Shared Value Creation

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(Español) En búsqueda de apuntar al abastecimiento responsable buscamos reflejar nuestro valor de sustentabilidad en toda nuestra cadena de suministro, incorporamos dentro de nuestros criterios de evaluación de proveedores la sustentabilidad, ética y los derechos humanos, a los cuales realizaremos un seguimiento continuo para establecer relaciones comerciales.

What do we expect from our suppliers?

We expect all of the suppliers we work with to comply with applicable legislation and to share our sustainability commitments in their own companies. We encourage all suppliers, including those responsible for inputs, services and consultancies, as well as intermediaries and others that provide services to SQM, to:

Respect their employees’ human rights
Care for the environment
Protect health and safety
Prioritize ethics and integrity in their business activities
Encourage fair treatment of their own employees

To that end, we ensure that at least the following are met in concrete terms:

Compliance with our Code of Ethics
Familiarity and understanding of our policies
Self-assessments on sustainability conducted annually
Commitment to providing more information if needed and/or participating in an additional validation
Application of corrective actions when necessary

Sustainability, Ethics and Human Rights Policy

Ethics and Corporate Governance

At SQM we are committed to conducing business in an ethical and transparent manner, following a high standard of integrity that must prevail over any other business considerations. This commitment applies equally to everyone at SQM, including the Board of Directors and all employees, with no exceptions. At SQM, our primary objective is to do our work in the right way with the right people and in a way that we can be proud of, creating value for our people, for the community, for our business partners and for our shareholders. Consequently, We are committed to:

Promote a culture of integrity and corporate ethics and to perform our daily tasks to the high standards described in our Code of Ethics.
Reinforce the respect and compliance with all commitments made to customers, employees, regulators, communities, suppliers, services provides, authorities and shareholders.
Maintain the fundamental commitment that we and anyone working on behalf of SQM must comply with the law.
Have zero tolerance for any type of corrupt activity by any person working on behalf of SQM.
Maintain corporate practices, directives, and instances that guide decision-making processes and the delivery of information within a framework of transparency, adequate risk management and control, contributing to the sustainable creation of value.
Ensure that our processes and supply chain are free of minerals originated in conflict zones, and that we do not directly or indirectly finance or benefit armed groups in countries in conflict zones, in accordance with applicable OECD guidelines.
Implement and enforce procedures in accordance with applicable legislation necessary to prevent and combat money laundering and the financing of terrorism.

Learn about our policy: Corporate Governance Policy Code of Ethics

Code of Ethics

We work actively to promote a culture of integrity, with full respect for the standards established in our Code of Ethics and strict compliance with the applicable legal regulations. In this context, we have developed an Ethics and Compliance Program that comprises a set of processes, policies, and procedures aimed at communication and awareness, risk assessment, the implementation and monitoring of prevention measures, and the creation of support and complaint channels. This Program and the framework it establish, which regulates how work is performed and business decisions are made at SQM, is structured along the following axes:

1.A.i Anti-Corruption.
1.A.ii Anti-corruption
1.A.iii Antitrust
1.A.iv Intellectual property
1.A.v Conflicts of interest
1.A.vi Money laundering

Learn about our policy: Crime Prevention Model Fair Competition Policy Anti-Bribery and Anti corruption compliance policy Code of Conduct for SQM´s Business Partners

Governance and Finances Approach

SQM has enacted a Corporate Governance Policy that regulates how the Board of Directors performs its duties in order to best safeguard the interests of the Company and its shareholders. This framework of responsibilities provides the Board of Directors with tools to ensure maximum honesty and integrity amongst the Company's senior executives, its advisors and external auditors. The Policy also enables the Board of Directors to determine the nature and scope of the financial risks that the Company may take in order to achieve its strategic objectives, while maintaining solid and effective risk management and an effective internal control system. The following permanent Board committees exist to provide the Board of Directors with support in these tasks: (i) Directors /Financial Risk and Auditing Committee; (ii) Health, Safety, and Environment Committee; and (iii) Corporate Governance Committee. Furthermore, and given SQM’s global business strategy and its worldwide presence through its commercial offices, the Company is committed to ensure that the value created by its operations is not transferred to jurisdictions with low or no taxation. Likewise, and to ensure that the value created through our operations benefits the countries where it is generated, SQM has developed a transfer pricing approach based on compensation to subsidiaries according to an asset and risk analysis, in accordance with the recommendations of independent transfer pricing studies. Our Corporate Governance Approach is articulated according to the following lines of action:

1.B.i Habituality Policy
1.B.ii Manual for the Management of Information of Interest for the Market
1.B.iii Investment and Financing
1.B.iv Business Risk Management
1.B.v Dividend Policy
1.B.vi Business Continuity

Learn about our policy: Dividend policy Policy on Customary transactions with related parties Financing an investment policy Policy Tax

Workers

People are at the center and at the core of everything we do. Therefore, in our Company we encourage respectful labor relations, creating the necessary conditions for each person to actively develop their capabilities. At SQM we value meritocracy, and favor equality of opportunities, the inclusion of diversity, non-discrimination, and the respect for human rights and individual and collective labor rights recognized by the main instruments of the International Labor Organization, as well as by the applicable laws of each of the countries where our operations are carried out. Consequently, We are committed to:

Reject without exception, all forms of child labor, forced labor and any working condition amounting to modern slavery; and to make this principle enforceable throughout our supply chain.
Respect our workers´ right to freedom and right of association, seeking to create spaces of informed and transparent dialogue that enable mutually beneficial agreements.
Promote a corporate culture that fosters diversity, inclusion, non-discrimination, respectful treatment, and equal opportunities.
Reject violence, sexual harassment, intimidation, and harassment at work.
Promote merit and empower our workers’ development with a view to developing their full potential.
Create safe and healthy working conditions, safeguarding the dignity of our workers, as well as promoting a culture of workplace safety through continuous dissemination of guidance, safety training and education, and adherence to regulations that ensure the protection and safety of workers.

Equality, Diversity, And Inclusion Approach

Our Company is made up of talented workers with immense capacities to contribute to the development of our activities, and our goal is to provide them with the right opportunities and conditions for each of them to develop and contribute in an environment of cordiality, equality, respect, and openness. To this end, we have defined the following lines of action:

2.A.i Ensuring no wage discrimination, hiring, promoting and making employment decisions based on objective criteria regarding each person’s aptitudes for the position
2.A.ii Blind recruitment, evaluating applicants in accordance with their skills and requirements for the position, with no discrimination of any other kind
2.A.iii Conducting activities and programs aimed at target groups who require further training or preparation

Learn about our policy: Diversity and Inclusion Policy

Labor Rights Approach

SQM has operations in several countries around the world, so it is our responsibility to ensure compliance with all applicable laws in each jurisdiction in relation to working conditions, wages and fair pay, working hours, workplace safety, right of association, prohibition of child labor and forced labor, among others. With a view towards respecting and protecting the labor rights of our workers, this approach is based on the following lines of action:

2.B.i Development of Internal Regulations, which must be informed and known by all of our workers, and which regulate the obligations and prohibitions applicable to SQM workers must be subject in relation to their work, permanence and life in the company's facilities
2.B.ii Promotion of freedom of association

Prevention To all Forms of Harassment Approach

At SQM, respect for each person’s dignity involves preventing and combating any form of harassment at the workplace, including insulting and disrespectful, hostile, humiliating, or offensive expressions; inappropriate physical contact; and intimidating actions intended to humiliate an individual or a group of people, or create a hostile workplace. The internal regulations that bind all SQM employees prohibit all forms of harassment, including stalking and sexual harassment. To ensure compliance with these commitments, the harassment prevention approach has the following lines of action:

2.C.i Existence and operation of an anonymous, confidential, and reprisal-free reporting channel, available to all workers and managed by an independent company specialized in the field
2.C.ii Development of an standardized and confidential investigation procedure
2.C.iii Development of educational and awareness-building plans and programs within the Company to prevent and eradicate all acts or culture of harassment

Workplace Health and Safety Approach

At SQM, we firmly believe that we all work better when we are in a safe and healthy environment, therefore our goal is to achieve a zero accident rate at our operations. To this goal, we have established a robust operational risk prevention and occupational health management system, applicable to the entire company and to all our contractors, regardless of their size or role. We also possess rigorous and clear guidelines and protocols that must be followed by everyone working at SQM to effectively guarantee safety in the performance of our duties. Our Company takes responsibility and ensures that all its employees receive adequate training to perform the tasks assigned to them, as well as to use the associated equipment and supplies, in order to carry out our work in a safe and responsible manner, effectively identifying the associated risks, implementing necessary control measures, and conducting timely monitoring. With the goal of meeting the targets set in this approach, SQM’s efforts center on the following lines of work:

2.D.i Occupational health and operational risk prevention management system based on international standards
2.D.ii Continuous training for all our personnel so that they can do their work safely
2.D.iii Implementation of the same occupational health and risk prevention standards in all our contractor companies
2.D.iv Promotion and control at all of our operations and facilities to ensure that they are alcohol and drug-free workplaces
2.D.v Promotion of healthy lifestyle amongst our employees and the employees of our contractors

Learn about our policy: Alcohol and Drugs

Development, and satisfaction approach

SQM's success is built on the immense human capital of its employees, and who have been able to develop over the course of their careers at the Company. In this sense, SQM assumes the duty and challenge of generating the necessary opportunities and possibilities to allow each and every employee to develop his or her capabilities and potential for mutual benefit. In this context, our lines of work under this approach are:

2.E.i) Creation of competitive promotions and internal mobility opportunities
2.E.ii) Training our workers to perfect their skills for their role
2.E.iii) Continuous evaluation of the performance of our workers, in the implementation of plans that allow continuous improvement of their work
2.E.iv) Implementation of a recognition system to promote SQM’s values in work teams
2.E.v) Monitoring trough surveys of working teams to determine strengths and opportunities for improvement, establishing an action plan for this purpose

Value Chain

We at SQM are responsible for delivering high quality products that strictly comply with committed standards and applicable regulations, as well as providing timely service and support to our customers and clients, through a rigorous Management Quality System. Moreover, we are determined to promote that human rights, fair treatment, and environmental protection are respected throughout our production and supply chain. Consequently, We are committed to:

Promote and encourage sustainable and responsible supply.
Respect and promote the respect for human rights, including labor rights, of workers in our supply chain, including consultants, contractors, distributors, independent contractors, subcontractors, and wholesalers
Delivering to our customers high-quality products that meet committed standards and applicable safety regulations.

Integrated Process Management Policy

Suppliers and Service Providers Approach

At SQM we seek to establish fair and clear relations and to extend our commitments regarding sustainability, workplace and labor rights practices, and human rights to our supply chain, with a view to promoting sustainable and responsible supply. We therefore use commercial and contractual means to encourage our suppliers to protect their workers’ health and safety, working rights, and human rights, and to respect and safeguard the environment. To this end, we have progressively incorporated in the risk assessment of our suppliers, the evaluation of fair working conditions, sustainability criteria, as well as incorporating to our decisions regarding procurement of goods and services, criteria associated to our Code of Ethics and sustainability. We also believe in collaborative work for the implementation of a responsible supply chain, so we generate opportunities for direct and ongoing communication with our suppliers and service providers and facilitate the means for small and local suppliers’ businesses to be able to attain the standards required. In this context, our lines of work under this approach are:

3.A.i Responsible Supply Policy
3.A.ii Communication of the Polity to the supply chain
3.A.iii Assessment of our suppliers and service providers incorporating sustainability criteria, as well as the provision of tools for the comprehension of the same for those who require such support
3.A.iv Promotion of participation and development of local suppliers and service providers

Responsible Sourcing Policy

Costumer Approach

At SQM we maintain ongoing communication with our customers and clients, ensuring transparency and collaboration in order to guarantee the responsible supply of our products. We also firmly believe that the development of our products is fundamental for human progress and, therefore, we are committed to making all necessary efforts to ensure a low environmental footprint of our products, as well as to make continuous efforts to increase efficiency in the use of our products and to reduce their impact in their entire life cycle. In this sense, we facilitate and promote the responsible design, use, reuse, recycling and disposal of packaging and waste in relation to our products throughout our value chain. Furthermore, as part of our commitment to the responsibility for the health and safety of our workforce, the community, and the environment, we are committed to an ongoing research and assessment of increasingly safer alternatives to hazardous substances that our operations may require, promoting their substitution. Our lines of work under this approach are:

3.B.i Quality assurance of our processes and products/services through adequate risk management and analysis.
3.B.ii Available and easily accessible channel for complains, queries, and requirements
3.B.iii Continuously updated information to our customers regarding the sustainability of our products and their potential health and safety effects
3.B.iv Generation customer satisfaction indexes with high degree of representativeness
3.B.v Channels of continuous relation with customers and clients to understand and attend to their needs, as well as those of other customers in the supply chain of our products.
B.vi Development of R&D programs that respond to the needs of our customers

Environment and Sustainable Development

As a company selectively integrated in the processing and commercialization of mining products, we are committed to sustainable development and to strict compliance with the environmental regulations in force in each of the counties where our operations are carried out, ensuring the rigorous assessment of the potential impacts of our operations on the environment, the responsible management of natural resources, the establishment of timely prevention, compensation and reparation measures, and an effective monitoring policy of them, in order to achieve development with shared social value that benefits local communities and at the same time ensures the care for people, biodiversity, and the environment. Consequently, We are committed to: Comply with the applicable environmental regulations and the best practices in line with applicable international standards.

Evaluate in advance the impacts of our operations on the environment and neighboring human communities.
Develop and implement the appropriate preventive, mitigating, and compensatory measures to reduce the environmental footprint.
Promote the development and implementation of technical advances aimed to achieving sustainable development.
Promote citizen and community participation in the environmental management of our investment projects, from their design to their implementation and monitoring of the associated commitments.
Continuously improve our environmental management system based on international standards.
Adequate preparation of our personnel, protocols and technology to respond to any eventual environmental emergency.

Water Management Approach

For SQM, the responsible use of water is a relevant aspect of its production processes, given the scarcity of this resource in some places where its operations are located. We hold duly authorized water usage rights for our operations, complying with all associated requirements and commitments. Likewise, we permanently oversee the efficient usage of the water we consume and the correct water management of the ecosystems of origin, always favoring recirculation and process optimization. In the same line, we implement environmental monitoring activities and early warning plans to ensure the protection of these ecosystems, and in our Sustainability Plan we have acquired specific commitments to reduce water consumption and extraction. In order to comply with this approach, we have developed the following lines of work:

4.A.i Quantification and reporting on freshwater consumption by operation and by product
4.A.ii Care and optimization of water resource usage, implementing industry´s best practices
4.A.iii Identification of potential effects on the surrounding ecosystems due to the use of inland water by our operations
4.A.iv Monitoring and implementation of measures to ensure that water usage at our operations does not generate adverse effects on the ecosystems and surrounding communities.

Climate Change Approach

At SQM we are deeply aware that our products are used in industries that play a vital role in human development and wellbeing. We have therefore set extremely ambitious goals in terms of greenhouse gas (GHG) emissions reduction, covering scope 1 and 2 emissions, and incorporating some categories for scope 3 emissions. These goals are reflected in our Sustainability Plan. Thus, our climate change approach lines of work are:

4.B.i Mitigation through quantification of GHG emissions according to international methodologies and periodically verified, in search of internal management in each of our facilities to meet the reduction goals specified in our sustainability strategy. Our methodology includes the identification, evaluation and implementation of opportunities to reduce our energy consumption and GHG emissions, and their periodic review.
4.B.ii Adaptation of our operations and production and logistics processes in accordance with the specific needs and risks of each project, incorporating climate change amongst the factors for periodic risk assessment, in order to identify, evaluate, and successfully manage possible impacts of the growing effects of climate change.

Emissions And Waste Approach

At SQM we are aware that one way of generating a potential impact on our environment is related to the emissions and waste products generated by our activity, so we seek to address these issue in conformity with applicable domestic legislation, our environmental commitments, and aligned with the best practices of the industry. We aim at an adequate management of emissions into the environment (air, soil, and water) and waste, minimizing their generation to the maximum extent possible, adding value to waste products that can be reused or eliminating waste where possible, thus reducing risk to human health, the environment, and communities. Under this approach, our lines of work are:

4.C.i Management of waste generation under the criteria of emissions and waste quantification, characterization, treatment, and reduction, in accordance with applicable environmental regulations
4.C.ii Quantification, segregation, reuse, and recycling of solid waste products, with the objective of minimizing impact and promoting a circular economy
4.C.iii Continuous search for alternatives to minimize both emissions and waste products

Impact Assessment And Identification Of Aspects Approach

The objective of each of the above approaches is to minimize the footprint of our operations in the areas where we operate. To this end, we must be able to identify those aspects of environmental relevance in each project and evaluate their potential impacts, which requires a high level of knowledge of the functioning of the ecosystems in the area of influence in which our projects are developed, in order to be able to manage and respond in advance to any potential impact. In order to strengthen this approach, we have developed the following lines of work:

4.D.i Early identification of all environmental aspects at each of our operations, with periodic reassessment
4.D.ii Rigorous assessment of the scale of potential impacts, and establishment of adequate controls for their reduction

Communities

Our projects seek to generate shared social value with the communities inhabiting the areas where they are developed. Based on the United Nations Guiding Principles for Business and Human Rights, the United Nations' Sustainable Development Goals, and the International Labor Organization's Convention 169 on Indigenous and Tribal Peoples, SQM promotes sustainable local development and the respect of the autonomy of the communities through a process of ongoing participation and dialogue in view of reaching mutually beneficial agreements and to enact community benefit plans and programs in priority areas such as education, social inclusion, entrepreneurship, rescue of historical heritage, and sustainable development. Additionally, with the purpose of generating informed joint diagnoses with the communities in relation to the potential impacts of our projects, we pursue the provision of continuous and transparent information, and we encourage the participation and consultation processes, whenever required by the legislation in force, particularly in the case of indigenous communities, incorporating to our performance the standards of Convention No. 169 of the International Labor Organization and of the United Nations Declaration on Indigenous Peoples. Consequently, We are committed to:

Promote, in accordance with the legislation in force, citizen participation, as well as providing transparent and timely information regarding our projects.
Promote the implementation of participation and prior consultation processes with the indigenous communities potentially affected by our operations, in good faith according to their culture, and in a freely and informed manner, according to the current legal standards.
Respect the autonomy and traditional values of the communities where our operations are developed.
Promote and support the sustainable economic development of the communities, and the generation of shared value projects between our operations and the communities where they are located.
Implement communication channels to allow a permanent dialogue with the community, as well as developing relevant human rights due diligence mechanisms.

Learn about our policy: Human Rights

Indigenous Communities Approach

SQM develops some of its projects in areas with a significant presence of indigenous communities. In conformity with the standards of Convention N° 169 of the International Labor Organization, the United Nations Sustainable Development Goals, and the he United Nations Declaration on the Rights of Indigenous Peoples, to which our Policy adheres, and in light of the best practices regarding indigenous peoples and the mining industry, SQM guides its relations with communities and human groups belonging to indigenous peoples potentially affected by its projects within a framework of good faith, participation, respect for their culture and autonomy, and the search for shared value. In this sense, at SQM we aspire that our projects not only achieve environmental and social sustainability, but also and in particular, that they promote the development and strengthening of communities and human groups belonging to indigenous peoples present in their area of influence, with full respect for their rights, culture, and territories, adopting the definition of indigenous peoples of the aforementioned Convention N° 169. SQM´s Indigenous Communities Approach is therefore built on the following core lines of work:

5.A.i Informed participation, with transparency and cultural relevance

Our standard policy for citizen participation and transparency regarding our projects and their possible effects is reinforced in relation to potentially affected indigenous communities, with a special attention and recognition of their cultural specificity, traditional forms of organization and ways of life, and their special relationship with the territory they inhabit. Participation and prior participation with indigenous relevance is further strengthened in accordance with current legislation, with continuous willingness to seek informed and good faith agreements with the communities and their traditional authorities, in order to effectively incorporate their points of view, resolve their concerns, and incorporate the necessary measures to avoid, mitigate or repair any possible impact. To this end, SQM has incorporated various mechanisms for participation and dialogue, including the signing of relationship and cooperation agreements, the creation of working groups, rounds of meetings, information and complaint channels, and joint monitoring processes.

5.A.ii Promotion of the development of indigenous communities

Alongside the active incorporation of a range of participation standards for work with indigenous communities, SQM has developed a will continue to develop an extensive support and cooperation policy for application with indigenous communities in the area of influence of its projects. SQM supports initiatives that are undertaken jointly from the earliest stages, offer a direct benefit to associated indigenous communities, and respect their culture, ancestral practices, and traditions. These initiatives must also be evaluated periodically to ensure that they meet international standards and best practices linked to indigenous communities.

Citizenship And Local Development Approach

At SQM we understand the relevance that our presence can have for the communities in territories associated with our production operations and facilities, so a fundamental pillar of our operation is good community relations adjusted to the needs and specificities of each territory, so as to generate positive substantive change in the lives of the people around us. Thus, SQM´s community relations are accompanied by a robust program of shared social value and best practices in human rights, environmental, labor and supply chain, among others. We also understand the strategic role that SQM plays in some of the territories where we operate in terms of structural support, and we assume this responsibility as a daily challenge in benefit of the inhabitants of these areas. SQM seeks to consolidate itself as a good neighbor, with practices such as participation and permanent and close dialogue with each human group involved, generating relationships of trust and transparency. These attributes are achieved as a result of dialogue and the co-creation and evaluation of programs, in instances such as working groups or conversation groups for the creation of social value. In order to comply with its social commitments, SQM defines and permanently reviews the areas of influence of its operations, based on a documented internal/external collaborative process, updated at least annually, including all communities involved in our projects, from an early stage. SQM carries out a detailed evaluation of the stakeholder map prior to the execution of every project, which is reviewed every two years by an external company or consultant, in order to provide traceability of the possible impacts of our projects on the community. Based on this information, a Territorial Shared Social Value Program is defined annually in order to focus community support in each area of influence, especially considering initiatives aimed at female participation, social inclusion and support for the vulnerable population. Throughout all stages of the Territorial Shared Social Value Program, SQM seeks to establish public-private and private-private collaboration channels as a way to enhance initiatives, ensure they are in tune with the needs and stakeholders of each territory and achieve their sustainability over time, strengthening the management capacity and organizational potential of the community itself. Our Company also encourages the participation of its employees as beneficial community agents in the different initiatives. All the initiatives of the Program are always agreed and validated with the communities, with full respect for their local culture, its organizations, and its decision-making processes, as applicable. All our community programs are subject to periodic and continuous assessment of their performance and acceptance by the community through impact indicators and qualitative studies. In order to strengthen the Citizenship and Local Development Approach, at SQM we focus our community relations efforts according to the following lines of action:

5.B.i Education: Support for the improvement in preschool and school education as a means of providing long-term sustainability to the quality of life of the people in the community
5.B.ii Social and productive development: Promotion of initiatives that encourage the generation of independent income by the community, inclusion and associativity
5.B.iii Heritage and culture: Support and implementation of cultural initiatives for the benefit of the community, as well as initiatives to value and rescue the tangible and intangible cultural heritage of the community
5.B.iv Sports and healthy living: Development of initiatives to promote sports, either recreational, educational or competitive

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