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Code of Conduct

  1. Principles
  2. Relationship with stakeholders
  3. Management of the Code

Introduction

Code of Conduct is an instrument designed to improve the internal and external relationships of an organization and enhance the environment of confidence within it. The content of the Code of Conduct must be updated whenever necessary to remain in step with the expectations of society.

This Code reflects the underpinnings for the moral behavior of us all and the ethical principles that are enshrined in the Aracruz declaration of “Mission, Vision and Principles.” It was prepared by a multidisciplinary group comprising representatives of the Company’s different areas with the support of specialist consultants. Its content was validated by the Executive Officers and the Sustainability Committee and approved by the Board of Directors in December 2007, replacing the previous version.

This is a guide for action and a reference for the initiatives and decisions that we take. This Code does not intend to cover every contingency in our day-to-day business dealings, but rather to act as a set of clear and non-negotiable guidelines for the conduct expected of each one of us. It also seeks to create coherence and convergence in Aracruz’s internal policies, rules and procedures.

This document is part of employee, trainee, materials and other supplier contracts and applies to Aracruz’s administrators; members of technical, consultation and oversight bodies; employees; suppliers; service providers and trainees and those of its controlled companies (denominated “Addressees” in this document) , who must sign a Declaration of Commitment stating they are aware of and agree to its conditions.

It is vital that we are all familiar with the content of the Code and the rules applying to our activities, and that behavior in our private lives is consistent with the conduct set forth in this document.

This document is embodied in the Aracruz Management System and is available through the in-company communication systems and via the Aracruz website on the Internet.

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1. Principles

1.1. Integrity

Aracruz’s businesses and the conduct of the Addressees of this Code must be based on fairness, loyalty and correct behavior. Neither corruption, extortion, bribery, illegality nor any kind of disrespect for human rights shall be tolerated. Everyone shall be treated fairly, equally, cordially and respectfully, regardless of the positions or jobs they occupy. We shall not admit:

  • discrimination or prejudice of any nature, such as that related to ethnic background, gender, religion, age, political convictions, nationality, civil status, sexual orientation or special conditions;

  • moral or sexual harassment or situations that represent pressure, intimidation or threats, regardless of the hierarchical level of those involved; and

  • the practice of any type of forced or child labor.

Actions, operations or transactions in the name of or involving the interests of Aracruz must be preceded by verification that they comply with the legislation of the jurisdiction where they are practiced or where they are intended to produce results.

Addressees of this Code who have access to information about the company and its business partners that has not yet been disclosed externally must keep such information secret, and it is prohibited to use it to obtain advantage for themselves or others.

Aracruz’s administrators, members of technical, consultation and oversight bodies, trainees and employees as well as suppliers and service providers who may act in its name must safeguard the Company’s interests and shall not participate in situations or circumstances that generate a conflict with such interests. Whenever personal interests conflict with Aracruz’s interests, the latter must prevail. In this regard, the aforementioned individuals must not:

  • participate in activities that could harm the Company’s interests;

  • participate in competing companies, suppliers or customers, except through mere ownership of shares without control or influence in their management, except when authorized by the Executive Officers or the Board of Directors;

  • acquire assets or rights they know are sought by Aracruz. The acquisition of assets or rights that are related to Aracruz’s businesses or interests, even when not sought by the Company, must be reported to the Executive Officers; and

  • offer or accept gifts, privileges, payments, loans, donations, services or other forms of benefit, in their own name or in the name of family members, that entail restrictions or rewards or that compromise their independence in negotiations or decisions related to third parties that have or intend to have relations with Aracruz.

Thus, they must:

  • adopt the procedures foreseen in the internal regulations when they become aware of irregularities that could involve Aracruz’s name or interests; and

  • report to their immediate superior or the Conduct Committee the existence of a spouse or relative up to third level, including through kinship, who may be an administrator, employee or controller of competitors, suppliers or customers. The Addressees must abstain from participating, even indirectly, in decisions regarding Aracruz’s business dealings with such companies.

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1.2. Transparency

Transparency is indispensable to credibility. With regard to communications between the Addressees of this Code among themselves and with governmental and non-governmental bodies, creditors, customers, society, shareholders and the press, we must all:

  • communicate in a manner that is clear, simple, direct and accessible to all stakeholders;

  • guarantee regular, accurate and up to date information that allows good understanding of the relevant aspects of our Company in the economic-financial, operational, corporate, administrative, social and environmental fields;

  • disclose information to stakeholders as quickly as practically possible; and

  • ensure that contacts with the media or announcements in the name of Aracruz are made exclusively by spokespersons designated by the Company in compliance with its internal rules.

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1.3. Asset Protection

We must safeguard Aracruz’s assets as if they belonged to each one of us. The Addressees of this Code are responsible for protecting the Company’s tangible and intangible assets, including its reputation, intellectual property and confidential or sensitive information. In this regard, we must not:

  • make use, for our own benefit or that of third parties, of Aracruz’s goods, services, rights or influence or any information we might have obtained as a result of the exercise of our functions or that is the result of our relationship with the Company;

  • make donations at Aracruz’s expense, except in compliance with the Company’s internal rules or with the authorization of the Board of Directors or Executive Officers, wherever applicable.

Thus, we must:

  • preserve Aracruz’s confidential or sensitive information to which we have access, including after leaving the company or ending our relationship with the company;

  • respect Aracruz’s intellectual property regarding products, processes, research, studies, brands, patents and similar rights, including during the stages of the development and registration process;

  • be prepared to clarify Aracruz’s decisions and positions to stakeholders and, whenever possible, take part in initiatives with this purpose; and

  • prioritize the use of internal channels for the expression of criticism about Aracruz’s actions or positions, in order to secure proper treatment for such expressions, seeking improvement of the governance processes.

Aracruz respects and requires that third party intellectual property be respected. The Addressees of this Code must comply with the legislation regarding such rights and must also refrain from the unauthorized use or improper expropriation of research, studies, texts, publications, computer programs and similar work produced by third parties. Furthermore, they must preserve the secrecy of sensitive information pertaining to third parties to which they have access and which is covered by the confidentiality commitment assumed by Aracruz.

The information, communication and technology resources available at Aracruz must be used in conformity with the Company’s internal rules, especially regarding the use and protection of access passwords.

The use of non-licensed programs is prohibited, as is the use of communications systems and tools made available by the Company, for the practice of illegal or improper acts, to obtain personal advantage, to access or disclose offensive or immoral content, to interfere in the systems of third parties or to participate in virtual discussions regarding matters that are not related to Aracruz’s activities or interests.

The occasional use of the communication and information technology resources available at Aracruz for personal matters is permitted, as long as they are used moderately and with common sense and the use does not interfere with professional performance.

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1.4. Environment

The concept of sustainability, in which economic development, social responsibility and protection of the environment coexist harmoniously, guides Aracruz’s activities.

In order to assure the availability of natural resources, we must all:

  • be aware of the environmental aspects and impacts of our activities, seeking the best technologies and practices that are appropriate to mitigate the negative effects and increase the eco-efficiency of our operations;

  • use natural resources in a sustainable manner;

  • contribute to the conservation of biodiversity by maintaining native reserve areas;

  • contribute to the reduction of the effects of climate change;

  • learn and practice the policies and procedures adopted by the Company with regard to the environment;

  • act in a proactive fashion to identify, evaluate and prevent risks; and

  • immediately report to the Safety and Environment areas any environmental accidents or incidents, as well as any act or fact that could represent an environmental legal infraction, damage or incident.

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2. Relationship with stakeholders

Aracruz shall maintain a frank and constructive relationships with all the various publics involved in its activities, with the central objective being to create long-lasting and harmonious relationships based on mutual trust.

In order to achieve this purpose, it is necessary that each one of us:

  • is aware of and sensitive to the aspirations and concerns of our stakeholders and strives to find solutions that satisfy a balance of all interests;

  • respects the diversity and freedom of opinion and expression; and

  • seeks effective engagement and cooperation, prioritizing dialogue to resolve conflicts.

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2.1. Employees

Aracruz values its employees as partners in its prosperity. While carrying out our duties and in our relationships, it is up to each one of us:

  • to safeguard our own workplace safety as well as that of our colleagues, respecting legal regulations, applicable internal rules and the best accident prevention practices;

  • to contribute to a healthy, stimulating and democratic environment where the right to collective bargaining and freedom of opinion, expression and association is respected and where an environment of courtesy, trust and cooperation is cultivated;

  • to stimulate team work and dialogue as a way of solving problems;

  • to respect and recognize the authorship of others’ work or ideas;

  • to evaluate candidates for employment or promotion from within the Company’s own ranks based upon their capacity to satisfy the requirements and expectations of the job. When family members or spouses of employees are hired or promoted, the criteria of merit and equality of conditions must be observed with respect to all other candidates, as well as the Company’s internal regulations; and

  • to not permit the possession or use of alcoholic beverages or illicit drugs on Company grounds, or the carrying of any kind of weapon, except by authorized professionals.

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2.2. Shareholders

All Aracruz shareholders must be treated with courtesy and respect, independently of the number of shares they may own. All shareholders are assured an equitable flow of information.

The relationship with the Company’s shareholders must be conducted only by the Executive Officers or persons they have authorized, and must be based on the communication of precise, transparent and timely information that makes it possible to follow the Company’s activities and performance.

The managers, members of technical and consultative bodies and the Aracruz Fiscal Council, its controlling shareholders, trainees, employees and service providers may trade shares of Aracruz and its subsidiaries as long as they observe the legal regulations and the Company’s internal rules, especially relating to periods and conditions when such trading is prohibited.

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2.3. Customers

Aracruz seeks to achieve a high level of customer satisfaction, striving for excellence in servicing their requirements and emphasizing long-lasting relationships. In order for these objectives to be met, we must:

  • satisfy our customers professionally and efficiently, treating them with dignity and respect;

  • assure the delivery of products and the rendering of technical assistance according to the terms that have been agreed; and

  • provide customers with technical data regarding safety, health and the environment related to the products.

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2.4. Suppliers and service providers

Long-term partnerships with suppliers and service providers, based on mutual trust, are an integral part of Aracruz’s business strategy. To meet this goal, each one of us must:

  • seek long-lasting relationships, within the principles of free initiative and fair competition;

  • guarantee that the hiring of suppliers and service providers is based on sound technical and economic underpinnings, impartially seeking the best cost-benefit return;

  • value the hiring of socially responsible companies, committed to the wellbeing of their employees and sustainable development;

  • observe that the hiring of suppliers and service providers that demonstrate evidence of conduct that is incompatible with this Code is prohibited; and

  • take care that the hiring of suppliers and service providers be conducted with the necessary diligence to avoid exposure by Aracruz to legal, social, environmental or reputational risks.

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2.5. Competitors

Free competition and access to markets are essential to a healthy business environment. We respect and require others to respect these principles and in the relationship with Company’s competitors, we must:

  • obtain information about the market, our competitors, their products and services in a lawful manner through legitimate means and procedures; and

  • respect our competitors’ reputations and seek to ensure that all actions conducted with them are within legal limits and with regard to matters of legitimate common interest.

The Addressees of this Code are encouraged to contact the Aracruz Legal Department to obtain advice on competitive matters and to resolve doubts about how to behave in specific situations.

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2.6. Government

Addressees of this Code are prohibited from using Aracruz’s resources, products or services to obtain unlawful advantage from authorities or public servants of government bodies or agencies, as well as companies directly or indirectly affiliated to the government, or to use them to induce rules to be promulgated, revoked or violated.

Aracruz does not carry out political party activities. However, the Company may offer financial support to parties and/or candidates whose ideas and proposals are consistent with the Company’s own Principles. Support of this nature shall be carried out in accordance with prevailing legislation and internal rules.

There shall be no restrictions on the political party activities of employees, trainees and service providers, although they must always act in a personal capacity and so as not to interfere with their professional responsibilities. Such activities should not be carried out within the work environment nor involve the Company’s funds, materials or equipment. Nor may employees, trainees and service providers wear Company uniforms when taking part in political activities.

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2.7. Communities

Aracruz is conscious of its role as a generator of wealth in the communities in which it operates as well as for the country itself. Thus, its actions should be oriented towards fostering its legitimate economic interests and to complying with its social functions.

We must respect the different cultures, customs and values of the individuals and groups present in the locations or regions in which we operate, being sensitive to the aspirations and concerns of the communities.

Aracruz encourages the Addressees of this Code, on a personal basis, to exercise their rights of citizenship, expressing their ideas and participating in the social and political life of the communities in which they are active, seeking to contribute to public governance and sustainable development.

Aracruz’s participation in projects, donations and sponsorships must be conducted in conformity with the Company’s legal precepts and internal rules.

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3. Management of the Code

The management of this Code is the responsibility of the Conduct Committee which, among other functions, shall oversee compliance with it and its alignment with Aracruz’s business environment. The Committee must also indicate how to punish instances of violation of the Code, which could include the adoption of disciplinary measures according to the seriousness of the violation, using the Company’s internal rules as reference. It is the responsibility of the Conduct Committee to ensure that all queries and accusations are kept secret and are examined only by the appropriate forum.

Executives at all levels and contract managers must guarantee that the employees, suppliers and service providers in their sphere of action understand and apply the principles established in this Code of Conduct.

The degree of understanding and compliance with the Code of Conduct will be evaluated through annual verification procedures conducted by an outside auditor and through internal or external audits, in the event it is so required by the Conduct Committee or the President and CEO. The audits will be conducted through surveys, interviews, analysis of registration and report procedures or other means of verification.

Any type of communication related to the Code of Conduct (suggestions, doubts or accusations) may be freely sent in by any person through the following channels:

  • immediate superior;

  • e-mail to the Conduct Committee (comitedeconduta@aracruz.com.br);

  • the Anonymous Communication channel available on the Aracruz Net;

  • Post Office Box 19.157 - CEP 04.505-970;

  • “Speak to the Conduct Committee” collection boxes, available in the Barra do Riacho and Guaíba units; and

  • a personal report during a meeting of the Conduct Committee.

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Glossary

  • environmental accidents – unexpected and undesired occurrences that, directly or indirectly, could damage the environment and people’s health [1].

  • administrator – an Executive Officer or member of the Board of Directors.

  • moral harassment - repeatedly exposure of someone to humiliating or coercive situations during the working day and when they are exercising the functions of their job.

  • sexual harassment - to coerce someone in order to obtain a sexual advantage or favor, misusing one’s position of hierarchical levels in the exercise of a job, position or function.

  • intangible assets – assets that lack material form and generate or have the potential to generate economic gains for the company, enhancing its competitiveness. Reputation is one of a company’s main intangible assets.

  • communities – groups of people with common interests who live in the same location and organize themselves within a set of rules.

  • conflict of interest – occurs when someone is not independent with regard to the subject in discussion and can influence or make a decision motivated by interests that are different from and contrary to those of the company.

  • creditors – any individual or company with which Aracruz has a relationship and to which the company has an obligation to give, pay or do something.

  • equitable – fair and reasonable treatment, in compliance with the law and the needs of each person, taking into consideration the characteristics of each situation.

  • consultative bodies – committees that advise the Board of Directors or the Executive Officers, with consulting and instructional functions regarding specific subjects of interest to the company.

  • oversight bodies - Fiscal Council.

  • technical bodies – committees made up of company employees, designed to follow up, monitor and formulate recommendations to management regarding specific matters related to Aracruz’s operations and procedures.

  • relative up to third level – father, mother, son, daughter, brother, sister, grandmother, grandfather, grandson, granddaughter, great-grandmother, great-grandfather, great-grandson, great-granddaughter, uncle, aunt, niece and nephew.

  • relative through kinship (in-law-relatives) – father-in-law, mother-in-law, step-son, step-daughter, brother-in-law, sister-in-law.

[1] Source: IBAMA.

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Last update on march 20, 2008.

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