This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because the risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP). 

Emergent’s corporate management system, policies and procedures should ensure that Environmental, Social, Health and Safety (ESHS) risks and impacts are properly assessed and that corresponding controls are in place at the corporate level to inform the ESHS management of each business line. The key ESHS risks associated with Emergent are related to the adequacy of internal procedures to screen ESHS risks and impacts; general OHS management; pollution prevention and control; labor management, including terms of employment, non-discrimination and gender-related issues at the workplace; contractor EHS management, relations with workforce, grievance mechanism; community safety; and stakeholder engagement.                                      

Environmental and Social (E&S) Policies and Management Systems:

Emergent LatAm’s ESHS performance is managed at the individual facility level. All facilities currently hold their respective environmental licenses and are operated in compliance with local legislation and have implemented the relevant industry standards for quality, safety and food handling. The existing facilities have different certifications depending on the company’s client requirements, country and regional food safety standards and certifications. Generally, the local facility management system comprises the following subsystems: Quality Management System and Food Safety (QMS); Control and Security Management (GCS); Social Responsibility Management (CSR), Occupational Health and Safety (OHS), and Management of Organic Products (GPO). The QMS are supported and validated by different certifications that are periodically renovated by the company and include all ESHS aspects of the operations and supply chain. The Company’s CSR and OHS Management Systems are generally aligned in most facilities in compliance with the criteria of “Ethical Trade Audit Codes” (e.g. SMETA code and SEDEX Audits) which assess human and labor rights aspects of its workers and suppliers, as well as responsible ESHS practices and ethics, and ensuring compliance with organic production standards according to the requirements of export destinations (e.g. USDA Organic).

The standards and certifications are consistent with local regulations and ISO 14001 for environmental management, particularly in relation to (i) identification of environmental aspects and potential impacts, (ii) legal and regulatory requirements, (iii) operations pollution prevention and control, (iv) environmental monitoring, (v) communication and community relations, and (vi) emergency preparedness and response.

Emergent is applying a corporate framework called “Emergent Way” aimed at integrating newly acquired or developed facilities with Emergent’s ESHS management systems, and has the goal of standardization, set reporting metrics (KPI’s) and criteria alignment across the various business units and countries. This process includes ESHS risk management, food safety and implementation of “Authorized Economic Operator (AEO)” certification related to the international movement of goods and compliance with the supply chain standards. 

This corporate improvement entails a process of six pillars, including energy efficiency, safety and compliance, maintenance, capex performance, material handling equipment (MHE) and strategic management.  Additionally, based on the facilities’ management systems, moving forward, Emergent, under ESAP #01, will develop and implement a corporate-wide environmental and social management system (ESMS) applicable to the group’s business activities. Specifically, this corporate ESMS will include: an overarching policy; targets based on the organizational structure, lines of reporting and relevant roles and responsibilities. The corporate procedures will guide the development and implementation of the required ESHS assessments and management plans at the facility level, both for acquisitions and for new facilities during construction and operations.

Policy

Emergent has operational corporate and local policies (EHS, HR and CSR) that guide its operations, including subsidiaries and associated companies. Policies are communicated to employees during the corporate induction process, posted in the offices and made available for consultation through other means in the various countries or facilities. As part of ESAP #01, Emergent will update the ESHS Policies in line with IFC Performance Standards and include commitments related to (i) stakeholder engagement, (ii) labor and working conditions, (iii) Security Service Policy, (iv) gender equality and no tolerance of gender-based violence and harassment (GBVH) and (v) climate change risks provisions.

Identification of Risks and Impacts:

Presently, each facility has a specific set of ESHS risk management procedures and operational risk matrices to screen for the ESHS risks during project design and to guide ESHS compliance. Also, when considering acquisition of existing assets, the Company conducts reviews or audits of prospective facilities benchmarked against Emergent standards.

Under the enhanced corporate ESMS (ESAP #01), the company will complement the operational risk matrix of Emergent’s ESHS risk and impact identification process consistent with IFC PS. That process includes all the necessary steps and methods that are required to assess the potential ESHS risks associated and commensurate with the company activities.

Management Programs

The Company’s management programs include the control of resource efficiency, general and hazardous waste management, liquid effluents, chemical materials handling, and ESHS trainings as per the requirements of the local environmental agency. OHS management programs include risk and hazard evaluation, prevention, training and biosecurity programs and fire safety.

Regarding the supply chain risk management, Emergent is establishing a Suppliers’ Code of Conduct applicable to distributors, contractors, and providers. It will require the compliance with legislations, regulations, and standards of each country where the company operates, prohibition of forced and child labor, respect for human rights, safe working conditions, reasonable salary payment, provision of social security, working hours, freedom of association, and prohibition of reprisals.

The company is establishing a monitoring program to track and report key performance indicators (KPIs) against the corporate ESHS targets. The monitoring program will cover the topics of resource efficiency, wastes, effluents, HR, OHS, security, emergency response, and grievance mechanisms.

To improve its management program as per the requirements established in the PS, under ESAP #01 the Company will develop the following procedures:(i) ESHS risk identification, (ii) contractor management, (iii) waste management, (iv) security management, (vi) road safety, and (vii) stakeholder engagement and grievance redress.

Organizational Capacity and Competency   

The VP of Operations and the local Operations Manager are responsible for the management of ESHS risks at the corporate and facility level respectively. At facility level, Environmental and OHS coordinators oversee ESHS, reporting to the local HR or OHS manager.

Emergent will assign a qualified person (i.e. Sustainability Manager or similar position) to oversee and monitor the implementation of the ESMS and oversee the ESHS assessment and management of risk and impacts for new projects and during routine operations in all countries. Emergent will clearly define his/her responsibilities and communicate these to the rest of the Company and site operating staff and will also be provided with sufficient authority and resources to manage the ESHS performance at all sites. (ESAP #02)

Monitoring and Review:

Emergent applies ESHS monitoring indicators that are audited on a yearly basis. As part of the ESAP #1, Emergent will develop an internal monitoring system which will include key KPIs such as GHG emissions, energy, and compliance with OHS requirements and indicators, suppliers risk assessment and management, and contractors ESHS performance.

In addition, Emergent will be implementing a formal ESHS audit program to further ensure ESHS performance for all projects under construction or in operation. The program will include detailed audit protocols for environmental and safety issues. The results of these audits will be documented at both the facility and corporate level, and will be made available to the Emergent senior management.

Emergency preparedness and response plans (EPRP)

Each of the Company’s local assets has developed EPRPs for its operations, aligned with local requirements and GIIP. Training of the EPRP is provided to all relevant employees. Emergency drills are conducted periodically in the facilities, based on risk level identified. Emergent’ s facilities are located in mixed used areas and the local EPRP has considered the potential impacts on and from the communities. 

Emergent has an emergency management policy which requires the Company to have at each facility (i) an evacuation plan, (ii) designated workers to perform leadership roles, (iii) well equipped fire protection, detection and alarm systems, (iv) clear procedures to manage the risk of ammonia used in the refrigerant systems, (v) first aid team, and (vi) designated assembly points.

Emergent will further operationalize its emergency preparation policy and plans by completing the necessary improvements (ESAP #03) in the facilities. Particularly, the equipment required to control events related to ammonia leakage will be audited and completed in all facilities with this risk, including the use of wind direction flags, fixed and portable ammonia detectors, fire hose and spray nozzle systems, self-contained breathing apparatus (SCBA) and other necessary personal protection equipment (PPE).

Human Resource Policies & Procedures

Presently, in all operations in LAC, Emergent has a workforce of about 1,758 direct workers (33% are female). The Company has prepared or is in the process of preparing a social and human resources (HR) guide, including employee rights, code of conduct, disciplinary procedures, grievance management and a monitoring process of social risks and indicators.  The HR policy commitments include, fair, safe and hygienic working conditions, living wages, working hours and benefits, non-discrimination or harassment, and prohibition of child and forced labor. While the policies are consistent with PS2 and national laws, the company, as part of ESAP # 04, will develop an HR Manual and relevant procedures guided by its policies and IFC PS2, addressing aspects of collective bargaining and freedom of association, retrenchment, grievance mechanism, equal opportunity, and gender-based violence. This manual will be supported by a revised induction training and communication material and will provide guidance on what constitutes complaints, and how Emergent will ensure non-retaliation and confidentiality in case of complaints.

Working Conditions and Terms of Employment

The company will update its HR policy and procedures, to include (i) requirements of hiring and promotion, (ii) trainings on code of conduct and policy on workplace harassment, and (iii) enhanced control of employees’ working conditions (i.e., management, salaries, benefits and control of overtime and rest days, monitoring of moral harassment cases, and enhanced training of managers) overseen and monitored by regional HR (part of ESAP #04). Emergent already has a system in each country to keep track of labor claims by country.

Workers’ Organizations and Grievance Mechanism

Emergent’s HR guide commits the organization to comply with national legislation and to provide workers with freedom of association. In those countries where there is an official trade union organization, the company is documenting and maintaining communication and negotiations, and operate in good relations with the union’s representatives.

Emergent has implemented at facility level, worker’s grievance procedure that is based on local regulations. The company, under ESAP #5, will develop a corporate procedure compliant with PS2 that will include (i) corporate platforms for submitting a grievance, and (ii) provision for both anonymous and gender specific complaints. The Company will keep a corporate and regional overview of all complaints and demonstrate the procedure followed during the investigation and the closure of the complaints.

Occupational Health and Safety

Emergent has made a strong commitment to ensure safe working conditions of all its workers and all contractors in all facilities, as OHS is one of the pillars used by the company that is implemented with priority during the pre-acquisition audits, and later during the integration process after a facility is acquired. The same platform is expected to be implemented by the company when the future facilities (e.g., D.R, Peru, and Ecuador) start operations.   

To operationalize the implementation, the Company is developing a Corporate Occupational Health and Safety (OHS) procedure aimed at (i) achieving a safe and accident-free workplace in all offices, warehouses, and during transportation of goods, (ii) incorporating OHS principles in project planning and work activities, (iii) ensuring identification and management of OHS risks in the workplace, including incident reporting and tracking, (iv) monitoring and reviewing implementation of OHS management measures and corrective action plans   and (v) worker OHS training programs. The scope of the procedure includes both employees and contracted workers.  The facilities’ managers are trained and tasked with enforcing OHS requirements and ensuring employees and contracted workers’ health and safety.

The company follows ISO 45001 for OHS and will establish the necessary corporate KPIs for OHS, utilizing lagging and leading indicators for reporting from all facilities.

Fire prevention, protection, suppression, and control measures are included in the design of the warehouses (greenfield projects), which are designed, constructed, and operated by competent professionals in accordance with design standards and GIIP, taking into consideration safety risks.

To manage the impact of COVID-19 on the business and employees, Emergent is ensuring compliance with the guidelines provide by the WHO and the Ministry of Health of the respective countries, and has developed appropriate mitigation and management measures, that are provided to all employees and contractors.

Workers engaged by Third Parties

Emergent is using commercially reasonable efforts to ensure that the third parties are legitimate companies of recognized integrity and have an adequate ESHS management system in place to operate in accordance with PS2. The Company has developed a contractor management guide; however, it does not detail how the ESHS policies are applicable to third party providers. As part of the ESAP #6, Emergent will complement the guide by implementing a contractor management process that will include the vetting and ongoing monitoring of contractors, safety, compliance with labor law, and alignment with Emergent policies and code of conduct. In addition, Emergent will ensure that all contracted workers have access to the worker’s grievance mechanism.                               

The Company commissions third party contractors for the construction of the new sites with direct contract, scope and specifications, which acts independently, and is responsible for the coordination with design, engineering, and environmental permits. Each such contractor has or will have a procedure for contractor management, establishing that contractors and subcontractors are required to adopt and implement the Company’s OHS and Environmental policies, standards and procedures. In addition, site inspections, audits and documentation reviews are performed regularly to assess compliance with Emergent’s standards. Meetings with subcontracted companies are held monthly to verify risk prevention practices and OHS and environmental management.    

Non-discrimination and Equal Opportunity

Emergent addresses gender aspects, assuring that employment conditions are equivalent for all workers.

Emergent respects all terms of diversity and is formalizing a corporate gender equity and/or diversity policy and strategy. Emergent considers gender in their policy, projects and programs, development, and monitoring. Emergent will develop an internal workforce confidential complaints/grievance mechanism, for incidences of sexual harassment and/or gender. For this, as part of ESAP #7, Emergent will develop and implement a “Corporate Gender Management Strategy” to: i) promote more women in the workforce in Company’s subsidiaries and associated enterprises, including contractors; ii) ensure there is no unintended discrimination in the recruitment selection and promotion procedures and removing any barriers for women to be hired, retained and promoted in the organization; iii) incorporate specific management tools related to the risk of experiencing gender-based violence, sexual harassment (GBVH), iv) training on the code of conduct, prevention and grievance mechanism for third-party contractors and subcontractors.                                                   

Resources Efficiency and Greenhouse Gas (GHG) Emissions

All Emergent facilities follow operational procedures for resources efficiency, pollution prevention and environmental monitoring.  Operations are guided by environmental controls procedure focusing on air emission; hazardous and non-hazardous waste management; hazardous material management; monitoring/ reporting; spill prevention and control/emergency preparedness and response; and training. As per ESAP #01, Emergent will develop a set of ESHS programs and procedures that will apply across all operations as explained in PS1. 

As Emergent’s warehouse facilities will be in industrial zones, electricity will be provided by the national distribution grid. There are back-up generators in most facilities. Energy consumption will be monitored closely, and data on electricity and diesel/gas consumption will be reported annually. The company aim at implementing energy efficiency measures and will develop a resource efficiency and refrigerant gas management plan. The annual total GHG emissions of the proposed acquisitions and greenfield based on electricity use (scope 2) are estimated at 2,400 tons of CO2-eqannually per facility and at corporate level is expected to exceed the 25,000 tons of CO2-eq per year.   GHG emissions are attributable mainly to the acquisition of energy for the refrigeration units (main building, cold storage and reefers), refrigerant emissions, and secondarily to the use of fuel for transportation.

Per ESAP # 8, the Company will: i) develop a corporate resource efficiency strategy aligned with PS3 to gradually implement cost effective measures for improving efficiency in the core business activities; and ii) perform GHG emissions accounting. The Company will report to IFC total annual GHGs emissions and all sources in accordance with PS3, utilizing an internationally recognized methodology.

For future developments, the Company will use equipment based on ammonia gas in closed circuit with glycol system to obtain the most energy efficient solution for the particular site, as per GIIP.

At each facility, the Company undertakes regular inspections and checks of the refrigeration equipment with ammonia and defines risk control measures. Generally, in all facilities, an automatic ammonia system monitoring system with dedicated control room is available, and a dashboard will display any anomaly. All the relevant procedures, including monitoring and control of leakages and safety procedures, will be included in the Resource Efficiency and Refrigerant Gas Management Plan, in the future corporate ESMS as per ESAP #01. 

Emissions from vehicles and truck part of the transportation fleet, are well managed through periodic maintenance programs and frequent renewal of the vehicles.

Pollution Prevention and Control 

Emergent has implemented different management and monitoring plans to ensure their activities are conducted to minimize adverse impacts on human health and the environment, including for areas under the direct control of the Company, and areas managed by contractors and subcontractors. An environmental management plan is developed from the environmental assessment of projects and activities, regulatory compliance and identification of environmental aspects and impacts. The plan includes mitigations and controls, as well as basic monitoring and reporting requirements. During the site visits to a sample companies and subsidiaries, the implementation of environmental mitigations was evident, with overall regular to good housekeeping, adequate segregation of residues and basic pollution prevention measures commensurate to the nature of the activity and the corresponding risks and impacts.

Waste & Hazardous Materials Management

Wastes are characterized as organic waste, solid and hazardous waste (tires, light bulbs, used oil and clothes, diesel tanks, chemical containers, batteries, refrigerant waste, etc.). Emergent has developed a standard waste management guide with provisions for the management of waste and disposal by authorized service providers. During construction, the ESHS management plan for the construction includes the relevant waste management measures.

Emergent, in all facilities, has an established pest management plan and selection of pesticides is controlled by O&M and safety teams, with a preference for the selection of natural and biodegradable products or mechanical systems. The company has a policy of not utilizing products classified as IA (extremely hazardous) by the WHO and ILO.

Water Consumption and Wastewater Management

The facilities are and will be in zoned industrial areas with established sewer lines and water treatment plants when there is food processing in a particular facility.  Sanitary effluents at the warehouses discharge into the city/local sewer lines.

Community Health and Safety

All Emergent facilities have processes in place to address the hazards posed by storage and transportation of refrigerated merchandize.

Emergent has a corporate-wide framework for updating and tailor the Emergency Response Plans (ERP) for each facility and include the necessary emergency scenarios involving neighboring communities, with the respective communication means are developed per the corporate guidelines. Presently, all the facilities had obtained the local permits. generally, the fire protection systems in the warehouses have been designed to local regulations and based on GIIP. The facilities maintain close contact with the local fire department. During the appraisal visit, it was observed that the fire protection systems were well maintained and in good operational conditions.

Transportation of materials and products:  all transportation operations are owned by the local company, or it is sub-contracted to specialized companies with safety and verification protocols. Emergent acknowledges and addresses the risks to communities resulting from of transport-related activities by i) delivering specialized training to drivers on defensive driving, ii) implementing safe transportation practices and emergency response, iii) conducting vehicle inspections before starting a journey, and iv) performing real-time GPS monitoring to all transportation units, verifying the use of designated parking and rest areas, and compliance with speed limits. Based on the above, and to further enhance the company’s safe transportation practices, Emergent will develop and implement, as part of ESAP #9, a “Corporate Transportation Manual for Community Safety” or “CTM” to include training and awareness in pedestrian safety, in emergency response for road accidents potentially affecting communities, and in the code of conduct and GBVH prevention in in resting areas or locations where drivers engage with communities.

Security Personnel.

Emergent facilities will be within industrial zones and will provide their own security service, and normally additional security service provided by the industrial park or free zones.  Emergent generally employs unarmed security personnel for access control and guarding of property, however, in some facilities in Brazil the security personnel is armed. As part of this project, and guided by IFC’s safety and security management guidelines, the company will assess risks posed by the proposed security arrangements and develop and implement a Security Management Plan (SMP). The SMP will include a training module for company’s management and security personnel and be aligned with PS 4 (ESAP #10).

The Company conducts stakeholder engagement and consultations as part of the environmental licensing process when required by local regulations, for example in Chile, DR and Peru. Emergent maintains positive relations with stakeholders in the areas of influence of its business units and companies by providing social support in education and cultural initiatives. At the local level, each facility has a community relations and corporate social responsibility departments with the main objectives of providing resources and know-how to the neighboring communities.

To ensure adequate stakeholder engagement, as per ESAP #11, Emergent will develop and implement a PS compliant “Corporate Stakeholder Engagement Framework” and “External Grievance and Communication Mechanism” to receive, track and address inquiries, concerns, and complaints related to the Company’s social performance from affected stakeholders and communities. The mechanism should be culturally appropriate and readily accessible, allowing adequate channels (including anonymous and confidential) and at no cost for claimers.

Contact Person: Ricardo Jacob  

Company Name: Emergent Cold Latam Holdings LLC

Email& Phone: rjacob@emergentcold.com / +55 (11) 99129-9240