Austral Food S.A.

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Project Number: 
CH3754A-01
Expected Consideration Date by the Board: 
03/06/2007
Date Posted: 
02/02/2007
Company: 
Austral Food S.A.
Financing Requested: 
Sector: 
Aquaculture and Fisheries
Location: 
Country: 
Scope Objective: 

Austral Food processes and exports fresh/refrigerated and frozen fish, particularly deep-sea cod, albacore, southern hake, salmon, and a variety of other fish and seafood. Austral Food purchases fresh fish from local independent fishermen and international suppliers. At its plant, Austral processes and packages the fish according to the clients’ requests and either freezes the product or ships it fresh/refrigerated to international markets. A percentage is sold locally.

Austral requested an IIC loan of US$3 million to finance working capital. Austral has found new sources to supply fish, which will allow it to significantly increase sales. To do so the company needs to finance a larger inventory and accounts receivable, since raw materials are purchased on a cash basis.

Environmental Review: 

Environmental Classification and Issues:

Classification:

This is a category III project according to the IIC’s environmental and labor review procedure because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. The environmental and labor considerations related to the project include: management of liquid effluents and solid waste, product quality control and safety, fire protection, personal safety, and emergency response.

Liquid Effluents

The main liquid effluent generated is processing plant wastewater containing organic residues. This water is pretreated with an enzyme additive that binds oils and sediments. The process takes place in a chamber with a volume equivalent to the amount of water used during approximately one hour of processing (11 m3). The treated water then rejoins the effluents from other sanitary services before continuing on to the sewer system. The sewer system is operated by Aguas Andinas, which processes the effluents at a collective plant. Aguas Andinas periodically tests water discharged into the sewer system to verify that it complies with certain parameters and limits.

Solid Waste Management

Solid organic waste generated by the plant is classified according to the species being processed. In the case of cod all waste is sent to a fishmeal plant, while waste from other species such as salmon and albacore is collected by a company that deposits it in an authorized landfill. In all cases, organic waste generated during the day is stored in a refrigerated chamber (between 2° C and 6° C) and is removed daily.

Product Quality Control and Safety

The company is certified according to the quality assurance program (PAC, Programa de Aseguramiento de Calidad) and Operational Sanitation Procedures (POS, Procedimientos Operacionales de Saneamiento) of the National Fishing Service of the Ministry of the Economy (SERNAPESCA, Servicio Nacional de Pesca del Ministerio de Economía). The PAC program is based on good manufacturing practices for the industry, including HACCP regulations, with special emphasis on the product’s traceability. The POS program ensures the safety of the plant, of individuals, and of materials being received.

Occupational Health and Safety

Austral Food has internal regulations for order and safety that establish working conditions, behavior in the work environment, general requirements and prohibitions, and penalties and fines. There are also internal industrial health and safety regulations that establish other requirements and prohibitions seeking workplace safety and accident prevention, as well as cleaning and personal hygiene measures to avoid contaminating the product or spreading disease. The duties of the Joint Health and Safety Committees include training workers in the correct use of protective gear, ensuring compliance with preventive measures, investigating accidents, examining machinery and processes, recommending corrective measures, and verifying compliance.

Labor Practices

Austral Food is in compliance with domestic labor laws and International Labour Organization (ILO) standards. These mandatory core labor standards include: social security benefits, freedom of association, organization of workers’ unions, and nondiscrimination in the workplace. The company’s employees do not belong to a labor union.

Monitoring and Reporting

Austral Food shall develop an Environmental Management Plan (EMP) satisfactory to the IIC to ensure compliance with domestic regulations and the IIC’s environmental and workplace safety and health guidelines. The EMP shall provide for a yearly report on: liquid effluent and solid waste management; health, occupational safety, and emergency response training, and accident reporting.