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 IFC investment comprises an A-loan in an amount of up to US$16 million, as well as a B loan of up to US$10 million, to finance capital expenditures and working capital needs of CHO Company ("CHO" or the "Company"), a Tunisian olive oil producer and bottler established in 1996. CHO Group is the largest olive oil milling operation in Tunisia and has vertically integrated operations, from orchards and olive fields to mills, refineries, accredited laboratory, and state of the art packaging facilities.The core business of CHO is to sell various grades of olive oil and by-products of olive oil processing: 1) virgin olive oil (both bio certified and non-certified, representing approximately 20% certified), filtered and bottled or sold in bulk; 2) refined oil (processed from pure olive oil or extracted olive residue oil), filtered and bottled or sold in bulk; 3) biofuel from waste olive residue; and 4) household soap and liquid soap using oil refining by-product. To this end, the company purchases pressed olive oil from third-party mills (70% in 2014) as well as from its own mills (30%), and CHO exclusively relies on external farmers for olive production as the company's own orchard produces only 2% of its total olive demand. CHO activities entail: a small olive tree orchard; olive pressing at one company owned facility; olive residue pressing (both physical and chemical extraction) at two company owned sites; oil refining; bottling; soap processing; procurement of olives, oil and olive residue; warehousing/storage of oil and operation of an International Olive Council certified laboratory.Company operations are located on the Mediterranean coast near the town of Sfax, which is approximately 230 km south of the capital city Tunis. The region of Sfax is an important olive-growing zone for Tunisia and accounts for 30 percent of the country's olive crop. Company activities are conducted across multiple operational units: 1) 100 hectare site, irrigated and planted in 2011 with 22,000 trees; 2) three company-owned olive presses and currently four additional ones are rented (pressing of bio-certified and non-certified olives kept separate). Waste material from the olive press is used as an input for the extraction facilities; 3) bottling facility for extra virgin olive oil (5 production lines for filling bio certified and non-certified product) and a refinery for processing "second grade" oil and olive residue oil into an edible oil. Waste material from the refinery is used as an input for the soap processing facility; 4) and 5) physical and chemical extraction of olive residue oil at two sites (El Amra and Chrarda) to provide input oil for the refinery. Waste material from this process is transformed into a combustible material and used as a source of biofuel across the Company's operations and all surplus is exported; 6) soap processing facility to transform waste by-product from refinery into various household grade soaps and liquid soaps; and 7) bulk oil warehousing facility to centralize procurement and mixing of all types of oil prior to bottling or bulk resale for export. This site also includes a quality testing laboratory to inform procurement decisions but also to ensure consistency in quality of oil produced and sold.
OVERVIEW OF IFC'S SCOPE OF REVIEW
IFC's environmental & social (E&S) appraisal took place from February 16th-20th, 2015, in Sfax and surroundings in Tunisia and included the following:-Meetings with CHO Company senior management, including CEO; Group Advisor and Chief Accountant; External Accountant; Chief Accountant and Human Resources; Business Development Manager; Commercial Manager; Sales & Marketing Executive, Western Europe Market Zone; Quality Manager; Environmental Manager; OHS and Security Manager; Warehouse Manager and Bulk Oil Procurement; Olive Residue Procurement; Site Manager, Olive Residue Extraction Plant at Chrarda; Site Manager, Cosmetic Production Plant; Quality Laboratory Manager; Site Manager, Bottling Plant and Refinery; Site Manager, Oil Press Plant; and Foreman, Olive Plantation.-Site visit to CHO Headquarters in Sfax including bottling unit, oil refinery, soap and cosmetics processing unit, oil warehousing and storage facility and oil quality testing laboratory; oil press located outside Sfax; olive orchard in El Aitha (Mahres-Sfax); and the Chrarda olive residue extraction plant located 70 km from Sfax;-Meetings with representatives from the Office National de l'Huile (National Oil Office) in Tunis: CEO, Commercial Manager, and Financial Director; and Director of Protected Areas at the Tunisian Forestry Service;-Review of technical documents provided by CHO, including detailed responses to IFC's E&S questionnaire, Environmental and Quality Policy, Certifications (ISO 14001, ISO 9001, ISO 22000, BRC Global Standard for Food Safety, IFS HPC, and IFS Food) and related supporting documentations, HACCP study and risk analysis, Integrated Management Manual, Risk hazard assessment and internal control procedure, SA 8000 checklist, occupational health and safety data, Supplier Evaluation Procedure, and External Communications Plan.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 3 - Resource Efficiency and Pollution PreventionPS 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
Of the existing olive oil production, which is bottled and sold by CHO, 70% was pressed and procured from over 200 third-party local oil mills. The relationship between CHO and these mills is based on yearly procurement contracts, without provision of any financial assistance although CHO provides technical advice on equipment and process improvements. As this contractual relationship is short-term, not exclusive and does not involved direct financial assistance, it is judged that CHO does not have reasonable commercial leverage over the operations of these third-party mills. Therefore, the 200 oil mills cannot be classified as "associated facilities" and for the purpose of this review, these will be considered as primary suppliers for which PS2 and PS6's related supply chain requirement applies.Issues related to PS5: Land Acquisition and Involuntary Resettlement are not expected as the Company has no plans to acquire more lands for olive tree cultivation or additional plant/operations. 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 Company's operational footprint. In the event that issues anticipated by these PSs arise, CHO 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 is expected to have limited environmental and social impacts which are expected to be site-specific and none is expected to be significant. 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, this is a Category B project in accordance with IFC's Environmental and Social Sustainability Policy. The project is designed to avoid, minimize and manage E&S risks and impacts of the Company's operations in compliance with Tunisian legal and regulatory requirements, IFC's Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Vegetable Oil Production and Processing) Environmental, Health and Safety (EHS) Guidelines.Key E&S risks associated with this investment are: (i) incomplete management plans and procedures for all the E&S risks and impacts identified throughout all of the Company's operations (including those related to the environment, food safety, and occupational health and safety); (ii) incomplete and decentralized monitoring process to assess the management effectiveness related to environmental, food safety, and occupational health and safety issues across all operational units and reporting to senior management for follow up action in case additional resources are needed; (iii) incomplete HR policy and procedures manual to manage HR practices across all its operations including seasonal employees; and(iv) absence of a supply chain verification mechanism to assess the occupational health and safety practices of third-party mill operations.
**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
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PS 2: LABOR AND WORKING CONDITIONS
CHO directly employs 404 employees (in addition to 40 in the farming operation), including 282 men and 122 women, and of which approximately 300 are fulltime (bottling and refinery plant, group administration, storage/warehousing, and soap plant), the rest being seasonal (olive oil press, extraction processing plant, and farm) given the nature of CHO's operations and the seasonality of harvesting and processing olives (November to March). All employees are hired from the surrounding regions.Human Resources Policies and Procedures. Although CHO currently does not have a stand-alone HR policy and procedures manual, principles related to the management of employees are stated in the group's overarching Quality Policy; CHO has a recruitment procedure; and CHO HR practices adhere to the requirements (related to hours of work, wages, overtime, compensation, and benefits for transportation and health care) as stipulated in the Collective Bargaining agreements, which the Company has signed. HR issues are currently overseen by the Human Resources Manager. CHO is also subject to regular inspections by the Ministry of Labor and no non-conformities have been noted. The HR practices of the bottling and refinery plant were reviewed in December 2012 against the SA 8000 standards, which confirmed compliance with national labor code and welfare requirements including remuneration, working hours, disciplinary practices, discrimination, freedom of association and right to collective bargaining, health and safety, forced and compulsory labor, and child labor. However, the review noted the lack of worker committees to interact with senior management, lack of sufficient documentation, and the need for improvement in areas related to health and safety. While CHO made progress in addressing issues related to the latter (see section on Occupational Health and Safety), there is no documented and comprehensive HR manual including all procedures for managing all HR aspects of CHO's operations.As part of the ESAP, the HR manager shall be responsible for developing and formalizing CHO's existing HR practices into a comprehensive HR policy and procedures manual that fully responds to the requirements of both Tunisian labor law and Performance Standard 2 to apply across all operations including seasonal employees, reflecting: values of diversity and dignity at work, code of conduct, term of employment and recruitment, hours of work, pay/salary grid, benefits and pensions, sickness pay provision, leave arrangements (annual, maternity), non-discrimination and equal employment opportunity, freedom of association, disciplinary and grievance mechanism, occupational health and safety, training and development, and separation/retirement. CHO shall ensure that these are communicated in a clear and understandable manner (in French and Arabic as necessary) to ensure that employees understand their rights under national labor and employment law.Working Conditions and Terms ofEmployment. CHO respects the requirements of the Collective Bargaining agreements, which the Company has signed and that apply to the following two sectors: 1) soap processing, refinery and oil extraction and 2) wholesale and trade. These specify wages and benefits; wage deductions; hours of work; overtime arrangements and overtime compensation; breaks; rest days; and leave for illness, maternity, vacation or holiday. Employee recruitment involves verification of identity and minimum age (18 years old), medical health check to confirm fitness to work, and absence of a criminal record. All employees receive a written contract and are declared to the national labor authority.Workers' Organizations. CHO supports the rights of employees to form or join workers' organizations including unions, if they chose to. Currently, only one union is active at one of the oil extraction processing sites because employees at this site were interested in joining. CHO management and HR representatives meet with union representatives on a regular basis. Employees at the other sites have the possibility to express their concerns at any time to CHO management or the HR representative who frequently visits all sites.Grievance Mechanism. CHO currently does not have a formal grievance mechanism to raise workplace concerns. Instead, small conflicts are resolved on the spot by supervisors and managers and if an issue persists, the HR representative gets involved. The most frequent complaints are typically around salary increases, currently set at 6% to keep up with Tunisia's inflation rate.As part of the ESAP, CHO shall establish and implement a grievance mechanism to raise workplace concerns and which is easily accessible to all employees. This will entail: i) involvement at appropriate level of management; ii) addressing concerns promptly; iii) understandable and transparent process that provides timely feedback to those concerned, without any retribution; iv) allow for anonymous complaints to be raised and addressed; v) not impede access to other judicial or administrative remedies that might be available under Tunisian law or substitute for grievances mechanisms provided through collective agreements.Occupational Health and Safety. CHO is committed to ensuring that all facilities are operated in a manner that is safe and healthy for all employees, although this is currently not reflected in a formalized policy. To this end and as required under National Law, CHO completed a Job Hazard Analysis by job function for each facility (see section on Identification of Risks and Impacts) to assess the physical, chemical, and biological risks that are inherent to the activities undertaken at each site. Based on the outcomes of the assessment, CHO has either eliminated, substituted, provided controls (including warning signage), and as required issued Personal Protective Equipment (PPE) so workers to that they are not exposed to unnecessary risk. CHO is currentlyin the process of reviewing its current health and safety practices against the requirements of the OHSAS 18001 standard on occupational health and safety. This will be undertaken in a phased approach over the next five years, starting with the bottling facility and refinery plant; followed by the soap processing facility; then the physical and chemical extraction plant at Chrarda; then the warehousing facility and oil press; and finally the physical extraction plant at El Amra.CHO has a process in place for recording and tracking work-related accidents and injuries as required under Tunisian law. All such cases are communicated directly to the HR unit but the OHS and Security Manager is responsible for analyzing all occurrences and determining the need for mitigation measures to address root causes and prevent re-occurrences. However, the data is currently only centralized for the bottling facility and refinery plant (16 recorded accidents and 193 lost work days in 2014), and no process is in place for systematically reporting the information from each operating site to aggregate it at the CHO group level.As part of the ESAP, CHO shall complete the review of its health and safety practices across all operating sites and develop the necessary Standard Operating Procedures reflecting the OHS measures in place including training (to be led by a competent individual and include employees who are directly affected by jobs that have inherent hazards associated with them) for effectively addressing identified physical, chemical, and biological risks across all sites. CHO shall centralize data collection of work-related accidents and injuries, aggregate data across all sites for analysis and follow up action, and consolidate data for integration into CHO group's annual EHSQ performance report.Supply Chain. CHO purchases pressed olive oil from a network of over 200 third-party mills and relies on external farmers for olive production for most of the needs of its own mill. There are no known cases or practices of child or forced labor in the olive sector in Tunisia. The occupational health and safety risks associated with mill operations are generally considered to be low as the moving/grinding parts of most modern equipment is typically enclosed. While CHO does not currently have a process in place for verifying the occupational health and safety risks and tracking the performance of all the mills in its supply chain, CHO typically visits at the beginning of the milling season most of the 200 mills that represent its primary supplier base to ensure good operating conditions and may provide advice on equipment improvements.As part of the ESAP, CHO shall also incorporate a review of the occupational health and safety practices of the mills that represent its primary supplier base (as part of the CHO Supplier Code of Conduct, as noted above in the Management Programs Section).
PS 3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION
Resource Efficiency. CHO operations are primarily powered by electricity from the national power grid and the largest energy needs (more than 50% combined) are for the refinery and the extraction processing plants (which operate seasonally (November to March). However, natural gas and diesel are also used, and biomass (from the olive residue extraction process) is used for heating boilers at the different sites. Water is sourced primarily from the municipal grid and the largest needs (more than 50% combined) are used as part of the process at the extraction processing plant and for washing olives at the Company operated oil press. However, overall, the largest water usage is at the farm, which is under drip irrigation and supplied from an on-site borehole (see Section on Water Consumption). Data on energy consumption (in kWh) by fuel type and water (in l) broken down by processing plant were not available during appraisal. To date, CHO has not benchmarked its energy and water consumption data against those of other similar industries to determine how efficiently the various processing plants within its operations are performing. CHO has undertaken a cleaner production audit of the refinery and established indicators to reduce energy and water consumption by 2% by the end of 2015.It is recommended that CHO benchmark the energy and water consumption data of all processing plants within its operations against those of other similar industries to determine how efficiently operations are performing in order to establish energy and water consumption reduction targets. Furthermore, it is also recommended that CHO also undertake a cleaner production audit of the extraction processing plant at Chrarda as this also accounts for CHO's largest energy and water needs.Greenhouse Gases. CHO is effectively implementing the use of alternative fuels to reduce greenhouse gas emissions by powering boilers at the oil extraction processing plants and the Company owned oil presses with biomass (dried organic matter from olive residue). CHO does not have a systematic monitoring process in place for quantifying reductions in greenhouse gas emissions as a result of this.As part of the ESAP, CHO shall monitor quantity of biomass used to track reductions in greenhouse gas emissions.Water Consumption. The most significant water consumption is at the farm, which is under drip irrigation (the most efficient type of water delivery system) and supplied from an on-site borehole, for which CHO has received the necessary authorization by the Ministry of Agriculture (to extract 19,000 m3 per year). As part of the process for granting the permit for the borehole, a water feasibility study was undertaken to ensure that sufficient ground water is available to support the farm's irrigation practices without adversely impacting other users. Water consumption is monitored through a meter at the borehole as well as separate meters for each of the farm's three sectors. Water consumption is recorded each month and reported to the local authorities in Sfax (for bill payment).Pollution Prevention. The various production processes across CHO's operations generate the following pollutants in the form of air emissions (from operation of 9 boilers; and fugitive emissions of hexane at the chemical extraction processing plant, which were estimated to be 110 mg/Nml); and a fleet of 18 trucks and tractors) and wastewater (from washing olives and decanting pressed olive oil; olive residue extraction process; process water from centrifuging refined oil; periodic cleaning of oil storage tanks; and regular cleaning and washing of equipment and floors of processing facilities). To avoid the potential impacts associated with improper management of these sources of pollution, CHO has adopted the following measures across its operations to avoid or reduce negative impacts: 1) all boilers undergo an annual maintenance inspection to ensure that they are operating efficiently and safely; 2) air emissions were tested at the chemical oil extraction processing plant once to review effectiveness of air emissions control system; 3) given the wastewater characterization, on-site wastewater storage tanks have been installed at all sites, which is periodically collected by a licensed contractor and disposed at an authorized processing facility for further treatment; and 4) on-site wastewater treatment facilities have been installed at both oil extraction processing plants for chemical (neutralization), physical (decanting and sand filter) and biological treatment prior to reuse in the extraction process or discharge to retaining ponds. Consequently there is no discharge of wastewater to surface waters and CHO complies with all local regulations on wastewater management and disposal.As part of the ESAP, CHO shall establish a monitoring procedure to periodically measure: 1) air emissions from the two boilers at CHO and those at the chemical oil extraction processing plant at Chrarda to ensure consistency with Tunisian national legislation or WBG EHS Guidelines for point source emissions to air (PM10: 50mg/Nml; NOx: 460mg/Nml; SO2: 2,000mg/Nml) whichever one being the most stringent and fugitive emissions of hexane at the chemical extraction processing plant to ensure consistency with WBG EHS Guidelines for hexane emissions (100 mg/Nml); and 2) volumes of wastewater generated and disposed by each processing plant.Wastes. The various production processes across CHO's operations primarily generate the following non-hazardous waste streams, which are typically characterized as organic waste: i) olive residue after the first pressing, ii) remaining olive residue and pit after the second pressing (physical or chemical extraction process), iii) olive oil sludge after undergoing refining, and iv) burned biomass (dried olive residue used to power boilers). The olive residue undergoes further drying and is then used as a source of biofuel either directly in CHO's operations or sold for export. The olive oil sludge is used as a key ingredient in the soap making process. Burned biomass residue is disposed at municipal landfill.Additional forms of non-hazardous waste include: i) defective glass, metal and plastic food packaging containers from the bottling plant; ii) general packaging materials such as cardboard, plastic film and crates; iii) office waste such as paper and printer cartridges; and iv) household waste from on-site kitchen. These wastes are collected by a licensed contractor and disposed at an authorized landfill in Sfax.CHO operations also generate limited quantities of hazardous waste, which entail: i) chemical products and residues from the on-site laboratory for product quality testing; ii) machinery maintenance products, containers, and contaminated rags; and iii) process by-products such as acids. These wastes are collected and stored on site at designated processing plants until an adequate disposal solution is found as currently there is no authorized facility for disposal in the area. For the chemical products and residue from the quality testing lab, the necessary documentation is completed to track the waste from the point of origin to storage. Currently, the Company stores 262 liters of such wastes and has a total storage capacity of more than 1000 liters, which is sufficient until an alternative solution is found, which is anticipated in 2016 when it will be possible to send these by-products for treatment by a specialized center managed by the National Agency for Waste Management.As part of the ESAP, CHO shall formalize waste management procedures for all waste streams including proper handling and storage, record-keeping on quantities, and work to identify alternatives for disposal such as recycling (for example, for glass, metal, plastic and paper) and distillation or neutralization for certain chemicals.Hazardous Materials Management. CHO uses the following types of hazardous materials in its operations: i) diesel used for back-up generators (when required); ii) sodium hydroxide (soda), phosphoric acid, and sulfuric acid used in the soap manufacturing and refinery processes; and iii) hexane(highly flammable), which is reused in the process after condensation at the chemical extraction processing plant. Diesel was stored in above-ground storage tanks with appropriate secondary containment structures consisting of walls capable of containing more than 110 percent of the tank volume in the event of a leak. However, instances of poorly maintained secondary containment structures or that they contained discarded materials were observed. Soda and acids are delivered by suppliers in bulk containers and the transfer of products into the processing circuit is undertaken via dosing pumps to reduce the likelihood of spills. Hexane is delivered in container trucks and transferred to on-site storage tanks, according to required industry safety procedures.As part of the ESAP, CHO shall formalize hazardous materials management procedures for all materials including proper handling, labeling, and storage including good maintenance of secondary containment structures and integrity of storage containers; spill prevention and steps to follow in case of an accidental spill; record-keeping on inventory; and availability of Material Safety Data Sheets.Pesticide Use and Management. CHO has in place the basis of an integrated pest management (IPM) approach at the olive farm. The application of pesticides at the CHO farm is rarely undertaken (if at all) and the farm has not experienced any cases of pest infestations. While insect pests do occur in Tunisia, outbreaks typically appear to be infrequent given arid growing conditions of olive trees. This reduces the need for wide-scale pesticide application and if it is required, it strictly regulated and entails the use of crop protection products that have been approved by the Tunisian Ministry of Agriculture (and Tunisia subscribes to the standards of the FAO/WHO Codex Alimentarius (Codex) since 1965). In the event wide-scale pesticide application is required (only in extreme cases where there are threats of large infestations), representatives from the Regional Centers of the Agricultural Development visit the olive orchards to inspect the insect traps that are located around the orchard and to estimate the damage threshold, which is used as a basis for deciding whether to apply treatment or not. If there is a need to treat, aerial spraying campaigns are launched (at the expense of the state), while avoiding those parcels that are listed as organic producers. For these parcels, biological treatment is undertaken.There is a big push in Tunisia for organic production, where currently around 285,000 ha are already organically certified land. According to government plans, targeted support was to raise this figure to 500,000 ha by 2014, with olive plantations being a major portion. Already over 40% of organic land is planted with olive trees with 100,000 trees being certified organic by certification organizations like BCS, Ecocert, ICEA or Lacon, and around 115,000 ha of olive plantations (in 2008) were no longer treated with chemical fertilizers and pesticides. This is generally the case for 90% of all of Tunisia's olive orchards. As part of its procurement process, CHO systematically tests all olive oil for pesticide residue and phthalates and would reject any such contaminated product.CHO has retained the services of an external contractor (Pest Control) approved by the Ministry of Health to apply preventive treatment against potential insect or rat infestations across processing plants. This entails monthly inspections and setting up UV lights and traps. CHO has a list and the Material Safety Data Sheets for the products used to fight insects, cockroaches, and rats.
PS 4: COMMUNITY HEALTH, SAFETY AND SECURITY
Food Safety Impacts and Management. As stated in the section Identification of Risks and Impacts, activities at CHO's bottling facilities are performed in accordance with the principles and practices of Hazard Analysis Critical Control Points (HACCP).This reduces risk related to hygiene and food safety and mitigates potential impacts to the community. As part of HACCP requirements, the design of the bottling facility is organized such that products move from "dirty" to "clean" areas to avoid contamination and is undertaken by pumping olive oil stored in bulk tanks to automated bottling machines, thus removing the potential for contact between workers and the finished product. Procedures are in place for ensuring daily cleaning of equipment and removal of solid waste. All staff have received training on food safety issues and have been issued the necessary work clothes (clothes, gloves and hair coverage) commensurate with the extent of contact with the finished product.Emergency Preparedness and Response. CHO facilities are located in industrial zones or in isolation from human settlements. For each of the facilities, CHO has undertaken a review of significance of risk and likelihood of occurrence, and for three out of five sites (the bottling facility and refinery plant, the chemical extraction site at Chrarda, and the soap manufacturing plant), CHO has already developed specific procedures for responding to emergencies under various scenarios.Security Personnel. CHO employs its own guards to monitor unauthorized access to CHO operational units, fully in compliance with Tunisian National Law.
PS 6: BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES
Sustainable Management of Living Natural Resources. CHO owns a 100-hectare parcel of land, which was previously unused land purchased as four separate parcels from private owners in an agriculturally zoned area in El Aitha (Mahres-Sfax), and which was planted with olive trees in 2011. The farm follows sustainable agricultural practices: it was set up with a drip irrigation system and currently the only form of fertilizer that is applied is organic waste. As is generally the case for olive orchards across Tunisia, application of pesticides is rarely undertaken (if at all as noted above) and only as necessary based on the detection of pests in traps set up around the orchard. Although CHO is committed to applying good international industry operating principles and the farm is already implementing sustainable management practices, this has not been certified by an independent accredited third party.As part of the ESAP, CHO shall undertake a review by an independent accredited third party of its agricultural management practices at the Company owned and operated farm in accordance with organic agriculture requirements and receive independent verification or certification.Supply Chain. Tunisia's olive resources are estimated at over 65 million olive trees, grown on 1 800 000 ha (accounting for 34% of Tunisia's total cultivated land) and of which 75 000 ha is dedicated to certified organic crops. Close to 90% of cultivated olive acreage is located in the central and southern regions of Tunisia. All olive plantations in Tunisia are located on consolidated agricultural lands and agricultural zoning as well as the cultivation of olive tree are strictly regulated under Tunisian law. Tunisia's current agricultural expansion strategy is based on the following priorities: renewal of unproductive, senescent plantations; changes in the tree density of plantations under rainfall watering regime; increase in the share of irrigated plantations; and introduction of new, more productive local varieties adapted to soil and climactic conditions. In the event of additional expansion of olive plantations, this would take place on existing agricultural and/or degraded lands rather than into natural/critical habitats, which are managed and protected under Tunisian law.CHO annually purchases olives (34,752 tons, equivalent to 7,872 tons of pressed oil)and pressed olive oil (34,668 tons) from approximately 400 oil presses from across all olive-producing regions of Tunisia of which a core of about 200 presses supply 70% of CHO's total need for pressed olive oil. CHO maintains a procurement log book (for olives at the olive press and for olive oil at the warehousing facility) identifying regions of origin and for certified olives and olive oil, a system is in place allowing for traceability all the way back to the farm of origin. However, CHO has not adopted as best practice a Responsible Sourcing Policy.As part of the ESAP, CHO shall adopt as a best practice a Responsible Sourcing Policy and seek to purchase an increasing amount of its olives and olive oil from certified suppliers.
