This is a Category A project according to IFC's Policy on Environment and Social Sustainability (2012). Key E&S risks and issues associated with this investment are:

(i)                 The robustness of SUCDEN’s E&S and Supply Chain risk assessment and implementation effectiveness of its Environmental and Social Management System (ESMS) for its direct operations (e.g., warehouses) and cocoa sourcing operations in CI, including gender-based violence (GBV) risks;

(ii)               The E&S capacity/competency to ensure timely implementation of SUCDEN’s Sustainable cocoa sourcing strategies for 2022-2026 in CI;

(iii)            Provision of fair and safe working conditions in line with PS2 and local labor requirements for direct workers and contractors of SUCDEN-CI;

(iv)             The efficacy of the risk assessment of its primary cocoa suppliers, including effective implementation of SUCDEN’s Supplier Code of Conduct, risk assessment procedures of its cocoa sourcing, and annual independent verification of compliance with SUCDEN and off-takers’ sustainability requirements, including avoidance of risks associated with child/forced labor, significant safety hazards (such as use of pesticides) or risks of conversion of Natural and/or Critical Habitats to farmland to be used for cocoa production;

(v)               The effectiveness of emergency preparedness and road safety policy and procedures; and

(vi)             The implementation of a Stakeholder Engagement Plan and Community Grievance Mechanism in CI.                                                  

Environmental and Social Assessment and Management System

Policy:

The Group has a corporate Responsibility Policy which includes its commitment to the environment, occupational health and safety of workers, provision of social and gender equality and supply chain management. The policy serves to outline the corporate Environmental and Social Management system (ESMS), detailing roles and responsibilities, the required management plans, and monitoring and reporting requirements for each entity of the Group. Moreover, the Group has developed other relevant policies and procedures such as human rights, child labor prevention and remediation, gender, forest protection and deforestation risk identification. The Group also has a code of conduct which its employees and contractors are required to meet. The Group policies and code of conduct are implemented at the company level by SUCDEN-CI. In addition, SUCDEN-CI has adopted supplementary policies regarding quality management, water, energy and waste management and human resource management. At the time of the appraisal SUCDEN CI was certified for ISO 9001:2015, a quality management standard.

Identification of Risks and Impacts:

SUCDEN-CI identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national laws and regulations, E&S regulatory permits and requirements, application of assessment practices common to the cocoa sourcing sector, independently audited assessments based on customer requirements, and those within recognized and credible VSS such as Rainforest Alliance (https://www.rainforest-alliance.org/ ) adding up to a total of approximately 60% of the traceable supply being certified.

Management Programs and Organizational Capacity and Competency:

The E&S team of the company is headed by a program director, who is supported by E&S coordinators, each responsible for a particular aspect of supply chain management; for example, the company social coordinator is responsible for identification and management and remediation of child labor risks in the supply chain. Overall, the team consists of eighteen staff. The team oversees programs related to agroforestry, reforestation, child protection and community development, and educational and financial support to farmers’ families. SUCDEN-CI also partners with several service providers, organizations and experts to support implementation of its programs relevant to agroforestry, sustainable agriculture, supply chain, child labor, education and co-op training and support.  Integrating Global Forest Watch Pro with Cocoa and Forest Initiative (CFI) boundaries and Google Earth Pro is undertaken in order to monitor for the risk of deforestation. The program director of SUCDEN-CI reports to the global cocoa sustainability head of the Group and ensures the implementation of these programs along with those requirements included in both voluntary and customer’s sustainability programs and initiatives to which the company is contractually bound as part of sourcing agreements.

Emergency Preparedness and Response:

SUCDEN-CI has a small footprint with respect to assets which are directly operated. For the two warehouses that it leases, the company ensures that they have fire-fighting equipment in place and they conduct annual internal and external audits of the facilities with respect to safety. SUCDEN-CI does not currently have a documented emergency response plan for those elements of its operation, nor does it require the service provider conducting processing on its behalf to have one. Going forward as part of ESAP#1, the company will develop an Emergency Preparedness and Response Plan (EPRP) to include these assets.  The EPRP will support the development of facility specific plans, in accordance with Good International Industry Practice, and address the following: implementation of a risk identification and response procedure; emergency communication; emergency response equipment, including that appropriate for firefighting; training and drills; inspection and equipment maintenance; definition of key performance indicators (KPIs) and performance reporting.

Monitoring and Review:

As noted above, the company has adopted a quality, water, energy and waste management policy, which provides a list of objectives related to energy and water conservation and waste reduction.  While the scope of the policy is limited to the office operations in CI, the company monitors energy and water consumption in the warehouses. SUCDEN-CI also monitors KPIs such as incidence of injuries; trainings carried out; farmers and supplier data including training provided to them, amount of traceable cocoa sourced, farmers mapped; social initiatives undertaken such as the establishment of village savings and loans associations, numbers of trees planted among others.

The company has developed and implemented robust monitoring and evaluation practices focused on key risks and impact. For example, with respect to child labor, the company’s staff, focusing on implementation of the Child Labor Monitoring and Remediation Systems (CLMRS) with the support of International Cocoa Initiative collaborate closely with CLMRS staff within implementing cooperatives and farmer groups. SUCDEN’s child protection and community development team oversee all implementation of the CLMRS by its partner cooperatives and farmer groups. They verify the quality of implementation of the CLMRS, and, as needed, devise initial remediation and remediation follow-up plans. In addition, the monitoring and evaluation teams assess data quality, based on coherence checks with the company databases. Remediation measures includes provision of school facilities and equipment, bridge schools, provision for school fees, development of female-run village savings and loan associations (i.e., VSLA – which help promote schemes/jobs that provide income not-related to cocoa production – therefore additional income), parent literacy programs and multiple awareness programs.

The KPIs are reported monthly to the corporate sustainability team in Paris. All occupational health and safety (OHS) and security incidents are summarized and discussed in a quarterly management meeting and SUCDEN-CI E&S team analyzes root causes if incidents have occurred and implements corrective actions as needed. The company utilizes legal requirements register for CI operations and has dedicated staff responsible to oversee its implementation. SUCDEN-CI also requires its contractors to commit to its code of conduct and requires them to submit their own code of conduct annually. The company monitors their contractor’s insurance coverage and carries out verification of fire extinguishers of the transport and processing contractors. SUCDEN-CI has limited oversight on the processing and transport contractors’ E&S management and does not currently investigate and record OHS incidents that may have occurred among the contractor employees. Going forward, the company will develop a contractor management plan which will include all relevant E&S requirements, commitments, and provisions for contractors to comply with IFC PSs and national labor law and regulation (ESAP#2). The contractor management plan will also include monitoring, auditing and reporting requirement.  SUCDEN-CI will upgrade its KPI list to include E&S indicators in relation to the performance of its contractors.

Supply Chain:

The two main risks identified in the production of cocoa in CI are those of the worst forms of child/forced labor and risk of conversion of protected areas and critical and natural habitats. Cocoa beans sourced by the company currently represent only three percent of the total cocoa supply of the country and this proposed financing by IFC will be limited to that supply that is traceable and therefore such risks would be able to be identified and measures taken to avoid, manage, mitigate and remediate them. SUCDEN-CI has several initiatives to manage and mitigate supply chain risks; these are discussed in the sections on PS2 and PS6 below, and include, but are not limited to, the use of credible third party VSS, including credible internationally recognized certification schemes for the majority of its traceable supply.

Human Resource Policies and Working Conditions:

At the time of the appraisal, the company had approximately 60 direct full-time employees.  SUCDEN-CI has documented a Human Resource (HR) internal regulation that is consistent with the national labor regulations and applies to all direct employees. Each worker receives a written contract that describes the working conditions and terms of employment, and a copy of the HR manual is also provided. Employees are required to work 40 hours per week, with working hours between 8 to 17:30hr with 1.5 hours break. Any excess hours are accounted as overtime.

Grievance Mechanism and Workers Rights:

The company has an equal opportunity policy and commits to the prohibition of gender-based violence. The company has a documented procedure for receiving and investigating grievances from employee and does provide anonymous means such as suggestion box, complaint book and email. SUCDEN-CI will update this procedure to ensure anonymity and confidentially is maintained throughout the whole process and ensure contractor’s employees also have access to the same grievance mechanism. This is addressed in ESAP#2. Whereby noting that national law recognizes workers’ rights to form and to join workers’ organizations of their choosing and the company complies with national law, going forward, SUCDEN-CI will update its HR manual to include explicit reference to the right to freedom of association, collective bargaining and workers' right to form and join workers organization (ESAP#3).

Occupational Health and Safety: The Group has formulated a health and safety policy under its responsibility policy, in which it commits to zero accidents. SUCDEN-CI has a Quality, Health and Safety officer and a medical doctor, and established an OHS committee. The committee is mandated to carry out periodic workplace inspections. The committee participates in workplace accident investigation and annually produces a report and a prevention program. The company carries out regular training for first aid, use of fire extinguisher, risk analysis, defensive driving, awareness of employer and employee legal obligation for health and safety. The scope of mandate of the OHS committee is limited to direct employees and OHS monitoring and performance review will be expanded to cover contractors and primary suppliers as discussed below.

Workers Engaged by Third Parties: As indicated above, the company has limited oversight on its contractors. As part of the contractor management plan under ESAP #2, SUCDEN-CI will require its contractors to carry out OHS risk assessments and will put in place means and resources to carry out bi-annual labor and OHS audits (at least one during the main season) of both processing and transport contractors to ensure compliance with company responsibility policy, code of conduct and IFC PS2. These audits will result in time-bound action plans, as needed, which the company will contractually require the contractors to implement.

Supply Chain:

SUCDEN-CI undertakes supply chain mapping through engagement with the co-operatives and the intermediary agents and can determine their cocoa sources down to the farm level. The company’s grievance mechanism and whistle blower policies also allow for reporting of child labor incidences in the company’s supply chain. Farmers engaged through co-operatives form about 80 percent of SUCDEN-CI's supply chain and are required to adhere to the Group’s requirements on prohibition of child labor. As for the last season, 54 percent of the supply chain (Co-ops) was certified with Rainforest Alliance. One of the requirements of the Rainforest Alliance is to achieve a living wage for the farmers by implementing wage improvement plan where needed. The group of certified farmers also receive a sustainability differential (cash bonus) for each season as part of Rainforest Alliance Certification.

The company undertakes a risk assessment at the household level where they identify the potential for child labor through documentation of minors present and/or working at the farms and documenting the labor practices that are classified as child labor (pls refer comment above). The process undertaken by the company, including visits to households and farms and relevant questionnaire, is aligned with PS2 on child labor. Irrespective of any risk identified, the company monitors the conditions of the household, including monitoring school attendance by the minors and other potential factors which may increase the risk of child labor, throughout the period of engagement with the farmer. Where harmful forms of child labor are identified, as per the CLMRS, the company develops remedial actions through sensitization and provision of financial support through loans or income diversification opportunities to reduce the reliance on child laborers. SUCDEN-CI has a dedicated procedure for grievance management in relation to forced labor that applies to all its stakeholders, including contractors, suppliers and communities, requiring them to report incidences of forced labor that may have been observed within the supply chain down to the farm level.

The company will document set targets for its supply chain KPIs as part of its performance review and continuous improvement of the strategies and programs; the CLMRS tool will also be improved to identify potential cases of child labor, within the traceable supply chain, but who are not members of the farmer household. This is addressed in ESAP#4.

The company has a policy for energy, water and waste management that is limited to energy use reduction regarding office activities and on managing office waste. Waste generated from the warehouses (waste beans or other organic matter) is sold to local farmers for composting purposes. Going forward, SUCDEN-CI will update their policies, procedures, and practices regarding warehousing and associated activities to include, at a minimum, transportation activities, management of hazardous material and waste management. The above will include the responsibilities and levels of performance of contractors engaged by the company; this is addressed under overall warehousing management under ESAP#1.

A carbon footprint analysis was undertaken in 2022 for SUCDEN-CI operations.  Annual Scope 1 and Scope 2 Greenhouse Gas Emissions amount to approximately 425 tonnes CO2eq/yr. The report recommends actively contributing to forest protection activities, ensuring that no new supply is sourced from recently deforested areas and composting of pod waste (to reduce methane release).

Sanitary and phytosanitary measures are used to control pest management during storage and export. The pesticide and fumigants used are classified as Class II pesticides as per the World Health Organization classification and are not on list of prohibited pesticide for CI. As part of its updated practices developed to respond to ESAP #1, SUCDEN-CI will develop and implement procedures relevant to management of hazardous material, including pesticides and fumigants, meeting PS3 requirements.

The warehouses are in port industrial areas with minimal risks associated with community health and safety issues. With respect to its primary suppliers, the company provides trainings for farmers on good agricultural practices and agro-forestry, including training on safe use of pesticides and fertilizers.

The company uses third party logistic companies for transportation of the beans within the ports, from the warehouse to the area dedicated for export operations. SUCDEN-CI will integrate transportation management in its contractor management plan, ensuring vehicle and driver safety requirements are met.

Security at the warehouses is provided by unarmed security personnel contracted by the processing contractor.

Transportation of the beans from the farms and co-ops is the responsibility of the farmers and is not a project activity. Security issues may occur on the long transportation routes from the co-ops to the warehouses as cocoa is a valuable commodity. As part of its corporate responsibility actions and its stakeholder engagement plan, SUCDEN-CI will explore opportunities to raise transportation safety and reduce traffic accidents and security awareness of the farmers.

The project supply chain sources cocoa beans which are produced in regions where there is a risk of significant conversion to natural and /or critical habitats. This risk is mitigated via a robust supply chain risk management system that includes use of a third-party system (Sourcemap) for farm-level tracing and verification of conversion risks (currently capturing 98 percent of suppliers), a supplier handbook to combat deforestation, policy and procedures for forest protection and identification of deforestation risk, internal auditing of suppliers, and regular independent review of conversion risks by an international organization (Proforest). At least half of each season’s supply chain is certified by standards designed to remove habitat conversion risk (Rainforest Alliance) and to facilitate access to premium markets. The exact proportion of certified farmers may exceed this minimum value based on market demands. The company has, in partnership with various organizations (e.g., PUR https://ambition4climate.com/en/pur-project-an-agroforestry-project/, Cocoa and Forest Initiative), established or joined programs to reduce deforestation and promote reforestation.

SUCDEN Group has been a participant member of UN Global Compact since 2020 and has been annually reporting on its performance (refer to sustainability report here: https://www.sucden.com/en/corporate-responsibility/our-approach/ ).

At the local level, in or near communities where coops and farmers are found, and aligned with its Responsibility Policy (as well as with requirements found in sourcing agreements with its customers), SUCDEN-CI implements a corporate social responsibility / community development program containing multiple elements. For example, they promote an initiative to help farmers establish formal land tenure for small holdings; they conduct community needs assessments and create and support action plans to address identified needs related to economic and other development; they provide training for women on functional and financial literacy to help them develop opportunities to diversity sources of income; and they support programs to identify nutritional needs for children and educate mothers regarding better nutrition for their children. The company actively engages with the Conseil de Cocoa et Café, the regulating body for co-ops in CI.

While the company has several channels to engage with the local communities, per the requirements of PS1, the company will enhance its ongoing stakeholder engagement with a mechanism for addressing community grievances arising out of company’s operations including those related to its contractors, supply chain management activities and community development projects. The grievance mechanism will also allow for the recording of any complaints associated with gender-based violence and harassment. This is addressed in ESAP #5.

 Contact Person: Simon Renou

Company Name: Sucden CI

Address: Abidjan, Côte d'Ivoire

Email: srenou@sucden.com

Phone: +225 27-24-38-31-74; +225 07-89-08-80-67

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