EXECUTIVE SUMMARY PICA DE HULE NATURAL, S.A.

is the Group Entity formed in Guatemala in order to gather several rubber plantations within a group structure. Each of the farms is a Group Member. The objective of this Group Entity is to achieve FSC certification while meeting FSC Principle and Criteria requirements. The Group Entity has been working with each Group Member during the past two years in order to identify and correct technical, administrative and environmental weaknesses in order to comply with FSC P&C. Natural rubber tree plantations are classified as an Agro-forestry crop. In Guatemala there are no historical records of rubber tree plantations managing latex and timber under FSC guidelines or using CO2 fixation as a financial sustainability model. The common practice has been to simply manage the farms for the exploitation of latex. Rubber tree plantations in Guatemala have been established for more than 50 years and managed under the traditional model of exploitation (latex only). PICA DE HULE NATURAL, S.A. has identified a great opportunity in the development of this sustainability model and to innovate along the value chain provided by natural rubber production. In 2009 PICA DE HULE NATURAL, S.A. (Group Entity) requested a pre-assessment by the local Guatemala Rainforest Alliance/Smartwood office, and in 2010 requested an assessment in order to obtain a holder certificate. During the pre-assessment process there were 30 Corrective Actions Request identified. During the year PICA DE HULE NATURAL, S.A. worked with each Group Member in order to prepare for the assessment. 29 of the 30 Corrective Actions Request have been closed to date. The remaining Corrective Action Request has to do with the use of pesticides and insecticides. There is an endemic fungus identified as Microcyclus ulei in Latin America. This fungus is particular to rubber trees and is characterized by attacking young leaves. This focused attack on young leaves directly affects rubber tree growth and can also have a direct impact on natural rubber production. There are no known natural predators or controls for this fungus. There is genetic work that has been done directed at fungal resistance via the development of resistant rubber clones, however, M. Ulei has been able to overwhelm all new clones developed to date. Research and testing of this alternative is ongoing. The Group has developed standard agricultural practices and has an established Integrated Pest Management Program which includes the use of pesticides and insecticides as a result of the above described situation.

The use of alternating pesticides and insecticides as part of the IPM is a focused approach tool which is specific in its use and application. Worker safety, environmental sensitivity and economic reality guide the use of the pesticides and insecticides. Ongoing efforts for finding methods and products which meet our commitments to the above are in place in order to find practices and products consistent with this commitment. From this we have a track record in the development of selective, low volume aerial application methods using ultralight aircraft. We have also been able to displace the use of an extremely hazardous herbicide as a result of the process. The use of highly hazardous pesticides and insecticides is under constant evaluation. We have been able to substitute some of them with equally effective products which are safer to handle by our employees and with a more controllable environmental impact. Ongoing efforts are in place in order to continue to improve our field practices, develop resistant clone material, and to find more acceptable substitute products to use in place of those which the attached Derogation Requests contemplate. Ongoing field research efforts in concert with product manufacturers are in place having been part of the product substitution success mentioned above. In accordance with the FSC Pesticides Policy, FSC certified forest and plantation managers shall not use pesticides containing any of the active ingredients listed on the FSC list of highly hazardous pesticides (FSC-GUI-30-001 Annex II) except in specific circumstances authorized by the FSC Board of Directors through the issuance of a formal derogation permit. Based on the above, PICA DE HULE NATURAL, S.A., as Group Entity, hereby requests the temporary derogation authorization for two fungicides and one insecticide which are classified by FSC as highly hazardous but are of fundamental importance to the viability of natural rubber tree plantations. Attached to this Executive Summary are three Derogation Requests corresponding to each of the products under discussion. The requests contain the technical arguments and explanations to support the need for the products use. We anticipate meeting FSC requirements for this purpose and expect to have a positive response on this subject. Going through the certification process has been a productive exercise for the Group Entity and also for each Group Member. This process has yielded improved management guidelines for the development and continued implementation of our agro forestry practices. Our IPM reflects improvement driven by this process. Our worker safety practices have improved. Our environmental sensitivity has improved. This process has moved us towards the achievement of our goal of FSC Certification.