Etoile du Nord S.A. (EDN)

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Project Number: 
HA2800A-01
Expected Consideration Date by the Board: 
05/09/2016
Date Posted: 
04/08/2016
Company: 
Etoile du Nord S.A. (EDN)
Sponsoring Entity: 
not applicable
Financing Requested: 
US$450,000
Sector: 
Agricultural Products
Location: 
Haiti
Country: 
Scope Objective: 

The project consists of a US$450,000 loan for the construction of a new sorghum processing facility in Port-au-Prince Haiti.  The objective of the project is to assist in the development of the sorghum industry in Haiti, which will make processed sorghum available for industrial clients, while at the same time, supporting small sorghum farmers to create a sustainable livelihood.   

EDN was formed in 2006 but remained dormant for 9 years before it was re-established by Ken Michel, an entrepreneur and Brasserie National d’Haiti (“BRANA”), a local brewery, 100% owned by Heineken, in 2015.  EDN purchases sorghum from local Haitian farmers, process it and sells it to three main customers; (i) BRANA, as a substitute for imported barley in the production of beer and malta; (ii) Food for the Poor (Haiti), as a substitute for imported rice in its feeding programs; and (iii) Epi d’Or, a large local bakery, as sorghum flour, which is a substitute for imported wheat flour in making bread.  

Environmental Review: 

Environmental and Labor Issues:

This is a category B project according to the IIC’s Environmental and Social Sustainability Policy.   There are a small number of limited and specific environmental and social impacts, which may result and that can be avoided or mitigated by adhering to generally recognized management practices.  The primary issues relate to the development of guidance material on environmental, health and safety, and standard operating procedures for the facility.  These issues are analyzed in further detail in the Environmental and Social Review Summary, and an action plan defines the specific documents for development as a condition for first disbursement.

Environmental and Social Context. The project is a warehousing facility for the storage, drying, enhancement and milling of sorghum grain.  The facility consists of two 48 ft. diameter storage silos, four silos that are seven ft., a drying facility, finished product storage facility and a two floor office building.  The facility is located on a small parcel of land (1,800 square meters) zoned for industrial use adjacent to the Port au Prince Airport.  EDN has a ten (10) year lease on the site, which was previously used also for warehousing of food commodities.  EDN purchases bagged sorghum from a network of roughly 1,500 small-scale producers, and has the sorghum trucked to its facilities by third party contractors.  The sorghum is then prepared, dried and stored for on-selling to multiple buyers including the Catholic Church, a bread chain, and a beverage company. The facility has been in operation since December 2015.

Environmental Risks and Impacts and Proposed Mitigation and Compensation Measures

Assessment and Management of Environmental and Social Risks and Impacts. As the project is located within an existing zoned industrial site, an environmental impact assessment was not required locally.  EDN did undertake ground surveys as part of a broader engineering study to evaluate the ground composition and structural integrity to support the silos constructed, and to engineer the facility to account for natural disaster risk.  Soil surveys were conducted as part of this exercise – no existing contamination was found present. 

EDN has hired a Canadian firm to produce an Environmental, Health and Safety Management System and stand-alone Standard Operating Procedures (SOPs) for operation of its facility.   As a component of this System, EDNSA will include a process to evaluate and audit environmental performance, conduct ESHS training, and work with its suppliers in mitigating environmental and social risk.  As this is the country’s first industrial grain storage and operating facility, EDN will share the SOPs with the Government of Haiti for adoption as best-practice material in any future development and government authorization of a similar site. Completion of its EHS Management System and review by IIC will be a requirement of the loan.

Labor and Working Conditions. EDN currently employs 11 people – 10 men and 1 woman.  They are in the process of updating and developing their human resources policy, grievance mechanism, and training program.  Completion of these aspects will be requirements of the loan.  During the site visit, all employees were observed wearing personal protective equipment, there was proper emergency signage, and the facilities were adequately ventilated.  The Canadian consultant retained by EDN is finalizing the Standard Operating Procedures, which will provide specific operating guidance and health and safety instructions for employees to follow.  As the facility is being optimized over the next three months, employees are also being trained on the operation of all equipment related to grain unloading, processing, storage, drying and milling, among other activates.

The company is finalizing its HR Policy and Grievance Mechanism, which will be administered by the Admin and Personnel Manager.  All of its employees have received documented information pertaining to their working conditions and terms of employment.  All new suppliers into its network have to sign a supplier code of conduct, which guarantees that sorghum has been produced free of child labor and in a manner consistent with sustainable practices.  This commitment is enforced by EDN’s buyer, Brana, and the wider SMASH program, which a majority of the suppliers have been trained through.  There have been no accidents or injuries since the start to operations in May 2015.

Resource Efficiency and Pollution Prevention.  As a warehousing facility, there is minimal production of wastes and use of hazardous materials.  Process waste includes sorghum husks as well as inferior grain, all of which is donated as animal feed.  With respect to gear oil and diesel fuel, the company has a designated location on site for proper storage of such materials, and spent fuel is disposed of through a waste management company.  The SOPs will include a section on pollution management.