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03/11/14 1 BRAZILIAN COTTON GROWERS ASSOCIATION RESPONSIBLE BRAZILIAN COTTON - ABR BRAZILIAN POSITIVE EXPERIENCE IN CONSTANT SEARCH FOR SUSTAINABILITY BRAZILIAN COTTON GROWERS ASSOCIATION SUSTAINABILITY EVOLUTION IN THE BRAZILIAN COTTON GROWING BRAZILIAN COTTON GROWERS ASSOCIATION CONTEXT ESSENCE OF SUSTAINABILITY Need for assuring that the products, since their origin, are produced sustainably: 1. RESPECTING FAIR WORK CONDITIONS 2. PROMOTING THE WORKER'S HEALTH AND SAFETY 3. CARING FOR ENVIRONMENTAL ISSUES: Rational use of the renewable and non-renewable resources Respect and preservation of environment ENSURING TODAY'S RESULTS MUST NOT COMPROMISE THE NEEDS AND THE CAPACITY OF PRODUCTION FOR THE FUTURE GENERATIONS. BRAZILIAN COTTON GROWERS ASSOCIATION BRAZIL: WHERE DID SUSTAINABILITY IN COTTON GROWING COME FROM? Early 90’s: CHANGE OF THE PRODUCTION AXIS TO BRAZILIAN CERRADO BUSINESS LIKE PRODUCTION TECHNIFIED AND LARGE-SCALE PRODUCTION Demand for larger labor force, mainly the specialized one: Growers face a huge and complex set of laws and standards related to labor, occupational health&safety and environmental issues. Demand for new areas: Implication of legal aspects of environmental nature: soil occupation and use, biome protection policies. THE NEW REALITY GENERATED A DEMAND FOR PROGRAMS HELPING GROWERS TO COMPLY WITH LEGAL REQUIREMENTS. BRAZILIAN COTTON GROWERS ASSOCIATION COTTON IN BRAZIL: WHO ARE WE? FOR MORE THAN TWO DECADES, SINCE MIGRATION TO CERRADO, BRAZIL ESTABLISHED ITSELF AMONG THE WORLD'S LARGEST PLAYERS IN COTTON PRODUCTION. By increasing the production, we achieved self-sufficiency, supplying national industry, which is one of the strongest in the world. Before 2001, Brazil was a cotton importer With self-sufficiency, we draw the attention to the external Market and started supplying the international industry as well. Thus, we changed the balance of trade, going from importer to an exporting country. BRAZILIAN COTTON GROWERS ASSOCIATION

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03/11/14  

1  

BRAZILIAN COTTON GROWERS ASSOCIATION

RESPONSIBLE BRAZILIAN COTTON - ABR

BRAZILIAN POSITIVE EXPERIENCE

IN CONSTANT SEARCH FOR SUSTAINABILITY

BRAZILIAN COTTON GROWERS ASSOCIATION

SUSTAINABILITY EVOLUTION IN THE BRAZILIAN COTTON GROWING

BRAZILIAN COTTON GROWERS ASSOCIATION

CONTEXT ESSENCE OF SUSTAINABILITY Need for assuring that the products, since their origin, are produced sustainably: 1. RESPECTING FAIR WORK CONDITIONS 2. PROMOTING THE WORKER'S HEALTH AND SAFETY 3. CARING FOR ENVIRONMENTAL ISSUES: ü  Rational use of the renewable and non-renewable resources ü  Respect and preservation of environment

ENSURING TODAY'S RESULTS MUST NOT COMPROMISE THE NEEDS AND THE CAPACITY OF PRODUCTION FOR THE FUTURE GENERATIONS.  

BRAZILIAN COTTON GROWERS ASSOCIATION

BRAZIL: WHERE DID SUSTAINABILITY IN COTTON GROWING COME FROM?

Early 90’s: CHANGE OF THE PRODUCTION AXIS TO BRAZILIAN CERRADO ü  BUSINESS LIKE PRODUCTION ü  TECHNIFIED AND LARGE-SCALE PRODUCTION Demand for larger labor force, mainly the specialized one: Growers face a huge and complex set of laws and standards related to labor, occupational health&safety and environmental issues. Demand for new areas: Implication of legal aspects of environmental nature: soil occupation and use, biome protection policies. ..

THE NEW REALITY GENERATED A DEMAND FOR PROGRAMS HELPING GROWERS TO COMPLY WITH LEGAL REQUIREMENTS.

BRAZILIAN COTTON GROWERS ASSOCIATION

COTTON IN BRAZIL: WHO ARE WE? FOR MORE THAN TWO DECADES, SINCE MIGRATION TO CERRADO, BRAZIL ESTABLISHED ITSELF AMONG THE WORLD'S LARGEST PLAYERS IN COTTON PRODUCTION. By increasing the production, we achieved self-sufficiency, supplying national industry, which is one of the strongest in the world. ü  Before 2001, Brazil was a cotton importer With self-sufficiency, we draw the attention to the external Market and started supplying the international industry as well.  ü  Thus, we changed the balance of trade, going from importer to an exporting country.    

BRAZILIAN COTTON GROWERS ASSOCIATION

03/11/14  

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COTTON IN BRAZIL: WHO ARE WE? Main indicators ü  Brazil is the 5th LARGEST GROWER, with an average of 1.2 MILLION Ha of cultivated area and 1.7 MILLION TONS of lint per crop year. ü  It is placed 4th in PRODUCTIVITY; currently producing 1,520 KG/Ha, the global leader in rainfed cotton production.

ü  It is the 5th LARGEST EXPORTER, with an average of 800 THOUSAND TONS exported per crop year. ü  It offers quality lint, with COTLOOK A INDEX quotations  

   

BRAZILIAN COTTON GROWERS ASSOCIATION

COTTON IN BRAZIL: WHO ARE WE? Associativity and representativeness    9 GROWING STATES State associations affiliated with Abrapa

981 PRODUCTION UNITS ü  99% OF THE CULTIVATED AREA ü  99% OF THE PRODUCTION ü  100% OF THE EXPORTS    

GO

MT

MS

MA

BA

PR

SP

MG

PI

BRAZILIAN COTTON GROWERS ASSOCIATION

2005: Creation of Instituto Algodão Social (IAS program) in the State of Mato Grosso 2009: Abrapa launches Programa Socioambiental da Produção de Algodão (Psoal program), in order to serve the other growing states 2010: Abrapa  and state associations become implementing partners of Better  Cotton  Initiative (BCI) in Brazil 2012: Abrapa and state associations unify the IAS and Psoal  protocols and launch Responsible Brazilian Cotton (ABR) program

SUSTAINABILITY, PLANNED AND CONSTANT EVOLUTION

2013: LAST STAGE BENCHMARKING UNIFIES THE ABR CERTIFICATION AND BCI LICENSING PROTOCOLS, FROM 2013/2014 CROP YEAR

BRAZIL GOES FROM IMPLEMENTATION PARTNER TO STRATEGICAL PARTNER OF BCI

BRAZILIAN COTTON GROWERS ASSOCIATION

ABR CERTIFICATION / BCI LICENSING A 3-phase process:

1. DIAGNOSIS OF THE PRODUCTION UNIT (UP)  

2. CORRECTION OF NONCONFORMITIES  

3. CERTIFICATION/ LICENSING CHECKLIST  

PHASES 1 AND 2: CONDUCTION AND MONITORING OF THE STATE ASSOCIATION

IN CHARGE OF AN INDEPENDENT EXTERNAL AUDIT *

THE STARTING POINT IS THE APPLICATION FOR ENROLLMENT IN THE ABR PROGRAM With the benchmarking, the grower may then declare his/her adhesion to BCI.

* Internationally-accredited certifying companies, authorized by Abrapa: ABNT, SGS, GENESIS GROUP, INTERTEK, ETC.

BRAZILIAN COTTON GROWERS ASSOCIATION

1. EMPLOYMENT AGREEMENT 2. PROHIBITION OF CHILD LABOR 3. PROHIBITION OF SLAVE-LIKE, DEGRADING OR UNDIGNIFIED LABOR 4. FREEDOM TO JOIN TRADE UNIONS 5. NON-DISCRIMINATION 6. RURAL OCCUPATIONAL HEALTH& SAFETY AND ENVIRONMENT OF WORK 7. ENVIRONMENTAL PERFORMANCE 8. GOOD AGRICULTURAL PRACTICES

ABR CERTIFICATION / BCI LICENSING Audit: application of a list consisting in 179 items, divided into 8 criteria:

CRITERIA 2 AND 3 MUST HAVE FULL CONFORMITY (100% ) THE OTHER CRITERIA HAVE EVOLVING MINIMUM CONFORMITY: ü  85% in the first crop year ü   2% growth per crop year, always including 16 items called Minimum Production Criteria (CMP)

BRAZILIAN COTTON GROWERS ASSOCIATION

O programa ABR é financiado com recursos do Instituto Brasileiro do Algodão The ABR program is funded  by  the  Brazilian  Cotton  Institute    

Validade: Este certificado é válido para o algodão produzido na safra 2013/2014 e sua

autenticidade pode ser confirmada no website  www.abnt.org.br Validity: This   certification is valid for the   cotton  produced in 2013/2014 crop   year  and its authenticity  may  be  confirmed in the  website  www.abnt.org.br

Associação Brasileira de Normas Técnicas –  Avenida Paulista, 726 – 10º andar – São Paulo/SP – Cep: 01310-910 CNPJ: 33.402.892/0002-97 – Phone +55 (11) 2344-1739 – http://www.abnt.org.br

Antonio S. Parente Gerência de Certificação de Sistemas

Systems Certification Management  

São Paulo, September 00, 0000

ABR CONFORMITY CERTIFICATE RESPONSIBLE BRAZILIAN COTTON – 2013/2014 CROP YEAR

ABR CONFORMITY CERTIFICATION RESPONSIBLE BRAZILIAN COTTON – 2013/2014 CROP YEAR

A ABNT Certificadora  concede este Certificado de Conformidade Socioambiental à Produção de Algodão da:

Unidade Produtiva / Farm:

Inscrição Estadual /State  Inscription:

Produtor(es) / Producer(s):

Grupo Empresarial / Business Group:

Município / City:

Estado / State:

Para o escopo “Produção de algodão com práticas socioambientais corretas, livre de trabalho infantil e análogo a escravo, degradante ou indigno”, em conformidade com os critérios do Programa Algodão Brasileiro Responsável – ABR.

ABNT Certificadora  grants  this  Certification  of  Socio-environmental  Conformity to Cotton  Production  from:

For the  scope ”Production  of  cotton  with  correct  socio-environmental    practices, free  from  child

labor, slave-like labor, degrading  and  undignified  working  conditions”, in conformity  with  criteria  of  the  Responsible  Brazilian  Cotton - ABR program.

Fazenda Modelo xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

000000000000

Antonio dos Santos Silva xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Santos & Silva Produtores Associados xxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx

Campos da Pluma

Mato Grosso

00000000-0000

ABR CERTIFICATE THE PRODUCTION UNIT APPROVED BY THE INDEPENDENT AND EXTERNAL AUDIT, RECEIVES THE ABR CONFORMITY CERTIFICATE, WHICH IS ISSUED BY THE CERTIFYING COMPANY. ü  The certificate is only valid for the corresponding crop year and its authenticity may be confirmed on the certifying company's website.

BRAZILIAN COTTON GROWERS ASSOCIATION

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THE PRODUCTION UNIT APPROVED IN THE INDEPENDENT EXTERNAL AUDIT IS ALSO GIVEN AUTHORIZATION TO AFFIX THE ABR CONFORMITY SEAL ON THE BALES OF THE CORRESPONDING CROP YEAR.

ABR SEAL

The seal contains the following data: ü  CROP YEAR ü  STATE OF ORIGIN ü  PRODUCTION UNIT ü  OWNER ü  BUSINESS GROUP ü  STATE REGISTRY ü  CERTIFYING COMPANY ü  CERTIFICATION PROCESS

BRAZILIAN COTTON GROWERS ASSOCIATION

ABR-BCI BENCHMARKING

BRAZILIAN COTTON GROWERS ASSOCIATION

BENCHMARKING_PREMISE AND STRATEGY PREMISE: ABR AND BCI OPERATE WITH THE SAME PROCESSES ü  Verification criteria ü  Minimum conformity, programmed and ongoing evolution ü  Certification and license through an independent external audit carried out by a renowned and internationally-accredited certifying company

STRATEGY: TO UNIFY THE PROTOCOLS OF BOTH PROGRAMS ü  Benchmarking study conducted by an external consulting firm, with follow-up of Abrapa  and Better  Cotton  Initiative

Goals: ü  TO FACILITATE THE GROWER'S PARTICIPATION ü  TO PROVIDE ABR CERTIFICATION AND BCI LICENSE IN A SINGLE VERIFICATION AND AUDIT PROCESS

BRAZILIAN COTTON GROWERS ASSOCIATION

BENCHMARKING _PROPOSAL Basis - mission of Better  Cotton  Initiative:

Basis of operation for the grower: ü   ABR PROGRAM, WITH OPTION TO ADHERE TO BCI PROGRAM

BCI'S MISSION MEETS ABR'S PROPOSAL AND STARTS TO SUSTAIN THE ABR-BCI BENCHMARKING POLICY IN BRAZIL.  

TO MAKE GLOBAL COTTON PRODUCTION: ü  better for the people who produce it, ü  better for the environment it grows in ü  and better for the sector’s future.

BRAZILIAN COTTON GROWERS ASSOCIATION

ABR PROGRAM IS SUSTAINED BY THREE PILLARS

They comprise the ANCILLARY and the CORE ACTIVITY of the grower

BRAZILIAN COTTON GROWERS ASSOCIATION

BRAZILIAN COTTON GROWERS ASSOCIATION

RESPECT AND APPRECIATION FOR THE WORKER

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THE ABR CERTIFICATION PROTOCOL IS COMMITTED TO THE INDIVIDUAL RIGHTS AND RESPECT TOWARDS OTHERS.

The worker is assured:  ü   Formal employment, fair salary, additional payments under the law, weekly rest break, and paid vacations ü  House or living quarters, meal, transportation, medical assistance, and structure for rest, socialization, and leisure ü   Non-discriminatory treatment and freedom to join a trade union

It is 100% aligned with the legal principles protecting and preserving the worker's integrity ü  100% ALIGNED WITH THE STANDARDS OF THE ILO - INTERNATIONAL LABOR ORGANIZATION ü  100% ALIGNED WITH THE BRAZILIAN LABOR LEGISLATION (CLT) ü  100% ALIGNED WITH STANDARD 31 Standard 31: Provides for occupational safety, health and environment (Brazil)

BRAZILIAN COTTON GROWERS ASSOCIATION

BRAZILIAN COTTON GROWERS ASSOCIATION

INTEGRATED AGRICULTURE AND NATURE

It fosters the relationship between man and nature, aiming at: ü  THE PERMANENT PRESERVATION OF ECOSYSTEMS ü  THE PROTECTION OF WATER SOURCES, WATERCOURSES, AND WATER RESERVOIRS ü  THE QUALITY OF THE AIR, WATER, AND SOIL Priority goals: ü  Mantain biodiversity in the production system:  effective actions against contamination of environment  and  for preservation of the fauna and flora. ü  Protect the workers from being exposed to the chemicals used in the cultivated areas.

TWO POINTS: ENVIRONMENTAL PERFORMANCE AND BEST AGRICULTURAL PRACTICES

BRAZILIAN COTTON GROWERS ASSOCIATION

The ABR program is aligned with the soil occupation and use policy. CONCENTRATION OF THE PRODUCTION IN AREAS OF CERRADO, RESPECTING THE PRESERVATION OF THE MAIN BIOMES.

Main biomes: ü  AMAZON RAINFOREST ü  PANTANAL ü  ATLANTIC FOREST

BRAZILIAN COTTON GROWERS ASSOCIATION

BRAZILIAN COTTON GROWERS ASSOCIATION

PROFITABLE INVESTMENT FOR THE GROWER

INHERENT CHARACTERISTIC OF ABR PROGRAM

Premise ü  The good social and environmental practices, essentially bring gains which promote the consolidation  and prosperity of the business. Favorable factors

The consumer's growing preference for products originated from efforts to preserve the environment and seeking for social justice

The power of associativity to place Brazilian cotton in the vanguard of sustainability

The awareness and proactivity of the other links of the chain, in face of a irreversible trend in the market

OPPORTUNITY FOR MAKING THE RESPONSIBLE COTTON A PROFITABLE INVESTMENT FOR GROWERS.

BRAZILIAN COTTON GROWERS ASSOCIATION

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ABR AND BCI IN FIGURES

BRAZILIAN COTTON GROWERS ASSOCIATION

ABR

+ 19% in the comparison

with 2011/2012

+ 95% in the comparison

with 2011/2012

SIGNIFICANT ADVANCE IN BCI: In 2011/2012, the number of PUs/BCI represented 50% of the PUs/ABR. In 2013/2014, the percentage increased to 82%. ü  The percentage is expected to grow until it achieves 100%, when all ABR-certified PUs will be BCI-licenced as well.

214 216

255

107 130

209

0

50

100

150

200

250

300

2011/2012 2012/2013 2013/2014

Production Units - UPs

ABR/BCI_PRODUCTION UNIT EVOLUTION

BCI  

Production Units - PUs

BRAZILIAN COTTON GROWERS ASSOCIATION

ABR/BCI_AREA EVOLUTION

THE DECREASE IN 2012/2013 REFLECTS THE GENERAL AREA SHORTAGE FOR THAT CROP YEAR

+ 30% in the comparison

with 2011/2012

+ 254% in the comparison

with 2011/2012

SIGNIFICANT ADVANCE IN BCI: In 2011/2012, the BCI-licensed area represented 34% of the ABR-certified area. In 2013/2014, the percentage increased to 93% (result of the growth of PUs). ü  The percentage is expected to grow until it achieves 100%, when all ABR-certified PUs will be BCI-licenced as well.

619,126

469,744

805,443

210,208 188,288

745,412

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

2011/2012 2012/2013 2013/2014

Cultivated area (ha)

ABR BCI  

BRAZILIAN COTTON GROWERS ASSOCIATION

ABR/BCI_PRODUCTION EVOLUTION

+ 38% in the comparison

with 2011/2012

+ 244% in the comparison

with 2011/2012

878,656 753,608

1,218,000

325,100 321,305

1,117,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2011/2012 2012/2013 2013/2014

Produced lint (tons)

ABR BCI  

THE DECREASE IN 2012/2013 REFLECTS THE GENERAL PRODUCTION SHORTAGE FOR THAT CROP YEAR OTHER SIGNIFICANT ADVANCE IN BCI: In 2011/2012, the BCI-licensed production represented 37% of the ABR-certified production. In 2013/2014, the percentage increased to 92% (result of the growth of PUs). ü  The percentage is expected to keep growing until it achieves 100%, when all ABR-certified PUs will be BCI-licensed as well.

AS IN THE OTHER PARAMETERS, THE LINES CLEARLY POINT TO A CONVERGENCE.

BRAZILIAN COTTON GROWERS ASSOCIATION

BENCHMARKING: ABR-BCI PRODUCTION x TOTAL PRODUCTION

2013/2014 CROP YEAR CULTIVATED AREA (ha) LINT PRODUCTION (tons)

Total Brazil 1,123,140.48 1,705,197.99 ABR 805,443.00 (72%) 1,218,000.00 (71%)

BCI 745,412.00 (66%) 1,117,000.00 (66%)

CONFIRMED: BRAZIL, THE LARGEST BC COTTON SUPPLIER IN THE WORLD

TODAY, THE BETTER COTTON PRODUCTION IN BRAZIL REPRESENTS: ü  66% of the entire national cotton production, more than two times the BCI goal for the global production ü  60% of the Better Cotton global production, accounting for more than half the volume

The sustainable cotton currently accounts for a significant share - in the order of 66% to 72% - in the total figures of cotton cultivated area and production in Brazil

BRAZILIAN COTTON GROWERS ASSOCIATION

GALLERY

BRAZILIAN COTTON GROWERS ASSOCIATION

03/11/14  

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GALLERY

BRAZILIAN COTTON GROWERS ASSOCIATION

GALLERY

BRAZILIAN COTTON GROWERS ASSOCIATION

GALLERY

BRAZILIAN COTTON GROWERS ASSOCIATION

THANK YOU ALL

Denilson Galbero Sustainability Manager

E-mail: [email protected] www.abrapa.com.br