Bearing Agro S.A.

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Project Number: 
UR3880A-01
Expected Consideration Date by the Board: 
11/24/2015
Date Posted: 
10/23/2015
Company: 
Bearing Agro S.A. (“Bearing Agro”)
Sponsoring Entity: 
N/A
Financing Requested: 
US$5,000,000
Sector: 
Agricultural Products
Country: 
Scope Objective: 

Bearing Agro is a Uruguayan company specializing in irrigation technology for traditional crops such as corn, soya bean, wheat, barley, and sorghum. The company leases and acquires land in the main productive areas of the country and enhances its productivity through irrigation systems.

The company is establishing a public financial trust to purchase rural properties and to invest in irrigation systems. Bearing Agro has committed to acquiring part of the shares. The IIC financing will be allocated in part to purchasing these shares and in part to providing working capital needed for growing crops on this new land.

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 Use: Bearing Agro expects to purchase land to be used for irrigated crops. Criteria for land selection include suitability for agriculture and irrigation. This means having a surface water supply or a suitable basin for a storage reservoir; a power supply for pumping; and largely flat, gently sloping terrain to avoid rapid runoff. To extract surface water or to build storage reservoirs, the company must obtain the corresponding permits from the Uruguayan national water directorate (Dirección Nacional de Aguas, DINAGUA), a division of the ministry of housing, land-use, and environment (Ministerio de Vivienda, Ordenamiento Territorial y Medioambiente, MVOTMA).

The land available in the areas Bearing Agro is considering has been subject to human activity, with a long tradition of agriculture or livestock farming. There are no protected areas or sensitive ecosystems—all areas are considered modified habitats. There are also no endemic or protected animal or plant species. Land is purchased on a free, competitive market. The land on the market is used for agriculture and livestock farming and no populations or economic activities will be displaced.

Air and Noise Emissions: Most air and noise emissions will be produced by vehicles and machinery operated by contractors during their agricultural activities (sowing, spraying, and harvesting). In addition to gas emissions from internal combustion engines, vehicle traffic will generate fugitive dust emissions. To mitigate gas and noise emissions, contractors will be required to perform appropriate maintenance on vehicle motors and to drive slowly in unpaved areas.

The spraying of agrochemical products can produce harmful effects on people, animals, or crops due to spray drifting toward populated areas, occupied buildings, or neighboring properties. The company and contractors must comply with local standards on minimum distances and appropriate environmental conditions (wind) for spraying agrochemical products.

Solid and Liquid Waste: Most solid waste is generated during the final disposal of empty agrochemical product containers. Bearing Agro supports the CampoLimpio program—a program that collects containers nationwide at eight collection centers in order to prevent pollution by recovering plastics. The program operates in 18 countries in Latin America. In Uruguay, the program is supported by 26 companies that import and sell agricultural inputs.

Occupational Health and Safety: Bearing Agro has a safety, hygiene, and biosafety manual. The manual covers risks including injuries that result from accidents while operating machinery and using tools and those caused by physical exertion, harmful movements, blows, falls, poisoning, burns, exposure to chemicals, electrical accidents, animal bites, infectious diseases, and other biological agents. The manual establishes staff obligations regarding workplace safety regulations, order and hygiene in the workplace, use of personal safety equipment, and general compliance with all company regulations on workplace health and safety. These standards also apply to contractors and suppliers that enter Bearing Agro’s properties. As for the handling of agrochemical products, the manual sets out safe work procedures, product storage conditions, and the procedure to triple wash and render containers unusable and ready to be disposed of under the CampoLimpio program. The toxic products are stored separately and appropriately labeled. The arrival and departure of goods is duly recorded and can be performed only by authorized personnel.

Labor and Social Issues: Bearing Agro is in compliance with domestic labor laws and International Labour Organization (ILO) 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. In accordance with Uruguayan law, workers and their dependents receive medical coverage through the national health fund (Fondo Nacional de Salud, FONASA), as well as insurance against workplace accidents and occupational illnesses.

Monitoring and Reporting: Bearing Agro will implement an Environmental and Social Action Plan (ESAP) to ensure compliance with IIC environmental and workplace safety and health requirements. Activities under the ESAP are to include the implementation of a contingency plan and a contractor monitoring plan. The company will submit annual progress reports to the IIC on the implementation of the ESAP.