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
Policy
Following the recent development of a Sustainability Strategy, including targets for the period up to 2030, the TOI Group has to date adopted nineteen (19) sustainability policies which are aligned with the relevant PSs. They are accessible on the TOI Group’s website and apply to all its companies and subsidiaries. The Group is currently in the process of revising its internal operational plans, programs and procedures, including training to implement these policies.
Identification of Risks and Impacts / Management Programs
In line with local legal requirements, the Group identifies and manages E&S and OHS risks associated with the activities of its companies and facilities and reports on their EHS performance. The Group’s E&S management system (ESMS) covers all its companies and facilities and relevant operations, and includes procedures relevant to risk assessment management, training, monitoring, auditing, reporting and staffing. Whilst the TOI Group’s Sustainability Lead undertakes audit visits and inspections and monitors permits of the facilities owned and operated by third parties, specifically the five storage facilities in MD, relevant procedures to monitor compliance of those operations and alignment with the relevant and applicable Group policies are yet to be integrated in the Group’s management systems. ESAP#1 will address this integration, including that of Frial Terminal at Constanta Port (RO) which is in the process of being acquired. The Group plans to progressively implement ISO 14001 Environmental and Social Management System (ESMS) at all its companies, subsidiaries and facilities.
Operational Capacity and Competency
The Group Head of Corporate Governance is responsible for the supervision and management of the Group’s environmental, occupational health and safety performance across all its operations, including implementation of the Group’s ESMS. The Group Head of Sustainability is responsible for sustainability reporting, supported by the data provided to him by dedicated OHS and E&S staff at company level. The Group has recently established a ESG Committee which, amongst others, will ensure involvement of TOI Group Management and all employees in the development and implementation of the Sustainability and ESG Strategy with its policies and programs. The operational capacity and competency to manage the E&S risks is developing. Company will ensure continuous development and implementation at all levels – company and facility - and ensure it aligns with IFC’s PSs. In line with PS1, Company will raise the internal awareness and knowledge of EHS, relevant to the TOI Group’s operations. E&S training packages will be designed and delivered to TOI staff who are responsible for managing the implementation of the ESMS. Company will designate competent E&S personnel with knowledge, skills, and experience necessary to implement the specific measures and actions required under the ESMS and the ESAP, as per IFC PS1, including current knowledge of the host country’s regulatory requirements and the applicable requirements of Performance Standards, and with clear lines of responsibility and authority. (ESAP #2).
Emergency Preparedness and Response Plans (EPRP)
Emergency plans are in place at all the facilities to ensure a coordinated and prompt response to protect workers, property, and assets during unexpected events. Training, tests and drills (internal and with local authorities) are regularly undertaken for the identified threats, notably fire, dust explosions, earthquakes and chemical spills, typically 1-3 times a year at the storage facilities. During the site visit to the Giurgiulesti facilities, fire alarm call points and clearly displayed evacuation route maps and hose reels were noted. Following an incident at the grain storage silos of Giurgiulesti which occurred in 2023, the Danube Oil Company, a TOI Group company which owns the storage facilities at Giurgiulesti, operates now Trans-Bulk Logistics current flat storages for the sunflower meal. New storage facilities for sunflower meal are considered to be rebuilt in a close future.
Monitoring and Review
Data on E&S performance, including energy and water consumption, waste generated and recycled, employee data, OHS statistics, including accidents and near misses, are collected monthly by the E&S Managers/OHS Managers at all companies and subsidiaries. Other metrics, including legal compliance, permits, training records, are also periodically collected and updated. The Group Head of Sustainability is responsible for reviewing the data, identifying and reporting on non-compliances and corrective actions to management. The Group Head of Sustainability coordinates the implementation of any corrective actions at the company and facility level with the Group management.
The TOI Group facilities which are certified under ISO and/or other standards undergo (i) external audits for certification maintenance and recertification purposes and (ii) internal audits as per ISO standards requirements. All Group companies and subsidiaries with all their facilities are subjected to EHS internal audits, as per an established schedule, to assess compliance with the applicable EHS requirements and TOI Group policies.
Supply Chain
As indicated above, the proposed investment will provide working capital to commodity sourcing and storage in MD and RO. Some of the commodity stored in MD and RO may be sourced and imported from Ukraine and other countries by third parties. However, this sourcing and import is not covered by this Facility. Sourcing by Company is undertaken directly from producers or through suppliers in MD and RO. The TOI Group is the leading agricultural producer in MD with around 70,000 hectares of high productive farmland in long-term leases, with approximately 2,000 farmers producing seeds/grains. The average size of farms supplying commodities to the Group is above the overall national average. The production of grains and seeds is mechanized. The manual work has been eliminated, thus minimizing PS2 risks. Commodities are produced on fields that have an agricultural designation, where there have not been recent deforestation or significant habitat conversion.
The TOI Group’s Corporate Sustainable Sourcing Policy prioritizes sourcing practices that reduce environmental impact. This includes selecting suppliers who demonstrate a commitment to sustainability, such as reducing emissions, conserving natural resources and minimizing waste. The same policy also commits to promoting fair labor practices and respecting human rights throughout the TOI Group’s supply chain. Other TOI Group policies relevant to its supply chain, include the Group’s Human Rights Policy which prohibits child or forced labor, its Deforestation Free Supply Chain Policy which commits to not sourcing products from suppliers involved in deforestation or forest degradation and its Corporate Biodiversity Conservation Policy which includes the commitment to screen the TOI Group’s suppliers and prioritize sources of materials and commodities that originate from regions, countries and households that have not been involved in any significant impact to biodiversity and natural habitat. Suppliers are contractually bound to a Suppliers Code of Conduct which follows these policies.
That said, a Supply Chain Management System (SCMS) has still to be developed across the Group. In accordance with ESAP#3, the TOI Group will finalize and implement a SCMS consistent with the Group policies and IFC’s PS2 and PS6, including traceability of all suppliers; an annual verification audit of the implementation effectiveness of the Supplier Code, sourcing risk assessment with the development of corrective action plans, where required, the implementation of which will be monitored; and a formal process for supplier disengagement in case corrective actions are not addressed by the supplier in an agreed period of time.
PS2: Labor and Working Conditions
Whilst the Company as a trader of the Group only has 17 employees, the TOI Group employs approximately 860 personnel in MD. These permanent employees are involved in the commodity sourcing, transport, storage and loading activities of the Group. Of these around 30 percent are female. Due to the nature of the operations which involve the use of heavy machinery and shift work, the male proportion of the workforce dominates, but there are a significant number of females holding management, laboratory and administrative positions. In addition to the direct workers, there are around 500 contracted workers, the majority of which perform road transportation services of commodities and goods. Others are involved in other support or construction services, including equipment installation and maintenance.
The Group’s Human Rights Policy, which covers employees and suppliers, is aligned with the Universal Declaration of Human Rights and the ILO Conventions. As per ESAP#4 this policy as well as other relevant human resources policies will be revised to explicitly cover contracted workers. The Group’s Human Rights Policy recognizes worker’s right to associate and right to collective bargaining, provides for non-discrimination and equal opportunities and prohibits forced and child labor in its operations. Around 25 percent of the Group’s workforce in MD is unionized. The TOI Group has yet to develop a policy for the prevention of Gender Based Violence and Harassment (GBVH). This will be undertaken as per ESAP#4 together with the revision of the other policies relevant to labor and working conditions.
All employees and temporary workers receive a written contract as per local requirements, including clear indications of the terms of employment, leaves and other benefits (e.g. annual medical screening, insurance, and hot meals). Several Ukrainian refugees are employed by the Group companies in MD and are subject to the same employment conditions and pay as other employees. The Group has a Grievance Management System for their permanent and contracted employees which is about to be revised and will meet the requirements of PS2.
In accordance with its Health and Safety Policy, the Group maintains an OHS management system in line with ISO 45001, which is implemented by all its companies, subsidiaries and facilities, and includes policies, procedures and safety instructions for direct workers, contracted workers, and visitors. The Group assesses OHS risks at the company level and reviews the assessments on a periodic basis as well as when changes occur or new processes, equipment and materials are introduced and when accidents or near misses occur. All employees undergo safety training targeted to their roles, both on induction and periodically thereafter
The most significant OHS risks at the TOI Group’s facilities relate to workplace dust, noise and physical hazards, such as falling from heights, working in confined spaces, equipment and machinery movement, and chemical hazards, such as exposure to solvents and acid fumes. With regard to dust and noise, workplace mitigation includes regular maintenance of machinery and equipment, housekeeping and the provision of protective equipment for the workers. However, noise and dust monitoring in the workplace is not a legal requirement, so monitoring is only undertaken following a grievance received from the affected workforce. The TOI Group will develop and implement a relevant workplace monitoring plan, based on a workplace hazard assessment at the operating facilities in MD and RO and will implement annual workplace health & safety audits in accordance with GIIP (ESAP#5).
The Group maintains a procedure to record and investigate near misses and accidents, with statistic collected monthly from each site. In the last two years there have been no accidents associated with the sourcing, storage and loading of the commodities, i.e. the Project.
PS3: Resource Efficiency and Pollution Prevention
In terms of resource efficiency, greenhouse house gas (GHG) emissions and pollution prevention, the crushing plants, which are not part of this Project, are most relevant. Aside from GHGs and other emissions, water and energy requirements are closely monitored as well as the management of waste. Aligned with its Sustainability Policy, the TOI Group is implementing initiatives to reduce energy and water consumption.
Resource consumption
Company itself, as a trading company with 17 employees, has very little water and energy consumption.
GHG emissions
The Group’s Climate Change and Energy Efficiency Policies describe the approaches to both emissions management and addressing climate related vulnerabilities.
The main sources of emissions are the crushing plants which utilize energy for the crushing and grain drying processes. These are not part of this Project.
For this Project, emissions from transport and storage of the commodities have been calculated as 3,572 tCO2e per year.
Dust and Noise
Dust is kept under control by dust extraction systems. The main risk at the storage facilities are dust explosions so a dust-free environment is the aim. The concentrated dust is non-hazardous, organic waste which is brought to landfill. Noise emissions from the facilities are in compliance with permit requirements. As indicated under PS2, noise emissions are mitigated through regular maintenance of machinery and equipment. Dust monitoring will be implemented as part of ESAP #5.
Waste
The TOI Group has hazardous and non-hazardous waste management procedures including a system of appropriate sorting, handling, storage and disposal which are consistent with applicable legal requirements. All hazardous and non-hazardous wastes are collected for disposal by licensed contractors or public services.
Hazardous materials management
The main hazardous materials are small quantities of chemicals used in the laboratories associated with the storage units. Diesel for the back-up generators is stored at the facilities. Recent internally undertaken audits have indicated that, in general, appropriate facilities and documentation are in place for storage, handling and spill control of such materials. Corrective actions identified are being implemented.
PS4: Community Health, Safety and Security
The majority of the TOI Group’s storage facilities in MD and RO are located within industrial areas surrounded by sanitary protection zones. Therefore, community receptors are not directly affected by them apart from traffic associated with the transport of raw materials and products.
Depending on the size and capacity of the storage facility, truck movements can range from 10 – 80/day. Smaller storage facilities may receive approximately 10 trucks/day. Larger storage facilities, such as Elevator Kelley Grains SA or Cereale Prut SA, can receive and/or deliver up to 1500 tons of commodities per 24 hours requiring approximately 50-60 truck movements.
As part of its ESMS, the TOI Group has developed and implemented a Fleet Safety Policy and Fleet Safety Management Program which includes aspects such as safe driving which are being adequately implemented and monitored.
Site security is mainly provided by company employees with a small number contracted from security service providers. All security personnel are trained in the TOI Group’s security procedures, how to react to different situations and are prohibited from holding firearms or other fighting means (knives, sticks etc.). No community complaints have been reported by the TOI Group relating to their security personnel.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Giurgiulesti Free Port, operated by Danube Logistics, is located at the confluence of the Prut and Danube Rivers and overlaps with the Danube Delta Ramsar Site. TOI Group operations are confined to part of the Free Port at the northernmost part of the Ramsar Site, with no greenfield expansion. Impacts on biodiversity values associated with the Ramsar Site are therefore not anticipated. In line with PS6 requirements, the TOI Group will inform relevant authorities or institutions responsible for the designation and management of the site with respect to any future planned activities or expansion within the Danube Delta Ramsar Site, if and when they occur.
Sustainable Management of Living Natural Resources
As stated under PS1 and based on information from the TOI Group, the stored commodities which the Company trades are sourced from RO and MD, with some from Ukraine and other countries. (Note: sourcing from Ukraine and other countries is not covered by this Facility). Sourcing is undertaken either directly from producers or through suppliers. According to information from the company, commodities come from production areas where there has not been recent habitat conversion. There are no certified grains and seeds available through suppliers in RO or MD. In line with PS6 requirements, deforestation and habitat conversion risks related to the Group’s supply chain will be further mitigated by the implementation of the Supply Chain Management System as per ESAP#3.
