterprise-wide tool. Cluster Heads of the product distribution chain operations undertake surprise inspections with focus on inventory management and working conditions. E&S staff from nearby manufacturing plants do visit the RDCs and warehouses to deliver training and capacity building programs and conduct internal audits.

As per the agreed ESAP #1 and as part of overall integrated ESMS development, the company will revise and update its E&S monitoring and review management element. In doing so the company will establish procedures to monitor and measure the effectiveness of the management programs, as well as compliance with any related legal and regulatory requirements. The E&S monitoring and review program will be overseen by the appropriate level staff in the corporate and plant level E&S organization. The monitoring program will also include dynamic mechanisms, such as periodic internal inspections & audits, regulatory & permit condition compliance audits and periodical auditing by independent external experts to verify ESMS functioning and the monitoring information as required under IFC PS 1. Corporate management will undertake periodic performance reviews of the effectiveness of the ESMS, based on systematic data collection and analysis.

The agrochemical division of the company employs about 2762 staff which includes 3rd party employees and contractual workers. As of August 2021, the company employed 1034 direct employees, 1148 third party payroll employees and 580 contractor staff. There are 58 female staff working with the company (54 direct & 4 third party payroll), the majority of whom are based at the corporate office and Nathupur plant; the female staff proportion is only some 2% of the total workforce. The Dahej facility which is under construction is expected to be commissioned by September 2021. The Dahej Plant will add another 500 jobs during the construction phase and 300 jobs during the operational phase of the project.

Staff turnover (attrition) rates have been over 20% in the past few years which according to company is well aligned to sectoral trends. Few observations on staff turnover trends in the company include: staff turnover in manufacturing and formulation plants are generally low; few staff and workers were shifted or transferred to other Company entities that contributed to staff turnover in FY19-20; and workforce from sales department contribute to higher staff turnover rates.

Working Conditions and Management of Worker Relationship:

Human Resources (HR) Policies and Procedures: The company has documented, corporate level HR policies and procedures that are applicable to all direct employees. The HR policies and procedures cover aspects such as: recruitment and selection process; prevention of sexual harassment in the workplace (this policy is also applicable to contract workers); Code of Conduct; whistle blower; appointment and renumeration; attendance, leave and holidays, which also includes information on maternity leave, paternity leave and compensatory leave; employee benefit policies; separation policy, which includes resignation, retirement and termination; reference check and background verification. These policies and procedures are aligned with IFC PS 2 . Each plant follows the corporate HR policies and procedures that are modified to suit local labor regulatory requirements. Some of the policies including the Code of Conduct; Whistleblower Policy; Appointment and Renumeration; and the Quality Policy are also disclosed on the company website (Refer: https://www.crystalcropprotection.com/corporategovernance). The company shares the documented HR policies and manuals with the employees at the time of joining and through Human Capital Management IT application (HCM app) introduced in 2020. The company provides appointment letters to all direct employees in which the working conditions and terms of employment based on company HR policies and procedures are clearly documented and outlined. There are no workers organization or union functional in any of the facilities though company has no restrictive or prohibitive policy preventing workers freedom to associate.

Additional specific HR policy and procedural elements that are required to ensure compliance with IFC PS 2 requirements include aspects such as that related to: non-discrimination and equal opportunity; prohibition of child, bonded and forced labor; grievance management; overtime work and related wages; retrenchment and collective dismissal; workers engaged by third parties and workers’ organization. Thus, as per agreed ESAP #4, the company commits to review and strengthen its existing HR management systems to incorporate these additional aspects.

Grievance Mechanism: Documented grievance redressal policy and procedures are being implemented in the Nathupur Plant and product supply chain assets (warehouses and RDCs), however not uniformly implemented across the business operations (e.g., Nagpur). A grievance committee is in place at a few facilities where members meet monthly and grievances from employees and contract workers are received through a complaints box system. An informal and verbal grievance mechanism is generally followed across all the sites of the company.

As discussed earlier, the company has formulated and implemented a policy and procedures on prevention of sexual harassment (POSH) as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for all its employees; the policy clearly defines the meaning of sexual harassment. It includes reference to an internal committee, complaint mechanism, investigation etc. As part of the procedures, an Internal Complaints Committee (ICC) has been constituted at the corporate level, which includes 5 members from the company and 1 external member.

As part of IFC investment and as per agreed ESAP #4, the company commits to develop and implement a grievance mechanism as a critical element of the revamped HRMS. The grievance mechanism will provide access to all types of workers (including direct workers and workers engaged through third parties) to raise workplace concerns and will be formulated and implemented to meet the requirements of Clause 20 of IFC PS 2. In addition, the existing POSH related policy and procedures will be implemented uniformly across all the plants, product supply chain assets and business operations.

Protecting the Workforce: At appraisal, no child labor engagement or forced labor practices were found across the plants and signages on prohibition of employing child labour at workplace was found displayed within plants. Stakeholder consultations also indicate that there have been no instances of forced or bonded labor practices employed at the plants

As noted above and under ESAP #4, the company commits to formulate policies and procedures to protect the workforce and prohibit child, forced and bonded labor practices; the policy and procedures will cover the contracted workers, transport fleet operators, supply chain and vendors as well in its scope. The procedures will include verification of age at the time of hiring for direct workers and at the time of contracting for contractors.

Occupational Health and Safety (OHS): Company is yet to formulate and implement a standardized occupational health and safety (OHS) management system appropriate to the nature and scale of its business operations and commensurate with the level of OHS risks and impacts. The current OHS management systems are formulated and implemented to achieve regulatory compliance and does not meet good international industry practices (GIIPs) as outlined in Section 1.2 of the WBGEHS Guidelines for pesticide industries. At the corporate level the company has formulated guidelines for safety which stipulates minimum applicable safety requirements to be implemented at the plant level. Corporate safety guidelines provide the frequency of safety committee meetings to be held at all levels and defines roles and responsibilities of key management staff. As noted above these committees do not necessarily meet as regularly as they should. At the plant level, EHS management has developed Standard Operating Procedures (SOP) covering some of the OHS aspects such as use of PPE, Lock-out tag-out controls, firefighting, confined space entry, hot work, and permit to work. At the Nagpur plant, these SOPs are yet to be approved by the management and have not been issued for implementation.

Incident and accident statistics are being recorded and maintained on a monthly basis as per local regulatory requirements. No fatal accidents have been reported across all the plants in the last 3 years. Incidents or accidents are investigated and the root cause analysis records are maintained though this procedure needs review and strengthening. An occupational health centre (OHC) with ambulance facility is also maintained as per regulatory requirements wherein certified medical professional visits the centre on pre-determined days of the week while medical attendants manage the OHC on all other days during the general shift. During the night shift, the OHC’s are manned by either medical professionals or attendants to attend to any medical emergencies. Facility managements across all locations have made arrangements with the nearby hospitals to attend emergency cases.

Taking into account the above and as per the agreed ESAP #1, the company will formulate and implement an occupational health and safety management system (OHSMS) that is appropriate to the nature and scale of its business operations and commensurate with the level of OHS risks and impacts. As part of the OHSMS and in compliance to Clause 23 of PS 2 requirements, company will: identify potential hazards to workers, particularly those that may be life-threatening; provision of preventive and protective measures, including modification, substitution, or elimination of hazardous conditions or substances; training of workers; documentation and reporting of occupational accidents including mandatory root cause analysis & investigation, diseases, and incidents; emergency prevention, preparedness, and response arrangements; strengthening occupational health and safety centre (OHC) with ambulance facilities to provide round the clock emergency medical services with qualified staff; establish clear safety accountabilities for management and supervisory teams to reinforce positive safety culture, oversight and supervision across all manufacturing and formulation plants and product supply chain assets (warehouses and RDCs); and independent process safety audit at regular intervals as part of Corporate ESMS/IMS/OHSMS. Company will also get the Corporate and Plant level OHSMS independently verified to be consistent with good international industry practice (GIIP).

From a process safety risk perspective, as described under PS 1 identification of risks and impacts section, all the manufacturing processes followed in the plants are operated at normal or relative low pressures/temperatures. There are though many active raw materials and majority of them are hazardous materials. Given batch reaction conditions and the presence of toxic and organic vapors in process areas, providing effective and sufficient local ventilation systems to ensure appropriate indoor air quality standards are met is a critical requirement. Appraisal visits to plants indicate that local ventilation arrangements and occupational exposure risk/workplace quality monitoring has not been addressed adequately. Specific risk areas identified include: there are no control measures for hazardous dust management; lack of worker occupational exposure level (OEL) and workplace quality monitoring program; lack of worker health surveillance program; lack of ventilation for VOC emissions and powder processing dusts; inadequate PPE protocol resulting in poor or no PPE usage in critical production areas; inadequate LFS facilities in production areas; electrical safety risks that could result in potential dust explosion scenario; poor ventilation in batch processing and material storage areas; absence of safety critical operating procedures for hazardous work activities; manually controlled process reactors with no automation; inadequate machine guarding, etc. In warehouses and RDCs, similar OHS risks are observed. Notably, contracted workers who handle highly hazardous chemicals such as Carbofuran and Furadan during loading/unloading operations have not received training on hazardous materials handling and did not have the appropriate PPE).

Taking into account the process safety risks discussed above and as per agreed ESAP#5, company will implement an industrial hygiene survey and employee exposure monitoring (workplace air quality and noise levels) program to ensure that associated health risks are controlled in each of its AI and Formulation manufacturing plants within 6 months of IFC investment.  As part of workplace air quality monitoring, any VOC emissions monitoring potentially present in the operations must include Phenol and BTEX (Benzene, Toluene, Ethylene, Xylene). Additionally, as per agreed ESAP #5.1, based on process safety assessments and HAZOPs discussed under ESAP#2, company commits to upgrade and/or improve the process plant assets including local exhaust ventilation and dust suppression systems and establish an appropriate asset integrity and maintenance program within 12 months of IFC investment.

COVID-19 impact on workforce: The company did not implement any HR measures such as retrenchment, job cuts, salary and benefit cuts, or changes to contracts because of COVID-19. As manufacturing plants received permission from local authorities given their agricultural products are part of essential commodities, the company’s plants and business operations were operating normally through the COVID-19 lockdowns albeit with reduced staff. However, remaining staff were also paid full salary through the lockdown period. The company adopted a work from home policy which allows any potential infected or normal staff to work from home to reduce the risk of COVID-19 contagion in the workplace. All relevant COVID protocol measures were put in place for ensuring the health and safety of employees who need to work at offices, manufacturing plants and warehousing facilities such as adequate social distancing, use of partitions, hand sanitizing, use of face masks, etc. Between March 2020 and September 2021, there were about 180 COVID-19 infections among the staff in the corporate office and plant level and 6 COVID related fatalities.

Workers engaged by Third Parties: Nearly 63% of staff or workers employed at the company are engaged by third party agencies or contractors who are performing work related to the core business processes of the project for a substantial period. Marketing and field-based staff are employed through third party agencies. Loading, un-loading, house-keeping and security services at each of the plants and supply chain assets are awarded to third party contractors based on a contract agreement with the company (except at the Lucknow warehouse) that defines worker contract terms, working hours and their wages. Contract workers are engaged by the contractors for undertaking their respective awarded work contracts. Most of the contractors engaged by the company do not come under the purview of the national Contract Labour Act as the number of workers engaged do not cross the threshold defined in the regulation. The contractors were found to be compliant to several regulatory requirements such as maintenance of wage registers and providing social security benefits such as PF and ESIC and non-compliant to various other regulatory requirements such as: minimum wages, payment of monthly wages on due dates, working hours per day, maximum permissible working hours in a week including permissible overtime hours per week, overtime register maintenance and payment of overtime wages. In addition, at most locations the existing grievance policy does not cover contracted workers. Potential child labor or forced labor risks were observed in the transport services contracted by the company for transporting raw materials and finished goods/products across the country.

As part of IFC investment and as per the agreed ESAP #1.3 and 4, Company commits to strengthen its HR policy and procedures with regards to workers engaged by third parties in compliance with IFC’s PS 2 requirements and periodically review & audit the contractors labor management practices and child or forced labor practices in the transport service providers across all its operational sites (such as Plants, Warehouses and RDCs) to ensure compliance to applicable labor regulations.

Consultations with contracted workers indicate that there has been no discrimination to migrant workers (such as at Nathupur plant) and that they are engaged on equivalent terms and conditions to non-migrant workers carrying out similar work. Neither the company nor the contractors have provided any accommodation services to migrant workers as accommodation is available in the nearby local communities.

Supply Chain: The company procures raw materials (chemicals) from the domestic market as well as the international market. Raw materials from other countries are generally imported through sea routes. Materials, components, goods or products for use in ongoing operations are sourced from reputable manufacturers and suppliers and hence there is a low risk of child labor or forced labor in the company's primary supply chain. Besides, company works with two of the third party contract formulation facilities located in Kolkata and Bhopal in India. The company has a dedicated supply chain and logistics team which has formulated a SOP on supply chain management and transportation aspects. However, the team does not undertake supply chain audits to verify compliance and performance of its national or international suppliers, third party contract formulation facilities and ports/terminals/inland container depots with regards to child labor or forced labor risks and occupational health & safety risks with supply chain workers. As part of IFC investment and as per agreed ESAP #1 the company will integrate the assessment and management of child labor or forced labor risks and occupational health & safety risks with workers in the supply chain within the scope of ESMS and introduce procedures and mitigation measures to ensure that primary suppliers of raw materials, third party contract formulation facilities and port/terminal/ICD authorities/intermediates within the supply chain are taking steps to manage supply chain related risk issues as per Clause 27-29 of IFC PS 2 requirements.

Resource Efficiency: Electricity is sourced from the national grid for plant operations while diesel generators are used as back up. Diesel, steam coal, biomass and firewood are also consumed for thermopack and boiler operations at some plants. Company consumes annually: 14.8 million kWh of electricity; 0.28 million liters of diesel; 1861 tons of biomass pallets; 3430 tons of biomass briquettes; 7501 tons of steam coal (includes estimated consumption at Dahej plant that is under construction); 1815 tons of firewood across all its AI and formulation manufacturing plants (including estimated consumption for Dahej plant under construction). The company is yet to start estimation and independently verify its Scope 1 and Scope 2 Green-house gas (GHG) emissions from its plants and other business operations. However, all the plants collect and maintain information pertaining to energy consumption.

Based on IFCs Carbon Emissions Estimator Tool (CEET) model GHG emissions for electricity and fuel consumed is estimated to be 22,500 tCO2e/year; this includes energy consumption at the 3 manufacturing plants and 4 formulation plants including the estimation for the Dahej plant which is currently under construction. To reduce its energy footprint, the company has started installation of rooftop solar projects and in the first such initiative a 540 kW rooftop solar unit is being installed at the Nathupur plant. Some of the resource efficiency measures undertaken at the warehouse sites include use of light emitting diode (LED) tube lights and bulbs and use of energy efficient air conditioners (3-star ratings).

Water consumption: Water is generally sourced from public utilities, the industrial estate utilities or abstracted from on-site groundwater abstraction wells. At the Nathupur AI manufacturing plant, the average water consumption is about 20-30 kilo liters per day (KLD), while at the Nagpur AI manufacturing plant, the average water consumption is about 200-250 KLD and in Dahej Plant that is under construction, the estimated demand is about 162 KLD.  In formulation plants, the average water consumption ranges from 3.5 KLD at Modern Paper Jammu to 7.2 KLD at CCPL Jammu. Thus, the total water consumption is around 440 KLD in AI manufacturing plants and about 20 KLD in formulation plants.

As part of the company’s integrated ESMS to be developed and as defined under ESAP #1, the company will incorporate resource efficiency related IFC PS 3 requirements as part of management program element of ESMS and specifically:: i) institute a program of independent GHG estimation covering all facilities and the entire business operations. Quantification of GHG emissions will be conducted by the company annually in accordance with internationally recognized methodologies and good practice; ii) institute a resource conservation program (RCP) that includes formulation of resource conservation related key performance indicators (KPIs) or targets that are general and site-specific covering energy, water and raw material inputs. Wherever appropriate global, national benchmarking data are available, the company will make a comparison to establish the relative levels of efficiency; and iii) review regulatory requirements and ensure valid permits for ground water abstraction from appropriate ground water authority in the region.

Pollution Prevention

Legacy soil and groundwater contamination risk: The company’s operational plants at Nathupur, Jammu, Anand and Nagpur are now operating for over more than a decade and there have been regulatory actions in the past over unauthorized effluent discharges off-site especially at Nagpur and Nathupur Plants. The company has commissioned independent, Phase I Environmental Site Assessment (ESA) studies covering all its plants (except Dahej which is under construction phase) as per ASTM E1527-13 Standards in August 2021. Company is committed to undertake Phase 2, ESA based on ongoing Phase 1 ESA study results. In the AI manufacturing plants located at Nathupur and Nagpur the scope of the ESA also includes undertaking a Phase II ESA as per ASTM Standard E 1903 11. The ESA studies are currently ongoing and expected to be completed by October 2021.

As part of IFC investment and as per agreed ESAP #6, company commits to comply with IFC PS 3 Clause 10 requirements based on the outcomes of ongoing ESA studies, wherein, if historical pollution such as land or ground water contamination exists, the company will seek to determine whether it is responsible for mitigation measures. If it is determined that the company is legally responsible, then these liabilities will be resolved in accordance with national law for soil and groundwater contamination, or with GIIP as applicable.

Air Emissions: The company monitors and manages air emissions from its plants in accordance with the local environmental permit conditions exception being the Nagpur Plant. Review of recent environmental quality monitoring reports indicate compliance to local regulatory standards and permit conditions. Among the air emission level parameters prescribed in Table 1 of WBG EHS Guidelines for Pesticide sector, only particulate matter is monitored, and it slightly exceeds the levels (by ~15%) at Nathupur AI Plant. The main sources of emissions include captive power generation (e.g., diesel generators), waste incinerators, boilers, process scrubbers and fugitive emissions. An ambient air quality (AAQ), ambient noise level (ANL) and point source air emissions monitoring program is in place as per permit conditions. A continuous online emission monitoring system (CEMS) for stack emission is installed for boiler and incinerator stacks and emission data is instantaneously shared with regulators. The CEMS systems are maintained by the original equipment manufacturer (OEM) and periodic calibration is undertaken. Periodic stack emission sampling is also carried out through third party for all stacks. However, at Nagpur plant the air emission monitoring program is not comprehensive enough and aligned to permit conditions. Hence non-compliance to permit conditions were observed and this include: lack of CEMS monitoring at the scrubber stack; stack attached to a 3 ton per hour coal fired boiler has not been identified as a point source of emission in permit documents; flue gas emission monitoring program from boiler stack, process stack and DG set stack has not been started yet; volatile organic compounds (VOC) monitoring is yet to be undertaken at Plant as per permit conditions; and parameters such as particulate matter, SO2 emissions from process, NOx emissions from process, acid mist/HCl, and chlorine from the Air Pollution Control Devices (APCD) needs to be included.

As part of IFC investment and as per agreed ESAP #1, company commits to review existing air emission monitoring program as against the permit conditions, regulatory standards and WBG EHS guidelines for pesticide sector. Based on the review, a comprehensive air emission monitoring program as part of the monitoring and review element in the integrated ESMS under development will be formulated and implemented. As part of the E&S monitoring and review program, company will formulate and implement plant-specific air emission monitoring program as a key element of integrated ESMS and would consist of fence line and off site AAQ and ANL program, workplace air quality monitoring and point source emission monitoring. VOC emissions monitoring must include Phenol and BTEX (Benzene, Toluene, Ethylene, Xylene) for the workplace air quality and at the fence line to monitor and control onsite fugitive emissions. Design and implementation of such program shall ensure compliance to permit conditions and emission guidelines presented at Table 1 in Section 2.1 of IFC EHS Guidelines for Pesticides sector. The monitoring program shall be undertaken using independent third-party agencies authorized and approved by regulatory authority. The environmental quality monitoring program for warehouses and RDCs will be customized to cover all the pollution risks as applicable at each facilities/sites but will include indoor air quality monitoring as a key element. As an immediate priority, within 6 months of IFC investment, compliance to permit conditions relevant to environmental quality monitoring program shall be audited and compliance ensured specifically at Nagpur Plant on a priority basis.

At Nathupur, all residual waste from solvent recovery process (e.g. distillation bottoms) and small quantities of biomedical waste are incinerated on site through dual furnace high temperature incinerator installed on-site but the emissions are not monitored as per MoEF Notification GSR 481(E) dated June 2008. At Nagpur, a diesel fired dual furnace waste incinerator has been installed but lying idle as the plant uses authorized treatment, storage and disposal facility (TSDF) facility nearby for hazardous waste disposal.

As a condition of IFC commitment and as per ESAP#7, company commits to institute a half-yearly hazardous waste incinerator stack emission monitoring program across all its plants that has incineration facility covering all parameters specified in: a) MoEF Notification GSR 481(E) dated June 2008 (Refer: (https://parivesh.nic.in/writereaddata/ENV/envstandard/envstandard34.pdf) that includes total organic carbon, dioxins and furans and b) Table 2. Air Emission Standards for Hazardous Waste Incinerators in the EU and US, WBG EHS Guidelines for Waste Management Facilities, December 2007. Company commits to institute hazardous waste incinerator stack emission monitoring program within 6 months of IFC investment and share the inaugural results with IFC. The company also commits to maintain dioxins and furan levels below the stringent permissible levels of either of the two standards mentioned above and if it exceeds these the company will explore and implement control options such as: installing a dioxins/furan scrubbers; segregation of chlorinated compounds from the waste to be incinerated; and sending the waste to nearby common incineration facility permitted to operate by regulatory authorities.

Noise Levels: Baseline background noise levels documented in the respective ESIA reports of Nagpur and Dahej sites indicate that ambient noise levels are compliant to National ambient noise standards prescribed for different land use types. The sources of noise in the operational plants are mainly from boilers, air compressors, blowers, pumps, vacuum pumps, ejectors, cooling towers, DG Sets and other process equipments. For the expansion project at Nagpur and greenfield facility at Dahej, adequate noise control measures such as enclosures for noise generating machines, mufflers, silencers at the air inlet/outlet, anti vibration pad for equipment with high vibration, earmuff and earplugs to the operators has been planned. The noise level within the plant is designed to be maintained to less than 75 dB(A).

In the operational plants, as part of permit requirements, fence line noise levels and near diesel generator (DG) machines are are monitored periodically along with overall environmental quality monitoring program. At Nathupur plant, as per local regulations, noise monitoring across all DG installations in the plant and 24 hour continuous ambient noise level monitoring has not been consistently monitored. At Nagpur, high noise areas have not been identified and occupational noise monitoring across all the high noise areas have not been undertaken.

As part of IFC investment and as per agreed ESAP #1, company commits to review existing noise level monitoring program as against the permit conditions, regulatory standards and WBG General EHS guidelines. Based on the review, a comprehensive noise level monitoring program as part of the monitoring and review element in the integrated ESMS under development will be formulated and implemented.

Wastewater: The company has installed effluent treatment plants (ETP) and sewage treatment plant s(STP) to treat process and domestic wastewater respectively from plant operations. In AI manufacturing plants, the ETPs are equipped with a zero liquid discharge (ZLD) system. As per permit requirements, treated effluent and sewage before reuse is to be monitored for prescribed standards. Permit requires the plant to install online effluent quality monitoring system.

At Nathupur, ETP with a capacity of 30KLD and 100 KLD in the formulation and AI manufacturing plant have been installed respectively with processes designed to achieve ZLD. The treated wastewater is recycled within the plant for cooling tower, gardening and sanitary flushing purposes. Effluent (both trade effluent and domestic) quality monitoring is carried out by external laboratory and daily samples are also tested in an in-house laboratory. The AI manufacturing plant ETP’s are equipped with continuous online monitoring system as per permit conditions. Storm water drains from inner AI Plant premises where hazardous materials are stored and handled are connected to ETP however the outer peripheral drains along plant perimeter are yet to be connected to ETP.

At Nagpur, the company has installed 41 KLD capacity ETP with ZLD system and 15 KLD capacity STP with treated STP water to be reused in gardening purposes. Stormwater drainage network is being revamped and constructed to connect to ETP for collecting the initial stormwater runoff. In other formulation plants, ETPs or STPs have been installed as per permit conditions and the effluent quality is being regularly monitored.

As part of IFC investment and as per agreed ESAP #1, company commits to review existing effluent monitoring program as against the permit conditions, regulatory standards and IFC EHS guidelines for pesticide sector. Based on the review, a comprehensive effluent monitoring program as part of the monitoring and review element in the integrated ESMS under development will be formulated and implemented. As part of the E&S monitoring and review program, company will formulate and implement plant-specific effluent monitoring program as a key element of integrated ESMS and would consist of on-site and off-site ground water quality monitoring (covering pre and post monsoon seasons), stormwater runoff post treatment and wastewater/effluent quality monitoring. At every plant, the individual organic pollutants also need to be evaluated for potential cumulative impacts in the effluent due to high toxicity. Company will ensure that contaminated stormwater/rainwater (first 15-30 minutes of rainfall) across the entire plant areas are collected and treated before discharge. Design and implementation of effluent monitoring program shall ensure compliance to permit conditions and effluent guidelines presented at Table 2 in Section 2.1 of IFC EHS Guidelines for Pesticides sector. The monitoring program shall be executed using independent third-party agencies authorized and approved by regulatory authority.

Wastes: Various waste streams generated from the plants typically include: process sludge (residue from distillation of solvents), filter dusts/residues, scrubber wastes, off-spec product, chemical sludge from ETP, used oil from DG sets, oil contaminated clothes, ash from incinerator, flyash from boilers, bio-medical waste, e-waste, battery wastes, empty chemical bottles and drums. Multiple organic solvents are used to extract products which also results in wastes. Most of the solvents are hazardous and the recycle and the disposal of the used solvents may pose significant environmental risks. Hazardous solid waste is disposed through an authorized treatment, storage and disposal facility (TSDF) operator. Sludge from STP is dried and used as manure within plant. All sludge from ETP and ash from incinerator is sent to TSDF. Used oil is disposed through authorized recyclers. Non-hazardous wastes such as plastic, paper waste, metal scraps, packaging wastes are disposed through scrap dealers.

So as to consolidate the approach to waste management and as per agreed ESAP #1, as part of the integrated ESMS under development, company will review existing waste management procedures, formulate and implement a comprehensive waste management policy and procedures that ensures compliance to regulatory requirements, permit conditions and requirements specified in Section 1.1 of the WBG EHS Guidelines for Pesticide sector. Waste management procedures will include in its scope all types of wastes viz. hazardous, non-hazardous, municipal solid wastes, e-wastes, medical waste from OHCs and battery waste. The revised and updated corporate waste management policy and procedures will then be applied at all operations.

Hazardous Materials Management:

IFCs appraisal indicates that the company operations are compliant to the Stockholm Convention requirements with respect to Persistent Organic Pollutants ((POPs) and World Health Organization (WHO) list of obsolete and discontinued pesticides. The company had exported Carbofuran and Monochrotophos formulations that are listed under Annex III of Rotterdam Convention twice to Uganda in the last 2 years with valid registration certificate. However, after Uganda banned these chemicals, the company has stopped its exports. Under IFC investment and as per agreed ESAP #1, as part of policy element of integrated ESMS under development, the company commits to comply with all international conventions, agreements and standards as amended and undertake independent annual compliance audit to verify and assure compliance to the same. The scope of ESMS/IMS audit discussed under PS 1 and ESAP#1 will be expanded to include compliance verification to international conventions, agreements and standards as applicable to pesticide industry sector.

Company does not manufacture glyphosates and permethrins but imports them for making formulation products that are classified as WHO Class II chemicals. Use of glyphosate-based products is highly regulated in India and few States banned its use in 2019 citing safety concerns.

The company has chlorinated products in the portfolio (e.g., CCMT – ChloroThiazole & its derivatives, CCMP – Chloro Methyl Pyridine based products, Clodinafop etc) and has chlorination processes for the manufacture of certain pesticide products (CCMT). Currently, there is no chlorine storage and use in any of the plants and in Nagpur the chlorination process uses Sulfuryl Chloride.. If the company plans to store and use chlorine in future in any of its plants then as part of IFC investment and as per agreed ESAP#8, company commits to undertake informed management decision on the purchase, store and use of chlorine in future at any of its plants, only after conducting an independent quantitative risk assessment (QRA) study that estimates the credible risk zone. If the QRA study indicates any impact on the neighborhood communities that could be located within the credible risk zone, the company will not purchase and store chlorine.

WHO Class Ia (extremely hazardous) and Class Ib (highly hazardous) Pesticides: The company does not manufacture but purchases/imports three WHO Class Ib active ingredients viz. Monocrotophos, Carbofuran, and Abamectin. Based on LD 50 toxicity levels, the final formulation product of Monocrotophos is still categorized as a WHO Class Ib, whereas the final formulation products of Carbofuran and Abamectin are categorized as WHO Class II. On Carbofuran, company purchases the active ingredient but gets substantial portions reformulated to WHO Class II product in third party contract manufacturers facility located in Kolkata and Bhopal in India and some portion in its own formulation plants.

As part of IFC’s investment and as per agreed ESAP#9, the company commits to a phased migration plan for Monocrotophos formulation products with 2 migration candidate chemicals that are identified with manufacturing schedules committed in the project. On Carbofuran, company commits to phase out purchase and handling of AI technical but will continue to sell formulation product procured from third party contract manufacturers subject to local regulations. On Abamectin and glyphosate based formulation product, the company has no immediate plans to find migration candidate as the formulation product is classified as WHO Class II. However, company commits to comply with prevailing local regulations as amended from time to time on these two chemicals and implement all IFC ESAP actions that proposes to strengthen its ESMS leading to have appropriate controls on manufacture, procurement, distribution and use of these chemicals. Company will provide a phase-out strategy and road map as a condition of IFC commitment.

Hazardous Materials: In the manufacturing and formulation plants besides raw materials which are different types of toxic chemicals, there are other hazardous materials such as solvents and petroleum products that are stored onsite. Hazardous chemicals are stored within closed premises or in bulk storage and underground storage tanks are provided for storing solvents and petroleum products. Appropriate regulatory permits to handle, store and use solvents and petroleum products are available and the permits are regularly updated and renewed across all the plants. For the management and handling of hazardous materials, generic standard operating procedures (SOPs) are in place covering highly inflammable, toxic chemicals and solvents which are not sufficiently customized to plant specific requirements. Such SOPs stipulate handling procedures covering tasks such as volume identification and identification of material nature (e.g., flammable/toxic/corrosive) with reference to its Material Safety Data Sheet (MSDS). Based on the SOPs, the company maintains a list of selected hazardous material with annual quantity used as per regulatory guidelines for storage and labelling before disposal. In addition, the SOPs for hazardous waste handling is established stipulating steps to be taken in case of spillage and action to be taken when spillage enters the storm water.

At warehouses and RDCs, there are no SOPs formulated covering tasks such as handling, storage and transportation of raw materials and finished products. As part of IFC investment and as per agreed ESAP#1, the company will update the hazardous materials management system (HMMS) as part of management program element of integrated ESMS under development as proposed under IFC PS 1The HMMS will cover within its scope the manufacturing/formulation plants and product supply chain operations including transport operations. As part of the updated HMMS, the company will avoid purchase, store and use of chemicals and hazardous materials subject to international bans or phaseouts due to their high toxicity to living organisms, environmental persistence, potential for bioaccumulation, or potential for depletion of the ozone layer. In doing so the company will consider less hazardous substitutes where hazardous materials are intended to be used in manufacturing processes or other operations.

Infrastructure & Equipment Design and Safety: All the manufacturing and formulation plants except Nathupur Plant are located inside industrial zoned land and within the authorised industrial estates managed by government industrial development corporations in the respective States. The Nathupur plant is located amidst other industries, but not in a notified industrial area and within 500m distance from Nathupur village settlements that has a population of about 3000-5000 people. At Nagpur, the nearest settlements are Salaidabha village in the north and Tembhari village in south with both villages located at about 1.3 km distance from the plant. At Dahej, the nearest settlement is Vadadla village at about 1.5km east of the site.

As part of IFC investment and as per agreed ESAP #1, Company commits to integrate IFC PS 4 requirements as part of the management program element in the integrated ESMS under development. More specifically this will include a periodical infrastructure and equipment safety testing program at each plant by competent professionals who are certified or approved by regulatory authorities. The program will be to comply with Indian Factory Act requirements.  The testing program will periodically evaluate structural elements and or components that are situated in high-risk locations and, where their failure or malfunction could impact the safety of neighborhood communities. The company will engage independent external experts to conduct a safety review and update the risk assessment studies throughout the project lifecycle. The company will also ensure that each plant is compliant to the Public Liability Insurance Rules, 1991 which requires that business entities involved in handling, storage and transportation of hazardous substances to provide for third party insurance cover.

Hazardous Materials Management and Safety: As discussed under PS 1, the manufacturing processes in AI Manufacturing Plants operate at normal or relative low pressures/temperatures. All the reactions are batch reactions in small vessels (most are less than 1 ton). The QRA and HAZOP studies undertaken to date indicate that due to the small amount of each chemical used onsite, the catastrophic event impact ranges are mainly within plant sites for most of the maximum credible loss accident scenarios. However, chlorine storage at Nagpur site can have a 1,200+ meter impact range and the Bromine tank catastrophic failure at Dahej site could have an impact range of 1400m+ with possible impact on neighboring communities at respective sites. As discussed under PS 3, currently there is no chlorine storage and should there be use of such in any of the plants, the company commits to comply with IFC ESAP#2 (revising & updating QRA and HAZOP studies across all plants within 6 months of IFC investment) and ESAP#8 (informed management decision on chlorine use and storage based on independent QRA study) requirements. All the AI manufacturing plants (including upcoming Dahej plant) have installed zero liquid discharge (ZLD) systems that reduces the risk of community exposure to hazardous effluent discharge. As part of IFC investment and as per agreed ESAP #1, as part of overall ESMS development, the company commits to revise and update off-site ERP systems at each of the company operational sites.

The company has outsourced raw material and finished goods transport fleet operations to third party logistics service contractors. The appraisal assessment indicates that there are areas for improvement in relation to such activities. A legacy incident in the past pertaining to leak of a toxic chemical from a container truck that was transporting the chemical to Nathupur plant of the company from a state-run inland container depot in Tughlaqabad near south Delhi in May 2017 indicates the significance of risks and impacts in transportation of hazardous materials. As part of IFC investment and as per agreed ESAP #1 the company will integrate the assessment and management of environment health and safety (EHS) and community health and safety (CHS) risks in the transport operations within the scope of ESMS and formulate documented management procedures and mitigation measures to ensure that primary suppliers, transport vendors and port/terminal/ICD authorities within the raw material supply chain are taking steps to manage transport related EHS and CHS related risk issues. Company commits to integrate following risk mitigant actions and enforce through contact conditions: defensive driving training to drivers, traffic safety management plan, providing portable fire extinguishers and first aid kits, basic training to fleet operators on hazardous materials and substances, and providing TREM cards (transport emergency cards as per the Central Motor Vehicle Rules, 1989, for transportation of dangerous goods) to the drivers carrying hazardous chemicals.

Security Personnel: The company has outsourced security services to licensed security contractors. The background verification of every security staff for past abuses deployed at company sites are done by the security contractors. There are no armed guards engaged in the security team across any of the plants and product supply chain assets. The company reports that there have been no past instances of conflict with workers and neighborhood community members involving company security personnel. The security staff deployed at company sites are trained on LFS aspects and are identified as key members of ERP team at plant sites. However, as discussed under IFC PS 1 management program element, as per agreed ESAP #1, company would formulate and implement a framework security management plan inclusive of security contractor selection/evaluation procedures and training program.