This project has been categorized as an FI-1 in accordance with IFC's Environmental and Social Review Procedure. The proposed investment consists of a risk-sharing facility of up to US$ 3 million with Société Ivoirienne de Banque (SIB), a subsidiary of the Attijariwafa Bank Group in Côte d'Ivoire, on a portfolio of eligible leases for trucks for selected Cargill partner cocoa cooperatives. SIB's overall portfolio entails exposures in the following sectors: Trade, Agribusiness, Transportation, and Divers Services; however, current exposures do not entail cooperatives in the cocoa sector. The main direct environmental risk of this project is related to the truck maintenance practices by the cooperatives. However, the most significant environmental and social risks of this project are related to the production of cocoa in Côte d'Ivoire, which is known to have been linked to the use of child labor and has involved the conversion of natural/critical habitats. These are considered to have potentially significant adverse social and environmental impacts that are diverse, irreversible or unprecedented. The portfolio risk is therefore considered to be high.

The main direct environmental risk of this project is related to the truck maintenance practices by the cooperatives, specifically the management and disposal of hazardous materials such as used oil, used oil filters, and car batteries, which is currently undertaken well below basic industry standards. However, this risk can readily be addressed and mitigated through additional capacity building work to be undertaken by Cargill with participating cooperatives. The most significant, although indirect, environmental and social risks of this project are related to the production of cocoa in Côte d'Ivoire, which is known to have been linked to the use of child labor and has involved the conversion of natural/critical habitats. These risks can be mitigated through the Cargill Cocoa Promise, which is Cargill's sustainability strategy including among others, certification programs like Rainforest Alliance, UTZ and Fairtrade, which are implemented through Cargill Partner cooperatives from which Cargill procures certified cocoa, and includes a traceability mechanism for both certified and non-certified cocoa and a register of coop members reflecting their certification status/progress toward obtaining certification. Additional Cargill efforts include collaborations on education with NGOs like CARE as well as private public partnerships with state agencies in order to enhance cocoa farming and thus farmers ‘livelihood.'

Finally, as SIB is the financial institution that will be processing the leasing transactions for trucks for cooperatives, there are potential risks related to SIB's capacity to adequately assess each cooperative's performance with respect to the certification requirements as well as their truck maintenance practices. SIB has already developed the necessary Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S risk management of its lending and leasing activities. As part of this investment, SIB will be required to revise and adapt the existing ESMS including the preparation of additional E&S due diligence questionnaires specific to the cocoa cooperatives and their truck maintenance practices. SIB will be required to incorporate the E&S due diligence and monitoring of eligible cooperatives as part of the lease review cycle. To ensure adequate ESMS implementation, IFC will review the E&S due diligence undertaken by SIB for the first 5 cooperatives proposed to be included under the project.