Business Ethics

We are committed to the highest level of ethical and legal conduct. The Freeport-McMoRan Principles of Business Conduct are a commitment to integrity and define the expected behavior of all employees and our board. We conduct comprehensive training on our Principles of Business Conduct, including annual certification of management-level employees (approximately 97 percent were trained in 2015). This process consisted of computer-based training, as well as a signed certification that the employee understands the Principles of Business Conduct and is not aware of any cases of non-compliance. Principles of Business Conduct training is also provided annually to non-management employees on a rotating basis by geographic location.

Anti-Corruption Corruption is sometimes widespread in local government systems and cultures near our operations. We do not tolerate the offering or payment of bribes, kickbacks or other similar payments to any person or organization or government official to secure advantages for our business. Likewise, we do not accept any of these payments. Our Anti- Corruption Policy and Guidelines require compliance with the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) and other relevant anticorruption laws, including local laws.

The company developed an online anti-corruption training module in 2012. Along with the transition to a new third party training provider, the company will introduce a new anti-corruption module in 2016. Going forward, completion of the anti-corruption training will be required annually. The online training is not meant to replace our existing classroom training programs; rather, it has been developed to supplement existing systems and extend the reach of the company’s overall compliance efforts. In the future, we will continue to broaden our training selection process to include additional employees within key departments and executive-level groups who may interact with government officials. This approach is expected to increase the number of employees selected for the training and provide a more consistent and automated selection process.

During 2015, we held in-person classroom training at Cerro Verde, corporate offices, FM O&G, PTFI, TFM, and for Exploration teams in Serbia. Training was also conducted for support functions, including the Accounting, Communications, Environmental Services, Global Supply Chain, Human Resources, Legal, and Sales and Marketing departments along with senior management responsible for approval procedures and internal controls. In addition, classes were held for 99 contractors at PTFI. Principles of Business Conduct, FCPA and Fair Competition training was also provided to the Climax Molybdenum and Sales and Marketing management teams.

In recognition of the potential legal liability that could result from actions of our business partners under the FCPA and other laws, the company has implemented its online due diligence platform, the Freeport Compliance eXchange (FCeX). FCeX is a survey-based software platform designed to assess risk in the areas of anti-corruption, international trade and human rights. FCeX has significantly enhanced the company’s ability to identify, assess and mitigate compliance risks.

Annually, Freeport-McMoRan performs company-wide audits with the assistance of our internal audit firm to assess risk and plan for the next year’s audit strategy. Formal fraud risk assessments have been implemented at Atlantic Copper, corporate offices, FM O&G, and PTFI, and mapped with business controls which are tested and reviewed annually. The fraud risk assessments consist of more than 100 risk scenarios spanning across more than 15 process areas, such as Asset Management, Purchasing, Payables, Financial Reporting, etc. All of these risk assessments include corruption as a risk factor.

Information and Reporting Freeport-McMoRan maintains a Compliance Line to provide guidance and assistance to workforce members with any questions or concerns related to our Principles of Business Conduct, policies or procedures. To encourage our workforce to raise any potential violations of business conduct, we also provide anonymous reporting through our compliance system. Spain, which prohibits anonymous reporting in accordance with Spain’s Data Protection Act (Organic Law 15/1999 on the Protection of Personal Data), is an exception. During 2015, 268 reports were made through the Freeport-McMoRan Compliance Line relating to various topics, including employee workplace conduct; environment, health, and safety; protecting company assets; and conflicts of interest. All reports are investigated and, if substantiated, appropriate disciplinary action is taken including possible termination of employment.