1

ANTITRUST COMPLIANCE

MANUAL AND POLICY

A guide for employees on compliance with antitrust laws

2

CONTENTS

F O R E W O R D F R O M M A R K C U T I FA N I , C H I E F E X E C U T I V E , A N G L O A M E R I C A N A N D C H A I R M A N , D E B E E R S 1

A W O R D F R O M B R U C E C L E AV E R , C H I E F E X E C U T I V E , D E B E E R S 2

1 . P U R P O S E O F M A N U A L 3

2 . W H Y I S E U A N T I T R U S T L AW R E L E VA N T T O M E ? 3

3 . O T H E R J U R I S D I C T I O N S W H E R E A N G L O A M E R I C A N D O E S B U S I N E S S 4

4 . W H AT I S A N T I T R U S T L AW A B O U T 4

5 . I G N O R A N C E O F T H E L AW I S N O D E F E N C E 4

6 . A N T I T R U S T L AW 5

7. W H AT A R E T H E C O N S E Q U E N C E S O F B R E A C H I N G T H E L AW ? 6

8 . A R T I C L E 1 0 1 7

8.1 WHAT IS PROHIBITED? 7

8.2 CONCER TED ACTIVITIES BETWEEN COMPETITORS 7

8.3 BLACKLISTED ACTIVITIES 8

8.4 INFORMATION EXCHANGE 9

8.5 COMPETITORS AS CUSTOMERS OR SUPPLIERS 10

8.6 JOINT VENTURES 11

8.7 JOINT PURCHASING 11

8.8 TRADE ASSOCIATIONS AND INDUSTR Y

CONFERENCES 12

8.9 PRICE REPOR TING 13

8.10 DO’S AND DON’TS 14

8.11 GUIDANCE FOR AGREEMENTS BETWEEN

COMPETITORS (HORIZONTAL RELATIONSHIPS) 15

8.12 GUIDANCE FOR AGREEMENTS BETWEEN

CUSTOMERS, SUPPLIERS AND DISTRIBUTORS

(VER TICAL RELATIONSHIPS) 15

8.12.1 WHAT IS PROHIBITED? 16

8.12.2 WHAT IS PERMITTED? 16

8.12.3 WHEN TO SEEK GUIDANCE 16

8.13 DO’S AND DON’TS 17

8.14 THE LICENSING OF INTELLECTUAL PROPER TY 18

9 . A R T I C L E 1 0 2 1 8

1 0 . W H AT C O N S T I T U T E S A D O M I N A N T P O S I T I O N ? 1 9

10.1 WHAT CONSTITUTES AN ABUSE? 20

10.2 DO’S AND DON’TS 21

1 1 M E R G E R C O N T R O L 2 2

1 2 . A W O R D O N I M P R O P E R A P P E A R A N C E S 2 2

1 3 . I N V E S T I G AT I O N S B Y C O M P E T I T I O N A U T H O R I T I E S 2 3

13.1 DAWN RAIDS BY THE EU COMMISSION 24

13.2 DO’S AND DON’TS 25

13.3 DOCUMENT RETENTION 25

1 4 . Q U E S T I O N S A N D W H AT T O D O I F Y O U D I S C O V E R A B R E A C H 2 6

A N N E X 1 - S O U T H A F R I C A 2 7

A N N E X 2 - A U S T R A L I A 2 8

A N N E X 3 - U N I T E D S TAT E S O F A M E R I C A 2 9

A N N E X 4 - P E O P L E ’ S R E P U B L I C O F C H I N A 3 0

A N N E X 5 - B R A Z I L 3 1

A N N E X 6 - G O L D E N R U L E S F O R D AW N R A I D S B Y C O M P E T I T I O N R E G U L AT O R S 3 2

A N N E X 7 - C O N S O L I D AT E D D O ’ S A N D D O N ’ T S 3 7

S E L F - C E R T I F I C AT I O N F O R M

F O R E W O R D F R O M M A R K C U T I FA N I , C H I E F E X E C U T I V E O F A N G L O A M E R I C A N A N D C H A I R M A N O F D E B E E R S

In common with our industry, Anglo American (including De Beers) is going through a period of change and I am looking to drive value from within the organisation and change the way we do business. However, certain things about the way we conduct ourselves will not change.

Embedded in our culture is a set of values that will continue to guide how we act and engage with our competitors, customers and suppliers. The Anglo American integrity value and the De Beers building trust value guide the way we conduct our businesses. We have therefore made it clear that we will not condone anti-competitive practices and will not tolerate any such activity by our employees.

We are subject to antitrust laws (also known as competition laws) in almost every legal jurisdiction in which we do business and compliance with these laws is not optional – it is the only way we will conduct our business.

The markets in which we operate may get tough from time to time, and the environment may be uncertain, but driving value for our stakeholders must not mean taking short cuts in how we interact with our competitors, customers or suppliers.

In fact, non-compliance with antitrust laws can significantly destroy value and result in serious fines (in the EU up to 10% of the Anglo American group’s worldwide turnover) as well as liability for private damages for losses arising from anti-competitive practices. In addition, in some jurisdictions, individuals can be liable for fines and other penalties, including prison.

Enforcement of antitrust laws around the world continues, with the need for compliance becoming even more compelling. Maintaining a culture of compliance therefore remains a key responsibility for all employees and we must not only do the right thing, we must be seen to be doing the right thing.

This Manual will assist you in complying by providing an overview and explanation of antitrust law. It also sets out our policy and standard of conduct – the “Do’s and Don’ts” – in respect of the types of activity that must be avoided and where caution must be exercised and advice taken.

As it has one of the most developed antitrust regimes in the world, the Manual is based on EU law and this provides a useful “proxy” for compliance in different jurisdictions. There are, however, differences between jurisdictions, and while the most important differences are highlighted, obtaining local legal advice will be appropriate in certain circumstances.

Of course, this manual is only an outline of the law. If you are in any doubt about a particular course of action, business practice or the rules in a particular jurisdiction, you must consult your manager, Group Legal or your compliance officer for specific advice.

We have rolled out competition compliance programmes within each of our business units, and arrange training sessions to provide employees with additional information as it relates to their particular business. We have also made available an online training programme. These programmes are supported by Group Legal and are reviewed by our Audit Committee to ensure that we maintain the necessary strong commitment to full legal compliance.

So while we will make changes in the way we do business in order to drive value, we will do so in full compliance with both our values and with antitrust law.

Mark CutifaniChief Executive, Anglo AmericanChairman, De Beers

2016

“WE WILL NOT CONDONE ANTI-COMPETITIVE PRACTICES AND WILL NOT TOLERATE ANY SUCH ACTIVITY BY OUR EMPLOYEES.”

2

A W O R D F R O M B R U C E C L E AV E R , C H I E F E X E C U T I V E , D E B E E R S

The adoption and maintenance of high ethical standards is a core principle of De Beers. Inherent in De Beers’ Ethics Principle is a commitment to comply with all applicable laws in the countries in which De Beers operates. This includes a commitment not to infringe laws that seek to regulate free and fair competition. Antitrust (or competition) law regimes exist in the jurisdictions in which De Beers operates. Adherence to these important laws is therefore integral to De Beers’ reputation, integrity and the pursuit of brilliance.

Competition law infringement is a serious concern for every business. Breaches of competition law, even unintentional ones, can have severe consequences for the financial condition of De Beers. Competition laws typically apply to groups of companies. Accordingly, anti-competitive conduct by De Beers can have adverse repercussions for the wider Anglo American group. References in this Manual to Anglo American therefore include De Beers.

In addition to adverse legal and reputational impact on De Beers and Anglo American, failure to adhere to competition laws can potentially result in ruined careers for the individuals involved. Whilst De Beers wishes to foster an environment where employees know that they will be supported if they seek timely legal advice if they are in any doubt about whether any activity is consistent with competition law, De Beers will not tolerate violations of competition law, or mistakes resulting from carelessness or inattention to compliance requirements by its employees.

It is your responsibility to ensure that De Beers does not breach competition laws. Failure to do so will lead to disciplinary proceedings, which may include termination of your employment or engagement. This could of course have a number of financial, professional and personal implications for you.

If you are in any doubt as to whether any conduct (including the conduct of businesses with which De Beers transacts) complies with competition law, please get in touch with Group Legal. Invariably, your instinct will be right. Ultimately, only the individuals within De Beers can ensure that the group continues to have a culture of compliance by speaking up.

Bruce CleaverChief Executive, De Beers

2016

“IT IS YOUR RESPONSIBILITY TO ENSURE THAT DE BEERS DOES NOT BREACH COMPETITION LAWS”

3

1 . P U R P O S E O F M A N U A L

This manual and policy are being implemented as part of the integration process with Anglo American, to further embed a culture of competition law compliance across De Beers.

The purpose of this manual is to explain the basic provisions of EU antitrust law, to give some details regarding the provisions of antitrust laws of South Africa, Australia, the U.S., China and Brazil, and to set forth clear and simple rules for how to comply as you conduct our business. The manual is not intended to make you an antitrust expert, but rather enable you to recognise dangerous situations which require care and, possibly, legal advice.

One of the most important features of antitrust compliance is that compliance isn’t enough – not only must we comply with antitrust laws, but we must also be seen to comply by customers, competitors, suppliers and antitrust authorities. We must avoid “private” statements and actions among friends and business colleagues

and in casual emails that are inconsistent with antitrust compliance, as these statements can easily become available to regulatory authorities in the course of an investigation (or “dawn raid”) and, if unfavourable, will be portrayed as betraying the “real” intentions of the company. Even statements in file notes, personal diaries and internal memos may have a significant effect on the way in which your actions, those of your business and of Anglo American as a whole are interpreted by antitrust regulatory authorities and the courts.

I N B R I E F :

y Explains purpose of manual

y Key is to be able to recognise risks and seek advice

y Appearances are important – not only must we comply but we must also be seen to comply

2 . W H Y I S E U A N T I T R U S T L AW R E L E VA N T T O M E ?

A common question among our employees, most of whom are located outside the EU, is why we base our compliance programme on EU antitrust law. Only a small minority of our employees and very few of our business operations are located in the EU. What relevance does EU antitrust have to our operations in Australia, South Africa, South America and the rest of the world?

There are three principal reasons for this. The first, and most important, is that the application of antitrust laws depends on where the effect of any violation is felt, which is usually where the product is sold. For example platinum, iron ore, rough diamonds and thermal coal may be produced in South Africa, but where they are sold in the EU, EU antitrust laws will apply if the market for the product in the EU is affected, regardless of where production or any infringing conduct takes place. Also, where a product market is worldwide, as many of our product markets are, the effect of a violation will be felt everywhere in the world, including the EU, even if our production is sold in Asia or North America. Any agreement or practice that has an effect on trade between Member States or which is intended to or has the effect of distorting competition within the Common Market, falls within the jurisdiction of the EU Commission – the EU antitrust regulatory authority. Thus, for example, an agreement by producers located outside the EU, not to sell into the EU, can infringe EU antitrust law and be subject to EU Commission jurisdiction.

The second reason is that in recent years the antitrust authorities in the EU have been some of the most energetic and innovative in enforcing antitrust laws and have devoted considerable resources to investigating potential infringements. EU antitrust laws are highly

influential in shaping the way antitrust laws are written and enforced in the rest of the world. Whilst differences do exist, particularly in some peripheral areas of the law, the fundamental principles of EU antitrust laws can be found in most of the other national laws to which our businesses are subject.

Finally, the EU Commission and competition authorities in the rest of the world exchange information and co-operate in relation to investigations into breaches of antitrust laws. Agreements with the EU Commission exist with many countries where Anglo American has operations (including Australia, South Africa and the U.S.). Particularly relevant for Anglo American, the EU has entered into an agreement with South Africa, which establishes a legal framework for consultation and co-operation between competition authorities in the EU and South Africa. The agreement enables either authority to request the other to take appropriate remedial action in relation to breaches of antitrust laws which substantially affect their respective important interests. Thus, for example, the South African Competition Commission may, at its own initiative or on request from the EU Commission, take enforcement action against companies in South Africa who are engaged in practices which substantially prevent or lessen competition in the EU.

I N B R I E F :

y Antitrust laws depend on where the effect of any violation is felt

y Fundamental principles of EU antitrust laws can be found in most other national laws

y Competition authorities exchange information and co-operate

4

3 . O T H E R J U R I S D I C T I O N S W H E R E A N G L O A M E R I C A N D O E S B U S I N E S S

As stated above, actions taken in one jurisdiction can violate the antitrust laws of other countries and a breach of antitrust law may occur in a particular country if the effect of anti-competitive conduct is felt within that country. So a company need not have activities or subsidiaries present within a particular jurisdiction in order for a breach of the laws to occur. If you have any questions or concerns about the legality of your actions you should seek the advice of Group Legal or relevant Compliance Officer.

This manual also briefly describes those areas where the antitrust laws of South Africa, Australia, the U.S., China and Brazil differ materially from those of the EU. If you have more detailed questions about the legality of your actions in those jurisdictions you should seek advice from Group Legal or relevant Compliance Officer.

I N B R I E F :

See the Annexes for a brief description of the differences in the following jurisdictions:

y South Africa

y Australia

y U.S.

y China

y Brazil

4 . W H AT I S A N T I T R U S T L AW A B O U T

The stated purpose of antitrust law is to sustain a free market economy where vigorous but fair competition will result in the most efficient allocation of goods and services, the lowest prices, the highest quality and the maximum innovation. The ultimate goal of antitrust law is to establish a free enterprise system where each company takes its business decisions independently and where enterprises do not restrict or distort competition by colluding or engaging in other unlawful business practices.

I N B R I E F :

y Supports free market and fair competition

y Promotes efficiency, low prices, innovation and independent decisions

5 . I G N O R A N C E O F T H E L AW I S N O D E F E N C E

Ignorance of antitrust law is no defence and will not deter the courts or regulators from imposing fi nes or other penalties. Although you are not expected to make diffi cult legal judgements on your own, you are responsible for learning enough about antitrust law to recognise risk situations, to know when legal advice is required and to obtain such advice.

“Turning a blind eye” to situations which you think might give rise to competition law risk is not acceptable. Furthermore, the excuse “all my competitors are doing it” is not a defence for breaching antitrust law but may well be a warning that an infringement of the law is already happening.

I N B R I E F :

y Be alert to risk areas

y Do not ignore a competition law risk – seek advice when in doubt

y Competitor activity will not justify illegal conduct

5

6 . A N T I T R U S T L AW

There are two fundamental provisions of EU antitrust law:

y Article 101 of the Treaty on the Functioning of the EU (“TFEU”) prohibits arrangements between parties which may affect trade between Member States and which have as their purpose or effect the prevention, restriction or distortion of competition within the Common Market; and

y Article 102 of the TFEU prohibits undertakings that are dominant in a market from abusing that dominant position.

The provisions are referred to as “Article 101” and “Article 102” throughout this manual, however, those references are intended to include the broadly similar provisions applicable in other jurisdictions.

The country-specific annexes to this document summarise the relevant provisions applicable in South Africa, Australia, the U.S., China and Brazil that cover the same ground as Articles 101 and 102.

It is Anglo American’s responsibility to assess compliance with antitrust law in the jurisdictions where it operates and to ensure it complies with the applicable legislation.

I N B R I E F :

y Article 101 – deals with horizontal relationships (i.e. between competitors) and vertical relationships (i.e. with customers, distributors and suppliers)

y Article 102 – deals with the abuse of a dominant market position

y It is our responsibility to ensure that we are compliant with antitrust laws

6

7. W H AT A R E T H E C O N S E Q U E N C E S O F B R E A C H I N G T H E L AW ?

F I N E S A N D I M P R I S O N M E N TBreaches of EU antitrust law may result in a fine of up to 10% of the annual worldwide sales turnover of Anglo American. The imposition of huge fines has been a continuing trend. For example, in 2012 the Commission imposed a fine of €1.47 billion on manufacturers of cathode ray tubes for price fixing, market sharing, customer allocation, capacity and output co-ordination and exchanges of commercially sensitive information. In 2009, the Commission fined Intel €1.06 billion for abusing its dominant position in respect of the supply of certain computer processors by engaging in an anti-competitive strategy to inhibit competition from rival processor manufacturers.

Substantial fines can also be levied for breaches of antitrust law in South Africa, Australia, the U.S., China and Brazil.1 Furthermore, in the U.S., China, Australia, Brazil (and in the future in South Africa)2 and in various other jurisdictions throughout the EU (including Germany, Austria, France, Ireland and the UK) violation of some parts of antitrust law can also have criminal consequences such as imprisonment and personal fines. UK companies and their executives also face risks of criminal sanctions in the U.S. as a result of the UK/U.S. extradition regime and the increased willingness of U.S. enforcement authorities to claim jurisdiction over acts that have not been committed in the country. Executives may not be able to avoid personal consequences even where they are not actively involved in the infringing conduct but are aware of it. It is therefore important that executives and senior employees both lead by example and are proactive in ensuring antitrust compliance within their business units.

A G R E E M E N T S B R E A C H I N G A R T I C L E 1 0 1 A R E U N E N F O R C E A B L EAny provision of an agreement or contract which breaches Article 101 is automatically invalid and therefore unenforceable before courts of law. If the agreement cannot operate without the provision, the entire agreement may be invalid.

Similar consequences apply for breaches of antitrust law in other relevant jurisdictions.

P R I VAT E A C T I O N S T O R E C O V E R D A M A G E S Breach of antitrust law may entitle those suffering damage as a result of the breach to sue in their local courts for the damage they have suffered arising from anti-competitive practices. This is particularly the case in the U.S. where successful actions by classes of customers affected by anti-competitive conduct can result in awards of treble damages on an industry-wide basis.

Follow-on damages claims are also possible in other jurisdictions and the EU is in the process of introducing legislation which will facilitate suits by private individuals to recover damages resulting from infringements of competition law.

D A M A G E T O R E P U TAT I O N A N D O T H E R L O S S E SA further critical consequence of breaching EU and other antitrust laws is the serious damage which it may inflict upon the reputation of a company. This may lead, for instance, to being excluded from tender procedures or to problems in dealing with antitrust regulators when seeking to obtain regulatory clearances, for example in merger cases. In addition, defending a company in antitrust proceedings involves considerable cost in terms of legal and expert fees and lost management time.

D I R E C T O R D I S Q U A L I F I C AT I O NIn a number of countries, breach of antitrust law can result in statutory directors being disqualifi ed from acting as such (for example in the UK, directors can be disqualifi ed for up to 15 years).

1. For instance: in South Africa the Competition Commission fined 15 construction companies (including Avel and Basil Read) a total of 1.5bn rand (around €114 million), for collusive tendering for construction projects in 2013; in the U.S. in 2012 Yazaki Corporation was fined $470 million (around €353 million) for price- fixing and bid rigging in the automobile parts industry; in the EU in 2013 a fine of around €94 million was imposed on Danish pharmaceutical company Lundbeck for agreeing with other pharmaceutical companies to delay market entry of generic medicines; in Australia in 2012 Singapore Airlines Cargo Pte Ltd was fined $12 million (around €8 million) for price-fixing of surcharges on international freight carriage.

2. Criminal liability will be introduced in South Africa with the entry into force of the South African Competition Amendment Act, although this has been pending for a number of years.

I N B R I E F :

y Fines of up to 10% of Group turnover

y Criminal consequences – imprisonment and personal fines

y Agreements unenforceable

y Lawsuits for damages – possibly double or triple damages

y Damage to reputation

y Director disqualification

7

8 . A R T I C L E 1 0 1

8 . 1 W H AT I S P R O H I B I T E D ?Article 101 prohibits “concerted activity”, i.e. an agreement or understanding, between two or more undertakings about how to behave in a market.

The concepts of “concerted activity” and “collusion” in antitrust law is broader than may be understood in common language. It is not limited to formal agreements or legally binding contracts. Rather, it covers every sort of formal and informal arrangement, whether written, oral or even unspoken. A simple exchange of information or a suggestion to a competitor at a cocktail party, followed by a parallel price increase or other parallel behaviour, may be enough to form the basis for determining that illegal concerted activity has taken place.

Furthermore, Article 101 does not require that the concerted activity be successful in reducing competition. Companies may be fi ned for violation of Article 101 even if their understandings had no effect on the market, for instance because the parties to the understanding did not adhere to it.

Truly unilateral conduct on the other hand is not prohibited by Article 101. This is the case, for instance, if a company unilaterally decides to increase or reduce its prices or to grant rebates to certain customers. Where the company engaging in the conduct is dominant in its market, however, unilateral conduct may be illegal under Article 102 (see below).

I N B R I E F :

y Concerted activity not limited to formal or binding contracts

y Concerted activity need not be successful to be a violation

y Truly unilateral conduct not prohibited

8 . 2 C O N C E R T E D A C T I V I T I E S B E T W E E N C O M P E T I T O R SAny direct or indirect contact with competitors may provide the basis for an accusation of concerted activity. For example, discussions or contacts with competitors, whether at a trade association meeting, a trade fair, industry conferences, a sports event or purely social gathering should be considered a risk situation from an antitrust law point of view. This does not mean that contacts with competitors as such are prohibited by law. Similarly, a risk situation may arise if a third party, such as a consultant, supplier, customer or trade association, is used as the conduit through which inappropriate (indirect) contact is made with a competitor. Contacts that do not suggest or result in parallel activity may present little risk, and some forms of concerted activity are perfectly legal. To give an example, there is no legal prohibition against a co-ordinated industry approach with regard to the following matters:

y The initiation of new legislation, the modifi cation of existing legislation or reaction to proposed legislation;

y Programmes to promote product safety or environmental protection or other matters of general interest to the industry;

y Programmes related to industry-wide quality control, education and training; and

y Joint compilation of general industry studies.

These types of contacts with competitors become illegal only if (i) their real purpose is to achieve adverse effects on competition, or (ii) if they involve discussions, understandings or the exchange of competitively sensitive information that may affect competition in the marketplace, or (iii) where they involve the setting of industry standards, if one or more industry participants have been excluded from the standard setting.

However, as discussed below, employees should participate in any “industry initiatives” only with the permission of the relevant Compliance Officer.

I N B R I E F :

y Contacts with competitors that do not result in parallel activity in a market may be permissible but seek advice as direct or even indirect contact may provide the basis for accusation of concerted activities

y Contacts are illegal if (i) the purpose is to achieve an adverse effect on competition, (ii) they involve the discussions, understandings, or the exchange of information that may affect competition in the marketplace (iii) or they involve standard setting where one or more industry participant has been excluded

8

8 . 3 B L A C K L I S T E D A C T I V I T I E SThe most serious breaches of Article 101 and the corresponding antitrust laws of South Africa, Australia, the U.S., China and Brazil – which, if uncovered, will undoubtedly lead to heavy fines (and potentially imprisonment for the responsible individuals) – are the following:

P R I C E - F I X I N GAny agreement or understanding, whether formal or informal, between two or more competitors to fix either the selling price or the purchase price of a product is strictly illegal. It is no defence that the price arrived at was fair and reasonable, or that the price would have been the same or higher had the parties not fixed it.

There are many ways in which prices can be fixed. Competitors are not permitted to set the components of a price, set a minimum selling price, establish a range outside which prices are not to move or establish the amount or percentage by which prices are to be increased.

“Price-fixing” may also involve matters other than price. For example, a breach of antitrust law can occur where two competitors agree on terms or conditions of sale such as discounts, rebates, shipping or credit terms.

L I M I T I N G P R O D U C T I O N A N D C A PA C I T Y Any agreement or understanding, whether formal or informal, between two or more competitors to limit or control production,

production capacity or the volume of goods they make available for sale is nearly always illegal. Such prohibited agreements may relate to production levels or quotas or may be intended to deal with structural overcapacity which is often an issue for the natural resources sector.

Competitors may not agree, or even discuss, limits on mine or smelter or other production output or capacity, co-ordination of future technical development or investment plans (including expansion of capacity or the opening of a new mine or infrastructure such as a smelter or refining facility) or co-ordination of the “mothballing” of existing operations. Any such decisions must be taken entirely unilaterally.

Some exceptions may exist in connection with the management of a joint venture if a competitor is also a joint venture partner but limitations will apply – see later at section 8.6 of this manual.

S H A R I N G T E R R I T O R I E S O R C U S T O M E R SAny agreement or understanding, whether formal or informal, between two or more competitors to apportion markets or customers between themselves whether by territory, type or size of customer, type of product or in any other way is strictly illegal. Agreements to allocate and maintain existing market shares, geographical focus and/or customer bases are similarly prohibited.

B O Y C O T T SAny agreement or understanding, whether formal or informal, between two or more competitors to “boycott” particular customers or suppliers and thereby exclude them from the market is strictly illegal.

B I D - R I G G I N GAny agreement or understanding, whether formal or informal, between two or more competitors who may participate in a tender to agree in advance the terms of their bids is strictly illegal. This can also include agreements as to which of them will submit bids in response to a call for bids. This could occur as part of a market allocation agreement between competitors, e.g. where competitors agree which of them shall win the contract, with the others either abstaining from participation in the tender procedure or handing in deliberately high offers. Bid-rigging is one of the most serious breaches of antitrust law. In 2009, the Office of Fair Trading (“OFT”) in the UK imposed fines totalling £129 million (around €158 million) on 103 construction companies for bid-rigging. In many countries, such as Germany, Brazil, China and Austria, bid-rigging is prosecuted as fraud under criminal law.

All of these black-listed activities may be prosecuted in the U.S. as criminal offences against both the company and participating employees.

I N B R I E F :

y Blacklisted activities result in largest fines and the greatest risk of criminal prosecution

y Blacklisted activities are agreements or understandings (formal or informal) relating to the following:

y Price-fixing

y Limiting production and capacity

y Sharing territories or customers

y Boycotts

y Bid rigging

9

8 . 4 I N F O R M AT I O N E X C H A N G EThe exchange of information between competitors with the purpose of, or which leads to, market co-ordination, or which induces participating companies to act in the same way, will constitute a breach of EU antitrust law and may constitute a breach in other jurisdictions as well. The sharing of data between competitors (whether at an organisational level, or by individuals) such as costs, figures on quantities produced and sold, capacity, prices and terms for discounts, credit notes and general terms of sale, delivery and payment, or any other information which could remove uncertainty of competitors behaviour in a market (“competitively sensitive information”) is generally regarded as a practice that distorts competition and is therefore prohibited. A breach of antitrust law may also arise where a third party, such as a consultant, supplier, customer or trade association, is used as the conduit through which competitively sensitive information is exchanged with a competitor.

As a general rule of thumb, information that is normally confidential and which is regarded as being competitively sensitive to Anglo American should never be provided to or received from a competitor. Information sharing, if followed by parallel movements in price, will lead antitrust authorities to assume that price fixing has occurred, even if the price movements are coincidental. In some circumstances, the mere provision of information by one competitor to another could lead to this assumption. One inappropriate contact between competitors can be sufficient to breach EU antitrust law.

E X C H A N G E S O F I N F O R M AT I O N W I T H C O M P E T I T O R S F O R C O R P O R AT E T R A N S A C T I O N P U R P O S E SThe rules regarding information exchange outlined above apply (subject to some modifications) even if the exchange is pursuant to a proposed transaction. There are lawful procedures under which competitors may exchange information in connection with the acquisition of whole or part of its business.

However, all discussions must be confined to the transaction at hand, information shared with the other party as part of due diligence should be limited to what can be justified as “reasonably necessary” to the due diligence process and that parties who are part of an “auction process” but are not the ultimate acquirers do not receive and use information improperly. This is because information disclosed as part of a due diligence process should not enable the parties to co-ordinate their strategic behaviour in the event that the proposed transaction does not proceed.

In particular, the parties should avoid sharing sensitive information regarding price, costs, business plans, customer-specific data or product innovation/research and development unless the information exchanged and the identity of the persons coming into contact with such information are limited to that which is

reasonably necessary to the due diligence process. Very sensitive commercial information, for example, strategy documents in relation to marketing, branding, pricing and customer information and the terms or timing of proposed tenders or bids, should be disclosed only to independent lawyers and accountants subject to obligations of confidentiality and senior management tasked with deciding whether the transaction should proceed (sometimes known as a “clean team”) and on what terms, and should not, in any event, be disclosed to any of the purchaser’s staff who are involved in day-to-day marketing or sales activities. Depending on the circumstances of the transaction, the competitive position of the parties and the nature of the markets involved, additional protective measures may need to be taken in connection with the provision of some of this very sensitive commercial information (particularly about the seller’s strategies with respect to such matters as marketing, pricing, capital investment and terms of proposed tenders/bids). It is no defence to an alleged infringement for the purchaser to argue that the information was provided willingly or for the seller to argue that the purchaser was otherwise unwilling to proceed with the transaction. Recipients of sensitive commercial information of the types outlined above need to exercise caution in this regard as do persons disclosing the information as part of the pre-transaction process.

Whether pursuant to a confidentiality agreement or not, people who receive information as part of the pre-transaction process should ensure that the information is not used for any purpose other than in relation to the proposed transaction. Additionally, if a transaction is not consummated, the information should remain confined to the “clean team” and tangible and electronic copies of it should be returned to the seller or destroyed.

These rules should be reviewed and explicit guidelines respecting the exchange of information should be established at the beginning of the due diligence process. Despite the apparent restrictions contained above, these rules provide sufficient flexibility to accomplish lawfully all necessary due diligence and integration planning needs. Precise procedures tailored to the specific transaction should be discussed with Group Legal. Guidelines should also be established for the period between entering into the sale agreement and completion to ensure that any integration planning does not result in inappropriate exchange of information or any premature integration activity before applicable competition clearances have been obtained (this is often referred to as “gun jumping”).

10

E X C H A N G E S O F I N F O R M AT I O N W I T H I N T R A D E A S S O C I AT I O N SThere is generally no objection under antitrust law if a trade association (and not one or more members) collects statistical information giving an aggregate picture of the relevant industry (output, sales, average prices etc). Generally, three conditions must be fulfilled.

y Identification of individual company figures by the trade association members should not be possible.

y There is open access to the trade association for all industry members, so that the aggregate collected information is freely available.

y Individual company information is maintained as confidential by the trade association and does not become available to individual members.

Antitrust law does not restrict businesses from obtaining current and accurate market place information from appropriate sources. This includes information genuinely in the public domain – i.e. information that is equally easy to access from customers and/or from intermediaries.

However, if an intermediary (possibly even a customer) is used as a conduit for the supply of information between competitors, the exchange may constitute a breach of antitrust law. In order to avoid misinterpretation about the lawfulness of your behaviour, it is recommended that you mark and date all information which you receive on your competitors’ prices, sales and the like to reflect the source (e.g. “Received from [name of customer, etc.] on ...”).

See also the discussion on Trade Associations in Section 8.8.

I N B R I E F :

y Providing confidential information to a competitor may be illegal

y Get legal guidance on how to conduct due diligence legally

y Identify sources of your information so you can prove you obtained it legally

y In a corporate transaction, restrictions on information exchange generally continue to apply until the transaction has closed

8 . 5 C O M P E T I T O R S A S C U S T O M E R S O R S U P P L I E R SIn some sectors where Anglo American is active, the nature of the industry is such that Anglo American’s competitors also have a relationship with the company as customers or suppliers. Dealings with competitors as customers or suppliers are compatible with antitrust law provided the arrangements are not used as a vehicle to co-ordinate commercial strategies, to foreclose competitors from access to key suppliers or customers or to restrict competition in any way. A particular area of concern can be the exchange of information with competitors who are customers or suppliers.

In such dealings it is necessary to take particular care that the information given to, or received from, a competitor is that which would normally be communicated to, or received from, a customer or supplier.

In some cases, for example, where one division of a company holds sensitive commercial information gained from its dealings with a customer or supplier which could be improperly used by other divisions of the company (for example, sales) which compete with that customer or supplier, it may be necessary for a company to have separate “ring-fencing” provisions to ensure that exchanges of information are properly controlled. Given the complexity of this area, arrangements in this area should be reviewed with a member of Group Legal.

As business units within Anglo American move to a more active trading business model, Anglo American will need to reassess some of the relationships within the organisation and ensure that information flows in the roles of trader and producer/marketer do not give rise to increased competition law risk, especially in markets perceived as being more concentrated. Please consult Group Legal for specific guidance on how to minimise the competition law risk which may arise where a business unit engages in increased trading of products.

I N B R I E F :

y Additional care is required where competitors are also active as customers or suppliers

y Not to use dealings with a competitor as a vehicle to co-ordinate commercial strategies

11

8 . 6 J O I N T V E N T U R E SOne feature of the natural resources sector is that the capital investment required to exploit resources, for example, the development of a mine or refining plant, can be so large that several competitors form a joint venture to invest in the project.

Joint ventures between competitors can be compatible with antitrust law, particularly where it is necessary to enable a project to proceed. However, the joint venture must not be used as a vehicle to co-ordinate commercial strategy in relation to activities outside the joint venture and particular care must be exercised in relation to information exchange, even if the information would be useful in the management of the joint venture.

Anglo American has developed detailed compliance procedures and strategies for the management of antitrust issues in the context of joint ventures with competitors. Given the complexity of this area, you should not conclude any agreement, however informal or limited, on the implementation and operation of joint ventures with a competitor without consulting

I N B R I E F :

y Joint ventures raise special antitrust issues

y May have merger control issues

y Given complexity seek legal advice

8 . 7 J O I N T P U R C H A S I N GJoint purchasing arrangements with competitors can unlawfully restrict competition – either (i) in the “upstream” market for the goods or services being purchased or (ii) in a “downstream” market in which the parties to the arrangement or their affiliates compete. Risk in this regard can occur in both more formal or structured contexts (i.e. where a joint purchasing agreement is proposed or a central buying organisation is involved) or in less formal contexts (i.e. informal contacts with fellow purchasers). This includes arrangements or contacts between Anglo American and joint ventures where Anglo American is a participant but does not solely control.

Joint purchasing arrangements can give rise to antitrust issues on the relevant downstream market where parties purchase a significant part of their products together, and face a reduced incentive to compete on the downstream market as a result. Where they have a significant combined market position on the downstream market, they may be able to drive cost savings on the procurement side of the market and co-ordinate their behaviour on the downstream market to avoid passing these through to consumers. Such arrangements can also give rise to issues on the relevant upstream market where the parties have significant “buyer power”, as this may enable them to limit access of their competitors to efficient sources of supply, or force suppliers to reduce the quality and range of products they produce.

Such arrangements may also lead to unlawful sharing of competitively sensitive information among competitors due to their presence on joint purchasing boards or committees. To the extent that sharing of information between competitors facilitates concerted action or provides information about their cost structures this may infringe competition laws – and this risk is not diminished where the focus is on procurement (i.e. upstream activities).

Joint purchasing arrangements may be permissible where they are necessary to generate efficiencies (such as cost savings) and those efficiencies are likely to be passed onto consumers to a sufficient degree that they will not be outweighed by any anti-competitive effects. Generally, where the market shares of the participants in the joint purchasing are below certain levels (generally,15%) on both the upstream and downstream markets concerned, joint purchasing arrangements are likely to be permitted.

Again, this is a complex area of the competition law, requiring careful analysis as in some countries (such as South Africa) there is an absolute prohibition on joint procurement between competitors. Seek advice from Group Legal before entering into discussions with competitors around procurement activities, whether formal or informal in nature.

I N B R I E F

y Joint purchasing arrangements with competitors can give rise to antitrust issues both in the “upstream” and “downstream” markets

y Seek advice from Group Legal

12

8 . 8 T R A D E A S S O C I AT I O N S A N D I N D U S T R Y C O N F E R E N C E SInvolvement in trade associations and industry conferences often involves a risk that informal discussion of confidential commercial matters will take place between competitors. Apart from the risks that arise from contacts with competitors, membership of a trade association itself can bring exposure to antitrust law problems.

Difficulties can arise in a number of ways:

y Restrictive agreements on behalf of members between trade associations and third parties;

y Agreements between an association and its members – for example, an agreement to abide by the rules and regulations of the association where these restrict competition; and

y Recommendations by a trade association to its members in relation to, for example, minimum prices, scales of charges and standard terms and conditions.

In light of these risks, Anglo American’s antitrust compliance policy requires employees to obtain the approval of the relevant Compliance Officer before joining a trade association or agreeing to attend an industry conference. It should also be noted that the fact that the company has historically belonged to a particular trade association does not mean going forward that participation in the trade association can be automatically assumed to be permissible.

This is especially true of trade or industry associations that were established prior to the introduction of a contemporary competition law regime in the relevant jurisdiction. In each case, a careful analysis will have to be performed of the commercial advantages of participation in the relevant trade association as compared to the potential risks arising from participation in the activities of that trade association.

If you are given permission to join a trade association or to attend an industry conference, you must exercise care to ensure that:

y You are either accompanied by a member of Group Legal or relevant Compliance Officer or provide a copy of the agenda or papers to be discussed at association meetings to Group Legal or relevant Compliance Officer for their review prior to any meeting;

y You do not discuss price or other “blacklisted” or confidential business matters with competitors either during formal or informal meetings or social conversation; and

y Any information sharing is subject to separate legal advice or control.

If, during a meeting, you are in doubt about whether confidential information is being exchanged or discussed or you are concerned that discussions infringe antitrust laws, you should leave the meeting and ensure that your departure is recorded in the association’s minutes. You should also keep your own notes of the meeting (which should also record if you leave the meeting) and a copy of the minutes for future reference and should report the incident to Group Legal or relevant Compliance Officer as soon as possible.

I N B R I E F :

y Get approval before joining or attending

y Review meeting agenda with a Compliance Officer

y Keep a register of trade associations/ conferences attended and identify to Compliance Officer

y Be vigilant and leave a meeting if you suspect improper activities

13

8 . 9 P R I C E R E P O R T I N GWhere Anglo American proposes reporting prices to a third party benchmark service provider (such as Platts) it is important that you consult with Group Legal to develop procedures appropriate for the relevant business unit to mitigate any risks arising from the potential for price co-ordination, or the manipulation of benchmark prices.

While this is an evolving area with increased regulation being proposed, the key principles that need to be adhered to when price reporting are:

y Accuracy: It is important to ensure that all trades are verified before being reported to ensure accurate reporting and there should be a system in place to address any reporting errors. Under no circumstances should reports be made on the basis of speculation or gossip and third parties (such as brokers and agents) should not be permitted to report on Anglo American’s behalf.

y Completeness: In order to avoid accusations of selective reporting, it is important to establish a clear framework for which trades will be reported to the benchmark service provider. It is therefore advisable to adopt a consistent approach within the relevant business unit and, to the extent relevant, across the Group on the types of trades which should be reported and put systems in place to ensure that all such trades are captured.

y Control: Only authorised employees who have received the appropriate training are permitted to report prices to a benchmark service provider and a list of all such authorised employees should be kept up to date. Employees, even where they are authorised employees, should not provide the benchmark service provider with market commentary or comment on the benchmark service provider’s methodology without consulting Group Legal and any concerns should be escalated internally through the appropriate channels.

y Independence: All reports to the benchmark service provider should be made independently and not in co-operation with any competitors. Under no circumstances should details of Anglo American’s price reporting be communicated with third parties without first obtaining approval from Group Legal.

y Integrity: Only bona fide trades should be reported to the benchmark service provider and trades should not be carried out for the purpose of influencing the benchmarking assessment.

There is an increased competition law risk associated with the disclosure of pricing information, so it is important that Group Legal be informed and consulted prior to engaging in any price reporting activity

I N B R I E F :

y Ensure that any price reporting adheres to the principles of Accuracy, Completeness, Control, Independence and Integrity

y Consult Group Legal before engaging in any price reporting

14

8 . 1 0 D O ’ S A N D D O N ’ T SThe following are some guidelines for compliance with EU antitrust law with respect to dealings with competitors:

D O N ’ T y Speak to, or communicate with, a competitor

concerning:

– Individual prices (both selling prices and those charged to suppliers), price changes, discounts, rebates, trade margins, credit terms and the like;

– Quantities to be sold or to be produced or planned levels of capacity;

– The geographic areas into which Anglo American and/or the competitor will sell or is/are expected not to sell; or

– The customers to whom Anglo American and/or the competitor will sell or is/are expected not to sell or the content of a bid or the decision not to submit a bid in response to a call for bids; or

y Exchange with competitors any data that would normally be regarded as a business secret.

D O y Openly end your participation in any meeting or

other communication if a competitor attempts to start an improper discussion;

y Keep antitrust law in mind whenever you have contact with a competitor, even on an informal or purely social level;

y Decline to discuss any “risky” topic if a competitor brings it up;

y Learn market intelligence from customers and reputable third party sources and not from competitors; and

y Record the source and date of receipt of all market intelligence.

C O N S U LT G R O U P L E G A L O R R E L E VA N T C O M P L I A N C E O F F I C E R

y Whenever you have doubts about the compatibility of your business behaviour with antitrust law;

y Before entering into any kind of agreement with a competitor;

y Before participating in an information exchange programme with a competitor (such as bench marking exercises);

y Before agreeing to attend an industry conference or joining a trade association;

y Before agreeing to participate in any price reporting arrangements with any independent third parties or otherwise;

y In relation to the implementation and operation of joint venture arrangements or joint procurement arrangements with competitors; and

y After receiving any written or oral communication from a competitor, which you deem questionable or worse.

A consolidated list of Do’s and Don’ts is attached as Annex 7.

15

8 . 1 1 G U I D A N C E F O R A G R E E M E N T S B E T W E E N C O M P E T I T O R S ( H O R I Z O N TA L R E L AT I O N S H I P S )

Certain agreements with competitors will not breach antitrust law because they are considered to be justified in terms of the economic benefits which they produce consumers. Certain types of restrictive agreement will not breach competition law where they improve the production or distribution of goods or promote technical or economic progress, provided consumers receive a fair share of the resulting benefit and the agreement does not contain unnecessary restrictions on competition and does not substantially eliminate competition in the relevant market.

The Commission has produced specific guidance on certain types of co-operation between competitors (including, in particular, research and development, commercialisation, production, purchasing and standards) and two “block exemptions” for research and development and “specialisation” agreements respectively. It is important to note that the block exemptions above apply only in narrowly defined and specific circumstances. If you intend to enter into any agreement with a competitor which might fall in any of the categories referred to above, seek guidance from Group Legal.

I N B R I E F :

y Certain types of agreements with competitors can be permissible under EU antitrust laws on the basis that they produce efficiencies, of which consumers receive a fair share

y Seek guidance from Group Legal before entering into any agreement with a competitor

8 . 1 2 G U I D A N C E F O R A G R E E M E N T S B E T W E E N C U S T O M E R S , S U P P L I E R S A N D D I S T R I B U T O R S ( V E R T I C A L R E L AT I O N S H I P S )

Article 101 of the EU Treaty not only applies to concerted practices between competitors but also to agreements and practices through which customers, suppliers or distributors are restricted in their freedom to do business. In particular, EU antitrust law, unlike the antitrust laws of South Africa, Australia, the U.S., China and Brazil, is concerned with the integration of the EU single market. Agreements with customers, suppliers and distributors which lead to a division of national markets (for example, via export bans or the prevention of parallel imports) are therefore strictly prohibited under EU antitrust law and may result in substantial fines (whereas such agreements may not be prohibited under the antitrust laws of other countries).

A new block exemption for vertical arrangements came into force in June 2010. By exempting certain agreements between a supplier and its distributors from the prohibition

on restrictive agreements under Article 101, the block exemption effectively sets the rules for the relationship between supplier and distributor, for example as regards exclusivity

and resale prices. The block exemption permits (without further scrutiny) certain vertical agreements provided that certain conditions are met.

The most important of these conditions are that:

y the market share of the supplier does not exceed 30% of the relevant market on which it sells the goods or services;

y the market share of the buyer does not exceed 30% of the relevant market on which it purchases the goods or services;

y the agreement does not contain so called “hard-core” restrictions; and

y the agreement does not exceed a certain duration.

Depending on the type of agreement other conditions may need to be fulfilled. However, in general, the block exemption on vertical agreements does not provide any exemption for agreements between competitors.

I N B R I E F :

y EU law prohibits division of integrated EU markets and prohibits - export bans within the EU - restrictions on where customers may resell goods within EU

y A block exemption may provide a safe harbour for certain vertical agreements

16

8 . 1 2 . 1 W H AT I S P R O H I B I T E D ?

E U / E E A“Hard-core” restrictions between suppliers and their customers which are always prohibited include:

y Export bans, that is, restrictions on reselling from one EU member state to another even if the original sale is from outside the EU;

y Resale price maintenance, that is, an agreement that any resales must be at a specific price or not less than a minimum prices; and

y Geographical and customer restrictions, that is, restrictions on the area into which and customers to whom, the buyer may sell goods or services. This prohibition is, however, subject to some exceptions – in particular, it is permissible to place such restrictions on a company’s wholesalers and distributors.

E U / E E A A N D O T H E R J U R I S D I C T I O N SOther provisions which may breach Article 101, depending on their terms and the market power of the parties, include:

y Exclusive dealing obligations (obligations or incentives which make the buyer purchase all or almost all of their requirements for particular goods or services from one supplier);

y Exclusive distribution agreements, whereby a supplier agrees to sell its products to one distributor only for resale in a particular territory; and

y Exclusive supply arrangements, whereby the supplier is obliged, either directly or indirectly to sell to only one buyer.

There is greater variation between countries in the rules governing vertical relationships than relationships among competitors, and the relevant rules in South Africa, Australia, the U.S., China and Brazil are summarised in the

country-specific annexes to this document. Review these annexes carefully if your proposed conduct occurs in or otherwise affects these jurisdictions, as the laws in those jurisdictions may be more strict than those applicable in the EU.

I N B R I E F :

y Hardcore restrictions always prohibited

y Resale price maintenance and geographical and customer restrictions are not permitted

y Greater variations between countries of regulations governing vertical relationships

8 . 1 2 . 2 W H AT I S P E R M I T T E D ?Certain agreements fall outside the scope of Article 101 and so do not infringe antitrust laws, namely, intra-group agreements (for example, between a parent and a controlled subsidiary company) and agreements between a company and its agents (provided there is a true agency relationship).

I N B R I E F :

y Intra-group agreements and true agency agreements generally do not create antitrust issues

8 . 1 2 . 3 W H E N T O S E E K G U I D A N C EThe golden rule is to consult Group Legal whenever you enter into an agreement or engage in a practice which restricts a customer or supplier in its ability to do business. This includes agreements with customers, suppliers and distributors that are part of the Anglo American consolidated group but that have some outside shareholders.

I N B R I E F :

y Seek guidance from Group Legal before imposing restrictions on how your customers or suppliers do business

17

8 . 1 3 D O ’ S A N D D O N ’ T SThe following are some guidelines for compliance with antitrust law with respect to dealings with customers, suppliers and distributors. Please also refer to the country-specific annexes in relation to the relevant additional rules applicable in other countries.

E U / E E A

D O N ’ T y Prohibit a customer/distributor from exporting

products from one EU/EEA state to another;

y Prohibit the sale of goods into the EU/EEA;

y Apply price increases to an exporter on a different basis than to locals;

y Discourage a customer or distributor from exporting or importing your products; in general, do not prevent or discourage parallel imports; or

y Prohibit responses by distributors to unsolicited orders (passive sales) from outside their territory.

However, you can restrict distributors from actively seeking orders from outside of their territory.

A L L J U R I S D I C T I O N S

D O N ’ T y Require a customer/distributor to adhere to

minimum or fixed resale prices or profit margins; the communication of recommended resale prices is lawful as long as you do not put pressure on your distributors to observe these prices; or

y Induce resellers not to discount, for example, by giving special deals to resellers who agree not to discount.

D O C O N S U LT G R O U P L E G A L O R R E L E VA N T C O M P L I A N C E O F F I C E R

y If a customer or supplier is also a competitor;

y Before you agree with a customer not to sell to its competitors;

y Before you restrict a customer or distributor in relation to resales of your products;

y Before you threaten to stop or limit purchasing from a supplier because the supplier is dealing with one or more of your competitors;

y Before terminating a distribution agreement; or

y If you have any doubts about the legality of your actions.

A consolidated list of Do’s and Don’ts is attached as Annex 7.

18

9 . A R T I C L E 1 0 2

EU antitrust law not only prohibits anti- competitive collusion between companies, it also prohibits the abuse by dominant companies of their dominant market position. Particular examples of “abuse” of a dominant position can include:

y Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

y Limiting production, markets or technical development to the prejudice of consumers;

y Applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or

y Making the conclusion of transactions subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, are not ordinarily connected with the subject of such transactions.

Article 102 regulates unilateral conduct of a company; “concerted activity” need not be shown. However, a dominant position can be held either unilaterally or jointly.

Infringements of Article 102 may lead to serious fines. In fact, some of the highest individual fines in the history of EU antitrust law have been imposed for abuses of dominant market positions. In the Microsoft

case, for instance, the defendant was fined €497 million for refusing to supply its competitors with information necessary for their products to interoperate with Windows and for tying its Windows Media Player product with its Window PC operating system. Subsequently, in July 2006, the Commission imposed an additional penalty of €280.5 million for non-compliance with its earlier decision. More recently in May 2009, the Commission fined Intel €1.06 billion (4.15% of its total worldwide (i.e. consolidated group) turnover in 2008) for breach of Article 102. Intel was found to have abused its dominant position by, among other things, providing substantial rebates to a leading EU computer retailer conditional on it selling only Intel-based personal computers.

I N B R I E F :

y Abuse of a dominant market position is prohibited even if truly unilateral conduct

y Infringements can lead to serious fines

8 . 1 4 T H E L I C E N S I N G O F I N T E L L E C T U A L P R O P E R T YArticle 101 also applies to agreements relating to the licensing and assignment of intellectual property rights to third parties. A block exemption exists for certain “technology licensing” agreements, in particular the licensing (and in some cases the assignment) of patents, know-how and/or software copyright (or combination thereof) entered into between two independent businesses.

Such agreements are block exempted from the application of Article 101 where the:

y combined share of the parties in the relevant technology and product market does not exceed 20% (where the parties to the agreement compete); or

y share of each party in the relevant technology and product market does not exceed 30% (where the parties to the agreement do not compete).

Where these “safe harbour” market share thresholds are not exceeded, the block exemption will not apply if the agreement contains certain “hardcore” restrictions, which vary according to whether or not the parties to the agreement are competitors.

The parties may also benefit from the block exemption where the agreement contains provisions which relate to the sale and purchase of products or to the licensing

of other intellectual property rights, provided that those provisions do not constitute the primary object of the agreement and are directly related to the production of the contract products.

By contrast, the block exemption for vertical agreements referred to in section 8.12 above applies to provisions relating to the licensing of intellectual rights provided that the licence is not the primary object of the particular agreement, but is, nonetheless, directly related to the supply of goods or services.

I N B R I E F :

y A block exemption may provide a safe harbour for certain intellectual property licences

y The application of the block exemption varies according to whether the parties are competitors

y Seek guidance from Group Legal before imposing restrictions on a party’s use of the intellectual property and/or the products to which it relates

19

1 0 . W H AT C O N S T I T U T E S A D O M I N A N T P O S I T I O N ?

Generally speaking, a company holds a dominant position if it is able to act in the market independently of its competitors to an appreciable extent. Whether this is the case depends on numerous factors, such as market structure, financial strength, technical resources, barriers to entry to the market, etc. One of the most important indicators of dominance is market share.

As a rule of thumb in the EU:

y A business holding a share of more than 40% of a relevant market will usually be regarded as dominant especially if its nearest competitor has less than half of its market share;

y With a market share below 30%, dominance exists only under exceptional circumstances; and

y Market shares between 30% and 40% require a more detailed analysis, with particular regard to the market shares of other competitors.

The relevant market shares that may give rise to a dominant position differ from jurisdiction to jurisdiction.

In order to apply this concept, the definition of the relevant product and geographic market is of paramount importance. Usually, the product markets are defined on the basis of demand substitutability. This means that all products which, from the point of view of the consumers, are substitutes by reason of their characteristics, price or use, will belong to the same market. This is determined by applying a hypothetical test: how would customers react to a small (5-10%) but permanent increase in the price of product A? If a small but permanent increase in the price of product A would result in customers switching to product B as a readily available alternative, and doing so is to an extent sufficient to make the price increase unprofitable, then product B is included with product A within the relevant market. The result is a broader market, and generally less likelihood of a finding of dominance.

The relevant geographic market may be as small as the territory of a single EU Member State or even a part thereof. While merger control decisions from the EU Commission provide a valuable indication of how the Commission might define a market, merger control and infringement procedures for abusive behaviour can produce different approaches. Merger control focuses on the future development of markets, but particular behaviour occurs. This usually means that markets are defined more narrowly in infringement procedures than in merger control cases. You should seek legal advice where there is any doubt as to whether a dominant position may be held, even if this would only be in a narrow market segment.

It is important to remember that it is not an offence to have a dominant position or to acquire a dominant position owing to the quality of our products or our mineral reserves. Our antitrust compliance programme is not intended to limit us from competing vigorously

in the markets, even if this will lead to our market share exceeding 40%. The prohibition is on abuse of a dominant position. In all cases, if you have concerns about whether the Company holds a dominant position so that its practices may be subject to scrutiny from a competition perspective you should speak with Group Legal or relevant Compliance Officer.

I N B R I E F :

y A dominant position can exist with a 40% market share

y Market shares are determined in relation to products and areas – will a price increase lead to the purchase of a different product or a purchase from a different area?

y Having a dominant market position is not illegal – abuse of a dominant position is illegal

20

1 0 . 1 W H AT C O N S T I T U T E S A N A B U S E ?It is impossible to draw up a complete catalogue of behaviour which is prohibited under Article 102.

Generally speaking, a business in a dominant position is prohibited from:

y Refusing or impeding effective competition, for instance by deterring new market entrants; and

y Exploiting suppliers or customers.

Anti-competitive motivation can often turn otherwise acceptable behaviour into abuse.

In any case, if you deal in a market where Anglo American has a dominant position, you should not engage in any of the following conduct:

D I S C R I M I N AT O R Y P R I C I N GA company holding a dominant position must not discriminate in the prices it charges or pays or in its terms of dealing with similar customers or suppliers, unless there is an objective business reason to do so. This means in particular that, in markets where Anglo American is dominant, it must not operate a pricing scheme that puts some customers or suppliers at a disadvantage compared to others, unless there are cost differences between these customers or suppliers that justify a price differentiation. A difference in price may, in principle, be justified if it reflects cost differences (e.g. higher sales volumes which enable production at lower costs).

In some jurisdictions, such as the U.S. and China, there is a separate offence in respect of price discrimination even where the seller is not dominant in a market.

E X C E S S I V E P R I C I N GA business with a dominant position may not charge excessive prices and thus exploit its customers. By the same token, it may not impose other unfair trading conditions on its customers or suppliers.

Clear guidelines do not exist as to what is an excessive price. A price which includes unreasonably high profit margins may be found to be excessive. For a dominant business, it is most dangerous to pursue a price strategy where – for identical products – a lower price is charged in one geographical market (where competition exists) than in another (where the business is dominant). The EU Commission may well compare these prices and find that the prices charged in the dominated market are abusive, unless there are objective justifications for the price differentiation (transport costs, customs duties, taxes, currency exchange values and the like).

P R E D AT O R Y P R I C I N GThe term “predatory pricing” refers to unusually low prices charged by a dominant undertaking if the objective or effect is the elimination or coercion of competitors or the deterrence of new market entrants.

Prices below variable costs are normally regarded as being predatory. In some jurisdictions, prices below total costs are predatory if they form part of an overall plan to eliminate a competitor.

Fidelity Rebates and Exclusive Dealing Loyalty or fidelity rebates or turnover related discounts granted by dominant businesses in return for securing all or an increased proportion of the business of customers may infringe Article 102 in particular where:

y The customer takes all or a very large proportion of its requirements from the supplier as a result of an exclusivity requirement or fidelity rebate;

y Price advantages granted are not cost reflective;

y The rebate structure creates disincentives to purchasing competitors’ products (i.e. where there are very large stepped discounts which encourage a customer to place significant orders with the supplier in order to meet the next target); or

y The rebate offered is “across the board,” i.e. it is calculated on overall purchases of products which fall into different product markets.

These rebates and discounts may infringe Article 102, notwithstanding that a customer willingly accepts the obligation or in fact pressures the supplier to offer such a rebate/ discount.

L O N G -T E R M E X C L U S I V E D E A L I N GEntry by a dominant business into a long-term, exclusive contract may constitute an abuse where the effect of the arrangement is to foreclose competitors or deter new entrants or where such an agreement forms a network of similar agreements and accordingly restricts competition.

R E F U S A L T O S U P P LYUnder normal circumstances, any business is free to decide to whom it wants to sell its products. If, however, a business holds a dominant position, it may only refuse to sell to customers if it has an objective justification to do so. It is not permitted to refuse to supply where a customer is, or may become, a competitor of the dominant business in a downstream market, and where a refusal to supply this customer would bar him from market entry. Here, it is no defence to argue that the customer is in competition with the dominant business and that supplying this customer could damage the dominant business’s business interests. Refusal to supply is particularly dangerous where a dominant company discontinues supply to an existing customer unless there is some objective justification for discontinuing supply.

Examples for objective justification to refuse supply include shortage or non-availability of the product concerned or insufficient creditworthiness of the customer.

21

A refusal to supply is particularly likely to infringe antitrust law where the refusal is with respect to access to an “essential facility”. This is a facility or piece of infrastructure, without access to which another market player cannot provide services to its customers.

In some jurisdictions, for example, Australia and South Africa (in respect of dominant firms), there are specific laws enabling third parties to obtain access to “essential facilities”. These provisions may apply to the mining sector, for example, third parties have attempted to use the law to gain access to railway track used for transporting coal between coal mine and port.

I M P O S I N G S U P P L E M E N TA R Y C O N D I T I O N S O N C U S T O M E R S O R S U P P L I E R SA dominant business must not exploit its dominance by imposing on its customers or suppliers supplementary conditions which, by their nature or according to commercial usage, are not ordinarily connected with the subject of these contracts. Even more important, as a dominant business you may not make the sale of a product for which you have dominance dependent upon your customer acquiring other products or services from you as well. This practice is generally referred to as “tying” or “bundling”. Dominant companies should be very careful when combining the sale or purchase of different products or services.

I N B R I E F :

y A dominant business may not:

– refuse or impede effective competition

– exploit suppliers or customers

y If Anglo American has a dominant position in a particular market it must:

– act fairly towards its customers and suppliers

– follow objective criteria for decisions in respect of customers, suppliers and distributors

1 0 . 2 D O ’ S A N D D O N ’ T SIn markets where Anglo American may have a leading market position, consult Group Legal or relevant Compliance Officer:

y Before applying different prices towards equivalent customers or suppliers;

y Before seeking to charge very low or very high prices;

y Before offering loyalty or target rebates;

y Before refusing to deal with a customer or supplier (either existing or new);

y Before making the sales of your product to a customer dependent on the customer acquiring another produce or service;

y Before adopting any practices that may appear to be “targeted” against a certain competitor or a potential new market entrant (for example, deliberately charging very low prices so that the competitor or entrant may find it difficult to remain in or enter the market); and

y Before entering into long-term exclusive arrangements.

A consolidated list of Do’s and Don’ts is attached as Annex 7.

22

1 1 M E R G E R C O N T R O L

Joint ventures and mergers and acquisitions often raise antitrust issues which can require notification to the EU Commission, national competition authorities or competition authorities elsewhere in the world. If merger control rules apply, these may require that completion/implementation of the transaction be suspended until merger clearance is obtained or fines can be levied and/or the transaction rendered invalid. Accordingly, consult Group Legal in relation to proposed transactions from the earliest stage of negotiations.

I N B R I E F :

y Most merger and acquisitions transactions by Anglo American require pre-clearance with antitrust regulators

1 2 . A W O R D O N I M P R O P E R A P P E A R A N C E S

Compliance with antitrust law is not only a matter of abiding by the law but also of avoiding improper appearances. Competition authorities rarely have unambiguous evidence of a violation and are accustomed to drawing inferences from vague or circumstantial evidence. As a result, misinterpretation of innocent but ambiguous statements is a distinct possibility. Accordingly, it is not sufficient to comply with the law, it is also necessary to avoid any appearance of inappropriate activities. Careless or inaccurate statements in correspondence or discussions with outsiders, or internal memos, emails or even notes on other written documents may be used as evidence against Anglo American in a competition investigation. Email messages are a particular source of concern, as they are often written without much thought for how they may be read or misread, may be taken out of context and often may be recovered even if the file is deleted. Finally, you should expect that if there is an investigation or an examination of a potential acquisition or disposal, regulators will have access to budgets, business plans and minutes of meetings (including informal meetings) and will see these documents as important sources of information on the Company’s intentions and behaviour and its view of the relevant markets.

The following are examples of words or expressions which may be subject to misinterpretation. Statements in a marketing plan or report such as “Competitor X will fall into step with our measures” or “Competitor X will increase his prices by 10% shortly” may be construed as evidence of co-operation between competitors in relation to pricing even if such statements are the result of an entirely independent market assessment. In addition, avoid certain phrases that can have negative connotations from an antitrust law perspective, for example: “foreclose competitors”, “reduce or eliminate competition or a price-cutting competitor”, “raise barriers to entry”, “entrench our dominant position”, “lead to more responsible pricing”, “call for supplier market discipline”, “send competitors a signal” or “support, follow or lead a price increase”.

Keep in mind that a company may be asked years after such documents have been written to rebut the allegation that such statements point to an illegal practice. When writing about competitors or the market, you should always ask yourself how a suspicious antitrust investigator might look upon your writings or behaviour.

Nothing in this section is intended to suggest that you may destroy or remove documents otherwise than in accordance with proper document retention practices. Please also refer to section 12.3 of this Manual, which deals with document retention in the context of investigations by competition authorities.

I N B R I E F

y Antitrust regulators have broad powers to inspect companies’ premises, files and computer records and even the homes of employees

y Consider how your emails and documents may be misinterpreted – draft as if the regulator is looking over your shoulder

y Don’t attempt to destroy compromising documents – consult Group Legal

23

1 3 . I N V E S T I G AT I O N S B Y C O M P E T I T I O N A U T H O R I T I E S

W I T H I N T H E E U / E E AThe EU Commission, being the main “guardian” of the EU treaties, is responsible for monitoring compliance with EU antitrust law. Most powers in this respect are exercised by the Directorate General Competition (“DG COMP”).

DG COMP officials have far-reaching powers to investigate companies and obtain information if there is the suspicion of anti-competitive behaviour. These powers include the right to conduct investigations on company premises without prior notice (so called “dawn raids”) and on private premises with judicial authorisation (“home raids”). National competition authorities have similar powers and the EU Commission and national competition authorities often co-operate in relation to investigations.

I N O T H E R J U R I S D I C T I O N SA number of countries have entered into co-operation agreements with the EU and with other antitrust authorities or have enacted legislation which enables them to use some or all of the powers they have for domestic criminal investigations to assist foreign authorities and to exchange confidential information about antitrust investigations. This means that a non-EU jurisdiction, for example the U.S. or Australia, can launch a dawn raid in its jurisdiction to assist the EU Commission in its search for documents and vice versa. Under the co-operation agreement between the EU and South Africa (referred to in section 2) the EU Commission may request that the South African authorities conduct a dawn raid to assist an EU investigation and vice versa.

In addition, many countries around the world have investigatory powers to assist enforcement of their antitrust laws. Accordingly, although there are differences in the nature of these powers between jurisdictions, the antitrust authorities in South Africa, Australia, the U.S., Brazil, China and a number of other countries have the power to investigate breaches of their own antitrust laws via on the spot investigations and other means. This manual deals only with the specific aspects of EU investigations. However, if you have any queries about the nature of investigations in other jurisdictions, please contact Group Legal for specific guidance. Finally, the EU Commission and most national agencies now also have the power to interview staff over the phone or at the Commission’s or the company’s premises, provided that the individual consents.

I N B R I E F :

y Antitrust regulators have broad powers to inspect companies’ premises, files and computer records and even the homes of employees

y Through international agreements, regulators in different jurisdictions co-operate to obtain and share evidence

24

1 3 . 1 D AW N R A I D S B Y T H E E U C O M M I S S I O NIf an investigation occurs, it will be in the company’s interest to have it conducted in a controlled manner. This requires some basic knowledge of DG COMP’s investigation powers. In addition, certain preparatory measures must be taken.

The EU Commission can carry out compulsory or voluntary investigations. If a cartel is suspected, the Commission will almost always carry out a compulsory investigation often by way of a “dawn raid”, in which the investigators arrive at the company’s premises without warning. The investigators are authorised to:

y Inspect books and other business records (though not exclusively the focus will usually be on the IT system, which may include mobile devices);

y Make copies or take excerpts of such records;

y Request oral explanations on site; and

y Enter all rooms, premises and means of transportation of the company as well as the premises of its employees.

If the company refuses to allow, or delays, the investigation, fines may be imposed. For example, companies have been fined for breaching seals put in place by investigators during a dawn raid to ensure potential evidence remained undisturbed and for delaying the Commission’s inspection by waiting for

the arrival of external legal counsel or planning how to respond . Moreover, national officials accompanying the Commission officials may have a search warrant allowing them to force their way into rooms and to search for documents themselves. However, the powers of the investigators are not unlimited. In particular, the investigators may not require (i) documents that are protected from disclosure under rules of attorney-client privilege; (ii) responses to questions, orally or in writing, that would infringe the attorney-client privilege or the privilege against self-incrimination; or (iii) documents or any other information on matters that fall outside the scope of the investigation. While you should understand these limitations, you should consult with Group Legal, your Compliance Officer or external counsel before you refuse to supply documents or information requested by investigators as a failure to comply with the Commission could amount to obstruction and result in significant fines for Anglo American.

I N B R I E F :

y Be aware of the powers, and limits on the powers, of the dawn raid investigators

y You must not frustrate the investigation or interfere with any potential evidence

25

1 3 . 2 D O ’ S A N D D O N ’ T SThe following are some key do’s and don’ts for dealing with dawn raids. Please refer to the “Golden Rules” for dealing with dawn raids at Annex 6 to this manual for further instructions on how to respond to a dawn raid.

D O y involve internal and external legal counsel promptly

– contact details will be provided by the Compliance Officer in each relevant jurisdiction;

y co-operate with the inspectors fully and actively within the scope of their mandate and in accordance with guidance from legal counsel;

y act professionally, remain calm and ensure that the response is co-ordinated efficiently;

y keep a full note of everything that happens (where the inspectors go, all questions asked and answers given, what hard copy and electronic documents they request/ review, any items of dispute);

y follow legal advice and instructions given by the nominated response co-ordinator;

y ensure inspectors act only in accordance with their mandate (i.e. any authorisation or warrant);

y seek to protect Anglo American Group’s legal rights during the investigation;

y ensure internal emails remind employees of obligations not to destroy or delete documents;

y get the PR right – prepare an appropriate holding statement with input from Group Legal/external counsel.

D O N ’ T y be hostile or obstruct the inspection;

y conceal or destroy documents or data;

y reverse any procedures put in place by the inspectors in respect of the use of electronic communication and the use of software or hardware (for example unblocking email accounts);

y be too compliant (e.g. do not volunteer documents, answer more broadly than the question asked);

y make any admissions without obtaining legal advice first;

y email or communicate with external parties in connection with the inspection or wider investigation unless authorised by legal counsel;

y send emails or communicate internally other than as required to comply with the inspection or as set out in these guidelines;

y compromise, tamper with or break any seals or attempt to enter any repository or area secured by the investigators;

y provide false or misleading information or answers; and

y speculate about the possible outcome of the investigation.

1 3 . 3 D O C U M E N T R E T E N T I O NAlthough laws differ between jurisdictions, it is Anglo American’s policy that whenever there is reason to believe that a regulatory or governmental investigation or other legal proceeding is pending or is about to be commenced, employees must not destroy or remove business records, documents or other records which may be relevant to the investigation or legal proceeding. This applies to emails and other electronic records as well. Even if there are no investigations or legal proceedings underway, it is still bad policy to destroy records of violations of law, because forensic efforts, electronic or otherwise, are frequently able to reconstruct records from other sources and the absence from our files of relevant records will reflect badly on Anglo American and almost inevitably will itself constitute a separate infringement of law. Should such materials come to light, employees are directed to preserve them and inform Group Legal or relevant Compliance Officer.

Always consult with Group Legal or the relevant Compliance Officer before destroying any documents relevant to antitrust law or any ongoing investigation or legal proceeding.

I N B R I E F :

y Do not destroy or remove business records, documents or other records which may be relevant to the investigation or legal proceedings

1 In 2008 E.ON was fined €38 million for breaching seals and Koninklijke Volker Wessels Stevin received a 10% uplift (by €1.7 million) on its fine for delaying the investigation for 47 minutes by waiting for the arrival of external legal counsel. Separately a fine of €30.8 million was imposed on a Polish telecoms operator for delaying the start of an inspection by over an hour. The case team was left waiting in the reception area whilst the duty manager organised an internal meeting on how to handle the raid

26

1 4 . Q U E S T I O N S A N D W H AT T O D O I F Y O U D I S C O V E R A B R E A C H

If you have any questions about Anglo American’s compliance policy, this Manual or the legality of your or your competitors’ actions, please contact Group Legal or relevant Compliance Officer.

If you believe that your competitors are acting in breach of antitrust law you may complain to the relevant antitrust authorities to take steps to stop the infringement. In addition, in many jurisdictions you may be entitled to leniency in circumstances where you “blow the whistle” on anti-competitive agreements with competitors in which you are involved. In all cases contact Group Legal or relevant Compliance Officer before acting.

The key message is “Speak Up” – if you are in any doubt as to whether any conduct (including the conduct of businesses with which Anglo American may interact) complies with antitrust law, please get in touch with Group Legal. Invariably, your instinct will be right. Ultimately, only the individuals within Anglo American can ensure that the Group continues to have a culture of compliance by speaking up.

I N B R I E F :

y Phone Group Legal or your Compliance Officer immediately if you discover or suspect a breach of law

y In certain jurisdictions, leniency may be available to “whistle-blowers”

27

A N N E X 1 - S O U T H A F R I C A

A N T I T R U S T L AWIn South Africa, the Competition Act prohibits:

y direct or indirect price fixing (both selling and purchase prices) or the direct or indirect fixing of trading terms between competitors (including actual and potential competitors), market division or bid rigging between competitors;

y agreements, arrangements or concerted practices between competitors in a horizontal relationship and between parties in a vertical relationship (as between a company and its customers or suppliers) which will have the effect of substantially lessening or preventing competition within South Africa;

y the practice of minimum resale price maintenance;

y any conduct that would amount to an abuse of dominance by a firm which enjoys market power or holds a market share of more than 35% (which includes excessive pricing (section 8(a)), refusing a competitor access to an essential facility when it is economically feasible to do so (section 8(b)), requiring or inducing a supplier or customer not to deal with a competitor (section 8(d)(i)), refusing to supply scarce goods to a competitor when it is economically feasible to do so (section 8(d) (ii)), bundling or tying (section 8(d)(iii)), predatory pricing (section 8(d)(iv)), and buying up a scarce supply of an intermediate good or resource required by a competitor (section 8(d)(v)); and

y price discrimination by a dominant firm, if such discrimination is reasonably likely to have the effect of substantially lessening or preventing competition.

E X E M P T I O N S F O R A G R E E M E N T S B E T W E E N C O M P E T I T O R SIn South Africa it is possible to obtain an exemption from the competition authorities from the application of the Competition Act to a prohibited agreement or practice, or category of agreements or practices, only in certain limited circumstances. In particular, it is only possible to apply for an exemption in circumstances where such ostensibly anti-competitive conduct contributes toward:

y the maintenance or promotion of exports;

y the promotion of the ability of small businesses, or firms controlled or owned by historically disadvantaged persons, to become competitive;

y a change in productive capacity necessary to stop decline in an industry;

y the economic stability of an industry designated to the South African Minister of Trade and Industry, after consulting with the Government Minister responsible for that industry; or

y the economic stability of an industry designated by the South African Minister of Trade and Industry, after consulting with the Government Minister responsible for that industry.

Unlike the EU, there is no provision for block exemptions for a range of designated agreements.

G U I D A N C E F O R A G R E E M E N T S B E T W E E N C U S T O M E R S , S U P P L I E R S A N D D I S T R I B U T O R S ( V E R T I C A L R E L AT I O N S H I P S )In South Africa certain “per se” prohibitions exist (i.e. always illegal without proof of anti-competitive effect) which cannot be justified by reference to any efficiency, technological or pro-competitive gains which arise as a result of prohibited conduct. One of these is the prohibition against the practice of minimum resale price maintenance.

28

A N N E X 2 - A U S T R A L I A

A N T I T R U S T L AWIn Australia, the Competition and Consumer Act prohibits:

y “cartel conduct” which includes price-fixing, restricting supply of goods or services, allocation of customers or geographic markets and bid-rigging between competitors. Cartel conduct is prohibited under Australian law without proof of any anti-competitive effect. Criminal sanctions can apply to cartel conduct, including substantial fines and imprisonment;

y contracts, arrangements and understandings which contain an exclusionary provision or which have the purpose, effect or likely effect of substantially lessening competition. Exclusionary provisions (i.e. agreements between competitors to restrict dealings with customers or suppliers) are prohibited without proof of any anti-competitive effect;

y mergers, or any acquisition of shares or assets, that are likely to have the effect of substantially lessening competition;

y corporations with a substantial degree of market power taking advantage of that power for an anti-competitive purpose; and

y certain vertical restraints, such as resale price maintenance, third line forcing and exclusive dealing (discussed below).

B L O C K E X E M P T I O N S F O R A G R E E M E N T S B E T W E E N C O M P E T I T O R SIn Australia, there is no provision for block exemptions in relation to designated agreements. Parties can, however, seek authorisation of certain agreements or parts of agreements which could otherwise breach the Competition and Consumer Act if the parties are able to show that the benefit to the public outweighs any anti-competitive effect.

The Competition and Consumer Act provides an exception for provisions in agreements that relate exclusively to the export of goods from Australia or to the supply of services outside Australia provided that full and accurate particulars of the provisions were given to the national competition body (the ACCC) within 14 days after the agreement was made. Particulars relating to the prices of goods or services are not required to be provided, but particulars of any method of fixing, controlling or maintaining such prices must be provided.

G U I D A N C E F O R A G R E E M E N T S B E T W E E N C U S T O M E R S , S U P P L I E R S A N D D I S T R I B U T O R S ( V E R T I C A L R E L AT I O N S H I P S )In Australia, exclusive dealing (i.e. imposing exclusive supply or purchase obligations, customer or territorial exclusivity) is prohibited if it has the purpose, effect or likely effect of substantially lessening competition in a market in Australia. Conduct which constitutes “third line forcing” (offering to supply on the condition that other goods or services are purchased from another supplier) and resale price maintenance are prohibited without proof of any anti-competitive effect.

D O ’ S A N D D O N ’ T SIn addition to the rules in Annex 7, remember the following rules in Australia:

D O y Notify the ACCC of any export agreement within

14 days if you require immunity for the export agreement under the Australian Act.

D O N ’ T y Supply goods or services on condition that the

purchaser acquires goods or services from a third party (or refuse to supply goods or services because the purchaser will not agree to that condition).

y Forget that an agreement may be lawful under the Australian Act, but still violate competition laws in other countries – if in doubt seek advice.

29

A N N E X 3 - U N I T E D S TAT E S O F A M E R I C A

A N T I T R U S T L AWIn the United States, the Sherman Act prohibits monopolisation, attempted monopolisation, or combinations or conspiracies to monopolise any line of commerce or in restraint of trade.

Also prohibited under the Sherman Act are the “blacklisted” agreements and practices discussed at section 8.3:

y price fixing between competitors;

y bid rigging;

y market allocations, agreements between competitors to divide territories or customers into exclusive markets;

y group boycotts, agreements between competitors refuse to deal with a particular person or group; and

y agreements between competitors to reduce or restrict capacity or output.

These are “per se” violations of antitrust law, illegal even without proof of anti-competitive effect, and they can be prosecuted both civilly and criminally. Individuals engaging in these activities personally on behalf of their Company can be criminally prosecuted, fined, and imprisoned.

It is possible to make legal business arrangements with competitors, but extreme caution must be exercised. Consult legal counsel before pursuing any of the following with a competitor: joint production, marketing, buying, or research and development; benchmarking or surveys; technology licensing; and mergers or acquisitions.

B L O C K E X E M P T I O N S F O R A G R E E M E N T S B E T W E E N C O M P E T I T O R SBlock exemptions for agreements between competitors are not recognised under U.S. antitrust law.

G U I D A N C E F O R A G R E E M E N T S B E T W E E N C U S T O M E R S , S U P P L I E R S A N D D I S T R I B U T O R S ( V E R T I C A L R E L AT I O N S H I P S )In the U.S., minimum resale price maintenance, whereby a supplier specifies the minimum retail price at which the distributor may sell the supplier’s product, and its opposite, maximum resale price maintenance, may be illegal under the Sherman Act.

Tying arrangements, obligating the customer of a specific product to buy additional products from the seller, may also be illegal under the Clayton and Sherman Acts.

In some circumstances, a unilateral refusal to deal with a customer or distributor may be illegal under the Sherman Act.

The Robinson-Patman Act makes it illegal to price the same products differently between customers when the price differences cannot be justified by differences in cost.

Certain other vertical practices may raise concerns and should be reviewed by Group Legal prior to implementation. These include vertical market allocations whereby a sale is conditional on agreement that the purchaser will not resell or locate a retail outlet outside of a designated market area, customer allocations such as a sale on condition that the purchaser will not resell to certain customers or classes of customers, reciprocal dealings such as a purchase on condition that the seller will buy goods sold by the purchaser or one of its affiliates, exclusive dealing contracts generally, and requirements contracts

30

A N N E X 4 - P E O P L E ’ S R E P U B L I C O F C H I N A

A N T I T R U S T L AWIn the People’s Republic of China (the “PRC”), the Anti-Monopoly Law of the PRC (“AML”) contains provisions that are similar to Article 101 and 102 of the EU Treaty.

Article 13 of the AML prohibits competing undertakings from entering into monopolistic agreements (horizontal agreements) for:

y fixing or changing prices;

y restricting the quantity of production or sales;

y sharing markets (on the supply or demand side);

y restricting the purchase of new technology or new equipment;

y restricting the development of new technology or new products; or

y collective boycotts.

Article 14 prohibits undertakings from entering into monopolistic supply or distribution (i.e. vertical) agreements for:

y fixing resale prices to third parties; or

y maintaining the minimum resale price to third parties.

Article 17 prohibits undertakings with dominant market positions (a greater than 50% market share) from abusing that dominance by engaging in any of the following (without objective justification):

y selling at unfairly high prices (excessive pricing) or purchasing at unfairly low prices;

y selling below cost (predatory pricing);

y refusing to trade with a counterparty;

y restricting a counterparty from trading with third parties;

y “tying” or imposing other unreasonable terms; or

y applying dissimilar terms to equivalent transactions (discriminatory pricing or terms).

B L O C K E X E M P T I O N S F O R A G R E E M E N T S B E T W E E N C O M P E T I T O R SIn China, there are no block exemptions for horizontal agreements as in the EU. Nor is there an established “rule of reason” test for determining when an agreement with anti-competitive effects may nonetheless be permitted due to countervailing, pro- competitive benefits. However, Article 15 of the AML allows a waiver of the application of the AML if undertakings are able to prove that the agreements concluded fall into certain categories (for instance where they improve technology or product quality, or reduce costs) and it can be shown that the agreement will not substantially restrict competition and will enable consumers to share in the resulting benefits.

However, the waiver regime is untested, and a waiver can only be claimed once the relevant authority has commenced an investigation (i.e. after the relevant conduct has been entered into). Legal advice should therefore be sought prior to entering into any arrangement or course of conduct where it is thought that a waiver may be needed.

31

A N N E X 5 - B R A Z I L

A N T I T R U S T L AWAnti-competitive practices are defined by Article 36 of the Brazilian Antitrust Law (Law No. 12,529/11) by reference to their actual or potential effects, irrespective of the subjective intention of the wrongdoer and specifically identifying as potential infringements conduct that could:

y limit, restrain or in any way restrict open competition or free enterprise;

y control a relevant market of a certain product or service;

y increase profits on a discretionary basis; or

y constitute an abuse of a dominant position in a certain market.

Paragraph 3 of Article 36 of the Brazilian Antitrust Law sets out a non-exhaustive list of specific acts that can be considered competition law infringements if they are capable of generating one of the harmful effects of Article 36 (regardless of whether there has been such an effect in practice).

Among the practices listed in Paragraph 3 are, for instance, cartels, collusive practices, tying arrangements, predatory pricing, exclusionary practices, practices giving rise to market foreclosure, bid-rigging, refusals to deal and so on.

Therefore, theoretically even anti-competitive practices which are considered “per se” violations (i.e. illegal even without proof of anti-competitive effect) in other jurisdictions are analysed in Brazil in light of the possibility of generating the harmful or negative effects of Article 36 and, also, in light of their possible benefits or positive effects in terms of market welfare and economic efficiencies.

Thus, as a rule, the Brazilian Antitrust Law prohibitions are violated only if the arrangements have an appreciable restrictive effect on competition that is not outweighed by pro-competitive benefits.

By and large, the finding of an appreciable effect is unlikely (but not impossible) if the parties’ combined market share is not at levels that would indicate dominance and is otherwise below certain levels – generally accepted as being 20%. Companies that hold greater than 20% of the relevant market are presumed to have a dominant position – although the antitrust authorities (CADE) may alter such thresholds in certain economic sectors and a dominance presumption may be rebutted having regard to the structure and the competition environment in the relevant market.

Generally, only benefits that can be shared by consumers are considered sufficiently important to outweigh an anti-competitive effect.

With respect to hardcore cartels and resale price maintenance, however, Brazilian antitrust authorities consider that, although the law does not establish a

“per se rule”, or a category of offences that are illegal without proof of anti-competitive effect, it implies that cartel conduct and resale price maintenance will be strictly scrutinised by noting that those practices almost always give rise to greater anti-competitive effects than pro-competitive benefits (if any) and therefore require “a more judicious application” of the rule of reason.

In Brazil, fines for antitrust violations range from 0.1% to 20% of the annual gross revenues of the investigated company in the year before the opening of the administrative procedure and in the field of the business activity in which the violation occurred. Officers or directors who are directly or indirectly liable for the violation are subject to fines ranging from 1% to 50% of the fine imposed on the company.

Some antitrust violations may also amount to criminal offences under the Economic Crimes Law and convicted offenders are subject to two to five years of imprisonment or a personal fine.

B L O C K E X E M P T I O N S F O R A G R E E M E N T S B E T W E E N C O M P E T I T O R SIn Brazil there is no provision for block exemption in relation to particular classes of agreements.

G U I D A N C E F O R A G R E E M E N T S W I T H C U S T O M E R S , S U P P L I E R S A N D D I S T R I B U T O R S ( V E R T I C A L R E L AT I O N S H I P S )Some vertical practices, i.e. practices between suppliers of products or services and other undertakings with which they relate in the same production chain, may also infringe the Brazilian Antitrust Law.

All vertical practices will be analysed by the Brazilian antitrust authorities under the rule of reason approach, pursuant to which the possible negative effects to competition associated with the practice concerned will be weighed against its economic efficiencies. The only vertical practice which is not analysed under the rule of reason is resale price maintenance. In Brazil this type of arrangement is assumed to damage competition and must be followed by enough efficiencies to be deemed legal.

J U R I S D I C T I O NThe Brazilian Antitrust Law is applicable to any conduct or act which produces, directly or indirectly, actual or potential effects over competition within the Brazilian territory, regardless of whether they are carried out within Brazilian territory or abroad.

N E W I N V E S T I G AT I V E P R O C E D U R E S I N B R A Z I L In line with other jurisdictions, the Brazilian antitrust authorities have been adopting sophisticated investigative tools, including dawn raids, inspections, leniency agreements and wire tapping. They have also entered into a number of co-operation agreements with foreign antitrust authorities.

32

A N N E X 6 - G O L D E N R U L E S F O R D AW N R A I D S B Y C O M P E T I T I O N R E G U L AT O R S

O V E R V I E W1. A “Dawn Raid” is an unannounced inspection of

records by a competition (or antitrust) regulator (such as the EU Commission and the UK’s Competition & Markets Authority or equivalent enforcement agency in any other country that has a competition law regime). “Dawn Raids” can happen at any time and prior warning is generally not given.

2. The inspectors have significant powers of investigation that enable them to find evidence of suspected infringements of competition law (including entering and searching business and private premises with a warrant).

– Subject to certain important exceptions detailed in these guidelines, the inspectors are entitled to examine any books and records related to the business that is being investigated, irrespective of the medium on which they are stored, and to take or obtain in any form copies of or extracts from such books or records. The inspectors can therefore search the IT environment and storage media (laptops, desktops, tablets, mobile phones, CD-ROM, DVD, USB-keys and so on), as well as hard copy documents.

3. The guidance contained in this document has been produced in the context of the enforcement of EU competition law. However, the guidance represents best practice and, so far as possible in light of local legal requirements, should be followed in all relevant jurisdictions.

G E N E R A L G U I D A N C E1. The response to a “Dawn Raid” can significantly

impact Anglo American Group’s ability to properly respond to any allegations of breach of competition law and to defend its position in any formal proceedings.

2. The first few minutes of an inspection are critical. While the investigation cannot be prevented or delayed, it is important to co-ordinate the response and ensure that legal counsel is involved from the earliest opportunity.

3. These guidelines are divided into two sections:

– The initial response – principally focused on the response by reception or security personnel;

– During the raid – the response of the business teams, including required IT support.

4. While specific guidance is given for each phase, there are certain “Do’s and Don’ts” which will apply at each phase of the “Dawn Raid”, as set out below.

NB Failure to comply with any legitimate requests of the investigators can result in significant penalties for the

Group.

The overarching message is that, subject to guidance from legal counsel (Group Legal or external), co-operate fully at all times – do not do anything to obstruct the investigation.

D Oinvolve internal and external legal counsel promptly – contact details will be provided by the Compliance Officer in each relevant jurisdiction

y co-operate with the inspectors fully and actively within the scope of their mandate and in accordance with guidance from legal counsel

y act professionally, remain calm and ensure that the response is co-ordinated efficiently

y keep a full note of everything that happens (where the inspectors go, all questions asked and answers given, what hard copy and electronic documents they request/ review, any items of dispute)

y follow legal advice and instructions given by the nominated response co-ordinator

y ensure inspectors act only in accordance with their mandate (i.e. any authorisation or warrant)

y seek to protect Anglo American Group’s legal rights during the investigation

y ensure internal emails remind employees of obligations not to destroy or delete documents

y get the PR right – prepare an appropriate holding statement with input from Group Legal/external counsel

D O N ’ T y be hostile or obstruct the inspection

y conceal or destroy documents or data

y reverse any procedures put in place by the inspectors in respect of the use of electronic communication and the use of software or hardware (for example, unblocking email accounts)

y be too compliant (e.g. do not volunteer documents, answer more broadly than the question asked)

y make any admissions without obtaining legal advice first

y email or communicate with external parties in connection with the inspection or wider investigation unless authorised by legal counsel

y send emails or communicate internally other than as required to comply with the inspection or as set out in these guidelines

33

y compromise, tamper with or break any seals or attempt to enter any repository or area secured by the investigators

y provide false or misleading information or answers

y speculate about the possible outcome of the investigation

T H E I N I T I A L R E S P O N S ESecurity and reception personnel must comply with the following guidelines to ensure the response can be efficiently and effectively co-ordinated from the outset:

1. IMMEDIATELY: Call your lawyer! Contact one of the lawyers in Group Legal and external legal counsel identified in your jurisdiction.

2. Co-operate fully and actively: The inspectors are entitled to gain immediate access to the premises – although they may be prepared (but not obliged) to wait a short period for legal counsel to arrive. Ask the inspectors if they are willing to wait and make constructive arrangements for the Inspectors in the meantime (e.g. providing site maps, organigrams etc) but do not obstruct the inspectors from commencing their search if they insist even if legal counsel have not yet arrived.

3. Obtain information:

y Time: Make a note of the time the inspectors arrived.

y Number of inspectors: Check and record how many inspectors there are.

y ID: Ask to see the ID cards/credentials of each of the inspectors. Photocopy each of these ID cards. If this is not possible, make a careful note of the names and positions of each of the inspectors and the organisation(s) that they are from.

y Official documents: The inspectors should have paperwork with them which evidences the authority to undertake the inspection and sets out the purpose of the visit (perhaps in the form of an official “decision” authorising the inspection or court search warrant). Even if they are not offered to you, ask to see inspection authorisation and purposes of investigation documents and fax or scan these to Group Legal or external counsel as soon as possible. Group Legal or external counsel will verify the authenticity of the inspection as soon as practicable.

y Anglo American Group staff named: Find out whose documents the inspectors want to review (name, department), and make a note of that.

4. Waiting room: If the inspectors are prepared to wait for the arrival of Group Legal or external counsel, show the inspectors into a waiting room (ideally, a separate room from the general waiting room for visitors so that the inspectors are not left waiting in an area or room where non-dawn raid related visitors may be present and (in any event) where no confidential information is kept).

y Explain that you will now take photocopies of the documents provided, make the necessary security/access arrangements and (if legal counsel has not yet arrived) contact the Anglo American Group employees the inspectors are requesting to visit.

y Security and health briefing – if not already provided, provide the necessary security and health and safety briefing for the relevant site.

y Provide the inspectors with badges to designate the inspectors and distinguish them from employees/external counsel.

y This process must be undertaken as swiftly as possible.

5. Photocopies: Have your notes and photocopied documents ready to give to a member of Group Legal or external counsel.

6. Ongoing support: Follow the directions of Group Legal/external counsel or any other designated Response Co-ordinator and support further as required during the investigation.

7. Commencement of inspections/access to employee offices: The inspectors may be willing to wait for a short period of time for legal counsel to arrive and/or for the initial formalities to be completed (e.g. arranging a room, obtaining security passes etc.).

y However, the inspectors are under no obligation to wait for any amount of time and they are entitled to gain immediate access to offices if they so request.

y The inspection can proceed in the absence of a lawyer (in-house or external). However make a note of requesting that the inspectors wait for legal counsel.

y If at any point the inspectors ask to commence their inspection, allow them to do so and do all you can to facilitate it (for example, unlocking doors).

Failure to do so will amount to obstruction for which for which the Anglo American Group could face significant fines!

y The inspectors must be allowed to access and use the office(s) of their choice. They may therefore insist on being shown into a specific office.

A N N E X 6 - G O L D E N R U L E S F O R D AW N R A I D S – C O N T I N U E D

34

If you refuse to do so this will amount to obstruction for which the Anglo American Group could face significant fines!

y Otherwise, if they are prepared to wait, identify a room (ideally a meeting room with no files or computers) in close proximity to the offices containing the files and equipment that the inspectors want to inspect, which the inspectors can use as their “base” for the duration of the inspection.

8. Accompany the inspectors: If Group Legal/external counsel is not present when the officials commence their inspection, ensure that they are accompanied at all times.

9. Questions asked: Make a contemporaneous written note of all questions asked by the inspectors and the answers given, or as soon as possible afterwards. Have these ready to give to a member of Group Legal or external counsel.

D U R I N G T H E I N V E S T I G AT I O N1. Organise an internal response team:

y Designate a Response Co-ordinator – if not done in advance this should be a member of Group Legal or, if not available, a senior executive based at the relevant site. The response team must include a dedicated in-house IT expert.

y Meet the investigators – the Response Co-ordinator (ideally with the designated IT expert – see below) should meet the inspectors and establish a protocol for engagement and to facilitate the inspection, including how to escalate/resolve any disputes. Arrange for a base area for the investigators with photocopying facilities

– provide assurances that Anglo American will co-operate fully and that employees will be notified of obligations to co-operate and preserve information.

y Copies of documents – documents collected by reception or security should be provided to Group Legal and transmitted to external counsel for review.

y Record any objections – where the inspection is being conducted without a warrant or without legal counsel present, ensure you note any objections to safeguard Anglo American’s position at a later stage in the proceedings but be aware that failure to allow the inspection to proceed risks heavy penalties.

y Designate “shadowers” – assign either Group Legal and/or external counsel and/or employees to:

– shadow the investigators at all times, but if no-one is available to “shadow”, do not obstruct the inspection;

– make a note of all questions asked, answers

given, all rooms, cabinets, cupboards, desks, files, documents, computers and computer files requested, examined and copied;

– make a note of which inspector requested access to which employees and which of their hard copy and electronic documents.

y Contact details – circulate mobile numbers of: (i) Response Co-ordinator; (ii) Group Legal; (iii) external counsel; and (iv) shadowers to each member of the response team.

2. IT:

y The response team must include a member of the IT team who is dedicated to providing expert technical support to the inspectors for the duration of the inspection. Inspections now focus almost predominantly on the IT environment and electronic storage media and resources need to be made available to facilitate this. The inspectors will search laptops, desktops, tablets, mobile phones, CD- Roms, DVDs, USB sticks, electronic diaries etc. The inspectors are likely to use their own forensic IT tools to search electronic storage and to require an electronic image of the IT environment to be captured and this is reviewed either on-site or at their premises – although the Anglo American Group will be able to request that a lawyer is present in the latter scenario.

y IT staff are required to comply promptly with the instructions of the investigators which may include:

– explaining the IT environment – IT team should understand and be prepared to explain to the inspectors in-house electronic storage infrastructure and limitations of the same (e.g. servers managed or accessible only by third party providers) as well as location of servers and data;

– blocking access to email;

– disconnecting computers from the network;

– removing and reinstalling hard drives from computers; and

– providing administrator access rights support.

y When such actions are taken, you must not interfere in any way with these measures (to do so would amount to obstruction for which the Anglo American Group could be fined) and all employees affected should be notified.

y Legal advice should be sought where any data accessible by Anglo American Group is stored in another legal jurisdiction.

Where any data is copied or imaged by the investigators, a copy should be requested.

3. Arrival of external counsel:

A N N E X 6 - G O L D E N R U L E S F O R D AW N R A I D S – C O N T I N U E D

35

y Check on credentials and scope

– external counsel to review copies of credentials of inspectors and scope of raid.

y Update on status – request a brief meeting to provide an update on status of inspection and any processes agreed with investigators.

4. Internal communications:

Once agreed with Group Legal, an email should be sent to employees advising of them of the inspection which should include a copy of these guidelines and remind employees:

y to fully co-operate with the inspectors;

y that they must not delete, destroy or conceal any information that may be relevant to the investigation or otherwise mislead the inspectors;

y not to break or compromise any seal affixed by the inspectors to any repository or room;

y not to reverse or circumvent any IT processes established by the inspectors; and

y not to inform third parties of the investigation.

It will be important to notify the PR/Comms team of the investigation so they can deal with any media inquiries.

5. Documents and copies:

Subject to 6 below, the inspectors are generally permitted to review all types of hard and electronic files and other records, manuscript notes, diaries etc.

y Usually only copies of documents need be provided – ensure three photocopies are made of each document (one for the inspectors, one for Anglo American Group and one for external counsel). Inspectors may however have the power to take original documents – in particular if they consider it reasonably necessary to preserve or prevent interference with the document.

y Make an inventory of all documents requested and copied – including making a reference to the location/file/computer drive/folder etc where obtained (include “post-it” notes to flag location in a file).

y Try to ensure documents are marked confidential when handed to the inspectors.

y Do not volunteer documents not requested by the inspectors.

6. Access to legally privileged documents:

Where a document or email is marked “legally privileged” or was created to request, or contains, legal advice, please contact a member of Group Legal or external counsel. Do not permit the document to be reviewed pending discussion with Group Legal or external counsel.

If there is a dispute as to whether a document is

privileged it should be placed in a sealed envelope for safekeeping pending resolution of the dispute at a later time.

7. Questions and answers:

Inspectors have the right to ask questions within the scope of the investigation – however there are limits:

y Where possible have a designated member of the response team to answer questions;

y Keep responses short, factual and to the point;

y Do not answer incriminating or leading questions without advice from legal counsel;

y Where you are unsure of an answer, explain this to the inspector and request that the question be addressed in writing to enable an accurate formal response – do not guess at the answer;

y Record all questions asked and answers given – use a dictaphone or recording device if possible;

y Do not give false or misleading information.

8. Before the inspectors leave:

Agree a daily and final wrap-up session with the inspectors to agree any outstanding items, obtain the inspectors’ records of documents taken and answers given by employees in response to their questions and otherwise try to confirm that the inspectors are comfortable with the level of support and co-operation provided by Anglo American Group.

9. Seals:

If the inspectors have affixed a security seal:

y ensure that it is clear that the seal must not under any circumstances be tampered with or broken;

y ensure that all employees have been informed not to compromise the seal and that procedures are put in place to ensure the seal is not breached inadvertently (e.g. by putting in place a security guard).

Anglo American Group could face significant fines if any seal is tampered with!

A N N E X 6 - G O L D E N R U L E S F O R D AW N R A I D S – C O N T I N U E D

36

D O y continue to co-operate fully and actively with the

inspectors within the scope of their mandate

y seek to retain documents subject to legal privilege – where disputed, ensure it is sealed in an envelope pending resolution

y seek to mark copies of documents as confidential or containing business secrets

y shadow inspectors at all times

y make a note of questions asked, responses given and documents reviewed and copied – and wherever possible retain an additional two copies of all documents provided to the inspectors

y to the extent you are able to answer, keep answers to questions brief, factual and to the point

y ensure that you are aware of and understand processes or restrictions established by the inspectors

y put in place procedures to ensure any inspector seals are not inadvertently compromised (e.g. by cleaners)

y seek legal advice if you are unsure of your rights or the extent of the inspectors’ powers

D O N ’ T y speculate or answer questions where you are unsure

of an answer

y volunteer information not requested

y disclose information not relevant to the purpose of the investigation

y disclose privileged documents (advice from, or communications with, legal counsel) without obtaining legal advice

y respond to any leading or incriminating questions, or make any admissions of any infringing conduct, without legal advice

y sign any documents prepared by the investigators without legal advice

y refuse to supply documents, or access to IT systems where you are able to do so

y refuse to respond to questions to which you are able to respond without legal advice

y allow investigators to remove original documents without legal advice

y tamper with or otherwise compromise in any way any seals attached by the inspectors to any rooms/cabinets/files

A N N E X 6 - G O L D E N R U L E S F O R D AW N R A I D S – C O N T I N U E D

37

A N N E X 7 - C O N S O L I D AT E D D O S A N D D O N ’ T S

D E A L I N G S W I T H C O M P E T I T O R S

D O N ’ T y Speak to or communicate with a competitor

concerning:

y individual prices (both selling prices and those charged to suppliers), price changes, discounts, rebates, trade margins, credit terms and the like;

y quantities to be sold or to be produced or planned levels of capacity;

y the geographic areas into which Anglo American and/or the competitor will sell or is/are expected not to sell; or

y the customers to whom Anglo American and/or the competitor will sell or is/are expected not to sell or the content of a bid or the decision not to submit a bid in response to a call for bids; or

y Exchange with competitors any data that would normally be regarded as a business secret.

D O y Openly end your participation in any meeting or

other communication if a competitor attempts to start an improper discussion;

y Keep antitrust law in mind whenever you have contact with a competitor, even on an informal or purely social level;

y Decline to discuss any “risky” topic if a competitor brings it up;

y Learn market intelligence from customers and reputable third party sources and not from competitors; and

y Record the source and date of receipt of all market intelligence.

C O N S U LT T H E G R O U P L E G A L O R R E L E VA N T C O M P L I A N C E O F F I C E R

y Whenever you have doubts about the compatibility of your business behaviour with antitrust law;

y Before entering into any kind of agreement with a competitor;

y Before participating in an information exchange programme with a competitor (such as benchmarking exercises);

y Before agreeing to attend an industry conference or joining a trade association;

y Before agreeing to participate in any price reporting arrangements with any independent third parties or otherwise;

y In relation to the implementation and operation of joint venture arrangements or joint procurement arrangements with competitors; and

y After receiving any written or oral communication from a competitor which

you deem questionable or worse.

D E A L I N G S W I T H C U S T O M E R S , S U P P L I E R S A N D D I S T R I B U T O R S

D O N ’ TIn relation to the EU/EEA:

y prohibit a customer/distributor from exporting products from one EU/EEA state to another;

y prohibit the sale of goods into the EU/EEA;

y apply price increases to an exporter on a different basis than to locals;

y discourage a customer or distributor from exporting or importing your products; in general, do not prevent or discourage parallel imports; or

y prohibit responses by distributors to unsolicited orders (passive sales) from outside their territory. However, you can restrict distributors from actively seeking orders from outside of their territory.

In relation to EU/EEA and other jurisdictions:

y require a customer/distributor to adhere to minimum or fixed resale prices or profit margins; the communication of recommended resale prices is lawful as long as you do not put pressure on your distributors to observe these prices; or

y induce resellers not to discount, for example, by giving special deals to resellers who agree not to discount.

C O N S U LT G R O U P L E G A L O R R E L E VA N T C O M P L I A N C E O F F I C E R

y If a customer or supplier is also a competitor;

y Before you agree with a customer not to sell to its competitors;

y Before you restrict a customer or distributor in relation to resales of your products;

y Before you threaten to stop or limit purchasing from a supplier because the supplier is dealing with one or more of your competitors;

y Before terminating a distribution agreement; or

y If you have any doubts about the legality of your actions.

38

I N M A R K E T S W H E R E A N G L O A M E R I C A N M AY H AV E A L E A D I N G M A R K E T P O S I T I O N

C O N S U LT G R O U P L E G A L O R R E L E VA N T C O M P L I A N C E O F F I C E R

y Before applying different prices towards equivalent customers or suppliers;

y before seeking to charge very low or very high prices;

y before offering loyalty or target rebates;

y before refusing to deal with a customer or supplier (either existing or new);

y before making the sales of your product to a customer dependent on the customer acquiring another produce or service;

y before adopting any practices that may appear to be “targeted” against a certain competitor or a potential new market entrant (for example, deliberately charging very low prices so that the competitor or entrant may find it difficult to remain in or enter the market); and

y before entering into long-term exclusive arrangements.

A N N E X 7 - C O N S O L I D AT E D D O S A N D D O N ’ T S – C O N T I N U E D