1. purpose 2. anti-corruption law and its impact on...

1

Title: Anticorruption Standard

1. PURPOSE

The objective of this Standard is to guide all employees, contractors, representatives, suppliers

etc. on how to regulate their conduct due to potential events that may lead to the practice of acts

of corruption

2. ANTI-CORRUPTION LAW AND ITS IMPACT ON THE COMPANY AND ITS

EMPLOYEES

Consequences for the companies involved

Fines: The Company will be subject to severe fines, which represent a significant percentage of

its revenues.

Compensation for damages: Every possible damage, as well as unduly benefits earned by the

Company, shall be fully repaired and/or returned.

Reputational risk: Punishments for corrupt practices tend to be widely disseminated and

generate an extremely negative publicity for the Company's image. Furthermore, the

Anticorruption Law establishes that if the Company is convicted under its provisions, it must be

published in newspapers of national circulation.

Misuse of resources by the Company: The investigations for violating laws against harmful acts

against the public administration and public property and corruption acts generate a misuse of

material and human resources for extended periods of time, which could be used more

effectively and beneficial for the Company and its employees.

Prohibition to celebrate Contracts with the Public Administration: The Company may be

prohibited from contracting with the Public Administration, usually not participating in bidding

processes.

2


Loss of assets: The Company will forfeit all property, rights or securities representing the direct

or indirectly benefit or advantage obtained from the breach of law.

Loss or not grant of tax benefits to the Company: The Public Administration may file lawsuits

aiming to ban the Company to have tax incentives, subsidies, grants, donations or loans for a

period from 1 to 5 years.

Suspension of the Company’s activities: The Public Administration may file lawsuits aiming the

partial or total suspension of the Company’s activities.

Dissolution of the Company: The Public Administration may file lawsuits aiming the Company’s

legal dissolution.

Unavailability of goods: The Public Administration may file lawsuits aiming to declare the

unavailability of assets, rights or values that guarantee the payment of the fine or the full

compensation for the damage caused.

Consequences for individuals involved

Fines and other administrative sanctions: The administrators, directors or any natural person,

author, co-author or participant in the wrongful act, will respond individually to the extent of their

culpability.

In the criminal context: in addition to the above administrative penalties, individuals will answer

for crimes committed based on the Brazilian Penal Code.

It is important to stress the importance of preventing and/or suppressing the occurrence of

infractions of this nature. For this reason this Standard should be strictly enforced by all

Company’s professionals and/or any representative and/or a third party.

3. DEFINITIONS AND ACRONYMS

BRIBERY - offering, giving, promising, receiving anything that has value to influence a decision

to do business with the Company or to give an undully advantage to the Company. An important

3


aspect of the definition of "bribery" is the purpose of the payment. Anticorruption laws prohibit

the payment of anything of value to obtain business, retain business or obtain any improper

advantage. Even if the Company has the legal right to an attitude of the government, such as

to receive a refund or license, payment of a bribe to get this right is still prohibited.

CIVIL SERVICE EMPLOYEE or GOVERNMENT OFFICER or PUBLIC SERVANT - all

employees of public or government-controlled companies, being: (i) Directors and employees

of any Government Entity in national, state, regional, municipal or local level, including the

leaders elected; (ii) Any individual temporarily acting in an official way for or on behalf of any

Governmental Entity (e.g., a consultant hired by a government agency); (iii) Directors and

companies with government participation’s employees; (iv) Candidates for political office at any

level, political parties and their representatives; (v) Directors, employees or officials of any

public international organization, such as World Bank, United Nations and International

Monetary Fund; and (vi) family members of any such person (spouse, partner, grandparents,

parents, children, siblings, nephews, uncles, cousins in first degree etc).

COMPANY(IES) - the company(ies) controlled by InterCement Participações S/A.

COUNTERPART – Participant of the business. A business has several participants who trade

with each other, being each counterparty to all others. For example, the seller is counterpart to

the buyer and vice versa.

CORRUPTION – action to deliver, offer or promise something in the expectation of an

advantage or benefit in certain business swindle; abuse of power or authority by a person in

order to obtain advantages for themselves or others, taking advantage of the power conferred.

The most common form of corruption is bribery.

GOVERNMENTAL ENTITIES - For purposes of this Standard, a government entity refers to

commercial enterprises, institutions, agencies, departments and bodies owned or controlled by

the Public Administration and other public entities (whether the participation or control is total

or partial), including research institutions, universities and hospitals.

INTERCEMENT PARTICIPAÇÕES S/A (INTERCEMENT) - corporation dully organized and

existing under the laws of Brazil, headquartered at Av Nações Unidas, 12,495, 13th and 14th

floors, Torre Nações Unidas – Torre A, Centro Empresarial Berrini – ZIP code 04578-000,

4


Brasil, enrolled in the National Register of Legal Entities ("CNPJ/MF") under No.

10.456.140/0001-22.

MANAGER(S) – is(are) the person(s) responsible for managing a specific project, such a

contract, a merger and acquisition, a capital markets operation, a consulting process, or process

of any other nature. A manager may be the person with the middle management position

(coordinator) or a higher hierarchical level (officer or director), never a person of lower

hierarchical level.

PUBLIC ADMINISTRATION - any direct, indirect or foundational public authority, including

Legislative, Executive and Judiciary, and even their offices and autonomous government entity,

domestic and foreign.

SIGNIFICANT CONTRACT - contracts where there may be, in a greater or lesser extent, a direct

or indirect interaction with the Public Administration, such as transport contracts, environmental

studies, civil engineering contracts, sponsorships etc.

UNDULY ADVANTAGE /FACILITATING PAYMENT can be considered undue advantage or

payments to Civil Servants, government officials and Civil Servants: money, gifts, travel,

entertainment, job offers, meals, illegal campaign contributions, inappropriate event

sponsorships, study scholarships, luxury items, jewelry or precious stones, etc. charitable

contributions. May still be a payment to a Civil Servant to ensure or expedite the performance

of an action or service that a person or company has the ordinary and legal right. For example,

payments to obtain permits, licenses and other official documents, regulatory approvals, block

the participation of a competitor in bidding, avoid negative attitudes of government, reduce

taxes, avoid charges or customs fees, processing of governmental papers, such as visas and

service orders; provision of telecommunications services; supply of water and electricity, etc.

4. RESPONSIBILITIES AND RULES

Of the Corporate Legal Department - (i) implement and maintain updated this Standard in

accordance with the specifications of the local legislation; (ii) together with the area of Risk

Management and Audit, perform the necessary training and knowledge to ensure compliance of

this Standard; (iii) provide advisory services to other areas of the Company on matters related

5


to this Standard; and (v) define and oversee the monitoring of compliance with this Standard

with the Risk Management and Audit.

Of the Human Resources - (i) be responsible for obtaining the signature of documents defined

by the Corporate Legal Department for all employees, organize and maintain these documents

next to each specific employee record; (ii) organize and ensure that all employees receive the

necessary training, or given periodic training for each new employee of the Company, conducted

by the Corporate Legal Department and the area of Risk Management and Audit; (iii) conduct

communication processes related to this Standard.

Of the Ethics Committee - receive information, analyze and refer matters to the relevant

departments, as the case may be.

Of the Risk Management and Audit - ensure the monitoring of the implementation of this

Standard.

5. CRITERIA AND RULES

5.1. - Specific Guidelines

As required by law, the breach of the laws dealing with harmful acts against the Public

Administration and Public Property may result in serious administrative and monetary fines for

the Company, and/or professionals, representatives and/or others involved.

a) Acts of Corruption

It is strictly forbidden to professionals, Company's contractors or third parties the practice of

offering, promising etc undully or unfair advantage of any nature or kind to any person, including

but not limited to the Public Servant, Governmental Entity or private company.

All Company’s professionals and third parties acting on their behalf are prohibited from

engaging in active, passive, or in a co-participating way, encouraging, approving, paying,

providing, retransmitting, concealing, cooperating or in any way allowing either actively or

6


passively the practice of bribery to any Public Servant to influence or reward any official act or

decision of such person on behalf of any company that may integrate the Company.

It is strictly forbidden:

all and any undully payment;

all and any improper influence on Public Servants;

acceptance of third parties’ nomination from for Public Servants;

maintain any relationship with employees and/or third parties if checked corrupt practices

or if one is being investigated, prosecuted or has been convicted; or

enter into agreements with third parties that do not contain any mandatory provisions of

compliance with laws against harmful acts against the Public Administration and public

property.

The confirmation of this practice will result in disciplinary actions,

including dismissal with cause.

Notwithstanding this Standard, the guidelines established in the Company's Code of Ethics and

Conduct should be followed in full.

As mentioned above, Undully Advantages offered to Public Servents may also be arising from:

b) Meals

Meals eventually shared with Public Servants, government employees and/or agents of the

government should have moderate costs, without extravagance, consistent with local laws and

directly related to the legitimate purpose of business. It is not allowed to offer meals to Public

Servants to improperly influence or compensate an official act or decision, actual or intended to

benefit the Company.

In all cases, one must ensure that records of expenses associated with meals in such situations

should be accurate and clearly reflect the true reason of the expense. Never, money in cash

may be given to any person, including a Public Servant.

c) Travel and Entertainment

7


It is not allowed to offer travels or entertainment to Public Servants to improperly influence or

compensate an official act or decision, actual or intended to benefit the Company. Offering of

travel and/or frequent entertainment to a Public Servant may be a indicative signal of

inappropriate activity and therefore should be avoided.

In every single situation one must ensure that records of expenses associated with travel and

entertainment should be accurate and clearly reflect the true reason of the expense. In any

case, money in cash can be provided to the Civil Servant, in order him/her organize a trip,

entertainment, event etc.

All payments for meals, travel and entertainment should be in accordance with the company

Travel Standard and will only be reimbursed within the limits, terms and conditions set forth in

the mentioned Standard.

d) Gifts and Giveaways

No gift or giveaway may, under any circumstances, be given in exchange for a Public Servant’s

favorable or preferential treatment, seeking any benefit for the company or individual involved.

Notwithstanding the provisions set forth in this Standard, guidelines on gifts and giveaways set

forth on the Company's Code of Ethics and Conduct should be followed entirely.

e) Contributions and Donations

Notwithstanding set forth in this Standard, guidelines on contributions and donations set forth

in the Company's Code of Ethics and Conduct should be followed entirely.

f) Sponsorship

All sponsorships must always be based on existing standards and formalized agreements

between the Company and the institutions that receive sponsorship and must have the prior

and express approval of the Executive Committee.

g) Mergers & Acquisitions

8


In the acquisition of any company or entering into any agreement by the Company, the

compliance process must include an compliance analysis of the target acquisition/procurement

to laws against harmful acts against the public administration and public property especially the

Anticorruption Law.

h) Accounting Books and Records

Regarding to the books and records, the Company:

must keep them in order to reflect accurately and fairly all transactions;

must establish accounting controls to provide reasonable assurance that transactions are

recorded accurately;

must properly record all transactions accurately and faithfully of all the original

documents, including invoices, receipts and expense reports, and not only the books;

never include any false or misleading documents;

never make inadequate, ambiguous or misleading accounting entries, and any other

procedure, technique, or accounting artifice that can hide or otherwise conceal illegal

payments.

i) Participation in bidding

The Company must always act independently in bidding processes, which includes NEVER:

conduct improper or unlawful agreements to act in a certain way;

make improper payments or favors to achieve certain benefit;

perturb, impede, frustrate or circumvent the competitive nature of the public bidding

process, as well as any of its actions, processes or contracts;

deviate or look to deviate bidders, by fraud or offering advantage of any kind;

create, fraudulently or irregularly, legal entity to participate in public bidding or enter into

administrative contracts;

gain an undully advantage by deception, modifications or extensions of contracts with the

Public Administration, without authorization by law, in the call act of public bidding or their

contractual agreements; or

9


manipulate or defraud the economic and financial balance of contracts celebrated with

the Public Administration.

j) Contracts

All contracts with suppliers/services providers, in addition to the contracts where there is the

possibility of an interaction with public authorities, directly or indirectly, shall contain a clause

prohibiting corruption, and providing that if any act of corruption be practiced by the counterparty,

the contract should be terminated with cause and without the imposition of any fine to the

Company.

5.2 - General Guidelines

To meet this Standard, employees should be aware of warning signs that may indicate possible

deviations such as:

Counterparty has a reputation for bribery;

Counterparty requests an excessive fee, in cash or other irregular means;

Counterparty is controlled by a Public Servant or his/her family members or have a close

relationship with the government;

Counterparty is recommended by a Public Servant;

Counterparty provides or requests invoice or other questionable documents;

Counterparty refuses to include, in written, in contracts and/or documents entered into

with the Company, reference to measures against harmful acts against the administration

and public equity, especially measures related to Anticorruption Law;

Counterparty proposes an unusual financial arrangement, such as a request for

payment in bank account in other country than that in which the service is being provided or

request payment in more than one bank account;

Perception that the donation to a charity at the request of a Public Servant is an

exchange for a government action.

Periodically and through the Risk Management Audit area, the Company will check if

professionals, representatives and/or third parties are acting in accordance with this Standard

and the laws that deal with harmful acts against the Public Administration and public property.

10


Managers should take steps to ensure that the professionals under their responsibility comply

with the rules and guidelines contained in this Standard, labor, tax and accounting laws,

processes and procedures, licenses etc.

In order to avoid any corrupt practices, Managers have the responsibility and obligation to keep

all their documents, Company’s documents, or documents that may affect the Company,

including passports, vehicles’ documents, properties’s documents, licenses of the area that they

oversee or manages etc. in perfect order and properly updated, thus avoiding any questions

about the correctness thereof.

Professionals who have any questions or concerns about this Standard and/or some law that

deals with harmful acts against the Public Administration or public property, should seek

clarification with their immediate manager or with the Legal Department. And, should never

make decisions without consulting the Company’s attorney.

5.3. – Implementation and monitoring the compliance of this Standard and the applicable law

The supervision of strict compliance with this standard by all Company’s professionals and/or

any representative and/or third parties, all who are acting on behalf of the Company, will include

compliance processes and periodic internal audits, constant monitoring of the implementation of

market programs and business practices, training programs, including contractual provisions in

compliance with the Law on sensitive contracts, as well as internal control and careful monitoring

of activities, procedures and behaviors.

Telephone conversations, e-mails, internal communicators, faxes and any and all other forms of

communication, by using tools made available by the Company can be checked at any time.

The same is applicable for physical and electronic records of employees in their workplace,

vehicle of the Company or its business tools such as computers and phones.

Anytime simulated investigations may be carried out by the Risk Management and Audit with

the support of the Corporate Legal and lawyers or external auditors in order to verify compliance

with this Standard.

Any employee witnessing or identifying a situation that violates the provisions of this Standard

may report it to the Legal Department or to the Ethics Line disclosed within the Company.

11


All complaints will be investigated, preserving the anonymity of the complainant.

The Company will not allow retaliation against good faith informers.

It is important to note that although the monitoring to be done by the Company is restricted to

the environment and work tools, public authorities can and generally perform search and

seizure procedures in homes, private vehicles, as well as wiretapping, breaking bank

confidentiality, telephone, written or virtual correspondence, and even monitoring of private

meetings.

5.4. – Communication and training

This Standard should be widely communicated to all Company’s employees.

All Company employees must sign the attached Statement of Knowledge, Adherence and

Compliance, confirming knowledge and ensuring compliance with this Standard, as well as

confirming knowledge that the documents and work tools are Company’s property, that at any

time may be inspected.

Cases of doubt about the contents of this Standard should be clarified with the Corporate Legal

Department.

Failure to understand any point of this Standard shall not relieve the employee of the

consequences of noncompliance.

All employees who are directly or indirectly linked to any situation of possible exposure or

interaction with the direct or indirect public authorities and/or Public Administration or with Public

Servants or persons connected to him/her, should be periodically trained on the proper use,

application and scope this Standard.

5.5. – Violation and mechanisms of punishment and correction of violations of this standard and

applicable legislation

12


It is the responsibility of all Company’s employees to report any violation or suspected of

violation of this Standard.

Violations to the law against harmful acts against the Public Administration and public property

or practices of corruption may result in severe civil and administrative fines for the Company

and to the professionals involved.

Fines imposed on individuals for violations of the Law can not be paid by the Company, and the

involved persons are subject to legal penalties.

In addition to the penalties imposed by law, violations of this Standard may be punished by

imposition of disciplinary action and/or employee’s dismissal with cause, termination of

customer/supplier/contractor’s contract.

Suspected violation of this Standard and the applicable law shall be determined by the Corporate

Legal Department and a committee formed by members of it, Human Resources and Risk

Management and Audit Committee, which shall hear all involved before taking any final decision.

If the violation is confirmed, the involved Managers and/or employees will be subject to internal

disciplinary measures to be imposed by the Company, taking into consideration the

circumstances of each case, without prejudice to the possible punishments provided by law

applicable by the public authorities.

Such disciplinary action may range from verbal warning and mandatory participation in training

programs, among others, to dismissal with cause.

In the stipulation of the applicable fine, the commission shall take into account the gravity of the

offense committed, guided primarily by the following factors:

nature of the practice: if the offense is only against this Standard;

consummation: the act was implemented or not;

abrangence: level of effect on the market;

negative impact on the Company’s image;

personal advantage: if the involved individual or company had or has any advantage with

the act;

13


good faith: if the person responsible was aware of the forbidden nature of the conduct;

and

the extent of damage.

Disciplinary measures applied by the Company do not limit or supersede any penalties imposed

by public authorities on the basis of applicable law or eliminate the personal liability for damages

caused to the Company.

Violations of this Standard and the applicable law will not be tolerated.

6. ANNEXES

Annex I - Term of Science, Adherence and Compliance.

7. RECORDS

N/A

1. purpose 2. anti-corruption law and its impact on...

Documents