Annual and Sustainability Report | 2019
Farm in São José do Rio Claro (MT)

Our Business
JBS Brasil

Sustainability:
Product integrity

GRI 308-1, GRI 414-1

Within the logic that supplier relationships and guarantee of origin are the main axes for guaranteeing product integrity, Friboi has invested in closer and closer relationships with producers, in addition to enhancing and expanding is tools and processes to guarantee the origin of raw materials.

Friboi develops actions to support enhanced management and development of good social and environmental practices across its entire value chain. This attitude not only results in a smaller environmental footprint, but also brings gains in quality in the raw materials the Company uses.

In 2019, Friboi surpassed the mark of 2 million head contracted in forward and fixed price purchases, models that allow producers to plan better and, as a result, gain more efficiency in future deliveries.

With a commitment to being a reference in this area, through actions in the axes of supplier relationships and product origin, Friboi seeks to contribute to enhancing management and social and environmental practices across its value chain through a variety of programs.

Management of Friboi cattle suppliers

+ 20 in-person and online meetings about the subject

+ 91,885 head of cattle monitored

+ 360 indicators found

Caio Penido
Rural producer and president of the Brazilian Roundtable on Sustainable Livestock (BRSL)

The Araguaia League was an initiative to call on the region's livestock producers

to take more of a leading role in environmental conservation and sustainable production. We are now working with JBS to develop the Araguaia Herd project, which also runs along these lines of constant promotion of sustainable intensification of livestock and working within environmental laws. Under this model, our challenge is to show consumers and the world that it is possible to have production in Mato Grosso with leading action by livestock producers spearheading this process."

Social Fuel Seal

Over the course of the year, 19,056 head of cattle were acquired from family farmers through the Social Fuel Seal program, a 60% increase year-over-year. This initiative is a partnership between Friboi and JBS Biodiesel in the São Miguel do Guaporé (RO) region and in 17 other municipalities in Rondônia, which is developed by training small livestock producers in an effort to improve pasture lands, property management, herd management and genetic improvement, with purchases guaranteed by the Company. Total revenue for the 338 families surpassed R$ 38.5 million for the year. Around 30,000 head of cattle are expected to be purchased in 2020, involving more than 400 families.

The Social Fuel Seal was offered exclusively to farmers, in order to foster development and generation of biodiesel based on oilseed sources, such as soybeans. Because beef tallow, a coproduct of meat processing, is the second most important source of raw material for the production of Brazilian biodiesel, inclusion of the livestock chain in the National Program of Biodiesel Production and Use National Program of Biodiesel Production and Use (PNPB) could generate an even greater stimulus for the economy.

The Social Fuel Seal (SCS), given by the Ministry of Agriculture, Livestock and Supply (MAPA), is connected to the National Program for Biodiesel Production and Use (PNPB). Support for the project has qualified JBS Biodiesel for the Brazilian government’s Social Fuel Seal. Two JBS Biodiesel units hold the seal.

Giro do Boi Platform

An initiative that includes a website with content aimed at livestock producers, profiles on social media and a daily TV show in Brazil. Broadcast by Canal Rural, the Giro do Boi program remains a reference among industry professionals. Communication initiatives on social media and content developed for the Giro do Boi program, which has the highest ratings among Brazil’s agribusiness TV programming, help to strengthen relations and dialog with this public. Surveys carried out by Friboi indicate that 22% of the Company’s cattle suppliers watch the show. Online, the platform had over 3.5 million pageviews.

Quality ranking

A tool that reconciles quality management of processed cattle and communications with livestock producers, by linking technical parameters for raw material, such as sex and age, with a quality-based bonus policy. Depending on indicators found, animals are classified using a green light (desired standard), yellow light (admissible standard) and red light (undesirable standard). This standard simplifies producers’ understanding of the importance of product quality for Friboi. As a result, the Company pays a variable bonus, proportional to the quality of animals supplied.

Conexão Friboi Website

The goal is to improve relations between Friboi and livestock producers, whether or not they are suppliers. This tool promotes discussions, distributes relevant content and helps producers advance their business. It also makes it easier to access JBS, providing information on the Company’s culture and work methods to those interested in establishing partnerships.

 

Connection Management Project

As an offshoot of Conexão Friboi, the project is aimed at bolstering management skills for mid-sized livestock producers, who are responsible for supplying between 300 and 2,000 animals each year. The project uses tools to support increased efficiency in the beef production chain, from livestock producing suppliers to the end consumer.

During the year, the program held animal welfare campaigns, delivering management kits to over 20,000 producers, promoting correct practices for vaccination against hoof and mouth disease as well as zero waste livestock production. The program also makes it easier to access JBS, providing information on the Company’s culture and work methods to those interested in establishing partnerships.

Mércia Silva
Executive Director of InPACTO

The National Pact to Eradicate Slave Labour

was created in 2005 as an initiative of the productive sector and civil society in an effort to provide responses to the challenge of human rights violations in production chains. We recently partnered with JBS and developed a vulnerability index to the occurrence of slave labor that will be of great help to companies, with efficient and effective information to help in the challenge of preventing and eradicating slave labor in production chains."

Guaranteed origin and responsible procurement

The entire process of acquiring raw materials for JBS operations needs to be in compliance with federal and local regulations. In addition to complying with laws and standards, JBS uses a variety of mechanisms to guarantee that raw materials in its production chain become products whose integrity is assured.

Friboi has a robust system of social and environmental monitoring, to analyse and verify whether its livestock supplying farms follow the criteria stipulated in its Policy on Responsible Procurement of Raw Materials, aimed at guaranteeing a sustainable supply chain. There are about 45 million hectares monitored in the Amazon region. (See more in Chapter 2/ Product integrity/ Amazon).

The system covers the identification of deforestation of old growth forests, invasion of indigenous lands and environmental conservation areas or areas under embargo by the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA), in addition to cases where forced labor is used.

Another instrument for guaranteeing raw material integrity and quality is the Supply Chain Protocol  (See more on Products and services).

Auditing

An audit done in 2019 of livestock purchases made by the Company throughout 2018 showed that 100% of processes complied with external and internal regulations.

Timber procurement

JBS applies internal and/or external audits to the timber supply chain. Biomass purchases are split into two types: acquisition from corporate suppliers and acquisitions made via local purchases. Corporate suppliers are visited once yearly, with no prior notice given. While local suppliers are visited on-demand, prior to contracting, or during supply, when any deviations are found.

Moreover, clearance certificates are required by the Company at the regional level, issued by IBAMA/Competent State Environmental Agency and by the Federal Labor Prosecution Office. Suppliers also may not be listed on lists related to slave labor.

As a result of these actions, JBS received an outstanding assessment from CDP Forests in 2019, when the Company had the best performance among South American companies.

Itumbiara (GO)

JBS 360º

JBS Couros launched 360e, a platform making it possible to access information on everything from the farm of origin to the final product. Through the jbs360.com.br website, customers have quick access to information on the origin of leather. Each item is identified, allowing the website to be used to trace where the product originated, the production units of raw materials and their respective locations, as well as the tanneries where leather was processed.

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