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.
PS 1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Management System and Policy
The company has established an overarching Integrated Management System (IMS) policy aligned with national law and standards that guide the company to achieve sound E&S performance and was bases for its E&S management system (ESMS). The company’s E&S management system (ESMS) is certified as per 14001 (Environment Management) and ISO 45001 (Occupational Health and Safety Management). The ESMS is compliant with national law , however, the ESMS need to be strengthen per requirements of IFC PS. Hence, AE will augment its ESMS procedures per IFC PSs and WBG EHS Guidelines for Metal, Plastic, and Rubber Products Manufacturing (2007) with the focus on : i) environmental risks and impacts identification procedure; ii) OHS risk management procedure, iii) environmental monitoring procedure v) facility level construction E&S management plan (ESMP), v) PRC related supply chain management and; vi) life and fire safety (L&FS) risk management (addressed by the ESAP action 1 – 5).
Identification of Risks and Impacts
The company 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. The company holds an Operating License, granted by Companhia Ambiental do Estado do São Paulo (CETESB). The license includes authorizations for the management of liquid and solid waste, as well as air emissions. Additionally, the authorization is valid for a production capacity of 4,180 tons of plastic preforms (tubes) per year. In 2024, the company has a production rate of 1,875 tons per year with a production forecast of additional 1,341 ton/year for 2028 with the new production line which will be constructed as part of the project. The company will, for the expansion and modernization of the Jundiai facility, conduct focused E&S assessment (FESA) per requirements of IFC PS1 and the WBG EHS Guidelines for Metal, Plastic and Rubber Products Manufacturing (2007). The company will based on outcomes of FESA , prepare, a suite of site -specific construction E&S management plans (CESMP) to address aspects such as dust & noise control, waste management, wastewater management, use of heavy vehicles, traffic management, hazardous material management, emergency preparedness and response, OHS, and others for the construction phase (ESAP item #1).
Organizational Capacity and Competency
America Embalagens has a corporate EHS organizational structure in the Jundiai existing facility under the Operations Manager who reports to the Company’s CEO. The Company has established EHS team composed of a Sustainability and IMS coordinator, an OHS technician, a waste management operator and an OHS apprentice. AE will expand the scope of work of the EHS team on the new line/facility that will be funded as part of the project.
Emergency Preparedness and Response
AE’s facility has documented an emergency response plan and facilities are equipped with adequate fire detection and fire-fighting passive and active systems in line with Brazilian safety codes and good international industry practice (GIIP). Fire and other emergency response drills are conducted regularly based on risk assessments and scenarios, including fire, sudden incidents, spills, run over, chemical emergencies, and leaks. The plan outlines the roles and responsibilities of the fire brigade response team, including crisis management, alarm procedures, and communication protocols.
Monitoring and Review
As part of the current ESMS, America Embalagens has a monitoring and reporting system which covers waste handling/disposal, resource consumptions and occupational health and safety (OHS) with established key performance indicators (KPIs). These KPIs are compiled by EHS team and shared with the operations manager and are ultimately reported to the company’s CEO. Moreover, as part of the ISO 14001 and 45001 regular recertification process, the company conducts internal and external annual audits.
PS2: Labor and Working Conditions
America Embalagens currently employs approximately 479 direct employees, of which 61% are female employees, and 153 temporary/outsourced employees. For the construction of the new facility, approximately 30 workers will be required over a 8-month period, and for O&M, 12 new operators are expected to be hired. The company also has a well-established Human Resources (HR) team , including an HR director reporting to the CEO, and supported by a coordinator and two analysts. .
Human Resources Policies and Procedures
The Company has adopted a corporate Human Resources (HR) management procedures and a Code of Conduct (CoC) that are applicable to all employees and third-party contractors, and cover recruitment, terms of employment, medical care, compensation and benefits, performance evaluation, training, and professional development. The HR policy is compliant with Brazilian labor legislation and consistent with IFC PS2 requirements, including adequate working conditions, non-discrimination and equal opportunity, freedom of association, prevention and management of risks related to sexual and other forms of harassment, and prohibition of child and forced labor. Induction and training programs on HR policies and procedures are tailored to the needs of each job function and provided to the AE’s corporate, technical, and administrative employees of all its operations.
Working Conditions and Terms of Employment
America Embalagens complies with Brazilian labor legislation for minimum age, working hours, shift times, overtime payment, and benefit requirements. Statutory working hours in Brazil is 8 hours per day, 44 hours (maximum per week). A contract is signed with every worker at the time of employment. The contract describes the working conditions and terms of employment. In addition, induction training is provided to explain human resources policies and procedures, working conditions, wage calculation, benefits, leave period, basic OHS, among other content. The policies and procedures applicable to all operations, are also displayed at the companies’ intranet available to all employees. Overtime hours at the facilities are within the legal limits and overtime is paid as per the legal requirements. No accommodation is provided to workers since the manufacturing plants are located within urban settings.
Workers’ Organizations
The Company recognizes workers’ right to freedom of association and collective bargaining per Brazilian labor law and its CoC. Currently, AE’s employees are represented by the Sindicato dos Trabalhadores das Industrias Plasticas de Jundai union. Workers, as part of collective bargaining, negotiate the right to strike and define minimum wage, working hours, overtime payment, compensation, and entitlement with the company.
Non-discrimination and equal opportunities
America Embalagens’ HR and policies on non-discrimination and equal opportunities specify equal opportunities, fair treatment, and non-discrimination based on race, nationality, disability, social class, age, gender, marital status, religion, and political positions. These policies are applied to its employees and are aligned with IFC PS2. The Company provides equal opportunity to all applicants, and its selection decisions are merit-based. This commitment is reflected in HR policies and procedures such as equal opportunities, compensation, evaluation procedures, and CoC.
Workers’ Grievance Mechanism
The company has established a confidential grievance mechanism provided by a third-party, with several channels, including web platform (https://contatoseguro.com.br/americaembalagens), email, app or phone numbers, that allow employees and contractors to file anonymous grievances related to non-conformities to the code of conduct, sexual and moral harassment policies (e.g. corruption, sexual and moral harassment) without retaliation and available 24/7. The HR department is responsible for handling and resolution of grievances, the disciplinary measures, and the estimated time frames to achieve resolution and to provide feedback and reporting to the senior management. The grievance mechanism is aligned with PS2 provisions.
Occupational Health and Safety
America Embalagens has established OHS risk management system compliant with national law and certified per ISO 45001. The OHS team is composed of an OHS Coordinator, OHS technician, waste management operator and an OHS apprentice, focused on tracking health and safety indicators in the workplace for all production lines. The Company has implemented OHS programs, prioritizing elimination, substitution, engineering controls, administrative controls, and Personal Protecting Equipment (PPE), covering the identification of OHS risks and defining corresponding preventive measures, training and reporting of accidents and emergency prevention and response. Job hazard analysis (JHA) is conducted for all positions exposed to physical or chemical hazards. In addition, a formalized OHS training plan is in place for new employee training and refresher courses covering aspects such as ergonomics and job safety is offered on a regular basis. Work related OHS statistics and incidents are recorded on a regular basis. Incidents are investigated and root cause analysis records are maintained. OHS statistics in the recent two years indicate no fatalities with major incidents reported including mechanical injury (e.g., cut, hit) and physical (e.g., slip). Overall, Lost Time Incident Frequency Rates (LTIFR) were 1.58 and 3.04 for 2022 and 2023 respectively, well below compared to the plastic manufacturing industry benchmark The Company, as part of ESAP item #1, will develop a construction phase related OHS risks management plan per national law and WBG EHS General Guidelines (2007).
Workers Engaged by Third Parties
Third-party contractors currently engaged by the Company include food and security service providers. AE has an adequate procedure to procure and oversee outsourced workers per Brazilian legislation and manage their OHS aspects in the existing facilities. AE procedures to hire construction firms for construction of new facilities or expansions will follow selection criteria and the construction firms will present evidence of compliance with applicable Brazilian regulations and IFC PSs in terms of labor laws. EHS performance of construction firms will be monitored through documentary evidence and site visits to verify site conditions and compliance with applicable regulations.
Supply Chain
Current primary suppliers for AE production include suppliers of polymers, base color and labels from companies based in Brazil and the United States. The company has a supplier code of conduct (CoC) and procedures for qualification, evaluation and monitoring of suppliers aligned with PS2 requirements.
With the expected expansion and investment, the company will start purchasing post-costumer recycled (PCR) pellets. PCR pellets will be provided by the Brazilian unit of the sixth largest producer of thermoplastic resins in the world. The supplier has its own supplier management system in place, and it is certified against social audits SMETA and RecyClass standard for recycling processes. RecyClass includes detailed requirements that align with PS2 and also require traceability of the PCR sources. All sub suppliers of the aggregators also have to comply with its process of responsible feedstock, accept and sign the company’s suppler CoC and are monitored annually for compliance. The supplier CoC is based on principles of International Labor Organization and includes prohibitions for child labor, forced labor in alignment with PS2.
Given that the sourcing of PCR pellets will expand a supply chain for the company with inherent high labor and social risks, as per ESAP item #2, AE will update its supply chain management system to ensure that PCR pellet suppliers labor practices are aligned with PS2 requirements which prohibits child labor, forced labor and addresses significant safety issues. The company’s system will include a supplier code of conduct, a mapping and risk assessment procedure, contractual clauses for suppliers to comply with the code of conduct and a monitoring procedure to ensure suppliers are meeting the requirements.
PS 3: Resource Efficiency and Pollution Prevention
Resource Efficiency and GHGs
The company's production is powered by electricity from the grid, which has a primarily hydroelectric mix with a consumption of approximately 1,2MWh in 2023 with a Mass Load Unit of 0.54 kWh/Kg, well below to the industry benchmark for plastic products that may vary from 1.0 kWh/Kg for extraction and blown film to 3.0 kWh/Kg for injection and blow molding. Additionally, the company has a backup generator for lighting some areas and corridors, but not for production lines. Some specific processes use Natural Gas with a consumption of 1,6 m³ in the last year.
GHG emissions: Following the Brazilian GHG Protocol Program, America Embalagens has quantified its greenhouse gas emissions from its operations, including scopes 1 and 2, to be 386 and 540 tons of CO2 equivalent for 2023.
Air Emissions: The company has installed a closed ventilation control system, especially at the points of highest processing temperatures along with the processing line as a preventive and control techniques for Volatile Organic Compounds (VOC) and Particular Matter (PM). The company will as part of the ESMS strengthening augment environmental monitoring procedure per national law and standards, WBG EHS Guidelines for Metal, Plastic and Rubber Products Manufacturing (2007) and WBG general EHS Guidelines (2007) (ESAP #3).
Noise and vibrations: The Company has undertaken vibrations and ambient noise monitoring, and results indicate compliance with the national law and standards.
Wastewater Management: Water is sourced from public water supply system and consumption in 2003 was 900m3. Sanitary wastewater is discharged in the municipal sewage system, and the wastewater generated by cleaning the cabins of painting and the compressions condensation processes is temporary collected in plastic drums and then transported and treated by a specialized and licensed wastewater treatment company. The company will as part of the ESAP #3 strengthen monitoring of the wastewater management including operation of the contracted specialized companies for wastewater.
Waste Management: AE has a Solid Waste Management Program to assess, address, and manage general and hazardous waste management, following Brazilian regulations and the performance standards provisions for current operations. The company maintains monthly records of waste generated, and the total volume recycled. The plan describes activities to be performed for waste management, roles and responsibilities of relevant staff and contractors, and the necessary personal protection equipment for waste handling. Hazardous and non-hazardous waste generated during expansion of the Jundai plant will be managed per site -specific CESMP, per ESAP item #1.
PS 4: Community Health, Safety & Security
Community Health and Safety
The Jundiai facility is located in an industrial park and its impact on the community health and safety is very limited and relates to transport of raw material and final products to and from the plant.
Life and Fire Safety
The company’s facility in Jundai is designed and constructed per national building and fire safety codes. The facility, including storage of raw material and final products is equipped with adequate fire detection, alarm and fire-fighting systems following respective national building and fire safety codes. AE also conducts routine fire safety inspections, including checking the condition of fire extinguishers, ensuring emergency exit pathways, and regularly checking electrical appliances. Staff training for fire safety management has been regularly implemented. The company, as per ESAP item #4, will prepare life and fire safety master plan including life and fire passive and active protection measures for the plant expansion including PCR pellets storage per national building and fire safety codes. The life and fire safety master plan implementation will be verified by a certified L&FS professional upon physical completion of the facility expansion.
Security Personnel
The Company hired unarmed private security personnel guards. These security companies are duly accredited under Brazilian law for the provision of these services and are responsible for preparing the Security Risk Assessment (SRA) and vulnerability analysis.
