PRC: Le Gaga Holdings Limited Greenhouse Agricultural ... · ADB AESPR - Asian Development Bank Annual Environmental and Social Performance Report CNY - Chinese Yuan EIA - Environmental

Environmental Compliance Audit Report Project Number: 47335-001 June 2018

PRC: Le Gaga Holdings Limited Greenhouse Agricultural Development Project Prepared by Le Gaga Holdings Limited for the Asian Development Bank This environmental compliance audit report is a document of the borrower. The views expressed herein do not necessary represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgements as to the legal or other status of any territory or area.

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Environmental Compliance Audit Report Le Gaga Holdings Limited May 2018

http://www.legaga.com.hk

http://www.legaga.com.hk/

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ABBREVIATIONS ADB AESPR

- Asian Development Bank Annual Environmental and Social Performance Report

CNY - Chinese Yuan EIA - Environmental Impact Assessment EIF - Environmental Impact Form EPB - Environmental Protection Bureau ESDD - Environmental and Social Due Diligence ESMS - Environmental and Social Management System ESU - Environmental and Social Unit IEE - Initial Environmental Examination PB - Production Base

WEIGHTS AND MEASURES

kg - kilogram km - kilometer m2 - square meter m3 - cubic meter mu - Chinese land measuring unit (1 hector = 15 mu) ha - hectare (10,000 m2)

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Table of Contents

I. Introduction ...................................................................................................................... 1

II. Applicable Legal, Administrative Framework and Standards ................ 3

1. ADB’s Safeguard Requirements ....................................................................... 3

2. National Legal, Administrative Framework and Standards ..................... 3

III. Scope of Review and Methodology ..................................................................... 4

IV. Compliance and liability ............................................................................................ 5

1. Subproject 1 Huidong PB .................................................................................... 5

2. Subproject 2 Zhangpu PB ................................................................................. 10

3. Subproject 3 Huian PB ....................................................................................... 14

4. Subproject 4 Huating PB ................................................................................... 18

5. Subproject 5 Fuqing PB ..................................................................................... 23

V. Conclusion and Recommendation ..................................................................... 28

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I. INTRODUCTION A loan up to $ 140 million to Le Gaga Holdings Limited (Le Gaga) for the Greenhouse Agricultural Development Project (PRC) was approved by ADB in 2015 to support Le Gaga in establishing and expanding a series of modern greenhouse operations in Guangdong and Fujian provinces. Five subprojects of Le Gaga, namely Huidong, Zhangpu, Huian, Huating and Fuqing (see Figure 1) converted the existing greenhouse area from traditional soil-based agriculture to modern soilless cultivation or construction of greenhouse and irrigation facilities using ADB loan. The conversion process mainly includes placing cultural bags and modifying the irrigation systems.

Note: PB=production base

Figure 1: Location of the Five Subprojects

The basic information of these five subprojects are summarized in Table 1. The major facilities include greenhouses, pumping system, offices, warehouse, access roads and accommodation facilities. The production process is consisting of breeding, cultivation and harvest. The major products are pimiento, tomato, pepper and eggplant. The cultivation conversion This environmental compliance audit was conducted in compliance with the ESMS of Le Gaga that subprojects involving existing facilities or under construction or with land leasing in anticipation of the ADB financing for the subproject, Le Gaga will undertake an environment and/or social compliance audit, including on-site assessment, to identify past or present concerns related to impacts on environment, involuntary resettlement, and indigenous people. The objective of this environmental compliance audit is to determine whether actions were in accordance with ADB’s Safeguard Policy Statement (2009) and safeguard requirement 1: Environment and to identify and plan appropriate measures to address outstanding compliance issues.

Guangdong Province

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Table 1: General information of Five Subprojects No. Subproject

Name Branch Company

Location Operated since

Arable land (mu)

Major activities

1 Huidong Linong Agriculture Technology (Huizhou) Co. Ltd

Huidong county, Guangdong

2005 3001.69 Conversion to soilless cultivation model

2 Zhangpu Land V. Agriculture Technology (zhangzhou) Co. Ltd

Zhangpu county, Fujian


3 Huian Liyuan Agriculture Technology (Quanzhou) Co. Ltd

Huian county, Quanzhou City, Fujian


4 Huating Putian Land V. Group Co. ltd

Putian City, Fujian

2014 961 Construct soilless cultivation model

5 Fuqing Linong Agriculture Technology (Fuqing) Co. Ltd

Jiangjing town, Fuqing City


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II. APPLICABLE LEGAL, ADMINISTRATIVE FRAMEWORK AND

STANDARDS This section discusses the ADB requirements and national and local legal framework that guided the assessment of the potential Project impacts.

1. ADB’s Safeguard Requirements

Safeguard Requirements (SR) 1 outlines the requirements that borrowers/clients are required to meet when delivering environmental safeguards for projects supported by ADB. Environment Safeguards are triggered if a project is likely to have potential environmental risks and impacts. The purpose of the Environment Safeguards is to ensure the environmental soundness and sustainability of projects, and to support the integration of environmental considerations into the project decision-making process. The SR 1 covers requirements on the following aspects: • Environmental assessment • Environmental planning and management • Information disclosure • Consultation and participation • Grievance redress mechanism (GRM) • Monitoring and reporting • Unanticipated environmental impacts • Biodiversity conservation and sustainable natural resources management • Pollution prevention and abatement • Health and safety • Physical cultural resources

2. National Legal, Administrative Framework and Standards

The major laws that established the PRC legal and administrative framework for environmental and natural resource management include, among others, the • Environmental Protection Law (2015 Amendment); • Environmental Impact Assessment Law (2016 Amendment); • Administration on EIA Registration Form (2017); • Water Law (2016 Amendment); • Regulations on Construction Project Environmental Protection Management

(2017 Amendment); • Water Pollution Prevention and Control Law (2017 Amendment); • Air Pollution Prevention and Control Law (2000); • Solid Waste Pollution Prevention and Control Law (2016 Amendment); • Soil Erosion Control Law (2010 Amendment); • Marine Environment Protection Law (2000); • Law of Protection of Wild Fauna (2004); • Administration Law (1999); • Energy Conservation Law (2008); and • Guideline of Environmental Protection Categories of Construction Projects

According to the 2008 version of the EIA categorization guideline, an environmental impact form (EIF) is required for agricultural production base project if not involve sensitive areas. This guideline was amended in 2015. According to the new EIA categorization criteria, the agricultural production base sector is classified into

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Category B if involves sensitive areas. If not, the applicable category is C, which requiring to register on EPB’s registration system for information. In addition, the company is subject to the governance of a broad range of agricultural laws, regulations and technical guidelines to ensure appropriate use of agricultural materials, such as farm chemicals, seeds, fertilizers, that may affect the health of human beings or animals, including but not limited to: • Law of the People's Republic of China on Agriculture (2013 Amendment); • Agricultural Product Quality Safety Law (2006) • Regulation on Pesticide Administration (2017 Amendment) • Safe Use of Pesticides (1982); • Guideline for Safety Application of Pesticides (GB/T 8321.5-2006) • Technical Guideline on Application of Pesticides for Environmental Safety (HJ

556-2010); • Banned and restricted pesticide list (Ministry of Agriculture, 2002 (No. 199),

updated in 2017); and • Technical Guideline on Environmental Safety Application of Chemical Fertilizer

(HJ 555-2010). The Regulation on Pesticide Administration (2017 Amendment) provides that: • Article 33 The use of pesticide shall follow the rules for preventing pesticide

poison, the mixture and application of pesticides shall be conducted correctly and a good job shall be done in disposing of wastes and in safety and protection work so as to avoid environmental pollution and poisoning accidents.

• Article 34 The use of pesticide shall conform to the relevant State provisions on safe and rational use of pesticides, and the application of pesticides shall follow the specified dosage, frequency of application, methods of application and withholding period to avoid polluting agricultural and sideline products. Extremely and highly toxic pesticides shall not be used for the prevention and control of insects harmful to public health nor on vegetables, melons, fruits, tea and Chinese medicinal herbs.

• Article 35 Care must be taken in applying pesticides in order to protect the environment, beneficial organisms and rare species. It is strictly prohibited to use pesticides to poison fish, shrimps, birds and animals.

III. SCOPE OF REVIEW AND METHODOLOGY The following documents were reviewed by the E&S general manager with support from the appointed external environmental consultant: • Simplified Environmental Impact Assessment Report and EPB approval for

Huidong Production Base (2014); • Simplified Environmental Impact Assessment Report and EPB approval for

Zhangpu production Base (2014); • Simplified Environmental Impact Assessment Report and EPB approval for

Huian production Base (2014); • Simplified Environmental Impact Assessment Report and EPB approval for

Huating production Base (2014); • Simplified Environmental Impact Assessment Report and EPB approval for

Fuqing production Base (2014); • Sample pesticide and fertilizer procurement contract; • Le Gaga’s internal production control documents, including pesticide usage

and management procedure, pesticide warehouse management procedure,

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field management system, quality control system, vegetable production tracking system.

Site inspections were conducted by the E&S manager of each subproject under the guidance of E&S general manager during May 2018.

IV. COMPLIANCE AND LIABILITY The following summarized the issues in terms of environment and compliance status with applicable ADB environmental safeguard requirements and national laws, regulations, and standards.

1. Subproject 1 Huidong PB

Huidong County is a county of southeastern Guangdong Province. The county is responsible for the administration of one subdistrict and 13 towns. Huidong PB operates two farms, i.e. Duozhu Farm in Sansheng Village of Duozhu Town and Pingshan Farm in Dabu Village of Pinshan Subdistrict. Duozhu Farm with an arable area of 1241.69 mu has been in operation since 2008. Pingshan Farm with an arable area of 1751.8 mu was built in 2005. The PB manager, Ms. Ma Dan was appointed as E&S manager overseeing environmental management of Duozhu Farm and Pingshan Farm.

Pingshan Farm Duozhu Farm

Figure Huidong-1: Layout of Huidong Production Base EIA status. • Duozhu Farm: the EIF was approved by Huidong County EPB in 2010; • Pingshan Farm (1751.8 mu): there has been no EIF development for Pingshan

Farm since its development in 2005 but the local EPB (Huidong County EPB) issued an official environmental clearance letter to certificate that Pingshan Farm has been operated in line with the relevant environmental requirements in 2015.

Environmental setting and sensitive receptors. • Duozhu Farm: The farm is surrounded by farmland operated by local villagers

and some litchi trees in the north side. • Pingshan Farm: The historical land use type is farmland. A small river goes

around in the west side of the site. The residential area of Dabu Village is about 500 m to the east boundary of the farm.

Water consumption. The irrigation water is sourced from runoff from the hills nearby. Huidong production base can save about 441,248 m3 comparing with traditional

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cultivation model1. Wastewater Treatment. The feed water is recycled within the irrigation system without discharge. The domestic sewage is stored in the septic tanks then used as fertilizer. The cultural bags are shed by the greenhouse. Storm water is collected by sewer and drainage to the channel around the greenhouse. Therefore, the runoff will not contain significant nutrients. Solid waste Disposal. The municipal solid waste is transported by local sanitation agency regularly. The residual leaves and rotten fruits are reused as fertilizer. The service life of the plastic shed film normally is 3 years as reported by the PB manager. It is estimated roughly that 125 tons waste films are generated. The demolished plastic shed film of the greenhouse and fertilizer bags are recycled by special collectors. The waste pesticide containers are hazardous waste, which are disposed by licensed hazardous waste treatment center or returned to the suppliers. Fertilizer Application. A stock solution consisting of a single fertilizer, or several compatible fertilizers, dissolved in water is supplied to the vegetables by in-line drip irrigation to ensure precise delivery of water and fertilizer to crop. Electronic conductivity (EC) and pH are monitored on line to control the concentration of nutrients. The pretreated coco-coir is used as substrate. In such a closed system, leached nutrient feed water is mostly contained within the greenhouse facility and is not lost to surface water or groundwater.

Fertilizer Storage. Fertilizer is stored in a dedicated locked warehouse. The floor was paved. Fire extinguisher is in place.

Figure Huidong-2: Fertilizer warehouse

Application of Pesticide and herbicide. Hormone is used to trap the pest in the field to reduce the usage of pesticides. The plastic film was laid to suppress weed growth. Otherwise, weeds are pulled out manually.

1 According to the Guangdong Water Use Quota (DB 44/T 1461-2014), traditional cultivation of

vegetables consume 210 m3 water per mu. Based on Le Gaga’s experience, soilless cultivation can save 70% water consumption comparing with traditional cultivation model.

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Figure Huidong-3: Weed suppression film

The review of the pesticide application records of 2017 provided by the E&S manager confirmed that the pesticides used by Huidong PB are neither in the list of banned or eliminated pesticide list promulgated by Ministry of Agriculture nor Annex III chemicals2. Huidong PB has trained a specialized team composed by 10 workers to be responsible for pesticide application. The maximum daily working hours are 6 hours. It was reported by the farm manager that PPEs (clothing, hats, masks and shoes) are provided to the workers. However, during this compliance audit, only protective coats were observed.

2 Published on http://www.pic.int/TheConvention/Chemicals/AnnexIIIChemicals/tabid/1132/language/en-US/Default.aspx. The chemicals listed in Annex III include pesticides and industrial chemicals that have been banned or severely restricted for health or environmental reasons by two or more Parties and which the Conference of the Parties has decided to subject to the PIC procedure. There are a total of 50 chemicals listed in Annex III, 34 are pesticides (including 3 severely hazardous pesticide formulations) and 15 industrial chemicals, and 1 chemical in both the pesticide and industrial chemical categories.

http://www.pic.int/TheConvention/Chemicals/AnnexIIIChemicals/tabid/1132/language/en-US/Default.aspx


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Figure Huidong-4: PPE on site

Pesticide Storage. The pesticides are stored in their original, labeled containers and placed on shelves on a dedicated locked warehouse. The floor was paved to help minimize contamination in case of spillage events. Fire extinguisher is in place. The material safety data sheet (MSDS) is in place in the warehouse.

Figure Huidong-5: Pesticide warehouse condition

A pesticide storage and application procedure is in place, covering: • Structural requirements to keep pesticides in good condition and fire and theft

proof; • Role of warehouse keeper; • Storage requirements; • Usage of pesticide; • Disposal of the empty pesticide containers.

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Figure Huidong-6: Pesticide application and management protoco

Environmental Monitoring and Reporting. As no specific requirements on environmental monitoring in the approved EIF, impact monitoring is deemed as not mandatory for the project considering the nature of the project under PRC regulations. GRM. A GRM was established with the ESMS in 2015 and disclosed to the villagers.

Figure Huidong-7: GRM disclosure on village information board

The Huidong PB E&S manager confirmed that there was no environmental complaints received since operation. Stakeholder Consultation. There are no mandatory requirements on public consultation and stakeholder engagement on agricultural farming project (PRC category B) in the process of EIF development. It was reported by the PB E&S manager that the EIF has been disclosed on local EPB’s website twice. This was the normal practices in PRC. The EPB usually discloses the environmental document on its website when it started the reviewing process. The second disclosure is before the final approval. However, the EIF for Duozhu Farm was approved about 8 years ago, there were no records on the public consultation conducted but the approved EIF was accessible in EPB upon public’s request.

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Project information disclosure has been disclosed to the villagers and other stakeholders during land leasing process. The E&S manager confirmed no concerns or complaints on aspects of environment received during the consultation.

2. Subproject 2 Zhangpu PB

Zhangpu County is a county of Zhangzhou City in far southern Fujian Province. Zhangpu PB operates two farms, i.e. Changxing Farm and Panlong & Xiangya Farm. The PB manager, Ms. Zhangyingying was appointed as E&S manager overseeing environmental management of Changxing Farm and Panlong & Xiangya Farm.

Changxing Farm Panlong&Xiangya Farm

Figure Zhangpu-1: Layout of Zhangpu Production Base EIA status. • Xiangya & Panlong Farm: the EIF was approved by Zhangpu County EPB in

2014. • The original EIF for Changxing Farm was approved by Zhangpu County EPB

on June 2008. Since the size of the land area expanded from 300 mu to 1200 mu, the updated EIF was approved in 2014.

Environmental setting and sensitive receptors. • Changxing Farm: The north, west and south sides were farmland operated by

local villagers. Changxing stream is 150 m in the west side. The nearest residential houses are about 10 m from the east boundary.

• Panlong & Xiangya Farm: The historical land use type is farmland. The Panlong part and Xiang part are separated by the county road and a small river.

Water consumption. The irrigation water is sourced from river water nearby. Zhangpu production base can save about 422,755 m3 comparing with traditional cultivation model3. Wastewater Treatment. The feed water is recycled within the irrigation system without discharge. The domestic sewage is stored in the septic tanks then used as fertilizer. The cultural bags are shed by the greenhouse. Storm water is collected by sewer and drainage to the channel around the greenhouse. Therefore, the runoff will not contain significant nutrients. Solid waste Disposal. The municipal solid waste is transported by local sanitation agency regularly. The residual leaves and rotten fruits are reused as fertilizer. 3 According to the Fujian Water Use Quota (DB 35/T772-2013), traditional cultivation of vegetables

consume 210 m3 water per mu. Based on Le Gaga’s experience, soilless cultivation can save 70% water consumption comparing with traditional cultivation model.

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The service life of the plastic shed film normally is 3 years as reported by the PB manager. It is estimated roughly that 93 tons waste films are generated. The demolished plastic shed film of the greenhouse and fertilizer bags are recycled by special collectors. The waste pesticide containers are hazardous waste, which are disposed by licensed hazardous waste treatment center or returned to the suppliers. Fertilizer Application. A stock solution consisting of a single fertilizer, or several compatible fertilizers, dissolved in water is supplied to the vegetables by in-line drip irrigation to ensure precise delivery of water and fertilizer to crop. Electronic conductivity (EC) and pH are monitored on line to control the concentration of nutrients. The pretreated coco-coir is used as substrate. In such a closed system, leached nutrient feed water is mostly contained within the greenhouse facility and is not lost to surface water or groundwater.


Application of Pesticide and herbicide. Hormone is used to trap the pest in the field to reduce the usage of pesticides. The plastic film was laid to suppress weed growth. Otherwise, weeds are pulled out manually. The review of the pesticide application records of 2017 provided by the E&S manager confirmed that the pesticides used by Zhangpu PB are neither in the list of banned or eliminated pesticide list promulgated by Ministry of Agriculture nor Annex III chemicals. Zhangpu PB has trained a specialized team composed by 10 workers to be responsible for pesticide application. The maximum daily working hours are 6 hours. It was reported by the farm manager that PPEs (clothing, hats, masks and shoes) are provided to the workers.

Figure Zhangpu-2: PPE on site


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Figure Zhangpu-3: Pesticide warehouse condition



Figure Zhangpu-4: Pesticide application and management protocol Environmental Monitoring and Reporting. As no specific requirements on environmental monitoring in the approved EIF, impact monitoring is deemed as not mandatory for the project considering the nature of the project under PRC regulations. GRM. A GRM was established with the ESMS in 2015 and disclosed to the villagers.

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Figure Zhangpu-5: GRM disclosure on village information board

The Zhangpu PB E&S manager confirmed that there was no environmental complaints received since operation. Stakeholder Consultation. There are no mandatory requirements on public consultation and stakeholder engagement on agricultural farming project (PRC category B) in the process of EIF development. It was reported by the PB E&S manager that the EIF has been disclosed on local EPB’s website twice. This was the normal practices in PRC. The EPB usually discloses the environmental document on its website when it started the reviewing process. The second disclosure is before the final approval. However, the EIFs were approved about 4 years ago, there were no records on the public consultation conducted but the approved EIF was accessible in EPB upon public’s request. Project information has been disclosed to the villagers and other stakeholders during land leasing consultation process. The E&S manager confirmed no concerns or complaints on aspects of environment received during the consultation.

Figure Zhangpu-6: Stakeholder consultation

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3. Subproject 3 Huian PB

Huian Production Base is located in Fengqi Village and Wushan Village of Wangchuan Town, Huian County. Huian County is a county under the jurisdiction of Quanzhou City. The PB manager, Ms. Zhuang Yuexia was appointed as E&S manager overseeing environmental management.

Figure Huian-1: Layout of Huian Production Base

EIA status. The EIF for Huian PB was approved by Huian County EPB in 2015; Environmental setting and sensitive receptors. The south side is farmland separated by a small river. Huian county wastewater treatment plant is in the south side. The residential areas are in the west side and north side separated by roads. Water consumption. The irrigation water is sourced from river water nearby. Huian production base can save about 248,918 m3 comparing with traditional cultivation model4. Wastewater Treatment. The feed water is recycled within the irrigation system without discharge. The domestic sewage is stored in the septic tanks then used as fertilizer. The cultural bags are shed by the greenhouse. Storm water is collected by sewer and drainage to the channel around the greenhouse. Therefore, the runoff will not contain significant nutrients. Solid waste Disposal. The municipal solid waste is transported by local sanitation agency regularly. The residual leaves and rotten fruits are reused as fertilizer. The service life of the plastic shed film normally is 3 years as reported by the PB manager. It is estimated roughly that 54 tons waste films are generated. The demolished plastic shed film of the greenhouse and fertilizer bags are recycled by special collectors. The waste pesticide containers are hazardous waste, which are disposed by licensed hazardous waste treatment center or returned to the suppliers. Fertilizer Application. A stock solution consisting of a single fertilizer, or several compatible fertilizers, dissolved in water is supplied to the vegetables by in-line drip irrigation to ensure precise delivery of water and fertilizer to crop. Electronic 4 According to the Fujian Water Use Quota (DB 35/T772-2013), traditional cultivation of vegetables


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conductivity (EC) and pH are monitored on line to control the concentration of nutrients. The pretreated coco-coir is used as substrate. In such a closed system, leached nutrient feed water is mostly contained within the greenhouse facility and is not lost to surface water or groundwater.


Application of Pesticide and herbicide. Hormone is used to trap the pest in the field to reduce the usage of pesticides. The plastic film was laid to suppress weed growth. Otherwise, weeds are pulled out manually. The review of the pesticide application records of 2017 provided by the E&S manager confirmed that the pesticides used by Huian PB are neither in the list of banned or eliminated pesticide list promulgated by Ministry of Agriculture nor Annex III chemicals. Huian PB has trained a specialized team composed by 6 workers to be responsible for pesticide application. The maximum daily working hours are 6 hours. It was reported by the farm manager that PPEs (clothing, hats, masks and shoes) are provided to the workers.

Figure Huian-2: PPE on site


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Figure Huian-3: Pesticide warehouse condition of Huian PB



Figure Huian-4: Pesticide application and management protocol

Environmental Monitoring and Reporting. As no specific requirements on environmental monitoring in the approved EIF, impact monitoring is deemed as not mandatory for the project considering the nature of the project under PRC regulations. GRM. A GRM was established with the ESMS in 2015 and disclosed to the villagers.

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Figure Huian-5: GRM disclosure on village information board

The Huian PB E&S manager confirmed that there was no environmental complaints received since operation. Stakeholder Consultation. There are no mandatory requirements on public consultation and stakeholder engagement on agricultural farming project (PRC category B) in the process of EIF development. It was reported by the PB E&S manager that the EIF has been disclosed on local EPB’s website twice. This was the normal practices in PRC. The EPB usually discloses the environmental document on its website when it started the reviewing process. The second disclosure is before the final approval. However, the EIF for Huian PB was approved about 3 years ago, there were no records on the public consultation conducted but the approved EIF was accessible in EPB upon public’s request. Project information disclosure has been disclosed to the villagers and other stakeholders during land leasing process. The E&S manager confirmed no concerns or complaints on aspects of environment received during the consultation.

Figure Huian-6: Introduction to the village visitors

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4. Subproject 4 Huating PB

Huating PB is located in the Yuantou Village, Huating Town of Chengxiang District, Putian City, Fujian Province. The PB manager, Mr. Yang Chunfei was appointed as E&S manager overseeing environmental management of Huating PB.

Figure Huating-1: Layout of Huating Production Base EIA status. The EIF for Huating PB was approved by Chengxiang District EPB in 2014. Environmental setting and sensitive receptors. The farm is surrounded by hills in three sides. The nearest residential area is about 50 m to the north boundary. Water consumption. The irrigation water is sourced from river water nearby. Huating production base can save about 181.629 m3 comparing with traditional cultivation model5. Wastewater Treatment. The feed water is recycled within the irrigation system without discharge. The domestic sewage is stored in the septic tanks then used as fertilizer. The cultural bags are shed by the greenhouse. Storm water is collected by sewer and drainage to the channel around the greenhouse. Therefore, the runoff will not contain significant nutrients. Solid waste Disposal. The municipal solid waste is transported by local sanitation agency regularly. The residual leaves and rotten fruits are reused as fertilizer. The service life of the plastic shed film normally is 3 years as reported by the PB manager. It is estimated roughly that 40 tons waste films are generated. The demolished plastic shed film of the greenhouse and fertilizer bags are recycled by special collectors. The waste pesticide containers are hazardous waste, which are disposed by licensed hazardous waste treatment center or returned to the suppliers.

5 According to the Fujian Water Use Quota (DB 35/T772-2013), traditional cultivation of vegetables


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Figure Huating-2: Bin for waste pesticide container

Fertilizer Application. A stock solution consisting of a single fertilizer, or several compatible fertilizers, dissolved in water is supplied to the vegetables by in-line drip irrigation to ensure precise delivery of water and fertilizer to crop. Electronic conductivity (EC) and pH are monitored on line to control the concentration of nutrients. The pretreated coco-coir is used as substrate. In such a closed system, leached nutrient feed water is mostly contained within the greenhouse facility and is not lost to surface water or groundwater.

Figure Huating-3: Integrated fertilizer-water irrigation system


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Figure Huating-4: Fertilizer storage warehouse

Application of Pesticide and herbicide. Hormone is used to trap the pest in the field to reduce the usage of pesticides. The plastic film was laid to suppress weed growth. Otherwise, weeds are pulled out manually. The review of the pesticide application records of 2017 provided by the E&S manager confirmed that the pesticides used by Huating PB are neither in the list of banned or eliminated pesticide list promulgated by Ministry of Agriculture nor Annex III chemicals. Huating PB has trained a specialized team composed by 5 workers to be responsible for pesticide application. The maximum daily working hours are 6 hours. It was reported by the farm manager that PPEs (clothing, hats, masks and shoes) are provided to the workers.

Figure Huating-5: PPE on site of Huiddong PB


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Figure Huating-6: Pesticide stored



Figure Huating-7: Pesticide application and management protocol of Huating PB Environmental Monitoring and Reporting. As no specific requirements on environmental monitoring in the approved EIF, impact monitoring is deemed as not mandatory for the project considering the nature of the project under PRC regulations. GRM. A GRM was established with the ESMS in 2015 and disclosed to the villagers.

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Figure Huating-8: GRM disclosure on village information board

The Huating PB E&S manager confirmed that there was no environmental complaints received since operation. Stakeholder Consultation. There are no mandatory requirements on public consultation and stakeholder engagement on agricultural farming project (PRC category B) in the process of EIF development. It was reported by the PB E&S manager that the EIF has been disclosed on local EPB’s website twice.

Figure Huating-9: Information disclosure during EIF development

Project information disclosure has been disclosed to the villagers and other stakeholders during land leasing process. The E&S manager confirmed no concerns or complaints on aspects of environment received during the consultation.

Figure Huating-10: Stakeholder consultation

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5. Subproject 5 Fuqing PB

Fuqing PB is located in Jiangjing Town, Fuqing City, Fujian Province. It was developed in 2011. The PB manager, Mr. Wu Yifei was appointed as E&S manager overseeing environmental management.

Figure Fuqing-1: Layout of Fuqing Production Base

EIA status. The EIF for Fuqing PB was approved by Fuqing City EPB in 2014. Environmental setting and sensitive receptors. Fuqing PB is close to the residential houses in the east side. A county road separates the PB into north part and south part. A small river flows through the farm in the central. Water consumption. The irrigation water is sourced from river water nearby. Fuqing production base can save about 340,706 m3 comparing with traditional cultivation model6. Wastewater Treatment. The feed water is recycled within the irrigation system without discharge. The domestic sewage is stored in the septic tanks then used as fertilizer. The cultural bags are shed by the greenhouse. Storm water is collected by sewer and drainage to the channel around the greenhouse. Therefore, the runoff will not contain significant nutrients. Solid waste Disposal. The municipal solid waste is transported by local sanitation agency regularly. The residual leaves and rotten fruits are reused as fertilizer. The service life of the plastic shed film normally is 3 years as reported by the PB manager. It is estimated roughly that 75 tons waste films are generated. The demolished plastic shed film of the greenhouse and fertilizer bags are recycled by special collectors. The waste pesticide containers are hazardous waste, which are disposed by licensed hazardous waste treatment center or returned to the suppliers.

6 According to the Fujian Water Use Quota (DB 35/T772-2013), traditional cultivation of vegetables


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Figure Fuqing-2: Bin for waste pesticide container

Fertilizer Application. A stock solution consisting of a single fertilizer, or several compatible fertilizers, dissolved in water is supplied to the vegetables by in-line drip irrigation to ensure precise delivery of water and fertilizer to crop. Electronic conductivity (EC) and pH are monitored on line to control the concentration of nutrients. The pretreated coco-coir is used as substrate. In such a closed system, leached nutrient feed water is mostly contained within the greenhouse facility and is not lost to surface water or groundwater.


Figure Fuqing-3: Fertilizer storage warehouse

Application of Pesticide and herbicide. Hormone is used to trap the pest in the field to reduce the usage of pesticides. The plastic film was laid to suppress weed growth. Otherwise, weeds are pulled out manually.

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Figure Fuqing-4: Weed suppression film

The review of the pesticide application records of 2017 provided by the E&S manager confirmed that the pesticides used by these five subprojects are neither in the list of banned or eliminated pesticide list promulgated by Ministry of Agriculture nor Annex III chemicals7. Fuqing PB has trained a specialized team composed by 8 workers to be responsible for pesticide application. The maximum daily working hours are 6 hours. It was reported by the farm manager that PPEs (clothing, hats, masks and shoes) are provided to the workers.

Figure Fuqing-5: PPE on site of Fuqing PB


7 Published on http://www.pic.int/TheConvention/Chemicals/AnnexIIIChemicals/tabid/1132/language/en-US/Default.aspx. The chemicals listed in Annex III include pesticides and industrial chemicals that have been banned or severely restricted for health or environmental reasons by two or more Parties and which the Conference of the Parties has decided to subject to the PIC procedure. There are a total of 50 chemicals listed in Annex III, 34 are pesticides (including 3 severely hazardous pesticide formulations) and 15 industrial chemicals, and 1 chemical in both the pesticide and industrial chemical categories.



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Figure Fuqing-6: Pesticide warehouse condition of Fuqing PB


proof; • Role of warehouse keeper; • Storage requirements; • Usage of pesticide; • Disposal of the empty pesticide containers. Environmental Monitoring and Reporting. As no specific requirements on environmental monitoring in the approved EIF, impact monitoring is deemed as not mandatory for the project considering the nature of the project under PRC regulations. GRM. A GRM was established with the ESMS in 2015 and disclosed to the villagers.

Figure Fuqing-7: GRM disclosure on village information board

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The Fuqing PB E&S manager confirmed that there was no environmental complaints received since operation. Stakeholder Consultation. There are no mandatory requirements on public consultation and stakeholder engagement on agricultural farming project (PRC category B) in the process of EIF development. It was reported by the PB E&S manager that the EIF has been disclosed on local EPB’s website twice. This was the normal practices in PRC. The EPB usually discloses the environmental document on its website when it started the reviewing process. The second disclosure is before the final approval. However, the EIF was approved about 4 years ago, there were no records on the public consultation conducted but the approved EIF was accessible in EPB upon public’s request. Project information disclosure has been disclosed to the villagers and other stakeholders during land leasing process. The E&S manager confirmed no concerns or complaints on aspects of environment received during the consultation.

Figure Fuqing-8: Introduction to visitors

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V. CONCLUSION AND RECOMMENDATION

The production bases have adopted advanced cropping practices. Low toxicity pesticides were used to minimize adverse environmental impacts. The corporate has developed and implemented complete field management procedures, including pesticide and fertilizer procurement, application and storage procedures, which are useful to control environmental risks. Table 2 presents a list of action required to be undertaken by the subproject to ensure closure of the gaps identified in the Table 2 and improve their environmental management performance in line with ADB’s environmental safeguard requirements and national legislative requirements.

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Table 2: Corrective Action Plan with Proposed Timeline ADB SR 1: Environment

Applicable Subproject

Gaps Recommendations Timeline

• Environmental Assessment

All of five subprojects

All of these five subprojects have history of non-compliance that been operated for several years without EIFs. This non-compliance was identified during the ESDD conducted in 2014. Since then, Le Gaga has taken corrective measures and received the approvals from local EPBs.

Organize training for the project companies to improve awareness of applicable environmental laws and regulations.

2018/12/31

• Environmental Planning and Management

Pingshan Farm of Huidong PB

Although Pingshan Farm has been operated without any environmental penalties, there is no formal EMP because no EIF for Pingshan Farm.

As the nature of Pingshan Farm is very similar with Duozhu Farm, it is recommended the E&S manager of Huidong to develop an EMP referring to Duozhu EIF to guide its daily operation.

2018/7/15

• Stakeholder Consultation

Huidong, Fuqing, Zhangpu, Huian, Huating

No records showed public consultation was conducted during the process of EIF development except for Huating. PB E&S manager reported stakeholder consultations were organized during the land leasing process. Environmental aspects were also mentioned to the stakeholders but lack of documentation.

The requirement on Information Disclosure, Consultation and Participation were covered by the ESMS of Le Gaga established in 2015. The PB E&S manager shall document the consultation process and results and maintain the documentations. The consultations conducted shall be reported in the AESPR. The AESPR and the compliance audit report will be disclosed on ADB website.

2018/12/31

• Monitoring and Reporting

Huidong, Fuqing,

As no specific requirements on environmental monitoring in the

Refer to the Compliance and Monitoring scheme defined in the ESMS. The

2018/12/31

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Zhangpu, Huian, Huating

approved EIF, impact monitoring is deemed as not mandatory for the project considering the nature of the project under PRC regulations.

environmental and social performance will be evaluated on an annual basis. The E&S general manager will prepare an annual environmental and social performance report (AESPR).

• Occupational Health and Safety

Huidong It was reported by the farm manager that PPEs are provided to the workers. However, during this compliance audit, only protective coats were observed.

Provide full set of protective equipment, including clothing, masks, hats etc. to the workers involved in pesticide application.

2018/7/15

Documents

PRC: Le Gaga Holdings Limited Greenhouse Agricultural ... · ADB AESPR - Asian Development Bank Annual Environmental and Social Performance Report CNY - Chinese Yuan EIA - Environmental