Code of Conduct

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Code of Conduct

November 2010

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ContentsIntroduction 5

Our Ambition 6

What we stand for 7

1 We deliver healthy nutrition to people around the world 7

2 We work together as motivated people 7

3 We care for the environment 7

Rules of Conduct 8

1 Consumers and customers 8

2 Employees 8

3 Environmental protection 10

4 Supplier relationships 1 1

5 Public activities 12

6 Communication 12

7 Bribery and corruption 13

8 Business relations and gifts 14

9 Competition 15

10 Conflict of interest 17

1 1 Integrity of financial reporting 18

12 Protecting confidential information 18

13 Legislation 19

Compliance with the Code of Conduct 20

Decision tree: how to deal with ethical dilemmas and the Code 20

Raising questions or concerns 22

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IntroductionThe objective of FrieslandCampina is to manufacture and market the

company’s dairy products in such a way as to create value that can be

sustained over the long term for consumers, customers, employees,

member farmers, business partners and the communities in which

FrieslandCampina operates.

We work to reach our objective on the basis of the power of our strong

brands and our strong market positions in consumer products, our role as

an innovative partner offering ingredients to the food and pharmaceutical

industries and on the basis of our geographical distribution of activities.

We recognise that maintaining the trust and confidence of our stakeholders

is crucial to realising our objective. We intend to merit this trust by

conducting ourselves according to the principles set out in this Code.

It is the responsibility of the management to ensure that all employees are

aware of these principles and behave in accordance with them.

It is the behaviour of each and every employee that establishes the

reputation of our company. Together we make up this company. And to

ensure our business is a success, we must follow our Code of Conduct.

Please take time to read this Code of Conduct and use it in your work at

FrieslandCampina.

Cees ‘t Hart

Chief Executive Officer

Executive Board

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Our AmbitionFrieslandCampina aspires to be the world’s most professional, successful

and attractive dairy company.

We aspire to be the ‘most professional’ dairy company, because we want

to be the number one expert when it comes to milk and the ways milk

can be processed into a wide range of products and ingredients. We keep

expanding our knowledge of milk by investing in research and development,

so that we can make the most of the market opportunities that present

themselves.

We want to be the ‘most successful’ in expanding and reinforcing our

market positions and in working and producing efficiently. Innovation plays

a key role in this respect, both applied to product development and based

on technological improvements.

And we want to be the ‘most attractive’ as a purchaser and processor

of the milk supplied by our member dairy farmers, as a partner for our

customers and as an employer for our employees.

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What we stand forWe deliver healthy nutrition to people around the worldWe are fascinated by the power and potential of milk. FrieslandCampina

provides people around the world with all the good things milk has to offer.

By nature milk is one of the richest sources of nutrition. Our dairy products

provide not only a unique taste sensation, but also proteins, fats, vitamins,

minerals and lactose - building materials and fuels that are important to

people’s health and well-being. We firmly believe that there is much more

to discover, not only about milk itself but the value we can create from milk.

We are passionate about unlocking that power and getting more out of milk.

We work together as motivated people We are a team that embraces challenges, grows together and remains

accountable. We are a global company with a strong local focus, working

closely with the people and communities where we operate. We create

value throughout the entire dairy chain and take ownership of our actions,

building a culture of trust, integrity and inspiration.

We care for the environmentWe aim to run our business in an environmentally sound manner and to

contribute to sustainable development for the benefit of both present and

future generations. That means we seek a balance between our need to

perform as a business and our commitment to society and the environment.

A balance that is sustainable in the long term, ensuring the continued

health of the environment, people and our business.

We are working to make all our actions sustainable throughout the dairy

chain; the journey that takes the milk from cow to consumer.

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Rules of Conduct1 Consumers and customersFrieslandCampina aims to create value for consumers and customers that

can be sustained over the long term by offering a wide range of high-quality

and safe dairy products.

FrieslandCampina ensures that the products meet at least all agreed

and legally required standards for consumer health and safety. In

order to assure that we manufacture safe and high-quality products,

FrieslandCampina’s Food Safety and Quality System has set high standards

for raw materials, ingredients and manufacturing- and packaging processes.

We have transparent and effective procedures in place that address

consumer complaints and contribute to fair and timely resolutions of

consumer disputes.

Protecting consumer health and safety at all times!

Our customers and consumers depend on us to deliver safe products. We cannot

take any risks when it comes to product safety. Therefore, compliance with

FrieslandCampina’s Food Safety and Quality system is obligatory at all times. If

you have any doubts about this issue, you must speak to your line supervisor.

2 EmployeesFrieslandCampina regards its management and employees as its

most valuable assets. At every level, involvement starts with open

communication – whether regarding specific aspects of the business or the

activities of the company in general.

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The current and future success of FrieslandCampina depends largely on the

quality of its employees. We therefore aim to offer an attractive, challenging

and inspiring working environment where employees are encouraged to

develop themselves both professionally and personally. This vision can only

be achieved with motivated and well-trained employees; employees with the

motivation and ability to secure a competitive advantage.

We respect the United Nations Universal Declaration of Human Rights as

a universal standard. In countries where FrieslandCampina companies are

present, human rights are supported in a manner that is consistent with

the host government’s international obligations and commitments, and

in accordance with what can reasonably be expected from a commercial

organisation.

Within the framework of applicable law, regulations and prevailing labour

relations and employment practices, FrieslandCampina

• refrains from any form of discrimination against employees with respect

to employment or occupation on such grounds as race, colour, sex,

religion, political opinion, national extraction or social origin,

• respects the right of its employees to join legally recognised labour

unions, and

• precludes the use of child labour and forced or compulsory labour.

FrieslandCampina is committed to providing a clean and safe working

environment for its employees in accordance with best practices.

Management and employees of FrieslandCampina have a duty to take every

reasonable precaution to avoid injury to themselves, their colleagues and

members of the public.

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Respect for each other

We value a working environment in which employees feel involved, responsible

and secure. This calls for an organisational climate characterised by fairness,

respect and integrity. It also implies that we attach great importance to an

open atmosphere in which employees feel confident to discuss issues with one

another and with management. In the first instance, try to discuss any issue of

integrity with the individuals involved. If the problem persists, approach your

line supervisor.

Treat each other with respect, share your questions and concerns and be

sensitive to the questions and concerns of others.

3 Environmental protectionFrieslandCampina is committed to running its business in an

environmentally sound and sustainable manner. We strive to minimise

the adverse environmental impact of our processes and products,

commensurate with our business activities. When it comes to environmental

management, a systematic approach is used in order to achieve continuous

improvement in the environmental performance. In this way, we contribute

to sustainable development by meeting the needs of the present without

compromising the ability of future generations to meet their own needs.

Within FrieslandCampina, environmental policies and programs are an

integrated part of business. Moreover, the environmental performance is

monitored annually.

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Environment: Positive attitude towards environmental sustainability

At FrieslandCampina we care for the environment and we constantly seek ways

to improve our production chain in a more sustainable way. This requires a

positive attitude towards sustainability from everyone at FrieslandCampina.

We do have clear targets for reaching sustainable goals. Sometimes this can

lead to dilemmas between profitability and sustainability targets.

Example of an environmental dilemma situation:

I’m a brand manager at FrieslandCampina. We have clear targets for the use of

sustainably produced chocolate (UTZ-certified) in our chocolate milk. Increased

demand requires that we step up production, but there is not enough UTZ-

certified chocolate available on the market. The increase in production means

we cannot meet our own desired sustainability targets. However, the target

for UTZ-certified chocolate is important in order to maintain the company’s

reputation. What do I do?

There is no easy answer to this question. In situations where multiple goals

or values conflict it is difficult to find a perfect solution. But the first step

to reaching a solution is to discuss the dilemma with your colleagues and

management, and be open about the difficulties you face.

4 Supplier relationshipsFrieslandCampina aims to deal only with reputable suppliers who are

willing to apply FrieslandCampina’s standards. Supplier relationships are

benchmarked and evaluated, with the objective of striving for continued

improvement in the area of quality, service, etc.

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5 Public activities FrieslandCampina neither supports political parties – whether organisations

or their representatives – nor contributes financially or otherwise to groups

whose activities are intended to promote party interests.

We are and will continue to be faced with social and ethical issues.

FrieslandCampina actively participates in these discussions.

In order to promote or defend FrieslandCampina’s legitimate business

interests, management and designated employees of FrieslandCampina are

encouraged, either directly or through bodies such as trade associations, to

raise questions and discuss government actions or decisions.

Management and designated employees are further encouraged to

co-operate with governments, governmental agencies, officials and other

organisations in the development of proposed legislation and other

regulations, which may affect such legitimate interests.

6 CommunicationFrieslandCampina ensures that timely, regular, reliable and relevant

information is disclosed regarding its activities, financial situation and

performance.

Stakeholders are encouraged to address the company at any time with

regard to its business conduct, as FrieslandCampina is committed to

open communication with all stakeholders. However, limits of commercial

confidentiality should always be respected.

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7 Bribery and corruptionFrieslandCampina will not engage in bribery or any other form of

corruption. Employees are not permitted to directly or indirectly promise,

offer or provide any improper (financial) advantage to any person –

including officials of a government or a government-controlled entity – for

the purpose of obtaining or retaining business or services.

In addition, third parties may not be used to circumvent the bribery and

corruption prohibition. Similarly, employees are not allowed to accept such

an advantage, if given to motivate them to act contrary to their prescribed

duties (see also section on business relations and gifts).

No compromise when it comes to bribery!

Example of bribery:

Suppose you are the head of sales at an operating company. You are currently

bidding on a mega deal to supply products to a large customer. Your operating

company really needs the contract. You receive a call from the customer’s

procurement officer who tells you that he will make sure you get the deal,

provided you deposit an extra 500 euro’s into his private account. The deal is

worth several hundred thousand euro’s…

Although it can be tempting to make such a payment, it is not permitted. You

should never engage in such payments. At FrieslandCampina we stand for

honest business. We also adhere to laws on bribery and corruption.

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8 Business relations and giftsIn many industries and countries, gifts and entertainment are used to

strengthen business relationships. Throughout the world, one principle

is common and clear: No gift, favour, or form of entertainment will be

accepted or provided if it will obligate or appear to obligate the recipient.

Offering or accepting occasional gifts and entertainment may be

appropriate in developing business relationships. However, gifts and

entertainment should further the business interests of FrieslandCampina

and not be lavish or in excess of the generally accepted business practices

of one’s country and industry.

The same principle applies to relations with government officials. In any

event, offering or accepting gifts or entertainment should be in line with the

law and policy of the recipient’s company.

If gifts and entertainment, whether provided or accepted, involve any travel

expenses or appear to be lavish or excessive (in the case of gifts, a value

> 50 euro’s), an employee is required to obtain written approval from the

Managing Director of the Operating Company/Corporate Staff Director or

the Executive Board in advance.

In case of gifts > 500 euro’s, the Company Secretary must be notified.

Requesting or soliciting personal gifts, favours, entertainment or services

is unacceptable, as is accepting or providing cash or cash equivalents.

Additionally, FrieslandCampina employees may not exploit their position

to solicit vendors, including financial institutions, to provide individual

preferential treatment in pricing, terms or loans.

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Providing/receiving gifts, favours or entertainment

Before providing or receiving a gift or entertainment, including any favour or

service, there are a few questions you need to ask yourself. If you answer ‘yes’ to

any of the following questions, do not provide/accept the gift or entertainment.

If you are in doubt, always contact your line supervisor.

Questions

• Isthegiftlavishorinexcessofwhatisgenerallyacceptedbusinesspractice

for developing business relationships (in the case of gifts, a value > 50

euro’s)?

• Doesprovidingoracceptingthegift/entertainmentconstitutea

contravention of the law or of the FrieslandCampina Code of Conduct?

• Isthegiftgivento(orwoulditappearto)obligatetherecipient?

• Doesthegiftcomprisecashoracashequivalent?

• Haveyourequestedorsolicitedthegift/entertainment?

• Wouldyoufeelembarrassedifyouhadtoexplaintoyourcolleaguesthatyou

had accepted the gift/entertainment?

• Wouldacceptingthegift/entertainmentmakeyoufeeluncomfortable?

• Doesthegiftfurtheryourinterestsotherthanthebusinessinterestsof

FrieslandCampina?

9 CompetitionWithin the framework of applicable laws and regulations, FrieslandCampina

conducts its activities in a fair and competitive manner. A specific

FrieslandCampina Anti-Trust Code of Conduct is applicable.

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Anti-trust code and competition law: How to act?

Imagine you find yourself in the following situation:

One of FrieslandCampina’s competitors approaches a company sales

representative and suggests a combined approach to a new foreign market.

His idea is to split the market in two regions, with each targeting one region,

in order to increase the effectiveness of the companies’ approaches and their

advantage over other competitors.

How to respond to this suggestion?

This form of collaboration with competitors would be a violation of the

FrieslandCampina anti-trust code.

The anti-trust code is based on anti-trust laws. Among other things, anti-

trust laws seek to promote and preserve each competitor’s independence

when making decisions on price, output, and other competitively sensitive

factors. Some of the most serious antitrust offenses are agreements

between competitors that limit independent judgment and restrain trade,

such as agreements to restrict the availability of a product provided by

FrieslandCampina or to divide a market in respect of customers, territories,

products or purchases. FrieslandCampina competes independently on the

merits of its products, the skills of its employees, its services and performance.

Employees should therefore not agree with any competitor on any related topic,

as these agreements – whether written or oral – are virtually always unlawful.

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10 Conflict of interestFrieslandCampina requires its employees to avoid personal activities and

financial interests, which could conflict with the execution of their jobs.

Working at FrieslandCampina means that you work in the best interests of

FrieslandCampina.

Conflict of interest

A conflict of interest occurs when personal interests compromise your

motivation to act in accordance with the interests of FrieslandCampina or

related parties (e.g. a supplier). Asking yourself the following questions will help

you understand whether a given situation might constitute a conflict of interest:

• DoI,ordoesafamilymember,friendorassociate,standtogainany

(financial) advantage by virtue of my function at FrieslandCampina?

• CouldpersonalinterestsinthissituationaffectanydecisionImightmakeat

FrieslandCampina?

• DoIfeelanyobligationasaresultofthenatureoftherelationshipIhave

with a third party doing business with FrieslandCampina?

• Couldthissituationaffectthefulfillmentofmyresponsibilitiesat

FrieslandCampina or could such a perception exist among other

FrieslandCampina employees or external parties?

• WouldIbeembarrassedifanyoneatFrieslandCampinaknewaboutthe

situation?

• Couldexternalparties,suchascustomersorsuppliers,cometoquestion

whether they have been treated fairly if they knew about the situation?

If the answer to any of the above questions is ‘yes’ (or could be perceived by

others as such), this may mean the situation you are in constitutes a conflict of

interest. If you are unsure how to deal with a situation, discuss it with your line

supervisor.

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11 Integrity of financial reportingFrieslandCampina accounting records and supporting documents must

accurately reflect the nature of the underlying transactions in accordance

with established accounting standards. We are committed not to engage in

any conduct or to make any arrangements that result in a false or artificial

entry on any record, including employee expense records. No undisclosed

or unrecorded account, fund or asset will be established or maintained.

Records must be maintained in all respects according to law, the accounting

principles and the policies and procedures that FrieslandCampina has

adopted.

FrieslandCampina will not knowingly evade tax obligations. All taxable

benefits employees may receive will be listed and declared for tax purposes.

12 Protecting confidential informationEmployees of FrieslandCampina companies must make sure that

confidential information is preserved and protected. Confidential

information is information that is exclusive to the organisation and either

gives, or could give, FrieslandCampina a competitive advantage. It is

information that could lead to the loss of an existing competitive advantage

if it became known in the public domain. This kind of information may not

be revealed to anyone outside the organisation.

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Looking after confidential information

In looking after confidential information related to the company, customers or

colleagues, keep the following in mind:

• Protectsuchinformationonyourcomputerviaapassword.

• Secureconfidentialdocumentsinadeskorcabinetbeforeyouleaveyour

workspace.

• Accessandshareconfidentialinformationwithcolleaguesonlyonaneed-

toknow basis.

• Shareconfidentialinformationwithexternalpartiesonlyaslegallyrequired

or as consented to by the Corporate Legal department.

• Becarefulwhendiscussingconfidentialinformationinpublicplaces.While

we understand the inclination to share certain work-related issues among

friends or family, you are expected to keep certain confidential information

within the company.

13 LegislationFrieslandCampina companies are required to comply with the law and

regulations of the countries in which they operate in pursuit of their

legitimate commercial objectives.

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Compliance with the Code of ConductThis Code applies to all FrieslandCampina employees. It is the responsibility

of the Executive Board of FrieslandCampina to ensure that the principles

embodied in this Code are communicated to, understood and observed by

all employees.

The general principles contained in this Code are the bedrock; for a number

of these principles, compliance is covered through specific policies and

procedures.

FrieslandCampina’s compliance with its Code is regularly monitored.

Findings and recommendations are reported to the Executive Board.

Decision tree: how to deal with ethical dilemmas and the CodeIf you are unsure about whether a particular course of action is acceptable

according to the company’s Code and policies, this decision tree may be of

help. Asking yourself the questions below will help you to critically evaluate

the intended course of action.

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Would this action be legal?

Would this action be consistent with the Code of Conduct and policies of

FrieslandCampina?

If you have answered ‘yes’ to all of the above questions, feel free to

proceed. If the answer to any of these questions is ‘no’, do not perform the action and, if needed, ask your line

supervisor how to proceed.

Am I confident that I am not treading on thin ice or edging towards the slippery slope?

Consider the consequences if everyone did what you are about to do, the consistency of your behaviours and future consequences. Ask yourself: am I getting not involved in a situation that can only become more complicated?

After performing this action, would I still be able to look at myself in the mirror?

Reflect on your own values, aspirations and boundaries and how these relate to the dilemma situation and different solutions. Consider how different

options make you feel.

Would this action be fit to appear on the front page of a newspaper or the company magazine?

Try to imagine how others would react if your solution to the dilemma, your decision or conduct were to be made known.

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Raising questions or concernsPlease contact your line supervisor if you have any further questions

regarding this Code of Conduct or if you need further practical guidance or

would like to address a concern.

If you are aware of a contravention of the principles set out in this Code, or

if you have a concern about a suspected contravention, you are encouraged

to come forward. If you seek to raise a concern and this does not prove

possible, or if you do not feel comfortable addressing the matter with your

line supervisor, you can choose to report to:

• the Local Trusted Representative or

• the Corporate Code of Conduct Compliance Officer or

• the External Contact Line.

The Local Trusted Representative and Corporate Code of Conduct

Compliance Officer are also available if you seek advice regarding sensitive

issues, or advice concerning matters that you cannot, or do not wish to,

discuss with your supervisor.

For further guidance on how to raise concerns about a (suspected)

contravention of this Code, see the whistle-blowing procedure.

Stationsplein 4

3818 LE Amersfoort

T +31 (0)33 713 3333

The Netherlands

www.frieslandcampina.com