Aracruz communicates with stakeholders on social and environmental issues through its Social and Environmental Report 2003. The Social and Environmental Report 2003, which is integrated into the company''s Annual Report 2003, describes the company''s progress in implementation of the Global Compact principles.

First, the report addresses Aracruz''s "Social performance," focusing on areas such as human resources (job generation, opportunity for young people, professional training, supplemental pensions), occupational health and safety (transportation safety, heath and quality of life), generation and destination of wealth, social actions and communities (see pages 16 to 29 of the report).

The report also describes the Aracruz''s environmental performance on pages 30 to 47 , focusing on issues of environmental management (licensing, climate change, and environmental fines), forestry operations, water resources, soils and fertilizers, agriculture defensive systems, and biodiversity and environmental quality.

Finally, under "Stakeholder Communication," the report describes efforts that Aracruz took to improve communication with various stakeholders, such as restructuring the company''s website (www.aracruz.com.br), instituting a regular channel of communication with the Forum of Environmental NGOs of Espirito Santo, and improving the Social and Environmental report (see page 9 of the report).

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One of the improvements in the Social and Environmental Report 2003 was the incorporation of a third-party verification. IFC Consulting, through its subsidiary IFC Consultoria do Brazil, carried out an independent verification of the methodology and procedures used to compile and report the information contained in the Social and Environmental Report 2003 (see page 49 of the report).

On page 48, the report lists numerous prizes and awards that Aracruz received in 2003 for its social and environmental performance. Among these prizes and awards, the company received the Best Annual Report Prize, in a competition run by the Brazilian Association of Publicly Traded Companies, and the ABERJE National Prize 2003, in the "Best External Newsletter" category for Aracruz News.