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Banks:
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • International Finance Corporation (IFC)
Bank Risk Rating: B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2016-07-22
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: NESPRESSO SUSTAINABILITY INNOVATION FUND
The holder of the loan, grant, or other investment.
Sectors:
The service or industry focus of the investment. A project can have several sectors.
  • Agriculture and Forestry
  • Industry and Trade
Investment Amount (USD): $ 3.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD): $ 6.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.

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Primary Source

Original disclosure @ IFC website
Updated in EWS: 2017-12-26
Disclosure Date: 2016-05-11
Nespresso East African Coffee Project
IFC-36083

Project Description
PROJECT DESCRIPTION The project consists of a US$3 million loan to Nespresso (guaranteed by Nestle S.A.) and US$3 million grant from the World Bank's BioCarbon Fund (to be disbursed through the Nespresso Sustainability Innovation Fund) to support smallholder coffee farmers and producer wet mill businesses in Ethiopia and Kenya involved in Nespresso's AAA Sustainable Quality Program (AAA Program). The project will be implemented on the ground by TechnoServe, and will entail agronomy and sustainability training to farmers and wet mill businesses and planting of shade trees. The scope of this project targets farmers and wet mill businesses in the regions of Sidamo B (in Southern Nations, Nationalities, and Peoples' Region, SNNPR) and Sidama A (in Oromia Region) in Ethiopia, as well as in central and western Kenya. The agronomy and sustainability training will target 33,000 AAA farmers and 125 wet mill businesses in Ethiopia, and 10,000 AAA farmers and 60 wet mill businesses in Kenya. In addition, shade tree planting activities will also target farmers and wet mills in the same AAA areas who previously participated in TechnoServe's training (as part of Gates or Nestle-funded programs, totaling around 25,000 farmers and 20 wet mills). In Ethiopia, seedlings will be grown in government-owned nurseries, from where they will be transported to farmers and wet mill businesses for planting. In Kenya, seedlings will be grown in cooperative-owned nurseries.Founded in 1986 and a wholly-owned subsidiary of Nestle, a Swiss multinational food company, Nespresso is headquartered in Lausanne, Switzerland and markets at-home espresso and coffee machines and capsules, as well as single-origin and specialty coffees from coffee producers around the world. Nespresso's AAA Sustainable Quality Program, launched in 2003, is the company's long-term commitment to working with farmers and coffee growing communities to promote a sustainable future. Currently, Nespresso sources 84% of its coffee from the AAA Program worldwide, and seeks to source 100% by 2020. As part of its sustainability goals, Nespresso has already planted over 600,000 trees and aims to plant several million trees in AAA coffee regions by 2020, which helps strengthen coffee farms' resilience to climate change and ensures sustainable coffee production for the future.TechnoServe was established in 1968 as a nonprofit organization with the aim of working in the developing world to build competitive farms, businesses and industries through the linking of people to information, capital and markets. To date, TechnoServe has worked in more than 40 countries across Africa, Latin America and Asia with coffee as one of its major sectors and has reached more than 250,000 coffee farmers around the world. TechnoServe has been present in Ethiopia since 2007 and provided training programs to approximately 50,000 smallholder coffee farmers centered around approximately 100 wet mills. In Kenya, TechnoServe has provided training to 17,000 smallholder coffee farmers and 72 wet mills. Initially funded by The Bill & Melinda Gates Foundation and now Nestle Nespresso, TechnoServe provides a farmer-training program (Coffee Farm College) to educate smallholder coffee farmers in sustainable agronomic practices to increase yields and business support to farmer cooperatives to establish or upgrade wet mills to improve coffee quality through the East Africa Coffee Initiative.Nespresso and TechnoServe have been working together in Ethiopia since 2013 and in Kenya since 2014 to implement and scale up the Nespresso AAA Sustainable Quality Program. This involves TechnoServe delivering the Coffee Farm College training to smallholder coffee farmers and sustainability and quality training to coffee wet mill businesses (cooperatives and, in Ethiopia, private businesses as well) to improve the quality and sustainability of their coffee, which also includes a module around coffee shade tree planting. The goal is to reach by 2020 an estimated 300 wet mills (purchasing from approximately 250,000 smallholder farmers), and provide agronomy training to 50,000 farmers. Achieving AAA supplier status will enable wet mill businesses to access a new market of Nespresso AAA sales and it is expected that smallholder coffee farmers will have increased coffee incomes as a result of improved yields, quality and market access to Nespresso's AAA supply-chain.Ethiopia, the single largest African coffee producer and the world's fifth largest, is commonly considered as the birthplace of coffee. Around 95% of Ethiopia's coffee is produced by an estimated 4 million smallholder farmers on plots with an average size of 0.5 hectare (the average farm size is less than 2 hectare), the majority of which live in the southwestern and southeastern parts of the country (regions of Jimma, Lekempti, Sidamo and Yirgacheffe). Smallholder farmers are typically grouped into producer cooperatives, which provide services to members including coffee processing (wet mill, sun drying area, and storage shed), credit and human and financial resources. Sidamo (named after the Sidama Zone in Southern Ethiopia) is one of Ethiopia's most distinctive coffee origins and accounts for more than two-thirds of Ethiopia's washed coffee output.Kenya is the second largest producer of washed Arabica coffee in Africa. About 55-60% of Kenyan coffee production comes from an estimated 570,000 smallholder farmers, while the remainder comes from large estates. Most coffee is grown in central and western Kenya, accounting for 70% of Kenya's coffee production. All smallholders process and market their coffee through cooperatives, where they are required by law to be members.The government policy does not allow private companies to operate wet mills to process coffee from smallholder farmers and instead these are operated by cooperatives.Both Ethiopia and Kenya account for a key component of Nespresso's overall supply from Africa, from where coffee is exported to Nespresso's facilities in Switzerland for roasting, packaging and distribution through the company's sales and marketing channels. OVERVIEW OF IFC'S SCOPE OF REVIEW IFC's environmental & social (E&S) appraisal took place on 2-5 November 2015, in Ethiopia as well as follow-up phone conversation and included the following:-Meetings with key TechnoServe staff, including the Ethiopia Coffee Initiative Regional Director and the Ethiopia Coffee Initiative Country Director in Addis Ababa; staff at Bokasso and Fero cooperatives located in Wonsho District (Sidama B zone, SNNPR Province); and Nespresso Coffee Sustainability Project Manager;-Site visit to the TechnoServe office in Addis Ababa; Bokasso and Fero cooperatives located in Wonsho District (Sidama B zone, SNNPR Province, 320 km south east of Addis Ababa);-Review of technical documents provided by TechnoServe, including the standards for sustainable coffee production and audit checklist, examples of sustainability standards scorecard, agronomy program and technical assistance, Coffee Farm College, TechnoServe employee handbook; Nespresso AAA Sustainable Quality Program, Nespresso's Tool for the Assessment of Sustainable Quality (2013), Nespresso AAA Shared Commitment (Version 1.0), Nespresso Ecolaboration Report 2009-2013, Nestle Supplier Code (December 2013), Nestle Employee Relations Policy (September 2010), and Nestle Corporate Business Principles.IFC's appraisal also considered the findings and performance of two previous IFC projects involving TechnoServe in Ethiopia (#29228 and #35023) including implementation and effectiveness of the standards for sustainable coffee production. TechnoServe successfully completed the Environmental and Social Action Plan (ESAP) agreed upon under the first project, thereby achieving compliance with national legal and regulatory requirements as well as with the IFC Performance Standards and committed itself to maintain and improve on its existing sustainability framework. TechnoServe maintained an excellent environmental and social performance under the second project.IFC's appraisal considered the environmental and social management plans for the project and gaps, if any, between these plans and IFC requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and in the agreed Environmental and Social Action Plan (ESAP) disclosed in this review summary. Through implementation of these management plans and the ESAP, the project is expected to be designed and operated in accordance with Performance Standards objectives. IDENTIFIED APPLICABLE PERFORMANCE STANDARDS** While all Performance Standards are applicable to this investment, IFC's environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards.PS 1 - Assessment and Management of Environmental and Social Risks and ImpactsPS 2 - Labor and working conditionsIf IFC's investment proceeds, IFC will periodically review the the project's ongoing compliance with the Performance Standards Issues related to the following PSs are not expected: PS3: Resource Efficiency and Pollution Prevention - project activities are not expected to generate pollution to air, water, and land as well as greenhouse gas emissions, nor to consume energy and water; PS4: Community Health, Safety and Security - project activities are not associated with adverse impact on any affected community; PS5: Land Acquisition and Involuntary Resettlement - the company has no plans to acquire land for coffee cultivation or additional plant/operations within the scope of this project; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources - all project activities will take place on existing coffee farms and already established wet mills and there will be no additional land conversion. Only indigenous tree species are expected to be used (for example, Acacia abyssinica, Albizia sp, Cordia africana, Milletia dura, and Sesbania) and seeds will be sourced from local suppliers. The indigenous False Banana (Ensete ventricosum) will also be considered for farms in Ethiopia as it is widely used for shade as well as a source of carbohydrates, while in Kenya, the ordinary banana (genus Musa) will be used, which already widely exists in agroforestry systems. The project does not entail the procurement of primary production. PS7: Indigenous Peoples and PS8: Cultural Heritage - no presence of Indigenous Peoples or known cultural artifacts within the company's operational footprint. In the event that issues anticipated by these PSs arise, Nespresso will promptly inform IFC and commit to addressing these in a timely manner. Screening and assessment of these issues against PSs requirements will be done through TechnoServe's E&S management system (ESMS). ENVIRONMENTAL AND SOCIAL CATEGORIZATION AND RATIONALE This proposed investment is not anticipated to generate adverse E&S risks but any that do arise are likely to be site-specific, few in number, reversible and readily addressed through mitigation measures. The key E&S risks identified with this investment are failure by Nespresso to maintain oversight of the activities undertaken by TechnoServe in compliance with its sustainability standards, including IFC's PSs.These impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC's Environmental and Social Sustainability Policy. **Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability ENVIRONMENTAL AND SOCIAL MITIGATION MEASURES IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFC's requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. PS 1: ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS Environmental and Social Assessment and Management System. Since 2005, Nespresso has applied a life cycle assessment (LCA) approach (developed according to international standards such as ISO 14040 and ISO 14044) for measuring and reporting environmental performance against five key indicators: climate change (also known as carbon footprint), water footprint, biodiversity, human health and energy. This process helps Nespresso make informed decisions on how to improve its environmental performance, by evaluating opportunities to reduce energy, material inputs or environmental impacts at each stage of the lifecycle. Nespresso commissioned a team of experts in the field of environmental life cycle assessment (LCA) to review its operations, which concluded that the biggest environmental impacts are associated with the use of the Nespresso machines and coffee growing. To address the environmental and social impacts associated with its value chain, Nespresso is promoting sustainable agriculture practices to farmers through its AAA Sustainable Quality Program, which is implemented on the ground in Ethiopia and Kenya by TechnoServe. The specific elements of the framework are described in further detail in each of the sections below and Nespresso holds TechnoServe accountable for their implementation. The framework is considered to be consistent with the requirements of PS1.Policy. Building upon the steps taken by Nespresso to improve farmer welfare and drive sustainability in coffee sourcing and consumption through its AAA Program, Nespresso has set out a strategy for 2020 (The Positive Cup) to further the company's goals for mitigating its impacts and create positive outcomes for coffee farmers and the sector at large. This includes sustainability objectives to achieve by 2020 in the areas of coffee sourcing and social welfare; aluminum sourcing, use and disposal; and resilience to climate change. Nespresso aims to source 100% of its permanent range of Grand Cru coffees sustainably through its AAA Program worldwide; expand the capacity to collect used aluminum capsules to 100% wherever the company does business and increase recycling rates; and have 100% carbon efficient operations.Identification of Risks and Impacts. Nespresso developed the AAA Program by using 296 sustainability criteria defined in partnership with the Rainforest Alliance and the Sustainable Agriculture Network (SAN) to address the risks related to the sector: 90 environmental criteria such as ecosystem conservation, wildlife protection, reforestation, wastewater management, soil preservation and waste disposal; 150 social criteria such as fair treatment and good conditions for workers, child labor, health and safety; and 56 economic criteria such as planning, book keeping, training, traceability and rational energy use. This is considered to be a comprehensive assessment of the prevalent risks of the sector. Nespresso uses the Tool for the Assessment of Sustainable Quality(TASQ, version 2013), which sets the guidelines to evaluate farms participating in the AAA Program. Farmers and wet mill businesses participating in the AAA Program are required to undertake regular audits against a subset of these criteria (applicable to Ethiopia and Kenya) in order to maintain their status within the AAA Program (see Monitoring and Review section below).Management Programs. Launched in 2003 in partnership with the Rainforest Alliance, Nespresso's AAA Program is the cornerstone of Nespresso's responsible sourcing approach. The AAA Program is based on a three-pronged approach: 1) quality (helping farmers adopt best practices in coffee cultivation to protect the supply of the highest quality of coffee); 2) sustainability (supporting farmers to become more environmentally and socially responsible); and 3) productivity (helping farmers to improve productivity and implement cost reduction initiatives to increase their net income). Consistent with Nespresso's objective to increase farmers' climate resilience by 2020, the company is expanding the agro-forestry component of the AAA Program by planting trees in and around AAA coffee farms to help restore natural habitats, regulate water availability, improve soil quality, and increase the capacity of coffee farming areas to better adapt to climate change.In Ethiopia and Kenya, Nespresso has been partnering with TechnoServe to implement on the ground the requirements of Nespresso's AAA Program. TechnoServe has developed standards for sustainable coffee production that apply to coffee processing enterprises (cooperative and private wet mills) and smallholder coffee farmers. The standards encompass the following five areas: i) production and farm management (promoting sustainable agronomic, social and environmental practices that maximize yield and quality while protecting producers, workers, environmental resources and surrounding communities); ii) social responsibility and ethics (encouraging fair and ethical employment practices); iii) occupational health and safety (promoting a safe working environment); iv) environmental responsibility (promoting management of all resources and landscapes in coffee production and processing in a manner that protects the local environment, producers, workers and the community); and v) economic transparency (encouraging consistent and complete record keeping and transparent financial management (such that producers are remunerated for their coffee in a transparent and equitable manner). For each of these five areas, the standards stipulate mandatory practices with which wet mill businesses and farmers are required to comply, pertaining to: child labor, forced labor, wastewater management, and environmental conservation (cutting of primary forest or within protected areas). Farmers and wet mill businesses participating in the AAA Program are required to comply with the standards for sustainable coffee production. The standards were considered tobe implemented consistently by farmers and wet mill businesses, with any gaps in application identified during regular audits undertaken by TechnoServe and a subsequent action plan developed and agreed with the cooperative and wet mill business.As part of the ESAP (item #1) and within the context of TechnoServe's existing standards, TechnoServe will integrate the outcomes of a biodiversity screening of sites targeted for tree planting (although tree planting is anticipated to have an ecologically positive impact) to mitigate any residual risk of habitat degradation on sites that may potentially have significant ecological value. Furthermore, TechnoServe will develop and implement a vehicle operator safety program for service providers operating vehicles involved in the transport of seedlings from nurseries to farmer groups and wet mills. TechnoServe will adopt good international industry practices for transport safety across all aspects of project operations with the goal of preventing traffic accidents and minimizing injuries suffered by project personnel and the public. This will also include tracking incidents, which may be used to terminate service provider contracts if necessary.TechnoServe also administers the Coffee Farm College, which is a 2-year course of specific coffee agronomy modules, delivered on a monthly basis on designated farms that serve as demonstration plots. The training curriculum includes topics such as tree canopy management (pruning and rejuvenation), tree nutrition, composting, soil erosion control, integrated pest and disease management, mulching, weed control, shade systems (the value of shade for coffee, appropriate level of shade, appropriate tree species, shade tree planting, and management), harvesting, the standards for sustainable coffee production, and business skills. The agronomy topics taught are all climate-smart solutions and include adaptation strategies to help farmers adjust to the impact of climate change (for example, mulching and shade to reduce plant and soil temperatures) and mitigation strategies to help reduce carbon emission (for example, tree planting to capture greenhouse gas emissions), while composting both sequesters carbon in the soil and reduces the amount of petroleum-based chemical fertilizers, as well as increasing the moisture-holding capacity of the soil and reduces drought stress. The sustainability training provided to wet mill businesses includes creating awareness among wet mill business leaders on the value of having a tree-lined perimeter (to act as a buffer zone around water bodies for protection), as well as the appropriate tree species to use, good planting and management practices.Organizational Capacity and Competency. The Nespresso AAA Program is overseen globally by the Green Coffee Sustainability Operations Manager within the Nespresso Sustainability Department, who supervises 5 country managers and 2 project managers. Each Nespresso country manager is responsible for overseeing externally contracted cluster managers and AAA agronomists (field staff including business advisors and farmer trainers--see below), totaling over 30 cluster managers and over 300 AAA agronomists worldwide. The Nespresso Sustainability Advisory Board, which is composed of key partners, was established to provide insight and recommendations to enhance the company's long term sustainability strategy and to serve as a base for partnerships on sustainability initiatives. Each year, the Board focuses on specific topics and aspects of sustainability.TechnoServe has a structured team to ensure implementation oversight of the standards for sustainable coffee production and monitoring at wet mill businesses participating in the AAA Program in Ethiopia and Kenya. Led by the Coffee Initiative Regional Director and overseen by the East Africa Regional Director, the Ethiopia Program Manager is supported by the Nespresso Agronomy and Sustainability Program Managers, 17 business advisors and 37 farmer trainers, and the Kenya Program Manager is supported by a senior business advisor, 5 business advisors and 30 farmer trainers, dedicated to reaching out to target wet mill businesses and farmers. TechnoServe also has a Regional Agronomy and Sustainability Manager who is responsible for maintaining oversight of the standards for sustainable coffee production and ensuring that the necessary processes are in place for their implementation. Under the technical leadership of the Regional Agronomy and Sustainability Manager, the Nespresso Agronomy and Sustainability Program Managers are responsible for managing the work plans and progress made by business advisors, who work with wet mill businesses and provide farmer training. Business advisors oversee the weekly work plans of farmer trainers and provide feedback on the training delivered. Business advisors also randomly select farmers to visit to review adoption of agronomy best practices against a best practice checklist (see below). The farmer trainers schedule and undertake agronomy trainings for farmers, regularly visit farms (up to 50 farmers per month such that all farming households are visited once every 6 months), and also complete the best practice checklist to record observed best practices.Monitoring and Review. Nespresso maintains an AAA Sustainable Quality Program database (the AAA Farm Advanced Relationship Management System) to gather, analyze and share information about sustainability with coffee farmers, to help them plan for the future. This allows Nespresso to reinforce its tailor-made support, by adapting the approach delivered through agronomists in the field in accordance to the farmers' individual needs. At a global level, this also allows Nespresso to maintain a more refined global view of AAA Program implementation and adoption of quality and sustainability best practice and to build more robust sustainability initiatives. Nespresso is working with an external expert on a project to improve its capacity to measure the qualitative and quantitative effects of applying the Tool for the Assessment of Sustainable Quality for wet mill businesses and coffee farmers. Also, to better understand the biodiversity impacts of company operations in coffee countries of origin, especially around coffee growing, Nespresso is working on a long-term project with IUCN to design an eco-monitoring system to evaluate possible future initiatives.Implemented at the field level in Ethiopia and Kenya, TechnoServe tracks progress through environmental sustainability audits and action plans (against the Tool for the Assessment of Sustainable Quality and the practices stated in the standards for sustainable coffee production), which are conducted annually at wet mill businesses, and surveys of adoption of best agronomy practices (randomly selected farmers). The outcome of the audit is compiled into a sustainability scorecard, which is used as the basis for developing an action plan to address outstanding issues and consequently improve the score from one audit to the next. In the first year of the program, audits are undertaken directly after the start of the coffee harvest season and an action plan is developed. A second audit is conducted just before the end of the harvest to monitor improvement. Thereafter, TechnoServe business advisors support the cooperatives to implement their action plans and audit annually for the duration that the wet mill business participates in the AAA Program. This ensures that wet mill businesses are continuously reviewing their practices and implementing the necessary corrective actions to remain compliant with the standards for sustainable coffee production. As part of the scope of this project, TechnoServe will visit a representative sample of farmers within the first few months after seedling delivery to confirm that seedlings were effectively planted. This approach is considered to be adequate for the scope of this project. PS 2: LABOR AND WORKING CONDITIONS Nespresso is present in 64 countries and employs more than 12,000 people worldwide.Human Resources Policies and Procedures. Nespresso follows Nestle's HR practices and policies, which promote a culture of trust, mutual respect, and dialogue and apply to Nespresso's operations worldwide. Nestle's Policy on Conditions of Work and Employment reflects the required work conditions, developed in line with the ILO Core Conventions, and the OECD Guidelines for Multinational Enterprises. Furthermore, Nestle's Employee Relations Policy requires strict compliance with applicable local legislation. Nestle recognizes that in some countries, the legal minimum wage levels do not fulfil the basic needs of a worker and has therefore committed to periodically verifying that the lowest level of salaries (and benefits) complies with local laws, are competitive, and allow employees to cover their needs according to local standards of living. Nestle supports the freedom of association of its employees and the effective recognition of the right to collective bargaining. In countries where these rights are not upheld by local laws, Nestle respects the right of employees to meaningful and constructive dialogue over issues that relate to working conditions and the workplace environment. Company employee representatives are expected to make all necessary efforts to develop fair and constructive negotiations to reach sustainable agreements with employees. Nestle respects the right of employees to engage in union activities if they so choose. Nestle respects the personal dignity, privacy and rights of every employee and is committed to maintaining a workplace free from discrimination and harassment. As stated in the Human Resources Policy and the Code of Business Conduct, the company does not discriminate on the basis of origin, nationality, religion, race, gender, age or sexual orientation; verbal or physical harassment by any employee based on any of the above or any other reason is prohibited. Failure to comply with the Human Resources Policy and the Code of Business Conduct may result in disciplinary action, including the possibility of dismissal and, if warranted, legal proceedings or criminal sanctions. Nestle has an Integrity Reporting System in place through which employees can file grievances related to labor practices.As referenced in the Nestle Corporate Business Principles, Nespresso is committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain. Anchored in Nestle's policy on safety and health at work, an occupational safety and health management system is implemented at all sites, which meets or exceeds the requirements of the health and safety laws applicable in the countries in which the company operates. As part of the management system, the identification of hazards is undertaken at all sites and actions are designed to minimize danger. Emergency and contingency plans to deal with residual risks are also established at each site to further minimize threats, which include communicating with local communities and their emergency services and providing them with adequate health and safety information on our operations. Manufacturing sites undergo regular audits against OHSAS 18001 certification by independent accredited bodies to ensure consistent and coherent implementation of the management system worldwide.Workers Engaged by Third Parties. Nespresso's AAA Shared Commitment stipulates the company's expectations of AAA supplier partners including operating with ethics and integrity as well as in compliance with the Nestle Corporate Business Principles and the Nestle Supplier Code. Nespresso has retained the services of TechnoServe as the technical implementation partner on the ground, with whom the company has worked in Ethiopia since 2013 and in Kenya since 2014. As outlined in the Nestle Supplier Code, Nespresso requires all suppliers to adhere to non-negotiable standards including the company's commitment to international standards such as the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, the Core Conventions of the International Labor Organization (ILO) and the 10 Principles of the United Nations Global Compact. Specifically, all suppliers are required to grant employees the right to Freedom of Association and Collective Bargaining in accordance with all applicable laws and regulations; prohibited from benefitting from forced labor; only employ workers who are legally authorized to work; prohibited from using child labor; provide fair and equal treatment of all employees including non-discrimination during hiring practices; ensure that employees work in compliance with all applicable laws pertaining to regular working hours and rest time (including holidays, and maternity and paternity leaves); pay wages and benefits that, at a minimum, comply with national laws or industry standards; and ensure a safe and healthy working environment for all employees.Suppliers are also required to have in place a system for reporting and managing anonymous grievances by employees, which is overseen in a confidential manner by a designated officer responsible for keeping records on issues raised and actions taken to resolve the issue. Furthermore, any supplier employee can report suspected violations of regulations, laws and the Supplier Code directly to a Nestle contact person, or reported confidentially using the Nestle website or a company hotline found on the website.Nespresso has reviewed the human resources practices of TechnoServe and has found these to be consistent with the Nestle Supplier Code. TechnoServe currently has a staff of 340 professionals working in the coffee team in Ethiopia and 35 employees in Kenya. TechnoServe has a human resource policy, which is outlined in its employee handbook, along with TechnoServe's mission, company values (such as non-discrimination and equal treatment including training on sexual harassment for all new staff), personal code of conduct, and procedures for employee selection, hiring, training, promotion, resignation, retrenchment and firing. It specifies the terms of employment for different categories of appointments and employee's working conditions (such as working hours, training, and salary scale) and benefits (communication, transportation and living allowances, medical and life insurance, pension, and leave). TechnoServe promotes staff recruitment based on merit without regard to gender, ethnicity, and religion. TechnoServe assesses and reports on individual employee performance bi-annually. TechnoServe continuously reviews its salary scale based on a wide-ranging salary survey among NGOs and Ethiopian and Kenyan institutions; remuneration levels always exceed the minimum wage and the general employment conditions are well above Ethiopia's and Kenya's standards. TechnoServe encourages an open door policy to discuss employee issues and a mechanism is in place for employees to bring job-related problems and concerns to the human resources department to be handled in a confidential manner. If an issue cannot be resolved through these channels, a formal filing process is in place, which is overseen by the Human Resources Manager and the Country Director who makes the final decision. Although there currently is no union representation nor a labor welfare committee at TechnoServe in Ethiopia and Kenya, there is no restriction on freedom of association as TechnoServe complies with the labor laws of both countries, which protect workers' rights on freedom of association. The human resource policy includes a specific provision related to dispute settlement. All policies, procedures and guidelines are made available to employees and comply with Ethiopian and Kenyan labor laws. TechnoServe's Human Resources Manager has oversight of the policy's implementation and all related activities.
Investment Description
Contact Information
Mr. Paul Stewart Regional Director Coffee Initiative TechnoServe PO Box 100598 Addis Ababa, Ethiopia Tel: +251 16 63 00 17 E-mail: mailto:pstewart@tns.org Mr. Alexandre Couesnon Coffee Sustainability Project Manager Nestlé Nespresso S.A. Avenue de Rhodanie 40 1007 Lausanne, Switzerland Tel: +41 21 796 94 11 E-mail: mailto:alexandre.couesnon@nespresso.com ACCOUNTABILITY MECHANISM OF IFC The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/
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