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, and design criteria. The main environmental and labor issues related to the project include environmental management and third-party certification, hazardous materials handling and storage, liquid effluents and air emissions, solid and hazardous waste management, occupational safety and health, and labor practices and social issues.

Environmental Management and Third-party Certification: Agripac has an environmental policy posted on its website. At the corporate level, it has a SHEQ (Safety Health Environment Quality) Office headed up by a physician and expert in occupational safety and health to handle all occupational safety and health, environmental, and quality-related issues associated with the operations of the Agripac group. The SHEQ manager coordinates the activities of staff responsible for the handling of these matters at each of the group’s manufacturing plants. The project’s environmental and labor review process included on-site visits to the Laquinsa (pesticide formulation), Balanfarina (balanced feed production), Celtec (manufacturing and repackaging of farm inputs), and Agrigrain (grain storage) plants, which have an internationally certified integrated environmental, occupational health, and quality management system under ISO 14001:2004, OHSAS 18001:2007, and ISO 9001:2008 standards. Other visits were made to the crop dusting company (Aeroagripac), the port terminal for the receiving and handling of fertilizer, and selected distribution centers.

Agripac conducts regular environmental compliance audits of its manufacturing facilities in accordance with Ecuadorian regulations, to which end it takes and analyses air, soil, and water samples to ensure the prevention and, where necessary, the due and proper control of any contamination from its operations. Laquinsa, Agripac, and Celtec all have environmental permits from the Municipality of Guayaquil’s Environmental Department. The Balanfarina and Aerograin facilities and port terminal are completing necessary formalities to obtain the corresponding environmental permits, which they expect to secure sometime in the next few months. Agripac also has Responsible Care certification by Aproque (the Ecuadorian chemical manufacturers association) as part of a global initiative by the chemical industry to continuously improve its performance in the area of health, safety, and environmental management and promote open, transparent stakeholder communication. This initiative, first mounted by the Chemistry Industry Association of Canada in 1985, currently includes over 50 national chemical manufacturers’ associations in charge of implementing the initiative in their respective countries. It was first launched in Ecuador in 1999 with Aproque as its implementing agency.

Hazardous Materials Handling and Storage: As per Ecuadorian regulations and the Stockholm and Rotterdam Conventions, Agripac does not market any pesticides whose production or use is restricted due to their toxicity or damaging effects on the environment. It does not formulate, repackage, or market any products classified in Hazard Class Ia (extremely hazardous) of the hazard-based pesticide classification system recommended by the World Health Organization. Class Ib (highly hazardous) products are repackaged and marketed by Agripac taking all security measures required under applicable domestic regulations and by international good practices. Likewise, Agripac takes the same measures with respect to the formulation, repackaging, marketing, and use of Class II (moderately hazardous) products. All pesticides formulated, stored, marketed, or employed by Agripac comply with the International Code of Conduct on the Distribution and Use of Pesticides developed by the FAO (the United Nations Food and Agriculture Organization). At the country level, Ecuador has adopted the Andean Standard (Decision 436-Resolution 630) governing the registration and control of pesticides used in agriculture. Agripac ensures that its products meet applicable standards and verifies the technical information displayed on product labels. As part of the registration process for its products, the company performs an environmental risk assessment and implements an environmental management plan, which is audited by the Ministry of the Environment.

Its warehouses and silos for the storage of raw materials or finished products are equipped with security signage, evacuation exits, alarms, fire-fighting equipment, and other required accidental spill or fire prevention measures. All fuel or other chemical storage tanks display NFPA (National Fire Protection Association) Hazmat diamond labels. Access to all Agripac facilities is restricted and controlled by cement perimeter walls, electrified fences, inside and outside closed-circuit cameras, round-the-clock private surveillance, and checkpoints for visitors entering and leaving the premises. All vehicles used for transporting agrochemicals are licensed to haul hazardous materials, equipped with spill control and personal protective equipment for employees, and required to strictly comply with all applicable traffic regulations. Each vehicle has a driver and an assistant, both of whom are trained in the safe handling of hazardous materials.

Liquid Effluents and Air Emissions: The types of operations performed in Agripac’s manufacturing plants produce minimal amounts of liquid effluents associated mainly with the cleaning of floors and equipment in quality control laboratories. The Laquinsa and Celtec facilities have industrial wastewater treatment plants for the treatment of liquid effluents prior to their use for the watering of gardens on the grounds of the facility or their discharge into the Guayas River for final disposal in accordance with domestic regulations. Agripac uses an Ecuadorian Accreditation Agency or OAE-accredited laboratory to perform monthly chemical analyses to monitor the quality of treated liquid effluents and files quarterly reports with the municipal environmental agency. According to the results of chemical analyses performed in the first quarter of this year, the maximum permissible level of pesticides in its treated liquid effluents meets United States Environmental Protection Agency (EPA) standards for drinking water. The IIC will require Agripac to continue to monitor the quality of its liquid effluents and submit regular reports on its findings.

The operations performed in certain processing areas (grinding and packaging) at the Balanfarina and Celtec plants generate particulate air emissions and volatile organic compounds. Most of the boilers run on gas, though some are fueled by diesel oil. Dust is captured at the emission source and conveyed to cyclone dust collectors for dust control purposes. The handling of any chemicals liable to emit volatile organic compounds is restricted to enclosed booths to control such emissions. Agripac regularly monitors air emissions, air quality, and noise levels through sampling and laboratory analyses performed by OAE-accredited laboratories to ensure compliance with domestic regulations and international good practices. According to monitoring data from December of last year for the insecticide packaging area at its Celtec plant, for example, concentrations of fine particulate matter (PM 2.5) in dust-producing areas are below the maximum exposure limits set by the United States Occupational Safety & Health Administration (OSHA) standard. Likewise, the monitoring data for concentrations of particulate matter in outside areas of the Celtec plant meets domestic standards. Figures for gaseous air emissions (NOx and SO2) at the Balanfarina plant from the diesel-powered boiler and for concentrations of particulate matter in manufacturing areas from monitoring activities conducted in June of this year are within maximum permissible levels under Ecuadorian regulations, except in the vicinity of the grain storage silos, where the analyzed sample showed high levels of PM 10. Monitoring activities conducted in the Aeroagripac hangar in April of this year examined air concentrations of combustion gases (CO, NOx, and SO2) from crop dusters and of volatile organic compounds from the handling of pesticides used for crop dusting and noise levels from the operation of small aircraft. According to the monitoring data, all Aeroagripac operations comply with Ecuadorian regulations and meet OSHA and ACGIH (American Conference of Governmental Industrial Hygienists) standards. The IIC will require Agripac to continue these monitoring activities and submit regular reports as part of an Environmental and Social Action Plan (ESAP) to be implemented by the company during the course of the project financed by the IIC.

Solid and Hazardous Waste Management: Agripac’s Laquinsa and Celtec plants are registered with the Ministry of the Environment as hazardous waste generators, which requires the filing of annual hazardous waste management reports with the Ministry. All wastes classified as hazardous (such as containers with agrochemical residues or contaminated personal protective equipment and other articles) are collected by authorized agents of the Ministry of the Environment for incineration under controlled conditions in facilities outfitted with air pollution control equipment. Plastic containers are first triple washed and then crushed to render them unusable. In addition, Agripac has a professional staff trained to schedule production to meet quality requirements and market needs to prevent its products from expiring while sitting in its distribution centers. Any expired products are turned over to an authorized agent of the Ministry of the Environment for controlled incineration in an accredited facility. Nonhazardous solid wastes (cardboard, paper, plastic, scrap metal, organic waste from the employee cafeteria, etc.) are collected and temporarily stored within Agripac facilities pending their collection by authorized agents for third-party recycling or final disposal in the city’s sanitary landfill.

Occupational Safety and Health: All Agripac manufacturing facilities and office spaces are outfitted with fire prevention and fire-fighting equipment. Manufacturing and storage areas for finished products are equipped with smoke detectors, visual and audible alarms, a water supply system for fighting fires, and fire extinguishers for different types of fires. The agrochemical packaging and formulation area at the Celtec plant, in particular, has a high-expansion foam-based fire-fighting system. Fire, emergency response, and evacuation drills were conducted at the Agrigrain facility in July and August of last year. Similar drills were conducted this year at the Balanfarina plant. Aeroagripac takes special precautions to ensure that no farm workers are present during its crop dusting operations. For example, it will post notices of the date and time at which a particular farm or plantation is scheduled to be sprayed in locations heavily frequented by farm workers (packing facilities, warehouses, offices, cafeterias) warning them to stay out of the fields. All crop dusting operations are scheduled and coordinated by farm managers and Aeroagripac personnel. Furthermore, the company strictly complies with health regulations for banana plantations banning crop dusting in populated areas, in the vicinity of schools and bodies of water, and in protected areas. To this end, it has maps and coordinates for all fields and sensitive sites where the use of pesticides is banned.

It is company policy to provide all customers with ongoing and refresher training in the safe use and handling of pesticides targeted specifically at agricultural professionals, workers handling agrochemicals, and community leaders, as well as businesses, associations, agencies and organizations, and the general public. In a quest to shore up the farmer training services provided by its technical departments for over twenty years, Agripac decided to partner with 3M, a leader in the manufacturing of respiratory protection equipment for the agricultural sector, strictly for purposes of continuing to instill farmers with a safety culture promoting the use of personal protective equipment designed to safeguard their health. As a result of this partnership, in late 2009, Agripac began offering its customers a protection kit of basic personal protective equipment consisting of a mask (respirator), gloves, goggles, and PVC apron for the safe handling of agrochemicals during the course of their transportation, storage, preparation, and application, designed to protect farmers’ health under the so-called “Concerned for your Health” program. With the launch of this program, it began selling the complete line of 3M protection products.

Agripac assesses the health of all new workers and provides regular medical check-ups to monitor the health of company employees. All new workers complete an induction training program before starting their jobs. The company provides all workers with work clothes and personal protective equipment, whose use is mandatory. There are emergency showers and eye wash stations for use in the event of accidental contact with agrochemicals. The company also runs vaccination programs in conjunction with the Ecuadorian Social Security Administration (IESS). Agripac requires all contractors entering its facilities to follow its security measures and all workers to be registered with the IESS. All company facilities have first aid kits and urgent care teams to provide immediate assistance in the event of an accident.

Labor Practices and Social Issues: Agripac complies with Ecuadorian labor legislation, granting its employees all legally established benefits. The company has internal workplace safety and health regulations approved by the Ministry of Labor Relations, which are in keeping with corporate environmental and labor policy. There is no union, but its workers have the right to organize if they so choose. As part of its corporate social responsibility program, Agripac is committed to hiring disabled workers under agreements with two government agencies, namely CONADIS (the National Council on Disabilities) and the SIL (the Job Placement Service). In 1994, Agripac launched a continuing training program (known as “la Escuelita” or “the Academy”) which creates jobs for the recruitment of young professionals/recent graduates in areas related to its own activities. After successfully completing an intensive five-to-seven-week-long training course dispensing formal and hands-on training, the young recruits are given an opportunity to intern at Agripac’s sales outlets around the country. As of June of this year, more than 450 young men and women had graduated from the “la Escuelita” program, some of whom are currently working for Agripac or other similar organizations and enterprises. In addition, Agripac provides agricultural technology transfer, technical assistance, and training services for farmers through informal talks, information sessions, on-site visits, and the publication of farming guides and pamphlets containing the latest information on integrated pest management and the proper use of pesticides. On average, Agripac’s technical division conducts over one hundred training activities each year for the benefit of more than 6,000 primarily low or middle-income Ecuadorian farmers.

So far, there have been no reports of any complaints or claims by residents of areas adjacent to Agripac facilities related to its operations. Agripac maintains open channels of communication with the public through its website and sales outlets. In accordance with domestic regulations, issuance of the environmental permit for its manufacturing facilities was preceded by a two-week-long public notice and comment period for the corresponding environment impact assessment allowing interested stakeholders to file comments or objections.

Monitoring and Reporting: Agripac will continue to implement the preventive, control, and mitigating measures established in the environment management plans crafted for the environmental compliance audits of its manufacturing facilities. The company will also draw up an ESAP in conjunction with the IIC with respect to the issues outlined in this summary to ensure compliance with IIC environmental requirements and international good practices as established in International Finance Corporation environmental, health, and safety guidelines. Agripac will submit to the IIC annual reports monitoring the implementation of the ESAP.