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Olam Corp Loan (IFC-31566)

Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Completed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
OLAM INTERNATIONAL LIMITED
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Investment Amount (USD)
Not Disclosed
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Other Related Projects
Primary Source

Original disclosure @ IFC website

Disclosed by Bank Apr 24, 2013


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Project Description
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 From its establishment in 1989 as cashew trader in Nigeria, Olam has progressively expanded into a multi-country, multi-product supply chain manager. Olam today is a leading global integrated supply chain manager and processor of agricultural products and food ingredients, supplying various products across 16 platforms to over 12,300 customers worldwide, including leading sustainability manufacturers, such as Unilever, Nestle, Coca-Cola, Costco, Kraft/Cadbury, etc. From a direct presence in more than 65 countries with sourcing and processing in most major producing countries, Olam has built a global leadership position in many of its businesses, including Cashew, Spices & Vegetable Ingredients, Cocoa, Coffee, Rice, Cotton and Wood Products.Since 2008, its business model has significantly evolved and developed both in depth as well as breadth, pursuing selected value chain adjacencies that both complement and enhance Olam's core supply chain model. Specifically, Olam has successfully completed transactions addressing opportunities in both upstream (plantation, forest concession and farming) and midstream (manufacturing and processing) parts of agro-commodities value chain. Olam's operations in primary production includes the following products and locations; tropical forest concessions in the Republic of Congo and Gabon; palm and rubber plantations in Gabon; almond orchards in Australia and the United States; coffee plantations in Laos, Zambia and Tanzania; rice farming in Nigeria; cotton farming in Brazil and dairy farming in Russia and Uruguay.In addition, Olam has had an exponential growth from a limited number of agro-processing units in 2009 to more than 110 by June 2012, including cashew/cocoa/ sesame/spice processing units, wheat/rice/sugar milling, palm oil refinery, tomato paste plant, dairy processing plant, noodles factory, etc. Olam plans to reach 200 processing / packaging units by 2020 through greenfield investments and acquisitions. More than 50% of its processing footprint is in Africa.Lastly, as per its original business model, Olam's trading activities include multiple agro-commodities across 16 product platforms spanning 65 countries, including beans, pulses, cotton, coffee, cocoa, wool, dairy, package foods, edible nuts, palm oil, rubber, rice, grains, sesame, sheanuts, spices, sugar and timber. Olam is also a major importer of agro-commodities (e.g. rice) from Asia to Africa.The proposed investment is up to a US$100 million corporate loan facility to Olam International Limited ("Olam" of the "Borrower"). The proceeds of the loan provided by IFC shall be used for: (a) partial refinancing of existing financial debt of Olam's subsidiaries in respect of Approved Projects pre-agreed between Olam and IFC; and (b) financing permanent working capital and capital expenditure requirements in respect of Approved Projects (the "Transaction"). Approved Projects are projects of Olam's subsidiaries that are pre-agreed between Olam and IFC in the Loan Agreement. Currently, Approved Projects are expected to consist of the following: 1) India - Hemarus Industries Limited (HIL) - Sugar Mill and Co-Generation Facility Acquisition and Upgrade; 2) India - SVI Spices Processing Facility Upgrade; 3) Nigeria: Crown Flour Mill (CFM) Factory Expansion; 4) Nigeria: Greenfield Cashew Nut Processing Plant; 5) Nigeria: Greenfield Sesame Hulling Unit - Relocation of Existing Facility and Upgrade. OVERVIEW OF IFC'S SCOPE OF REVIEW The scope of the IFC's environmental and social (E&S) review for this corporate investment in Olam (or the "Company") included meetings with Olam senior management at its headquarters in Singapore, E&S team based in London, UK and at the numerous operations mentioned above, including:- Meetings with the Managing Director, Olam Cocoa and Chairman of the Corporate Responsibility and Sustainability (CRS) Executive Committee, the Senior Vice President and Head of CRS, the President & Global Head of Manufacturing, Innovation and Technical Services (MATS), the Senior Vice-President, MATS/Africa & Europe, the President & Global Head, Human Resources, the Certification Programme Manager & Social Services, the Head of Corporate & Sustainability Communications, and, India and Nigeria's Country Managers, Business Heads for sugar, spice, cashew, coffee, and grains, and respective plant/plantation managers;- Review and assessment of key technical documentation provided by Olam, at corporate level, including Environmental, Occupational Health and Safety (OHS) and Quality Policies, CRS and MATS's risk screening and management process and procedures, report format, technical quality and robustness of due diligence, in-house technical capacity, CRS and MATS's corporate and regional monitoring and evaluation oversight framework and Key Performance Indicators (KPIs). In addition, site visits to the plants allowed reviewing operational permits, HR regulation, working terms and conditions for employees, contractual and seasonal workers, existence of Standard Operating Procedures (SOPs), SOPs' implementation status and in-house technical capacity, internal and external environmental and OHS audits/inspections, life and fire safety (L&FS), resource efficiency (water, energy), and social performance;- Third-party review and assessment of Olam's environmental and social performance from a recognized environmental and social consultancy firm and consultation with stakeholders (commercial banks, consultancy firms, and NGOs);- Site visits to Hemarus Sugar Mill (Kolhapur, India), SVI Spice Processing Plant (Cochin, India), Crown Flour Mill (Lagos, Nigeria) and Sesame Hulling Factory (Lagos, Nigeria). Cashew processing plant in Ilorin, Nigeria has not been visited due to logistical constraint. 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 3 - Resource Efficiency and Pollution PreventionPS 4 - Community Health, Safety and SecurityIf IFC's investment proceeds, IFC will periodically review the the project's ongoing compliance with the Performance Standards ENVIRONMENTAL AND SOCIAL CATEGORIZATION AND RATIONALE This proposed corporate investment targeting specifically the five agro-processing plants represent on-going and planned initiatives within existing industrial footprints. As such, these are expected to have limited environmental and social impacts which are site-specific, and largely reversible. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, overall, this is a Category B project in accordance with IFC's Environmental and Social Sustainability Policy. This categorization is in accordance with other similar type of projects within the sector. The targeted projects are designed to avoid, minimize and manage environmental and social risks and impacts of Olam's subsidiaries' operations in compliance with applicable IFC's Performance Standards and World Bank Group (WBG) General and Sector (Sugar Manufacturing, Food and Beverage processing) Environmental, Health and Safety (EHS) Guidelines.Key E&S issues applicable for this corporate and plant-level investments are: (i) Olam's QEHS policies, risk assessment and management/monitoring systems, plans and procedures, and technical capacity to manage E&S performance of all its various operations, especially the five facilities targeted by the use of the proceeds; (ii) Olam's corporate HR policies and onward adherence to national labor law, worker conditions, standards and OHS risk prevention and management, including Olam's employees, contractors and nearby communities; (iii) land acquisition and expansion planning procedures, (iv) Life and Fire Safety (L&FS) provisions and emergency preparedness and response; (v) use of public utilities (water supply and energy), optimization of water and energy use through project design and resource conservation measures and greenhouse gas emissions; (vi) wastewater collection and treatment, solid waste disposal, air emissions from generators and boilers, potable water quality, treatment and monitoring, hazardous material handling, management and control of pest and rodent; (vii) food and transport safety, and (viii) engagement with communities on EHS, food and traffic safety and social performance.Description of key environmental and social issues and mitigationTo ensure that Olam will continue to comply with IFC Performance Standards and WBG EHS Guidelines as well as national environmental, labor and social laws and regulations for its corporate and targeted operations under this investment, Olam will implement the measures summarized below and in the attached Environmental and Social Action Plan (ESAP), which has been agreed upon by Olam and IFC and which will address any compliance gaps with PS requirements. The scope of the E&S due diligence has been focusing on the E&S performance of the proposed Approved Projects. Main gaps deficiencies identified against IFC Performance Standards for these five facilities have been the following: limited environmental and social management system and related standard operating procedures, deficient internal EHS technical capacities, less than optimum OHS performance, including absence or early development of OHS management plan and practices, oversight monitoring of third-party contractors, resource efficiency, and wastewater and solid waste management measures needed to be improved at several sites. Plant-level due diligence reports, including EHS findings and deficiencies against PS requirements have been shared with Olam's corporate and plant-level managers for corrective actions at each facility. IFC further carried out a review of Olam's corporate EHS management systems and procedures which is presented below. **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 Policies. Olam's vision statement, adopted in 2009 and further enhanced in 2011, states that "Olam endeavours to generate economic prosperity, contribute positively to social welfare and manage our stewardship of the environment in a sustainable way, so as to ensure the creation of a real long-term value for all". These three pillars of sustainability, namely economic prosperity, social welfare and environmental stewardship constitute its commitment towards achieving the Olam Sustainability Standard. The operational translation of this Standard has been consolidated by the adoption of Quality, Environment and Sustainability, Occupational Health and Safety (QEHS) Policies in June 2011. This forms the foundations of Olam's Codes of Practices which are being rolled out across its businesses. As set forth in the attached Environmental and Social Action Plan (ESAP), these Policies will be reviewed and updated in order to capture the expanded scope of Olam's business model toward primary production and processing, while making a direct reference and a commitment to comply with IFC Performance Standards and relevant World Bank Group's Environmental, Health and Safety (EHS) Guidelines.Environmental and Social Risk Assessment and Management System and Program. In accordance with Olam's original business model focusing on sourcing and trading of agro-commodities, Olam has established in 2005 a Corporate Responsibility and Sustainability (CRS) function to pro-actively identify, assess, and manage supply chain's E&S requirements as part of the Function's operations. Specifically, Olam adopted in 2011 its Livelihood Charter (olamonline.com/sustainability/olam-livelihood-charter) framework encompassing 8 qualifying principles, namely 1) finance (pre-finance crop purchase and provide capital advances for production), 2) yield improvement (training of farmers in Good Agricultural Practices (GAP), establishment of model farms and farmer field schools, provision of seedlings, tree grafting, fertilizer and crop protection products), 3) labor practices (educating farmers groups to adhere to a "no child labour policy", training in OHS and safety use of equipment), 4) market access (fair and competitive price offered to farmers), 5) quality (good quality products, including promotion of defined good quality parameters and payment of premium), 6) traceability (farmer record keeping for full chain of custody to the customer, including all in-country transportation, primary processing and storage, all to independent auditing standards), 7) social investment (investment in community-based projects to enhanced livelihoods and contribute to economic development, such as building primary schools and health units, HIV/AID awareness training and installation of water pumps), and, 8) reduction of environmental footprint across the supply chain (working with farmers to intensify production of existing farms, reducing deforestation, water managementand reinforcing sustainable agricultural practices). These principles captured the IFC Performance Standards' supply chain requirements as they relate to harmful child/forced labor and biodiversity risks associated with conversion of natural and critical habitats. To date, more than 17 Olam supply chain initiatives fully complies with the 8 principles, encompassing 212,377 farmers (annual increase of 230% from 2011) and covering 369,740ha (annual increase of 236% from 2011). More than 80% of these results have been achieved in Africa. In addition, 11 additional supply chain initiatives are presently under implementation but have not yet reached compliance with all of Olam's principles. Olam has set a target that by 2020 there will be 800,000 smallholders within the Olam Livelihood Charter.In the context of the expansion of its business model towards upstream operations across nine products (timber, palm, rubber, coffee, almond, rice, cotton, and dairy) and in eleven origins (for details, consult olamonline.com/sustainability/sustainability-reports), the Olam Executive Committee (ExCo) has laid out the following requirements:1) all upstream operations shall undergo a detailed Environmental and Social Impact Assessment (ESIA) Study using host country's laws and regulations and Principles and Criteria of Voluntary Agro-Commodity Standards as applicable E&S requirements; 2) all plantation projects should obtain certification against recognized sector standards (e.g., FSC, RSPO); 3) a separate technical plantation competency team accountable to ExCo, and liaising with the CRS function should be established through the recruitment of internal and third-party environmental and social experts; and 4) the strengthening of the internal E&S due diligence process prior to investment through completion of a due diligence report, to be reviewed by the CRS Board Committee prior to submission to Olam's Capital Investment Review Committee (CIRC). During the IFC due diligence, validation of compliance with these requirements has been done, especially for timber, palm oil, rubber and rice. Specifically, a review of detailed Environmental and Social Impact Assessment (ESIA) Studies has been done for a sample of upstream businesses, including discussion on High Conservation Value (HCV) and Free Prior Informed Consent (FPIC) processes. It is now being rolled-out for other commodities, especially coffee plantations in Laos, Tanzania and Zambia. Olam is presently one of the largest natural forest managers with over 2.2. millions hectares of forest concessions under management, including over 1.3 million hectares of FSC-certified forests in the Republic of Congo, making Olam amongst the largest suppliers of FSC certified tropical hardwoods in the world. In addition to its goal in achieving certification for all its timber concessions (65% achieved to date, while the rest of the concessions are certified under French-based Sustainable Forest Management), Olam is committed to reaching, as requested under IFC's PS6 requirements, RSPO certification for its palm oil plantations and to any other relevant and credible standards, if existing, for its rubber, rice and coffee plantations.As mentioned above, Olam has also invested in more than 110 agro-processing units so far. To address Quality, Environmental, Occupational Health and Safety (QEHS) aspects of these acquisitions and/or greenfield investments, Olam has established - in early 2010 - another central function, named Manufacturing, Innovation and Technical Services (MATS). Building on the EHS policies adopted in June 2011, this Unit has developed QEHS standards and code of practices under each corporate QEHS policies, namely a) Quality (Food Safety, Good Manufacturing Practices, Hazard Analysis and Critical Control Points, Good Laboratory Practices, Traceability and Certification, Recall Procedure, Suppliers, Environmental Monitoring, etc.); b) Environment and Sustainability (Energy, Water and Waste, etc.); and c) Occupational Health and Safety (Workplace Risk Assessment, Incident Investigation and Corrective Action Plan (CAP), Power Lockout and Tag out (LOTO), PPE, Workplace Inspection, Permits, Hot Work, Confined Place, etc.). When considering the acquisition of an existing asset or greenfield investment, MATS conducts either a comprehensive technical review or an audit of prospective facilities, benchmarked against Olam's policies and QEHS standards, to determine areas of concern and identify necessary mitigation measures to ensure compliance with the relevant national requirements. IFC reviewed the quality and robustness of MATS's QEHS risk assessment process and recommendations during its due diligence, including for the five targeted plants, for an acquisition process and a project investment thesis for a greenfield investment. The process included the inclusion of specific QEHS recommendations into the CAPEX program. The MATS's QEHS risk assessment process is now being mainstreamed for all new investments over 1 million dollars. Going forward, as set forth in the ESAP, the scope of review and audits will be expanded to include the requirements of all IFC Performance Standards and applicable WBG generic and sector-specific EHS guidelines.In addition, MATS is presently developing a master list of QEHS procedures, which will cover all Performance Standards requirements (e.g., stakeholder engagement plan, external communication and grievance mechanisms, supply chain management system procedure, resource efficiency, security personnel, land acquisition and involuntary resettlement, management of ecosystem services, indigenous peoples, and cultural heritage's chance finds procedure) and quantifiable parameters under World Bank Group General and Sector-specific EHS Guidelines, to be adopted and implemented in each agro-processing / packaging facility encompassing: a) governance/management (integrated management control (e.g., policy and legal review, emergency preparedness, customer and consumer feedback, procurement), improvement management (e.g. data collection and analysis), production management, and personnel management); b) quality and food safety management (e.g., supplier and input management, product control, and QFS monitoring); c) environmental management (e.g., energy, water, waste, emissions, packaging, ODS management, release prevention and response management, and microbiological hazard control); and d) occupational health and safety program management (e.g., workplace health and safety, including contractors, machinery and equipment, hazardous work activities, occupational health management, occupational and industrial hygiene, and fire safety management).Need identification and definition of these procedures are assessed through the completion of Olam's QEHS Maturity Gap Analysis Tool at each plant and are integrated into the preparation of a plant-level QEHS roadmap. Considering the significant legacy of processing units and the work required to bring them up to Olam's QEHS standards, MATS's interventions has prioritized, on a pragmatic risk assessment approach, plants assessed as having higher risks on Quality and Food Safety and OHS management issues. As a consequence,environmental and sustainability issues will be covered on a more comprehensive basis in the next implementation phase. IFC site visit and its findings at the plants in India and Nigeria support this risk prioritization. This being said, reporting on environmental and sustainability (e.g., carbon, water usage, energy usage, waste usage) at all these plants will start in the next few months.As set forth in the ESAP, going forward, Olam's senior management has agreed to further develop and integrate CRS and MATS's Environmental, Occupational Health and Safety (EHS) and quality/food safety management system elements - in line with ISO 14001, OHSAS 18001 and HACCP/ISO 22001 - into an Integrated Management System consistent with IFC's PS1 requirements and applicable WBG General and Sector-Specific Environmental, Health and Safety (EHS) Guidelines. In addition, the application of the Master List of QEHS Procedures that must be in place for quality control and compliance during operational phase will be expanded to all Olam operations.Organization. In 2008, under the leadership of Olam Group Managing Director and Chief Executive Officer (CEO), Mr. Sunny George Verghese, the CRS Executive Committee was established to deliver, monitor and evaluate corporate and product-level sustainability initiatives across its businesses and origins. Chaired by the Managing Director of Olam's Cocoa Business & Executive Committee Member, its activities are managed by the Function Head, Senior Vice-President based in London and CRS representatives in Africa and Asia. The CRS Executive Committee is accountable to the CRS Board Committee. The CRS function on supply chain risk management, including the Livelihood Charter's initiatives, is composed of 637 nationals working with farmer associations and cooperatives. CRS has also established a corporate team of 5 technical resources, covering CRS and plantation related activities, which is going to expand through identification of internal Olam's technical competencies based on critical skill sets and development of "champions" and "Communities of Practice" in key disciplines. On its side, the MATS Leadership team is composed of 8 dedicated senior professionals assigned to processing projects at corporate and regional levels (Americas, Africa & Europe, and Asia) or products (spices, food staples and packaged foods). The MATS community also includes plant managers and staff, engineering and project managers, technical experts, Quality Assurance, Food Safety / Environmental and OHS experts assigned at the plant level, technical services, product application, and sale support. MATS intends to establish and formalize Communities of Practice on specific issues (e.g., wastewater management, air emissions, waste management and valorization) in the next few months. In addition, for greenfield processing investments, a Steering Committee is systematically established consisting of Country Head, Business Product Leader, and MATS to define and select state-of-the-art design processes and equipment and to monitor project implementation, including EHS performance. CRS, the plantation unit, and MATS are supported by an extensive consultancy network. The global Human Resources (HR) function also has a team of auditors that visit individual country operations to ensure compliance with local law and Olam HR policy.Training. Considering the expansion of Olam's business model toward upstream and midstream operations in the agro-commodity value chain, in addition to its original trading activities, the establishment of the CRS and MATS functions has been accompanied by delivery of training programs over the last two years to effectively ensure the implementation of its corporate EHS policies, operational QEHS standards, and procedures. In particular, Olam's extensive team working on its sourcing from small-scale agribusiness suppliers works with farmer organizations and cooperatives in strengthening their internal control systems as well as continuous training support to farmers in alignment with Olam Livelihood Charter Principles. Considering the significant increase in the number of farmers reached, the effectiveness of this program has been validated, including through meetings with Olam supply chain representative in Ivory Coast. As indicated above, ESIA studies complying with national EIA regulations and/or Principles and Criteria of Voluntary Standards for large-scale plantations have raised the level of awareness and familiarity of project/plantations managers with the proposed ESMP, including EHS mitigations measures to be implemented during construction and operation phases. Lastly, MATS had embarked on the delivery ofan ambitious number of competency workshops to Olam project/plant managers from January 2012 to June 2012, especially in the Africa region, on introducing corporate EHS policies, standards, QEHS Self-Assessment GAP Tool, plant-level QEHS management system procedures, MATS's QEHS scorecard and monthly reporting requirements, etc. Additional delivery of these workshops will take place in Asia in FY12-13. MATS has also started delivering plant site-specific HACCP, BRC and QEHS management system and procedures training sessions in Africa. Further Olam's senior management has agreed to further consolidate this training program, especially in the context that ultimate responsibility for the day-to-day E&S performance rests respectively with the contractor and project/plantation/plant managers during construction and operational phases.Monitoring and Reporting. Olam has adopted a comprehensive EHS monitoring and reporting system for all its various operations in order to measure its development impacts and the continuous improvement of its E&S performance. In particular, for the Olam Livelihood Charter - the Olam-wide commitment to developing sustainable supply chains - CRS is annually monitoring and reporting on a range of KPIs aligned to its 8 Principles, including all its on-going 28 initiatives (including some not as yet qualifying for the Livelihood Charter). Information, such as general farmer organization information (number of farmers, number of hectares, and average farmer income), key yearly achievements, cost of the initiative, finance, training, inputs (fertilizers), labor practices, market access, quality, premium prices paid, traceability and certification, community social investment projects and collection of socio-economic data) is collected, analyzed, aggregated and reported in its annual CRS and Livelihood Charter publications, as well as the Company website. It is worthwhile to indicate that this monitoring and reporting framework captures PS2 and PS6's supply chain requirements. On its side, the plantation unit has provided to the IFC team a final draft of the M&E framework, encompassing key metric categories to be monitored, including economic (e.g., cost per unit of production), agronomic (e.g., productivity), ecological (e.g., soil, air quality, water use and efficiency, carbon balance, and energy consumption) and customer (e.g., traceability and certification) parameters. The Olam plantation-based projects funded by DFIs undergo semestral E&S monitoring and reporting on the implementation status of the ESIA's ESMP by independent consultancy firms. Olam's CRS plantation unit and project/plantation managers work closely with these firms during this process for continuous improvement. Lastly, MATS has also introduced standard performance metrics and reporting framework (Olam balanced scorecard across QC4S) based on 15 key parameters, including quality, cost, safety (Lost Time Incidence Frequency Ratio and Accident Free Days),Sustainability (Carbon, Water Usage and efficiency, Energy usage - energy consumption/tons produced, Waste - biomass produced), staff (retention, training days). It is worthwhile to underline that these capture IFC E&S mandatory Development Outcomes Tracking System (DOTS) indicators for IFC investments in agriculture and food and beverage. As indicated above, monthly tracking of quality and food safety, as well as OHS issues, has already started for most agro-processing units, and its scope will expand to include environmental/sustainability indicators in the next few months. Based on this tracking, MATS will use these reports to pro-actively establish Communities of Learning on key issues (wastewater, waste valorization) and pro-actively identify resource efficiency projects (e.g., cleaner production, co-generation plant). It is worthwhile to underline that Olam has been producing increasingly transparent, result-based, and forward-looking Corporate Responsibility and Sustainability (CRS) Reports since 2008. In addition, Olam started reporting on its E&S performance in 2012 following the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (G3.1), the most comprehensive sustainability reporting guidance currently available, and on Carbon Disclosure Project in 2011. Olam will report annually to concerned country/local authorities and IFC as part of the Annual Monitoring Report (AMR) for the five targeted projects.h PS 2: LABOR AND WORKING CONDITIONS Human Resources (HR) Policy and Management. Olam has over 18,000 direct employees in 65 countries. The basic management principle of Olam's HR function is that the country managers and/or business heads are responsible for HR matters in their operations. Sometimes, this arrangement is not feasible as some countries where Olam operates have only 4 employees. However, when Olam operations within one country reach more than 200 employees, Olam establishes a senior HR position to manage HR issues. As an example, Nigeria and India already have HR teams. Business heads receive training on HR matters during a compulsory one week induction course led by Olam's CEO, which sets a common culture and values for the Company. Olam has also adopted policies on equal opportunity and sexual harassment as contained in its 2009 Code of Conduct. These are available, as is the corporate grievance policy, on Olam's intranet site so that all employees can easily access it. In addition, Olam has a standing committee on diversity and inclusiveness. Most human resource policies and procedures are spelled out in national employee handbooks, which is appropriate given the basic requirement to meet national labor and employment law. The Employee's Handbook for Olam Nigeria, for example, details the company policy with respect to hours of work, benefits, compensation, and promotion.Working Conditions. Olam's corporate and country's operations do not discriminate against workers seeking collective bargaining arrangements. In the spice plant in India, for example, there is a union associated with the Bangla Congress Party of Kerala. In Nigeria, both CFM and the sesame hulling unit have their respective workers' organization, representatives being elected by staff. In fact, a majority of Olam's employees in Africa belong to a union. Because it has only recently gone into manufacturing, Olam does not have an explicit labor relations policy. Although, in practice it has an implicit policy of actively engaging with unions. As set forth in the ESAP, Olam corporate and country-based HR Policy will have explicit references to the employees' rights to freedom of association and collective bargaining.Retrenchment. Olam is in the process of acquiring existing companies as it seeks to expand its operations globally, both in upstream and midstream parts of agro-commodities value chain. In some cases, these acquisitions involve reductions in staff, typically of prior senior management team. Olam Nigeria Ltd's Employee Handbook does cover redundancy, including seeking deployment of the workers to other parts of the in-country operations, setting out the principles by which people will be selected for retrenchment, and what their separation benefits will be. Olam needs, additionally, to ensure that workers receive notice of dismissal and timely payments as required by national law. Where there are collective dismissals that are justified by business necessity, Olam's country operations will need to prepare retrenchment plans based on consultation with the workers to be retrenched and their representatives. As set forth in the ESAP, Olam corporate and country-based HR Policy will have explicit references to PS2 retrenchment requirements.Grievance Mechanism. Olam has a corporate grievance policy, as mentioned above, that is available on-line. Individual country operations, such as Olam Nigeria have a grievance mechanism in line with PS2 that is detailed in its Employee Handbook.Child/Forced Labor. Olam's directly-controlled operations globally do not hire people younger than 18 years of age. Issues concerning child/forced labor in its supply chain have been discussed above in the Supply Chain section of PS1.Contracted Workers. Olam's country operations can involve significant numbers of contracted workers. For example, at Vallabhas Kanji Ltd (SVI) in India, there are 80-90 contractual workers recruited on a monthly basis through two HR service providers. SVI undertakes due diligence before establishing a contractual arrangement with a service provider, including review of the provider's registration with the Ministry of Labor. In the context of the proposed expansion, SVI is not planning to recruit any additional permanent employees. Instead, additional contractual workers are being considered. At India's Hemarus sugar mill (HIL), 150 seasonal/part-time employees (e.g., security personnel, loading laborers at sugar mill and canteen workers) are contracted through HR service providers. HIL also undertakes due diligence of service providers before establishing a contractual arrangement. During harvesting season, HIL recruits third-party sugar cane harvesting and transport companies. HIL has introduced pertinent sections in contracts to ensure that all contractors and sub-contractors are in compliance with the payment of workers' legal benefits; timely payment of wages; OHS regulations, including provision of personal protective equipment (PPE); and ILO Convention 138 on Minimum Age. As set forth in the ESAP, each Olam operational unit will contractually ensure and monitor the compliance of service providers with minimum age employment requirements. This provision is particularly of key importance for the contracted third-party harvesting and transport companies. Olam units will also ensure that contracted workers have access to a grievance mechanism, as required by PS2, either through the contractor/subcontractor or Olam unit's own mechanism.Occupational Health and Safety. Olam has adopted, in 2011, a corporate Occupational Health and Safety (OHS) Policy, which is being mainstreamed into all its operations. From an operational standpoint, MATS, as per its project investment thesis (new investment) or technical due diligence (acquisition of existing asset), ensures planning and/or upgrade, if need be, based on the OHS Maturity GAP Tool self-assessment, of necessary OHS mitigation measures (included into CAPEX),including establishment of OHS management system (e.g., procedures developed, certified first party OHS auditor on-site, and document control program in place), leadership (e.g., communication of the plant-level OHS policy, safety goals and procedures, including responsibilities and accountabilities, and regular workplace inspection), compliance (e.g., enforcement of use of Personal Protective Equipment (PPE), compliance of energy power control, power lock out and tag out, accident and incident reporting and investigation), zero accident mindset (e.g., training, monthly safety data collected, including lost time injuries, restricted work injuries, first aid, near misses unsafe acts and conditions, and monthly reporting), equipment and process design, permit to work (e.g., hot work, at height, and confined space procedures) and staff capability (e.g., structured induction program on safety for staff and contractors, and documented competency based assessment program for all operators, including contractor, engaged in safety related tasks). OHS training of project/plant managers, as well as the recruitment of plant-level OHS officers, is on-going. OHS Procedures are clearly spelled out in MATS QEHS Master List of Controlled Documents and are under development in all the five processing units that IFC visited. Data related to the ratio of total lost man-hours due to accident to total man hours worked was not available at any of the sites. Monthly QEHS from each site will allow MATS corporate and regional specialists to develop an OHS Corrective Action Plan (CAP) if necessary. As set forth in ESAP, Olam is presently planning and/or conducting an OHS audit for the five operations targeted by the use of proceeds of IFC. Olam will provide OHS performance update, including a CAP, if necessary, at these plants.Life and Fire Safety. MATS, as per of its project investment thesis (new investment) or technical due diligence (acquisition of existing asset), ensures planning and/or upgrade of the fire hydrant system's hoses in accordance with national regulations and statutes. The recommendations of MATS specialists are then integrated into the CAPEX program. Based, on site visits of the targeted agro-processing units and review of MATS QEHS recommendations, IFC confirmed the efficiency of this L&FS risk assessment process at all sites. As set forth in the ESAP, upon completion of the construction phase of the Nigeria/sesame hulling plant (Lagos) and cashew mechanized plant (Ilorin), the upgrade/rehabilitation phase of the India/sugar mill and spice processing unit, and the upgrade of the Nigeria/Crown Flour Mill (Lagos), Olam will recruit an independent fire consultant to perform an independent Life and Fire Safety audit at each of these facilities against the respective countries' life safety codes. PS 3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION As part of its existing QEHS management system and program, Olam is committed to adopt state-of-the-art technology/equipment and design for all of its operations, as well as implementing a comprehensive set of procedures for the management and monitoring of energy, potable water use, liquid and solid waste, and greenhouse gases (GHG) emissions. Considering the early stage of the establishment of the QEHS at the five facilities visited, IFC was not able, during its due diligence, to access comprehensive data related to energy use (kWh & diesel consumption/ton of product) and estimation of tons of CO2 equivalent per ton of product, water treatment, consumption and efficiency (kilolitres/ton), wastewater treatment volume and treatment (effluent parameters), ambient and stack air emissions, hazardous and solid waste management and disposal, etc. As set forth in the ESAP, Olam has committed itself to achieve compliance with the country/local, PS3 requirements, and WBG's generic and sector-specific Environmental, Health and Safety Guidelines. As part of the MATS reporting balanced scorecard across QC4S, as set forth in the ESAP, MATS will expand its sustainability indicators to encompass monitoring of wastewater effluents & air emissions. PS 4: COMMUNITY HEALTH, SAFETY AND SECURITY Community Health and Safety. As indicated above, the five targeted Olam agro-processing facilities are either located in remote rural areas or industrial estates. Adverse risk and impacts to human settlements are relatively limited. In addition, induced traffic should not represent a significant risk for the local population. Olam requests transport sub-contractors to produce a validated driver license. As set forth in the ESAP, Olam will develop and implement a safe driver and transport safety vehicle procedure, including a training session for its driver. This procedure will be mainstreamed into the QEHS Master List of Controlled Document. Idem for certificate requirement for forklift operator, if appropriate. Olam is committed to extend the application of this procedure and training to its fleet contractors.Emergency Preparedness and Response. As part of the MATS GAP analysis on QEHS standards, emergency preparedness plan's need assessment is being assessed and included, as needed, within each plant's QEHS roadmap, including emergency preparedness and response protocols, procedures and plans. The emergency plans respond to the needs of accidents, bomb threats, fire, breach of security, oil, chemical and fuel spills, and severe weather alerts. An emergency team has and/or will be established at each facility. Emergency Preparedness and related Code of Practice is already identified into MATS QEHS Master List of procedures.Community Grievance Mechanism. Olam has not yet adopted a formal Community Grievance Mechanism at each of its facility, especially for its plantations and processing units. As set forth in the ESAP, such a mechanism will be formalized and included as part of the QEHS Master List of procedures in order to receive and to address any issues and/or complaints raised by surrounding stakeholders and end-customers resulting from its plantation, production, and transport activities.Security Personnel. Security personnel at Olam's operations visited during the field visits in India and Nigeria were all contracted, licensed providers. Staff assigned to security purposes are trained for defensive measures and are armed or not, depending on security level. In addition, Olam is progressively installing CCTV cameras at most of its facilities, including India's SVI spice processing unit, Nigeria's flour mill (CFM), and cashew mechanized plant (Ilorin).Corporate Social Responsibility Projects. Olam pro-actively pursues CRS initiatives at each of its operations. In India's operations, its main objective is to support education through career guidance to students and provision of computer to primary school, health awareness (AIDS), water and sanitation projects in surrounding villages, environmental protection and community improvement in villages surrounding the plant. In addition, for all its plantations and agro-processing units, Olam is actively seeking the development of out grower scheme and/or sustainable sourcing ofproducts through its Livelihoods Charter's Principles through improving farmer productivity, increased access to finance, introduction of good agriculture practices, traceability and certification, etc. Olam is currently developing an initiative to support the sugar farmers supplying the India mill that will be within the Olam Livelihood Charter.
Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.
ACCOUNTABILITY MECHANISM OF IFC The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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How it works