Wow Nutrition employs 1,107 direct workers distributed at the corporate and operational levels: 205 people at the corporate level based in São Paulo, 809 people at the plant and distribution center in Caçapava, 23 people at the plant in Manaus and 70 people at the sales office in Fortaleza. Most of the employees are hired locally and regionally. Of the full time staff, approximately 30% are women. The company offers its workers all basic benefits guaranteed by Brazilian law, and all employees are paid above the Brazilian minimum wage in accordance with the salary grid and compensation package agreed in the collective agreements with the labor unions. 

Human Resources (HR) Policies and Procedures, Working Conditions and Terms of Employment: The company has a comprehensive set of policies and procedures applicable to all direct employees that reflects the Brazilian labor code known as the  Consolidação das Leis de Trabalho or CLT, which outlines the following provisions: (i) recruitment and hiring; (ii) compensation (including wages and benefits); (iii)hours of work; (iv) overtime arrangements; (v) leave; (vi) benefits, including health insurance, pension schemes; (v) conditions of work; (vi) termination procedures and rights; (vii) communication procedures; (viii) training; and (ix) other requirements according to national law. Wow Nutrition is currently reviewing all job positions, remuneration and promotion criteria to be fully aligned with market good practices and to enhance workers retention.  

The company has a Code of Conduct since 2014, applicable to all the employees, contractors and suppliers, which includes statements regarding ethical behavior, non-discrimination and equal opportunity. A Compliance Committee has been established to monitor the implementation of the Code of Conduct. Complaints can be addressed to HR or directly to the Compliance Committee members. A monitoring report was reviewed during the appraisal, and was seen to include a description of complaints received and the procedures adopted to solve the situations. Example of complaints included disagreements between employees and direct management. All the reported complaints have been investigated, addressed and closed.   

Wow Nutrition abides by all legal prohibitions against under-age employment and forced labor. Minimum age of employment in Wow Nutrition is 18 years old, except for apprentices, which can range from 14-24 years old according to the Federal Decree 5.598/2005. According to reviewed documents during the appraisal, the company has an apprentice program and a partnership with Centro de Integração Empresa Escola (CIEE) and Fundação Roberto Marinho to identify, support and hire apprentices, in order to reach the target established by this Federal Decree. 

According to reviewed documents, as of September 2015 Wow Nutrition had not reached the target established by the Federal Law 8.213/91 for the employment of people with disabilities. The company is preparing a work plan to increase the number of people with disabilities amongst its workforce, and therefore, to reach compliance with this federal law by 2017. The work plan will be submitted to the Ministry of Labor for approval in November 2015. As part of this plan Wow Nutrition has established a partnership with Impacta Institute. As per the ESAP, Wow Nutrition will provide evidence to IFC that the work plan (to reach compliance with Federal Law 8.213/91 for the employment of people with disabilities) has been approved by the Ministry of Labor.

During the appraisal IFC verified the company’s commitment to implement good labor standards, consistent with the Brazilian legislation and Performance Standard 2, in terms of working conditions, terms of employment and occupational health and safety. In addition, IFC noticed good relationship between management and workers.  Nevertheless, Wow Nutrition reported that there are 83 outstanding lawsuits by the Public Prosecutor for labor issues associated with requests for additional payment for overtime, night shift, unhealthy and hazardous activities. These lawsuits have been managed by the company’s legal department in accordance with the Brazilian legislation. 

Workers’ Organization: As per the Brazilian Labor Code in Brazil (CLT), as well as determined in the company Code of Conduct, the employees have the right to freedom of association, and there is no restriction to collective bargaining. Under Brazilian legislation all employees are registered with a union, and in the case of Wow Nutrition and its subsidiaries, its employees are represented by different unions from São Paulo, Caçapava, Manaus and Fortaleza. The collective agreements for each subsidiary have been reviewed during appraisal and are judged to be in compliance with the requirements of this Performance Standard. Wow Nutrition and its subsidiaries abide by the collective agreements on salaries and benefits negotiated under the collective bargaining. There is no history of strikes or current indication of tensions beyond those outstanding lawsuits already discussed.  

Retrenchment: During 2014 and 2015, as part of an organizational restructuring of the processing plant in Caçapava, the company retrenched approximately 80 employees. This process, as confirmed by the HR department, was conducted according the Brazilian legislation.  In the event that the elimination of a number of work positions or the dismissal or layoff of workers is required, Wow Nutrition will follow the requirements of PS2 in addition to Brazilian legislation and requirements under union agreements.

Grievance Mechanism: Workers can address grievances and complaints to the human resources department, to managers and to the Compliance Committee. The workers are informed about the available channels for communicating any concerns at the time of recruitment during induction sessions. Although it is not compulsory according to the Brazilian legislation, a channel that allows anonymous complaints should be available for workers, aligned with IFC PS2. As set forth in the ESAP, Wow Nutrition will enhance its grievance mechanism by developing a procedure that allows for anonymous complaints to be raised and addressed and by defining key indicators to be monitored.

Occupational Health and Safety: The company is committed to ensure a safe and healthy work environment for all its employees, formalized in the Wow Nutrition OHS Golden Rules, OHS programs and standard operational procedures (SOPs). The company maintains an occupational health and safety management system to address the risks of its operations, including identification of key occupational risks, implementation of relevant OHS plans and procedures, and a monitoring system with defined indicators. The company works in line with the Brazilian regulatory standards on mandatory procedures related to occupational health and safety (Normas Regulamentadoras de Segurança e Saúde no Trabalho – NR). 

The processing plant in Caçapava has assigned a team in order to promote the health and protect the integrity of workers in the workplace (Serviços Especializados em Engenharia de Segurança e em Medicina do Trabalho – SESMT), which is comprised of a health and safety engineer, 4 OHS technicians, an occupational physician, an occupational nurse and 3 nurse technicians. At the processing plant in Manaus, since the operation is small with limited OHS risks, the Operations Manager is responsible for implementing the SOPs. Both operations have a Workplace Risks Prevention Program (Programa de Prevenção e Riscos Ambientais – PPRA) that identifies occupational risks and determine the appropriate control measures, and a Medical Control Program for Occupational Health (Programa de Controle Médico de Saúde Ocupacional – PCMSO) which is a plan to monitor occupational health of all employees. These programs, which are updated on a yearly basis, were reviewed during appraisal. The use of personal protective equipment (PPE), such as steel-toe boots, ear plugs, mask, gloves and glasses was observed during IFC’s site visit. For those functions involving hazardous activities, a specific authorization (Permissão de Trabalho – PT) is required, which must be signed by the operational coordinator and an OHS technician. The company has also established a workplace accident prevention committee known as CIPA (Comissão Interna de Prevenção de Acidentes) that promotes various training and awareness efforts on workplace safety. 

All OHS accidents are investigated by the OHS team and Workplace Accident Communication Forms (Comunicação de Acidente de Trabalho – CAT) are sent to the Ministry of Social Security. At the plant in Caçapava, assigned OHS technicians supported by managers, supervisors and coordinators, undertake regular OHS internal audits to verify compliance with SOPs.

All employees have a medical file, and are subject to annual medical tests. From Sep 2014 to August 2015, the operations registered 24 accidents (mainly related to unsafe acts, such as failure to use personal protective equipment) that resulted in 325 lost workdays. In 2014, the lost time injury frequency rate (LTIFR, number of injuries per million work hours) was 14, compared to 24 in 2013 and 17 in 2015 (up to September). Since the beginning of 2015, the company has enhanced its OHS program by hiring an OHS Engineer, reviewing its SOPs and monitoring the OHS performance indicators closely.  The plant in Caçapava has a contract with EMERCOR for emergency assistance in the case of emergency situations that cannot be treated at the onsite clinic, and to transport potential patients to the hospital in Caçapava. Each processing plant has a structured training program with an outlined annual training plan and budget for staff. During the appraisal, the plan was reviewed by IFC.  

Workers Engaged by Third Parties: The vast majority of Wow Nutrition’s workforce consists of direct-hire employees.  The company outsources some services to third parties, such as cleaning activities, employee restaurant and guard services. The company’s contracts with these contractors include legal requirements related to proper labor practices, and Wow Nutrition pays them only on the basis of evidence that they are in compliance with the legislation. All third party workers go through OHS and other appropriate training (such as the Code of Conduct) during the induction session before they start working within the company area. Third party workers have access to the grievance mechanism provided in the Code of Conduct. 

Supply Chain: Wow Nutrition’s beverages are manufactured from fruit pulp, concentrates, and sugar supplied from companies in Brazil and imported tea powder and soy protein, mainly originating from Asia. The diet and light food segment is manufactured from imported products from Asian suppliers. The top ten suppliers are responsible for around 60% of all supplied products (bottle packaging, cans, cardboard packaging box, sugar and concentrated juices and fruit pulps). In relation to the fruit pulp, Wow Nutrition has an extensive supply chain and sources from all over Brazil. The company is very selective in choosing its suppliers, and whenever possible, works with well-established companies, that adopt a solid quality control system in its operations.

Among Wow Nutrition’s supply chain there is a supplier of açaí pulp, based in Manacapuru, Amazonas. Whereas fruit pulp and concentrate corresponds to about 25% of the total procurement of Wow Nutrition, açaí accounts for less than 1% of this amount. However, IFC carried out a due diligence on this particular element of the company’s supply chain since the harvesting of açaí berries is located in the Amazon region, and has been associated with safety risks and/or the participation of children in harvesting.

During the appraisal, IFC found that this supplier has been working in the region since 2007, hiring local workers in compliance with the Brazilian legislation to work at the processing plant and developing a good relationship with the local communities that supply the açaí berries, seeking to establish commercial partnerships that benefit all parties involved. IFC visited some of these communities along the river; however it was not possible to visit any traditional harvesting activity actually taking place due to the timing of the visit. Despite not seeing practices firsthand, IFC did discuss the overall supply chain, including harvesting, at length with the supplier to better understand the nature of the business and also the traditional practices employed to harvest berries.

The company that supplies açaí pulp to Wow Nutrition buys açaí berries from approximately 200 families within traditional populations living along the Solimões river, known as ‘ribeirinhos’. Because they live in a challenging environment where the force of nature is ever-present, ribeirinhos learned to live in an environment full of constraints and challenges posed by the river and the rainforest. Most of the dwellings are built of wood, on stilts as they are located next to riverbanks, without running water and sanitation. The river plays a key role in the lives of ribeirinhos and rafts and boats are the only means of transport. Their means of livelihood include subsistence agriculture, fishing, and collection of açaí berries (from the açaí palm, which is native to South America and widely spread across the northern part of Brazil). Ribeirinhos have a vast amount of knowledge of the forest flora, fauna, river and soil. The geographical situation of many of these communities is a major factor limiting access to basic health and education services. The Brazilian legislation, Decree No. 6.040 from February 7th 2007, recognizes the existence of traditional peoples and communities, among which are ribeirinhos, establishing a national policy geared to the specific needs of these people – the National Policy of Development for Traditional Peoples and Communities (PNPCT). 

The main season for harvesting açai berries in Brazil is between January and June. Therefore, in October and November this supplier runs meetings with ribeirinhos in their own communities to discuss and agree on contracts for the season. During the appraisal, IFC verified that this açaí pulp supplier has developed good relationship with ribeirinhos, seeking to establish commercial partnerships directly with ribeirinhos in order to avoid middlemen. However, in some cases the company purchases the berries from intermediaries, due to the isolation of these communities and the difficulty they have to deliver the berries to Manacapuru. The açaí berries have a short lifespan, and the supplier must ensure that the entire process from harvesting to shipping and manufacturing takes place in no more than 36 hours. The supplier also has a good relationship with IDAM (Institute of Sustainable Agricultural and Forestry Development of Amazonas), which supports ribeirinhos with capacity building activities. The supplier has a processing plant that works from January to July, with approximately 25 workers (permanent and temporary). In 2014 the company produced 450 tons of açaí pulp, of which 300 tons were supplied to Wow Nutrition. A new plant is currently being built, which should be operational by 2016, in order to expand its processing activities. 

Wow Nutrition has an operational procedure in place to identify, register and monitor suppliers through the following steps: (i) identification and qualification of suppliers based on the analysis of operational licenses and permits and the supplier quality management system; (ii) evaluation of suppliers’ proposals based on commercial and technical aspects; (iii) establishment of contractual agreements, which include clauses related to quality management, as well as environmental  and social compliance with the Brazilian legislation (such as environmental permits and licenses, payment to workers, prohibition of child and forced labor). The contracts also acknowledge Wow Nutrition’s Code of Conduct and the grievance mechanism provided in the code; and (iv) monitoring of suppliers to ensure the quality of their products.  

As noted above, IFC did not observe açaí harvesting taking place (as it was not the season for harvesting). As such, it is not possible to provide an opinion as to the safety risks or labor practices associated with harvesting. Later desk-based research described the traditional practices as involving young men climbing up to 15-20m up the palm trees to cut down the berries; this corroborated the description obtained from Wow’s supplier. Whereas such information provides some assurances to IFC, the possibility of risks associated with harvesting remains. As per the ESAP, therefore, Wow Nutrition will enhance its procedures regarding oversight of suppliers by developing a specific Code of Conduct for all suppliers and by including environmental and social criteria in its Suppliers’ Monitoring Program. Specifically, Wow Nutrition will make a particular effort to develop a monitoring program in partnership with the supplier of açaí pulp, that includes (i) mapping the açaí berries suppliers; (ii) identifying potential significant adverse risks and impacts associated with the supply chain; and, if discovered, (iii) implementing procedures to manage these risks.

Co-Packers: Wow Nutrition has a number of contracts with suppliers that are responsible for manufacturing and bottling part of the company’s products, named co-packers. The contracts signed with these suppliers also include clauses related to quality management, environmental and social compliance with the Brazilian legislation (such as environmental permits and licenses, payment to workers, prohibition of child and forced labor). The contracts acknowledge Wow Nutrition’s Code of Conduct and the grievance mechanism provided in the code. Wow Nutrition performs regular audits to monitor co-packers’ quality management system. As per the ESAP, Wow Nutrition will enhance its procedures for monitoring co-packers by developing a specific Code of Conduct for all suppliers and by including environmental and social criteria in its Suppliers’ Monitoring Program.