IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Policies. Somabis has not yet documented any E&S policies for its operations, other than the principles spelled out in the Employee’ Code of Ethics. This Code outlines ethical behaviors expected from all employees, such as mutual respect, cooperativeness, and fair treatment at work. Likewise, Somabis has not yet developed an E&S Management System (ESMS). Somabis will hire a qualified E&S consultant to develop and implement an ESMS consistent with the IFC PSs requirements, which will include (i) an E&S policy, (ii) a process of identification of E&S risks and impacts, (iii) E&S management programs as defined by the regulatory ESIA process and its Manual of E&S Procedures, (iv) organizational E&S function, (v) emergency preparedness and response, (vi) monitoring and reporting, (vii) stakeholder engagement and community grievance mechanism. Somabis will agree with IFC on the Terms of References (ToR) for this consultancy, including timelines for key deliverables. The scope of this consultancy will apply to the existing and the new facility. Performance-based requirements of this E&S Policy and ESMS will be Malian’s legal and regulatory requirements, IFC PSs and WBG EHS Guidelines (ESAP#1).
Environmental & Social Risk and Impact Assessment. Somabis holds a valid environmental clearance for its existing factory, delivered in 2018 by the “Regional Directorate in charge of Sanitation and Pollution Control”. To meet this regulatory requirement, Somabis prepared an E&S Impact Assessment (ESIA), in accordance with Malian legal and regulatory requirements. As per the environmental clearance’s Terms and Conditions (T&Cs), Somabis secured all required permits. A regulatory E&S audit was carried out at the current factory in December 2022. Key issues identified included the lack of organizational capacity to manage E&S risks and the absence of E&S Management Plans and Manual of Procedures. These gaps will be addressed as part of the above mentioned ESAP#1 and additional mitigation measures described in the below sections.
In 2022, Somabis acquired a new plot in Banancoro, rural commune of Sanankoroba, on a willing seller-willing buyer basis. The site is a 2.5 ha greenfield yard located in a new industrial estate under development and was intended by the previous owner for industrial activities. The land acquisition process did not trigger any economic or physical displacement. As per Mali’s regulation, Somabis will prepare an ESIA for this new factory. As part of ESAP#1, Somabis will develop an E&S risk screening and management procedure applicable to the operational phase of both its current and future facility, with a dedicated section for the construction phase of the new factory. Performance-based requirements for this risk assessment procedure will include Mali’s legal and regulatory requirements, IFC PSs, WBG EHS Guidelines, and Food Safety requirements. Based on this procedure, Somabis will prepare a PS-compliant ESIA for the new factory (ESAP#2). To ensure full institutionalization of food safety requirements in its food processing operations, Somabis started developing a Hazard Analysis and Critical Control Points (HACCP) system. Once developed, Somabis will certify its Food Safety Management System (FSMS) against ISO 22001. Somabis will share with IFC a timebound implementation plan for the FSMS, including copy of compliance verification audit once the system is effectively implemented (ESAP#3).
E&S Management System and Programs. As indicated above, Somabis has not yet developed any ESMS or an FSMS at its current facility. These requirements will be addressed as per ESAP#1 and ESAP#3. Besides, in the 2018 ESIA prepared for the current factory, an E&S Management Plan (ESMP) had been prepared but not implemented, as highlighted in the 2022 regulatory E&S audit. As part of the ESMS development (ref. ESAP#1), Somabis will ensure that the ESMP resulting from the E&S risks identification and assessment process and ESIA Study fully addresses the recommendations of the regulatory audit and includes a Construction’ EHS Plan (CEHSP) covering labor and OHS issues. A Manual of EHS Procedures will be prepared to formalize the ESMP’s mitigation measures. The FSMS will be developed with the support of a consultant and include the relevant Standard Operational Procedures on sanitation, Good Manufacturing Practice (GMP), Staff hygiene and training, and Customer complaints mechanism.
Organizational Capacity and Competency. Somabis has not yet established an E&S organizational structure nor appointed designated personnel. It employs a E&S consultant, on an ad hoc basis, for the preparation of regulatory-required ESIA and ESMP’ monitoring reports. Likewise, Somabis outsources its Human Resource oversight to an external party. Going forward, Somabis will establish and maintain its internal E&S organizational structure with full time E&S capacity and competency, including assignment of OPEX/CAPEX for E&S workplan. Specifically, Somabis will recruit one qualified E&S specialist with clear responsibility and authority to implement the ESIA’s ESMP, the E&S Manual of Procedures (SOPs), including OHS procedures, and implement the IFC-compliant ESMS at the existing and planned production sites. An experienced HR officer will also be recruited to oversee HR and social related issues (ESAP#4).
Emergency preparedness and response plan. Somabis’ current facility is equipped with fire detectors, alarm systems, and fire-fighting equipment regularly maintained by the municipality fire brigade, and which were found in good working order. However, some raw materials were stored along passageways causing partial obstruction in case of emergency evacuation; this situation is owed to production targets exceeding original storage capacity. There is no formal or documented emergency preparedness and response plan (EPRP) validated by local authorities. To address these issues, Somabis will construct the new facility following recognized Malian building codes and life and fire safety (LFS) standards. As part of the ESMS (ref. ESAP#1), Somabis will develop an EPRP consistent with PS1 and GIIP and will collaborate with communities nearby its factories and local government agencies to respond effectively to emergency situations.
E&S Monitoring and Review. Municipality’s Civil Protection services perform E&S audits and controls on a quarterly basis and issue annual compliance certification. Going forward, Somabis will develop an E&S monitoring procedure which will specify Key Performance Indicators (KPIs), including OHS leading and lagging indicators, environmental resource (water and energy efficiency), pollution control (air emissions, noise, effluents monitoring, solid/hazardous waste management) and Food Safety KPIs (ref. ESAP#1). Somabis will ensure corrective actions are taken, as necessary, based on monitoring results.
Supply Chain Risk Assessment & Management. Somabis sources its production inputs (raw material) from the local market on a spot purchase basis. Key agro-commodities required for its operations include maize and wheat flour, sugar, vegetable fats and packaging (plastic and cardboard). Maize and wheat flour suppliers are based in Mali (e.g. Moulins du Sahel and Grands Moulins du Mali); sugar powder and syrup sugar is mainly procured from N-Sukala (Mali based sugar cane producer). However, as these local suppliers often cannot meet the demand, sugar and flour products are often imported from Brazil. To address PS2/PS6 supply chain risks, Somabis will develop a supply chain management system (SCMS) composed of (i) Supply Chain Sustainability Policy; (ii) Updated Supplier Code to align with IFC PS supply chain related requirements, including updating selection criteria for third-party suppliers of high risk commodities; (iii) scoping of options for third-party suppliers that can meet selection criteria, including options to source certified sugar and maize; (iv) internal training to commodity purchasing team to facilitate operationalization of SCMS; (v) request third-party suppliers in Mali to inform the client of any planned/actual conversion of natural habitats, with subsequent update to IFC of such changes (ESAP#6).
PS2: Labour and Working Conditions
Somabis has a workforce of 107 direct workers, which includes 12 managers, 9 supervisors, 11 skilled workers and 75 unskilled workers. The headcount includes 27 female workers of which 2 are working in administration and have permanent contracts. Factory supervisors and staff in the administration and commercial functions have permanent contracts; the remaining laborers (approx. 70%) are temporary workers. There is also a pool of daily workers hired from surrounding communities for loading/unloading activities and facilities cleaning. Somabis expects that the new project will require approx. 96 additional positions.
Human Resource Policy and Procedures. Somabis has a Human Resources (HR) Manual and an ‘Employee Code of Conduct’ which respectively outline HR commitments and procedures, including ensuring mutual respect and a fair and equal workplace free from harassment. The HR manual broadly complies with PS2 requirements, except for gaps associated with commitments on non-discrimination and equal opportunity, prohibition of sexual harassment, freedom of association, procedures on prohibition of harmful forms of child labor and forced labor, documentation of employees’ contracts, grievance mechanism, and labor and OHS policies and procedures relating to workers engaged by third parties. As per the ESMS (ref. ESAP#1), Somabis will update its HR policies and procedures to align with PS2 requirements, including gaps identified during the IFC appraisal.
Working Conditions and Terms of Employment. Monthly minimum salary for low skilled employees follows the “minimum salary policy” defined by Malian Labor Authorities. All employees’ salaries are above the minimum wage defined in Mali. The factory operates on average 16 hours a day through two shifts (8am-4pm and 4pm-00am). A night shift (00am-8am) can be added based on production targets. Operational staff alternate in rotational shifts, whereas female workers do not work during the night shifts as required by Malian labor laws. Car shuttles are made available for the transport of employees. Administrative staff work 40 hours a week. Adequate changing rooms, toilets and shower facilities are available at the factory and respect gender sensitivities. Permanent and skilled workers have written contracts established in accordance with Malian labor regulations, which specify entitlements and obligations, including working hours, probationary period, remuneration package and leaves. There is however a certain number of unskilled workers who do not have any written record detailing their entitlements and obligations. In addition, the recruitment of daily workers is carried out through an informal process; cleaners and temporary laborers are community members and generally hired based on affinity or at the gate, with no recording. Somabis will develop record-keeping procedures, identify and register all employees and revise employee contracts in a manner consistent with Malian labor laws and IFC PS2 requirements (ESAP#7).
Grievance Mechanism. Somabis will roll out a grievance mechanism indicating (i) available channels to submit grievances (including separate channels for grievances related to sexual harassment, and for confidential and anonymous complaints); (ii) roles and responsibilities for treating and responding to grievances; (iii) timelines for taking action; and (iv) system to log, track and report grievances and their status in accordance with PS2 requirements (ref. ESAP#1). In addition, Somabis will (i) implement support services for affected workers (e.g., medical services, counseling, legal assistance, job reassignment, etc.); and (ii) appoint a committee to monitor, channel and resolve received grievances. This procedure will be documented, and appropriate worker sensitization undertaken through in-person sessions and dissemination of information on online platforms and notice boards. Staff involved in managing sexual harassment grievances will receive additional specialized training.
Workers Organizations. Malian labor law mandates that employee representatives be selected for a minimum of 10 employees. As part of its HR policies update (ref. ESAP#1), Somabis will document a procedure demonstrating its support to freedom of association.
Workers Engaged by Third Parties. Somabis does not work with Labour Agencies in its operations. For the construction of the new facility, it will use local contractors as manpower under the supervision of the respective modular equipments suppliers. Other short-term contractors include technicians visiting for non-routine works, such as specialized maintenance, retrofits or upgrades of machinery and equipment. Somabis will incorporate its E&S requirements into relevant contractors’ terms and conditions, for compliance with E&S clauses on labor, OHS, Child labor, Forced labor in accordance with PS2 objectives (ESAP#8).
Occupational Health and Safety. Somabis’ biscuit production line is designed with adequate protection barrier along the baking oven through to the cooling and packing stations, allowing safe operations and maintenance. Workers are provided with personal protective equipment (PPE) such as hygienic caps, gloves and working overalls according to their assigned workstations. Workplace noise monitoring conducted as part of the regulatory audit confirmed that levels are compliant with WBG EHS Guidelines. However, lighting is insufficient in the production hall and workplace temperature is noted to be significantly high during the hot season. Somabis has started improving illumination by adding more lights and started installing engineered humidifiers to maintain an adequate room temperature in the production hall. As part of IFC financing, Somabis will develop procedures for good housekeeping and material handling, heat stress prevention and management with assigned responsibilities in the ESMS (per ESAP#1); measures will include implementing work/rest schedules with adequate breaks; sensitizing on hydration and training the workforce on heat stress prevention procedures. Furthermore, as highlighted in the PS1 section, Somabis has not yet developed any OHS management system, policies, standards or records. As part of its ESMS (ref. ESAP#1), Somabis will develop an OHS Management System which will include procedures for hazard identification, risk management, occurrence reporting, and performance measurement. The latter two are further specified under ESAP#5. In addition, it will develop (i) OHS training and performance assurance for workers, supervisors and management team and (ii) periodic medical surveillance program for workers. These programs will be developed in line with Mali’s OHS laws, WBG General EHS and GIIP. (ESAP#9)
PS3: Resource Efficiency and Pollution Prevention
Resource efficiency and greenhouse gas emissions. Somabis requires limited amounts of water given the dry process of its biscuit production. Water is obtained from the municipality’s water supply network. Total consumption in 2022 amounted to 4.4 m3/day, characterized by limited water quantity for dough preparation and for sanitation or equipment cleaning. At the new site, Somabis has already drilled a borehole for water supply with a sustainable yield of 5 m3/day and has secured water abstraction permit from the Ministry of Environment and Sustainable Development. Electricity is supplied from the local grid at the current and planned factories; diesel is only used for backup generators in case of power outage. Somabis does not systematically monitor its water/electricity consumption. As part of the ESMS (ref. ESAP#1), Somabis will develop an energy efficiency policy and will implement relevant energy saving measures, including adoption of LED lights and allowing natural light to the extent possible inside its facilities (ESAP#10).
Annual greenhouse gas (“GHG”) scope 1 and 2 emissions include electricity consumption, vehicle fuel consumption and diesel for back-up generators. Total emissions, including those generated by the new factory are estimated to be less than 25,000 tCO2e per year, mainly because generators are only used during power outage (less than 500hrs/year), and the vehicles fleet do not cause significant emissions.
Air emissions, effluents and noise monitoring. As Somabis biscuit production process is a dry process operation, there is limited process water (effluents) other than sanitation and cleaning. The factory allows stormwater to discharge into external drains. Sanitary pits are emptied by a licensed contractor for discharge into designated municipal sewage treatment facilities. The ESMS will incorporate a wastewater management plan. The two on-site diesel generators and vehicles are considered the main sources of air and dust emissions as well as noise nuisance. Ambient noise monitoring in the neighborhood was conducted as part of the latest regulatory E&S audit in Dec 2022 which confirmed that levels comply with WBG EHS Guidelines.
Management of solid and hazardous waste. Solid waste generated by Somabis’ operations include food byproducts and general waste, such as packaging. Food wastes are reprocessed for livestock feed. The remaining general waste, including empty non-hazardous containers and packaging, are stored in a designated area, collected periodically and sent for disposal by authorized service providers to the municipal waste disposal facility. Main hazardous materials include lubricants and fuels. Somabis will implement an environmental management plan for solid and hazardous wastes (ref. ESAP#1).
PS4: Community Health Safety and Security
Food safety management system. Somabis has organized disinfection posts at the production hall entrance and staff are provided with adequate PPEs. However, there is still a risk of foreign bodies inclusion in the products or other contamination due to the lack of adequate process controls. Somabis will implement a HACCP system (ref. ESAP#3) which will be certified against ISO 22001 and implement required control measures. The new factory will be designed and constructed following modern technology, recognized building codes, food safety and life and fire safety standards.
Traffic Safety. Somabis’ existing factory is located in a residential surrounding. It is well fenced and operations are confined within the boundaries. Traffic at this factory includes supply and distribution logistics by company trucks or third-party transporters. The new site will be located in an industrial setting away from neighboring communities thus will not present community traffic risks. As part of the ESMS (ref. ESAP#1), Somabis will develop a Road Safety Management Plan for both the current and future sites, applicable to its own transport fleet and to its suppliers and distributors. The plan will address driver fitness, competence and training, speed limits, emergency response for road accidents, vehicle maintenance and safety standards.
PS6: Biodiversity Conservation and Sustainable Natural Resources Management
Somabis sources its raw materials (e.g. maize flour and sugar) which are produced in regions (e.g. Brazil) where there is a contextual risk of significant conversion to natural and /or critical habitats. Sourcing in Mali are considered low risk for significant habitat conversion. Though land in Mali is assigned to sugar concessions for future development, this development has not proceeded as planned due to various issues. Somabis will monitor this and update IFC accordingly should any changes in this status be noted. Commodities imported from Brazil are purchased on a spot market as needed to fill gaps in local supply. Somabis varies its third-party suppliers based on demands, availability and price. As per ESAP#6, Somabis will scope options to source from certified/verified suppliers that align with PS2/PS6 supply chain related requirements and update its supplier selection criteria to include PS alignment when choosing future third-party suppliers. The supply chain mitigation and proposed corrective actions associated with these risks are described under PS1.
