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: Environmental and Social Assessment and Management System
Policy: The Group’s corporate Responsibility Policy remains in force which includes its commitment to the environment, occupational health and safety of workers, provision of social and gender equality and supply chain management. The policy serves to outline the corporate Environmental and Social Management system (ESMS), detailing roles and responsibilities, the required management plans, and monitoring and reporting requirements for each entity of the Group. Moreover, the Group has developed other relevant policies and procedures such as human rights, child labor prevention and remediation, gender, forest protection and deforestation risk identification. The Group also continues to implement a code of conduct which its employees and contractors are required to meet. The Group policies and code of conduct are implemented at the company level by SUCDEN-CI. In addition, SUCDEN-CI has adopted supplementary policies regarding quality management, water, energy and waste management and human resource management. At the time of the appraisal SUCDEN CI was certified for ISO 9001:2015, a quality management standard. SUCDEN CI will continue to implement and report on the existing ESMS and related policies.
Identification of Risks and Impacts: SUCDEN-CI identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national laws and regulations, E&S regulatory permits and requirements, application of assessment practices common to the cocoa sourcing sector, independently audited assessments based on customer requirements, and those within recognized and credible VSS such as Rainforest Alliance (https://www.rainforest-alliance.org/ ) and the IFC Performance Standards, including having completed all ESAP items for the existing investment. For the last season, 100% of the supply was traceable and 57% of the traceable supply was Rainforest Alliance certified. The company is also certified to the Fairtrade standard. The remaining amount is audited against customer requirements that include E&S criteria responsive to the E&S risks and impacts found in cocoa sourcing.
Management Programs and Organizational Capacity and Competency: The E&S team of SUCDEN-CI continues to be headed by a Sustainability Director, who is supported by E&S coordinators, each responsible for a particular aspect of supply chain management; for example, the company social coordinator is responsible for identification and management and remediation of child labor risks in the supply chain. Overall, the team consists of nineteen staff. The team oversees programs related to agroforestry, reforestation, child protection and community development, and educational and financial support to farmers’ families. SUCDEN-CI continues to partner with several service providers, organizations and experts to support implementation of its programs relevant to agroforestry, sustainable agriculture, supply chain, child labor, education and co-op training and support. The program director of SUCDEN-CI reports to the Global Program Manager of the Group and ensures the implementation of these programs along with those requirements included in both voluntary and customer’s sustainability programs and initiatives to which the company is contractually bound as part of sourcing agreements.
Emergency Preparedness and Response: The small footprint with respect to assets which was documented in the ESRS for the first investment remains the case. For the two warehouses that it leases, the company ensures that they have fire-fighting equipment in place, and they conduct annual internal and external audits of the facilities with respect to safety. SUCDEN-CI did not have a documented emergency response plan for those elements of its operation, nor did it require the service provider conducting processing on its behalf to have one at the time of the appraisal of #47216. In response to the ESAP item #1 regarding the need to address both issues, the company has developed an Emergency Preparedness and Response Plan (EPRP) to include these assets. The EPRP supports the development of facility specific plans, in accordance with Good International Industry Practice, and addresses the required elements of an EPRP as per the Performance Standards requirements. Implementation of EPRP is ongoing.
Monitoring and Review: As noted above, the company has adopted a quality, water, energy and waste management policy, which provides a list of objectives related to energy and water conservation and waste reduction. While the scope of the policy is limited to the office operations in CDI, the company monitors energy and water consumption in the two warehouses. SUCDEN-CI also monitors KPIs such as incidence of injuries; trainings carried out; farmers and supplier data including training provided to them, amount of traceable cocoa sourced, farmers mapped; social initiatives undertaken such as the establishment of village savings and loans associations, numbers of trees planted among others.
The company has developed and continues to implement robust monitoring and evaluation practices focused on key risks and impacts. For example, with respect to child labor, the company’s staff focusing on implementation of the Child Labor Monitoring and Remediation Systems (CLMRS) with the support of the International Cocoa Initiative, collaborate closely with CLMRS staff within implementing cooperatives and farmer groups. SUCDEN’s child protection and community development team oversee all implementation of the CLMRS by its partner cooperatives and farmer groups. They verify the quality of implementation of the CLMRS, and, as needed, devise initial remediation and remediation follow-up plans. In addition, the monitoring and evaluation teams assess data quality, based on coherence checks with the company databases. Remediation measures include provision of school kits and equipment, bridge schools, provision for school fees, development of female-run village savings and loan associations (i.e., village savings and loans associations (VSLA) – which help promote schemes/jobs that provide income not-related to cocoa production – therefore additional income), parent literacy programs and multiple awareness programs.
The KPIs are reported quarterly to the corporate sustainability team in Paris. All occupational health and safety (OHS) and security incidents are summarized and discussed in a quarterly management meeting and SUCDEN-CI E&S team analyzes root causes if incidents have occurred and implements corrective actions as needed. The company utilizes legal requirements register for CDI operations and has dedicated staff responsible to oversee its implementation. SUCDEN-CI also requires its contractors to comply with its code of conduct and requires them to submit their own code of conduct annually. The company monitors their contractor’s insurance coverage and carries out verification of fire extinguishers of the transport and processing contractors. In response to the ESAP item #2 associated with the first IFC investment, the company developed a contractor management plan including all relevant E&S requirements, commitments, and provisions for contractors to comply with IFC PSs and national labor law and regulation. This contractor management plan includes monitoring, auditing and reporting requirements. Also, SUCDEN-CI upgraded its KPI list to include E&S indicators in relation to the performance of its contractors.
Supply Chain: The two main risks identified in the production of cocoa in CDI are those of the worst forms of child/forced labor and risk of conversion of protected areas and critical and natural habitats. Cocoa beans sourced by SUCDEN-CI represents four percent of the total cocoa exports of the country. This proposed additional financing by IFC will be limited to that supply that is traceable and therefore risks related to child/forced labor and deforestation will be able to be identified and measures taken to avoid, manage, mitigate and remediate them. SUCDEN-CI continues to engage in several initiatives to manage and mitigate supply chain risks; as before, these are discussed in the sections on PS2 and PS6 below, and include, but are not limited to, the use of credible third party VSS, including credible internationally recognized certification schemes for the majority of its traceable supply.
PS2: Labor and Working Conditions
Human Resource Policies and Working Conditions:At the time of the first appraisal, the company had approximately 62 direct full-time employees and 82 third party employees. SUCDEN-CI has documented a Human Resource (HR) internal regulation that is consistent with the national labor regulations and applies to all direct employees. Each worker receives a written contract that describes the working conditions and terms of employment, and a copy of the HR manual is also provided. Employees are required to work 40 hours per week, with working hours between 8 to 17:30hr with 1.5 hours break. Any excess hours are accounted as overtime.
Grievance Mechanism and Workers Rights:The company has an equal opportunity policy and commits to the prohibition of gender-based violence. The company has a documented procedure for receiving and investigating grievances from employee and does provide anonymous means such as suggestion box, complaint book and email. SUCDEN-CI has updated this procedure to ensure anonymity and confidentially is maintained throughout the whole process and ensure contractor’s employees also have access to the same grievance mechanism as was required by ESAP item #2 of the first IFC investment. In addition, SUCDEN-CI updated its HR manual to include explicit reference to the right to freedom of association, collective bargaining and workers' right to form and join workers organization as was required under ESAP #3 of project #47216.
Occupational Health and Safety: The Group has formulated a health and safety policy under its responsibility policy, in which it commits to zero accidents. SUCDEN-CI has a Quality, Health and Safety officer and a medical doctor, and established an OHS committee. The committee is mandated to carry out periodic workplace inspections. The committee participates in workplace accident investigation and annually produces a report and a prevention program. The company carries out regular training for first aid, use of fire extinguishers, risk analysis, defensive driving, awareness of employer and employee legal obligation for health and safety. The scope of mandate of the OHS committee is limited to direct employees and OHS monitoring and performance review will be expanded to cover contractors and primary suppliers as discussed below.
Workers Engaged by Third Parties: Workers engaged by third parties carry out a range of activities which includes monitoring and control of export cocoa stock, drawing up daily stock reports, drawing up daily production reports, management of pallet and export stock, management and control of bagging, drawing up daily bagging inventories, assistance to stock manager, setting up unloading teams, positioning trucks on the quay according to vehicle and product type, truck inspections, monitoring bag reloading, ensuring quay cleanliness. As indicated above, the company has limited oversight on its contractors. As part of the contractor management plan updated in relation to ESAP #2 of the first investment, SUCDEN-CI now requires its contractors to carry out OHS risk assessments and has put in place means and resources to carry out bi-annual labor and OHS audits (at least one during the main season) of both processing and transport contractors to ensure compliance with company responsibility policy, code of conduct and IFC PS2. These audits result in time-bound action plans, when necessary, which the company contractually requires the contractors to implement.
Supply Chain: SUCDEN-CI undertakes supply chain mapping through engagement with the co-operatives and the intermediary agents and can determine their cocoa sources down to the farm level. As reported to IFC, 100% of farms supplying the company have been mapped.
The company’s grievance mechanism and whistle blower policies also allow for reporting of child labor incidences in the company’s supply chain. Farmers engaged through co-operatives form about 80 percent of SUCDEN-CI's supply chain and are required to adhere to the Group’s requirements on prohibition of child labor. As for the last season, 57% percent of the traceable supply chain (Co-ops) was certified with Rainforest Alliance. One of the requirements of the Rainforest Alliance is to achieve a living wage for the farmers by implementing wage improvement plan where needed. The group of certified farmers also receive a sustainability differential (cash bonus) for each season as part of Rainforest Alliance Certification. Additional 2% of the supply chain is certified Fair Trade, while the remaining is certified against Sucden Standard. Sucden Standard is broadly aligned with IFC PS requirements.
The company undertakes a risk assessment at the household level where they identify the potential for child labor through documentation of minors present and/or working at the farms and documenting the labor practices that are classified as child labor (pls refer comment above). The process overseen by the company, including visits to households and farms and application of subject-specific questions, aided by the 281 field agents as trained by Sucden E&S staff, is aligned with PS2 on child labor. Irrespective of any risk identified, the company monitors the conditions of the household, including monitoring school attendance by the minors and other potential factors which may increase the risk of child labor, throughout the period of engagement with the farmer. Where harmful forms of child labor are identified, as per the CLMRS, the company develops remedial actions through sensitization and provision of financial support through loans or income diversification opportunities to reduce the reliance on child laborers. SUCDEN-CI has a dedicated procedure for grievance management in relation to forced labor that applies to all its stakeholders, including contractors, suppliers and communities, requiring them to report incidences of forced labor that may have been observed within the supply chain down to the farm level.
The company has documented set targets for its supply chain KPIs as part of its performance review and continuous improvement of the strategies and programs; the CLMRS tool has been improved to identify potential cases of child labor, within the traceable supply chain, but who are not members of the farmer household. This requirement, met by the company since the commitment of project #47216 was addressed in ESAP #4 of that initial IFC project.
PS3: Resource Efficiency and Pollution Prevention
The company has a policy for energy, water and waste management that is limited to energy use reduction regarding office activities and on managing office waste. Waste generated from the warehouses (waste beans or other organic matter) is sold to local farmers for composting purposes. SUCDEN-CI updated their policies, procedures, and practices regarding warehousing and associated activities to include transportation activities, management of hazardous material and waste management. The above now includes the responsibilities and levels of performance of contractors engaged by the company.
A carbon footprint analysis was undertaken in 2024 for SUCDEN-CI operations carried out in 2023. Annual Scope 1 and Scope 2 Greenhouse Gas Emissions amount to approximately 425 Metric tons (Mt) CO2eq/yr. Scope 3 emissions related to the 227,652 BEQ Metric tons of Ivorian cocoa beans sourced during 2023 amount to 8,740,000 Mt CO2e/yr. This is based on the most up to date Emission Factors for Land Use Change (LUC) and Land Management (LM) practices. The report recommends actively contributing to forest protection activities, ensuring that no new supply is sourced from recently deforested areas and composting of pod waste (to reduce methane release).
Sanitary and phytosanitary measures are used to control pest management during storage and export. The pesticide and fumigants used are classified as Class II pesticides as per the World Health Organization classification and are not on list of prohibited pesticide for CDI. As part of its updated practices developed to respond to ESAP #1, SUCDEN-CI has developed and implement procedures relevant to management of hazardous material, including pesticides and fumigants, thereby meeting PS3 requirements.
PS4: Community Health, Safety and Security
As previously reported, the warehouses are in port industrial areas with minimal risks associated with community health and safety issues. With respect to its primary suppliers, the company still provides trainings for farmers on good agricultural practices and agro-forestry, including training on safe use of pesticides and fertilizers.
The company uses third party logistic companies for transportation of the beans within the ports, from the warehouse to the area dedicated for export operations. SUCDEN-CI has integrated transportation management in its contractor management plan, ensuring vehicle and driver safety requirements are now met.
Security at the warehouses is provided by unarmed security personnel contracted by the processing contractor.
Transportation of the beans from the farms and co-ops is the responsibility of the farmers and is not a project activity. Security issues may occur on the long transportation routes from the co-ops to the warehouses as cocoa is a valuable commodity. As part of its corporate responsibility actions and its stakeholder engagement plan, SUCDEN-CI continues to explore opportunities to raise transportation safety and reduce traffic accidents and security awareness of the farmers.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
The project supply chain sources cocoa beans which are produced in regions where there is a risk of significant conversion to natural and /or critical habitats. This risk is mitigated via a robust supply chain risk management system that includes use of a third-party system data collection system, Farmforce, as well as the development of an in-house system for farm-level tracing and verification of conversion risks (now capturing 100% of SUCDEN-CI suppliers), a supplier handbook to combat deforestation, policy and procedures for forest protection and identification of deforestation risk, internal auditing of suppliers, and regular independent review of conversion risks by international organization such as Earthworm. At least half of each season’s supply chain is certified by standards designed to remove habitat conversion risk (Rainforest Alliance) and to facilitate access to premium markets. The company has, in partnership with various organizations (e.g., PUR https://ambition4climate.com/en/pur-project-an-agroforestry-project/, Cocoa and Forest Initiative), established or joined programs to reduce deforestation and promote reforestation.
