General Administrative Terms (BAG)

CORPORACIÓN NACIONAL DEL COBRE DE CHILE
GENERAL ADMINISTRATIVE
TERMS AND CONDITIONS FOR
SERVICE CONTRACTS
CORPORACION NACIONAL DEL COBRE DE CHILE R evision: 1
GENERAL ADMINISTRATIVE TERMS AND Effective Date:

31/ 10/ 2015
CONDITIONS FOR SERVICES CONTRACTS Page. 2
TABLE OF CONTENTS
CHAPTER I. GENERAL PROVISIONS ______________________________________________ 6

1 SCOPE AND PURPOSE ______________________________________________________ 6
2 APPLICABLE LAW __________________________________________________________ 6
3 SPECIAL AND CONVENTIONAL DOMICILE _______________________________________ 6
4 OFFICIAL LANGUAGE _______________________________________________________ 6
CHAPTER II. FORMALIZATION OF THE CONTRACT AND ITS GENERAL CONDITIONS ________ 7
5 DEFINITION AND SCOPE OF WORDS ___________________________________________ 7
6 FORMALIZATION OF THE CONTRACT __________________________________________ 7
6.1 SUBSCRIPTION ___________________________________________________________ 7
6.2 Term of Execution ________________________________________________________ 8
7 CONTRACT DOCUMENTS - ORDER OF PRECEDENCE ______________________________ 8
8 REPRESENTATIVES OF THE PARTIES ___________________________________________ 9
9 CONTRACT RESOURCES _____________________________________________________ 9
9.1 Of the Contractor ________________________________________________________ 9
9.2 Of CODELCO _____________________________________________________________ 9
10 OUTSOURCING: CONTRACTUAL CONDITIONS __________________________________ 10
11 TAXES, LIENS, DUTIES AND RIGHTS ___________________________________________ 10
12 ASSIGNMENT OF RIGHTS AND OBLIGATIONS ___________________________________ 11
13 RULES GOVERNING THE LIABILITY OF THE PARTIES ______________________________ 11
CHAPTER III. EXECUTION OF THE CONTRACTS ___________________________________ 13
14 STARTUP ________________________________________________________________ 13
14.1 Kickoff Meeting _________________________________________________________ 13
14.2 Immediate Startup ______________________________________________________ 13
14.3 Handing over of the Job Site _______________________________________________ 14
14.4 Obtainment of Permits and Licenses ________________________________________ 14
14.5 Job Site Facilities and Provisional Works _____________________________________ 14
15 ENTRY INTO THE INDUSTRIAL PREMISES OF CODELCO AND/OR PREMISES CONTROLLED
THEREBY ________________________________________________________________ 15
16 EXECUTION OF THE WORK _________________________________________________ 15

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16.1 Scheduling, Planning and Control of the Work ________________________________ 15

16.2 Quality Control and Assurance _____________________________________________ 15
16.3 Technical, Quality and Risk Prevention Audits ________________________________ 16
16.4 Reviewal of Audit Findings ________________________________________________ 16
16.5 Environmental Protection _________________________________________________ 17
17 PERFORMANCE___________________________________________________________ 17
18 PAYMENT OF THE PRICE ___________________________________________________ 17
19 PARTIAL CONTRACT CLOSURES ______________________________________________ 18
20 CONTRACT AMENDMENTS _________________________________________________ 18
21 INCENTIVES AND SANCTIONS _______________________________________________ 18
21.1 Incentives during the Execution of the Contract _______________________________ 18
21.2 Sanctions for Breaches ___________________________________________________ 19
22 SUSPENSION OF THE WORKS OF A CONTRACT DUE TO SAFETY, HEALTH OR
ENVIRONMENTAL FACTORS ________________________________________________ 19
23 SUSPENSION OF THE WORKS OR SERVICE DUE TO A DECISION BY CODELCO _________ 20
24 FORCE MAJEURE _________________________________________________________ 20
CHAPTER IV. ACCEPTANCE OF THE WORKS OR SERVICES __________________________ 21
25 ACCEPTANCE PROCEDURE __________________________________________________ 21
25.1 Provisional Acceptance ___________________________________________________ 22
25.2 Final Acceptance ________________________________________________________ 23
CHAPTER V. TERMINATION OF THE CONTRACT __________________________________ 23
26 DEMOBILIZATION ACTIVITIES _______________________________________________ 23
27 SETTLEMENT AND FINAL PAYMENT OF THE CONTRACT __________________________ 23
28 EARLY TERMINATION OF THE CONTRACT DUE TO SERIOUS BREACH BY ONE OF THE
PARTIES_________________________________________________________________ 24
29 EARLY TERMINATION OF THE CONTRACT BY MUTUAL AGREEMENT ________________ 26
30 EARLY TERMINATION OF THE CONTRACT DETERMINED BY CODELCO _______________ 26
CHAPTER VI. COMPLEMENTARY PROVISIONS ___________________________________ 27
31 COMMUNICATION BETWEEN THE PARTIES ____________________________________ 27
32 TRANSPARENCY OF THE CONTRACTING AND CONTRACT EXECUTION PROCESS _______ 27
33 CRIMINAL LIABILITY OF BODIES CORPORATE ___________________________________ 28
34 CONFIDENTIALITY AND PUBLICITY ___________________________________________ 28

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35 INTELLECTUAL-INDUSTRIAL PROPERTY _______________________________________ 29

36 PATENTS AND TRADEMARKS _______________________________________________ 30
36.1 Inventions and Rights of Use: ______________________________________________ 30
36.2 Liability for use of Licenses, Patents and Trademarks __________________________ 30
37 ALCOHOL AND DRUG CONTROL _____________________________________________ 31
38 REMAINS OF GEOLOGICAL OR ARCHAEOLOGICAL INTEREST_______________________ 31
39 DISPUTE RESOLUTION _____________________________________________________ 32
39.1 Requests and Complaints _________________________________________________ 32
39.1.1 Request for Compensation ________________________________________________ 32
39.1.2 Claims __________________________________________________________________ 32
39.2 Competent Courts of Law _________________________________________________ 32
40 ABSENCE OF STANDARDS AND/OR REGULATIONS ______________________________ 33
EXHIBIT I. GUARANTEES AND INSURANCE ________________________________________ 35
EXHIBIT II. CONDITIONS THE CONTRACTOR MUST MEET WITH REGARD TO ITS WORKERS
WHEN THE SERVICES ARE RENDERED AS A CONTRACTOR OR PROVIDER OF SERVICES _ 42
EXHIBIT III. PAYMENT OF THE PRICE OF THE CONTRACT ______________________________ 50
EXHIBIT IV. AMENDMENTS OF THE CONTRACT _____________________________________ 55
EXHIBIT V. GLOSSARY _________________________________________________________ 57

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INTRODUCTION
Within the framework of the new Contractual Policy adopted by CODELCO, it has been deemed
necessary to draft General Contractual Administrative Terms and Conditions (the “GATC”) in the
English language, reinforcing the focus of achieving an alliance with its foreign Contractors with a
view to effectively developing and achieving its business objectives.
In this regard, it is essential for contractors to assume their role, with the understanding that the
achievement of CODELCO'S goals depends, to a great extent, on their performance and
cooperation.
These “GATC,” together with any relevant complementary documents, contain and set forth the
provisions under which CODELCO's contractual relations with parties rendering services to the same
are based and which encourage performance of excellence as well as the contribution of
knowledge, experience and innovative solutions for the new challenges facing the industry, among
other aspects. The aforementioned is founded on a relationship based on business ethics consistent
with the application of the CODELCO´s Statement of Values to its contractual and business
relationships.
Thus, while aspiring to achieve greater efficiency and productivity, CODELCO intends to promote,
generate and maintain balanced, safe and healthy working conditions, within a framework of due
observance and compliance with the legal and regulatory provisions governing contracting between
parties in the civil and business environment.

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CHAPTER I. GENERAL PROVISIONS
1 SCOPE AND PURPOSE

These General Administrative Terms and Conditions, hereinafter indistinctly the “GATC”,
set forth the general provisions applicable to construction, engineering and general services
contracts (hereinafter the “Contract”) entered into by Corporación Nacional del Cobre de
Chile, hereinafter and indistinctly also “CODELCO”, provided the same are expressly stated
and/or included by reference in such contracts. For the purpose of this document,
CODELCO´s Contractor shall hereinafter be referred to as Contractor. Each of CODELCO
and the Contractor hereinafter may also be referred to as a Party and collectively, the
Parties.
The provisions of the GATC may only be subsequently amended by other documents that
become an integral part of the Contract, with a preferential order of precedence, pursuant to
the provisions of paragraph 7 hereof.
The execution of the relevant Contract or any Contractor thereof or of any of the documents
that form part of the same, shall imply knowledge and awareness of the GATC and
acceptance as well as approval of the same by the Contractor.
CODELCO shall be entitled, as the case may be, to stipulate any specific terms and
conditions for each Contract in the Specific Contracting Terms and Conditions (“SCTC”),
which may add to or be complementary to these GATC, or possibly amend some
provisions. Furthermore, to the extent that it is expressly and specifically stated in the
SCTC, the clauses of the latter may substitute the provisions of the GATC that are
specifically referred to therein. The above is without prejudice of any other additional
documents which CODELCO and the Contractor agree to in connection with the Contract.
2 APPLICABLE LAW
These GATC and the Contract shall be governed in all respects by Chilean Law, unless
otherwise stated in the SCTC. In this regard, the expression "law" shall include and deemed
to include any law, decree law, decrees, regulations, resolutions or other rules and
regulations issued by the central government, regional or municipal authorities and others
corresponding to the institutional legal order of the Republic of Chile.
3 SPECIAL AND CONVENTIONAL DOMICILE

Unless otherwise stated, for all legal effects and purposes the special domicile of the
Parties hereto shall be the city and municipality of Santiago, Chile, recognizing and
attorning to the jurisdiction of the city's courts.
4 OFFICIAL LANGUAGE
The official language of the GATC and Contract will be Spanish. All documents forming
part of the Contract, as well as reports and products resulting therefrom, must be in
Spanish, and any version in any other language will only have referential value.

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CHAPTER II. FORMALIZATION OF THE CONTRACT AND ITS GENERAL CONDITIONS
5 DEFINITION AND SCOPE OF WORDS

The terms used herein and in other documents that form part of the Contract, will have the
specific meaning stipulated in Exhibit V hereto, which contains the specific terminology of the
activities regulated by the Contract.
For the correct interpretation of the Contract, it shall be understood that:
a. The words indicating a gender will include all genders;

b. The words indicating singular, will also include the plural, and the words that
indicate plural, will also include the singular;
c. The provisions in which the term “agree”, “agreed” or “agreements” appear, will
require the agreement to be recorded in writing;
d. “Written” or “in writing” means written by hand, by machine, or by any printing
method, either on paper or digitally, unless some special means of documentation
is required by law or by the provisions of the Contract; and
e. The words situated at the margin of the page, and other headings, are strictly
referential and shall not be considered for the interpretation of the Contract.
6 FORMALIZATION OF THE CONTRACT

6.1 SUBSCRIPTION
Each party shall be responsible for executing the Contract, through one or more duly
authorized representatives, whose mere act of executing the Contract shall be deemed in
all respects as a certification that such representatives have sufficient power and authority
to execute the Contract. Notwithstanding the above, CODELCO may require the other party
to prove and evidence the authority, powers, faculties and identities of its representatives.
The Contract will be extended and executed in as many copies as there are parties, signed
by the representatives of all Parties, with one copy being provided to each party.
Once the Contract has been awarded, the Contractor must provide and deliver the
guarantees provided for under the Contract (Exhibit I, number 1) and copies of the
insurance policies (Exhibit I, number 2), within the established terms and in accordance with
any other conditions that may have been established. The relevant terms will be counted as
of the date of the corresponding letter evidencing the awarding the Contract.
The Contractor shall have 7 (seven) days to review the Contract provided by CODELCO
and formulate any observations or comments, which under no circumstances shall depart
from the terms and conditions established in the bidding or tender process and the
corresponding letter awarding the Contract. For the avoidance of doubt, it is hereby
expressly stated for the record that the purpose of these comments is to correct any error or
omission in the way that the terms and conditions previously agreed upon between the
Parties in the bidding process were drawn up, regardless of any new negotiation stage. If
the Contractor fails to make any observations within the aforementioned term, it shall be
understood that it fully accepts the document, which will be signed within the following
seven (7) working days, except in case of duly justifiable grounds approved by CODELCO.

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6.2 Term of Execution

The term of execution of the Contract, and the partial terms or milestones, shall be set forth
and established in the SCTC, the Principal Document, as defined herein, and any
amendments thereto.
The agreed terms and any extensions shall be modified by means of an amendment to the
Contract which shall be duly executed by the parties.
For all intents and purposes, the terms will be calculated considering that day 1 (one) is the
date of the handing over of the work site, or the date of the initiation of activities, as the case
may be. The terms will be counted as per calendar days.
Any delay by CODELCO in providing the Contractor with information, supplies, the job site or
other inputs it has undertaken to provide, may be considered grounds for extending the term,
if, and only if the Contractor can provide CODELCO with justifiable and timely grounds for not
being able to comply with the execution schedule in due time and form, as per the Contract.
Any interruptions or delays in the execution of the Contract due to rejection by CODELCO in
light of faulty executed work, or due to the goods and services not meeting the required
quality and performance standards specified, or other grounds not attributable to CODELCO,
shall not constitute grounds for the extension of the term, unless specifically stipulated in the
Contract and its relevant documents.
The fact that there are full and/or free margins with respect to the Contract schedule does not
mean that the parties have the right to unilaterally modify its terms of execution.
7 CONTRACT DOCUMENTS - ORDER OF PRECEDENCE
The Contract will stipulate the documents that form an integral part of the same. Should any
document not be stipulated, it will be understood that the following documents are referred to,
in the following order of precedence, as indicated below:
a. Contract and any amendments thereto.

b. Letter awarding the Contract and Immediate Startup Order, as the case may be.
c. Written agreements prior to the execution of the Contract, understanding that such
documents set forth the terms and conditions that the Parties may have agreed
upon in case the same engaged in negotiations, as part of a selection process.
d. Written responses to queries by participants in the bidding process and
clarifications sent by CODELCO, with precedence in accordance with the date of
issue, as the case may be.
e. Specific Contracting Terms and Conditions (SCTC) and any Exhibits thereto.
1
g. RESSO, Fatality Control Standards (FCS) , Safety Standards in the Workplace and
REMA.
h. Internal divisional standards governing quality, safety, environment, occupational
health and industrial safety, set forth in Technical Specifications and/or Contract.
1
FCS: These are mandatory in all existing or future workplaces; this means that they are applicable to all
individuals working at CODELCO, whether contractor personnel or not, and also to individuals entering or visiting
CODELCO’s operations (documents available on the CODELCO website).

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i. GATC (this document).

j. Clarifications made by Contractor to its Technical or Economic Bid.
k. The Contractor's Technical Bid.
l. The Contractor's Economic Bid.
The provisions contained in the Contract and any documents incorporated by reference shall
be deemed and considered to be complementary among the same, and any discrepancy that
cannot be resolved by applying the aforementioned order of precedence shall be resolved by
mutual agreement between the Parties, and should failure to agree occur, by application of
the mechanism for dispute resolution stipulated herein.
8 REPRESENTATIVES OF THE PARTIES

In the Contract, each of the Parties shall appoint a professional to represent it as the Contract
Manager.
9 CONTRACT RESOURCES
9.1 Of the Contractor
The Contractor will contribute all the human and material resources, and any other
specialized resources that are or may become necessary in order to comply in due time and
form with the quality and quantity of the goods and/or services it provides, or the material
works it executes while carrying out each and every one of the stages of the Contract and
that are not specifically included as CODELCO contributions.
The Contractor must at all times have available all of the quality certificates of the materials it
provides. CODELCO may at time require the same, at no cost to CODELCO.
CODELCO's Contract Manager shall be entitled at all times to order the removal and
replacement of any defective material, machinery or equipment of the Contractor or its
subcontractors, that are not in acceptable working or safety conditions for use in the
contracted work or services.
The Contractor will not use any permanently installed equipment without the express written
approval of CODELCO. When such authorization is granted, the Contractor will correctly use
and maintain such equipment, and when it has finished using the same, will overhaul it at its
own expense in order to return it in accordance with applicable specifications.
9.2 Of CODELCO
CODELCO shall, in the SCTC, specify the contributions it will make under the Contract,
expressly stating the conditions, time and mode of delivery to the Contractor, making it
absolutely clear whether they will be charged to, or free of charge for the latter.
Once the material and equipment contributions have been delivered, they will remain under
the custody and responsibility of the Contractor, so that if they are damaged or lost, or suffer
any impairment, the latter must replace the same at its own cost, expense and account.
Should the Contractor fail to do so, CODELCO may discount the corresponding cost from any
payment it must make to the Contractor, or any withheld guarantee, or guarantee of any other
nature, which it holds.

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10 OUTSOURCING: CONTRACTUAL CONDITIONS

The Contractor will at all times be liable to CODELCO for any and all noncompliance or partial
compliance of obligations and/or undertakings of any nature on behalf of its subcontractors, as
the case may be, and shall be solely liable to CODELCO for all work and services contracted.
All human resources and materials of any subcontractor will be subject to the same conditions
that the Law imposes on the Contractor. Hence, the Contractor must in turn hold its contractors
and subcontractors accountable for all such conditions, and especially any requirements related
to risk, quality, safety and environmental controls, both in the workplace and in the transfer
and/or transportation of resources.
In any event, any outsourcing and subcontractors will be subject to prior authorization by
CODELCO, which must, at a minimum, be provided the following information for the purpose of
granting such authorization:
- A list of the subcontractor's workers, with their respective employment contracts.
- A simple affidavit regarding the existence or nonexistence of the subcontractor's
relationship with individuals holding management positions, or who are employees of
CODELCO, pursuant to NCC 18 of CODELCO.
- Commitment to adhere to the risk control program, quality plan, and the Environmental
Protection Plan.
- Workplace Health and Safety Management Systems of the subcontractor.
- The outsourcing work schedule for which CODELCO's approval is being requested.
Any unauthorized outsourcing will constitute and be deemed in all respects as a serious breach
of the Contract. Similarly, any disputes, complaints, lawsuits or other interferences due to the
relationship of the Contractor with its subcontractors, that hinder compliance with contractual
obligations or the normal carrying out of CODELCO's activities, will constitute and be deemed
in all respects as a serious breach of the Contract and sufficient grounds for its early
termination.
11 TAXES, LIENS, DUTIES AND RIGHTS

The Contractor shall be solely and entirely liable for any and all applicable taxes, liens, duties
and rights, pursuant to Chilean law, directly or indirectly accrued as a consequence of
compliance with the terms and conditions of the Contract and any documents forming part of
the same. Any and all processes as well as import and customs duties derived from the
importation of parts, capital assets and/or other products, will also be entirely to the account
of the Contractor.
The Contractor shall declare and pay to the corresponding authority any and all taxes,
customs duties and other fees, rates and contributions arising from the Contract, that must be
declared and paid by law, as well as all taxes, duties and social security contributions
required by law or rules and regulations with respect to salaries or other wages paid to its
workers and employees.
CODELCO shall pay any corresponding value added tax (VAT) applicable and included by
the Contractor in the invoices issued in its name under the Contract, provided the Contract is
subject to such tax, or alternatively shall withhold the second category tax or additional tax of
the Income Tax Law, as the case may be, or any other applicable tax stipulated by law, as
the case may be.

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In the case of payments made by the Contractor to any foreign technicians, professionals or
specialists working and/or performing services whether in Chile or abroad and that have been
contracted directly or on account of CODELCO for the purposes of the Contract, the
Contractor shall withhold, declare and pay the corresponding Additional Tax. Should
payments to such foreign individuals been made directly by CODELCO, the same shall
withhold, declare and pay the Additional Tax. In any case, the Contractor hereby undertakes
to make its best efforts for CODELCO to be reimbursed the Additional Tax withheld in Chile,
which can be used by such foreign technicians, professionals or specialists as a foreign tax
credit in their countries of origin, as a result of their respective annual income tax statements.
The Contractor shall ensure that CODELCO is at all times held free of all liability resulting
from the failure by the Contractor or any of its subcontractors, as the case may be, to declare
and/or pay the aforementioned taxes as well as any other duties, liens or charges in a timely
manner. Any tax assessment, charge, interest or fine arising from such noncompliance shall
be to the sole expense, cost and account of the Contractor.
At the request of CODELCO, and at any time during the contractual relationship, the
Contractor must prove and duly evidence the declarations and payments referred to in this
section, by way of exhibiting and/or providing notarized copies of the respective receipts.
Should new laws come into effect during the execution of the Contract that substantially
modify tax conditions, customs duties, liens or other similar items included in the respective
Contract, CODELCO and the Contractor shall review any impact that such modifications may
have on the Contract, and seek a fair and equitable solution for absorbing the new charges or
compensations.
12 ASSIGNMENT OF RIGHTS AND OBLIGATIONS

The Contractor shall not assign, transfer or transmit in any way, whether fully or partially, the
Contract and any and all rights and obligations set forth in and/or arising from the Contract,
nor constitute or create guarantees, pledges or other liens that may affect the same without
the prior written consent of CODELCO. Any breach of this provision shall be deemed to be
sufficient grounds for early termination of the Contract by CODELCO, without any right of
indemnity of any kind for the Contractor.
Nonetheless, the Contractor may assign the credits contained in its invoices for the payments
of the Contract, by means of factoring transactions with institutions licensed for such
purposes within the framework of Law 19.983 and articles 1901 and other relevant provisions
of the Civil Code, all of the aforementioned in accordance with the provisions of number 5 of
Exhibit III hereof.
13 RULES GOVERNING THE LIABILITY OF THE PARTIES

The following rules will be used for determining liability, should there be any contradictions,
errors or doubts regarding the liability of each one of the contracting Parties in the Contract
or in its constituents documents.
a) Each one of the Parties will assume liability for its own acts committed in relation to
the Contract, especially if they are negligent or fraudulent.
b) The fact that either of the Parties does not expressly demand strict observance and
execution of any provision of the Contract or its documents, will not under any

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circumstances be construed or deemed a waiver of such provision or affect it in any

way, or deprive the Parties of their respective rights, nor deprive the Parties of the
right to demand full compliance with the respective provision in equal or similar
cases that may occur in future.
c) The Parties will abide by the rules and regulations established in the Civil Code of
the Republic of Chile regarding contractual liability.
d) The Contractor shall defend, protect and hold harmless CODELCO against
complaints, lawsuits, remedies or other judicial or administrative actions filed by
third parties, or damages caused by the negligent or fraudulent acts of the
Contractor or its subcontractors, and shall pay all the costs and expenses of any
lawsuit of this nature. Notwithstanding the above, CODELCO shall have the right to
participate in such processes, without freeing the Contractor of its obligations. The
costs generated by the defense of CODELCO shall be to the expense of the
Contractor.
e) The Contractor shall assume full responsibility for the proper rendering and correct
execution of the services and/or work entrusted, whether rendered or executed
thereby, its personnel, or the third parties rendering services or executing work for it
in relation to the Contract.
Hence, the Contractor shall indemnify CODELCO and any corresponding third
parties, for all damages caused to CODELCO, its personnel, its assets and third
parties present in its Divisions or Projects, for the incorrect execution of the
Contract.
f) CODELCO will indemnify the Contractor for all direct damages resulting from the
negligent or fraudulent acts of its personnel, in accordance with the law and the
Contract.
g) Notwithstanding the Contractor's obligation to re-perform work or correct and/or

amend the services that do not meet the quality and performance requirements
specified in the Contract, at its entire expense, cost and account, or correct the
technical and administrative deficiencies or any breach of the quality and
environmental management system of the Contract in a timely manner, CODELCO
may compensate itself for the damages that the Contractor is responsible for,
through the execution of guarantees, the use of withheld amounts, and the
exercising of legal actions, compensation for debts and other mechanisms
stipulated by law and in the Contract, either at the outset, while it is underway, or at
its conclusion. All of the above will not preclude the application of the fines that
may be contractually pertinent.
h) Provided the Contractor is a consortium, or is comprised by another group or similar

association, each one of its members, shareholders or partners will be jointly and
severally liable for the obligations owed to CODELCO under the Contract.
i) In all cases, the party that caused the damage and/or infringed the obligations of
the Contract, will be required to prove that it has not acted negligently or
fraudulently.
j) CODELCO reserves the right to compensate any credit held by the Contractor
against it with such payments that it is obligated to make to third parties by due to

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the joint and several liability corresponding to it for the acts of the Contractor or its
personnel having been made effective.
k) The Contractor shall be liable for the damages it causes to the facilities of
CODELCO or its personnel, as well as the assets and personnel of other
Contractors and third parties.
l) Should the Parties agree in the Contract on exclusions or maximum limits of

liability, it will be understood that such agreements will never apply to cases of
gross negligence or willful misconduct, in which liability must be assumed for the
total amount of the damage caused.
CHAPTER III. EXECUTION OF THE CONTRACT

14 STARTUP
14.1 Kickoff Meeting
Notwithstanding the provisions of the SCTC or the Contract, after the issuing of the Award
Letter or the execution of the Contract, CODELCO will arrange a meeting with the Contractor
in order to agree and coordinate the activities that must be completed prior to initiating the
execution of the Contract.
In this initial bilateral coordination meeting, led by the Contract Managers appointed by the
Parties, the terms and conditions agreed with regard to the planning and execution of the
work, the rendering of the committed services and the specified quality and performance
requirements, will be reviewed, and it will be confirmed that each one of the Parties has all the
documentation that will govern the Contract, including the requirements set out in RESSO
and REMA.
The Contract Managers will draw up and execute the Startup Minutes, which will first of all
confirm the startup date of the execution of the Contract and the agreements regarding
activities prior to such startup, corresponding to each one of the Parties, especially stating
for the record the date on which such events should occur.
Under no circumstances will the term of execution of the work owed under the Contract be
understood to be suspended or extended by the fact that the Contractor's Contract
Manager does not attend the meeting. The unjustifiable absence of the Contractor will also
be grounds for early termination of the Contract by CODELCO.
In any event, CODELCO may authorize startup activities prior to the signing of the Contract
and the kickoff meeting, by subscribing an Immediate Startup Order under the terms and
conditions set forth further herein. The above does not limit compliance with the provisions
of RESSO and REMA.
14.2 Immediate Startup

Under specific circumstances determined by CODELCO, an Immediate Startup Order will
be issued to the Contractor in order to initiate the execution of the Contract immediately or
at an early date, prior to signing the Contract. The Early Startup Order may be contained or
provided for in the Letter of Award itself or in an independent document whose title must be
"Immediate Startup" or "Immediate Startup Order". Notwithstanding the provisions of
foregoing clause 6.1, the term within which the Contract must be subscribed cannot exceed

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30 calendar days from the date on which CODELCO provides the Contractor with the
Contract for execution. Should the respective term expire without the Contract having been
executed, CODELCO may at its discretion, immediately or at any time thereafter terminate
the services, without any indemnity or compensation whatsoever to the Contractor. Should
such situation occur, the Contractor shall only be entitled to receive the price of the works
and services effectively executed and/or rendered up to the termination date, further
provided they are directly related to the Contract and have been duly accepted or approved
by CODELCO.
For the execution of the services, the Contractor must provide CODELCO with the
guarantees established or agreed, and the Immediate Startup Order must be duly executed
by the representative of the Contractor as a token of acknowledgment and acceptance of its
terms and conditions. CODELCO will not make payments of any kind until it has duly
received the guarantees and copies of the corresponding insurance policies.
14.3 Handing over of the Job Site

If pertinent, the job site must be handed over to the Contractor on the date and at the
location established, i) in the Contract, or ii) in the notification sent by CODELCO to the
Contractor once the Contract has been executed, or iii) in the kickoff meeting.
The handing over of the job site will be stated for the record in the Minutes of the Handing
Over of the Job Site, which will be signed by the Contract Managers of both Parties, and
which will set forth the conditions of the site on which the service will be executed.
Should the Contractor's Contract Manager not appear to receive the job site on the date
indicated by CODELCO, the term of execution of the entrusted work will under no
circumstances be understood to be suspended or extended. The unjustifiable absence of
the Contractor at the handing over of the job site will be grounds for immediate termination
of the Contract by CODELCO.
14.4 Obtainment of Permits and Licenses

Unless otherwise stated in the SCTC, CODELCO will be responsible for the approval of
drawings and obtaining any requisite permits before the corresponding authorities, when
required for performing the entrusted work within its premises, with the payment of the fees,
contributions and taxes corresponding to such approvals and permits being to its expense.
The Contractor will be responsible for and must assume the cost of all sectorial permits
required for the job site facilities, works and temporary installations, the licenses for the
provisional or final disposal of leftover material or rubble, for exploiting and using borrowed
fill deposits, or others, located outside of CODELCO'S premises, as well as the permits and
obligations related to the transportation, use, handling and storage of explosives,
inflammable, corrosive and contaminating substances and hazardous industrial waste,
which the Contractor must acquire for compliance with the Contract.
14.5 Job Site Facilities and Provisional Works
When CODELCO provides for or facilitates spaces or facilities that must be shared between
two or more Contractors, the Contractor shall provide the pertinent facilities and will
coordinate the activities accordingly with the persons appointed by CODELCO and other
Contractors, in order to avoid and/or minimize negative impacts on the execution of such
Contracts.

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The Contractor shall be responsible for ensuring the correct functioning of its temporary
facilities and/or camps, as the case may be, throughout the period of execution of the
Contract, for which it will adopt any and all timely conservation and repair measures
necessary for correcting any deficiency or anomaly that may arise within this period.
15 ENTRY INTO THE INDUSTRIAL PREMISES OF CODELCO AND/OR PREMISES

CONTROLLED BY CODELCO
The Contractor is obligated to comply with the standards and procedures established by
CODELCO for the entry and exit of resources in its premises, and for preventing this control
from affecting or interfering with the normal development of the Contract. The Contractor
shall previously, and in a timely manner, coordinate the procedures for such purpose with
CODELCO's Contract Manager.
16 EXECUTION OF THE WORK

The Contractor is obligated to execute the Contract, strictly abiding by the specifications,
(when pertinent), and the instructions issued by CODELCO, and in full conformity with the
provisions of the terms and conditions and other documents of the Contract, as well as the
laws, ordinances and standards in force in the country.
CODELCO may at any time clarify and complement such information and data provided for
the correct execution of the work. The Contractor may only object to the work owed under the
Contract on the basis of such data or complementary information on duly justifiable grounds.
In particular, the following activities must be considered for the execution of the Contract:
16.1 Scheduling, Planning and Control of the Work

Once the Contract has been awarded, and within the term indicated in the SCTC, the
Contractor must update its Work Schedule submitted in its bid on the effective Contract
startup date, with the updated schedule being denominated “Valid Work Schedule.”
CODELCO may request the subdivision of the scheduled activities with a greater degree of
detail, for better control and planning of the work.
All amendments of the Valid Work Schedule must be previously submitted to the
consideration of CODELCO's Contract Manager. Any amendment of the agreed terms will be
performed by means of a Change Note, or an express modification of the Contract, pursuant
to the provisions of Exhibit IV hereof.
On the basis of the information contained in the Work Schedule, established by the
Contractor and accepted by CODELCO, partial and cumulative progress checks will be
performed, comparing the scheduled progress with the progress effectively achieved in the
former. These comparisons will reveal any deviations, progress or delays, in respect of
which the corrective actions and/or fines will be applied, as the case may be.
16.2 Quality Control and Assurance

During the execution of the Contract, and as part of its obligations, the Contractor must
perform or entrust quality control and assurance in accordance with the specific

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requirements of each case and the methodology stipulated in the Contract. It must also
regularly inform CODELCO of the results of the tests and assays carried out.
Notwithstanding the above, CODELCO may also perform or entrust the tests and assays it
deems necessary for verifying the quality reported to it, or to verify the reliability of the
quality control performed.
The application of the quality assurance and/or quality control system and compliance
therewith by the Contractor, will not release or free the same or limit its liability for the
quality guaranteed by the Contractor in the terms established in the documents that are an
integral part of the Contract.
16.3 Technical, Quality and Risk Prevention Audits

CODELCO, through its Contract Manager, may carry out the Technical, Quality and Risk
Prevention audits and the audits of compliance with the Fatalities Control Standards (FCS)
applicable to the service and which will be specified in the SCTC, by it or by technical or
specialized agencies appointed for such purposes, on each one and/or any of the stages or
activities related to the Contract. For such purposes, the Contractor will provide all
information and free access facilities to all areas in which activities related to the Contract
are being carried out, and at all times.
The purpose of the audits carried out by CODELCO is to determine whether the elements
of the Quality Assurance System used by the Contractor are effective and appropriate for
complying with the quality and performance requirements established in the Contract. The
purpose and objectives are extended to the right of inspection, examination and testing by
CODELCO of the assets and/or services provided by the Contractor during the execution of
the Contract.
The Contractor shall be obligated to accept all proposals by CODELCO's Contract Manager
aimed at improving safety, quality and the care and protection of the environment, obey his
instructions and/or promptly inform the same in writing of any impediments it may have for
compliance therewith.
The audits, controls or inspections of any kind, whether total of partial, that CODELCO
performs, is aware of, or accepts during the execution of the Contract, will in no way release
the Contractor from any possible contractual and legal liability in the roles it assumes by
virtue of the Contract, and it will always be obligated to respond for the quality and correct
execution of the contracted services. Furthermore, under no circumstances will there be
any liability for CODELCO due to, or on occasion of, the execution of or failure to execute
such audits, controls or inspections.
16.4 Review of Audit Findings

The Contractor may appeal to CODELCO's Contract Manager to review the instructions,
indications or decisions that the latter may have communicated to it as a result of the
recommendations and audits and/or inspections carried out in regard to any matter related
to the execution of the Contract, presenting the grounds for its request.
The justifiable request for review must be submitted in writing within five (5) working days of
the date on which it was informed of the instruction or measure. Nonetheless, the
Contractor must obey the instruction and adopt the indicated corrective measures resulting

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from the audits performed, immediately, when serious mistakes are being committed by the
Contractor in the execution, or when there are procedures, conduct and conditions
representing a serious risk of accidents that may affect the safety or integrity of individuals,
equipment or facilities and/or put the continuity of the productive process at risk, without this
being construed or deemed in any way or manner as a waiver of the terms of the review
requested.
CODELCO's Contract Manager must respond to the review request in writing within five (5)
working days of the date on which it was submitted. If it does not reply within such term, it
will be understood that it does not accept the request.
Should the review request be accepted, the Contractor will have ten (10) working days to
submit a request to the Divisional Director of Procurement or the Procurement Manager,
who must resolve within (30) working days.
16.5 Environmental Protection

The Contractor is obligated to permanently comply with the Environmental Protection Plan
developed and submitted in its bid.
CODELCO may permanently inspect such plan, and should it have any observations, the
Contractor must modify it to the entire satisfaction of CODELCO. No modifications may
result in changes in the price of the Contract, to the extent that such modifications are the
result of breaches of the legal and/or administrative environmental standards, of the
constituent documents of the Contract and/or CODELCO's internal standards disclosed for
the preparation of the bid.
The review of the Environmental Protection Plan by the Contract Manager, will not release
the Contractor from its obligation of fully complying with the legal framework governing the
activities of the Contract in the environmental or sustainability areas, or of any other nature.
17 PERFORMANCE
CODELCO will regularly gauge the performance of the Contractor while the Contract is in
force and effect, for the purpose of updating its record of compliance and its technical and
management potential. The method and regularity of the performance assessment will be
defined in the SCTC.
The classification of performance, in its different levels of degrees of acceptance and

rejection achieved by the Contractor, will enable CODELCO to decide on the convenience
of ongoing future business relations with it.
18 PAYMENT OF THE PRICE

CODELCO will pay its Contractor the price agreed in the Contract, by means of payment
statements for the work effectively performed and/or services effectively rendered, as long
as they have been duly accepted, and which will be issued against progress statements, or
in accordance with compliance with certain events based on a specific payment calendar,
such as for example the partial delivery of the works and/or product. The mechanism
chosen for each transaction will be established in the respective SCTC.

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The Payment Statement with its respective Progress Statement will be drawn up and issued
by the Contractor on the date and with the periodicity established in the respective SCTC,
or the Contract, and it shall submit the same to the consideration of CODELCO's Contract
Manager, who will check them and give them due course or present his objections.
CODELCO's Contract Manager may accept the uncontested portion of a Payment
Statement that has been rejected due to errors in its formulation or calculation.
The procedures for making payments, putting forward conditions and other details, can be
found in Exhibit III.
The approval of the payment statement will not entail acceptance, whether provisional or
final, of the part of the Contract executed up to the partial closure date, nor will it in any way
affect the rights of CODELCO. These matters will always be subject to the corresponding
procedures of inspection, final acceptance and guarantee conditions established in the
Contract.
19 PARTIAL CONTRACT CLOSURES

The Parties may draw up partial closure protocols (partial settlements) of the Contract, for
the purpose of preventing and avoiding the normal development of the Contract being
affected by unresolved disputes or disagreements, whenever they deem convenient.
For such purposes, and on the corresponding occasion, correlatively identified partial
closure minutes will be drawn up and executed by the legal representatives of each party.
Such minutes will record the agreements reached, both in contractual terms and in matters
not foreseen or regulated in the Contract and that may have affected any of the Parties up
to the date of partial closure. The Parties shall grant one another mutual settlement and
conformity exclusively with respect to the agreements indicated in the partial closure
minutes.
In any event, it must be understood that a partial closure executed as per the
aforementioned terms does not constitute acceptance or provisional or final acceptance of
the part of the Contract executed to the partial closure date. These matters will always be
subject to the corresponding procedures of inspection, final acceptance and guarantee
conditions established in the Contract, and therefore, unless otherwise specifically
mentioned and expressed in the same document, its subscription will in no way affect
CODELCO's rights and actions that will become effective after the expiry of the Contract,
such as those aimed at making effective liability for the quality of the contracted works or
services, the correct performance of materials, construction defects or rendering of
services, and in general for the correct execution of the Contract.
20 CONTRACT AMENDMENTS
The Parties may from time to time agree to amend the Contract. The administrative and
commercial procedures and provisions governing the matter can be found in Exhibit IV.
21 INCENTIVES AND SANCTIONS

21.1 Incentives during the Execution of the Contract
The SCTC's may consider incentives in favor of the Contractor. CODELCO's Contract
Manager will verify compliance by the Contractor of those achievement goals or milestones
for which the payment of incentives have been established by means of an incentives plan

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previously defined between the Parties. Furthermore, a necessary condition for the
payment of incentives will be full compliance by the Contractor of performance goals.
CODELCO's Contract Manager will be responsible for calculating and paying the
incentives.
21.2 Sanctions for Breaches

The SCTCs will, on a case-by-case basis, establish the variables subject to fines for
breaches attributable to the Contractor.
Fines will be levied administratively, through the Contract Manager, and will be deducted
from the amounts to be received by the Contractor for its payment statements, or any
withheld amounts that may exist, or the Contract guarantees, and can also be deducted
from any payment that CODELCO owes to the Contractor.
Unless otherwise stated in the SCTCs, the total accumulated amount of the fines, for any
reason, will be limited to the equivalent of ten percent (10%) of the total price of the
Contract.
Should the total accumulated amount of fines and sanctions exceed the previously
established ceiling, the Contractor will be deemed to have incurred in a serious breach of its
contractual obligations and CODELCO will be entitled to declare early termination of the
Contract without the Contractor having the right to compensation of any kind.
Should the situation described in the foregoing paragraph occur, CODELCO will assess the
situation and decide discretionally on the convenience of resolving the Contract,
suspending any part of the work under the Contract, or continuing the execution of the part
in question due to noncompliance, but subject to a new execution plan, with the Contractor
assuming the costs for overcoming the shortcomings that caused the serious breach in this
case. CODELCO will inform the Contractor of its decision in a written communication
addressed to its Contract Manager.
22 SUSPENSION OF THE WORKS OF A CONTRACT DUE TO SAFETY, HEALTH OR

ENVIRONMENTAL FACTORS
When works are executed within the premises of CODELCO and/or premises controlled
thereby, or in situations involving safety, health and/or environmental risks, or other
emergency risks, qualified by CODELCO, CODELCO may at any time fully or partially
suspend the execution of the Contract by means of verbal communication to the Contractor,
which it will subsequently confirm in writing within five working days of the date of the
suspension. In this written communication, CODELCO's Contract Manager must specify
which part of the execution of the Contract will be suspended, the effective date of the
suspension, and its estimated duration. The Contractor will suspend the execution on the
indicated date, but will continue the execution of the Contract with respect to any such parts
not interrupted by the suspension.
Furthermore, due to safety, weather, environmental, operational or other reasons, CODELCO

may order the temporary closure of roads within its premises, in the same terms stated in the
foregoing paragraph. Should this situation occur, the Parties will agree to the procedures and
measures they will adopt to mitigate any impact on progress and ensure compliance with the
Contract.

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CODELCO may at any time lift the suspension, informing the Contractor's Contract Manager
in writing of the portion of the Contract that will be re-initiated and its effective termination
date. The Contractor will reinitiate the activities and/or work of the Contract that had been
suspended as soon as possible upon receiving such notice.
During the suspension, CODELCO shall only pay the Contractor the reasonable costs directly
related to the suspended part of the Contract, without including overheads or profits. In such
cases in which stoppage is a consequence of serious mistakes in the execution, or
procedures, conduct or conditions attributable to the Contractor, the suspension shall
continue until the situation that caused it has been satisfactorily overcome, and the Contractor
will therefore not be entitled either of direct costs or compensation of any kind. In the latter
case, the Contractor will also not be entitled to the extension of the term of execution of the
Contract.
The sole obligations of CODELCO to the Contractor for these kinds of suspensions in the
execution of the Contract are those stipulated in this paragraph. The Contractor shall include
the provisions of this paragraph in the Contracts it enters into with its subcontractors, as the
case may be.
23 SUSPENSION OF THE WORKS OR SERVICE DUE TO A DECISION BY CODELCO
CODELCO may at any time instruct the Contractor to suspend the execution of all or part of
the works or services. During such suspension, the Contractor must protect, store and/or
safeguard such part or totality of the works, or else the elements, assets or inputs for
performing the service, against any deterioration, loss or damage.
Once CODELCO has authorized the resumption of the Contract, it will examine, together with
Contractor, the status of the works, facilities, and/or materials affected by the suspension.
The lack of diligence or care by the Contractor in the protection, storage or safeguarding of
the works, facilities or materials shall make the same liable for the damages caused during
the suspension.
Should CODELCO order the suspension for reasons that the Contractor is liable for, the latter
shall have no right to any compensation whatsoever.
Should CODELCO order the suspension of the Contract for any reason not attributable to the
Contractor, and should the Contract suffer any delay or incur in costs derived from such
suspension, the Contractor shall be entitled to request:
a) An extension of the term due to such delay.

b) The payment of any of the reasonable costs derived from the suspension.
24 FORCE MAJEURE
Force majeure or acts of God will be understood to be the events or occurrences referred to
in Article 45 of the Chilean Civil Code.
The strikes declared, pursuant to law, by the workers of CODELCO, or the workers of the
Contractor or its subcontractors, within a regulated collective bargaining process, shall not be
considered causes of force majeure or acts of God.

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When a case classified as force majeure or an act of God occurs, the affected party must
immediately provide notice to the other party of the occurrence of the event of force majeure
or act of God, and as soon as conditions permit, inform it in writing of the impact of the
situation on the carrying out of the work owed under the Contract and its estimated duration.
The affected party must make its best efforts to minimize and/or mitigate the effects of the
force majeure or act of God.
Should the services or works have been fully or partially suspended as a result of the force
majeure or act of God, the affected party must provide the other party with timely notice of the
estimated re-initiation date thereof.
If as a result of the force majeure or act of God the affected party is unable to comply with all
of its obligations, and if after 90 calendar days of the occurrence of the event it has not lifted
or terminated the force majeure or act of God, any of the Parties may immediately terminate
the Contract without compensation for damages or any additional charges or payments.
When an event classified as force majeure or an act of God occurs, each one of the Parties
must assume its own risks and absorb the costs derived therefrom.
The party affected by an event of force majeure or an act of God cannot be released of its
obligations when any of the following circumstances occur:
• When the event or its consequences, invoked as force majeure or an act of God,
was caused by the action or omission of the affected party, or by its agents, workers
or other individuals related thereto, such as such subcontractors or consultants.
• When the law makes the respective party liable for the force majeure or act of God,
or its consequences.
• When the affected party has exposed itself to the damage, by its willful misconduct,
omission or negligence and has not adopted the measures that would have been
reasonably necessary for avoiding the effects of the force majeure or act of God.
CHAPTER IV. ACCEPTANCE OF THE WORKS OR SERVICES

25 ACCEPTANCE PROCEDURE
Once the execution of the Contract has concluded, there will be a provisional acceptance
followed by a final acceptance after the term established for such purposes in the SCTC. The
aforementioned term will be understood to be a guarantee or testing term, notwithstanding the
possibility of guarantees being extended for an additional term. CODELCO may conduct the
acceptance in advance, if it deems it convenient.
Partial provisional acceptance may be established in the SCTCs, and will be subject to the
procedures expressly indicated for such purposes. Should the Contractual documents
stipulate progress or partial compliance milestones, the Parties will state for the record the
date of compliance of each one of them in the partial acceptance minutes drawn up for such
purposes.
In the case of services rendered or the construction of material works that do not require
any testing or guarantee period, a sole, definitive acceptance will be conducted.

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A copy of the minutes, signed by the respective Contract Managers, will be given to each
one of the Parties.
In case of application of fines to the Contractor for breach of the term of execution of the
Contract, the termination date stipulated in the provisional acceptance minutes, or in the
Sole Final Acceptance minutes, as the case may be, will be considered.
25.1 Provisional Acceptance

Once the Contract has been executed, the Contractor must request Provisional Acceptance in
writing from CODELCO's Contract Manager, who will proceed to verify that the services or
works that are the subject matter of the Contract are completely finished and executed in
accordance with the conditions of the Contract.
If the services or works that are the subject matter of the Contract are accepted without
comment by CODELCO, Provisional Acceptance will be extended, stipulating the date on
which the Contractor requested such acceptance as the termination date in the minutes.
Should it be determined that the services or works that are the subject matter of the Contract
have not been terminated, CODELCO's Contract Manager will not proceed with the
Provisional Acceptance and will state the corresponding observations for the record in the
minutes. The Contractor's Contract Manager must act on such observations, resolve them,
and then request Provisional Acceptance anew. Once the observations have been corrected,
Provisional Acceptance will proceed.
In any event, CODELCO's Contract Manager may choose to accept the services or works
with observations, and will proceed to extend a "Provisional Acceptance with Observations",
stating such observations for the record in the minutes. The Contractor must correct the
observations within the term agreed by the Parties in the minutes.
Should the observations be corrected within the agreed term, the final termination date will be
the date on which the Contractor requested the acceptance, without including the term
employed for correcting the observation.
Should the observations be corrected within a term greater than the agreed term, the final
termination date will be the date on which the observations were effectively corrected.
Should seven (7) or more calendar days have transpired from the date of the minutes with
observations, and the Contractor has not initiated work to correct them, CODELCO may notify
the Contractor that it will proceed to execute the pending work or repairs on its own account
or through third Parties. The cost of such work or repairs will be entirely to the expense of the
Contractor, and if it does not pay, directly to CODELCO, and its value will be deducted from
the Contractor's assets held by CODELCO, and failing that, by the guarantees of the
Contract.
CODELCO will only return the corresponding withheld amounts at the request of the
Contractor once provisional acceptance has been extended, deducting from the same all
corresponding charges pursuant to the Contract.

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25.2 Final Acceptance

Final acceptance of the works, work or services that are the subject matter of this Contract
will be conducted within the term established for such purposes in the contractual
documents. If there is no mention of the term, it will be counted as of the date of the
minutes of the provisional acceptance.
The act of Final Acceptance must be attended by the Contractor's Contract Manager. In this
act, CODELCO's Contract Manager will proceed to verify that the executed works, work or
services fully comply with the conditions of the Contract, and are in conditions for final
acceptance. If this is the case, final acceptance will proceed.
If CODELCO's verification determines that the works, work or services have flaws or defects,
the Contractor shall be obligated to carry out all the necessary repairs and/or re-performance,
at its sole expense, costs and account, within the term agreed to by the Parties for such
purposes. If the flaws or defects are not repaired by the Contractor within the agreed term, or
if the repair work is not initiated within 7 working days, CODELCO will be entitled to correct
the observations at its own account, or through third parties, charged to the guarantees or
other assets that it holds, without precluding any other actions it may exercise for forcefully
demanding compliance with the Contract or payment for damages.
Final Acceptance will be stated for the record in the minutes drawn up for such purposes,
which will be signed by CODELCO's Contract Manager and the Contractor's Contract
Manager. Settlement and final payment of the Contract will then take place.
CHAPTER V. TERMINATION OF THE CONTRACT

26 DEMOBILIZATION ACTIVITIES
As part of its Demobilization activities, the Contractor will remove its temporary facilities and
return to CODELCO the premises it had occupied for such purposes, clean and clear, i.e.
devoid of rubble, remains of materials and liquid or solid waste of any kind. For such
purposes, it must collect and transport the aforementioned materials and waste to the
authorized final disposal dumps indicated by CODELCO.
In case of noncompliance, CODELCO may carry out, or have these activities carried out and
charged to any amount that it must pay the Contractor, for any reason, and even execute the
guarantees granted to it.
The Contractor must also comply with the provisions of the foregoing paragraphs in case of
early termination of the Contract for any reason, as the case may be.
27 SETTLEMENT AND FINAL PAYMENT OF THE CONTRACT

Once the minutes of final acceptance, or sole acceptance of a definitive nature have been
signed, the final settlement of the Contract will take place. The Contract Managers of both
Parties will draw up the settlement minutes, which will include the payable balances and
pending withheld amounts in favor of the Contractor, the discounting of fines or other charges
applicable on that date, and the return of the guarantees, if pertinent.
Prior to the drawing up of the settlement minutes, the Contractor must provide CODELCO
with the valid certificates of the Labor Inspectorate, Social Security Institutions and Pension

31/ 10/ 2015
Fund Managers (AFPs), stating that there are no pending complaints by its employees who
participated in the execution of the Contract for labor or social security matters, including the
payment of salaries and wages, severance payments, indemnities for termination of contract,
vacations and Social Security contributions. Together with the certificates, the Contractor
must provide an affidavit signed by the legal representative stating that it has no pending
lawsuits or litigation related to or derived from the Contract.
Once the settlement minutes have been signed by both Parties, they will be attached as a
backup to the Final Payment Statement, and will serve as proof of the completion of the
execution of the works of services, and for requesting the return of the guarantees.
Once the Contract has been settled at the price agreed in the Contract and in each one of its
change orders, the Contractor will grant and issue the Release and Settlement Agreement,
consisting in a document that releases CODELCO from its contractual obligations.
The payment made by CODELCO and the subsequent release and settlement granted by
the Contractor for the execution of a material work, only means that the executed work has
been approved as being in accordance with the Contract externally, and does not liberate the
Contractor from its obligations after the conclusion of the services, such as those
contemplated in Article 2.003 numbers 3 and 4 of the Civil Code, in the Framework Law of
Urbanism and Construction and other laws, or in general, those related to the obligations of
guarantee or quality of services and work performed. Similarly, the settlement of the Contract
of an intangible service or work, does not liberate the Contractor from the liability established
by law for the lease of the services, nor does it constitute a waiver of the rights to enforce the
liability of the Contractor or the actions of CODELCO to enforce the liability of the Contractor
regarding the rendering of intangible services when negligence, gross negligence or willful
misconduct is involved.
The relevant bank bond will be returned after the signature of the release and settlement.
28 EARLY TERMINATION OF THE CONTRACT DUE TO SERIOUS BREACH BY ONE OF THE

PARTIES
Any one of the Parties shall be entitled to request the declaration of early termination of the
Contract in case of any breach by the other party qualified as serious. In this case, this
decision will be communicated to the other party by means of a certified letter sent by the
legal representative of one of the Parties to the legal representative of the other,
understanding them to be the individuals who executed the Contract.
Nonetheless, CODELCO may declare the early termination of the Contract, without paying
any compensation and without the need for any judicial or extrajudicial process, should any
of the following causes of non-compliance by the Contractor occur:
a) If the Contractor does not initiate the execution of the Contract within ten (10) days of the
agreed startup date, or suspends and/or interrupts it without any justifiable grounds
accepted by CODELCO.
b) Due to serious or repeated noncompliance by the Contractor with the instructions
imparted in writing by CODELCO's Contract Manager.
c) If the total accumulated amount of fines and sanctions applied to the Contractor
exceeds ten percent (10%) of the total price of the Contract.

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d) Should the Contractor fail to comply with the Contract execution schedule for reasons
attributable to it, and does not make up for its delay within the term and in the manner
agreed by the Parties.
e) Should the Contractor fail to comply with the minimum performance goals established in
the Contract, should there be any, for three consecutive months, or six times in one
calendar year.
f) Due to the bankruptcy or insolvency of the Contractor, unless CODELCO expressly
agrees to continue the execution of the Contract, pursuant to the legislation in force
regarding bankruptcy.
g) Should the Contractor stop the execution of the Contract due to strikes or disputes with its
workers, or with its subcontractors, and does not offer CODELCO a plan to resolve these
contingencies, recover the delay caused and normalize the rhythm of execution of the
Contract, within the term that CODELCO may have set for the delivery of such plan.
h) If the Contractor, its subcontractors or personnel dependent on it, cause direct, indirect,
pecuniary or non-pecuniary damages to CODELCO.
i) If the Contractor fails to comply or partially complies with the legal and regulatory
provisions governing health and safety in the workplace and the environment; these
grounds are of an essential nature.
j) In general, in all cases in which the Contract states that CODELCO shall be entitled to
declare early termination of the Contract in the event of an occurrence or omission
attributable to the Contractor.
Should CODELCO declare early termination of the Contract for any of the reasons
established in the foregoing paragraphs, it may suspend pending payments and make
guarantees effective administratively without any need for judicial or extrajudicial procedures
or a formal declaration of arrears, and notwithstanding the compensation that may be due as
redress for the direct damages it may be subject to. The guarantees may be used by
CODELCO to compensate for any pending debt or obligation that the Contractor may have
with CODELCO and also enforce any other liability. All withheld amounts will become the
property of CODELCO as compensation for any breach of the Contract.
Once notice of early termination of the Contract has been provided, the following activities
will be performed:
i) The Contract Managers of the Parties will draw up minutes stating for the record the
progress status of their work at that time, an inventory of existing materials and equipment
and other pertinent details regarding the nature and type of assets and/or services
Contract.
ii) The Contract Managers of the Parties must also subscribe a deed of early termination of
the Contract. CODELCO will pay the Contractor for the assets and/or services that it may
have received to its entire satisfaction to that date, notwithstanding the fact that the
amount involved can be compensated between the Parties if reciprocal obligations exist.
CODELCO will be entitled to require the Contractor to remove all or part of its materials,
inputs or other assets on its premises, or else use them to continue and terminate the
unfinished part of the Contract. In the latter case, the materials, inputs or other assets of the
Contractor used by CODELCO to continue the work will be appraised at their proven cost
from invoices, and their value will be included as part of any final settlement.

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29 EARLY TERMINATION OF THE CONTRACT BY MUTUAL AGREEMENT

If early termination of the Contract occurs by mutual agreement between the Parties, it will be
resolved in accordance with what they formerly agree, subject in all cases to the provisions of
Chilean legislation.
30 EARLY TERMINATION OF THE CONTRACT DETERMINED BY CODELCO

CODELCO shall have the option of terminating the Contract, by operation of law, without
expression of cause, and without the Contractor being entitled to claim compensation of any
kind other than that stipulated herein.
Should CODELCO decide to exercise this right, it will communicate its decision to the
Contractor in a written notice, delivered at least (40) calendar days prior to the early
termination of the Contract.
Once it has received this early termination notice, the Contractor must:
i) Suspend work and/or services of the Contract on the date indicated in the notice, and
proceeded to demobilization pursuant to the provisions of CHAPTER V, number 26.
ii) Give the corresponding notice of early termination to the subcontractors and/or
suppliers it may have engaged for meeting its Contractual obligations. For such
purposes, the Contractor must include an early termination clause, in similar terms,
in the Contracts it enters into with third parties for the purposes of the Contract..
iii) Submit a settlement document with which final payment of the Contract will be made.
The settlement must be backed up with the information and data of the work
effectively executed up to the early termination date, calculated at the prices, tariffs,
overheads, fees and other reimbursable expenses agreed in the Contract.
The Contract Managers of the Parties will then meet to define the terms in which the Contract
will be settled.
The settlement of the Contract will include:
a) The payment of outstanding balances corresponding to works and/or services

effectively executed and/or rendered up to the early termination date, and received to
the satisfaction of CODELCO, in accordance with the prices of the Contract,
including the direct costs derived from compliance with the labor obligations to the
workers assigned to the Contract by the Contractor (severance agreements, legal
bonuses, compensation for years of service, etc.);
b) The costs of removing the temporary facilities, materials, machinery and equipment
contained in the Contract (demobilization), if pertinent according to the Contract;
c) A sole total amount for compensating the Contractor for direct losses and damages
that such early termination may cause it.
The amount of the compensation referred to in foregoing c) will be calculated on the basis of
the following criteria, bearing in mind that all necessary calculations will be made to the early
termination date, communicated to the Contractor by CODELCO:
Compensation for overheads and profits: CODELCO will pay the Contractor as
compensation an amount equal to the value agreed in the Contract for one month of
overheads and profits. If the Contract does not explicitly state the monthly amount of the
overheads, it will be assumed, only for the purposes of this clause, that they are equal to

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15% of the Contract price, divided by the duration of the Contract expressed in months.
Similarly, if the Contract does not explicitly state the monthly amount of the profits, it will be
assumed, only for the purposes of this clause, that they are equal to 10% of the price of the
Contract, divided by the duration of the Contract expressed in months.
Compensation for investments not written off: Provided one of the Contract documents
establishes a lineal depreciation table for investments that have not been written off,
CODELCO will pay the Contractor as compensation, only for those assets included in the
aforementioned table which on the early termination date of the Contract have no alternative
use for the Contractor, the difference between (a) the value of such investments effectively
written off, and b) the estimated commercial value of such assets on the date of early
termination of the Contract. Hence, investments that are not explicitly included in the
aforementioned table will not be considered in this calculation under any circumstances.
The commercial value of investments will be determined by an appraiser appointed by

CODELCO.
The SCTCs may provide for the possibility of CODELCO becoming the owner of such
equipment, temporary facilities and materials or assets that have not been written off, for the
price established in the SCTCs, in which case the compensation referred to in the foregoing
paragraph will not be applicable.
CHAPTER VI. COMPLEMENTARY PROVISIONS

31 COMMUNICATION BETWEEN THE PARTIES
All communication between the Parties must be formal. This means that it must be
performed in such a way that its contents are fully recorded, either in writing in a physical
document, or in an electronic file, which will also enable the party that issued it to prove that
such communication was in fact sent at the stated time, in accordance with the rules of
evidence established by law.
The date of a communication delivered by hand will be the date on which it was received by
the addressee, and in case it was sent by certified mail, the date of communication will be
the date on which it was certified by the post office.
Unless otherwise stated in the respective SCTCs, the communications exchanged between
CODELCO's Contract Manager and the Contractor's Contract Manager during the
execution of the Contract, will be performed by means of the application denominated
"Digital Job Log" (DJL). The DJL will be the only formal means of communication between
the Parties, its use will be mandatory, and it will be fully valid as a means of evidence.
In addition to such correspondence, in material works construction Contracts, the

Contractor must provide and maintain on the job site, or in the place agreed to by the
representatives of both Parties, the communication's journal denominated “Job Log”, the
use of which will be mandatory. The annotations in the log will be transcribed to the DJL on
a daily basis. If the Parties agree to use this type of journal in other types of Contracts, it will
be denominated the “Services Log,” or simply the “Communications Log.”
32 TRANSPARENCY OF THE CONTRACTING AND CONTRACT EXECUTION PROCESS

In accordance with the Business Code of Conduct, all forms of corruption are unacceptable
to CODELCO. Hence, CODELCO promotes honest and loyal business relationships with

31/ 10/ 2015
third parties in a healthy and transparent business environment. Similarly, CODELCO

encourages the parties to always act in accordance with the Value Statement and the
Business Code of Conduct and Ethics.
The Contractor will immediately inform CODELCO by the most expedient means possible, if
any individual or agency wrongfully offers it to act as an intermediary between it and
CODELCO, or else wrongfully provides it with information regarding a contracting process
or process in which the Contractor may be a participant, while any possible Contract is
valid.
33 CRIMINAL LIABILITY OF BODIES CORPORATE

a) The Contractor's workers or employees must respect standing legal provisions applicable
to their work. Each worker or employee must expressly abstain from committing or
participating in any way in the commission of one or more of the following crimes
• Laundering of assets, contemplated in Article 27 of Law No. 19.913;
• Financing of terrorism, stipulated in Article 8 of Law No. 18.314; and
• Crimes of bribery stipulated in Articles 250 and 251-bis of the Criminal Code.
b) Management, workers and employees must control the personnel subordinated to them,
seeking to avoid that those under their supervision commit or participate in any way in the
commission of the crimes mentioned in the foregoing paragraph.
c) All workers or employees of the Contractor shall be obligated to inform CODELCO of any
act or Contract that may constitute one or more of the aforementioned crimes.
d) All workers or employees of the Contractor must also attend all training and induction
events organized by the Contractor, for the purpose of adopting, implementing or updating
all the instructions and ordinances issued by CODELCO, especially those referred to in Law
No. 20.393, and actively participating in their execution.
34 CONFIDENTIALITY AND PUBLICITY

During or after the term of validity of the Contract, the Contractor will take care not to
disclose or reveal to any individual, firm, corporation or association, in written or spoken
form, without prior consent in writing from CODELCO, any information related in any way to
its properties, facilities, operations and business affairs that it may have acquired by way of
its contractual relationship, either through visits to CODELCO's respective facilities, offices,
properties or premises controlled thereby, through assessments, or in any other way.
Nonetheless, the Contractor may reveal the information that is indispensable for its
executive or employees who are directly involved in assessing such information for the
purpose of complying with the requirements or obligations of the Contract. The Contractor
will restrict access to the information only to such members of its personnel that strictly
require the same, and shall ensure that such individuals handle and maintain all the
information in a confidential manner, being obligated to establish this obligation in the
respective confidentiality commitments.
The Contractor shall not under any circumstances use to its advantage any technical,
operational, engineering, administrative or financial information provided to it, that it
produces, or draws up in compliance with the Contract, or that it may become acquainted
with by virtue of the Contract, or that may affect the interests of CODELCO, nor may it

31/ 10/ 2015
disclose or reveal it to any individual or agency, in any way, either verbally, in writing, by
magnetic media, photographs or in any other way, nor make it known to third parties or
publicize it, without prior express written authorization from CODELCO. For these purposes,
such information is of a CONFIDENTIAL nature and all information thus classified will be of
a CORPORATE SECRET nature.
For the Contractor, the acceptance of the GATCs means that the CONFIDENTIAL
CORPORATE SECRET information, as the case may be, must be safeguarded in the
manner established in Law No. 19.093 governing Industrial Privileges and the Protection of
Industrial Property. Hence, any breach of the obligation of confidentiality may be prosecuted
and sanctioned in the manner established in the aforementioned legal provision. Should the
Contractor breach the confidentiality agreement, CODELCO will exercise the legal actions
to compensate for the losses and damages that such breach or noncompliance may cause
it, without prejudice of the preliminary and interim measures contemplated in the
aforementioned law.
The aforementioned obligations will subsist for an additional term of three years after the
expiry of the term of the Contract, counted from the date of its termination.
All information must be returned to CODELCO either at the end of the term established in
the Contract; the end of the term of execution of the Contract, or on the date that
CODELCO expressly requested, and will be returned in the same format and media in
which it was provided.
The Contractor also undertakes not to reveal or disclose information, publicity or press
releases of any kind, even of a technical or scientific nature, related to the Contract or to
CODELCO. The Contractor shall not publish, or have published, any material related to the
Contract, or deliver conferences or presentations on these matters, nor organize visits of
third parties to CODELCO's facilities, without prior written authorization from CODELCO.
The same confidentiality obligations established herein will be made extensive to the
Contractor's personnel, any third party source and the personnel that it uses for executing
the Contract, and it will be exclusively liable for adopting the pertinent safeguards for
adequate compliance with these obligations.
35 INTELLECTUAL-INDUSTRIAL PROPERTY
All the work, drawings, designs, reports, catalogs, data, specifications and, in general, all
documents, instruments, products or processes that the Contractor develops or draws up
during the Contract, particularly engineering designs and solutions, shall be the property of
CODELCO and will be handed over to it once they have been completed. The assignment
by the Contractor to CODELCO of the corresponding rights will be an essential condition of
the Contract, when required by the latter at any time. Failure to assign such rights to
CODELCO in a timely manner will be considered a serious breach of the obligations of the
Contract.
By virtue of the Contract, the intellectual or industrial property of the work and/or services
provided by the Contactor will at all times be understood to be transferred to CODELCO,
which will be fully empowered to complete, extend or modify the work and/or service
resulting from such contracting, for the purpose of immediately protecting it by means of
patents or in any other way, as well as for its use and/or transfer to its subsidiaries.

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The technical developments and technological innovation created by CODELCO, either

materially or represented or described in any media, will be considered the protected
property of CODELCO for all intents and purposes of any specific contracting, and
therefore, when the Contractor has access to this information, it is automatically prohibited
from using or enjoying, reproducing or disclosing such technical developments and
technological innovation it in any way, without the prior written consent of CODELCO.
36 PATENTS AND TRADEMARKS

36.1 Inventions and Rights of Use:
Should the Contractor or its personnel create any invention based on information that it
must maintain confidential by virtue of the Contract, it shall immediately inform CODELCO
thereof.
Furthermore:
a) It will be understood that the Contractor has granted to CODELCO in the Contract,
and bearing in mind the price it effectively paid for it, an irrevocable license, not
exclusive, free of royalties and the irrevocable rights to grant nonexclusive licenses,
free of royalties, without informing it thereof, for using the inventions under the
Patent Rights of the Contractor, as defined below. The right to grant licenses may
be assigned by CODELCO to any of its subsidiaries.
b) Only for these purposes, the term "Patent Rights" will mean patents and patent
applications for inventions created by the Contractor or its personnel, which are
based on information belonging to CODELCO and which were conceived while the
Contract was valid, or in a period of three (3) years after the expiry or termination of
the Contract.
In addition to the above, and without limiting the foregoing provisions, it will always be
understood that in the Contract the Contractor has granted CODELCO and its subsidiaries
a free, irrevocable license, not exclusive, for use in the development, operation and
exploitation of any of its projects and facilities, and all the patent rights that currently belong
to or are controlled by the former, as long as they are related to the processes, equipment,
facilities and other items described or incorporated in the work of the Contract, as well as
selling the products fabricated by such use, together with the right of granting the license to
any valid successor of the projects and facilities of CODELCO.
36.2 Responsibility for use of Licenses, Patents and Trademarks

a) The Contractor shall be fully liable for the resources it uses for complying with the
execution of the Contract, and will respond to any legal complaint for the
unauthorized use it may make of licenses, patents, registered trademarks or
property rights for the purposes of the Contract, either while it is valid, during its
guarantee period and for up to three (3) years, counted from the date of expiry of
such guarantee period.
b) The Contractor will assume any liability attributed to CODELCO and will reimburse
it the amounts it is condemned to pay, if CODELCO is prevented from using the
resources that are the subject matter of the complaint by a judicial order of
withholding or prohibition. The Contractor shall adopt all the necessary measures

31/ 10/ 2015
at its own expense, so that CODELCO can continue receiving the service, product
or part thereof that had been prohibited or withheld, replacing it or modifying it so
that it does not constitute a breach.
For the application of this provision, it will suffice for CODELCO to inform the Contractor of
the existence of any complaint regarding these matters. The Contractor shall assume the
defense and negotiations associated to such complaints at its own expense.
37 ALCOHOL AND DRUG CONTROL

CODELCO is committed to maintaining the highest standards of safety, efficiency and
productivity among its own workers, as well as the workers of its contractors and
subcontractors.
As stipulated in CODELCO's Corporate Policy on Alcohol, Drugs and Tobacco, the

consumption of alcohol, drugs or other similar substances is not allowed within the facilities
and premises of CODELCO, under any circumstances, since they have adverse effects for
the safety of those consuming them, and due to the risks they entail for the other workers.
This breach is considered serious for all legal and contractual effects and purposes, and will
be grounds for immediate expulsion from CODELCO's facilities and premises of any of the
Contractor´s or subcontractor's workers who breach this or who may be involved in the
same, and subsequent prohibition of entry.
For due supervision of the application of this policy, and for the control and prevention of
stealing and/or theft, CODELCO may carry out inspections on its premises without prior
notice, including in the facilities and premises occupied by the Contractor, its subcontractors
and its personnel.
In its premises, CODELCO may also require the Contractor and its subcontractors'
personnel to submit to a medical assessment or drug and alcohol test in the establishments
determined by CODELCO, whenever consumption of any of these substances is
suspected. A positive result of any test, or the refusal submit to it, shall be grounds for the
expulsion of the affected party from the facilities or premises and the subsequent prohibition
of entry. In those cases in which there is a duly certified medical prescription for the
administration of drugs, such circumstance and the correct use of the medicament must be
proven before CODELCO's competent departments.
38 REMAINS OF GEOLOGICAL OR ARCHAEOLOGICAL INTEREST

At all times during the execution of the Contract, the Contractor must take care to protect
and preserve the country's natural, archaeological, historical and cultural heritage.
If during the execution of the Contract, and within the premises of CODELCO, or in the
terrain, areas and sites controlled thereby, the Contractor should find or discover on the
surface or below it, objects or other manifestations of interest, such as geoglyphs, fossil or
archaeological remains, it must immediately shut down the job sites or works and
communicate the findings to CODELCO's Contract Manager and the competent authorities,
for their examination. Such items will be considered to have been discovered by CODELCO
and will become part of its property, pursuant to the provisions of Law No. 17.288 governing
National Monuments.

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The Contractor shall take all reasonable precautions to prevent the looting or damaging of
such species, until the discovered objects or sites are under the supervision of the
competent authorities. CODELCO's Contract Manager will be immediately informed as
soon as such objects have been discovered, and prior to removing or intervening the same.
If as a result of the instructions imparted by CODELCO on occasion of the discovery, the

Contractor suffers any delay and/or incurs in additional cost, it's may request a Change
Note, or a special modification, if pertinent, pursuant to the mechanism established in
Exhibit IV of the GATC.
39 DISPUTE RESOLUTION
39.1 Requests and Complaints
Should the Contractor consider that an order or instruction, action or omission, event or
circumstance that departs from the conditions established in the Contract is detrimental to it,
or entitles it to charge additional expenses or claim compensation, or a variation of the term
provided for in the Contract, it may inform CODELCO's Contract Manager in writing of its
intention to request the corresponding compensation, within the following five (5) calendar
days. This term can be extended for the same number of calendar days at the request of the
Contractor. If the conditions that the Contractor claims are affecting it persist after such notice,
it may request the corresponding compensation, following the procedure below.
39.1.1 Request for Compensation

Once it has expressed its intention of requesting compensation, the Contractor's Contract
Manager will present a written compensation request to CODELCO's Contract Manager, with
a description of the events or circumstances which serve as basis for the request and its
arguments as to why they are affecting it. The request must be submitted within twenty (20)
calendar days counted as of the occurrence of the action, event of circumstances affecting it.
After this term, the right to request compensation will expire.
39.1.2 Claims
A "claim" will be understood to be a formal request for economic compensation and/or an
extension of any relevant terms provide for under the Contract, presented by the Contractor to
CODELCO as the result of an action, event or circumstance which, in the opinion of the
Contractor, departs from the provisions of the Contract, and has produced favorable
consequences and which has not been resolved consensually between the Contract
Managers of both Parties.
The treatment of claims will be subject to the rules set out in the Instructions for Formal
Request of Economic Compensation and/or Extension of Terms which CODELCO
maintains in force.
39.2 Competent Courts of Law

Any disputes that may arise and/or subsist between the Contractor and CODELCO
regarding the validity, application, compliance, interpretation or termination of the Contract
or its complementary or amending documents, after attempting to resolve them by mutual
agreement applying the procedure described in the foregoing paragraph, will be submitted
to the courts a s provided for below, unless the SCTCs state that the same must be
resolved by arbitration or any other alternative dispute mechanism, as the case may be.

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All proceedings arising out of, relating to or in connection with the Contract shall be heard
and determined exclusively in any New York federal court sitting in the Borough of
Manhattan of the City of New York; provided, however, that if such federal court does not
have jurisdiction over such proceeding, such proceeding shall be heard and determined
exclusively in any New York state court sitting in the Borough of Manhattan of the City of
New York; provided, further, that each Party shall be permitted to institute a proceeding in
any court of competent jurisdiction for the purposes of enforcing any final judgment of a
New York court rendered pursuant to this section. Consistent with the forgoing, each of the
Parties hereby (a) submits to the exclusive jurisdiction of any federal or state court sitting in
the Borough of Manhattan of the City of New York for the purpose of any proceeding arising
out of, relating to or in connection with this Contract brought by any Party, and (b)
irrevocably waives, and agrees not to assert in any above-named New York court or any
court of competent jurisdiction by way of motion, defense, or otherwise, in any such
proceeding, any claim that it is not subject personally to the jurisdiction of the above courts,
that its property is exempt or immune from attachment or execution, that such proceeding is
brought in an inconvenient forum, that the venue of such proceeding is improper, or that the
Contract or any of the documents that form part of the same may not be enforced in or by
any of the above-named courts.
Each of the Parties hereby expressly waives to the fullest extent permitted by applicable law
any right it may have to a trial by jury with respect to any proceeding or liability directly or
indirectly arising out of, under or in connection with the Contract. Each of the Parties hereby
(a) certifies that no representative of any other party hereto has represented, expressly or
otherwise, that such other party would not, in the event of any such proceeding or liability,
seek to enforce the foregoing waiver; and (b) acknowledges that it has been induced to
enter into the Contract, by, among other things, the mutual waivers and certifications set
forth in this section.
Each Party, on behalf of itself and its Affiliates, hereby irrevocably agrees (a) to accept
service of process in any proceeding or related proceedings arising out of, under or in
connection with the Contract at such Party’s address as set forth in the Contract or as each
Party may from time to time designate and (b) not to assert by way of motion, defense or
otherwise any claim that such service is not effective; provided, however, that nothing in the
Contract shall affect the right to serve process in any manner permitted by applicable legal
requirements.
To the extent permitted by applicable legal requirements, if any Party has or hereafter may
acquire any immunity (sovereign or otherwise) from any proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or otherwise)
with respect to itself or any of its property, such Party hereby irrevocably waives and agrees
not to plead or claim such immunity in respect of its obligations under the Contract. The
Parties agree that the waivers set forth in this section are intended to be irrevocable and not
subject to withdrawal for any purposes.
40 ABSENCE OF STANDARDS AND/OR REGULATIONS

In case there are no regulations, applicable Chilean or foreign standards, technical,
engineering or other specific instructions of CODELCO for resolving certain singularities,
new situations and special details of the contracted work and/or service with scientific-
technical rigor and operational safety, the following procedure will be applicable:

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The Contractor will draw up the specifications, standards and/or criteria that must be
applied to that part of the work and/or service that is lacking governing standards. For such
purposes, it will draw on its own experience; similar applications developed by the industry;
international standards and/or regulations that may be used as a reference; technical
studies; normally accepted engineering-fabrication-construction-assembly-manufacturing
practices, and any other action which, to the best of its knowledge, is applicable to the
matter at hand.
The standards and/or criteria developed by the Contractor must indicate in their introduction
the methodology employed, making special reference to the legal and/or regulatory
framework on which they are based, or that backs them up, and they will be drawn up in
such a way as to satisfy CODELCO's safety requirements for individuals, equipment,
occupational health and the environment.
Once the standards and/or criteria have been drawn up, the Contractor will submit them to
the consideration of CODELCO for it to be able to engage their true purpose and
application.
On each occasion, CODELCO will agree a prudent term with the Contractor for the former
to express its reservations and observations, which may include rejection, or it may inform
the Contractor that it has no objections to its proposal of standards and/or criteria and that it
can consider them to be accepted.
Once the standards and/or criteria drawn up by the Contractor have been accepted by
CODELCO, they will become part of CODELCO's set of quality and performance
requirements, complementing the other standards and regulations that served as a basis for
resolving all the stages of the Contract.
Notwithstanding the acceptance by CODELCO mentioned in the foregoing paragraph, the

Contractor will continue to be liable as the guarantor of the quality of the products, work
and/or services provided and executed by it and/or its subcontractors, for any specific
Contract.

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EXHIBIT I. GUARANTEES AND INSURANCE
1 GUARANTEES
1.1 Performance Bond
The amount of the performance bond for each and every one of the obligations undertaken by the
Contactor in the Contract, is the equivalent of five percent (5%) of the Contract price and its
extensions. Such amount will be constituted by means of an ad-hoc banking instrument.
Exceptionally, the SCTCs may exempt or reduce the need for this guarantee. Similarly, the SCTCs
may increase their amounts or establish additional guarantees.
a) Bank Bonds
The SCTCs stipulate whether a Bank Bond, Guarantee Policy or a Stand-by Letter of Credit will be
required in each specific case, depending on whether national or international contracting is
involved; in all these cases the instruments will be payable on site, unconditional and irrevocable
and with no collection restrictions, taken out by the Contractor in favor of “CODELCO-Chile” in the
currency of the Contract or in Unidades de Fomento, as stipulated in the SCTC.
These guarantee instruments must be extended in Spanish and be issued by banks or world class
companies, to the satisfaction of CODELCO. The text of the letters of credit granted directly by a
foreign bank will previously be submitted to the approval of CODELCO. If the bank or issuing
company is foreign, such interest amounts must be tested with codes through a corresponding
Chilean bank.
Validity: The term of validity of guarantee instruments must include the Contractual term plus
at least ninety (90) days.
In Contracts whose duration is equal to or greater than twenty-four (24) months, and
if authorized by the SCTC, the total amount of this guarantee can be documented in
renewable annual periods; or for annual periods, and for an amount equivalent to the
portion of the price of the Contract, estimated for one year.
The guarantee documents that may have been agreed for guaranteeing faithful
compliance with a Contract, must be valid at all times, both in terms and in amount.
This implies, particularly, that should they be made effective prior to the expiry date,
the Contractor must issue a new banking instrument, in the same previously
described conditions, for maintaining the continuity and validity of this guarantee.
Furthermore should the renewal of an instrument be agreed, the replacing instrument
must be received by CODELCO at least three (3) working days prior to the expiry of
the first document. If this does not occur, CODELCO will collect on the previous
document prior to its expiry.
Delivery: The Contractor must deliver the guarantee instruments within a maximum of ten (10)
calendar days from the date of the awarding of the Contract, in the place and with the
annotations indicated in the SCTC or the Award Letter. This term will be extended
only in cases duly justified by the Contractor.

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Should it be agreed to extend the term for the delivery of the guarantee, the
Contractor must extend the validity of the Bank Bond in order to guarantee the
formality of its proposal, should it have been established.
Should the Contractor fail to deliver the performance bonds to CODELCO within the
term established or agreed in each case, it will be understood that the Contractor has
committed a serious breach of the Contract, which will entitle CODELCO to exercise
the actions or rights corresponding to it and cash in the performance bond of its
proposal, should there be one. In any event, CODELCO will not make payments of
any kind as long as it has not received the corresponding Performance Bond to its
entire satisfaction.
Extensions: Should the Parties agree to increase the price of the Contract in a percentage greater
than twenty percent (20%) of its subscription amount, or extend the execution term,
the Contractor must increase the coverage of the Performance Bond or extend its
validity respectively, in order to cover the modified amount of the Contract or the
extension of its term of execution, in the same conditions established in this
paragraph.
All the expenses which the Contractor must incur for establishing or extending this
guarantee and/or extending coverage, will be to its entire expense, cost and account,
except those that can be attributed to a serious breach by CODELCO of its
obligations under the guaranteed Contract.
CODELCO will not make any payments of any nature as long as it has not received
the instrument corresponding to renewals or increases of coverage of this guarantee
to its entire satisfaction, within the term agreed on each occasion by the Parties,
which cannot exceed twenty (20) working days in the case of extensions and/or
increases of coverage.
Failure by the Contractor to provide CODELCO with the renewal of the guarantee or
the extensions of coverage within the established or agreed terms, will be considered
a serious breach of its contractual obligations, and the latter will be entitled to cash in
the performance bond valid at that time.
Collection: CODELCO may cash in the Performance Bond administratively and without the need
for judicial or arbitrational action of any kind, being free of any obligation to the
Contractor should the latter fail to comply with any of the obligations undertaken by
virtue of the Contract, or complies with them partially or in an untimely fashion.
In particular, CODELCO may cash in this guarantee as compensation for damages

caused to its personnel, subcontractors, suppliers or third parties, for acts or
omissions attributable to the Contractor in which CODELCO is alternatively or jointly
and severally liable, or that are charged to CODELCO in a legal ruling, if there is no
insurance or if its coverage is insufficient. The same criteria will be applicable with
regard to fines or sanctions or if CODELCO is convicted by environmental, technical
and/or sanitary authorities for acts or omissions of the Contractor, its personnel, its
subcontractors and their workers.
The above does not preclude the actions that CODELCO may take separately and
independently for claiming the corresponding compensation for damages by virtue of
the Contract and applicable Chilean legislation.

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Return of bonds: The Performance Bond, or bonds, will be returned, if pertinent, after the
settlement and final payment of the Contract.
1.2 Quality Guarantee

In order to guarantee the quality and performance requirements specified in the Contract, the
Contractor will answer for any flaws of deficiencies in the quality of the goods or services it
provides. This guarantee entails that the Contractor will be obligated to repair and/or repeat poorly
performed work, repair and/or replace defective equipment, parts and components at its entire
expense, cost and account, and also compensate CODELCO for direct losses and damages
caused by noncompliance with the specified quality. The SCTCs will establish the validity of this
guarantee as well as the repair and/or replacement agreement or procedure and the executive
instruments for pecuniary redress, should CODELCO determine that they are necessary. If no
mention is made of this in the SCTC, it will be understood that this guarantee will operate for the
legal term.
The Bank Performance Bonds in the Contract may be cashed in case of non-compliance with the
quality obligations described in the foregoing paragraph. Nonetheless, in the SCTC CODELCO
may require the Contractor to provide specific banking instruments as pecuniary guarantees for
such obligations. In this case, the SCTC will stipulate the content, validity and other specific
requirements of such documents.
Should the Contractor fail to redress or make up for the noncompliance with the quality obligations
within the agreed term, CODELCO shall be entitled to carry out the repairs directly, or through third
Parties, and charge them to the valid Contract guarantees. In this case, CODELCO will give prior
notice to the Contractor in a Collection Letter, in which it will detail the reasons for cashing in the
guarantees as a form of compensation or indemnity.
The above does not preclude the actions that CODELCO may exercise pursuant to law, to
compensate for the direct damages that this noncompliance may cause it, and obtain the payment
of the corresponding indemnities.
The Quality Guarantee mentioned in this clause will be understood to be irrespective of the civil
liability of the Contractor, referred to in article 2003, number 3 of the Civil Code, for the construction
of material works, which will be in force for five (5) years after the date of Final Acceptance.
The technical or compliance audits, including revisions, inspections, acceptance and/or payments
that may be performed by CODELCO with regard to products, on its own account, or through third
Parties, will not release the Contractor from its obligation of meeting the specified quality and
performance requirements.
Early termination or settlement of the Contract will not release the Contractor from its obligations of
redress or compensation, in accordance with the agreed quality guarantee.
1.3 Withholdings Due to Labor and Social Security Breaches

In order to answer for the obligations arising from the breach by the Contractor of the labor and
social security laws, while the Contract is valid, which may be reported by the Labor Inspectorate,
Social Security Institutions or any other agency entitled or legally required to do so, CODELCO may
discount all amounts necessary for fully resolving the aforementioned obligations from any currently
due credit with the Contractor, or any payment it may owe it for any reason.

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In order to recover these additional withheld amounts, the Contractor must prove that it has
resolved or effectively paid the obligations resulting in the labor and/or Social Security breachs, by
means of a certificate from the respective institution or the court that may have ordered the
withholding.
All amounts withheld for the aforementioned reasons will be returned to the Contractor, if pertinent,
without any adjustments.
The same rules will apply to breachs incurred by the subcontractor.
CODELCO will always make use of the right to information referred to in articles 183-A and
following of the Labor Code, especially in accordance with the provisions of article 183-C of such
Code.
1.4 Additional Discounts and Withholdings

CODELCO will be entitled to discount from the payment statements, administratively and without
any kind of legal proceedings, any amount owed to it by the Contractor, or its subcontractors,
whether for fines, supplies or services rendered, or for damages caused to its property or its assets.
Should there be any of the aforementioned complaints or requirements, whose amounts exceed the
available amount of the payment statement, plus the amounts already withheld by CODELCO, the
latter shall be entitled to cash in any guarantee of the Contractor that it holds.
CODELCO may discount administratively and without any kind of legal proceedings, all amounts
that it may be obligated to pay for lawyers’ fees, costs and legal expenses if a lawsuit or injunction
is filed against it by any authority due to any acts attributable to the Contractor that occur while the
Contract is valid, or obligations of the Contractor that survive the Contract.
Furthermore, should there be any claims or complaints by third parties against CODELCO, or
incidents or accidents that may reasonably give rise to such claims or complaints, derived from the
events or omissions attributable to the Contractor, CODELCO may exceptionally withhold from the
payment statements or other payments that may be due to the Contractor, the amounts it
reasonably deems necessary for guaranteeing due compliance with such claims or complaints,
should they be accepted, and the costs and expenses in which CODELCO must incur as a result
thereof. It will be understood that the Contractor has constituted a civil pledge on the amounts
withheld in favor of CODELCO.
2 INSURANCE
The Contractor must determine, on its own account and risk, the insurance it deems necessary for
the nature of the services, including those proposed by CODELCO, or whether it will assume, at its
own cost and risk, any possible incidents, events, unforeseeable or accidental losses or damages
that may occur during the period of execution of the Contract.
Thus, the Contractor may take out all the insurance it deems convenient for covering the risks that it
may be exposed to when executing the Contract, regardless of the liabilities assumed in the
Contract and/or imposed on it by law. Such liability will also be extended to those cases in which
the Contractor is insured against a specific risk and the insurance refuses to pay for the resulting
damages.

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Although there are insurance policies taken out by CODELCO and other contractors or suppliers for
covering risks, which would possibly be similar to those that the Contractor would have to take out,
no endorsements of insurance policies of any kind will be performed.
2.1 General Provisions

a) When CODELCO has required some type of insurance, the Contractor will be obligated to
exhibit the respective valid insurance policies when required to do so.
The Contractor's Contract Manager will hand over the corresponding policies to
CODELCO's Contract Manager in the kickoff meeting all within the first fifteen (15) calendar
days after the date of the minutes of the delivery of the job site, or the startup activities, as
the case may be.
b) The Contractor must renew each insurance policy for the same amount whenever it is
applied or used.
c) Knowledge or acceptance of the insurance policies by CODELCO will not limit the
Contractor's liability should the losses and damages exceed the amount of the insurance or
if the insurer does not fully or partially pay the insured amount, for whatever reason. In such
cases the Contractor will be directly liable for covering any difference.
d) CODELCO will be entitled to pay itself, discounting the corresponding amounts from the
payment statements, withheld amounts and guarantees it holds, and may also deduct them
from any payment owed to the Contractor, when accidents that include individuals and any
losses and damages caused to it as a result of the execution of the Contract are involved.
e) Unless otherwise stated in the SCTC, the insurance policies must be extended in amounts
expressed in Unidades de Fomento and must be valid at least until the end of the execution
term of the Contract, plus the additional term established therein.
f) In case of insolvency, bankruptcy or suspension of the operations of the insurer for

whatever reason, the Contractor will be obligated to issue replacement insurance with
another insurer until the term required in each Contract has been completed. Nonetheless,
the Contractor must extend the validity of the insurance policies for the necessary time if it,
or its personnel, remains on the job site for an extended period of time and the risks remain.
The cost of the extension of these insurance policies will be to the expense of CODELCO
only when it is responsible for the extended term.
g) Any alteration or modification of the terms of insurance policy must be previously accepted
by CODELCO's Contract Manager.
2.2 Insurance Covering Work Accidents and Occupational Diseases

Pursuant to Law No. 16.744 and its regulations, the Contractor must have valid insurance policies
against work accidents and occupational diseases, covering all of its personnel employed in the
execution of, or compliance with, a specific Contract subscribed with CODELCO
The Contractor and its subcontractors, should there be any, must also comply with the following
complementary provisions when the former executes the Contract on the premises of CODELCO
and/or premises controlled thereby:

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a) Be a member of any legally recognized Mutual Safety Association for providing medical
attention and hospitalization for its workers in case of work accidents.
b) When the Contractor is a Contractor, it must take out Complementary Health Insurance to
cover the medical expenses of its workers and their dependent family members. The total
minimum coverage of this insurance must be the equivalent of five hundred Unidades de
Fomento (500 UF) for each worker and his dependent family members. CODELCO has an
open insurance Contract for covering this risk, with a monthly cost equivalent to half a Unidad
de Fomento (0.5 UF) per worker. The Contractor can use this policy if it pays the
corresponding costs, or may take out this insurance at its convenience in the market, in
insurance companies licensed by the Superintendency of Securities and Insurance. If there is
co-payment of the monthly premium by the worker, it cannot exceed 20% of the monthly
amount of the premium.
c) The procedure or activities for complying with Laws 19.404, 16.744 and 19.518 must not
entail costs for workers, except for the excess contribution determined by the Ergonomics
Commission, pursuant to law.
2.3 Insurance covering Accidental Death and Permanent Disability

All workers of Contractor or subcontractor companies that render services to CODELCO, covered by
Law 20.123, which covers work in the outsourcing system and transitory services work, will be
covered by and accidental death and permanent disability insurance, taken out and financed by
CODELCO.
The content of the valid policy, which sets out the coverage and conditions of this insurance, as well
as the documentation and the procedures to be followed for being entitled to the benefit in case of an
accident, all of which is considered an integral part of this instrument for all legal effects and purposes,
is available at www.CODELCO.cl /Suppliers/Conventions and Insurance.
The Contractor must inform CODELCO, throughout the term of validity of the Contract, and in the
formats established by CODELCO, of the information of its workers and its subcontractor companies,
in order to comply with the comments of the insurance company. This information must be provided
within a maximum of 30 days after the end of the month for which the information is required.
Failure to provide the information required of the Contractor regarding the workers covered by the
insurance in a timely, reliable and correct manner, will be considered a serious breach in the
assessment of its performance, and will be sanctioned with a fine of 2% of the invoiced amounts in the
months in which the information is required, and cannot be more than UF 15 (fifteen Unidades de
Fomento) on each occasion. This amount will be discounted from the guarantees or assets of the
Contract. Reiterated breach of this option will entail, among other measures, early termination of the
Contract.
The Contractor must fully comply with the "Instructions for the use of the Accidental Death and
Permanent Disability Insurance," which can be found on the aforementioned webpage and forms an
integral part of this Contract for all legal effects and purposes, when providing information on
accidents. Should the Contractor fail to comply with the term for reporting accidents established
therein, and the insurance therefore does not operate, the Contractor must assume the costs of the
accident at its own expense.
2.4 Other Insurance


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The SCTC may require the Contractor to take out other insurance policies in addition to those
mentioned above, for the purpose of ensuring the specific risks of the Contract, for which it may
determine the general conditions of the insurance policies that the Contractor must take out, as well
as the acceptable risk classification of the Insurance Companies.

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EXHIBIT II. CONDITIONS THE CONTRACTOR MUST MEET WITH REGARD TO ITS
WORKERS WHEN THE SERVICES ARE RENDERED AS A CONTRACTOR OR
PROVIDER OF SERVICES
1 ASSIGNMENT OF PERSONNEL
Any changes or replacements of any of the professionals or technicians assigned by the Contractor
in its bid, in accordance with the requirements or profiles of aptitude, quality and performance that
may have been established, either in the bidding terms and conditions or in the constituent
documents of the specific Contract, must be justified by the Contractor's Contract Manager, and
must be previously approved in writing by CODELCO's respective Contract Manager.
2 GENERAL CONDITIONS
The conditions established in this paragraph are applicable in the same terms to the Contractor's
personnel and the personnel of its subcontractors, should there be any.
In its Contracts with its subcontractors, the Contractor must include clauses that enable it and
CODELCO to review the documentation and withhold payments if any breach of the labor obligations
stipulated in this paragraph are detected, especially when the former provides goods and/or services
within the premises of CODELCO and/or premises controlled thereby.
The relationship between CODELCO and the Contractor, including its personnel and subcontractors,
is civil and commercial, and never work-related. Hence, the payment of salaries, contributions,
insurance and other necessary expenses for the contracting of personnel or other individuals who
render services to it in relation to the execution of a specific Contract, will be to the sole expense, cost
and account of the Contractor.
The Contractor must hire its workers respecting the labor laws and rules and regulations in force.
Employment Contracts can be of indefinite or fixed term duration, by job or by project.
2.1 Salaries.
The salaries of the Contractor's workers and its subcontractors, should there be any, cannot be less
than the minimum legal wage determined by the competent authority. The Contractor may only deduct
the discounts permitted by law from its workers' salaries.
The Contractor must also comply with the salary levels, structure of salaries and benefits, both fixed
and variable, that it used for calculating the costs of manpower, professional resources and other
employees included in its economic bid. Failure to comply with this provision will be considered a
serious breach of the obligations of the Contractor.
The Contractor will provide the facilities for CODELCO to be able to exercise the right to verify, on its
own account, or through third Parties, compliance with the above provisions, and should it detect any
breachs, it shall communicate its findings to the Contractor, giving it a maximum of 30 (thirty) calendar
days to correct them and normalize salary levels and the structure of salaries and benefits that do not
comply with what was budgeted in the price of assets and/or services that it provides, with retracted
effects should that be the case.
Should the aforementioned term expire without the Contractor having corrected its breach, CODELCO
will be entitled to fully or partially suspend payments due to the Contractor pursuant to the Contract, or
deduct the differences detected from any of the guarantees of this Contract that it holds, should the
withheld amounts for breachs of Social Security provisions referred to in Exhibit 1, number 1.3 of the

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SCTCs be insufficient. CODELCO may carry out the actions described above until the Contractor has
fully and satisfactorily corrected its breach. The above does not preclude its right to exercise the right
of withholding and payment by subrogation, referred to in article 183–D of the Labor Code.
When the Contract subscribed between the Parties has an execution term equal to or greater than
twelve (12) consecutive months, the Contractor will enter into open-ended employment Contracts with
the workers its employs for meeting its Contractual obligations with CODELCO. However, should the
Contractor consider that some employment will be temporary because it is related to a specific job or
task; it must declare and identify it as such in its Technical Bid.
2.2 Quality and Performance Requirements

The Contractor and its subcontractors, should there be any, will only employ workers who meet the
standards of suitability, technical competency, capability, knowledge and experience for the work or
performance that will be required of them by the Contractor, in accordance with the characteristics
and requirements of the Contract that it will execute for CODELCO.
For the sole purpose of verifying compliance with the requirements of suitability, degrees of
experience and technical competence that may have been established in the Contract, CODELCO's
Contract Manager may require the Contractor's Contract Manager to provide information on the
résumés or the performance of its workers.
2.3 Health and Aptitude of the Personnel

The Contractor will be solely responsible for permanently checking the health conditions and aptitude
of its workers and the subcontractors' personnel for the type of work and the locations to which they
will be assigned.
All personnel incorporated into the Contract, whether own personnel or of any subcontractor, must
have passed a pre-employment medical exam. The Contractor must present CODELCO's Contract
Manager with a medical certificate of aptitude for the type of work and the location to which the worker
will be assigned, which must not be more than six (6) months old.
2.4 Obligation of Informing Personnel Assigned to Work of Risks

The Contractor and its subcontractors, should there be any, in their standing as employers, are
obligated to fully and in a timely manner inform all other workers regarding the risks entailed in their
work, the required preventive measures and safe work methods, stating such instruction for the
record in writing, with the signature of the worker as a token of having received and understood it.
At the time they are hired, or when initiating activities entailing risks, workers must be properly
instructed with regard to the elements, products and substances they must use in the production
processes or in their work, the identification and handling of hazardous substances and products,
permissible limits of exposure to them, health hazards, and the control and prevention measures
they must adopt for avoiding such risks.
As the employer, the Contractor is responsible for verifying and gauging the capacity and experience
of its workers.
2.5 Accidents Involving Personnel at CODELCO's Premises or Premises Controlled by

CODELCO and Urgent Medical Attention provided to the same.

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Notwithstanding the obligations established by law, the Contractor will also be obligated to
immediately inform CODELCO's Contract Manager of any accident or incident that occurs in
CODELCO's premises, or premises controlled thereby, and those occurring on the direct route to and
from such premises in compliance with the Contract, that may affect its personnel or the personnel of
its subcontractors, should there be any.
The workers of the Contractor, and those of its subcontractors, should there be any, who may be
involved in any accident in the premises of CODELCO and/or premises controlled thereby, must be
attended in the first aid or emergency medical attention services in the different job sites. Contractors
working in CODELCO's mine or industrial areas, who have a first aid medical attention service on site,
will be obligated to inform the aforementioned services provided by CODELCO of all accidents
involving personnel, regardless of how serious they are.
In case of an accident involving injuries that require specialized attention, the affected party must be
transferred to the closest emergency service or Mutual Safety Association medical center, where the
doctor on duty will determine the pertinent actions in each case.
In case of a serious or fatal accident involving workers of the Contractor and/or its subcontractors,
should there be any, the direct employer of the affected worker(s), or the person indicated in the Job
Site Health and Safety Management System (SST), will order the immediate suspension of work on
the affected job site, and if necessary, will provide all the facilities for the evacuation of the worker(s), if
there is the possibility of another accident of similar characteristics occurring on the job site.
The Contractor and its subcontractors, should there be any, must be members of the Chilean Safety
Association, the Mutual Safety Association of the Chilean Construction Chamber or the Work Safety
Institute, for the medical attention and hospitalization of their personnel in cases of work accidents
Pursuant to the provisions of Exhibit 1, number 2 of these Terms and Conditions, the Contractor will
be responsible for maintaining the validity of the insurance policies necessary for covering the work
accidents and occupational diseases of its own workers and those of its subcontractors, should there
be any.
The fact that the Contractor has health plans for the attention of its workers and their respective
dependent family members, aimed at reducing expenses when medical attention is required, will be
positively evaluated by CODELCO.
2.6 Catering, Lodging and Mobilization of Personnel

When according to the terms of the Contract, the Contractor must execute the Contract in the
industrial premises of CODELCO and/or premises controlled thereby, it and its subcontractors, should
there be any, must establish and provide the following services to their workers or employees for
meeting their Contractual obligations:
a) Catering: Must be provided for the different shifts in suitable premises and in accordance with
the environmental and sanitary conditions stipulated by the Ministry of Health. This benefit
can also be provided to workers by means of the payment of an assignment, or by delivering
meals through third Parties, ensuring that the rations meet quantity and quality standards
equivalent to those provided by CODELCO to its workers.
b) Lodging: in exceptional situations, qualified case-by-case, and especially agreed between the
Parties, CODELCO may authorize the installation of camps within its premises.

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c) Mobilization: Must be provided with safe and adequate means for individuals and the
environment, which enable mobilizing the Contractor's personnel to the job sites where the
work of the Contract is being executed. The service will be free of charge for workers.
CODELCO will provide the requirements that must be met by the vehicles used for these
purposes, as well as for their circulation and transit, depending on the location of the job site,
zone or sector involved.
In general, these vehicles and their drivers must have prior authorization for entering
CODELCO's premises and/or premises controlled thereby, which will be granted by the
corresponding unit entrusted with access control and industrial protection. The authorization
of the entry of vehicles may be subject to special technical revisions required by the
aforementioned unit.
Should the Contractor outsource demobilization of its workers to some company in that line of
business, it must agree on a civil and penal liability clause with the party rendering the
service. In this case, both the transportation vehicle and its driver must have prior
authorization for entering CODELCO's premises and/or premises controlled thereby. Prior to
entering the job site, the Contractor will provide CODELCO's Contract Manager with a copy of
the Contract with the company that will provide the mobilization service.
CODELCO does not allow pedestrian transit of workers on roads in its industrial and mining
areas, nor the practice of requesting assistance for transportation within its premises and/or
premises controlled by it. Should any of this type of conduct be detected, the authorization for
entry of the duly identified infringing party will be revoked, without further liability for
CODELCO.
2.7 Safety Procedures for Services or Work to be Executed in the Industrial Area
During the execution of the Contract in CODELCO's premises and/or premises controlled by it, the
Contractor will be specially obligated to prove compliance with the legal and regulatory provisions in
force regarding hygiene, safety and health in the workplace, with regard to its personnel and the
personnel of its subcontractors, as the case may be.
CODELCO has Safety and Occupational Health Management Systems, and similarly, the Contractor
must have its own methods and systems for guaranteeing safety and protecting the health of its
workers in the terms established in the Law and its Regulations, especially for executing all kinds of
accident free work or works, even though there are no specific requirements or controls governing any
activity it must execute for CODELCO under any specific Contract.
These methods, systems and procedures of the Contractor must be duly approved by the competent
authority, be consistent with the Special Regulations for the Safety and Health Management System
in the Workplace for CODELCO's Contractor and subcontractor companies, referred to in article 66 of
Law 16.744, and may be audited by CODELCO.
This requirement is especially applicable to the work to be carried out in CODELCO's operating areas,
particularly the kind of work that can put the life and health of individuals at risk.
In each case, the procedure must be established by the Contractor sufficiently in advance, informing
its workers and those of its subcontractors, should there be any, so that the personnel assigned to this
work are duly instructed and equipped with all the required personal protection gear.

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The Contractor must also inform CODELCO's Contract Manager, in advance and in a timely manner,
when work must be performed for compliance with the Contract that entails risks such as those
mentioned previously, and will provide it with the procedure or procedures it will apply for controlling
the risks for individuals, assets and the environment, as well as up-to-date documentation with the
registries and licenses required by the corresponding authorities in safety matters.
In case of a work accident suffered by any worker of the outsourcing chain, the Contractor will fully
assume the obligations of compensation generated, whether civil, penal or moral, contractual or
tort, as long as the underlying cause can be attributed to the Contractor or its agents. In case of
shared liability, the compensation and its proportionality will be determined by the corresponding
technical legal agency. All the above in accordance with the provisions of number 13 of these
SCTC's.
Concealing from CODELCO the incidents or accidents that occurred while work was underway, and
that affected individuals or the assets of the Contractor or CODELCO, will be considered a serious
breach.
CODELCO will make extensive to all workers involved, whatever their dependence, the Safety and
Health Management System in the Workplace or the Safety and Health Management System in the
Workplace for Contractor and Subcontractor Companies, that it may have implemented in its own
job sites in its operations.
The provisions contained in this paragraph are of an essential nature, and breach thereof by the
Contractor will constitute a serious breach of the obligations undertaken by it in the specific Contract,
which will entitle CODELCO to declare early termination of that Contract.
3 COMPLIANCE WITH THE CONTRACTOR'S LABOR AND SOCIAL SECURITY

OBLIGATIONS WHILE ACTING AS A CONTRACTOR
3.1 Responsibility of the Contractor
The breach of the labor and social security legislation applicable to the service being executed will
constitute a serious breach of the contractual obligations of the Contractor.
The Contractor will be directly, exclusively and civilly liable before CODELCO for all consequences, of
any nature, deriving from the breach of such obligations.
CODELCO will consider the Contractor's obligations regarding salaries and social security
contributions to have been fulfilled when they have been duly paid within the legal terms, or
conventional terms, in the case of other benefits that the Contractor may have agreed to with its
workers. This provision is made extensive to the workers of the subcontractors when concerning this
qualification of compliance.
The Contractor will also perform the following actions:
a) Ensure that each one of its workers and those of its subcontractors who enter CODELCO's
premises and/or premises controlled by it for the first time to carry out work and/or render
services, present a copy of their employment Contract. This can be verified randomly or in a
general manner by CODELCO's Contract Manager.
b) Maintain a Monthly Work Information Registry, updated for each Contract. The information
must be organized in such a way as to facilitate the inspections that CODELCO wishes to
perform. The information must be organized at least according to:

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• Staffing (by discipline or performance category, with monthly and accumulated

rotation);
• Type of employment Contracts;
• Payments made for agreed fixed and variable wages;
• Severance agreements of the period, their amounts and;
• Social security institutions to which the corresponding contributions are being
paid.
As part of the activities prior to the initiation of the Contract, the Contractor will propose to
CODELCO the formats in which it will record the work and personal information and data of
its workers, as well as the workers of its subcontractors, as the case may be.
In these formats, it must include a reference for each bit of information or data that identifies
the place or file where the original backup documents are stored, safely and reliably, which
must be available at any time to determine the degree of compliance with work and social
security obligations.
CODELCO may request the handing over of this information and conduct sporadic reviews
or scheduled audits on its own account or through third parties.
c) Maintain a Register of Work Incidents for the application of: 1. Complaints and/or lawsuits
in course, with their causes and the mitigating, conservative, resolutory or executive
measures that the Contractor may have taken or implemented to prevent, safeguard or
avoid the aggravation of the consequences for the Contract; 2. Labor negotiations planned
or in progress; 3. Any other labor contingencies that may arise or constitute a singularity
that would negatively impact on the Contractor's labor or employment climate.
d) Facilitate for CODELCO or its representatives, the compliance reviews or audits, exhibiting
all the documents that back up the labor information and/or labor incident registries, and
others requested for the same purpose.
e) Backup each monthly payment statement with the certificates referred to in article 183-C of
the Labor Code, in order to prove the amount and status of compliance of the labor and
Social Security obligations to its workers, and the workers of its subcontractors, should
there be any.
f) In order to facilitate payments and avoid delays, CODELCO will accept payment slips
issued by collection agencies such as Previred, as a means for verifying compliance with
the payment of Social Security contributions (pension funds, health contributions, mutual
safety Association's and compensation funds) of those workers who render services on its
premises and/or in those controlled by it, while the pertinent agencies issue the
corresponding official certificates in each case.
g) The Contractor must also submit the simple affidavit referred to in paragraph c.4 of number
2 of Exhibit III (payment of the price of the Contract), of these SCTCs.
h) In all cases, the Contractor's Contract Manager must hand over to CODELCO's Contract
Manager the vouchers of the certifying agencies within ten (10) working days following the
expiry of the legally established term for the payment of the salaries and pension
contributions of its workers.
i) Present the severance agreements of workers, duly signed by them and countersigned by
the Ministers of Faith stipulated in the Labor Code. Otherwise, CODELCO will consider

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them to be unpaid, which will generate a salary debt, the amount of which will be
discounted from the amount withheld for non-compliance with social security commitments
by the Contractor.
j) Pay CODELCO the expenses for salaries and fees of lawyers, as well as the costs of their
transfers, hotels, per diem costs, plus legal costs, when CODELCO must appear before the
courts as the result of a subsidiary or joint and several lawsuit filed against it for the breach
of labor and Social Security obligations of the Contractor or its subcontractors, should there
be any. The resulting amounts will be invoiced to the Contractor and deducted from any
amount CODELCO may owe it, for whatever reason.
3.2 Powers of CODELCO

For the duration of the contractual relationship, CODELCO will carefully observe the behavior of the
Contractor, especially with regard to the labor climate in maintains with its workers and the workers
of its subcontractors, as the case may be.
In particular, CODELCO will observe the strict compliance of its Contractor with the labor and Social
Security legislation in those contracts in which, due to their nature, the provisions of outsourced
work are applicable.
Within this context, CODELCO will enforce compliance with the labor and socialist unity obligations
that the Labor Code on Contracts that it enters into with third Parties under the Outsourcing
Regime, through the exercising of the following faculties:
a) Exercise the right to be informed by its Contractor regarding the degree of compliance of its
obligations in labor and Social Security matters with its workers, and the workers of its sub-
contractors, should there be any.
b) Verify on its own account, or through third Parties, fully or selectively, compliance of all
kinds of obligations that it’s Contractor may have undertaken with its workers, or that affect
the workers of its subcontractors, should there be any. Merely by way of example,
CODELCO could check the attendance and/or salaries ledger, the employment Contracts,
individually or collectively, salary payment slips, vacations, medical leave, severance
agreements, social security and health contributions, the payment of indemnities, etc.
c) Exercise the right to discount from any amount it owes to its Contractor in any specific
Contract, the amount it is responsible for pursuant to law, should the latter not be able to
prove full compliance with its labor and Social Security obligations with the vouchers
referred to in subparagraph e) of the previous paragraph.
d) Withhold from any payment that it must make to its Contractor, the amounts reported by the
Labor Inspectorate or social security agencies due to complaints by its workers or its
subcontractors, until it proves normalization with a certificate from the respective agency
e) Pay the corresponding worker and/or accrediting agency by subrogation, in case of

noncompliance by the Contractor.
3.3 Responsibility of the Contractor for the Acts and Conduct of its Dependent
Personnel or Subcontractors
The Contractor will be responsible for the conduct of the personnel it employs for the purpose of a
specific Contract, whether executed on CODELCO's premises and/or outside of them, as well as for

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damages, disturbances or any other events of a similar nature that they may cause. The Contractor
will especially adopt all necessary measures for preventing risks and avoiding work accidents of its
employees or agents in premises belonging to CODELCO and/or controlled by the same.

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EXHIBIT III. PAYMENT OF THE PRICE OF THE CONTRACT

1 PAYMENT AND INVOICING PROCEDURE
Unless otherwise stipulated in the SCTC, the payment and invoicing procedure of the Contract will be
as follows:
a) On the date agreed between the Parties, the Contractor's Contract Manager will present
CODELCO's Contract Manager with the monthly Payment Statement (PS), duly signed and
correlatively numbered, for its review. It will be formulated in accordance with the budget prices of
the respective Contract, using the forms previously agreed with CODELCO.
b) The amounts that must be paid to the closure date of the monthly payment statement will be
included in each PS, in accordance with the Contract execution plan, and it will be calculated
strictly abiding by the Terms and Conditions of Measurement for Payment, or with the specific
modalities and other conditions that may have been agreed in such contracting.
c) CODELCO's Contract Manager will approve or reject the PS prior to the issuing of the invoice by
the Contractor. Should CODELCO reject the PS, it must justify its reasons for doing so in a written
communication addressed to the Contractor's Contract Manager.
d) Nonetheless, CODELCO's Contract Manager may authorize the objected part in a PS that has
been rejected due to mistakes in its formulation or calculation, as soon as the Contractor's
Contract Manager presents a summary sheet separating the objected charges from the approved
charges. On this spreadsheet, CODELCO's Contract Manager will approve the PS, signing it and
consigning on it the corresponding number of the Services Entry Sheet in SAP (SES number) for
the collection of the services. The objected portion of the PS will be corrected by the Contractor
and will be submitted in the following PS.
e) Should a PS be rejected by CODELCO's Contract Manager because it is incorrectly formulated

and/or calculated in its entirety, then for all intents and purposes of this procedure the
presentation date will be the date on which the Contractor's Contract Manager submits the
corrected version.
f) After the PS has been reviewed and submitted for payment, fully approved, or only the part
approved by CODELCO's Contract Manager, the Contractor will issue and submit the respective
invoice in CODELCO's office stipulated in the SCTC, or in the respective Contract Document,
attaching the folder with which the corresponding PS was submitted. The invoice details must
indicate the number of the Contract with its denomination, the number of the PS and the SES
number. CODELCO's Contract Manager must also coordinate the aspects relative to factoring, in
case the Contractor intends to use this right, pursuant to the provisions of number 5 of this
Exhibit.
g) CODELCO will review the invoice, and if it has no observations, it will pay within thirty (30)
calendar days counted as of the working day following the date of reception of the invoice, by the
means established in the SCTC, or those that may have been agreed in the Contract.
Invoices that are incorrectly issued will be returned to the Contractor, and the payment term will
be counted as of the date of the submittal of the new corrected or properly completed invoice.
If a payment term less than the term established herein is agreed in exceptional circumstances, it
cannot be less than fifteen (15) calendar days.
CODELCO promotes and encourages the use of legal electronic invoices (LEI), which is required
of the Contractor in its business relations with CODELCO, unless the use of physical tax

31/ 10/ 2015
documents is accepted in duly justifiable exceptional circumstances. The issuing of legal

electronic invoices (LEI) or other electronic documents (credit notes, debit notes), must be in
accordance with the instructions published on CODELCO's webpage: www.CODELCO.cl -
Suppliers Section - Payment of Invoices.
2 CONDITIONS FOR MAKING PAYMENTS IN THE CONTRACT

CODELCO will make the corresponding payments as long as the Contractor has copulatively
complied with the following conditions:
a) The Contract has been duly subscribed by the Parties. Exceptionally, in situations qualified by
CODELCO, the initial payment could be made against acceptance by the Contractor of the
Immediate Startup Order.
b) The Contractor has delivered, and CODELCO has accepted without comment, the
guarantees and/or insurance policies that may have been established.
c) The Payment Statement has the following backup documents:

c.1) Certificate from the Labor Inspectorate or other appropriate agency stipulated in
Law, certifying that on that date the Contractor is up to date in compliance with its
labor and Social Security obligations to the workers employed by it for complying
with its contractual obligations with CODELCO, and there are no pending claims
against it in such matters.
To the contrary, and including the existence of any legal requirement, payment
corresponding to such PS may be used as part of the amounts withheld for Social
Security breaches referred to in number 1.3 of Exhibit I hereof.
The obligation to prove that there are no labor or social security claims will also be
extensive to the Contractor’s subcontractors related to the Contract, should there
be any.
There will be no such requirement in Contracts with domestic companies when the
work and services are executed or rendered outside of the premises belonging to
CODELCO and/or controlled thereby.
This requirement will also not be applicable in Contracts with foreign companies
when the work and services are executed or rendered outside of national territory,
or sporadically in the premises of the Corporation and/or premises controlled
thereby.
c.2) In order to facilitate the payment process of a PS while the Contractor obtains the
certificates from the pertinent official agencies in a Contract in which the provisions
of the outsourcing regime are applicable, the Contractor may request authorization
from CODELCO's Contract Manager to present a simple affidavit subscribed by its
legal representative detailing the total amount of workers assigned to compliance
with the Contract, by discipline and professional category and/or by specialty, when
concerning qualified manpower, corresponding to the payment period. In this
affidavit it must also confirm that to the date of the PS it has had no complaints of
any nature from its workers, especially that it is up to date in the payment of their
salaries, including the benefits it may have agreed with them, such as incentives,
salary adjustments, overtime work, payment of indemnities and/or bonuses etc.

31/ 10/ 2015
Otherwise, in its affidavit the Contractor will give an account of the problems,
claims, complaints or breaches involved in this relationship with such workers and
will state when they will be resolved or the measures that have been taken to
resolve them, or the impediments it has encountered for resolving such difficulties.
This affidavit will allow CODELCO to make a payment, either without reservations
or withholding the appropriate amounts, in accordance with the withholding due to
Social Security breaches referred to in number 1.3 of Exhibit I hereof, while the
Contractor meet its labor and Social Security obligations within a maximum term of
thirty (30) calendar days. Nonetheless, this declaration cannot be used when the
payment of the settlement of a specific Contract is involved.
c.3) The certificates extended by each one of the subcontractors and/or authorized
suppliers for the purposes of the Contract, which prove correct and timely
compliance of the Contractor with its business commitments, and that the
subcontractors and suppliers have no complaints against it in relation to the goods
or services provided to that date. Should it have complaints, it must identify them,
quantify them, or inform CODELCO of the impediments it may have for compliance.
c.4) A declaration subscribed by the legal representative of the Contractor, confirming

that it has no complaints regarding the execution of the Contract to that date.
Should it have any, it must identify and quantify them prior to issuing the Payment
Statement.
c.5) Any deceit or omission in which the Contractor or its representatives incur due to or
on occasion of the extension of any of the declarations contained in the foregoing
sections, will be considered a serious breach of the Contract.
REIMBURSABLE EXPENSES
Should the Contract consider a reimbursable costs item in its payment mode, the reimbursement to
the Contractor of the disbursements effectively made in the payment period will be included in the
payment statement, either proven or documented, and subject to prior authorization of the expense
by the Contract Manager.
These expenses must be charged by the Contractor to CODELCO, attaching copies of the backup
documentation proving that the payment was made by the Contractor. The above will be attached
to the payment statement corresponding to the period in which these expenses originated. If the
Contract establishes a surcharge or fee on the reimbursable amount, this will be included in the
same payment statement.
All documentation backing up the reimbursement of expenses, whether invoices, vouchers or other
collection documents, will be issued in the name of the Contractor and the Contractor will invoice
CODELCO for the net amounts, plus VAT, or without VAT, as the case may be.
4 PRICE ADJUSTMENT
Should CODELCO establish price adjustment in the Contract, the respective SCTCs will establish the
adjustment formulas, the calculation mechanism and the period in which it will be applied, in each
case. The SCTCs will also define the sources or origins of the adjustment factors when the formula
comprises indices published by public agencies, business entities, or other commonly accepted
national or international sources.

31/ 10/ 2015
The existing prices in an adjustable Contract will be adjusted up or down, in accordance with the
variation of the adjustment factor or formula, calculated in any one of the agreed calculation periods
(increase or reduction of the resulting price).
The agreed price adjustments will only be applied while the Contract is valid, except if the Parties
agree on a different treatment through an express amendment.
The base month of the indices, factors or any other indicator comprising any adjustment formula, for
its calculation in any specific Contract, will be the month in which the proposal is submitted and the
resulting adjustment factor will be expressed to five decimal points, equivalent to three decimal points
if it is expressed as a percentage.
If the indices used in the price adjustment formula (CPI, exchange rate, or other) are replaced, then
the official indicators substituting them in accordance with the regulatory or legal provisions that may
have been promulgated for such purposes will be applied. Should they be suspended or eliminated,
the Parties will agree on the treatment they will adopt should this situation occur.
Nonetheless, when the result of the formula agreed in the Contract for adjusting its prices is negative,
i.e. it generates a reduction of prices during any period of application, or in particular, when the index
for adjusting salaries that is an integral part of this formula has a negative variation in the respective
application period, according to the Contract, reductions in the salaries agreed with the workers
assigned to the Contract must not occur.
In any event, the price adjustment will be valid only until the end of the term for the execution of the
Contract, except when CODELCO is liable for the cause of the delay.
CODELCO's general criteria in matters of adjustment formulas, as well as the components or

variables involved in such formulas, is that they must be elements normally employed by the industry
or the business area that the Contract is part of, so as not to inadvertently generate, in this way,
financial derivatives with a special treatment within the IFRS framework (International Financial
Information Standards).
5 ASSIGNMENT OF CREDITS CONTAINED IN INVOICES

In accordance with the requirements of CODELCO's verification and payment accounting systems,
and without this entailing any limitation whatsoever in the rights conferred by Law 19.983, the
Contractor will inform CODELCO's Contract Manager in a timely manner whether or not it will
assign the credits contained in the invoices emanating from the Contract, either at the outset or
during their execution, indicating the name of the factoring company or companies with which it will
operate and whether it will assign the credits contained in these invoices permanently or
sporadically.
The information given to CODELCO will be understood to be timely when it has been provided at
least fifteen (15) days prior to the scheduled date for a payment that must be made by virtue of
such Contract.
CODELCO reserves the right to object to the content of the invoice, within thirty (30) calendar days
of its reception, with the Contractor being obligated to adopt the pertinent safeguards and means of
information. Notwithstanding the above, should mistakes be detected after the expiry of such term
or the payment of the invoice, the necessary adjustment for compensating such mistakes will be
made in subsequent PSs.

31/ 10/ 2015
Furthermore, any assignment of the credit contained in an invoice must be performed in accordance
with the procedures established in Law 19.983, for the assignee to be able to receive the payment
or exercise the rights granted to it by law, as the case may be.
Any matters concerning the timing of the legal notification regarding the assignee of the credit, or
any other situation that alters the payment system agreed between the Parties, must be
coordinated directly and in advance with CODELCO's Contract Manager, for the purpose of
adopting the pertinent administrative control, payment or safeguard measures, in compliance with
the law.
The Contractor will be liable for any expense, payment, costs or legal costs resulting from the
untimely delivery of the information and reliable backup data of its invoices for the purposes of this
procedure, or incomplete or mistaken delivery; these amounts can be discounted by CODELCO
from any payment that it must make in accordance with the Contract or a purchase order, or from its
guarantees (performance bond, withholding or deposit), or from any amount that CODELCO may
owe it for any reason. This situation will be considered a serious breach of the contractual
obligations.
In the case of intentional actions, such as the duplication of assigned invoices, the assignment of
already paid invoices, double assignment or any other similar irregularity, the Contractor will be
deemed to have seriously infringed the Contract and CODELCO may suspend its business
relationships with the Contractor indefinitely, without precluding the corresponding legal actions for
compensating the losses and damages that such actions may have caused it.
CORPORACION NACIONAL DEL COBRE DE CHILE R evisión: 3
BASES ADMINISTRATIVAS GENERALES DE Fecha de entrada en

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CONTRATOS DE SERVICIOS Pág. 55
EXHIBIT IV. AMENDMENTS OF THE CONTRACT
1 AMENDMENTS DUE TO CHANGES IN THE CONTRACT

1.1 Change Notes
The Parties may from time to time agree on amendments to the Contract, within its scope,
incorporating new works, assets and/or services not contemplated therein. Such amendments may
give rise to:
i) Greater or lesser quantities of contracted works, assets and/or services, which could entail
Increases or Reductions in the Contract Price.
ii) Elimination and/or substitution of any contracted asset and/or service.
iii) The inclusion of any asset and/or service not contemplated in the Contract, but related to its
purpose, the materialization of which is essential for complying with the purpose of the
Contract, notwithstanding the liability of the Contractor in these situations.
iv) Changes in the execution methodology or the sequence and planning for materializing the
Contract, notwithstanding the liability of the Contractor in these situations.
In any of the above cases, such amendments will be formalized by means of a Change Note, a
document drawn up and signed by CODELCO and the Contractor's Contract Managers, stating the
nature of the amendment and its purpose, with the formalities, conditions and requirements
stipulated below.
Notwithstanding the above, CODELCO will always have the option of executing the amendments
referred to in the foregoing paragraphs with a third party, and in such case, the Contractor must
provide the necessary facilities for them to be executed in that way.
For a Change Note to constitute a fully valid contractual obligation, the corresponding changes and
amendments must abide by the following conditions:
A. The accumulated direct cost changes, with their respective indirect costs (without
overheads or profits), must have the following positive or negative variation limits:
- In lump sum Contracts: up to an amount equivalent to 10% (+/-10%) of the original

lump sum price of those Contracts, excluding the pro-forma value and reimbursable
expense items, should there be any
- In unit price series Contracts: up to an amount equivalent to 20% (+/-20%) of the
estimated original price of these Contracts, contained in the all-included Unit Tariffs
Budget, oriented Budget with the Unit Price Series.
- In Contracts with Unit Tariffs and overhead and profit lump sums: up to an amount
equivalent to twenty percent (+/-20%) of the original budget comprising solely the unit
prices of the contracted assets and/or services.
- In other contracting modalities: the variation will be agreed, and its treatment will be
established case by case for the contracting of assets and/or services that require the
use of own modalities, or which, due to their characteristics, are agreed under specific
regulations.
B. The term of execution of the Contract cannot be amended by means of Change Notes.

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C. In order to make changes whose effect entails overcoming any of the limits established in
the foregoing paragraphs, in addition to subscribing the corresponding Change Note, it will
also be necessary to expressly amend the Contract (Addendum o Modification).
2 AMENDMENTS FOR THE PROVISION OF ASSETS, NEW WORKS AND/OR SPECIAL

SERVICES IN THE CONTRACT
During the execution of the Contract, CODELCO may request and entrust the Contractor with the
provisions of goods, the execution of material works or the rendering of services that are not part of
the purpose of this Contract, or modifications that can be resolved by the mechanism of change
notes referred to in paragraph 1 of this Exhibit. Such goods, works and/or services will be
denominated 'special' and will be incorporated into this Contract by means of a special modification
thereof (Addendum or Modification), duly subscribed by the Parties. The terms and conditions for
entrusting the special goods, works and/or services must be fully agreed by the Parties prior to
initiating their execution. Should they fail to reach an agreement, the Contractor will not be obligated
to provide such special goods, works and/or services.
In cases qualified by CODELCO as being urgent, its Contract Manager may request early startup of
their execution by means of a written communication addressed to the Contractor's Contract
Manager, before the respective modification of the Contract has been signed by the Parties, in which
it will also state that such modification must be completed by them within thirty (30) days following
such communication. This exceptional case can only materialize if CODELCO's Contract Manager
has a proposal from the Contractor, which has been evaluated, negotiated and accepted by
CODELCO in accordance with the internal procedures applicable to these cases. As long as the
modification of the Contract has not been subscribed by the Parties, payments can be made to the
Contractor for up to the equivalent of eighty percent (80%) of the total price of the budget accepted by
CODELCO, in accordance with the status of progress of the execution and/or delivery of the special
goods, works and/or services that may have been received by CODELCO, and following the other
stipulations concerning forms of payment agreed in the Contract.

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EXHIBIT V. GLOSSARY
The terms defined in this glossary will be applicable to all the valid constituent documents of the
Contract entered into between the Parties.
1. Addendum or Modification: During the execution of the Contract, CODELCO may request
and entrust the Contractor with the provisions of goods, the execution of material works or the
rendering of services that are not part of the purpose of this Contract, or modifications that can
be resolved by the mechanism of change notes referred to in paragraph 1 of the SCTCs. Such
goods, works and/or services will be denominated 'special' and will be incorporated into this
Contract by means of a special modification thereof denominated Addendum or Modification,
duly subscribed by the Parties.
2. Award: Act whereby CODELCO accepts a specific proposal and informs the bidder of its
decision.
3. Awardee: Bidder selected in CODELCO's contracting process.
4. CODELCO's Contract Manager: Person appointed by CODELCO in the Contract, who will act
in its representation during the execution of the Contract and will be responsible for the
management, supervision and coordination by CODELCO of the execution of the Contract, as
well as safeguarding and defending its interests.
5. The Contractor's Contract Manager: Person appointed by the Contractor in the Contract, with
sufficient powers of representation to ensure prompt compliance with the contractual obligations
agreed with CODELCO.
6. Technical, Quality, Risk Prevention and Environmental Audits: The discretional, systematic
and independent examination of the Contractor's activities that CODELCO will carry out on its
own account, or through third parties, to determine whether the activities related to the specified
minimum quality and performance standards, the established management system and the
applied Risk Control and Environmental programs meet the previously agreed provisions, and
that such provisions have been effectively executed and are suitable for achieving the
objectives of the Contract.
7. Bidding or Contracting Terms and Conditions (BTC): The series of documents constituting
the information delivered to the Contractor for the presentation of its bid, including the
clarifications and addenda.
8. Measurement and Payment Terms and Conditions: The methodology that will be used for
determining payment for the progress of services or works, and the means of measuring the
progress thereof, which will be part of the Contract.
9. Special Contracting Terms and Conditions (SCTC): A series of provisions and procedures
that regulate administrative, business and or legal matters of the contracting process and the
Contract, and that stipulate the terms and conditions that will be particularly or specifically
applied in these matters in the Contract, depending on their nature, complexity, magnitude and
other peculiarities.
10. Technical Specifications or Technical Terms and Conditions (TTC): A series of provisions
specifying the purpose of the Contract, its scope and the technical requirements of quality and
performance, stipulating characteristics and establishing the conditions that must be met in

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works and services. The Technical Specifications can also regulate the requirements that must
be met by materials and equipment, as well as the tests that the different phases of
materialization of a product or specific work must pass, also being able to include technical
specifications; drawings; rules and regulations or enforceable execution, production and/or
fabrication standards; operating/control protocols and their restrictions; as well as the terms of
reference within which the work must be performed, a specific service rendered, or a specific
item provided. The Technical Specifications will comprise a chapter of the Specific Contracting
Terms and Conditions.
11. Management Capacity: Having human and material resources in sufficient quantity and
quality, appropriately organized and directed, for achieving previously established performance
objectives, respecting the environment and the community. Know-how, planning, organization,
execution and control of systematic activities that enable developing/conducting, in time and
form, a series of technical, administrative and business processes for providing goods and/or
services for satisfying the time-cost-quality goals agreed in the Contract, in a healthy working
environment free of personal and material accidents.
12. Assessed Capacity: The condition of individuals and/or bodies corporate that meet the
requirements of Aptitude, Technical Competence, Management and Financial Management
Capabilities established by CODELCO, either as a prior condition for entering into a specific
Contract, or as a consequence of the assessment of the performance of such individuals
carried out by CODELCO after executing a Contract of any nature for the Corporation.
13. Letter Of Award: A written communication, issued by CODELCO and addressed to the bidder
that participated in the bidding for the Contract, informing it of the terms and conditions under
which CODELCO accepted the bid; this document must be subscribed in token of acceptance
and a signed original copy must be returned to CODELCO.
14. Collection Letter: A document sent by one party to the other requiring payment of a duly owed
amount.
15. CODELCO, CODELCO-CHILE, the Corporation or the Client: Corporación Nacional del
Cobre de Chile.
16. Technical Competence: Mastery of one or several areas of knowledge applied to a material,
technological and/or industrial activity. Professional capability, expertise, aptitude, skill for doing
something, or intervening in a specific matter, or resolving multidisciplinary engineering
problems at a professional level in any liberal arts, for executing material work, rendering
services, providing goods or fabricating a specific product, in accordance with specified quality
and performance requirements, and should express specification be lacking, in accordance with
the standards accepted in the industry.
17. Contractor: Refers indistinctly to the Contractor or the Party Rendering the Service, without
entailing confusion regarding the legal nature of one or the other.
18. Contractor: An individual or body corporate that has undertaken to execute a Material Work,
Work or Service within the facilities of CODELCO, in accordance with the conditions
established in the Contract and its respective exhibits.
19. Contract: The contractual agreement between the Parties, comprising the Principal Document
and the Contract Documents.

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20. Day: Means complete calendar days, including Saturdays, Sundays and holidays, unless a
different definition is explicitly used.
21. Working Day: Each calendar day, excluding Saturdays, Sundays and holidays.
22. Contract Documents: The documents comprising the Contract, as stipulated in the Principal
Document, corresponding to those mentioned in clause eighth of these Terms and Conditions,
unless otherwise stated.
23. Principal Document: Document subscribed by the legal representatives of the Parties,
reflecting the agreement between them for the execution of the works or rendering of the
agreed services, and which has first order of precedence.
24. Payment Statement (PS): Document whereby the Contractor formulates charges to
CODELCO, based on the execution of the Contracted work, on the occasion and with the
format and backup documentation indicated in the Contract, its terms and conditions or
constituent documents.
25. Quality Guarantee: Commitment by the Contractor whereby it undertakes, at its own expense,
to repair and/or repeat work that is not up to standard, restore and/or replace equipment,
defective parts and components, and compensate CODELCO for the direct losses and
damages caused by failure to comply with the quality specified in the Contract. Compliance
with the Quality Guarantee may be assured by the granting by the Contractor of specific
banking instruments for responding for such obligations in pecuniary terms.
26. Performance Bond: An amount guaranteeing faithful compliance of each and every one of the
obligations undertaken by the Contractor in the Contract, consisting in a Bank Bond or a
Standby Letter of Credit, or exceptionally, a Guarantee Fund.
27. Overheads: That part of the price corresponding to all the costs that the Contractor, under its
sole responsibility, deems necessary and sufficient for complying with the Contract in terms of
management and the contracted works and/or services, insurance, guarantees, or maintenance
of facilities, financing and head office expenses, among others, and that are not part of the
direct or indirect costs, or profits.
28. Free Margin: Is the margin of time within which the startup or culmination of an activity can be
postponed, without this entailing the postponement of startup or earlier culmination of its
immediately succeeding activities. Free Margin is not an exclusive right of the Contractor.
29. Total Margin: Is the margin, in units of time, within which the startup or culmination of an
activity can be postponed without affecting the termination date of the Contract. Total Margin
is not an exclusive right of the Contractor.
30. Services Entry Sheet (SES): Is the electronic document with which the Payment Statement is
entered into CODELCO's system for recording payments to Contractors.
31. Aptitude: Capability, experience and specialized knowledge in the exercising of a trade or
profession, whether at a manpower, technical and professional level, for working in the Contract
in accordance with the requirements of CODELCO in the bidding process or the Contract.
32. Bidding: Any market consultation process for obtaining bids for the provision of services or
materials/inputs for CODELCO.

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33. Budget Item List: Document prepared by CODELCO that contains the items or assignments of
works and/or services contemplated for a specific Contract, with their corresponding units of
measurement and volumes, takeoffs or quantities estimated or determined by CODELCO,
together with other information requested by CODELCO, and which the bidder must use for
establishing the budget in its Economic or Financial Bid. Volume or quantity mean physical
quantity and not price.
34. Complaints Resolution Committee (CRC): A committee for resolving complaints, comprising
three individuals appointed by the Contractor and a similar number of individuals appointed by
CODELCO, whose faculties and obligations are stipulated in number thirty-nine point one point
two (39.1.2) of the SCTC.
35. CODELCO's Standards or CODELCO's Internal Regulations: The internal provisions

establishing CODELCO's different requirements in matters of operational risk control, safety,
hygiene, environment, entry and exit of resources, use of explosives, driving in restricted areas
and others, applicable according to the nature of the Contract. These regulations contain the
procedures that must be followed by the Contractor, its personnel, its suppliers and
subcontractors, in the execution of the Contract.
36. Change Note: Agreement subscribed between CODELCO and the Contractor's Contract
Managers, the purpose of which is to modify the Contract in the terms and with the limitations
established in Exhibit IV of the SCTC.
37. Immediate Startup Order: Instruction of an exceptional nature issued by CODELCO to the
Awardee of a Contract requesting prompt or immediate startup of the execution of the Contract,
prior to signing the Principal Document. The Immediate Startup Order may be contained in the
Award Letter or in an independent document; it must stipulate the main terms and conditions of
the Contract, and must be signed and accepted by the legal representative of the awardee.
38. Parties: The Parties to the Contract, i.e., CODELCO and the Contractor. The singular
reference “Part” can refer indistinctly to any of the Parties and will be interpreted according to
the circumstances.
39. Environmental Protection Plan: Measures and strategies for protecting the environment
presented by the Contractor in its bid, whereby it complies with the legal framework governing
the activities of the Contract in the environmental and sustainability areas.
40. Term of Execution: The term agreed for the complete and correct execution of the contracted
works, counted as of the date of the startup activities minutes.
41. Term of Validity of the Contract: The term between the awarding of the Contract and its final
settlement, the dates of which are established in the Contract.
42. Services Provider: The individual or body corporate who, by virtue of a specific Contract,
undertakes the obligation of executing a material work or of rendering services for CODELCO in
accordance with the terms and conditions contemplated in the Contract, but without the status
of Contractor for the purposes of articles 183-A and following of the Labor Code.
43. Work Schedule: A schedule of activities presented by the Contractor in its bid for the
execution of the Contract or entrusted work. Work schedules that have been updated by the
Contractor after the awarding of the Contract will be denominated “Valid Work Schedule”.

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44. Bidder: An individual or body corporate participating in any of CODELCO's bidding processes
through the presentation of a bid or offer.
45. Bid or Offer: The documented response to the bidding process for a specific Contract,
containing a Technical-Economic bid delivered by the bidders for the purpose of the bidding of
this Contract for CODELCO.
46. Change Proposal: Document containing a proposal for the modification of the Contract, drawn
up by the Contract Manager of one of the Parties, whose Change Request has been previously
requested by the other party, and which, if approved, will give rise to a Change Note. Change
Notes are regulated in number 1.2 of Exhibit IV of the SCTC.
47. Supplier: Individual or body corporate with whom a Contract is agreed for the supply of goods.
48. Final Acceptance: Final acceptance granted by CODELCO of the Contracted services and
works, which will occur within the term stipulated in the Contract, usually after a testing or
guarantee period.
49. Provisional Acceptance: Immediately after the Contract execution period, CODELCO will
verify compliance of the works of services to its satisfaction, and will grant provisional
acceptance, which will be purely and simply when it deems that the works of services comply
with the Contract, or will make observations when it deems that they are not finished or do not
comply with the Contract. Provisional Acceptance may be partial if the SCTCs contemplate
partial fulfillment during the execution of the Contract.
50. Sole Acceptance: In the case of rendering of services or the execution of material works that
do not require a testing or guarantee period, sole final acceptance of them will be performed.
51. Comprehensive Registry of CODELCO Contractors: A certified assembly of administrative,

legal, technical, financial and performance information of those individuals and bodies corporate
who, as a result of the evaluation of their background information, are eligible for subscribing a
Contract with CODELCO.
52. REMA: The “Special Environmental and Territorial Management Regulations for CODELCO's
Contractor and Subcontractor Companies," published on the Corporation's webpage.
53. RESSO: The “Special Regulations for the Implementation of the Health and Safety
Management System in the Workplace for CODELCO's Contractor and Subcontractor
Companies," published on the Corporation's webpage.
54. Critical Route: The sequence of activities necessary for the execution of an entrusted work
with a total of zero margin.
55. Financial Situation: The objective, financial and economic capability of the Contractor that
makes it eligible for entering into the Contract and complying in time and form with the delivery
of goods, services and Contracted works.
56. Change Request: Written request for the modification of the Contract, by the Contract
Manager of one of the Parties to the other, in the terms stipulated in Exhibit IV number 1.2.

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57. Subcontractor: Individual or body corporate, authorized by CODELCO, who by virtue of a

contractual agreement with the Contractor, undertakes to carry out the work or services, on its
own account and risk, and with its own dependent workers.

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CORPORACIÓN NACIONAL DEL COBRE DE CHILE

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

CHAPTER I. GENERAL PROVISIONS ______________________________________________ 6

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

16.1 Scheduling, Planning and Control of the Work ________________________________ 15

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

35 INTELLECTUAL-INDUSTRIAL PROPERTY _______________________________________ 29

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

CHAPTER I. GENERAL PROVISIONS

1 SCOPE AND PURPOSE

3 SPECIAL AND CONVENTIONAL DOMICILE

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

CHAPTER II. FORMALIZATION OF THE CONTRACT AND ITS GENERAL CONDITIONS

5 DEFINITION AND SCOPE OF WORDS

For the correct interpretation of the Contract, it shall be understood that:

a. The words indicating a gender will include all genders;

6 FORMALIZATION OF THE CONTRACT

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

6.2 Term of Execution

7 CONTRACT DOCUMENTS - ORDER OF PRECEDENCE

a. Contract and any amendments thereto.

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

i. GATC (this document).

8 REPRESENTATIVES OF THE PARTIES

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

10 OUTSOURCING: CONTRACTUAL CONDITIONS

11 TAXES, LIENS, DUTIES AND RIGHTS

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

12 ASSIGNMENT OF RIGHTS AND OBLIGATIONS

13 RULES GOVERNING THE LIABILITY OF THE PARTIES

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

circumstances be construed or deemed a waiver of such provision or affect it in any

g) Notwithstanding the Contractor's obligation to re-perform work or correct and/or

h) Provided the Contractor is a consortium, or is comprised by another group or similar

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

l) Should the Parties agree in the Contract on exclusions or maximum limits of

CHAPTER III. EXECUTION OF THE CONTRACT

14.2 Immediate Startup

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

14.3 Handing over of the Job Site

14.4 Obtainment of Permits and Licenses

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

15 ENTRY INTO THE INDUSTRIAL PREMISES OF CODELCO AND/OR PREMISES

16 EXECUTION OF THE WORK

16.1 Scheduling, Planning and Control of the Work

16.2 Quality Control and Assurance

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16.3 Technical, Quality and Risk Prevention Audits

16.4 Review of Audit Findings

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16.5 Environmental Protection

The classification of performance, in its different levels of degrees of acceptance and

18 PAYMENT OF THE PRICE

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19 PARTIAL CONTRACT CLOSURES

21 INCENTIVES AND SANCTIONS

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21.2 Sanctions for Breaches

22 SUSPENSION OF THE WORKS OF A CONTRACT DUE TO SAFETY, HEALTH OR

Furthermore, due to safety, weather, environmental, operational or other reasons, CODELCO

GENERAL ADMINISTRATIVE TERMS AND Effective Date:

23 SUSPENSION OF THE WORKS OR SERVICE DUE TO A DECISION BY CODELCO

a) An extension of the term due to such delay.