I’m proud to be a part of this team, which is expanding opportunities in a sector that is very promissing in Brazil.

Silvana Wen Shih Lin

Ethics, Transparency
and Integrity

I’m proud to be a part of this team, which is expanding opportunities in a sector that is very promissing in Brazil.

Silvana Wen Shih Lin

<Local Development>GRI Supplement

Ethics, Transparency and Integrity

The Odebrecht Entrepreneurial Technology (TEO) is the central pillar of our management model and strategy and prioritizes transparency and ethics in our relations with all stakeholders in the value chain. Our governance structure ensures greater independence in the management of our businesses and the compliance of our activities and processes with the laws and regulations governing the sugar and ethanol industry.

Our governance policies and practices have evolved continuously to meet the demand of stakeholders and are aligned with best industry practices. One of the main advances in the 2015/2016 crop year was the drafting of the Odebrecht Agroindustrial Sustainability Guidelines, which guides the incorporation of sustainable practices in all of our activities, operations and relationships and emphasizes the principles and values espoused by TEO.

The guidelines drew on references such as the principles and aspirations of international and national commitments (e.g., UN Global Compact and Brazilian Coalition on Climate, Forests and Agriculture) and the Company’s materiality matrix, internal guidelines and international performance standards (e.g., GRI, Bonsucro and Equator Principles). The document is distributed at Production Clusters and has played a key role in placing our Leaders on the frontline to uphold the commitments we have undertaken, such as fostering environmental preservation, improving sustainability performance and strengthening relations with Team Members, Clients, Partners and Communities.

Our values and principles are outlined in the Code of Ethics for Team Members and the Code of Ethical Conduct for Suppliers. The documents are available to anyone interested on our corporate website and intranet. Furthermore, all Team Members and Partners are introduced to the codes immediately after they are hired or authorized, respectively. One of our goals is to strive continually to strengthen these values and guidelines through recycling campaigns targeting our Team Members. G4-56Click here to learn more about this aspect in the GRI Supplement

The launch of Sustainability Guidelines strengthens this topic’s integration into our activities

To ensure transparency and integrity in our relationships, we have the Ethics Hotline, which is a whistleblowing channel for receiving reports of conduct that violates these codes, the applicable laws, regulations and internal procedures or ethical principles and good governance practices. The Ethics Hotline can be reached by Internet or telephone (0800 721 8434) and is can be used by Team Members, Partners, members of the local Community as well as other stakeholders. G4-58Click here to learn more about this aspect in the GRI Supplement

All reports received are processed by a report management system that ensures complete confidentiality and then forwarded to the compliance department. More serious cases are analyzed by our team and those easily resolved are forwarded to the departments involved, which must present an action plan. The main reports received in the 2015/2016 crop year involved moral harassment and noncompliance with the Company’s internal policies and procedures. In these situations, the Leaders of Team Members involved are oriented to strengthen the commitment of their teams to our culture and to TEO. G4-58Click here to learn more about this aspect in the GRI Supplement

Ethics Hotline – Reports received in 2015/2016 by subject

During the period, we received 402 reports, of which 356 (88.6%) were deemed valid. Two cases alleging conflicts of interests and irregularities in relations with Partners were duly investigated. The investigation of one of the reports resulted in the termination of a Team Member and the disqualification of a Supplier. The second case, which involved the accusation of improper payments by Suppliers to Team Members, was still being investigated at the end of the reporting period. None of these cases was related to bribery or corruption involving government agencies in accordance with Brazil’s Clean Company Act (Federal Law 12,846/2013). G4-58Click here to learn more about this aspect in the GRI Supplement G4-SO5Click here to learn more about this aspect in the GRI Supplement

Corporate Governance

Our governance structure includes a Board of Directors, whose members are appointed by the Controlling Shareholder and hold executive positions at other companies in the Odebrecht Group. The Board is supported by Committees, which submit recommendations to the body with a view to improving the quality and speed of the approval process. G4-34Click here to learn more about this aspect in the GRI Supplement

Two of these Committees are permanent and meet at least twice each year:

  • Finance, Investment & Audit Committee: responsible for corporate policies involving these topics, it analyzes the Financial Statements and any investment transactions and projects and monitors related-party transactions, among other duties.
  • People & Organization Committee: its main responsibilities include updating the corporate guidelines in aspects such as compensation, Team Member development and sustainability, setting the parameters for implementing long-term incentives and private pension and variable compensation programs; conducting individual analyses of management compensation; and monitoring Health, Environment and Safety (HES) indicators. G4-34Click here to learn more about this aspect in the GRI Supplement

The execution of the strategies defined by the Board of Directors is the responsibility of the Board of Executive Officers, which is formed by the Entrepreneurial Leader and seven other Leaders who guide the development of activities in the administrative and operating areas.

For those interested, short biographies of the persons responsible for our governance are available on the Company’s website.

Industry commitments and agenda

In line with our strategy, undertaking voluntary commitments and upholding global principles makes an important contribution to the growing integration of the sustainability agenda with our business activities. This helps to improve processes, expand our dialogue and reporting with stakeholders and provide institutional support for the development of public policy of relevance to the Company. The principles and guidelines of these commitments served as reference for the drafting of the Company’s Sustainability Guidelines. G4-15Click here to learn more about this aspect in the GRI Supplement

In addition to the commitments, our corporate engagement through trade associations in the sugar and ethanol industry has helped to further the discussions on the challenges and needs of sugar and ethanol producers involving our peers, the government and other agents in the value chain. G4-16Click here to learn more about this aspect in the GRI Supplement

The main topics discussed in these forums in the 2015/2016 crop year were: 1) the development of differentiated taxation that considers the positive impacts of substituting gasoline with ethanol; 2) the development of mechanisms that reflect the gains captured by energy generated from biomass in the formation of prices in energy auctions; 3) the fostering of a competitive international environment for the trading of sugar and ethanol. The main agendas of the trade associations representing the productive sector are modernizing the country’s labor laws and being able to compete in the international market. G4-16Click here to learn more about this aspect in the GRI Supplement

Improved discussions on the challenges and needs of sugar and ethanol producers involving other players, governments and other stakeholders in the value chain

The largest trade association representing the sugarcane and bioenergy industry in Brazil is the Sugarcane Industry Association (UNICA). Odebrecht Agroindustrial is a member of the association's Board of Directors and participates on the seven working groups (taxation, governance, sustainability, environment, trade unions, communication and bioelectricity). In the 2015/2016 crop year, the Company contributed additional financial resources to UNICA so that it could develop a technical report to defend the industry against protectionist measures targeting sugar imports into Thailand. The report was widely discussed with the Brazil’s federal government, which began efforts to launch a panel process against the Asian country at the World Trade Organization. Through UNICA, the Company also contributes to the debates of the National Sugar and Ethanol Forum and of the Parliamentary Front for Promoting the Sugar and Ethanol Industry in the Brazilian Congress. G4-16Click here to learn more about this aspect in the GRI Supplement

Voluntary commitments undertaken by Odebrecht Agroindustrial G4-15Click here to learn more about this aspect in the GRI Supplement

  • Business Initiatives of the Center for Sustainability Studies (GVCes) of the Getulio Vargas Foundation (FGV): participation in the partner company network of the GVCes offers, among other benefits, various tools for enhancing the measurement of sustainability performance. The Company joined the effort in 2016 initially for the purpose of conducting its greenhouse gas emissions inventory in accordance with the Brazilian GHG Protocol Program. The actions planned for the next crop year include conducting product life cycle analyses that consider water and carbon footprints and sustainability management in our Supplier chain.
  • Global Compact: Odebrecht Agroindustrial signed the letter of commitment to uphold the principles of the Global Compact in 2012, when it participated in the Rio+20 Earth Summit. In the first half of 2016, the Company reaffirmed its commitment to the Sustainable Development Goals and Agenda of the United Nations by becoming a formal signatory to the Global Compact.
  • Brazilian Coalition for Climate, Forests and Agriculture: due to the importance of the sugar and ethanol industry for mitigating and preventing climate change, Odebrecht Agroindustrial has participated in this initiative since 2015, through UNICA. Coordinated by associations from various of the country’s production sectors, the Coalition has worked on, among other topics, developing the commitments undertaken by Brazil in the Paris Agreement negotiated at COP-21.
  • Friends of the Children Company: from 2009 to 2015, the Company's engagement in a program sponsored by the Abrinq Foundation of the Brazilian Association of Toy Manufacturers (Abrinq) resulted in a better understanding of the impacts and opportunities generated by our activities on the protection of children’s rights. As from 2016, the Company’s commitment to this topic will be through its participation as a signatory to the Global Compact.
  • Agro-Environmental Protocol: In 2008, the Company undertook a commitment to eliminate, before the mandated deadline, the practice of burning sugarcane fields during harvest, with our harvest operations 100% mechanized since our incorporation in 2007. The Protocol is coordinated by the São Paulo State Government, the Sugarcane Industry Association (UNICA) and the Organization of Sugarcane Producers in Brazil’s Center-South Region (Orplana).
  • Senai Eco-efficiency Program: the Santa Luzia, Eldorado and Costa Rica units are part of an initiative in the state of Mato Grosso do Sul that assesses the environmental performance of manufacturers in the state and issues a seal classifying the performance of each one. This seal is used as a parameter for expanding tax incentives (State Decree 13,606/2013) or adopted voluntarily as a management instrument.
  • National Commitment to Improve Labor Conditions for Sugarcane Workers: undertaken from 2009 to 2013, this commitment is an example of the improvements in long-term management that can be obtained by engaging in voluntary external initiatives. The agreement, which was signed by seven Ministries and four civil society organizations, promoted the development of better working conditions in sugarcane fields. Even after the termination of the agreement, the Company continues to implement its practices to ensure its compliance with the Commitment's principles.

Credits

Head of Sustainability | Mônica Alcântara
Head of Corporate Communication | Andressa Saurin
GRI consulting and writing | Usina82
Graphic design | Versal Editores
Web development | Agência Dinamite
Photography | Anderson Meneses, Eduardo Moody e Lourenço Furtado

We thank all Team Members of Odebrecht Agroindustrial who participated in the preparation of this publication.