Inter Sea Farms de Venezuela, C.A. - 5 -    International Finance Corporation     A Member of the World Bank Group     International Finance Corporation     A Member of the World Bank Group     Environmental Review Summary (ERS)     Project Name	Venezuela  Inter Sea Farms    Region	Latin America and the Caribbean    Sector	Food and Agribusiness    Project No.	009247     1   .		   The proposed InterSea Farms Venezuela (ISFV   Comprising  a joint venture company  Sea Farms International (SFI) and Interaqua    ) project consists of   an integrated shrimp-farming operation near Maracaibo, that includes a shrimp hatchery, production ponds (2,500 ha) and a processing plant.  The project is composed of two phases with phase one involving the construction of the hatchery, about 1,000 has. of ponds, and all farm infrastructure and equipment. Phase two is to be implemented two-three years after phase one and consists mainly of the processing facilities and an additional 1,500 has of ponds. At full capacity, the project will generate e  mployment for approximately 274 farm staff, 80 hatchery staff, and 500 processing plant staff.   IFC financing will be based only in phase one assuming shrimp processing will be undertaken by third parties however, environmental and social appraisal has addressed  both phases. As part of the development proposal, the sponsor has prepared and submitted an EIA for the project, which has been approved by Venezuelan authorities.    2.		This is a category B project according to IFCs environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor as well as site visits and discussions with the sponsor, national NGO''s and government agency''s.  The following potential environmental, social, health and safety impacts of the project were analyzed:    ·	  Habitat loss and other ecological impacts arising from development of production areas, hatchery and other facilities;   ·	  Farm management and production issues;   ·	  Water use and waste water management from production and processing activities;   ·	  Solid waste management and disposal;   ·	  Environmental Management Systems;   ·	  Employment and occupational health and safety issues;   ·	  Land acquisition process and possible impacts related to physical and/or economic displacement.    The information provided about how these issues and potential impacts have been addressed in the development of the project are summarized in the paragraphs that follow.    3.	   Habitat loss and other impacts arising from development of production areas, hatchery and other facilities   :  The farm site (8,000 ha) comprises an extensive clay alluvial plain that lies behind the main coastal sand dunes on the Gulf of Venezuela.  The area is flat (except for one line of residual dunes that will be retained in the development) and approximately 80% of the site is devoid of vegetation or supports coarse grass during infrequent periods of rain.  The remaining 20% of the site comprises xerophytic vegetation (Acacia and cactus) which are widely distributed throughout the states of Zulia and Falcon. The site does not support significant fauna or areas of standing water that might act as sources of food/security for migratory or other birds or fauna. The loss of these areas of natural habitat will not have a significant impact on the ecology of the area. There are no significant habitat issues associated with the siting or development of the hatcheries or packing plant.    4.	To the west of the site lies the 26,000ha Olivitos Wildlife Management Reserve  whose boundaries were defined by the Government of Venezuela with support and collaboration from the shrimp aquaculture sector and others.  The primary objective of the reserve is to protect birds and other animals and the site  supports one of the most important flamingo colonies in the southern Caribbean.  A salt producing company - Produsal - is located within the reserve area (an area of 3,000ha along the eastern edge of the reserve) and has been abstracting saline waters from the Reserve''s lagoon for over 10 years.  Produsal provides a physical barrier of between 1-2km width between the edge of the ISFV project site and the main wetland and also acts as a barrier to the movement of freshwater from the east into the wetland.  There has been no evidence of ecological change within the wetland as a result of Produsals activities and potential impacts arising from the proposed project (through salinization or changes in hydrology) are not considered likely.     5.	   Farm management and production issues:    A semi-intensive production system is proposed  (15-20 shrimp/m2) and post larvae (pl) will be provided by two 60  million pl per month hatcheries which will be located at nearby sites on the eastern coast of the Paraguaná peninsula in the State of Falcon.  There will be no capture of wild pl.  The non-native shrimp species    Penaeus vannamei    is the culture species of choice for the project  and the sponsor will install grills and other control measures to reduce the risk of shrimp escape.    P. vannamei     is widely used in shrimp aquaculture operations throughout the Caribbean region.     6.	Chemical use on the farm will be limited to the addition of calcium and phosphorus compounds (added as an inorganic fertilizer to reduce feed use through the  promotion of  phytoplankton growth)  and malathion or rotenone (to treat residual ponds following shrimp harvesting and drawdown).  Use of these materials will be controlled and the sponsor has demonstrated adequate management capacity at other sites to ensure that use will conform to WBG requirements.     7.	   Water use and waste water management from production and processing activities   :  Pond water at the farm will be  exchanged at the rate of approx. 5 % of volume per day, (2 million m3 per day at full project development) to maintain good dissolved oxygen levels and salinity conditions in the ponds.  There is an adequate and sustainable supply of water (which will be drawn from the Gulf of Venezuela) and abstraction will not have  a significant impact on other users of the Gulf or the wider environment.  At the proposed stocking densities, waste water effluents will be in compliance with WBG requirements (Table 1), however, in addition, the project will incorporate a  225 ha. effluent treatment pond, providing a greater than 24 hr. retention time before discharge water is returned to the Gulf of Venezuela.   The inclusion of the effluent treatment pond is to provide flexibility should higher stocking densities be selected in the future. Surface runoff will be directed to a large   (812 ha) retention area and then diverted around the site to discharge directly to the sea.  It is not anticipated that this will cause significant ecological impacts.    8.	The soils at the site are predominantly clay and will form an effective barrier against the seepage of saline waters into the ground. There are no people or agricultural activities within or adjacent to the site that could be affected by changes in salinity.  Similarly, given the physical barrier between the site and the Olivitos Reserve, the risk of impacts to the wetland are not significant. The sponsor will be required to monitor groundwater quality as part of the project.    9.	Wastewater from the (third party owned and operated) packing plant that the project will use during phase I is discharged to Lake Maraciabo  and data provided by the owner demonstrates compliance with Venezuelan standards and requirements. The new packing plant that will be designed to comply with effluent WBG requirements.    10.	   Solid waste management and disposal   :   The principal waste materials generated by the farm and packing plant will be: sanitary wastes of employees, materials from office and cafeteria, repair shop discards including used motor oil, feed sacks, and shrimp heads. The sponsor will recycle and re-use material where possible and will dispose of remaining farm waste at the Quisiro landfill which will be improved through a joint program to be developed by the sponsor and local municipality.     11.	   Hazardous Materials Use and Management   : Hazardous materials that will be used include: diesel fuel, rotenone, malathion, chlorine, and lime. (Table 2). Diesel fuel will be stored in secure tanks with secondary containment.  Rotenone  and malathion application will be by trained operators, and chemicals will be stored in a secure location.   The existing packing plant uses Freon 502 refrigerants  and there are no significant emissions from other sources.  The new plant will use ammonia or CFC free refrigerants and will be designed to comply with WBG requirements.    12.	    Environmental Management Systems (EMS)   : An EMS will be established and in house monitoring of key parameters will be undertaken. This will be complemented by periodic sampling by independent and government agencies as part of the permitting requirement of the Government of Venezuela. Responsibility for implementing and supervising the EMS will be assigned at the senior technical level, reporting directly to the projects General Manager.  The packing plant is HACCP and ISO 9000 certified and the ISFV operation will develop and implement similar quality management and health and safety requirements when it develops its packing plant.  The project will also be designed to comply with the Global Aquaculture Alliance''s  codes of practice for responsible shrimp farming   Global Aquaculture alliance (1999) Codes of practice for responsible shrimp farming   GAA St Louis MO ( http://www.GAAlliance.org )  .    13.	   Occupational health and safety issues   : The sponsor will provide a full support and benefit package as required under Venezuelan law (social security and insurance, minimum wage + 20%, vacations and productivity bonus).  As per the Venezuelan Labor Code, an Occupational Health and Safety plan will be implemented as part of  the project.    14.	   Land acquisition process and possible impacts related to physical and/or economic displacement   : The farm will be developed on approximately 8,000 hectares whose southernmost boundary is located approximately 2 km to the north of the village of Quisiro. The entire site was acquired by Interaqua in two lots from a single family in the early 1990s and there has been no physical resettlement or economic displacement. The project will not affect public access to the beach or interfere with traditional fishing and recreational activities carried out there.  There are no recorded archaeological or cultural remains or sites within the development area.    15.		IFC will monitor ongoing compliance with World Bank Group environmental, social, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by the sponsor and by conducting periodic supervision.  In particular, IFC will require annual confirmation:    ·	  of compliance with Venezuelan EIA review requirements (relating to compliance with Venezuelan norms and standards, construction practices, mitigation and monitoring practices - including those relating to monitoring of ecological impacts to the Olivitos wetland);   ·	  of pesticide (and other agrochemical) use and management practices as well as details of pests controlled;   ·	  that the company is achieving WBG requirements for waste water quality from all its sites and Venezuelan effluent standards from the Maracaibo packing plant that is owned by third parties;   ·	  that the development and operation of the Quisiro landfill complies with WBG requirements; and    ·	  of the progress in implementing the company''s EMS.    16.		Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project will meet World Bank Group environmental, social, health and safety policies and guidelines and host country requirements.      Table 1  Waste water quality from existing Interaqua operations        Parameter        Measurement        World Bank Guideline         PH      ±7.5      6-9        BOD5      <25      50 mg/L        Oil and Grease      N.A.      10 mg/L        Total Suspended Solids      <25      50 mg/L        Coliforms      <50      < 400 MPN/100 mL        Temperature Increase      N.A.      <3º C.      Based on existing GGM operations     Table 2 Estimated chemical use at the farm      Diesel Fuel    893,300 gallons/yr., for pumps, vehicles etc      Rotenone    Approx   4,000 lbs/yr , for pond preparation. (5-8 % active ingredient)       Malathion    1 x 55 gallon /pa at full development       Chlorine    Approx.   4,000 lbs/yr, for disinfecting shrimp handling containers.      Lime    Approx 20,000 lbs/yr., for pond bottom preparation     Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).