DUE DILIGENCE FOR URUGUAY'S NOMINATION FOR THE

UNCLAS MONTEVIDEO 000463 SIPDIS STATE ALSO FOR EEP/EPPD - SMITH-NISSLEY/ENOCH E.O. 12958: N/A TAGS: PREL ETRD ELAB UY SUBJECT: DUE DILIGENCE FOR URUGUAY'S NOMINATION FOR THE SECRETARY'S AWARD FOR CORPORATE EXCELLENCE REF: A. MONTEVIDEO 315 ¶B. STATE 84836 ¶1. Post has reviewed its May 2008 nomination for the Secretary,s Corporate Excellence Award and is confident that Weyerhaeuser remains an ideal candidate (ref A). Weyerhaeuser has created a strong and consistent reputation in Uruguay for economic transformation, social responsibility and best practices. Its commitment to these principles has positioned Weyerhaeuser as a corporate leader in Uruguay and provides a great example of the benefits of foreign, and especially U.S., investment. Weyerhaeuser has made the Ambassador and Embassy,s job to open doors for American business easier in Uruguay. ¶2. The Ambassador led Post,s due diligence review of the Weyerhaeuser nomination, requested in ref B. Post,s responses follow: A) Post identifies no potential downside to selecting Weyerhaeuser for the Secretary,s ACE. B) Weyerhaeuser hired at least six professional and executive level U.S.-based employees to oversee plant expansion, finance and project management for its operations in Uruguay. In addition, the company employed significant U.S.-based third party contractors in the areas of industrial support service, plant equipment refurbishment, and logistics and customs handling. Imports of Weyerhaeuser plywood from Uruguay generate jobs in logistics at the ports of Savannah, Georgia and in the future Mobile, Alabama. The majority of its products destined for the U.S. are used in the upholstered furniture industry, which plays an important role in the economies of Mississippi and North Carolina. C) For the expansion project at Weyerhaeuser,s Los Piques mill in Tacuarembo that began in 2007 and will run through 2009, the company will import USD 15.5 million of equipment from the United States. During the original construction of the plywood mill in 2005-06, Weyerhaeuser imported USD 10.2 million of U.S. materials. The company continues to source significant purchases of equipment and technical support form the U.S. D) Weyerhaeuser has had a notable positive impact in the areas it operates. The difference is evident during visits to the rural areas in which Weyerhaeuser operates. Its employees are paid better than average for Uruguay, and since most newly created jobs have been concentrated in economically depressed areas in the interior of Uruguay, the impact has been even greater. Weyerhaeuser sets the bar in safety and security for its workforce in the forestry industry. Employee retention is very high and even when employees have the opportunity to leave for higher paying jobs, many cite safety and community involvement as reasons for staying with Weyerhaeuser. Although unions are common in Uruguay, Weyerhaeuser operated for ten years without a union. In the first half of 2008, a union representing approximately 20% of Weyerhaeuser,s workforce was formed at its Los Piques mill. E) Post is not aware of any pending litigation in local courts involving Weyerhaeuser. F) Neither the Ambassador nor officers involved in the nominating process are stock holders or stakeholders of Weyerhaeuser. Baxter