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Communication

JBS STATEMENT REGARDING RAINFOREST FOUNDATION NORWAY REPORT

Regarding the report, “Driving deforestation”, JBS emphasizes its policy of zero tolerance of deforestation and regrets that the NGO responsible did not have the initiative to approach the Company to discuss the cases and get a better understanding of the reality of the facts, which demonstrates its lack of transparency and interest in actually contributing to fighting deforestation in Brazil.

The report does not make it clear whether the methodology on which it based itself was in fact 100% attested based on GTAs (Animal Transportation Permits) or on the so-called risk analysis of the zones from which the meatpackers make their purchase. In both cases there are serious problems that could have been much better analyzed.

If the study is based on GTAs, this is confidential information to which the industry only has access at the final stage when the animals are delivered to a facility for processing. The preceding stages are protected by confidentiality, and only the suppliers of raw materials to the industry can access this. The secrecy also prevents the plants from accessing and using this information.

Regarding the risk analysis of the purchase zones, JBS reasserts that this methodology is flawed and contradicts the science of quality. It has already been amply proven that it is somewhat superficial, being based on an erroneous correlation and leads to grave errors. This technique simply correlates the concentration of deforestation in a given municipality with the locations of a company’s processing units. The fact that there are farms engaging in deforestation in a region where a company has beef processing units, like JBS, obviously proves nothing. Worse, it ignores the policies and practices the company has adopted to mitigate the risk of deforestation in its production chain.

At any rate, JBS has reviewed the 8 cases of cattle purchases raised in the report and has noticed that in seven of them their supplier was in compliance with the Responsible Procurement Policy of JBS, the prevailing legislation and the Supplier Monitoring Protocol of the Federal Prosecution Office. In the last case, none of the farms mentioned are in the company’s supplier data base, therefore they do not trade with JBS.

The infographics in the report that accompany the description of the cases seeking to link socioenvironmental irregularities to the processing operations of JBS expose this fragility. In all of them, the alleged connections between rural properties are described as “potential links”. Not even the authors themselves are certain about what they are asserting, and it is very serious that they produce a report that seeks to raise a fanfare based on this type of analysis, without at least giving those mentioned the opportunity to respond. The Sustainability Directorate of JBS has also identified cases in which the report alleges that the company purchased from certain farms that had never supplied the company with animals, yet another point that evidences the technical fragility of this paper.

The truth is that JBS adopts a zero deforestation approach throughout its supply chain. The company is one of the first in the sector to invest in policies and new technologies for countering, discouraging and eliminating deforestation in the . Since 2009, it has had a Responsible Procurement Policy for raw materials that sets socioenvironmental criteria for selecting its suppliers, excluding farms involved in deforestation.

All farms that are direct suppliers of beef cattle to JBS in the region are monitored via satellite imagery and geo-referenced data of the property. Therefore, direct suppliers who level the forest will be detected by the Company’s monitoring system and cattle purchases suspended.

The JBS monitoring system in the assesses over 60,000 cattle supplying farms covering a production area exceeding 540,000 km² (54 million hectares), bigger than Germany (357,000 km²) or the state of California (424,000 km²), USA. Over 11,000 farms have been suspended by the Company’s monitoring system for failure to comply with its socioenvironmental criteria. This includes any involvement in deforestation of native forest stands, invasion of protected areas such as indigenous lands or areas of environmental preservation, or properties containing areas embargoed by IBAMA.

Independent audits carried out over the last six years show that purchases of cattle were 99% compliant, or higher, with the Company’s socioenvironmental criteria . In 2019, 100% of the purchases met our socioenvironmental criteria. The results of these audits are available on the company’s site.

JBS has also allocated priority to developing sectorial strategies that can be applied across the entire beef industry in the , with the aim of reducing deforestation in the region and enhancing standards within the industry. A good example of this is the “Beef on Track” program (https://www.beefontrack.org/) jointly developed by JBS, the Federal Prosecution Office and the NGO Imaflora, which has defined the protocol that beef cattle suppliers to the industry must adhere to. Now, this same alliance is working on preparing a socioenvironmental audit for purchases of animals by companies operating in the Legal region.

Last September, JBS launched the Transparent Livestock Farming Platform that uses blockchain technology to enable the Company to extend the reach of its monitoring to the suppliers of its suppliers. This ground-breaking initiative by the company will address, by 2025, a definitive solution to be shared with the entire industry. As part of this endeavor, Green Offices at the JBS units will offer beef cattle producers advisory services to foster environmental regularization.

To assure the consumer of JBS of even more transparency, a unique open platform has been created to allow online access to the traceability details of each item, including information about the supplier farms, the slaughterhouses and the processing tanneries. (http://www.jbs360.com.br)

In regard to the 8 cases mentioned in the report, click here to see the table in which JBS analyzes them one by one and shows how in seven of them its supplier was compliant with the Company’s Responsible Procurement Policy, while in the last case, none of farms mentioned appears on its supplier base; therefore, they did not trade with the Company.