Code of Business Ethics
INTRODUCTION
What are we talking about?
We are talking about ethics. We are talking about how we - as individuals and as employees of International Paper - act towards one another. Ethics is fundamentally a question of what kind of people we are and what values guide us in our daily activities. And we are talking about making ethical decisions as we conduct the business of the company.
What's in this Code of Business Ethics?
In this booklet, we have defined what is appropriate behavior and what isn't - in other words, our company's ethics. We live in times that are characterized by new relationships, new realities and new pressures on us as individuals. In the midst of this, the values and principles included in this Code of Business Ethics are solid, enduring and time-tested. They eliminate uncertainty, and provide clarity for making decisions ethically.
Whom does this Code of Business Ethics apply to?
All employees of International Paper are accountable for adhering to this Code of Business Ethics no matter what their level or position in the company. That means not only compliance with law and policy, but also honesty and fairness in our treatment of all persons, and taking responsibility for our actions and their consequences. We are responsible as well for reporting illegal or unethical behavior when it affects our company and violates this Code. Employees who fail to comply with this Code of Business Ethics will be subject to disciplinary action.
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Who stands behind this Code of Business Ethics?
This Code of Business Ethics was prepared and is issued by International Paper Company under the authority of its board of directors, which has reviewed and adopted it. Any waivers from its provisions as to the principal executive officer of the company, all executive officers and senior financial officers including the principal financial officer, the principal accounting officer and others performing similar functions may be granted only by the board of directors or a committee of the board. International Paper shall disclose such waivers promptly and publicly. It is the expectation and intention of the company that no such changes or waivers shall be sought or granted.
Ultimately, our company's ethics represent more than regulations, laws or policies. They comprise the business practices and principles by which we develop our people, focus on our customers, and achieve operational excellence. International Paper?s ethics bind us together, just as they define us as a company and as a community of individuals.
INTERNATIONAL PAPER'S BUSINESS ETHICS STANDARDS AND POLICIES APPLY TO ALL EMPLOYEES WORLDWIDE
The following standards, policies and procedures, when taken together, define our ethics as a company. They apply to all employees in every business we operate worldwide. Our ethics are not simply rules and regulations; rather, they describe for us the right way of doing business and of relating to others. Often, they reflect standard legal concepts. Always, they represent basic values and beliefs about how we expect ourselves and our fellow employees to treat each other, as well as our customers, suppliers, shareholders and the people who live and work in the communities, states and countries where the company has operations.
Throughout this booklet, you will find references to our International Paper Principles of Excellence, including the one on this page. These Principles, which are from the IP Way, are based on our shared values, and help us translate those values into action, results and operational excellence.
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WE HAVE RESPONSIBILITIES TOWARD EACH OTHER
International Paper, in the conduct of its business, is committed to protecting and advancing human rights globally. This means we will not tolerate child labor, forced labor, physical punishment or abuse. We comply with the employment laws of every country in which we operate, and we recognize lawful employee rights of free association and collective bargaining.
We have a diverse workforce in our company - it's as diverse as the markets that we serve. We believe that differences among us should be valued, so that we all can work in an environment that supports growth and our company goals. We believe that we will all benefit from the creativity, varied perspective, innovation, and energy that arise out of our diverse workforce. At International Paper, diversity is embraced, managed and led at every level of the company.
Good human relations lead to good employee relations. Treating each other and all of our company stakeholders with dignity and respect is how we practice good human relations. Expecting fellow workers to perform their jobs with integrity and expertise is our company norm. Abusive, deceitful, or violent behavior will not be tolerated, nor will any violation of the company's Equal Employment Opportunity (EEO) policies.
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OUR RESPONSIBILITIES EXTEND TO SAFETY, HEALTH AND PROTECTION OF THE ENVIRONMENT
We are committed to providing a safe and healthy work environment and this means operating in compliance with applicable health and safety regulations and laws, as well as our own standards, which are often higher. It also means the accurate and timely reporting of any incident required to be reported. Each facility in the company is required to have a safety program in place.
We do not tolerate any acts or verbal or physical behavior that could lead to or cause workplace violence. The health and safety of our employees, as well as the expectation of quality by our customers and shareholders, require that each employee works free from the influence of any substance that could prevent or impede safe and effective work activities. We are each responsible for our own safety, and that or our co-workers.
International Paper believes that being accountable means conducting our business in a manner that respects, preserves and improves the environment. We conduct our business in an environmentally responsible and sustainable manner, we use energy wisely and efficiently, and we employ technology to minimize any risk of environmental damage. These beliefs, along with our steadfast commitment to comply with all applicable environmental laws and regulations, comprise our environmental ethics.
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WE ARE EACH RESPONSIBLE FOR HONORING THE LETTER AND THE SPIRIT OF THE LAW
Working together, we conduct International Paper's business legally and ethically.
Antitrust
We believe in free and open competition. In all of the countries where we operate, strict laws are in force - similar to antitrust laws in the United States and competition laws in the European Union - prohibiting collusive or unfair business behavior that restricts free competition. We are not permitted to enter into agreements with competitors to fix prices, terms of sale or production output. Also, attempts by suppliers to discriminate in prices or terms of sale between customers, or to otherwise restrict the freedom of our customers to compete, can sometimes be illegal. Legal issues can also arise from refusal to deal with customers or competitors.
Failure to adhere to these laws could result in significant penalties to both the employee and the company. And these questions are complicated. The company Legal Department can answer any questions you may have about antitrust and competition issues.
Contact Points - the Legal Department or the HelpLine
Copyrights
We respect and protect intellectual property, whether it belongs to us or to others. Copyright laws protect intellectual property, including written and electronic materials, computer software, CD-ROM and videotape products. We obey these laws, and are prohibited from copying or distributing copyrighted materials without the permission of the copyright owner.
Gifts
We believe that no gift, favor or entertainment should be accepted or provided if it will obligate, or appear to obligate, the receiver. The giving or accepting of bribes or inappropriate, lavish or repeated gifts or other benefits is always prohibited, even if acceptable by local custom. Similarly, requesting or soliciting personal gifts or services, or requesting contributions from vendors, suppliers or other business partners, is prohibited. In general, providing or accepting normal sales promotion items, occasional meals or other non-cash items of minimal commercial value is appropriate.
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Political Activities/Foreign Corrupt Practices Act
Many International Paper employees actively participate in the political life of their communities, and the company encourages that participation. But employees may not use company resources and assets to support their choice of political party, candidate or cause.
As a company, we take positions on political issues and lobby on behalf of our interests and goals, but always in strict conformance with applicable laws. Employees who communicate with government officials should always contact the Legal Department to make sure that they fully understand the laws and regulations in question.
When doing business outside the United States, International Paper and its employees honor local laws and applicable U.S. laws, including the Foreign Corrupt Practices Act (the FCPA). This law, in general, prohibits our company and its employees from offering, promising to pay or authorizing the payment of money or anything else of value to non-U.S. officials, parties or candidates in order to influence their acts or decisions. The rules are complex, so you should always seek advice from the Legal Department before acting. Do not act without such advice.
Embargoes and Boycotts
The United States has strict export control laws prohibiting exports to certain countries from the U.S. and, in some cases, from our operations outside the United States. Other countries may also prevent companies from conducting business with certain countries. These actions are embargoes. Additionally, United States laws prohibit any action that might help facilitate boycotts. Boycott problems may arise in the context of sales, letters of credit, bid proposals and shipping documents. You should seek help immediately from the Legal Department or the HelpLine if you think that someone is asking you to participate in a boycott or break an embargo.
Records and Information Management
Business records and documents should be retained or destroyed only according to the company?s records management policy. This policy provides that each company location has schedules and regulations covering retention of records, including printed files and those maintained electronically. Strict compliance with these policies is very important for the protection of the company and individual employees.
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WE EACH HAVE RESPONSIBILITIES TO OUR SHAREHOLDERS
International Paper's assets - both physical and intellectual - are very valuable. Employees have an obligation to protect these assets for the benefit of the company and its shareholders.
Confidential Information
Information is one of our company's most valuable assets. Employees are responsible for protecting the company's confidential information, which includes new product and marketing plans, manufacturing processes, research and development ideas and information about potential company investments. This responsibility does not end when employment is terminated. In turn, confidential information that new employees and consultants bring with them from another company has to remain confidential, and current employees must ensure that they do not receive or use confidential or proprietary information belonging to another company or person.
We have many tools available to us to manage the information resources of this company, including e-mail, the internet, mobile communication devices, and telephones. In order to protect the company and employees, International Paper has developed a comprehensive set of standards for information resource and asset use and management.
Insider Information
Employees at every level see information that, if it became public, could affect the price of the company's stock or the stock of another company. Examples would be new products, facility closings, new manufacturing processes, earnings and performance information, expansions or mergers and acquisitions. Revealing this type of information to anyone - even family members - before it is public could subject the employee and the company to substantial civil and criminal penalties. International Paper promotes compliance with applicable laws in this area, particularly insider trading laws. Insider trading is both unethical and illegal. Violations of these laws will be dealt with decisively.
Accurate Records
Accurate and honest recording and disclosure of information is extremely important, especially because so many people depend on this information to make responsible business decisions. The company expects all records involving its businesses to be complete and accurate and all required disclosures to be full, fair, timely, accurate and understandable. Equally, it is not acceptable for a supervisor to direct an employee to do otherwise. If such an incident occurs, it is the employee's responsibility to report the matter and seek guidance.
Conflicts of Interest
Our shareholders have a right to expect that our business decisions are made ethically and in the best interest of the company. Any situation that creates, or appears to create, a conflict of interest between personal interests and the interests of the company must be avoided or eliminated. These types of conflicts may arise when employees or their family members own, directly or indirectly, a substantial interest in any entity that does, or seeks to do, business with International Paper. An employee?s outside employment may also give rise to a conflict. Employees are prohibited from using their position or the company's property or information for personal gain, from competing with the company and from taking for themselves opportunities that are discovered through the use of company information, property or position.
Where conflicts may exist, employees must report them to the company. When you are not sure of potential conflicts, seek guidance and assistance. Such reports or requests for guidance should be made to the Director of Ethics and Business Practice who will work with the reporting employee and others in the company to resolve the issue.
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WE ARE EACH RESPONSIBLE FOR DEALING FAIRLY WITH OUR CUSTOMERS AND BUSINESS PARTNERS
International Paper depends on excellent and mutually beneficial relationships with our customers, suppliers and business partners who help us provide our high quality products.
Fair Dealing
Common sense and good judgment, as well as the law, dictate that each of us not engage in any activities that defraud individuals, customers or suppliers. Further, good judgment dictates that we must avoid initiating or participating in false or misleading advertising and discrediting competitors. Abiding by the prevailing laws of the areas where the company operates will help ensure that the company's business is being conducted ethically.
Our Expectations in Doing Business
International Paper seeks to do business with suppliers, contractors, joint venture partners, agents, distributors and other partners who demonstrate standards of ethical business behavior equally as high as ours. This means that International Paper will not knowingly engage as business partners any persons or companies who operate in violation of applicable laws and regulations, including employment, safety and environmental laws. We take steps to assure that our business partners understand the standards we apply to ourselves, and expect from them.
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POLICIES OF SPECIAL RELEVANCE TO SPECIFIC TYPES OF WORK
We are a large and diverse company with employees engaged in many and varied endeavors. Adherence to work-specific policies is an equally important component of our business ethics for the employees to whom they apply. All of these policies are incorporated into this Code of Business Ethics, and apply to all employees.
Manufacturing
Many of International Paper's employees work in direct manufacturing. These employees follow very specific policies dealing with environmental, health and safety procedures, raw material and inventory control procedures, site physical security, product quality requirements and regulations applicable to sites due to their location or purpose.
Sales and Marketing
Our sales and marketing employees must be familiar with the laws and regulations that apply to their activities including basic contract law provisions, antitrust and competitor laws, and policies and laws applicable to advertising.
Purchasing
All employees who make purchases on behalf of International Paper, or who are involved in the purchasing process, irrespective of the department or business unit in which they work, must adhere to specific policy guidelines that are set forth the Purchasing Policy and Procedure Manual of the Global Sourcing Department. This manual contains a compilation of business ethics standards that apply to all company purchasing and procurement transactions.
Finance
Employees of the company who work in the finance function prepare and publish full, fair, accurate, timely and understandable disclosures in the periodic reports that our company is required to file with, among others, the United States Securities and Exchange Commission. In addition, our principle executive officer and senior financial officers have specific, legally mandated disclosure and filing requirements. The specific financial record-keeping and reporting policies and procedures that we have adopted in compliance with applicable law and regulation are included in our Financial Policy Manual and the other manuals and handbooks of International Paper's Finance Department.
Forest Resources
Management of the company's forest resources is a significant responsibility, involving rules and practices that are unique to this effort. Employees in this field adhere to additional standards and regulations which are included in the Forest Resources Division Environmental Management System Manual and Environmental Policy.
Administration
Many International Paper employees perform general administrative activities including auditing, human resources, communications, finance, government affairs, legal, logistics, purchasing, tax and others. Many of these areas have specific policies and procedures designed to address issues such as information management, lobbying restrictions and accurate reporting and recordkeeping.
National Laws
All International Paper employees are subject to the laws and regulations of the country in which they reside and work. Our business ethics code and company policies supplement national and local laws, with which all employees must be familiar.
Environment, Health and Safety
Employees whose work affects environmental compliance must be completely familiar with the permits, laws, and regulations that apply to their work. In the area of safety, all employees are responsible for their own safety and the safety of co-workers. It is imperative that employees know the safety procedures and regulations for their workplace. Company policies covering these areas are in the Corporate Environment, Health and Safety Policy Statement and in the EHS Policy and Procedures Manual and Manager's Guide.
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WHERE TO FIND ASSISTANCE
The company provides resources for assisting employees who need information or advice concerning all of the topics covered in this Code of Business Ethics.
Periodically, each of these departments conducts seminars regarding compliance with company policies. Some of these seminars are required, such as "Respect, Dignity and Diversity in the Workplace". All are important, and employees should participate through arrangements made with their supervisors.
Counseling
In addition to general education and awareness, counseling and advice in the area of business ethics and compliance is available to employees from the Director of Ethics and Business Practice (901-419-9000) and through the International Paper HelpLine (1-800-443-6308) or (ethics@ipaper.com). The following departments may also be able to provide counseling for specific situations that arise:
- Corporate Human Resources department
- Legal department
- Corporate Environment, Health and Safety department
- Corporate Patent department
- Corporate Secretary's department (Records Management)
Reporting Violations and Whistleblower Procedures
Employees who become aware that this Code of Business Ethics, company policy or applicable law may have been violated, or of any illegal or unethical behaviors affecting the company, have the right and the responsibility to report such incidents to one of the following:
- Immediate supervisor or supervisor's manager
- Human Resources, Audit or Legal Departments
- The International Paper HelpLine
(800-443-6308 in North America)
(877-319-0263 via AT&T Direct outside North America)
E-mail: ethics@ipaper.com
- The Director of Ethics and Business Practice
(901-419-9000 - this number is located in the U.S.)
There is no requirement that employees making reports under these procedures follow any particular chain-of-command or sequence. Complaints or concerns regarding the company's accounting, internal accounting controls or auditing matters, irrespective of their source or materiality, should be made to the International Paper HelpLine or the Director of Ethics and Business Practice directly. Such reports will additionally be forwarded to the audit and finance committee of the board of directors.
The reporting of behavior in the company which employees reasonably believe is illegal or unethical is an important component of our business ethics. Employees making such reports will be free from any retribution, retaliation or adverse effect in their employment. International Paper does not tolerate retaliation - this is the company's promise in return for our employees' making such reports. Employees should also report any incident of retaliation.
Any employee who discourages or prevents other employees from making such reports or seeking the help or assistance they need, will be subject to disciplinary action.
Reports made to the International Paper HelpLine may be anonymous, at the choice of the individual making the report.
All reports made under these procedures will be handled with the maximum degree of confidentiality, and information from the report will be shared only to the extent necessary to conduct a complete and fair investigation. All such reports will be promptly reviewed and resolved.
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MAKING ETHICAL DECISIONS
We can make better business decisions when our decisions are based on our values and concepts of business ethics. Business decisions are complicated. Here are some points to consider as you decide.
- Think about why you might have an ethical concern about the situation.
- Identify who is affected by the situation, and by your decision
- Review this Code of Business Ethics, the IP Way and any company policies relevant to the situation.
- Consider your decision alternatives, and think about the consequences of each different course of action.
- Evaluate the impact of doing nothing.
- Find out if and how a similar situation has been successfully dealt with before.
- Seek advice. Page 16 of this publication identifies offices and persons who may be able to help.
- Determine when you must act to produce the best result for everyone involved.
- Think about how your action and decision will affect people, your customers and our operational excellence.
- Remembering our values and Principles of Excellence, think about what is the right thing to do.
CONCLUSION
Respect. Integrity. Honesty. Accountability. Compliance. Good citizenship. Dignity. These words represent our core values, but they are only words unless given life through actions. Our company cannot grow and prosper unless our core values are embraced and practiced by each of us.
Living our values is a matter of good behavior, and of good business. Customers want to know that they are doing business with a company that is ethical and trustworthy, and more to the point, that they are working with individuals they trust. Honest, ethical people create and maintain the trust on which business relationships are ultimately based. We each can take pride in our ethical values. When practiced everyday, they will help our company achieve excellence.
The message in this Code of Business Ethics is simple. We should treat each other as each of us want to be treated - that is, with honesty and respect for one's ideas, opinions and dignity. If we achieve this, we will be aligned, dedicated and highly motivated people delivering superior value to customers through operational excellence.
THINK ABOUT THIS
Q: Several of my teammates and I get uncomfortable when our team leader tells off-color jokes. Is this okay? What should we do?
A: Dealing directly with the situation is usually the best way to resolve it. You should tell your supervisor that the behavior makes you uncomfortable and that you would like it stopped. If you feel that you can't talk directly to the person in question, talk to your supervisor's manager, or to Human Resources. You can also call the HelpLine (see page 16). International Paper does not tolerate harassment or other inappropriate behaviors in our workplace.
Q: I'm friends outside of work with someone who works for a competitor, and we sometimes talk about our companies' plans. Is this okay?
A: You should be very concerned. You might be revealing confidential or proprietary information - even unknowingly - that is very valuable to International Paper. You may also be violating antitrust or competition laws that prohibit certain types of discussions. If you find yourself in this type of situation, end the discussion immediately and seek help from the company's Legal Department or the HelpLine (see page 16).
Q: I have seen some behaviors repeated day after day at my worksite that I think are unsafe, but they're not taking place in my section. What should I do?
A: At International Paper, we believe that each employee is responsible for his or her own safety, as well as the safety of all teammates. This type of matter should be reported to management immediately.
Q: We seem to be setting higher goals every year, and my teammates and I are under pressure to get results. Is this the right way to run the business?
A: Our Principles of Excellence say that we set stretch goals and are passionately focused on business results. And they also say that we uphold the highest ethical standards. We do set high goals and we work hard to achieve them. But we can never violate our ethical standards in order to meet or beat our targets.
Q: What if some of my personal beliefs are in conflict with International Papers goals or programs? Which one wins?
A: International Paper does not seek to change the personal beliefs of its employees. Our goals, programs, policies and standards are based on values and business ethics that define how we behave in the workplace with each other, with our customers and toward our stakeholders as we conduct the company's business. If you feel there is a conflict, seek advice from your manager or from the company resources listed on page 16.
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