CODE OF CONDUCT FOR ETHANOL SUPPLIERS

Braskem’s Code of Conduct for Ethanol Suppliers underlines the Company’s commitment to operating in accordance with sustainable development principles.

Applied to relations with ethanol suppliers, these measures cover aspects such as:

1. Cane burning;
2. Biodiversity;
3. Good environmental practices;
4. Human and labor rights;
5. Product life cycle analysis.

The basic principle of the Code is continuous improvement and compliance with Brazilian legislation and is modeled on the good practices described in the São Paulo State Agri-environmental Protocol, the Global Compact and the National Commitment to Improve Labor Conditions in Sugarcane Plantations. Therefore, Braskem’s ethanol suppliers undertake are committed to respecting and following the good business practices described below:

1. CANE BURNING:

a)
Respect the following targets: For mechanized areas, on land with a gradient of up to 12%, the deadline for eliminating cane burning is 2014, while the percentage of unburned cane in 2010 must be at least 70%;

For non-mechanized areas, on land with a gradient above 12%, the deadline for eliminating cane burning is 2017, while the percentage of unburned cane in 2010 must be at least 30%;

b)
Do not burn cane for harvesting purposes on sugarcane expansion areas, Expansion areas are defined as those areas whose cultivation implies an increase in planted area over the previous harvest.

c)
Do not burn sugarcane bagasse or any other sugarcane by-product in the open air.

2. BIODIVERSITY:

a)
Map areas of riparian forest in leased or owned areas and draw up a forest recovery project or plan.

b)
Adopt measures to protect headwaters in areas pertaining to the plant, favoring the regeneration of riparian forest within a radius of at least 50 meters, in compliance with the requirements of the prevailing Forestry Code.

c)
Take appropriate action to favor the regeneration of degraded Permanent Protection Areas (PPAs) in areas pertaining to the plant, in compliance with the requirements of t he prevailing Forestry Code.

d)
Adopt preventive and corrective measures to prevent and combat riparian forest fires in areas pertaining to the plant:

Maintain firebreaks (places where vegetation is removed to prevent fires from spreading) of at least six meters between plantation and forest.

Maintain a fire brigade comprising at least one vehicle equipped with a water tank and a fully-trained trained team when burning sugarcane straw (respecting the targets established in item 1);

e)
Comply with the Sugarcane Agri-ecological Zoning in effect, prepared by the Ministry of Agriculture, Livestock and Supply, aiming to ensure the balanced and sustainable growth of sugarcane production throughout Brazil.

f)
Do not plant sugarcane in the Amazon, Pantanal and Upper Paraguay Basin biomes.

g)
Preserve Environmental Protection Areas (EPAs) in accordance with Federal Law 6902 of April 27th, 1981, or any law replacing it in the future.

3. GOOD ENVIRONMENTAL PRACTICES:

a)
Implement measures to dispose of empty pesticide and herbicide packaging, adopting appropriate procedures for cleaning rigid containers, as well as for storage and final disposal in accordance with the prevailing legislation, and provide adequate training for those employees involved.

b)
Adopt verifiable measures to reduce atmospheric pollution in industrial processes, in compliance with National Environmental Council (CONAMA) Resolution 382 of December 26th, 2006 in the case of new resources. In the case of resources prior to 2006, prepare a schedule for compliance with said Resolution.

c)
Maintain appropriate practices for the recycling and reuse of waste generated during ethanol production.

d)
Maintain a soil conservation plan that includes erosion prevention. This plan may be based on the recommendations of the manuals prepared by the São Paulo State Agriculture and Supply Secretariat’s Integrated Technical Assistance Department (CATI/SAA).

e)
Control the water balance by means of a conservation plan that assesses the possibility of water reuse, keeping catchment to a minimum, as well as the reuse of liquid effluents in sugarcane plantations. The plan should also contain targets for reducing water consumption per ton of sugarcane processed.

f)
Prioritize the development of sugarcane production in regions that do not require irrigation.

g)
Prioritize biological pest control, aiming to minimizing the use of pesticides.

h)
Continuously improve practices related to health, safety and the environment (HSE).

4. HUMAN AND LABOR RIGHTS:

a)
Acknowledge, support and respect internationally recognized human rights and ensure that said rights are not infringed, including, but not limited to, child or forced labor.

b)
Not be included in the Ministry of Labor’s “Black List” (Administrative Rule 540 of October 15th, 2004), which lists those plants where forced labor has been used in conditions analogous to slavery.

c)
Keep all workers registered regarding their working papers and social security registrations, both in the industrial facilities and also in the manual activities such as planting and cutting sugar cane.

d)
Respect collective bargaining conventions or agreements governing the compensation of manual sugarcane harvesters.

e)
Ensure good quality accommodations for migrant workers who cannot return to their city of residence after working hours, in accordance with Regulatory Standard 31 of the Ministry of Labor and Employment.

f)
Maintain an Internal Rural Working Accident Prevention Commission (CIPATR) and ensure good health and safety management practices.

g)
Distribute personal protective equipment (PPE) free of charge to all employees and maintain programs to make workers aware of the importance of using such equipment during working hours.

h)
Provide the workers with safe transportation to work sites in the field.

i)
Provide hygienic thermal containers capable of maintaining temperatures for meals taken at the worksite.

j)
It is important, though not mandatory, that suppliers have plans or projects to support and disclose initiatives related to education, health, culture, sports and leisure in the employees’ communities.

5. PRODUCT LIFE CYCLE ANALYSIS (LCA):

a)
Provide Braskem, or a third party assigned by it, with the necessary information to conduct Life Cycle Analyses (LCA) of products whose raw material is sugarcane ethanol. An LCA study considers the following aspects:

1. Energy Consumption: the energy expended in the entire production cycle, including transportation;
2. Consumption of Natural Resources;
3. Use of Land: the average area of land used in production processes;
4. Waste: includes solid waste, liquid effluents and atmospheric emissions;
5. Human Toxicity Potential: data on all potentially toxic substances used;
6. Occupational Injury and Illness Potential: average employment-related accidents and occupational illnesses.

6. FINAL PROVISIONS:

a)
It is the responsibility of the Supplier to disclose and to orient its supply chain regarding full compliance with the terms of this Code of Conduct.

b)
Braskem reserves the right to require some or all of the documents attesting to compliance with the requirements listed herein and to establish criteria and procedures for monitoring and evaluating results, including the possibility of using a third party to verify compliance with this Code of Conduct.

c)
In case of non-compliance with any item of this Code of Conduct in one or more plants belonging to the Supplier, the Supplier must present a Braskem Code of Conduct for Ethanol Suppliers Compliance Plan, Plan, with defined compliance deadlines, to be signed by both parties. If Suppliers do not present this Plan, the plant(s) may be excluded from Braskem’s accredited list of ethanol suppliers.