Anti-Bribery and Anti-Corruption Manual

Introduction

Intro

duction

• This Manual is part of the Programcreated by Raízen to fight briberyand corruption, as they go againstRaízen’s culture, its core values ofHonesty, Integrity, and Respect forPeople, its principles, and its Codeof Conduct shared by its employeesunconditionally and unrestrictedly.

• Raízen fulfills its duty to conduct itsbusiness ethically and inaccordance with local andinternational legislation.

• There is no business or result thatjustifies resorting to bribery and/orcorruption. The tremendous negativeimpact on the company’s finances,reputation, business, and growthplans greatly exceeds any benefitthat may be obtained from briberyand corruption.

• To directly fight bribery andcorruption is good for the company’sreputation and helps to attractbusiness partners, clients, suppliers,employees, and quality serviceproviders, and seize the bestbusiness opportunities.

Raízen’s position on bribery and corruption is very clear: they should never happen.

To whom does this manual apply?

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This Manual is mandatory for:

• Raízen’s employees, managers,partners, distributors,representatives, contractors,suppliers, attorneys-in-fact, andagents, including the Company’sBoard of Directors and ExecutiveBoard.

• Companies and joint ventures inwhich any of the Raízen Group’scompanies have direct or indirectcontrolling interest.

• For joint ventures not controlled byany of Raízen Group’s companies,Raízen’s representative in the jointventure must try to encourage theadoption of this Manual, as well asthe Anti-Bribery and Anti-CorruptionPolicy or, should that not bepossible, equivalent principles.

• If third parties (consulting firms,attorneys-in-fact, representatives,etc.) are engaged to act on behalf ofRaízen, Raízen’s employee incharge of such engagement mustensure that such contractors areaware of and have formally adheredto the rules of this Manual (see the“Representatives andIntermediaries” section).

Raízen’s employees involved in bribery and/or corruption are subject to disciplinary measures, dismissal (including termination for cause), and may have a criminal action brought against them.

Understanding the Legislation

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• There are many national andinternational laws createdspecifically to identify and punishcases of bribery and corruption,including in corporations. Raízen issubject not only to the Brazilianlegislation but also to someinternational anti-corruption rulesthat have the force of a local lawand must be complied with by theCompany and its employees.

• On account of the diversity of theanti-corruption laws, this Manualwill help you understand and act incompliance with the legislation,avoiding any liability to thecompany and individuals, includingcriminal liability.

• The main foreign laws that may beapplied to Raízen, its employees andthird party representatives are theForeign Corrupt Practices Act –FCPA, a US law that shaped mostanti-corruption laws of othercountries, and the UK Bribery Act –UKBA.

• The main Brazilian anti-corruptionlaw is Law No. 12846, of August 1,2013, which regulates administrativeand civil liability resulting from acts ofcorruption against the government,including liability of legal entities.

Acts of corruption committed by Raízen, its employees, and third party representatives may entail liability for both its shareholders, in Brazil and abroad.

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• Foreign Corrupt Practices Act(FCPA)

• UK Bribery Act (UKBA)

• OAS’s Inter-American Conventionagainst Corruption

• Organization for Economic Co-operation and Development –OECD

• UN’s Global Compact againstcorruption

• Criminal Code

• Administrative Impropriety Law

• Bidding Process Law

• Anti-Corruption Law

• Decree No. 60106/14 (State ofSão Paulo)

International Legislation

Brazilian Legislation

In general, bribery is committed only in relation to a public servant under the legislation.

Raízen’s Policy goes further: bribery is not admitted in any way, whether it involves a public servant or not.

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• The FCPA prohibits bribery of publicservants, even outside the UnitedStates, by companies andindividuals subject to the provisionsof the FCPA, which is the case ofRaízen directly, or because itsshareholders have business and/or securities issued within USjurisdiction.

• Under the FCPA, bribery is anypayment or promise of payment incash, gifts, entertainment or anyother thing of value intended toinfluence public servants, anywherein the world, to offer the briber anyundue advantage in order to get orfavor any deal.

• Under the FCPA, it is irrelevantwhether the bribe was paid directlyor with the help of an intermediary,or whether the act of bribery occursoutside the US territory. Itsapplication is “extraterritorial.”

• Heavy fines may be imposed on bothRaízen and its shareholders and/orbriber. If it is an individual, asentence of imprisonment may beimposed as well (criminal liability).

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• The Brazilian Criminal Codecriminalizes the act of offering orpromising any type of undueadvantage to a public servant toinduce them to perform, not toperform, or delay any act theyshould perform, and imposes apenalty of up to twelve (12) yearsof imprisonment and a fine.

• Pursuant to Law No. 8666/93, anindividual that performs acts ofcorruption to take advantage in abidding process is also committinga crime and may be imposed asentence of imprisonment and afine.

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• The Anti-Corruption Law (Law No. 12846/13) lists several acts that are considered corruption, among which are the following:

Promise, offer or give, directlyor indirectly, undue advantageto a government agent or athird party related to him/her.

As to bidding processes andcontracts: thwart or swindle, bymeans of adjustment,arrangement, or any otherexpedient, the competitivenature of public procurement.

Hinder investigation orinspection conducted bygovernment bodies, entities oragents, or interfere with theirwork, including regulatoryagencies and inspectionauthorities of the nationalfinancial system.

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• The Brazilian Anti-Corruption Lawestablishes a series of penalties thatmay be imposed on companies forcorruption or bribery:

Fine of up to 20% of the grosssales revenue of the last fiscalyear, or up to R$ 60,000,000.00when gross sales revenuecannot be verified;

Publication of the adversejudgment (negative effect onthe company’s image);

Compensation for alldamages caused;

Suspension or partialdiscontinuation of thecompany’s activities;

Compulsory dissolution of thecompany;

Ban on incentives, subsidies, andloans from government entities orfinancial institutions for 1 to 5 years;

Inclusion in the National Register ofPunished Companies (CNEP).

Under the Anti-Corruption Law, the company’s liability does not exclude the civil and criminal liability of the individual who committed an act of corruption.

Bribery, Facilitation Payments, and Kickbacks

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• Raízen’s policy does notdifferentiate between bribery andpayments called “facilitation,”which are forbidden as well.

• Facilitation payment is usually asmall amount, not officially or legallyrequired, paid to a public servant(often of a lower-level position) toinitiate or expedite a process whichis such official’s obligation toperform.

• We also strive to ensure our agents,contractors, service providers,representatives, attorneys-in-fact,and suppliers do not makefacilitation payments on our behalf.

• Raízen’s employees should neveraccept or offer bribery, facilitationpayment, kickback or other unduepayments for any reasonwhatsoever.

• Kickback is how bribery isaccomplished, and it may be apayment in cash, gifts or anything ofvalue that is offered in exchange forundue favorable treatment. Thatapplies to transactions withemployees or representatives of aforeign or local government, or withany private company or individuals,in conducting national or internationalbusiness. It also applies to situationswhere kickback is offered or receiveddirectly or through third parties, suchas agents, representatives,contractors, distributors, or tradeassociations.

Representatives and Intermediaries

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• Execution of a contract with arepresentative, attorney-in-fact, salesagent, consultant, supplier or serviceprovider (Third Party) that may have adirect or indirect relationship with agovernment agency on behalf of Raízenposes the risk of the Third Party makingan improper payment to obtain undueadvantage. The fact that Raízen is notaware of any act of bribery orcorruption committed by Third Partiesdoes not rule out Raízen’s liability.

• Thus, before executing this type ofcontract, the company must carry out areasonably informative and thoroughevaluation of the Third Party involved andensure its integrity.

• In case of certainty or suspicion aboutwhether the Third Party made or will makeany illegal payment in connection with anycontract with Raízen, all payments to suchThird Party must be immediately stopped,and the matter should be submitted to thefocal point of Compliance.

• To evaluate the Third Party’sintegrity, the following factors mustbe taken into account, among others:

• Geographical risk, that is, the level ofcorruption recurrent in the countrywhere the Third Party is located. Theentity Transparency Internationalpublishes a corruption risk assessmentfor almost all countries, which isavailable at http://www.transparency.org/country;

• Due diligence conducted for executionof contracts with Third Parties. Shouldthere be any red flags or issues raisedduring the due diligence, the focal pointof Compliance must be immediatelyinformed;

• National Register of PunishedCompanies (CNEP) – check whetherthe Third Party is included in thisregister and other similar registers.

Gifts and Hospitality

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• Raízen prohibits its employees fromrequesting gifts, entertainment orhospitality from third parties withwhich they have a relationship. As ageneral principle, the company alsodiscourages accepting gifts,entertainment or hospitality.However, Raízen acknowledges thatoccasional acceptance or offer ofgifts, entertainment, and hospitalityof insubstantial value can be alegitimate contribution to goodbusiness relationships.

It is important that gifts, entertainment or hospitality are never perceived as significant enough to influence their beneficiaries in their decision-making process.

• What you should consider:Raízen acknowledges that, attimes, refusing to accept gifts,entertainment or hospitality from abusiness partner or not offeringthem may be perceived as impolite.Raízen’s employees must considerthe following aspects beforeaccepting or offering gifts orhospitality:

• Can my acceptance or offer entailan obligation?

• Is the gift, entertainment orhospitality a reward for a businesstransaction?

• Is the gift, entertainment orhospitality of excessive value?

Gift

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y• Acceptable gifts, entertainment, andhospitality. The following may beaccepted or given (considering publicservants as well) without prior approvalfrom your line management or CEO:

• Gift (whether comprising one or more items)whose value does not exceed R$ 100.00 perbeneficiary, including corporate gifts thatfeature the logo of the donor (diaries,calendars, etc.), especially on holiday season,such as Christmas and New Year;

• Meals not exceeding R$ 200.00 per person,provided that reasonably associated withlegitimate events in which Raízen isrepresented before function/business partners;

• Invitations to occasional events not exceedingR$ 400.00 per person and extending over aperiod of more than one day. In this case,“occasional” means no more than two or threetimes a year with the same function/businesspartner.

Pay attention to the rules on facilitation payments to make sure no gift, entertainment or hospitality is perceived as such. If you have any doubt, talk to your supervisor or focal point in your department and keep contemporary internal records of the events.

• Gifts, entertainment, and hospitalitythat require approval from the AreaOfficer/CEO. Approval from yourOfficer will be required for you to acceptor offer:

• Gifts or hospitality exceeding theamounts indicated in the leftcolumn;

• Events that last longer than a day orthat take place more often thanallowed by the rules on the leftcolumn;

• Travel or lodging.

• Special occasions. Special occasionsinvolving senior executives of Raízenand third parties’ senior representativesmay justify initiatives involving higheramounts, depending on the businessprotocol generally accepted and withCEO’s approval.

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• Forbidden gifts, entertainment,and hospitality. You can neveraccept or offer the following, with orwithout approval:

• Illegal gifts, entertainment, andhospitality;

• Money or equivalent;

• Personal services;

• Loans;

• Gifts, entertainment or hospitality thatare improper in nature or in improperplaces;

• Events or meals in which the function/business partner is not participating;

• Gifts or hospitality at times whendecisions that are important to Raízenare to be made by the beneficiaries.

If approval is required for the gift, entertainment or

hospitality, formally request approval and be reasonably clear about

the specific circumstances of the event. The clearer the

request for approval, the more transparent the

process will be, and the less likely negative

consequences will be faced.

Sponsorships, Donations, and Social Investments

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Sponsorships, donations, and social investments should never influence the conduct or decision-making process involving third parties in favor of Raízen’s interests. They must be offered to legitimate organizations, not to individuals.

• Sponsorships, donations, and socialinvestments may be used forimproper purposes and mask acts ofbribery and corruption. These risksmay be identified by analyzing theintegrity of the beneficiaries and theassisted projects, to ensure theinitiative is not meant to bring aresult that benefits Raízen.

When dealing with sponsorships, donations, and social investments, take the following precautions:

• Check whether the recipient is alegitimate organization;

• Identify whether there are anygovernment representatives or publicservants involved (for example, if agovernment representative requestedthe donation or sponsorship or if theyare affiliated with the recipient of thedonation or sponsorship);

• Make sure relevant facts identified inthe integrity analysis have beenaddressed;

• For social investment, involve theSocial Responsibility manager; and

• Keep records of the initiative not onlyin the company’s accounting but alsomanagement records detailing thecircumstances that justify itsdevelopment by Raízen.

Mergers, Divestiture, Acquisitions and Joint Ventures

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res• In line with the international practices

in this regard, the Brazilian Anti-Corruption Law establishessuccessor liability for acts committedby legal entities that were succeededby other(s) in a corporate acquisition.

• The risk of liability for acts committedin the past by legal entities acquiredby Raízen leads to the need for adue diligence as part of theacquisition process.

• Raízen’s employees involved inmergers, divestiture, acquisition, andorganization of joint ventures mustensure that the audit on compliancewith anti-corruption rules is part ofthe process and is conducted byappropriate professionals (Legal/Finance).

Every acquisition or transfer of assets (including non-controlling interest) or organization of joint venture (JV) must include a specific audit on compliance with anti-corruption laws.

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In the case of JVs not controlled by Raízen, the business manager in charge of the negotiation must make sure the Anti-Bribery and Anti-Corruption Policy and this Manual or equivalent material are adopted by the JV.

• If this Manual or equivalent materialcannot be adopted by a JV notcontrolled by Raízen, the businessmanager must notify the competentfocal point of Compliance and getinstructions on the necessary actionsto approve the deal.

• The business manager in chargemust demand that the managementof the JV not controlled by Raízenadopt this Manual or similar material,and prepare an annual report oncompliance with anti-corruption rules.

• If any non-conformity is reported or ifthere is reason to believe it exists,Raízen’s representative in the JVmust, on behalf of Raízen, formallyexpress their disapproval anddemand that immediate correctivemeasures be taken.

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• Any Raízen employee allocated in aJV must promptly notify Raízen’sLegal Department, their immediatesuperior or a focal point ofCompliance if such employeebecomes aware of:

• bribery or attempted bribery by orinvolving any employee or officer ofthe JV;

• allegation or investigation of briberyinvolving the JV.

Raízen’s Legal Department must be consulted immediately if members of the JV’s board indicated by Raízen have doubts as to whether their conduct in the JV may constitute violation of their fiduciary duties to the JV.

Questions and Information

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• Raízen has the duty to investigate anyallegations made in good faith aboutviolation of its Code of Conduct, its internalpolicies and the laws, and it is committed torespecting the privacy of any personal datait processes.

• All incidents will be properly registered andhandled under the Key Principles of DataPrivacy and Protection, adopted byRaízen’s Code of Conduct, available athttp://intranet.raizen.com/codigo_etica/default.aspx.

• RAÍZEN IS DETERMINED TOCONDUCT ITS BUSINESSACCORDING TO ITS COREVALUES OF HONESTY,INTEGRITY, AND RESPECT FORPEOPLE, AND IS COMMITTED TOEXPEND ANY NECESSARYEFFORTS AND RESOURCES TOFIGHT BRIBERY ANDCORRUPTION.

• If you want to report any violation oryou have any questions about thisManual or Raízen’s Anti-Bribery andAnti-Corruption Policy, do nothesitate to contact the Focal Point ofCompliance indicated for your area,your immediate superior, themanager of your department,Controlling, Audit or the LegalDepartment, or contact Raízen’sEthics Channel:

• 0800-772-4936

• canaldeetica@raizen.com