PS 5 is not applicable as no new land will be required as part of this project that would result in involuntary physical or economic resettlement; PS 7 and PS 8 are not triggered as there will be no impact to indigenous peoples or cultural heritage as operations – existing and/or potentially new operations – are limited to existing farming operations that will simply be converted from cultivation of one crop to blueberries. 

 This is a Category B project according to IFC’s 2012 Environmental and Social Sustainability Policy. The Project is expected to generate limited and site-specific E&S risks and impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. The key E&S risks and impacts include (i) those associated with new farm development, specifically having sustainable water supplies, and that any new infrastructure that is required to fully operationalize existing or new farms is designed and built in accordance with applicable regulation and does not significantly impact other water users; (ii) labor and working conditions of the large permanent and temporary / seasonal work force continues to be managed in compliance with South African laws and regulations and IFC PS2 requirements; (iii) security measures are undertaken in compliance with relevant requirements of the PS and law/regulation, and; (iv) for those farms located in areas of biodiversity importance (e.g. Alliance for Zero Extinction) do not expand farming operations or convert land beyond their long established border. 

  In 2018, United Exports was in the process of finalizing, formalizing, and adopting overarching policy statements defining its E&S objectives and principles to achieve sound E&S performance of its operations. Over the last four years, UE have continued to expand and codify its policies and made them available using their company internal portal information/communication system (i.e., intranet/portals) to all employees and those working for or on behalf of UE, including growers/suppliers. This comprehensive repository of policies, procedures, and practices includes company developed documents regarding sustainability, legal regulations, templates, etc., growers guides and SOPs, informational bulletins (on current issues, e.g., Covid-19 requirements), matters related to Broad-Based Black Economic Empowerment (B-BBEEE), Grievance/Whistleblowing, etc. These policies - already in existence back in 2018, such as those pertaining to fair labor (including those that comply with the requirements of SIZA - the Sustainability Initiative of South Africa), principles of environmental planning and land development, wildlife conservation, energy/water efficiency and human resources – provide a comprehensive framework for the E&S risk assessment and management of issues and impacts associated with UE’s operations. Based on IFC review, these policies are in alignment with PS requirements, WBG EHS General and sector-specific (Food and Beverage Processing and Perennial Crop Production) Guidelines and applicable laws and regulations of the jurisdictions in which such operations are being undertaken.

Identification of Risks and Impacts. As per the requirements of the above E&S policies (and expressly described in the E&S Responsibility’s policies and procedures), UE conducts both formal annual (and when needed) project-specific E&S risk and impact assessments. These identify, and keep current, assessments of those E&S risks and impacts associated with its operations. The policy and procedure also describe the inter- related elements of the company’s ESMS based on the risk assessments (e.g., corrective action plans, implementation of management plans, organizational capacity and competency, training, communication/engagement, monitoring, review, and reporting, both internally and externally). As part of the above process, UE continues to comply with the principles and criteria (P&C) of credible and recognized third party certifications, including GlobalGAP and SIZA (to which they have recently added the environmental requirements of SIZA to accompany the existing SIZA social/labor requirements). In sum, the scope of these standards covers the following: a commitment to implement an E&S management system, food safety, site/farm management, traceability/quality assurance, forced or bonded labor, child labor, freedom of association and collective bargaining, discrimination, harassment or abuse, health and safety, working hours, wages, benefits and terms of employment, healthy soil practices, water-use and energy efficiency, prevention of contamination to soil and water bodies, responsible management of waste, control of invasive alien plants, reduction in greenhouse gas emissions, integrated pest management, plant protection product management, fertilizer management, biodiversity and restoration of natural ecosystems.

Combined with UE’s risk assessment practices, these certifications complement a risk assessment practice whose scope meets IFC PS requirements for UE’s operations, including that for the supply chain that provides blueberries to UE from out growers, as these requirements also apply to such operations.

Examples or risks and impacts previously observed during the 2018 appraisal, and that remain relevant today, include those related to labor and working conditions, worker health and safety (including fertilizer and, when needed, pesticide management), appropriate use of natural resources (including soil/water management and integrated pest management - IPM), pollution prevention and waste management, and engagement with communities found near farming operations. Details on how the company avoids or manages and mitigates such impacts are found in the relevant sections below.

Management Programs. UE implements E&S management programs, including mitigation and performance improvement measures that address the above identified E&S risks and impacts of the project. The working relationships between the corporate head office and farms has been strengthened over the years with the use of grower’s portal that is a conduit for information/resources that reflect South African regulatory requirements, company-derived policies and practices and those mandated by certification standards and/or by customers. For example, the portal contains SOPs regarding the establishment and maintenance of a safe and healthy working environment, including the need to have farm-level programs led by senior farm management, provide guidelines and examples (that are created at HQ and that can be downloaded and implemented at the farm site) of a number of corrective actions/requirements for working on farms detail to need to provide and have workers wear appropriate clothing and personnel protective equipment (PPE), and that adequate signage alerting workers to hazards is in place and is understood.

Audit compliance management is also described in the portal; likewise, management measures related to agronomy are described in a series of SOPs (such as those pertaining to pruning (to avoid need for fungal treatments), drip irrigation management and hydration (to minimize use of water), proper and safe chemical management, proper fertilizer management, heat stress management, etc. Evidence of the implementation effectiveness of such actions and requirements was observed during the farm visits undertaken as part of this appraisal. Discussions held with farm management and with workers showed that the requirements are being implemented and applied in a consistent manner, that matters of compliance are integrated from top down and bottom up, that a safe and healthy work environment is provided, and that resource efficiency is at the heart of UE operations, either direct or through its out growers. Continued and ongoing successful certification to recognized international standards namely Global GAP and SIZA as well as evidence of compliance with applicable local laws and regulations, and customer requirements, provides additional confidence that E&S management programs are having the desired effect.

Organizational Capacity and Competency. UE has matched its rapid operational growth with an increase in management and staff responsible for E&S management. The current organizational structure that defines roles, responsibilities, and authority to implement the management of environmental, OHS and social matters is housed in an HQ department under ‘shared services.’ The sustainability function is led by a Sustainability Manager (hired in 2018) who reports directly to the CEO and oversees the HQ sustainability team. The Sustainability Manager is supported by the Environmental and Natural Resources Manager, the Environmental and Social Compliance Manager and the HR Director. The team coordinates and ensures that all the functions related to E&S risks and impacts are carried out in accordance with UE’s E&S policies, SOPs and practice throughout all its direct and out growers’ operations.

Sustainability counterpart staff at the farm and pack house level consist of a Compliance Officer and a HR Officer, who report to the Farm Manager or the Packhouse Manager as applicable. The company is in the process of recruiting the full contingent of officers for each farm and the main packhouse. Production managers also oversee farming practices, ensuring that measures stipulated in the SOPs including those on irrigation, stores and equipment, workshop and maintenance, nursery and research, chemicals management are implemented. The farms also receive support from the HQ Agronomy and the Research and Development teams, specifically on E&S risks and impacts related to biodiversity, soil, water, use of fertilizers and use of pesticides.

The HQ sustainability team supplements desk-based reviews of reports and self-audits submitted through the UE and out grower web-based reporting systems, with periodic in-person supervision visits to the out grower farms, UE farming operations and the packhouse.

Emergency Preparedness and Response. The company has an emergency preparedness and response system in place. Starting with an assessment of the risk of non-routine situations (such as emergencies including wildfires in farming areas, chemical spills, snake bites, fires in pack houses or company offices to name but a few), management measures to address these accidents and emergencies are described in company documentation (e.g. fire plan); such documentation cross-references requirements found in certification schemes as appropriate (e.g., SIZA 7.3, Accident, Emergency and Risk Management Procedures). In addition, as per the Business Continuity Policy, there is on-going review of new situations that may pose threats to UE’s operations. These approaches allow for the identification of on-going possibilities and those that may arise in an ad-hoc manner and define roles and responsibilities with respect to actions to be taken should they materialize. The emergence of the COVID-19 pandemic in South Africa, along with the social unrest experienced and possibility of a declaration of a state of emergency imposed by the government, resulted in UE establishing an ad-hoc risk operations team made up of functional leads for all departments and all operations. As for the pack houses, these assets represent a higher level of risk due to their operations and workforce. The design of these facilities complies with South Africa building codes, including that related to Life and Fire Safety. During the site visit to the new facility in Johannesburg, expected equipment to tackle blazes and/or to be used in the event of an emergency (ring main, extinguishers, emergency lighting and signs, means of egress, appropriate number of stairwells, etc.) were all observed. Designated response teams and information from quarterly emergency drills, during which simulations are used to test readiness of documented emergency procedures, was shared during the appraisal.

Monitoring and Review. Procedures to monitor and measure the effectiveness of its E&S management programs and compliance with legal and regulatory requirements or contractual obligations are in place at UE. One of the central principles of oversight of its operations are the internal audits to review compliance to both regulatory and voluntary requirements. As was determined during the appraisal of #40468, successful outcomes of the monitoring and measurement program is the continued certification of EU operations with recognized sustainability standards and the successful compliance to regulatory audits from the South Africa’ Department of Labor. Copies of current certifications (e.g. GLOBALGAP, SIZA, and relevant customer standards such as BRC and UK retailers individual schemes), and current water permits and operating licenses from respective local municipalities were reviewed by IFC during the site visit.

Sustainability performance indicators (KPIs) are developed and monitored annually (e.g., total number of lost workdays, minimizing staff turnover, and tracking living wages paid to ensure no poverty among workforce have been used to drive labor and working conditions performance); other KPIs apply to minimizing total waste sent to landfills, using carbon emissions data to drive production efficiencies, and working to minimize audit minor non-conformities. Consolidated summaries of these E&S KPIs are reviewed by senior management to ensure the implementation effectiveness of the management plans for material E&S risks and impacts. Beyond this KPIs review and EHS performance as reflected by successful external audits, UE also reviews its compliance with local laws and regulations (audited by the internal audit team). Quarterly technical farmer’s meeting also take place to allow sharing of best agricultural practices among its farms and out growers’ operations. Necessary and appropriate steps to ensure the operations are run in a way that supports the intent of the client’s policies with regards to E&S matters are the outcome of such senior management reviews .                                               

 United Exports has 879 direct workers in South Africa while its casual labor force peaks at 4,500 in its farms and packaging facilities during harvesting seasons. Individual farms also have a high casual labor force when establishing new nurseries. Some farms use casual workers from labor outsourcing companies while others engage workers directly from an existing labor database made up of residents of settlements found near the farming areas.

Human Resources Policies and Procedures: The company continues to implement its HR policies which cover hours of work, remuneration, leave, workplace health safety and security, grievances, training, sexual harassment, performance management, recruitment, freedom of association and the right to collective bargaining, child labor, and housing. In its initial investment, IFC had determined that these policies comply with PS 2 requirements and the company confirmed that no material changes have been made to the policies since. The company has continued to manage human resources (HR) at the company level through a HR Manager and HR Officers at farm level.

Working Conditions and Terms of Employment: All workers continue to receive contracts that outline the working terms and conditions. In recent months, the company has established enhancement of the the OZblu Academy that provides an online platform for staff sensitization on HR policies and procedures as well as staff training on fire safety, general OHS, first aid, and other specific skills that support career development. The company has also collaborated with Wage Wise Foundation to provide a financial literacy education program for its workers covering an understanding of payslips, bank statements, credit and debt management, retirement planning,finances and mental health. The training takes into account the workers literacy levels and integrates in-person, social media and web-based training tools. UE uses its online platform for on-going communications with staff through newsletters.

Workers Accommodation: Workers’ accommodation is provided on the farms and maintained by the company. The company continues to undertake periodic inspections of workers accommodation at the farms as part of the SIZA and GlobalGAP Certification. The accommodation policies as well as inspection, monitoring and maintenance procedures are in compliance with PS 2 requirements. The findings of the audits also inform management on maintenance and repair needs that may arise for workers’ accommodations.

Workers Organizations: The company facilitated the establishment of workers committees which include representatives in employment terms, first aid, occupational health and safety and fire safety. Staff are still free to refer to union representation. The company is currently adjusting its system to onboard workers who joined the Agricultural Food and Allied Democratic Workers Union in 2021.

Grievance Mechanism: The company maintains a grievance policy and procedure, a sexual harassment policy and a whistle blower policy. The company maintains grievance boxes as the main platform for submission of anonymous grievances. The boxes are opened by workers representatives who sit in a committee to review the issues. The company grievance redress mechanism allows for independent handling and resolution of grievances on sexual harassment and sexual exploitation. Such grievances when received through open and anonymous channels, are referred to management who then refer them to the external party for action. However, there is no explicit inclusion of definitions of gender-based violence (GBV) in the workplace. The company shall review its sexual harassment policy and grievance redress policy and procedure to integrate definitions and mechanisms for reporting and addressing GBV related complaints in the workplace. These additions shall not impede access to existing judicial and administrative remedies available under local law. (ESAP#1). The whistle blower mechanism allows for anonymous and confidential mechanisms for business related indiscretions and confidential redress of such complaints.

Workers committees are trained on the local labor requirements and are also guided by UE’s Code of Conduct. They are also sensitized on the types of grievance that should be referred to management, such as sexual harassment cases and other human rights violations. Such cases are raised to company management level after which they are referred to an external investigator to handle and provide direction to close out the cases or indicate remedies as appropriate.

Occupational Health and Safety: The company has an Occupational Health Safety and Security policy and procedures and continues to implement the OHS plans as indicated under PS1. The policy aims at instituting work practices to eliminate hazards and outlines the company’s commitment and responsibilities as well as UE’s expectation on its workers towards a safe and healthy work environment. Good practices observed on site included use of serviced fire-fighting equipment, provision of PPE, provision of clean gender segregated sanitation facilities with individual lockers, good housekeeping in the work areas and storage spaces. At farm/facility level, the compliance officer is responsible for OHS implementation and covers both direct and outsourced workers. Company farms and facilities as well as out growers provide internal self-audit reports through the company and out growers portals. The company continues to facilitate the establishment of workers OHS committees which includes trained fire marshals and first aiders. Sample OHS committee members interviewed during the appraisal reported satisfaction with the company’s response to OHS issues raised through the committee. The company and its out growers undertake mandatory health checks for workers as required by local law and to comply with SIZA and Global GAP certification. The company reported that fire drills are undertaken twice a year at facility level. The company’s “transport of employees” policy further requires use of road worthy vehicles and operation by competent and qualified drivers with valid licenses. These policies apply to both UE and contracted transportation services.

COVID 19 Management: The company established policies and protocols for COVID-19 management including provisions of handwashing stations and sanitizers; requirement for use of facemasks on premises, screening of workers and visitors to the farms and company facilities to check for vaccination status and signs of infection. The company also instituted a vaccination policy for workers and farm residents and provided guidance for work related travel to reduce the risk of infection.

Third Party Workers: Contracts with out growers require good labor relations practices with employees and independent contractors, and the company reserves the right to inspect out grower farms and verify compliance. The company reported that they only engage SIZA certified out grower farms and labor outsourcing companies. The company has integrated labor audits their monitoring and audit system. These annual HR audits cover labor issues for outsourced workers as well as the workers in the out grower farms.                                             

 Resource Efficiency. The client continues to implement technically and financially feasible and cost-effective measures for improving efficiency in its consumption of energy, water, as well as other resources and material inputs for core business activities. These are detailed below.

Greenhouse Gases. The company tracks its inputs and uses that data to determine the GHG emissions associated with its farming operations. The most recent full year data (2021) reported 3,952 CO2 equivalent tons (scope 1 and 2) of GHG. This figure does not include sequestration of carbon from UE’s farming operations. UE is working on a methodology to calculate that figure which would reduce the already low equivalent tons generated amount. The company uses R507 and R404 refrigerant gases at the pack houses; only small amounts are used on the farms as those storage facilities are only designed to hold one or two days of harvested berries. Several farms have installed a solar hybrid system to lessen dependence on the grid; for example, at Metsi Berries, the farm’s carbon footprint was reduced year-on-year by 70%. Likewise, Lulamanzi Berries has installed a grid- tied solar system, which only uses 34% grid electricity, and Lepalala Berries also utilizes a hybrid solar system.

Water Consumption. Farms are only selected based on the availability of sufficient water rights. Water is drawn from sustainable water supplies, either boreholes, rivers or from rainy season run-off catchments that are found on some farms and that have been approved by the relevant government oversight body. Use of steel tanks or lined earth buffer dams lined with clay are used for storage to minimize water loss and provide supplies during periods of low/no rain. Water rights associated with the farms are regulated; they are granted by the Department of Water Affairs and Forestry, or DWAF and are tied to the farm property. Water use is monitored to ensure compliance with the amounts granted by such permitted rights. UE farm managers, or their delegates, participate in local water user associations; ostensibly a co-operative of individual water users, formed under the auspices of the National Water Act, that act together to equitably manage the shared water resource. This is therefore one aspect of UE’s stakeholder engagement; centered around the most important resource available to UE’s farming operations.

The model approaches established to minimize water use, assessed by IFC in 2018, are still in evidence in those farms. Standard operating procedure (SOPs) for new farms are available and also disseminated using the Grower portal. These include, among others, use of overhead netting (which results in saving up to 20% due to a reduction in evaporation and transpiration), use of bags for planting instead of planting directly in soil (minimizing water loss), leaf analysis to promote efficient use of water, use of real time data from soil moisture probes to schedule irrigation events, use of drip irrigation to only apply needed water at the base of the plant.

Pollution Prevention – Wastes. Initiatives are in place to avoid the production of waste. For example, re-usable shallow plastic crates remain in use for transporting blueberries from the farm to the packing facility; recyclable cardboard boxes are still used for all exported blueberries. The packing facility in Johannesburg participates in broader recycling efforts; all wastes are sorted and duly collected by a licensed contractor. Waste berries are collected and taken to local pig farming operations for use as animal feed. Waste generation and management on farms is subject to SOPs. Such documents refer to criteria within multiple standards, regulation, and the company’s own policies. Requirements pertain to monitoring, management, and control (referencing risk assessments as a starting point) including aspects related to training, storage, bunding, labeling, manifests, transport, ultimate disposal, as appropriate.

Wastewater on farms (from sanitary sources) is sent to septic tanks and then to leach fields. Effluent volumes are not large; for example, typical workforce numbers at farms are between 18 and 56 individuals but do increase during harvest season. Systems are designed with such loads in mind. In addition, certification requirements are translated into SOPs that dictate the presence and sanitary operation (maintenance and disposal of collected contents) of in-field portable toilets.

Hazardous Materials Management – Pesticide Use and Management. As per GlobalGAP certification, UE employs Integrated Pest Management (IPM) and, where and when it must use pesticides – based on economic threshold (ET), manages their storage, mixing, application and disposal of waste containers in accordance with standard and applicable national law and regulation. Pest scouts, under the management of the farm agronomists, are used to detect and determine whether populations of pests could pose economic challenges to yields and if so, to implement necessary and required interventions. As part of this approach to avoid or minimize the use of chemicals, farms also use natural predators for insects (thrips) – i.e., biologicals; this is facilitated due to the enclosed nature created by the roof and wall netting. The company now engages a professor from a recognized South African university to further develop their IPM practices around avoidance of chemicals in blueberry propagation; as such, avoidance of use of chemicals remains the first choice in protecting the crop. Chemicals that must be used (no WHO class 1a or 1b are authorized for use) are kept under lock and key and are only used by suitably trained individuals. Good signage regarding hazards were observed on farms and, in the case of emergencies, equipment such as emergency showers were readily available and easily accessed.

Hazardous wastes. Waste oil and lubricants (from equipment maintenance activities, for example) are collected and disposed of by a certified/licensed company. This is required by UE’s policy and practice; vendors need to be licensed and records of disposal are collected and maintained as proof of compliant disposal practices .                                                

  Company farms subject to this investment – and other UE farms and those of out growers who supply to UE – are in traditional farming areas of South Africa. Whereas these farms may have neighboring farms in the vicinity, there are no directly impacted affected communities. Impacts from farms are limited and contained within the farm footprint. These include minimal dust generation from farm vehicle movements, noise from field-based generators used to power the small wind turbines used to address frost in the few farms in the north of South Africa that already employ such practices, noise from the pump house used to irrigate the blueberries, etc. When needed, chemical spraying is done in a manner to prevent drift – it is applied row by row either manually or using a small tractor and takes place within the netted growing areas.

The company does transport blueberries from its farms to the packhouse operations. Based on conversations with farm managers, trucks (for the most part owned and operated by UE and limited to less than 10 – some trucks serve multiple farms on their collection routes) are limited to one per day from each farm during harvest season. They are new vehicles, subject to inspections prior to each trip, and drivers are required to demonstrate they are fit for duty, prior to operating the vehicle, etc. Trucks are all equipped with GPS which tracks their operational parameters including location, speed, routes, need for rest stops, etc. When needed 3rd party trucks, with their own operators, are recruited. These are similarly equipped, inspected, and supervised. Only minimal distances are driven on dirt roads; the routes are majority based on tarmac roads, highways, etc. The risk of this limited truck traffic is immaterial to the overall risks found with regards to traffic on the roads of South Africa.

With regards to security, the company uses minimal measures in general, such as third-party unarmed workers to staff points of entry and exit to farms (farms are fenced off and access is controlled through these points). CCTV is in operation at some farms. Packhouses are in industrial parks; these facilities have their own security checkpoints (operated by the industrial park themselves) that ensure visitors have a purpose to access companies located therein. In addition, there is another gate and fence surrounding the packhouse facility itself; the facility in Johannesburg was staffed by unarmed 3rd party personnel .                                                

 UE owns or sources berries from over 30 farms in South Africa. These occur throughout South Africa and overlap the following eco-regions: Central bushveld, Fynbos shrubland, Knysna-Amatole montane forests, Limpopo lowveld, and Renosterveld shrubland.

Five of these farms overlap with three nationally protected or internationally recognized areas: Waterberg System KBA, Boland Mountains KBA, Magaliesberg KBA. All of these KBAs include a combination of natural ecosystems and existing agricultural and residential areas. In all cases, project farming activity is restricted to existing farmlands equivalent to modified habitat. The client has an existing policy to conserve natural areas, ensure that farming activities have no impact on surrounding natural areas, and implement proactive restoration in areas affected by farming activities. No changes to natural habitats are expected. This existing policy will be upgraded to include reference to the types of habitats that are described within PS6; this will further promote the notion of protection of areas of importance (ESAP#2).

Three of the five overlapping farms occur in the Waterberg System KBA which is also an AZE. As noted, the project is restricted to existing modified habitats and no conversion of natural habitats is planned. The landscape historically includes natural and agricultural lands, though some agricultural lands have been undergoing recent conversion to wildlife-friendly land uses, such as game farming. The AZE site was recognized in 2018, the same year UE began operations in these areas. Consultation with AZE Secretariat regarding this overlap will be required. UE will engage AZE Secretariat and conservation management stakeholders associated with the AZE to confirm and maintain existing alignment with AZE conservation objectives (ESAP#3).

UE also sources primary production from out growers. Seven of these occur in high-risk contexts, including the Waterberg System AZE. UE policies related to natural habitats also apply to out growers. Risk of Natural and/or Critical Habitat conversion is low. Given the limited and well traced supply chain, that is audited as part of the required certification schemes, no new supply chain risk assessment is required. All UE farms – and those parts of the supplier farms that supply blueberries to UE – are certified to GlobalGAP and other recognized credible standards (e.g. SIZA environmental and social/labor requirements and valid customer requirements such as Field to Fork and those of the British Retail Consortium, or BRC).