Ciluluk Village Microfinance

completed

{L:\docs\nproj\non\ei\memo\VM1650.DOC;3 2/14/2000 11:46 AM}2Environmental Review Summary (ERS)Project Name Indonesia - Ciluluk VillageRegion Asia and the PacificSector TextilesProject No. 10308 1. This project involves an investment in a small local cooperative in Ciluluk Village, West Java. The cooperative produces woven mats using reeds and cotton and polyester yarns, and related small woven items. These are largely sold for domestic use in West Java, including in Jakarta. The investment of US$45,000 will assist the cooperative to optimize cash flow and permit measured expansion of their activities. The materials are woven on small wooden looms in the home.2. This is a Category B project, according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of visiting the village and examining working conditions and discussing with the members of the cooperative. The following potential environmental, health and safety and social impacts of the project were analyzed:· Materials supply· Air, water and solid waste emissions· Handling of hazardous materials· Workplace conditionsThe information about the scale of these potential impacts and how they will be addressed is summarized in the paragraphs that follow.3. Materials supply. The reeds (mendong) used in production of the mats are harvested in Java, with much of the supply currently coming from the Jogjakarta area. As volume increases, the cooperative will begin growing the reeds locally in rice fields where conditions are appropriate. This is not expected to result in significant conversion of land from rice production.4. Air emissions. There are no air emissions associated with this operation.5. Wastewater emissions. Wastewater is produced only when washing yarn prior to dyeing, and after the dyeing process itself. Dyeing is done on a household basis only as needed, and is reported to be infrequent, perhaps monthly. Small quantities of yarn amounting to a few kilograms are dyed at any one time, using three to five liters of water. Any wastewater is disposed of with other domestic wastewater, which usually enters a soakaway or cesspit near the house. The volumes are insignificant in terms of other domestic wastewater production from washing and bathing.6. Solid wastes. No solid wastes are produced.7. Hazardous materials. Dyes for the yarn are purchased locally in small amounts (a few grams) from bulk suppliers, and are reported to consist of various widely used organic and inorganic colorants, including food coloring. IFC will assist the cooperative in assessing and reviewing the sourcing and composition of these dyes, and will assist in identifying alternatives if found necessary.8. Workplace conditions. Weaving is done at small wooden looms located in the homes of cooperative members. Some members have more than one loom and may have an out-building devoted to the weaving process. Conditions are basic but adequate in those cases examined during this review. As weaving is carried out in the home, children may assist after school with some tasks such as threading bobbins, but no harmful child labor is used in weaving or in any other aspect of production. Weavers are paid on a piece-wage rate basis and incomes are comparable to earnings in an industrial context in West Java.9. Village development. Ciluluk village is typical of villages throughout West Java in its requirements for improved infrastructure including basic utilities and services. This investment will assist the village in improving its economic base and establishing the basis for improved conditions for members of the cooperative as well as for the village as a whole. IFC will pursue with the World Bank any opportunities to link this investment with other ongoing village improvement programs carried out by the Bank in West Java.10. IFC concludes that the proposed project will meet the applicable World Bank/IFC environmental and social policies and environmental, health and safety guidelines. 11. IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual monitoring reports and conducting periodic site supervision visits.