annual report 2017

A priority throughout our operations is to incorporate principles of environmental, social and corporate governance. We believe that generating value and sustainable development are complementary objectives and acting responsibly toward our stakeholders is fundamental to operating a more productive and profitable business in the long term. In order to balance our economic objectives with good corporate citizenship, we are guided by the following set of principles and associated practices:

ENSURING THE WELL-BEING AND SAFETY OF OUR EMPLOYEES:

Employee well-being

Meet or exceed all applicable labor laws and standards, which include respecting human rights, offering competitive wages and implementing nondiscriminatory, fully inclusive hiring practices.

Health and Safety

Maintain a goal of zero serious safety incidents throughout our businesses by working to implement consistent health and safety principles across all operations.

SERVE THE COMMUNITIES IN WHICH WE OPERATE

Community engagement

Engage with community groups that might be affected by our actions to ensure that their interests, safety and well-being are properly respected and integrated into our decision-making processes

Philanthropy

Empower and encourage our employees to participate in community activities and use our resources to promote and develop the communities in which we operate.

MITIGATE THE IMPACT OF OUR OPERATIONS ON THE ENVIRONMENT:

Environmental management

Minimize to the greatest extent possible the environmental impact of our operations and improve the efficient use of our resources.

CONDUCT BUSINESS ACCORDING TO THE HIGHEST ETHICAL AND LEGAL/REGULATORY STANDARDS:

Governance, ethics and fairness

Operate with the high ethical standards defined in our Code of Business Conduct and Ethics, by conducting activities in compliance with applicable legal and regulatory requirements.

Transparency

Be accessible to our stakeholders by responding to requests for information in a clear and objective manner.

 

Black lion tamarin, protected species, São Paulo

Sustainable Business in Brazil

We have a major presence and responsibility in Brazil, where we have been operating since our foundation 119 years ago. Our operations provide jobs for over 20,000 employees and are present in 19 Brazilian states, covering hundreds of municipalities. Aware of the impacts and of the importance of these operations, Brookfield and its investors act with social and environmental responsibility by supporting several projects and programs as a way to contribute to the different communities where we operate. We also encourage and support several entities and initiatives in education, culture, healthcare and the environment. Learn more about some of the initiatives developed by Brookfield and its companies on the following pages.

Supporting Environmental Preservation

The concern with environmental preservation is present throughout our business areas. We maintain approximately 618,000 acres of protected areas in our Agriculture and Forestry operations (Legal Reserves and Permanent Protection Areas) spread across 12 Brazilian states. Through Tegra Incorporadora, we develop projects and programs that contribute to the preservation of the Tamboré Biological Reserve, which includes 40 million sq. ft. and is one of the largest urban environmental conservation areas in Brazil.

In Agriculture, we maintain the Projeto Mico-Leão Preto [Black Lion Tamarin Project], developed in partnership with the Institute for Ecological Research (IPE), at the Mosquito unit in the municipality of Narandiba (São Paulo). In the Atlantic Forest reserve located at Pontal do Paranapanema, the project foresees the recovery of the biodiversity corridors for the purpose of connecting the fragments inhabited by the primate population. We also maintain two natural heritage preservation projects. The first is in Mosquito Farm, in Narandiba, São Paulo, with the preservation of the largest continuous Atlantic Forest reserve in Pontal do Paranapanema, with 3,138 acres. In the Pirapitinga unit in Minas Gerais, we preserve the largest native bushland area in the region, Cerrado do Bugre, with a total area of 7,400 acres. We are partners in projects with the National Confederation of Private Natural Heritage Reserves, the Institute for Ecological Research of the Oeste Paulista University, FAPESP and the Federal Universities of Viçosa and of Lavras.

Through Brascan Projetos de Recuperação Ambiental (BPRA), we have been maintaining a broad forest recovery program since 2005 for native forests in areas degraded by mining activities in the National Forest of Jamari, in the State of Rondônia. The recovered areas are kept closed and protected. Approximately 230 species of birds, 115 reptiles and amphibians, 240 species of fish and 30 medium-to-large sized mammals have already been cataloged, including jaguars, pumas, giant anteaters, ocelots, collared peccary and various primates.

In Arteris, our highway concessionaire, the preservation of flora and fauna, correct disposal of waste and rationalization in the consumption of natural resources are present in several initiatives. With respect to protecting wildlife, the initiatives include the installation of fences and directional screens, in addition to over 300 wild animal crossing corridors, so that they can move safely, without risking their lives or those of the drivers. One of these corridors was specially created to protect a reserve of endangered species of golden lion tamarins located near one of our concessions in Rio de Janeiro.

The company has planted over 1.7 million trees as compensation, prioritizing areas considered more vulnerable, such as riverbanks, areas surrounding natural springs, hilltops and ecological corridors, which allow animal movement, for example. In addition, all waste collected along the concessionaires’ range of responsibility, in the highway service plazas and in the administrative units is properly discarded. For recyclable materials, the company gives priority to recycling through partnerships with collection cooperatives and companies that use the materials as raw materials in their production chains. Contaminant waste, such as batteries and fluorescent lights, is sent to companies specializing in the treatment of these materials.

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NTS supports the Brazilian Symphony Orchestra

Brookfield has been one of the sponsors of the Brazilian Symphony Orchestra (OSB) since 2000. The most traditional orchestra in the country, OSB was founded in 1940 with a mission to disseminate repertoires, create new audiences and develop talents. In August 2017, NTS, the gas transportation company acquired by Brookfield, began to support OSB by developing the Musical Connections project, for the purpose of taking musical training to the regions where NTS operates. The city chosen for the project’s debut was Japeri, in the Baixada Fluminense region of Rio de Janeiro, where 15 local musicians were selected to receive classes with OSB musicians, and public-school teachers were trained to provide musical education to their students. The local musicians selected had the chance to participate in a concert presented by the OSB to Japeri’s population. Thirty other cities will receive the initiative over three years.

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Identifying and supporting young talent in Rio

Another initiative that Brookfield has been proud to support over the last 10 years is the Estrela Dalva Program, helping to provide educational assistance for gifted children from low-income communities in the city of Rio de Janeiro. After a thorough analysis and selection process, the program consists of supporting and preparing these children for admission exams to some of Rio’s schools of excellence, through different activities that stimulate the overall knowledge, creative and cognitive capacities of these students, as well as ethical thinking. Throughout the 10 years of partnership, the Estrela Dalva Program has already assessed around 30,000 elementary school third-grade students from municipal schools, of which approximately 320 were selected, 250 took entrance exams for schools of excellence, and 240 were approved for the school of their choice. In 2017 alone, approximately 3,000 students were tested from 54 municipal schools in Rio de Janeiro, and all 36 students selected for the project passed tests for public schools of excellence (UERJ and Colégio Pedro II).

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Road Safety and Traffic Education

Traffic safety and education are among the priorities of Arteris and encompass a series of the company’s initiatives. To that end, the company joined the Decade of Action for Road Safety 2011–2020, an initiative of the United Nations (UN) to prevent traffic accidents – the third cause of deaths in the 30-44 age range in the world. Brazil is ranked fifth among the countries with the most traffic deaths.

From there, the company has undertaken the goal of reducing fatalities on its concessions. Through investments in the concessions and several education and awareness initiatives, Arteris has recorded average reductions of 12% in the number of accidents and 36% in the fatalities on its ten concessions between 2010 and 2017, with three of its concessions seeing the most significant reductions: Autopista Fluminense and Autopista Planalto Sul, with 60% drops, and Autopista Régis Bittencourt, with a 57% drop.

The company maintains an Accident Reduction Strategy Group (Gerar), whose purpose is to ensure that safety is the focus of daily management and that responsibility for the subject is shared by everyone internally, in addition to developing initiatives involving the community in general.

In the area of education, the main initiative of Arteris is the School Project, maintained for the last 16 years in partnership with Municipal Departments and Boards of Education. The initiative consists of training educators to develop, along with the students, activities focused on identifying problems in traffic, reflecting on alternatives and identifying a solution. Currently, the School Project covers all 10 Arteris concessions and is present in 590 teaching institutions in 138 municipalities, covering over 16,000 teachers and about 290,000 students.

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Project supports small farmers in Rio Grande do Norte

Two key priorities of our renewable power business are to stimulate local development and serve the communities where we operate. These priorities have been put into practice in Rio Grande do Norte, the state where we operate wind energy generation farms. The project “Family Agriculture: technology, training and entrepreneurship in the semiarid region of Rio Grande do Norte” is sponsored by Brookfield Energia Renovável (BER), through social sub-credit from the Brazilian Development Bank (BNDES), benefiting around 300 rural families in the municipalities of João Câmara and Parazinho, with planning workshops, Rural Professional Training courses, Social Promotion and technical assistance services. In one year of the project, there has been an increase of about 30% in the income of some participating families, as well as the transformation of community areas into productive yards in all of the communities.

The BER initiative in Rio Grande do Norte is among a number of initiatives designed to support the community. In 2011, when it began to operate the Barra do Braúna plant, one of its largest hydroelectric generation plants, located in Minas Gerais, BER joined state environmental regulatory bodies to develop a stimulus plan for the economy of the surrounding region. In the last five years, various initiatives have been developed including the implantation of a waste separation and classification system, recycling and composting center in the municipality of Recreio and the construction of community centers focused on social, cultural and technical training programs in Laranjal and Dois Lajeados, etc.

BER operates 65 hydroelectric, wind and biomass cogeneration plants in Brazil, through which it generates clean and renewable energy, free of carbon emissions and with very low environmental impact.

Small farmers supported by Brookfield project in Rio Grande do Norte.

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Project generates BRL 2 million for rural fruit growers

Benefiting the surrounding community is a key priority of our Agricultural operations, which are present across 12 Brazilian states. The Pineapple Project is one initiative in support of this. It benefits 128 families through the assignment of land by subsidized lease. These families of rural workers became fruit growers, injecting about BRL 2 million into the local economy on an annual basis from fruit production. The project was expanded with an additional funding of BRL 1 million from PRONAF (National Program for Strengthening Family Farming) to small farmers. The project directly benefits 384 people and indirectly involves other 1,500. The project occupies an area of 632 acres on the Pirapitinga farm, in the municipality of Canápolis, in Minas Gerais.

In the area of healthcare, we maintain the Saúde no Campo [Health in the Field] project, which benefits around 600 people, involving workers and family members on eleven farms. The purpose is to guide people and raise awareness through educational activities related to high blood pressure, sedentary lifestyle, oral hygiene, blood sugar levels, socialization activities, balanced diet, risks of alcohol and tobacco, among others. In the Rancharia unit, in rural São Paulo, we maintain a Therapeutic Horseback Riding Center that assists in the treatment of children with specific physical disabilities. Recognized by the Federal Council of Medicine, Therapeutic Horseback Riding uses the horse to work the child’s health and physical development. Partners include the City of Rancharia and APAE.

Pineapple growers, Minas Gerais

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VLI invests in Health and Education programs in Santos

VLI, an integrated logistics company in which Brookfield is a shareholder, signed an agreement with the City of Santos in 2017 to invest BRL 6 million in the municipality’s areas of Healthcare and Education. The investment is part of VLI’s commitment to contribute to the economic and social development of the regions where it operates. The company’s operations are present in more than 300 Brazilian municipalities, in several of which it supports projects intended to improve the population’s quality of life.

Healthcare investments will be divided between three initiatives. The first is the qualification and modernization of eight of the municipality’s 18 Basic Healthcare Units, which will receive new furniture, computers and medical-hospital equipment, in addition to improving customer service and developing new campaigns. More than 120,000 people will benefit from these improvements. The second is the establishment of a Mobile Eye Doctor’s Office, through the purchase and equipping of a van that is expected to hold 900 eye appointments per month. The third is the expansion of Escola das Mães [School of Mothers], a project that is part of the Mãe Santista program, which is already supported by the City of Santos and promotes a set of educational activities that supplement doctor’s visits and prepare women and their support networks (partners, friends and family) for motherhood. Since its deployment in 2013, Mãe Santista has supported more than 13,000 expectant mothers, with assistance from prenatal care through the children’s second year of life. The partnership with VLI will allow the project to assist other 2,500 pregnant women. This work contributed to the City of Santos achieving the lowest infant mortality rate in its history in 2017: nine deaths for every 1,000 live births, below the target of the World Health Organization of 10 for every 1,000 births. Prior to the beginning of the program, this rate was almost 14 deaths per thousand live births and even climbed to 34/1,000 in 1990.

VLI and the City will also allocate funds In the area of Education via two projects. The Schools that Innovate program is one of them and sets forth the creation of Technology Centers and the qualification of nine school libraries, seeking to offer better learning spaces in the public school network in Santos, benefiting more than 8,000 students. An Education for Peace Center within the Santos Board of Education will also be built, which is part of the plan to deploy Restorative Justice and will serve to resolve conflicts initiated in the city’s schools, in addition to discussing sensitive issues, proposing solutions and training professionals to deal with situations that involve violence. Over 7,600 students and teachers will benefit from the project.

Participants of the Mãe Santista Program, Santos, São Paulo.

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Cachoeiro do Itapemirim is the highlight for basic sanitation services

BRK Ambiental’s excellence in sanitation services in Cachoeiro de Itapemirim (Espírito Santo) was recognized by one of the sector’s most important entities in the country, Instituto Trata Brasil. The municipality was chosen as one of the success cases presented in the seminar “Examples in Basic Sanitation – Municipalities prove that it is possible to universalize services and reduce water loss”, held in October 2017 in São Paulo, when BRK Ambiental was recognized for its significant contribution.

Currently, 98.06% of sewage in Cachoeiro de Itapemirim is collected, and of this total, 98.15% is treated, which corresponds to around 21 million liters of sewage treated daily, avoiding pollution to Rio Itapemirim and the region’s streams. In Brazil, over 100 million people still do not have this service. With almost 212,000 inhabitants, Cachoeiro is in the select group of Brazilian cities that have already managed to address the problem.

The concession of the municipality’s sanitation services was established in 1998, when less than 5% of homes received sewage treatment services. Since then, BRK Ambiental has invested over BRL 210 million in the municipality. Major work performed includes the construction of 10 Sewage Treatment Stations (STSs) and over 60 kilometers of collecting networks.

In addition to the advances in sewage services, Cachoeiro is an example of fighting water wastage. The rate of loss in Cachoeiro de Itapemirim when BRK Ambiental assumed the services in 1998 was 56%. After a series of investments, the municipality reached the 13% loss mark, among the best rates in Brazil.

The municipality is also an example when it comes to conscious consumption. Prior to the concession of the services, each resident consumed an average of 173 liters of water per day. Since then, BRK Ambiental has been promoting a series of actions and educational campaigns that contributed to a considerable reduction in the per capita water consumption. Today, each resident uses about 118 liters, a rate that is among the lowest in Espírito Santo.

The actions performed by BRK throughout the regions in which it operates prevented the loss of 24 million m3 of water in 2017 alone, the volume required to supply a city of 444,000 inhabitants for a year.

Sewage treatment station, Cachoeiro do Itapemirim, Espírito Santo.

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