03/11/14 SUSTAINABILITY EVOLUTION IN THE BRAZILIAN COTTON GROWING RESPONSIBLE BRAZILIAN COTTON - ABR
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1 RESPONSIBLE BRAZILIAN COTTON - ABR BRAZILIAN POSITIVE EXPERIENCE IN CONSTANT SEARCH FOR SUSTAINABILITY CONTEXT SUSTAINABILITY EVOLUTION IN THE BRAZILIAN COTTON GROWING ESSENCE OF SUSTAINABILITY Need for assuring that the products, since their origin, are produced sustainably: 1. RESPECTING FAIR WORK CONDITIONS 2. PROMOTING THE WORKER'S HEALTH AND SAFETY 3. CARING FOR ENVIRONMENTAL ISSUES: ü Rational use of the renewable and non-renewable resources ü Respect and preservation of environment ENSURING TODAY'S RESULTS MUST NOT COMPROMISE THE NEEDS AND THE CAPACITY OF PRODUCTION FOR THE FUTURE GENERATIONS. BRAZIL: WHERE DID SUSTAINABILITY IN COTTON GROWING COME FROM? Early 90 s: CHANGE OF THE PRODUCTION AXIS TO BRAZILIAN CERRADO ü BUSINESS LIKE PRODUCTION ü TECHNIFIED AND LARGE-SCALE PRODUCTION Demand for larger labor force, mainly the specialized one: Growers face a huge and complex set of laws and standards related to labor, occupational health&safety and environmental issues. Demand for new areas: Implication of legal aspects of environmental nature: soil occupation and use, biome protection policies. THE NEW REALITY GENERATED A DEMAND FOR PROGRAMS HELPING.. GROWERS TO COMPLY WITH LEGAL REQUIREMENTS. COTTON IN BRAZIL: WHO ARE WE? FOR MORE THAN TWO DECADES, SINCE MIGRATION TO CERRADO, BRAZIL ESTABLISHED ITSELF AMONG THE WORLD'S LARGEST PLAYERS IN COTTON PRODUCTION. By increasing the production, we achieved self-sufficiency, supplying national industry, which is one of the strongest in the world. ü Before 2001, Brazil was a cotton importer With self-sufficiency, we draw the attention to the external Market and started supplying the international industry as well. ü Thus, we changed the balance of trade, going from importer to an exporting country. 1
2 Associação Brasileira de Normas Técnicas Avenida Paulista, º andar São Paulo/SP Cep: CNPJ: / Phone +55 (11) O programa ABR é financiado com recursos do Instituto Brasileiro do Algodão The ABR program is funded by the Brazilian Cotton Institute Gerência de Certificação de Sistemas Systems Certification Management São Paulo, September 00, /11/14 COTTON IN BRAZIL: WHO ARE WE? Main indicators COTTON IN BRAZIL: WHO ARE WE? Associativity and representativeness ü Brazil is the 5 th LARGEST GROWER, with an average of 1.2 MILLION Ha of cultivated area and 1.7 MILLION TONS of lint per crop year. 9 GROWING STATES State associations affiliated with Abrapa MA ü It is placed 4 th in PRODUCTIVITY; currently producing 1,520 KG/Ha, the global leader in rainfed cotton production. ü It is the 5 th LARGEST EXPORTER, with an average of 800 THOUSAND TONS exported per crop year. 981 PRODUCTION UNITS ü 99% OF THE CULTIVATED AREA ü 99% OF THE PRODUCTION ü 100% OF THE EXPORTS MT MS GO SP PI BA MG ü It offers quality lint, with COTLOOK A INDEX quotations PR SUSTAINABILITY, PLANNED AND CONSTANT EVOLUTION 2013: LAST STAGE BENCHMARKING UNIFIES THE ABR CERTIFICATION AND BCI LICENSING PROTOCOLS, FROM 2013/2014 CROP YEAR ABR CERTIFICATION / BCI LICENSING A 3-phase process: 1. DIAGNOSIS OF THE PRODUCTION UNIT (UP) 2. CORRECTION OF NONCONFORMITIES 3. CERTIFICATION/ LICENSING CHECKLIST BRAZIL GOES FROM IMPLEMENTATION PARTNER TO STRATEGICAL PARTNER OF BCI 2005: Creation of Instituto Algodão Social (IAS program) in the State of Mato Grosso 2009: Abrapa launches Programa Socioambiental da Produção de Algodão (Psoal program), in order to serve the other growing states 2010: Abrapa and state associations become implementing partners of Better Cotton Initiative (BCI) in Brazil 2012: Abrapa and state associations unify the IAS and Psoal protocols and launch Responsible Brazilian Cotton (ABR) program PHASES 1 AND 2: CONDUCTION AND MONITORING OF THE STATE ASSOCIATION * Internationally-accredited certifying companies, authorized by Abrapa: ABNT, SGS, GENESIS GROUP, INTERTEK, ETC. IN CHARGE OF AN INDEPENDENT EXTERNAL AUDIT * THE STARTING POINT IS THE APPLICATION FOR ENROLLMENT IN THE ABR PROGRAM With the benchmarking, the grower may then declare his/her adhesion to BCI. ABR CERTIFICATION / BCI LICENSING Audit: application of a list consisting in 179 items, divided into 8 criteria: 1. EMPLOYMENT AGREEMENT 2. PROHIBITION OF CHILD LABOR 3. PROHIBITION OF SLAVE-LIKE, DEGRADING OR UNDIGNIFIED LABOR 4. FREEDOM TO JOIN TRADE UNIONS 5. NON-DISCRIMINATION 6. RURAL OCCUPATIONAL HEALTH& SAFETY AND ENVIRONMENT OF WORK 7. ENVIRONMENTAL PERFORMANCE 8. GOOD AGRICULTURAL PRACTICES CRITERIA 2 AND 3 MUST HAVE FULL CONFORMITY (100% ) THE OTHER CRITERIA HAVE EVOLVING MINIMUM CONFORMITY: ü 85% in the first crop year ü 2% growth per crop year, always including 16 items called Minimum Production Criteria (CMP) ABR CERTIFICATE THE PRODUCTION UNIT APPROVED BY THE INDEPENDENT AND EXTERNAL AUDIT, RECEIVES THE ABR CONFORMITY CERTIFICATE, WHICH IS ISSUED BY THE CERTIFYING COMPANY. ü The certificate is only valid for the corresponding crop year and its authenticity may be confirmed on the certifying company's website. ABR CONFORMITY CERTIFICATE RESPONSIBLE BRAZILIAN COTTON 2013/2014 CROP YEAR ABR CONFORMITY CERTIFICATION RESPONSIBLE BRAZILIAN COTTON 2013/2014 CROP YEAR A ABNT Certificadora concede este Certificado de Conformidade Socioambiental à Produção de Algodão da: ABNT Certificadora grants this Certification of Socio-environmental Conformity to Cotton Unidade Produtiva / Farm: Fazenda Modelo xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Production from: Inscrição Estadual /State Inscription: Produtor(es) / Producer(s): Antonio dos Santos Silva xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Grupo Empresarial / Business Group: Santos & Silva Produtores Associados xxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx Município / City: Campos da Pluma Estado / State: Mato Grosso Para o escopo Produção de algodão com práticas socioambientais corretas, livre de trabalho infantil e análogo a escravo, degradante ou indigno, em conformidade com os critérios do Programa Algodão Brasileiro Responsável ABR. For the scope Production of cotton with correct socio-environmental practices, free from child labor, slave-like labor, degrading and undignified working conditions, in conformity with criteria of Antonio S. Parente the Responsible Brazilian Cotton - ABR program. Validade: Este certificado é válido para o algodão produzido na safra 2013/2014 e sua autenticidade pode ser confirmada no website Validity: This certification is valid for the cotton produced in 2013/2014 crop year and its authenticity may be confirmed in the website 2
3 ABR SEAL THE PRODUCTION UNIT APPROVED IN THE INDEPENDENT EXTERNAL AUDIT IS ALSO GIVEN AUTHORIZATION TO AFFIX THE ABR CONFORMITY SEAL ON THE BALES OF THE CORRESPONDING CROP YEAR. The seal contains the following data: ü CROP YEAR ü STATE OF ORIGIN ü PRODUCTION UNIT ü OWNER ü BUSINESS GROUP ü STATE REGISTRY ü CERTIFYING COMPANY ü CERTIFICATION PROCESS ABR-BCI BENCHMARKING BENCHMARKING_PREMISE AND STRATEGY PREMISE: ABR AND BCI OPERATE WITH THE SAME PROCESSES ü Verification criteria ü Minimum conformity, programmed and ongoing evolution ü Certification and license through an independent external audit carried out by a renowned and internationally-accredited certifying company STRATEGY: TO UNIFY THE PROTOCOLS OF BOTH PROGRAMS ü Benchmarking study conducted by an external consulting firm, with follow-up of Abrapa and Better Cotton Initiative Goals: ü TO FACILITATE THE GROWER'S PARTICIPATION ü TO PROVIDE ABR CERTIFICATION AND BCI LICENSE IN A SINGLE VERIFICATION AND AUDIT PROCESS BENCHMARKING _PROPOSAL Basis - mission of Better Cotton Initiative: TO MAKE GLOBAL COTTON PRODUCTION: ü better for the people who produce it, ü better for the environment it grows in ü and better for the sector s future. BCI'S MISSION MEETS ABR'S PROPOSAL AND STARTS TO SUSTAIN THE ABR-BCI BENCHMARKING POLICY IN BRAZIL. Basis of operation for the grower: ü ABR PROGRAM, WITH OPTION TO ADHERE TO BCI PROGRAM ABR PROGRAM IS SUSTAINED BY THREE PILLARS RESPECT AND APPRECIATION FOR THE WORKER They comprise the ANCILLARY and the CORE ACTIVITY of the grower 3
4 THE ABR CERTIFICATION PROTOCOL IS COMMITTED TO THE INDIVIDUAL RIGHTS AND RESPECT TOWARDS OTHERS. It is 100% aligned with the legal principles protecting and preserving the worker's integrity ü 100% ALIGNED WITH THE STANDARDS OF THE ILO - INTERNATIONAL LABOR ORGANIZATION ü 100% ALIGNED WITH THE BRAZILIAN LABOR LEGISLATION (CLT) ü 100% ALIGNED WITH STANDARD 31 Standard 31: Provides for occupational safety, health and environment (Brazil) The worker is assured: ü Formal employment, fair salary, additional payments under the law, weekly rest break, and paid vacations ü House or living quarters, meal, transportation, medical assistance, and structure for rest, socialization, and leisure ü Non-discriminatory treatment and freedom to join a trade union INTEGRATED AGRICULTURE AND NATURE The ABR program is aligned with the soil occupation and use policy. TWO POINTS: ENVIRONMENTAL PERFORMANCE AND BEST AGRICULTURAL PRACTICES It fosters the relationship between man and nature, aiming at: ü THE PERMANENT PRESERVATION OF ECOSYSTEMS ü THE PROTECTION OF WATER SOURCES, WATERCOURSES, AND WATER RESERVOIRS ü THE QUALITY OF THE AIR, WATER, AND SOIL Priority goals: ü Mantain biodiversity in the production system: effective actions against contamination of environment and for preservation of the fauna and flora. ü Protect the workers from being exposed to the chemicals used in the cultivated areas. CONCENTRATION OF THE PRODUCTION IN AREAS OF CERRADO, RESPECTING THE PRESERVATION OF THE MAIN BIOMES. Main biomes: ü AMAZON RAINFOREST ü PANTANAL ü ATLANTIC FOREST PROFITABLE INVESTMENT FOR THE GROWER INHERENT CHARACTERISTIC OF ABR PROGRAM Premise ü The good social and environmental practices, essentially bring gains which promote the consolidation and prosperity of the business. Favorable factors OPPORTUNITY FOR MAKING THE RESPONSIBLE COTTON A PROFITABLE INVESTMENT FOR GROWERS. The consumer's growing preference for products originated from efforts to preserve the environment and seeking for social justice The awareness and proactivity of the other links of the chain, in face of a irreversible trend in the market The power of associativity to place Brazilian cotton in the vanguard of sustainability 4
5 ABR/BCI_PRODUCTION UNIT EVOLUTION Production Units - UPs PUs ABR BCI / / / % + 95% ABR AND BCI IN FIGURES SIGNIFICANT ADVANCE IN BCI: In 2011/2012, the number of PUs/BCI represented 50% of the PUs/ABR. In 2013/2014, the percentage increased to 82%. ü The percentage is expected to grow until it achieves 100%, when all ABR-certified PUs will be BCI-licenced as well. ABR/BCI_AREA EVOLUTION + 30% Cultivated area (ha) 900, , , , ,000 ABR 600, , , , , , % BCI 200, , , , / / /2014 THE DECREASE IN 2012/2013 REFLECTS THE GENERAL AREA SHORTAGE FOR THAT CROP YEAR SIGNIFICANT ADVANCE IN BCI: In 2011/2012, the BCI-licensed area represented 34% of the ABR-certified area. In 2013/2014, the percentage increased to 93% (result of the growth of PUs). ü The percentage is expected to grow until it achieves 100%, when all ABR-certified PUs will be BCI-licenced as well. ABR/BCI_PRODUCTION EVOLUTION 1,400,000 1,200,000 1,000, , , , ,000 0 ABR 878,656 Produced lint (tons) 753,608 BCI 325, , / / /2014 1,218,000 1,117, % + 244% THE DECREASE IN 2012/2013 REFLECTS THE GENERAL PRODUCTION SHORTAGE FOR THAT CROP YEAR OTHER SIGNIFICANT ADVANCE IN BCI: In 2011/2012, the BCI-licensed production represented 37% of the ABR-certified production. In 2013/2014, the percentage increased to 92% (result of the growth of PUs). ü The percentage is expected to keep growing until it achieves 100%, when all ABR-certified PUs will be BCI-licensed as well. AS IN THE OTHER PARAMETERS, THE LINES CLEARLY POINT TO A CONVERGENCE. BENCHMARKING: ABR-BCI PRODUCTION x TOTAL PRODUCTION The sustainable cotton currently accounts for a significant share - in the order of 66% to 72% - in the total figures of cotton cultivated area and production in Brazil 2013/2014 CROP YEAR CULTIVATED AREA (ha) LINT PRODUCTION (tons) Total Brazil 1,123, ,705, ABR 805, (72%) 1,218, (71%) BCI 745, (66%) 1,117, (66%) TODAY, THE BETTER COTTON PRODUCTION IN BRAZIL REPRESENTS: ü 66% of the entire national cotton production, more than two times the BCI goal for the global production ü 60% of the Better Cotton global production, accounting for more than half the volume CONFIRMED: BRAZIL, THE LARGEST BC COTTON SUPPLIER IN THE WORLD 5
6 THANK YOU ALL Denilson Galbero Sustainability Manager 6
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