Sucafina Coffee in Rwanda

Sucafina Holding S.A of Luxembourg (Sucafina) is seeking coverage from MIGA for the risks of Expropriation, War and Civil Disturbance and Transfer Restriction and Inconvertibility. This is for its equity and quasi-equity investments, made through its subsidiaries Millco Ltd and Cofco Ltd, into Rwacof Exports Ltd (Rwacof) and Rwanda Estates Ltd (REL), (together the ‘Project Enterprises’ (PEs) or ‘Rwanda operations’).

Rwacof is a coffee exporting enterprise with an Export Operation License from the National Agricultural Export Development Board (NAEB) of Rwanda, and its activities comprise procuring, processing and exporting arabica coffee. Its activities also include small-scale coffee roasting to supply a coffee shop in Kigali which it operates under its Farmer Hub program. Rwacof leases a dry mill in Kigali, 30 wet mills (Coffee Washing Stations or CWSs) and agricultural equipment from REL, as well as 4 other CWSs from a third party, Caferwa Ltd. REL is a real estate and agricultural equipment leasing company, which, in addition to the assets that it leases to Rwacof, owns land, seven commercial houses, vehicles, non-agricultural machines and four warehouses. The warehouses are in Kigali’s Special Economic Zone (SEZ) and REL leases them to other companies.

The 34 CWSs which Rwacof operates represent ~10% of all CWSs operating in Rwanda. Annually, Rwacof can process up to 17,000 metric tons (MT) of coffee cherries and export ~8,000 MT of green coffee. The PEs operate from their headquarters in Kigali where their facilities include the dry mill, bonded and non-bonded warehouses, security station, offices, cafeteria, maize flour processing section, vehicle parking and loading area. Whilst Rwacof is not planning any expansions of the dry mill, it plans to increase its efficiency and capacity by adding a new warehouse, renovating its intake and adding new hulling machines.

Among the 34 CWSs, 19 are in Western Province, 7 are in Southern Province, 6 are in Eastern Province, and 2 are in Northern Province. On average, each CWS occupies an area of 4.8 acres and typically comprises cherry processing units, drying beds, staff accommodation, offices, storage (warehousing), staff and public washrooms, wastewater treatment unit, pulp composting pits, waste disposal area, security sentries, water supply and storage tanks, chemical storage, equipment storage and back-up generator housing.

Rwacof predominantly sources coffee cherries directly from over 36,000 independent smallholder farmers and independent cooperatives who supply approximately 60% of cherries. The remaining 40% is procured from third party CWSs under contract. The main coffee harvesting season occurs between February and June whereas in some areas a second shorter harvest occurs between November and December. Rwacof has valid certifications to export coffee under Café Practices, FairTrade, Impact, Organic and Rainforest Alliance standards (hereafter ‘responsible sourcing standards’ or ‘certification standards’).

Logistically, Rwacof’s operations commence with suppliers and its site collectors delivering coffee cherries to CWSs. Transportation of those deliveries is done by foot, bicycle, motorcycle or vehicle. At the CWSs, processing cherries into parchment involves certification sorting, floating, sorting, weighing and data entry, pulping, fermentation, washing and grading, sun-drying and storage.

Rwacof transports parchment from the CWSs to the dry mill through its fleet of vehicles. This also involves using third-party maritime transport on Lake Kivu to transport parchment from Cyebumba CWS. At the dry mill, Rwacof processes fully washed, honey anaerobic and natural parchment into green coffee for export. This entails weighing, sample analysis, storing, destoning hulling, silver skin removal, size grading, weight grading, color sorting, sample analysis, bulking and bagging off, and sample analysis and inspection by NAEB. Therefrom, preparations for export take ~15 days after which third parties transport the green coffee to Mombasa (Kenya) or Dar Es Salaam (Tanzania) Ports over a period of ~10 days.

Rwacof and its partners provide extension services and farmer support programs to enhance productivity and farming practices in its supply chain. The programs encompass providing farm management loans to allow farmers to invest in, or improve, their farms during off-seasons. Additionally, Rwacof provides inputs such as agricultural lime and fertilizers to its best performing farmers whereas its agronomists conduct soil testing and farm inspections to inform the extension services. Rwacof also has a research centre at Karenge CWS which aims to solve, or support solving, agronomic challenges in its supply chain. 

This is a Category B project according to MIGA’s Policy on E&S Sustainability (2013). The Project is expected to have potentially limited adverse E&S risks, which will be few, site-specific, largely reversible, and readily addressed through mitigation measures.

Key E&S risks associated with this Project relate to E&S Management System (ESMS) implementation and scope, management of labor and working conditions (including occupational health and safety (OHS), workers organizations and unions) in the PEs’ facilities, solid and liquid waste management, water consumption, security management, community health and safety, and supply chain risks relating to land use practices, pesticide and fertilizer use, deforestation, labor conditions, child and forced labor, and OHS. These risks were assessed against MIGA’s Performance Standards (PSs) and relevant World Bank Group (WBG) Environmental and Health and Safety Guidelines (EHSGs). Contextual risks of coffee production in Rwanda were also reviewed using the Global Map of E&S Risks in Agro-commodity Production (GMAP). According to GMAP, the highest risks in coffee production in Rwanda are use of harmful child labour and forced labour, impact on protected areas and presence and impact on high or unique freshwater biodiversity. This ESRS discusses the Project’s measures for managing those risks.

While all PSs are applicable to this investment, current information indicates the Project will have impacts which must be managed in a manner consistent with the following PSs:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts
• PS2: Labor and Working Conditions
• PS3: Resource Efficiency and Pollution Prevention
• PS4: Community Health, Safety and Security
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources 

The Project does not trigger, the following PSs:

• PS5 Land Acquisition and Involuntary Resettlement: All Rwacof and REL properties were acquired through willing buyer/willing seller transactions.
• PS7 Indigenous Peoples: No groups among stakeholders and potentially affected communities are Indigenous Peoples.
• PS8 Cultural Heritage: The Project comprises existing facilities whose development did not encounter nor impact any physical cultural resources.

In addition to the WBG General EHSGs (2007), the WBG EHSGs for Perennial Crop Production (2016) and Food and Beverage Processing (2007) will be applicable.

MIGA’s E&S due diligence (ESDD) of this Project included reviewing the following documents:

• Sucafina Environmental and Social / Human Rights Management System (ESMS) Manual, 2021.
• Sucafina Environmental, Health and Safety Policy, 2020.
• Rwacof Exports Ltd Human Resources (HR) Manual, 2021.
• Rwacof Dry Mill and CWS Details and Spatial Data, 2024.
• Rwacof Coffee Processing Standard Operating Procedure (SOP), 2024.
• Bureau of International Labor Affairs, Child Labor and Forced Labour Reports, Rwanda, 2022.
• IFC and WWF Global Map of Environmental and Social Risks in Agro-Commodity Production, 2024.
• Global Forest Watch, (2014). World Resources Institute. Accessed on July 29, 2024.
• Rwacof Data of Mapped Farms, 2024.
• Rwacof Internal Management System Manual, 2024.
• Rwanda Regulation No. 004/R/SAN-EWS/RURA/2016 Governing Decentralized Waste Water Treatment Systems, 2016.
• Rwanda Law No. 49/2018 of 13 August 2018 Determining the Use and Management of Water Resources in Rwanda.
• Rwanda Law No. 66/2018 of 30 August 2018 Regulating Labour in Rwanda, 2018.
• Rwanda Regulation No. 007/R/SAN-EWS/RURA/2021 on Governing Solid Waste Collection and Transportation Services, 2021.
• Ministerial Order No. 001/MoE/24 of 02/04/2024 Relating to Water Resources Use Permit.

In addition to reviewing the above documents, MIGA’s ESDD included virtual meetings with project staff and a site visit to project facilities from 9th to 17th May 2024. The site visit entailed meetings with the Project’s staff with E&S responsibilities. Those meetings comprised discussions on, and reviews of, the Project’s operations, and E&S documentation and performance. The ESDD also included meetings with the Ministry of Agriculture and Animal Resources (MINAGRI), and representatives of farmers and local communities at Nyamiyaga, Nyamyumba, Kayumbu, Karenge, Rwinyoni, Macuba, Karambi and Mubuga CWSs.

MIGA’s ESDD considers the Project’s E&S risk management and documentation to identify gaps between them and MIGA’s requirements. Where necessary, corrective measures intended to close these gaps within a reasonable period are summarized in this section and in the E&S Action Plan (ESAP) attached to this ESRS. Through the implementation of those measures, the Project is expected to operate in accordance with the PSs.

Key potential E&S issues associated with the Project are summarized in the paragraphs herein.

mpacts 

PS1: Assessment and Management of Environmental and Social Risks and I

Environmental and Social Assessment and Management System 

Sucafina has a group-level E&S Management System (ESMS) which applies to its operations in Rwanda, and establishes E&S operational requirements for the PEs. The ESMS is documented through a manual whose provisions aim to align operations with Sucafina’s overarching EHS Policy. The ESMS’s references include IFC’s guidelines on ESMS (Performance Standards) and group policies such as Sucafina’s Code of Conduct (CoC) and Supplier CoC. The PEs adopt the group policies and procedures, and where necessary customize them to their operational contexts. Together with the EHS Policy, the manual’s provisions align with PS1 requirements. Further, Rwacof has an Internal Management System (IMS) Manual for its operations which supports implementation of the ESMS. To address REL’s unique operations at the SEZ warehouses and residential houses, the PEs will apply the ESMS to the operations by including them in the scopes of annual EHS audits and the IMS (ESAP Item #1). 

Policy

Sucafina has a group-level Environmental, Health and Safety (EHS) Policy, which applies to all its businesses and operations, including the PEs. The policy sets the group’s EHS commitments and vision, and is communicated through notice boards and posters throughout the company, and on Sucafina’s website (https://group.sucafina.com/files/4216/3059/0445/EHS__Sustainability_Policy_v.3_.pdf).  

Sucafina’s Sexual Harassment (SH) Policy outlines its commitment to providing a safe environment for all its employees, free from discrimination and harassment, including SH. The policy identifies sanctions against SH to comprise disciplinary action. Definitions of SH in the policy include physical, verbal and non-verbal conduct and promotion and/or distribution of sexual content. The policy allows reporting complaints and allegations of SH to the HR Department or through the Speak Up grievance mechanism (https://speakup.sucafina.com) which allows anonymity. The SH policy requires training employees on its content as part of their induction whereas the HR Department is responsible for monitoring, evaluating and reporting on its implementation. This entails reporting on the number of incidents and their outcomes.

Identification of Risks and Impacts   

Rwacof identifies and assesses risks and impacts of its operations through two types of risk assessments. The first comprises internal risk assessments under the ESMS and IMS, and the second is in its supply chain through internal and external assessments in line with its certification standards and Labour and Human Rights Procedure. This review covers the supply chain risk assessments under PS2. The assessments required by the ESMS and IMS include annual country risk assessments and quarterly task-based risk assessments, whose outputs are risk registers as per the ESMS. The task-based risk assessments apply to all activities likely to cause injury or loss, including contractor works. The IMS further provides for assessing risks relating to third parties and categorizing them by magnitude. This determines the frequency and methods of risk assessment applicable to the third parties. Rwacof’s risk assessments and facility-level monthly inspections provide for continuous risk assessment and development of mitigation measures.

Rwacof assesses the operational aspects of CWSs it intends to lease. This ascertains their alignment with its requirements and results in a CWS Assessment Report for decision-making. Rwacof will update this practice into a procedure for assessing the E&S aspects of third party CWSs. This will entail screening their locations for E&S risks and assessing their E&S performance against national law and the PSs. In addition, Rwacof will also include maritime transport and the coffee shop in the scope of its risk assessments (ESAP Item #2).

REL does not currently undertake risk assessments of its operations, and therefore, will conduct a risk assessment in line with PS1 under ESAP Item #1, and develop and maintain a risk register that is specific to its operations, including the SEZ warehouses and residential houses.

Management Programs 

Rwacof has an EHS Plan which includes management goals, objectives and actions on safety, health, environment, human rights and security. The IMS further entails an Environmental Management Plan (EMP) for the 2023 - 2026 period for Rwacof. The EMP covers the topics of OHS, agrochemicals, fertilizers, waste, soils, energy, water and biodiversity. The PEs will report to MIGA annually on the implementation status of all management and monitoring actions, including corrective and improvement actions from all ESAPs, audits, inspections and risk assessments, and for each specific facility and/or operations.

The group-level ESMS requires the PEs to prepare legal registers with compliance requirements for all operations. The PEs will provide evidence of fulfilling this requirement, in line with the ESMS and PS1 (ESAP Item #3).

Organizational Capacity 

E&S responsibilities applicable to the PEs cascade from group and regional personnel to country-level personnel. A Global ESMS Committee, which convenes online, holds overall responsibility in East Africa as per the ESMS’s provisions. A Regional EHS Coordinator provides oversight for Sucafina’s operations in East Africa whereas a Country ESMS Committee provides overall EHS oversight in Rwanda. Complementarily, a Staff Representative Committee (SRC) provides oversight and leadership on HR functions. 

Among the PEs’ staff, a Certification and EHS Coordinator leads EHS functions with support from the HR Manager and Gender Lead. A Staff Committee and Grievance Committee form part of EHS staff at headquarters. At the CWS-level, CWS Managers hold overall responsibility for EHS functions and report to the Certification and EHS Coordinator. Six thematic committees support CWS Managers. These are General Workers Committee, Assess and Address Committee, Workers’ Grievance Committee, First-Aid Committee, Gender Committee and EHS Committee. 

The group-level ESMS provides for training through an E&S/Human Rights Training Procedure (EHSP 008), and exclusive requirements for Contractor Induction, Induction Training and Management of Change. At the operational level, the HR Manager, Certification and EHS Coordinator, Gender Lead and CWS Managers facilitate training on EHS and social aspects. 

Emergency Preparedness and Response  

Sucafina’s group-level ESMS proscribes a framework for developing Group and Country Specific Emergency Preparedness and Response Plans (EPRPs). Rwacof’s EPRP includes response guidance for emergency scenarios relating to accidents, fires, robbery, poisoning, undue contact with chemical substances and natural hazards (floods, earthquakes and landslides). Rwacof provides support to communities responding to disasters and trains farmers on mitigating natural hazards. Rwacof reports conducting its first emergency drills in 2024. As part of the ESAP and ESMS, Rwacof will update the Country Specific EPRP to align with PSs 1 and 4. This is by including procedural and responsibility provisions, stakeholder involvement in response planning, and emergency scenarios of spills and uncontrolled effluent discharges, equipment failure and other natural hazards such as storms and strong winds (ESAP Item #4). 

As part of its emergency preparedness measures, Rwacof’s EHS Plan requires installation of fire detection systems, establishing emergency teams, developing emergency response plans, scheduling escape and evacuation arrangements for persons living with disability (PWDs), providing fire-fighting appliances and conducting emergency drills annually. In addition to designating assembly points, Rwacof provides training and raises awareness internally on emergency response. 

Monitoring and Review  

Rwacof’s EHS Plan guides implementation and performance monitoring of E&S management goals, objectives and actions. Simultaneously, the IMS identifies monitoring information sources for hazards under the topics of effluents, contamination, hazardous materials, biodiversity, OHS and environmental issues sensitive to public opinion. Rwacof collects monitoring data through internal and external audits, inspections, risk assessments, meetings, internal standardized forms, effluent sampling and testing, third-party self-reporting, and using information systems to manage supply chain data and monitor deforestation risk. 

Rwacof’s updates on the IMS under ESAP Item #1 will include enhancing its E&S monitoring to align with the requirements of the WBG EHSGs and PSs. This is on the aspects of OHS, indoor air quality (dry mill), noise (dry mill), water quality, effluent quality and solid waste (See PSs 2 and 3 for more details).

Stakeholder Engagement   

Rwacof has a Stakeholder Engagement Plan (SEP) and leads the PEs’ engagements with stakeholders who include government agencies, cooperatives, farmers and community members. This is through community visits, weekly village meetings, meetings with farmers (including farmers’ parties (Ubusabane) and farm visits by its agronomists), public consultative meetings and participating in monthly community service days (Umugunda). Other interfaces include Rwacof’s call center, hotline and suggestions boxes, and Sucafina’s website, email and Speak Up channel.

Rwacof maintains good relations with stakeholders, including farmers who prefer approaching its staff for in-person discussions on any issue. Even as Rwacof maintains diverse interfaces of engaging with stakeholders, the PEs will document all engagements with stakeholders and maintain consultation records. As part of their annual reporting to MIGA, the PEs will include details and outcomes of their consultations with stakeholders.

External Communication and Grievance Mechanisms

Sucafina’s group-level ESMS designates country-level external communication responsibilities to the Country EHS, Regional EHS and Country Manager. The ESMS requisites handling external communications through a Communications Procedure (EHSP 015) whilst communicating to suppliers through the Supplier CoC’s provisions. The ESMS also provides for posting public statements on E&S issues on Sucafina Group’s website and disseminating them to stakeholders. Sucafina posts its annual sustainability reports on its website (https://group.sucafina.com/sustainability/) whereas Rwacof communicates with stakeholders through meetings, notice boards, and its hotline and call center. The PEs will develop and maintain external communication registers for their communication modes across all levels of the enterprises. Further, they will include a summary of external communications as part of their annual reporting to MIGA.

Sucafina’s group-level ESMS requisites managing social issues adequately and in line with its EHS Policy. This predicates a procedure for handling grievances (EHSP 013) as part of the ESMS. In practice, Rwacof has a Grievance Mechanism and Remediation Protocol (GMRP) in alignment with its Rainforest Alliance certification. Rwacof methods of receiving external grievances include the call center, Sucafina’s Speak Up channel, suggestion boxes and Grievance Committees. Rwacof also allows external parties to raise grievances directly to CWS Managers. The Speak Up channel, which a third-party manages, and suggestion boxes allow for anonymity.

Rwacof’s Assess and Address Committees are responsible for remediation actions whereas grievance committees manage external grievances and provide for escalation, hierarchically, to CWS managers, and a global grievance committee. The remediation protocol further allows escalation to the group-level grievance committee and Rainforest Alliance’s grievance committee. Rwacof discloses information about its grievance process through posters, Sucafina’s website and at meetings with farmers and community members. Both enterprises will ensure the GMRPs document and manage any verbal issues and grievances, and all interfaces remain available or functional.

Sucafina’s Labour and Human Rights Procedure, and SH Policy, and Rwacof’s HR Manual provide definitions of GBV and SH which they prohibit. The PEs will develop exclusive incident reporting and investigation protocols for allegations of project-related SH and Sexual Exploitation and Abuse (SEA) to align with survivor-centered good practice (ESAP Item #5).

Ongoing Reporting to Affected Communities

At group level, Sucafina provides periodic reports on E&S issues by posting its annual sustainability reports on its website (https://group.sucafina.com/sustainability/). In-country, Rwacof reports periodically to affected communities and farmers through village, community and public consultative meetings. 

PS2: Labor and Working Conditions

In July 2024, Rwacof’s and REL’s workforces comprised 3,667 (64% Female) and 3 (33% Female) employees, respectively. Expatriates comprise 3 employees at Rwacof and 1 employee at REL. Several of Rwacof’s employees fulfill responsibilities in both PEs. Temporary workers comprise majority of Rwacof’s workforce at 3,500 (95.4% of total, 65% Female), and on average, each CWS hires 61 temporary workers during the coffee season and 1 temporary worker during the off-season. The CWSs also hire site collectors to source coffee from farmers, including with more locational convenience for farmers. None of the PEs are planning to increase their workforce as Rwacof also has an ongoing cessation on recruitment.

Working Conditions and Management of Worker Relationship

Sucafina’s Labour and Human Rights Procedure applies to all its businesses, suppliers, contracts, subcontractors, freelancers, members of the public and other parties engaging in its business (including temporary workers). The procedure sets organizational expectations on managing risks relating to forced labour, child labour, discrimination, freedom of association, collective bargaining, just and favourable remuneration, and OHS. In line with the procedure, Rwacof has a HR Manual which provides policies, procedures and management rules in accordance with Law No. 66/2018, and which aligns with PS2.

The HR Manual requires its annexure to employment contracts and for the contracts to stipulate, among others, contract nature and duration, job nature, probation and notice period, salary, allowances and deductions, date and place of payment, overtime remuneration, labour collective conventions and internal rules and regulations. This is in accordance with Ministerial Order 7-MO19 of 2020. Rwacof’s employee contract template includes the information and thus, addresses providing workers with information on their rights relating to working hours, remuneration, overtime and benefits. Rwacof issues contracts to all its permanent employees, whereas temporary workers sign employment forms for their engagement periods, usually a season. 

The Labour and Human Rights Procedure and HR Manual allow employees to form and join unions even though none of the PEs’ employees are members of any unions. Simultaneously, the PEs are not subject to any collective bargaining agreements. However, Rwacof’s employees elect a SRC which includes a staff representative who presents employees’ issues to management on a regular basis.

The PEs are not planning any retrenchments in the foreseeable future, whereas none of them are subject to any ongoing court cases relating to employment or labour aspects.

Rwacof provides accommodation to its employees at each CWS. The housing arrangements typically comprise sharing a single housing unit among permanent and/or fixed-term CWS employees. Rwacof will assess the alignment of its accommodation provision with the requirements of national law, MIGA PS2, and, as applicable, the Workers Accommodation: Processes and Standards Guidance Note by IFC and EBRD (ESAP Item #6).

The Labour and Human Rights Procedure, Group Code of Conduct and SH Policy define employee behavioral expectations and consequence management at a group-level. Together with the HR Manual, they define processes of handling violations and internal grievances. Internal grievance channels available at Rwacof include line managers, HR Manager, Speak Up (email and telephone), suggestion boxes, and Worker Grievance Redress Committees. The Speak Up interface and suggestion boxes allow for anonymity. 

The HR Manual includes definitions of behaviour it classifies as SH whereas it identifies SH and GBV among behaviour it defines as gross misconduct under the Labour Code of Rwanda and provides corresponding disciplinary actions. This is in addition to prohibiting discrimination on the basis of sex and gender, and in connection, any forms of harassment. The manual outlines Rwacof’s commitment to encourage reporting harassment and maintaining confidentiality when handling allegations as well as providing support and protection to survivors. It includes processes for receiving complaints, conducting investigations, and communicating results of investigations, and any other relevant measures, to survivors. 

 The PEs will update the Group Code of Conduct to reference the Sexual Harassment Policy explicitly (ESAP Item #7). Further, the PEs will complement their risk framework by developing pre-training and post-training assessments for GBV training activities as part of ESAP Item #1.

Protecting the Work Force 

The PEs do not employ workers under the age of 18 in accordance with national law and PS2. The PEs verify employees’ ages on recruitment through their national identification cards. The PEs also do not employ any form of forced or compulsory labour according to national law, PS2, and the Labour and Human Rights Procedure, and Group Code of Conduct.

Occupational Health and Safety  

Rwacof holds overall responsibility in all facilities it occupies or operates, while REL is responsible for providing risk management inputs related to the facilities that it owns, such as maintenance, and providing and servicing fire extinguishers.

During normal operations, Rwacof’s OHS risks relate to noise, dust, air emissions, moving parts, manual handling, slippery surfaces, inclined surfaces, heat and cold stress, flammable substances, chemical hazards (hazardous materials), ergonomic stress, repetitive movements, remote and lone work, elevated objects, road and maritime traffic, working at height, working over water and electric hazards. Excluding the facilities Rwacof operates, REL’s OHS risks in the other facilities include electric hazards, working at height, slippery surfaces, moving parts and equipment, and road traffic.

Rwacof’s risk assessments and mitigation measures described under PS1 encompass OHS risks and include Job Hazard Analyses which cover all its facilities and workers. Rwacof’s Gender Lead also integrates gender considerations in the assessments whereas a sample of training records indicate that training covers OHS aspects. Rwacof will supplement its OHS measures by developing a procedure for mitigating risks relating to lone and remote work in its operations as part of the IMS updates comprising ESAP Item #1. Those procedures will integrate and/or formalize existing mitigation measures.

Rwacof will enhance its OHS monitoring, as part of ESAP Item #1, by updating the IMS to collect and maintain data on working hours, first-aid injuries, lost-time injuries, lost workdays, near-misses, incidents, accidents and fatalities. 

 Rwacof’s updates on E&S monitoring under PS1 will encompass monitoring indoor air quality at the dry mill and flour section in line with the group-level ESMS, and PSs 2 and 3. Noise sources from Rwacof’s operations include hulling machines at the dry mill and milling machines in the flour section. Rwacof provides PPEs to staff working in those sections whereas they also work in shifts to reduce exposure. Rwacof is planning to install equipment with low noise ratings, and its updates on E&S monitoring will include noise monitoring at the dry mill (See PS1).

The group-level ESMS includes an Incident Investigation and Reporting Procedure (EHSP 004) which describes minimum requirements for managing incidents. The procedure’s scope includes OHS and environmental incidents whereas its response requirements extend the group-level ESMS’s provisions on emergency response. 

Rwacof has a medical surveillance program which covers all its employees. The program requisites mandatory surveillance for staff with higher exposure to risks. Such staff include plant workers at the dry mill and those who use phytosanitary products. Rwacof also provides medical and workmanship insurance for its employees and their direct family members. 

Workers Engaged by Third Parties

The PEs engage third parties to provide security, staff transport, equipment supply and installation, consumables, coffee transport and shipping, and construction and maintenance works. Rwacof’s labour and OHS controls for third parties include obligating compliance through contract clauses in addition to inspections, auditing and self-evaluations. Rwacof scales those controls according to the risk profile of the third-party services or contract. 

Rwacof provides induction training to its third parties during their onboarding. During service delivery, Rwacof conducts monitoring and inspections for quality control and EHS performance. Rwacof will ensure its EHS training procedures include all third-party staff, and conducting induction training on changes among the staff.

Supply Chain 

Rwacof relies on 36,000 independent smallholder producers in rural areas to supply coffee cherries to the CWSs. According to the GMAP Tool, risks in the coffee supply chain in Rwanda include child and forced labour, and OHS concerns, including manual handling, pesticide use and exposure to extreme temperatures. Contributing factors to these risks include poverty, which affects farmers’ capacity to hire labour and implement safeguards, and reliance on children for farm work due to lack of affordable transport and the need for assistance among the elderly.

Sucafina’s Labour and Human Rights Procedure and Supplier CoC prohibit employing harmful child and forced labour, and require suppliers to provide a safe and healthy working environment. Rwacof conducts risk assessments on its supply chain, and develops mitigation measures, through inspections, internal audits and its Supplier Social Audit Checklist. The assessments focus on risks of child and forced labour, deforestation, labour and working conditions, human rights, pollution and OHS. Further, the assessments are also among the requirements of the responsible sourcing standards whose certification processes entail training farmers on related topics as well as gender equality, GBV and good agricultural practices (GAP). The responsible sourcing standards provide market-driven mitigants on supply chain risks since they depend on demand for certified coffee. Rwacof engages certified third parties to conduct certification and re-certification audits for those standards. This is in addition to monitoring risks in its certified supply chain and intervening on non-conformities.

Rwacof’s production data for 2023 indicated that certified coffee comprised 66% of total production. Rwacof is planning to increase the proportion of certified coffee it exports by increasing the number of certified farmers that it procures from. To address risks relating to non-certified supply from third-parties, Rwacof will: (i) conduct audits on all its third-party suppliers of non-certified cherries or parchment, (ii) obtain representation from existing third-party suppliers that their supply chains do not use child and forced labour, and (iii) update its cherry and parchment supply contract template to include specific clauses on child and forced labour, OHS and maintaining auditable records for traceability (ESAP Item #8). In its annual reporting to MIGA, Rwacof will provide the number of certified and non-certified farmers it procures from as well as the amounts of non-certified cherries it procures from other CWSs or suppliers (See PS6 for more details). 

Rwacof will expand the scope of incidents under its Incident Investigation and Reporting Procedure (EHSP 004) to include instances of child and forced labour, and allegations of SEA incidents in its primary supply chain (ESAP Item #9). 

PS3: Resource Efficiency and Pollution Prevention

Resource Efficiency 

The PEs’ water sources for operations include natural springs, rivers and municipal supply from Water and Sanitation Corporation of Rwanda. Rwacof has valid surface water abstraction permits for 12 springs and 2 streams with a cumulative flow rate of 490 m3/day. Rwacof is in the process of acquiring surface water abstraction permits for 5 water sources for Muhura, Nyagatovu and Ruhango CWSs. Rwacof will submit copies of the permits to MIGA as evidence of compliance with related regulations (ESAP Item #10). 

Rwacof uses 42,107 m3 of water in 2024, which translates to 3.1 L per kg of cherries. Rwacof monitors water quality by sampling and analyzing its sources annually. Rwacof will update its water quality monitoring programs to align with the quality requirements in the WBG General EHSGs and span all its water sources (See PS1). Rwacof’s water conservation measures encompass tracking usage through meters, installing eco-pulpers and eco-washers (which reduce consumption by 50%), using dry fermentation of parchment to reduce water consumption, and recycling washing and pulping water twice.

The PEs’ energy sources include grid electricity, solar and petroleum. The dry mill and offices use grid electricity with diesel back-up generators supplemented by solar power. The CWSs use grid electricity, diesel back-up generators and diesel powered pulpers. REL uses grid electricity with diesel back-up generators at the SEZ Warehouses. Both PEs use petroleum and electricity for staff transportation. The latter is through a third party who provides staff transport through electric buses.

In 2024, Rwacof’s energy consumption comprises 92,825 kWh of electricity, 1,923 L of petroleum and 12,960 L of diesel. This translates to 0.0068 kWh/Kg of cherry and 0.0009 L of diesel/kg of cherry. In the same year, REL consumes 355,693 kWh of electricity, 0 L of petroleum and 1,200 L of diesel. Energy efficiency measures at both PEs include using energy efficient appliances, optimizing heating and ventilation, using solar, improving insulation, and using equipment efficiently. The IMS includes energy use and conservation procedures in alignment with the group-level ESMS. 

Sucafina estimates its greenhouse gas (GHG) emissions from its Rwanda operations in 2023 to amount to 647.5 tCO2e. MIGA anticipates the Project’s potential GHG emissions will remain below 25,000 tCO2e/yr.

Pollution Prevention   

The PEs’ operations which generate air emissions include the use of internal combustion engines, parchment hulling at the dry mill, maize flour production, road transport, fertilizer use, and cooking in staff houses. The PEs’ emission mitigation measures include using solar power and installing equipment which emit less dust at the dry mill, and installing Penagos pulping machines to replace diesel pulping machines. 

The PEs’ operations generate solid wastes which include organics (pulp, husks, paper and wooden pallets) and inorganics (sheeting, nylex, shade nets and office waste). Rwacof generates 4,000-5,000 MT of pulp per year which it composts and distributes to farmers as fertilizer at no cost. Rwacof also recycles husks by selling them to a brick manufacturing company, and reuses nylex and shade nets for two seasons before disposal. Both PEs engage a licensed third-party to dispose solid wastes and they will integrate solid waste monitoring as part of updates on E&S monitoring (See PS1).

Effluent sources from the PEs’ operations include greywater from non-production facilities and production effluent from pulping, fermentation and washing. The PEs dispose greywater through municipal sewers, septic tanks and latrines. At the CWSs, Rwacof recycles washing effluents twice for washing cherries and pulping. Thereafter, Rwacof provides treatment through filtration lagoons. Rwacof monitors effluent quality on the parameters of Biological Oxygen Demand (BOD), Chemical Oxygen Demand (COD), Total Suspended Solids (TSS), Oil and Grease and pH. Results from 9 CWSs, indicate elevated levels of pH (1 sample), TSS (1 sample), BOD (8 samples) and COD (all samples) against WBG EHSGs. Rwacof is piloting effluent treatment systems at 3 CWSs with an aim of complying with WBG EHSG quality limits. Rwacof will expand the pilot to provide treatment for all process effluents at all CWSs. Rwacof will complement this by updating its monitoring under PS1 to encompass all CWSs and on all parameters that the WBG EHSGs require (See PS1). In connection, Rwacof will include effluent quality results in its annual reporting to MIGA. 

Rwacof does not use herbicides in its supply chain as national authorities prohibit their use in coffee farming. However, MINAGRI, through NEAB and Coffee Exporters and Processors Association of Rwanda (CEPAR), procures and provides pesticides and fungicides for Rwacof to facilitate their application for farmers in its supply chain. This is since national law does not allow private entities or farmers to do so, whereas MINAGRI also requires Rwacof to facilitate application instead of providing pesticides and fungicides directly to farmers. The pesticides and fungicides are all Class II (Moderately Hazardous) according to the WHO Recommended Classification of Pesticides by Hazard. Rwacof’s safety measures on their use encompass training personnel, providing PPEs, conducting medical surveillance on the personnel who conduct application and providing for sanitation after application. For farmers, Rwacof provides training on Integrated Pest Management (IPM) and pesticide safety. Rwacof also notifies farmers in advance of pesticide and fungicide application. The notices include reminders on availing water and red markers, or paint, which they use to indicate, or warn of, pesticide and fungicide presence in farms. During spraying periods, Rwacof stores pesticides, fungicides and spraying equipment in secure storage at the CWSs. Rwacof’s management of pesticides and fungicides aligns with PS3 requirements.

PS4: Community Health, Safety and Security

Community Health and Safety

The PEs’ operations pose Community Health and Safety (CHS) risks relating to road and maritime traffic accidents, pesticide and fertilizer use, fire and technological emergencies and potential for project-related SEA risks to the community. 

The PEs’ transport operations entail using their own fleet of vehicles and third parties. Sucafina’s Road Safety Policy provides controls for transport risks, including vehicle inspections. 

In relation to managing potential project-related SEA risk to the community, the PEs will update the Group Code of Conduct to explicit references to third-parties or communities and include definitions of behaviour and actions which qualify as SEA (See ESAP Item #7). Further, the PEs will enhance their GRMs to provide exclusive protocols and procedures for handling SEA incidents in alignment with survivor-centered approaches (See PS1).

Security Personnel  

The PEs engage a private security contractor to provide unarmed security services at their facilities. The contractor has registration and clearances from national security agencies in compliance with national law. The contractor provides monthly security reports and, when necessary, security briefings. The contractor deploys 124 guards (3% Female), with their majority (120) at Rwacof’s facilities and particularly CWSs (111). The guards work in two shifts wherein the dayshift and nightshift span 11 and 13 hours, respectively.

PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

General

The PEs’ facilities are brownfield and operational and do not feature greenfield expansions. Therefore, the potential for direct biodiversity risks relating to land use change is limited. 

Legally Protected and Internationally Recognized Areas

Three CWSs are located in Key Biodiversity Areas (KBAs). These are Ngororero CWS, Nyamiyaga CWS and Karenge CWS which intersect Satinsyi River, Nyabarongo River and Nyabarongo Wetlands KBAs, respectively. Within each of these KBAs, the CWSs are part of modified habitats in mosaics with farms and rural settlements. Rwacof will consult the organizations who manage the KBAs through its SEP. 

Supply Chain

Rwacof’s biodiversity risk management is primarily focused on the supply chain. The IMS requires developing catchment maps and biodiversity inventories, and restoring impacted ecosystems. In Rwacof’s supply chain, biodiversity risks are mainly related to the use of pesticides and fertilizers, and potential land conversion (deforestation).

Rwacof manages deforestation risks by providing training to its certified farmers on agroforestry and regenerative agriculture. Rwacof prohibits farmers from cutting trees in line with national law. In partnership with Nestlé, Rwacof provides farmers with seedlings for shade trees whilst also sharing information on native tree species they can cultivate. Rwacof also prohibits farmers from hunting and trains them on proper waste management. 

Desktop screening of Rwacof’s supply chain indicates low likelihood of intersecting landscapes with high risk of significant conversion of natural and critical habitats. Further, 66% of the supply chain by output in 2023 is traceable and certified by the responsible sourcing standards whereas 100% is subject to internal verification. Rwacof monitors deforestation risks in its traceable supply chain in accordance with the certification and verification requirements of the responsible sourcing standards. Rwacof plans to increase the amount of certified coffee it exports, and this entails increasing traceability within its supply chain, including the third-party CWSs from which it procures.

Rwacof will update its Supplier Code of Conduct to commit to a supply chain that does not support conversion of natural or critical habitats as part of ESAP Item #8. This will also entail updating the Supplier Audit Checklist to include assessing the systems and verification processes of third-party cherry or parchment suppliers. Rwacof will also develop a reporting template for supply chain risks among the IMS updates in ESAP Item #1. In its annual reporting to MIGA, Rwacof will include (i) proportions of certified and verified supply, including any changes in certification standards, (ii) a summary of any non-compliances identified by certification and/or verification audits, and (iii) a summary of deforestation monitoring, including notification of any deforestation events identified within the supply chain, and measures relating to developing catchment maps and biodiversity inventories, and restoring any ecosystems.

The documentation listed below is available electronically as PDF attachments to this ESRS at www.miga.org. 

• Environmental and Social Action Plan

Project Contact Information:

Contact: Tran Dao

Position: Insurance Team Leader

Email: tran.dao@sucafina.com 
Address: Sucafina SA, Place de Saint-Gervais 1, 1211 Geneva 1, Switzerland

Broad Community Support is not applicable for this Project. 

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MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities. 

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA. 

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm. 

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below: 

Compliance Advisor/Ombudsman 

International Finance Corporation 

2121 Pennsylvania Avenue NW 

Room F11K-232 

Washington, DC 20433 USA 

Tel: 1 202 458 1973 

Fax: 1 202 522 7400 

E-mail: cao-compliance@ifc.org