This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Based on information reviewed by IFC, the proposed project will 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 key E&S risks and issues associated with this project include (i) that the client’s existing E&S management system and staffing evolves in scope to assess and manage risks of new and expanded operations in line with IFC PSs including matters related to any land acquisition; (ii) assurance of fair and safe working conditions in line with IFC PSs and legal requirements for all existing owned operations, supply chains and new operations that may be acquired using proceeds from this investment; (iii) that the company’s own farming and processing operations are managed in accordance to the requirements of the IFC PSs and World Bank Group EHS Guidelines; and (iv) that any and all expansion in the company’s supply chain of fruit from new origins is subject to the existing sustainability standard requirements as are found in WFIL’s current supply chain. 

  The Group has developed an overarching strategy, the 2020 Westfalia Fruit International Environmental Strategy which has been adopted by the company’s board as well as a Research, Technology and Environment sub-Committee that oversees the Groups actions with respect to matters of sustainability. The group has developed a comprehensive set of policies that govern its actions with respect to the specific environmental and social risks and impacts associated with its operations. These include an environmental policy, an Ethical Policy, a Health and Safety Policy, a Human Rights Policy Statement, an Anti-Bribery and Corruption Policy, a Whistleblowing policy, a Preventing Unseen Labor Exploitation Policy, a Policy on Forced Labor within the supply chain, a Responsible Recruitment Policy, a Child Labor Policy, a Positive Work Policy and a Grievance Procedure.

Risk identification and assessments, both of WFIL’s own operations and those of its suppliers, are undertaken on a regular basis in support of the above policies. Assessments vary according to the nature of the asset; those required of warehouses and distribution centres will differ to those applied to orchard development or expansion. For example, structures located in industrial areas (such as would be used for ripening and storage) are subject to assessment based on planning/local siting and building code and permit requirements (including life and fire safety, waste separation and management). Orchards are assessed for availability of land, absence of sensitive biodiversity areas, water availability (using such tools as WWF Water Risk Filter and compliance to host nation law and regulation governing extraction of the same). Operations are also assessed against the requirements of voluntary sustainability standards as all operations will ultimately need to demonstrate compliance to the same.  Risks and impacts arising from non-routine incidents and commensurate emergency preparedness and response actions are addressed in the company’s Environmental Management System (EMS). In addition, there is a Crisis Management Plan in place.

The operation of actions, programs, and procedures to avoid, manage or mitigate identified risks is led by the Group Safety and Environment Executive (who is responsible for Health and Safety, Food Safety and Sustainability) and the EHS staff and management (including those responsible for Human Resources) located in the UK and in major fruit origins. For example, the lead on sustainability based in South Africa has a remit that includes promotion of water efficiency; their counterpart in Chile drives initiatives around carbon footprint. Westfalia Technological Services, based in Limpopo, South Africa, is the research division of Westfalia Fruit and the largest privately funded subtropical fruit research organization in the world. It is staffed by a team of scientists and technicians who focus on varietal development, innovation and environmental matters including those that drive resource efficiency in primary production. Supplementing these teams are experienced partners with whom the company works to measure itself against recognized protocols: for example, The Carbon Trust and the World Resource Institute Guidelines to determine the greenhouse gases (GHG) attributable to its orchard operations in South Africa and distribution business in the UK.

The Westfalia EMS, certified to ISO14001:2015, pertains to its UK operations, and holds all managers responsible for the environmental performance of their business units. Senior management is required to report on environmental issues to the Westfalia Research, Technology and Environment sub-Committee of the board on an annual basis. The group’s policy on health and safety (H&S) is aligned to ISO 45001, and the H&S management system designed and implemented to support the objectives applies to all employees, contractors, visitors, and other stakeholders with whom WFIL engages.  In addition, and with regards to corporate governance, there are sub-committees dedicated to audit and risk, remuneration, nomination, and governance, social and ethics and health and safety.

With regards to risk and impacts in the company’s supply chain, there is full and complete certification of the company’s supply chain to recognized voluntary sustainability standards (VSS). Such VSSs require actions to address a wide range of E&S risks and impacts and include GlobalG.A.P., GlobalG.A.P. Risk Assessment on Social Practice (GRASP), Rainforest Alliance, Fairtrade and the Sedex Members Ethical Trade Audit (SMETA social accreditation). In addition, there is a requirement to comply to WFIL’s customer requirements such as British Retail Consortium (BRC) standards, individual UK and European retail sustainability standards (for example, Field to Fork) and certification to management system standards for food safety (such as the International Featured Standard (IFS) Food, a Global Food Safety Initiative (GFSI)-recognized standard for certifying the safety and quality of food products and production processes, and organic standards such as those found in EU regulations. See PS6 below for more details on the company’s oversight of its supply chain.

Key Performance Indicators (KPIs) are set on an annual basis. Progress towards achieving them is regularly monitored and measured and reported to management and the board. Example KPIs that were reported to the board in August 2022 included results from external audits of certified management systems, consumption of electrical energy per tonnes of fruit sold, amount of electrical energy generated, volumes of waste diverted from landfills (see PS3 below for more details). Both WFIL operations and suppliers are subject to audit of their E&S performance and compliance to applicable requirements. WFIL has its own auditors in key supplier countries (such as South Africa and Peru); in other countries, that supply smaller amounts of fruit, the company hires locally based, third party auditors. Results from audits are reviewed by sustainability and EHS leads and if needed, timebound corrective actions are developed. Results are shared with the board.

In summary, the combination of policies, procedures, programs, and outcomes as outlined above, along with the fact that the avocado supply chain is 100 percent certified to credible, recognized international sustainability standards, demonstrates compliance with the requirements of this performance standard.          

 The Group employs approximately 7,500 people throughout its global operations. Each country operation has its own h uman resource’s function that is responsible for demonstrating compliance with applicable country labor law and regulations. Written contracts, describing roles and responsibilities, rights and entitlements are provided to all workers, contractors and third parties supplying labor to the company. Contracts also contain relevant information on working conditions and terms of employment, non-discrimination, sexual harassment/gender-based violence, access to collective bargaining and equal opportunity, access to a variety of grievance mechanisms (online, including anonymous access, drop boxes, etc.).  The provision of such facilities is audited on a regular basis.   A Whistleblowing hotline is accessible for temporary and permanent workers; the aim of the hotline is to report workplace dishonesty, while remaining totally anonymous. This hotline is managed via the Westfalia group in South Africa and is communicated down to the relevant HR Business Departments within the group if a complaint is raised.                                       

WFIL is committed to acting under the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work. The company has developed and embedded a human rights policy framework that addresses human rights in its own operations and in that of its suppliers. PS1 above lists many of those policies.

The aforementioned Environmental Strategy also requires management and oversight of the people employed by the company; for example, KPIs such as tracking the number of training hours provided, the accident frequency rate, staff retention percentage, and, more recently, actions related to Covid-19 are used to drive performance in this area.

The labor and working conditions in the large and diverse supply chain is the greater risk faced by the company. To avoid, manage or mitigate such risk, the company has been conducting risk assessments of its suppliers since 2012; current assessments (using the company’s Ethical Risk Assessment Tool) use a combination of country-level information sources, audit results, SEDEX, Global Slavery Index, International Trade Union Confederation (ITUC) and information from the US Department of Labor’s Bureau of International Affairs or ILAB. Results are used to assess origins as ‘green,’ ‘amber’ or ‘red’; green allows the grower to supply with no further action, amber requires further clarification on ethical hotspots i.e., grievance, recruitment of labour, transport, and accommodation, and red are deemed not currently fit for supply and further investigation / discussion is required for them to be considered as suppliers. WFIL suppliers from countries deemed high-risk are ethically audited to grower level by third party auditing bodies. For example, in South Africa suppliers undergo Sustainability Initiative of South Africa (SIZA) audits as per the frequency determined by the auditing body or Rainforest Alliance audits, and in other countries, suppliers undertake SMETA, Fair for Life, Rainforest Alliance, and GRASP on an annual basis. WFIL undertakes third party SMETA audits every 2 years. The company’s UK labor providers are Gangmaster & Labour Abuse Authority (GLAA) licenced and are independently third party audited on an annual basis.

Further, with regards to monitoring ongoing suppliers, as well as conducting the above audits, the company compiles supplier scorecards for each supplier at the end of the season review which includes compliance to Westfalia Fruit UK Ethical Policy. Ethical KPI’s are reported monthly to the Senior Management Team. The company also works with a service provider to make available a grievance mechanism to workers within the company’s supply chain. Workers from the companies that supply to WFIL can send information to WFIL on matters such as modern slavery, fair pay, health and safety, labor rights and freedom of association. Results can be viewed via a dashboard and follow up conducted as necessary. The company reports that, to date, 157 workers have provided anonymous feedback using this system; upon receipt of such, the company works with its suppliers to remediate issues as needed. This pilot approach is currently being rolled out to more medium and high-risk origins.

Other activities in this area involve the company engaging in platforms to promote better working conditions in supply chains at large. For example, they are a part of the Spanish Ethical Trading Forum, Ethical Trading Initiative (ETI) working group on Social Dialogue in Peru and &Wider, a platform for due diligence and monitoring of working conditions in the supply chain. In 2022 the company gained Stronger Together    

Business Partner Status, a multi-stakeholder, business-led initiative aimed at reducing modern slavery, particularly hidden forced labor, labor trafficking and other third-party exploitation of workers.

   The group makes use of innovation, new technologies and better agricultural practices to drive efficient use of inputs in its owned and operated orchards of avocados and to reduce the amounts of waste of non-fruit outputs associated with its distribution of fruit, ripening and processing operations. The company’s UK operations are certified to the ISO 50001:2018 energy management system (EnMS) which is used to drive efficiency in ripening, storing, distribution practices; operations in other parts of the world follow the outline/approach of these management systems but have not certified to them. For example, better packaging (such as modified atmosphere packaging film or MAP) prolongs shelf-life and reduces in-store wastage; new processing techniques (including high pressure processing or HPP) have reduced fruit waste as new by-products can be used as raw material in new products. The stones in avocados (historically a waste when making oil or guacamole) are now being ground into microbeads which can replace plastic microbeads in cosmetic applications.    

Overall, and as reported in its last sustainability report (from 2020), the group has increased its recycled waste by 28 percent and global water-use efficiency by 14 percent. For example, use of precision drip irrigation in South Africa, Portugal and Chile has reduced water use on those farms by up to 43 percent. Similar technology has been deployed at the Catandica farm in central Mozambique, the group’s newest farm, which will afford significant reduction in water use once the orchard matures and the trees bear fruit.  Use of mulch in the orchards further reduces water use (up to 50 percent per hectare in one farm in South Africa). Switching to a newly developed growth medium also reduces water use, promotes more efficient uptake of fertilizers, and being locally produced (i.e., proximate to the orchards) reduces the associated carbon footprint.

Summary results show that the group has reduced its carbon footprint per kg/fruit by just over 5 percent, reduced the amount of waste sent to landfills by 9 percent, liquid fuel use by 26 percent and electricity use by 4 percent. The group has short-, medium- and long-term goals with respect to sustainability; notably zero waste to be sent to landfills by 2025, achieve carbon neutrality, make the switch to widely recyclable materials and reduce water use by 50 percent per kg of fruit by 2030 and to have recovered their lifetime carbon by 2049. They currently generate six percent of their global electricity needs through use of solar technology. They utilize power purchase agreements or virtual power purchase agreements from green energy suppliers globally. Plastic packaging has been replaced by cardboard packaging; transit boxes for bulk products are reused. Pesticide use has been reduced following advances made by Westfalia Technological Services and use of Integrated Pest Management using biological controls is a requirement of the standards to which they certify; for example, widespread use of natural predators in some orchards in Chile and Columbia have negated the need to spray pesticides for over 10 years.

The company has completed its GHG emission assessment for the entire group operations (i.e., including those operations not subject to this investment) for 2020 and 2021. Results for scope 1 emissions (from use of fossil fuels, fertilizers, refrigerants, etc.) totalled 10,091 tCO2e for 2020 and 10,377 for 2021. For scope 2 emissions (from consumption of electricity) tCO2 for 2020 was 21,254 and 23,995 for 2021. The company also assess its scope 3 emissions (those associated with its purchased goods and services, including its fruit supply chain); they reported 840,337 tCO2e for 2020 and 790,252 tCO2 for 2021.

 Security Personnel. Depending on the risk situation in a particular origin, the company deploys third party security at its own facilities. These are recognized, international security companies, who adhere to the expected norms regarding those they employ and the measures they are allowed to take, while complying with national law and regulation. Risk assessments are conducted by ControlRisks (https://www.controlrisks.com/). The company will make available its community grievance mechanism to communities near to its operations to allow them to record any issues with respect to the conduct of security operations (see ESAP item #1).

Avocados from orchard to packhouse is undertaken by licensed trucking contractors or in WFIL’s own trucks. In both instances, vehicles are assessed against the company’s health and safety standards and those pertaining to food safety. The majority of fruit is transported on public roads.

   WFIL owns and manages avocado orchards and sources avocados from suppliers. Its own orchards are long established, located in lands long used for agricultural practices. The company has obtained certification to globally recognized sustainability standards for all of its owned operations and as such, implement sustainable management practices in their primary production of avocados.

Many of the suppliers of fruit to WFIL have done so for over a decade or more. Prior to being accepted as a supplier of fruit to WFIL, the prospective supplier must complete a supplier warranty and due diligence pack. The warranty covers multiple technical, environmental, and ethical areas and the due diligence pack contains policies, undertakings, grower information/traceability, information on allowable pesticide applications, post-harvest treatments and specific Westfalia Fruit supply requirements. Results are uploaded to the Westfalia Supplier Management System (WSMS) to be reviewed by an assigned technical manager. At a minimum, packhouses must have a current GFSI Benchmarked third-party food safety accreditation such as BRC, IFS Food, Food Safety System Certification (FSSC) 22000 or Primus GFS or if not held, a valid Hazard Analysis and Critical Control Point (HACCP) system must be in place. All packhouses are audited by Westfalia Fruit Technical/CSR team prior to commencing supply. All growers who supply Westfalia with fruit must have GlobalG.A.P accreditation, benchmarked to GFSI. Growers that have been identified in Worldwide Fund for Nature (WWF) high risk water regions need to be SPRING (Sustainable Program for Irrigation and Groundwater Use) accredited or to a standard equivalent such as Rainforest Alliance (RA), Sustainability Initiative of South Africa (SIZA) Environmental Standard, etc.

For supply to the UK all packhouses and growers must be registered on the SEDEX platform with Self-assessment questionnaire (SAQ) 100 percent complete. In addition, retailer specific standards and requirements may apply (depending on for which customer the supply is intended) such as accreditation to the Linking Environment and Farms (LEAF) standard; these are communicated to suppliers via the WSMS.

The full traceability and certification of the company’s supply chain, and its practices within its own fruit orchards, aligns with the objectives of this performance standard.  

  WFIL has mapped its many and varied stakeholders/interested parties. Following identification, they are ranked by the CSR Manager according to their degree of priority and their relevance to current company objectives, policies and conformity of product and services. The overall score is used to prioritize the adoption of any relevant needs or expectations. Based on the scoring output the CSR Manager in conjunction with the Head of Operations considers, develops, and implements the engagement approaches which outlines how the company manages and complies with the needs and expectations of the interested parties. Categories of interested parties include governments/regulators, shareholders, investors, customers, neighbors, employees, NGOs, insurers, suppliers, third party auditors, utility providers, packers/landlords and certification bodies. 

Many of the voluntary sustainability standards to which the company and its suppliers are certified require stakeholder engagement at the producer/farm level. The company also participates in collaborative Due Diligence with NGOs, customers and stakeholders on specific issues relevant to its operations. The company is currently developing a Global Community Partnership Plan through which all WFIL operations will engage with their local communities. Elements to be included are education, healthcare, water security, financial literacy, skills development; the overall aim is to have a program that targets the nine social goals of the SDG2030.    

The company’s website provides information and resources to all interested parties and can be used to provide inputs/contact the company (https://www.westfaliafruit.com/contact-us/). This is a more high-level mechanism to receive inputs; therefore,  WFIL will (i)revise its stakeholder engagement practice to ensure it engages with local communities near to its farming operations, and (ii) make available a community grievance mechanism, and publicize its existence, to ensure that communities, in proximity to its operations, are aware of the mechanism, its objectives, how complaints, including anonymous complaints, are handled, and how feedback is given to those raising issues. The community grievance mechanism will allow local communities to lodge complaints associated with company’s projects and operations, including with respect to issues such as harassment and gender based violence, transport of produce and the conduct of security operations.  This is addressed as ESAP item #1.   

Company Secretary.

Westfalia Fruit Group

42 Kings Hill Avenue

Kings Hill

West Malling

Kent

ME19 4AJ

Telephone: +44 13 224 2555