Nicaragua Sugar (IDBI-12814-01)

Countries
  • Nicaragua
Where the impacts of the investment may be experienced.
Financial Institutions
  • IDB Invest (IDBI)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Oct 31, 2019
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Nicaragua Sugar States Limited
The holder of the loan, grant, or other investment.
Sectors
  • Agriculture and Forestry
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 25.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Loan Amount (USD)
$ 25.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ IDBI website

Updated in EWS Oct 26, 2019

Disclosed by Bank Sep 16, 2019


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Project Description

According to IDB Invest website, the financing consists of an 8-year senior loan of up to US$37.5 million to be provided to Nicaragua Sugar States Limited as follows: US$25 million funded by IDB Invest and US$12.5 million funded by concessional funds administered by IDB. Nicaragua Sugar, one of the leading companies in the sugar sector in Nicaragua and Central America, will use of the financing (i) to continue to improve its efficiency and productivity levels through industrial and agricultural investments, (ii) for permanent working capital needs of its operations and its supply chain, and (iv) for green projects that improve its use of resources, especially water. 

People Affected By This Project

1. Scope of Environmental Review

Nicaragua Sugar Estates Limited (NSEL), also known as Ingenio San Antonio, was incorporated 1890 by the Pellas family and it is the largest sugar player in Nicaragua. It produces and sells sugar and other related products like molasses and energy. SER San Antonio is located in the Chichigalpa municipality, department of Chinandega, approximately 83 miles northwest from Managua. Sugarcane is harvested from plantations owned by NSEL (16,458 has) and by third party growers (15,595 has). In both cases, NSEL oversees harvesting and transporting sugarcane to the sugar mill during the Zafra.

The Environmental and Social Due Diligence (ESDD) mission took place from July 22 - 25th. IDB Invest team met NSEL's senior the management team at the corporate offices located in Managua to obtain general operations orientation. The ESDD continued in Chichigalpa to visit the following components of the SER San Antonio complex involving operations in plantations, mills,all biological control unit, the Alfredo Pellas Chamorro Hospital and the Modelo School. At the time of the site visit, no industrial activities were underway. Meetings were held with NSEL's sustainability team. The ESDD team interviewed various ISA workers and met with six independent sugarcane suppliers to NSEL (all members of APRICO: Association of Independent Sugarcane Producers). The ESDD included the review of technical and environmental, health and safety (EHS) documents presented by the company.

2. Environmental and Social Categorization and Rationale

The Project has been classified as a Category B, according to the IDB Invest'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.

Key E&S issues and risks associated with the project include: (i) functionality of the company's E&S management and monitoring systems, (ii) management of occupational health and safety ("OHS") programs and prevention of Chronic Kidney Disease (CKD);(iii) generation of solid waste and effluents; (iv) air emissions (from cogeneration of bagasse and dust from transport operations); and (v) potential safety risks to local communities due to cane transport vehicles movement.

As a result of the ESDD, it can be concluded that this operation will have impacts that will be managed in accordance with the following Performance Standards: (i) PS-1: Assessment and Management of Environmental and Social Risks and Impacts; (ii) PS-2: Labor and Working Conditions; (iii) PS-3: Resource Efficiency and Pollution Prevention; and (iv) PS-4: Community Health, Safety, and Security.

PS-5, Land Acquisition and Involuntary Resettlement, is not triggered as the company has legal title over its plantations and there are no known legal claims against its property. PS-6, Biodiversity Conservation and Sustainable Management of Living Natural Resources (no natural or critical habitat or endangered species have been found to be affected by NSEL); PS-7, Indigenous Peoples is not relevant as there are no IPs in the areas where NSEL's operations are located and there are no assets or lands negatively impacting indigenous people. PS-8, Cultural Heritage will not be triggered either (No cultural heritage or archeological sites are found in the project site or its vicinity). If these PSs become applicable, NSEL will immediately inform IDB Invest.

3. Environmental and Social Context

The area of influence of SER San Antonio includes the municipalities of El Realejo, El Viejo, Posoltega and Chichigalpa in the department of Chinandega, and the municipalities of Leon, Telica, Quezalguaque and La Paz Centro in the department of Leon. Chronic kidney disease (CKD) is part of the social contextual risk in field workers in Nicaragua. The Country is also prone to seismic and volcanic activity, hurricanes, severe storms and flooding which may pose an unforeseen risk for the Project.

4. Environmental Risks and Impacts and Proposed Mitigation and Compensation Measures

4.1 Assessment and Management of Environmental and Social Risks and Impacts

4.1.a E&S Assessment and Management System

NSEL's Environmental and Social Management System (ESMS) consists in a series of policies, manuals and procedures implemented by the company to evaluate, support and comply with the requirements for maintaining the different certifications that SER San Antonio holds, including: ISO 9001-2015, FSSC 22000, HACCP, OSHAS 18001, BONSUCRO, ISCC, Halal, Kosher, and Fair Trade USA. The NSEL Sustainability Committeeand IDB Invest conducted a joint self and independent assessment of the nine elements of the ESMS as defined in PS-1. The average value of the self and independent assessment revealed a high degree of ESMS maturity. Still, there is room for improvement when it comes to communication with the communities and management programs that need to be documented.

4.1.b Policy

NSEL has adopted a Sustainability Policy as well as complementary policies (Environmental, Health and Safety) that are aligned with PS-1 requirements. As per NSEL's Sustainability Manual, Policies are reviewed and revised at least once a year with the participation of senior management. As part of the investment, NSEL's will communicate the Sustainability Policy to all its employees and its suppliers.

4.1.c Identification of Risks and Impacts

NSEL's Sustainability Committee, comprised by multiple departments, conducts the identification of Environmental, Social, Health and Safety (ESHS) risks. Senior management and workers representative participate in the identification of risks. NSEL will develop a procedure for the identification and review of risks and impacts in an integrated fashion by the Sustainability Committee, which shall consider the proactive engagement of external experts, contractors and sugarcane suppliers. As a result of this procedure, NSEL will produce an integrated risk and impacts matrix to be reviewed and updated at least once a year, based on the most updated environmental, health and safety and social monitoring data.

4.1.d Management Programs

NSEL has developed and implemented management programs and procedures to mitigate the following identified risks: i) emergency preparedness and response; ii) occupational health; iii) labor health and safety; iv) internal and external grievance mechanisms; v) waste (hazardous and non-hazardous); vi) integrated pest and disease management; and vii) supply chain management.

As part of the investment, NSEL will develop procedures within its ESMS to: i) monitor air quality and greenhouse gases; ii) manage hazardous materials, and to routinely review, and verify progress on action plans and ensure that appropriate adjustments and ESMS improvements have been made according to monitoring data.

4.1.e Organizational Capacity and Competency

NSEL has a cross-functional team of trained professionals from all business areas, organized into a Sustainability Committee in order to cover all ESHS areas. The committee, led by NSEL's Corporate Director, meets and reviews E&S issues on a routine basis.

The company provides introductory and refresher training at least once a year to all direct and contracted workers and suppliers. NSEL will update its management system procedures to i) assess the effectiveness of its training through surveys and interviews; and ii) to improve its training program based such assessments.

4.1.f Emergency Preparedness and Response

The company has developed and implemented an Emergency Preparedness and Response Plan (EPRP) that contemplates all areas and emergency scenarios. NSEL will complete a review of the EPRP to include the following information: (i) EPRP policy; (ii) graphic information to understand the EPRP domain, including geographical location, roads, vicinities, basic floor plan drawings of the different structures, hospital, school, cold storage, fire protection systems, fire alarm, safe distances of main risk scenarios, Hazardous Materials; (iii) information on hazards near the shore, like "person overboard", "boat overturned", other; (iv) tentative training schedule for minimum the next 3 years; (v) section of "record of changes"; (vi) external communications strategy during emergencies, making reference to the Stakeholder Engagement Plan (SEP); (vii) indications of mutual aid with other companies or authorities, if applicable (viii) clarify the use of the ammonia and location of the hazard; and (ix) detailed information and evacuation procedures for Hospital and School.

4.1.g Monitoring and Review

NSEL has trained personnel responsible for periodic monitoring of E&S performance and the progress of its action plans. The company also conducts regular monitoring through external experts as part of their annual recertification process. The Management Systems Manager is responsible to ensure that all areas comply with the requirements needed to maintain such certifications. Senior management regularly meets with the Sustainability Committee to monitor KPI's and to evaluate the effectiveness of NSEL's ESMS.

4.1.h Stakeholder Engagement

NSEL has developed a Stakeholder Engagement Plan (SEP) to document how it will maintain a continuous communication with its stakeholders. As part of the SEP, the company conducted a stakeholder mapping exercise to identify affected stakeholders in its area of influence, to determine communication channels (including how activities are documented) and frequency of engagement. The Stakeholder Matrix, a joint effort of the Sustainability Committee, categorizes stakeholders through a qualitative mapping criteria scale (low, medium, high) based on: i) how they are potentially impacted by NSEL's operations; and ii) by their potential influence on the company. Engagement frequency is assigned according to their allotted categorization.

NSEL will update its SEP to i) describe how stakeholder engagement activities will be incorporated into the company's ESMS; ii) describe what information will be disclosed, in what formats, and the type of methods (e.g., oral, brochure, reports, posters, radio, etc.) that the company will use to communicate such information to its stakeholders, and iii) describe any other engagement activities that the company will undertake, such as benefit-sharing programs, stakeholders development initiatives (e.g., such as the ones carried out with ASOCHIVIDA), etc.

4.1.i External Communication and Grievance Mechanisms

NSEL has implemented an External Grievance Mechanism that can be accessed via telephone at (505) 2452-6313 Ext: 3034 - 3040 - 3032 - 3045. The company has developed an electronic mechanism to register grievances and complaints that are centralized and managed by the General Services and Social Responsibility division.

NSEL will update its external Grievance Mechanism ESMS procedure to: i) contemplate alternative instruments for grievances to be raised (e.g. dedicated email address and NSEL's web page); ii) allow anonymous grievances; iii) describe actions to be taken when claims are raised by illiterate individuals and/or anonymously; iv) document how the company registers and keeps track of grievances, v) to ensure that the mechanism will not hinder access to judicial or administrative remedies and vi) to document how the Grievance Mechanism is communicated.

4.1.j Ongoing Reporting to Affected Communities

Communities are aware of the type of impacts and mitigations measures generated by NSEL through different communication channels, such as radio, TV and social networks. The company, however, does not issue E&S performance reports to communities within its area of influence. NSEL will update its SEP to include annual E&S performance reporting to its stakeholders: i) on the implementation of and progress on the specific items in its management programs, including the action plans, that involve ongoing risk to or impacts on communities. and ii) in response to community feedback or grievances.

4.2 Labor and Working Conditions

4.2.a Working Conditions and Management of Worker Relationships

NSEL complies with labor laws of Nicaragua. The company employs nearly 1,051 people on a permanent basis across sugarcane plantations, sugar mill, administration, and its other ancillary facilities (hospital, school, etc.). In addition, there are an estimated 4,950 temporary workers during the Zafra hired directly by NSEL following national labor regulations.

i. Human Resources Policies and Procedures

NSEL manages workers and adheres to Nicaragua labor law, providing in full all benefits required by law and PS-2. Their provisions for employees and family's wellbeing go beyond PS-2 and national law. Nevertheless, these actions need to be documented in the Human Resources (HR) Policy. NSEL will update its HR Policy document to add PS-2 principles, including: i) terms of employment, such as wages and benefits, hours of work, overtime compensation, maternity, vacation, hiring period, compensation, promotions, salary increases, worker's associations, termination of contract procedures and existence of an internal grievance mechanism; ii) intolerance to child / forced labor; and iii) rights of non-employee and supply chain workers.

ii. Working Conditions and Terms of Employment

To create a favorable work environment, NSEL provides benefits such as free access to hospital for spouse and children under 18 years of age, periodical medical exams, free K-12 school, food allowance, free training to its workforce and life insurance. During the visit to the school, it was observed that restrooms would welcome sanitary improvements. NSEL will develop a management system procedure to ensure that all restrooms are maintained in best sanitary conditions, including the requirement to ensure continuous running water, hand soap and hand towels or air dryers, etc., following OSHA's (Occupational Health and Safety Administration) Restroom Rules. Restrooms at the school will be refurbished in order to comply with OSHA's standard.

iii. Workers' Organizations

The company has enjoyed a respectful and peaceful working environment. NSEL is in compliance with freedom of association, a right that is guaranteed by Nicaragua labor law and required under PS-2. The company respects collective bargaining agreements with five unions that can be freely joined by workers. Collective Agreements are renewed every two years.

iv. Non-discrimination and Equal Opportunity

NSEL is an equal opportunity employer and does not discriminate with respect to aspects of religion, ethnicity, gender, political opinion, sexual orientation, national or social origin, general working conditions, or physical disabilities

v. Retrenchment

NSEL does not anticipate any retrenchment in the future. However, if such becomes necessary, the company will develop a retrenchment plan following the national labor law and PS-2. Any retrenchment plan will be shared with IDB Invest for approval.

vi. Grievance Mechanism

NSEL's internal Grievance Mechanism, under the responsibility of the Human Resources department, is available to all employees (direct and indirect) and allows anonymous complains through email, suggestion boxes, in person or through the unions. The internal Grievance Mechanism Procedure will be updated to describe how the company will respond to anonymous complains and to indicate that there will be no retaliation to workers raising complains. The updated procedure will also state that the mechanism will not impede access to other judicial or administrative remedies that workers may have available under local law.

4.2.b Protecting the Workforce

There is no evidence of forced and/or harmful child labor at the NSEL's operations, including in the supply chain.

4.2.c Occupational Health and Safety

There have been no fatal accidents at NSEL, and the low accident rates (LTIFR of 15.16 and LTISR of 149.16 for the last 12 months) demonstrate the implementation of good OHS practices.

The company aims to provide workers with conditions that safeguard their physical integrity and health and therefore reduce risks. In this sense NSEL has a well-developed, robust program that includes monitoring workers for evidence of health impacts.

Chronic Renal Disease (CKD): Climate change is increasingly connected to detrimental health impacts of warner temperatures on workers in several environments in Central America, escalating the risk of Chronic kidney disease. CKD is a prevalent Mesoamerican nephropathy of unknown etiology found in rural and urban populations. Strong evidence links the disease with frequent dehydration and heat stress. The disease occurs in a wide range of sectors (mining, ports, construction, agriculture, brick manufacturing, etc.), affecting adults and children. NSEL has developed and implemented a World Class CKD Prevention Program, which is a model for the sugar industry in Central America and elsewhere. The CKD Prevention is now part of "Iniciativa Adelante", an association of private sector, civil society and international development financial organizations. The following vulnerable groups have been identified in agricultural operations: field workers planting and replanting, workers applying plant protection products, manual cane harvesters, workforce cutting cane clonal planting materials, health and hydration coordinators, irrigation operators, field managers, workers inside stores manually loading bags of products, personnel in sugar mills (operating boilers and others). Elements of NSEL's integrated prevention program include pre-employment medical assessment, mandatory hydration rests under shade (10 - 20-minute breaks, seated, using a stool), adaptation to heavy work prior to starting manual harvest, training and awareness of CKD, thermal insulated clothing and personal protection equipment. The Company maintains databases of CKD cases and manages statistical records for monitoring.

Frequency of hydration rests under shade may increase according to the heat stress assessment using the Wet Bulb Globe Temperature (WBGT). The shade is moved around the field as the harvest progresses and is always within 50 m away from cane cutters to avoid long distance walks for rest and hydration. Potable water is provided to each worker at the mandatory rate of 1 liter per hour together with 300 ml of a concentrated electrolyte solution. This, not precluding any extra amount voluntarily demanded. Water is treated in a purification plant using a reverse osmosis system and distributed to workers on daily basis during the Zafra.

NSEL has two mobile health clinics to perform tests on workers before, during and the end of their workday in order to assess their level of hydration. If dehydration is detected, workers are either handled in situ or transferred to the NSEL hospital for urgent care. Additionally, for every group of cane cutters (60 workers in each) there is a designated field supervisor (Promotora), whose function is to enforce the use of Personal Protective Equipment (PPE), ensure that cane cutters stay hydrated and the mandatory rest breaks.

As a result of NSEL's CKD prevention program, the incidence of this disease has reduced to 1.2 per 1,000 workers (down from an all-time high of 33.7 in 2001). In addition, results of productivity under the CKD Prevention Program demonstrate a business case for investing in protecting the workforce and achieving a more sustainable sugar operation. The productivity per cane cutter was assessed, and, in 2019 the yield in ton/hour reached 1.34 tons in 4.2 hours of labor. This from a baseline of only 0.81 ton/hour in an 8-hour shift in 2012. Payment per ton has been increased by NSEL to avoid loss of household income.

NSEL's CKD Prevention Program won the BONSUCRO Inspire Award 2019 on Superior Social Impact.

4.2.d Workers Engaged by Third Parties

All harvesting, collecting, transportation activities, and field activities are done by the company. Hence, no cane cutters or field workers are indirectly hired by NSEL. The company ensures that contracted workers of suppliers have same appropriate labor and working conditions as outlined in the PS2, concerning risks of child labor, forced labor and safety issues.

4.2.e Supply Chain

NSEL's supply chain comprises 209 suppliers. The company provides periodic training to cane cutters hired by third parties covering topics such as NSEL's environmental policy, solid waste management, child labor, force labor, deforestation and biodiversity conservation. Suppliers, on the other hand, have developed training material that is distributed There is a need to progressively implement the CKD Prevention Program in the supplier's fields on field workers performing crop maintenance and cultural practices.

4.3Resource Efficiency and Pollution Prevention

4.3.a Resource Efficiency

Since 2004, NSEL has a cogeneration plant with an installed generation capacity of 79.3 MW, composed of four turbo generators and three medium pressure boilers (600 PSIG). The company eliminated bunker fuel consumption for its operations, generating clean renewable energy from the bagasse of the sugarcane and eucalyptus chips. This renders the company to be energy self-sufficient and sell the surplus to the country's national grid. During the last Zafra period (2018-2019) the generated energy was of 254.64 GWh on 165 days. Energy production with wood chips on the first Zafra day was 398,191 KWh using eucalyptus wood from NSEL own sources.

4.3.b Air Quality and Greenhouse Gases

Emissions monitoring is done twice during the Zafra, generally in December or January and March or April. To reduce the GHG emissions of the process, NSEL has implemented wet scrubbers in each of the three installed stacks. The monitoring results of stack emissions are below the values established on the WBG General EHS Guidelines (PM10, NOx, and SO2).

During the Zafra 2018/2019 in order to reduce emissions to the air, NSEL increased the area of mechanized cane cutting (from 94.9% to 95.7%), reducing the area where cane is burnt. The debris from the mechanized harvest is left in the field as source of organic matter. Considering 3,074,313 TM of processed cane during the Zafra 2018/2019 and the 0.3841 tons CO2eq/TM processed cane, during this period NSEL generated a total of 1.1 million tonsCO2eq. NSEL performs permanent quantification of GHG generated by its operations, which is an auditable indicator of the Bonsucro certification.

Emissions generated will be monitored by the company. This shall include the hospital incinerator (the incinerator will reach compliance when the new structure is operational). NSEL will develop a stack emissions and air quality monitoring program, to become fully integrated with its ESMS to ensure that monitoring results ares constantly assessed, and trends and KPIs are analyzed and timely reported to senior management. NSEL will conduct particulate stack emissions measurements and compare levels to WBG General EHS Guidelines for ambient air concentrations (particulate matter limit (PM10) of 100 mg/Nm3 of 460 mg/Nm3; SOx of 2000 mg/Nm3) and submit a report to IDB Invest. If measurements exceed industry guideline limits, NSEL will propose corrective measures, and a schedule to bring all emissions into compliance with WBG EHS guideline requirements.

4.3.c Water Consumption

NSEL has authorizations by the Water National Authority (ANA as per its Spanish acronyms) to use of 153 groundwater sources and 61 of surface sources. The company uses ground water for irrigation in a responsible and sustainable manner, and over time, has implemented various water saving initiatives. These include: i) pivot and drip irrigation systems; ii) mixing irrigation water with process water resulting from cane processing; iii) installing a system that allows the recirculation of water on cooling towers, cooling pool and bins.

During the 2018-2019 Zafra, total consumed water was 16,798,315 m3, equivalent to 5.46 m3/ton processed cane (considering 3,074,313 tons of processed cane), which is higher than the WBG EHS Industry Guideline for sugar manufacturing benchmark for freshwater consumption of 0.9 m3/ton cane.

Drinking water is sourced from wells and purified at NSEL's purification plant using a reverse osmosis system and distributed to all company employees on daily basis and to all field workers during the Zafra.

4.3.d Pollution Prevention

i. Wastes

NSEL has implementing segregation programs to reduce the generation of waste and to maximize the separation of recyclable and reusable materials. Wastes that cannot be recycled or reused, are deposited in a sanitary landfill on its property, lined with geomembrane.

Empty containers of agrochemicals are subjected to a triple wash and delivered to ANIFODA (Nicaraguan Association of Formulators and Distributors of Agrochemicals) where they are treated to be recycled or used as normal waste containers. The waters resulting from the triple wash is collected in septic tanks and used in irrigation of non-agricultural areas.

Organic wastes from mill operations include solid plant residues from the clarifier and cane laundry (cachaza), molasses from sugar crystal separation, general processing wastewater and waterborne ash from stack gas scrubbing operations in boilers. All liquid and solid wastes generated by the mill, except for molasses, are employed for cane field irrigation and soil enrichment. There are no discharges to surface water sources.

Hazardous waste, such as used oils, fluorescent lamps, radiography plates (hospital), batteries and oil impregnated materials, are temporarily stored in a covered area, and later delivered to a company authorized by MARENA for treatment or final disposition.

Clinical waste like gauzes, sharps, cottons contaminated with blood or body fuels are deposited in red colored bags/containers and are daily sent to the onsite incinerator for final disposal. Bottom ash generated by the incinerator is currently disposed in security graves.

Furthermore, the ESDD evidenced that the hospital incinerator requires an improved design for optimal operation. NSEL will replace its current incineration structure with one designed to achieve appropriate temperatures, residence times, and other conditions necessary to destroy pathogens, minimize emissions, avoid clinker formation and slagging of the ash (in the primary chamber) and avoid refractory damage destruction. The new location of the incinerator will be done after considering downwind receptors throughout the year. The company will also develop and implement an ESMS procedure for the operation of the incinerator, following international best practice such as those of the World Health Organization (WHO)[1].

ii. Hazardous Materials Management

Few hazardous materials are currently stored at NSEL's premises. The company also uses hydrocarbons substances (gasoline, kerosene, keroturbo and diesel) to provide fuel to mobile equipment, that are stored in underground and above storage tanks.

iii. Pesticide Use and Management

NSEL has developed an integrated pest management (IPM) that combines non-chemical approaches (biological control as the cornerstone) and as last resource chemical, to minimize pest impact. The company utilizes commonly available herbicides and chemical ripening agents, which have very low toxicity and half-lives. NSEL's technology acquisition process includes state-of-the-art R&D facilities aligned with the sugar cane field production and associated agribusiness. The facilities include pest/disease control laboratories where predators are reared following international standards. An integrated pest/disease management system, where biological control (fungusMetarhizium anisopliaeBeuaveria bassianaandPaelomyces lilacinus) is the main component, has been developed and implemented in all NSEL field operations to promote non-chemical control. This includes fields contracted from independent sugar cane growers.

NSEL employs Coumatetralyl, a WHO Class Ib, a concentrated power formulation used for the control of rats and mice in the mills. The company provides training to employees applying the rodenticide and employs appropriate precautions (PPE) for application and protection of employees exposed to the material. Using commercially and technical viable best practices, NSEL will aim to eliminate the use of this chemical for rodent control for a less toxic rodent control approach.

4.4Community Health, Safety and Security

4.4.a Community Health and Safety

Stakeholder engagement (SE) is incorporated into the company's ESMS and done through a proactive systematic approach, prioritizing who is critical to engage and the sequence for engagement. SE is integrated in the core business and managed as any other corporate function. It aligns with the principles described under PS4 including and not limited to transparent information disclosure and grievance management, inclusion, stakeholder consultation, negotiation and reporting, joint selection of external consultants and participatory monitoring of key issues. The company's proactive SE has led to a partnership that have benefit local communities that includes engagement and dialogues with lenders, NGO stakeholders, local and international consultants. Following a dialogue process sponsored by IFC's Office of the Compliance Advisor/Ombudsman (CAO), NSEL has expanded its collaborative relationship with the Chichigalpa Association for Life (ASOCHIVIDA), an association of former cane workers affected by the disease.

NSEL maintains a communication channel to overcome limitations of ASOCHIVIDA patients and their families. It has also supported research towards better understanding of Chronic kidney disease epidemiology through in situ work done by the University of Boston's School of Public Health. NSEL and ASOCHIVIDA also meet regularly to find solutions to the needs of families affected by this disease.

Support for ASOCHIVIDA is the most important investment item of NSEL social responsibility with the community. Approximately US$900,000 are allocated annually by NSEL as part of its Corporate Social Responsibility program. This includes food supplement (cereals), food supply (beans, rice, sugar, salt, oil, soap, corn). Christmas toys, backpacks and school supplies are donated to all children of ASOCHIVIDA members. Profits of a Poultry Farm Project, funds are allocated for operational expenses and humanitarian aid to the members of ASOCHIVIDA. In social aid and in the institutional strengthening of ASOCHIVIDA, funds are earmarked for the Development of Technical Capabilities and Business Management, whose objective is to promote income generation for members of ASOCHIVIDA. The latter is assisted by the Nicaraguan Institute for Investigation and Development (NITLAPAN) for the accompaniment, design, assembly and development of business initiatives.

Cane transporting trucks are equipped with Geographical Information Systems (GIS) so that their location and driving speed can be monitored and traced to avoid impacts on neighboring communities.

4.4.b Security Personnel

Security functions are subcontracted to a specialized firm registered to the national authorities and includes the requirement to train security personnel in human rights. However, the company does not have a formal ESMS procedure for management of security personnel covering their functions, documentation, obligations, prohibitions, duties and code of conduct and management of equipment. NSEL will assess security risks from and to the community and will develop appropriate policies and procedures (e.g., a written code of conduct; training; procedures in the event of any incident, community unrest, community request, or alleged violation, etc.) to ensure effective oversight and accountability for the security personnel in alignment with PS4 requirements as described in paragraphs 12 - 14.

5. Environmental and Social Action Plan. (Please see attached document)

CONTACT INFORMATION

For project inquiries, including environmental and social questions related to an IDB Invest transaction please contact the client (seeInvestment Summarytab), or IDB Invest using the emaildivulgacionpublica@iadb.org. As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing tomecanismo@iadb.orgorMICI@iadb.org, or calling +1(202) 623-3952.

[1]https://www.who.int/water_sanitation_health/medicalwaste/en/smincinerators3.pdf

Investment Description
  • IDB Invest (IDBI)
Private Actors
  • Nicaragua Sugar Estates Limited -- Implementing Company
Contact Information

Katya Gomez
Finance and Commercial Manager
+(505) 2274-4150
kgomez@sersanantonio.com

ACCOUNTABILITY MECHANISM OF IDB INVEST

The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IIC)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IIC is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).