Cargill - Sustainability Report 2016

G4-4 Primary brands, products,
produtos and/or services

G4-5 Location of organization’s headquarters

G4-6 Countries where the organization has significant operations or those that are specifically relevant to the sustainability aspects covered in the report

G4-7 Nature of ownership and legal form

G4-8 Markets served

G4-9 Scale of the organization

G4-10 Employee profile

G4-11 Percentage of employees covered by collective bargaining agreements

In 2016, Cargill initiated internal dialogues on a very challenging subject: the implementation of management of labor and union relations in the company, geared toward standardizing negotiations and harmonizing legal concepts and practices in order to maintain a good work environment. The scenario is extremely complex, with a series of different specificities from region to region. Through extensive analysis and studies, the Human Resources area has been working continuously to propose the best relationship strategy with labor unions, in line with Cargill’s organizational values. All employees are covered by labor agreements or collective bargaining agreements.

G4-12 Description of the organization’s supply chain

Message from the president

G4-13 Significant changes regarding size, structure, ownership, and supply chain

G4-14 Description of how the precautionary approach or principle is addressed by the organization

The precautionary principle is not formally adopted by Cargill in Brazil, but the company follows procedures provided by law to avoid or mitigate any damages in its operations posing hazards to the environment, people and communities. In the case of environmental accidents, Cargill has in place documented procedures for the prevention and remediation of any damages to the environment. These procedures are part of the company’s formal assurance processes in all of its operations involving transportation and storage of materials potentially harmful to the environment.

G4-15 Externally developed social charters, principles, or other initiatives

G4-16 Memberships of associations and organizations

Cargill participates in trade associations that discuss infrastructure, logistics and social and economic development in Brazil. These associations include: Brazilian Association of Large Industrial Energy Consumers and Free Consumers (ABRACE), Brazilian Association of the Industrial Tomato Production Chain (ABRATOP), National Association of Grain Exporters (ANEC), Brazilian Association of Port Terminals (ABTP), Association of Cocoa Processing Industries (AIPC), Brazilian Association of the Industry of Chocolates, Cocoa, Peanuts, Candy and By-products (ABICAB), American Chamber of Commerce (Amcham/SP), Brazilian Association of Food Industry (ABIA), Brazilian Association of the Oil Industry (ABIOVE), Federation of Industries of the State of São Paulo (FIESP), Federation of Industries of the State of Minas Gerais (FIEMG), Federation of Industries of the State of Goiás (FIEG), Brazilian Association of Business Communication (ABERJE), Brazilian Association of Agribusiness (ABAG).

Identified Material Aspects and Boundaries

G4-17 Entities included in the consolidated financial statements and entities not covered by the report

G4-18 Process for defining the report content

G4-19 List of material aspects

G4-20 Aspect boundary, within the organization, of each material aspect

G4-21 Aspect boundary, outside the organization, of each material aspect

G4-22 Restatements of information provided in previous reports

There were no significant restatements in relation to the previous Report.

G4-23 Significant changes from previous reporting periods in the scope and aspect boundaries

Information regarding Cargill Nutrição, responsible for the company’s animal nutrition business, is now considered in this year’s Report. The consolidated financial result for Cargill Alimentos, which includes the results for Cargill Agrícola S.A. and Nutrição Animal, was disclosed for the first time.

Stakeholder Engagement

G4-24 List of stakeholder groups engaged by the organization

G4-25 Basis for identification and selection of stakeholders with whom the company engages

G4-26 Approach to stakeholder engagement

G4-27 Key topics and concerns that have been raised during the engagement, by stakeholder group

Report Profile

G4-28 Reporting period

G4-29 Date of most recent report

G4-30 Reporting cycle

G4-31 Contact point for questions regarding the report or its contents

G4-32 ‘In accordance’ option and location of the GRI Content Index

Governance

G4-33 Policy and current practices with regard to seeking external assurance for the report

G4-34 Governance structure of the organization

Ethics and Integrity

G4-56 Organization’s values, principles, standards and norms of behavior

SPECIFIC DISCLOSURE INDICATORS

CATEGORY: ENVIRONMENTAL

Aspect

Description

PAGE/DISCLOSURE

Water

DMA Water

G4-EN8 Total water withdrawal by source

G4-EN10 Percentage and total volume of water recycled and reused

Biodiversity

DMA Biodiversity

G4-EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

We did not record any impact on biodiversity in protected areas or areas of high biodiversity value located outside protected areas. We have a series of projects that confirm our commitment to nourish the world in a responsible way to mitigate possible impacts.

Emissions

DMA Emissions

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1)

G4-EN16 Indirect greenhouse gas (GHG) emissions from the acquisition of energy (Scope 2)

G4-EN18 Intensity of greenhouse gas (GHG) emissions

G4-EN21 NOx, SOx and other significant air emissions

Effluents and Waste

DMA Effluents and Waste

G4-EN22 Total water discharge by quality and destination

G4-EN23 Total weight of waste by type and disposal method

G4-EN25 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention 2 annex I, II, III, and VIII, and percentage of transported waste shipped internationally

Products and Services

DMA Products and Services

G4-EN27 Extent of impact mitigation of environmental impacts of products and services

Compliance

DMA Compliance

G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

Significant fines and non-monetary sanctions	2016	2015
Total monetary value of significant fines (BRL)	373,017	390,000
Total number of non-monetary sanctions	0	1
Proceeding instituted through mechanisms of arbitration	0	0
Significant fines and non-monetary sanctions
Total monetary value of significant fines (BRL)	2016	2015	373.017	390.000
Total number of non-monetary sanctions	2016	2015	0	1
Proceeding instituted through mechanisms of arbitration	2016	2015	0	0

In 2015, Cargill received 10 notices of infraction; In 2016, five. The notices of infraction in 2016 generated a total liability of BRL 373,017. The cases involving the company were:

Três Lagoas (MS) – BRL 100,000

Reason: Emission of particulate matter not in compliance with the license.

Measures adopted: correction and monitoring.

Três Lagoas (MS) – BRL 150,000

Reason: Emission of effluents not in compliance with legislation.

Measures adopted: Development of action plan to achieve the parameters.

Goiânia (GO) – BRL 100,000

Reason: Disposal of waste in a permanent preservation area.

Appropriate measures: Removal of waste from the site and training of employees so that the irregularity does not recur.

Patrocínio (MG) – BRL 16,617

Reason: operation without a license.

Measures adopted: the unit had applied for a license, but was already operating. The license has already been issued.

Dourados (MS) – BRL 6,400

Reason: absence of environmental license and disposal of waste not in compliance with legislation.

Measures adopted: not applicable, since we demonstrated that operations were conforming.

CATEGORY: HUMAN RIGHTS

Aspect

Description

PAGE/DISCLOSURE

Investments

DMA Investments

Employees; Community

G4-HR1 Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening.

G4-HR2 Total number of hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations of the organization, including the percentage of employees trained

Non-discrimination

DMA Non-discrimination

G4-HR3 Total number of incidents of discrimination and corrective actions taken

In 2016, a case of discrimination was recorded at Cargill, which is still pending a decision by the Labor Court. The complainant alleges that she was informed that her presence in the company was not being appreciated and, for this reason, she was being transferred to a different workplace. In addition, she said that she was communicated by a manager that she did not match the profile of the company in view of the color of her skin (black). After this case, a report was made to the manager, there were conversations with the parties involved, and a labor suit was developed. Cargill’s Legal Department is preparing the defense.

Freedom of Association and Collective Bargaining

DMA Freedom of Association and Collective Bargaining

G4-HR4 Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights

In 2016, we did not identify any risk or violation of the right to exercise freedom of association or collective bargaining.

Child Labor

DMA Child Labor

G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective eradication of child labor

Child labor is not a recurring problem in Cargill’s operations in Brazil. All of its contracts include a clause that establishes restrictions and sanctions if a supplier uses child labor. Cases of child labor have never been found in the company’s operations or in its direct suppliers. In general terms, this issue is dealt with in the company in a legal manner and through incentive and private social investment programs to guarantee the future of children in the country.

Another issue that is related to child labor is sexual exploitation of children. In this regard, Cargill signed a commitment to act in addressing the cause by becoming a signatory, in 2007, of the Corporate Pact against the Sexual Exploitation of Children and Adolescents on Brazilian Highways. The Pact provides that the company carries out continuous education campaigns and acts with truck drivers and transport service providers, turning them into agents of protection of children and adolescents.

Cargill carries out these activities through its participation in the Na Mão Certa Program, an initiative by Childhood Brazil that aims to mobilize governments, companies and third-sector organizations around the most effective way to address sexual exploitation of children and adolescents on Brazilian highways. Officially launched on November 28, 2006, the Na Mão Certa Program is based on the Corporate Pact, proposed by Childhood Brasil in partnership with the Ethos Institute of Business and Social Responsibility and with the support of the International Labor Organization (ILO).

The Program is of fundamental importance for Cargill’s operations, since the company makes intensive use of road transport. Children and adolescents are susceptible to forced or family-induced sexual exploitation, and this usually occurs in places where there is a large concentration of truck drivers (fuel stations, rest areas and areas for loading and unloading of materials/products).

Cargill disseminates information to drivers who come to its units, alerting them to the importance of addressing the cause and instructing them to report these cases. In 2016, Cargill carried out four campaigns on this matter, with the participation of ten plants. The campaigns took place on May 18 (National Day to Combat Sexual Abuse and Exploitation of Children and Adolescents), September 16 (Campaign “Together on the Road for Child Protection”, in celebration of the National Truck Driver Day) and in internal events (Faithful Friend and National Traffic Week).

The activities carried out on these dates included driver training and guidance, lectures, workplace workout, massage and health services, always approaching the Na Mão Certa Program and distributing informative materials, benefiting approximately 1,500 drivers.

Forced or Compulsory Labor

DMA Forced or Compulsory Labor

Cargill Brasil is one of the signatories to the National Pact for the Eradication of Bonded Labor. We are also members and founders of InPacto, an institute that developed and has been monitoring the Pact for ten years. We are committed to combating bonded or compulsory labor in our production chain and across the industry. See further details in the following item (G4-HR6).

G4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor

Most of Cargill’s operations are directly related to the agricultural sector, mainly for the origination of grains and raw materials. Since this sector concentrates the largest number of cases of bonded labor identified in Brazil, the company takes a series of measures to mitigate this risk and manage its supply chains in order to avoid such occurrences:

The company is a signatory of the National Pact for the Eradication of Bonded Labor in Brazil, an initiative created by the Ministry of Labor and Employment (MTE), the International Labor Organization, the Ethos Institute, Observatório Social, and Repórter Brasil to involve companies and organizations with this aspect. Cargill participates in the group’s annual meetings and submits to this group annual progress reports as a way of providing visibility to the actions that have been developed to ensure compliance with the Pact.

The company is associated with InPacto – Institute of the National Pact for the Eradication of Bonded Labor and a financial supporter of the institution.

Regarding management processes, today Cargill has an automated central system to block, in our procurement, billing, and receiving control systems, those employers listed in the bonded labor black list. In practical terms, all CNPJs (Corporate Taxpayer Numbers) included in the official list of the Ministry of Labor and Employment (MTE) are blocked in Cargill’s computer systems, so that it is not possible to make purchases, sign contracts or receive goods from companies or individuals in this list. This blocking model ensures that negotiations with long-term delivery of goods are also covered by the blocking mechanism. For example, a purchase made months before the harvest (delivery of goods) is subject to assessments upon delivery of the product to Cargill and until settlement of the related debts.

In short, if a company has sold goods to Cargill and has been included in the bonded labor black list at any time between the signing of the contract, delivery of goods and/or payment of debts, Cargill can identify this situation and cancel all negotiations with that supplier. To this end, all Cargill contracts have a clause that provide on the obligations of company suppliers and contractors and ensures the right to impose sanctions, such as suspension and cancellation of contracts that are not in compliance with these terms.

The standard draft of raw materials, products and services contracts today has a specific clause that establishes as a basic condition for commercial relations the respect for public policies related to bonded labor, in addition to restrictions and sanctions if the supplier uses or is accused of making use of bonded or compulsory labor.

Security Practices

DMA Security Practices

G4-HR7 Percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations

Indigenous Rights

DMA Indigenous Rights

G4-HR8 Total number of incidents of violations involving rights of Indigenous peoples and actions taken in this regard

In 2016, we did not identify incidents of violation of rights of Indigenous or traditional peoples in our operations.

Assessment

DMA Assessment

G4-HR9 Total number and percentage of operations that have been subject to human rights reviews or impact assessments

All our commercial operations are subject to assurance procedures regarding issues related to bonded or compulsory labor, in accordance with the requirements and details presented in the G4-HR6 indicator, associated with this aspect. Direct purchases of materials and inputs are also governed by our Supplier Code of Conduct, which sets forth the rules for supply and whose formal acceptance is a condition for participating in any of the company’s procurement processes. This code is available here.

Supplier Assessment For Human Rights

DMA Supplier Assessment For Human Rights

G4-HR10 Percentage of new suppliers that were screened using human rights criteria

G4-HR11 Significant negative and potential impacts on human rights in the supply chain and measures taken in this regard processed and resolved through a formal mechanism

All Cargill suppliers are subject to human rights impact assessments. No supplier with potential or with human rights impacts identified can be registered or used for any purpose by the company. Cargill has in place procedures for prior assessment of human rights violations, specifically bonded or compulsory labor, and occupational health and safety practices. Since the previous assessment is objective, no cases of violation of our assurance procedures were found, although we recognize the importance of the agricultural sector in relation to human rights violations.

In 2016, we did identify instances of human rights violations in our value chains. The procedures implemented were sufficient to prevent such occurrences from being recorded. No contract terminations were necessary because of this type of violation.

Cargill is a member of the National Pact for the Eradication of Bonded Labor and conducts an annual assessment of compliance with this commitment, reinforced by external audits linked to other certification programs.

Commitments of the Pact:

1.Recognize the legitimacy of the Register of Employers who have subjected workers to conditions analogous to that of bonded labor – “Black List” (Interministerial Ordinance MTE/SDH No. 2, of March 31, 2015)

2. Establish commercial restrictions on individuals and legal entities included in the “Black List” that are part of the value chain of the company or organization

3. Regularize labor relations in the value chain

4. Support actions aimed at the professional qualification of rescued and vulnerable workers

5. Support actions to reintegrate rescued and vulnerable workers into the formal labor market or into entrepreneurial initiatives, in partnership with public and private entities

6. Promote information and communication actions aimed at preventing bonded labor

7. Support and participate in InPact’s coordination to promote public policies for preventing and eradicating bonded labor

8. Systematize, disseminate and share best practices for preventing and eradicating bonded labor

9. Participate in the periodic monitoring process carried out by InPacto

10. Develop a plan for implementing the commitments made with InPacto

Human Rights Grievance Mechanisms

DMA Human Rights Grievance Mechanisms

G4-HR12 Number of grievances about human rights impacts filed, addressed, and resolved through formal mechanisms

In 2016, there was only one case of labor claim related to human rights violations, which is still pending decision by the Labor Court.

CATEGORY: SOCIAL

Aspect

Description

PAGE/DISCLOSURE

Local Community

DMA Local Community

G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs

	2016	2015	2014
Percentage of operations implementing community engagement programs	20.00%	13.61%	13.46%
Percentage of operations implementing community engagement programs	2016	20.00%	2015	13.61%	2014	13.46%

There were no operations to implement community impact assessment programs or local community development programs.