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Sub-sectoral Environmental and Social

Guideline: Edible Oils Processing

Edible Oils Processing

This guideline is designed to be used by EBRD Financial Intermediaries (FIs) to understand
the nature of environmental and social (E&S) risks associated with existing operations in this
sector and suggested actions for businesses to manage these E&S risks. It also provides
guidance for FIs on potential due diligence questions to raise with management to understand
how their business is managing these E&S risks. This guideline focuses on material E&S
risks; it is not an exhaustive list. In managing E&S risks, all businesses should be compliant
with relevant E&S laws and regulations.1 Where applicable, this includes European Union
legislation, which may also be taken as a benchmark for good practice.
This guideline covers the production of edible oils through extraction from seeds, beans, fruits
and nuts. It does not cover the production of oils from animal-derived sources, or the
manufacture of biodiesel.

Reference NACE codes:

• 10.4: Manufacture of vegetable and animal oils and fats;

• 10.41: Manufacture of oils and fats;

• 10.42: Manufacture of margarine and similar edible fats.

Material risks

Below is an overview of the material environmental and social (E&S) risks present in edible
oils processing:

1 This guideline outlines some relevant legislation but does not provide an exhaustive list of applicable laws and regulations.

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Sub-sectoral Environmental and Social
Guideline: Edible Oils Processing

E&S Risk Category Environment Health and Labour Community Page

Safety no.

Affect the natural Affect Affect the health and

environment Affect the workplace safety, livelihoods,
Key E&S Risks2 health or conditions and and environment of
safety of the treatment the community and
employees of employees wider public
 Palm Oil/Biodiversity √ √ √ 4
 Food Hygiene & √ √ √ 5
Product
Contamination
 Odour √ √ 6
 Solid Waste √ √ 6
 Volatile Organic √ √ √ 7
Compounds (VOCs)
 Hazardous Materials √ √ √ 8
 Water Use √ √ 9
 Wastewater √ √ 10
Energy Use √ √ 11
 Air Emissions √ √ 11
Noise √ √ √ √ 12
 Pesticides √ 13
Organic Products & √ √ 13
Labelling

Machine & Electrical √ 13

Safety
Manual Handling √ 14
Slips, Trips & Falls √ 14
PCBs & Asbestos √ √ √ 15
Temperature √ √ 15
Confined Space √ √ 15
Labour & Working √ 15
Conditions
Relations with Local √ 16
Communities

2Note: this table provides an indicative list of the EHS risks associated with the sub-sector; it is not meant to be an
exhaustive list and EHS risks will depend on the specific setting and scale of the operation or facility.

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Guideline: Edible Oils Processing

Contents

Section Page No.

1. Process description 4

2. Key E&S Risks 4

3. Financial Implications 16

4. Suggested due diligence questions 17

5. References and additional sources 21

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Guideline: Edible Oils Processing

Vegetable oils and fats are an important

1. Process Description ingredient in a vast number of products
providing flavour, texture and structure.
Vegetable oils are extracted from seeds, They are used in food applications, animal
beans, fruits and nuts. The basic steps in the feed, cosmetics, detergents, paints, plastics,
process are shown in the Figure 1 below. candles, pharmaceuticals, biofuels and many
other technical applications.
Figure 1. Edible Oils Production

Seeds/ Beans
2. Key E&S Risks
Cleaning/Drying/
Sorting/Dehulling
Below are the material E&S risks associated
with this sector and key measures to manage
Crushing/Heating Filtration them. Where gaps are found in the
management of key E&S risks, the E&S risk
Solvent management measures may form part of a
Degumming
Extraction corrective E&S action plan agreed with your
customer.
Wet Cake Miscella*

Desolventing Solvent Removal Palm Oil/Biodiversity

Toasting by Distillation Pressed
Extracted Crude Oil
Crude Oil
Refining (Physical
Drying Cooling
or Chemical)
Palm oil plantations are under increasing
Semi-refined oil
scrutiny for their effects on the
Meals quality environment, including loss of carbon-
sequestering forest land.
Hydrogenation Interestification
There is also concern over displacement and
disruption of human and animal populations
Deodorisation due to palm oil cultivation.

Fully Refined Production of palm oil has been

Product controversial in recent years and could
*Miscella is a mixture of oil and solvent reflect on purchasers and processors of
these crops.
The extracted crude oil will be refined either
through chemical/alkali refining or through
physical means. The primary purpose is to
separate the free fatty acids and remove
other unwanted substances.

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 Train staff in food safety issues and follow

How can a business manage this risk?
established procedures for hand washing,
 Perform background checks on raw material working attire (clothes, shoe coverings,
suppliers to determine the origin of gloves and hair coverage), and how to
feedstocks. handle injuries and diseases;

 Establish plant such that products move

from dirty to clean areas, to avoid
recontamination. Staff movement to be
Food Hygiene & Product Contamination
opposite to the manufacturing flow
direction of products (i.e. from ‘clean’
towards ‘dirty’ areas);

Contamination of product could result in ill  Undertake regular cleaning and disinfection
health in the general public and may result in to maintain food safety and hygiene
product recall. Vegetable oils can become standards;
contaminated as a result of contamination of
the raw materials during processing,  Process hygiene standards should prevent
packaging and transport. Screening of raw the spread of diseases such as salmonella,
materials will identify any incoming Escherichia coli (E. coli) and Legionnaires'
contaminated raw product and food hygiene disease beyond the factory boundaries, for
standards such as Hazard Analysis Critical example to the local surrounding
Control Points (HACCP)3 and Codex community and/or consumers;
Alimentarius4 will need to be considered in
order to reduce the risk of contamination.  Consider implementing product traceability
systems that facilitate tracing of products
once released for sale;
How can a business manage this risk?
 Regular, rigorous hygiene monitoring
 Consider food hygiene under the programmes should be in place. All surfaces
requirements of EU food safety directives and equipment should be cleaned regularly
and legislation (e.g. Regulation No. to prevent the build-up of oil and fat and to
178/2002, Regulation on general principles reduce the risk of health hazards;
and requirements of food law, No.
882/2004 on general food safety, Regulation  Ensure that appropriate clothing is provided
No. 2073/2005 on microbiological criteria to all facility visitors, that hygiene
for foods) in addition to local/national food requirements adhered to and that external
safety regulations; contact with the products is avoided.

3 ISO 2005
4 FAO and WHO (1962–2009).

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Odour  Spent bleaching earth, activated clay,

silica and carbon are used in the
bleaching process and will contain
pigments and residues of other
undesirable substances such as gums and
Unpleasant odours may be generated during metals;
operations which heat the oil and involve
solvents.  Sludge arising from wastewater treatment
which may be contaminated with
hazardous chemicals or have a high pH
How can a business manage this risk?
and therefore require appropriate
 Reduce odour emissions from extraction disposal.
cookers, vacuum and pressurised systems by
using caustic, alkaline or ozone scrubber Extracted oil is typically packaged in plastic,
systems or by incinerating the gas; cans and glass. Waste may arise from the
 Adopt odour management measures to packaging process in the form of discarded
prevent and minimise odour nuisance to local packaging offcuts.
communities and other receptors;
 Control temperature and humidity to reduce
odour emissions. How can a business manage this risk?

 Comply with national and EU regulations (as

Solid Waste applicable) for the safe disposal of waste;

 Explore waste recovery measures such as:

o Use of waste vegetable matter as a soil

Edible oil processing can generate significant improver;
quantities of organic solid waste such as o Use of waste oils for biofuels;
empty fruit stalks and waste palm kernels. o Use of waste vegetable matter and free
Other solid wastes may include: fatty acids as fuel for steam and power
generation at refineries or for animal
 Deodoriser distillate; feed;
o Use of free fatty acids as feedstock for
 Mucilage5 from degumming; chemical industry;
o Use of uncontaminated wastewater
 Spent catalysts and filtering aid from treatment sludge in agricultural
hardening; applications;
o Use of spent bleaching earth in
brick/block/cement manufacture,
fertiliser, anaerobic digestion;
 Maintain an inventory of wastes generated
and minimise where possible;
5 Gelatinous substances secreted by plants.

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 Store solid wastes in adequate containers and mild central nervous system (CNS)
segregate to encourage recycling; depression and irritation of the skin and
mucous membrane. Prolonged exposure
 Dispose of wastes regularly to avoid odour, may cause serious health damage. Hexane is
litter, fly and rodent problems; also harmful in low concentrations to
aquatic organisms. Strict controls are
 For wastes that cannot be recycled, due to required to prevent a build-up in working
biosecurity issues, dispose according to the areas and discharges to the environment.
requirements of local health authorities;
How can a business manage this risk?
 Companies operating within the European
Union (either as a manufacturer or as a  Consider solvent processes under the
supplier into European Union countries) will European Community Directive
be subject to the European Union Packaging 2008/112/EC on the limitation of emissions
and Packaging Waste Directive (94/62/EC of volatile organic compounds due to the use
as amended by 2005/20/EC), which aims to of organic solvents in certain activities and
reduce the amount of packaging that is being installations and the European Council
introduced into waste streams. Directive 88/344/EEC on the extraction of
solvents in foodstuffs. Further industry
 Recover and reuse packaging material where guidance is available6;
possible or ensure that the packaging is easy
to recycle.  Minimise solvent use by switching to physical
(rather than chemical) refining where the free
fatty acid content is >2%;

Volatile Organic Compounds (VOCs)  Improve process design to increase solvent

recovery, e.g. distillation, reuse of vapours,
gravity separators etc.;

 Consider the soil and groundwater

Solvent is used to separate oil from the contamination implications of the use and
vegetable matter. Solvent emissions arise storage of solvents
from several steps in the process such as the
solvent recovery plant, volatisation during
refining and leaks in piping and vents.

The most common solvent used is hexane,

which is a colourless, volatile liquid, soluble
6AEA Group Guidance on VOC Substitution and
in water and highly flammable and may Reduction for Activities Covered by the VOC
cause explosions due to the volatisation of Solvents Emissions Directive - Guidance 19:
the solvent dissolved in the oil. Exposure to Vegetable oil and animal fat extraction and vegetable
hexane may cause impaired fertility. Acute oil refining activities
inhalation of high levels of hexane can cause http://www.fediol.eu/data/VOC_Guidance.pdf

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Guideline: Edible Oils Processing

Hazardous Materials Bulk storage facilities will be used for the

storage of oil seeds and beans, gas and liquid
chemicals used in the production process
and for cleaning and disinfection, and fuel
oils for energy production.
In addition to solvents, a range of other
potentially-hazardous materials may be used
during processing and cleaning, including: How can a business manage this risk?

 Operations where pollution has occurred or

 Phosphoric acid – used in degumming;
there is a threat of it occurring to water
resources, land and protected species and
 Spent bleaching earth – this material
habitats may be liable under national
presents a fire risk;
legislation and EU legislation for preventing
and remedying environmental damage.
 Hydrogen;
Within the EU, the Environmental Liability
Directive (ELD) (2004/35/EC) established a
 Solvents;
framework of environmental liability, based
on the "polluter-pays" principle, to prevent
 Cleaning agents such as detergents.
and remedy environmental damage;
 Fuels - edible oils processing is a heat-
 Compliance with the EU BREF Guidance
intensive process and can use
Note on Food, Milk and Drink Industries
hydrocarbon fuels (oil, diesel, coal) for
(2006) is required for ‘intensive’ facilities
heating processes. Underground storage
falling under the ELD; compliance with
tanks are a common source of
EBRD Performance Requirement 3 (whether
groundwater pollution unless contained,
the facility falls under the ‘intensive’
managed and tested regularly. Coal
definition or not;
storage can lead to soil contamination,
unless covered/contained appropriately.
 Provide adequate secondary containment for
all hazardous fuels and oils etc.; install
 Drain corrosion – edible oils processing
suitable shut-off and alarm systems;
processes commonly use
caustic/corrosive chemicals for cleaning
 Maintain storage areas to ensure that they are
processes (including CIP). If discharged
organised, secure, clean and dry. Storage
to drainage systems, this can lead to
facilities should be properly designed with
corrosion of pipework and creation of
appropriate signage and ventilation and
new contaminant pathways.
should be locked and accessible only to
trained and approved personnel. Storage
The transport, storage and handling of such
facilities should be inspected on a regular
materials provide opportunities for spills and
basis to ensure that leaks and spillages do not
other releases to the environment and
occur;
present a risk of fire and explosion.
 Record all hazardous materials held on site in

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an inventory with Materials Safety Data  Washing and deodorisation;

Sheets (MSDSs) available in the appropriate
language; procedures should be prepared for  Cleaning process areas;
their handling and treatment in the event of
spillage;  Steam production.

 Conduct regular inspection of all bulk Water can be wasted when much of it can be
containment facilities and effluent holding treated and reused in the process. It is
tanks to ensure integrity of storage; typical for abstraction or water use permits
to detail volumes of water abstraction
 Provide personal protective equipment (PPE) allowed as over abstraction can impact local
that is fit for the task to prevent injury and communities. Whenever changes take place
maintain hygiene standards; in product volumes this should be reflected
in the permit.
 Train staff in the correct selection, use and
maintenance of PPE. PPE should be
How can a business manage this risk?
inspected regularly and maintained or
replaced as necessary.  Consider discharges and abstraction from
water resources under the requirements of
 Maintain storage, transport and conveyance the EU Water Framework Directive
systems in good condition; (2000/60/EC) and local environmental
regulations and permitting requirements;
 Protect raw materials storage from rain and
wind to prevent contaminated runoff and to  Evaluate water supply and water efficiency
minimise wastage. measures (e.g. recycling, reuse, run-off
reduction, storage etc.) to reduce impacts on
surrounding resources and community
supplies;
Water Use
 Separate cooling water from process water,
and recycle condensates and cooling waters;

 Reduce cleaning water needs by ensuring that

Edible oil extraction can use a relatively solid waste is removed before rinsing and
large quantity of water throughout the washing, e.g. using scrapers, brooms and
process primarily for: vacuum cleaners;

 Raw ingredient cleaning;  Use taps with automatic shutoff valves;

 Cooling water in crude oil production;  Use high pressure hoses and optimised
nozzles to minimise water usage;
 Chemical neutralisation;
 Use hot water or steam as this can reduce

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Guideline: Edible Oils Processing

water requirements;
How can a business manage this risk?
 Consider adoption of equipment cleaning-in-  Comply with national and international
place (CIP)7 methodologies to reduce regulations for edible oils processing; large
chemical, water and energy consumption. edible oils processing facilities in the EU,
with (capacity for greater than 300
tonnes/day of finished product), are subject
to national regulations under the Industrial
Wastewater Emissions Directive (IED) 2010/75/EU.
Other smaller facilities within the EU and
operations outside the EU will be subject to
local regulation;

Large volumes of wastewater containing  Where feasible, use citric acid to replace
high organic loads, organic nitrogen, oils and phosphoric acid in degumming to reduce
fats, cleansing agents, solvents and phosphorous loading in effluent;
suspended solids may be produced.
Wastewater may also be contaminated with  Use appropriate cleaning chemicals in the
pesticide residues. right dosage for the equipment to be cleaned,
e.g. caustics for polymerised fat and acids for
The main production processes producing lime deposits. Use hot water rather than
wastewater are the refinery, deodorisers and solvents to facilitate cleaning where possible;
boilers. Wastewater will typically require
treatment before it can be discharged to a  Ensure that contaminated sludge is disposed
municipal wastewater treatment system or to of by incineration or landfill at permitted
the environment. Many facilities have on facilities;
site wastewater treatment plants, which may
utilise mechanical and chemical means of  Install filters to collect sediment/debris
treatment. A permit with specific discharge before wastewater discharge;
parameters from the regulatory authorities
will normally be required.  Install diversion drains to direct surface water
runoff away from waste areas;

 Treat wastewater prior to discharge to

separate oils and fatty acids from the water
and discharge through a fat trap;
7CIP is a method of cleaning the interior surfaces of pipes,
vessels, process equipment, and associated fittings, without  Install (or upgrade) wastewater treatment
disassembly using approved chemicals and/or detergents plant.
with minimal environmental impact and compatible with
subsequent wastewater treatment processes.

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Energy Use the use of compressed air and high-pressure

water for cleaning.

Workers may inhale or ingest the dust and

aerosols exposing them to biological hazards
Large quantities of energy are consumed in which present a risk of occupational lung
oil processing in two ways: disease. This may give rise to skin irritation
or allergic reactions.
 Thermal energy in the form of steam and
hot water used for distillation, cleaning, A dust cloud of any flammable material will
and sterilising. Frequently an auxiliary explode where:
boiler is used to generate steam;
o The concentration of dust in air falls
 Electricity for machinery operation, within the explosive limits;
refrigeration, lighting and production of
compressed air. Minimum refrigeration o There is a source of ignition.
requirements are normally determined by
regulation.
How can a business manage this risk?

How can a business manage this risk?  Many countries are signatories to the Kyoto
Protocol and have adopted targets for the
 Use heat recovery to heat incoming oil with reduction of CO2 emissions. Where
the outgoing oil thereby reducing energy Governments have set up carbon emission
demand and water demand for steam; reduction programmes, industrial processes
like edible oils processing are required to
 Examine other options for heat recovery and reduce their CO2 emissions through setting
insulation, to reduce/supplement energy targets. This can result in a need for
usage; substantial investment in new/clean
technologies to achieve the emission targets
 Examine options for increasing energy set. These targets can be reflected in
efficiency through modifying work practices environmental permits;
and installing energy efficient
devices/equipment.  Consider air emissions under the
requirements of EU air quality and emissions
directives (e.g. Directive 2008/50/EC on
ambient air quality also Industrial Emissions
Air Emissions Directive (IED) 2010/75/EU) and local
environmental regulations and permitting
requirements;

 Reduce dust emissions through:

Dust may arise from storage, handling and
drying activities; aerosols typically arise from o Ensuring proper maintenance of all

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Guideline: Edible Oils Processing

cleaning, screening and crushing of intrinsically safe electrical equipment;

equipment to prevent fugitive emissions;
o Ensuring vessels and tanks have sufficient
o Enclosing and sealing plant and emergency venting capacity to relieve
equipment to prevent escape and excessive internal pressure in the event of
accumulation of dust; fire; if the silo is contained within a plant,
evacuate gases outside.
o Using doors/plastic strip curtains on
building access points;  Install dust and solvent emissions monitoring
equipment at sensitive points;
o Redesigning processes to reduce free-fall
distances and speed of movement for dry  Inventory all GHG emissions associated with
products; the edible oils processing process and its
value chain , as well as the GHG emissions
o Replacing external bulk storage areas with associated with life cycles of its products; this
silos, fitted with alarms to prevent information can be used in the reporting
overfilling; processes where necessary, and to set
effective reduction targets/initiatives.
o Installing a centralised piped vacuum
cleaning systems;

o Installing dust extractors e.g. cyclones and Noise

fabric filters;

o Improving ventilation within buildings;

o Maintaining a slight negative pressure The noise generated by equipment and

within storage vessels such as bins and processes such as steam generation,
silos. condensers, ventilation, and pressurised air
equipment as well as trucks can be a
 Reduce the risk of fire and explosion by: nuisance if the site is located close to
residential areas and other sensitive
o Reducing dust emissions as above; receptors.

o Locating equipment within a lightweight Noise induced hearing loss can occur from
building so that the roof and wall cladding working in noisy areas, e.g. internal
panels can act as explosion relief; transport, conveyors, boilers, pumps, fans,
and steam and air leaks.
o Fitting silos and bins with explosion relief;

o Assessing explosion potential by zoning

hazards within the facility and installation

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aprons etc.;
How can a business manage this risk?

 Locate and design facilities to avoid sensitive  Train staff in the correct selection, use and
receptors to noise; maintenance of PPE;

 Enclose noisy machinery to isolate people  Implement worker management plans to

from noise where practicable and reduce ensure that workers with allergic reactions are
noise exposure through the hierarchy of not working with substances that cause a
controls; reaction;

 Provide hearing protection as required.  Conduct health screening of new staff and
regular health monitoring of existing staff.

Pesticides
Organic Products and Labelling

Chemicals including pesticides and

insecticides may be applied to raw materials Processing and production of organic
and/or physical structures to control pests. products that are sold and labelled as
Pesticides are potential pollutants which may organic must meet a number of
cause environmental and health impacts. requirements under Council Regulation (EC)
No 834/2007 of 28 June 2007 on organic
Toxic pesticides which biodegrade slowly, production and labelling of organic
can accumulate in body tissues and be products.
harmful to ecosystems and human health.
Accidental exposure to hazardous
How can a business manage this risk?
substances (e.g. pesticides) can result in
dermal contact and inhalation. Contact can  Follow EU guidelines (834/2007/EC) which
lead to burns or inflammation of skin or introduce requirements for production and
allergy. Inhalation can lead to respiratory labelling of organic products
difficulties.

Machine & Electrical Safety

How can a business manage this risk?

 Provide personal protective equipment (PPE)

that is fit for the task to prevent
exposure/risk and maintain hygiene
standards, e.g. gloves overalls, respirators, In a busy processing environment, injuries
involving machinery or equipment are
common. Conveyors, packaging machines

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Guideline: Edible Oils Processing

and palletisers or operating fork lift trucks awkward shaped items, and manoeuvring
and delivery vehicles/trucks are commonly carts/manual forklifts.
used in edible oil processing.
Repetitive tasks such as the operation of
Over a quarter of all manufacturing injuries slicing and vacuum-packing machines can
occur in the food processing industries8. lead to musculoskeletal injuries and work-
related upper limb disorders (WRULDs).

How can a business manage this risk?

How can a business manage this risk?
 Within the EU, machinery purchased after 1
January 1995 must comply with the  Redesign manual processes and rotate work
Machinery Directive 98/37/EC; tasks to avoid heavy lifting and repetitive
activities;
 Assess machine safety in consultation with
machine operators, reduce hazards  Install mechanical lifting aids where possible.
according to the hierarchy of controls and
undertake modifications/install guards and
interlocks as required;
Slips, Trips and Falls
 Assess electrical installations and ensure that
appropriate insulation, earthing and residual
current devices (RCDs) are in place;

 Separate people from vehicle movement to Food preparation processes may require
ensure the safety of workers, the community access to elevated areas such as gantries, vats
and the public; and storage silos. These activities may
require working at height.
 Train vehicle and forklift drivers to properly
operate the machinery and equipment
How can a business manage this risk?

 Effective design can often eliminate the need

Manual Handling to work at height but in the event that it is
necessary, such work should be carefully
managed and controlled;

 Install correct fall arrest systems (guarding

Lifting, repetitive work and posture injuries and harnesses attached to fixed anchor points
can occur from lifting and carrying heavy or etc.).

8 United Kingdom Health and Safety Executive 2014

http://www.hse.gov.uk/food/hse.htm.

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Polychlorinated Biphenyls (PCBs) & Confined Spaces

Asbestos

Edible oils processing facilities contain

PCBs may be present in electrical vessels such as tanks and pits which may
switchgear, transformers and fluorescent require entry by staff during maintenance
light starters. and cleaning activities. Entry to confined
spaces without effective management and
Asbestos may be present in fire proofing control can result in engulfment and
and insulation material, including as asbestos asphyxiation.
cement boards, as fire retardant gaskets in
pipe work and as fire retardant insulation
around boilers and furnaces, particularly in How can a business manage this risk?
older buildings.
 Implement confined space procedures,
provide training, equipment and control
Both materials give rise to risks to the
systems if confined space entry is necessary.
environment and health and safety.

How can a business manage this risk?

Labour & Working Conditions
 Where the presence of asbestos or PCBs is
known or suspected, seek professional advice

Temperature Edible oils processing operations may use

casual and contract labour. Poor working
conditions for casual labourers in the food
processing sector is a key labour risk.

High temperatures can lead to collapse Child labour is a prevalent risk particularly in
through heat exhaustion and contact burns. relation to smaller-scale family run
operations.
How can a business manage this risk? Worker accommodation standards,
 Minimise time needed for staff to access high particularly for temporary/casual labourers,
temperature areas, issue protective clothing may not reach the standard required for
and ensure that regular breaks and hydration permanent employees.
takes place

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Stakeholder Engagement Plan (SEP);

How can a business manage this risk?

 Comply with International Labour  Manage traffic flows with

Organisation (ILO) requirements on working consideration of local communities.
hours, pay, overtime, etc.;

 Include all ILO prohibitions on child labour

into contracting agreements;
3. Financial
 Provide appropriate worker accommodation Implications
which meets, at a minimum, the basic needs
of workers, national legislation and Outlined below are key financial implications of
international good practice9. management of E&S risks related to edible oils
processing.

 Product recall can have a significant impact,

Relations with Local Communities e.g. compensation claims, loss of reputation,
loss of contracts and in terms of export
markets. Significant upgrades in hygiene
standards may be required at the production
facility in order to reduce the risk of
Having good relationships with contamination during processing and to
neighbouring communities reduces the risk satisfy national and European food hygiene
of local opposition to food processing standards. A system of product traceability is
activities. Opposition may arise from odour required to facilitate product recall;
emissions and increased traffic.
 If oil and solvents are allowed to enter the
effluent stream, the cost of treatment
How can a business manage this
increases and this represents the loss of
risk? valuable by-products;
 Engage with the local community and
 Significant capital expenditure might be
assess opportunities for their
required to maintain environmental, health,
involvement in employment or in
safety and hygiene standards;
provision of goods and services;
 Capital and operational investments to obtain
 For large-scale intensive facilities, or in
and maintain industrial emissions permits
highly populated areas, prepare a
and, where applicable, achieve compliance
with Best Available Techniques (BAT);

9Workers’ accommodation: processes and standards:

 Capital and operational investments to
A guidance note by IFC and the EBRD; August 2009 prevent and minimise the risk of
contamination of soil, surface water and

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groundwater resources from edible oils

processing waste;
4. Suggested Due
Diligence Questions
 Injuries may lead to increased payroll costs to
replaced workers;

 Fines, penalties and third party claims may be When assessing E&S risks, it is important to
incurred for non-compliance with engage the customer on how these risks are
environment, health and safety regulations; managed.

 Capital expenditure for installing or Perform a complete tour of the facility,

upgrading wastewater and waste treatment accompanied by someone knowledgeable about
facilities; all the activities at the site.

 Capital expenditure for installing or Confirm organisational responsibilities and

upgrading storage facilities for chemicals, systems for environment, health, safety and
fuels and oils; social matters and that these systems cover both
employees employed directly and sub-
 Product contamination issues may result in contractors.
restrictions on price and demand, and export
markets (e.g. EU); During the initial site visit, the issues will vary
according to the type of edible oils processing
 Inadequate health and safety provisions and the level of environment, health and safety
(including risk assessments, training, and hygiene management already introduced.
infection control and provision of Personal While visiting the site it is important to discuss
Protective Equipment (PPE) etc.) for and review the following:
workers (permanent, temporary and/or
casual) may lead to absenteeism, health care General Housekeeping
costs or health and safety incidents and
claims;  Check the condition and containment
arrangements of raw and finished product
 Community health and safety impacts from storage facilities;
edible oils processing (e.g. exposure to
contaminated drinking water and/or living in  What is the standard of general house-
proximity to infectious diseases) may lead to keeping on site? Do areas look clean and
reputation damage, legal tidy? Look for localised spills, leaking pipes
challenges/prosecutions and/or etc.;
compensation claims.
 Check the age and condition of buildings and
equipment.

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Health and Safety source and origin of Oil Palm if used in the
process?
 Check whether Health and Safety risks have
been systematically assessed, documented  Does the organisation have insurance in
and addressed; place to cover product contamination? Have
there been any recent incidents? Has the
 Check whether efforts have been made to company any other insurances and have there
reduce hazards through application of the been any claims against these policies?
hierarchy of controls i.e. eliminate, substitute,
engineer, administer then issue personal  Is the facility subject to any audits by
protective equipment PPE as a last resort customers? What was the outcome of these
(e.g. install noise reduction equipment before audits?
resorting to issuing hearing protection);
Waste Management
 If PPE is required, check that it is being
supplied by the employer, is used effectively  Check that waste disposal takes place on a
and maintained/checked regularly; regular basis;

 Note the signage around the site, does it  Check that waste storage areas are clear of
convey what health & safety risks might exist debris and that skips are covered to prevent
in areas? waste escaping; for example, check that waste
containers have lids or are stored in an area
 Check whether an asbestos survey has been with a roof;
undertaken at the facility, have the costs for
management/removal been assessed, and if Wastewater and Surface water Management
asbestos exists, is an asbestos management
plan in place?  Check whether drainage systems lead to
wastewater treatment systems or discharge
 Check whether fire-fighting and first aid directly to surface waters;
equipment is available, and is it
checked/maintained regularly?  Check whether the routing of wastewater
drainage systems within the facility are well
 Have the premises been inspected recently understood; has the facility undertaken dye
(within the past 2 years) by the regulatory tracing and/or video surveying of drain
authorities for health, hygiene and systems?
environment? What were their findings?
 Check that the routing of surface water
Edible Oils Processing Management drainage systems from the facility are well
Practices understood (and are separate to the
wastewater drainage system); has the facility
 Check the source of raw materials. Are the been the subject of surface water pollution
levels of pesticides and other contaminants incidents; is any system in place to capture
quantified and within guidelines? What is the surface water in the event of a release, or a

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first flush system to capture an initial penalties, fines, major recommendations or

washdown? corrective action plans?

 Check the extent of treatment/capture  Does the organisation have a grievance

systems for the different types of wastewater, mechanism which allows employees to raise
workplace concerns?
including process water, surface water runoff
and cleaning water;
 Are employees free to form, or join, a
workers’ organisation of their choosing?
 Check if monitoring and testing is
undertaken as a requirement of operating
 Check worker accommodation.
licences and the extent of compliance in
recent years;
Incident Management
 Note the colour and appearance of adjacent
 Check if any recent incidents have taken
water courses.
place on site involving serious injuries,
fatalities, fires/explosions, spills or gas
Pollution Control releases of ammonia or chlorine. Note
whether these incidents were investigated and
 Is the facility next to any vulnerable water
staff trained.
bodies, sited in a floodplain, or close to
groundwater sources which may be
Community Complaints/Grievances
contaminated by activities?
 Is a grievance mechanism in place to allow
 Check the location and condition of oil and
the community to raise concerns regarding
chemical storage areas. Are these well
farming operations?
controlled, appropriately constructed and is
containment / spill clean-up equipment
 Note any history of public complaints
provided?
relating to the facilities operation.

Labour Management
Investment
 Check that labour standards, contracting and
 Check if the business has budgeted line items
remuneration are in line with national law
and are consistent with the average for the for environment, health and safety
sector; improvements - check whether there are any
high value improvements in the business plan
 Check that hours worked, including for E, H & S issues in the coming
overtime, are recorded and staff should months/years.
receive written details of hours worked and
payment received; Regulatory Compliance

 Has the Company received inspections from  Check if the Company has received
the local labour inspectorate in the previous inspections from the local labour, H&S or
three years? Have these resulted in any Environmental inspectorate in the previous

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three years and whether these have resulted o Food safety management plans;
in any penalties, fines, major
recommendations or corrective action plans. o Environmental, Health, Safety and Food
Safety audits of its operations conducted
 Establish whether the company has via a third party;
undertaken a systematic, documented review
of operations against national legal o Demonstrable involvement of senior
requirements relevant to Environmental, management in environment, health &
Health, Safety and Social performance and safety, and hygiene management and
the extent of compliance with that legislation. leadership.

Management Plans

 Review the operational procedures and

management plans available regarding the
control of risks. As a minimum any
business should have the following in place:

o Environmental, Health & Safety

management systems which include
operational procedures that are
communicated, implemented and
regularly reviewed (i.e. ‘live’ systems that
are used in practice, not just kept as an
office manual);

o Monitoring programmes to monitor

environmental, health & safety, and
hygiene risks (and where necessary,
testing of water, air, noise, waste
emissions etc.);

o Improvement objectives, targets and

project plans;

o A training plan for personnel to include

environmental and health and safety
issues;

o Emergency plans for environment,

occupation & community health & safety,
and food safety incidents and site security;

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5. References and Additional Sources

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International Finance Corporation (IFC), Environment, Health and Safety Guidelines. Vegetable
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European Union 2004, Directive 2004/35/CE of the European Parliament and of the Council of
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European Union 2006, Directive 2006/42/EC of the European Parliament and of the council of
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European Union 2007, Commission Regulation No. 1441/2007 of 5 December 2007 amending
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