Dialogue with Local Communities and Indigenous Peoples

Engagement with the Local Community

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In collaboration with the Ome District Division and Tama University Research Laboratory, we implemented a model project on dialogue and collaboration under the Local Community Contribution Assessment initiative. The purpose of the survey is to identify local issues through research, and then to develop, implement, and evaluate programs that contribute to solving these challenges in a way that reflects our company's unique approach, and evaluate their effectiveness.

Handling Complaints and Inquiries from the Local Community

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Should the development of mines and related facilities necessitate the resettlement of local community members, we offer them substitute properties and secure their understanding beforehand. The Hishikari Mine relocated three local households between 1983 and 1989. Taganito HPAL (THPAL) relocated 41 households living in the impacted area.¹
We are considering implementing a human rights due diligence program for local communities.
When complaints are received from government agencies or local communities at any of our business sites, we respond appropriately and share the information with relevant departments within the Company. Additionally, the details of all complaints are reported to the relevant departments of our company every six months. In fiscal year 2024, our Group received five complaints from local communities, all of which were handled appropriately.
When mines have been suspended or closed in the past, we have taken measures such as constructing plants for different business ventures to help maintain local employment. For example, following the depletion of resources that led to the closure of mining operations, the Kunitomi Mine, which had previously operated as a smelter, ceased smelting in 1973 and was subsequently converted into a manufacturing plant for electronic component materials. Today, under the name Sumiko Kunitomi Electronics Co., Ltd., it provides high-quality products including crystal materials and magnetic materials.

• 1The relocation was planned in accordance with the World Bank's Operational Policy on Involuntary Resettlement, with the consent of all residents, and was completed by December 2010.
  Even after relocation, we continue to support residents through repair and maintenance of housing, as well as livelihood recovery programs designed to equip them with the skills and knowledge to maintain long-term income.

Dialogue with Indigenous Peoples

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Because mining development and smelting and refining operations have a significant impact on the environment and local communities, they pose a risk of infringing upon the rights of indigenous peoples living in those areas, who are generally in a vulnerable position. For this reason, we believe that gaining the understanding and trust of indigenous peoples is a fundamental prerequisite for conducting our operations. Our Group is committed to respecting international norms such as the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which advocates for consideration of the right to Free, Prior and Informed Consent (FPIC), one of the distinctive rights of indigenous peoples, and the position statements of the International Council on Mining and Metals (ICMM). While cooperating with relevant stakeholders such as local governments in our areas of operation, we aim to foster mutual understanding and trust with indigenous peoples. We will continue dialogue based on an understanding of their traditions and cultures.
In the Philippines, following extensive consultations with stakeholders, including government authorities and local communities, we obtained Environmental Compliance Certificates and commenced operations at Coral Bay Nickel Corporation (CBNC) in 2005 and Taganito HPAL Nickel Corporation (THPAL) in 2013. Even after operations began, we established dedicated organizations to implement local social development initiatives in accordance with applicable laws and regulations, and continue to operate a Social Development and Management Program: (SDMP). Specifically, CBNC regularly exchanges information with 22 barangays¹, including 11 impact barangays around Rio Tuba, while THPAL regularly exchanges information with 14 barangays, including four nearby impact barangays. Based on these exchanges, budgets are allocated to areas such as health, education, welfare and livelihood, and with approval from the local government, we provide services including free health checkups, medical treatment, and agricultural support. We also allocate separate budgets for activities not included in the SDMP, such as building schools and community centers for indigenous peoples to help preserve their culture and unique languages.
In Canada, we collaborated with our partner, IAMGOLD Corporation on the Cote Gold Project which entered the construction phase in 2020. We provided preliminary explanations for each permit to help affected indigenous groups understand the project and maintained ongoing dialogue throughout the process. Through participation in cultural training and other events organized by indigenous groups, we fostered mutual understanding and trust, which ultimately led to the conclusion of an Impact Benefit Agreement. At present, we are working together with indigenous groups and project partners to create a new lake matching the surface area of the one located at the proposed development site. As part of our biodiversity conservation efforts, aquatic species from the existing lake are being relocated to the new lake and adjacent water systems.
There have been no reports of serious conflicts concerning land use or the customary rights of indigenous peoples in the vicinity of any mines or smelters and refineries where we hold more than a 50% interest. Additionally, no complaints have been received through channels such as JaCER (grievance remedy platform) regarding this matter.

• 1The smallest local government unit constituting cities and towns in the Philippines, and denotes a village, district, or ward

Implementation of In-house Education on Indigenous Peoples

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The SMM Group provides in-house education to ensure that employees understand who indigenous peoples are and how the Group should handle the rights of indigenous peoples. The education aims to help employees understand these issues as matters they themselves are involved in, through messages from top management and case studies from our Group. As for the educational content, we are in constant dialogue with experts¹ on indigenous peoples and are receiving their guidance to ensure the content is fair.
With guidance from experts, we will continue our initiatives to further deepen the understanding of our Group employees on the traditions and cultures of indigenous peoples.

• 1Keiichi Omoto (Professor Emeritus, The University of Tokyo), Tomoaki Nishihara (Professor, Seisa University), Eiichiro Noguchi (Member of the NGO "Taiga Forum")

Dialogue with Experts, NGOs and NPOs

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We work to raise the direct contribution we make to the local economy through measures such as recruiting from areas surrounding our business site and procuring from local suppliers, and we also contribute to improving the living standards of these communities, particularly in emerging nations, by providing infrastructure such as roads and ports, building needed facilities, building and operating public facilities such as schools, hospitals, and marketplaces, providing teaching materials as educational support and the goods required to operate facilities, supporting free healthcare for local communities, and promoting activities that help households to support themselves. When implementing these measures, we establish opportunities for regular communication with local communities and move forward while also checking the requirements of residents. In addition, twice a year we exchange opinions with the international environmental NGO FoE Japan regarding issues such as the water quality of rivers around Coral Bay Nickel Corporation (CBNC) and Taganito HPAL Nickel Corporation (THPAL), in the Philippines. Those opinions and recommendations are referred to when implementing necessary improvements.