PS5 on Involuntary Resettlement was not deemed relevant because all the facilities under the scope of the project are within landfill sites that are operating for more than 10 years with no identified related issues. A biodiversity screening of the relevant sites did not identify risks that need to be managed in accordance with PS6 on Biodiversity Conservation and Sustainable Management of Living Natural Resources given that the footprints are on degraded habitats. PS7 on Indigenous Peoples and PS8 on Cultural Heritage were not considered relevant because the project does not impact such aspects. 

If IFC's investment proceeds, IFC will periodically review the project's ongoing compliance with the Performance Standards.            

This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). The project is considered to have limited adverse E&S impacts that are few, site-specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP). 

The main E&S issues reviewed at appraisal and which will be discussed in the subsequent section on E&S Mitigation Measures are: i) the adequacy of the company's E&S management systems (ESMS) and organizational capacity at both corporate and asset-level, and relevant procedures and plans to screen, assess, and manage the limited adverse E&S risks and impacts of its operations in line with IFC PSs; ii) environmental licenses and other permits; (iii) management of project-induced risks to affected communities and of the Environmental, Health and Safety (EHS) performance of contractors in accordance with GIIP; iv) workers' grievance management, including measures to address Gender-based Violence and Harassment (GBVH); v) management of hazardous materials, solid and hazardous waste and wastewater; vi) community health and safety including security management; and (vii) stakeholder engagement and grievance mechanism.                

The company has a corporate-level integrated Quality, Environment, and Health & Safety Management System (QEHS-MS) managed from the headquarters in São Paulo and is under review by a corporate team with the assistance of an external firm. The site-specific EHS procedures are prepared according to the general guidelines of the corporate procedures. The efficiency of the systems is monitored through internal audits that are carried out on an annual basis.

Operations-level QEHS-MS are being implemented in São Gonçalo and in Barra Mansa landfills, including the management of the LROs. Currently, management procedures and controls applied in the Jaboatão landfill consider the company's general guidelines, however the local E&S management system procedures are not formalized although under final phase of implementation. It is noteworthy that the MRF, in spite of being part of the Jaboatão landfill area, must have its own QEHS-MS. 

As per ESAP #1, Orizon will review and enhance the corporate-wide and relevant site-specific QEHS-MSs in line with PS1 requirements, WBG General and Waste Management Facilities EHS Guidelines. The updated QEHS-MS will include, among others, an E&S risks and impacts screening and identification procedure to better inform the decision-making process and the identification of the mitigation measures or future acquisitions or development of new operations, business lines, or material changes to existing operations to identify risks and propose mitigation measures as per IFC PS1. This procedure will be applied for the development of the future MRF in São Gonçalo landfill. 

Policy

As a listed company since 2021, Orizon´s holding has adopted a set of Environmental and Social Governance (ESG) practices, including a Risk Management Policy (that considers E&S risks) and priority Sustainable Development Goals (SDGs). 

At the corporate level, Orizon´s QEHS Policy, approved in 2020, defines its strategic guidelines and principles that include, among others, meeting legal and other relevant requirements, engagement with stakeholders, mitigation of EHS risks and impacts, and promoting the development of its workers through consultation and participation. The Policy disclosure or awareness/training is part of the onboarding of employees and integration with workers from contractors and is also available through internal communication murals and Corporate TV, available in the main areas accessed by the workers. 

Identification of Risks and Impacts 

All landfills presented regulatory ESIAs for their environmental licensing processes (in 2005 for Jaboatão landfill, 2008 for Barra Mansa landfill, and 2010 for São Gonçalo landfill). The LRO in Barra Mansa was presented as part of the project in the landfill ESIA and it is included as one of the landfill´s Operations Permit (OP) conditions. The OP for Barra Mansa and São Gonçalo landfills are under renewal process and these landfills have been subjected to Infraction Notices in 2021 for not meeting certain requirements that did not cause a material impact on the operations of the assets. The Jaboatão MRF is expected to start operations in mid-2022 for which the company will obtain an OP. The environmental licensing processes of the MRF in Jaboatão, the future MRF in São Gonçalo landfill, and for the LROs in São Gonçalo and Barra Mansa landfills did not require the preparation and presentation of separate stand-alone ESIAs from those of the respective landfills. 

As per ESAP #2, Orizon will prepare a Focused E&S Assessment (FESA) and resulting E&S management plans (ESMP) for the new MRF in Sao Goncalo in line with IFC PS1, relevant EHS Guidelines, and the Updated QEHS-MS.

As indicated above, the footprints of the facilities to be financed by the project are on degraded habitat categorized as Modified Habitat, per PS6 provision. Past and future conversion of Natural Habitats (NH) for both the São Gonçalo and Barra Mansa landfills, unrelated to the implementation of the project, will be compensated through forest restoration programs, as part of the landfills' OPs. When finalized, forest restoration will exceed current and planned NH conversion.

During the preparation of the ESIA for the São Gonçalo landfill, two archaeological sites were identified within its Area of Influence (AoI). Although these are not directly impacted by the project, the relevant authority required the company to conduct monitoring programs, which are in progress. As part of the updated QEHS-MS (ESAP# 1), the company will develop and implement a Chance Finds Procedure, including training of its workers and contractors' workers engaging in groundworks, as per legal and PS8 requirements.

Management Programs

EHS Management Programs are in place as required by the Environmental Permits for the landfills. At the corporate level, there are a series of procedures in the QEHS-MS that guide the management programs and are applied according to the specificity of each unit. 

As part of ESAP #1, Orizon will review and improve its EHS Management Programs, including but not limited to: development and implementation of management plans for emergency preparedness and response, integration of the E&S requirements into contractor's procurement and contractual obligations, and management of contractors' E&S performance, hazardous, water, odor, noise, traffic management, community health and safety, security, Stakeholder Engagement Plan (SEP), Chance Find Procedure, related KPIs and targets; of monitoring programs, and training to employees and contractors.

Monitoring and Review

As part of the ESAP #1, the company will establish procedures to monitor and measure the effectiveness of the E&S management programs under the updated QEHS-MSs. Where appropriate, Orizon will consider involving representatives from affected communities to participate in E&S monitoring activities. In addition, documented monitoring results will be used to identify and implement corrective and preventive actions in the amended management programs and plans. Senior management will receive periodic performance reviews of the effectiveness of the QEHS-MS, based on systematic data collection and analysis. Based on results, senior management will take the necessary and appropriate steps to ensure the intent of the project´s policy is met, that procedures, practices, and plans are being implemented, and are seen to be effective.

Organizational Capacity and Competency

Currently, the management of E&S matters is under the responsibility of the corporate New Business Director and they are managed in a decentralized manner by the legal area, HR, and communications. 

The LRO facilities financed under the project are managed by the same team managing the EHS matters in the landfills: one environmental supervisor, one environmental analyst, and one safety technician per unit, in addition to trainees. The connection with the corporate area is made through the operations directorate by the operations manager, who is assisted by two supervisors (environmental and operations supervisors). There is no specific responsibility for stakeholder engagement, and this function is performed by the environmental supervisor and by the OHS analyst. Site-level EHS personnel demonstrated an adequate level of knowledge, skills, and experience required to perform their functions following local legal requirements. The EHS team for the MRF in Jaboatão includes one safety technician; however, as per H&S regulation, at least two safety technicians would be required. Going forward, as per ESAP #3, Orizon will (i) hire a social specialist at the corporate level with qualification and experience with the PSs; (ii) hire at least one environmental specialist and two safety technicians in the MRF in Jaboatão in accordance with the Brazilian legislation; and (ii) ensure that sufficient staff and contractor resources are allocated to E&S management at all times and receive training as per legal requirements and applicable PS provisions.

Emergency Preparedness and Response

The Emergency Preparedness and Response Plans (EPRPs) for Jaboatão, São Gonçalo and Barra Mansa landfills comprise emergency scenarios such as fire, explosion, chemical spills, leachate and H2SO4 spills, diesel spills, electrical shocks, etc. 

As per ESAP# 4, Orizon will review and improve its EPRPs for the assets to include all risk scenarios, including for geotechnical aspects, in line with IFC PS, WBG General and Waste Management Facilities EHS Guidelines, and GIIP. The company will disclose the EPRPs to employees and contractors´ workers, affected communities, and to local authorities, implement periodic drills including key stakeholders from authorities and communities, as well as contractors‘ workers.

Waste Pickers

Waste pickers are not directly working with the project or the landfills. There are no impacts expected due to the project on cooperative of waste pickers or individuals and their livelihoods. The project will not impact the volume of wastes currently received by the landfills from the clients (municipalities and/or companies) and the project will not affect the wastes streams that are collected by the waste pickers.               

Working Conditions and Management of Worker Relationship

As of December 31, 2021 the Orizon had 1,043 employees (155 women and 882 men. The São Gonçalo and Barra Mansa landfills had 92 and 55 direct employees and 16 and 8 indirect workers, respectively. These people are also responsible for the LROs operations. About 280 additional workers will be hired for the MRF in Jaboatão operation at full capacity. Although the future MRF in São Gonçalo landfill is not detailed yet, the number of employees will be probably around the same as the MRF in Jaboatão. 

A Code of Ethics is in place at the corporate level, including a commitment to zero tolerance in the use of child, forced, or any other form of illegal labor, as well as sexual exploitation or human trafficking. There is zero tolerance of any abuse of power, discrimination, threats, intimidation, violence, or moral or sexual harassment are also clearly expressed. In case of non-compliance with the Code, a complaint can be made through the Complaints Channel, which is completely outsourced and available to all employees, community, suppliers, and business partners and assures anonymity. 

Overall good labor management practices were observed at appraisal. In general, working conditions comply with local legislation and the terms are negotiated with the Labor Unions (Sindicato dos Profissionais e Trabalhadores em Atividades de Defesa do Meio Ambiente in RJ, and Sindicato dos Empregados de Empresas Prestadoras de Serviços, Asseio e Conservação in PE).  

As required by ESAP #6, Orizon will improve the HR procedures to: (i) make explicit statements and ensure equal opportunity and fair treatment; and (ii) strengthen the awareness program regarding the internal grievance mechanism in case its use has not been effective. All documents will be in alignment with Orizon's policies, and PS2 requirements.

Occupational Health and Safety

Orizon conducts regular OHS reviews to ensure compliance with local regulations and the adoption of good practices. Responsibility for OHS management on the sites is of the Operations Managers, with the support of OHS personnel, under the supervision of the corporate EHS team. Results from monthly OHS inspections of each unit are shared with the corporate team. All OHS accidents are investigated by the OHS team and, when applicable, a Workplace Accident Communication Form is issued to the Ministry of Social Security. Internal Audits are conducted on a yearly basis. 

There is an Occupational Risk Prevention Program (Programa de Prevenção de Riscos Ambientais, or PPRA in Portuguese) for the MRF in Jaboatão which includes risks identification and management procedures per function. Both São Gonçalo and Barra Mansa landfills have identified key OHS and management procedures in each operation, through the PPRAs and related OHS Control Program (Programa de Controle Médico de Saúde Ocupacional, or PCMSO). Main OHS risks identified for both landfills, are exposure to noise, chemical, physical, and biological agents. Inherent OHS risks and specific classes of hazards of the LROs units are managed through the landfills' PPRAs and related PCMSOs. 

The company has a policy and procedures in place for contracting suppliers and services providers, including guidelines for the initial evaluation and qualification of third parties. These are carried out by the procurement unit. After approval, the contract is managed by the requesting unit. The Code of Ethics and relevant policies are formally shared with contractors and their workers, who formally agree to follow them. As per ESAP #1, going forward, Orizon will integrate the E&S requirements into the contractor's procurement and contractual obligations, as well as manage contractors' E&S performance, at both corporate and operations-level QEHS-MS.

Orizon will also, per ESAP #7, conduct an analysis of OHS monitoring results per site against PS2 requirements and benchmarking and proceed with Plan-Develop-Check-Act (PDCA) cycle. 

Orizon has put in place good COVID-19 prevention and mitigation controls and monitoring protocols. Business operations have not been substantively impacted by COVID-19. No retrenchment, salary reduction or changes in contracts were applied.          

Orizon implements programs and procedures focused on avoidance of pollution, and to enhance energy and water efficiency. The MRF in Jaboatão will use water from a groundwater well for washing and sanitary purposes. Orizon has a permit for land perforation and search of water for the MRF but no permit for water abstraction (such permit will be obtained before the well is installed and only in the case water is found). The MRF will have segregated drainage systems from the Jaboatão landfill. In addition, there are plans to install a rainwater collection system for the MRF to reduce the use of groundwater resources. In the LROs, clean water is used for RO membrane washing to improve its efficiency. There is no connection with public water systems at the landfills where the four sites are/will be located, and they use water provided by third-party trucks (potable water is bought in 20-L gallons). Wastewater from the MRF and LROs will be treated in the leachate treatment facilities and is reused for industrial purposes. Wastewater treated by the LROs will be reused for watering roads and dust control. The leachate concentrate will be stored in lined ponds and sent back to the landfills. In São Gonçalo landfill, treated wastewater is partially discharged into the surface water body (25%) and is partially reused (75%), meanwhile, the Barra Mansa landfill reuses 100% of the treated wastewater. The landfills maintain a daily visual inspection procedure to avoid leachate pond overflow. The landfill operations, drainage design, and slope maintenance were developed to maximize run-off and hence reduce water infiltration in all the landfills. Sanitary and industrial wastewater generated by the MRF in Jaboatão will be treated by the landfill´s wastewater treatment plant. 

Greenhouse gas (GHG) emissions inherent to the project´s operation are expected from energy consumption in the MRF and LRO facilities, in addition to heavy vehicles operations in the case of the MRFs, and estimated to be about 1,694tons CO2eq/year. The three landfills have biogas collection infrastructure installed. In the São Gonçalo and Barra Mansa landfills, the biogas is sold to a third-party operator, and, only, excess biogas (approx. 62,172 kNm³/year and 22 % of total of the Orizon’s landfills) is burned in the centralized flares. In the Jaboatão landfill, the biogas is used to fuel a power plant operated by a third-party. Orizon´s total generation of GHGs in 2021 was estimated in 1.65 million tons of carbon equivalent. Four Orizon´s landfills, including Jaboatão and São Gonçalo, are registered under the UN Clean Development Mechanism (CDM), and the Certified Emissions Reductions (CERs) are created and verified under this program. The registering process for the Barra Mansa landfill CDM and CERs is ongoing.

The MRF in Jaboatão will be provided with energy from landfill's biogas power plant generation. In São Gonçalo and in Barra Mansa landfills, energy is provided by the grid. Diesel fuel stand-by generators are installed in all landfills. 

Monitoring of landfills stability is conducted through geotechnical instrumentation, piezometers, and surface topographic marks for soil settlement measurements. Independent assessments are conducted as part of Orizon´s operations management system and as a requirement of the environmental agency in the case of São Gonçalo and Barra Mansa landfills.

No hazardous wastes are expected to be handled during MRF operations. Leachate treatment facilities handle chemical products as part of their operations, such as sulfuric acid for pH control, as well as biocides. It was observed during the site visits that some hazardous wastes generated by the landfills' activities were not stored in accordance with Brazilian regulations. Hazardous wastes storage areas and diesel AST (Aboveground Storage Tanks) loading areas were found not to be included in inspection checklists. Some chemical products storage areas were not paved and with secondary containment. Sulfuric Acid loading and unloading areas were paved and provided with anti-acid floors. 

Impacts to ambient noise are not expected in the MRF nor in the LRO treatment facilities, however, in the São Gonçalo landfill, diesel generators installed close to the LRO area are a source of noise with higher level of noise measured in July 2021. No baseline noise assessments were conducted as part of the landfills´ ESIAs and the environmental licenses do not require noise monitoring programs. Although at the corporate level, a procedure on ambient noise monitoring exists, its application appears to be inconsistent. 

Dust control is carried out through watering of roads. In Barra Mansa landfill, the company agreed with the closest community schedules for truck movements. Odor is controlled by operational procedures, such as the daily covering of residues with soil, and periodic cleaning of access roads and drainage devices.

As required by ESAP #8, Orizon will (i) define KPIs, targets, and measures to reduce the use of water and energy, and monitor and demonstrate efficiency regarding its leachate treatment; (ii) develop and implement a water balance model for the MRF in Jaboatão. Additionally, as per ESAP #9, the company will: (i) improve hazardous materials and hazardous waste management in the three landfills to comply with Brazilian regulations and PS3 and consistent with GIIP as per relevant EHS Guidelines, including impermeable paving and secondary containment in hazardous waste/hazardous material; and (ii) monitor and mitigate impacts on ambient noise. Enhanced management programs implementation will ensure proper dissemination, training, responsibilities, supervision, and audits as well as corrective actions, including wastes and hazardous materials managed by contractors.                         

Contextual security risks in the peripheral urban areas in Jaboatão and São Gonçalo are high, while in Barra Mansa, a rural area, the security risks are lower. In Jaboatão and in São Gonçalo landfills, Orizon uses the security services of outsourced companies, which must be registered and authorized by the federal police, according to legal requirements. Guards working during night shift are armed. Barra Mansa landfill is secured by direct employees and there is no use of firearms. As per ESAP #10, the company will develop a Security Management Plan in line with PS4 to manage any relevant risks.

There are no approved firefighting systems in place yet related to the MRF at Jaboatão, although firefighting equipment is in place. The L&FS Permit for the Jaboatão landfill expired in December 2021 and was subsequently renewed. Even though São Gonçalo and Barra Mansa landfills have L&FS systems in place, the permits were not issued by the relevant authorities yet. A fire destroyed the main administrative building of São Gonçalo landfill in 2020 and a container has been used while a new building is installed. 

In all areas, vector control is carried out using specific techniques and procedures that include: i) isolation of the area through wire mesh, barbed wire fences, and/or live fences; ii) daily covering of residues: The destined material must not be exposed to the atmosphere for more than 24 hours and must be covered daily by soil from a licensed quarry. Periodic cleaning of access roads and drainage devices prevents points that favor the proliferation of vectors, such as stagnant water and organic waste.