If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.
PROJECT DESCRIPTION
The proposed investment involves a Risk Sharing Facility with two Barry Callebaut (BC) subsidiaries in Cote d'Ivoire: Societe Africaine de Cacao (SACO), a Barry Callebaut's subsidiary in Cote d'Ivoire and Biopartenaire (BP) which is 100% owned by Barry Callebaut; to provide non-cash lending with a short to medium term tenor by directly delivering inputs/services (fertilizers) to a large number of smallholder/farmer suppliers within BP's and SACO's partner cooperatives. Repayment of the loan will be deducted from the payment of the cocoa delivered by each farmer and cooperative. The project will also involve participation from at least one local Microfinance Institution, at which participating farmers will maintain a savings account to be used as collateral for the loan. Each borrower will be required to deposit a significant loan amount upfront in a savings account to be located at the MFI (through mobile money technology where available). This will help them establish a bankable credit history.Headquartered in Switzerland, Barry Callebaut AG is the world's leading manufacturer of high-quality chocolate and cocoa products. Barry Callebaut is fully integrated, from the sourcing of raw materials through the production of semi-finished products to the production of liquid and molded chocolate products for the entire food industry. The Societe Africaine de Cacao (SACO) is Barry Callebaut's main processing subsidiary in Cote d'Ivoire, which sources cocoa from cooperatives.Biopartenaire is part of the Biolands Group (100% owned by Barry Callebaut as of February 2014), a direct sourcing and farm services entity operating across Tanzania and Cote d'Ivoire and dedicated to sourcing sustainably produced cocoa directly from farmers. Biopartenaire obtained UTZ certification in 2011 and Rainforest Alliance certification in 2012 and works directly with farmers and village coordinators to provide training and support professional services (such as tree pruners and pesticide appliers), inputs such as fertilizers, financial services, support and assistance in the production of certified cocoa.Headquartered in Abidjan, Societe Africaine de Cacao has two cocoa processing units in San Pedro and Abidjan. BC does not own cocoa farms in Cote d'Ivoire. Instead, SACO sources a significant share of cocoa from partner cooperatives and through BP's network of registered farmers and from other active suppliers (local traders and other cooperatives). Of the total cocoa beans procured annually, the large majority are ground in SACO's processing units in Cote d'Ivoire, while the remaining are destined for export.
OVERVIEW OF IFC'S SCOPE OF REVIEW
IFC's environmental & social (E&S) on site appraisal took place from July 6th-9th, 2015, in Abidjan and surroundings in Cote d'Ivoire and included the following:-Meetings with SACO and BP senior management, including SACO's Program Manager for sustainable cocoa and Horizons Cocoa, Field Operations Supervisor; Partnerships Coordinator, and Director for Cocoa Procurement; BP's Country Manager for Cote d'Ivoire; Group Administrator and members including a farmer of a cooperative in Tiassale; and members of BP's Farmers' Group in N'Gouamoinkro;-Site visit to SACO Headquarters in Abidjan including the cocoa processing facility, a cooperative in Tiassale as well as a farm, and the cocoa storage warehouse and meeting point of the BP Farmers' Group in N'Gouamoinkro;-Review of technical documents provided by SACO and BP, including the BC Cocoa Sustainability Report 2013-2014; BC Supplier Code; Rainforest Alliance Certification, Internal Management System, procedures, traceability system and related documentation of the cooperative in Tiassale; Biopartenaire Internal Management System; WCF's CocoaAction framework; and Rainforest Alliance related supporting documentation including sample audit reports of cooperatives.IFC's appraisal considered the environmental and social management plans for the project and gaps, if any, between these plans and IFC requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and in the agreed Environmental and Social Action Plan (ESAP) disclosed in this review summary. Through implementation of these management plans and the ESAP, the project is expected to be designed and operated in accordance with Performance Standard objectives.
IDENTIFIED APPLICABLE PERFORMANCE STANDARDS**
While all Performance Standards are applicable to this investment, IFC's environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards.PS 1 - Assessment and Management of Environmental and Social Risks and ImpactsPS 2 - Labor and working conditionsPS 4 - Community Health, Safety and SecurityPS 6 - Biodiversity Conservation and Sustainable Management of Living Natural ResourcesIf IFC's investment proceeds, IFC will periodically review the the project's ongoing compliance with the Performance Standards
SACO sources the majority of its cocoa from partner cooperatives, and the remainder from BP's network of registered farmers and active suppliers (local traders and other cooperatives). The relationship between SACO and the partner cooperatives, BP and the registered farmers as well as the active suppliers is based on yearly procurement contracts. SACO and BP may also provide technical advice to partner cooperatives and the network of registered farmers. As this contractual relationship is short-term, not exclusive and does not involve direct financial assistance (which is not readily available as part of standard sector practices), it is judged that SACO and BP do not have reasonable commercial leverage over the practices of these other than ceasing procurement from these sources. For the purposes of this project, the partner cooperatives, registered BP farmers and active suppliers will be considered as primary suppliers for which PS2 and PS6's related supply chain requirement applies. Furthermore, for the purposes of this project, only partner cooperatives and registered farmers within BP's network are eligible for non-cash lending from BC. SACO's two cocoa processing units in San Pedro and Abidjan are not classified as "associated facilities" within the scope of this project because these would be viable in the absence of this project, and application of the Performance Standards to their operations does therefore not apply.For the purposes of this project, issues related to PS 3: Resource Efficiency and Pollution Prevention do not apply; however, issues related to PS 3 outside the scope of this project are being addressed under BC's sustainability framework. Issues related to PS5: Land Acquisition and Involuntary Resettlement are not expected as the company has no plans to acquire land for cocoa cultivation or additional plant/operations within the scope of this project. Issues related to PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected with this investment for the following reasons: there is no presence of Indigenous Peoples or known cultural artifacts within the footprint of cocoa production areas. In the event that issues anticipated by these PSs arise, BC will promptly inform IFC. Screening and assessment of these issues against PSs requirements will be done through the company's E&S management system (ESMS).
ENVIRONMENTAL AND SOCIAL CATEGORIZATION AND RATIONALE
This proposed investment has the potential for significant environmental and social risks related to child labor, loss of biodiversity and traceability of products, which are site-specific. Key E&S risks associated with this investment are common across the cocoa industry and the subject of numerous on-going industry and joint stakeholder as well as BC specific initiatives: (i) current procurement of cocoa is not yet 100 percent sustainable and traceable; and (ii) the child labor monitoring and remediation system (CLMRS) to identify child labor risks in BC's supply chain and to target assistance to the verified risks is in the process of being set up. The associated risks are already the topic of significant preventative and remediating programs addressed by BC outside of this project. Potential risks can be further avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Moving forward, BC's risk management framework and implementation will be fully in compliance with these standards and guidelines. However, residual risk remains due to limited traceability of cocoa from sources other than from SACO's partner cooperatives and BP's network of Farmers' Groups.This is a Category A project in accordance with IFC's Environmental and Social Sustainability Policy. The project is designed to further avoid, minimize and manage E&S risks and impacts of the company's operations in compliance with Cote d'Ivoire legal and regulatory requirements, IFC's Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Plantation Production and Crop Production) Environmental, Health and Safety (EHS) Guidelines.
**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at
www.ifc.org/sustainability
ENVIRONMENTAL AND SOCIAL MITIGATION MEASURES
IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFC's requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.
PS 1: ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS
Environmental and Social Assessment and Management System. BC is a committed partner of CocoaAction, the industry's strategy to modernize the cocoa sector (see below). It outlines a set of actions to provide cocoa farmers with a combination of productivity enhancements and community development interventions (including child labor monitoring) as well as standards and indicators to assess the process and impact of actions. CocoaAction is organized around six thematic areas that focus on the greatest needs of the cocoa sector in Cote d'Ivoire: 1) Planting Material; 2) Fertilizer and Soil Fertility; 3) Community Development; 4) Government and Donor Alignment; 5) Innovation/Future Forms of Agricultural Extension Work; and 6) Shared Commitment to Measuring Progress and Impacts.To measure progress toward two broad outcomes (Productivity and Community), six Key Performance Indicators have been defined under CocoaAction: 1) number of farmers applying a minimum number of good agricultural practices; 2) number of farmers adopting recommended planting materials to rehabilitate a minimum percentage of their old or non-productive cocoa trees; 3) number of farmers adopting recommended fertilizer and soil fertility practices on their farms; 4) number of children participating in child labor as defined by the ILO; 5) number of women in leadership positions in farmer organizations; and 6) percentage of school-age children regularly attending school.Aligned with the above and to manage the environmental and social risks across its cocoa supply chain, BC has developed a framework of actions that are anchored in its Supplier Code, which sets forth the essential minimum requirements expected from suppliers and is a pre-condition for delivering any cocoa to BC: compliance with laws and regulations, compliance with international labor standards (including child labor and safe and healthy working conditions), and monitoring of on-going compliance and notification in case of a breach. Suppliers sign a written declaration of their commitment to BC's Supplier Code. In addition, for the purposes of sourcing "sustainable cocoa," the environmental and social risks of suppliers are managed according to the requirements as stipulated in BC's own, third party verified Horizons Cocoa, in a certification scheme such as UTZ Certified, Rainforest Alliance, Fairtrade or Starbucks, or according to customer specific, independently verified requirements.The specific elements of the framework are described in further detail in each of the sections below. The framework can generally be considered to be consistent with the requirements of this Performance Standard and by addressing the action items (see sections below and as outlined in the ESAP), BC's framework, moving forward, will be fully in compliance with this Performance Standard.Policy. BC has established a Sustainable Cocoa policy, which is embedded in its overall business strategy as one of four pillars and isdefined through its mission to improve the livelihoods of cocoa farmers and their communities through the promotion of sustainable, entrepreneurial farming, improved productivity, and community development. This is implemented through the sourcing of "sustainable cocoa," which are produced according to a certification scheme (such as UTZ Certified, Rainforest Alliance and Starbucks) or BC's Horizons Cocoa. BC is developing an internal strategic project, which features as one key component the establishment of publicly communicable targets for the procurement of sustainable and traceable cocoa. For the purposes of this IFC project, all sourced cocoa will be traceable and sustainable.As part of the ESAP, BC shall continue to focus efforts on the development of its internal strategy project to increase the share of sustainable and traceable cocoa procured in its supply chain.Identification of Risks and Impacts. BC participated in the development of CocoaAction (
http://www.worldcocoafoundation.org/cocoaaction), the industry's comprehensive strategy launched in 2014 to sustain the cocoa and chocolate industry and improve the livelihoods of cocoa farmers in the world's leading cocoa producing countries. With 10 of the world's other leading cocoa and chocolate companies, BC contributed to assessing the key challenges and risks facing the cocoa sector, which are broadly defined as declining soil fertility, lack of access to and knowledge on how to apply fertilizers, lack of access to and knowledge on good agricultural practices, and environmental stewardship. The issue of the worst forms of child labor as defined by the ILO was also included as an on-going challenge.Impacts related to air, water, and land as well as consumption of resources (energy, water, and other material inputs) associated with cocoa cultivation are limited. Limited and localized pollution to land and potentially to water can be expected from activities surrounding farm management and the operations of cooperatives but are readily addressed through the mitigation actions of BC's management programs, which are also consistent with certification requirements. Cocoa cultivation requires no input of energy or water as the process is undertaken manually and neither the cocoa trees nor the cocoa harvesting require inputs of water, other than from rainfall.Management Programs. BC operates the Horizons Cocoa program, initially established as the Quality Partner Program (QPP) in 2005 to enable farmers to grow cocoa in a sustainable and responsible way, increase yields and improve farmer family livelihoods through farmer training and improved access to education and basic healthcare services. The program works with cooperatives and focuses on eight areas to promote the sustainability of cocoa farming: farmer training (including traceability; quality; good agricultural practices; environmental, health and safety; child labor; and functional literacy), child labor mitigation efforts (support for prevention plans and teacher training), access to water (provision of water infrastructure), access to education (provision of educational infrastructure), farmer premiums, traceability (documentation system to trace cocoa beans from the farmer to the warehouse), transparency, and verification of the program (annually, by an independent, external agency). With the move from QPP to Horizons Cocoa in 2015, BC expanded both the size and scope of the program by aligning the protocols and activities with CocoaAction and Barry Callebaut's current Sustainable Cocoa policy.Starting in 2010, BC worked with an increasing number of partner cooperatives and through Biopartenaire directly with farmers to achieve certification (UTZ Certified, Rainforest Alliance, Fairtrade and Starbucks). As of 2013-2014, 62 partner cooperatives have achieved certification. Within the context of certification, participating cooperatives are required to establish and implement an Internal Management System, which includes procedures for: Screening of New Farmer Members, Cocoa Traceability System (for certified/sustainable cocoa), Farmer Training Program, Certification Requirements, Internal and External Audit Process, Proper Application of Pesticides, Community Engagement, Grievances, and Emergencies. The Training Program includes modules on Certification Criteria, Good Agricultural Practices, Good Environmental Practices, Occupational Health and Safety, Preventing Child Labor, and Basic Literacy.Starting in 2012, all of BC's activities to improve farmer productivity and implement community engagement programs (see below) have been grouped under the Cocoa Horizons initiative. This includes targeted use of sustainable cocoa premiums to finance farmer productivity programs, farmer organizations, and community improvement programs through various mechanisms. These activities have now been expanded and aligned with the objectives of CocoaAction in order to increase the positive impact on the ground, including the launch of the Cocoa Horizons Foundation as a dedicated, not-for-profit entity to scale impact and drive change from these activities, and the revision and expansion of scope of Cocoa Horizons.Within the BP network of cocoa farmers, farmers are members of Farmers' Groups, which are informally organized and collaborate within a village or encampment. The Group provides a platform for sharing knowledge, access to specialist farm services (fertilizer sales, phyto-sanitary application, plant material/nurseries, and pruning), and training (good agricultural practices and certification requirements for UTZ Certified and Rainforest Alliance).BC has in place the basis of an integrated pest management (IPM) approach for cocoa farmers from which it sources. To further support this, BC's Cocoa Centers of Excellence provide training to farmers on good agricultural practices, including the use of preventive measures such as early removal and elimination of black pods, so that crop protection products are used only as a last resort. The application of crop protection products is undertaken only as necessary and based on the detection of pests. Within the context of some of BC's cocoa suppliers (partner cooperatives and participating farmers in BP's network), these comply with certification requirements and make use of only strictly regulated crop protection products that have been approved by the Ivorian Ministry of Agriculture.BC has in place a training curriculum for coaches on productivity, and outside the scope of this project, BC shall also address the following areas: process for training eligible farmers on proper fertilizer dosage and application techniques to avoid potential pollution impacts to land and water and requiring participating cooperatives to develop a hazardous waste management procedure for ensuring the proper storage and disposal of empty chemicals containers (for example, crop protection products) and activities related to truck/vehicle maintenance (used oil, used oil filters, and car batteries).Organizational Capacity and Competency. BC has established an organizational structure that defines roles, responsibilities and the necessary authority for implementing BC's sustainability initiatives across its operations in Cote d'Ivoire, through the activities of SACO and BP. To this end, BC has designated within SACO a Program Manager and within BP a Country Manager with current oversight for sustainability (pending the hiring of a Sustainability Manager). These report respectively to BC's General Manager for Cocoa Sustainability and Biolands Group's General Manager, who ultimately report to BC's Vice President for Global Cocoa Sustainability and Managing Director of Biolands.In Cote d'Ivoire, SACO's sustainability team comprises 35 employees, who work with partner cooperatives to organize training and support for their farmers and their communities. BP's sustainability team comprises 22 employees, who work with Farmers' Groups to designate a Village Coordinator and provide training.During IFC's site visit and based on discussions with key individuals at individual sites, staff were generally found to be competent and knowledgeable of sustainability and certification requirements.Emergency Preparedness and Response. SACO and BP have in place the necessary emergency preparedness and response plans to respond to accidental and emergency situations such as in the event of a fire or a pandemic outbreak to protect employees and surrounding communities.Monitoring and Review. SACO has established procedures for undertaking regular audits of partner cooperatives to monitor the environmental, health and safety aspects as stipulated in BC's Horizons Cocoa and as required under the various certifications (UTZ Certified, Rainforest Alliance, and Starbucks). This includes a clearly defined plan for regular auditing of all sites by a qualified, external expert, which entails an inspection of the required documentation at the cooperative level (Internal Management System and supporting procedures and record-keeping to enable traceability of cocoa beans; and the Environmental and Social Management System and supporting documentation including training); a site visit of a representative sample of member plots including a review of evidence of protection of biodiversity, and practices with respect to working conditions and labor; and an assessment of awareness and understanding of requirements by the Group Administrator and cooperative members.In 2014-2015, SACO undertook certification audits against Rainforest Alliance, UTZ Certified and Starbucks requirements. For those cooperatives, which failed the audit, cocoa beans that were procured during that season were not considered to be "sustainable cocoa."Within the context of SACO's procedures for the annual audit cycle of partner cooperatives to verify on-going compliance with requirements, a key principle is child labor. During the audit of one cooperative in January 2013, three cases were identified where member farmers employed a 14-year old, a 15-year old (who happened to be the younger brother of the farmer), and a 17-year old. This resulted in immediate exclusion of two of the farmers from the cooperative, a survey of child labor practices among all members of the cooperative, and additional awareness training on condemning child labor and promoting education.BP has in place a process for undertaking regular audits of participating farmers to verify on-going compliance with certification requirements. BP has not encountered cases or practices of child or forced labor in its network of farmers and if this were the case, these farmers would be excluded from the Farmers' Group until the situation has been remedied.SACO and BP's sustainability team meets and reports on a regular basis with management (organized as the CSR Steering Committee, which includes BC's CEO, COO, President Global Cocoa, and VP Cocoa Sustainability & Managing Director Biolands) to provide an update on sustainability issues. This includes reporting on key indicators, reflecting issues and progress made. Information is available both on operational as well as on KPIs (such as increased cocoa-income earning potential for targeted CocoaAction farmers, increased cocoa productivity for targeted CocoaAction farmers, and farmers adopting recommended good agricultural practices and rehabilitation techniques using recommended planting materials), following CocoaAction's Reporting Framework.Stakeholder Engagement. BC took a leading role in addressing strategic issues in the cocoa value chain by bringing together industry partners at CHOCOVISION, the first and only business-for-business conference in the cocoa value chain in 2012. This provided a neutral platform for an open discussion among key stakeholders from around the world (from the cocoa farmer to NGOs and theconsumer) on key industry issues, to develop ideas and sustainable solutions along the value chain. This led to the subsequent creation of the global initiative, CocoaAction, which is now the World Cocoa Foundation's overall strategy for addressing sustainability challenges in the sector. The next CHOCOVISION conference is scheduled for June 2016 (
http://www.chocovision.ch).BC is also a member of several industry trade associations, which work with stakeholders to make cocoa farming more sustainable, including addressing child labor issues. Among these, BC is a member of the Board of the World Cocoa Foundation (WCF) and contributes to the WCF Cocoa Livelihoods Program and the African Cocoa Initiative, by helping to fund development programs and research that benefit farmers in cocoa-growing regions. BC is also a member of the Board of the International Cocoa Initiative (ICI) and contributes to initiatives aimed at improving the lives of children and eliminating child labor in cocoa growing communities and the cocoa supply chain.External Communications. In addition to participating in public forums to further the sustainability agenda for the cocoa sector (see section above), BC disseminates information on its sustainability efforts on its corporate website (
http://www.barry-callebaut.com/sustainability) as well as regularly publishes a Sustainability Report and encourages the public to provide feedback to BC's Head of Sustainability Communications.
PS 2: LABOR AND WORKING CONDITIONS
SACO employs a total of 543 employees (of which 6 are temporary) and BP employs a total of 298 employees (of which 147 are temporary). SACO does not own cocoa farms in Cote d'Ivoire but instead sources cocoa through BP's network of registered farmers as well as from partner cooperatives and other active suppliers (local traders and other cooperatives). The main risks related to labor and working conditions are the potential use of child labor on cocoa farms, which is known to be significant in this sector in Cote d'Ivoire, and to a much lesser extent, the potential occupational health and safety risks associated with cocoa cultivation, which are generally considered to be medium and can be readily mitigated through appropriate measures as promoted by BC.Human Resources Policies and Procedures. Both SACO and BP have adopted and are implementing human resources policies and procedures for managing employees in compliance with Cote d'Ivoire's labor code. To this end, both SACO and BP have developed an internal code of conduct, which reflects the rights of each employee and is shared with all employees upon hiring. Furthermore, SACO recently developed a Human Resources Manual (dated August 2015), which includes procedures for hiring, training and evaluating employee performance as well as disciplinary actions. BP does not yet have a Human Resources Manual, which is in the process of being developed and will be aligned as much as possible with SACO's procedures.Working Conditions and Terms of Employment. Both SACO and BP have written employment contracts, reflecting the conditions and terms of employment including salary, which is above the minimum wage in Cote d'Ivoire (60,000 CFA). The terms of employment are also consistent with those stipulated in the collective bargaining agreement that is still in effect (dated 19 July 1977). Additional conditions and terms of employment are reflected in the internal code of conduct.Workers' Organizations. Both SACO and BP support the activities of worker organizations at their facilities. In compliance with the labor code of Cote d'Ivoire, employees elect designated employee representatives every two years, which negotiate with senior management on behalf of the employees.Grievance Mechanism. SACO and BP have in place a formal, written grievance mechanism for employees to raise workplace concerns. BC has a Code of Conduct for all its employees, which states that all comments, concerns or events of non-compliance about business practices that cannot be addressed by an employee's direct manager or local HR department can be reported directly and anonymously via email to BC's whistle-blowing platform (
http://www.bcintegrity.com) or by calling BC's integrity phone line. Contact information is displayed on posters at the sites. However, the phone line has a Swiss number that would incur costs to employees calling from Cote d'Ivoire and not all employees may have access to the internet to submit their concern via email.As part of the ESAP, BC shall improve accessibility to the grievance mechanism to raise workplace concerns to be easily accessible to all employees in Cote d'Ivoire.Protecting the Work Force. Neither SACO nor BP employ children or persons under the age of 18. The age of employment is confirmed at the time of hiring through verification of the birth date of the individual (as specified in the internal code of conduct).Occupational Health and Safety. Both SACO and BP have taken steps to prevent accidents, injury, and disease occurring in the course of work by minimizing the causes of hazards associated with external contractors and visitor access to SACO sites, areas of use of personal protective equipment, work in confined spaces, regular equipment inspections, and investigation of accident/incident. Steps taken include identification of hazards by job function, development of procedures, and training as well as oversight from a committee on occupational health and safety (as required by the labor code of Cote d'Ivoire). However, work-related accidents and injuries are currently only tracked on a regular basis across SACO operations.Supply Chain. BC has policies that condemn forced labor, slavery, human trafficking, and all practices that exploit children or expose them to harmful or hazardous conditions. All cooperatives who participate in the Horizons Cocoa agree to and sign BC's Supplier Code of Conduct as well as the Child Labor Charter to uphold the principles of responsible labor practices as expected by BC and defined by international labor standards, copies of which are kept at SACO. An integral part of the training in good agricultural practices that is provided to farmers is sensitization on child labor. Through SACO, BC works with partner cooperatives (that implement cocoa sustainability programs including UTZ Certified, Rainforest Alliance and BC's Horizons Cocoa). Participating farmers have been trained and certified, and as a result their cocoa beans can be sold under the applicable sustainability scheme.BC has been working for more than a decade with other companies in the cocoa and chocolate sector (along with the government and NGOs) to work toward the elimination of the worst forms of child labor as defined by the ILO. This includes working with the International Cocoa Initiative to develop tools and training modules to raise awareness of child labor issues among producers. Within the context of BC's community development initiatives (see below), BC works with community leaders to address child labor, including on-going awareness raising about the issue and developing community capacity for monitoring and remediation.As part of the ESAP, and within the context of the CocoaAction requirement to set up a child labor monitoring and remediation system (CLMRS) to identify child labor risks in this part of BC's traceable supply chain and to target assistance to the verified risks, BC shall start piloting the project in 2016 and store data in a central data management system.The occupational health and safety risks associated with cocoa cultivation are typically associated with the improper use of machetes, carrying heavy loads and the potential exposure to crop protection products due to poor application practices. At the level of partner cooperatives and BP's network of Farmers' Groups, procedures are in place for training on occupational health and safety risks and good practices. Furthermore, specifically for crop protection products, guidelines are in place on the proper storage of chemicals, disposal of empty containers, cleaning of equipment, and appropriate use of required Personal Protective Equipment (PPE) to mitigate potential environmental, and occupational health and safety risks.As part of the ESAP, and within the context of BC's Farm Development Plan, BC shall require participating cooperatives and Farmers' Groups to keep on-site the Material Safety Data Sheet for the crop protection products used, maintain an inventory of availability of adequate PPE, and ensure training on proper storage and application.For the portion of SACO's non-certified/non-sustainable cocoa that is sourced in part through cooperatives as well as local and international traders, it is not possible to verify with 100 percent certainty the risk of child or forced labor nor verify that occupational health and safety risks are appropriately mitigated beyond suppliers to BC being required to sign BC's Supplier Code of Conduct as well as the Child Labor Charter, which would prove to be significantly challenging.
PS 4: COMMUNITY HEALTH, SAFETY AND SECURITY
Community Health and Safety. Potential risks and impacts to the health and safety of surrounding communities derived from BC activities are associated with the circulation of company vehicles and trucks on public roads. SACO and BP combined own and operate 179 vehicles, 48 trucks and 118 motorbikes and BC is committed to avoiding the occurrence of incidents and injuries to members of the public associated with the operation of these vehicles. Steps taken to this end include development of procedures on topics such as personal safety while driving, training on vehicle use and maintenance to minimize hazards associated with vehicle and road safety.
PS 6: BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES
Sustainable Management of Living Natural Resources. Cocoa cultivation is undertaken on plots that average 1 to 3 hectares in the southern region of Cote d'Ivoire, which do not require irrigation. There are two cocoa harvests in Cote d'Ivoire: the main crop from 1 October to 31 March--with peak production at the end of December, which provides 75 percent of a higher-quality harvest and the mid-crop, from 1 April to 30 September, which provides 25 percent of a lower-quality harvest. BC is not directly engaged in the primary production of cocoa and does not own cocoa farms. BC sources all cocoa beans from cooperatives, Farmers' Groups and middlemen (see below).A portion of the cocoa is sourced from certified cooperatives and farmers or cooperatives that participate in BC's Cocoa Horizons program. Within the context of certification, participating cooperatives are required to establish and implement an Internal Management System, which includes a Farmer Training Program addressing Certification Criteria, Good Agricultural Practices, Good Environmental Practices, Occupational Health and Safety, Preventing Child Labor, and Basic Literacy). To further support these efforts, BC has put in place a training infrastructure (Cocoa Center of Excellence in Pacobo) to train the trainers (96 trainers in 2013/2014 and cooperative managers) to disseminate good agricultural practices to farmers (reaching 99,000 farmers in 2013/2014) across the cocoa growing areas of Cote d'Ivoire to improve productivity on their farms. BC has also set up 23 model farms to allow farmers to see first-hand best farming practices (including tree pruning, making compost, intercropping, preventing soil erosion, integrated pest management, and rejuvenating farms) and in 2013-2014, conducted 496 farmer field schools to teach about post-harvest management techniques, optimal use of inputs, environmental protection, certification, child labor, health and safety, and basic business skills. In 2013, BC launched a multifunctional training truck to bring farmer training (on good agricultural practices, child labor sensitization and literacy), education and health services to remote cocoa growing communities.Supply Chain. In Cote d'Ivoire, the land surface area dedicated to cocoa cultivation is considered to be the most important for a single crop in terms of total acreage in the southern region of the country. Cocoa cultivation is typically undertaken on plots of 1 to 3 hectares, and with reducing cocoa yields due to generally poor agricultural practices, serious expansion occurred (in 1999-2005) into forested areas designated as National Parks and Classified Forests under Ivorian law, which has resulted in severe degradation of the country's biodiversity.SACO sources the large majority of cocoa beans from certified cooperatives (mainly from UTZ Certified and Rainforest Alliance), participating cooperatives in BC's Horizons Cocoa program, via BP's network of Farmers' Groups (mainlyUTZ Certified and Rainforest Alliance), and the remainder being sourced from other active suppliers.SACO and BP maintain detailed procurement logs for certified and Horizons cocoa beans, allowing traceability to the farmer point of origin for 44% of BC's total cocoa sourcing in Cote d'Ivoire. Within the context of certification requirements and BC's Horizons program, the plots of all participating farmers are geo-localized, such that none are known to be located within the boundaries of a nationally protected area. If this were found to be the case, the plots of these farmers would not be eligible for participation in the partner cooperatives or as part of BP's Farmers' Groups. For the remaining cocoa beans sourced in Cote d'Ivoire, SACO has not yet made it a formal requirement to track cocoa back to the farmer origin, to determine whether the cocoa came from an area that has negatively impacted biodiversity.As part of the ESAP, BC shall revise its Supplier Code to maximize the certainty that no non-certified/non-sustainable cocoa is sourced from National Parks and Classified Forests, unless written agreement from legally competent government authorities for such uses has been provided. Furthermore, BC shall develop and implement a global policy (currently in draft) to address the issue of deforestation.
