BEFESA

The honesty, integrity and good judgment of Befesa’s employees, executives and Board Members is essential to the company’s reputation and success.

The existing Code of Conduct governs the working activities and relationships of Befesa’s employees, executives and Board Members with its customers and potential customers, with colleagues at work, the competition, government bodies, the media, and any other individuals or institutions the company may come in contact with. These relations are essential to attain Befesa’s continued success. When mention is made in this Code of Conduct of "Befesa", it also refers to Befesa Medio Ambiente, S.A. and each and every one of its subsidiaries.

The existing Code of Conduct:

• Demands the highest standards of honesty and ethical conduct, including suitable and ethical procedures for dealing with real or possible conflicts of interest between professional and personal relationships;
• Demands complete, true, precise, timely and intelligible communication in the periodic Reports Befesa must present to the Administrative bodies and in any other communications made;
• Demands abidance of all the applicable laws, rules and regulations;
• Covers real or possible conflicts of interests and provides guidance so that the employees, managers and Board Members report said conflicts to Befesa;
• Covers the wrong use or wrong application of Befesa’s goods and business opportunities;
• Demands the highest degree of confidentiality and fair treatment inside and outside of Befesa; and
• Demands immediate internal communication of breaches of this Code of Conduct and suitable communication of any illegal behavior.

II.- Corporate Culture and Common Management Systems

• Befesa values its Corporate Culture and Common Management Systems as key assets. They define the way Befesa conducts business, establishing a series of Required Compliance Rules (NOC). Following them correctly is a source of profitability and security for the development of Befesa’s activities.
• Non-compliance with the Common Management Systems will be determined by the Board of Directors, which can delegate this power to its Chairman, delegated commissions or, whenever appropriate, the delegated management.
• In any event, non-compliance in any area that directly affects the results of the activity or assumes uncontrolled risks is considered a very grave offence.

Professional Rigor

• The concept of professionalism at Befesa is closely linked to the dedication to rendering a service or to carrying out any activity and to a direct involvement with the business project at hand.
• All actions carried out in conjunction with the assigned duties must be characterized by a sense of professional responsibility and guided by the principles established in the Code of Conduct.

Quality

• Befesa is committed to quality in all of its activities, both internal and external. This task is not assigned to a specific group of people, or to Senior Management, but rather it affects all the members of the organization in their daily work.
• Befesa has established specific Quality Regulations, which are the result of carrying out activities with knowledge, common sense, rigor, order and responsibility.

A "conflict of interest" occurs when one’s private interests interfere in any way or appear to interfere with Befesa’s interests. One is expected to avoid all situations that might lead to a real or apparent material conflict between one’s self-interests and one’s duties and responsibilities as an employee, officer or manager of Befesa. Employees, officers or Board Members who have questions or concerns about a potential conflict of interest should contact the Secretary of the Board of Directors. Befesa’s Internal Code of Conduct on matters relating to the Stock Exchange specifically regulates these questions.

Non-public information regarding Befesa or its business, employees, customers and suppliers is considered confidential and, as an employee, officer or manager, one is trusted with such confidential information. One is only allowed to use such confidential information for the specific business purposes of Befesa. One is not allowed to share confidential information with anyone outside of Befesa, including family and friends, or with other employees of Befesa who do not need the information to carry out their duties. One’s obligation to keep all information confidential continues even if one ceases to be employed by Befesa.

The following is a non-exclusive list of confidential information:

• Material, non-public financial information regarding Befesa or any of its subsidiaries or affiliates.
• Trade secrets, which include any business or technical information, such as a program, method, technique, compilation or information that is valuable because it is not generally known.
• All rights to any invention or process developed by an employee using Befesa’s facilities or trade secrets, resulting from any work done for Befesa, or relating to Befesa’s business, that belongs to or is assigned by law to Befesa, and,
• Proprietor information such as customer lists.

All public and media communications involving Befesa must have prior clearance from the Board of Directors or the Chairman of the Board of Directors, or compliance officer.

In many industries and countries, gifts and entertainment are common practices used to strengthen the bonds of business relationships. Throughout the world, Befesa’s position is clear. No gifts, favors or entertainment should be accepted or provided if it will obligate or appear to obligate the individual who receives it. The receiving or giving of gifts of cash or cash equivalents is never allowed.

Befesa employees may accept or give gifts, favors and entertainment only if they meet all of the following criteria:

• They are not against the law or the policy of the other party.
• They are consistent with customary business practices in the country or industry.
• They are reasonably related to business relationships.
• They are consistent with any existing business guidelines.
• They cannot be construed as a bribe, payoff, or improper influence, and
• They do not violate Befesa’s business values or ethics in any other manner.

One is required to report promptly to Befesa’s Legal Department Manager all information in one’s possession that may be necessary to ensure that Befesa’s financial reports and disclosures, as filed with or submitted to the National Securities and Exchange Commission (NSEC) or for other public communications, are complete, fair and accurate.

The Code of Conduct does not allow for the buying, selling, trading or participating in any way in operations that may affect Befesa’s assets or which may be illegal, while in possession of any substantial information concerning Befesa that has not been released to the general public and which when released may have an impact on the market price of Befesa’s securities. This Code of Conduct also considers it illegal to buy, sell, trade or otherwise participate in transactions involving the securities of any other company while in possession of similar substantial non-public information concerning such a company. Any questions concerning the legality of effecting a transaction with Befesa’s (or any other company’s) securities should be directed to Befesa’s Legal Counsel or compliance officer.

Before agreeing to act as a director, officer, consultant or advisor for any other business organization, one should notify one’s immediate superior. Board Members should disclose all new directorships or potential directorships to the Chairman of the Appointments and Remuneration Committee.

Each employee, officer and manager should undertake to deal fairly with Befesa’s customers, suppliers, competitors and employees.

Complying with the law is not only an external requirement but also an obligation of the organization and its personnel. The law provides security to our activities and reduces the risks to our business. Any action that breaks the law is expressly and firmly prohibited. When in doubt about the legality of any action, it is essential to consult with the Legal Department in advance.

Befesa requires its employees, officers and Board Members to talk to supervisors, managers or other appropriate personnel to report and discuss any known or suspected criminal activity involving Befesa or its employees. If, during the course of one’s employment, one should become aware of any suspicious activity or behavior, including concerns regarding questionable accounting or auditing matters, it is necessary to report violations of laws, rules, regulations or the existing Code of Conduct to Befesa’s Legal Department Manager. Reporting the activity will not subject the employee to disciplinary action unless the report is deliberately false. All reports shall be treated confidentially and will be the object of a full inquiry.

In addition to the provisions of the existing Code of Conduct and other policies of Befesa, employees working with any government entity in any country have an obligation to know, understand and abide by the laws and regulations that apply to the conducting of business with those entities. If a government agency, whether national, state or local, has adopted a more stringent policy than Befesa’s policies regarding gifts and gratuities, Befesa’s employees and representatives must comply with that more stringent policy.

Specifically, the U.S. Foreign Corrupt Practices Act (FCPA) makes it a crime for companies as well as their officers, Board Members, employees and agents, to pay, promise, offer or authorize the payment of anything of value to a foreign official, foreign political party, officials of foreign political parties, candidates for foreign political office or officials of public international organizations for the purpose of obtaining or retaining business. Similar laws have been or are being adopted by other countries. Payments of this nature are strictly against Befesa’s policy even if the refusal to make them may cause Befesa to lose business.

The FCPA also requires companies to maintain accurate books, records and accounts and to devise a system of internal accounting controls, sufficient to provide reasonable assurance that, among other things, the company’s books and records fairly reflect in reasonable detail transactions and dispositions of its assets.

Befesa will not give or encourage anyone else to give inducements of any kind to any government employee, or to any supplier under government or non-governmental contracts or sub-contracts, in order to gain any business advantage or contract.

The existing Code of Conduct shall be managed and monitored by Befesa’s Board of Directors. Any doubts regarding or questions concerning the existing Code of Conduct should be directed to the Manager of Befesa’s Legal Department.

Befesa’s employees, officers and Board Members are expected to adhere to this existing Code of Conduct at all times. Under rare circumstances, situations may arise in which a waiver may be appropriate. Waivers shall be determined on a case-by-case basis by Befesa’s Board of Directors for directors and officers. Any waiver for Board Members or officers and the grounds thereof shall be disclosed to stockholders in accordance with the applicable laws and regulations.

Failure to comply with this Code of Conduct may result in disciplinary action up to and including termination, depending upon the nature and seriousness of the violation. In addition, any supervisor, manager, officer or director who directs, approves or condones infractions, or has knowledge thereof and does not promptly report and correct them, will be subject to disciplinary action up to and including the termination of his/her working relationship with the Company.