Oackley S.A.

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Project Number: 
UR3883A-01
Expected Consideration Date by the Board: 
12/18/2015
Date Posted: 
11/18/2015
Company: 
Oackley S.A. (“Oackley”)
Sponsoring Entity: 
not applicable
Financing Requested: 
US$3 million
Sector: 
Agricultural Products
Location: 
Uruguay
Country: 
Scope Objective: 

Oackley is a Uruguayan family business that focuses on agricultural production, mainly soya, rice, and cattle. It operates on 7,000 hectares of farmland, of which it owns 2,225 hectares and leases the remainder.

The funds from the IIC financing will be used to refinance its liabilities.

Environmental Review: 

Environmental and Labor Issues:

This is a category B project according to the IIC’s Environmental and Social Sustainability Policy because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. The principal environmental and social issues related to this project include: efficient resource use and pollution prevention, workplace and labor conditions, and community health and safety.

Land and water use. Oackley does its farming and ranching on its own land and on land it leases. Almost all the land is used for farming and ranching and has a long tradition of human use. The land that the company owns has been in the family for more than a century, while the leased land has been with the family for nearly 30 years. There are no protected areas or sensitive ecosystems, as all these areas are classified as modified habitats. No populations or economic activities have been displaced, nor are there any endemic or protected plant or animal species.

There are two irrigation reservoirs on the land that between them hold 6 million m3 of water, enough to irrigate 600 hectares of rice or 2,000 hectares of soya. These two reservoirs are 30 years old and were approved by the National Water Directorate, which is under the Ministry of Transportation and Public Works. The irrigation system is made up of 28 km of main channels and 14 km of secondary channels, all of which work using gravity, with no need for pumping and therefore no energy consumption. There are other sources of water for the livestock that consist of natural water flows (the Tupambaé Creek and Medio Creek) as well as dikes that create water reserves across the plots.

Air and noise emissions. The main air and noise emissions come from the vehicles and machinery used on the farmland (sowing, applying agrochemicals, and harvest). The company uses its own machinery and in some cases leases machinery from third parties. In addition to gas emissions from internal combustion engines, vehicle traffic will generate fugitive dust emissions. To mitigate gas and noise emissions, the motors must be correctly maintained and the machinery must travel at low speeds.

The spraying of agrochemicals can have damaging effects from aerosols reaching populated areas or buildings, or bordering fields, affecting people, animals, or crops. The company and contractors shall observe local regulations on minimum distances and environmental conditions (wind) for which spraying agrochemicals is allowable.

Solid and liquid waste. Most of the solid waste is generated with the final disposal of empty agrochemical containers. Oackley collects the empty containers, triple-washes them, and sends them to the CampoLimpio program. This program collects containers from throughout the country at eight collection points in order to recover the plastics from them and prevent pollution. The program operates in 18 countries in Latin America. In Uruguay, it is supported by 26 companies that import and sell agricultural inputs.

Workplace health and safety. Oackley has a health and safety supervisor to ensure compliance with domestic safety regulations, prepare a workplace safety plan, and aid with the training of personnel on accident prevention. This professional helps the company identify and evaluate risks, enabling it to develop workplace safety procedures and training programs, as well as define personal safety equipment needs and emergency procedures. This professional also designs and implements safety oversight and inspection procedures, accident investigation procedures, and subcontractor oversight procedures.  Oackley does most of its work with its own staff, but when it needs to contract with other companies for preparing the land or planting or harvesting work, these obligations also apply to its contractors, as well as to suppliers that enter company property. One of the fundamental elements of the safety program is the prevention plan for the transportation, storage, handling, and application of phytosanitary products (herbicides, insecticides, pesticides, and fungicides).  

Labor and social. Oackley is in compliance with domestic labor laws and International Labour Organization standards. Core labor standards include: social security contributions, freedom of association to form labor unions, nondiscrimination in the workplace, and the elimination of exploitative and abusive child labor. The Guidelines on the Right to Work in Rural Areas prepared by the Labor and Social Security Ministry compile all the current legislation on this issue. In keeping with Uruguayan law, workers and their dependents receive medical coverage through the National Health Fund (FONASA), as well as insurance against workplace accidents and occupational illnesses.

Monitoring and reporting: Oackley will implement an Environmental and Social Action Plan (ESAP) to ensure compliance with IIC’s environmental and workplace safety and health requirements. Activities under the ESAP will include the implementation of a workplace safety plan. The company will submit annual progress reports to the IIC on the implementation of the ESAP.