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
E&S Management System & Programs, Rima’s industrial operations are certified under several management systems standards including ISO 9001 (Quality), 14001 (Environment), ISO 45001 (Occupational Health and Safety), and SA8000 (Labor). Rima’s forest management unit in Buritizero is certified under Forest Stewardship Council (FSC) standards (FSC license 12993).
E&S Policies. Rima has adopted an integrated management system policy alongside separate environmental, human resources, occupational health and safety (OHS), and social policies, all of which align with the objectives and requirements of the Performance Standards 1 to 4. None of these policies explicitly address the objectives and requirements of Performance Standard 6, which focuses on biodiversity conservation and the management of living natural resources. To fill this gap, as per ESAP item #1, Rima will develop and implement a Biodiversity Policy that aligns with the requirements of PS6, focusing on avoiding planting in or purchasing wood and charcoal from areas that have been recently deforested. This commitment aims to ensure No Net Loss of Natural Habitat.
Identification of E&S Risks and Impacts. Rima has adopted an E&S Risk Assessment Framework for new projects. This framework outlines the process for the identification and assessment of potential E&S risks and impacts associated with air emissions, water consumption, effluent discharge, waste generation, noise and vibration, energy consumption, and soil erosion. The policy also includes the preservation of areas legally protected (e.g., Areas of Permanent Protection (APP), Remnants of the Atlantic Forest, etc.), and the prioritization of already degraded areas for the establishment of new projects. Finally, the framework mentions the requirement to promote the fair treatment of workers and to adopt occupational health and safety management systems.
Rima has developed an Environmental Impact Assessment (EIA) and an Environmental Management Plan (PCA, or “plano de controle ambiental” in Portuguese) for its forestry operations in Buritizero. These documents were prepared to secure the necessary environmental license, ensuring compliance with state environmental regulations for silvopastoral activities while also adhering to the FSC’s Principles and Criteria. Separately, Rima conducted a Social Impact Assessment for its forestry operations in Buritizeiro; however, the methodology only relied on interviews with a limited number of stakeholders. To assess and manage the potential impacts on communities, Rima will conduct additional studies including an air quality impact assessment as referenced in ESAP item #7 under PS3, an ecosystem services risk assessment noted in ESAP item #8 under PS4, and transportation safety as outlined in ESAP item #9 under PS4.
E&S Organization Capacity/Competency. Rima has established a robust corporate structure with multiple in-house teams to manage E&S issues. These teams are organized into the following departments: Environmental and Biodiversity (E&B), OHS, Human Resources (HR), Land Acquisition, and Forest Assets Protection. Moreover, Rima supports the Vicintin Foundation, which leads the company’s Corporate Social Responsibility (CSR) activities with communities in the company’s area of influence and socio-development organizations in Minas Geras. The environmental, OHS and HR units report to a corporate E&S Manager with direct reporting line to the company’s CEO.
Emergency Preparedness and Response (EPR). Rima has developed an Emergency Preparedness and Response Plan (EPRP) for its forestry division in Buritizeiro, addressing the following emergency scenarios: i) serious incidents with casualties, injuries, or sudden illnesses; ii) spills of hazardous materials; iii) fires in both internal facilities and external forestry plantations; iv) transportation-related accidents; and v) natural disasters. The plan integrates fire prevention, detection, and response strategies, including: (i) the establishment of firebreaks and use of cattle grazing to reduce ground fuel; (ii) a control room with 24-hour electronic monitoring system; (iii) a trained internal fire brigade comprised of 104 personnel across nine operational areas; (iv) and fire-response equipment (i.e., six 20,000-liter water trucks and pick-up trucks equipped for rapid response, featuring smaller water tanks, hoses, and firefighting tools such as rakes, dampers, and hoes). Rima also has a mutual aid agreement with other companies in the region, and during summer and dry seasons, it allocates additional resources for fire prevention efforts. As a result, the last significant fire occurred in 2020, affecting less than 100 hectares. As forest fires are a major hazard that can adversely impact the health and safety of neighboring communities, as per ESAP item #2, Rima will update its Emergency Preparedness and Response Plan (EPRP) to include the participation of communities in emergency drills for scenarios that may impact them. Additionally, the plan will outline processes for effectively communicating with communities in the event of an emergency.
E&S Monitoring and Reporting. Rima conducts regular internal audits, which are reviewed by senior management. The company also conducts environmental monitoring to comply with legal and FSC requirements. This includes monitoring effluent quality (from water oil separators and sanitary effluent treatment plants), noise levels, ambient water quality (surface and groundwater), and drinking water quality. Additionally, Rima keeps records on water consumption, waste generation, areas affected by fire, and presence of fauna. As per ESAP Item #3, Rima will update its E&S monitoring program to incorporate the limits set forth in the WBG EHS Guidelines where applicable (e.g., effluent quality, noise). The updated monitoring program will also incorporate social indicators to evaluate the effectiveness of the company’s grievance mechanism and stakeholder engagement activities.
Supply Chain: Rima sources less than 15% of its charcoal from a small number of medium-sized local third-party eucalyptus plantations. Contracts with these suppliers include stringent clauses that prohibit the employment of workers under the age of 18, forbid practices akin to forced labor—such as excessive overtime, degrading conditions, and restrictions on movement—and ensure compliance with labor laws (i.e. suppliers are required to submit monthly evidence of wage and benefit payments). Additionally, the contract requires suppliers to adhere to environmental legislation, obtain necessary licenses, and refrain from using native vegetation. Rima also conducts regular on-site audits based on a documented procedure to verify working conditions and ensure that labor documentation is current and compliant.
PS2: Labor and Working Conditions
As of August 2024, Rima's workforce consists of approximately 5,500 full-time employees including 1,200 from the forestry division. Women representation in Rima’s forestry workforce is around 16%.
Human Resources Policies and Procedures. The company’s Human Resources (HR) Policy and Code of Ethics are aligned with PS2 objectives and encompass principles on human rights, ombudsman, diversity and inclusion, health and safety, quality of life, recruitment and selection, and disciplinary measures. As per ESAP item #4, Rima will include the company’s commitment to the prevention of Gender-Based Violence and Sexual Harassment (GBVH) in its Code of Ethics and HR Policy.
Working Conditions and Terms of Employment. Rima is committed to maintaining fair and equitable standards for wages, benefits, and health and safety working conditions. Terms of employment for both direct employees and contracted workers are established in accordance with local labor laws and collective agreements (CBA) with unions, in line with PS2 requirements. The company monitors working conditions, including contract verification, payment of social security benefits and monthly salaries, and recording of working hours and overtime. This monitoring is conducted for direct employees by an internal auditing team and for contracted workers by an external service provider. All workers, whether direct or outsourced, receive the same comprehensive induction training package. This training includes health and operational safety, the company’s Code of Ethics, and the channels for raising complaints and grievances.
Non-discrimination and Equal Opportunity. Non-discrimination in the workplace is a core principle of Rimas's corporate HR Policy. This policy applies to all employees and contractors and includes provisions to promote fair treatment and non-discrimination. The policy aims to protect all workers, including vulnerable workers such as migrants, third-party contracted, and supply chain workers.
Workers Organization. Labor rights in Brazil are enshrined in the Constitution and the Consolidated Labor Laws (Consolidação das Leis do Trabalho - CLT). Labor relations are highly regulated, including the requirement for most categories of workers to belong to a union. At Rima, the workforce related to the Buritizeiro forestry management unit is represented by the union Sindicato dos Trabalhadores Rurais de Buritizeiro, union, member of the FETAEMG union. All employees are under unionized agreements at Rima.
Protecting the Workforce. Rima complies with Brazil's labor laws, which set the minimum employment age at 16 and allow apprenticeships for individuals as young as 14. The company verifies the ages of all workers during the application, recruitment, and contracting processes, with no workers under 18. In line with its HR Policy, Rima explicitly prohibits child and forced labor and has reported no cases of either in labor courts. Furthermore, contractual agreements with charcoal suppliers stipulate that no workers under the age of 18 are permitted.
Worker’s Grievance Mechanism. Rima's worker grievance mechanism is embedded within its corporate grievance mechanism, which applies to all employees and stakeholders. Workers can raise complaints through multiple channels: mailbox, digital channels (webpage, e-mail, WhatsApp), hotline and mail. According to the procedure, grievances submitted through these channels undergo a confidential investigation and are reviewed by a committee that meets regularly and possesses internal authority to take corrective actions. As per ESAP Item #5, Rima will (i) regularly raise awareness about the grievance mechanism among workers and stakeholders; (ii) document all grievances or complaints received, along with the resolutions implemented; and (iii) develop and implement an internal audit program to evaluate the effectiveness of the grievance mechanism. Additionally, Rima will ensure that anonymous complaints can be submitted and that GBVH complaints are handled by qualified personnel using a survivor-centered approach.
Workers Engaged by Third Parties. Rima utilizes external companies for transportation services. The HR department manages contracting, whereas the OHS team is responsible for ensuring OHS compliance. The process involves a detailed labor/OHS checklist, and the Compliance team assesses all contracts before signing.
Occupational Health & Safety (OHS). Rima has a comprehensive Occupational Health and Safety (OHS) plan and a well-structured team managing OHS hazards and risks in compliance with Brazilian labor regulations. The company has implemented legally mandated OHS programs, including risk prevention plans, health monitoring plans, accident prevention committees, and emergency response plans. Rima provides appropriate personal protective equipment (PPE) and is gradually implementing collective prevention measures. Rima records both lost-time and non-lost-time injuries. Over the last four years, the forestry division in Buritizeiro has reported an average of only 1.5 lost-time injuries and 3.5 total injuries per year, with no serious accidents or fatalities. As per ESAP Item #6, Rima will enhance its OHS program to: (i) assess and mitigate climate-related hazards such as extreme weather events, heatwaves, and flooding; (ii) review the assessment of OHS risks associated with kiln operations and implement controls based on the mitigation hierarchy; and (iii) expand its statistical incident reporting system to include the recording, classification (e.g., severity, type, cause), investigation, and analysis of trends for all incidents, including lost-time injuries, injuries with restricted work, near misses, and work-related ill health. The statistics shall include incidents related to the transportation of personnel, wood and charcoal.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency. In 2023, Rima's water consumption was almost 40% below the approved permitted flow rate for the nursery and the cloning house by 2023. The company conducts monthly monitoring of its wells, adhering to the parameters set out by the authority. Rima also has withdrawal water permits for the Formoso river (state basins) and the São Francisco River (federal basins). Some measures taken by Rima to increase water efficiency include planting exclusively during the rainy seasons of January to March and October to December.
Greenhouse gas emissions. Rima’s greenhouse gas inventory is certified and follows ISO 14064-1 standards and the Brazilian GHG Program Protocol guidelines, methodologies recognized by the World Steel Association. The company works towards balancing its greenhouse gas emissions (scope 1 and 2) through its plantations. In 2023, the company produced 39,615 t/CO2e and removed 33,216 t/CO2e.
Air Emissions. In the Buritizeiro forest management unit, Rima operates 720 circular masonry kilns at Santa Efegenia I farm and 360 masonry kilns at Santa Efegenia II farm, producing 50,400 and 25,200 tons of charcoal per year respectively. Rima commissioned air emissions dispersion modeling for both farms, which indicates that concentrations of total suspended particles may not consistently meet the ambient air quality guidelines established in CONAMA 491/2018. Considering these modeling results and the lack of data on other air pollutants, as per ESAP item #7, the company will undertake a comprehensive air quality impact assessment (AQIA). The AQIA will involve measuring or estimating emissions of air pollutants from the kilns and collecting ambient air quality data, focusing on pollutants such as NOx, PM10, PM2.5, phenolic compounds, and PAHs throughout different seasons. This data, along with dispersion modeling of air quality impacts, will be conducted by qualified professionals. The findings, including facility descriptions, methodologies, and comparisons to ambient air quality standards, will be compiled into a detailed report that includes recommended mitigation measures to address any identified compliance issues.
Noise emissions. Rima monitors annually the level of noise at the limits of its industrial facilities (i.e. kilns). Results indicate that noise levels comply with WBG EHS General Guidelines both during the day and night. Considering that the kilns are located inside the forestry plantations, more than 1 km from the boundary, no noise exceedances are anticipated at sensitive receptors.
Wastewater Management. Rima's wastewater primarily originates from sanitary sources, including cafeterias, restrooms, and showers. This wastewater is treated using septic tanks and a wastewater treatment system before being discharged into the soil. Rima monitors the effluents in accordance with the provisions outlined in the Environmental Impact Assessment (EIA).
Solid Waste Management. Rima has established waste management procedures that comply with Brazilian national regulations and align with PS3 requirements. Its solid waste management strategy aims at minimizing waste generation through the mitigation hierarchy and circular economy approach. The company ensures proper collection, safe storage, treatment, transport, and final disposal of all generated waste. In the company offices, solid waste is produced daily from garbage collection, kitchens, and dining areas, including meal preparation and post-consumption leftovers. Solid waste materials, such as plastics and metal cans, are disposed of responsibly through recycling efforts, achieving a recycling rate of 55%.
Hazardous Materials. Rima has implemented a hazardous waste management program that includes procedures for the safe storage and handling of hazardous waste in accordance with Brazilian ABNT NBR 10004 standards. A comprehensive database of Material Safety Data Sheets (MSDS) is maintained in the production area, ensuring that employees have immediate access to essential safety information.
Pesticide Use and Management: Rima employs biological control methods to manage pests in its plantations, significantly reducing the need for chemical pesticides. Based on the data provided, the company neither purchases, stores, nor uses World Health Organization (WHO) Class Ia (extremely hazardous) or Class Ib (highly hazardous) pesticides, aligned to PS3 requirements and international good practices.
PS4: Community Health, Safety and Security
Transportation Safety. Rima outsources the truck fleet and complies with legal and regulatory occupational health and safety, including Brazilian regulatory standard NR1. Rima conducts audits on an annual basis to verify compliance with its OHS management. Rima, as per ESAP item #8, will develop and implement a corporate road safety procedure for vehicle operation, particularly on neighboring unpaved roads, in accordance with ISO 39001, WBG General EHS Guidelines (Section 3.4 - Traffic Safety), and Good Practice standards for Road Safety. These procedures will include the use of alternative routes to avoid transit through neighboring communities, assess GBVH risks in the resting points for trucks, adequate signage such as speed limit signs, mechanisms for managing the driver’s fatigue, and safe driving protocols that prohibit cell phone use while driving and highlight dangerous intersections.
Management of Ecosystem Services. Rima's environmental management and monitoring programs for the protection of surface water and groundwater resources focus on preventing contamination through measures such as controlling soil erosion during planting, road construction, and harvesting activities; prevention of spillages of hazardous wastes and materials; managing the use and application of pesticides; and monitoring ambient surface and groundwater quality. Water consumption in nursery operations is minimal, and the company restricts planting during the rainy season. Nevertheless, the Social Impact Assessment indicates a general perception of a decline in both the quality and quantity of water resources in the region. As per ESAP item #9, Rima will conduct an Ecosystem Services Risk Assessment for the unit of Buritizeiro, focusing on water resource dependence for communities, and including potential impacts on surface and underground water quality and availability from the company’s operations. Mitigation actions will be developed as needed, in alignment with IFC PSs.
Security Personnel. Rima has a security program which details responsibilities, techniques, tactics, human rights and principles for the progressive use of force, aligned with Brazilian security rules and PS4 provisions. Security staff are directly employed by Rima. Only a limited number of security personnel carry firearms in security control points; security personnel patrolling the sites for forest asset protection do not carry firearms. No incidents involving security personnel have been reported by the company.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Protection and Conservation of Habitats. The project does not overlap with legally protected areas or internationally recognized areas. The company’s operations are located within the Cerrado Ecoregion (WWF), which is a landscape highly modified due to long established eucalyptus plantations and livestock farming. The company’s forest management unit of Butizeiro spans 21,430 ha where, currently, about two-thirds consist of established plantations. Remnants of Natural Habitat (~29%) are mostly associated with mandatory set asides (~4,602 ha of legal reserves and areas of permanent preservation, as per Brazil’s legislation) as well as other remnant NH areas - including ~1,340 ha of native vegetation and ~300 ha of former eucalyptus plantations where natural regeneration of the Cerrado biome is ongoing. Priority biodiversity values in the area include several globally Vulnerable mammals (White-lipped Peccary - Tayassu pecari, Marsh Deer - Blastocerus dichotomus, Northern Tiger Cat - Leopardus tigrinus, Giant Armadillo - Priodontes maximus, Lowland Tapir - Tapirus terrestris, Giant Anteater - Myrmecophaga tridactyla) and the globally Vulnerable frog Proceratophrys carranca.
As per ESAP item #10, Rima will conduct a biodiversity assessment to confirm habitat classification in areas of former eucalyptus plantations where natural regeneration of the Cerrado biome is ongoing and determine appropriate management measures to ensure No Net Loss within the farm’s NH remnants. Areas of native vegetation and areas where natural regeneration of the Cerrado biome could be classified as Natural Habitat under the PS6 approach will be protected from any project intervention.
Sustainable Management of Living Natural Resources. Rima’s current plantations are Forest Stewardship Council (FSC) certified, and the company will continue to uphold this certification for all existing plantations, including crops funded by IFC’s Use of Proceeds.
