Annual and Sustainability Report 1 Introduction
Dear reader,
Braskem’s 2010 Annual and website, including its text, charts, Sustainability Report presents the pictures and videos (cases), while the progress of its business strategy printed version presents a summary aligned with the establishment of a of the year’s highlights and the sustainable development model. The Company’s key messages. chapters of this report will feature details related to the progress made by Enjoy your reading! management, successful transactions, new product launches, key indicators, and the lessons contributing to Braskem’s continuous evolution.
This report was prepared in Questions, suggestions accordance with the guidelines or comments established by the Global Reporting Initiative (GRI), an organization Address: headquartered in Amsterdam, Avenida das Nações Unidas, 8.501 the Netherlands, which includes Centro Empresarial Eldorado representatives from the government, Pinheiros – 05425-070 – companies and civic entities. The São Paulo (SP) – Brazil. quality standards set forth by this model are: balance, comparability, Email: accuracy, timeliness, clarity and
2010 Annual and Sustainability Report | 1 Introduction 2020 Vision
In 2010, Braskem redefined its long-term • strengthen its product portfolio to vision, formalizing the incorporation make it increasingly sustainable by of sustainable development principles increasing the share of products into its strategy. The Company has made from renewable raw established the following goals to be materials, for example; achieved in Brazil and abroad by the end of the decade: • develop even more useful resins, through research and innovation, To become the global leader as well as new applications of in sustainable Chemistry+, plastics that contribute to a higher innovating to better serve people. quality of life and sustainability.
To achieve this vision, Braskem has For a better understanding of the defined three main pillars grounded in 2020 Vision and its relationship with sustainability: Braskem’s growth strategy, please refer to the chapter Business and • make its operations and resources Sustainable Development. increasingly sustainable;
Growth and A Message from Entrepreneurship Management
Braskem began 2010 as the leading global market. In September, through strengthening the petrochemical and petrochemical company in Brazil, a pioneering initiative, Braskem plastics production chains in Brazil and and ended the year as the leading launched the largest biopolymer in the countries where the Company petrochemical company in the operation in the world, with capacity operates, in addition to contributing to Americas and in the global production to produce 200,000 tons of sugarcane the well-being of society as whole. of biopolymers, which are resins from ethanol-derived plastic per year, renewable and/or biodegradable instead of using crude oil derivatives. Braskem benefited from Brazil’s raw materials, replacing crude oil With this initiative, the Company favorable economic scenario and derivatives. In the first half of 2010, has positioned itself at the forefront global chemistry market. The following the acquisition of Quattor of the global chemical industry, Brazilian economy grew at one of Participações S.A. (“Quattor”) in with innumerable opportunities for its highest rates ever, with Brazil’s Brazil and the polypropylene assets the development of products and GDP growth reaching 7.5% in 2010, of Sunoco Chemicals in the United applications that improve people’s lives according to the Brazilian Institute States, the Company reached a and are friendlier to the environment. of Geography and Statistics (IBGE). scale of production and a level of This growth resulted in an increase in competitiveness that enabled it to All these achievements are in line with income, consumption and industrial meet the domestic demand and Braskem’s commitment to continuously activity, which in turn drove up the assume a prominent position in the improving its service to Clients and domestic demand for thermoplastic
2010 Annual and Sustainability Report | 2 resins by 15% in relation the among them, as mentioned above, start of construction on a new PVC previous year. In the international was the creation of Braskem America, plant in Marechal Deodoro (Alagoas), market, higher chemical product which added 950,000 annual tons to which will require a total investment prices also contributed to the the polypropylene production capacity, of R$900 million and will have a Company’s good results. in addition to being located in the capacity of 200,000 tons/year, with United States, one of the world’s operations scheduled to begin in We successfully integrated the teams largest consumer markets. Through 2012. The strategy is to strengthen and professionals of the acquired this transaction, Braskem became the Company’s presence in the PVC companies. The units of Quattor and the third largest global polypropylene segment, keeping in pace with the Braskem America – the name given producer, with capacity to produce 3 growth of the domestic demand, to the polypropylene assets of Sunoco million tons per year. which is currently being met, in Chemicals – became more efficient, part, through imports. Braskem also which can be seen in the results at Another highlight in the international made progress in its analyses carried the end of the year: at Quattor, we market was the joint venture between out in conjunction with Petrobras were able to nearly double the EBITDA Braskem and the Mexican group Idesa, to participate in the Rio de Janeiro in comparison to 2009, reaching through which we will participate Petrochemical Complex (COMPERJ) R$984 million; our U.S. operations in in the Ethylene XXI project, with project, where it is responsible for the turn registered an EBITDA of US$114 investments estimated at US$2.5 petrochemical division. million, a 73% increase year on year. billion for the production of 1 million The expectation for 2011 is that, with tons of polyethylene, from an equal All these investments will allow Braskem management in place for an volume of ethylene, which is obtained Braskem to continue to grow in the entire year, these operations will be from natural gas. Located in the coming years, in line with the principle further enhanced. state of Veracruz, the new project is of financial discipline and supporting scheduled to start operating in the the Company’s cash generation With reference to the acquisition of beginning of 2015. In addition to capacity, once again evident in 2010. Quattor, which represented a new supplying the Mexican market, it will We ended the year with R$34.7 stage in the consolidation of the play an important role in Braskem’s billion in revenue1 and a net revenue Brazilian petrochemical industry, the strategy to grow in North America. of R$27.8 billion, increases of 22% operation was fully and unanimously and 23%, respectively, in relation to approved by the Brazilian Anti-Trust Braskem has also strengthened its 2009. The Company’s consolidated Commission (CADE) on February 23, international presence by opening new EBITDA increased by 27%, reaching 2011 in a decision that confirms the offices in Singapore and Colombia. R$4.1 billion. The net debt at the end global nature of the relevant market Other projects are under way in the of the fiscal year was R$9.8 billion, for the sector, in terms of competition. international market: a petrochemical down 14% from December 2009. The In 2010, more than 200 members complex in Peru and two projects financial leverage, as measured by the were involved in identifying and undergoing feasibility studies in ratio of net debt to EBITDA, which shaping opportunities for synergy Venezuela. These initiatives are in was 3.59x in 2009, ended the year on four fronts: industrial, logistics, line with the Company’s strategy to at 2.43x, due to the drop in net debt supplies and finance. In 2010, these consolidate its leadership in the South for the year and the higher operating synergies reached the EBITDA in the and North America, while diversifying income, measured by the EBITDA. amount of R$170 million, annual and its raw material matrix with a higher recurring. For 2011, a variety of steps share of natural gas derivatives. The stock market recognized Braskem’s were taken to capture an additional performance and potential for creating R$207 million, totaling R$377 million, Taking into account its operations value, as well as the sector’s growth on an annual and recurring basis. in Brazil, Mexico and the United projections for the coming years. States, Braskem invested a total of The Company’s Class “A” preferred To operate on the global market in R$1.8 billion in 2010, excluding stock, traded on the São Paulo Stock a more efficient and coordinated acquisitions, twice as much as last Exchange (BM&FBovespa) under the manner, in the beginning of 2011 year. A substantial portion of these ticker BRKM5, experienced some of the Braskem brought together operations investments were in modernizing highest increases on the Ibovespa and management and new project assets and expanding capacity, which ended the year with an appreciation of development outside of Brazil under includes not only the inauguration of 45%. Partly due to the appreciation of the International Business Unit. Prime the green ethylene unit, but also the the Brazilian real against the U.S. dollar,
1 The amounts are presented on a pro-forma basis, as if the acquisition of Quattor and the polypropylene assets from Sunoco Chemicals (now Braskem America) had taken place on January 1, 2010.
2010 Annual and Sustainability Report | 3 Braskem’s (BAK) American Depositary this belief, in 2010 Braskem invested The segment of biopolymers, of which Receipts (ADRs) traded on the New R$8.2 million in training, including Braskem became the world leader in York Stock Exchange rose by 53%, the Introduction to Odebrecht 2010, also stands out in the innovation while the Class „A” preferred stocks Enterprise Technology (TEO) program. criterion, since biopolymers are traded on the Labitex (XBRK) rose by The program trained more than thermoplastic resins from renewable 61% in the period. 170 Quattor and Braskem America raw materials that offer many benefits, Members, in addition to professionals including environmental ones, given
New vision hired in 2010, through a total of 6,000 that biomass captures CO2 during “To become the global leader in hours of activities. the photosynthesis process. Carbon sustainable Chemistry, innovating to is subsequently sequestered in the better serve people” is Braskem’s 2020 Our human capital is also a plastics produced by the industry, Vision. It means producing more while fundamental part of Braskem’s which also contributes to a reduction consuming less natural resources, aim of becoming one of the most in greenhouse gas emissions, dreaming the dreams of our Clients innovative companies in Brazil. To responsible for the global warming. and strategic stakeholders in order achieve this objective, the Company to identify and meet their needs, and began to increase investments in In September, an ethanol-derived increasingly investing in research and attracting and training scientists, as ethylene plant was inaugurated at innovation in order to introduce more well as in partnerships with research the Triunfo Petrochemical Complex, products and applications featuring institutes. In 2010, our Innovation and in Rio Grande do Sul, which absorbed increased efficiency and lower Technology team grew from 190 to investments of approximately R$500 environmental impact. 240 researchers, and we established million, with an annual production a partnership with the National capacity of 200,000 tons of green Since its creation in 2002, Braskem Bioscience Laboratory (LNBio) to install polyethylene (PE). We opted for has taken steps to increase the a new biopolymer research unit in sugarcane because of its productive efficiency of its operations. Using eco- Campinas (São Paulo), in addition to efficiency and because Brazil’s ethanol indicators, we track the Company’s our partnerships with other institutions industry is already well-developed. progress in terms of its internal such as the University of Campinas At the end of the year, we announced management, in order to reduce the (UNICAMP), the São Paulo State our decision to build a new plant consumption of natural resources Research Support Foundation to produce green propylene from and the generation of waste and (FAPESP) and the Petrobras sugarcane. The plant’s location is emissions. In 2010, despite having Research Center (CENPES). still undetermined. taken on units whose practices differ from ours, we were able to improve Plastic resins have traditionally had All Braskem’s investments and the eco-indicators in comparison with beneficial applications, from a social achievements will benefit our Clients the results from 2009, especially with standpoint, by attending to people’s in Brazil and the other countries in the 4% reduction of greenhouse everyday needs, as well as from which we operate. In Brazil, given our gas (GHG) emissions and the 6% an environmental standpoint, by leadership position, we understand reduction in energy consumption. substituting products that are heavier the responsibility that we have in Water consumption proved to be or whose production processes developing the sector’s productive the exception. require high water and energy chain, which justifies our emphasis consumption. In 2010, Braskem on innovation and partnerships with Our occupational safety and health carried out some product launches Clients and Suppliers. We want indicators also showed improvements that are examples of advantageous to foster the emergence of new in 2010, except in terms of the severity substitution: polypropylene paint solutions, which help other Brazilian rate+, which had a significant increase, buckets reduce the weight of companies compete at the global level causing us to redouble our focus on the product, allow for better use and contribute towards positioning that aspect, simply because it has a of the paint, do not rust or bend, the country as an exponent of the new direct impact on the safety and well- and are easy to reuse; polyethylene “green economy” that is currently being of our Members. silo bags reduce storage costs and flourishing (read more about this the loss of grains, fertilizers, silage concept in the chapter Business and We believe that the expertise of our for livestock feed, as well as other Sustainable Development). teams will allow us to continually products and by-products from the achieve better results. In line with agro-industrial chain.
2010 Annual and Sustainability Report | 4 Another 2010 highlight was the According to the latest International We would like to thank our Clients Company’s investments in social Monetary Fund’s projection, published for trusting in Braskem, since this and environmental projects, which last April, the global GDP will grow partnership is what moves us to totaled R$16.3 million2, aimed at by 4.4% in 2011. It is our belief continuously strive for excellence. We simultaneously promoting economic that the recovery of U.S. economy also would like to extend our gratitude growth, environmental protection and and continuous growth of emerging to our Shareholders, especially inclusion in society. Among the most countries will play an essential role in Odebrecht and Petrobras, for their important initiatives are the Parque da the materialization of this global GDP boundless support to strategic projects Amizade, in Paulína (São Paulo), which projection, which is mainly jeopardized that have strengthened the Company. is a public use and environmental by the possible slowdown of the And finally, we would like to thank education space for residents, as Chinese economy, the worsening our Suppliers and Members for their well as recycling incentive initiatives. of the issues associated with the dedication and competence, which are Currently, Braskem is investing in the sovereign debt in the Euro Zone, as paramount in achieving our results. development of a recycling program in well as of the social tensions in the municipalities located in São Paulo, Rio Arab world. We are operating under Carlos Fadigas de Janeiro, Rio Grande do Sul, Alagoas the assumption that Brazil will grow CEO of Braskem and Bahia, promoting the distribution approximately 4.5% in 2011, above of income and social inclusion. the 4% rate disclosed in April by Brazil’s Central Bank, which should These and other initiatives are reflect in a 10% increase in the part of the Braskem strategy for demand for thermoplastic resins. In conducting its business in a socially and this context, Brazil needs to stimulate environmentally responsible manner, domestic industrial competitiveness, in line with each of its commitments removing the constraints imposed by publicly made, including the UN’s Global the tax policy, the bottlenecks caused Compact, to which the Company has by logistics and infrastructure, and been a signatory since 2007. other aggravating factors such as the overvalued exchange rate, as well as Outlook investing more and more effectively in Braskem will maintain its long-term the training of skilled professionals. strategy based on three main pillars: meeting the domestic demand for Braskem’s priorities in 2011 are: 1) plastics, which tends to continue to strengthening and increasing the grow, with increasing competitiveness; competitiveness of the petrochemical to reaffirm its leadership position in and plastics chain, especially through the Americas through international partnerships with Clients and research projects; and to increase the institutes; 2) maintaining investments production of biopolymers by in new capacities and expanding developing new production processes. the current ones, as well as in the Based on these pillars, our top modernization and reliability of priority is to find new opportunities industrial assets to keep pace with the to continue generating value for our market’s growth. We plan to invest shareholders and society as a whole. R$1.6 billion in 2011.
2 The amounts are presented on a pro-forma basis, as if the acquisition of Quattor had taken place on January 1, 2010, and they do not include Braskem America.
2010 Annual and Sustainability Report | 5 A new milestone A Message from in petrochemicals Management
The creation of Braskem, in 2002, • Environmental: through between Braskem and the Mexican was the milestone that consolidated the development of more group Idesa, through which we the presence of Odebrecht in the sustainable products and will participate in the Ethylene XXI petrochemical sector, where it has services, saving natural project, with investments estimated operated since 1979. In almost 10 years resources, using clean at US$2.5 billion for the production of operations, Braskem has played an technology and renewable of 1 million tons of polyethylene, essential role in the Brazilian and Latin resources, preserving from an equal volume of ethylene, American petrochemical company biodiversity, recycling waste and which is obtained from natural gas. and has contributed for Odebrecht controlling GHG emissions; Located in the state of Veracruz, the to become a global organization, new project is scheduled to start composed of knowledgeable people, • Political: through the active operating in the beginning of 2015. committed to sustainable development, cooperation with governments In addition to supplying the Mexican and a leader in the segments and and representatives from market, it will play an important countries in which it operates. society in the establishment role in Braskem’s strategy to grow in of participative public policies North America. In 2010, among other initiatives, and other initiatives promoting Braskem acquired Quattor, the resins sustainable development. As the largest petrochemical sector of the American company company in Brazil, Braskem’s Sunoco Chemicals, and inaugurated its • Cultural: through respect for ethnic permanent challenge is to increase first green ethylene plant in the Triunfo and cultural diversity and support the sustainability of its operations Complex (Rio Grande do Sul). to artistic initiatives and the and resources, as well as the preservation of cultural heritage. portfolio of products and solutions Since the Organization’s creation, that, together with its Clients, it sustainable development, which is In order to act in a more efficient offers to society. increasingly important in all aspects and coordinated manner on the of life, has been a part of the global market, at the beginning of With relationships guided by Odebrecht Entrepreneurial Technology, 2011 Braskem brought together the satisfaction of its Clients, having continuously improved over the management of its operations Shareholders and all other the years. Today, guided by our and the development of new stakeholders, Braskem strives to Sustainability Policy, our teams strive projects outside of Brazil under improve the qualifications of its to master business practices and the International Business Unit. Members and Suppliers, as well as competences, aiming to contribute to Prime among them, as mentioned to strengthen its partnerships with the sustainability of the countries and above, was the creation of Braskem Clients to develop integrated and regions in which they operate. America, which added 950,000 innovative solutions that can add tons to the annual polypropylene value to each of the links in the • Economic: through the generation production capacity, in addition to productive chain, and to promote of results for Clients, Shareholders, offering a strategic location in the sustainable development. Members and the communities in United States, one of the world’s which we operate; largest consumer markets. Through Marcelo Odebrecht this operation, Braskem became the Chairman of Braskem’s • Social: through the creation of world’s third largest polypropylene Board of Directors opportunities related to education, producer, with capacity to produce 3 work and income generation million tons per year. for employees, partners and the populations of the communities in Another highlight in the international which we operate; market was the joint venture
2010 Annual and Sustainability Report | 6 profile
With its capability of producing 15 million tons of chemicals a year, Braskem is active in five Brazilian states and the U.S.
Braskem is the largest producer of to Braskem, including researchers, The largest petrochemical thermoplastic resins in the Americas, managers, engineers and other enterprise in the with a focus on polyethylene, professionals who, in partnership Americas and third largest polypropylene and PVC, and the with advanced research centers of eighth largest petrochemical the academy, government agencies, polypropylene producer in company in the world (see the and client companies, develop the world, the Company’s ranking in the chapter Financial and solutions to improve people’s strategic cornerstones Economic Dimensions). Its current lives. These efforts resulted in are competitiveness and standing came about through the many achievements, including the acquisition of its primary competitor operational start-up of the first technological autonomy, in Brazil, Quattor, as well as of the plant producing ethylene made allied to its commitment polypropylene assets of Sunoco from sugarcane ethanol for the to fostering sustainable Chemicals in the United States, production of green polyethylene development. currently Braskem America, both of (PE) in 2010. The product shows which in 2010. Today the company the innovation capacity of the has units across five states in the Company and its chemical industry South, Southeast and Northeast partners, and its commitment to regions of Brazil, and three states sustainable development (see table in the United States, where one of in this chapter). the three units of its Technology and Innovation Center is also located. Braskem’s current size and leadership position have allowed it to reinforce With capacity to produce more its international presence in 2010 than 15 million tons per year of through the opening of offices in chemical products, Braskem has Colombia and Singapore and the clients in more than 60 countries implementation of the Ethylene XXI across five continents, supplying project in Mexico (see tables in this products that, after being processed, chapter), and decide to make new are transformed into goods daily investments in the development of used by individuals from a wide its technological competence, as range of cultures and backgrounds. the Company intends to double its Automobiles, household utensils, research and development (R&D) cleaning and personal hygiene efforts by 2016. To strengthen its products, flexible packaging (shaped productive chain in Brazil, Braskem in accordance with the packaged provides technical, logistics, legal product), home appliances, and even and financial support to its Clients, buildings are examples of products in addition to adopting a business made with thermoplastic resins. policy that encourages exports.
At the end of 2010, a group of Braskem continuously invests to 6,750 Members (which is how we make its operations more efficient, refer to our employees) made up posting a significant improvement the workforce directly connected in its eco-indicators, including
2010 Annual and Sustainability Report | 7 profile
consumption of water, energy and materials, and waste generation (see OPERATIONS the chapter entitled Environmental, Business Model Health and Safety Dimensions). In addition to contributing to increase Braskem’s operations are based on • Polymers Unit: This unit consists skilled labor in Brazil, which is one three business units that coordinate of the second-generation of the greatest challenges for the the industrial, commercial, operations in the petrochemical country’s sustainable development, marketing, logistics, procurement, chain, producing polyethylene, the Company also invests in exports, human resources, planning polypropylene and PVC, as well as social projects that benefit many and controllership. Each unit has chlorine and soda. Its plants are communities of various Brazilian decision-making autonomy to carry located in the five Brazilian states regions (for more information, see out its activities in the segment: where Braskem operates: Alagoas the chapter Social Dimension). (Maceió and Marechal Deodoro), • Basic Petrochemicals Unit Bahia (Camaçari), São Paulo A publicly-held company listed on (Unib): This unit is responsible (Paulínia, Mauá and Cubatão), Rio the stock exchanges of São Paulo for the first generation of de Janeiro (Duque de Caxias) and (BM&Fbovespa), New York and petrochemicals, it produces Rio Grande do Sul (Triunfo). Madrid, Braskem is committed ethylene, propylene, chemical to good corporate governance intermediates and aromatics. • International Business Unit: practices, including a transparent Ethylene is used to produce This unit is responsible for relationship with the capital polyethylene and PVC, for Braskem’s international markets and the creation of value example, while propylene expansion, including the to shareholders. In 2010, for the serves as the raw material for management of Braskem America sixth consecutive year the Company polypropylene. The Unib plants and the Green Business area, was included in BM&FBovespa’s are located in Bahia (Camaçari), whose purpose is to consolidate 2011 Corporate Sustainability Index Rio de Janeiro (Duque de opportunities related to (ISE) (read more in the chapter Caxias), Rio Grande do Sul renewable raw materials Corporate Governance). (Triunfo), and São Paulo (Mauá). and biopolymers.
Our products
Polyethylene (PE): raw material for bags, PVC: mainly used in construction for films and packaging for the industries of pipes, but also in footwear, clothing food, and personal hygiene and cleaning and upholstery, IV and blood bags, products. There are many types: High and other applications. Density Polyethylene (HDPE), Low-Density Polyethylene (LDPE), Linear Low-Density Soda/Chlorine derivatives: Polyethylene (LLDPE) and Ultra-High raw materials used to manufacture Molecular Weight Polyethylene (UHMW). soap, paper, pulp, aluminum and other products, in addition to Polypropylene (PP): resin with intensive water purification. application in flexible and rigid packaging, in single-use products such as disposable Basic petrochemicals: products cups and diapers, household items, bags such as turpentine, benzene, (raffia), in the automobile industry and ethylene and propylene for the agro-industry, etc. chemical industry.
2010 Annual and Sustainability Report | 8 profile
STRATEGY Quattor Acquisition
In January 2010, Braskem between the companies, with 31 plants, with annual production concluded negotiations for the consequent increase in its capacity of 6.5 million tons of resins. the acquisition of Quattor by stake in the Company. entering into an Investment In February 2011, the operation was Agreement with Odebrecht, The consolidation of the fully approved by the Administrative Petrobras, Braskem and Unipar. petrochemical interests enabled Council of Economic Defense The agreement enabled Braskem to strengthen its position (CADE), the antitrust authority that Petrobras to consolidate its in the Americas as the leader in analyzes mergers and acquisitions, interests in Brazil’s petrochemical thermoplastic resin production, aiming to maintain a competitive sector into Braskem, which placing the Company at a new environment. Braskem agreed became the preferred vehicle level of scale and efficiency to to regularly provide CADE with of Petrobras for its activities in overcome the challenges of confidential information regarding the petrochemical sector, and the international market. The its resin import and sale contracts to expand the strategic alliance industrial complex comprises containing exclusivity clauses.
NEW FRONTIER Biopolymer Leadership
On September 24, 2010, Braskem materials. Green plastics (developed The polymerization process, which inaugurated the Triunfo Petrochemical from polyethylene obtained from converts ethylene into resin, is carried Complex, located in Triunfo, state of sugarcane ethanol) are exceptionally out at Braskem’s existing units at Rio Grande do Sul, the largest plant eco-friendly, since the process used the Triunfo Complex (Rio Grande do in the world producing ethylene from to produce each ton of polyethylene Sul). The final product has exactly the sugarcane ethanol. The plant, with from the primary raw material same properties and characteristics an annual production capacity of 200 removes 2.5 tons of carbon dioxide as conventional polyethylene and can ktons of green ethylene, will enable from the atmosphere. Since 2009, be processed by clients’ equipment Braskem to supply the market with the Company has established without the need for any adjustments. resin made from renewable sources, several partnerships to supply advancing its strategy to become the green polyethylene to domestic Braskem’s next step in the world leader in sustainable Chemistry and international clients who have development of biopolymers with diversified and competitive raw adopted sustainable development was announced in October: the material sources. The project, which as a pillar of their market strategy. construction of a green propylene absorbed investments of almost This pioneering group of companies (PP) plant, with US$100 million R$500 million, was based on the includes Tetra Pak, Brinquedos in investments (read more in the company’s own technology. Estrela, Toyota Tsusho, Natura, chapter Business and Sustainable Johnson & Johnson, Acinplas, and Development), which is still in The initiative is a landmark for Procter & Gamble. Some of the first the early stages of development. Braskem, turning the company applications of the new product The new plant will be able to into a leader in the pioneering field include food packaging, toys and produce yet another renewable of polymers from renewable raw household items. source resin: polypropylene.
2010 Annual and Sustainability Report | 9 profile
Braskem’s GLOBAL MARKET figures in 2010 New International Business
With teams established in Argentina, ethylene and polyethylene at 6,750 Chile, Venezuela, the Netherlands three polymerization plants, with Members and the United States, Braskem took operations expected to begin in 2015 some larger steps towards becoming and a fixed investment of US$2.5 a global operation. In 2010, in billion. The initiative represents R$34.7 addition to opening business offices the largest direct investment by a billion in consolidated in Colombia and Singapore, the Brazilian company in Mexico and gross revenue Company acquired the polypropylene the most significant contribution to assets of Sunoco Chemicals in the Mexico’s petrochemical sector in the United States, currently Braskem last 20 years. R$4.1 America, and formalized the billion in EBITDA creation of a joint venture with one In the United States, Braskem concluded, of the main petrochemical groups in April 2010, the acquisition of the in Mexico, where it already has a polypropylene (PP) division of Sunoco 28 industrial dedicated team. Chemicals. The Company invested units in Brazil US$350 million in the acquisition, in In partnership with Idesa, Braskem line with its strategy to establish an will lead the implementation of an industrial base in the U.S., which will 3 industrial integrated petrochemical project play an important role in the expansion units in the United States in Mexico. The two companies of the Company’s international business. won the auction held by Pemex Braskem’s U.S. operations have a Gás and Petroquímica Básica production capacity of 950,000 tons 3 units for the acquisition of 66,000 of PP per year, representing 13% of Technology and barrels a day of ethane, which the local installed production capacity. will be used as a raw material With the acquisition of these assets, Innovation Center at the petrochemical complex to the Company is reinforcing its global be built in Coatzacoalcos, in the expansion strategy, becoming the 15 million Mexican state of Veracruz. The world’s third largest polypropylene project involves the production producer, with capacity to produce 3 tons per year of thermoplastic of 1 million tons per year of million tons per year. resins and other chemical products per year
2010 Annual and Sustainability Report | 10 profile
Braskem sales distribution – 2010 (% of volume)
10%
4%
4% 29% Food Packaging Construction 6% Consumer Goods Hygiene and Cleaning 2010 Retail 7% Automotive Industrial Agribusiness 9% Others 18%
13%
Polyethylene
4% 4% 3% Food Packaging 2% Retail 7% Consumer Goods Hygiene and Cleaning 4% Cosmetics & Pharmaceutical Automotive 4% Construction 3% Industrial Infrastructure Others 8% 42% Chemicals & Agrochemicals 6% Agribusiness 13%
2010 Annual and Sustainability Report | 11 profile
Polypropylene
Food Packaging Consumer Goods Hygiene and Cleaning Cosmetics & Pharmaceutical Automotive Construction Electric & Electronic Industrial Others Agribusiness pvc
Consumer Goods Hygiene and Cleaning Cosmetics & Pharmaceutical Automotive Construction Electric & Electronic Infrastructure Food Packaging
Main raw materials used by Braskem
Ethanol (derived from sugarcane) Natural gas Propylene from refineries Naphtha
2010 Annual and Sustainability Report | 12 profile
Innovative polyethylene solutions
• Rotomolded manholes* - a storage capacity and less food • BubbleDeck – the product, which is substitute for conventional concrete losses; a drop in the cost to the a lighter alternative for the concrete manholes, using sealed pieces producer; a reduction in truck slabs used in construction that do manufactured with rotomolded traffic for transporting the harvest. not have structural functions, allows polyethylene. This solution is for a significant reduction in the innovative in Brazil, despite being • Fuel tanks - an alternative to use of materials, this contributing already used in Europe and Israel. replace metal tanks in automobiles to a reduction in greenhouse gas The market potential is estimated with plastic tanks. The project was (GHG) emissions. The advantages in to be 1.7 million new manholes to designed for the automaker Fiat and comparison with concrete: it reduces be installed, plus a 1% replacement its main advantage is that the plastic by up to 35% the weight of the slab rate per year. The main benefits are: tank weights less than the metal one. in comparison to the conventional the elimination of spills, preventing system; 3.5 kg of plastic can be used groundwater contamination; the * Installations (normally urban) to replace 14.31 kg of concrete; a absence of leaks, reducing the that allow access to the network of savings of 0.05 m3 of wood, which cost of sewage treatment; since underground services, including sewage, means that for every 10,000 m2 its weight corresponds to only 8% telephone lines and power lines. carried out, 166.6 trees are saved. of concrete’s weight, the product allows for a reduction in polluting Innovative gas emissions during transport; it polypropylene solutions is 100% recyclable, while concrete becomes rubble; it can be installed • Pack less – the product represents six times more rapidly, reducing the an alternative to traditional gases emitted by backhoes, and wooden pallets, used in the immediately delivering the social unitization and shipping of cargo, benefits of the project. at a significantly reduced weight. Because it is 100% composed • Silo bags – an alternative solution of polypropylene, pack less is
for storing grains, fertilizers, recyclable. CO2 emissions during silage for animal feed and other the product’s lifecycle can be products and by-products from up to 85% less than that of the agro-industrial chain, directed wooden pallets. at a market that produces around 143 million tons of grain in Brazil, • Polypropylene paint bucket – which has an estimated storage replacing metal with polypropylene deficit between 10 million to 40 in the buckets provides a variety million tons. A 110kg silo can store of benefits: it significantly reduces more than 200 tons of soybeans, the weight of the final product; it for example. In July 2010, the provides better use of the paint, first domestic production unit of because the lack of „dead spots” silo bags entered into operation, where the product can collect; created and development through it does not rust or dent, which a partnership between Braskem reduces the transportation-related and one of its clients, with the loss rates (it is also estimated that it capacity to produce approximately reduces the release of greenhouse 4,000 tons of polyethylene per gases by 60%); it facilitates reuse year. The main benefits are: higher by the consumer.
2010 Annual and Sustainability Report | 13 profile
Awards and recognition
In 2010, Braskem was recognized by • XIV National Quality of Life renowned institutions and important Award for UNIB-BA, for their media outlets. The honors included: implementation of the Sempre Saúde (Forever Health) program. • Selected as a model business in the Exame magazine 2010 • Best Quality of Life Case from Sustainability Guide. Proteção magazine, for Unib-BA.
• 2010 Polo Award for Excellence • Listed among the 100 Best in Health, Safety and the Companies for Corporate Citizenship Environment. Excellence for PE-1 from the RH & Gestão (HR & and UNIB-BA and Stars for PE-2. Management) Publishing House. PE-3, CS BA and PVC BA. • Standout in the Petroleum & Gas, • TOP Environmental Award, given by Chemical & Petrochemical sector the Brazilian Association of Sales and in terms of value creation during Marketing Directors (ADVB). the triennium 2007-2009, from the Abrasca ranking. • Environmental Standout Award, given by the Rio Grande do • M&A of the year from Latin Sul Chemical Industries Union Finance magazine. (SINDIQUIM), the Regional Chemistry Council (CRQ) and the • 2009 Transparency Trophy - XIII Brazilian Association of Chemical Anefac Awards. Engineering (ABEQ-RS).
• 2010 ABPA Award, for Health Safety and the Environment in the Chemical sector.
2010 Annual and Sustainability Report | 14 profile
Braskem International Certifications
Unit ISO 9001:08 ISO 14001:04 OHSAS 18001:07
Support (Corporate) x x x
UNIB1 BA* x x x
TEGAL (UNIB1-BA) x x
UNIB2 RS x x x
UNIB3 ABC x x x
UNIB4 DCX x
UNPOL (PE1 BA /PE2 BA) x x
UNPOL (PE3 BA) x x x
UNPOL (PE4 RS) x x
UNPOL (PE4 RS-Spherilene) x x
UNPOL (PE5 RS/ PP2 RS) x x
UNPOL (CS1 AL,CS2 BA) x x
UNPOL (PVC 1 BA, PVC 2 AL) x x
UNPOL (PE6 RS) x
UNPOL (PE7 ABC) x x x
UNPOL (PE8 CUB) x
UNPOL (PE9 DCX) x
UNPOL(PP1 RS) x x
UNPOL (PP3 PLP) x x
UNPOL (PP4 ABC) x x x
UNPOL (PP5 DCX) x x x
UNPOL (PP6 BA) x x x
UNPOL (PP7 NEAL) x
UNPOL (PP8 LA PORT) x
UNPOL (PP9 M.HOOK) x
*Includes the Gas and Liquids Terminal (TEGAL) and the Raw Materials Terminal (TMP).
2010 Annual and Sustainability Report | 15 profile
History - Timeline
1970s 2001 2009 Odebrecht, a traditional company In partnership with Grupo Mariani, The Company incorporates specializing in construction, enters Odebrecht acquires control of Copene Petroquímica Triunfo, in Rio into the petrochemical sector in 1979, (Camaçari Petrochemical Complex) Grande do Sul. a year after the inauguration of the and begins an unprecedented process Camaçari Petrochemical Complex of first and second generation asset 2010 (Bahia). The first step for initiating integration in Brazil. The Company acquires the its petrochemical activities was the polypropylene assets of Sunoco purchase of one third of the voting 2002 Chemicals, in the United States, capital of the Camaçari Petrochemical Braskem is created from the and Quattor, in Brazil. Company (CPC), which produces PVC. integration of six companies: Copene, OPP, Trikem, Nitrocarbono, Proppet The new green ethylene plant is 1980s and Polialden. inaugurated in Triunfo (Rio Odebrecht acquires a stake in Grande do Sul). Salgema, a manufacturer of 2006 chlorine-soda located in the state of The Company acquires control of Braskem creates it first joint venture Alagoas, as well as in the following Politeno, a polyethylene producer in with Mexico’s Idesa group, joining companies: Poliolefinas (polyethylene Camaçari. the Ethylene XXI project, which will producer), PPH (polypropylene receive investments of US$2.5 billion producer) and Unipar (petrochemical The process of integrating Politeno for the production of 1 million tons holding company). into Braskem begins. of polyethylene from ethane, a raw material derived from natural gas. Odebrecht Química S.A. is created 2007 to manage the group’s interests and An Investment Agreement is signed investments in the sector. with Petrobras, which increases its interest in Braskem by transferring 1990s petrochemical assets. The government initiates a privatization of the petrochemical 2008 sector. Odebrecht joins the group Braskem launches the world’s first controlling the Raw Materials green polyethylene (PE) certified Center of the Rio Grande do Sul by Beta Analytic, which verifies the Petrochemical Complex (COPESUL). percentage of renewable raw materials From that point forward, a variety of utilized in the product. new acquisitions, carried out under the National Privatization Program (PND), The Company inaugurates increased Odebrecht’s presence in the its polypropylene plant in petrochemicals sector. The company Paulínia (São Paulo). acquires control of PPH, Poliolefinas, Salgema and CPC. Odebrecht integrates PPH and Poliolefinas, creating OPP Petroquímica S.A. It also integrates Salgema and CPC, creating Trikem S.A., Brazil’s first vertical integration in the sector.
2010 Annual and Sustainability Report | 16 Business and Sustainable Development Alert to current challenges, Braskem invests in research and innovation, building up new partnerships in the productive chain, focusing on sustainability.
Braskem is aware of the challenges strengthening its relationship with lying in the way to sustainable stakeholders (read more about the development, both at its plants and definition of the materiality process along the entire production chain. In in the chapter About this Report). the 2009 Annual and Sustainability Report, six key factors were chosen The analysis that was previously to highlight these challenges: carried out, and described in Chapter hazardous chemicals, greenhouse 5 of the 2009 report, remains valid. gas emissions, water consumption Today there is a new approach to this in the production processes, use of issue, which is becoming increasingly non-renewable raw materials (oil and relevant for the business community: gas), disposal of plastic waste, and the so-called “green economy”.
The Green Economy
The perception that environmental and the report Towards a Green Economy social problems lack a solution has not in February 2011. The publication changed. The minor advances seen at conceptualizes the green economy in the Conference of the Parties to the the following manner: “the economy United Nations Framework Convention that results in improved human on Climate held in Copenhagen in 2009 well-being and social equity, while (COP-15) and in Cancun (COP-16) in significantly reducing environmental 2010, confirm this vision. In an attempt risks and ecological scarcities” and to obtain a negotiated solution, the UN as “low carbon, resource efficient Commission for Sustainable Development and socially inclusive.” In summary, decided to focus on strengthening it is an economy that promotes the role of private initiative and of the sustainable development. economy in the quest for sustainability, choosing the green economy as one The report also includes a specific of the possible themes to advance chapter on the contribution of this debate at Rio+20, the next UN industry, given that it has “a major conference on sustainable development, material impact on the economy and to be held in Rio de Janeiro in 2012. the environment.” In that respect, it considers companies to be part To support this discussion, the UN of the solution, highlighting their Environment Program (UNEP) released possible contributions to sustainable
2010 Annual and Sustainability Report | 17 Business and Sustainable Development
development, suggesting the How to operate in this scenario? following priorities: The year of 2010 marked the end of a cycle for Braskem. The Company Improved use of resources: went from being one of the largest • Improved use of mineral reserves, as petrochemical companies in Brazil well as oil and gas; to being the leading resin producer in the Americas and one of the • Reduced waste generation; largest companies in the global petrochemical industry. With the • Use of a product lifecycle approach; acquisition of Quattor, an operation that contributed to consolidate Brazil’s • Structuring of production systems petrochemical industry, the acquisition in cycles, encouraging reuse of the polypropylene assets of Sunoco (remanufacturing) and recycling Chemicals, currently Braskem America, of materials; and the start-up of the biopolymer production, the Company defined its • Improved efficiency in water use; strategic vision: to become the global leader in sustainable Chemistry by • Longer useful life of materials; 2020, with a focus on innovating to better serve people (see box). • Use of renewable sources of raw materials; The 2020 Vision combines two of Braskem’s ambitions. The first one is • Improved energy efficiency; to expand its international operations, making use of its solid capital structure • Combined generation of to seize business opportunities focused heat and energy. on the Americas, becoming an increasingly important global player in the chemical industry. The other Generating “green jobs”: ambition of the Company is to advance • Primarily in the remanufacturing and in its strategy to establish itself as a recycling chains. reference in sustainable Chemistry (see box in this chapter) by improving Encouraging innovation, with a the eco-efficiency of its operations, focus on cleaner, more socially- responsibly generating wealth for its inclusive technologies; stakeholders, and continually and increasingly investing in innovation Increasing customer involvement (see box in this chapter) to further the by providing information on issues introduction of solutions that improve related to sustainability, so that an people’s quality of life. For Braskem, informed choice can be made. these two aspects – business and sustainability – are intrinsically related, These topics and the approach of the given that the market already values, six aspects discussed in 2010 overlap, and, as time goes on, will tend to underlining the importance of the increasingly value companies that are chemical industry’s contribution to innovative, ethical and committed to sustainable development. sustainable development.
2010 Annual and Sustainability Report | 18 Business and Sustainable Development
Braskem’s Seven Macro Objective Growth Strategies
Macro Braskem’s Initiatives Braskem’s 2020 Vision Objective in 2010 Initiatives to 2015
Chemical • Registered its products 2011-2015: lead • Braskem as a leader in safety in the European REACH the Latin American the worldwide use and (Registration, Evaluation, implementation of the production of chemical Authorization and Global Product Strategy. products. Restriction of Chemical Substances) system. 2011 – 2015: promote • Neither use nor produce the continuousl substances included in • Led Latin America, of improvement of the global blacklists. the GPS (Global Product company’s Risk Rating, Strategy) project of the which is a process safety ICCA (International Council rating established by of Chemical Associations) insurance companies, in order to promote in order to achieve a the recognition and minimum of 90 points, dissemination of the risks to considering the average of people and the environment all Braskem’s plants rated due to the use of chemicals. “above standard.”
• Carried out the preparation 2011 – 2014: replace and adjustment of material cell houses with Hg and safety data sheets (MSDS) asbestos in accordance with NBR 1425/2009, with a 2011 – 2015: maintain warning about the dangers waste generation stable of some of Braskem’s and remain as reference substances, in order in its sector. to meet the guidelines of the GHS (Globally Harmonized System for the Classification and Labeling of Chemicals), in Brazil.
2010 Annual and Sustainability Report | 19 Business and Sustainable Development
Macro Braskem’s Activities Braskem’s Vision 2020 Objective in 2010 Activities to 2015
Greenhouse •Achieved an 11.6% reduction 2011- 2015: progress •Achieve the same GHG gases (GHG) in the GHG emissions on the transparency and emission intensity as the intensity indicator since result dimensions of world’s best large-scale 2008. the CDP; chemical companies.
•Began using sugarcane 2011 – 2015: reduce •Sequester considerable as raw material for the emission intensity amounts of indirect GHG production of ethylene, which emissions through the
will reduce CO2 emissions by 2011 – 2013: obtain use of renewable raw up to 750,000 tons per year. the first carbon credits. materials.
Water • Reduced the generation of • Reduce water • Braskem as a reference efficiency effluents by 12% since last consumption by 23% in its sector in use of year. Between 2002 and and the generation of water, reusing 100% 2010, there was a 36% effluents by 20% (in of the water in water reduction in the generation of comparison with 2010), stress areas. effluents. with the adoption of reuse projects.
• Continue remediation projects.
Energy • Reduced its energy • Continue • Achieve the same efficiency consumption level by 6% reducing energy energy consumption since 2009. consumption levels. level as the world's best large-scale chemical companies.
• Become an important user of recyclable-source power.
2010 Annual and Sustainability Report | 20 Business and Sustainable Development
Macro Braskem’s Activities Braskem’s Vision 2020 Objective in 2010 Activities to 2015
Renewable raw • Began using sugarcane- • Continue research into • Become the most materials based ethanol as a raw alternative technologies important global material in the production for renewable raw player in biopolymer of ethylene, with the materials. production. inauguration of the green ethylene plant in Triunfo (Rio • Implement, by 2013, the Grande do Sul). sustainable development management process • Announced the construction in 90% of ethanol of a green propylene plant. Suppliers.
• Defined a code of conduct 2011: define the for its ethanol Suppliers and feasibility of new green implemented it in 70% of investments. the supply. 2013: operational start- up of the first green polypropylene plant.
Post- • Invested in development • Define a business and • Braskem as an consumption of technical support for 38 partnership model for important player in mechanical sorting and Brazil’s first energy solving the problem of recycling centers for plastics, recycling plant. plastic waste. in Rio Grande do Sul. • Strengthen the recycling • Reach levels similar • Was one of the founders of chain in the states in to those in developed the Instituto Socioambiental which we operate (Rio countries, currently of Plastivida, which promotes Grande do Sul, São around 35%, with the recycling. Paulo, Rio de Janeiro, mechanical recycling of Bahia and Alagoas). plastics. • Launched actions to implement recycling-based • Make energy recycling social insertion programs in of urban solid waste a the states of Alagoas, Bahia, reality. Rio de Janeiro and São Paulo.
2010 Annual and Sustainability Report | 21 Business and Sustainable Development
Macro Braskem’s Activities Braskem’s Vision 2020 Objective in 2010 Activities to 2015
People • Launched training programs • Complete the • Braskem is for its Members. implementation phase perceived as an of SEMPRE in recently engaged company • Carried out private social acquired assets. that contributes to investment. improving human • Include social development in its • Prioritized relations with responsibility in SEMPRE, projects’ locations. the communities based on the Corporate surrounding its plants. Social Responsibility • Braskem is recognized Standard ISO26000. as the industry’s best • Began the implementation workplace. of the System of Excellence • Expand nationwide in Safety, Health and the social insertion the Environment (SEMPRE) program through the at the plants acquired strengthening of the from Sunoco Chemicals mechanical plastics and Quattor. recycling chain.
• Reduce accident and new occupational illness rates, continuing to be a reference in its sector.
• Review Private Social Investment (PSI) programs, in order to align them with Braskem’s contributions to improving the HDI, the Global Compact and the Millennium Development Goals in the locations where the company operates.
2010 Annual and Sustainability Report | 22 Business and Sustainable Development
Growth Strategies make tires and rubbers in general, in Rio Challenges Through its financial capacity and Grande do Sul. The plant is expected to for 2011 the opportunities arising in the absorb R$300 million in investments and business scenario, Braskem will use to come on stream at the end of 2012. • Improve the the following drivers to grow in the performance of all coming years: The Company’s plans also include eco-indicators. new projects in Peru and Venezuela, • to grow in Brazil, making the as well as its participation in Comperj, investments necessary to keep pace an integrated petrochemical complex • Conclude the with the domestic demand, including under construction in Rio de Janeiro. integration of the strengthening of the plastics chain; In light of the National Pact for the Chemical Industry, introduced Quattor and capture • internationalization, with special in 2010 by the Brazilian Chemical the synergies of efforts towards the development of Manufacturers’ Association (Abiquim), this process. the Ethylene XXI Project in Mexico, Braskem and other companies in the and the constant evaluation of industry estimate the need for an opportunities to invest in competitive overall investment of R$167 billion • Continue to invest raw materials and synergistic by 2017 to keep in pace with Brazil’s in technological operations in the Americas; growth and encourage the replacement research and of imports (see box in this chapter). development. • implementation of a biopolymer investment strategy, prioritizing a Therefore, Braskem reiterates its portfolio of short-term initiatives, commitment to the competitiveness • Develop the new product research and of the petrochemical and plastics green development, and new routes production chains in the Brazilian polypropylene to sustainable Chemistry; market. In addition to investing in its production capacity and project. • new businesses mainly based establishing partnerships with Clients on increasing the value of some to develop products and markets, • Reinforce the of their products through the Company seeks to consolidate downstream integrations. Brazil as one of the countries with development the greatest potential to meet the of people. Currently, Braskem’s largest investments world’s demand for green plastics, in its production capacity are the combining biopolymer technology, integrated ethylene and polyethylene whose efficiency has been proven, plants in Mexico (see box in this with the established efficiency and chapter), and the new PVC plant in maturity of Brazil’s ethanol production Marechal Deodoro (Alagoas), with chain. This perspective was outlined operations scheduled to begin in 2012, during the 16th edition of Conference which will require approximately R$900 of the Parties of the United Nations million in capital and will create 2,000 Framework Convention on Climate temporary jobs during the peak phase Change held in Cancun, Mexico (COP- of its construction. Braskem also began 16), from November 29 to December to develop the project for a new plant 10, where the successful Brazilian producing butadiene, an input used to experience in the field was presented.
2010 Annual and Sustainability Report | 23 Business and Sustainable Development
With reference to conventional Responsible Consumption of Plastic gas emissions, to a more efficient plastics, which are produced from Bags program developed by the management of water and energy fossil energy sources, Braskem takes National Plastics Institute (INP), the resources, and to social inclusion. part in many initiatives to promote Social-Environmental Institute for Bearing this in mind, the initiatives its products, pointing out their Plastics (Plastivida), and the Brazilian to be implemented in the coming environmental advantages in relation Association for the Flexible Plastic years include: (1) instituting a new to their substitutes, in addition to Packaging Industry (Abief). decision-making process based on carrying out educational campaigns life-cycle analysis and the product and and supporting recycling initiatives Additionally, the Company seeks market technological development that aim to minimize the problems to reinforce the image of plastics processes by 2013, and (2) developing arising from their use and improper and its contribution to sustainable a program to strengthen the image disposal. Over the last two years, development, with the consequent of plastics, involving the first, for example, the Company invested improvement in the quality of life, second and third generations of the R$3.5 million in the Quality and to the reduction in greenhouse production chain, by 2015.
Contribution to sustainable development
Braskem has developed an agenda gas emissions, water and energy guided by evaluating its practices and consumption in the production results in terms of economic, social processes, use of non-renewable raw and environmental responsibility to materials (oil and gas), disposal of establish its corporate sustainability plastic waste, and strengthening its policy and redefine its programs relationship with its stakeholders (see related to the topic. These initiatives the table Braskem’s Progress in its aim to acknowledge the value of Macro Objectives). people, minimize risks, increase efficiency, create competitive As a signatory to the UN Global advantages, innovate products Compact since 2007, Braskem also and processes, and to reveal new joined the management, in 2010, business opportunities. of the Global Compact’s Brazilian Commission, of which it became a Braskem’s sustainable development member in 2008. The Global Compact agenda involves the entire production initiatives aim to promote corporate chain, and not just its plants. The social responsibility principles Company’s main challenges are worldwide, advocating a set of associated with the following factors: values in the areas of human rights, hazardous chemicals, greenhouse labor standards, the environment
2010 Annual and Sustainability Report | 24 Business and Sustainable Development
and anti-corruption. The voluntary committees, including the Responsible commitments undertaken by the Action Program, which aims to Company encompass all its operations promote sustainable development in Brazil and abroad. principles in Brazil’s chemical sector. In addition, Braskem took a more To reinforce the contribution of active role in international debates of Brazilian entrepreneurs to sustainable the global chemical industry, through development, in 2010 Braskem the International Council of Chemical became responsible for some activities Associations (ICCA), particularly in the of the Brazilian Business Council for Executive Leadership Group and the Sustainable Development (CEBDS), workgroups on energy, climate change which was created in 1997, having and chemical safety. the Company as one of its founders. Braskem also took on leadership Braskem’s efforts to be recognized functions on the Board of Directors of as a global reference in the sector by the Brazilian Chemical Manufacturers’ 2020 for its contribution to sustainable Association (Abiquim), coordinating development include: to issue an and participating in a number of its annual and sustainability report at the
COMMITMENT National Pact for the Chemical Industry
In June 2010, the Brazilian imports, and tax incentives Chemical Manufacturers’ for companies that invest in Association, of which Braskem is innovation and technology. The a member, disclosed the National industry’s growing incorporation Pact for the Chemical Industry. of sustainable development The goal is to position Brazil’s principles is connected with chemical industry among the five these efforts. largest in the world, and turn Brazil into a surplus producer and This report includes investment leader in the so-called “green projections by chemical and chemistry”, which has a low petrochemical companies for environmental impact. The pact the next ten years. By 2020, involves a set of commitments by companies in the industry expect the chemical industry to innovation to invest US$167 billion – the and Brazil’s economic and social amount needed for the chemical development, in addition to and petrochemical industries establishing conditions favorable to meet demand in this period, to investments in the industry, as wiping out the commercial Brazil’s stronger presence on the balance deficit, which closed global market depends on issues 2010 at approximately US$20.6 such as access to raw materials billion. Braskem contributed to that are competitive in terms of a reduction in this amount by price, availability and volume, singlehandedly reaching export simplification of product taxation revenues of US$4.2 billion, a and arbitration in order to facilitate 56% increase from 2009.
2010 Annual and Sustainability Report | 25 Business and Sustainable Development
B+ Application Level of the Global Reporting Initiative (GRI), version G3 GUARANTEE (2006) guidelines, in 2011, and at the I’m GreenTM: renewable A+ Application Level by 2015, and to resources seal better comply with the requirements of the BM&FBovespa’s Corporate In the first half of 2010, in emphasizes the identity of the Sustainability Index (ISE). anticipation of the start of green products that have an essential polyethylene (PE) production, connection with nature, as well as Sustainable Chemistry vs. Braskem launched the I’m GreenTM transferring value to the brand and Green Chemistry seal. The objective is the create consumers seeking to include the Sustainable chemistry and green value for the product upon which it practice of sustainable consumption chemistry are two different concepts is affixed and identify polymers from to their daily life. In accordance with that are not always fully understood. renewable raw materials – the next Company regulations, whenever For Braskem, sustainable chemistry is will be green polypropylene, whose the seal is used on products or based on the management of three production will start in 2013 (see their final application, it should different categories of impacts (both the box in this chapter). include the percentage of resin positive and negative): environmental, from renewable sources and the social and economic, while green The seal’s use is contingent upon verification method that was used, chemistry, which is a widely-publicized compliance with certain rules, which i.e. the inscription “verified by term, has a more restrictive definition, take into account transparency ASTM D6866”, an international with a focus on products from in communication and meeting guideline issued by Beta Analytic, renewable raw materials, in addition international guidelines for green a world leader in the analysis of to aspects such as the minimization seals. The main objective of these carbon isotopes. To use the seal, the of waste and toxicity and more eco- criteria is to create a strong identity product should contain more than efficient and safer processes. that transmits credibility to the end 51% renewable content. consumer, avoiding the association In this field, although there is room of any products using Braskem The initiative reinforces Braskem’s for the continuous development of green plastic with the practice of commitment to creating value solutions with reduced environmental greenwashing. for the production chain in which impact, Braskem is already positioned it operates, for its Clients and a global leader, especially after The seal was created to offer society, while also contributing the start-up of its green ethylene simple and direct communication to a reduction in greenhouse plant and the launch of the green to a variety of audiences. Its use gas emissions. propylene production project, both of which are derived from sugarcane ethanol. Many other innovative products launched by the Company, as well as the improvement, year after year, of its eco-indicators (more The greatest challenge of Braskem for balance on environmental, social information in available in the chapter related to its vision to become a and economic matters must be present Environmental, Health and Safety global leader by 2020 lies in the field from the beginning of the chain up to Dimensions), indicate that reducing of sustainable Chemistry, as this goal the recycling and disposal of products, environmental impacts is already part requires that the Company looks at the and not only in the industrial plants. of its Members’ daily routines. productive chain as a whole. Its search
2010 Annual and Sustainability Report | 26 Business and Sustainable Development
For Braskem, being a leader in sustainable Chemistry also means INNOVATION to actively participate in the Green development of Brazil’s entire polypropylene production chain (see box in this chapter). Internally, the Company After becoming, in September materials, in accordance with relies on the engagement of its 2010, the largest producer of green the international certification corporate leaders, who are prepared polyethylene (PE) in the world, obtained by the Company. The to provide guidance, listen and manufactured using sugarcane- final product will offer the same implement the initiatives of the derived ethanol (see chapter technical properties, processability other Members, encouraging entitled Profile), Braskem took and performance provided by the them to reflect and showing them another step towards establishing polypropylene produced using new ways of working. However, itself as a global innovator in the traditional means. due to the wide range of social production of biopolymers. In and environmental aspects, there October, the Company announced The preliminary eco-efficiency must be a prioritization. For this the conclusion of the conceptual study of the product was reason, Braskem has defined three phase of the project to build a favourable, in view of the main pillars of action, aimed to green polypropylene plant, which is environmental benefits of make its operations, resources and expected to require an investment green ethylene. The study was product portfolio more sustainable, of approximately US$100 million carried out in partnership with while improving people’s lives by and offer a minimum production the Espaço Eco Foundation offering new solutions to society. capacity of 30,000 tons of the and was based on conceptual Seven macro objectives have been product per year. engineering data. For every ton established to make the adoption of green polypropylene produced, of these pillars more effective (see In 2011, the basic engineering approximately 2.3 tons of CO2 are in this chapter the table Braskem’s studies will be completed. Once expected to be sequestered. Progress in its Macro Objectives). the final approval has been obtained, the implementation Polypropylene, the second most- of the project will begin, with used plastic in the world, has the plant scheduled to become characteristics that are unique operational in the second half of among polymers, such as the 2013. The green polypropylene excellent balance of physical produced by Braskem will utilize properties, the possibility of high technology that has already been transparency, impact resistance lab tested, using ethanol, which at low temperatures, low density allowed for the production of – providing low weight per piece – resin samples free of fossil raw and highly versatile applications.
2010 Annual and Sustainability Report | 27 Business and Sustainable Development
Focus on Innovation
Being recognized among the Brazilian effort to increase the technological companies that invest most heavily autonomy of its productive processes, in innovation, which is currently the alongside its research activities and the case, is not enough for Braskem. development of new products In 2010, the organization made and applications. further progress, by sharpening its focus on development and the As such, the first step involved an research into new solutions as an internal reorganization. In 2010, essential attribute of 2020 Vision. the strategic importance of the The permanent challenge in this corporate vice president dedicated field consists of continually adding to the area was strengthened, acting value to products, developing new more closely with the innovation applications that diminish potential teams of the basic petrochemical and negative environmental impacts polymers areas, focused on short-term stemming from the incorrect use of results, and further strengthened by the product, while enhancing the the integration of the research and social and environmental benefits. In development unit of Braskem America, order to accomplish this, the company in Pittsburgh, Pennsylvania. If the revised its innovation and technology focus had previously been on product strategy, changing the focus and development, the strategy now providing more support to the team, consists of seeking out opportunities more investments in training its through the development of new professionals, the establishment or production processes, such as the one strengthening of partnerships with that allows for the transformation of research institutes and clients, and a ethanol into plastic resin. By year end, gradual increase in the consumption of the company had registered more renewable raw materials. than 400 patents.
Developing its own technologies, or Braskem believes that innovation is collaborating with research institutes, fundamentally associated with ideas, is also a central aspect of Braskem’s and, therefore, with people. As such, it vision of becoming the global leader in prioritized the ongoing establishment sustainable chemistry. Until recently, of partnerships with research prior to the incorporation of Quattor organizations and, internally, accepted and the polypropylene assets from the challenge of exponentially Sunoco Chemicals, Braskem was increasing the training and recruitment acquiring a considerable amount of of scientists. In 2010 alone, the technology from other companies. The number of researchers working for company’s new reality, presently one of Braskem leapt from 190 to 240. Other the largest worldwide in the industry research and innovation highlights and in the process of expanding include the registration of 30 patents, internationally, requires an extra 13 of which were related to new
2010 Annual and Sustainability Report | 28 Business and Sustainable Development
developments and 17 of which were the partnership. The deadline for Ministry of Agriculture, Livestock extensions of existing patents, in other the submission of research proposals and Food Supply. The cooperation areas, as well as the incorporation of was November 16, and they will be agreement on science and technology the patent portfolio inherited from evaluated according to their potential aims to identify more productive and Sunoco Chemicals. to offer new and creative solutions to biodegradable cellulose nanofibers the domestic and global markets. from different plant-based sources In terms of financial capital, the for use by industry. The project company intends to significantly In September, the Company entered has the support of FAPESP and the increase, by 2016, its investments in into partnership with the Brazilian Foundation for Industrial Research and innovation and technology and, as National Biosciences Laboratory Advancement (FIPAI). such, be counted among the industry (LNBio), in Campinas, for the players that stand out in this regard. installation of a laboratory to be With a three year timetable and used by a team of researchers from R$500,000 in resources – R$248,000 Research Partners the Company. In addition to the of which was invested by Braskem - To achieve its goal of being one of physical space, Braskem will have the program is aimed at financially the most innovative companies in the complementary access to the latest supporting cooperative research global chemical industry, developing LNBio equipment. The initiative is projects to be established with public the entirety of the sector’s production aimed at carrying out research in and private higher education and chain, Braskem maintains partnerships biotechnology, seeking to develop research institutions in the state of with public and private research products that are both economically São Paulo. The focus is on the study institutes throughout Brazil. The year competitive and friendly to the of sugarcane bagasse, coconut husks, 2010 brought many new agreements, environment, with an emphasis specific varieties of colored cotton, which are expected to lead to the on the use of raw materials from sisal, curaua and agricultural waste. introduction of creative solutions in renewable sources. plastic in the coming years. Lastly, in December, Braskem and the The partnership with the laboratory state of Bahia established a partnership In August, the São Paulo State includes the initial use of a 50 m2 for the development of technology Research Support Foundation (FAPESP) space, which will be expanded to 200 with a focus on sustainability. The first and Braskem issued the second call m2 before the end of the year. In the project from this partnership is UTEC® for proposals for the Agreement near term, the project will involve fiber – manufactured using ultra-high on Scientific and Technological an estimated group of 40 Braskem molecular weight polyethylene – in a Cooperation that they signed in researchers. This team will have access pioneering initiative featuring 100% February 2008. The aim is to support to cutting-edge laboratory facilities Brazilian technology. Its primary use cooperative research projects on connected to the Ministry of Science will be in pre-salt oil drilling platforms the synthesis of chemical products and Technology. and in bulletproof vests for personal obtained from renewable sources, safety use. The project, which also has such as sugars, ethanol and biomass. In November, a project involving the support of the Financiadora de nanotechnology and the use of Estudos e Projetos (FINEP) - a public Each party will contribute with R$5 renewable resources was launched agency that provides support for million for the selected research in partnership with the Brazilian research - will receive US$10 million in projects, which accounts for one fifth Agricultural Research Corporation investments and is expected to being of the total to be invested through (EMBRAPA), an agency linked to the production in 2013.
2010 Annual and Sustainability Report | 29 Business and Sustainable Development
Strategic Consolidation
The ongoing reorganization of the Brazil accounts for less than plays an important role in providing petrochemical industry in Brazil, of 4% of the global production of credit to its Clients - both domestic which the acquisition of Quattor thermoplastic resins. Presently, and internationally - with the total by Braskem, at the beginning between 20% and 30% of domestic portfolio averaging R$3.5 billion. The of 2010, is just the most recent demand has been met through importance of this system became step, has strengthened the entire imports, which negatively affects apparent during the global economic domestic industry and its financial Brazil’s trade balance. In 2010 crisis that began in 2008, when the capacity, encouraging new long-term alone, the deficit between exports lines of credit from the financial investments to accompany the growth and imports in the chemical sector system were no longer available and of the Brazilian economy. In addition, reached US$20.6 billion (according Braskem increased the resources the industry’s consolidation has made to information from the Ministry of available to its Clients to finance Braskem more prepared to compete Development, Industry and Foreign working capital, maintain liquidity in the international petrochemicals Trade, Brazil’s resin imports grew in throughout the plastics production market, where geographic and volume by approximately 26% from chain, which allowed the industry to cultural barriers no longer inhibit 2009). On the other hand, during overcome this moment of turbulence activities by companies. the same period, Braskem’s exports and maintain its process of growth. grew by 56%, reaching US$4.2 Petrochemical pricing obeys the billion, largely due to the increase in In order to increase the law of supply and demand on the petrochemical prices on the global competitiveness of its Clients on global market, as frequently occurs market. These numbers confirm the the international market, Braskem in capital-intensive industries. petrochemical market’s global scale. also engages in Sales with Export Petrochemical products, for the most Incentives, in which special prices are part, particularly thermoplastic resins, One of Braskem’s ongoing offered for the portion of production are easily transported from one side commitments is the constant that is destined for international of the globe to another and are not improvement of competitiveness in customers. In 2010, sales of subject to any major commercial the entire production chain. To that manufactured goods with export barriers that might impede their end, the company has programs incentives represented 10% of the circulation. As a result, no country is in place to support its Clients, in total volume of polypropylene and 4% able to impose artificially high prices order to grow together and become of the volume of polyethylene traded in relation to those found on the stronger, both in the domestic and on the domestic market, totalling international market. international markets. The Company 115,000 tons sold with incentives.
2010 Annual and Sustainability Report | 30 Corporate Governance Braskem is advancing with the challenge of incorporating a broader vision of entrepreneurial strategy, oriented by the principles of sustainable development.
Braskem’s governance practices and into account the principles of processes are aimed at ensuring the sustainable development. observance of ethics, transparency and respect to Clients, Shareholders, • Adhere to regulatory, Members, Suppliers and other legal, statutory and stakeholders, in order to deliver procedural guidelines. value to the Shareholders, making payments on their capital and In keeping with these values, protecting their assets. Braskem’s accountability includes The values and principles of the publication of the Annual and governance observed by the Sustainability Report, as well as Company are the following: quarterly earnings reports, with analysis of key economic indicators. • Guarantee that ethical integrity The Company also holds regular permeates all systems of meetings with analysts and investors. governance dealing with the Company’s internal and Braskem regularly sends information external relations. to the Securities and Exchange Commission of Brazil (CVM) and • Ensure that the available the stock exchanges of São Paulo information is transparent, going (BF&MBovespa) and New York beyond the minimum obligations (NYSE), through reports, standardized to promote free, frank, precise and financial statements, earnings rapid communication. releases, annual and quarterly reports, Form 20-F, minutes, notices, • Offer all stakeholder fair and announcements and material facts. equitable treatment. In order to facilitate access to this information by Shareholders and the • Require that governance agents financial community, the Company (Managers, Fiscal Council Members offers a website featuring additional and Auditors) fully respond for information, such as: quarterly their actions while exercising fact sheets, quarterly valuation their mandates to those who books, annual sustainability reports, elected them. important information on industrial plants, information on subsidiaries • Guarantee that governance agents and affiliates, industry information, look after the long-term health prices and stock price charts from of the Company, incorporating a the BM&FBovespa and NYSE, broad business strategy and taking among others.
2010 Annual and Sustainability Report | 31 Corporate Governance
Corporate Sustainability Index
Braskem has spent six consecutive announced in November 2010, brings to now become the world leader in years on the BM&FBovespa’s Corporate together 47 papers of 38 companies, sustainable chemistry through growing Sustainability Index (ISE), which representing 18 industries and R$1.17 investments in innovations aimed at reflects the performance of a portfolio trillion in market cap. The index runs better serving the public. of actions by companies with a from January 3 to December 29, 2011. recognized commitment, in the normal The selected companies stand out course of business, to best practices Braskem’s permanence on the ISE by maintaining formal commitments in governance, social responsibility reflects the Company’s stance and its to sustainable development in their and sustainability. The new portfolio, new 2020 Vision, whose objective is business strategies.
PRINCIPLES Code of Conduct
Braskem’s Code of Conduct manner and in strict accordance • Use and Conservation of Braskem’s establishes ethical principles and with the law, Company principles Assets: it is the responsibility standards of conduct for guiding and Company guidelines; of Members to ensure the the internal and external relations conservation of Braskem’s assets, of all of Company Members, • Business Relationships with Clients, which include facilities, machines, independent of their roles and Suppliers and the Government: equipment, furniture, vehicles, responsibilities, confirming its Braskem instructs and expects valuables, etc.; commitment to ethical, responsible its member to carry out business and consistent behaviour with all relationships in accordance with • Accounting and Financial of the Company’s audiences. The the laws and legal practices of Transparency: transparency is document, like all of the Company’s the market, and, particularly, in essential to allowing the market to corporate policies, also applies to accordance with the domestic and correctly evaluate Braskem; operations outside of Brazil. international regulations on economic order and in defense of competition; • Environment: maintaining Braskem’s Code of Conduct the environmental balance establishes the following principles: • Handling of Insider Information and preserving nature are of and Conflicts of Interest: Braskem’s fundamental importance to • Relationship with Members: Members must ensure that their Braskem’s business activities; there will be no discrimination actions do not conflict with the based on religion, political or interests of the Company nor cause • Slave and Child Labor: Braskem philosophical belief, nationality, harm to its image or reputation; does not tolerate, does not origin, sex, age, color, sexual allow and does not condone the preference, marital status, or • Relationship with Shareholders and employment of slave labor or child mental or physical disability; Stakeholders: the treatment given labor in any process related to the to Shareholders does not depend Company’s operations. • Responsibility in Business: Members on the quantity of shares that they are responsible for carrying out own, subject to legal restrictions. their activities and conducting All will be afforded equal access to Braskem’s business in a transparent the flow of information;
2010 Annual and Sustainability Report | 32 Corporate Governance
Ownership Structure*
2.9% 20.2%
38.3%
5.5% voting TOTAL Odebrecht Petrobras Bndespar 47.0% 50.1% 35.8% Others
*Does not include shares held in treasury (0.2% of total capital).
Odebrecht and Petrobras have direct company BRK Investimentos, which and indirect stakes in Braskem. is controlled by Odebrecht S.A., with Indirectly, both own shares in the a 53.8% share, and the other 46.2% Company through the holding owned by Petrobras.
Total Shares
Common Shares 451,669,063
Class A Preferred Shares 349,004,561
Class B Preferred Shares 593,818
Total 801,267,442
2010 Annual and Sustainability Report | 33 Corporate Governance
Governance Structure
Braskem has been part of the Level unified term of up to two years, The Braskem governance model is 1 Special Corporate Governance with reelection permitted and, at composed of a Board of Directors, Segment on the BM&FBovespa least 20% of the board composed Standing Committees that support the since December 2003 and meets of independent members; Board of Directors, an Fiscal Council the standards set by Law 6,404/76 and an Ethics Committee. Braskem’s (Brazilian Corporate Law), the • tag along for 100% of the shares corporate governance is supported rules of the Brazilian Securities in the event of a change in the by the Corporate Security area, and Exchange Commission and controlling interest. which carries out the roles of internal the Bovespa’s rules regarding auditor, advisor for the management Differentiated Corporate Governance In 2005, nearly one year before of business risks, responsible for Practices, as well as its own bylaws. it was required, Braskem met the compliance with regulations and requirements established by the laws, such as the SOX and the FCPA, Braskem also meets to the Sarbanes-Oxley Act (SOX). Since as well as managing the “Ethics requirements set by Level 2 and the then, every year it has been certified Line” complaint channel, carrying Novo Mercadosegment, namely: in compliance by external auditors out the evaluation, investigation and from PricewaterhouseCoopers monitoring of reported violations of • Disclosure of financial statements (PwC) and been recognized for the Braskem Code of Conduct. in accordance with international the adjustment of its corporate standards (US GAAP and IFRS, the governance practices. Internationally, The governance model for the latter still in preparation); the Company’s shares are listed on relationships between Shareholders, the NYSE and the Latibex, the Latin Board Members, Management and • Board of Directors with, at American listing segment of the Independent Auditors is organized in minimum, five members and a Madrid Stock Exchange. the following manner:
2010 Annual and Sustainability Report | 34 Corporate Governance
SHAREHOLDERS, DIRECTORS, BOARD AND INDEPENDENT AUDITORS
Entities Participants Objectives
• Macro-objectives and strategies • Targeting for negotiations and strategies Board of Shareholder • Monitoring performance Directors representatives • Approval of basic policies • Resolutions contained in the bylaws
Standing committees that support the Board • Recommendations to the Board of Directors based on analyses of • Finance and information, aimed at improving the Committee members elected Investments quality and speed of the deliberative according to their specialties process • Strategy and • Monitoring decisions as assigned by the Communication Board of Directors
• People and Organization
• Supervisory role over the actions of Braskem’s managers, in order to ensure Fiscal Shareholder compliance with their legal and statutory Council representatives duties • Has broad functions, sometimes instituting an Audit Committee
• Issuance of independent opinions on • External auditors financial statements, in accordance with Auditors prevailing legislation • Corporate security • Audit Program focused on Risks and Compliance with laws like the SOX
Head of Legal, Head of Corporate • Adoption and continual updating of the Ethics Governance, Head of People and Code of Conduct Committee Organization (P&O) and Head of • Assessment and referral of solutions to the Institutional Relations (IR) reports received through the Ethics Line
2010 Annual and Sustainability Report | 35 Corporate Governance
Composition of the groups responsible for corporate governance at Braskem*
Gender Age group
Women MEn Under 30 Between 30 Over 50 and 50
2008 0 16 (100%) 0 2 (12%) 14 (88%)
2009 0 16 (100%) 0 3 (19%) 13 (81%)
2010 1 (6%) 15 (94%) 0 3 (19%) 13 (81%)
*As of: 30/04/2011. Note: Members of the Board of Directors (11) and the Fiscal Council (5).
Board of Directors The Board of Directors represents • approving the matters set forth which will also define, from among the Braskem’s Shareholders and serves as the in the statutes and policies members of the Board, the Chairman Company’s deliberative (non-executive) proposed by the CEO; and Vice-chairman, who can also be body. It operates independently, replaced at any time. During the absence providing accountability to the • submitting to the Shareholders’ or temporary disability of a sitting Shareholders, the other stakeholders and Meeting the matters for which it is member, he/she will be replaced by the to society as a whole with respect to the responsible, as defined in the bylaws; respective alternate. tangible and intangible assets used in conducting the Company’s business. • monitoring the CEO’s Action Plan In response to a corporate governance through monthly reports; requirement regarding the independence Some of the main duties of the Board of the Board of Directors, it is important of Directors include: • hiring the registered independent to note that no Board Member, sitting auditing company, under the terms set or alternate, including the Chairman, is • setting the general direction of forth in the Brazilian Corporate Law. a member of Braskem’s management. In the business; 2010, there were two board members In accordance with the bylaws, as sitting members on Braskem’s Board. • guaranteeing Braskem’s adoption Braskem’s Board of Directors is The Board Member’s independence is of a corporate governance system composed of 11 members and their based on the following concepts: that adheres to the market’s respective alternates, Shareholders, best practices; residents or non-residents of the country, • not having any connection with the subject to election or being removed at Company, except for a • approving the CEO’s action plan. any time by the Shareholders’ Meeting, possible interest;
2010 Annual and Sustainability Report | 36 Corporate Governance
• not being a controlling Shareholder, There is no formal channel of direct The Board meets regularly at least a member of the controlling group, communication between Braskem’s four times per year, as well as in or a spouse or relative to the Members and the Board of Directors. special meetings when called by second degree of any such person, In accordance with the bylaws, the the Chairman, Vice Chairman or by nor maintain connections with Board’s demands are sent directly two members. In 2010, there were any organizations related to the to the Company’s CEO, who has 21 ordinary and special meetings. controlling Shareholder; the responsibility of acting on the Resolutions require a quorum of the issues discussed during the meetings. majority of the Board members and • not having been employed by or Beyond this, there is no other direct are adopted with a majority vote, served as Executive Officer of the form of communication between the subject to the Braskem Shareholder Company or any of its subsidiaries Board and Company Members. Agreement in force. during the prior three years; The mandate for members of the • not being the spouse or relative up Board of Directors is two years, with to the second degree of any of the reelection permitted. The term in office company’s Executive Officers for the Chairman and Vice Chairman is or Managers; one year, with reelection permitted.
• not receiving other compensation from the Company, besides the Board Member fees.
Members of the Board of Directors*
Sitting Members Alternates
Marcelo Bahia Odebrecht – Chairman Cláudio Melo Filho Paulo Roberto Costa – Vice Chairman Antonio Aparecida de Oliveira Alfredo Lisboa Ribeiro Tellechea André Amaro da Silveira Almir Guilherme Barbassa Pedro Augusto Bonesio Álvaro Fernandes da Cunha Filho Felipe Montoro Jens Eduardo Rath Fingerl Marcos Luiz Abreu de Lima Francisco Pais Andrea Damiani Maia José Carlos Grubisich Filho José de Freitas Mascarenhas Maria das Graças Silva Foster Arão Dias Tisser Newton Sérgio de Souza Mônica Bahia Odebrecht Luciano Nitrini Guidolin Carla Gouveia Barretto
*As of: 30/04/2011.
2010 Annual and Sustainability Report | 37 Corporate Governance
Support Committees In their advisory and supportive investment decisions, as well as The Rules of Operation of Braskem’s roles, committees are to support monitoring the investments and Board of Directors establishes basic the decisions of the Board of contracts with related parties roles and responsibilities for the Directors, through non-deliberative approved by the Board. Board’s Support Committees, as recommendations based on specialized well as basic guidelines for their analysis of specific issues that seek to • Committee on Strategy and establishment and operation. As was improve the quality and speed of the Communication (CEC): In terms stated herein, the committees can be deliberative process. of the company’s strategic permanent or formed on an ad hoc objectives, it continually evaluates basis. The Permanent Committees • Committee on People and the planning goals, which are the are those that deal with issues Organization (CPO): has the task basis of Braskem’s Business Plan. whose nature and objectives remain of evaluating new policies, as well With respect to communication, it unchanged over time. as the monitoring and review of evaluates new policies, as well as existing policies related to People and monitoring and analysing existing The Permanent Committees are a part Organization. It is also responsible for corporate policies for capital markets of Braskem’s Corporate Governance supporting the Board in the decisions and social responsibility. structure and their aim is to advise the under its jurisdiction, in accordance Board of Directors on predetermined with the Company’s bylaws. topics. Each Committee is coordinated by a member of the Board and is • Committee on Finance and made up exclusively by sitting and/or Investments (CFI): evaluated new alternate members. Qualified Braskem policies, monitors and analyses executives who have involvement existing policies related to financial with or knowledge of the issue can management, insurance and take part in these meetings, invited guarantees, and integrated risk as guests, or at the request of the management, among others. It is Coordinating Board Member. also responsible for recommending
The composition of the Board’s Support Committees, as of April 30, 2011, was as follows:
Committees Coordinator Participating Participating Participating Member Member Member Finance and Luciano Nitrini Guidolin Felipe Montoro Jens Paulo Roberto Costa Eduardo Rath Fingerl Investments
People and Maria das Graças Álvaro Fernandes André Amaro da Silva Carla Gouveia Barretto Organization Silva Foster da Cunha Filho
Strategy Almir Guilherme Alfredo Lisboa and Newton Sérgio de Souza Francisco Pais Barbassa Ribeiro Tellechea communication
2010 Annual and Sustainability Report | 38 Corporate Governance
Fiscal Council for reelection. The mandates expire at The Brazilian Corporate Law requires the subsequent Annual Shareholders’ the establishment of a permanent or Meeting. In accordance with the law, non-permanent Fiscal Council (FC). members of the Board of Directors or Braskem’s bylaws provide for the the Executive Board of the companies establishment of a permanent FC, cannot participate as members of composed of five sitting members and Fiscal Council. Employees, spouses five alternates. It is a corporate entity and relatives of members of the that operates independently from management are also prohibited from management and the independent participating. The FC regularly meets auditing companies, whose primary every three months and in special responsibility is to review the activities meetings, when necessary. of Management and the financial statements, as well as render accounts As is the case with Braskem’s Board of to Braskem’s shareholders. Directors, the Fiscal Council also has an exclusive information channel that The members of the Fiscal Council can be accessed through the Braskem are elected by the Shareholders at the website (www.braskem.com.br). The Annual Shareholders’ Meeting for a composition of the FC, as of April 30, one-year term and they may stand 2011, was as follows:
Fiscal Council
Sitting Members Alternates
Maria Alice Ferreira Deschamps Cavalcanti Carlos Alberto Siqueira Gomes
Aluizio da Rocha Coelho Neto Jayme Gomes da Fonseca Júnior
Antônio Luiz Vianna de Souza Marcílio José Ribeiro Júnior
Ismael Campos de Abreu Afonso Celso Florentino de Oliveira
Manoel Mota Fonseca Ana Patrícia Soares Nogueira
2010 Annual and Sustainability Report | 39 Corporate Governance
Executive Board except the CEO (Business Leader) The Executive Board is managerial and the Chief Financial and Investor body of the Company. According to Relations Officers, do not have specific Braskem’s bylaws, the Executive Board titles and are known only as “executive is composed of the CEO and three to officers.” As of April 30, 2011, the nine other statutory executive officers. members of the Executive Board were The members of the Executive Board, the following:
Executive Board
Name Job Position
Carlos Fadigas CEO
Marcela Aparecida Drehmer Andrade Chief Financial and Investor Relations Officer
Décio Fabrício Oddone da Costa Executive Officer
Edmundo José Correia Aires Executive Officer
Maurício Roberto de Carvalho Ferro Executive Officer
Manoel Carnaúba Cortez Executive Officer
Patrick Horbach Fairon Executive Officer
The statutory executive officers are business leadership, the Board of as well as the company’s robust elected by the Board of Directors Directors approved, in December investment program, both in Brazil for a two-year term, corresponding 2010, the nomination of Carlos and in the international market. to the terms of the members of the Fadigas to the position of Braskem’s Board of Directors, with reelection CEO. He actively participated in The choice of this particular permitted. The current term of all of the negotiations that led to the executive to take over as CEO is the statutory executive officers expires acquisitions of Quattor and the part of the strategy of leadership at the 2012 Annual Shareholders’ Sunoco Chemicals assets in the renovation and succession within Meeting. The Board of Directors can United States, and, since the the Odebrecht Organization, in remove an executive officer at any beginning of 2010, he has been which the processes are ongoing time. The same law specifies that the in charge of business at Braskem and occur naturally, as a result executive officers must be residents of America. He will continue the of new challenges and business Brazil, but need not be shareholders. implementation of Braskem’s growth dynamics. In addition, this decision strategy, with a focus on 2020 addresses the company’s desire to Continuing the process of Vision’s goal of becoming a global constantly improve its corporate succession in the Company’s leader in sustainable chemistry, governance process.
2010 Annual and Sustainability Report | 40 Corporate Governance
Executive Committee Braskem’s executive body is the take place, in principle, on a monthly responsibility of the CEO, supported basis. In 2010, 13 meetings were by the Executive Committee, made held. The Committee is composed of up by the leaders of the Business the CEO and his executive officers, as Units and Support Units. The shown in the table below, based on meetings are called by the CEO and information from April 30, 2011:
Executive Committee
Name Position (or area of responsibility)
Carlos Fadigas de Souza CEO
Marcela Aparecida Drehmer Andrade Finance and Investor Relations
Marcelo Lyra do Amaral Institutional Relations and Sustainable Development
Manoel Carnaúba Cortez Basic Petrochemicals Unit
Rui Chammas Polymers Unit
Mauricio Roberto de Carvalho Ferro Legal and Corporate Governance
Fernando Musa Business Planning and Development
Décio Fabrício Oddone da Costa Investments
Edmundo José Correia Aires Corporate Innovation and Technology
Patrick Horbach Fairon COMPERJ Project
Luiz de Mendonça International Business Unit
Marcelo Arantes People and Organization
2010 Annual and Sustainability Report | 41 Corporate Governance
Ethics Committee of Conduct. Braskem’s Corporate Deliberative and consultative body, Security department is responsible responsible for guaranteeing the for confidentially analyzing understanding of Braskem’s ethical all reports, with the help of a principles, issuing opinions and specialized outsourced company. All applying disciplinary sanctions in of the cases reported and the results cases of transgression of the values of their respective analyses are described in the Company’s Code presented to and discussed by the of Conduct. Company’s Ethics Committee.
The Ethics Committee is composed The communication channel is also of at least four members: the head responsible for establishment of best of the legal department, the head practices in Corporate Governance of Corporate Security, a leader from (an initiative that meets Section People and Organization and another 301 of the Sarbanes-Oxley Act), member appointed by the legal contributing to the maintenance and specialist. The members regularly dissemination of Braskem’s Ethical meet four times a year and hold Principles and Code of Conduct, special meetings when necessary, for in accordance with the levels on which minutes are kept. In 2010, the transparency required by the market. Committee held three meetings. The Company has no formal Ethics Line mechanisms for Members to make Braskem’s Ethics Line is a recommendations or provide communication channel accessible by guidelines to the Board of Directors. all, through email, toll free telephone As such, any and all communications or by a regular mail PO box, which addressed by them to that forum exists to receive complaints related is handled by the Corporate to violations of the Company’s Code Security department.
Internal Control Review
Braskem’s Corporate Security processes, making leaders aware department is developing a of the importance of the ongoing permanent process evaluation evaluation and improvement of risk program in order to identify business management and the internal control risks and propose alternatives to of the Company’s business processes, company leaders in order to manage promoting adherence to internal them. The procedure also guarantees rules and market regulations, while the increased efficiency of internal minimizing the occurrence of fraud.
2010 Annual and Sustainability Report | 42 Corporate Governance
Executive Committee
Carlos Fadigas de Souza de Comunicação on two separate Aeronáutica (ITA) and holds a graduate Elected Braskem’s business leader on occasions, first as a commercial officer degree in Business Administration from December 7, 2010, Carlos Fadigas and, more recently, from 2003 to the Getulio Vargas Foundation (FGV). was responsible for Braskem’s Finance 2007, as the director of Business and and Investor Relations area from Media. He received his degree in Mauricio Roberto de Carvalho Ferro 2007 to 2010, and served as the CFO Electrical Engineering from the Federal Head of the Legal and Corporate of Construtora Norberto Odebrecht University of Bahia (UFBA) and holds Governance Department at Braskem, from 2002 to 2006, as well as having a graduate degree in Marketing from he also serves as Vice Chairman of the occupied a variety of positions at Salvador University (UNIFACS), as Board of Directors at Politeno, member OPP and Trikem, companies that well as additional training in General of the Board of Directors at Poliaden were merged during the formation Management from the Harvard and alternate member of the Board of of Braskem. He received his degree Business School. Directors at Petroflex. He worked as in Business Administration from an attorney at the law firm of Carlos Salvador University (UNIFACS) and Manoel Carnaúba Cortez Eduardo Paladini Cardoso in 1989 earned an MBA from the Institute for Executive Vice President of the Basic and as an attorney at the law firm Management and Development (IMD), Petrochemicals Unit, he has held a Bulhões Pedreira, Bulhões Carvalho e in Switzerland. variety of positions at Braskem, having Advogados Associados from 1991 to been the Executive Vice President 1995. He received his law degree from Marcela Drehmer of the Vinyls Unit in 2008, the Vice the Pontifícia Universidade Católica Head of Finance and Investor Relations President of the Basic Petrochemicals do Rio de Janeiro (PUC-Rio) and his at Braskem, Marcela Drehmer was Unit from 2007 to 2008, an Industrial Masters from the University of London the Company’s chief financial officer Officer in the Basic Petrochemicals Unit and the London School of Economics. from 2005 to 2010, and managed from 2004 to 2007, and an Industrial Structured Operations between 2002 Officer in the Vinyls Unit from 2003 to Luiz de Mendonça and 2005. She also served as the head 2004. He is President of the Chemical Head of the International Business of Structured Operations and Planning and Petrochemical Product Industries Unit, he is also in charge of Braskem at OPP Petroquímica, from 1994 to Union (SINPEQ) and oversees the America and the renewable raw 1999, when she joined Odebrecht S.A. Committee for Industrial Development materials businesses. Until the and began working directly with the (COFIC). He received his degree in beginning of 2011, he was the Vice President in charge of Investments Chemical Engineering from the Federal Executive Vice President at Quattor for the holding company. In 2000, University of Bahia and holds an MBA and, prior to that, Executive Vice she took part in the Corporate Finance in Business Management from the President of Braskem’s Basic Internship Program at Credit Suisse Getulio Vargas Foundation (FGV). Petrochemicals Unit and Executive Vice First Boston, in New York. She received President of the Polyolefins Unit. He her degree in Business Administration Rui Chammas spent 15 years at Rhodia S.A., where from Salvador University (UNIFACS) Current Executive Vice President of the he served as the general manager and her MBA in Finance from IBMEC, Polymers Unit, he has held a variety of production, supply, finance and in São Paulo. of positions at Braskem, beginning, in marketing, executive officer in the 2002, as the chief of PVC in what was chemicals division (Latin America) Marcelo Lyra do Amaral then known as the Vinyls Unit. He then and Vice President of Rhodia USA. Head of Institutional Relations and went on to lead the Polypropylene He received his degree in Production Sustainable Development at Braskem, business and, more recently, the Engineering from the Polytechnic from 2000 to 2003, he served as the Polyethylene business. He began his School at the University of São Paulo an executive officer at Rede Globo career in Rhodia, where he remained (Poli-USP) and earned an MBA from Television in São Paulo, in charge of until 2002. He received his degree in INSEAD, in France. Relations with Affiliated Stations. He Aeronautical Infrastructure Engineering also held positions at Rede Bahia from the Instituto Tecnológico da
2010 Annual and Sustainability Report | 43 Corporate Governance
Fernando Musa from Petrobras, with training from Board of Directors at Copesul, Head of Planning and Productivity at the Advanced Management Program Quattor, Petroquímica Suape and Braskem, he was the Vice President at the Harvard Business School, as Refap, as well as a member of the of Quattor in 2010. He received his well at the Advanced Management Board of Directors at Braskem from degree in Mechanical Engineering Program at INSEAD, in France. He 2004 to 2007. He also served as from the Instituto Tecnológico da also received an Honorary Doctor the Holdings’ director at Petrobras Aeronáutica (ITA), and assumed of Education degree from Aquino Química S.A., CFO at Downstream leadership roles in Strategic Planning University, in Bolivia. Participações S.A. and General at companies such as Dow Chemicals, Manager of Business Development McKinsey, Editora Abril and Monitor Edmundo José Correia Aires at Petrobras. He received his Group. He earned an MBA from Head of Technology and Innovation degree in Electrical Engineering INSEAD, in France. at Braskem, he was a member of from the Federal University of Rio Braskem’s Board of Directors between de Janeiro, has a graduate degree Décio Fabrício Oddone da Costa 2008 and 2010 and was an alternate in Management from Pontifícia Head of Investments at Braskem, member of the Company’s Board Universidade Católica do Rio de he served as the CEO of Petrobras of Directors from 2001 to 2008. He Janeiro (PUC-Rio) and an MBA in Energia S.A. from 2008 to 2010 and also chaired the Board of Directors Finance from COPPEAD-UFRJ. chaired the Board of Directors from at Petroquímica Triunfo from 2005 2006 to 2008. He was a member to 2008, and was a member of Marcelo Arantes of the Board of Directors at Innova the Board of Directors at Fábrica Head of People and Organization S.A. and several other companies Carioca de Catalisadores (FCC) and at Braskem, he joined the Company within the Petrobras System. He held Ipiranga Petroquímica. He also served in 2010, after two years as the HR a variety of management positions as the coordinator of the Board of director of Latin America at Fiat do at Petrobras and its international Investments at Petroquisa, and has Brasil. He served as the director of subsidiaries, serving as the chief held a variety of executive positions Human Relations at Reckitt Benckiser, executive officer at Petrobras at Petrobras and Petroquisa since from 2005 to 2008, and was in Bolívia S.A., as well as managing 1980. He received his degree in charge of Human and Organizational the operations of Petrobras in the Chemical Engineering from the Federal Development at Intelig Comunicações Southern Cone. He received his University of Rio de Janeiro (UFRJ). for five years. He received his degree degree in Electrical Engineering from in Business Administration from the Federal University of Rio Grande Patrick Horbach Fairon Faculdade UNA, in Minas Gerais, and do Sul (UFRS) and holds a graduate Head of the Company’s COMPERJ earned his executive MBA from the degree in Petroleum Engineering Project, he was a member of the Dom Cabral Foundation (FDC).
2010 Annual and Sustainability Report | 44 Economic and Financial Dimensions
With the acquisition of Quattor and Sunoco Chemicals, 2010 was marked by the thoroughness of controls of losses and performance indicators.
The year 2010 offered favorable management systems. In 2010, 8th with respect to the production conditions for Braskem’s operations, average plant utilization reached of polymers, assuming a strategically with an increase in domestic demand 87%, an increase of one percentage important role in Brazil. for thermoplastic resins and, at the point over 2009 (the calculation same time, an increase in the price includes the addition of new assets). According to information from the of petrochemical products on the Ministry of Development, Industry and international market. On the other hand, in terms of Foreign Trade, the volume of Brazilian financial management, the priorities resin imports grew 26% from 2009 to In the resins segment, taking were to equalize the debt inherited 2010. At the same time, revenue from into account only three items - from Quattor – objective fully Braskem’s exports increased more polypropylene, polyethylene and achieved – and generate a safe than 56%, jumping from US$2.7 PVC – the Company’s domestic sales level of cash flow in order to ensure billion to US$4.2 billion. The numbers reached 3.4 million tons, an 11% against low liquidity risks and confirm that the petrochemical increase over 2009. Internationally, support the operations of a company market operates on a global scale. sales volume fell by 11%, as a result that had expanded in size, with of rerouting to the Brazilian market, growing investment needs. The Company’s pioneering efforts which was offset by the increase with renewable raw materials in resin prices on the international These efforts, taken together, (sugarcane-derived ethanol) place market. The total produced by allowed Braskem to end 2010 with it among the innovators in the Braskem for the year reached 5.4 financial results that exceeded industry and allow for greater million tons, 6% higher than in the projections and greater profitability competitiveness in a market that previous year. at Quattor and Braksem America, increasingly values a commitment as well as to regain its stock price to sustainable development. The In the basic petrochemicals segment, and carry out new ventures, which expectation is that this differentiating international prices experienced an will allow the Company to maintain factor will generate more value for average increase of 56% on the its growth over the medium term. the Company in the future. year. While ethylene and propylene Among the primary initiatives of sales increased by 6%, BTX revenues 2010, beyond the acquisition of Despite the high level of investment increased by 5% and cumene, 20%, the new assets in Brazil and the United in the current cycle, the Company’s latter due to an increase in activity in the States, were: the inauguration of the Management proposed a distribution textile sector and an increase in capacity largest green ethylene plant in the of R$666 million in dividends at the at the São Paulo Basic Petrochemicals world, at the Trinfo Petrochemical Annual Shareholder’s Meeting. Unit (in Mauá, in the ABCD region). Complex (Rio Grande do Sul); the start of efforts to double capacity Braskem sets performance targets From an operational point of at the PVC plant, in the city of that include the Company’s the view, the strategy was to seek out Marechal Deodoro (Alagoas); lowest levels of management. The operations with the lowest possible and the agreement to develop an Finance and Strategic Planning losses, in order to improve on all of integrated petrochemical project in Department is in charge of the indicators – a challenge which Mexico, as well as other investments compliance with the performance became even greater with the in Brazil and abroad. Whereas objectives. The Company’s financial acquisition of Quattor and Sunoco Braskem was the 12th largest policy, which is publicly available, Chemicals, now Braskem America, company in the industry in 2009, applies to Braskem and all of its which had completely different the Company began 2011 ranked subsidiaries, in Brazil and abroad.
2010 Annual and Sustainability Report | 45 Economic and Financial Dimensions
Main Financial and Operational Results
Sales and Production Performance: 2008 - 2010
Thermoplastic resins 2008 (t) 2009 (t) 2010 (t) Variation (%) (Consolidated) 2010/2009
Total sales PEs 1,557,388 2,430,896 2,498,153 3 PP 742,266 2,383,757 2,404,125 1 PVC 514,740 497,691 504,974 1 Total resins 2,814,394 5,312,343 5,407,252 2 Production PEs 1,586,963 2,369,726 2,536,776 7 PP 731,506 2,305,863 2,437,643 6 PVC 522,441 479,077 475,559 (1) Total resins 2,840,910 5,154,666 5,449,978 6
Total Sales Performance: 2008 - 2010
Basic 2008 (t) 2009 (t) 2010 (t) Variation (%) petrochemicals * 2010/2009
Ethylene 252,502 498,731 517,260 4 Propylene 370,644 383,048 414,443 8 Cumene** - 239,806 288,890 20 BTX* 782,405 1,070,373 1,121,010 5 Production Ethylene 2,116,924 3,086,103 3,276,626 6 Propylene 1,032,376 1,429,812 1,520,142 6 Cumene - 243,940 286,284 17 BTX*** 845,102 1,249,111 1,310,545 5
* Main products. ** The acquisition of Quattor in 2010 was behind the significant increase in sales during this period. *** BTX: benzene, toluene, orthoxylene and paraxylene.
2010 Annual and Sustainability Report | 46 Economic and Financial Dimensions
Net Revenue (R$ million)
18,541 22,647 27,829
Variation – 23%
Net Revenue (US$ million)
10,343 11,620 15,833
Variation – 36%
2010 Annual and Sustainability Report | 47 Economic and Financial Dimensions
EBITDA (R$ million)
2,485 3,181 4,055
Variation – 27.5%
Financial Results: 2007 - 2010
Stakeholder 2007 2008 2009 2010 distribution (IFRS)* (IFRS)*
Government 1072 539 2,499 1,781
Tax discounts or subsidies (incentives) 1072 539 2,499 1,781
Employees 589 561 473 787
Salaries (personnel and managers) 393 439 348 631
Benefits** 196 122 125 156
Creditors 172 4,445 (493) 1,872
Third-party capital 172 4,445 (493) 1,872
Minority interests 390 39 - (6)
Shareholders 671 (2,492) 399 1,895
Interest on equity and dividends 278 - - 415
Retained earnings/losses for the year 393 (2,492) 399 1,480
Total distributed 2,894 1,642 2,878 6,329
*The financial statements for fiscal years 2009 and 2010 are in accordance with the new accounting standard issued by the International Finance Report Standards (IFRS). **The benefits include the Government Severance Indemnity Fund for Employees (FGTS).
2010 Annual and Sustainability Report | 48 Economic and Financial Dimensions
Direct economic value generated and distributed (R$ million): 2008 - 2010
2008 2009 2010* Period
(+) Direct economic value generated 17,960 16,136 25,495
a) Revenue 17,960 16,136 25,495
(-) Economic value distributed 20,659 15,977 25,825
b) Operational costs 15,141 13,530 21,412
c) Employee salaries and benefits1 524 433 742
d) Payments to capital providers 4,445 (493)** 1,872
e) Payments to government 539 2,499 1,781
f) Community investments*** 10.6 7.5 16.4 (=) Accumulated economic value (2,700) 159 (330)
1 Benefits do not include the FGTS. *The increase in relation to previous years is justified by the acquisition of Quattor and the assets of Sunoco Chemical in the United States, now Braskem America. **The amount is composed of financial performance coupled with the exchange rate variation. As a result, it may oscillate, including negatively. ***Includes private social investment, environmental compensations agreed upon with creditors, donations to the Odebrecht Foundation and other types of donation. The values are based on pro-forma figures, as if the acquisition of Quattor had occurred on January 1, 2010, and do not include Braskem America. In 2010, new temporary projects were considered, particularly new investments such as Parque da Amizade in Paulínia (São Paulo) and Projeto Acreditar in Alagoas.
2010 Annual and Sustainability Report | 49 Economic and Financial Dimensions
Significant financial assistance received from the government*
2008 2009 2010
Fiscal incentives / credits R$77,542,000 R$107,765,000 R$19,885,255
Subsidies 0.00 0.00 -
Subsidies for investments, 0.00 0.00 R$ 1,400,900 research and development and other relevant types of concession programs
Premiums 0.00 0.00 -
Royalties 0.00 0.00 -
ECAs (financial assistance from 0.00 0.00 - exportation credit agencies)
Financial incentives 0.00 0.00 -
Other financial benefits 0.00 0.00 - received or receivable from any government for any operation
Total** R$77,542,000 R$107,765,000 R$21,286,155
*Does not include amounts related to the operations of Braskem America. **The annual amounts vary depending on the recovery of taxes in 2008 and 2009, as reported in the 2008 Financial Statements (note 25) and 2009 Financial Statements (note 27).
2010 Annual and Sustainability Report | 50 Economic and Financial Dimensions
Advance payment of debts In October, the Company was able Investment policy The consolidation of the Brazilian to change its debt profile, with the In order to optimize resource petrochemical industry, further average debt term increasing from management, Braskem updated its cemented with the acquisition of seven to 12 years, improving the investment policy in 2010. During Quattor, has created excellent prospects share division between three types this time, the Company invested for Braskem, but also introduced of lenders: banks, capital markets a total of R$1.8 billion, which enormous challenges. Associated and funding agencies, such as the represents a 99% increase on the with the purchase of assets, the Brazilian Development Bank (BNDES). R$894 million disbursed during Company inherited a short term A total of R$1.2 billion was obtained the previous year. As shown in the debt, concentrated in the banking from the capital markets, at a highly chart below, a large part of this sector, of around R$7.4 billion. Part competitive cost. amount was directed towards the of the debt was liquidated by the new operations that were integrated R$3.7 billion increase in capital, with From an operational standpoint, during the course of the year: the $1 billion contributed by Odebrecht, the plants inherited from Quattor new green ethylene plant, at the R$2.5 billion contributed by Petrobras began 2010 with a reduced capacity Triunfo Complex (Rio Grande do and the remainder from the other utilization rate. This was mainly due Sul); Quattor; Braskem America: and Shareholders. In order to manage the to problems related to raw material the Ethylene XXI project, in Mexico. remainder of this liability and change its supply, which were overcome, Other significant contributions profile, the strategy was to negotiate over the course of the year, under were made to increase production advance payment to the bank at the new management. The operations capacity, which was the case at the lowest possible cost, which took place that already belonged to Braskem PVC plant in the city of Marechal because of the Company’s credibility maintained their quest for efficiency Deodoro (Alagoas), in health, and its long history with the financial and innovation. In partnership with safety and the environment, in sector. Another important aspect was its Clients, efforts were focused maintenance downtime and in the the liquidation of the project finance on generating higher added replacement of equipment. for the Integrated Polyethylene Unit value, which happened with the located in Duque de Caixias (Rio de development of innovative products - In 2011, Braskem plans to invest Janeiro), formerly known as RioPol, the new silo bag, fuel tank, R$1.6 billion, between maintenance freeing Braskem of certain commercial paint bucket and similar products, downtime (R$390 million), operational obligations that were compromising the made from plastic (see the chapter investments (RS660 million) and Company’s competitiveness. entitled Profile). increasing capacity (R$500 million).
2010 Annual and Sustainability Report | 51 Economic and Financial Dimensions
Investments: 2008 – 2010 (R$ million)
Allocation 2008 2009 2010
Increasing capacity 195 207* 109
Equipment replacement 238 188 230
Safety, health and the environment (HSE) 161 102 103
Technology 91 55 -
Productivity 202 68 66
Maintenance downtime 407 187 365
Information systems 55 50 -
Education/training (internal and external) 9 7 8**
Community programs 11 7 16
Quality/Other 25 23 -
Braskem America - - 32
Quattor - - 352
Mexico - - 47
Green polyethylene - - 343
Quantic - - 6 Other (includes reliability, IT, - - 123*** commercial and others) Total 1,394 894 1,800
* Of the total, R$183 million went to the Green Polyethylene project. ** Does not include investments in Quattor and Braskem America. *** Includes investments in technology, information systems and quality.
2010 Annual and Sustainability Report | 52 Economic and Financial Dimensions
Projected investments for 2011 (R$ million)
391 142 Maintenance downtime 94 HSE Productivity Increased capacity and PVC Alagoas 407 Equipment replacement Mexico 243 89 Other
Total – 1,644 278
Prospects for Growth advantage of these opportunities Given its current scale and level through new investments in the of competitiveness, with its solid expansion of productive capacities, balance sheet structure, good new acquisitions and agreements governance practices and good with other companies. The favorable innovative capacity, Braskem sees macroeconomic scenario in Brazil many value-adding opportunities and other emerging economies for growth in Brazil’s and abroad. only serves to reinforce this The Company is prepared to take optimistic outlook.
2010 Annual and Sustainability Report | 53 Economic and Financial Dimensions
Investor Relations
In 2010, Braskem’s financial policy Some steps taken by the Investor was updated and approved by the Relations department were decisive Board of Directors, with the aim in improving the perception of the of improving its business practices. Company. Particularly fruitful endeavors The new document reflects the in this regard include the effort made Company’s size and offers clear to improve communication with guidance on important aspects, such the market, with improved earnings as: raising capital, taking on debt, and releases, and the return, after an financial investments, among others. absence of a few years, of „Braskem Alongside the positive changes in Day,” which places financial analysts governance, the positive results in direct contact with executives from obtained through management of the areas of Investments, Polymers, the Quattor and Braskem America Quattor, International Businesses, assets, together with the rapid return Basic Petrochemicals and Braskem to the leverage levels held prior to America. Another step was seeking the acquisitions, were well received out greater approximation with the by the financial market, which was sell side+ analysts, helping them better reflected in the share valuation over understand Braskem’s current situation the course of the year. and its perspectives for growth.
Meeting demand
Now united under the same of producing 510,000 tons per year Company, Braskem and Quattor have – the installed capacity in Brazil is the capacity to meet the demands of 785,000 tons per year – to attend to the domestic market and export its a demand that can reach 1.1 million excess production, contributing to tons and is met with regular imports an improvement in Brazil’s balance from Argentina and Colombia, as of trade. The annual polyethylene well as 17 other countries. (PE) production capacity is now at 3 million tons, while domestic demand With the goal of turning the country is a little lower than 2.4 million tons self-sufficient, Braskem initiated an per year; the Company also produces investment of R$900 million to build a 2 million tons of polypropylene (PP) new PVC plant, in Marechal Deodoro per year, which more than meets (Alagoas), with an annual capacity of the annual demand of 1.4 million 200,000 tons. The plant is expected tons. With PVC, Braskem is capable to be completed by 2012.
2010 Annual and Sustainability Report | 54 Social Dimension In its Vision 2020, Braskem calls for economic development, hand-in-hand with preservation of the environment and social equity.
Braskem’s commitment to personal environment; and it respects the local Internally, Braskem established an development is clearly expressed laws wherever it operates. Braskem operational strategy for the 2011- in its Vision 2020 and its Social also supports social, environmental 2015 cycle, revised its trainee Responsibility Policy, which seeks to and cultural initiatives as part of its program and strengthened personal simultaneously promote economic Private Social Investment Program (ISP). development programs as a way growth, environmental preservation to meet the growing demands of and social equity. The Company has Another important aspect of Braskem’s a company that now has industrial sought to fulfill its corporate promise social responsibility can be found in its operations on the international in this respect, offering Clients high strategy aimed at strengthening the market. Externally, the Company quality, high yield products and relationship between its Members, maintained its dialogue with the services, while maintaining strong Suppliers, Clients and the communities communities that are receiving ethical principles. The Company in which it operates. In 2010, the new projects, steering investments generates resources for the State, Company began a program of through prior consultation; it created though the collection of taxes; it offers structured dialogue with each of a code of conduct specifically job opportunities and professional these audiences, in an initiative that is for ethanol suppliers; it provided development; it distributes part expected to improve its management technical assistance to client of the revenue to its Members in the near future. The first step taken companies; and it increased the and Shareholders; it reinvests a in this direction was the consultation resources allotted to supported social substantial portion of the revenue; on the Annual and Sustainability Report projects. This chapter features some it develops economically and socially (learn more about this initiative in the of the initiatives carried out in 2010. sustainable businesses; it protects the chapter entitled About this Report).
Talent Management
For the Vice President of People support the innovation boom expected Braskem’s values. The prevailing and Organization, who has the in the coming years (find out more guideline during this process was: responsibility of supporting people in the chapter entitled Business and open communication with new management at Braskem, 2010 was a Development). The year was also Members, with all significant changes period of great challenges and many marked by the integration of the presented to each of the teams at least accomplishments. The goal of turning companies that were acquired at the 60 days in advance. the Company into one of the best beginning of the year: Quattor and places to work – one of the Vision Braskem America. In these cases, 400 At the same time, there was a 2020 macro objectives – included senior executives received training considerable effort made to reconcile not just the ongoing international based on the Company’s culture. Over 55 conflicting people management expansion, but also the definition of the course of 2010, Braskem invested practices. By the end of the year all new strategies for the 2011-2015 R$8.2 million in actions aimed at of the practices had been reconciled. cycle, with the review of certain developing competencies. In terms of the layoff of Quattor initiatives, such as the Odebrecht Members, which occurred primarily MBA and the trainee program, and a In the case of the Quattor integration, in the administrative areas, given greater emphasis on recruiting talent the cultural alignment also gave that the overlap was much lower and training scientists in order to priority to the transmission of in the industrial area, the total
2010 Annual and Sustainability Report | 55 Social Dimension
accounted for between 4% and 5% the pillars that will support Braskem’s planned and responsible delegation, it of the overall workforce. strategy: Education and Development; can form better leaders who are more Culture; Environment and Image; committed to further improving the Recruiting new talent and training Positive Feedback and Recognition; Company’s results. Members are essential components of Excellence in Service. the Company’s future development, Based on the Company’s strategic since its international expansion plans Based on the results of this meeting, vision, which defines the required and focus on innovation demand a on studies dealing with the challenges skills, coupled with the necessary high number of qualified professionals. of growth in Brazil, and on the need knowledge base and expected Braskem estimates that it will need to train human resources, priority attitude, all Braskem Members are to integrate 600 people into its was given to strengthening the evaluated by the Leaders, working research and development team by Company’s image and reputation, together to build the Individual 2015, a challenge that will be met to the recruitment and development Development Plan (PDI), created through a greater approximation of new talents, to supporting the and agreed upon by the leader and with academia, through a search for internationalization process through their subordinate, based on the students from foreign universities and global practices, to the ongoing opportunities for improvement seen the Company’s direct participation in improvement of the internal during the evaluation period. The training researchers – by broadening workplace, to strengthening corporate PDI lists the development goals that the support for research and academic culture, to Odebrecht Enterprise can be achieved through educational grants, for example. Technology (TEO), to a compensation initiatives offered by, or related to, the policy based on the current challenges, subordinate’s job. Another priority for Braskem includes to inclusion of workers issues in the developing the management capacity political and strategic agenda and to In 2010, more than 170 Quattor and of its Members, with a focus on contributions towards development of Braskem Members, as well as the new sustainable development. To do partner companies. Members hired during the course so, a training program focused on of the year, participated in a total of sustainability was launched at the One example from among the variety 6,000 hours of activities (training) beginning of 2011. The program of proposed initiatives for meeting related to the TEO, included as part of features the participation of members the needs of Clients was the work their Introduction to the Culture. of the technical and support staffs, carried out in 2010 with Embrasa, as well as certain stakeholders, a packaging manufacturer (sacks Odebrecht Organization MBA such as Clients, Suppliers, NGOs and big bags). Braskem helped the In 2010, a group of 23 Braskem and banks. The initiative, developed company implement and develop an Members participated in the Odebrecht in partnership with the Fundação integrated planning approach, which Organization’s Executive MBA, a Instituto de Administração (FIA) at established and tracked specific goals. specialization program directed at a the University of São Paulo (USP), will The process took place parallel to the group of the Organization’s executives, offer a total of 460 hours of content family succession underway at the which is in its first edition under the to a group of 36 people. Embrasa businesses. current format, with the participation of all of the group’s companies, offered in Strategy Solid culture partnership with the Instituto de Ensino During the strategic planning event, The principles and concepts e Pesquisa (Insper). carried out in 2010, a group of behind TEO, which is practiced by 81 Members from the People and all companies controlled by the With a total course load of 528 Organization team created the vision Odebrecht Organization, guide the hours, 480 of which are spent in statement for the department: „To activities of Braskem’s Members. The the classroom, the course focuses be a leader in the development of role of the leader is fundamental, on current trends in the market and knowledgeable people who can because they serve as the educator, includes, among other topics: supply assure the Organization’s sustainable responsible for the professionalism chain management, opportunities for development, guarantee the in their area, maintaining a positive innovation and process improvement; perpetuation of the culture and work environment and training their market tendencies; risk management; promote a happy work environment.” successors. Braskem places its trust values and culture; and people In order to achieve this, it defined in people and believes that through management. One of its unique
2010 Annual and Sustainability Report | 56 Social Dimension
characteristics is the inclusion of sustainability in business, management • commitment to sustainable • respect for freedom of expression; and social actions, with an emphasis development; on relationships with the broad range • respect for Members’ decision to of shareholders. • autonomy to set their own goals affiliate themselves with union and pursue them as if they owned organizations; Trainee Program updates the business; Braskem’s new size, process of • dialogue and understanding are the internationalization and focus on • focus on results. preferred means, at Braskem, to solve innovation, coupled with the reality of potential labor and union issues; the labor market, with its increasingly Salaries and benefits intense competition for top talent, led Braskem’s Compensation Policies Braskem’s principles and values are the Company to remodel its Trainee and Practices establish that total the non-negotiable; Program in 2010. compensation offered to its Members (salary, benefits and bonuses) be situated • the physical integrity of the With the primary objective of becoming in the market’s third quartile (25% organization’s people and property part of the strategy of training and above average). Annually, the Company must be maintained. developing future Company leaders, carries out a salary review cycle in which the new program’s major innovation is it applies the concept of meritocracy to Competencies and learning its division into two basic profiles: one all of its Members, comparing individual Braskem’s Members are evaluated technical, for the industrial area, and placement with the market averages on the basis of Competencies, which one generalist, for the administrative and regional averages that Braskem includes: characteristics of the Braskem and support areas (commercial, finance, seeks to position itself against. The Member; Braskem competencies; legal, among others). objectives are: reduce variations to a technical competencies. The first fixed compensation (with respect to two items reflect the organization’s Other significant changes included market practices and positioning among culture and the third, the abilities the lengthening of the course, which salary averages) and apply meritocracy as and understanding required of went from 12 to 18 months, and a form of individual recognition. working professionals. In order to new criteria for offering slots in the align the competencies, attitudes program: the leadership succession All Members have an Action Plan and values of Members with the plans and Braskem’s growth. Nearly (PA) that defines their individual competencies required by the 13,000 applications were received for goals to be met during the fiscal year, Company, the Individual Development Braskem’s 2011 Trainee Program. The which are reflected in their share of Plan (PDI) has been adopted, which 27 selected candidates will begin their the Company’s results, in the form is agreed upon by the leader and the careers at the Company in February. of bonuses. The policy does not subordinate, based on opportunities take gender into account, and the for improvement that were observed Desired profile compensation criteria are applied during the evaluation phase. The PDI Beyond the technical qualifications equally among men and women, lists the development goals that can and the preparation needed to based on merit and performance. be achieved through educational perform their functions, Braskem initiatives offered by, or related to, the is seeking professionals who are Union relations subordinate’s job. aligned with its corporate culture. Braskem’s Code of Conduct does not The primary characteristics valued permit discrimination of any kind, The Horizons Program, created and among Members are: including due to affiliations with developed by Braskem in 2010 in organized labor. The principles that order to facilitate the transition process • humility, simplicity and a spirit of guide the relationship with unions and to retirement, identifying productive service; workers are: (post-career) opportunities, seeks to support Members in better planning • openness to positive relationships • recognition of labor unions for this moment in their career, as with leaders, subordinates and all s institutions that legally well as guaranteeing the transfer other colleagues; represent workers; of knowledge through generations.
2010 Annual and Sustainability Report | 57 Social Dimension
The initiative, which is based on discrimination to be any behavior that annual qualitative evaluation, which three primary aspects – appreciation, disrespects a human being, including plays a role in determining bonuses. recognition and personal orientation physical and verbal aggression. None Every 12 months, the Member’s – covers all retired Members or those of the cases discussed below are qualitative analysis is analyzed by within one year of full retirement (for classified on the basis of gender, Corporate Security in order to establish time served) who wish to leave the race, color, religion, political opinions, whether there has been, in fact, Company, as retirees, within a year. nationality or social origin. progress in the workplace.
The program, which lasts 12 months, Discrimination cases are identified by b) Termination of the Member’s includes four workshops that motivate the Ethics Line, a regularly audited, employment. awareness and planning, with a focus open channel of communication on reflections about life, career, the for Members, Suppliers, Clients and transmission of knowledge and the other stakeholders. Braskem adopts life projects of individual Members. In specific procedures for dealing with two workshops, Members are invited reported complaints and all of them to bring their husbands/wives in order are investigated. to share the knowledge that they have gained, allowing for greater exchange The cases are evaluated by the Ethics and integration, as well as a sense of Committee, which decides what action group identity at an important and is to be taken. Incidents involving decisive moment in their lives. workplace discrimination can be treated in two different ways: Combatting discrimination Braskem has structured a rigorous a) Inclusion or intensification of the process, with internal management Member’s participation in professional mechanisms, that has contributed development programs, monitored to the maintenance of non- by P&O leaders and team members. discrimination measures in the Progress with respect to the Member’s workplace. The Company considers behavior should be included in his
2010 Annual and Sustainability Report | 58 Social Dimension
Total number of discrimination cases and the measures taken*: 2008 – 2010
20081 20092 20103
Substantiated cases 2 1 1 Unsubstantiated cases 3 5 3 Total 5 6 4
*Incidents reported to the Ethics Line that are not based on race, color, sex, religion, political opinion, nationality or social origin, as defined by the International Labor Organization (ILO), or other relevant forms of discrimination involving internal and/or external stakeholders in Company operations.
Resolution of substantiated cases arrangement, his behavior in front of his colleagues improved significantly. 1 The Member accused of harassing another Member was transferred 2 Braskem requested that a Supplier from the department and began remove an employee who worked being monitored by his supervisors. at one of the Company’s facilities During a period of regular and did not maintain cordial feedback, he showed significant relations with others. improvement in his conduct, without any repetition of the 3 The Member received feedback inappropriate conduct. from leadership, and was placed under observation with 1 The Member received feedback ongoing evaluations. Under this from leadership, and was placed arrangement, his behavior improved under observation with ongoing significantly, without repeating the qualitative evaluations. Under this inappropriate behavior.
2010 Annual and Sustainability Report | 59 Social Dimension
Social performance indicators
Distribution of Members by gender and age group – 2010
Braskem e Female Male Total Female Male Quattor per age (%) (%)
Under 30 445 883 1,328 34% 66%
Between 30 and 50 777 3,166 3,943 20% 80%
Over 50 122 921 1,043 12% 88%
Total per gender 1,344 4,970 6,314
Braskem America Female Male Total Female Male per age (%) (%)
Under 30 12 19 31 39% 61%
Between 30 and 50 36 217 253 14% 86%
Over 50 24 129 153 16% 84%
Total per gender 72 365 437
*Data unavailable for 2008 and 2009 due to the integration of the data systems, which took place in 2010, with the acquisition of the Quattor and Braskem America operations.
2010 Annual and Sustainability Report | 60 Social Dimension
Member distribution by work contract and region – 2010
Região Members Outsourced
Northeast 2,328 10,896
Southeast 2,241 6,118
South 1,745 5,082
Total 28,410
*Data unavailable for 2008 and 2009 due to the integration of the data systems, which took place in 2010, with the acquisition of the Quattor and Braskem America operations.
Members by occupational level
Categories 2010
Female Male
Operational 250 2,229
Administrative 756 1,057
Technical 343 1,679
Total per gender 1,349 4,965
Overall total 6,314
*Data unavailable for 2008 and 2009 due to the integration of the data systems, which took place in 2010, with the acquisition of the Quattor and Braskem America operations.
2010 Annual and Sustainability Report | 61 Social Dimension
Investments in education and training* 2008 - 2010
*In relation to the total revenue obtained by the Company each year.
Professional Turnover* 2008 - 2010
6.3% 8.7% 8.2%
*Turnover. **In 2010, a year in which the Company dismissed 585 Members, the percentage includes the Braskem, Quattor and Braskem America plants.
2010 Annual and Sustainability Report | 62 Social Dimension
Percentage of employees covered by collective bargaining agreements*
Total Members
4,764 4,531 99.2% 99.1% 98.5% 6,222
*Does not include Braskem America.
Base salary ratio between men and women by job category*
Job category Salary ratio (Women/Men)
Operational 3/4
Administrative2 3/5
Technical 1
*Does not include information from Braskem America. Notes: 1 With a greater number of men in the workforce, they account for more time served, which also elevates their compensation. 2 The number of men is higher in leadership positions, united under the Administrative category.
2010 Annual and Sustainability Report | 63 Social Dimension
Collective commitment
Braskem’s Code of Conduct is Upon entry into the Organization, periodically revised, in order to new Members receive a copy of the assure its continual improvement. Code of Conduct. Every two years, the The review process includes the Company carries out awareness and participation of Members of the publicity campaigns for each aspect respective areas of interest and the contained in the document, which Board of Directors (representing the provides an opportunity for Members Shareholders). Currently, the Code of to reacquaint themselves with its Conduct for Suppliers is also in the contents. The most recent campaign process of being reviewed. took place in December 2009.
Partnerships with suppliers is issued, which is used to define the Braskem maintains and encourages opportunities for improvement and long-term relationships with create an Action Plan. its Suppliers, offering training and spreading its values and its In addition, in order to support them commitment to sustainability. The in structuring and increasing the criteria used for selecting business competitiveness of their businesses, partners includes technical and the Company relies on the Braskem+ commercial competence, as well as a Parceiros program, which includes the financial evaluation carried out by a following goals: qualified company. • strengthening the chain of Braskem All suppliers are periodically suppliers; evaluated, in order to guarantee their qualifications and allow for the • maximizing the levels of quality and ongoing improvement of the processes productivity when contracting goods and services they provide. During and services; the evaluation phase, verifications are carried out on customer service • mapping the factors that impact and the supplied materials, the the competitiveness of supplier certifications regarding quality and the processes and the consequences in environment (NBR ISO 9001 e NBR Braskem contracts; ISO 14001) and the compliance with Braskem’s Code of Conduct. The result • improving the management of of this analysis is used to produce Health, Safety and the Environment the Supplier Performance Index (IDF), at partner companies; which ranges from 0 to 100 points. Based on the grade that is received, an • training the supplier in quality analysis of performance for the period concepts, HSE and management tools.
2010 Annual and Sustainability Report | 64 Social Dimension
PRODUCTIVE CHAIN Best practices in PARTNERSHIPS the ethanol The 20 largest production chain Braskem suppliers*
With the launch of the green bioadditive for fuels. The majority of this • Akzo Nobel Ltda. ethylene plant, in Triunfo (Rio demand is supplied through contracts • Arkema Química Ltda. Grande do Sul), Braskem increased with the main ethanol suppliers of Brazil. • Bahiagás – Cia. de Gás da Bahia its demand for sugarcane-derived ethanol. In order to orient the The main references used to create the • Bulktrade AG companies supplying this raw code were Brazilian law and principles • Chesf – Cia. Hidroelétrica material and establish good taken from the São Paulo State Agro- do São Francisco environmental and social practices Environmental Protocol, the Global • Companhia de Gás do Estado do Rio along the entire production chain, Compact, the UN, the Agro-Ecological Grande do Sul the Company created the Code of Sugarcane Zoning (which guides • Construtora Norberto Odebrecht S/A Conduct for Ethanol Suppliers, in ethanol production in Brazil) and the September 2010. National Commitment to Improve • Gás de Alagoas S/A Labor Conditions on Sugarcane • Latina Distribuidora de Petróleo Ltda. The document represents the Plantations. These documents seek • M&G Polímeros Brasil formalization of a partnership to guarantee basic rights, a better • Opip – Odebrecht Plantas between Braskem and its ethanol quality of life for sugarcane plantation Industriais e Participações S/A suppliers for the sustainable workers and control of the primary • Petrobras Distribuidora S/A development of the production environmental impacts along the chain, from the origin of the raw ethanol production chain. • Petrobras Petróleo Brasileiro material to the final product. • Refap S/A Among the topics covered by the Since the Code’s introduction, • Refinaria de Petróleo current code are the steps taken 70% of Braskem’s ethanol demand Riograndense S/A with respect to controlled burns, in 2010 was met by plants that • Shell Western Supply and Trading Li the protection of biodiversity, good were committed to its policies environmental practices, human and guidelines. The supplier’s • Standard Chartered Trade Services rights, workers’ rights and the commitment is placed in writing and • Sojitz Corporation analysis of the product’s lifecycle. signed by a representative and/or the • Trafigura Behher B V Amsterdam director of the supplying plant. • White Martins Gases Industriais Ltda. The Company is the largest industrial consumer of ethanol in Brazil, In order to monitor compliance with utilizing approximately 700 million the obligations taken on through the *In alphabetical order. liters per year, for the production of Code of Conduct, Braskem carries out green polyethylene (PE) and ETBE – a periodic visits to its Suppliers’ plants.
2010 Annual and Sustainability Report | 65 Social Dimension
Community relations
Environmental protection and the Through the Acreditar Project, the commitment to improving results. productive social inclusion of the community of Marechal Deodoro was This corporate mission’s reach goes communities in which it operates are involved in preparing for the launch beyond the Company and includes some of the sustainable development of project operations, including a the communities in which it operates, principles that guide Braskem’s actions. workforce training program to fill with its traditions and culture, which The company makes every effort new job openings. A total of 680 are part of a rich intangible heritage to maintain good relations with its openings were reserved for members that must be preserved and protected. neighbors, seeking to understand their of the population over 18 years of Private social investment in programs main problems, train local workers and age, divided into 12 courses with an aligned with its principles and values contribute towards strengthening the average classroom time of 20 hours represents one of the ways to reach production chain, as well as contributing per week. The students receive a these objectives. In 2010 alone, the to the generation of new jobs. behavior assessment on a weekly basis. Company invested a total of R$9.2 million in different Private Social The city of Marechal Deodoro, in Another similar example was seen at Investment Projects, as well as the Alagoas, for example, will receive the Triunfo Petrochemical Complex, R$7.1 million invested in social and a new industrial PVC plant, which in Rio Grande do Sul, during the environmental projects associated with will receive approximately R$900 construction of the green ethylene new investments, some of which are million in investments. The project plant. Creating partnerships with described in this chapter. In 2009, the includes the creation of 2,000 direct governments and civil institutions is investments reached R$7.5 million. jobs while under construction, and part of the Company’s plans to enter another 480 indirect jobs following and operate in this and other locations The choice of supported projects is its opening. And the project’s in which it directly operates. based on the Social Responsibility benefits extend even further, given Policy, which declares that the that in recent years at least ten Management of social investments Company’s investments in this area plastics processing companies have Braskem’s corporate culture calls must prioritize social inclusion, established themselves in the region for valuing human beings through environmental education or cultural and others have announced their education and work. All that is needed promotion. In 2010, Braskem did not intention to do the same, motivated is the willingness to serve, the capacity utilize fiscal incentive resources in its by Braskem’s project. and the desire to progress and the Private Social Investment projects.
2010 Annual and Sustainability Report | 66 Social Dimension
Social and environmental projects from all over the state of Alagoas In the other states, the same project Braskem’s commitment to contribute and the surrounding community. The in 2010 began diagnoses of the social to the development of the reserve includes 280,000 planted situation of the recycling materials communities in which it operates goes seedlings, 200 conserved plant collectors and the quality of the beyond economic issues to cover social species, 400 varieties of wild Brazilian recycling warehouses operating in and economic issues, as well. As such, fauna – introduced and reproduced each location. Using these analysis, in 2010 R$16.3 million was invested onsite – as well as the discovery of the training and development phases in different social and environmental “Alagoas Red Propolis,” which may will be implemented in 2011 for projects. Some of the projects receive a geographic identification seal the recycling materials collectors, as supported by the Company include: (origin name). Due to these results, well as investments in equipment Cinturão Verde has received a number and technology to improve the Lagoa Viva Environmental of special recognitions, including: warehouses, guaranteeing an increase Education Program Atlantic Forest Biosphere Reserve the income and social inclusion of Started in 2001, in the neighborhood (UNESCO), Environmental Education these professionals. of Pontal da Barra, which is home Center (UNESCO) and Flora and Fauna to the community neighboring the Conservation Area (IBAMA). Forest Factory Braskem Chloro-Soda Industrial Plant, This is a project that promotes the in Maceió (Alagoas), the project Recycling projects production and planting of native gained momentum and alternate Braskem is investing in the species seedlings along the Costa dos sources of income by encouraging development of a unique recycling Coqueiros Ecological Corridor and the sustainable practices. Classes in music, project for the municipalities of Forest Ring region, in the northern English, hydroponics, beekeeping and certain regions in São Paulo, Rio de coastal region of the state of Bahia, continuing studies, among others, Janeiro, Rio Grande do Sul, Alagoas in order to restore the Atlantic Forest, provided training and a diversity of and Bahia. In Rio Grande do Sul, the with an emphasis on the reforestation occupations that wound up promoting project is in an advanced development of natural springs and riparian buffer social mobility within the community. phase. It was carried out by the Rio zones that extend from the Camaçari Currently, the initiative brings together Grande do Sul State Department of Industrial Complex to the Sauípe Eco 28 groups engaged in ongoing Justice and Social Development and Park. One hundred and fifty thousand environmental education training, led by the Fundação Vonpar, with the seedling were planted in 2010, which in 35 municipalities of Alagoas, participation of the Fundação Banco contributed to the restoration of 100 where they carry out activities such do Brasil, the Centro de Assessoria hectares. There was also preparation as presentations, regional meetings, Multiprofessional (CAMP), Maxiquim training offered to 120 people and congresses, courses and training and professors from the Sapucaia do another 500,000 seedlings will be sessions. Yet, the Company has not Sul campus of the Sul-Rio-Grandense planted in 2011. carried out a quantitative survey Federal Institute (IFSUL). The project or evaluation of the impacts of seeks to include recycling materials Program of Integrated and these activities. collectors in productive society and Sustainable Development to strengthen recycling units by of the Mosaic of APAs in Cinturão Verde providing technological support to Southern Bahia (PDIS) (Greenbelt) the recycling centers. Presently, the The challenge involves making a This Environmental Preservation Area project includes 38 warehouses, depressed rural area, with extensive (APP), created in 1987, constitutes a throughout the state, with environmental heritage, dynamic and 50 hectare ecological reserve located investments in improving the facilities, prosperous, by placing young talents in the coastal forest of the Pontal sorting equipment and workplace in the field. The pursuit of this da Barra neighborhood, between safety, management training and common goal, which revolves around the Atlantic Ocean and the Mundaú the productive process. The initiative the sustainable development of the Lagoon, in Maceió (Alagoas). The promotes social inclusion, with the Pratigi Environmental Protection aim is to achieve the growth and participation of approximately 180 Area (APA), a single initiative, are the natural reproduction of local flora recyclers, who benefit from greater eight Millenium Development Goals and fauna, transforming the area into income and the proper destination (MDGs) proposed by the United an ecological refuge. Cinturão Verde of municipal solid waste, which Nations (UN) and agreed upon by has already been visited by more than contributes to environmental 192 countries. The actions favor the 175,000 people, including students conservation. young and their interaction with their
2010 Annual and Sustainability Report | 67 Social Dimension
families, in an attempt to transform Approximately 10,000 people live in resistant material made from recycled the reality of rural communities. The the areas surrounding the park, in plastic waste; and PVC concrete PDIS was recognized by the UN with the neighborhoods of Jardim Amélia, masonry, which renders the use of a 2010 UN Public Service Award in Jardim Leonor, Alto de Pinheiros, finishing material unnecessary. The the category „Fostering participating Morro Alto, Parque das Árvores and projects, which began in July 2010, in policy-making decisions through Chácara São Domingos. The objectives were largely carried out by workers innovative management.” Issued by of the project included improving the from the surrounding communities. the Division for Public Administration quality of life of those who live in the and Development, the awards region through theme-based formative Braskem Theater Awards (PBT) highlight institutions that have activities monitored by Gaia. Over the Created in 1994, this award recognizes contributed to improving the course of 17 months, the NGO carried the best theatre productions in Bahia effectiveness of public service. In out a number of formative activities state in ten categories with the aim of 2010, Braskem contributed R$4.6 on the management and sustainability valuing and awarding professionals in million to the program through the of the park, as well as income the performing arts, helping pave the Odebrecht Foundation. generation, entrepreneurship and way for new talent. The selections craftsmanship, social and professional are made by a commission of judges Parque da Amizade qualification and articulation of the specializing in cultural activities. (Friendship Park) employability network, environmental Inaugurated in January 2011, the and audiovisual education, institutional Braskem Theater Parque da Amizade, located in development and project design. Award – PBT Paulínia (São Paulo), received R$6.5 Created in 1994, to reward, in million in investments from Braskem. A total of 10 programs were offered, ten categories, the best teather In a 300,000m2 area of remnants in addition to social and educational productions of the State of Bahia, of the Atlantic Forest, within a actions and workshops that directly to recognize and encourage theater Permanent Preservation Area (APP), involved more than 1,100 people from professionals and to pave the way there are approximately ten springs the community, as well as institutional for new talents. The nominations are and five kilometers of streams. The representatives. The process of made by a jury of culture experts. project was launched in 2009 and articulation and the establishment conceived of as an integrated unit of partnerships in order to organize Braskem on Stage Award for promoting initiatives involving the workshops were two important The “Porto Alegre on Stage” festival environmental preservation, leisure, aspects of the project, which resulted is recognized as one of the leading sports, cultural and educational in the engagement of 182 founding theater festivals in Latin America. activities, as well as training activities partners. 55% of the 82 young people During its 17 years of existence, based on citizenship, income who received training were able to the festival has brought to the city generation and social inclusion. enter the job market. of Porto Alegre major national and international names in theater, music The implementation of Parque da With the aim of reducing the and dance. Braskem has sponsored Amizade was carried out by the non- environmental impact caused by the festival’s last four editions. The governmental organization (NGO) the use of natural resources, certain company also sponsors the Braskem Grupo de Aplicação Interdisciplinar technologies were used in the park: on Stage Award, which recognizes the à Aprendizagem (Gaia). The rainwater collection, which can be best productions in Rio Grande do Sul organization was created 20 years reused to irrigate the landscaping or state in the following categories: Best ago, with headquarters in Campinas be used for cleaning; the adoption of Production, Best Director, Best Actor, (São Paulo), and it specializes in joint shed-type roofs that enable natural Best Actress and the People’s Choice enterprises between companies and ventilation and light; the use of sun Award for Best Production. The awards governments, in order to benefit the shades on front windows, which also ceremony takes place at the close of population. The park was built with helps cooling the rooms; a thermal the “Porto Alegre on Stage” festival. resources donated by Braskem during layer and white roofing tiles to reflect the installation of its polypropylene the heat of the sun, eliminating the unit in Paulínia, as an environmental need for air conditioning; outdoor compensation measure. furniture made of plastic wood, a
2010 Annual and Sustainability Report | 68 Social Dimension
Braskem Frontiers conceived and funded by the of Thought Odebrecht Foundation with the Held exclusively in the city of Porto objective of: establishing families in Alegre, the capital of Rio Grande do the countryside, bringing together the Sul, with ten scheduled meetings latest technology and family farming; per year, the project places major socially including members of the international minds in direct contact cooperative, turning them into a new with the public, giving them a rural middle class; distributing income chance to hear and discuss issues based on productivity and work; of major importance from several reaching the eight UN Millennium fields of knowledge. Since its launch, Development Goals; among other it has showcased 40 national and objectives. One of the focus points international speakers from a wide of the support from Braskem/Ideom range of specialized backgrounds, at (an innovation and technology 26 different events. company created by Braskem in December 2008) is the development Starch Cooperative of the market and applications Alliance Project (ACA) for cassava starch, seeking to add In 2010, Braskem introduced support greater value to the product and for the Starch Cooperative Alliance thereby enhance family incomes in Project (ACA). It is a sustainable the region. The project, which is still development project that seeks social in the implementation phase, already inclusion and an improvement in the includes 13 cooperative producers. quality of life of the “family units” The expectation is that the benefits that are members of the Bahia State will reach at least 400 families. More Cassava Starch Producers Cooperative information can be found on the (Coopamido). The initiative was website
2010 Annual and Sustainability Report | 69 Environmental, Health and Safety Dimensions Integrated management ensures continuous monitoring to avoid losses and prevent accidents, fostering alignment with the Company’s policies and practices.
Like all organizations that experience an alignment with the Company’s plants, based on 2010. The results a rapid growth process, in 2010 policies and practices. show that the intensity of the emissions Braskem faced a series of challenges dropped by 11.6% from 2008, which related to the environment, health With the integration of Quattor and allowed it to achieve the goal set for and safety. In most cases, the Braskem America, the indicators 2013 well ahead of schedule (see the outcomes were positive: energy regarding eco-efficiency, as well tables relative to the GRI EN16 and EN18 efficiency was increased; green as process and workplace safety indicators, contained in this chapter). plastic production was introduced, improved, except for the severity rate+ incorporating the primary raw and water consumption (see charts). One negative aspect of Braskem’s material (sugarcane) into its matrix; In terms of process safety, four plants performance in 2010 was the Reach (Registration Evaluation were audited and all of them obtained occurrence of a fatal accident at the and Authorization of Chemicals) improvements in their Risk Rating. Basic Petrochemicals Unit, in Camaçari system certification was obtained With respect to chemical safety, 28 of (BA), which stands in stark contrast to for chemicals, which clears the the 33 substances used by Braskem the Company’s historical performance, way for the Company’s products in that are expected to be marketed which puts it among the global leaders Europe; the greenhouse gas emission to the European Community and in this regard, within the industry. The inventory was updated; the post- submitted to the European Chemicals victim was an outsourced worker who consumption structuring strategy was Agency have already been approved. climbed on to a piece of scaffolding initiated; and investments to promote In the area of health management, the in order to carry out an inspection, the health of its Members, education actions involved activities to promote when the tube broke. Based on and environmental protection were Members’ well-being, from the the evaluation of the Company’s maintained (see the box entitled GHG prevention of occupational illnesses to management, the leaders intensified Methodology Protocol). early detection of diseases. behavioral dialogues with their teams and took steps to accelerate The management of these areas In the environmental realm, Braskem the adoption of the 285 Sempre was carried out through the Sempre obtained, in 2010, its best results requirements at all units, including (Excellence in Safety, Health and the since its inception (2002) on all of those that were recently acquired. In a Environment) program, integrally the eco-efficiency indicators, as a message circulated internally about the developed and instituted in 2005, result of continuous investments in incident, the president of Braskem at with the objective of minimizing modernization, technological upgrades the time, Bernardo Gradin, reminded and preventing losses. In 2010, one and the maintenance of industrial everyone that no amount of profit is of Braskem’s primary concerns was assets, with the exception of the water justified when people’s lives are at risk. mapping the situation with its newly consumption index. The Company also In 2011, investments in this area will acquired assets, among them Quattor completed the inventory of greenhouse grow and are expected to reach an and Braskem America, and promoting gas (GHG) emissions from all of its estimated R$142 million.
2010 Annual and Sustainability Report | 70 Environmental, Health and Safety Dimensions
Collective Agreements
In addition to the clauses regarding • presentation of a technical lecture wages, working conditions and social at the Internal Accident Prevention obligations, the collective agreements Week (Sipat); signed with the workers’ unions during the period from 2009 to 2011 • assurance of access to the plants include topics related to health, safety by union leaders who have taken and the environment (HSE). leave at the request of the union, upon prior arrangement with the Examples of clauses agreed upon in the Company’s management, or its collective bargaining process include: designated representative, with a clearly defined objectives, dates, • authorizing the union doctor to locations and durations. have access to biological control information; Similarly, in addition to the clauses regarding workplace safety set out in • commitment to carrying out a the collective agreements, Braskem’s group of technical seminars on Code of Conduct provides for an HSE, gender and bullying; anonymous complaint system through the Ethics Channel. The Member • annual presentation of the Health should discontinue any operation Safety and Environment Policy to they are carrying out when they the labor union; understand that their life and physical integrity, or that of their colleagues, • in the event of an accident at work, are in grave and imminent risk due to assurance of the participation of a lack of proper protective measures. a representative from the Internal It is recommended that the fact Accident Prevention Commission be immediately communicated to (Cipa) in the Workplace Accident a superior, or, in their absence, to Investigation Committees of the the Safety department, so that the area in which the accident occurred; situation can be duly analyzed.
2010 Annual and Sustainability Report | 71 Environmental, Health and Safety Dimensions
Investments in health, safety and the environment, HSE (R$ million)*
*The amounts do not include investments in health, safety and the environment (HSE) by the Quattor and Braskem American plants. The reduction in investments in 2009 was due to the decision to apply more capital resources towards strengthening the long term sustainability strategy, such as with the development of green polyethylene.
Accident frequency, without and with lost work time (SAF + CAF), per 1,000,000 man-hours*
10,07
8,49
7,52 4,85
6,53 4,93
6,13 4,63 2,02
*Pro forma indicator. The data include the Braskem, Quattor and Braskem American industrial plants.
2010 Annual and Sustainability Report | 72 Environmental, Health and Safety Dimensions
Rates of injuries, occupational illnesses, days lost, absenteeism and work-related fatalities, by region
2008 2009 2010 Indicator
Members1 0.84 0.59 0.73 Accident rate with lost work time (CAF) Service 0.61 1.26 0.57 providers
Injury Total 0.66 1.05 0.62 rate (TL)
Members2 3.85 3.27 2.20 Accident rate with and without lost work time Service providers 6.77 5.53 1.94 (CAF + SAF)
Total 6.13 4.79 2.02
Days lost Members 23.97 26.60 304.05 Rate of days lost (TDP) (workplace accidents and occupational illnesses)3 Service 34.41 71.17 225.97 providers
Total 32.11 56.59 249.61 Taxa de doenças ocupacionais4
One case of Three accounts One case: Registry of new noise-induced of occupational removal due to a occupational illnesses5 hearing loss illnesses – one at clinical illness of a (NIHR) at PE4, PE6 and one at Member of the CS with zero days PP1, due to BA maintenance lost, because it department, with was discovered noise-induced a history of back during the hearing loss problems, whose Member’s (NIHL), both crisis of neck pain dismissal exam. without any days was classified as Occupational lost, because the a Musculoskeletal illness illnesses were Occupational registry discovered during Illness by the Members’ INSS, without dismissal exams the possibility and one at PE2, of denial by identified as a the company, worsening of due to the a preexisting nonexistence of musculoskeletal counter evidence disease, with 66 in the form days lost. of ergonomic evaluations.
Total (only Members) 0.02 0.07 0.02
2010 Annual and Sustainability Report | 73 Environmental, Health and Safety Dimensions
2008 2009 2010 Indicator
Members 0.028 0.073 0.041 Rate of absenteeism Rate of (Members) Absenteeism Service providers - - - (TA)6 Total 0.028 0.073 0.041
Members 0 0 0 Number of deaths for the year Deaths7 Service providers 0 0 1
Total 0 0 1
Basis for calculations 1 No. of CAF accidents/man-hours worked* 1,000,000 2 No. of SAF + CAF accidents/man-hours worked* 1,000,000 3 No. days lost + debited/man-hours worked* 1,000,000 4 No. illnesses * 1,000,000/man-hours worked (considering incidence). 5 No. of new cases of occupational disease registered during the period. 6 No. of days * 100/man-hours worked (considering incidence). 7 No. of deaths in the year.
Note: Pro forma indicator. Occupational illnesses and absentee rate of Service Providers is not monitored. Includes UNIB-RS, PE5, PP2, PE6 and PE3 beginning in 2002, and PP3 beginning in 2008. In 2009, the green ethylene plant was included (Triunfo-RS); does not include Cinal.
Accident frequency rate without and with lost work time (SAF + CAF) per 1,000,000 man-hours
Region/Plant 2008 2009 2010
Alagoas 0.84 0.85 0.26 Bahia 1.65 0.96 1.02 São Paulo 10.15 12.23 2.70 Rio Grande do Sul 3.83 0.87 0.53 Rio de Janeiro 11.83 9.15 2.91 Braskem America 5.44 2.72 7.68
2010 Annual and Sustainability Report | 74 Environmental, Health and Safety Dimensions
Accident frequency rate with lost work time (CAF) per 1,000,000 man-hours
3,06
2,45 2002 2003
2,18 2004 2005 1,70 2006
1,70 2007 1,07 2008 0,66 2009 1,01 0,62 2010
*Pro forma indicator. These data include the Braskem, Quattor and Braskem America industrial units.
Severity rate* (1 million man-hours)**
260,18 2002 109,68 2003 77,69 52,76 2004 2005 2006 184,19 47,17 2007 31,01 50,94 2008 2009 2010 249,61
*Time computed per million man-hours of exposure to the risk during a specific period. **Pro forma indicator. These data include the Braskem, Quattor and Braskem America industrial units.
2010 Annual and Sustainability Report | 75 Environmental, Health and Safety Dimensions
Rate of absenteeism per region: 2008 - 2010
Region 2008 2009 2010
Alagoas 0,105 0,142 0,023
Bahia 0,109 0,091 0,013
São Paulo 0,005 0,024 0,016
Rio Grande do Sul 0,005 0,078 0,025
Rate of days lost* by region (1,000,000 man-hours): 2008 - 2010
State/Unit 2008 2009 2010
Alagoas 17,90 0,00 0,00
Bahia 17,95 1,18 402,21
Rio de Janeiro 35,77 128,15 6,18
São Paulo 33,39 202,82 520,07
Rio Grande do Sul 41,50 28,19 28,61
Braskem America 177,94 0,00 104,61
*Due to workplace accidents and/or occupational illnesses.
2010 Annual and Sustainability Report | 76 Environmental, Health and Safety Dimensions
Transport accidents and chemical spills
Total finished product transport accidents* - 2010
liquid products – 5 solid products – 82 salt – 0
* These data do not include Quattor and Braskem America.
Number and total volume of significant spills
Incidents 2008 2009 2010
Quantity 1 1 2
Volume - - 1,300 liters
Loss (in US$) US$18 million US$8,5 million US$280,000
There have been no reports of spills during the period coinciding with financial statements issued since 2007.
2010 Annual and Sustainability Report | 77 Environmental, Health and Safety Dimensions
Solid product transport accident rate* (%)
7.36 5.98 5.44
*Number of accidents/quantity of trips/10,000.
Liquid product transport accident rate* (%)
3.91 3.17 5.31
* Number of accidents/quantity of product spilled/1,000,000. Note: these data do not include Quattor and Braskem America.
2010 Annual and Sustainability Report | 78 Environmental, Health and Safety Dimensions
Resin theft percentage by transported volume*
0.026% 0.027% 0.008%
*Quantity of stolen product versus quantity of transported product. Note: These data do not include Quattor and Braskem America.
Braskem Risk Rating*
87.0 82.8 85.2
*These data include all of the Braskem, Quattor and Braskem America industrial plants.
2010 Annual and Sustainability Report | 79 Environmental, Health and Safety Dimensions
Waste disposal and treatment
Generation of waste (kg/t)*
2002 2003 2004 2005 2006 2007 2008 2009 2010
*Pro forma indicator. These data include the Braskem, Quattor and Braskem America industrial units.
2010 Annual and Sustainability Report | 80 Environmental, Health and Safety Dimensions
Total weight of waste by disposal type and method: 2008-2010
Quantity (kg)
Hazardous Waste 2008 2009 2010
Composting 0 0 0 Reuse 0 0 9,52 Recycling 2,919,109 2,086,160 1,819,892,483 Recovery 0 0 2,93 Incineration (or use as fuel) 215,09 134,62 111,86 Landfill 434,53 163,65 12,83 Underground waste injection 0 0 0 Onsite storage 0 0 0 Other 1,423,93 234,899 1,897,11
Non-hazardous waste 2008 2009 2010
Composting 0 0 0 Reuse 250,950 436,530 85,920 Recycling 0 0 1,370 Recovery 0 0 0 Incineration (or use as fuel) 1,182,490 1,570,640 1,551,050 Landfill 0 0 1,318 Underground waste injection 0 0 0 Onsite storage 1,346,380 278,520 313,010 Other 0 0 0
2010 Annual and Sustainability Report | 81 Environmental, Health and Safety Dimensions
Weight of waste that is transported, imported, exported or treated that is considered hazardous under the Basel Convention* (in kg)**
2008 2009 2010
Transported*** 24,314,855 20,315,539 12,496,443
Imported NA NA NA
Exported NA NA NA
Treated*** 24,458,775 20,376,739 12,752,029
*Read more about this initiative in the glossary. **These data do not include Braskem America and Quattor. ***The difference between the weight of transported and treated waste is due to the treatment carried out at the generating plant. NA – Not Applicable.
Production of hazardous waste (in kg)*
24,169,720 20,541,984 20,032,836
* These data do not include Quattor and Braskem America.
2010 Annual and Sustainability Report | 82 Environmental, Health and Safety Dimensions
Effluent generation (m3/t)*
2002 2003 2004 2005 2006 2007 2008 2009 2010
*Pro forma indicator. These data include the Braskem, Quattor and Braskem America industrial units.
Energy
Energy Consumption (GJ/t)*
2002 2003 2004 2005 2006 2007 2008 2009 2010
*Pro forma indicator. These data include the Braskem, Quattor and Braskem America industrial units.
2010 Annual and Sustainability Report | 83 Environmental, Health and Safety Dimensions
Direct energy consumption by primary energy source (GJ)*
Non-renewable sources 2008 2009 2010 of direct energy
Coal - - - Natural gas - - - Crude oil distillate fuel, including gasoline, 80,544,055 85,912,951 109,054,289 diesel, LPG, CNG, LNG, butane, propane, ethane, etc. Electricity 1,475,861 1,764,357 1,902,752 Steam - - -
2008 2009 2010 Renewable sources of direct energy Bio-fuels - - - Ethanol Hydrogen 1,286,187 1,193,875 1,195,538 Total 125,334,475 130,584,282 168,718,267
*These data do not include Braskem America.
Total energy consumption - 2010
Thermal Electricity Total Renewable Consumption consumption (GJ) Energy (%) (GJ) (GJ)
2010 112,496,536 15,608,483 128,105,018 9% (Braskem) 2010 150,745,273 17,842,923 168,588,197 8% (Braskem + Quattor)
2010 Annual and Sustainability Report | 84 Environmental, Health and Safety Dimensions
Energy saved due to improvements in conservation and efficiency*
2009 2010
Non-renewable sources of direct energy (GJ)
Coal (254,689) 1,851,295
Natural gas 9,389,731 3,500,128
Crude oil distillate fuel, including gasoline, diesel, LPG, CNG, (909,290) (3,623,791) LNG, butane, propane, ethane, etc,** Electricity (coal-based) - -
Steam 514,813 823,702
Total saved (non-renewable) (1,163,979) (3,623,791)
Renewable sources of direct energy (GJ )
Electricity (hydroelectric) 3,187,698 473,071
Bio-fuels - -
Ethanol - -
Hydrogen (133,494) 42,915
Total saved (renewable) (133,494) -
Total (renewable + non-renewable) (1,297,473) (3,623,791)
*These data do not include Braskem America, **Including only diesel, LPG and fuel oil, Note: Quattor’s energy data was not included in 2009, The amounts highlighted in orange indicate that a reduction in energy consumption did not occur.
2010 Annual and Sustainability Report | 85 Environmental, Health and Safety Dimensions
Water resources
Water consumption (m3/t)*
4.29 4.50 3.83 4.15
2007 2008 2009 2010
*Pro forma indicator. These data include the Braskem, Quattor and Braskem America industrial units.
Volume of water withdrawn (m3)*
64,746,330 57,502,408 64,953,369
2010 Annual and Sustainability Report | 86 Environmental, Health and Safety Dimensions
Withdrawn water totals by source* (m3)
Origin of the withdrawal 2008 2009 2010 and/or supply
All sources** 64,746,330 57,502,408 64,953,369
Surface (wetlands, 30,545,071 28,959,083 50,285,423 rivers, lakes, oceans) Groundwater 14,258,256 9,393,225 16,324,193
Rainwater 459,944 1,225,203 0 (directly collected and stored) Effluents collected 186,137 329,544 593,715 from another organization Municipal supply 12,931,453 12,599,776 16,121,036 or other collections
*These data do not include Braskem America. **The total withdrawn is the sum of all of the water taken to the Company limits from a variety of sources (surface, groundwater, rainwater, and the municipal water supply) for any use, during the period covered by the report.
Volume and percentage of recycled and reused water (m3)
2008 2009 2010
1,687,800 1,684,058 13,457,018 2.6% 2.9% 20.7%
*The data from 2007 to 2009 do not include Braskem America and Quattor.
2010 Annual and Sustainability Report | 87 Environmental, Health and Safety Dimensions
Protected Biodiversity areas
Protected or restored habitats
Operation Protected Size Location Comments Areas (hectares)
Alagoas Atlantic Forest Reserve 904 Maceió This is an area owned by Braskem, (Alagoas), in without external certification.T o an area located this end, it was requested in 2010 between the that the National Council of the municipalities Atlantic Forest Biosphere Reserve of Marechal (CNRBMA) recognize it as a “Posto Deodoro and Avançado da Reserva da Mata Coqueiro Seco Atlântica” (Outpost of the Atlantic Forest Reserve). The request is still being analyzed. There are no partners on the project.
Rio Grande do Sul Cinturão Verde 68 Rio Grande Our partner in monitoring the flora (Greenbelt) do Sul, in the and fauna of the preservation area Environmental Station municipality of is Fundação Zoobotânica of Rio (preservation area) Triunfo, 1km Grande do Sul, which an entity from Unib-RS. connected to the Department of Located on the Environment. the margins of the Rio Caí, It is an unenclosed area, where within the animals are free to roam. Braskem Petrochemical has partnered with local police to Complex prevent hunters from entering. preservation The Company is also engaged in area biological monitoring projects at the Environmental Station (more information is available in the 2009 Annual and Sustainability Report – Protected Areas). Total 972
2010 Annual and Sustainability Report | 88 Environmental, Health and Safety Dimensions
Rehabilitated Biodiversity areas
Protected or restored habitats
Operation Rehabilitated Size Location Comments Areas (hectares)
Bahia Forest Ring at Not Available Camaçari The plantings have already Camaçari Complex (ND) been visited and approved, in 2010, by specialists from the Escola Superior de Agricultura Luiz de Queiroz (Esalq). They are currently in the process of resuming activities. The Ring was restored by the Forest Factory Project, and the restoration process is still underway. The area has not been used for operational activities or affected by the Company (see also the 2009 Annual and Sustainability Report – Protected Areas).
Alagoas Cinturão Verde 50* Maceió The area was restored by (Greenbelt) (Alagoas) Braskem. It currently is classified Environmental Station as a “Reserva da Biosfera da Pontal da Barra Mata Atlântica” (Atlantic Forest Neighborhood Biosphere Reserve) by Unesco (around the and the National Council of factory) the Atlantic Forest Biosphere Reserve (CNRBMA), and “Criadouro Conservacionista da Fauna e Flora” (Flora and Fauna Conservation Area) by Ibama.
The initiative to restore Cinturão Verde is mainly due to the effort to contain the encroachment of development on the area surrounding the Operation (see also the 2009 Annual and Sustainability Report - Protected Areas). Total 50
*The 2009 Annual and Sustainability Report incorrectly listed it as 150 hectares. ND – Not Available.
2010 Annual and Sustainability Report | 89 Environmental, Health and Safety Dimensions
Emissions Control
Braskem completed its inventory of reduction in the intensity of these REFERENCE greenhouse gas (GHG) emissions, emissions, reaching a level of 0.646 covering all of its industrial plants tCO e/t of produced product, in line GHG Protocol 2 Methodology and corporate centers, based on with the 2020 goal of 0.6 tCO2e/t of the year 2010. The updated survey produced product. includes: CO2 (carbon dioxide); CH4 Braskem’s Greenhouse Gas (GHG)
(methane gas); N2O (nitrous oxide); By carrying out the emissions Inventory was developed using the and HFC 134 (hydrofluorocarbon, inventory, Braskem is putting into Greenhouse Gas (GHG) Protocol a fluid refrigerant). practices one of the guidelines of Corporate Accounting and Reporting its public commitment “É preciso Standard – Revised Edition, published In 2010, direct emissions (scope 1) amadurecer para ser verde” (You by the World Resources Institute totaled 9,233,668 tCO2e, which Have to Mature to Be Green) (link (WRI) and by the World Business represents a slight decline of 1% web). In that document, which Council for Sustainable Development from 2009, while indirect emissions was published in August 2009, the (WBCSD), and features guidelines for (scope 2), due to purchased energy Company committed to continually the quantification and presentation consumption (electricity and steam), improving the intensity of its GHG of GHG emissions that are reached 337.294 tCO2e, increasing emissions, improving its energy internationally recognized. over the previous year due to the efficiency initiatives and identifying GHG emissions are usually grid factor, which practically doubled new technological opportunities. In represented by the amount of carbon during the period due to the national addition, among other measures, dioxide equivalent (CO2e) emitted energy matrix. In terms of scope 3 Braskem is reaffirming its strategic by the Organization. CO2e emissions (other indirect emissions), the tally decision to increase the use of are calculated by weighed sum reached 5,871,747 tCO2e, through renewable raw materials in its of the GHGs and their respective an increase in the reporting of these operations. Global Warming Potential (GWP). emissions, covering 100% of the units. The Global Warming Potential (GWP) In a comparison between 2008 and consists of a measure of how a The decrease in the volume of gases 2010, the indicator that measures certain amount of greenhouse gases emitted by the Company (scope 1 Braskem’s emissions dropped by contributes to global warming. It is + scope 2) resulted in a 4% real 11.6% (see chart). a relative value, which compares the emitted gas with the same quantity of carbon dioxide (whose potential is arbitrarily defined as 1).
2010 Annual and Sustainability Report | 90 Environmental, Health and Safety Dimensions
Total direct and indirect emissions of greenhouse gases, by weight*
tCO e Emission source 2 2008** 2009 2010 Combustion emissions 7,154,989 9,242,794 9,130,730
Fugitive emissions (refrigerant gas lines) 75,785 76,053 88,059
Fugitive emissions (insulating gas lines) NA 1,195 311
Fugitive emissions (CH4 e CO2 lines) 12,504 3,443 3,365
Ventilation process emissions 302,087 46,295 11,202
Total – scope 1 7,545,365 9,369,780 9,233,668
Purchase of energy 248,408 214,712 337,294
Total – scope 2 248,408 214,712 337,294
Total (scope 1 + scope 2) 7,793,773 9,584,492 9,570,962
*These data do not include Braskem America. **In 2008, the emissions data does not include the operations of the former Quattor. NA – not applicable.
Initiatives to reduce GHG emissions and the reductions achieved
Reduction of Braskem + Quattor emissions* (tCO2e)
Emission - Sources 2008* 2009 2010 Scope Combustion emissions (652,006) - (108,411) Fugitive emissions (refrigerant gas lines) - - - Direct Fugitive emissions (insulating gas lines) - - (884) emissions Fugitive emissions (CH e CO lines) - (9,061) (78) (Scope 1) 4 2 Ventilation process emissions (72,821) (255,792) (35,093) Total – scope 1 (724,828) (264,853) (144,466) Indirect Purchase of energy - (33,696) - emissions Total – scope 2 - (33,696) - (Scope 2) Total (scope 1 + scope 2) (724,828) (298,549) (144,466)
*The 2008 emissions data does not include Quattor.
Note: The blanks (with dashes) indicate that there was no reduction in CO2e emissions.
2010 Annual and Sustainability Report | 91 Environmental, Health and Safety Dimensions Greenhouse gas emission intensity: 2008-2010
2008* 2009 2010
Production (t) 13,531,049 14,191,837 14,825,796
Intensity of the
emissions (tCO2e/t of 0,73 0,68 0,65 produced product)
*The 2008 Quattor emissions were estimated using emissions data presented in the 2009 inventory. This extrapolation was designed to permit an appropriate comparison of the Braskem + Quattor emissions on the same basis in subsequent years.
Emissions of substances that deplete the ozone layer, by weight*
Potentially damaging to HCFC HFC 134a HCFC 22 CFC 12 CTC the ozone layer (CFC-11 141b equivalent)
2008** 68,63 25,55 4,55 0 23,92 28,35 2009 90 26,97 0 0 0 1,88 2010 91,12 41,18 0,12 0 0 2,48
*Does not include the Braskem America units. **In 2008, the data include only the Braskem units.
Units in 2008 – PE1, CS (BA), PVC (BA), PE2, PE3, UNIB (RS), PP1 (RS), PE4 (RS), PE5/PP2 (RS), CS (AL), PVC (AL), UNIB (BA) e CPL (BA). Units in 2009 – PE1, CS (BA), PVC (BA), CPL (BA), CS (AL), PVC (AL), PE2 (BA), PE3 (BA), UNIB (RS), PP1 (RS), PE4 (RS), PE5 (RS), PP2 (RS), QB (ABC), PE (ABC), PP (ABC), QB (DCX), PP (DCX), PE (CUB) e PP (CAM). Units in 2010 – UNIB (BA), CPL (BA), CS (BA), PVC (BA), PE1 (BA), PE2 (BA), PE3 (BA), UNIB (RS), PE4 (RS), PE5 (RS), PE6 (RS), PP1 (RS), PP2 (RS), CS (AL), PVC (AL), PP3 (SP), QB (ABC), PE (ABC), PP (ABC), QB (DCX), PP (DCX), PE (CUB) e PP (CAM).
Comments: • Ozone destroying substances contained within products or emitted by them during their use or disposal are not included. • Includes substance emissions covered by Appendices A, B, C and E of the Montreal Protocol on substances that deplete the ozone layer. • Emissions = production + import – export of substances. • Production = substances produced – substances destroyed by technology – substances completely used as feedstock (raw material) in the manufacture of other chemical substances. • Recycled ozone-depleting substances are not considered to be part of production.
2010 Annual and Sustainability Report | 92 Environmental, Health and Safety Dimensions
Expenses and environmental investments
Total investment and spending in environmental protection, by type* – (R$)
Items 2008 2009 2010 2010**
Environmental licenses 27,613 136,232 226,460 302,556
Atmospheric emissions 1,124,578 1,809,504 1,554,553 2,019,852 management Groundwater 2,201,925 544,628 87,678 459,143 management Other environmental 2,623,591 1,994,739 5,175,196 3,356,166 monitoring
*Does not include Braskem America. **Consolidated data – Braskem + Quattor.
Costs associated with waste disposal, treatment and mitigation of emissions* – (R$ thousand)
2010 2008** 2009 Expenses (Braskem + (Braskem) (Braskem) Quattor) Variable production services 113,718,303 120,294,507 128,747,301 (variable cost)*** Atmospheric emissions management 1,124,578 1,809,504 2,019,852
Groundwater management 2,201,925 544,628 459,143 Administrative energy and water 324,267 1,549,510 3,686,458
Other environmental monitoring 2,623,591 1,994,739 3,356,166
Environmental investments 24,000,000 28,694,862 41,400,000
Total - 154,887,750 179,668,920
*Does not include Braskem America. **Estimated. ***Treatment of liquid effluents, solid waste disposal, packaging recovery and other.
2010 Annual and Sustainability Report | 93 Environmental, Health and Safety Dimensions
Costs of prevention and environmental management – (R$ thousand)*
2008** 2009 2010 (Braskem) (Braskem) (Braskem + Quattor)
Staff employed for education - - - and training
Environmental licenses 27,613 136,232 302,556
Atmospheric emissions management 1,124,578 1,809,504 2,019,852
Groundwater management 2,201,925 544,628 459,142
Other environmental monitoring 2,623,591 1,994,739 3,356,166
*Does not include Braskem America. **Estimated.
Total expenditure on environmental protection* – (R$ thousand)
2008 2009 2010
Environmental liabilities** 14,260,000 11,412,936 19,419,839 Prevention and environmental 29,977,706 33,779,966 45,643,887 management costs
*These data do not include Braskem America. **In 2010, Quattor and Braskem America presented no environmental liabilities.
2010 Annual and Sustainability Report | 94 Environmental, Health and Safety Dimensions
HSE Legal Requirements
Braskem is structured to monitor The system is audited annually, and accompany the applicable internally and externally, with legislation, through qualified respect to 100% of the applicable teams at all of its sites, with the laws. Braskem identifies, support of ongoing management analyzes and deals with all and consulting, which updates on of the requirements applicable a monthly basis all of the new bills to its business. related to Braskem’s business, as well as all of the changes to current, In order to respond to new bills and relevant and applicable legislation. the alteration of existing laws, action There is a procedure in place to plans are defined that aim for synergy orient the process and define the in the homogenization of practices operational and strategic indicators. among different plants.
Investments in health, safety and the environment – 2010*
Total (R$ million) Projects
Health 13,7 28
Safety 50,7 197
Environment 38,6 48
*Does not include figures from Quattor and Braskem America.
2010 Annual and Sustainability Report | 95 Environmental, Health and Safety Dimensions
New projects in COMPANY Braskem’s Recycling the productive chain Grand Prix
In November 2010, Braskem carried out In 2010, in partnership with Suppliers • Preservation of approximately 39,000 an unprecedented campaign, with the and Clients, Braskem continued some trees per year. objective of mobilizing the population existing projects and developed new of São Paulo to dispose of plastics at initiatives that offer environmental Note: Regardless of the time period, specific collection posts located in five benefits and are aligned with the whenever the volume is increased municipal parks, as well as the Interlagos from 24.75 tons to 25.5 tons, there is Company’s commitment to sustainable a 3% gain per truck, which results in a Racetrack during the three days of the development. These include: 3% reduction in the number of trucks Brazilian stage of the Formula 1 races. needed to carry the same volume. A total of 13.5 tons of plastic waste was Substitution of collected and subsequently donated to wooden pallets in Project: bulk recycling cooperatives. the logistics chain • Benefits: reduction of 49,000 An equivalent volume of recycled plastic • Benefits: cost optimization and pallets per year and a savings of material was transformed into 500 units reduction of environmental impacts 29,000 big bags and 113,000 of urban furniture (flower beds and through the return of 175,000 sacks per year, as well reducing garbage cans), that were subsequently pallets in 2010. the number of transport trucks by donated by Braskem to the City of • Financial impact: Braskem saved 24%. These savings are obtained São Paulo during the celebration of R$1.5 million in 2010. using a platform for bulk delivery, the 486th anniversary of the city’s • Preservation of approximately by container, which allows for a founding, on January 25, 2011. Plásticos 53,000 trees per year. reduction in logistical costs. Suzuki – one of Braskem’s clients, is • Financial impact: savings headquartered in Estância Velha (Rio Project: 1,500kg pallet of R$2.7 million per year. Grande do Sul), and develops plastic • Benefits: 3% reduction in the • Preservation of approximately wood technology - manufactured all of number of trucks, reduction of 12,250 trees per year. the furniture with recycled material. packaging waste, 8% optimization The action was the result of a of the storage area, savings of partnership between Braskem, the City 156,000 pallets per year. of São Paulo and the Plastivida Institute, • Financial impact: R$5.7 million with the participation of five recycling per year. cooperatives to sort the materials and weight the plastic waste. The selected cooperatives were: Cooperativa da Capela do Socorro; Corpore Centro; União de Itaquera; Central do Tietê; Greater reuse and Cooperviva Bem. Each of them was responsible for collecting the waste of water in their respective region. Coopercaps was responsible for collecting the waste disposed of at the Interlagos Racetrack. Braskem has partnered with Foz do Hemisphere and the fifth-largest in the Braskem’s Recycling Grand Prix Brasil – an environmental engineering world, with a production capacity of campaign included the participation of firm with the Odebrecht Group – 1,000 liters per second. racecar driver Emerson Fittipaldi as its and the Sanitation Company of spokesperson and received considerable São Paulo (Sabesp) to supply 433 In addition to meeting the needs of exposure during the Brazilian stage liters per second of reused industrial other industrial customers, Aguapolo will of the Formula 1 competition – held water, thereby becoming the largest offer benefits the distribution carried out on November 5-7 at the Interlagos customer of the Aguapolo project, by Sabesp, since the volume of first-use Racetrack, in the southern region of the which will begin operations in 2013. water that will no longer consumed by city of São Paulo – where Braskem and It is the largest initiative for the reuse companies will be enough to supply up Plásticos Suzuki displayed a miniature of treated sewage in the Southern to 600,000 people. recycling plant for the public.
2010 Annual and Sustainability Report | 96 About this report Important Issues for Braskem New round of consultations with stakeholders, in Brazil, marks the 2010 reporting process and contributes to Braskem’s advances in rendering accounts to society.
The materiality principle is one of the of consultations, carried out with most important guidelines issued by stakeholders in Brazil, with the the Global Reporting Initiative (GRI). objective of supporting the decision Based on this premise, many companies regarding the report’s structure and have oriented their practices and other content, including the main issues communication initiatives regarding from the representatives of eight relevant issues, both internally and stakeholder categories. for their stakeholders, to include the economic, social and environmental In order to identify the main issues impacts of their activities. related to the sustainability of Braskem’s Brazilian operations, 24 stakeholder In 2009, Braskem defined its Vision representatives were interviewed, three 2020 for sustainable development, from each of the eight stakeholder with seven macro objectives: people, categories: Clients, Shareholders, greenhouse gases, energy efficiency, Members, Suppliers, Governments, post-consumption, renewable raw Funding Agencies and Academia. The materials, chemical safety and process also involved consultation water efficiency. It was forged in with communities located in São the context of strategic planning for Paulo, Bahia and Alagoas and the the next ten years, and was based local governments of Alagoas, Rio de on the environmental, economic Janeiro and Bahia. The identification and social issues and aspects that of these audiences was based on the have an impact on managing for closeness of the relationship with the sustainable development at the Company, the level of influence and the Company. As a result, this report was impact that the Company had on them based on materiality published in and their capacity to interfere with 2009, which was updated during the decisions made by the Organization. course of 2010 through a new round The consultations also sought to of consultations. It is a process of include the opinion of stakeholders stakeholders reflection on aspects that regarding public information, as well are essential for the Company. as sustainability management and performance. The previous definition of materiality was based on an internal survey, The responses were organized into which included the participation of 87 topics, according to the degree of leaders and teams from the areas relevance of each issue. The results of Health, Safety and Environment, were prioritized in order to identify the Institutional Relations and Sustainable issues of interest that Braskem should Development. Complemented with seek to address, taking into account bibliographical studies, material issues external and internal factors, as well as were used to define the seven Vision stakeholder perception. The following 2020 macro objectives. In 2010, table shows the issues of interest, the process of defining material grouped by topic and allocated issues evolved through a new round sustainability dimensions (see table).
2010 Annual and Sustainability Report | 97 About this report Global Compact GRI Index
Stakeholder Consultation
Topics Stakeholders Issues Location in of Interest the report
Communication Clients • Actions of Clients and Braskem regarding Growth and relationship the image of the petrochemical company Strategy management Funding with stakeholders Agencies
Members
Economic Shareholders • Financial impact of Braskem investments Profile and financial Economic and performance Members • Increase in Braskem productivity Financial Dimensions
Government • Braskem Performance / Growth
Suppliers • Current financial and economic results and future prospects Environmental Shareholders • Production processes (disposal, recycling, Environmental, Management cleaner production, internal processes) Health and Safety Suppliers Dimensions • Use of natural resources (water and Funding energy)
Agencies • Monitoring and reduction of water consumption and the emission of Government greenhouse gases
Community • Evolution of environmental practices that accompany the company’s growth
• General environmental indicators
• Management of environmental aspects
• Braskem environmental impact
• Use of best environmental techniques and practices
• Environmental protection
• Braskem’s contribution to combatting global warming
2010 Annual and Sustainability Report| 98 About this report Global Compact GRI Index
Topics Stakeholders Issues Location in of Interest the report
Value chain Members • Management of third parties in commercial Social Dimension management relationships Suppliers Partnerships with • Management of the chain of suppliers – suppliers Clients impacts on the value chain
• Braskem’s role in the production chain (from the producer to the end customer)
• Impacts of Braskem regulations on the work methods of contracted companies People Members • Member training Social Dimension
• Employee integration People and Organization Innovation Academy • Plans for the future Business and Sustainable Government • Green chemistry (the use of renewable Development raw materials) Clients • Partnership in the development of new Suppliers products and market research to meet current and future needs. (examples: Funding products made from renewable raw materials) Agencies • Innovation: development of new products, partnerships with universities, R&D / possibility for partnerships in the development of new equipment, technical projects and social projects Health and Members • Commitment to the health and safety of Environmental, safety people who work at the Company and live Health and Safety Community in the community Dimensions
• Safety of Company facilities
2010 Annual and Sustainability Report| 99 About this report Global Compact GRI Index
Within the social dimension, the issues for local workers, income generation, considered to be most important were tax payment and purchase policies. health and safety, the management Also cited as important issues were of employees and the management information about the market of products and services. From that environment, the value creation perspective, important issues arose strategy and long term growth, as well regarding Braskem’s communications as the financial results of the activities. with its stakeholders, such as its commitment to the safety of people From an environmental perspective, and facilities, the need to inform the the predominant topics were related community about safety measures to environmental management, such and the management of workplace as production processes (disposal, safety. The issues of interest related to recycling, cleaner production, the topic included employee training internal processes, etc.), to the use and integration, monitoring corporate of natural resources (water and mood and integration strategies, energy) and to the monitoring and engagement, compensation, people reduction of the consumption of management and talent retention. these resources. Also highlighted Those relating to products and services were issues such as an interest in referred to evaluations of the life protecting the environment - control cycle and supply of the product, as of greenhouse gas (GHG) emissions, well as the development of green the use of better environmental polyethylene (partnerships, information practices and techniques, about the product, environmental performance indicators, management performance, etc.). of environmental impacts and aspects, contingency plans, and For the economic dimension, the environmental impact risks. recurring topics were: cumulative positive and negative impacts, In 2011, Braskem’s challenge will competitive markets and transparency/ consist of defining the material issues financial results. Among the issues of from the intersection of different interest mentioned by stakeholders visions: social and environmental within this topic were the development issues, identified as important by of logistics and infrastructure for ports our public (external realm), and their and industrial complexes (suppliers and importance for the Company (internal clients) in the states where Braskem realm), in accordance with its strategy, operates, employment opportunities its risks and opportunities.
2010 Annual and Sustainability Report| 100 About this report Global Compact GRI Index
2010 Reporting Cycle a process which is expected to be Our Annual and Sustainability report, consolidated only in 2012. Among published annually, qualifies for the the challenges that the Company is Global Reporting Initiative’s (GRI) facing are the incorporation onto a B+ Application Level. The report common platform of its indicators covers the period from January 1 to regarding strategic management and December 31, 2010, and includes information systematization, as a a three year historical perspective. result of its most recent acquisitions: The information includes Braskem’s the assets of the former Quattor activities in Brazil, including, and of Sunoco Chemicals in the whenever possible, the Company’s United States, which is now Braskem operations in the United States America. Because the integration (Braskem America), as well as the of these operations took place over former Quattor, which was acquired the course of 2010, the information at the beginning of the fiscal year. related to their respective histories The differences in the thresholds of will be drafted over the course of the GRI indicators are detailed in the three years and presented in the index. Any significant changes with coming reports. respect to previous years, such as alterations to the calculation base or Braskem understands the importance indicator measurement techniques, of moving forward and continuing are reported throughout the text. with the reporting process so that the stakeholders can evaluate With the aim of improving the the Company’s performance, management and collection of with consistent and comparable indicators, in 2011 an external information, presented in a consultant was hired to support balanced manner that reflects the the processing of obtaining and organization’s actual performance. reporting information. The Company In addition, as it continues, the remains committed to improving reporting process will guarantee, the management system and its in the future, improvements in the sustainability information. Currently, monitoring of indicators. part of the data is taken from the consolidated database in SAP, while the External verification of the Portuguese rest are still tracked on spreadsheets. version of the Sustainability Report was carried out by Det Norske Veritas In order to improve data (DNV) in accordance with the GRI G3 management, Braskem has invested Guidelines, in compliance with all of in mapping the flow of information the requirements for a B+ Application and identifying partial indicators, Level, declared by Braskem.
2010 Annual and Sustainability Report| 101 About this report Global Compact GRI Index
Global Compact
The 2010 Annual and Sustainability brings together companies, workers Report also includes initiatives related and civil society in order to promote to the Ten Principles of the Global sustainable growth and citizenship. Compact, to which Braskem is a For more information, visit the signatory (see index). The UN initiative website
Chapters and GRI indicators that show Braskem results related to the Global Compact
Principle 1 Business and Sustainable Development
Respect and Corporate Governance protect human rights Braskem evolution strategies in seven macro objectives
Social Dimension • Workplace discrimination
LA7 / LA9 / LA13 / LA14 / HR5
Principle 2 Business and Sustainable Development Prevent human Corporate Governance rights violations Braskem evolution strategies in seven macro objectives Social Dimension • Partnerships with suppliers
HR4 / HR5
Principle 3 Social Dimension Support freedom of • Collective Agreements association in the workplace HR5
2010 Annual and Sustainability Report| 102 About this report Global Compact GRI Index
Principle 4 Corporate Governance Abolish Social Dimension forced labor • Partnerships with suppliers Principle 5 Corporate Governance Abolish child labor Social Dimension • Partnerships with suppliers Principle 6 Corporate Governance Eliminate Social Dimension workplace • People Management discrimination LA2 / LA13 / LA14 / HR4 / HR5
Principle 7 Business and Sustainable Development Support an Braskem evolution strategies in seven macro objectives precautionary Environmental, Health and Safety Dimensions approach to environmental challenges EC2 / EN5 / EN6 /EN7 / EN18 / EN30
Principle 8 Business and Sustainable Development Promote Braskem evolution strategies in seven macro objectives environmental Environmental, Health and Safety Dimensions responsibility
EN3 / EN5 / EN6 / EN7 / EN8 / EN13 / EN18 / EN19 / EN22 / EN23 / EN24 / EN28 / EN30
Principle 9 Business and Sustainable Development Encourage Braskem evolution strategies in seven macro objectives environmentally Environmental, Health and Safety Dimensions friendly technologies
EN10 / EN18 / EN30
Principle 10 Business and Sustainable Development Combat corruption Corporate Governance in all of its forms, Braskem evolution strategies in seven macro objectives including extortion and bribery
2010 Annual and Sustainability Report| 103 About this report Global Compact GRI Index
GRI Index
Profile Disclosures
1. Strategy and Analysis
Description of the primary Location in the report / response impacts, risks and opportunities
1.1 Statement of the most senior decision-maker Directors’ Message of the organization (such as the CEO, Chairman of the Board of Directors, or similar post) • New petrochemicals milestone (page 6) regarding the importance of sustainability for the organization and its strategy
1.2 Description of the primary impacts, risks and Business and Sustainable Development opportunities. • Contribution to sustainable development (page 24)
• Braskem evolution strategies in seven macro objectives (page 19)
2. Organizational Profile
2.1 Name of the organization. Directors’ Message
• New petrochemicals milestone (page 6)
Profile
2.2 Primary brands, products and/or services Profile
History
• Timeline (page 16)
• New products (page 8)
• Innovative polypropylene solutions (page 13)
2010 Annual and Sustainability Report| 104 About this report Global Compact GRI Index
2.3 Operational structure of the organization, History including main divisions, operating companies, subsidiaries, and joint ventures. • Timeline (page 16)
• Business model (page 8)
2.4 Location of organization’s headquarters. Introduction (page 1)
Corporate information 2.5 Number of countries where the organization Profile operates, and names of countries with either major operations or that are specifically History relevant to the sustainability issues covered in the report. • Timeline (page 16)
• Braskem’s numbers in 2010 (page 10) 2.6 Nature of ownership and legal form. Corporate Governance
• Corporate Structure (page 33) 2.7 Markets served (including geographic History breakdown, sectors served, and types of customers/beneficiaries). • Timeline (page 16)
• New foreign businesses (page 10)
• Business model (page 8)
2010 Annual and Sustainability Report| 105 About this report Global Compact GRI Index
2.8 Scale of the reporting organization. Profile
History
• Timeline (page 16)
• Braskem’s numbers in 2010 (page 10)
• Braskem’s sales distribution – 2010 (page11)
2.9 Significant changes during the reporting Profile period regarding size, structure, or ownership, including: History
• location and changes in operations, • Timeline (page 16) including the opening, closing or expanding of operational units;
• changes in the capital structure or other capital formation, maintenance or alteration in operations (for private-sector organizations).
2.10 Awards received in the reporting period. History
• Timeline (page 16)
• Awards and recognitions in 2010 (page 14)
3. Report parameters
3.1 Reporting period (e.g., fiscal/calendar year) About this report for information provided. • 2010 Reporting Cycle (page 101) 3.2 Date of most recent previous report (if any). About this report
• 2010 Reporting Cycle (page 101) 3.3 Reporting cycle (annual, biennial, etc.) About this report
• 2010 Reporting Cycle (page 101) 3.4 Contact point for questions regarding the Introduction report or its contents. 3.5 Process for defining report content, About this report including: determination of materiality; prioritization of topics in the report; • Braskem material issues (pages 97 to 100) identification of which stakeholders the organizations expects to use the report. 3.6 Boundary of the report (e.g., countries, About this report divisions, subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary • 2010 Reporting Cycle (page 101) Protocol for further guidance.
2010 Annual and Sustainability Report| 106 About this report Global Compact GRI Index
3.7 Declaration of any specific limitations on the About this report scope or boundary of the report. • 2010 Reporting Cycle (page 101) 3.8 Basis for reporting on joint ventures, About this report subsidiaries, leased facilities, outsourced operations, and other entities that can • 2010 Reporting Cycle (page 101) significantly affect comparability from period to period and/or between organizations. 3.9 Data measurement techniques and the About this report bases of calculations, including assumptions and techniques underlying estimations • 2010 Reporting Cycle (page 101) applied to the compilation of the Indicators and other information in the report. 3.10 Explanation of the effect of any re- About this report statements of information provided in earlier reports, and the reasons for such • 2010 Reporting Cycle (page 101) re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods). 3.11 Significant changes from previous reporting About this report periods in the scope, boundary, or measurement methods applied in the report. • 2010 Reporting Cycle (page 101) 3.12 Table identifying the location of the Standard GRI Index (page 105) Disclosures in the report.
Identification of the page numbers or links to Internet pages in which the following information can be found:
• Strategy and analysis 1.1 and 1.2;
• Organizational Profile 2.1 to 2.10;
• Report parameters 3.1 to 3.13;
• Governance, commitments and engagement 4.1 to 4.17;
• Management processes, by category;
• Essential performance indicators;
• Any additional GRI indicators that were included;
• Any indicators from the supplementary sections of the GRI that were included in the report. 3.13 Policy and current practice with regard DNV Guarantee Statement (pages 97 e 98) to seeking external assurance for the report. If the assurance was not included in the report, the scope and basis of any external assurance that was supplied must be provided, as well as the relationship between the reporting organization(s) and the auditor(s).
2010 Annual and Sustainability Report| 107 About this report Global Compact GRI Index
4. Governance, commitments and engagement
4.1 Governance structure of the organization, Corporate Governance including committees under the highest governance body responsible for specific • Governance Structure (pages 34 to 38) tasks, such as setting strategy or organizational oversight. 4.2 Indication as to whether the Chair of Corporate Governance the highest governance body is also an executive officer (and, if so, their functions • Governance Structure (pages 34 to 38) within the administration of the organization and the reasons for such an arrangement). • Board of Directors (page 36) 4.3 For organizations that have a unitary Corporate Governance board structure, state the number of members of the highest governance • Governance Structure (pages 34 to 38) body that are independent and/or non-executive members. 4.4 Mechanisms for shareholders and employees Corporate Governance to provide recommendations or direction to the highest governance body. • Ethics Line (pages 34, 35 and 42)
Include references to processes relative to:
• use of shareholder deliberations or other mechanisms that allow minority shareholders to express their to top management;
• information and consultations with employees about workplace relationships with formal representational entities, such as “worker committees” at the organizational level and employee representation at the highest level of governance. 4.5 Linkage between compensation for No compensation (fixed or variable) or offered to members members of the highest governance of the Board of directors that are wholly connected to the body, senior managers, and executives Company’s economic, social and environmental performance. (including departure arrangements), and the organization’s performance (including social and environmental performance). 4.6 Processes in place for the highest There is no conflict of interest resolution process at the Board governance body to ensure conflicts of of Director level. interest are avoided. 4.7 Process for determining the qualifications There is no defined process for determining the qualifications and expertise of the members of the and knowledge of members at the Board of Director level, highest governance body for guiding the but, historically, all Board Members have had proven organization's strategy on economic, qualifications and knowledge of the petrochemicals business. environmental, and social topics.
2010 Annual and Sustainability Report| 108 About this report Global Compact GRI Index
4.8 Internally developed statements of mission Corporate Governance and values, codes of conduct, and principles relevant to economic, environmental, and • Code of Conduct (page 32) social performance and the status of their implementation. Explain to what point they:
• are applied to the organization in different regions and departments/units;
• relate to internationally recognized standards. 4.9 Procedures of the highest governance Corporate Governance body for overseeing the organization’s identification and management of economic, • Board of Directors (page 36) environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with The identification, supervision and management of economic, internationally agreed standards, codes of social and environmental performance are activities provided conduct, and principles. for by the Company Bylaws and the Internal Regulations of the Board of Directors (BOD). This issue is also frequently discussed by the members of the BOD Strategy and Communication Support Committee, which meets at least three times a year. 4.10 Processes for evaluating the highest There is no defined process for the Board of Directors to governance body's own performance, evaluate its own performance. particularly with respect to economic, environmental, and social performance. 4.11 Explanation of whether and how the In principle, Braskem does not produce, handle, use, sell, precautionary approach or principle is transport or dispose of any product unless it can be done in a addressed by the organization. safe manner with minimal impact to the environment.
4.12 Externally developed economic, Business and Sustainable Development environmental, and social charters, principles, or other initiatives to which the • Contribution to sustainable development organization subscribes or endorses. (pages 24 e 25)
2010 Annual and Sustainability Report| 109 About this report Global Compact GRI Index
4.13 Memberships in associations (such as Business and Sustainable Development industry associations) and/or national/ international advocacy organizations: • Contribution to sustainable development (pages 24 e 25) • membership in governance bodies;
• membership in projects or committees;
•contributes substantive funding beyond routine membership dues;
•views membership as strategic 4.14 List of stakeholder groups engaged by the Business and Sustainable Development organization. • National Pact for the Chemical Industry (page 25) 4.15 Basis for identification and selection About this report of stakeholders with whom to engage. Includes the organization’s process for • Braskem material issues (pages 99 to 102) defining its stakeholders and the groups with which to engage and not to engage. 4.16 Approaches to stakeholder engagement, About this report including frequency of engagement by type and by stakeholder group. • Braskem material issues (pages 99 to 102) 4.17 Key topics and concerns that have been About this report raised through stakeholder engagement, and how the organization has responded to those • Braskem material issues (pages 99 to 102) key topics and concerns.
2010 Annual and Sustainability Report| 110 About this report Global Compact GRI Index
Economic Dimension Location in the Braskem Global Description report / response Scope Compact Economic performance
EC1 Direct economic value generated Business and Sustainable Braskem, Quattor - and distributed, including revenues, Development and Braskem operating costs, employee America compensation, donations and other • Direct economic value generated community investments, retained and distributed (R$ million): earnings, and payments to capital 2008 – 2010 providers and governments. EC2 Financial implications and other risks Business and Sustainable Braskem, Quattor 7 and opportunities for the organization’s Development and Braskem activities due to climate change. America • Contribution to sustainable development Braskem, Quattor • Sustainable Chemistry vs. and Braskem Green Chemistry America • Green Polypropylene Braskem, Quattor Environmental, Health and Braskem and Safety Dimensions America EC4 Significant financial assistance received Social Dimension Braskem and from government. • Management of social Quattor investments
Environmental Dimension
Energy
EN3 Direct energy consumption by primary Environmental, Health and Safety Braskem and 8 energy source. Dimensions Quattor
• Direct energy consumption by primary energy source
EN5 Energy saved due to conservation and Environmental, Health and Safety Braskem and 8 and 9 efficiency improvements. Dimensions Quattor
• Energy saved due to conservation and efficiency improvements
2010 Annual and Sustainability Report| 111 About this report Global Compact GRI Index
EN6 Initiatives to provide energy-efficient Energy efficiency Braskem and 8 and 9 or renewable energy based products The reductions in energy Quattor and services, and reductions in energy consumption were the result requirements as a result of these of actions taken to optimize initiatives. operational efficiency, projects applying six sigma tools, equipment substitution projects and initiatives to reduce operational losses.
UNIB2 RS •Operating pyrolysis furnaces, with the minimum excess air. We still have furnaces with excess air higher than the technical minimum. •Due to market limitations, some of the processed products are reprocessed. This reprocessing of products leads to a greater consumption of energy. If we were to sell these products, energy consumption would drop.
PVC1 BA •The gases burned in the incinerator are released at a higher temperature and must be cooled. When carrying out this cooling, we produce more vapor than is needed for the MVC plant. In order to make better use of this steam, we began using it in the PVC plant, turning the MVC plant self-sufficient in medium-pressure steam. The 6 Sigma projects of incinerator operation and optimization allow for a greater operability of the system, with a resulting increase in internal steam generation.
2010 Annual and Sustainability Report| 112 About this report Global Compact GRI Index
EN6 Initiatives to provide energy-efficient UNIB1 BA Braskem e Quattor 8 e 9 or renewable energy based products •Energy conservation – The and services, and reductions in energy project aims to substitute all of requirements as a result of these the thermodynamic traps with initiatives. free-floating traps, in order to reduce the loss of steam (240.000 GJ) •Reduction in energy loss through the chimney of exhaust fumes from the superheaters, due to the installation of air pre- heaters, resulting in an energetic integration (450.000 GJ) • Projects to improve combustion in the furnaces at UO1 – BA01106 (24.000 GJ) // Osmar Serra , Emerentino •Reduction of Steam Lost in Distribution (61.600 GJ) – Reducing the number of leaks on the steam distribution lines for clients and the second generation •Reduction in energy consumption at the BTX - Fase 2 extraction and fractioning units (30.800 GJ) •Efficiency improvements at BA -701 A/B/C (67.760 GJ) - The A-700 furnaces are responsible for nearly 38% of the Paraxylene block’s energy consumption. The increase in the efficiency of this equipment reduces the energy consumption of the Paraxylene Production Units, increasing the profitability of the Aromatics Units 1 business. •Optimization of the A-300 Reactive Systems (46.200 GJ)
EN7 Initiatives to reduce indirect energy Braskem is structuring the Braskem and 8 and 9 consumption and reductions achieved. management of its initiatives Quattor to reduce the consumption of indirect energy. During the period covered by this report, it was not yet possible to identify the results. However, the monitoring of this indicator will be improved and the data is expected to be presented in the next report.
2010 Annual and Sustainability Report| 113 About this report Global Compact GRI Index
Water
EN8 Total water withdrawn by source. Environmental, Health Braskem and 8 and Safety Dimensions Quattor
• Water resources EN10 Percentage and total volume of water Environmental, Health Braskem and 8 and 9 recycled and reused. and Safety Dimensions Quattor
• Water resources
Biodiversity
EN13 Habitats protected or restored Environmental, Health Braskem and 8 and Safety Dimensions Quattor
• Biodiversity
• Protected areas
Emissions, effluents and waste
EN16 Total direct and indirect greenhouse gas Environmental, Health Braskem and 8 emissions by weight. and Safety Dimensions Quattor
• Atmospheric emissions EN18 Initiatives to reduce greenhouse gas Environmental, Health Braskem and 7, 8 and 9 emissions and reductions achieved. and Safety Dimensions Quattor
• Atmospheric emissions EN19 Emissions of ozone-depleting Environmental, Health Braskem and 8 substances, by weight. and Safety Dimensions Quattor
• Atmospheric emissions EN22 Total weight of waste by type and Environmental, Health Braskem and 8 disposal method. and Safety Dimensions Quattor
• Waste management and treatment EN23 total number and volume of significant Environmental, Health Braskem 8 spills. and Safety Dimensions
• Cargo transport, accidents and spills
• Total number and volume of significant spills
2010 Annual and Sustainability Report| 114 About this report Global Compact GRI Index
EN24 Weight of transported, imported, Environmental, Health Braskem and 8 exported, or treated waste deemed and Safety Dimensions Quattor hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, • Waste disposal and treatment and percentage of transported waste shipped internationally.
Compliance
EN28 Monetary value of significant fines Braskem operates in accordance with Braskem, Quattor 8 and total number of non-monetary the laws and regulations of the country. and Braskem sanctions for non-compliance The company has not been definitively America with environmental laws and ordered to pay fines or comply with regulations. non-monetary sanctions in the period from 2007 to 2010. The preparation of this report utilized the same materiality criteria as the Reference form, which was instituted by the Brazilian Securities and Exchange Commission (CVM) under the terms of Instruction CVM 480/2009.
Geral
EN30 Total environmental protection Environmental, Health Braskem and 7, 8 and 9 expenditures and investments and Safety Dimensions Quattor by type. • Waste disposal and treatment
Social Dimension: labor practices and decent work
Employment
LA1 Total workforce by employment Social Dimension – People Management Braskem and - type, employment contract, Quattor and region. • Social Performance Indicators LA2 Total number and rate of employee Social Dimension Braskem, Quattor 6 turnover by age group, gender, and Braskem and region. • People Management America
• Social Performance Indicators LA3 Benefits provided to full-time The benefits offered by the Company to Braskem and - employees that are not provided to Members working half time (6 hours) Quattor temporary or part-time employees, are the same as those offered to full- by major operations. time Members, which include: life insurance; health insurance; disability coverage; maternity leave; retirement fund; meal ticket. (The report does not include Braskem America.)
Labor/Management Relations
2010 Annual and Sustainability Report| 115 About this report Global Compact GRI Index
Social Dimension Braskem, Quattor Percentage of employees covered by LA4 • People Management and Braskem 1, 2 and 3 collective bargaining agreements. America • Social Performance Indicators
Occupational health and safety
Environmental, Health Rates of injury, occupational diseases, and Safety Dimensions Braskem and LA7 lost days, and absenteeism, and number 1 Quattor of work-related fatalities by region. • Collective Agreements
Environmental, Health Health and safety topics covered in and Safety Dimensions Braskem and LA9 1 formal agreements with trade unions. Quattor • Collective Agreements
Training and education
Social Dimension Programs for skills management and lifelong learning that support the continued Braskem and LA11 - People Management - employability of employees and assist them Quattor in managing career endings. - Social Performance Indicators
Diversity and equal opportunity
Composition of corporate governance bodies and breakdown of employees per Corporate Governance Braskem and LA13 category according to gender, age group, 1 and 3 Quattor minority group membership, and other - Governance Structure indicators of diversity.
Social Dimension Ratio of basic salary of men to women by Braskem and LA14 - People Management 1, 2 and 3 employee category. Quattor - Social Performance Indicators
Social Dimension: Human Rights
Non-discrimination
Braskem, Quattor Total number of incidents of discrimination Social Dimension HR4 and Braskem 1, 2 and 3 and actions taken. - Combatting discrimination America
Freedom of association and collective bargaining
2010 Annual and Sustainability Report| 116 About this report Global Compact GRI Index
No Braskem operation was found Operations identified in which the right to pose a risk or obstacle to the to exercise freedom of association and Braskem, Quattor rights of its Members to exercise HR5 collective bargaining may be at significant and Braskem 1, 2 and 3 their freedom of association or risk, and actions taken to support these America collective negotiation, during the rights. period covered by the report.
Social Dimension: Society
Compliance
Braskem operates in accordance with the laws and regulations of the country. The company has not been definitively ordered to pay fines or comply with non-monetary Monetary value of significant fines and total sanctions in the period from Braskem, Quattor number of non-monetary sanctions for non- SO8 2007 to 2010. The preparation and Braskem - compliance with environmental laws and of this report utilized the same America regulations. materiality criteria as the Reference form, which was instituted by the Brazilian Securities and Exchange Commission (CVM) under the terms of CVM Instruction 480/2009.
Social Dimension: Product Responsibility
Consumer health and safety
All Braskem products are evaluated based on categories defined by indicator, covering the Life cycle stages in which health and safety following stages: development impacts of products and services are of the product concept; research Braskem, Quattor PR1 assessed for improvement, and percentage and development; certification; and Braskem - of significant products and services manufacture and production; America categories subject to such procedures. marketing and promotion; storage, distribution and supply; use and service; disposal; reuse and recycling.
Product and service labeling
2010 Annual and Sustainability Report| 117 About this report Global Compact GRI Index
Business and Sustainable Development
– Braskem evolution strategies in Braskem, Quattor seven macro objectives and Braskem Type of product and service information America required by labeling procedures, and PR3 The products marketed by - percentage of products and services subject Braskem require procedures Braskem, Quattor to such information requirements. regarding information and and Braskem labeling, indicator categories, America except in the case of the category “outsourcing product or service components,” for which there is no such requirement.
2010 Annual and Sustainability Report| 118 Credits
Institutional Relations Marcelo Lyra do Amaral
Corporate Communications Nelson Letaif
Sustainable Development Supervisio Jorge Soto, André Leonel Leal e Deborah Baré
Content production, design, web development and videos Report Comunicação
GRI Consultants ERM Brasil Ltda.
English Version MZ
2010 Annual and Sustainability Report | 119