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PPUUBBLLIICC MMOONNIITTOORRIINNGG SSUUMMMMAARRYY  

TANAGRO  S.A.  has  its  head‐office  in    Montenegro,  Rio  Grande  do  Sul, Brazil,  and  manages  an  area  of  approximately  55  thousand  hectares, distributed  in  20  districts  of  the  State  of  Rio Grande  do  Sul.  The  Forest Management  is  certified by  the FSC®  ‐ Forest  Stewardship Council Norms (Forest Management Council) and ISO 9001 (Quality Management System). 

TANAGRO  S.A.  plants  and  harvests  Black  Acacia  forests,  supplying  raw‐material  for  two  industrial units of TANAC S.A., private  company of  state funds, controller of Tanagro. Supplies debarked wood for the woodchip and pellet  Mill  in  Rio  Grande  and  bark  for  the  vegetable  extract  Plant  in Montenegro. 

PPLLAANNTTEEDD AARREEAA Chart 1: Distribution of the areas of the company by region Region / Head-

office Districts Area of effective plantation (ha)

Total area (ha)

Montenegro Montenegro and Triunfo - 12,0

Cristal Camaquã, Canguçu, Chuvisca, Cristal and Pedro Osório 5.136,7 10.891,1

Encruzilhada do Sul

Amaral Ferrador, Cachoeira do Sul, Encruzilhada do Sul and Piratini 5.615,6 12.787,7

Piratini Arroio Grande, Bagé, Candiota, Cerrito, Dom Pedrito, Herval, Jaguarão, Pinheiro Machado and Piratini 13.853,5 31.365,9

TOTAL 19 Districts 24.605,8 55.056,7

Source: Forest Survey of Tanagro (03/31/2018).

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FFOORREESSTT BBAASSEE The forest plantations, with a great geographical distribution, are administrated from Montenegro, head-office of the company and by three regional-offices (Cristal, Encruzilhada do Sul and Piratini). Each region includes various districts. The Forest Nursery is situated in the district of Triunfo.

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TTHHEE BBLLAACCKK AACCAACCIIAA The Black Acacia is a medium sized tree, native from Australia and planted commercially in Rio Grande do Sul since 1928. Initially planted due to the quality and of the content of tannin in the bark, gained greater importance along the years by the coincident quality of its wood, such for energy generation as for the plywood and cellulose industries. The culture has a relevant social importance in the state, with more than one hundred

nurseries and a dozen of thousand producers, predominantly small and medium, suppliers of the bark and wood market. Besides the social-economical aspect, the species is distinguished as an environmental restorer for being a pioneer of short life, recovers the soil rapidly, is not invasive of preservation areas, favors the natural succession and enriches the soil through the atmospheric nitrogen fixation.

PPLLAANNTTAATTIIOONN QQUUAALLIITTYY CCOONNTTRROOLL

Up to 6 months after the plantation a survey is fulfilled to quantify the main items which affect the quality of the plantation, enabling to define continuous improvement plans of this activity. Region Year Cristal Encruzilhada do

Sul Piratini Average of the Regions

2010 10,0 8,3 9,1 9,1

2011 9,8 8,8 9,6 9,4

2012 10,0 10,0 9,5 9,8

2013 8,3 9,5 9,0 8,9

2014 8,6 9,0 8,2 8,6

2015 - 8,1 9,7 8,9

2016 9,2 8,9 9,1 9,1

2017 9,5 - 7,9 8,7

Chart 2: Description of the Plantation Quality Indices by regions

FFOORREESSTT  MMAANNAAGGEEMMEENNTT  The plantation fulfilled with density of 1.905 seedling per hectare are usually from the second year onwards maintained intercropped with cattle in low stocking and rotating between plots. The forest harvesting is fulfilled around the 7th year due to the better quality of the wood and level of tannin of the bark. This harvesting age also results lower exportation of nutrients per ton produced. The average annual increase is of 30 m³pilled/hectare.

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BBEEEETTLLEE  MMOONNIITTOORRIINNGG  The main plague for the acaciculture is the coleopter of the gender Oncideres spp. (Coleoptera–Cerambycidae) which curls the branches and the top of the trees, damaging shape and growth. The control is due in the state law which obliges the collection and burning of the infested branches, as a phytosanitary measure. The areas are monitored annually between the months of January and June, independently of the infestation level, except for those forests which will be collected during this period. Considering the population increase throughout the years and the social and economical severity of the damages caused, the Ministry of Agriculture Cattle and Supply decreed “Emergency Phytosanitary State”, which should conduct alternative measures of control, greater disclosure and supervision and conduction of research related to it.

Graph 2: Description of the quantification of the branches collected and eliminated per region

FFAAUUNNAA MMOONNIITTOORRIINNGG The monitoring began in the year of 2003, with the fulfillment of a Environmental Diagnosis in all the actuation regions of Tanagro, with the objective of giving subsidies to the Managing Plan and to be used as reference for future monitoring. This work pointed out that there is important biodiversity in the areas studied and which in general, the negative impacts of the forest operations and of the cattle activity are not significant to the adjacent natural environments and the fauna present. From the subsidies brought about by the Environmental Diagnosis four strategic lines for the environment conservation were established:

a) Effectiveness of all the native forest areas as conservation areas; b) Protection of the animals threatened or in danger of extinction; c) Control of the access to the areas for an effective suppression of hunting; d) Environmental Education for the workers and community of the surroundings in the sense of knowing, disclosing and to guarantee the result in the actions proposed.

The field surveys have been demonstrating that there are no significant differences for the occurrence of species between the cultivated environment and the environment of native vegetation. The results pointed out the constant use of the cultivated environments by many species, including species considered threatened of extinction in Rio Grande do Sul”. Currently the tasks are being fulfilled at Ouro Verde Farm with the monitoring of mammals, birds, reptiles and amphibians.

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

2011 2012 2013 2014 2015 2016 2017Years of Monitoring

MONITORING OF THE BEETLE(Collected and eliminated branches)

Cristal

Encruzilhada do Sul

Piratini

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Chart 3: Fauna threatened or in risk of extinction observed in the Farm monitored in 2017. Family Scientific Name Popular Name Registration Site Category

Cotingidae Pyroderus scutatus pavó Ouro Verde Vulnerable Mustelidae Galictis cuja ferret Ouro Verde Insufficient data Mustelidae Lontra longicaudis otter Ouro Verde Almost threatened

Procyonidae Nasua nasua coati Ouro Verde Vulnerable Dasypodidae Cabassous tatouay soft-tailed armadillo Ouro Verde Insufficient data Dasypodidae Dasypus hibridus armadillo mullite Ouro Verde Insufficient data Cuniculidae Cuniculus paca paca Ouro Verde Vulnerable

Dasyproctidae Dasyprocta azarae agouti Ouro Verde Vulnerable Source: Tecnicyamb (Environmental Diagnosis) and State Decree n. 51.797/2014

Also since 2005 the Fauna Spontaneous Monitoring is being fulfilled, where the own collaborators of Tanagro register the presence of animals in the areas of the company. In the sequence, some registries of fauna are presented which were observed in the areas administered by Tanagro during the year of 2017.

GGrreeeenn--bbeeaakk ttuuccaann ((RRaammpphhaassttooss ddiiccoolloorruuss)) OOuurroo VVeerrddee FFaarrmm,, CCrriissttaall//RRSS

coati (Nasua nasua) Ouro Verde Farm, Cristal/RS

rraaccoooonn ((PPrrooccyyoonn ccaannccrriivvvvoorruuss)) OOuurroo VVeerrddee FFaarrmm,, CCrriissttaall//RRSS

Agouti (Dasyprocta azarae) Ouro Verde Farm, Cristal/RS

PPaaiinntteedd ffrroogg ((PPhhyyssaallaaeemmuuss bbiilliiggoonniiggeerruuss)) OOuurroo VVeerrddee FFaarrmm,, CCrriissttaall//RRSS

Bush graxaim (Cerdocyon thous) Ouro Verde Farm, Cristal/RS

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FFLLOORRAA MMOONNIITTOORRIINNGG Tanagro has been fulfilling since 2003 studies of vegetation characterization. These studies were developed to evaluate the current situation of remaining forests, on farms which develop silviculture with Black Acacia intercropped with cattle and also to evaluate the richness and abundance of species in all vertical strata (herbaceous, shrubby and arboreal) in areas of PPAs, in grasslands and forest matrices. During this period a characterization of rock flora on rocky outcrops was also held in three areas. Following, some photographic registers are presented of the flora and the list of endangered species which were observed in the areas administrated by Tanagro.

Chart 4: Flora species threatened of extinction in Rio Grande do Sul, registered in the areas of Tanagro.

Family Scientific Name Popular Name Category * Occurrence (Region/Area)

Anacardiaceae Astronium balansae (Myracrodruon balansae) (1) aroeirão In Danger Encruzilhada do Sul / Coastal

Plains Araucariaceae Araucaria angustifolia (1) pinheiro-brasileiro Vulnerable Camaquã / Coastal Plains Bromeliaceae Dyckia remotiflora (4) gravatá Vulnerable Do Seival Farm

Cactaceae Frailea gracillima (4) tuna Vulnerable Do Seival Farm Cactaceae Frailea pygmaea (4) tuna Vulnerable Do Seival Farm / Do Cerrito Farm Cactaceae Gymnocalycium denudatum (4) tuna In Danger Luis Rodrigues Farm Cactaceae Parodia erinacea (4) tuna In Danger Do Seival Farm Cactaceae Parodia linkii (4) tuna Vulnerable Do Seival Farm Cactaceae Parodia mammulosa (4) tuna Vulnerable Do Seival Farm

Cactaceae Parodia ottonis (4) tuna Vulnerable Do Seival Farm / Do Cerrito Farm / Luis Rodrigues Farm

Cactaceae Parodia oxycostata (4) tuna Vulnerable Do Seival Farm Cactaceae Parodia permutata (4) tuna In Danger Do Seival Farm

Lauraceae Licaria armeniaca canela Critically Endangered Camboatá Farm

Lauraceae Ocotea lanceolata (1) canela-amarela In Danger Camaquã / Piratini / Coastal Plains

Melastomaceae Tibouchina asperior (2) douradinha In Danger Ouro Verde Farm Myrtaceae Eugenia dimorpha (4) - Vulnerable Luis Rodrigues Farm

Orchidaceae Baptistonia riograndense orquídea Vulnerable Ouro Verde Farm Orchidaceae Cattleya intermédia (1) orquídea Vulnerable Ouro Verde Farm

Oxalidaceae Oxalis refracta azedinha Critically Endangered Santa Fé Farm

Poaceae Chascolytrum bulbosum (Erianthecium bulbosum) - In Danger Cerro Branco Farm / Santa Fé

Farm Solanaceae Solanum viscosissimum (2) joá-cipó-melado In Danger Santa Fé Farm

Sources: (1) Tecnicyamb; (2) A. Guglieri & F.J.M. Caporal; (3) Silas Mochiutti; (4) Biota * According to State Decree n. 51.109/2014

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HHIIGGHH  CCOONNSSEERRVVAATTIIOONN  VVAALLUUEE  FFOORREESSTT  

OOUURROO  VVEERRDDEE  FFAARRMM  After study fulfilled by the company, the areas of native forests of the Ouro Verde Farm, situated in the district of Cristal, RS, were elected as High Conservation Value Areas, because they presented a significant concentration of biodiversity, outstanding the other 100 areas analyzed by presenting attributes such as:

• Being inserted in a region with a high level of human disturbance according to the definition of the Environmental Forestry (Silviculture) Zoning (EFZ); • Sufficiently big area to maintain the biodiversity present; • Proximity with the conservation unit; • Ecological corridors with the objective of conservation in the EFZ for the region; • Occurrence of exceptional number of fauna endangered species; • Occurrence of flora endangered species.

INDICATORS YEAR 2017

Environmental Non-compliance No records

Animals run over 1 (snake)

Occurrence of illegal activities 2 (1 trace of hunting and 1 entry of unathorized person)

Social and Environmental Actions 10 (visits to ecological track)

Amphibians: Wealth x Frequency 19 species identified (Quantitive Results - Anuran Count Points: 18 species identified, with 1,555 contacts)

Birds: Wealth x Frequency 129 species identified (Quantitative Results - Linear Transect Method: identified 63 species with 1,607

contacts)

Mammals: Wealth x Frequency 22 species identified (Quantitative Results - Photographic traps: identified 12 species with 99 records)

Reptiles: Wealth x Frequency 8 records with 5 species identified

With the monitored aspects and annual results, work is done to mitigate recurrence of the mentioned events and diverse improvements. In 2017 there were improvements in the environmental education program with visits to the "Caminho das Figueiras" ecological track. Mainly students of the regular school system are received with the disclosure of the monitoring results carried out in this area and other information referent to environmental conservation.

UUSSEE OOFF SSOOIILL  The areas of Forest Management are distributed in 6 river basins and 19 districts. According to Forest Registry (03/31/2018), the distribution of the Black Wattle cultivation in 84 places confers to the plantations a great dispersion without a significant impact in the regional landscape. Due to the relative size of the areas, the use and the management applied in the adjacent properties has significant influence in the fauna circulation, in the quality and availability of superficial water and in the entrance and circulation of seeds. Conversions of natural vegetation areas into Black Acacia plantations are not done.

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Chart 5: Relation of main uses of soil with the respective occupation area.

Areas (ha) 2017

Total %

Black Wattle 24.605,8 44,7%

Native Forest 12.855,7 23,3%

Field 8.953,6 16,3%

Others 8.641,6 15,7%

Total Area 55.056,7 100,0% Fonte: Tanagro Forest Registry (03/31/2018).

MMOONNIITTOORRIINNGG  OOFF  WWAATTEERR  RREESSOOUURRCCEESS  Since 2006 Tanagro fulfills a study of Hydrosedimentological and Quality Monitoring of the water of a stream at the Ouro Verde Farm, as well the characterization of a standard related to the Black Acacia cultivation. Various equipments for monitoring the climate and water conditions were installed, such as: water level measuring gauge, spillway (Parshall gutter), recording rain gauge, rainfall gauge and turbidity gauge. Analysis of the water quality is regularly executed and the data generated is crossed with the automatic weather station on the same farm. During 2017 Black Acacia was collected in the monitored microbasin and no significant changes were reported in the data.

Graph 3: Data for rainfall (P) and spill (Q) between the years of 2008 and 2017.

MMOONNIITTOORRIINNGG  OOFF  SSUUPPEERRFFIICCIIAALL  WWAATTEERRSS  Since 2008 two areas were selected for the monitoring of surface waters, which are Crepúsculo Farm (district of Camaquã), situated in the Camaquã Watershed and the Camboatá Farm (district of Piratini) situated in the Mirim Watershed – São Gonçalo. The objective of this work is to demonstrate if there will be impact related to the Black Wattle plantations in the quality of the surface waters, due to the management used. To analyze the interference of the rainfall and of the temperature in the selected areas, rainfall gauges and thermometers of maximum and minimum temperatures were installed in each of them for the registry of information.

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The analyses of the water quality are executed monthly and the parameters monitored are: pH, temperature, DO (Dissolved Oxygen), Total and Fecal Coliform Bacteria, OBD5 (Oxygen Biochemical Demand), OCD (Oxygen Chemical Demand), turbidity, total dissolved solids, total phosphorus and total nitrogen.

Graph 4: Data of OBD5 (mg/L) of Crepúsculo Farm between January 2013 and December 2017 evaluated at the input and output of the water stream of the farm area.

HHUUMMAANN RREESSOOUURRCCEESS  

INDICATORS YEAR

2013 2014 2015 2016 2017

Direct and indirect collaborators 589 568 581 713 587

Training hours 9.498 2.166 3.190 2.674 2.641

Abstention (Forest harvesting) 1,56% 1,45% 1,37% 0,93% 1,11%

Abstention (Silviculture) 1,99% 1,99% 1,90% 2,03% 2,31%

Labour Claims 13 06 11 10 16

Accidents without leave 10 10 6 3 3

Accidents with leave 46 15 24 20 25

Medical/odontological appointments (R$) 322.690 207.941 454.727 564.761 650.032

0

2

4

6

8

10

12

14

16

Jan‐13

Mar‐13

May‐13

Jul‐1

3

Oct‐13

Dec‐13

Feb‐14

May‐14

Jul‐1

4

Sep‐14

Nov

‐14

Jan‐15

Mar‐15

Jun‐15

Ago

‐15

Oct‐15

Dec‐15

Mar‐16

Jun‐16

Sep‐16

Dec‐16

Feb‐17

Apr‐17

Jun‐17

Aug

‐17

Out‐17

Dec‐17

OBD

5 (m

g/l)

Monitoring  Period

Crepúsculo Farm

OBD5 (Input) OBD5 (Discharge) Res. 357/05 CONAMA (Class III ‐ until  10 mg/l)

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SSOOCCIIAALL WWOORRKK  

WORK YEAR

2013 2014 2015 2016 2017 Employees instruction (general after 2014) 3 17 17 9 13

Disclosure of Public Health Campaigns 4 3 5 6 10 Environmental Education Events – After

2016 2 2 0 0 10

Number of external demands - environmental, social, health, safety, etc.

(% of attendance) 50 (78%) 64 (93%) 72 (91%) 115

(90%) 173

(91%)

The Ecological Track “Caminho das Figueiras” was established at the Ouro Verde Farm, that has become part of the environmental education program, acting in the different working regions of the company.

RREESSIIDDUUEE GGEENNEERRAATTIIOONN  Region Nursery Cristal Encruzilhada

do Sul Piratini

TYPE OF RESIDUE Year 2017

Dry (kg) 1.949 13.894 12.691 32.183

Dangerous (kg) 46 5.626 5.710 11.680

Contaminated soil (kg) 0 1.028 40 49

Agrotoxic Containers (un) 565 675 409 1.153

Further information at www.tanac.com.br, through the e-mail: florestal@tanac.com.br or 55 0(XX)-51-3632-4055.

Review: June 2018.