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| Environmental Review Summary with attachments : Corrective Action Plan |
This Environmental 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 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. |
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| Project number | 24173 |
| Project name | Itambe |
| Country | Brazil |
| Sector | Food & Beverages |
| Department | Agribusiness |
| Company name | Cooperativa Central dos Produtores Rurais de Minas Gerais Ltda |
| Environmental category | B |
| Date ERS disclosed | August 31, 2005 |
| Status | Completed |
| Previous Events | Signed: December 15, 2005
Approved: November 8, 2005 |
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| Project description |
The Cooperativa Central dos Produtores Rurais de Minas Gerais (Itambé, the Cooperative or the company) is expanding its milk processing capacity from 3.5 MM liters/day to 5.0 MM liters/day to meet increased demand from the internal and export markets and to expand its geographical milk purchasing base. During 2005 and 2006, investments include:
- construction of two new milk processing plants;
- expansion and modernization of two existing plants; and
- additional working capital.
Itambé, which is the largest dairy cooperative in Brazil, is a central cooperative (a cooperative owned by other cooperatives) owned by 33 cooperatives which in turn represent close to 7,000 farmers, mostly small and medium-size milk producers. Itambé processes milk and its sub-products and market these products directly to retail companies. Itambé is also responsible for 1/3 of Brazilian dairy exports, primarily as powder milk and sweet condensed milk. The Cooperative is located in Belo Horizonte, State of Minas Gerais. The company owns 5 milk processing plants (Goiania (a new plant is being developed adjacent to existing facilities), Uberlandia (plant under construction), Guanhaes, Sete Lagoas and Para de Minas) and a feed mill (Contagem) in the States of Minas Gerais and Goias. |
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| Environmental Category B disclosure requirements |
IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors.
The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the community (Advertisement in newspaper in Belo Horizonte and Goiania; Municipalities where Itambé has a plant; and company website). The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.
To view the Summary of Project Information(SPI) for this project, click here |
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| Environmental and social issues |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social 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/social information submitted by the project sponsor and by visits to plants, collection points and a sample of farms. The following potential environment, health and safety and social impacts of the projects were analyzed.
- Corporate environmental and social management capacity;
- Quality of potable water supply;
- Treatment of liquid effluents;
- Air emissions;
- Occupational, health and safety (OHS) issues;
- Site acquisition and development;
- Management and reduction of solid waste;
- Use of refrigerants;
- Labor practices;
- Third party farms and agricultural practices; |
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| Proposed mitigation for environmental and social issues |
The Corrective Action Plan (CAP), attached with this document and agreed upon between the IFC environmental team and the sponsor, will address the compliance gaps with IFC’s requirement. The implementation of the Corrective Action Plan will ensure that the proposed project will comply with the environmental, health & safety, food safety and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. Further information is provided in the attached CAP.
- Corporate environmental and social management capacity:
Itambé does not have a formal or centralized environmental/ social management system, although each plant collects some environmental data and undertakes independent social investment activities. There are also no formal responsibilities allocated for environmental management and the company relies on consultants to assess and manage environmental issues. To ensure that the company can fully and effectively manage environmental, health & safety, food safety and social issues, and report these to IFC and others, Itambe will develop a comprehensive and integrated environmental, health & safety, food safety and social management system and recruit an environmental/social coordinator in compliance with the CAP.
- Quality of Potable Water supply:
Water supply for all plants is from municipal or groundwater resources and while there is basic quality monitoring, it does not analyze all the parameters to ensure compliance with IFC requirements. Itambe will need to ensure quality of potable water in compliance with WBG/IFC standards and according with the CAP.
- Treatment of liquid effluents:
Waste water treatment systems are operating at capacity at several plants (Sete Lagoas, Para de Minas, and existing plant at Goiania) and are not in compliance with IFC requirements for the following parameters: BOD, COD, oil and grease, coliforms and total suspended solids. Itambé is currently undertaking a review of wastewater treatment requirements at these plants and will provide details of technical solutions to compliance failings. Implementation of an integrated monitoring program will be carried out in accordance with the CAP.
- Air emissions:
Oil fired boilers are present at most sites – though these will increasingly be transferred to gas fuel as supply becomes available. The boilers range in size from 8-30 tons steam/ hour. Itambé has no point air emission monitoring program in place. Implementation of an integrated monitoring program will be carried out in accordance with the CAP.
- Occupational, health and safety (OHS) issues:
OHS issues are well managed at all sites with the exception of Sete Lagoas. There are programs in place at all plants and OHS issues are taken seriously by senior and plants’ management. Personal protective equipment was provided and worn at each site. Sete Lagoas, is the company’s oldest plant and because of the age of the plant and the confined nature of operations, OHS was poorer than at other sites (for example, slippery floors in certain areas; high temperatures near the autoclave lines; dangerous working conditions and use of forklift truck in confined areas; inadequate lighting in places; some moving machinery parts unguarded). Itambe has not presented information related to accident statistics, OHS training, workplace conditions (ventilation, noise, lightening), first aid and fire safety. These gaps will be addressed in the CAP.
- Site acquisition and development:
Newly acquired sites under construction include Goiania and Uberlandia; both have appropriate Brazilian planning and environmental permits. Acquisition and development of these sites has not resulted in resettlement, economic displacement, significant impacts to natural habitat or other IFC safeguard policy concerns. The sites are well located (i.e. within/adjacent to existing industrial estates) and construction practices, including occupational health and safety, comply with IFC requirements. Existing sites have been developed over a period dating back 30 years and are located within or adjacent to industrial / urban areas.
- Management and reduction of solid waste:
Solid waste management is effective and well organized – with on site segregation, reuse and recycling at all sites.
- Use of refrigerants:
Ammonia refrigeration systems are used at all sites (and will be installed at new sites). These systems are well managed and operate in compliance with IFC requirements.
- Labor practices:
The company does not employee children and monitors the supply chain for such practices. IFC found no evidence that the dairy sector in Minas Gerais and South Goiás, where Itambe operates and procures milk, is associated with egregious labor practices (forced, harmful or degrading labor). Similarly IFC found no evidence that the company, or its supply chain, is involved in such practices.
- Third party farms and agricultural practices:
The States of Minas Gerais and the Southern part of Goiás have been farmed for many years (and centuries in some areas) and the agricultural frontier moved through both states during the 1970’s. Today farms are well established and titled, and questions of conversion and the extension of the agricultural frontier into natural habitats are not an issue in the areas that Itambe operates. IFC’s analysis of indigenous and Quilombero groups in both states indicates that Itambe’s supply chain does not directly affect the activities or livelihood’s of either group. |
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| Conclusion |
| Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures described in the Corrective Action Plan. |
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| Monitoring and compliance |
IFC will evaluate the project’s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering:
- the status of implementation of any measures contained in the Corrective Action Plan and
- ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs.
Periodic site supervision visits will also be conducted. |
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| Environmental and Social Documentation |
| Corrective Action Plan |
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