9108 - Alkaloid A.D.

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Environmental & Social Review Summary

Project Number

9108

Company Name

ALKALOID A.D.

Date ESRS Disclosed

Feb 5, 2010

Country

North Macedonia

Region

Europe

Last Updated Date

Dec 31, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 30, 1999
Signed : Jul 20, 1999
Invested : Jul 5, 2000

Sector

Pharmaceuticals and Medicine

Industry

Health, Education and Life Sciences

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Environmental Review Summary (ERS)

Project Name: FYR of Macedonia – Alkaloid A.D.

Region: Central and Southern Europe (CSEG1)

Sector: G-IB - Pharmaceuticals (including vitamins)

Project No: 009108

1. Alkaloid A.D. is a Skopje-based joint stock company manufacturing pharmaceutical, chemical, cosmetic, coating and food products. The company was founded in 1936 for the production of narcotics using the morphine extracted from locally grown poppies. Alkaloid, now one of the most successful in the country and leader in the domestic pharmaceutical sector, is currently organized in four profit centers: (i) pharmaceutical products; (ii) fine chemicals and cosmetics; (iii) herbs; and (iv) coatings. Main pharmaceutical products include capsules, pills, tablets, ampoules in different dosage forms, ointments, creams, jellies, syrups and solutions. Most of these products are primarily used as analgesics, antibiotics for wide applications, anti-diabetics and tranquilizers. Alkaloid consists of four existing facilities all located in and around the capital city. The company employs a total of 1,758 workers.

2. IFC and EBRD are considering providing parallel convertible loans to Alkaloid. The proceeds of the loans will be used for (i) the completion of a new pharmaceutical production facility to comply with Good Manufacturing Practice standards, and (ii) the upgrade the Company’s related pharmaceutical production facilities. The total cost is estimated at DM63.2 million equivalent, and the project is expected to be completed by end of 2001.

3. 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 the project consisted of appraising technical and environmental information submitted by the project sponsor, and the technical appraisal completed by IFC’s environment staff. With respect to the new pharmaceutical operation, the following potential environmental, health and safety impacts of the project were analyzed:

· liquid effluent;
· air emissions;
· solid waste disposal and disposal of pharmaceutical products;
· adverse drug effects and product recalls;
· fire prevention and emergency response;
· workplace health and safety, particularly air quality.

4. An independent consultant was contracted by EBRD to undertake an environmental audit of the existing manufacturing component of the company, as required by IFC. The audit was designed to identify any environmental liability issues, and any environmental and worker health and safety risks associated with past and current operation of the plant, particularly issues related to soil and ground water contamination. The consultants also reviewed relevant environmental information including the Environmental Impact Assessment undertaken by the company in relation to the new developments and identified and assess the conformity with any Macedonian requirements for public participation.

5. The information provided by Alkaloid about how each of the potential impacts (listed in paragraph 3 above) will be addressed in the development of the proposed project is summarized in the following paragraphs. The company commits to implement the project in accordance to Macedonian and EU regulations as well as IFC requirements.

Liquid effluents. Wastewater includes sewage and effluent produced by washing equipment and floors. Wastewater will be discharged in the city sewer with characteristics compliant with local regulations.

Air emissions. These include small quantities (4.7 Kg/h in total) of filler particles, colors and flavors, preservatives, traces of active substances, and solvents (alcohol, water). The project includes a central dust control system to reduce particulate emissions to acceptable levels.

Solid waste disposal and disposal of pharmaceutical products. Most of the wastes will be disposed of in the municipal landfill facility. A small amount of solids, which are not suitable for municipal disposal, will be destroyed in accordance to Macedonian regulations and international good practice.

Occupational health and safety. Handling of hazardous materials (biohazards, solvents, etc.) and staff protection against noise and other occupational hazards will be undertaken according to international good practice. Air quality inside the plant will be controlled with a 7-stage system, which ensures 99.99% efficiency in the removal of breathable particulate matter. Detection instruments for organic solvents will also be installed. The company undertakes periodic medical check-ups to monitor the health of the staff and provides regular training in personal protection and emergency response. This practice will continue with the implementation of the project.

Fire prevention and emergency response. Fire prevention and emergency response measures compatible with IFC Health and Safety Guidelines have been duly considered in the project.

6. IFC’s conclusion is that Alkaloid’s existing facilities and proposed project will meet IFC’s environmental, health and safety policies and guidelines, World Bank Group pollution prevention and abatement guidelines and requirements of the government of FYR of Macedonia and the European Union. This conclusion is based on IFC’s initial review of information provided by the company regarding potential environmental impacts and proposed mitigation measures of this project, the independent audit report completed in April 1999 and the corresponding Environmental Action Plan.

Although Alkaloid’s current operations are not fully compliant with IFC requirements, the company has formally committed to follow the recommendations of the independent audit report and to implement prevention, mitigation and control measures as per the corresponding Environmental Action Plan within the timeframe established therein.

7. IFC will monitor ongoing compliance with IFC’s environmental, health and safety policies and guidelines and World Bank Group pollution prevention and abatement guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Alkaloid and by conducting periodic supervision. Both the annual monitoring reports and supervision missions will make reference to all Alkaloid’s facilities in Skopje.

Environmental and Social Mitigation Measures

Broad Community Support

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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