While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS1: Social and Environmental Assessment and Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement PS4: Community Health, Safety and Security PS5 does not apply as the project involves no land acquisitions or involuntary resettlement PS6 there are no biodiversity conservation or natural resource management issues PS7 and PS8 do not apply as there are no indigenous peoples or cultural heritage sites in the area of influence of the project

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria as is described in the following sections. Key environmental and social issues reviewed during the appraisal include the following: Management of its environmental, health and safety performance in the operation of all facilities; Safe and healthy working conditions at the Company’s plant in the state of Bahia, Brazil; Labor issues in the Company’s operations; Management of emissions to air and water arising from the operation of its facilities; Use of energy, water and resources; Relations with the nearby communities. IFC’s investment in Kordsa Argentina is expected to be a category B investment. However, IFC’s review of individual assessment of Kordsa Argentina, definition of an action plan, if necessary, as well as appropriate public disclosures will be conditions of IFC’s commitment to lend to Kordsa Argentina.

SOCIAL AND ENVIRONMENTAL ASSESSMENT AND MANAGEMENT SYSTEMS Environmental and Social Assessment. The Company’s operations are located within the Camaçari Industrial Complex (Polo Industrial Camaçari) near the city of Salvador in the state of Bahia. The Company is the result of the acquisition of two similar contiguous textile operations in the same site: COBAFI and DUSA. At the time the original plants were established a full environmental assessment was not required, and the operations complied with all applicable licensing requirements. As no expansions took place at the time of the Company’s acquisition in 2005 or since then, no additional E&S assessment was necessary beyond IFC’s due diligence. Management Systems. Kordsa has a number of management systems certifications in various operations worldwide. The Company consolidated the prior ISO 9001 certifications in 2005 and recertified as ISO9001:2008 three years later. The Company has a robust environmental management system, consistent with ISO 14001 standards and is preparing for integrated certification with its Safety, Health, and Environment (SHE) management system by 2011 according to the Company’s current Strategic Plan. The Company also has a number of continuous improvement systems in place including PSRM, 6-SIGMA, 5-Ss, and CRM/CCM. SHE Organization and Capacity. The Company has capable dedicated SHE staff. The Health, Environment and Systems Development Manager reports directly to the Manufacturing Director. Her primary responsibilities include: environment, occupational safety, and emergency preparedness and response, and management systems. Labor issues, occupational health, security and community relations are managed by the Human Resources Director. The Company provides regular training to employees in a number of areas according to their roles and responsibilities. Training areas include: quality; safety, health and environment; manufacturing practices; human resources; and career development LABOR AND WORKING CONDITIONS Human Resources Policy and Management. The Company has 366 direct employees, 25% of which are female employees. Temporary employees (3% of the work force) are only contracted for specific activities. There are also 30 employees of 3rd-party contractors in the premises working in the canteen, doing gardening and cleaning. The Company complies with local requirements regarding labor laws. The Company has a human resources policy that includes non-discrimination, equal opportunity, workers organization and grievance mechanisms. The Company communicates the Policy to its employees at inception and keeps it available to all employees. During induction all employees receive a handbook that contains (i) the Company’s organization and contact details for HR issues, (ii) Salary and Benefits, (iii) Human Resources Procedures, which fulfill IFC’s labor and working conditions requirements including hiring procedures, disciplinary practices and grievance mechanisms, (iv) Occupational Health and Safety, and (v) Workers’ Voluntary Social Services. Worker’s Organizations. The Company has agreement with local unions in all its operations in the state of Bahia; the company does not impose restriction for the participation on worker’s organizations. The Company has a collective bargaining agreement, whose conditions and benefits apply to all workers. There are several unions in the Company’s operations. No recent workers’ actions or strikes have taken place. Retrenchment. There was no significant retrenchment at the time of consolidation and the Company handled it strictly according to Brazilian law. The Company has had a stable workforce since with a very low turnover of 0.3%. The Company is planning to have a steady growth and therefore retrenchment is not expected from this project. Protecting the Work Force. The Company does not hire employees under 18 years old. Salaries and benefits are in line with market conditions. Employees are provided with medical insurance and transportation. Occupational Health and Safety. The Company has a SHE management system that comprises programs and procedures to develop and maintain the high level of health and safety required by the Brazilian legislation. The company has a SHE manager reporting to the Operations Director and several safety officers at the Camaçari site. All employees receive a thorough initial SHE training and regular reinforcement by supervisors and fellow workers. Occupational risk assessment, workplace monitoring and accident prevention exercises are regularly undertaken. The Company’s accident statistics have been consistently low for Brazil and the manufacturing sector. Only 3 accidents were reported each in 2008 and 2009. POLLUTION PREVENTION AND ABATEMENT Pollution Prevention, Resource Conservation and Energy Efficiency. The Company is compliant with Brazilian environmental requirements and has all the corresponding permits and licenses, and is also compliant with IFC guidelines. The Company promotes resource conservation and energy efficiency and has implemented a number of initiatives, involving the re-distribution of sites and closure of underused areas, which have significantly reduced energy consumption in terms of electricity, gas and steam, which are provided by Braskem, a utilities company located within the same industrial complex. Braskem also sells clarified water to the Company for industrial use. However the Company is currently abstracting most of its water needs from two production wells according to a rate agreed upon with the local government. The Company recycles process water and condensate in order to minimize abstraction. Air Emissions. Given that no polymerization takes place at the Company plant, air emissions are mainly from the dipping area, and include the exhaust from the gas ovens and from the dipping materials such as ammonia, volatile organic compounds, nitrogen oxides and formaldehyde. According to the monitoring reports for 2009, the Company is compliant with Brazilian and IFC air emission requirements. The total production of GHG at the Company plant in Camaçari is equivalent to around 15,000 tonnes of CO2/yr. Liquid Effluents. The Company manages through the CETREL wastewater treatment facility. The Company has a contract with CETREL to treat a fixed amount of organic and suspended solids load. Whenever the BOD or COD loads exceed the contracted quantity, the company pays the excess at a higher rate, and pays a fine for an excessive amount of SS. The company keeps under the contracted values in order to avoid excessive surcharges or fines. The CETREL wastewater treatment facility is compliant with Brazilian regulations, and meets IFC Guidelines. Waste. The Company has an elaborate system for separation and recycling which minimizes the disposal of unrecoverable waste. In 2009 the company recycled approximately 600 tonnes of waste including cardboard, paper, plastic, metal, and wood. All final waste is picked up under COFIC’s contract and disposed of according to the characteristic of the waste: in the Polo’s sanitary land fill or in dedicated disposal sites for hazardous materials. Hazardous Materials. At the Company plant in Bahia several areas, particularly drying, spinning and dipping, use materials that are considered hazardous because of toxicity, corrosiveness or flammability. The company takes all the necessary precautions for the proper handling of hazardous materials including MSDS sheets in Portuguese, labeling, personal protective equipment, spill containment, and fire prevention equipment. COMMUNITY HEALTH, SAFETY AND SECURITY Community Health, Safety and Security. The Company’s operations are located within the Camaçari Industrial Complex and with little contact with communities. The Company’s community engagement is limited to voluntary social services undertaken by the Company and its employees within the framework of the industrial complex’s initiatives. Emergency Preparedness and Response The company has community health and safety procedures consistent with IFC requirements, including life and fire safety, and emergency preparedness and response procedures. Emergency procedures in The Company are robust and operate in coordination with health, fire and rescue emergency systems of in the industrial complex, which includes several hazardous petrochemical industries, and authorities in the municipalities of Camaçari and Dias D’Avila. Security Personnel Requirements The company hires the services of a security company that work in accordance to procedures consistent with the Voluntary Principles on Security and Human Rights (VPSHR, commonly referred to as the VPs), which require that personnel be properly trained to deal with security issues with due consideration to the rights of Company employees, visitors and the community.

The Company operations are located within the Camaçari Industrial Complex (Polo Industrial Camaçari), and the Company is an active participant in community engagement activities through COFIC, the Polo’s administration body. These activities are in support of the neighboring communities of Camaçari and Dias D’Avila and include reforestation of the Polo’s green belt, environmental awareness building (Programa Verde Dentro), and voluntary work for the enhancement of local schools. In particular, The Company makes available an area within its property for COFIC’s industrial safety drills and actively participates and provides expert advice in these exercises.

Environmental documentation will be made available at the plant of Kordsa Brasil. KORDSA BRASIL S.A RUA ETENO, 3832 – PÓLO INDUSTRIAL DE CAMAÇARI 42810-000 CAMAÇARI/BAHIA - BRASIL