Investor Presentaiton

54 VALUE CHAIN SUPPLIERS (G4-12) Improvements in supply chain management In the second half of 2016, the "Equipo Por- tal" was implemented to simplify the regis- tration of Eldorado suppliers. Registration involves the electronic analysis of a series of documents from potential partners to dem- onstrate their compliance with labor, human rights and environmental legislation. Partners may also access the Code of Conduct on the portal, and sign the required commitment term digitally. ANDRITZ ANDRITL Automation GERAL STOCAGE PROD DADD UNHAS ESTOCAGE ANDRITZ Pulp & Paper 3254-08-1955 ELDORADO BRASIL 2016 SUSTAINABILITY REPORT 55 Flaper Partners in the Eldorado supply chain are fundamental for the exe- cution of company strategy and for its good performance on all busi- ness fronts. Relations with these partners are guided by appropriate commercial practices, development incentives, and compliance with standards of ethics and integrity. In 2016, the Eldorado supplier base consisted of some 1,500 companies -including effective and potential suppliers, broken down into the categories of inputs and services for the company's forestry, indus- trial, logistics and transportation areas. Aware of the contribution that a company of its size may make to the region in which it operates, since its foundation; Eldorado has undertaken initiatives to develop local companies with a view mak- ing them commercial partners in the future. In 2016, the company contracted 172 suppliers based on the positive impacts these partner- ship generate for the community. At the same time, Eldorado takes care to minimize the risks of small suppliers becoming economically dependent, carrying out a pains- taking analysis of each partner's financial situation. A good example is the PAIS (Integrated and Sustain- able Agro-ecological Production) program, a partnership between El- dorado and Sebrae, which enabled the production of organic foods by smallholders in the region. In 2016, the company started buying produce from this group of agricul- tural producers (further information about this initiative in the sub- chapter Communities). Aimed at reinforcing traceability in its supply chain and ensuring com- pliance with all legal requirements, in 2016 Eldorado concluded the distribution of its Code of Conduct to its suppliers, who signed and returned the term of commitment, including a specific clause on the non-use of child or slave labor. Worth to remind that the Ombudsman channel is also open to suppliers. All of the suppliers contracted in 2016 were assessed based on compliance with human rights and labor criteria, as well as environ- mental legislation. No significant negative impacts were proven after this process. Eldorado ter- minated commercial partnerships with only seven companies upon discovering that they did not com- ply with its requisite human rights parameters.

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