Frutales del San Juan, S.A.

completed

- 2 - International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name NICARAGUA: FrutanRegion Latin America and the CaribbeanSector Food and AgribusinessProject No. 009143 1. This project involves the development of new orange grove plantations in the southern part of Nicaragua, north of the Los Chiles border with Costa Rica, and in an area bordering the San Juan River. Frutan will provide oranges to TicoFrut, another IFC client and juice extraction operation in Costa Rica, under a long-term supply contract. The land for this 2000 hectare citrus grove was previously used for cattle ranching, cash crops and other agriculture. Presently, it is 20 % planted with orange trees. When fully planted in 1999, the project will employ 42 full-time and 500 transient workers.2. This is a Category B project according to IFC’s environmental review procedure because a limited number of specific environmental impacts may result from this project. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor by IFC’s Technical and Environmental Department staff. The following potential environmental, safety and health impacts of the project were analyzed:· land cultivation techniques;· use and handling of pesticides and chemical fertilizers;· storage and disposal of containers and outdated materials; and· general employee health and safety, including training.The sponsor has presented plans to address these issues and demonstrate that the proposed project will comply with Costa Rican laws and regulations and applicable World Bank requirements. The information about how these potential impacts are addressed by the sponsor is summarized in the paragraphs that follow.3. The project will employ appropriate citrus grove farming techniques. The plantation will be managed by agronomists trained in carrying out all agricultural tasks, including application of agrochemicals and operation of equipment.4. Frutan will apply fertilizer and pesticides mechanically with specialized equipment coupled to and pulled by a tractor. Only 8,000 liters/year of the herbicide “Roundup”, and 5 metric tonnes/year of the ant control insecticide, “Lorsban” will be used with all being permissible as per World Bank guidelines. In addition, non-hazardous oil will be periodically sprayed as a means of pest control. Usage and application rates will be monitored and recorded. Fertilizers, pesticides, herbicides, and oil will be clearly labeled and stored in a locked warehouse away from water sources. 5. Other than a small amount of used, plastic drums, no significant wastes are generated. Used agrochemical drums will be rinsed and returned to the manufacturer/distributor or safely disposed.6. Frutan will institute training programs on the correct handling, application , and use of agrochemicals. In addition, operators of agricultural machinery and equipment will be trained in safety procedures.7. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project will meet World Bank environmental, health and safety policies and guidelines and Costa Rican requirements.8. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating monitoring reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.L:\wpeu\STEPHEN\ERS\frutan.ERS.docMay 18, 1998 12:24 PM