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 & Social Policies. The company has established a set of Environmental, Health, Safety and Quality policies that embody its commitment to continuous improvement, employee and environmental protection, and compliance with respective national laws of its operation. Although the policies apply to the group’s employees and contractors, they are limited in scope and do not explicitly cover suppliers and distributors. The group will (i) review and update the scope of its E&S policies to cover sales, distribution operations, and third-party suppliers, and (ii) articulate its commitment to achieving the objectives of IFC’s Performance Standards (PSs).(ESAP#1)
Identification of E&S Risks and Impacts. The group identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements. An Environmental Impact Assessment (EIA) was prepared for the Kikuxi plant soft beverage operations in line with national law and licenses obtained from the national Minister of the Environment. The proposed expansions will occur within the existing plant footprint and do not require additional EIA studies and/or addendums. In addition, since 2023, the group has embarked on a review of the risk identification and assessment framework to align with the approach followed by its major international commercial partners, which are largely in line with Good Industry International Practice (GIIP). In this context, it has implemented a raw materials supply screening procedure and undertaken a risk assessment of the water supply reliability (‘Source Vulnerability Assessment or SVA’) for the Refriango plant. The raw materials screening procedure is in its early stages of implementation and requires enforcing (as further discussed in the supply chain risk assessment section below). The SVA showed that although water is available in sufficient quantities, Refriango needs to implement water usage optimization measures and increase water usage efficiency. The group will augment its ESMS to integrate the requirements of its international commercial partners. As part of this effort, it will augment ESMS procedures for the identification of E&S risks and impacts and supply chain management per Angolan national law, IFC PSs requirements and the World Bank Group’s Environmental Health and Safety (WBG EHS) General Guidelines, and Food and Beverage safety (2007). (ESAP#2)
E&S Management Systems & Programs. The group has established an E&S management system (ESMS) compliant with national law and certified per ISO9001:2015 (Quality management), FSSC22000 (Food safety) and has recently adopted sustainability principles implemented by its international commercial partners, which are aligned with GIIP, intended to serve as an E&S benchmark for soft beverage operations. The ESMS incorporates various policies, management programs, and Standard Operating Procedures (SOPs) defining E&S objectives, responsibilities, and authorities. The ESMS is commensurate with the E&S risks of operations and is partially consistent with the requirements of IFC PSs. Hence, the group will augment its ESMS and respective EHS Standard Operating Procedures (SOPs) per IFC PSs, WBG General EHS Guidelines (2007), and WBG EHS Guidelines for Food and Beverage Processing (2007). The updated ESMS will cover all its operations and include a comprehensive Environmental, OHS, and social gap assessment against IFC PSs. In case of a corrective action plan (CAP) resulting from the gap assessment, a time-bound implementation schedule and CAPEX/OPEX will be assigned (ESAP #3).
E&S Organizational Capacity and Training. The group’s E&S function falls under the responsibility of the plant quality manager, assisted by two OHS officers. The manager implements E&S policies and procedures on quality, food safety, environment, and OHS management. To strengthen its EHS function to support the implementation of the updated ESMS adequately, Refriango will develop a comprehensive training program under ESAP #3, to familiarize its workforce, including new hires, permanent and casual employees, contractors, and distributors, with IFC’s PSs, and WBG EHS Guidelines (General and specific to the Food and Beverage Sector) with targeted modules for senior management, for the quality manager, OHS officers and all crosscutting functions and staff with delegated responsibilities in the ESMS implementation.
Emergency Preparedness and Response. Refriango has developed an emergency preparedness and response plan approved by the Angolan Fire Department, broadly aligned with the requirements of IFC PSs. The plan covers most of the major emergency scenarios (e.g. fire, explosion, injury, road traffic accidents, chemical spills, etc.) and provides adequate prevention measures and response arrangements. It includes provisions for regular inspections and maintenance of emergency equipment including fire hydrants, cylinders, alarms, first aid boxes, emergency showers and eye washes. There is a trained team of firefighters and emergency responders who organize periodic emergency drills, and an adequate number of fire marshals and first-aiders in every shift.
E&S Monitoring & Reporting. At Refriango, E&S monitoring and reporting requirements are primarily defined by its environmental permits issued by the Angolan Ministry of the Environment and the voluntary management systems. The local Environmental Authority mandates periodic inspections and compliance audits; the group also performs internal and external audits as part of the quality and food safety management systems. The group is subject to internal compliance audits and is assigned environmental, social, and governance (ESG) objectives. Its annual E&S performance reporting obligations cover water usage, emissions, resource use, waste management, employee wellbeing, diversity, training hours, and human rights and labor terms and conditions. The group will augment its E&S monitoring and reporting procedures as part of ESAP #3.
Supply Chain Risk Assessment and Management: Primary raw material supply chain for soft drinks includes juice concentrates, sugar, and pre-form plastic bottles. Suppliers are shortlisted after due screening against the principles for sustainable agriculture (PSA) to which Refriango is committed, and which aim to address environmental and social challenges associated with agriculture, including water management, land use, biodiversity conservation, farmer livelihoods, and responsible pesticide use.
Refriango’s major sugar suppliers for the year 2024 source sugar from countries including Brazil, France, Poland and Germany. Brazil is in a region of concern for habitat conversion for sugar production, with sugar cane expanding into previously uncultivated areas, some of which have been zoned for production by the government, including parts of the Amazon rainforest and the Pantanal. There is no evidence that sugar production is expanding into undeveloped, natural areas in the other countries. IFC’s assessment revealed that there is no compliance issue (habitat conversion) associated with certified sustainable sugar suppliers since these are PSA compliant; while suppliers for which no certification was available, source sugar from countries which are considered low risk for habitat conversion.
The group changes suppliers periodically, therefore it will produce an updated supply chain management policy, in time for the next purchasing cycle, that includes (a) a commitment to only buy sugar that is certified, or PSA compliant, in the cases where the sugar originates in regions of concern for habitat conversion, (b) a set timeframe, to be agreed with IFC, to increase the percentage of certified sugar supply obtained from suppliers that are verified or certified to relevant sustainability standards; and (c) specific provisions to conduct periodic audits of the supply chain system and compliance with the updated policy commitments (ESAP#4).
As of November 2023, Refriango had 2423 workers (including 7% women) at the plant. Although all workers have direct long-term contracts, around 9% are temporary workers hired during peak production periods under direct contracts. Contractors are appointed for supporting services (cleaning, catering, security, distribution). No additional staff will be required for the expansion project.
Human Resource (HR) Policy and Procedures. Refriango’s primary policies and procedures governing working conditions under the HR Director’s oversight include the Human Resources (HR) Manual, the Internal Regulations, and the Employee Onboarding Manual, designed in line with Angolan Labor laws. The HR Manual outlines the company’s general terms and conditions of employment, working hours, wages and compensation, arrangements for employee representations and occupational health and safety in the business. It also incorporates recruitment and talent acquisition policies, workers training and capacity building, and the ‘Collaboration Agreement with Independent Syndicates’. The group will update its HR policies and procedures per requirements of IFC PS2, to expressly cover issues such as non-discrimination and equal opportunity, freedom of association, prevention of sexual harassment, Gender Based Violence (GBV), workers’ grievance mechanism, prohibition of child labor and forced labor. (ESAP#5)
Working Conditions and Terms of Employment. New workers are informed of the general internal policies via the ‘Employee Onboarding Manual’. The module outlines the company’s HR policies and provides information on standard employee entitlements and duties, such as wages, leaves, working hours, overtime and overtime compensation, medical care, transportation, meal policies, disciplinary procedure etc. For seasonal jobs where verbal contracts are legal, a public notice of the job is posted, indicating the terms of employment with copies made available on request. Most of the workforce is on open-ended terms documented in written contracts.
Employees work 5 days a week in administration and 6 days at the plant, in rotational 8-hour shifts and have free lunch at the workers’ canteen. Working hours are consigned in contracts, in line with national legislation, and the company keeps records for each worker but does not systematically analyze data to ensure that effectively worked hours comply with national law. Wages policy and non-salary benefits for workers are consistent with the collective agreement and Angolan legislation. Wages are paid regularly, the lowest compensation is above the Angolan minimum wage, and workers are paid premium rates for extra work (e.g., overtime, night work, etc.). IFC did not find evidence of non-compliance with local labour laws on working hours, overtime and overtime pay in connection with allegations of unfair treatment and excessive overtime flagged by media.
Non-discrimination, fair treatment and Equal Opportunity. The HR Internal Regulations include provisions on mutual respect at the workplace and the talent acquisition policy spells out the company's commitment to non- discrimination, harassment and equal opportunity. The Gender and Gender Based Violence (GBV) risk assessment indicated that there is a substantial risk of non-compliance. Measures to address this gap will be incorporated in the grievance mechanism. As part of ESAP#5, Refriango will document its commitment to non-discrimination and equal opportunity and will raise staff awareness through sensitization and training on related topics such as conscious and unconscious bias in the workplace and cultural sensitivity in the workplace. The company will incorporate a periodic staff satisfaction survey as one of the tools for internal monitoring and evaluation of the implementation of its updated HR policies and procedures.
Freedom of Association and Workers Organization. Refriango’s collaboration agreement with the union recognizes workers' right to form and join organizations of their choosing and bargain collectively; the HR Director coordinates union relations. Under ESAP#5, Refriango will reiterate its commitment to freedom of association and will sensitize staff on the same.
Worker’s Grievance Mechanism. The group has yet to establish a workers’ grievance mechanism. Complaints by staff are handled by the direct line managers with the option of escalation to HR and Legal and the company CEO. Hence per ESAP #6, The group will develop a workers’ grievance redress mechanism (GRM) per requirements of IFC PS2. The mechanism shall provide the means for the registration of complaints, including a mechanism for raising and addressing anonymous complaints. The GRM will also outline the nominated focal points for addressing complaints related to gender-based violence and sexual harassment (GBV&SH) and outline the specific measures for identification and management of such complaints and the company will provide appropriate training to the appointed focal points. Complainants will also be allowed to choose the gender of the person they submit such complaints to. The GRM shall be integrated into the Employee’s handbook and will be presented in clear uncomplicated language and will integrate union representation for unionized workers. The GRM shall not impede access to other judicial or administrative remedies that might be available under the law.
Protecting the Workforce. Age is verified at hiring, and Refriango reaffirmed that no child labor is involved in its operations. The company shall document its commitment to the prohibition of harmful forms of child labour and forced labour to cover its direct workforce, contractors and supply chain, and will integrate the related procedures in its HR manuals for direct staff (per ESAP #5 above) and procurement processes for contractors and in supply chains (per ESAP #1 and #4 above).
Workers Engaged by Third Parties. As indicated above, contractors are used for supporting services. There is limited due diligence to ensure that these companies are legitimate and no specific policies addressing labor and working conditions for contracted workers. As part of ESAP #1, Refriango will develop and implement a contractor and supplier management policy and incorporate E&S requirements in contractors’ and distributors’ contracts.
Occupational Health & Safety (OHS). Potential operational OHS risks are related to lifting, repetitive work, posture injuries, hygiene and falls on slippery surfaces. Refriango has implemented a basic OHS system with procedures for task-based job safety analyses, emergency preparedness and response, and induction for employee. The production lines are fully automated using modern machinery with adequate safety features and limited moving parts; workers across the plant have appropriate personal protective equipment. Work-related accidents are monitored, and performance trends analyzed by lagging indicators. However, these measures are not consistently applied across all operations, and the OHS training plan does not cover the full spectrum of OHS topics relevant to the hazards and risks in the beverage sector per WBG EHS Guidelines. Also, there appears to be minimum investigation and documenting of occupational accidents.
Nonetheless, in 2023, the group reported a Loss-Time Injury Frequency Rate (LTIFR) within the international benchmark of 1.1 for the manufacturing sector. Intense effort is ongoing to strengthen the current OHS system by implementing additional policies, administrative controls, training and safe work procedures aligned with internationally recognized OHS management frameworks. Refriango will strengthen the current OHS practices following the gap assessment under ESAP#3 to develop an OHS management program consistent with the principles of the WBG EHS Guidelines (General and Food and Beverage Processing) (ESAP#7)
PS3: Resource Efficiency and Pollution Prevention
Greenhouse gases. Per IFC's estimations total GHG emissions were estimated at 87,041 tCO2e (including Scope 1 and scope 2 emissions), which significantly exceeds the IFC reporting threshold of 25,000 tCO2e. The company anticipates that this figure can be reduced once resource optimization measures are fully implemented. Refriango will perform annually quantification of GHG emissions in accordance with internationally recognized methodologies and good practices.
Resources Efficiency. Key resources used at the plant include electricity from the national power grid, diesel and water. Refriango undertook an energy efficiency audit (covering energy, water, and raw materials) in 2023. following which it defined a corporate resource efficiency strategy. The group is also actively working on a roadmap to improve efficiency and introduced KPIs based on the GRI (Global Reporting Indicators). IFC’s recommendations regarding energy use are summarized in ESAP#8 below.
Water consumption. The company undertook a Water Resources Sustainability Assessment, which primarily focused on water resource availability. Water is abstracted from the Cuanza River, via a long pipeline operated by Luanda’s Public Water Company ‘EPAL’. The plant’s hourly water intake is 1,080 m3/hr corresponding to 3.24 M m3 annually. The report concludes that water availability is of no concern, even with significant climate change impacts on river runoff.
However, considering the international benchmark water use ratio (WUR) of 1.7 (for water and CSD), 4 (wine) and 28.5 (hard liquor), it appears that Refriango’s gross water consumption (average WUR of 4.0) exceeds international standards. Despite extensive water metering, the company still records 39% of the gross intake as lost (and not treated) wastewater. This partially explains the inadequate performance of the plant in terms of WUR.
Refriango will (i) perform a detailed water and energy use assessment (including WUR, EUR and water balance assessment) for each of its soft beverage production lines (CSD, energy drink, water and fruit juices), by installing water and energy metering equipment and monitoring its water use efficiency and energy use for each production line monthly and benchmarking its WUR and EUR ratios in line with ‘WBG EHS Guidelines for Food and Beverage processing (2007) and GIIP; (ii) coordinate with its international commercial partner’s water specialist to develop, implement and agree with IFC on a Water Resources and Energy Management Plan (WREMP) aimed at improving its WUR and EUR ratios consistent with the WBG EHS Guidelines for Food and Beverage processing (2007), and GIIP; and (iii) establish an in-house Water Resources and Energy Management Team (WREMT) for the implementation of the WREMP and the annual reporting of GHG emissions. (ESAP #8).
Wastewater and Effluent Treatment. Process wastewater is treated at an onsite activated sludge wastewater treatment plant (WWTP) and discharged to the municipal drainage pond downstream. Sludge is reused for farming activities, while wastewater subjected to tertiary treatment is reused for irrigation, firefighting, car washing and other cleaning operations. Systematic monitoring of effluent quality is performed (including bacteria, pH, N, P, BOD5, COD and TSS, various metals, etc.); and 2023 monitoring results comply with national effluent quality standards and effluent levels of WBG EHS Guidelines for Food and Beverage processing (2007). Stormwater is collected via the plant gutters and discharged to the municipal drainage system.
Air Emissions and noise monitoring. The main sources of point gas emissions are diesel boilers, backup generators, CO2 production process, the preform injection process (natural gas and diesel). Backup generators are used less than 500 hours/year. Routine preventive maintenance of equipment helps optimize efficiency while reducing air emissions. Noise emissions are relatively low considering the nature of operations. Current air pollution prevention and noise control technologies and techniques are generally in accordance with GIIP. Under its ESMS (per ESAP#3), Refriango will perform noise and air emissions monitoring in line with WBG EHS Guideline values.
Waste Management. The plant generates different waste streams, including glass, metals, aluminum, plastic, wood, PET, and cardboard. Refriango is also assigned packaging and waste management targets under its engagements with its international commercial partners (underpinned by the Sustainable Development Goals for Sustainable Communities and cities-SGD11 and Life Below water-SDG14). The company has established a waste minimization, reuse and recycling program in partnership with licensed waste operators. Recycled PET material is channeled to the packaging partner, for bottle manufacturing, while the remaining waste streams are sent for disposal in government-approved landfills. The company will also install RGB (returnable glass bottle) lines under the proposed expansion. Under ESAP#3, the company will require waste operators to comply with its E&S and OHS policies. For PET plastic waste management in remote areas, in collaboration with the education ministry, Refriango launched the ‘Eco Bins’ program in Lobito and Benguela along the Ocean, as part of its Corporate Social Responsibility (CSR). The program includes the installation of collection bins and consumer awareness campaigns on waste sorting at source and recycling.
Hazardous material storage and management. The main hazardous materials used in cleaning include fuel, lubricants, chemical reactants, and detergents. The cleaning-in-place system (CIP) helps minimize the use of chemicals and water; ad hoc training is organized for employees involved in hazardous chemicals handling and storage. Hazardous materials are adequately stored in a dedicated warehouse, labeled and safely handled in compartmented rooms for chemicals segregation. Operations do not involve manufacturing, trade or large-scale use of pesticides or herbicides. Refriango will develop and implement a hazardous material management plan as part of its ESMPs (ref. ESAP#3).
PS4: Community Health, Safety & Security
Refriango premises are in an Industrial Complex fenced off from the surrounding land users. The nearest properties are for industrial, residential, and commercial use. The main E&S risks and impacts to communities include road safety, food safety, management of security personnel, and pollution prevention and emergency response (covered under PS1 and PS3).
Road Traffic Safety. Refriango is subject to its international commercial partners’ fleet management procedure, which defines the minimum required control measures to ensure fleets operate in a manner that safeguards the company’s drivers, products, and the public. However, Refriango has not fully rolled out the existing procedure to distribution operations. Per ESAP#9, the company will (i) develop a transport management plan per WBG General EHS and GIIP, and (ii) implement an action plan to address the requirements, including cascading them down to subcontractors in charge of product distribution.
Food Safety. Refriango is certified per FSSC22000 (Food Safety) and manages food safety and product quality in line with the system’s requirements. Internal and external audits are carried out periodically to ensure compliance with standards and certification conditions, and continuous improvement. In addition, the plant has adopted the KPIs of its international commercial partners. It is strengthening its food quality and safety requirements to meet these requirements based on Environmental and Occupational Safety and Health (EOSH) and Global Food Safety Initiative (GFSI) standards.
Security Personnel and Management Plan. Refriango has contracted unarmed security personnel on its premises. As part of ESAP #1, the company will assess the risks and impacts on communities due to the project’s use of security personnel. Based on the assessment findings, Refriango will develop Security Personnel Management Procedures that will incorporate (i) a security staff Code of Conduct, (ii) guidelines on the appropriate use of force, (iii) training on Refriango’s human rights commitments, and (iv) community grievance channel to address any community complaints related to Refriango’s security personnel.
