Companhia Brasileira de Distribuiçao Netherlands B : Policy of Beef Purchasing

SOCIAL AND ENVIRONMENTAL

BEEF PURCHASING

POLICY

TABLE OF CONTENTS

1.	PURPOSE.........................................................................................................................................................................................	3
2. SCOPE..............................................................................................................................................................................................	4
3.	TERMS, EXPRESSIONS, AND DEFINITIONS............................................................................................................................	5
4. GENERAL GUIDELINES..............................................................................................................................................................	10
	4.1	CONTEXT...................................................................................................................................................................................................	10
	4.2	COMMITMENTS BY GPA........................................................................................................................................................................	13
		4.2.1	COMMITMENTS IN FAVOR OF NON-DEFORESTATION AND THE PROMOTION OF HUMAN RIGHTS..............................................	13
		4.2.2	OTHER COMMITMENTS AND TOOLS.................................................................................................................................................................	16
5.	SPECIFIC GUIDELINES................................................................................................................................................................	18
	5.1	PROCESSES THROUGHOUT GPA.........................................................................................................................................................	18
		5.1.1	INTERNAL ENGAGEMENT & AWARENESS........................................................................................................................................................	18
		5.1.2	INCLUSION OF SUPPLIERS & REMEDIATION PROCESS..................................................................................................................................	19
		5.1.3	MONITORING & CONTROL OF POLICY IMPLEMENTATION AND COMPLIANCE BY SUPPLIERS........................................................	20
		5.1.4	COLLABORATION BETWEEN ALL STAKEHOLDERS OF THE CHAIN.............................................................................................................	23
		5.1.5	RESULTS DISCLOSURE............................................................................................................................................................................................	24
		5.1.6	SOCIAL INVESTMENTS FOR THE PRESERVATION OF FORESTS....................................................................................................................	25
	5.2	SUPPLIERS' RESPONSIBILITIES.............................................................................................................................................................	26
		5.2.1	ADHERENCE TO THIS POLICY...............................................................................................................................................................................	26
		5.2.2	COMPLIANCE WITH GPA'S CODE OF ETHICS..................................................................................................................................................	26
		5.2.3	MONITORING PROTOCOL FOR CATTLE SUPPLIERS IN THE AMAZON......................................................................................................	29
		5.2.4	TRACEABILITY DOWN TO THE DIRECT ORIGIN.................................................................................................................................................	31
		5.2.5	SOCIAL AND ENVIRONMENTAL MONITORING OF FARMS..........................................................................................................................	32
6. WHISTLEBLOWING CHANNEL................................................................................................................................................	38
7.	REFERENCES................................................................................................................................................................................	39
8. NETWORK...................................................................................................................................................................................	40
9. POLICY UPDATES........................................................................................................................................................................	41
10. POLICY VALIDATION.................................................................................................................................................................	41

1. PURPOSE

This Social and Environmental Beef Purchasing Policy presents

general and specific guidelines on the purchase of beef by GPA and its chain.

It has as purpose to provide guidance on the existing relationships between GPA and its suppliers of beef products, in addition to presenting criteria of compliance, integrity, and sustainability required from such suppliers in view of the critical nature of this chain in terms of deforestation, working conditions and respect for land tenure.

With this Policy GPA sets forth commitments, performance hallmarks, and guidelines that serve as basis for the company's beef purchase process, in addition to ensuring compliance with the Brazilian Forest Code and all current legislations.

Compliance with these guidelines is mandatory for all beef suppliers and is a condition precedent for providing goods to GPA and maintaining long-term relationships with the Group's business units.

If a supplier refuses to apply these guidelines or to take the required corrective actions, GPA can terminate the business relationship with such supplier.

CONTENTS

2. SCOPE

GPA's Social and Environmental Beef Purchasing Policy

applies to all suppliers in the supply chain of all of our businesses, which supply beef products of Brazilian origin, whether fresh or processed, chilled or frozen, regardless of the biome in which they are located and for all the brands supplied.

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3. TERMS, EXPRESSIONS AND DEFINITIONS

• Amazon Biome: forest formation that encompasses several countries in South America (Brazil, Peru, Colombia, Bolivia, Guayana etc.). In Brazil, the Amazon covers 40% of the Brazilian territory, in the States of the Legal Amazon, which is close to the Equator. This one is considered the world's most bio diverse biome.
• Legal Amazon: administrative geographical definition composed of all the Brazilian States of Acre, Amapá, Amazonas, Mato Grosso, Pará, Rondônia, Roraima, and Tocantins, in addition to part of the State of Maranhão. It encompasses not only the Amazon biome but also part of the so-called 'Cerrado' savanna (open pasture with patches of stunted vegetation), in addition to part of the Pantanal wetlands of Brazil (the richest biodiversity biome in South America).
• Cerrado Biome: composed especially of savanna, the Cerrado (open pasture with patches of stunted vegetation) biome represents the second largest vegetation formation in Brazil, with 22% of the Brazilian territory. Its continuous area covers the Brazilian states of Goiás, Tocantins, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Bahia, Maranhão, Piauí, Rondônia, Paraná, Sao Paulo, and the Federal District, as well as the enclaves in the Brazilian States of Amapá, Roraima, and Amazonas. The Cerrado vegetation does not have a single aspect, as along its extension it is possible to find several phytophysiognomies (aspects of the peculiar vegetation of a region).
• Environmental Areas Permanently Protected (APP): these are legally-protected areas, covered or not by native vegetation, with the environmental function of preserving water resources, landscape, geological stability and biodiversity, facilitating the genetic flow of fauna and flora, protecting the soil and ensuring the well-being of human populations.
• Deforestation/Conversion of native vegetation: total or partial removal of natural and/or native vegetation
  (in the case of Conversion of native vegetation), resulting from: (i) conversion to agriculture or other non-forest land use; (ii) conversion to a planted forest; or (iii) severe and continuous degradation.
• • Legal deforestation: vegetation suppression in rural properties under the consent of a public agency and formalized through the Consent for Suppression of Native Vegetation or another equivalent documentation.

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