ABIOVE ABIOVE

ABAGABAG

AssociaAssociaçção Brasileira de Agribusinessão Brasileira de Agribusiness

Carlo LovatelliCarlo Lovatelli

PresidentePresidente

AlemanhaAlemanha

10 de Julho de 200610 de Julho de 2006

ResponsibleResponsible ProductionProduction of of SoySoyAgribusiness in Agribusiness in BrazilBrazil

ABIOVEABIOVEAssociaAssociaçção Brasileira das Indão Brasileira das Indúústrias de strias de ÓÓleos Vegetaisleos Vegetais

((BrazilianBrazilian VegetableVegetable OilOil Industries Association)Industries Association)

Fabio TrigueirinhoFabio TrigueirinhoGeneral General SecretarySecretary

SeminarSeminar onon twotwo yearsyears of the of the NationalNational PactPact for for EradicationEradication of of SlaveSlave LaborLaborInstituto Instituto EthosEthos -- São PauloSão Paulo -- MayMay 17, 200717, 2007

DateDate ActionAction LocationLocation

IASC Meeting IASC Meeting onon SustainabilitySustainability

TalkTalk onon SectorSector’’s s VisionVision atat the the firstfirst Round Round TableTable ononResponsibleResponsible SoySoy (RTRS)(RTRS)

OrganizingOrganizing CommitteeCommittee Meeting and Meeting and ManifestationManifestation of of InterestInterest in in ParticipatingParticipating inin the the CommitteeCommittee

RTRS Workshop RTRS Workshop –– TalkTalk

SignatureSignature of the of the NationalNational PactPact for for EradicationEradication of of SlaveSlaveLabor Labor –– Instituto Instituto EthosEthos

PromotionPromotion of the of the SeminarSeminar onon StrategicStrategic PlanningPlanning for for SustainabilitySustainability of Agribusinessof Agribusiness

SoySoy MoratoriumMoratorium –– ABIOVE / ANECABIOVE / ANEC

ABIOVEABIOVE’’s s ElectionElection to the RTRS to the RTRS CouncilCouncil in the RTRSin the RTRS’’s s frstfrst General General AssemblyAssembly

NovNov/2004/2004 LondonLondon

Mar/2005Mar/2005 Foz do Foz do IguaIguaççuu

AugAug/2005/2005 Buenos Buenos AiresAires

Apr/2006Apr/2006 São PauloSão Paulo

AprApr/2006/2006 São PauloSão Paulo

JunJun/2006/2006 São PauloSão Paulo

Jul/2006Jul/2006 São PauloSão Paulo

MayMay/2007/2007 São PauloSão Paulo

EnvironmentalEnvironmental SustainabilitySustainability and Social and Social ResponsibilityResponsibility

•• ActionsActions byby the Sectorthe Sector

SoySoy CropCrop in in BrazilBrazil

ShareShare in in NationalNationalAgriculturalAgricultural IncomeIncome

SoySoy30%30%

OthersOthers70%70%

Source: CNA

•• SoySoy is is BrazilBrazil’’s s mainmain agriculturalagricultural cropcrop, in volume , in volume and in and in gerationgeration of of incomeincome

•• Over 243,000 Over 243,000 producersproducers ((smallsmall, , mediummedium and and largelarge), ), spread over 17 states (1996 spread over 17 states (1996 CensusCensus))

•• The sector The sector generatesgenerates aboutabout 1.457 1.457 millionmillion jobsjobs --directdirect and and indirectindirect (812,000) and (812,000) and incomeincome--effecteffect(645,000)(645,000)

•• The The SoySoy ComplexComplex ((graingrain, , mealmeal and oil) is and oil) is oneone of the of the countrycountry’’s s mainmain sourcessources of of exchangeexchange ((aboutabout 10% of 10% of total total exportsexports))

EconomyEconomy

SoySoy CropCrop in in BrazilBrazilTOWNTOWN HDIHDI--MM CLASSIF. MTCLASSIF. MT CLASSIF. BRCLASSIF. BR ECONOMYECONOMY

Campos de JCampos de Júúliolio 0.8450.845 11 4848 AgribusinessAgribusiness

SorrisoSorriso 0.8230.823 22 194194 AgribusinessAgribusiness

CuiabCuiabáá 0.8210.821 33 221221 CapitalCapital

Lucas do Rio VerdeLucas do Rio Verde 0.8170.817 44 263263 AgribusinessAgribusiness

ClClááudiaudia 0.8130.813 55 330330 AgribusinessAgribusiness

Campo Novo dos Campo Novo dos ParecisParecis 0.8090.809 66 397397 AgribusinessAgribusiness

SinopSinop 0.8070.807 77 424424 AgribusinessAgribusiness

Primavera do LestePrimavera do Leste 0.8050.805 88 463463 AgribusinessAgribusiness

Alto Alto TaquiriTaquiri 0.8040.804 99 476476 AgribusinessAgribusiness

SapezalSapezal 0.8030.803 1010 504504 AgribusinessAgribusiness

Nova MutumNova Mutum 0.8010.801 1111 534534 AgribusinessAgribusiness

Campo VerdeCampo Verde 0.8000.800 1212 563563 AgribusinessAgribusiness

Alto GraAlto Graççasas 0.7950.795 1313 674674 AgribusinessAgribusiness

RondonRondonóópolispolis 0.7910.791 1414 780780 AgribusinessAgribusiness

Barra do GarBarra do Garççasas 0.7910.791 1515 784784 LivestockLivestock/Industrial/Industrial

VVáárzea Granderzea Grande 0.7900.790 1616 816816 IndustrialIndustrial

Pontal do AraguaiaPontal do Araguaia 0.7890.789 1717 832832 LivestockLivestock

JaciaraJaciara 0.7880.788 1818 849849 AgribusinessAgribusiness

DiamantinoDiamantino 0.7880.788 1919 850850 AgribusinessAgribusiness

Santa CarmemSanta Carmem 0.7870.787 2020 889889 WoodWood

The 20 The 20 townstowns in Mato Grosso (MT) in Mato Grosso (MT) statestate withwith the the highesthighest HDI*HDI*

Source: IBGE, 2000 Census

DevelopmentDevelopment of of soysoy cropscrops

ledled to to improvementsimprovements in the in the

qualityquality of of lifelife and the and the

developmentdevelopment of of

infrastructureinfrastructure in in transporttransport, ,

educationeducation and and healthhealth in the in the

interior of the country.interior of the country.

NB. The HDI for NB. The HDI for BrazilBrazil in in

2002 2002 waswas 0.775.0.775.

Social Social DevelopmentDevelopmentVectorVector

* HDI – Human Development Index

SoySoy ProductionProduction in in BrazilBrazil

•• ResearchResearch & & DevelopmentDevelopment

•• Professional Professional ManagementManagement

•• ScaleScale EconomyEconomy

CharacteristicsCharacteristics

SoySoy ProductionProduction in in BrazilBrazil

SoySoy ProductivityProductivity33--yearyear movingmoving averageaverage

24502639

2771

24392189

2577

1900

2100

2300

2500

2700

2900

95 96 97 98 99 00 01 02 03 04 05

USA Brazil Argentina

'

Source: USDA

Break in Crop

kg/ha

•• BrazilBrazil uses uses statestate--ofof--thethe--artart technologytechnology in in soysoy productionproduction (30 (30 yearsyears of of researchresearch))

ResearchResearch & & DevelopmentDevelopment

EvolutionEvolution of of cropcrop techniquestechniques, , withwith the the ““tropicalizationtropicalization”” of of

soysoy, , allowedallowed the the extensiveextensive and and rudimentaryrudimentary occupationoccupation in the in the Cerrados to Cerrados to bebe replacedreplaced byby ananactivityactivity basedbased onon technologytechnology

withwith economiceconomic, social and , social and environmentalenvironmental sustainabilitysustainability..

SoySoy ProductionProduction in in BrazilBrazil

Professional Professional ManagementManagement

Training Training ProgramsPrograms

SoySoy FieldField DaysDays

SoySoyResearchResearchBulletinBulletin

SpreadingSpreading GoodGoodAgriculturalAgricultural PracticesPractices

SoySoy ProductionProduction in in BrazilBrazil

ScaleScale EconomyEconomy

•• TopographicTopographic characteristicscharacteristics in in BrazilBrazil’’s s CenterCenter--WestWestregionregion favor favor mechanizedmechanized agricultureagriculture..

•• The The averageaverage sizesize of of soysoy producersproducers in the in the CenterCenter--WestWestregionregion is is aboutabout 1,000 hectares.1,000 hectares.

SoySoy ProductionProduction and and SlaveSlave LaborLabor

•• SoySoy productionproduction requiresrequires highhigh

investmentsinvestments in in agriculturalagricultural machinerymachinery, ,

humanhuman resourcesresources, , technologytechnology, ,

logisticslogistics and and workingworking capital.capital.

•• SoySoy productionproduction requiresrequires highlyhighlyqualifiedqualified labor.labor.

SoySoy cropscrops are are incompatibleincompatible withwithlabor labor thatthat is is poorlypoorly qualifiedqualified..

The use of The use of ““SlaveSlave LaborLabor”” is is generallygenerallyassociatedassociated to clearing to clearing untoucheduntouched forestsforests

ActionsActions thatthat inhibitinhibit clearing new clearing new areasareascontributecontribute to the to the reductionreduction of of ““SlaveSlave LaborLabor””

SoySoy MoratoriumMoratorium

•• OnOn July 24, 2006, ABIOVE and ANEC July 24, 2006, ABIOVE and ANEC establishedestablished a a SoySoy MoratoriumMoratorium, , withwith a a

durationduration of of twotwo yearsyears..

•• ABIOVE and ANEC are ABIOVE and ANEC are committedcommitted notnot to trade to trade anyany soybeanssoybeans originatedoriginated in in

areasareas withinwithin the the AmazonAmazon BiomeBiome thatthat werewere deforesteddeforested afterafter thisthis date.date.

•• In In additionaddition to to addressingaddressing the the growinggrowing concernsconcerns of of EuropeanEuropean importersimporters

regardingregarding conservationconservation ofof the the AmazonAmazon Forest, the Forest, the moratoriummoratorium unitesunites thethe

business sector and NGOs business sector and NGOs withwith the the objectiveobjective of of developingdeveloping a a governancegovernance

structurestructure for for responsibleresponsible soybeansoybean productionproduction in the in the AmazonAmazon BiomeBiome..

•• ThereforeTherefore, the , the SoySoy MoratoriumMoratorium cancan directlydirectly and and indirectlyindirectly contributecontribute to the to the

reductionreduction of of ““SlaveSlave LaborLabor””..

ABIOVEABIOVE

C O M M U N I Q U É

ABIOVE, the Brazilian Vegetable Oil Industry Association, ANEC, the National Grain Exporters Association, and their respective members are committed to implementing a governance program, with the objective of not trading soy from areas within the Amazon Biome that are deforested after the date of this Communiqué.

This initiative will last for two years and seeks to reconcile environmental conservation with economic development through the responsible and sustainable use of Brazil´s natural resources. During this period, the sector is committed to working together Brazilian government entities and entities that represent the rural producers and civil society to:

a) Prepare and implement a plan that includes an effective mapping and monitoring system for the Amazon Biome or one based on official maps received from that area’s federal government;b) Develop strategies to encourage and make soy producers more willing to comply with the Brazilian Forest Code;c) Work together with other interested sectors to develop new rules for operating in the Amazon Biome, collaborating with and asking the Brazilian government to define, apply and comply with public policies (economic-ecologic zoning) for land use in this region.

The sector reiterates its repudiation of the use of slave labor. Its member companies have incorporated into their soybean purchase contracts a clause that annuls the contract if labor analogous to slave labor is employed.

Sao Paulo, July 24, 2006ASSOCIAÇÃO BRASILEIRA DAS INDÚSTRIAS DE ÓLEOS VEGETAIS - ABIOVEASSOCIAÇÃO NACIONAL DOS EXPORTADORES DE CEREAIS - ANEC

SoySoy MoratoriumMoratorium

•• AccordingAccording to to ImazonImazon’’s SAD (s SAD (DeforestationDeforestation AlertAlert SystemSystem), ), deforestationdeforestation in the in the

statestate of Mato Grosso is of Mato Grosso is significantlysignificantly lowerlower, , comparedcompared to prior to prior yearsyears..

SourceSource: : ForestryForestry TransparencyTransparency No. 5 (IMAZON)No. 5 (IMAZON)

““Zero Zero ToleranceTolerance”” byby the sector for the sector for ““SlaveSlave LaborLabor””

•• Of the 166 Of the 166 employersemployers listedlisted, 13 , 13 soybeansoybean producersproducers werewere identifiedidentified ((outout of a of a universeuniverse of over 243,000 of over 243,000 producersproducers))

•• Of Of thesethese 13 cases, 13 cases, onlyonly four four werewere dedicateddedicated exclusivelyexclusively to the to the productionproduction of of soybeanssoybeans; the ; the otherother farmsfarms hadhad otherother activitiesactivities

•• TheseThese 13 13 propertiesproperties are are locatedlocated in the in the followingfollowing states: states: fivefive in Mato Grosso, in Mato Grosso, threethreein Tocantins, in Tocantins, twotwo in Bahia, in Bahia, oneone in in PiauiPiaui, , oneone in in MaranhaoMaranhao and and oneone inin ParaPara

EmployersEmployers RegisterRegister -- RegulationRegulation 540, 540, dateddated OctoberOctober 15, 200415, 2004

LIST UPDATED ON MARCH 12, 2007LIST UPDATED ON MARCH 12, 2007

The The soybeansoybean productionproduction chainchain adoptedadopted a a ““Zero Zero ToleranceTolerance”” policypolicy for for ““SlaveSlaveLaborLabor”” byby::

•• IncludingIncluding in in theirtheir soybeansoybean purchasepurchase contractscontracts a a clauseclause thatthat revokesrevokes thethecontractcontract ifif labor labor analogousanalogous to to slaveslave labor is labor is employedemployed

•• ParticipatingParticipating in the RTRS, in the RTRS, whichwhich followsfollows ILO ILO standardsstandards