P&G Forest Resources Policies Though P&G does not own or manage forests, we are a major purchaser of wood-derived fiber. Because of this, we believe we have a responsibility to ensure the sustainability of the world's forest resources. The principles of sustainable forest management include economically and environmentally responsible harvesting and reforestation to minimize impacts on wildlife habitat, soil and water quality; with protection of special sites of unique geological, biological or historical significance. Consistent with this view, P&G has three policies which apply to how we manage our purchasing and utilization of fiber:   1. Fiber Procurement P&G purchases wood-derived fiber from suppliers that: Ensure the safety of forestry and manufacturing operations for employees and the environment. Document that the fiber is from legally harvested wood and that other legal requirements are met. Practice principles of sustainable forest management in their own operations and in sourcing of wood. Do not obtain the fiber from sites designated for conservation or judged to have unique environmental or cultural value. Reflect our social values and support of universal human rights through work with local governments and communities to improve the educational, cultural, economic and social well-being of those communities. We ensure compliance with this policy through site visits, comprehensive surveys and research, required documentation and independent third-party certification of sustainable forest management practices.   2. Sustainable Forest Management Certification A majority of our fiber supply is currently purchased from companies that have independently certified their forestry operations within a credible forest certification system. P&G is requiring all its fiber suppliers to independently certify their forestry operations by December 31, 2006. In addition, P&G will require suppliers to provide an auditable assurance that fiber sources not directly owned and managed by them are obtained via legal means and that harvest is conducted via sustainable practices. P&G believes that independent certification can be an effective means for a fiber supplier to verify its sustainable forest management practices. As a global company sourcing fiber worldwide, we also recognize the importance of flexibility in forest certification systems and the need for these systems to be responsive to specific local requirements. To this end, the certification systems that our suppliers select must be consistent with the following generally accepted criteria for sustainable forestry management: A commitment to forest regeneration and reforestation. Protection of soil quality, riparian zones and water quality. Protection of ecologically and culturally unique forest areas. Maintenance and conservation of biological diversity. Stakeholder consultation and public reporting. Continuous improvement in forestry practices. Compliance with legislation. Social development principles. We also support the World Business Council for Sustainable Development and the International Forest Industry Roundtable in their efforts to develop a Legitimacy Threshold Model (LTM) for credible forest certification systems.   3. Efficient Use of Forest Resources P&G is committed to strategies that reduce demand on the world's forest resources and will continue to: Focus on source reduction or use of less fiber through development of innovative technologies that provide maximum product performance using minimal fiber. Evaluate the use of non-forest derived sources of fiber, recognizing that alternatives must also meet principles of sustainable management. Use recovered fiber in our products when it can be done without having a negative impact on product performance, manufacturing efficiency, resource and energy usage and waste generation.