Animal Welfare Marfrig Beef

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1 Animal Welfare Marfrig Beef The Marfrig Beef Animal Welfare Program program seeks to ensure the safety and humane management of animals and is part of the company's business strategy. Get to know! Animal Welfare MARFRIG

2 1 Marfrig Beef Animal Welfare Program 2 Animal Welfare Area and Committee 3 Staff training 4 Humane management 5 Structure and equipment in the units 6 Animal Welfare in rural properties 7 Transport of animals 8 Actions with employees and the community 9 Acknowledgment Animal Welfare MARFRIG

3 Marfrig Beef Animal Welfare Program The Marfrig Beef Animal Welfare Program, prepared in accordance with legal standards and customer requirements, seeks to ensure the safety and humane management through internal, audited rules and procedures. The project was designed in partnership with suppliers and employees, all the time prioritizing top quality of products. The company developed the Welfare Animal Policy and considers it as an essential and strategic part of its business and, for over a decade, intensifies the work in this area. Based on care of animals throughout the process, it is possible to provide the best food to consumers worldwide. For this, the units invest in new technologies and equipment, as well as modern structures and awareness of employees, through regular training. Marfrig Beef seeks to comply, as applicable, with the five inherent freedoms of animals as defined by the Brambell Committee and improved by the United Kingdom Farm Animal Welfare Council, currently the Farm Animal Welfare Committee (FAWC). Ÿ Physiological Freedom: absence of hunger and thirst; Ÿ Environmental Freedom: facilities adapted for higher comfort; Ÿ Health Freedom: absence of pain, disease and injury; Ÿ Behavioral Freedom: allowance to express normal behaviors; and Ÿ Psychological Freedom: absence of fear and distress*. Among the initiatives for continuous improvement in animal welfare processes, Marfrig Beef works with some universities and research entities, and maintains contact with the World Animal Protection (WAP), one of the largest nongovernmental global organizations. Most part of the educational material that evidences good management practices, distributed by WAP, was recorded and pictured at the Company's premises. Animal Welfare Area and Committee In 2006, Marfrig Beef developed a specific Animal Welfare area, composed of technicians (zootechnicians and veterinarians) and duly qualified employees. The team is responsible for developing strategies, implementing management improvements and structure to offer appropriate treatment to the animals, compliant with all rules of national and international laws, as well as customer protocols and voluntary activities of the Company. They also offer trainings and workshops on this topic and monitor the activities in both industries and farms. The international activity of the Beef division follows the same procedures of animal welfare applied in Brazil. The Global Animal Welfare Committee is comprised of representatives from Marfrig Beef and Keystone Foods, and is focused on sharing all updates on issues related, such as new legislation and trends, for instance. Each operation corresponds to a representative for the topic, all the time seeking continuous improvement according to related segments and their particularities. The Committee operates in all units with management and supervision teams, as well as with the corporate area (coordination and leadership) and holds weekly meetings in order to share concepts, update indexes, deal with internal issues and prepare joint actions. The objective is to share experiences and encourage commitment towards the goals, according to the results of the previous year. The Company publishes some indexes and evolution of the area once a year in the sustainability reports and on its website as well, all the time maintaining the transparency of data, which is one of its main values. Staff training Animal Welfare is addressed from the integration of new employees joining the Company, when representatives of the area promote general awareness and ethical commitment, established through internal rules, for both carriers and employees. All the people involved in management of animals receive technical training and are trained, qualified and able to ensure suitable procedures are taken. The trainings are offered in a regular basis, focusing innovation, dynamism and awareness for general benefit: animals, managers, producers, transporters, industry and consumer. * Distress: negative, intense stress that cause fear and suffering to animals.

4 Humane management Pre-slaughter and slaughter management is a determining factor within the Humanitarian Slaughter Program. In this sense, Marfrig Beef provides and follows all conditions established in the program, seeking to improve management and minimize stress. All animals destined for slaughter should be linked to a reference document (Letter of Guarantee) which proves non-use of cloned animals and substances considered as growth promoters. Marfrig Beef does not promote use of antibiotics unless prescribed by a veterinarian, duly responsible for the property. Drugs as Quinolones, 3rd and 4th generation Cephalosporins, Ractopamine and hormones should never be used. It also suggests that, whenever required, it should be prescribed by an accredited professional, recording all information on application of controlled drugs, at least per batch or, if applicable, individually. Livestock producers sign a commitment evidencing nonuse of banned products and proper treatment of animals. All animals arriving at Marfrig Beef facilities are linked to a statement from the rural producer, declaring the non-use of hormones or growth promoters, and in case antibiotics were used, if the delay period was met. In addition, there is the National Meat Residue Control Plan (PNCRC), which provides for random sampling in all slaughterhouses and confirmation of data provided by cattle ranchers. Surgical procedures as castration, dehorning and cesarean, if applicable, must be performed by a qualified technician, and pre and post-surgical care should be strictly followed. In order to allow replacement of aversive techniques with less aversive techniques, as replacement of electric rods with flags, for example, Marfrig provides drivers whenever necessary and along the training of employees responsible for handling in stockyards, as well as during field visits for property management teams. Marfrig's Animal Welfare area holds regular monitoring in the industry, all the time following AMI (American Meat Institute) standards, customer protocols and current legislation. Different indicators are considered, such as number of falls, slips, vocalization, use of the electric baton, efficacy of stunning, deaths, injured animals, rate of hematomas and transportation, among others. According to internal audits, in 2016 the average indices verified in Brazil were in conformity with the parameters considered acceptable by the institute, as shown in the table below. Table 1: Index of animal welfare Animal Welfare Indexes Marfrig Beef Brazil Acceptable parameters - according to the AMI Protocol (American Meat Institute) Stunning performance on first shot Over 95% Minimum 95% Conscious animals in the gutter None - 0% 0% Falls Lower than 1% 1% Slips Lower than 3% 3% Use of electric baton Lower than 25% 25% Vocalization Lower than 3% 3%

5 Animal Welfare Marfrig Beef Sampling of animals monitored daily in each production unit is 50 animals.at Marfrig Beef, if the need for assistance of the electric baton during handling is evaluated, a maximum of 11 animals may be touched, as long as it complies with the recommendations and specifications allowed. Any deviations are treated according to the established criteria for all points. The performance records are kept daily and represented monthly to follow the measures and their evolution. There are also the second and third party audits that occur in the units and the results are reported directly to customers. Structure and equipment in the units Marfrig seeks information in the literature and supports scientific work to develop better ways to treat animals and prevent stress.as result, practically all stockyards within the units over the last decade were built in a "fishbone" shape, based on the concepts of Dr. Temple Grandin, a reference in Animal Welfare, upon confirming the theories would apply to the reality. The corridors were also fitted into curves and circular syringes, all with closed sides to prevent distraction of the animals. Corridors with closed sides By understanding that even the most climate-resistant animals in Brazil have the need for thermal comfort, the facilities are provided with sprinklers that cool the animals housed in the yards, without disturbing them. Some units have also installed shading systems with specific canvas for air circulation. They are properly positioned to avoid behavioral problems that could lead them to stress. Shading system in housing pens Accommodations seek to follow established laws and regulations.the accommodation is made in suitable facilities, with slip-proof flooring, stockyards sanitized at each batch exchange, use of recommended densities, providing the right to lie down, get up, walk, access to food and fresh water in abundance, along all the time the animals remain in the yards, among other requirements.

6 Animal Welfare Marfrig Beef The facilities are provided with the most modern containment and pre-desensitization machinery, which are properly maintained and, along with recommended parameters and trained staff, support the efficacy of stunning in 100% of animals, ensuring prolonged unconsciousness and avoiding unnecessary suffering. In addition to pneumatic equipment, specific, portable equipment is available for emergency use so that all animals are stunned as quickly as possible before any painful procedure. The requirements for religious slaughter are maintained and followed according to customer requirements, taking into account all humanitarian practices. Monitoring during stunning of animals Marfrig also encourages the development of joining projects with equipment manufacturers to facilitate the operation and to provide better welfare to animals and employees. One example was the development of the "Move Boi", an exclusive equipment designed within one of the units for cattle management, that runs along the corridor signaling the animals to walk, avoiding being touched with the electric baton at the entrance of the slaughter house. Another recent investment was the renewal of the floors in the yards area, after spoting some issues during the handling. Non-slip floors

7 Animal Welfare in rural properties In Brazil, the climate allows the breeding of animals in open air, without the need to keep animals in facilities as enclosed sheds. For intensive confinement systems during the termination of animals in the properties, a 10m² per animal is recommended, considering the favorable space according to the nonovercrowding standard. The fattening program is previously planned according to the storage capacity, considering the individual space and infrastructure for the development of animals, such as water and high quality feed, throughout the period to all animals and in similar way, and shelters with easily accessible shades, dry and in favorable conditions. The facilities should be provided with systems that ensure the supply of water and high quality food in the event of a mechanical or electrical failure. It is recommended that the unit provides sufficient space for all animals, in accordance with the plan and that all records are maintained. Guidance during farm visits

8 In Uruguay, the Viva Grass Fed Beef program stands out, carried out jointly with the cattle suppliers to obtain a distinguishable product, in which livestock are exclusively fed in pasture and, given the demand of the North American market, without the use of antibiotics, growth hormones and animal products. Upon the approval from the US Department of Agriculture (USDA), the products are marketed in large American retailers. Among other activities, the Marfrig Beef Animal Welfare department conducts internal audits in the properties of suppliers, following the management of shipments, evaluating all documented criteria (Audit Check List for Rural Properties). Within the possibilities and whenever requested, lectures and training are offered to ranchers and their teams. Whenever visits are allowed in the properties, the technicians shall provide all directions necessary on the subject. One of the criteria for the properties to be audited in the month is the index of hematomas found in the carcasses, classified during the slaughter. The system was developed based on the "Aus Meat" method and adapted to some areas. Information on these results is also included in reports to producers. Through the Marfrig Club Program, the Company verifies all items and promotes awareness-raising visits to farms. During technical visits, the team uses specific questionnaires and checklists to keep track of developments and improvement opportunities. Delivery of informative material during farm visits Marfrig Beef also develops support materials as manuals, delivered during the visits and available on the website and in the production unit. Other practices and guidelines are available on Guia de Práticas Sustentáveis Marfrig Club. The objective is to raise awareness, to interact and to expand the theme even further.

9 Animal Welfare Marfrig Beef

10 Transport of animals Marfrig Beef is provided with a logistics system that coordinates the segment, duly supported by the Livestock Acquiring Sector. Marfrig is benefited by a range to direct the animals to the nearest units to avoid long distances and prolonged periods, seeking, whenever possible, the shortest travel time. Marfrig's recommendation on transportation of animals is 40km/h. Based on this, 80% of travel meets the recommended time by some customers for 8 hours of travel. Daily, the supervisor checks all information regarding the boarding bulletin, such as schedules, handling, behavior, physical conditions, density, among other requirements. Type of vehicle, structure quality and general conditions, adequate density, driver training, animal care and comfort are also considered. To assess density, for example, table 1 is applied, indicating the optimum line spacing for each animal, depending on the approximate live weight. Table 2: Recommended spacing for animals in transport vehicles Line spacing Approximate weight/live animal (kg) Adapted from the formula, ML = 0.01xPV0.63, where ML is linear meter of cage and PV is the approximate mean live weight of the animals. Livestock drivers are oriented to consider the welfare of animals throughout the process. Regular trainings are carried out and validated through efficacy evaluation, with the issuance of a certificate and a transportation authorization card. Marfrig also develops internal campaigns and projects to encourage engagement from everyone. Carriers are invited to the units to learn about the processes. So, they receive inputs and awareness of the importance of taking good care of animals. There is also a specific clause for animal care in contracts with carriers. In case of an intentional measure of non-compliance with proper care, the Company may take actions deemed appropriate and, depending on the fault, may terminate the contract for noncompliance with the policy, on both occasions.

11 Animal Welfare Marfrig Beef Actions with employees and the community All production units promote regular awareness campaigns, mainly on the World Animal Day, celebrated on October 4th. The initiative was suggested by an Animal Welfare supervisor in 2012, in a single unit, which gained increasing adherence until it became a common practice for all units. The activities involve employees from different sectors, children and adolescents from the Marfrig Institute, drivers of live loads and young apprentices. In 2016, almost four thousand people took part in internal and external actions in animal welfare. In 2016, the 1st Transport Workshop was held, bringing together coordinators of the carriers from different states of Brazil to discuss issues of animal welfare and crisis management. Those responsible for the carriers have access to the Contingency and Crisis Management Plan promoted by the Company. The activities also involve consumers. During customer visits, the theme is approached in loco, and during the fairs of the sector in which Marfrig Beef participates, informative materials on the entire productive chain and on the origin of the meat is given. They represent educational means to the public to show them the Company's procedures. Yearly, all registered customers receive a document with answers to the questionnaires, about Animal Welfare.

12 Acknowledgment Due to all efforts and attention to Animal Welfare in all units, the Company is approved in audits based on the AMI Protocol, as well as protocols of customers demanding animal welfare, carried out by third parties. In addition, Marfrig Beef is included in the Ranking of Companies that publish animal welfare information in the BBFAW Report. In May 2014, the coordinator of the Animal Welfare area of Marfrig Beef Brasil was recognized as a professional who makes a difference in Brazilian livestock, who won the Beef Point Animal Welfare Award, granted by Beef Point. This year, an important recognition came from the customer Fleming's Prime Steakhouse, who achieved first place in the ranking of the best restaurants by TripAdvisor. Fleming's is an exclusive customer of Marfrig, and recognized that the company's products were part of this achievement, referring to the quality from the care of animals.

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