Ethical conduct and integrity

Fairness and transparency in the Company’s relationships, protecting fundamental freedoms and in compliance with national legislation and international agreements.

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Code of Conduct, training and anti-corruption communication

In 2020, a process to review and update Klabin’s Code of Conduct was initiated, which aims to further reinforce the Company’s commitment to promoting an inclusive and respectful work environment, which values ​​the observance of ethics and integrity in the attitudes of all employees, third parties and other parties related to Klabin.

In relation to training, the Company published innovative training on the Code of Conduct for all employees in 2020, presenting the Company’s values ​​in an interactive manner, with an excellent evaluation by the internal public. Training sessions were held by renowned experts in the market, reinforcing the Anti-Corruption and Competition themes, especially to the management public (specialists, coordinators and managers), in a webinar format due to the pandemic restrictions, with learning evaluations. All training was made available in the e-learning format on an internal portal.

As another form of disclosure and encouragement to register complaints, especially those related to women, the Integrity Area participated with partner areas in campaigns to prevent and combat violence against women and sexual harassment at work, intensifying the importance of reflecting on the theme and reporting to the Integrity and Ombudsman Channel.

The Klabin Integrity and Ombudsman Channel (https://www.canalconfidencial.com.br/klabin/#home) aims to provide employees, suppliers and the general public with a confidential and secure means of communication for reporting suspicions or conduct that violate company standards and/or current legislation.

The Channel is managed by an independent and specialized third-party firm, ensuring that the information and identity of all people involved are kept confidential, issues are addressed appropriately and free from any conflicts of interest and whistleblowers are protected from any kind of retaliatory actions. Reports can be filed anonymously or identified, according to the whistleblower’s preference, thus ensuring the necessary confidentiality. Available 24/7 on the website or by phone toll-free (0800 718 7814), and with personal telephone service, conducted by a specialized attendant, the Channel is open to internal and external audiences. All reports filed on the Channel generate an exclusive service protocol for the whistleblower, which can be used to check the progress of the investigations conducted by the Company.

Access Klabin’s Code of Conduct

Access Klabin’s Anti-corruption Manual

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Percentage of employees and business partners notified and trained on anti-corruption, by region and functional category

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RegionYear2020202020192019
 TypeNotifiedTrainedNotifiedTrained
NorthTotal2462822426
 Percentage100%11.38%100.00%11.61%
NortheastTotal1.4151701.281164
 Percentage100%12.01%100.00%12.80%
MidwestTotal00
 Percentage00
SoutheastTotal2,7889193,077937
 Percentage100%32.96%100.00%30.45%
SouthTotal10,4254,3437,5344,450
 Percentage100%41.66%75.48%44.58%
TotalTotal14,8745,46012,1165,577
 Percentage100%36.71%83.20%37.10

Note: In 2019, the company did not have employees in the Midwest region. In 2020, the training conducted by operations acquired in the Midwest region was not counted, in line with the reporting from the People and Management area.

Own employees notified and trained on anti-corruption policies and procedures (by functional category)     
Functional categoryYear2020202020192019
 TypeNotifiedTrainedNotifiedTrained
Senior Executive BoardTotal13121212
 Percentage100%92,31%100,00%100,00%
Management and CoordinationTotal629523608531
 Percentage100%83.15%100.00%87.34%
TechnicalTotal9556431.274976
 Percentage100%67.33%100.00%76.61%
AdministrativeTotal1,6111,0771,110714
 Percentage100%66.85%100.00%64.32%
OperationalTotal11,3833,1058,7523,186
 Percentage100%27.28%85.84%28.45%
ApprenticesTotal10720235101
 Percentage100%57.94%100.00%42.98%
InternsTotal1768012557
 Percentage100%50.57%100.00%45.60%
TotalTotal14,8745,46012,1165,577
 Percentage100.00%36.71%83.20%37.10%

Note: The group identified as “Board of Directors” was not considered.

Directors trained and notified on anti-corruption policies and procedures     
 Year2020202020192019
 TypeNotifiedTrainedNotifiedTrained
DirectorsTotal13121212
 Percentage100.00%92.31%100.00%100.00%

Note: The group of directors is located in the Southeast region

Business partners notified and trained on anticorruption policies and procedures     
 Year2020202020192019
 TypeNotifiedTrainedNotifiedTrained
PartnersTotal1581,381 1,097 0
 Percentage100.00%22.00% 98.90% 0.00%

Note: This item reports the total number of service providers (considering all regions) and, of this total, the number whose contracts include an Anticorruption Clause. The difference between the numbers corresponds to price agreements, software contracts, partnership contracts, leases, contracts with real estate companies and airline operators.

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In 2020, it was possible to expand the user base registered on internal employee portals, increasing the number of people notified about anti-corruption practices.

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Cases involving violations of the Code of Conduct and bribery and/or corruption

TypeInquiredConfirmed
Unlawful Acts236
Behavioral339133
Conflicts of Interest331
Corruption00
Others4121
Information Security10
Violation of Regulatory Laws or Standards13547
Total572208

Klabin’s Channel for reporting complaints was restructured at the end of 2019, now being directly controlled by the Integrity area, and managed by a specialized, independent company. This change has strengthened the governance process, rendering impossible any conflict in the receiving and treatment of reports. The announced changes have underscored the differentials introduced: change in management, specialized and independent company, process of governance, personal attendance by a consultant, Integrity Commission for ruling on and treatment of complaints, as well as reinforcing the level of confidentiality  and guarantee of non-retaliation against complainants. Vehicles for disclosure have been increased (e-mail, mural, internal radio, totems distributed throughout Klabin’s units, adhesives  and explanatory video from the Legal, Integrity and Risk Management and Internal Controls Director and the Integrity Unit). In the light of the continual growth of the Company, we believe that the differentials that have been implemented will strengthen the use of the Channel.

Measures taken

No cases of corruption or bribery were reported to Klabin’s Integrity and Ombudsman’s Channel in 2020. The aim of the Channel, as recipient of complaints, anonymity  guaranteed, is to receive reports of infringements of the Code of Conduct, rules and the prevailing legislation. These are handled in accordance with the complexity of the reported situations. They undergo a process of analysis, investigation, and imposition of disciplinary measures and /or remedial actions  for cases where wrongdoing is confirmed. Upon assessment of the seriousness of the situation, disciplinary measures adopted range from a formal warning to rescission of the work or service contract.For cases where a misdemeanor is proven, preventive measures are also adopted to mitigate any eventual reoccurrence.

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Complaints of discrimination and harassment

Confirmed casesCases under investigation
Sexual harassment104
Discrimination125
Total229

Confirmed cases of discrimination involved four reports of gender discimination (of which two cases involved the same incident) and one report of racial discrimination. Disciplinary measures imposed took into account the seriousness of each case and included a verbal warning, a written warning, conversation sessions to reinforce the awareness of Klabin’s guidelines as well as monitoring for any eventual recurrences.

There were two reports of sexual harassment involving two company and two outsourced employees. With the contracted outsourced companies, the two employees were removed at the request of Klabin. One of the cases involved an employee of the company and resulted in termination. In the other case, awareness measures were adopted with direct monitoring of the G&G area with respect to the reported situation.

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Anti-corruption management

The Integrity Area periodically conducts processes to map the risks of corruption in its operations. The last mapping took place in the 2018-2019 biennium, when workshops and interviews were conducted with all directors and questionnaires were applied to the managers of all Klabin units in Brazil, Argentina and Austria, concerning 100% of the operations. The results were presented in meetings separated by board to define possible action plans.

In 2020, the Integrity Area worked intensively on risk mitigation, reinforcing its training program by promoting specific sessions to the management public, disseminating a renewed training on the Code of Conduct to the entire Company and continuing with the Ethics Week event, a communication action that aims to foster reflection on issues of integrity in the business environment. Improvements were also made through the elaboration of policies and procedures, which formally established general or specific guidelines and responsibilities, and resources were hired to improve the assessment of third parties and the Company’s Integrity and Ombudsman Channel.

Also in 2020, the Integrity Area evaluated 100% of the donations and sponsorships granted by Klabin, integrating the assessment flow of the recipients in the mitigation of reputational risks that may damage the Company’s image and reputation.

For the 2020-2021 biennium, a new risk mapping will be conducted with the help of specialized external consultants, in order to cover the entire Klabin operation, including the new units acquired from International Paper, for the purpose of continuous improvement of the Integrity Program.

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Conflict of interest prevention and management

The Klabin Code of Conduct, a document evaluated and approved by the Company’s Executive Board and Board of Directors, the highest instance of internal governance, establishes guidelines on conflicts of interest, guiding its directors and employees to avoid activities that are incompatible with the interests of the Company: “A conflict of interest will occur whenever the administrator or employee engages in any activities incompatible with the interests of the Company.”

Conduct that is prohibited and may lead to termination of the employment or service provision contract includes conducting parallel activities that compromise work or performance, taking advantage of the Company’s resources for their own benefit or that of third parties, soliciting improper sponsorships from suppliers or taking advantage of the position and internal information. Cases of potential conflict of interest are analyzed by the Company.

In order to improve the assessment structure of third parties, specialized research and analysis solutions were hired, which offer the possibility of identifying negative media, registration in sanctioning lists, PEPs (politically exposed people), among other points of reputational attention. The tools mature the structure for evaluating donation, sponsorship and contracting processes with suppliers.

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Pending and/or closed lawsuits during the period covered by the report regarding unfair competition and violations of antitrust and antimonopoly laws

Unit20202019
Number of pending or closed lawsuitsNo.00

Report the results and progress of legal proceedings relating to anti-competitive practices and violations of antitrust and antimonopoly laws

We did not have any lawsuits relating to anti-competitive practices and violations of antitrust and antimonopoly laws. The Company’s Code of Conduct determines the compliance and respect for the legislation related to the topic, in addition to providing training to the areas most exposed to risks.

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Significant fines and non-monetary sanctions resulting from non-compliance with environmental laws and/or regulations

Unit20202019
Monetary value of significant finesBRLBRL 45,000.00 BRL 12,071.15
Total number of non-monetary sanctionsNo. 1
Total number of cases resolved through arbitration mechanismsNo.
Accumulated environmental liabilities at the end of the yearBRL

Note: Fines of more than 10 thousand dollars are considered significant.

In 2020, we were served the notice of infraction AI No. 13807-D regarding the unlicensed operation of the resin machine at the Correia Pinto (SC) unit, in the amount of BRL 45,000.00. We paid in advance with a 30% discount (BRL 31,500.00), after which the administrative environmental inspection proceedings were closed and archived by the environmental agency.

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Right to freedom of association and collective bargaining.

The hiring of suppliers at Klabin follows a number of criteria to ensure that legal and sustainability aspects are extended to the Company’s value chain.

In addition to requiring minimum levels of quality and timely delivery, tax compliance, compliance with applicable labor, environmental and human rights legislations are non-negotiable conditions.

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Child and/or forced labor

The hiring of suppliers at Klabin follows a number of criteria to ensure that legal and sustainability aspects are extended to the Company’s value chain.

In addition to requiring minimum levels of quality and timely delivery, tax compliance, compliance with applicable labor, environmental and human rights legislations are non-negotiable conditions.

Since 2013, Klabin has been a signatory to the National Pact for the Eradication of Slave Labor, reinforcing its commitment in the combatting of slave and child labor.

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Management of the topic

Klabin’s Integrity Area, responsible for enforcing the guidelines of the Code of Conduct, Anti-Corruption and Competition rules and laws, in line with the Sustainable Development Goals (SDGs), set its short, medium and long-term goals, aiming at rectitude and transparency in the Company’s relationships, protecting fundamental freedoms, in compliance with national legislation and international agreements. Thus, we established as goals for the Integrity Area: (a) to strengthen the pillars of the Integrity Program; (b) disseminate them in all its units and strategic partners; and (c) consolidate integrity as a value perceived internally and externally.

The Integrity Policy was approved in 2020, which formalizes the Area’s guidelines and responsibilities, in addition to listing the Pillars of the Integrity Program: 1. Senior Management Commitment and Support; 2. Assessment of Risks of Corruption, Anti-Competitiveness; 3. Code of Conduct, Policies and Procedures; 4. Training; 5. Complaints Channel; 6. Communication; 7. Third-Party Evaluation; 8. Monitoring; and 9. Periodic Review. We highlight below actions to improve some of these pillars.

Within the scope of third-party assessments, the Integrity Area started to formally and regularly produce the analysis flow for donations and sponsorships, being responsible for the assessment of entities from a reputational point of view, seeking to mitigate risks of relationships that may harm Klabin’s image and reputation. In addition, in order to improve the assessment structure of third parties, specialized research and analysis solutions were hired, which offer the possibility of identifying negative media, registration in sanctioning lists, PEPs (politically exposed people), among other points of reputational attention.

We have further intensified training on the topics of Competition, Anti-Corruption and Code of Conduct through live webinars or in sessions made available in the e-learning format. Our communication actions included another edition of our annual event to foster ethical reflection with the 5th Edition of the Ethics Week, an event held completely online due to the pandemic, with excellent engagement from all of the Company’s units. In 2020, the Brazilian Corporate Communication Association (ABERJE) awarded Klabin in the Ethics and Compliance Category for holding the 4th Edition of the Ethics Week, held in 2019. The association’s award recognizes inspiring cases and best business communication practices.

In 2021, 8% of the executive directors currently have a variable compensation tied to Ethical conduct and integrity’s performance. Apart from them, 12 leaders (from consultants to managers, which represent 2% of them) also managed to develop variable compensation tied to the company’s specific target.