Provision of a USD 125 loan to Olam International Ltd in order to provide stable financing for the working capital needs of the company in Georgia, Egypt, Poland, Turkey and Ukraine (the "project countries").
The loan will be used to finance the sourcing, processing, storage and transportation of agricultural commodities such as nuts, grains, dairy and dried vegetables, across these countries.
ETI score: 75
The proposed project is expected to support Olam's expanding operations in the project countries by increasing the local sourcing of agricultural commodities and the export potential of these countries, further integrating them into the global economy. Additionally, the Project plans to address regional inclusion issues by assisting the company in developing and implementing capacity building programmes for suppliers and farmers in Turkey and Georgia, thus improving agricultural practices and quality standards.
OLAM INTERNATIONAL LIMITED
Olam International Ltd, established in Singapore, is one of the largest integrated commodity traders in the world. EBRD funds will be provided to Olam International, which will on-lend the loan proceeds to its subsidiaries in Georgia, Egypt, Poland, Turkey and Ukraine.
EBRD Finance Summary
Total Project Cost
Environmental and Social Summary
The Project was categorised B according to the EBRD's Environmental and Social Policy (2014).
Environmental and social due diligence (ESDD) on this project was undertaken by staff from the Bank's Environment and Sustainability Department and included interviews with CSR management and review of documentation provided. The findings of ESDD are that OLAM has a range of E&S policies and codes in place which are captured within the Olam Sustainability Standards Framework (OSSF). Achieving national environmental and social standards and regulations are basic minimum requirements for Olam facilities. Olam seeks to embed sustainability into all areas across its supply chain and the Company has made a commitment to have sustainable supply chains in place by the end of 2020; and the Company's CEO has publically committed to ensuring that sustainability remains at the core of OLAMs expanding activities. E&S issues are managed by Olam by its Corporate Responsibility and Sustainability (CR&S i as termed by OLAM) function overseen by two management committees. Products and regions also have their own sustainability teams. The aim of the Company is to cascade responsibility for management of key CR&S issues throughout the Company, at all levels, whether dealing with farmer suppliers, plantations, concessions and farms, sourcing and trading, processing, logistics and offices. Sustainability goals are set for each year and the Company reports publicly on how it has achieved compliance with the set targets. Each of the Company's CSR managers are set sustainability KPIs, which marry with the Company's overall targets for the year, and implementation of these targets is monitored by headquarters.
OLAM manages HR issues from both headquarters, at the level of individual units, and also within its policies and codes. While the Company does not have universally applicable HR policies, all employees and contractors are governed by the Olam Code of Conduct and International Labour Organization (ILO) compliant labour standards. The Code of Conduct includes a globally applicable Grievance Procedure which is available to anyone who wishes to raise a grievance with the Company.
Key environmental issues are dealt with in a number of different ways and managed through the Company's policies and codes and varies depending on the nature of the business. Within the processing segment, for example, the Company utilises its "Environment Maturity Gap Tool" to assess against the key factors of management systems, leadership, compliance, continuous improvement, equipment and process design, people capability, and external stakeholders. The outcome of each gap analysis is used to develop a prioritised improvement programme for that facility. The Company is a signatory to numerous initiatives and partnerships focused on differing commodities, many of which include elements of pollution control within production and processing activities.
The Company implements a Health and Safety Policy and has a stated aim to achieve "zero harm" to workers within its operations. Key objectives of the H&S Policy are to promote consultation on matters affecting safety and health in the workplace, form safety committees to identify, assess and eliminate risks, implement a safety management programmes, establish measurable health and safety goals and targets and carry out conformance assessments using internal and external auditors.
Overall, Olam has the capacity to comply with national requirements and implement the Project in line with EBRD's Performance Requirements. The EBRD will monitor ES performance in the project countries through annual reports provided by Olam.
Technical Cooperation and Grant Financing
The Bank is considering TC that would support primary producers who are suppliers to the Company, and to other companies in the market in Georgia and Turkey, in order to enhance the yields and quality of nuts and to acquire certifications on best agricultural practices.
Company Contact Information
The Loan enabled the Group to finance part of its working capital needs to purchase, store, process, distribute and market agricultural commodities in Turkey, Egypt, Ukraine, Poland and Georgia. The Project supported Olam's expansion in parts of the EBRD region where the Group only started operating recently, as well as strengthening operations in the existing markets.
The Project has contributed to regional development; by training local farmers via the implementation of teaching programs in Turkey. Besides this, the Project also supported the Group to significantly increase local agricultural procurement volumes in most of the Project Countries by working with hundreds of additional farmers across the region, which contributed to the resilience of the regional supply chain. Despite significant deteriorated global market conditions due to the coronavirus pandemic, the Group continued its robust financial and operational performance since the signing of the Loan in 2017.
PSD last updated
17 Feb 2021
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
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The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.