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 Policies. InVivo adopted a unified CSR policy in 2023 which commits to the (i) reduction of its environmental footprint and the optimization of resource efficiency (being carbon neutral in 2050 and achieving zero waste); (ii) positive and innovative products/services (through carbon neutrality, soil health, farmers’ livelihoods, sustainable value chain); (iii) employees’ safety, well-being and professional development. To translate these policy commitments, InVivo has been implementing a 2030 Sustainability Strategy https://www.invivo-group.com/en/direction2030 since 2020 which includes five objectives: (i) working towards zero pesticide residues; (ii) restoring and enhancing biodiversity; (iii) contributing to carbon neutrality; (iv) preserving and regenerating the soil; and (v) diversifying farmers’ incomes. Malteries Soufflet translated these five InVivo objectives into its own 2030 CSR division strategy with measurable Key Performance Indicators (KPIs) and annual targets. Malteries Soufflet’s four sustainability objectives are: (i) reduction of its carbon footprint (Scope 1 and 2) by 50% and water usage by 30%; (ii) reduction of its sick leave accident by 60%; and (iii) achievement of 80% sustainable barley sourcing in its global barley purchases. Energy, water, occupational health and safety (OHS) and sourcing roadmaps have been defined for its existing 29 malting plants, including assignment of EHS capital expenditure (CAPEX) / operational expenditure (OPEX) for 2023-2025.
Malteries Soufflet’s E&S commitment for consistent risk management in all its malting plants is based on achieving ISO 9001 (Quality Management System), 14001 (Environmental Management System), 45001 (Safety Management System), 50001 (Energy Management System) and Organic Certification. Malteries Soufflet’s E&S policy commitments will be implemented at the new Pleven and Johannesburg malting plants.. The Group’s performance-based requirements include national legal and regulatory requirements and international regulations (e.g., ATEX Directives) applicable to its malthouses. Policies’ implementation effectiveness is verified through internal/external audits and findings and corrective actions. A global review of the local management system is done annually through a management review. Malteries Soufflet shares its global results annually in the CSR Committee of InVivo Board.
Identification of Risks and Impacts. E&S risks and impacts are identified by the company at all its malting operations, according to country level E&S regulatory requirement, building/operational permit’s Terms and Conditions, and Malteries Soufflet’s EHS Standard Operating Procedures (SOPs), as defined in its Quality, Environmental, Health and Safety (QEHS) management system. For the new Pleven and Johannesburg malting plants, plant’s technical design and equipment’ performance specification take into account Malteries Soufflet CSR 2030 targets (energy/water resource use and efficiency, workplace safety and sustainable sourcing). For the proposed Pleven malting plant, an E&S Impact Assessment (ESIA) was not required by the local authorities. Environmental License’ Terms and Conditions include annual reporting of dust (PM) level at barley unloading station, energy usage (from grid) and steam, quantity/quality of water extracted from on-site borehole, OHS statistics, ambient noise, volume / characterization of effluents and solid/hazardous wastes. For the new Johannesburg malting plant, Malteries Soufflet will commission and finalize an ESIA in compliance with South Africa’s legal and regulatory requirements and IFC’s PSs (ESAP#1). Aside from regulatory requirements, EHS risk assessment at Malteries Soufflet malting plants is done through using Malteries Soufflet EHS SOPs, which are the foundation on which malting plant’s EHS management programs are established, reviewed and implemented annually. The scope of such risk assessment covers contractors’ operations, including identification and development of corrective measures, as needed, based on audits of Group’s E&S requirements, and enforcement of such requirements applicable to contractors performing work at company’s facilities. All malting plants undergo an annual internal audit against Malteries Soufflet EHS procedures and evaluation of its regulation conformity against applicable national legal and regulatory requirements and international regulations. Deficiencies identified are documented and addressed through, plant-level time-bound corrective actions plans, with CAPEX/OPEX assigned for their closure. Malteries Soufflet, through its local team, maintains a legal EHS and labor registry of applicable national laws and regulations, accessible to legal, CSR and operational management teams.
E&S Management System and Programs. Malteries Soufflet has implemented an Integrated QHSE management system aligned with international management standards (ISO 9001:2015; ISO 14001:2015, ISO 45001:2018 and ISO 50001:2018) which is implemented at the malting plants. The scope of this QHSE management system includes its main industrial process component, including malt/barley conveying system, barley storage silo, malt production system (steeping, germinating, and kilning). Malteries Soufflet plans to certify its new Pleven and Johannesburg malting plants against these ISO standards within 24 months after commissioning. Malteries Soufflet QHSE management system is robust and consistent with PS. A Hazard Analysis and Critical Control Points (HACCP) framework has been developed for the malting facilities which is under the responsibility of Malteries Soufflet’s CSR Director and the Food Safety Manager.
Organizational Capacity/Competency. At the InVivo Group level, a CSR Director oversees the CSR/Sustainability 2030 strategy and monitoring/reporting on CSR/EHS performance of all divisions. The malting division has a dedicated CSR Director, 22 QHSE managers managing the 29 malting facilities, one Safety Manager, one Food Safety Manager and one CSR Manager. Malteries Soufflet plant-level EHS function is under the oversight of a regional QEHS manager who provides professional coaching program to plant-level EHS teams. InVivo Group has four cross-functional monitoring committees (Audits and Risks; Appointments & Remuneration, Ethics and Governance; CSR). The Audits and CSR committees are involved in Malteries Soufflet QHSE monitoring and performance review. The new Pleven and Johannesburg plants will be each staffed, upon commissioning, with one full-time QEHS manager and one safety officer.
E&S Training. Malteries Soufflet has implemented a comprehensive EHS training program for its malting operations that encompasses an induction on EHS for new malting workers and discussion on CSR policies, strategies, objectives and targets. At plant-level, EHS training is defined as per employee roles and responsibilities and workplace risk assessment (e.g., use of PPE, good housekeeping practices, electrical safety (Lock-Out/Tag-Out system), work-permit system (e.g., confined space, hot work, working at heights, rigging and scaffolding, heavy lift), emergency preparedness, fire prevention, first aid, chemical handling and storage). Plant-level management team is aware of management systems and emergency preparedness. An annual plan for OHS training is developed, and outcome of risk assessments to be agreed with the Plant level management. Malteries Soufflet have Environmental and OHS preventative plans for all contractors.
Emergency Preparedness and Response. Malteries Soufflet division has developed Emergency Response Plans (ERPs) at all its operations, commensurate to potential risks, including life and fire safety. These are documented and maintained in accordance with local law. ERPs are a combination of procedures for using, inspecting, and maintaining emergency response equipment; notification of the public and emergency response agencies; and training programs. Specific training on European Union (EU) requirements (ATEX directives), describing equipment and safe working operations for a potentially explosive atmosphere, is included. EHS operational and emergency procedures and staff training to prevent and respond to accidental events, including ammonia management, are in place and will be updated for the new plants. The malting plants in Bulgaria and South Africa will be equipped with dedusting systems and safety devices, including life and fire (L&FS) equipment (fire alarm systems, fire hose and fire extinguishers) as it is in place in Malteries Soufflet’s barley silos in the four barley origins,. Malteries Soufflet’s silos are inspected on a regular basis for compliance with ATEX directives and included in the preventative maintenance program. The new malting plants in Pleven and Johannesburg will use ammonia for refrigeration purposes, store and use chemicals to keep equipment clean, utilize combustible substances and employ pressurized vessels. For the storage and use of chemicals and substances, emergency preparedness and response scenarios will be in place to ensure that workers are protected and understand what measures are to be taken in the event of an emergency. The ammonia storage areas at the malting plant will be equipped with leak detectors, alarms and signage, and have entry restricted to only authorized personnel. A standard requirement at all malting plants is the installation of clearly marked evacuation routes and lighting throughout the facility. These were observed along with appropriate equipment during the visit of Pleven malting plant. Annual evacuation drills are held, and coordination takes place with local emergency authorities. There are trained local staff along with appropriate equipment in place.
Monitoring and Review. Malteries Soufflet has implemented a QEHS monitoring and reporting system, including performance indicators related to resource efficiency, environmental protection, and OHS leading / lagging indicators. Malteries Soufflet management team reviews the EHS performance of the malting plants on a quarterly and annual basis. Benchmarking is done against the energy, water, OHS and sustainable sourcing roadmaps and yearly objectives as defined in the 2030 CSR targets. An Annual Management Review takes stock of progress achieved against CSR sustainability targets and defined additional mitigation measures for improvement. Since 2012, Soufflet Group published a CSR (Sustainability) report covering the malting plants. The InVivo CSR (Sustainability) report is scheduled to be disclosed in November 2023 and will present consolidated figures based on audited results for each division, including Malteries Soufflet’s E&S performance. Various types of internal QHSE audits and controls are conducted at Malteries Soufflet’s operations. The QHSE Managers conduct equipment, staff safety audits, HACCP and safety standards implementation of selected facilities. Hygiene and safety audits are conducted by the In Vivo Group’s audit department depending on site performance and implementation of corrective actions are monitored.
Supply Chain Risk Assessment & Management System. In June 2020, Soufflet Group launched the program “Sowing Good Sense” which was adopted by InVivo - https://www.invivo-group.com/en/group/sowing-good-sense. The 2030 CSR target for Malteries Soufflet is to achieve 80% of sustainable barley sourcing through promotion of agro-ecological practices, reduction of carbon footprint, biodiversity protection, preservation of water resources and soil quality. The barley sourcing risk in the four project countries is considered low from a PS2/PS6 supply chain requirements as all barley produced is mechanically harvested (eliminating the risks of Child Labor / Forced Labor (CL/FL) and are produced in existing consolidated agricultural areas for the European-based and South Africa origins (see PS6 section below for further details for South Africa). All barley purchased is/will be 100% traceable to farms, including in Bulgaria, Poland, Romania and South Africa. To achieve its 2030 CSR targets of 80% sustainable cultivated barley, Malteries Soufflet developed a sustainable sourcing strategy in all project countries. Malteries Soufflet is using the Sustainable Agriculture Initiative (SAI) / Farm Sustainability Assessment (FSA) tool - to audit farmer’s agronomic management practices and respect for bio-physical environment (soil, water, biodiversity) at the farm level. Implementation of the FSA tool in the four origins is / will be independently audited.
PS2. Labor and Working Conditions
As of June 2023, the Bulgarian malting operations in Pleven and Haskovo had 48 permanent employees (16 female or 32 percent of the total workforce). Upon its commissioning, the Johannesburg plant is scheduled to create 50-60 permanent jobs.
Human Resources (HR) Policies and Procedures. InVivo defined its internal documentation to covered HR organization: Ethic code, Code of conduct, Compliance & Alert procedure. Malteries Soufflet applies InVivo documents in its organization and in all targeted origins (Bulgaria, Poland, Romania, South Africa) and local labor regulatory requirements. As per the InVivo HR organization, the contents are shared with new employees during their induction process. The HR induction covers information on terms of employment and working conditions, covering employment, recruitment, probation period, transfers, promotion, and termination. It provides details on work schedule, remuneration, including overtime pay, public holidays and leave, health insurance, pension fund, training and development, staff relations and communications (including a grievance mechanism or GM), occupational health and safety, workplace rules, code of conduct and disciplinary actions that could be taken. The company offers competitive salaries at or above market and industry practice in Bulgaria. The Group’s HR policy framework is consistent with the requirements of IFC PS2.
Working Conditions and Terms of Employment. The Malteries Soufflet’s workforce in operations consists of direct workers under permanent or temporary contracts. Regular working hours and overtime paid are in accordance with the country-level labor laws. In the Pleven malting facility, there are two shifts of 12 hours. Four teams are rotating on two shifts to ensure that maximum working hours per week is respected. The company offers competitive salaries which are / will be regularly updated, based on benchmarking against market and industry practice in Bulgaria and South Africa. Employees are provided with a contract and the terms and conditions specific to the grade and role of the employee as per the Group’s requirements and country labor law.
Workers Organizations. Malteries Soufflet do not restrict the freedom of workers to associate. Management encourages workers to establish a worker committee to discuss labor and OHS aspects of their operations. This provision is defined in InVivo’s Ethic code and communicated during worker induction session. These workers organizations are in place in Bulgaria, Poland, Romania and will be established in South Africa, upon plant commissioning.
Grievance Mechanism. A formal corporate worker’s grievance mechanism procedure is in place and provides several alternatives for employees and temporary workers to raise concerns in writing to management other than to immediate supervisors and allows grievances to be presented without the risk of retaliation, in line with IFC’s PS2. In case contractors do not have their own grievance mechanism, the Group will extend their grievance mechanism to third party workers. Sexual harassment stipulations are included in the InVivo’ Ethic Code, which is used in the InVivo’s subsidiaries, including Malteries Soufflet. The company does not tolerate any form of harassment, and this is communicated to all employees during the induction process. The InVivo’s Code of conduct includes the respect for the individual and for privacy.
Protecting the Work Force. Neither child labor or forced labor will be or is utilized by any Malteries Soufflet operation as per the InVivo Group HR requirements. Malteries Soufflet only employs persons according to legal age employment regulation.
Workers engaged by Third-Party. Malteries Soufflet, in case of contractors need, will select them regarding their technical competences and will validate the contractor’s EHS level. In the preparation of Contractor Management Plan, a dedicated part will be for contractor’s EHS obligation during the whole construction phase. The civil engineering firm at the Pleven construction site has developed its E&S Contractor Management Plan and assigned a full-time EHS officer who is permanently on site. The main role of the EHS officer is to oversee the enforcement of the E&S rules by the civil contractor and all sub-contractors, including compliance with applicable labor and OHS regulatory requirements. Plant-level General Manager also oversee monitoring compliance with labor law by the contractor companies. There have been no lost-time accidents registered at the Pleven construction site since its start in April 2023.
Occupational Health and Safety. Inherent hazards and risks of a malting plant include working at height, in confined spaces, with energized equipment, or with hazardous materials (ammonia) have been assessed and safe working measures developed and implemented. As part of its 2030 CSR strategy, Malteries Soufflet has set a target of a reduction of 60% of Loss-Time Injury Frequency Rate (LTIFR). Current LTIFR at the level of Malteries Soufflet globally was 9.5 in June 2023, which is higher than OHSA Industry Data on malting manufacturing for 2021 (6.1). Pleven and Haskovo malting plants in Bulgaria have not registered lost-time accidents for 308 and 3,615 days respectively. Malteries Soufflet has developed an OHS 2023-2024 roadmap which actions will focus on (i) training and coaching its operational teams and managers, including performing risk analysis prior to operations; (ii) reinforcing its processes post major accidental events, through enhancing the quality of analysis and the use of feedbacks from other malting plants, and defining serious accidents and crisis management standard, (iii) leveling up Malteries Soufflet safety standards and organization, including implementing safety targets at operational level and improving the sharing and use of feedback and initiatives across sites; (iv) anticipating the impact of organizational changes and projects on safety. Building on its All-Safe Together (OHS) policy and its ten golden rules, Malteries Soufflet is seeking to avoid and minimize workplace risks in its operations. OHS SOPs and working permit system are in place and were observed at Pleven facility. The new Pleven and Johannesburg malting plants will be fully automated, minimizing workplace risks. Malteries Soufflet conducts annual updating of its safety risk assessment at its plants, assessing the implementation effectiveness of its safety procedures. OHS prevention plan, with the technical support of specialized companies, are established, if needed. Malteries Soufflet has assigned corporate and plant-level OHS specialists. OHS function at Pleven is composed by an EHS manager and a safety manager, which is supported by OHS Working Committee which have regular meetings. Safety leading and lagging KPIs are reported via an OHS dashboard for each facility and publicly disclosed in the facilities. When incident or accident occurs, a flashcard is developed showing the incident or accident, the root causes and corrective measures taken. The flashcard is then translated and published in all facilities. To reduce noise level at the plant, engineering and administrative controls are implemented. As needed, for workplace having noise levels above 80 dBA, all equipment is
confined inside the production buildings and earmuffs are provided to staff. Annual health check-up of workers is done. Employees are trained on first aid.
Supply Chain. Barley production in all four origins (Bulgaria, Poland, Romania, South Africa), due to being fully mechanized, is not known to be associated with PS2-related supply chain risks (child labor, forced labor, and significant safety issues).
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency. The production of malt is a resource (energy/water) intensive process. Malteries Soufflet 2030 CSR strategy includes reduction targets for carbon footprint (Scope 1&2) by 50% of CO2 emissions and for water usage by 30%. Malteries Soufflet developed roadmaps for achieving its energy and water reduction targets, including annual plant-level objectives. Cleaner production measures implemented included the introduction of renewable energy, such as use of co-generation, heat pump, solar panels. Technical water saving solutions are also implemented in the operational facilities to reduce water usage, including a patented process for re-circulation of process water and use of treated effluents after UV/reverse osmosis instead of raw water, where allowed by the local regulations. For Pleven and Johannesburg malting plants, these innovative technologies have been mainstreamed into plant’s technical design and will meet GIIP.
Greenhouse gas (GHG) emissions. The project is estimated to generate 23,928 tCO2e/year for scope 1 emissions, and 10,437 tCO2e/year for scope 2 emissions. Hence, the total project absolute emissions are 34,365 tCO2e/year. The projected relative emissions of approximately 30,803 tCO2e/year rely on the company’s anticipated adoption of cleaner energy practices in their operations, such as utilizing solar panels for electricity generation, and efficient co-generation for heating. These GHG calculations have been conservatively estimated by IFC. Malteries Soufflet will quantify annually its GHG emissions in accordance with internationally recognized methodologies and good practice.
Pollution Prevention. The main environmental risks associated with the malting plants are related to grain dusts, noise, and wastewater. As part of its CSR 2030 Strategy, Malteries Soufflet has set a target of zero percent of landfilled waste in 2030. In Bulgaria, Malteries Soufflet is managing its solid wastes in a sustainable manner including biowaste which is sold as animal feed or as fertilizer. As grain dust at malting plant may pose risk of explosions or fires if allowed to build up in an uncontrolled way within the facility, the new Pleven and Johannesburg facilities will install state-of-the-art dust control, utilizing filtered ventilation and enclosed conveyor systems. Maintenance plan and cleaning program are already part of Malteries Soufflet’s EHS SOPs. At this stage of the design, the company is considering the installation of small gas boilers to produce heat that could be used in the kilning process. The thermal power capacity would be below 3MW in average, which is considered a small combustion facility, as defined in WBG General EHS Guidelines. Based on 2022 measurements, air emissions from boilers in the existing Pleven malting plant meet local regulatory and the WBG EHS Guidelines values. Process wastewater is generated by the malting plant only. The existing Pleven malting plant is connected to the municipal wastewater treatment plant (WWTP). The Johannesburg malting plant is scheduled to have its onsite WWTP which, based on Malteries Soufflet’s E&S policy commitment and equipment performance specifications, will meet WBG EHS Guidelines. Hazardous materials, such as ammonia for refrigeration and diesel for back-up genset and fire system generators, are properly and separately stored and marked with appropriate warning signs. Secondary containment is in place, in case of spills.
Pesticide Use and Management. Rodent and pest control at the malting facilities is undertaken by licensed companies.
PS4: Community Health, Safety and Security
Community Health and Safety. While both plants are in industrial areas, the closest human settlements from the Pleven and Johannesburg plants are respectively at 200- and 1,000-meters distance. Potential risks and issues for Bulgaria and South Africa are those associated with management of dust, odor, noise, and transport. As indicated, there are EHS operational safeguards and procedures, including sensors, atmosphere monitoring, and emergency response to prevent and respond to industrial accidents, including ammonia management. Malteries Soufflet carried out an assessment of community health and safety risks and impacts of its malting operation in Bulgaria. A risk assessment with respect to management of dust, odor, noise, transport, and chemicals, including ammonia management, will be done for both new plants prior to the commissioning and, for the Johannesburg plant, assessed as part of the ESIA process (ref. ESAP#1).
Road Traffic Safety. For the transport of grain/barley, Malteries Soufflet uses Soufflet Agro and third-party service providers. For its own trucks, Soufflet Agro has specific policies/procedures for drivers’ safety rules and in accordance with country-level road safety regulations. Soufflet Agro drivers receive periodical drivers’ safety training. Local third parties transport are required by the company to comply with legal requirements for the vehicles. There is a technical check by a qualified technician each time before leaving the garage for work. Drivers are trained in terms of safety instructions upon they start working for the company and a refresher is delivered every three months. Medical checks are undertaken upon the start of work. Drivers must hold a psychological fitness certificate which is renewed periodically. To avoid the presence of barley delivering trucks on public areas and access roads, the new Pleven and South Africa malting plant will have a parking for trucks within their premises.
Food/Product Safety Management. As stated above, the malting division has a HACCP framework in place based on the ISO 22000 food safety standard, which is annually checked by an independent certified body (for France only). Annual internal HACCP risk assessments are completed. All malting facilities in the Project’s countries, including Pleven, have an on-site laboratory for quality testing.
Security. Malteries Soufflet uses contracted security personnel for controlling access to the malting plants. Security guards are trained and certified in accordance with local regulatory requirements and do not carry firearms. In case of a security incident, the local police will be called. No incidences regarding the conduct of the security personnel were reported by the company. Security risk and management will be included in the ESIA for the new plant in Johannesburg (ESAP#1).
PS6: Biodiversity conservation and sustainable Management of Living Natural Resources
Sustainable Management of Living Natural Resources. Grain/barley production areas in Bulgaria, Poland, Romania and South Africa are in consolidated agricultural lands, and as such there is no risk of recent or expected significant conversion of natural habitats. In South Africa, a biodiversity risk screening for the five targeted barley production regions indicated that these regions are long-standing commercial farming areas, in which high priority fragment of indigenous ecosystems, micro-endemic flora species and high-priority birds may exist within the farmland footprint. Also, in the driest barley producing regions, priority arid zone ecosystems and flora and remnant wooded savannah wildlife remain. Using national biodiversity database in high resolution, Malteries Soufflet will update its Sustainable Procurement Policy and Supplier CSR Charter (Supplier Code), consistent with IFC PS6, clarifying that land use expansion into natural habitat by its third-party barley suppliers in all origins is prohibited, especially for South Africa barley sourcing (ESAP#2). Malteries Soufflet will implement a farm-level biodiversity risk screening procedure and monitoring mechanism in South Africa for checking on compliance. Independent annual verification of Supplier Code compliance will take place. In accordance with its 2030 CSR target of sourcing more than 80% of sustainably produced barley, Malteries Soufflet is implementing a sustainable barley road map in its barley origins with focus on (i) increasing SAI/FSA volume through carrying out FSA audits in project countries, (ii) integrating SAI/FSA equivalent certifications; (iii) developing sales of sustainable barley; (iv) developing and commercializing InVivo dedicated sustainable initiatives, such as Sell Clim Care offering (low carbon barley/malt); (v) expanding Clim Care to biodiversity and “regenerative agriculture” approach. The SAI/FSA tool aligns with the PS6 requirements.
