Stakeholder Engagement

Stakeholder engagement is key to building the mutually beneficial relationships that help us achieve our goals and move toward our vision.

Our major stakeholders are employees, customers, investors, suppliers, regulators and the communities where we operate.

How PotashCorp Engages Stakeholders

• Customers — We connect with our customers through personal contact, trade shows and online communication. Each customer has assigned service representatives and sales staff and access to a toll-free 24/7 customer service line. We survey customers annually to measure satisfaction, to learn how to better meet their needs and to understand how we compare with competitors.
• Investors — We conduct one-on-one meetings and calls, make analyst presentations, participate in quarterly conference calls and webcasts and administer an annual perception survey. In 2010, we created an online executive compensation survey.
• Communities — We participate in community advisory panels, host meetings, survey community leaders, publish newsletters and produce local sustainability brochures.
• Employees — We conduct an annual employee engagement survey and elicit feedback through employee meetings. We hold meetings on safety, environment, business prospects, compensation, benefits and other topics. Newsletters are published at the plant sites and corporate offices.
• Regulators — We meet with elected officials and regulators, contribute to the US subsidiary’s Political Action Committee (contributions limited to the United States from US employees) and work with trade associations.
• Aboriginal Communities — We seek to build partnerships with Aboriginal communities — a rapidly growing sector of Saskatchewan’s population and labor force — to become more accessible and a more attractive employer. We engage Aboriginal communities in meetings, participate in Aboriginal events and sponsor scholarships and other activities.
• Suppliers — We work closely with more than 650 key suppliers — up from 380 in 2008 — to ensure that we receive the best products and services possible. In 2009 and early 2010, all of our facilities re-evaluated their key suppliers and their certifications to establish and maintain a rigorous culture of business ethics. We are in the process of either receiving a signed certificate of business principles or reviewing their codes of conduct to determine if they are comparable with our own.

Stakeholder Engagement Highlights — 2009

Customers

New Product Quality Target

In 2010, we will evaluate the data related to our product quality, intending to establish a new product quality target for 2011. Variables under review will include the number of customer complaints, incidents where product did not meet a customer’s standards and incidents where product met a customer’s standards but did not meet our more stringent internal standards.

2009 Results

Annual surveys conducted in mid-2009 revealed that escalation and volatility of pricing was the single greatest concern for customers, along with the impact of new pricing on credit lines.

PotashCorp has worked extensively with customers to help them understand the fundamentals that drive pricing in the fertilizer industry, enabling them to make more informed business decisions. We have also provided key information through our website, including Market Analysis Reports. Even as demand declined dramatically in 2008 and 2009, we worked to increase meaningful contact with fertilizer distributors and other customers. On a survey question regarding whether we maintain the right level of contact throughout the year, 96 percent of fertilizer customers, 96 percent of feed customers, 91 percent of nitrogen industrial customers and 74 percent of phosphate industrial customers said yes.

Customer groups rated reliability of supply as the most important element after price in judging suppliers. We continued our potash capacity expansion projects in 2009 despite decreased short-term demand.

We have also taken steps to upgrade and expand our North American and international distribution system, increasing storage capacity, adding transportation options and expanding our warehousing network to bring our products closer to the customer. We increased our distribution points in North America to 251 — up from 203 in 2008. Canpotex Limited, the offshore marketing company for Saskatchewan potash producers, leased additional railcars and continued to invest in port facilities designed to increase shipping capacity.

In 2009, we also:

• collaborated with customers to optimize their supply chain and reduce seasonality stresses on their business;
• supplemented our Safe Feed/Safe Food certification by voluntarily implementing enhanced risk analyses;
• expanded our Market Analysis Reports, targeting the issues and trends most important to customers.

Survey Feedback

Our Fertilizer group finished first in product quality ratings. PotashCorp was judged to have the most reliable long-term supply compared to competitors by a margin ranging from 5 to 26 percentage points, and was considered the most reliable supplier by 63 percent of customers — more than all other companies combined. Reliable supply was considered an important issue for 88 percent of customers.

Our Feed group ranked highest in credit policies and pricing for the first time, and highest on every aspect of product quality, reliability of supply and customer service.

Our Industrial group continued to make gains in customer rankings of its pricing and credit policies while achieving top ranking in product quality, supply reliability and sales representative performance.

Our Purified Acid group rated lowest on pricing but highest on reliability of supply. It also ranked significantly higher than competitors in providing market information and communicating with customers.

Performance vs. Competitors

Company Actions Taken in 2009

• Continued to expand potash capacity in a program that began in 2005 and will nearly double our annual operational capability by 2015 to more than 17 million tonnes;
• Completed construction of a new sulfuric acid plant at Aurora NC;
• Installed a new mixing pit and filters in Augusta GA to improve urea ammonium nitrate solution quality;
• Utilized a product cooler at White Springs FL to improve the quality of granular mono-ammonium phosphate;
• Improved product quality as total customer complaints declined by 18 percent and complaints related to dust, lumps or product sizing declined by 20 percent;
• Continued to offer 24/7 customer service and to train service agents to maintain quality standards.

Investors

While 2009 was a difficult year to predict for our business, we continued to meet with investors and provide access to our management team. We listened to our shareholders and sought to address their concerns, focusing our efforts on providing information about the key drivers of our business and demonstrating execution of our long-term strategies through our disclosure materials and website.

In 2009, we:

• Increased total investor/analyst meetings by 51 percent over 2008 (752 total);
• Met our objective of seeing shareholders with 1 percent or greater ownership of PotashCorp in their offices during the year; we saw 95 percent of shareholders holding greater than 1 million shares in their offices, up from 90 percent last year;
• Attended nine sell-side conferences;
• Hosted an analyst meeting in Chicago, plus five mine tours;
• Re-designed our website with a focus on improving stakeholder information, using an online website survey to help direct the redesign, improving our provision of data and market information to give stakeholders the information they need, when they need it, in a way they can use and share it;
• Voluntarily adopted a Say on Pay vote for our 2010 annual shareholders meeting. To gather input from our investors, we introduced a compensation survey available through our website and videos of the board compensation committee discussing this important matter. The survey feedback will be provided to the committee for evaluation of future compensation practices.

Survey Feedback

We continued our annual survey of buy-side and sell-side analysts, which helps us understand shareholders’ perceptions and set our communication priorities.

According to survey answers, PotashCorp continues to be considered a must-own company in agriculture and fertilizer, and agriculture remains an attractive sector.

Like most companies in 2009, we were challenged by the extent and duration of the global economic crisis and its impact on our business. However, despite this difficult environment, investors expressed confidence in management’s ability to create long-term shareholder value and praised the company’s communication efforts, describing us as responsive, transparent and consistent.

Communities

Site Specific Activities
Each of our sites is an engaged and active participant in its local community. Each site’s activities are summarized in the Facilities section.

Donations
We donated $9.5 million in 2009. To learn more about corporate donations, see our Donations section.

Meetings
We hold regular community meetings to build strong relationships and better understand and respond to concerns. We participated in or conducted 386 meetings in 2009.

2009 Community Meetings — by Type

Surveys
PotashCorp administers community leader surveys in the communities where we operate. The surveys use a scale of 1 (not performing well) to 5 (performing very well).

Surveys were conducted between 2004 and 2009 at all the locations where we operate. We achieved our target score of 4 or above at 14 of 15 sites surveyed, with an average score of 4.2 for all sites.

We learned that communities judge our company by our local actions rather than our national reputation or performance. The most common criticism was that PotashCorp needed to communicate more about our activities to the community.

Community leaders at Aurora NC, Cincinnati OH and Joplin MO completed surveys in 2009 to help us measure perceptions of our community involvement, our business practices (specifically regarding safety, health and environment) and our impact on local economies.

• Aurora — Score 4.3
  This survey, completed in the summer of 2009 — near the end of the mining permit process — enabled us to compare results with those of a survey given in 2005.

  Some 2009 survey participants who supported our getting the permit were concerned by the length and uncertainty of the mining permit process. PotashCorp was credited with building understanding and support for our position. There was a strong desire for more communication between the company and the community, especially regarding local initiatives.

  To make local initiatives more visible, we are promoting our monetary and volunteer-hour donations through local advertising. We are also working with local officials to make sure community residents are aware of local emergency procedures.

• Cincinnati — Score: 4.1
  The citizen advisory panel (CAP) was perceived as a key communication vehicle with the community. Some residents praised our participation in the CAP; others wanted more. Overall, the perception was that we were addressing existing issues at the site. Survey participants want more communication with our company.

  To facilitate more communication with the community in 2010, we are looking for more opportunities to sponsor community activities, expand presentations at local schools and publicize community activities such as emergency drills with local fire departments.

• Joplin — Score: 4.2
  PotashCorp was described as having a proactive and visible safety culture and is considered important to providing jobs and economic growth. Site recognition by survey participants was low.

  To increase site recognition, Joplin has assigned staff and management to communicate with schools, the chamber of commerce, women’s organizations, hospitals and other local organizations. We will also improve distribution of news releases and reports to local newspapers on plant achievements.

Community Engagement by PotashCorp’s Operating Sites 2009

Trinidad Model Farm

The 75-acre PCS Model Farm and Agricultural Resource Centre, a PotashCorp-funded facility, was created to help educate Trinidadians about best practices in modern agriculture. Since it opened in February 2009, 250 farmers, students and agricultural professionals have visited. Training programs include farm economics, soil fertility and managing pests and diseases.

2009 Key Performance Measures — PCS Model Farm

Community Sustainability Reports

Our annual sustainability brochures detail the performance of each PotashCorp operation in its local community, including the site’s safety and environmental performance, community initiatives and local spending.

Employees

To help achieve our goal of attracting and retaining dedicated and talented employees, we administered a 10-question survey to 1,353 PotashCorp employees at six locations. The survey uses a scale of 1 (not engaged) to 5 (very engaged). An employee response of 4 or 5 is considered to be a response of engagement. The survey showed an overall employee engagement rate of 76 percent.

Employee Engagement Survey Results

We attempt to survey the same group of employees every two years to benchmark our performance. In 2009, most scores were higher than in previous surveys, with improved ratings in performance feedback, learning and growth, and communications.

Our employees continue to give us high marks for efforts to help them to successfully do their jobs, for a commitment to quality on the part of all workers and for the way we are able to serve customers. Employee feedback affirms that we should continue to work at improving supervisory bench strength in coaching and performance feedback.

The sites surveyed in 2009 were last surveyed in 2007. In both surveys, the statement “PotashCorp encourages me to learn and grow in my job, and helps me to find better ways to do my job” drew the lowest score. In 2007, 49.6 percent of our employees responded affirmatively to that statement. In 2009, positive responses came from 65.5 percent of employees in this group.

Ongoing efforts at every site have contributed to this improvement, including initiatives to improve skills of our front-line supervisors through innovative training that is more responsive to their needs.

Through the work of an interdivisional group, we developed universal core leadership competencies in 2009 to emphasize this commitment and bring consistency to leadership training programs throughout the company.

After the 2009 surveys, we held third-party focus groups for employees. The survey results were discussed and employees assessed the company’s performance. Participating site managers developed action plans to address the feedback.

Political Engagement

We engage federal governments through our industry organizations: The Fertilizer Institute (TFI) in the US, Canadian Fertilizer Institute (CFI) in Canada and the International Fertilizer Industry Association (IFA) for global issues. Public policy issues addressed or monitored in 2009 included:

• Proposed Climate Change legislation — Through TFI and CFI, we tracked pending legislation. Our CEO met with three US senators and one congressman to discuss the impact of the proposed climate change legislation on the fertilizer industry and agriculture. Our COO met with two senators. We want to ensure that any legislation protects food security and gives companies incentives to operate sensibly.

• Proposed rules on nutrient runoff — We worked with TFI to respond to a growing concern about how commercial fertilizers — nitrogen and phosphate — are negatively affecting rivers, streams and other bodies of water. In Florida, the EPA has proposed Numeric Nutrient Criteria that would limit the amount of nutrients in waterways. TFI has provided comments to EPA and attended public meetings to make sure the new rules have the correct scientific basis to protect the environment in a cost-effective way.

  Through our trade associations, we continue to educate farmers and policy makers about nutrient management to help reduce fertilizer runoff. TFI and CFI support more than 13,000 certified crop advisors in North America, who help educate growers about best management practices in areas ranging from nutrient management to soil and water quality.

Aboriginal Communities

Having good relations with Aboriginal groups is important to our company. They are valued members of our community, and their success will help us grow.

As we expand operations in Saskatchewan and New Brunswick, we look for ways to deepen our partnership with Aboriginal groups, increase Aboriginal representation in PotashCorp and find targeted, sustainable ways to contribute to Aboriginal education and socio-economic development.

In 2009, we:

• Sponsored the Saskatchewan First Nations Summer Games as a major title sponsor and provided a CDN $50,000 donation;
• Provided 10 CDN $1,000 scholarships for students at the Saskatchewan Indian Institute of Technology;
• Provided seven CDN $1,000 bursaries for Aboriginal students studying at the Saskatchewan Institute of Applied Science and Technology;
• Provided one CDN $5,000 scholarship to the University of Saskatchewan;
• Attended numerous Aboriginal-themed and endorsed seminars, conferences and meetings aimed at enhancing understanding of Aboriginal issues.