SUSTAINABILITY
REPORT 2012 and 2013
Relatรณrio de Sustentabilidade | BSC / Copener 2012 | 2013
BSC Sustainability Report 2012/2013 Index Profile of Bahia Specialty Cellulose and Copener Florestal ............................. 8
Forest Operations ........................................................................................................... 24
Industrial Operations .................................................................................................... 32
Economic Performance ................................................................................................ 36
Environmental Management ..................................................................................... 40
Social Management ....................................................................................................... 52
GRI Content Index .......................................................................................................... 77
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SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
General Manager’s Statement G4-1 In 2013, Bahia Specialty Cellulose and Copener Florestal completed their 10th year of acquisition by Sateri Holdings Limited. The investments made in this last decade were crucial to positioning our company among the top players in the specialty cellulose segment. This rapid growth - we grew from an initial capacity of 115,000 tons/year to 485,000 tons/year since our second production line came into operation in 2008 - brought not only technical, but also strategic business challenges for the group, due to the global economic crises experienced in recent years, including 2012 and 2013. If, on the one hand, market instability compromised part of Bahia Specialty Cellulose’s financial performance in the period, on the other, what we learned from that moment and the certainty that we need to be increasingly more consolidated locally to increase our global presence contributed to our forestry and industrial operations evolving in a manner never before seen and absolutely necessary. In these two years, we advanced in terms of the quality of our cellulose, improved production stability, improved processes resulting in increased productivity. We achieved records in various stages of the production process, and intensified our presence in communities. These began to further benefit from the company’s presence in this region, as we favor local suppliers and workers, invest in widereaching structuring social projects and share knowledge and technology with our partners, as is the case with rural producers integrated in our forest development program. To highlight only one of the initiatives in terms of technology, we innovated by implementing a state-of-the-art pilot plant for cooking and washing cellulose, and an autoclave system that enables obtaining specialty cellulose from small volumes of processed wood. This makes it possible to develop the manufacturing process and identify e.g. wood hybrids with greater potential for industrial activities. In both the industrial and forestry areas, we are strongly dedicated improving the environmental aspects related to our production process, which is something that can be seen throughout this report. The results achieved to date strengthen and stimulate our commitments to development in dealing with issues related to the sustainability of our operations. At the same time, we are aware that there is still much to do to improve our operations, especially with regard to the strengthening of safety procedures in order to avoid accidents involving our team. We are heavily engaged in this, which can is confirmed by our most recent results. With all of this, we won not only new clients, but new strategic partners – which are critical in a competitive market in which the arrival of new specialty cellulose manufacturers will increase the supply of the product to volumes above the expected demand in the near future. BSC believes it is on the right path, with the right people, with the best management practices, with important financial investments in research and technology and with an ethical and transparent relationship model with interested parties so that our operations and products are not only good for the company, but also for society and the environment. Per Olof Lindblom General Manager
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About the publication G4-18 Following its decision to publish sustainability reports every two years, BSC releases this publication with consolidated results of its economic, social and environmental performances for the years of 2012 and 2013, except when a different period is mentioned. Here one can find information on operations of the Bahia Specialty Cellulose plant, in the Industrial Complex of Camaçari, Copener’s forest operations, headquartered in Alagoinhas, and activities in several municipalities of the Northern Coast and Bahia agreste region. This publication complies with the G4 version guidelines of the Global Reporting Initiative (GRI), which is recognized as one of the most adopted report standards in the world.
Materiality Matrix G4-19; G4-20; G4-21; G4-25; G4-26; In order to define this report’s content, a survey was carried out with 24 BSC/Copener managers, in coordination, management and board levels who attributed ratings according to the degree of relevance of several aspects related to the company’s activities. This work resulted in the definition of the 10 following topics of interest: Business development Financial and economic performance Transparency Relationship and development of communities neighboring the forest areas Economic, social and environmental impacts Consumption of natural resources/eco-efficiency Occupational safety and health Forestry Best Practices Qualification and training Certifications For the next issues of the sustainability report, BSC/ Copener intends to consult representatives of the external audiences with which it interacts.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
2014 Objectives and Goals G4-27
Material aspect
2014 Objectives and goals
Business development
– To consolidate the controls over the management of third parties at the companies’ disposal; – To raise awareness among old and new suppliers so that they embrace the company’s culture.
Transparency
– To comply with the safety behavioral audit plan; – To update the company’s website every month; – To disclose the company’s forest management plan to surrounding communities, registering at least 1,500 participants; – To meet the return deadlines of the demands and complaints of forest areas, as per the procedure.
Financial and economic performance
– To produce and sell more special pulp considering its higher added value and higher positioning within the value chain. – To keep on strengthening its position as one of major global suppliers in the market, particularly in acetates.
Relationship and development of communities neighboring the forest management areas
– To increase by 30% the number of people who have been benefited by the company’s social responsibility projects; – To implement the family agriculture project in communities in the area, benefiting at least 100 families; – To implement in at least two other municipalities the educational projects which had their pilot programs implemented in 2013; – To inaugurate the Uniform Plant - Andorinhas Project; – To consolidate the company’s Ombudsman’s office, registering and properly handling all the demands and complaints received relative to the forest activities, according to the pre-established procedure; – To disclose the company’s forest management plan to surrounding communities, registering at least 1,500 participants; – To improve the survey of the social impacts caused by the company’s activities, with the participation of the Community Relations team in the microplanning actions.
Economic, social and environmental impacts
- To implement the measurement system for waste generation in the forestry area; - To execute at least 12 internal communication actions for the environment, health and safety of the workers in the forestry and industrial areas; - To reduce the harvesters’ diesel consumption rate; - To implement the sorting process of forestry machine parts, avoiding unnecessary disposal; - To perform 75% of the Degraded Area Restoration Program (Prad).
Consumption of natural resources(eco-efficiency)
– To reduce water consumption at the plant until it reaches 36.2 m³/Admt (air dry metric ton); – To implement the monitoring system for power and energy consumption at the nursery.
Occupational safety and health
– To reduce to 1.1 the frequency rate of accidents with leave of hired and outsourced employees in the forestry and industrial areas.
Forestry Best Practices
– To verify and mark off all the permanent preservation areas of projects involving cutting, planting or lopping carried out in 2014; – To complete the implementation of the accuracy monitoring system of the mechanized activities of subsoiling, fertilization and phosphate fertilization; – To execute 100% of the microplanning in the areas where the operations will take place, by preparing the book of 2014 PAC (Annual Harvest Planning) projects containing the most relevant operating, environmental and social information, in order to ensure the sustainable management of the operational forests.
Qualification and Training
– To execute at least 20 hours of training with employees over the year; – To coach all the on duty workers for forest fire fighting.
Certifications
– To obtain the Cerflor certification for the company’s forest management areas in the North Coast and Bahia agreste region and its chain of custody to the BSC plant in Camaçari; – To obtain re-certification of ISO 9001 e ISO 14001 standards.
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Relatรณrio SUSTAINABILITY de Sustentabilidade REPORT | BSC / Copener 2012 | 2013
Profile of Bahia Specialty Cellulose and Copener Florestal
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Profile of Bahia Specialty Cellulose and Copener Florestal G4-3; G4-4; G4-5; G4-6; G4-7; G4-8 In 2013, Bahia Specialty Cellulose (BSC) and Copener Florestal completed 10 years of acquisition by Sateri Holdings Limited. Since then, the company started a development plan which increased the annual production capacity of 115,000 tons of dissolving wood pulp, in a single line, to the current 485,000 tons, in two lines, and incorporated to its products portfolio high quality chemical specialties in order to serve the textile, automobile, food, pharmaceutical, cosmetic, cleaning and hygiene products, paints and cigarette filter markets, etc. Located in the Camaçari Industrial Complex, in Salvador’s metropolitan region in Bahia, BSC is the only manufacturer of dissolving wood pulp from eucalyptus in Latin America. Its participation of approximately 8% of the specialty cellulose’s global supply shows the strength of the enterprise that ranks among the world leaders of its segment, whose main customers are in Asia, Europe, and the United States. The eucalyptus, its main raw material, is obtained in the company`s forest base that is sustainably managed by Copener Florestal, headquartered in Alagoinhas and planting areas in more than 20 municipalities in the north and in Bahia’s agreste region, which are benefited by initiatives from sustainable commitments guiding the entire production process. Together, our forestry and industrial activities employ over 4,000 people and rank us among the largest employers in the area, with social and environmental initiatives that add value to operations and contribute to improving the quality of life for thousands of residents. For a better flow of the text, in this report, whenever possible, the information about Bahia Specialty Cellulose (BSC) and Copener Florestal was consolidated and will be treated only by the name of BSC, unless otherwise specified.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Our shareholder G4-34 Listed on the Hong Kong Stock Exchange, Sateri Holdings Limited (“Sateri�; stock code: 1768) is one of the largest specialty cellulose producers in the world. Sateri produces different grades of high-purity dissolving wood pulp and viscose staple fiber, which are natural raw materials and key ingredients to a diverse range of everyday items from textiles, baby wipes and cigarette filters, to soft ice-cream, sausage casings and pharmaceuticals, as well as industrial products such as cord yarns for high performance tires. Sateri has a vertically integrated business. Its upstream operations in Brazil consist of a secure renewable plantation that grows eucalyptus trees on its 150,000 hectares of freehold land, and a stateof-the-art mill to produce high-purity dissolving wood pulp. Sateri’s downstream business in China consists of production facilities that use dissolving wood pulp to produce viscose staple fiber to capture the fast growing consumer market demand in China. Sateri attaches high priority to its social and sustainability responsibilities and is committed to preserve and protect the environment in every aspect of its operations. Sateri has corporate offices located in Shanghai and Hong Kong.
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SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Mission To generate sustainable growth; To be a leader in the dissolving wood pulp segment; To give best returns to stakeholders, simultaneously contributing to the local and regional social and economic development; To create value through modern technology and industrial knowledge, more important goods and values, relationships and solid human resources.
Vision To be the leading producer of dissolving wood pulp, with the best management practices and with the highest added-value product in the world; To be the clients` preferred supplier of dissolving wood pulp worldwide and the employees` preferred employer.
Cultural Pillars Time, Quality, and Cost - Relentless quest for more economical, efficient and quality alternatives. Focus on improvement actions in all stages and processes. Aims at acting faster, better, and cheaper. Passion and Teamwork – Communication and mutual support among employees without personal or geographical barriers; respect and encouragement; continuous learning; collective responsibility for results; exceeding of expectations, maintaining good relationships and a commitment to always do better. Proactivity and Innovation - Anticipation of market demands; open to change, with active participation in all processes; incentive to positive attitude, aggregating motivated people with creative minds to find solutions and innovate in their activities.
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BSC’s business Our product and the market G4-4 The dissolving wood pulp produced by BSC differs from that intended for the paper industry due to its high degree of purity, low rate of inorganic contaminants and variety of levels of brightness and viscosity, defined from the client’s specifications. Because it is a natural fiber obtained from sustainable sources (eucalyptus wood), pulp is a natural biodegradable polymer used as a raw material with competitive advantages when compared to the available synthetic fibers which are obtained from petroleum. Two types of dissolving wood pulp are produced by BSC: rayon-grades and specialty-grades.
Rayon-grades • Lyocell and viscose staple fibers: woven and non-woven fabrics, including wet wipes, cosmetic masks, etc. • Viscose filaments: woven and knitted fabrics.
Specialty-grades • Acetate: cigarette filters and textile filament yarns • Microcrystalline cellulose: pharmaceutical and food products; • Industrial filament: high perfomance and run flat tires • Other special applications including sausage casings, cellophane, sponges etc.
Participation in class entities and associations G4-16 In 2012 and 2013, BSC relied on representatives in associations, unions and other entities related to the forestry and industrial sectors, such as: – Abaf: Associação Baiana dos Produtores de Florestas Plantadas (Plantation Forests Producers Association of Bahia); – ABTCP: Associação Brasileira de Celulose e Papel (Brazilian Technical Association of Pulp and Paper); – Bracelpa: Associação Brasileira de Celulose e Papel (Brazilian Association of Pulp and Paper); – Cofic: Comitê de Fomento Industrial de Camaçari (Camaçari Industrial Development Committee); – Fieb: Federação das Indústrias do Estado da Bahia (Bahia State Industries Federation); – Sindpacel: Union of Industries of Paper, Cellulose, Cardboard, Pulp and Paper and Cardboard Artifacts in the State of Bahia.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Historical evolution 1984: 1980: Foundation of Copene Energética, by Copene Petroquímica do Nordeste S/A.
End of the oil crisis. Company redirects its activities and starts to produce eucalyptus for the pulp industry.
1983: Change of name to Copener Florestal Ltda.
1989:
2003:
Association of Riocel (whose main shareholder was Klabin) with COPENE to build a pulp mill in Entre Rios Norcell.
Riocel and Braskem sell Copener and Klabin Bacell to Sateri Holdings Limited. The plant is now called Bahia Pulp and Copener maintains its name.
2002:
Copene and Riocel cancel the industrial project. Copener focuses on the export of eucalyptus and sale of wood to the Klabin Bacell plant. Copene is acquired by Odebrecht, which renames the company to Braskem.
1985: Construction of seedling nursery, in Inhambupe.
Copener Florestal
BSC 2000: Change of name to Kabin Bacell;
1979: Start of the plant’s operation;
1994: 1970: Foundation of the state company Companhia de Celulose da Bahia (CCB), which manufactures pulp from sisal for the paper industry;
Change of name to Bacell S.A.;
1989: Plant`s privatization and acquisition by Klabin - Fabricadora of Papel e Celulose SA;
2010: Change of name to Bahia Specialty Cellulose (BSC).
2003: Plant is acquired by Sateri Holdings Limited along with Copener Florestal and is now called Bahia Pulp;
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Production Process Eucalyptus production process Technology In the company’s genetic basis the eucalyptus hybrids are produced and selected with the characteristics that are desirable to manufacturing dissolving wood pulp. These hybrids are tested in field conditions for seven years and after this period the technological analysis of wood is carried out in order to define which are the truly superior hybrids that will be released for commercial planting.
Seedling Production Sprouts are obtained from the recommended hybrids, originating new seedlings. This stage lasts for 90 days. During this period, the future trees receive special care such as temperature, humidity, lighting and fertilization until they are ready to be planted in the field.
Soil preparation The care with where these seedlings will be planted starts way before their production in the nursery, with the mapping of the soil for the separation of production areas and preservation of reserve areas. The soil’s nutritional condition is improved by means of balanced fertilization.
Eucalyptus plantation The planting of eucalyptus seedlings can be done either manually or mechanically. The seedlings are arranged respecting technical and environmental criteria that ensure their perfect development and the maintenance of the environmental quality in areas where they are planted.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Maintenance Soon after planting, the seedlings are fertilized. Copener constantly monitors the plantations, controlling the infestation of weeds, pests and diseases. The intervention with chemicals is performed only when absolutely necessary. Within the farms’ boundaries protection barriers (firebreaks) are also implemented to prevent fires.
Harvest The eucalyptus harvesting is mechanized, made by specialized machines that allow an accurate activity, with comfort and safety for the operators and minimal environmental impacts. The wood cutting, which is debarked and chopped into logs, occurs around the sixth year after planting. The trees’ bark, branches, and leaves are left in the field, aiding in the soil’s nutrition, physical structure and protection.
Transport After cutting, eucalyptus logs are shipped and transported in special trucks or trains to the lumber yards of Bahia Specialty Celluloses’ plant.
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Dissolving wood pulp production process Supply The eucalyptus arrives at the factory debarked and cut into 6 meter-logs that are temporarily stored in lumber yards. Trucks and trains transport the wood from the field to the factory.
Production of chips In order to start the manufacturing process of dissolving wood pulp, logs are washed and chopped into small pieces, called chips, which are stored in a pile.
Cooking Equipment installed near the pile collects and transports the chips to be cooked in the digester. The purification and separation process of wood fibers occurs in the digester. These separated fibers form the brown dissolving wood pulp.
Washing and purification After the cooking process, it is necessary to separate the chips that were not fully cooked and wash the produced brown pulp. The black liquor is a sub-product obtained from the washing of the pulp.
Cold caustic extraction The final step of the washing and purification process is known as CCE - English acronym for cold caustic extraction. Thanks to this process, the product reaches a degree of purity greater than 98%.
Bleaching After the brown pulp is cleaned and washed, it is treated with bleaching chemicals to become whiter. BSC uses the elementary chlorine free (ECF) process which is industrial standard.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Recovery system The black liquor resulting from the washing process is sent to be evaporated (to remove the water) and is then burned in the recovery boiler. The burning of the liquor generates steam used in turbines to produce electric power for the plant’s operation and also to increase the process’ temperature and to perform the chemical reactions. This procedure also allows reusing approximately 98% of the chemical reagents - specifically the caustic soda - used in the pulp’s cooking process.
Solid waste and liquid effluents The solid material not reused in the industrial process is sent to a waste treatment plant that turns this product into an input for the agricultural sector or negotiates the recyclable material with specialized companies. The liquid effluents, in turn, are sent to the primary treatment station and then biologically treated by a specialized company located in the Camaçari Industrial Complex.
Drying and packaging After the bleaching process, the pulp is pressed and dried with hot air, gaining the appearance of a sheet. After drying, it is cut and packaged in bales or wound in rolls, according to the need of the client receiving it, and placed in the plant’s warehouse.
Final destination From the warehouse, the product is packed in containers or trucks and taken to the Port of Salvador, where it is then shipped in special vessels heading to several countries in Asia, Europe and the United States. For Brazilian clients, the products are transported in trucks.
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Corporate Governance G4-34 Bahia Specialty Cellulose and Copener Florestal adopt the Corporate Governance Policy established in 2010 by Sateri Holdings Limited, which extends to its subsidiaries. In this context, BSC/Copener undertakes to reach and maintain the highest corporate governance standards, since it understands that this is a deciding factor to gain and maintain the shareholders’ and stakeholders’ trust. Also, good practices are necessary for the Group’s engagement and transparency in the management, in order to support the organization’s success and create value in the long run for shareholders. The policies established by the Board provide the directors and other managers with guidance so that they may exert exemplary corporate governance, thus anticipating conflicts and ensuring harmonious internal control of the organization. The company is committed to achieving and maintaining high standards of corporate governance, as the Board believes that good and effective corporate governance practices are key to obtaining and maintaining the trust of our shareholders and other stakeholders, and are essential for encouraging accountability and transparency so as to sustain the success of the Group and to create long-term value for the shareholders of the Company.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Internal audit, risks and controls G4-14 BSC/Copener has an internal audit department that provides consulting and evaluation services and aims at adding value and enhancing the organization’s operations and processes. The audit helps the organization to achieve its goals by adopting a disciplined and systematic approach to evaluate and enhance the efficiency of internal control and risk management processes. As for the internal audits, 10 processes in the forestry area and 22 processes in the industrial area were audited in both 2012 and 2013.
Investigation of dumping hypothesis G4-SO7 On November 6, 2013, the Ministry of Commerce of the People’s Republic of China (Mofcom) announced a preliminary decision on an anti-dumping investigation which started in February of that same year and, consequently, provisional anti-dumping measures were imposed against dissolving wood pulp manufacturers in the United States, Canada and Brazil, including BSC. With effect as of November 7, 2013, BSC’s products importers now have to pay a surety bond at the rate of 6.8% of the taxable value. The position of Sateri Holdings Limited, a shareholder of BSC, is that the company complied at all times with the laws and any provisional claims or conclusions as to product dumping are completely without merit. By means of its legal consultants, the group will continue to contribute and cooperate with Mofcom, which shall announce its conclusion on the investigation in 2014.
Integrated Management System BSC/Copener has an Integrated Management System (SIG - Sistema Integrado de Gestão) which covers the plant`s Quality and Environmental Management System and the forestry area`s Environmental Management System. The SIG establishes that the forestry and industrial operations be developed in compliance with the environmental, quality, safety and health standards. In 2012, 24 new procedures were introduced in the company`s Integrated Management System, in addition to 61 other procedures introduced in 2013. The main inclusions are related to the Information Technology Policy and the forestry area procedures, with adaptations to the forestry certification standard.
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Integrated Management Policy G4-56 BSC/Copener`s Integrated Management Policy was reviewed in 2013 and incorporated its commitment to the forest management. The policy is committed to: • Raise awareness and qualify its employees; • Foment a safe and healthy workplace; • Respect the rights of local communities, seeking to maintain dialog and the resolution of conflicts through negotiation and consensus; • Meet contractual requirements, occupational safety and health, social security and labor legislation, legal and relevant environmental requirements and others subscribed by the organization which are related to its activities; • Manage the processes and its respective social and environmental aspects and impacts and the hazards and risks of the activities, focused on the prevention of pollution, conflicts and work accidents; • Share with society the development of preservation programs and sustainable management of natural resources; • Strengthen the internal and external communication processes and the relationship with workers and other stakeholders, acting in an ethical and respectful manner, open to dialog according to the commitments made. • Manage the forest plantations according to the principles and criteria of the good practices which conciliate environmental safeguards with social benefits and economic feasibility; • Implement the strategic guidelines, balanced to the needs and expectations of clients, shareholders, collaborators, suppliers, society, and other stakeholders; • Ensure constant improvement of its integrated management system in order to guarantee the achievement of objectives, avoid accidents, and enhance social and environmental performance. Certifications The company is ISO 9001 certified for the production and marketing of dissolving wood pulp, and ISO 14001 certified for the production and marketing of dissolving wood pulp, seedlings, and eucalyptus wood. In February of 2013, a maintenance audit of these certifications occurred, with recertification audits scheduled for January of 2014.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Chain of suppliers G4-12; G4-EC9 In 2012, services were hired or product acquisitions were made from 1,470 suppliers, 1,018 being hired by BSC and 452 by Copener. Of this total, 55.6% were suppliers from Bahia. Only at BSC, out of the total hirings, 45.87% were from companies in Bahia, while t Copener, 77.43% of the acquisitions or hirings were from companies in the region. In 2013, out of the 1,524 contracted suppliers, 962 being hired by BSC, and 562 by Copener, 56.75% were companies from Bahia. Of all the hirings by BSC, 45.6% were companies from Bahia, while at Copener, this number increases to 75.8% of local suppliers. All the contracts for the supply of goods and services have clauses that ensure compliance of labor, social security, environmental and tax obligations by the supplier, including specific items related to human rights and the abolition of child labor and forced labor. The contracts also empower BSC to control the compliance of these requirements. Also, suppliers receive the Supplier`s Code of Ethics, which is prepared by the company, and undertake to contractually comply with BSC’s internal procedures and standards.
Legal Issues Since the current shareholder took control of the companies, supply contracts, especially service contracts, have been amended, always aiming at the legal security of the parties and 3rd parties involved, namely the employees of these companies that serve BSC. Over the last few years, these amendments have culminated, on one side, in service contracts with clauses that set forth and require the service provider to strictly comply with labor, social security, and tax obligations. Compliance of these obligations has been systematized and the company has a specialized team that quantitatively manages the documents and, through sampling, the legal character of its contents, notifying the service providers that eventually present pending matters, and establishing deadlines for regularization. The other integrated management systems of third parties, such as procedures for occupational health and safety and of the areas that make use of third party`s services complement this control. With regard to Conflict Management, the company has its own procedure that foresees any lawsuit against other parties, or even in case of defense in lawsuits filed by third parties against the Company, the option is the amicable understanding as a major objective and rule. Only in situations where an amicable understanding is not successfully reached, is a legal process initiated.
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Forest Operations
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
The company has 150,000 hectares of land in the northern and agreste regions of Bahia. Of this total, 84,000 hectares are reserved for eucalyptus plantation, 58,000 correspond to legal reserve, permanent preservation and native vegetation area, and 8,000 are used for infrastructure areas and other uses. The forests are managed by BSC, which is committed to sustainability throughout the entire process and aims at supplying the dissolving wood pulp plant with approximately 2,5000,000 cubic meters of eucalyptus wood per year. All operations are executed in order to obtain the highest productivity and quality, respecting the environment and the surrounding communities. The plant is supplied exclusively with wood grown in the areas owned by the company and also in the forest projects which are developed in partnership with rural producers of the region and through the Forest Producer Program. The company uses monoclonal plantations of eucalyptus hybrids, mainly Eucalyptus grandis and Eucalyptus urophylla, selected by means of a network of 45 clonal tests, containing 1,418 genetic materials, installed in different soil and climatic conditions of the region.
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Forestry Management System (FMS) In 2010, BSC/Copener started to computerize its forestry processes, aiming at greater efficiency in controls and processes, having as a goal to reach within three years the control and programming of all its operations through the FMS (Forestry Management System) module. The goal was achieved in 2013, with 100% of the operating areas registered in the system. Therefore, data relating to operations started to be updated automatically with a high level of reliability, improving the processes of monitoring and control of production, increasing the mechanical and operational efficiency of the equipment and enabling the generation of budgets and scenarios for the decision making process. The forest logistics team also started counting, in addition to the GF, with an annual transportation tactical optimizing system (OTTMA), developed jointly with a specialized company, which assists in wood delivery projections, costs, qualitative and quantitative inventory, fleet efficiency and demand.
Microplanning In 2012, microplanning meetings were held before and after forest operations, in order to mitigate the impacts of activities in neighboring regions. Microplanning is executed in a participatory and interdepartmental manner to ensure that the principles of economics, quality, respect for the environment and surrounding communities are taken into account during the implementation, reform, harvesting and transportation of wood.
Forestry technology In 2012, the company invested 69% more financial resources in research compared to the previous year. In 2013, the investment was 27% more than in 2011. These investments were particularly made in the selection of genetic material which is suitable to the environmental and manufacturing characteristics, development of silvicultural management and more efficient fertilization, monitoring of soil fertility, and the identification and production of natural enemies of major pests and diseases that threaten forest crops for use in environmentally friendly biological control techniques. To guarantee biological control, BSC/Copener maintains a forest protection laboratory where predators and parasitoid of forest pests are created, especially for control of defoliating caterpillars. The company prioritizes the adoption of biological control using chemical pesticides only when necessary and opting for preferably low toxicity products.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Soils and Nutrition BSC has mapped 100% of its properties, adding up to 110 units of soil distributed in seven of the 13 classes defined in the Embrapa Brazilian Soil Classification System. This mapping is essential for the prescription of genetic material, subsoiling and fertilization method to be used. The company has also a twin plot system, which is a powerful tool for evaluation of the assertiveness of the fertilization recommendation. During 2012/2013, 12 experiments were installed to evaluate sources, timing and fertilization application method, as well as physiological characteristics related to drought tolerance. The company improved the processes of cover fertilization, enabled through works developed by research institutions and in partnership with other forestry companies. As of 2013, this allowed the reduction from three to two in the number of cover fertilizations per planting. The same quantity of fertilizer was split into two applications. This provided significant savings in financial resources and also environmental benefits such as less soil compaction and carbon dioxide (CO2), with an annual reduction of up to 270 tons of CO2. The main challenges faced by soil and nutrition area are to implement a monitoring system of the erosion and soil compaction, improve the accuracy of the nutritional diagnosis system of the eucalyptus plantations and carry out the soil survey in forest development areas.
Seedling Production In 2012, BSC/Copener started the commercial production of eucalyptus seedlings at the Farm Quatis nursery, in Entre Rios, replacing the previous nursery that used to operate at Fazenda Salgado, in Inhambupe. Despite the higher production capacity with the new structure, which is 24 million seedlings per year, due to the transition phase from the old to the new nursery and to the learning curve, in that year and in 2013, 5.9 million and 6.3 million seedlings were produced from 10 different genetic materials.
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Silviculture BSC/Copener has a total cultivatable area of 84,000 hectares, In 2012, the company had 79,162 hectares of effectively planted land (before harvest). On December 31, 2013 the total cultivated area covered 74,625 hectares. This data does not include the areas where there were harvest operations. As for the new plantations, 915 hectares were planted in 2012 and 314 ha were planted in 2013.  Company lopping was 1,403 ha in 2012 and 1,472 ha in 2013. In addition to the above, more than 919 hectares of lopping were added in development areas in the last year. In order to deal with the eucalyptus formation needs, in 2012 and 2013, the company carried out planting, even during the drought season, applying planting irrigated with water collected in stations authorized by the Bahia Environment and Water Resources Institute (Inema). For 2014, the aim is to plant 14,101 hectares only during the rainy periods, in order to increase the quality and productivity of the forests’.
Soil management In 2013, BSC/Copener adopted a precision monitoring system of the mechanized activities of subsoiling, fertilization and phosphate fertilization. This system enables to accurately know which type of fertilizer and the quantity used, ensuring strict control of the application of these products in the forest areas.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Forest Producer Program The Forest Producer Program (PPF - Programa Produtor Florestal), which fosters eucalyptus cultivation by rural producers in the region, ended 2012 with 89 partner producers, 16 being newly fostered, with a total planted area of 7,294 hectares. As for 2013, the planted area within the program was 7,552.81 hectares, with the participation of 93 partner producers. In the beginning of 2013, BSC/Copener started to harvest wood in the first development projects that were planted in the years 2007 and 2008. Until the end of 2013, the wood of 12 projects had been harvested, with an average productivity of 250 m³ of wood per hectare. So far, PPF contemplates properties in the municipalities of Alagoinhas, Aporá, Araçás, Aramari, Camaçari, Candeias, Cardeal da Silva, Catu, Conde, Entre Rios, Esplanada, Inhambupe, Itanagra, Jaguaripe, Jandaíra, Maragogipe, Mata de São João, Ouriçangas, Rio Real, Santo Amaro, São Francisco do Conde and São Sebastião do Passé.
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Harvesting In 2012 and 2013, 36 forestry machines and 3 new support modules were acquired for the forestry operation staff. During this period, the module II maintenance team went through an insourcing process, which improved maintenance management and reduced operating costs. The average daily production levels increased from 5,539 mÂł in 2012 to 6,004 cubic meters in 2013. BSC/Copener created an operational training center for forestry machine operators which has a transportation and harvester simulator, in addition to hydraulic and electrical training. The structure has been used for the qualification of new professionals. For the next few years, among the objectives and goals of the company are the implementation of a management system for the fleet maintenance process, the development of alternate suppliers for the acquisition of parts, the staff`s continuous development through qualification programs that encourage and prepare them to increase productivity and improve equipment performance.
Logistics The transportation of harvested wood from the field to the plant is done with the use of the railway modal, in partnership with the Ferrovia Centro-Altântica (FCA) and roadway modal, with semi-trailers, and two and three trailer train trucks that transit mainly along the BA 099, BA 093, BR 101 e BR 110 highways. In 2012, BSC/Copener transported 1,479,000 tons of wood, 17% by railroad and 83% by highway. In 2013, the volume transported was 1,591,000 tons, 18% by train and 82% by a fleet of 130 trucks, in late 2013. The company performs the maintenance and recovery of the roads it uses. In 2012, 115.46 km of roads were recovered. In 2013, 182.02 km were recovered.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Fire Fighting The company has a Forest Fire Fighting and Protection Program (PPCIF - Programa de Prevenção e Combate a Incêndios Florestais) which is reinforced between the months of September and May, since it is a dry period with a high risk of fires. In order to reduce the occurrences, the company operates along with its employees and communities. Internally, periodical trainings are provided for the fire brigade members. Externally, awareness campaigns are promoted via radio stations, printed newspapers and outdoors in the region. The relationship with the communities, including with the intense disclosure of the 0800 hotline, also helps in the identification process of fire outbreaks and in the reduction of arson.
Wood theft Police and BSC records reveal that, in 2012, at least 36,583 cubic meters of eucalyptus wood were stolen from the company’s areas. In 2013, in order to reverse the situation, BSC conducted wood theft suppression operations with the Department of Public Security - by means of the Civil Police Department in Alagoinhas, the Office of Environmental Protection - with the State Finance Department, the Bahia Environmental and Water Resources Institute (Inema) and the Public Prosecutor of Bahia. The company also invested in the professional and technical qualification of its property security staff and in an integrated system of safety, offense prevention and organized crime suppression in its properties. BSC participated in the creation of the Forest Safety Interactive Council of Northern Bahia (Cisnorba), which aggregates local forestry companies, whose main objective is to promote the interaction of all the segments of society and agencies responsible for the public security in the municipalities of the region. Furthermore, BSC enhanced its presence through actions described in its Social Responsibility Plan, which has contributed to the creation of new employment and income perspectives for the area and to the strengthening of the relationship between the company and the local population. In 2013, these initiatives resulted in a 75%reduction in the number of wood theft police reports compared to 2012.
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BSC has been improving its plant’s stability, despite the unplanned shutdowns in 2013 having an impact on the general results in terms of the volume of produced dissolving wood pulp, which was 413,589 t. In 2012, the total volume reached 432, 102 t.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Industrial Operations
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34
Improvement in the wood washing process Changes in the showers of the log washing station during the chip preparation improved the washing of wood logs, resulting in the reduction of silica content in the wood chips and barks. The measure also reduced the water consumption in this stage and resulted in an efficiency rate of 74% during the wash.
Pilot plant In 2012, BSC started the operation of a pilot pulp cooking and washing plant and of an autoclave system which allows obtaining dissolving wood pulp from small volumes of processed wood. This industrial laboratory supports the development of the manufacturing process by facilitating the completion of small-scale cooking tests of several hybrid eucalyptus developed by the forestry team. In addition to providing subsidies for the forestry operations annual planning, the pilot plant allows BSC to identify the genetic material with the greatest potential for industrial activity. Hence, the company makes better use of financial resources and produces products that are more appropriate for the clients’ needs.
Logistics In 2012, 431,359.531 tons of dissolving wood pulp were transported to the clients. In 2013, 411,863.716 tons were transported. Of the average monthly volume of 38,000 tons, 23,000 tons are shipped to clients in Asia, 10,000 tons to the United States, and 5,000 tons to Europe. In November of 2013, BSC achieved record levels of exports with the shipping of 97 containers per day - nearly five times more than the second largest exporter in Bahia. This was a significant milestone for the company, considering that the average is 50 containers/day.
Lumber yard fire On November 22, 2012, a fire of large proportions destroyed an inventory of 40,000 cubic meters of lumber located in the plant’s external yard. Originating from the vegetation around the yard, the fire was controlled by the Camaçari Fire Department and by the fire brigade of the Mutual Assistance Plan, an anti-fire group administered by the Camaçari Industrial Development Committee (Cofic). There were no injuries or significant environmental damages, and the plant’s operating routine remained the same. As from the incident, additional safety measures were implemented so as to prevent new occurrences from occurring at the site.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
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Economic Performance
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
G4-9; G4-17; G4-EC1 For business analysis purposes, we reproduce the Sateri Holdings Limited S.A financial statements, an organization that includes the Bahia Specialty Cellulose and Copener Florestal companies in Brazil.
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Financial Analysis Consolidated Results The Group’s revenue decreased by 10% to US$646 million for the year ended 31 December 2013 from US$720 million in 2012 mainly as a result of the lower ASPs of rayon-grade DWP and VSF. The impact of lower revenues was partially mitigated by a reduction in the total cost of sales which declined by 14% to US$428 million from US$500 million in 2012. As a result, gross profit decreased by 1% to US$218 million but gross profit margin improved from 31% to 34%. EBITDA increased by 3% to US$206 million and EBITDA margin also improved from 28% to 32%. However, profit attributable to shareholders decreased by 40% to US$33 million from US$56 million in 2012 and net profit margin dropped from 8% to 5%, while earnings per share decreased to US1.0 cent from US1.6 cents in 2012. Cost of sales primarily consists of the cost of planting and harvesting wood, DWP purchased from third parties for the Group’s VSF business, chemicals, and conversion costs including energy, labor costs and depreciation. The Group’s cost of sales decreased by 14% to US$428 million for the year ended 31 December 2013 despite some operational issues at its mill in Brazil in the second half of 2013. The decrease was mainly due to a drop in the prices of certain key materials for production, the Group’s continuing effort to improve cost competitiveness as well as a weaker Brazilian Reais during the year compared to 2012. The average exchange rate depreciated by 11% from US$1:BRL1.95 in 2012 to US$1:BRL2.16 in 2013. Selling and distribution expenses decreased by 14% to US$52 million for the year ended 31 December 2013, from US$61 million in 2012, mainly due to the Group’s relentless efforts in cost reduction. Administrative expenses, by contrast, increased by 18% to US$76 million as a result of increasing expenses in China as the construction of the Fujian mill continued to take place during the year. The Group’s finance costs increased to US$33 million for the year ended 31 December 2013 from US$30 million in 2012 as a result of the drawdown of the US$440 million term loan tranche of the US$500 million senior secured trade facility agreement completed on 15 February 2013.
Capital Expenditure G4 17 The Group continued to exercise careful control over capital expenditure and to constrain expenditure as appropriate during the year. Overall, the Group incurred US$304 million in capital expenditure for the year ended 31 December 2013, compared to US$206 million in 2012. Of the US$304 million, US$64 million was incurred in Brazil, including US$32 million spent on forestation and reforestation assets, and US$5 million was incurred in Jiangxi. During the year, the Group’s new VSF mill in Fujian commenced operation. The Group incurred US$235 million on this project in 2013 (2012: US$107 million) and total capital expenditure up to 31 December 2013 amounted to US$387 million.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
FINANCIAL SUMMARY THE LAST 5 YEARS For the year ended 31 December 2013 US$’000
2012 USS’000
2011 US$’000
2010 USS’000
2009 USS’000
645,681 217.548 43,310 37.759
720,285 219.706 52.023 56.280
806.574 323.073 143.850 150.525
923.257 456.723 332.282 328.090
551.998 210.107 104.414 107.430
33.344 4.415 37.759
55.561 719 56.280
154.713 (4,188) 150.525
323.881 4.209 328.090
106.867 563 107.430
0.01 2.50
0.02 2.50
0.05 2.50
0.11 -
0.04 -
161.554 1,737,909 46.947 93.360 2,039,770
185.678 1,539,447 52.783 123,144 1,901,052
187.797 192.192 1,455,966 1,384,070 50.251 39.953 101.006 65.254 1,795,020 1,681,469
177.691 1,376,386 34.536 42.767 1,631,380
180.954 190.659 166.046 537.659
143.634 151.104 195.476 1,043 491.257
180.590 153.232 8.119 328.999 612 671.552
88.636 108.736 39.452 435.865 21.674 694.363
53.177 107.402 132.231 108.807 5.293 406.910
135.732
147.267
72.198 17.518 225.448
195,792 19,469 362,528
136.574 8.119 198.403 62.961 406.057
156.136 39.452 153.816 30.589 379.993
77.314 132.231 177.119 44.756 431.420
Net current assets/liabilities) Non-current liabilities
312.211
128.729
265.495
314.370
(24,510)
Bank borrowings Other non-current liabilities
593.725 67 593.792
301.980 4.501 306.481
379.970 4.010 383.980
510.483 1.646 512.129
277.777 143.559 421.336
Net assets Capital and reserves
1,758,189
1,723,300
1,676,535
1,483,710
1,185,534
Share capital Share premium and reserves Equity attributable to owners of the Company Non-controlling interests
171.021 1,549.020 1,720,041 38.148 1,758,189
170.896 1,519,692 1,690.588 32.712 1,723,300
170.794 168.441 1,474,871 1,279,573 1,645,665 1,448,014 30.870 35.696 1,676,535 1,483,710
409.009 745.348 1,154,357 31.177 1,185,534
CONSOLIDATED INCOME STATEMENT Revenue Gross profit Profit before taxation Profit for the year Profit/Loss) for the year attributable to: Owners of the Company Non-controlling interests Earnings per share (US$) Dividend per share (HK cents) CONSOLIDATED STATEMENT OF FINANCIAL POSITION Non-current assets Forestation and reforestation assets Property, plant and equipment Deferred tax assets Other non-current assets Current assets Inventories Trade and other receivables Bills receivables discounted Bank balances and cash Other current assets Current liabilities Trade and other payables Advance drawn on bills receivables discounted Bank borrowings Other current liabilities
120 ANNUAL REPORT 2013
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Environmental Management
Relatório SUSTAINABILITY de Sustentabilidade REPORT | BSC / Copener 2012 | 2013
In its forestry and industrial activities, BSC/ Copener strives to enhance its productive processes, update its equipment and implement good environmental management practices, so that the sustainable utilization of the natural resources enable the businesses’ perpetuation and ensure the preservation of wildlife, as well as the maintenance of the soil, water and air quality, which are vital to the neighboring communities’ well-being.
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Forestry Activities BSC implements the most advanced ecological farming, better known as “mosaic plantation concept�, which distributes the plantation areas in order to enhance soil fertility and water retention, and organize harvesting and transport activities in order to reduce wood waste and soil erosion. In this concept, the eucalyptus plantations are merged with natural forest reserves, in order to maintain the wildlife’s biodiversity.
Solid waste management The responsible disposal of waste originated from the forestry activities complies with the legislation, protecting the good environmental conditions and generating business with specialized partner companies and pesticide dealer associations. Only common waste, inappropriate for recycling, is collected by the public cleaning service. In order to enable the sorting of waste by category, BSC promotes the selective collection throughout its areas, installing appropriate collectors and periodically raising employee awareness about proper disposal of waste. To minimize the impact of its activities, the company sends its contaminated waste to specialized companies for proper incineration and treatment. Over the last two years, 86,454 kg of contaminated waste were sent to these companies, thus avoiding inappropriate disposal. Waste
2012
2013
Total
Fluorescent lamps
80 units
142 units
222 units
Agricultural pesticides packaging
1,897 drums 3,971 kg of cardboard 813 kg of plastic bags
1,643 drums 4.419 kg of cardboard 2.535 kg of plastic bags
3,540 drums 8.390 kg of cardboard 3.348 kg of plastic bags
Tires
22 units
69 units
91 units
Lubricating oil
33,800 liters
15,675 liters
49,475 liters
Scraps
7,404 kg
62,270 kg
69,674 kg
Common waste
330 kg
6,000 kg
6,330 kg
Contaminated soil
1,728 kg
5,184 kg
6,912 kg
Contaminated items
5,292 kg
8,694 kg
13,986 kg
Oil filters
3,360 kg
4,550 kg
7,910 kg
Contaminated hoses
46,746 kg
18,810 kg
65,556 kg
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Environmental Preservation G4-EN13; G4-EN14 The eucalyptus plantations by Bahia Specialty Cellulose are established according to the criteria which give primary importance to the preservation of the remaining native forest within its properties, where fauna and flora species are preserved and protected. A total of 37,335 hectares were reserved, as provisions set forth by law. Approximately 40% of the company’s forest areas are occupied by native vegetation among areas of permanent preservation (APP), legal reserve (LR) and other remaining areas. These areas are interspaced with the eucalyptus plantations forming a 91km long green corridor, connecting portions of native forests and areas intended for environmental restoration. A survey on the wildlife species found in the company’s areas intended for recovery and maintenance of the native forest within its properties indicated the existence of 299 species of plants, 32 being endemic and 15 endangered. Fauna is characterized by 231 species of animals, of which 23 are endemic and eight are included in the endangered animals list. The areas intended for environmental preservation by BSC include the Lontra Private Reserve of Natural Heritage (RPPN) between the municipalities of Entre Rios and Itanagra. With 1,377 hectares, Lontra is a forest fragment of the remaining Atlantic Forest in an advanced phase of regeneration located in the coastal tablelands in the North of Bahia. Aiming at expanding its RPPN (Private Reserve of Natural Heritage) areas, BSC is currently developing 35 new reserves within its properties. If the protocol made with the environmental agencies is approved, this initiative will result in the addition of approximately 9,5000 hectares of native forests as RPPNs to the company’s properties in the municipalities of Cardeal da Silva, Conde, Entre Rios, Esplanada, Jan-
daíra, Itanagra and Mata de São João. BSC maintains a Damaged Area Restoration Program (Prad - Programa de recuperação de áreas degradadas) adopted also in the lands used as gravel deposits. Restoration is made by planting native regional species and improving the soil›s chemical and physical conditions, which makes restoration of the vegetation cover more agile. In order to preserve the biodiversity, whenever necessary, BSC provides environmental diagnoses and reforestation of riverside ecosystems and the native forests.
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Biodiversity, ecosystem and water G4-EN26 In 2013, BSC/Copener hired the environmental consulting company Casa da Floresta for a biodiversity, ecosystem and water study. The study, which will be completed in 2014, covers: – identification of the environmental values potentially impacted by the forest management activities; – identification of rare and threatened (or potentially threatened) species in the region of influence of the forest management unit and of their habitats, with integrated forest management prescription, taking into account the areas of native vegetation and areas of forest plantation with its operations; – identification of representative samples of the native ecosystems, with justification of their classification and integrated management prescriptions, taking into account their relation with the forest plantation areas and forest management operations carried out by the company; – preparation of a monitoring plan (focused on fauna and flora) through which the company can monitor and evaluate the environmental impacts of its forest operation on local habitats; – preparation of a monitoring plan for High Value Preservation Areas.
Water resource management BSC manages the use of water resources in its operations, continuously controlling and monitoring all the processes involving water collection and consumption. The points of water collection or disposal are operated according to the specific concessions.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Disease and pest control BSC executes the integrated management of diseases and pests throughout the forestry production process. This effort is basically comprised of three integrated and subsequent actions: identification, monitoring and control of pathogenic agents and pests threatening the plantations. When chemical control is necessary, the company prefers the use of low toxicity pesticides. However, in terms of fighting pests and diseases, priority is given to biological control, which makes use of control agents of the species, especially defoliating caterpillars, threatening the planted forests. Among other advantages, biological control contributes to the environmental balance, the protection of biodiversity and the reduction of the use of pesticides. In 2012, BSC introduced this technique in commercial scale in its activities. In this regard, the company developed a forest protection lab with physical structure and qualified staff for the creation and reproduction of control agents to be used in the field. Also, pathogenic tests are carried out in new genetic materials which are developed in the company’s genetic improvement program, as well as diagnoses of phytopathogenic agents that attack the eucalyptus in the nursery and in the field.
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Forest fire fighting and prevention Every year BSC promotes an awareness campaign for employees and neighboring communities in relation to the risks of forest fires. Resources such as leaflets, posters, outdoors and lectures are added to the technical support offered by the company to rural producers who want to conduct burnings in their properties in a controlled manner. The campaigns take place in the beginning of the most critical period for the fires to happen, which is between the months of September and January. Additionally, the company reinforces the cleaning of internal and external firebreaks, especially those that border areas where the risks of fire are higher, and updates maps showing water collection points, strategically distributed in order to facilitate access and the supply of water by fire trucks and fast brigades (rapid displacement teams). BSC has 16 forest fire towers which are constantly in communication with each other and positioned so as to cover the company’s entire forest area.
Micro basin monitoring BSC has a monitoring station for the Farge River, one of the arms of the Quiricó Grande creek which in turn belongs to the Sauípe River basin. The monitoring aims at obtaining hydrology indicators for sustainable management of the eucalyptus plantations. The micro basin area is approximately 125 hectares, where 80 hectares were replanted and the rest was intended for permanent preservation, which includes the creek’s head and banks as well as the areas located in the higher lands of the micro basin. The monitoring is done at the river’s head by means of a global analysis of the water’s natural availability, the maintenance of the soil’s productive potential and the measurement of the physical and chemical variables of the water quality. The results obtained so far reveal the non existence of negative effects of the forestry production on the water quality variables at the site.
Damaged Area Restoration Program In the Damaged Areas Restoration Program (Prad), 6.66 hectares were recovered in 2012, exceeding the estimate of 4.24 hectares. Another 26 hectares were environmentally recovered in 2013.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Forest management plan In 2013 BSC/Copener initiated the preparation of its forest management plan, which was forecast to be completed in March of 2014. This plan outlines the programs, actions and procedures adopted by the company in its forest management process and is being designed to be an information instrument with the following major objectives: • To clearly present BSC/Copener’s policies for the forestry, environmental and social areas, verifying its good practices of forest management, based on its vision of sustainability; • Contribute to the understanding by BSC / Copener employees and other stakeholders of technical, environmental and social aspects of its forest management process; • To serve as a forest certification guide, helping stakeholders to identify programs, procedures and documents involved in the process. The management plan will be a reference for the development of more specific and detailed documents on the company’s forestry process. In 2013, the company also started identifying its high-value environmental conservation areas and plans to complete this work in 2014.
Industrial activities At the plant, a recent chemical recovery system is able to recover and recycle up to 95% of the chemicals used in the manufacturing process as well as increase energy efficiency so that the company becomes less dependent on fossil fuels. Consequently, the company produces its own energy and the excess is sold to the national electrical grid.
Water G4-EN8 BSC’s plant is supplied with water from 11 production wells that collect water from the São Sebastião aquifer. In the last two years, the company has achieved its goal of reducing water consumption. In 2012, the plant consumed 35,9 m³/admt monthly. In 2013, this index was 36.2, consuming less resources than the target of 36.5.
Presence in the basin committee As a means to contribute to the discussion of issues related to the responsible use of water resources and the recovery or protection of sources and watercourses, BSC integrates the River Basin Committee of Recôncavo Norte and Inhambupe, managed by the Water Resources State Council (Conerh). The committee comprises 43 municipalities of the region where the rivers Subaúma, Pojuca, Jacuípe, Joanes, Subaé and Açu and the secondary rivers of Baía de Todos os Santos and the Inhambupe river are located.
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Solid waste management Non industrial solid waste (ton/year) G4-EN23
Type of waste
2011
2012
2013
Metal
418
652
83
Plastic
32
56
71
Paper/cardboard
273
98
174
Glass*
5
2,1
3,7
Total
728
808,10
331,7
* It is donated. The others are sold.
Industrial solid waste (kg/ton) In 2012, when the goal was the monthly generation of 205 kg of industrial solid waste per ton of dissolving wood pulp produced, the company recorded 186.4 kg/ton. In 2013, the index was 180 kg/ton produced, compared to a goal of 200 kg/ton.
Type of waste
2011
2012
2013
Eucalyptus biomass (dirty, whole, chopped bark, sawdust)
94,14
91,16
86,06
Primary mud
13,26
20,73
18,81
Grits
8,96
7,87
7,99
Dregs
32,44
19,15
12,74
Lime mud
26,18
24,80
15,44
Lime waste
1,07
1,89
0
Knots and rejects
25,41
17,87
21,95
Total
201,46
183,47
162,99
* Sent to company-owned industrial landfill
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Auxiliary fuel Type of fuel
2011
2012
2013
Natural Gas (total used in m続)
65.091.795
69.902.858
79.644.423
LPG (total used in ton)
3.751
603
1.446
Generation, consumption, purchase and sale of electric energy (MWh) G4-EN3 Year
Purcha sed
Generated
Consumed
Sold
2011
63.288
339.141
380.054
22.375
2012
27.588
415.363
396.641
46.310
2013
42.297
369.597
385.859
26.036
Despite the progresses in environmental aspects, certain other aspects need to be improved and BSC has been working continuously to reach this goal. While in 2013 the goal of reducing the load of organic effluent generation, which was 12.4 kg/ton produced, was exceeded with the volume of 8.6 kg/ton produced, in 2013, given this goal of 11.8 kg/ton produced, the index was 12.3 kg/ton produced. The same thing happened with the goal of reducing the volume of organic effluents which in 2012 dropped to 26.5 m続/ton produced, but in 2013, it increased to 30 m続/ton produced.
Effluent volume Effluent volume
2011
2012
2013
Effluent volume (m続/Admt)
28,7
26,4
32,1
Effluent BDO (kg/Admt)
13,1
8,6
11,9
49
50
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Odor control In 2011, the company recorded 36 odor complaints. In 2012, they totaled 27 and in 2013 there were five records. BSC is constantly striving to mitigate the emission of odor-causing gases generated by its plant. In 2012, the gas collection systems of lines 1 and 2 were improved with the installation of new equipment that increased their capacity and efficiency. Efforts to reduce greenhouse gas emissions continued in 2013, with the burning of CNG from the cooking in the incinerator so as to avoid the emission of strong odorous gases to the atmosphere. In addition to internal controls, the company has the support of 20 volunteers that make up its Odor Perception Network, established in 2009. All of them live in the neighboring communities and were trained to identify and notify the company in case of any odor occurrences coming from the plant. These volunteers have a free phone to receive calls and each is directly handled by the Environment Department, which calls back to the contacts, informing them about the factors that caused the occurrence.
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SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Social Management
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Social Management Human Resources G4-10; G4-EC8 BSC ended 2013, with a staff of 1,250 professionals (665 in the industrial area and 585 in the forestry area) against 1,096 (668 in the industrial area and 428 in the forest area) in the previous year. This progress is mainly due to the insourcing process of the forest harvesting operations, which started in 2011 and was completed two years later. All of BSC/Copener’s silvicultural services are performed by service providing companies. In 2012, there were six partner companies and in 2013 seven. These companies employ 1.5 thousand and 2 thousand people, depending on the volume of activities, having a higher number of employees during rainy seasons, when seedlings are planted. BSC is committed to providing its professionals with conditions that are appropriate to the development of their activities and personal and professional growth, selecting professionals recognized for their expertise and competence. To attract and retain these people, the company offers benefits that are aligned with the best market practices and programs enabling the training of new professionals and the improvement of skills and abilities for those who have more experience in the field.
Characterization of professionals Employees’ profile by gender G4-LA1; G4-LA12 Area Forestry
Industrial
Year
Men
Women
General total
2012
377
51
428
2013
496
89
585
2012
556
112
668
2013
548
117
665
Employees’ place of birth Area Forestry
Industrial
Year
Bahia
Other states/countries
General total
2012
397
31
428
2013
547
38
585
2012
642
26
668
2013
641
24
665
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
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Employees’ profile by age bracket Area
Year
18 a 20
21 a 30
31 a 40 41 a 50
51 and bove
General total
2012
3
136
180
73
36
428
2013
5
177
245
116
42
585
2012
5
175
282
148
58
668
2013
4
175
285
142
59
665
Forestry
Industrial
Employees’ profile by race Area
Year
Yellow
White
Black
Mulatto
No information
General total
2012
4
47
34
308
35
428
2013
4
38
33
264
246
585
2012
9
136
64
387
-
668
2013
8
156
59
442
-
665
Forestry
Industrial
Special Needs People Type of disability Year
Area
2012
Total
Gender
Physical
Visual
Hearing
Mental
Male
Female
13
11
1
1
0
10
3
22
17
2
1
0
12
7
18
15
0
0
3
12
6
26
20
1
0
5
17
9
Forestry 2013 2012 Industrial 2013
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Female presence in leadership roles
Year
Area
2012 Forestry 2013
2012 Industrial 2013
Profile
% in relation to the total of employees
% in leadership roles in relation to the total of leadership roles
% in Officer roles in relation to the total of Officer roles
Women
12
25
0
People over 45 years old
17,1
30
100
Women
13,5
16
0
People over 45 years old
17,1
40
100
Women
16,8
19,2
0
People over 45 years old
20,7
38,5
100
Women
17,6
24,5
0
People over 45 years old
19,7
32,5
100
Training G4-LA9 Investments in training made by BSC have a defined purpose and were designed to enhance the employees’ specific competencies and qualifications, which are necessary for the complete development of their activities in the several administrative areas and of the forestry and industrial operations. This program aims at qualifying employees for the position requirements, making them aware of safety, occupational health, quality and environment, training them to practice activities that are inherent to the operational and corporative procedures as well as enabling them for management practices. Also, the program aims at improving the employees’ skills for potential job opportunities within the organization. All of the training programs required by law are strictly carried out according to the workload and content required for every operating sector. In the industrial area, in 2012 the goal of completing 30 hours/men of training with employees was exceeded in 40% reaching 42 hours/men of training and in 2013 the number of trainings was 35% higher than the stipulated goal (goal 20 hours/men of training - result 27 hours/men of training). The training-related information for the forestry area was not available.
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Number, types and hours of training Goal Outcome (hht) Total number (hht) Year of trainings
Types of training
Total participants attending the training programs
Hours of training
Security Technicians
Security
Technicians
Security
Technicians
2012
344
30
42
94
250
14.289
20.067
147
392
2013
223
20
27
114
109
14.217
3.954
312
300
*Similar data related to the forestry-related trainings will be measured as of 2014
Education incentive program 2012 AND 2013 EDUCATION INCENTIVE PROGRAM Area
Forestry
Industrial
Year
Participants
Investments (BRL)
Graduation
Postgraduation
Language Technical (English) Course
2012
12
36.425,44
7
1
3
1
2013
16
24.921,60
4
1
3
0
2012
32
98.016,93
15
7
10
0
2013
16
55.423,46
11
2
3
0
Young Apprentice Program Year
Area
2012
Number of Apprentices 9
Forestry
2013 2012
12 18
Industrial
2013
22
Turnover rate Area Forestry Industrial
Year
Contractors
Dismissed
Transfers
Month and employees
Turn-over
2012
124
63
0
350,41
17,98%
2013
239
81
0
502
16,14%
2012
122
63
0
622,5
10,09%
2013
117
112
-1
675
16,59%
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Programs and benefits offered to employees G4-11; G4-EC3; G4-LA2 DESCRIPTION
SUMMARY
Profit-sharing Program
Encourages and rewards employees’ performance for the achievement of annual operational goals depending on the team’s effort and cooperation. The evaluation and reward criteria are determined by a committee comprised of members elected by the employees, company’s representatives and a representative of the employees’ labor union.
Health and Dental Plan
They have medical and hospital coverage nationwide for all employees and their legal dependents. The company bears most of the costs arising from consultations, examinations, admissions and other medical and dental procedures.
Collective life insurance
It covers the employees and their legal dependents, with low costs. Burial assistance is included.
Meals
According to the work shift, the company provides employees of the industrial area with breakfast, lunch, dinner, snack or supper at the plant’s cafeteria. Meal vouchers are available for the forestry staff with sufficient credits for meals during work hours. For the field staff, the company provides a high quality meal at the workplace.
Basic food basket aid
Granted to all employees as a food voucher, through the Worker’s Meal Program PAT.
Complementary Pension Plan
It works as a retirement fund, where contributions are funded by the company, considering a retirement plan.
Leisure
Agreements with the Athletic Association of the Banco do Brazil (AABB), with subsidized contributions, and the Industry Social Service (SESI), providing employees with access to sports clubs and recreational areas. Additionally, the company owns an internal lounge area for the forestry staff, located in the company’s forestry office in Alagoinhas.
Other benefits
Return from vacation award, day care assistance for children up to 3 years old, reimbursement for expenses with school supplies, assistance for employees with special need children, burial assistance and additional salary for sick pay and work accident.
Career Plan - Positions and Salaries
The company carries out market surveys with external organizations to ensure its competitiveness in order to remain consistent with local market practices and in the pulp and paper industry. Every year the company evaluates the performance of each employee and compares the salaries paid internally with the market salaries, result of salary surveys. Wages are adjusted according to the individual performance and market practices, and also promotions are analyzed and planned.
Collective Bargaining
For those employees who do not have a management position. The company in conjunction with the employees’ labor unions, strives to align with the market practices.
Partnerships
Agreements with pharmacy chains, optical centers, fitness centers and language schools that provide employees with more favorable payment terms and prices.
Life Quality Program
Actions aimed at promoting health and the well-being of employees, with lectures, supporting the marketing of campaigns created by the Ministry of Health.
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Work safety G4-LA6 BSC maintains a routine of reviewing of procedures, safety critical analysis meetings, improved criteria for accident investigation, emergency training and drills and also invests in emergency response equipment and team training programs. In order to improve safety performance, the OPA program (Observe, Plan and Act), the Behavioral Audit and the Work Permit Audit were implemented to recognize unsafe conditions. In the industrial area, these initiatives have reduced the number of accidents with leave, from 2012 to 2013, from six to one. In the forestry area, the reduction was from six to three. After evaluating historical data on accidents within the company in the last few years, a maximum rate of lost-time accidents of 3.19 for own employees was established for 2012. However, this rate was exceeded and closed the year at 9.1. In 2013, the maximum frequency rate was set at 4.5 and ended at 0.66 for the year. This accident reduction was the result of programs implemented by the company, such as the OPA, behavioral auditing and safety training. Regarding people hired in 2012, the maximum frequency rate set was 5.4, reaching the result of 3.0 In 2013, the same maximum rate of losttime accidents of 4.5 was established for employees and contractors. The result exceeded the maximum limit established, ending the year with a rate of 5.0. During 2012 and 2013, two fatalities were recorded, both in the industrial area and involving outsourced employees. In both cases, the victims carried the required personal protective equipment and were qualified for the operations, but they failed to meet the safety requirements defined in BSC procedures. These occurrences were used as additional reinforcement for the control of safety procedures.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
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Health BSC promotes campaigns and periodic interventions aimed at fomenting and maintaining employee health conditions. These initiatives include, among others, vaccination campaigns and lectures given by health professionals, as well as educational material focused on the health and well-being of the person.
Support to public health campaigns In January of 2012, BSC began to support the dissemination of public health campaigns carried out by the Ministry of Health by means of posters released by the government agency using the company’s internal communication channels. Some examples are campaigns to prevent AIDS, cancer, dengue, tuberculosis, hepatitis B and C, leprosy, osteoporosis and hypertension, in addition to actions to support the donation of blood and breast milk, as well as to raise awareness of the risks of smoking and vaccination campaigns against influenza, poliomyelitis, etc. This partnership was maintained during the years of 2012 and 2013.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
External public Citizen Fair BSC has participated with environmental education initiatives in the Citizen Fair event since its creation in 2008. It is a day of social action promoted by the Camaçari Industrial Development Committee (Cofic) in partnership with the city of Camaçari, the Government of Bahia and companies of the Industrial Complex of Camaçari that provide the population with utility services related to health, education, culture, citizenship, sports and leisure, among others. According to Cofic, in 2012 the Citizen Fair served 5,024 people with 15,073 services. In 2013, there were 17,098 services provided to 5,699 residents from Camaçari and the surrounding areas.
Building the Future Program In 2012 and 2013, BSC participated in the Building the Future program, conducted by the Camaçari Industrial Development Committee (Cofic) in order to introduce students of the 9th grade and high school to the main professions required by the industries of the Camaçari Industrial Complex through lectures by experts in each area. In these events, professionals visit public schools and districts of Camaçari and Dias d’Ávila and share their experiences with the students. The program’s goal is to stimulate the interest and curiosity of students in relation to the industry, contributing to help them choose their careers. Also, the program allows students to learn skills and competencies that need to be developed for their professional success. In these two years, a total of 2,033 students from 28 schools in the region had access to the program.
Peace on the Roads BSC was one of the sponsors of the Peace on the Roads Campaign, which was held by the Association of Auxiliary Military Police Officers - AOAPM during Carnival of 2013. The goal of the campaign was to alert drivers and riders about the risks of drinking and driving and not wearing a seat belt and the use of infant car seats (in the case of automobiles) and helmets (in the case of motorcycles). The campaign was held in the metropolitan region of Salvador with drivers being approached and offered brochures with information on safety.
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Social Responsibility G4-24 BSC / Copener understand that the impacts of its activities go far beyond the physical limits of its facilities and its social mission must be based on ethical principles and on the real goal of contributing to the development of the communities where it operates. Guided by this insight, the company performed, in the first half of 2012, an integrated social and economic diagnosis of the municipalities in the area of influence of its forest management. The work, conducted by a specialized company, traced the historical, social, economic and political portrait of the 21 cities where the company has forest properties, enabling it to establish new communication channels with stakeholders at a safer level regarding the actual and effective implications of the undertaking in the lifestyles, production and distribution methods of the population. The study covered the municipalities of Acajutiba, Água Fria, Alagoinhas, Aporá, Araçás, Aramari, Cardeal da Silva, Catu, Conde, Crisópolis, Entre Rios, Esplanada, Inhambupe, Itanagra, Itapicuru, Jandaíra, Mata de São João, Olindina, Ouriçangas, Rio Real and Sátiro Dias.
Characterization of the communities G4-24 As for the population dynamics, BSC / Copener forest management influences, directly or indirectly, a region inhabited by 604,025 people (IBGE data, 2010), where the municipality of Alagoinhas has the largest population (141,949) and the municipality of Itanagra has the fewest residents (7,598). Of the total population, 62.38% live in urban areas and 37.61% in rural areas, more than the percentage for Bahia (27.93%) and Brazil (15.65%). Regarding the Human Development Index (HDI), which blends elements related to income, education and health, 12 out of the 21 municipalities that make up the Area of Influence of BSC / Copener forest management have an HDI lower than Bahia, and the state’s worst HDI is in this region, in the municipality of Itapicuru, occupying the 415th position. Also among the worst human development indexes of Bahia are the towns of Araçás, Inhambupe, Crisópolis and Sátiro Dias. In this region, the best HDI is Alagoinhas, which occupies the 10th position in the state ranking. Among the economic activities in the region, farming is still the one that most uses agricultural area in Bahia, occupying 57.63% of the area of rural establishments. In the BSC/Copener areas of influence this index is 43.97%. The planted forest area represents 19.2% of the total area of rural establishments and the percentage dedicated to the area with permanent and temporary crops is approximately 33%, and native forests of 5.51%, higher than the average in Bahia, 3.34%. Hence, silviculture is not the main activity in the area. Livestock and temporary and permanent crops occupy a more extensive area. Other crops such as maize, beans, peanuts, cassava and orange also had their production increased over the past 40 years in the BSC / Copener municipalities of influence. The peanut crop has increased 150% since the 70s, which made the 21 municipalities account for 16.44% of the total peanut area in Bahia. While in Bahia, as a whole, cassava production decreased 11% in the company’s area of influence, there was an increase of 65% in the same period, making the municipalities responsible for 10.5% of the area harvested with cassava
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
in the territory of Bahia. In 2010, the production of orange underwent an increase of almost 4,000% compared to the harvested area in 1970. Thus, this region accounts for 80% of the area harvested with oranges across Bahia. In the municipalities of Acajutiba, Aporá and Crisópolis, the percentage of persons employed in rural establishments is higher than the total resident population in these rural municipalities, which indicates that this sector is also attractive for urban populations. This demonstrates that the rural sector in the area of influence of BSC / Copener forest management is dynamic, diverse and highly productive, enabling the maintenance of a significant rural population contingent and generating more jobs than the urban sector. Considering people as an economically active population between 15 and 59 years, the region has a total of 369,603 people, of which only 56,837 are considered employed, according to IBGE in 2009, which is equivalent to 15.37% of the economically active population. The average wage in the region is two monthly minimum wages, which can reach 4.5 in Catu and 4.2 in Entre Rios. The lowest rates are found in Acajutiba, Aporá, Araçás, Ouriçangas and Rio Real, with only 1.5 times the minimum wage per month.
BSC/Copener Social Responsibility Policy G4-15 One of the diagnosis’s direct consequences was the company’s preparation of the Social Responsibility Policy, whose general objective is: “Promoting business with respect for the environment and supporting communities’ social and economic development through ongoing dialogue and encourage the education, agribusiness, associativism, employment and income in the surroundings of the company’s management unit.”
Specific Objectives of the Social Responsibility Policy • To establish a relationship of commitment, trust and reciprocity, between BSC/Copener, communities and other stakeholders in its area of influence for the forest management unit. • To promote education as a key to social development, to obtain employment and income, as well as for environmental preservation. • To strengthen local productive arrangements, in order to contribute to improving the living conditions and income of the social centers, including family farmers, and most of all to be perceived as neighbors and partners of BSC / Copener. • To consolidate the channels of dialogue and building partnerships in order to strengthen the participatory arrangements and implementation of shared actions. • To develop actions and projects in communities where attributes of i high conservation value can be found, essential to their survival, so as to maintain and / or increase such values. • To define and disclose the principles, criteria and procedures for building partnerships between BSC / Copener and communities / other stakeholders. • To minimize risks for the forestry enterprise;
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• To explain all relevant information to the communities regarding activities of the company, objectively, transparently and in an easy to understand way; • To anticipate operational and reputational risks; • To generate innovation, while considering the views of key stakeholders as a way of mapping out new opportunities and adding them to the strategic planning and business areas; • Governance (impact management): To identify key issues related to the business sustainability strategy and evaluate the social, environmental and economic impacts resulting from the strategy’s implementation through dialogue with stakeholders.
Goals of the Social Responsibility Policy • To strengthen the company’s opportunities for integration with the community; • To create an auditing system that reaches all stakeholders, with clear response mechanisms to the concerns, suggestions and complaints of the people; • To formalize and document the positions of the population on matters pertaining to the activities of the company in each of its stages; • To give transparency and access to public information relating to activities undertaken through bilateral dialogue, which gives both sides the opportunity to exchange views and information, to listen, and to have their questions and concerns resolved or forwarded to the company; • To value local and regional cultural events, seeking to integrate them to our actions; • To engage directly affected communities; • Strive for internal and external communication to be done seamlessly. • To reinforce good practices for sustainability; • To develop projects of the communities’ actual interest, defended and validated by them and that actually achieve effective results in the local development.
Social Indicators • The monitored social indicators consider the social aspects that can be positively or negatively impacted by the company’s activities. • They are: • People’s lifestyle: how they live, work, spend their spare time; • The population’s culture: its beliefs, values, habits, language and dialects; • The community itself: cohesion, stability, identities, services, infrastructure, equipment; • The political system: how people can participate in the decisions that have an impact on their lives, existing democracy index, resources provided for the achievement of this aspects; • The living environment: air quality and water use, availability and quality of food, security and risk level, dust and noise they are exposed to, adequate sanitation, physical security, access and control of resources; • Health and well-being: physical, mental, social, and spiritual well-being and not just the absence of disease or sickness;
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
• Individual and property rights: if they are economically affected or suffer personal injury which may include the violation of rights and freedoms; • Fears and aspirations of people: perceptions of safety, fears regarding the future of their community, aspirations related to their future and their children.
Communities in the area of company influence G4-24; G4-25 Between 2012 and 2013, the company intensified its actions in relations with the local communities. Because of this, we structured a team of experts in social projects and community relations, who started the constant work and intense mapping and registration of all localities in the surrounding areas. By the end of 2013, 251 communities were mapped and registered, in which the company initiated the opening for dialogue channels and the building of relationships. All of them were included in the company’s social mapping, received a visit from the Community Relations team to complete registration with specific characteristics and capture a GPS fix for inclusion in the operational map.
Traditional communities in the area of BSC/Copener influence Indigenous People Data regarding the existence of indigenous peoples in the municipalities of BSC / Copener’s area of influence are not included in the records of the National Association of Indigenous Action (Anai) and National Indian Foundation (Funai).
Remaining Quilombo Communities (Quilombolas) Data from the Palmares Cultural Foundation indicate the existence of 67 quilombola communities in the area of BSC / Copener influence, 46 only in the municipality of Araçás. Of these, 42 were registered and recognized in April of 2013, surpassing the regional average which is three to seven communities registered by municipality. Between 2006 and 2011, only four registered communities similar to the quilombolas existed in Araçás. Considering the total quilombolas communities found in the region, it is found that most of them are not located in the area directly impacted or near the sites of company activity.
Areas of special interest BSC/Copener develops a work of constant registration and identification of areas of special interest from the point of view of the communities located in the areas affected by the forestry enterprise. Between 2012 and 2013, five points of special interest were identified and marked: Santa Cruz das Missões in Jandaíra, the cemetery of Comunidade Quilombola Mucambos do Rio Azul, in Rio Real, the Cemetery of Areal and the Caboclo Cemetery, both in Entre Rios, and the protection area of the African-Brazilian cult in the areas of legal reserve of Água Boa and Mangueira projects, both in Alagoinhas.
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Customary rights and usage rights In the last two years BSC / Copener has worked on the identification of areas characterized by some kind of customary law from the communities’ point of view. Until December of 2013, no kinds of action or habit in the company’s area were disclosed, repeated over time, with or without force of law, access rights defined by local habits and mutual agreements, or prescribed by other entities evidencing rights obtained from the use of forest resources that could characterize customary law.
Areas of high conservation value In 2012 and 2013, the company found forest areas with a potential to be characterized as vital for meeting local communities’ basic needs (AVC 5), in the communities of Treme and São José do Avena, in Itanagra, and in the community Baixão-Forquilha, in Entre Rios. Basically, it was found that the water used by locals came from surface collection in a watercourse whose sources and accumulation basins are located in these regions. After this identification, communities attended lectures given by company’s representatives and consultants hired to understand the real importance of preserving these sites for their survival. All locations have been properly signaled and are being protected by the company in partnership with the interested communities. So far there is no evidence of the existence of forest areas that are critical to the traditional cultural identity of local communities (AVC 6) in the BSC / Copener area of activity. The region has no indigenous communities that maintain direct relations with forests. Similarly, due to the intense fragmentation of forests caused by the historical process of economic occupation, based on extensive cattle raising and the creation of small urban centers, the communities’ cultural bond with forest areas is not critical to their cultural identity.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
BSC/Copener Social Responsibility Program G4-SO1 Based on the social and economic diagnosis made in 2012, BSC / Copener instituted and implemented a Social Responsibility Policy structured into six main areas of activity: education, entrepreneurship, agribusiness, permanent dialogue, associativism and qualified social demands. Each area includes a series of specific and structured projects that started to be implemented in 2012.
Learning With You Program This BSC / Copener education support program aims to strengthen the educational practices in the municipalities of the company’s area of influence, working with all involved stakeholders. The program is comprised of the following projects:
Planting and Growing Project: professional training Launched in 2010 and completed in the first half of 2013, this project provided vocational preparation courses in the communities of the region where the company operates, enabling access of 447 residents from Alagoinhas, Aramari, Camaçari, Dias d’Ávila, Entre Rios and Inhambupe to courses that allowed them to develop economic activities appropriate to their profile and to the natural and technical resources available in each location. Qualification courses were offered in sewing, rehabilitation of degraded lands, chemical laboratory assistant, instrumentation assistant, server assistant, farm management, cooperativism and associativism, making of beanbags, preparation of Social Projects, IT, increased education level, forest machine operator and nursery training.
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Pedagogical Guidance Project This is an effective continuing education program in conjunction with educators (teachers, coordinators and school principals), aimed at qualified pedagogical guidance, the strengthening of practice in the classroom and the improvement of the students’ learning results. In total, 120 teachers from municipal schools and approximately 2,000 students have benefited from the pilot project, developed in partnership with Cepec (Centro de Educação, Pesquisa e Consultoria Ltda.) in the Aporá municipality, which was chosen because it had the lowest recorded Ideb (Basic Education Development Index) among all the municipalities in which the company operates.
Social Mobilization for Education Project The project started with the objective to educate parents and the society about the importance of actively participating in children’s and adolescents’ school life in order to contribute to the improvement of education and to the students’ best school performance. Developed in partnership with the Universidade do Estado da Bahia (University of the State of Bahia) (UNEB), it has benefited approximately 1,200 people, including students, teachers, parents and community leaders.
Environmental Education Project Between 2012 and 2013, BSC / Copener environmental education project developed activities mainly focused on the most relevant issues for the region, which are the conservation of the riparian forest, the protection of water sources, the treatment and disposal of waste. The activities were aimed at children from public schools, who attended a series of lectures and joint efforts for the planting of native seedlings. The actions have been developed in partnership with Empresa Junior Verde, Universidade do Estado da Bahia (University of the State of Bahia) (UNEB). During the second half of 2013, the company and the university began discussing a new proposal for activities to be developed in 2014, with their main target being municipal school teachers. The company’s goal for the coming years is to develop the environmental education project in partnership with the municipalities, directly benefiting hundreds of teachers and thousands of students through engagement, training, and awareness actions.
Education Level Improvement Project With the objective of improving the level of education among its own employees and third parties, BSC / Copener executed in 2012 and 2013, the Education Level Improvement Project, in partnership with SESI (Industry Social Service) and Isetec - Institute for Educational Technology, intended for the 52 people who had not completed their studies at the elementary school levels I, II and III and high school. For the coming years, the company hopes to improve the education level for the communities where it operates, either directly or in partnership with public institutions.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Undertaking With You Program It is an initiative to stimulate entrepreneurship and collective professional qualification, giving communities new opportunities to generate income through the creation of productive groups or vocational training. The following projects are included in the program:
Soil Fibers Project A few years ago, the company developed the Piaçava Project, but in 2013 it was restructured, and started to reach the rural communities of Entre Rios and Mata de São João, and also to Itanagra and Araçás. Under the new name Fibers of the Earth, the project included artisans who work with lianas, which expanded the number of benefited families to 250. The project’s reformulation, which facilitates access of artisans to courses that address the sustainable extraction of fibers to the processing, design, marketing, business management, and aspects of associativism and cooperativism, had the partnership of specialized consultancy, such as Educambiente and Environmental Tauassú, and the Cooperativa de Artesanato do Trançado Tupinambás (Coopartt), which involves five craft associations from Entre Rios and Mata de São João, as well as two other associations in Araçás and Itanagra. In that first moment, the next phase of the project was focused on the sustainable extraction of raw materials and on the exchange of knowledge among the artisans who were already participating in the project and those who had joined this new format. For 2014, BSC / Copener wants to partner with specialized institutions to develop more effective qualification, production of unique products, use of new techniques, pricing and new markets for the new benefited group.
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Projeto Andorinhas (Swallows Project) After the eucalyptus nursery in Inhambupe was disabled, BSC / Copener decided to partially use the physical structure for the development of actions aimed at generating income. Thus, the uniform factory was created and named Projeto Andorinhas (Project Swallows). Through this project 40 local women were skilled in industrial cutting and sewing and the equipment necessary for the production of uniforms and garments were acquired by the company to facilitate the plant’s operations. Approximately BRL 400,000.00 were invested in the project. BSC/Copener started donating used uniforms so that they were reused in the manufacture of giveaways, which is another line of the project. The warehouse and the machines were leased for the group to use in all of the project’s activities. For 2014, the company intends to formalize the opening of the Uniform Factory, presenting to the market a diversified service offered by people from the community, as well as to integrate another 40 local women to the project and to partner with a specialized institution to develop the group’s business plan.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Cultivating With You Program BSC / Copener encourages the development of collective practices that generate income for rural communities. In this regard, the following projects are developed:
Beekeeping Project The company gives some of its areas of eucalyptus, environmental preservation and legal reserve for the development of beekeeping activities, through a technical cooperation agreement with the Government of Bahia and Coopevales (Agricultural Cooperative of Costa do Sauipe), benefiting 330 partner beekeepers. Furthermore, in 2013, BSC / Copener promoted courses on training, associativism, production strategies, pricing and marketing, and other topics relevant to the success of beekeeping in the region. This project was a partnership with the Universidade do Estado da Bahia (University of the State of Bahia) (UNEB), which conducted a georeferencing of the region in order to identify and characterize all locations where the activity is performed, to outline the beekeepers’ profile and to verify supply chains. The georeferencing aim was to identify and strengthen cooperatives and groups through the social and productive projects, supporting producers in the legal, economic and administrative training and improving the quality of their products. For 2014 and 2015, an agenda will be set to focus on the discussion and treatment of producers’ main demands, involving the company, the government and the associations of beekeepers.
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Support to rural entrepreneurship BSC / Copener invests in initiatives that generate employment and income for those living in rural communities when it mobilizes and encourages the development of entrepreneurial activities in the communities and provides access to training courses offered by specialized institutions and public authorities. In 2013, to encourage the formation of community gardens and to facilitate the flow of agricultural production in the region, the company provided 650 machine-hours to prepare the land for cultivation and the opening or rehabilitation of rural roads, benefiting 269 families of producers in the municipalities of Itanagra, Aramari and Entre Rios. In the same year, the company started supporting approximately 450 rural families and quilombolas from Aramari and Alagoinhas living basically from the processing of cassava for the production of flour, tapioca, starch and other derivatives of the root, donating certain amount of wood to be used as an energy source in flour mills. Also in 2013, from BSC / Copener support, in partnership with Sennar (National Rural Apprenticeship Service, 25 rural families from the rural area of Inhambupe, Entre Rios and Aramari attended courses in the production of jams, jellies and soft candies. For 2014, the company plans to provide new courses, therefore serving a higher number of families. As a goal set for the upcoming years, BSC / Copener intends to initiate a consistent family farming project that will benefit hundreds of families throughout the company’s region of influence.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
Permanent dialogue Created to strengthen relationships with stakeholders located in areas around its activities, in 2013 BSC / Copener launched the Copener With You program, which shares information with the various stakeholders in a clear and transparent manner, thus clarifying questions and developing the company’s knowledge of all the communities in its area of influence.
Relationship mobile unit In order to be more present in the communities where it operates and, at the same time to provide the local populations with some sort of service, BSC / Copener launched in 2013 a traveling relationship project with a mobile unit - a van called Copener with You - that visited 40 communities of Alagoinhas, Araçás, Aramari, Entre Rios, Conde, Cardeal da Silva, Esplanada, Inhambupe and Itanagra in this first year. A total of 2,208 people participated in the activities, which involved lectures on business, health, entrepreneurship and the environment, as well as workshops and prize drawings. The goal for the coming years is to keep the mobile unit operating, expanding the range of services and information to be provided for the local populations.
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Meeting with the Communities Thinking about learning more about the region in which it operates and establishing a permanent relationship channel with the local populations, in 2012 the company started the Meetings with Communities project, through which the representatives of the Community Relations department provide information on forestry and any other activities developed by the company, answer questions, identify demands and receive complaints to be forwarded to the responsible areas. Furthermore, the teams map the special points of interest of each community and distribute brochures. In 2013, 56 meetings were held with communities, reaching the number of 1,045 participants.
Ombudsman’s Office BSC/Copener established an Ombudsman system provided with tools for the service, record and handling of demands and complaints received from the communities. The Ombudsman`s office can be reached at 0800 284 4747 (available for 71 and 75 area codes), in person, mail or fax. In 2013, the company established a relationship procedure with the communities in order to set and maintain a communication channel with stakeholders. In 2013, 185 demands were registered, most of which were originated from the municipalities of Alagoinhas, Entre Rios, Itanagra, Aramari, Cardeal da Silva, Araçás and Inhambupe. The majority of the requests were related to support to events, maintenance or recovery of neighboring roads, education and agribusiness projects. All demands received were answered and 58% were resolved in 2013. In relation to the complaints, there were 57 records in 2013. All complaints were investigated and handled and the respective claimants received a formal response from the company.
Communication channels In the second semester of 2013, BSC launched the newspaper called Com Você (With You) for all the communities surrounding the forestry management unit. With monthly issues and 8,000 copies, the newsletter has information about its operations, social investments and promotes environmental awareness campaigns. More information about the company can be found on the website www.bahiaspeccell.com or requested to faleconosco@bahiaspeccell.com. The employees are provided with an internal weekly newsletter, corporate e-mail (for the administrative personnel) and bulletin boards located in busier areas.
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
GRI Content Index Content
Indicator
Page/answer
STRATEGY AND ANALYSIS G4-1
General Manager’s Statement
5
ORGANIZATION PROFILE G4-3
Organization name
10
G4-4
Products and services, including brands
10, 14
G4-5
Location of headquarter
10
G4-6
Countries and region of operation
10
G4-7
Type and legal nature of the property
10
G4-8
Marked served
10
G4-9
Organization size
37
G4-10
Breakdown of workforce
54
G4-11
Coverage of collective bargaining agreements
59
G4-12
Description of supply chain
23
G4-13
Significant changes during the reporting period
There was not
G4-14
Addressing the precautionary approach of principle
21
G4-15
External charters, principles or initiatives endorsed
65
G4-16
Memberships in associations
14
IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES G4-17
Report coverage of the entities in the consolidated financial statements.
37, 38
G4-18
Process for defining the report content and the aspect boundaries
6
G4-19
Material aspects identified during the process of definition of the report content
6
G4-20
Aspect boundary within the organization
6
G4-21
Aspect boundary outside the organization
6
G4-22
The effect of restatements of information provided in previous reports
There was not
G4-23
Significant changes in the scope and aspect boundaries from previous report
There was not
STAKEHOLDER ENGAGEMENT G4-24
List of stakeholder groups engaged
64, 67
G4-25
Base for identification and selection of stakeholders
6, 67
G4-26
Approaches to stakeholder engagement
6
G4-27
Response to key topics and concerns raised
7
REPORT PROFILE G4-28
Reporting period
2012-2013
G4-29
Date of most recent previous report
2011
G4-30
Reporting cycle annual
Each 2 years
G4-31
Contact point for questions
77
G4-32
In accordance option
Essential
G4-33
Policy and current practice regarding external assurance
Report was not submitted to external verification
GOVERNANCE G4-34
Governance structure
11, 20
ETHICS AND INTEGRITY G4-56
Values, principles, standards, code of conduct and code of ethics
22
SPECIFIC STANDARD DISCLOSURES GENERIC DISCLOSURES ON MANAGEMENT APPROACH
G4-DMA
Why the aspect is material? Aspects that make it material
Survey of material aspects, impacts, responsible for complying with the targets will be information in the next report.
77
78
INDICATORS BY ASPECTS ECONOMIC ECONOMIC PERFORMANCE G4-EC1 Direct economic value generated and distributed G4-EC3 Coverage of defined benefit plan obligations Indirect economic impacts G4-EC8 Significant indirect economic impacts Procurement practices G4-EC9 Spending on local suppliers ENVIRONMENT Energy G4-EN3 Energy consumption within the organization Water G4-EN8 Total water withdrawal Biodiversity G4-EN13 Habitats protected or restored G4-EN14 Number of vulnerable species affected by operations Effluents and waste G4-EN23 Total weight of waste by type and disposal method G4-EN26 Water bodies and related habitats significantly affected by water discharges and runoff Products and service G4-EN28 Percentage of products sold and their packaging materials that are reclaimed by category Supplier environmental assesment G4-EN32 Percentage of new suppliers that were screened using environmental criteria LABOR PRACTICES AND DECENT WORK Employment G4-LA1 New employee hires and employee turnover G4-LA2 Benefits provided to full-time employees that are not provided to temporary or part time employees Occupational Heath and Safety (OHS) G4-LA6 Injuries, lost days, absenteeism and fatalities Tranning and education G4-LA9 Average hours of training per year per employee by gender, and by employee category Labor practices grievance mechanisms HUMAN RIGHTS Non-discriminition GR-HR3 Actions taken in incidents of discrimination Freedom of association and collective bargaining GR-HR4 Supporting right to freedom of association and collective bargaining in risk areas Child labor GR-HR5 Measures taken to eliminate child labor in risk areas Forced or compulsory labor GR-HR6 Measures taken to eliminate forced or compulsory labor in risk areas Indigenous rights GR-HR8 Violations of indigenous peoples’ rights and actions taken SOCIETY G4-SO1 Local community engagement, impact assessments, and development programs Anti-corruption G4-SO5 Actions taken in response to corruption incidents Anti-competitive behavior G4-SO7 Anti-trust and monopoly court cases Supplier assessment for impacts on society G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society PRODUCT RESPONSIBILITY Customer health and safety Compliance with regulations and voluntary codes concerning the health and safety impacts of G4-PR2 products Product and servic e labeling G4-PR3 Product information required by procedures G4-PR4 Compliance with regulations and voluntary codes concerning product information G4-PR5 Results of surveys measuring customer satisfaction Marketing communications G4-PR6 Sale of banned or disputed products G4-PR7 Compliance with regulations and voluntary codes concerning marketing communications Compliance G4-PR9 Compliance with regulations concerning the provision and use of products and services
37 59 54 23
48, 49 47 43 43 42, 48, 49 44 Not applicable There was not
54 59 61 57
There was not There was not There was not There was not There was not 69 There was not 21 There was not
There was not Not applicable Not applicable
Not applicable Not applicable There was not
SUSTAINABILITY REPORT | BSC / Copener 2012 | 2013
79
80
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