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.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
Environmental & Social Policies. Eni’s Decarbonization Strategy (https://www.eni.com/en-IT/net-zero.html, 2023) is the primary business pathway to achieving carbon neutrality by 2050. Agribusiness activities in Kenya are part of the Strategy, and guide the structure and goals set for the project. For the Kenya operations, Eni also implements a Health, Safety and Environment (HSE) policy, road safety (driving) and alcohol, substances and drugs policies. The HSE policy adopted by the company details the commitments to compliance with Kenyan legal and regulatory requirements and Good International Industry Practices (GIIPs) for managing operation in a way to protect health and safety of company and contractors’ personnel and to preserve the environment. Eni's has a strong policy commitment to act responsibly and respect human rights in its own operations and in those held by its business partners. Such commitment is stated in its Code of Ethics, in Eni’s Statement on Respect for Human Rights and in its Supplier Code of Conduct which were inspired, among others, to the IFC Performance Standards and international best practices. In relation to the Kenya operations, specific procedures were issued in order to regulate the most relevant processes in the areas of Land Management, Stakeholder Engagement, Grievance Mechanism and Human Rights.
Identification of E&S Risks and Impacts. Eni has an overarching technical guideline on environment, social, and occupational health impact assessment, which sets the performance-based requirements for its greenfield projects. This guideline is aligned with most IFC PSs requirements and WBG EHS Guidelines. The identified PS gaps, mainly relating to resource efficiency, emissions, noise, waste management, pesticide use will be developed/upgraded as indicated in respective sections below. Eni fully integrated a Land Management Procedure into the company ESMS for identification and management of economic and physical displacement. The scope of the procedure is for land acquired by or for Eni and broadly complies with PS 5 requirements. Eni also undertakes inspection of large farms prior to engagement in order to identify eventual risk and take necessary action. For routine operational E&S risk identification and management, Eni conducts annual corporate risk assessments and updates the corporate HSE risk register, the tool used to track all pertinent E&S risks in its operations and inform implementation effectiveness of its HSE management plans. The HSE register is a live document, updated as required. Eni has task-based risk identification/assessment process through permit-to-work system implemented at all operations.
Screening for Indigenous Peoples (IPs). Eni has adopted a policy on human rights which recalls the company commitment to respect the distinctive rights of indigenous peoples, with particular reference to their cultures, lifestyles, institutions, in line with international standards. Further, Eni has conducted a Social and Human Rights Impact Assessment in the environs of the first Agri-Hub, Makueni; to identify the impacts associated with this project area and the rural communities involved in the project. In Kenya, cultivation of oilseeds is mostly entrusted to local farmers, both small-holders and large farms. From the desktop screening of the areas of agricultural development for the small-scale farms engaged by aggregators and the large plantations, there are possible overlaps with lands used by communities that meet the definition of IPs as per PS7. As part of the scope of its supply chain E&S risk assessment and verification audits, Eni will include screening for impacts on IP communities via a screening criterion acceptable to IFC, conduct the first two internal IP audits in compliance with PS7 and for any identified impact on IPs throughout the project life and agree on mitigation approach with IFC prior to the Company acting (ESAP#1). If impacts on IP communities are identified, the Company will, with the support of qualified IP experts, undertake a consultation process and assess the project-related impacts on these identified communities and jointly develop and implement mitigation measures in a manner commensurate with the nature and scale of impacts, cultural characteristics, and the vulnerability of these communities and consistent with PS7 requirements.
Identification of E&S Risks and Impacts. Environmental and Social Impact Assessments (ESIAs) were undertaken for the Makueni and Kwale Agri-Hubs in 2021 and 2022 as per Kenyan regulatory requirements and environmental permits issued before commencement of construction. Main terms and conditions (T&Cs) of the environmental permits were compliance with regulations relating to waste, effluent, air emissions, noise, water quality management and OHS issues. Mitigation measures to address these issues were included in the E&S Management Plans (ESMPs). Further E&S corporate procedures and corrective actions are required to address IFC PS requirements in the ESMPs and adequately address the identified risks at the Agri-Hubs. To address potential operation-phase impacts at the Kwale Agri-Hub, the Company will conduct a baseline ambient air quality and noise analysis including on sensitive receptors within the defined area of influence once the bulk of construction is completed, to provide a benchmark for future monitoring (ESAP#2). Kwale Agri-Hub processing capacity will be expanded in the future to accommodate the expected increase in production. Before this expansion, the Company will update the ESIA study. For the upcoming Agri-Hub 3 and 4, Eni will agree with IFC on the Terms of Reference (ToRs) for the ESIAs prior to commencement of the studies and conduct the ESIAs in compliance with IFC PS requirements before commencement of project construction (ESAP#3).
HSE Management System & Programs. The Company has an integrated HSE Management System comprising of HSE Policy, HSE Manual, HSE procedures and HSE Professional Operating Instructions aligned to International Oil & Gas Producers (IOGP) Guidelines, ISO 14001:2015 (Environment) and ISO 45001:2018 (Occupational Health and Safety) and Eni Model. The document covers key risks, such as safety risks, waste, land transport, security, environmental spills, hazardous materials, emergency response. The contractor HSE management procedures cover contractor compliance with these risks. Eni will develop additional procedures to set benchmark for risk assessment and management for noise, air quality, wastewater, resource use/efficiency, security and engagement of stakeholders, as defined in ESAP items found below. These additional procedures will be integrated into Eni HSE Integrated Management System.
For continuous improvement of its HSE performance, Eni sets key performance targets for each department which are continuously tracked. Weekly, monthly and quarterly management site meetings are held to appraise performance with set HSE targets and identify and manage emerging issues. Eni has an internal audit function that conducts audits (incl. HSE) of its operations, including contractors. The Company has also adopted Eni’s Sustainability Management System on social issues (e.g MSG Sustainable Development and its annexes on Grievance Mechanism, Land Management, Human Rights, Stakeholder Engagement, etc.).
HSE Organizational Capacity/Competency. The Company has an HSE management team of four persons led by the HSE Manager at corporate-level and four HSE officers (1 HSE superintendent and 3 supervisors) at each Agri-Hub. The Company has, as well, a sustainability and external relations team composed of a coordinator and an officer. Corporate HSE objective-setting occurs annually and monitoring and reporting is judged robust, from daily on-site reporting to monthly management review and annual HSE Management reviews. Given the expected significance of HSE risks in the supply chains as oilseed sourcing ramps up, the Company will designate competent HSE field officers per sourcing region (number per region to be based on size of supply chain and agreed with IFC) to oversee compliance with its HSE policies/procedures and contractual HSE requirements by the contracted aggregators and large-scale farms, including enforcement of its supply chain HSE risk management system for smallholder included in PS2/PS6 supply chain sections below (ESAP#4).
HSE Training. Eni, directly or through the Company, conducts induction training to all workers, direct or contracted. Eni, through the Company, also conducts periodic training needs assessments and updates its training plan periodically. The training plan is implemented as primary intervention for upskilling all workers with respect to required competencies for their jobs. On-site trainings delivered through group toolbox and leadership talks, pre-task safety briefings and incident follow-ups also contribute to capacity building of the workforce. As the sourcing of oilseeds is a new Eni’s operation, it will conduct special training for all staff and aggregators overseeing HSE risk in its sourcing, including labor and working conditions and biodiversity risks in the supply chain. The training programs will be developed and implemented with the support of Eni’s corporate-level biofuels experts (ESAP#5).
Emergency Preparedness and Response Plan. Eni has an emergency preparedness and response procedure (EPRP) adopted by each plant and adequate for the scope of potential emergency situations at the site, including Makueni Agri-Hub. The EPRP covers all key risks including fire, medical emergency, explosions, building collapse, equipment integrity failure, oil spills and. The Agri-Hub has an evacuation plan testing schedule (drill schedule) that covers all the identified emergency scenarios and maintains a clinic and a nurse at each plant. Eni also has working arrangements with the county fire department and hospital facilities for cases of emergency. For the Makueni Agri-Hub, Eni and/or the Company, will update the EPRP communication plan to include local communities, public authorities and contractors (ESAP #6).
HSE Monitoring & Reporting. Once annual corporate HSE risk assessments and KPIs are updated, the Company’s Managing Director oversees an HSE management performance tracker. At the existing Agri-Hub, weekly meetings are held, and reports submitted through to HSE Manager. On a monthly basis, HSE performance reports are consolidated by HSE manager and reviewed by management. Eni has set ten golden HSE rules that every worker abides by. Eni management will continue to regularly visit the Agri-Hubs to discuss/refresh the workers on these rules and visually assess adherence. Required corrective measures are discussed on site and followed up by HSE manager. This module of monitoring and reporting includes contractor workers within Eni operational sites. Project or task-based contractors are supervised daily based on their contractual HSE requirements and management plans for their respective tasks. Annual (from start of operations) environmental audits for the Agri-Hubs are required by the NEMA and Eni will be undertaking these external audits accordingly. Neither of the two Agri-Hubs was due for this audit at the time of appraisal.
Supply Chain. The supply chain is certified according to International Supply Chain Certification – European Union (ISCC EU) Scheme. The ISCC sustainability requirements are laid down in the form of six principles (Principle 1 Protection of land with high biodiversity value or high carbon Stock; Principle 2: Environmentally responsible production to protect soil, water and air; Principle 3: Safe working conditions; Principle 4: Compliance with human and labour rights and responsible community relations; Principle 5: Compliance with land rights, laws and international treaties and Principle 6: Good management practices and continuous improvement). The Project promotes cultivation on degraded areas, and more specifically in the arid and semi-arid lands (ASALs), as well as the introduction of cover crops, agro-forestry, and the valorisation of residues from agro-processing industries, not only from Kenya but also from neighbouring countries (e.g., Uganda and Tanzania). Cotton seeds will be sourced from ISCC EU-certified ginneries (with supplier traceability systems) where they are considered waste products. This will allow for increase value capture from existing agriculture and unlikely to encourage any new natural/critical habitat conversion. Croton seeds are sourced from existing trees. Croton is a spontaneous tree widespread in Kenya. To increase the share of croton supply, the Company is designing an agroforestry project with the farmers, aggregators, and government authorities to expand the amount of land planted with croton trees. Expansion of spontaneous forest species is likely to yield positive biodiversity and climate impacts by contributing to reforestation efforts. No natural/critical habitat conversion risk is expected. Biodiversity risks related to Castor seeds and recommended mitigation are discussed under PS6. Supply chain risks related to oilseed transportation, labor and OHS are discussed in PS2 below.
PS 2 – Labour and Working Conditions
As of July 2023, the Company has employed 57 direct workers (37 Kenyan nationals) out of which 22% are female, and five third party workers (administrative duties at the head office). At the Makueni Agri-Hub, the Company has retained 130 third-party workers for various services (production, maintenance, logistics, security, catering, clinic, cleaning). The Bonje Agri-Hub is still under construction and about 50 third-party workers are already onboard ahead of the operations phase. The Company engages contractors for the design and construction of these processing plants.
Human Resource Policy and Procedures. Eni have corporate and country level HR policies and procedures, defined in Management System Guidelines, Health Management System Guidelines, Policy Ethics as well as Compliance and Governance Policies, broadly aligned with Kenya labor requirements and PS2 objectives. These policies include provisions against all forms of harassment, equal opportunity, and fair treatment of workers at the workplace. The implementation of these policies is overseen by HR and General Services team, headed by HR Manager. HR function includes administrative officers, a health coordinator, and a security officer. Employees have access to Eni’ HR policies through e-based online portal. Workers contracts also provide extracts of the terms and conditions derived from these HR policies/procedures. Employee sensitization on Eni’ HR policies is undertaken at induction and periodically on issues as brought to the HR management team’s attention through virtual and in-person meeting platforms. No retrenchment is foreseen as the project is still ramping up.
Working Conditions and Terms of Employment. The HR policies require all workers to have a labor contract aligned with Kenyan legal requirements, which, at a minimum, requires the nature and category of employment, place of employment, start date and duration, working hours, remuneration, leave, benefits, and employee rights and obligations. Workers’ salaries comply with minimum legal wage requirements. No workers are accommodated within Eni or the Company premises.
Non-discrimination and Equal Opportunity. Eni implements a Human Rights Policy, Code of Ethics and Policy on Zero Tolerance to Harassment at the Workplace, adopted by the Company, – all with provisions on non-discrimination and equal opportunity.
Workers Organization. The Company HR policies allow for freedom of association but at the time of appraisal, none of the workers were unionized. The Company reported that there was no past labour action (strikes, go-slows, etc.)
Protecting the Workforce. The Company HR polices align with Kenyan laws which prohibit child labor and forced labor (CL/FL). The minimum age of employment is 18 years, and all job applicants are required to present proof of age in the form of an identification card. Child labor and forced labor risks in the supply chain are covered below.
Worker’s Grievance Mechanism. Eni has in place a Whistleblowing Management System, open to any stakeholder, including workers, which complies with PS2 requirements and guarantees confidentiality, anonymity, and non-retaliation. Such system covers anonymous grievances and grievances related to gender-based violence and sexual harassment in the workplace and it is fully implemented for the Kenya operations given all workers have access to the Eni system. In addition, the Company has a community grievance and ensures that both the mechanisms are known and accessible to all contractors/third party workers, in accordance with PS2 requirements.
Occupational Health and Safety. Key OHS risks of the Agri-Hubs operations are chemical handling, physical activity/movements, working in confined spaces, hot works, electrical installations, fire and explosion, noise, air quality and road transport/logistics. The HSE Policy and SOPs Manual are implemented at Makueni and Kwale Agri-Hubs. The Company has also developed specific SOPs for high-risk tasks and established a permit-to-work system to facilitate task-based risk assessments and compliance. Both plants have OHS committees. Risk assessments are conducted under the leadership of the plant-level managers and EHS officers. Employees are trained periodically on HSE matters as per an established annual training schedule and required personal safety equipment (PPEs) are provided. A health clinic is located at Makueni Agri-Hub, with a full-time nurse. Same arrangement will occur at Kwale. In addition to health insurance, staff health programs also include statutory pre-employment medical examinations, periodic fitness to work examinations, health promotion activities and dedicated support to workers with special workplace needs. Eni is also currently developing a health model to enhance primary health and emergency services available for the local communities around the Agri-Hubs. Eni implements periodic internal audits which include E&S audits and monitoring. No serious injuries or fatalities have occurred in the Kenya operations. Ricin contained in castor seeds and in the press cake requires specific control measures due to the presence of toxalbumin that poses health risks. The general public may be at risk for exposure from ricin content in the dust released from the castor processing. To address potential release with process dust at the Makueni Agri-Hub, the plant has a closed air collection system that filters the process air and collects resulting dust for re-feeding into the oil-cake formation system. At Makueni Agri-Hub, latest assessments of fire safety and noise indicate that adequate measures are in place and noise levels are within the WBG EHS Guideline values. To improve health and safety assurance at the existing and future Agri-Hubs, Eni will (i) expand the scope of E&S monitoring by developing and implementing a periodic indoor air quality and noise monitoring program (including PM2.5, PM10, NOx, SOx and castor cake exposure) to complement these measures; and (ii) develop and implement an annual health (including audiometry and spirometry) testing schedule for all workers at the Agri-Hubs (ESAP#7). Eni will also commence periodic point-source emission quality monitoring to ensure no significant amounts are released as dust within the workplace and externally via the vertical exhausts, as per ESAP#11 below.
As related to the oilseed sourcing operations, the main OHS risks are transport safety, physical activity (e.g., ergonomics, repetitive movements, cut injuries) by aggregators, seed collectors and at farms, including contact with venomous reptiles and wild animals, during seed collection across villages, security at farms and exposure to extreme heat. ISCC certification, Principles 3 and 4 also cover these aspects. Training and competence of aggregators’ workers (and their respective supply chains) for high-risk tasks, the prevention and handling of accidents and the protection of workers as well as requirements related to basic human and labor rights and provisions for responsible community relations are duties of the aggregators. The Company carries out periodic audits in order to verify the compliance to requirements and is already planning to increase the number of internal audits in order to increase surveillance (related further requirement in ESAP #8 below).
Third Party Workers. Eni and the Company’s recruitment policy is to outsource its workforce at the Agri-Hubs. When Makueni and Kwale processing plants will be fully operational, estimated 330 outsourced staffs will be required (130 in Makueni and 200 in Kwale) and will be covering core operations in oil processing. Other contracted staff will include staff project contractors providing engineering services, operational maintenance (major and minor) works as well as the related project management services. In addition to complying with OHS requirements in the contracts, periodic internal audits are designed to include contractor workers, as per requirements of the contractor EHS management procedure. All contracted and outsourced staff at the Agri-Hubs fall under the remit of the Agri-Hub Project Management Department. The Company will update the Contractor EHS Management Procedure to ensure responsibility of contracted and outsourced workers by designated EHS officers at the Agri-Hubs includes oversight of compliance with PS2 requirements including training, monitoring and any needed corrective action identified in audits (ESAP#8).
Supply Chain. Key labor related risks of feedstock production in Kenya are related to various supply chains, including the type of farms (ranging from small-scale to large farms) and agri-commodities processing facilities (e.g, cotton ginneries). Supply chain risks are managed by the Agri-Hub Project Management Department with support from the Sustainability and External Relations Department. At full sourcing operations, Eni supply chain will be split and managed in two regions. The Company will designate E&S field/regional officers to specifically ensure the enforcement of its Supply Chain Management System, including procedure for risk assessment and management of PS2 related supply chain issues. The Company has a direct contractual relationship with large farms, while Aggregators have contractual arrangements with medium and small-scale farmers. The key risks include child, forced labor and significant safety issues.
The aggregators and third-party suppliers for castor and croton seeds, cotton gins and traders supplying to the Company are certified according ISCC-EU, which includes labor aspects. In particular, ISCC Principle 3 is on safe work conditions and has requirements on training, risk assessment, adequate mitigation, PPE etc. for workers, that generally align with PS2 OHS requirements. Additionally, the Company specifies contractual provisions requiring that all its suppliers at farm-level do not employ forced and child labor and meet ISCC-EU requirements. To ensure implementation effectiveness of this measure, ISCC-EU has been retained as an independent auditor to conduct annual audits on the project and report against the certification requirements. ISCC Principle 4 requires evidence of respect of health, safety and social standards such as respect of workers’ rights according to ILO standards, and requirements related to basic human and labor rights. Further, the Company reserves the right to conduct audits of the aggregators and farmers on ISCC-EU certification requirements and it is already committed to increase the number of internal audits in order to increase surveillance.
The Company will (i) review contracts with primary suppliers to strengthen suppliers’ commitment to address significant OHS risks on supply chain workers, and eliminate life-threatening OHS risks from the supply chain; (ii) develop a supply chain E&S management system, including a risk assessment procedure for oilseed sourcing in relation to OHS, child labour and forced labour (CL/FL) in the different oilseeds value chains, including large and small-scale farms; prioritization of the various types of suppliers by level of risk; tracking of suppliers performance as per PS2 requirements; (iii) expand the scope of its internal supply chain auditing and monitoring system to include compliance with Eni’s Supplier Code, E&S contractual requirements and IFC PS2 requirements for Eni’s direct suppliers and, on sample basis, for farms operating under Eni’s direct suppliers; and (iv) develop a training program to support the aggregators to train small-scale farmers on improving labor conditions in line with national legislation and PS2. This program will target the aggregators’ training under a “training for trainers” approach and will cover labour requirements as per local law and PS2, as well as sensitization on unacceptable PS6 practices in avoidance of biodiversity risks (ESAP#9).
PS 3 – Resource Efficiency and Pollution Prevention
Resource Efficiency. Energy use at the Makueni Agri-Hub is from grid electricity, and minimal amount of diesel is stocked up only for the backup generator. This will be the same case of the three upcoming Agri-Hubs. Water use is minimal for mechanical processing. The Company will develop a resource (energy and water) monitoring program for all its Agri-Hubs (ESAP#10).
Air emissions. Main sources of air emissions are related to agro-processing and road transport. The Agri-Hub in Makueni is designed for mechanical oil extraction. Particulate matter (PM10 and PM2.5) may be the principal source of air emissions from the operations, from cleaning, screening, and crushing of oilseeds. The castor line in the Makueni Agri-Hub is equipped with a dust collection system. Access roads to the Agri-Hub are being asphalted to eliminate ambient dust from truck and anyway periodically watered to manage dust. The Company will: (a) develop an air quality management and monitoring procedure with sampling locations, schedules and scope (aligned to WBG EHS Guidelines) to be applied at all Agri-Hubs; (b) for Makueni plant (i) install an air collection and dedusting system for the mixed (cotton and croton) extraction line; (ii) conduct ambient air quality and point-source air emissions (generator exhaust and steam release vent/exhausts from process lines, including castor cake residue content for the castor line) assessment against applicable WBG EHS Guidelines (ESAP#11).
Greenhouse Gas Emissions. Eni accounts for greenhouse gas (GHG) emission considering the whole value chain, including emissions related to cultivation of oilseeds, seed logistics from the field to the Agri Hub, oil extraction, inland outbound logistics for the vegetable oil, international shipping, HVO production and distribution. Once at full operation, the project GHG emissions from the supply chain processes is estimated at up to 189,000 tonnes of CO2 equivalent per annum (tCO2eq/annum); while similar emissions from the Agri-Hub operations is estimated at up to 12,000tCO2eq/annum. As agricultural practices and fuel production technologies evolve during Project implementation, GHG emissions are expected to reduce. The numbers provided are estimates based on conservative assumptions regarding the longer-term performance of the value chain, which have not been developed specifically for the purpose of ISCC or other relevant certifications which may be sought. Eni reports annually actual certified GHG emissions from the Project.
Noise. Eni, directly or through the contracted companies, conducts periodic noise assessments at its processing plant, and the latest measurements at Makueni indicated noise values are within WBG EHS Guidelines. The Company will formalize its noise management and monitoring approach into a noise management procedure that covers both the Agri-Hub and the surrounding area at all plants (focusing on nearest sensitive community receptors) (ESAP#12).
Solid and Hazardous Waste. The types of waste generated at the Makueni Agri-Hub include general (paper, wood, plastics) and hazardous wastes (medical from the on-site clinic and lubricants contaminated wastes). The Company has a waste management procedure and track waste handling and transportation and disposal by the contracted waste companies.
Wastewater and Effluent Management. Wastewater is minimal and characterized by sewage, stormwater and wash water from process equipment cleaning. The wastewater from process is collected and treated through wastewater treatment tanks within the facility and circulated back into the process. Effluents are treated through an on-site effluent treatment plant meeting Kenyan regulatory requirements and discharged to environment. No effluent analysis report had been shared with IFC at the time of the appraisal. The Company will (i) improve the wastewater management plan for alignment with WBG General and sector-specific EHS Guidelines (Vegetable Oil Production and Processing); and (ii) conduct an effluent analysis at the Makueni effluent treatment plant as per Kenyan legal requirements and WBG EHS Guidelines and (iii) agree with IFC on an action plan, in case of non-compliances (ESAP#13).
Storage of Hazardous Materials. Main hazardous materials are diesel, lubricant oils and greases, and vegetable oil. These are stored adequately in containment and spill management procedures are documented as per Eni product safety management procedure that provides guidance on classification of substances and safe handling or hazardous materials and products. The Company keeps a register of all hazardous materials bought and retained in their operations. At the Makueni Agri-Hub, the hazardous materials have respective material safety data sheets (MSDS) and water points (also eye wash stations); and appropriate PPEs are stored on site.
Pesticide Use and Management. Pesticides containing Polychlorinated Biphenyls (PCBs) and ozone depleting substances subject to international phase out are not in use in Eni Agri-Hubs. Given there is a possibility of pesticide us in the supply chain during the course of this Project, the ISCC Principle 3 includes also topics of training and competence creation at farm level, including handling of plant protection products and other hazardous chemicals. Moreover, as the sourcing of oilseeds will increase, the Company will develop an Integrated Pest Management (IPM) Guideline for all the contracted parties (aggregators and directly contracted farmers) in line with Food and Agriculture Organization’s International Code of Conduct on the Distribution and Use of Pesticides and other relevant GIIP, and ensure that the training on this guideline is offered to the Company E&S field officers, aggregators and directly contracted farmers as part of their capacity building program. The Guideline will document Company commitment and entail provisions to: (i) ensure that pesticides are handled, stored, applied, and disposed of in accordance with the Food and Agriculture Organization’s International Code of Conduct on the Distribution and Use of Pesticides or other GIIP; and (ii) prohibit purchase, storage, use, manufacture, or trade in products that fall in WHO Recommended Classification of Pesticides by Hazard Class Ia (extremely hazardous); or Ib (highly hazardous), and purchase, storage, use, manufacture or trade in Class II (moderately hazardous) pesticides, unless the project has appropriate controls on manufacture, procurement, or distribution and/or use of these chemicals within their supply chain (ESAP#14).
PS 4 – Community Health, Safety and Security
Community Health and Safety. Makueni Agri-Hub and road transport are the main project elements that may pose community safety and health risks. Mombasa Port Oil Storage facilities is managed by third-party. The Company holds 450m3 of produced vegetable oil in above surface tanks within Makueni Agri-Hub. To address possible safety risks related to spill or fire, the Company has provided adequate secondary containment, conducts periodic equipment integrity tests on the piping system at the Makueni Agri-Hub. The Company has an adequate emergency response plan for the Makueni Agri-Hub and has evaluated the same for the lessor’s storage terminal in Mombasa and determined that it meets their HSE policy requirements and the Kenya Port Authority HSE requirements. The Company has good working relationship in EHS risk assessments and management with the lessor. As mentioned above, management of potential health risks and impacts associated to the castor cake residue as part of the oil extraction process will be addressed by ESAP#11 and #14 above. As part of their program, the Company also undertakes contextual health need assessments within neighboring communities close to its Agri-Hubs. The assessments will inform the development or updates to the Health Model Plan designed by the Company to cover its employees and the communities within proximity to operations. The community health need assessments also inform Eni prioritization of support programs to local health facilities and services that would be incorporated into its community health outreach program.
Life and fire safety: The Company’s design of the Agri-Hubs includes a comprehensive fire safety system that comprises sufficient fire water storage mapped to facility size, fire hose reels, sprinklers and fire extinguishers. In addition, the company has trained fire safety officers and have a fire safety layout plan that guides the workers. The Company has a fire safety clearance certificate from the occupational safety and health department for the Makueni Agri-Hub, and this will be the case for all other Agri-Hubs. The EPRP covers fire risk emergencies.
Road transport. The Company has comprehensive road transport risk management procedures. Vegetable oils are transported by licensed trucks to a third-party oil storage facility (six above surface tanks of 5,000m3 each) at the Mombasa Port. Special tankers are operated by an experienced licensed contractor in oils and gas, as per Eni land transportation and road safety (driving) policies and have speed limiters. For transportation of oilseeds by aggregators to the Makueni Agri-Hub, aggregators are expected to align their policies to the Company land transportation policy, as a contractual requirement. Currently, the Company conducts periodic checks and sensitization sessions with aggregators (contract owners) to ensure compliance. This effort will be improved with the recruitment of field HSE officers to have more oversight to ensure compliance with this procedure.
Security Personnel. Eni policy commitments and guidelines on security forces and human rights comply with PS4 requirements. Eni Security Management System encompasses considerations for both contextual risks and company operations and the use of security personnel guided by the principles of proportionality and good international practice in relation to hiring, rules of conduct and monitoring. The Company implements mechanisms that are commensurate to the level of risks and in compliance with national and international standards and law. The mechanisms cover (i) due diligence on past human rights violations by potential bidders/service providers, (ii) identification of risks and impacts on communities due to the project’s use of security forces, (iii) guidelines on use of firearms, (iv) collaboration on awareness raising and training on Eni human rights commitments, and (v) mechanisms within the Eni community GRM to address community complaints around security personnel for Eni operations.
PS6- Sustainable Management of Living Natural Resources
ISCC Principle 1 covers the legal sustainability requirements of the European Commission Directive (REDII), specifying areas which are excluded biomass production, such as areas with high biodiversity or high carbon stock. Evidence must be provided that the production of raw material does/did not interfere with the nature protection purpose and that the status of the area is not negatively influenced by it. Castor seed is sourced from farmers. Based on the provided information, the castor supply chain is traceable to the farms. The Company is currently onboarding the full supply chain into the Global Risk Assessment Service (GRAS) application, a tool to guarantee that biomass is being produced sustainably and provides information on biodiversity, carbon stocks, land use change (LUC) as well as an agri-technology platform (GIAS-by Agronica), to digitize locations of all farms for ease of surveillance. This is still an ongoing process.
At the time of the IFC appraisal, some 21,000 (of the 44,000 farms engaged) farms had uploaded their details into the application. IFC screened the 21,000 farms and some were found to be in nationally protected areas and in Key Biodiversity areas (KBAs) including AZE and WHS sites. These cases present a risk of significant conversion of natural/critical habitats and the Company has defined an appropriate plan to exclude non-compliant farmers from the poll of the potential suppliers. The application of the GIAS tracing platform to cover all existing and new farmers is on-going. To align with IFC PS 6 (and PS2 - supply chain) the company will: (i) develop a sustainable castor seed sourcing strategy for 2023-2026 period. The strategy will include methodology, commitment on resources, timebound roadmap and working programs to achieve 100% digitized traceability/verification, including interim milestones; (ii) update the Supplier Code of conduct with PS2/PS6 compliant requirements to be signed by all suppliers as part of sales agreement, which will include shifting away from suppliers where conversion risks to natural/critical habitats exist; (iii) define risk screening and monitoring procedures for the implementation of the sourcing strategy and undertaking regular internal audits and independent annual audits; (iv) retain an independent consultant to periodically assess and review land conversion risks associated with the supply chain as it expands. (ESAP#15). The castor plant has been classified as an invasive plant by the Global Invasive Species Database, known to displace native species due to its rapid growth mainly in riparian areas. However, the plant is not recognized as an invasive plant in Kenya and the International Union for Conservation of Nature (IUCN) through the Invasive Species Specialist Group (ISSG), includes castor as a native species of Kenya.
