Project Name BRAZIL: Sadia Concordia SA Industria e Comercio II

Region Latin America

Sector Agribusiness

Project No. 7568


1. This project involves participation in Sadia’s on-going investment program in it’s eighteen different facilities. Sadia is one of Brazil’s leading food companies engaged in the production, marketing and distribution of poultry, pork and beef products as well as soybean and corn-derived products such as margarine, spreads and dry foods.

2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and the technical appraisal and site review completed by IFC’s Agribusiness Department staff. The following potential environmental, health and safety impacts of the project were analyzed:

· air emissions;
· liquid effluent treatment and discharge (especially from processing of animal based products);
· solid waste recycling and/or disposal;
· use of CFC free refrigerants;
· fire and dust explosion prevention (especially at grain and flour handling facilities);
· emergency response;
· use of personal protective gear (especially at meat processing facilities); and
· general employee health and safety.

The sponsor has presented plans to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.

3. Individual environmental reports for each of Sadia’s facilities were submitted by the company on July 19, 1996. Based on IFC’s review of these reports several issues, particularly with regard to effluent treatment and boiler emissions, were outstanding. A Corrective Action Plan (CAP) including action plans and schedules to be implemented by the facilities to achieve World Bank guidelines has been prepared. The schedules provided indicate that most of the actions will be completed before or on July 1997, the compliance deadline established by IFC. However, some of the facilities will be implementing their corrective actions up to end of 1997. These facilities need to justify the reasons for this delay or adjust the schedules so that the CAP for all facilities is acceptable to IFC as a condition to first disbursement.

4. Emission tests for particulate concentrations, from the burning of wood and additionally SOx or NOx emissions for the boilers using combustibles other than wood will be provided by the sponsor. The mitigations to any non-compliance air related issues will be part of the CAP.

5. Solid residues, in all facilities, are recycled and/or properly disposed as per local authority requirements. Ammonia is used as the refrigerant, all cold storage refrigerants are CFC-free.

6. In order to minimize the risk of fires and explosions associated with the handling of flammable materials and presence of high concentrations of grain dust the sponsor has put in place a detailed safety training program. The dust accumulated on roofs and floors is consequently cleaned off to eliminate the possibility of fires. Fire detection and fire fighting systems have been installed including fire extinguishers, fire hoses, sprinklers and dedicated fire warning systems. Each facility maintains a well-trained and equipped fire brigade. Backup power units ensure adequate firefighting capabilities in case of emergency. All facilities will have emergency response plans in place.

7. The transportation, unloading and storage of flammable materials are performed with strict safety procedures under the direct supervision of the Safety and Industrial Hygiene personnel in charge. No traffic around the hexane and fuel oil storage areas is permitted during loading operations. No “hot activities” are performed during loading times. The equipment involved on the loading operations (valves, pipes, etc. ) is carefully checked to ensure that accidental spills will not occur.

8. Sadia has established Fire Safety and Occupational Health and Safety programs which comply with governmental standards and World Bank guidelines. Employees are trained with regard to plant safety rules, accident prevention, hazards of the workplace, spill prevention, fire safety and emergency response and use of Personnel Protective Equipment (PPE). The workplace is monitored for employee exposure to noise, dust and temperature. Employees are provided with and required to use appropriate PPE when noise dust and temperature levels are above the standards. There are clearly signaled restricted areas where only authorized personnel is permitted.

9. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that, subject to implementation of the CAP, the proposed project is being designed to meet Government of Brazil requirements, and World Bank policies, and environmental, health and safety guidelines.

10. IFC will monitor Sadia’s progress regarding implementation of the CAP and evaluate its environmental status in July 1997. IFC will also monitor Sadia’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating the environmental performance reports submitted annually (coinciding with the anniversary of the signing of the investment agreement) to IFC by the sponsor and by conducting periodic site reviews during project supervision.