Freeport-McMoRan is committed to the highest level of ethical and legal conduct. Our Principles of Business Conduct are a commitment to integrity and define the expected behavior of all employees and our Board of Directors. We implement an aggressive training program on our Principles of Business Conduct including an annual certification of management-level employees. During 2011, this process consisted of computer-based training, as well as a certification that the employee understands the Principles of Business Conduct and is not aware of any issues. This training is also provided annually to approximately one-third of our non-management employees on a rotating basis and is also mandatory for all new hires.

Corruption sometimes is widespread in local systems and cultures near our operations, particularly in developing countries. We do not tolerate the offering or payment of bribes, kickbacks or other similar payments to any person or organization or governmental official to secure improper advantages for our business. Likewise, we will not accept any of these payments. Our Anti-Corruption Policy and guidelines assist in ensuring compliance with the U.S. Foreign Corrupt Practices Act of 1977 and other relevant anti-corruption laws, including local laws.

During 2011, the Company designated compliance officers for each of its primary business units to assist with managing compliance activities. In addition, we have designed training to tailor the topics and level of focus of our anti-corruption program to specific trainees based on job function. Three types of training on our anti-corruption policies and procedures include: Basic (as part of our Principles of Business Conduct training); Awareness (for employees in roles most likely to encounter corruption issues); and Gatekeeper (for accountants, attorneys, and managers responsible for approval procedures and internal controls).

For example, during 2011 we held awareness training at TFM for departments including Government Relations, Travel, Immigration, Human Resources and Logistics. Gatekeeper training also was conducted in small groups for the Legal Department, Accounting Department and senior management personnel. In addition, several classes were held for TFM’s third-party contractors. This anti-corruption training at TFM reached over 115 employees and contractors. Anti-corruption training also was conducted at Cerro Verde and for the Climax Molybdenum management team. Anti-corruption awareness training at PTFI was postponed due to labor disruptions and has been rescheduled for the second quarter of 2012.

Freeport-McMoRan maintains a hotline to provide guidance and assistance to workforce members with any questions or concerns related to our Principles of Business Conduct and supporting policies. To ensure that any potential violations of business conduct are brought forth, we also provide anonymous reporting through our compliance system. During 2011, 255 reports were made through the Freeport-McMoRan Compliance Line relating to various topics, including employee workplace conduct and disciplinary actions; environment, health, safety and security; protecting Company assets; and conflicts of interest. All reports are investigated and, if substantiated, appropriate disciplinary action is taken, up to and including termination of employment.

In addition to our Compliance Line, our site-compliance officers work closely with the corporate compliance group to investigate potential incidents of corruption. For example, a senior buyer located in a South African regional support office for TFM was terminated for improper conduct associated with loan requests from a supplier. Four loans from the supplier were requested, three of which were provided but not repaid. The fourth request included a summary of approximately $680,000 worth of business recently directed to the supplier with a request for payment in return. In a separate incident during an inventory audit and investigation conducted at the TFM warehouse at the end of 2011, it was determined that there had been collusion between vendor fuel truck drivers, weighbridge operators and warehouse personnel by falsifying records and diverting fuel deliveries. Five employees and three contractors were terminated for their involvement. Following the investigation, TFM instituted new procedures for more frequent inventory counts of fuel and rotating employees responsible for conducting inventory counts.

Every year, our internal audit firm performs a company-wide, global business risk assessment to assist in planning the next year’s audit projects.  This overall risk assessment includes corruption as a risk factor.  During 2010 and into 2011, certain anti-corruption policies and procedures in Indonesia were audited.  Based on the results of the audit, we are augmenting our policies and procedures in Indonesia as part of our Global Compliance Program.

From time to time, Freeport-McMoRan conducts specific risk assessments for corruption in particular businesses or geographic regions.  For example, in 2010 we began a risk assessment of compliance topics, including corruption, in several of our business units, in Indonesia, North America, Chile, Peru and Spain.  This review was completed in 2011 and as a result, we formalized our compliance program, identified business unit compliance officers and established strategic priorities to continue to improve our global compliance program.  We are developing and implementing detailed anti-corruption policies and procedures at our operations in the DRC, Peru and Chile, as well as for our Exploration group.  Corruption risk has been reviewed and assessed at each of our business units in the last several years and we are taking action based on those results.

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