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JBS Denies Breaking Sustainable Procurement Agreement

21 October 2011

BRAZIL - Brazilian beef processing giant JBS SA has hit back at allegations that it has broken an accord over buying cattle from sustainable source.

In a statement to shareholders the company said it has "not violated any agreement or commitment to all public bodies and civil rights in Brazil".

JBS said it adopts a strict control process for the purchase of raw material, follows a rigorous sustainability policy with all its suppliers and disclaims any practice where there is damage to the environment or people.

The company had received a notice from the Federal Attorney General for the state of Mato Grosso on Monday (17 October), which alleged is had breached the agreements for sustainable farming in the state.

JBS said it recognises and reinforces its intention not to flout the practices outlined by the federal government agency.

After checking its cattle procurement system, the company found that in relation to the farms embargoed by IBAMA, purchases were made with 13 farms, which were embargoed by IBAMA, but these were on date before the publication on the website of the IBAMA list of restrictions on the properties of the public body.

In relation to farms located on Indian lands, JBS said that although the company has asked all the public agencies responsible at the federal, state and local on numerous occasions for the database or a list of properties that carry agricultural activities irregularly within the areas of Indian reservation, the company has never had access to this material.

Because of this, JBS said, it assumed the costs of the operation and proceeded to geocode every property that provide cattle for the company.

From this survey, all the information collected indicated that the farms mentioned in the notification of the Public Prosecution Service are off-reserve.

ASs for the properties mentioned in the notification from the Federal Prosecutor of Mato Grosso, JBS said that some never had any business relationship with the JBS and were not even included in the database of suppliers of the company.

"This is a clear sign that the data consulted by prosecutors and released by non-governmental organisations was not properly checked, which has led these overseeing bodies to come to inaccurate conclusions," the JBS statement said.

"It is worth mentioning that in Mato Grosso, the deadline for the registration of the perimeter of livestock farming, which would make the analysis even more precise, has been extended to November 2012."

JBS added that given the difficulty of obtaining accurate information and forms in a timely and reasonable manner, the company is still reviewing the case of one farm on the supposed banned list from the Ministry of Labour and Employment.

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