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 Assessment and Management System. The Company adopted a health, security, and environment (HSE) policy in June 2022. This policy commits Pharmakina to include HSE in the business strategy, systematically identify HSE risks, provide the necessary resources to comply with HSE principles, set up an HSE management system, measure HSE performance annually, and publicize the policy to workers and other stakeholders. Going forward, Pharmakina will review its E&S policy to specifically refer to IFC PSs and WBG EHS Guidelines as performance-based requirements above and beyond national legal and regulatory requirements and develop an Environmental and Social Management Systems (ESMS) commensurate with its operations and aligned to PS requirements and WBG EHS guidelines on Pharmaceuticals and Biotechnology Manufacturing (ESAP#1). The E&S management procedures to be developed and implemented as part of the ESMS will include: (i) supply chain risk assessment and management) (ii) monitoring procedure for effluent, ambient air quality, noise, and solid/hazardous waste management and storage; and (iii) stakeholder engagement procedure and community grievance mechanism.
Identification of Risks and Impacts. The company maintains a legal register and all Pharmakina operations are in compliance with legal and regulatory requirements. The HSE policy commits Pharmakina to systematically identify HSE risks, the company is yet to develop a procedure to identify risks and impacts of its operations. However, Pharmakina developed and has been implementing an environmental and social compliance plan - Plan de Mise en Conformité Environnementale et Social (PMCES) in April 2021 (please refer to ANNEX1). As part of this project, Pharmakina will develop a procedure to identify potential E&S risks and impacts on all operations. The procedure will define the approach for planning and implementing the mitigation measures with action steps, the timetable for completion, and the needed CAPEX/OPEX. As a part of the procedure, for all greenfield projects or new plantations that are subjected to an ESIA, the Company will prepare the ESIA in line with national legal and regulatory requirements, IFC PSs, and WBG (General and Sector-Specific) EHS Guidelines. (ESAP#2).
Management Programs: The company is using a voluntary standard targeting food safety based on Hazard Analysis and Critical Control Points (HACCP) certification and will develop and implement management programs to mitigate its risks. (Ref ESAP#1).
Organizational Capacity and Competency. Pharmakina management has the ultimate responsibility of ensuring HSE objectives. The company has advertised for an environmental, social, and governance (ESG) Manager to develop and implement Pharmakina ESG strategies, ensure the company's commitment to sustainability, responsible business practices, and stakeholder engagement, and implement an Environmental and Social Management Systems (ESMS).
Emergency preparedness and response plan. Pharmakina has documented emergency response plans for its operations, including (i) a risk management plan related to natural disasters, (ii) a firefighting preventive measures and the evacuation intervention plan and (iii) instruction on risk prevention for fire, flood, accident, hygiene, and sanitation. The roles and responsibilities for various teams responsible for evacuation, rescue, firefighting, etc., are defined and displayed at various locations across the facilities. Fire alarm call points, evacuation route maps, and hose reels have been placed at many locations.
Monitoring and Reporting. The company does not have a systematic mechanism for monitoring key performance indicators (KPIs) such as records of injuries, L&FS measures, usage of personal protective equipment (PPE), energy and water consumption, and waste generation for its operations. As part of the ESMS development (see ESAP #1), Pharmakina will develop and implement an E&S performance monitoring system. The system will include the KPIs to be reported on a monthly basis to the compliance management team.
PS2: Labor and Working Conditions
Human Resources Policies and Procedures. Pharmakina has a Human Resources (HR) Policy (Politique sur le code et reglement de conduit), which applies to all its operations, and set out the main policies and procedures that guide human resources management. The policy relates to equal opportunities, code of ethics, disciplinary policy, forced labor (modern slavery), discrimination, , and abuse of power, consistent with the national labor regulations, and international regulations like the United Nations (UN) Guiding Principles on Business and Human rights, the International Labor Organizations (ILO) Declaration on Fundamental Principles and Rights at Work, UN Global Compact and generally compliant with IFC PS 2 requirements and managed by an HR function. The company is recruiting a competent HR manager to lead the HR function.
Working Conditions and Terms of Employment. As of August 2023, Pharmakina’s total labor force is around 600 of which around 400 are on contract and approximately 200 are temporary workers. The overall number of direct workers is expected to remain the same upon project completion. The company will develop a HR manual which will include procedures for; equal opportunity and non-discrimination, recruitment, remuneration, allowances and benefits, training, leave, disciplinary code and grievance handling procedure, occupational health and safety, gender-based violence and sexual harassment, working hours & overtime and termination. The procedures will be issued to all employees, during the induction period and provide continuous awareness training to workers to ensure compliance with DRC labor laws and PS2 requirements. (ESAP#3).
In May 2018, a Decree was passed by the Congolese Government increasing the new daily SMIG (Salaire Minimum en République du Congo). Going forward and as part of this project, Pharmakina will develop a clear plan to pay wages in accordance with the decree (ESAP #4).
Workers Organizations. The HR policy is explicit on workers’ rights to join unions of their choice. There are five unions represented in Pharmakina, and 90% of the workers are unionized and have a Collective Bargaining Agreement (CBA).
Workers’ Grievance Mechanism: The company holds regular meetings with union representatives and the union acts as a channel for the voicing of employee grievances to management. Pharmakina has also established a workers’ disciplinary code and grievance handling policy that fits all its operations and a commensurate procedure, issued to every employee. The procedure provides documented grievance reporting, alternative handling methods, regular meetings, and feedback to claimants, and appeal options, enable traceability (and anonymity, if requested) and are consistent with PS2 requirements. The company has provided suggestion boxes as an anonymous grievance mechanism.
As a result of the labor movement in 2018, nine workers, representing 2 % of the workforce, were terminated. There are ongoing labor cases related to the termination and the benefits provided. The company will conduct a series of training to enhance labor-management relationships and foster constructive labor engagement (ESAP#5).
Occupational Health and Safety (OHS): Pharmakina, has an HSS policy which defines its commitment, to take all practical steps for its workers, contractors, and third-party suppliers. The company uses Hazard Identification and Risk Assessment Control Procedure to identify OHS risks at facility level. All staff undergo an OHS induction training and other OHS related training are provided as needed. Incidents and/or accidents are reported and investigated as per internal procedures. The company experienced a fatality in 2022, a worker committed suicide by drinking poison. The worker had a history of mental illness. The company took preventive measures, including counseling and the creation of awareness on mental health, to prevent recurrence.
The facilities are over 30 years old, and the company has commissioned an engineering consultant firm to advise on viable options. Preliminary findings suggest replacement of the boiler, toluene tank, bark mill, chilled water system, steam pipe, power stabilization, heating, ventilation, air conditioning (HVAC), and lockout systems to improve local safety. As part of this project, the company will prioritize these changes (ESAP#6).
Third Party Workers: The company has various contractors for transport, provision of seasonal employment and for security services. As part of the HSS policy, Pharmakina requires its contractors to comply with national labor laws through specific contract clauses. Given the large workforce of seasonal employment, the company will strengthen the hiring and management procedures for seasonal workers in compliance with all the relevant country labor and social security laws and in line with PS2 requirements (ESAP# 7). The labor engagement practices, and statutory documentation maintained by the contractors are subjected to audits undertaken by the company’s HR team.
Supply Chain Risk Assessment & Management. Pharmakina obtains 80% of its raw material from aggregators. Pharmakina will update its risk screening for its potential and existing suppliers, considering IFC PS2 supply chain requirements, and develop and implement a commodity level risks screening approach to avoid child labor, forced labor and significant OHS issues and deforestation risk in its commodities supply chain (ref ESAP #1). Pharmakina will then use the risk assessment’s results to inform its sustainability sourcing strategies including achieving full traceability of its supply chain and zero child or forced labor. In addition, Pharmakina will select and implement digital mapping of the perimeters of all its Cinchona farmers (ESAP#7) as part of the traceability and risk screening platform. The digitalization of these farms will validate avoidance into National Parks, Protected Forest and Key Biodiversity Areas and will also capture socio-economic data (e.g., number of children, proximity to school) to prevent any risk of harmful child and forced labor.
PS3: Resource Efficiency and Pollution Prevention
The company’s operations primarily involve bark milling, an extraction plant, a tableting, and an injectables plant.
The company has commissioned a consultancy firm to conduct a mass and energy balance analysis. Based on the analysis the company intends to implement projects like steam piping installation, PVC rooftop solar, boiler replacement with pulverized wood boiler to utilize spent bark rainwater harvesting to improve resource efficiency across its facilities.
Electricity is sourced from the national grid supplemented by a standby diesel generator. A boiler produces steam for the process and use natural firewood as fuel. As part of this project, Pharmakina will monitors emissions and ambient air quality at plant boundaries on a quarterly basis. The emission monitoring reports will be presented to the management and included in the annual monitoring report (ref ESAP #1).
Pharmakina has three sources of water: (i) sourced from the local utility supply company, (ii) pumped directly from Lake Kivu, and (iii) from a borehole within the compound. The company has an in-situ water treatment plant used mainly for tablet and injectable production. The company is planning for rainwater harvesting to supplement these sources.
The company monitors resource consumption, especially electricity and diesel for generators and vehicles. GHG emissions due to the proposed expansion are not expected to be significant and total GHG emission is expected to be well below 25,000 tons of carbon dioxide-equivalent per year.
Industrial wastewater from the last phase of quinine extraction is reused in the plant. The totaquine and the yellow resin mother liquors are treated neutralized by pH adjustment and channeled to lake Kivu along with storm water. Domestic wastewater is channeled to a septic tank. The company has conducted a feasibility study to construct a waste wastewater treatment plant, which will enable re-use of wastewater for gardening and landscaping, used at the boiler and cooling pipes. The remaining treated effluent will be discharged in lake Kivu. As part of this project, the company will provide documented evidence that the design meet WBG/IFC EHS General Guidelines or DRC regulations whichever is stringent as spelled in the legal limits for discharge to surface water. The treated effluent will be tested periodically and the monitoring reports form part of the AMR (ESAP#8).
The company operations use toluene, sulfuric acid, hydrochloric acid, and caustic soda which are classified as hazardous. The company has implemented strict handling and storage procedures of these products. The products are stored in restricted areas and handled by trained authorized personnel.
Guided by its global waste management and disposal plan and procedures, Pharmakina is implementing initiatives to recycle most of its wastes. Pharmakina has a licenced landfill where solid waste is mostly buried and incinerated by an authorized company, for the biomedical waste. The company will conduct a soil contamination study to ensure the soils around the landfill are not polluted and will develop a remediation/rehabilitation plan if needed. The studies will be conducted periodically, and monitoring reports will form part of the AMR (ref ESAP #1)
PS4: Community Health, Safety and Security
Life and fire safety procedures are guided by a firefighting preventive measure and the evacuation intervention plan, and instruction on risk prevention for fire, flood, accident, hygiene, and sanitation. Fire alarm call points, evacuation route maps and hose reels are in place. The compliance team conducts internal audits to evaluate the implementation of fire safety measure. Several workers have been trained in fire safety and operation of fire safety equipment every month including construction workers. However, the procedures do not include other stakeholders. The company will amalgamate the life and fire procedures and include a section on community participation during emergencies. (ESAP#9).
Pharmakina has unarmed security guards for access control provided by a contractor. The company will develop a security policy and procedure aligned with IFC PS 4. The rules of conduct for security personnel will include clear instructions on permissible actions and the use of force. The company will require its security service providers to provide training in the adequate use of force, monitor the conduct of security personnel, and provide a grievance mechanism for affected communities to express concerns about security arrangements and acts of security personnel. (ESAP#10).
