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California Transparency In Supply Chains Act Disclosure (SB 657)

The California Transparency in Supply Chains Act of 2010 (SB 657) requires companies that manufacture or sell products in the State of California to provide information regarding their efforts, if any, to eradicate slavery and human trafficking in their supply chains.

Pacific Ethanol, Inc. and its subsidiaries and affiliates (“Pacific Ethanol”) are committed to complying with the law wherever we operate and to conducting all business activities in accordance with high ethical standards. We expect the same of our customers, suppliers and other parties with whom we do business.

Our ethical standards are reflected in our Code of Ethics applicable to Pacific Ethanol’s directors, officers, employees and consultants. We adopted and implemented our Code of Ethics at our inception in 2006. Our Code of Ethics outlines our expectations of ethical conduct and compliance with laws by these personnel, and sets our customers’ expectations when dealing with Pacific Ethanol and its personnel. Pacific Ethanol expects its suppliers to comply with the law and operate consistent with the principles of our Code of Ethics, including as to abuses of human rights, including slavery and human trafficking in our supply chains.

Verification 

We intend to do business with suppliers who  conduct their businesses in a manner consistent with our Code of Ethics. Our corporate business practices embodied in our Code of Ethics provide that integrity and reliability are considered when we assess potential suppliers, and personnel are directed to report observed or suspected illegal or unethical behavior by those with whom we do business.  However, we do not presently employ any formal supply chain verification processes to evaluate or address the risks of slavery or human trafficking.

Auditing & Certification 

We may from time to time conduct audits on our internal operations which are discreet and unannounced, but we do not presently conduct audits of supplier compliance with our Code of Ethics as to slavery or human trafficking. We may from time to time require direct suppliers to certify that materials incorporated into their products comply with the laws regarding slavery and human trafficking of the country or countries in which they do business, but we do not presently obtain such certifications.

Internal Accountability 

We expect our personnel to report violations of our Code of Ethics and we maintain a process and an ethics hotline for this purpose. Reports of violations are reviewed and handled accordingly. Our internal accountability standards for violations of our Code of Ethics by our personnel include disciplinary action up to and including termination.

Training 

Our management is responsible to educate, train and motivate our personnel, including those personnel directly responsible for supply chain management, to understand and comply with our Code of Ethics and applicable laws. We do not presently employ any formal training program directed to address or mitigate the risks of slavery or human trafficking in our supply chains. Any such training is undertaken at the supervising manager’s initiative.