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| Tecnoquimicas |
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| Environmental & Social Review Summary |
This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. |
| Project number | 25672 |
| Country | Colombia |
| Sector | Chemicals |
| Department | Global Manufacturing & Services |
| Company name | Tecnoquímicas S.A. |
| Environmental category | B |
| Status | Pending Approval |
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| Date ESRS disclosed | May 6, 2008 |
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| View Summary of Proposed Investment (SPI), click here |
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| Overview | Category & Applicable Standards | Key Issues & Mitigation | Community Engagements | Client's Documentation |
| Overview of IFC's scope of review |
IFC’s review comprised site-based inspection of the following manufacturing facilities:
- pharmaceutical manufacturing plants of Jamundi and Tecnofar,
- headquarters and alcohol filling plant of San Nicolas in Cali,
- hospital adhesives plant in Cali.
Site inspection visits were also made to the MORE agricultural formulations joint venture facility and to Tecnoquimicas’s main distribution center at Yumbo.
Site visits were supported by a review of environmental and social (E&S) documents provided by Tecnoquimicas, which included written replies to an E&S questionnaire submitted by IFC, reviews of the manufacturing sites’ environmental reports to the local regulators, and review of socially-relevant documents such as Tecnoquimicas’s Human Resources (HR) policy and certain HR procedures.
Meetings were held with Tecnoquimicas’s Vice President and team responsible for the environmental aspects of Tecnoquimicas’s Responsible Care program, with the Vice President and Human Resources team who operate the HR and social responsibility elements of the program, and with managers of the sites which were visited. |
| Project description |
Tecnoquimicas S.A. (Tecnoquimicas or the company), with its subsidiaries and affiliates, is a local pharmaceutical manufacturer in Colombia. The company and its subsidiaries are involved in the production and distribution of generic pharmaceutical drugs, baby care products, personal care products and animal/veterinary health products. While the company sells majority of its products in Colombia, it also has exports to Ecuador and other countries in Latin America.
Over the next three years, the company plans to undertake investments and capital expenditure, totaling up to $100 million, for:
- expansion and upgrade of its manufacturing facilities;
- possible acquisition of pharmaceutical companies or facilities in the Andean region;
- general corporate expenditure; and
- long-term working capital. |
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| Identified applicable performance standards |
While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:
- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
The project will proceed at established sites, and no land acquisition is anticipated. It is for this reason that issues covered by PS6, PS7 and PS8 are not expected to be encountered during the course of the project. |
| Environmental and social categorization and rationale |
Specific key environmental and social issues are listed below:
- Tecnoquimicas’ management of social, environmental, and health and safety matters, including due diligence of potential acquisitions;
- labor and working conditions;
- use of hazardous chemicals;
- fire protection and emergency response;
- potential employee exposure to chemical/pharmaceutical compounds;
- machine guarding;
- hazardous wastes and emissions;
- management of the company’s security forces.
Potential adverse effects arising from these issues are limited, site specific may readily be addressed through mitigation measures. This is therefore an environment Category B project. |
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| Key environmental and social issues and mitigation |
Tecnoquimicas has described how the proposed project will comply with host country environmental and social requirements as well as IFC’s Environmental and Social Performance Standards and industry guidelines, through continuation of existing management practices and implementation of agreed additional measures. The following paragraphs describe how these potential impacts are or will be addressed by Tecnoquimicas.
- Environmental, Health and Safety Management
Tecnoquimicas has been working proactively to manage environmental and occupational health and safety aspects of its business since 2004, and for this purpose established a “Responsible Care” unit. Under this Responsible Care program, Tecnoquimicas has an environmental management team reporting to the Vice President of Operations. The Responsible Care unit provides technical support in environmental management to Tecnoquimicas’ various business units.
The company’s social responsibility efforts include community outreach programs, and occupational health and safety management issues are managed through a team reporting to the Vice President for Human Resources and Strategy.
Tecnoquimicas through Responsible Care has managed its operations essentially in general compliance with Colombian legislative requirements. Monitoring of regulated environmental impacts is rigorous, and comprehensive annual reports are sent annually to the regulators in the jurisdictions in which Tecnoquimicas’ facilities are located. This monitoring and reporting program has identified the need for a number of environmental upgrades which have been implemented.
The pharmaceutical manufacturing plants are currently Colombian GMP (Good Manufacturing Practices) certified and Jamundi plant has also ISO 9001:2000 certification. ISO 14001 certification of the company is expected by the end of 2008. A few occupational health and safety (OHS) shortcomings were identified during the site visits; corrective actions are documented in the Action Plan which accompanies this ESRS. Management resource, and internal and external risk assessors are used to identify safety hazards and identify mitigation measures. The company also acknowledges that if and whenever it undertakes any acquisitions, it shall adopt appropriate procedures in the environmental, health and safety area, and has committed to upgrade, if necessary, any facilities that it may acquire to meet local legal requirements and IFC’s Performance Standards within two years of acquisition.
The company is working towards OHSAS 18001 certification of its OHS systems, and expects to obtain this certification in 2009.
- Labor and Working Conditions
Tecnoquimicas has a Human Resources (HR) policy. Copies are handed to all new employees who are asked to sign to acknowledge receipt and that they will abide by the policy. Topics covered by the policy include the labor relationship, training and development, wellbeing and safety, and workplace ethics.
The policies provide employees with information about their rights and responsibilities of both sides to the employment relationship which is based upon non-discrimination and equal opportunity. A Pacto Colectivo between the company and the employees, first established in 1977 and revised annually which covers all direct employees and permanent contract workers, contains collective agreements on salary structure, other non-salary benefits.
Tecnoquimicas has a chartered a Comité de Convivencia in charge of promoting a healthy coexistence among co-workers as well of receiving complaints, analyzing specific conflict situations, and recommending action plans to help solving them.
Tecnoquimicas does not have a trade union, although the Pacto Colectivo serves many of the functions of a union. Tecnoquimicas’ internal work rules dating from 1992, and approved by the Colombian Ministry of Labor and Social Security prevent the company from limiting the right of association.
The minimum age of employment is 18.
- Occupational Health and Safety (OHS)
Tecnoquimicas has a strong commitment to provide employees with a safe and healthy work environment. The company uses both internal and external resources to identify workplace hazards, assess and mitigate risks. The company regularly monitors workplace air quality and noise. An employee health monitoring system based on workplace risks has been developed, and the company is fully compliant with national laws on occupational health and safety. In the area of chemical safety, the company has a complete library of Material Safety Data Sheets for all substances it uses, and has prepared two-side laminated cards, available through out the workplace, which summarize the key safety messages related to each chemical used in each workplace. These are innovative and highly effective. The company occupational health and safety performance has been awarded in 2007 by the Consejo Colombiano de Seguridad (Colombian Safety Council).
During the site visits, IFC identified certain areas where OHS improvement is required, although most of these had already been identified by the company and corrective action was planned under the company’s continuous improvement process. The company will include professional ATEX (explosive atmospheres) assessment of its facilities to identify the need for, and if necessary design and plan implementation of additional protective measures. Machinery guarding will be reviewed and upgraded as required, the ongoing solvent extraction project at the adhesive tape facility will be completed, and fire protection systems, emergency egress and lighting at the Yumbo warehouse will be reviewed and upgraded as required.
- Pollution Prevention and Abatement Issues
Hazardous Material Substitution:
The company avoids use of highly toxic solvents in pharmaceutical manufacturing and there are on-going efforts to eliminate or minimize formulations containing organic solvents through substitution with aqueous solutions. Technoquimicas will investigate the feasibility to replace existing solvents with water based formulations in its adhesives plant and feasibility to replace some hazardous chemicals with safer alternative compounds in its agro-vet facility.
Hazardous Material Handling:
Tecnoquimicas has well-developed hazardous material storage, handling and disposal procedures and generally secure and well-constructed facilities for storage of such materials, though certain improvements such as secondary containment of the flammable materials store, ground impermeability etc. would be analyzed for enhancement at certain facilities. Wastes are separated and disposed of in several ways, according to risk. Recycling is promoted; where this is not possible, materials are disposed of to authorized landfill, returned to the manufacturer (used fluorescent light bulbs), or in the case of hazardous materials (off-specification or returned products, raw material containers, dust filters, laboratory chemicals, printing inks) disposed of by a local cement manufacturer licensed for hazardous material destruction.
Emissions to Air:
Tecnoquimicas’ combustion facilities are small, and below the size threshold at which IFC or local regulators require emissions monitoring.
Manufacturing facilities are equipped with dust collection filters in order to prevent pharmaceutical dust emissions to the environment. Extraction points will be reviewed, and upgrades to the emission control systems will be made where assessment indicates risk.
Additional monitoring of some process exhausts for volatile organic compounds (VOCs) and highly active ingredients will be undertaken and action taken to reduce emissions if shown necessary by such monitoring.
Ozone depleting substances are avoided in new equipment and replacement of CFC and HCFC-containing air conditioning and process cooling systems is ongoing.
Emissions to Water:
Effluent monitoring undertaken shows compliance with local requirements and with IFC requirements for the parameters monitored. Additional monitoring for high risk compounds will be undertaken, and if shown necessary action will be taken to limit presence of such compounds in liquid effluents.
- Community Health, Safety and Security
Process Emissions:
Action described above to undertaken further monitoring, and if necessary controls, on emissions to air and water will protect Tecnoquimicas’ neighbors from any process-related impacts.
Company Security Forces:
Tecnoquimicas has a multi-layer security system which features armed guards and the use of guard dogs, and is designed for defensive purposes only. Security is provided by the company’s own staff, and by several reputable security contractors. Each guard is subjected to a background check, including polygraph test on taking up employment, with additional checks on the guards undertaken if indicated.
Security is structured so that employees of Tecnoquimicas and its contractors work together, with each forming a cross-check on the behavior of the other. Security staff are also continuously monitored by CCTV. With the exception of an armed patrol on a street corner in Cali, no weapons ever leave Tecnoquimicas’s premises, and therefore there is no scope for Tecnoquimicas’ security to use their position or materials provided by Tecnoquimicas in an unauthorized private capacity.
IFC has concluded that Tecnoquimicas’security force is managed in compliance with the requirements of PS4. |
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| Client's community engagement |
| Tecnoquimicas has active community development and social engagement programs in the areas around its plants, especially in the less developed areas south of Cali where several manufacturing sites are located. Tecnoquimicas’ community activities are wide-ranging and include support for education (for example, the 21st Century Leaders’ Program), support to development of community infrastructure in Villa Rica (for example construction of kitchens and dining rooms, classrooms and toilet facilities at schools, and donation of chairs and tables to a school library). The company has also donated to health projects, and to the development of microenterprises. |
| Local access of project documentation |
This ESRS and accompanying Environmental Action Plan constitute the first formal public disclosure of information related to the environmental performance of Tecnoquimicas. It will be available for review and comment at the:
Centro de Comercio de Cali
Calle 8 #3-14, Cali, Colombia
For comments, please contact:
Jorge Enrique Giraldo, Human Resources Manager:
Telephone: 57-2-882-5555 |
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| Availability of Full Documentation |
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| Information Disclosed |
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