Public Due Diligence Report(DS MYANMAR)

1. Company Information

Established in 2017, DS Myanmar Compamy Limited is one of tin metal producers, sourcing raw materials globally from Myanmar, Asia, Africa, Europe and South Americas to supply its international customers. The company is based in Thanlyin province, Myanmar and has ID Number CID003831. DS Myanmar has 1 (one) smelting/refining facility, located at Lot No. BL-1, Zone B, Thilawa SEZ, Yangon, Myanmar. The smelting/refining facilities processes Tin containing material to produce Tin metal products.

2. RMAP Assessment Summary

DS Myanmar will undergo initial RMAP assessment from 24th to 25th June, 2022. The assessment will be valid for one year. The assessment period is from 7th September, 2021 to 7th May, 2022. The assessment will be conducted by a Responsible Sourcing Audit Firm, Arche Advisors.

3. Company Supply Chain Policy

To avoid the use of conflict minerals, which directly or indirectly finance or benefit armed groups and/or involve other serious human right abuses in high-risk and conflict-affected regions, DS Myanmar has developed a supply chain policy. The supply chain policy is fully aligned with the third edition of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance). It covers all of the risks identified in Annex II of the OECD Guidance and its geographic scope is global. DS Myanmar is committed to addressing any Annex II risks if identified. The policy was reviewed and approved by the senior management, which committed to support its implementation. The policy has been widely disseminated to relevant stakeholders (suppliers, customers, employees etc.) and is available on our website at www.dshm.co.kr

4. Company Management Systems

Management Structure

The company follows through on its commitments in the supply chain policy and has developed an internal procedure for due diligence with the following aspects:
• The company’s Managing Director is responsible to oversee the due diligence program and risk management design and implementation.
• The company has assigned a procurement team leader as a due diligence program manager to coordinate the work of the relevant departments to ensure each department
    follows up on their roles and responsibilities to implement the due diligence program and report any red flags and potential risks identified.
• The company have plan to conduct due diligence management system training once a year for key staff from all relevant departments (Including logistics and production team)
    required in due diligence program. If there is an update of the program, the company will conduct additional training as necessary.

Internal Systems of Control

The company has established its due diligence management system to be aligned with the OECD Guidance and RMAP in May 2022. Upon this system, material is inspected, documented, identified and quantities reconciled through receipt, processing and sale. Due to Covid-19 pandemic, the company did not conduct due diligence in 2021 with direct suppliers at their sites, however, the company will ask the suppliers/traders to provide relevant documents and on-the ground reports (where possible) for the company’s checking. The company refers to RMI’s grievance mechanism to collect information on grievances from interested parties. (https://www.responsiblemineralsinitiative.org/rmap/grievance-mechanism/)

Record Keeping Systems

The company requires that all records relating to the due diligence program are maintained at least for five years and that they be properly used and safely stored in company database.

5. Risk Identification

For risk identification purpose, company established following steps to identify risks of our supply chain on May, 2022

Firstly, referring to the risks in the company’s supply chain policy, the company established a procedure to identify CAHRAs(Which needs to be done prior to initial transactions with new suppliers for all material origin and transit routes). The procedure includes the resources used, the criteria to define a “Conflict-Affected and High-Risk Area” as well as the frequency with which our determination is reviewed. The company uses the following resources to determine CAHRAs:

1) US Dodd-Frank : Presence of armed conflict and widespread violence (Democratic Republic of the Congo) or transit risks (nine surrounding countries)
2) European Union CAHRAs List: The indicative, non-exhaustive and regularly updated list of CAHRAs
3) RMI’s Global Risk Map Tool : Ranking of risk level for the following indicators:
    • Heidelberg Conflict Barometer : Presence of armed conflict and widespread violence.
    • Fragile State Index: Human Rights and Rule of Law indicator : Other risks of harm to people and rule of law.
    • Worldwide Governance Indicators : Bribery, fraudulent misrepresentation of the origin of minerals, money laundering,
        non-payment of taxes, fees and royalties to governments.
    • Fragile State Index: Security Apparatus Index : Direct or indirect support to public or private security forces.

Secondly, the company has made a Know Your Counterparty (KYC) form to include information concerning supplier legal status, identity and potential risks. The company’s due diligence program manager will review the provided information and the UN Sanction List. KYC procedure needs to be done prior to initial transactions with new suppliers. Whenever inconsistencies, errors or incomplete information are identified in the KYC form, the company will communicate the improvement areas to suppliers and request an updated form. If red flags were identified, the company will further engage with its suppliers to clarify and improve the documents as needed.

Thirdly, the company will request origin information for each material transaction and will ensure that it is able to understand the transaction origin, transportation route, as well as direct suppliers’ names and locations.

Fourthly, all information collected will be reviewed by the company against CAHRAs, sanction lists, local laws and internal sourcing requirements

Risk Assessment (HIGH RISK SOURCING ONLY)

For material and supply chains determined to be “high-risk”, the company have plan to conduct enhanced due diligence. This include:
• Assessing the context of CAHRAs;
• Clarifying the chain of custody;
• Assessing the activities and relationships of upstream suppliers;
• Identifying locations and qualitative conditions of the extraction, trade, handling, and export of minerals

6. Risk Mitigation (HIGH RISK SOURCING ONLY)

Company established plan for risk mitigation identified in high-risk supply chains as follows;

1. Notification to supplier
    Once any supplier in supply chain is determined as “high-risk”, supplier will be informed of the action plan and given a period of six months for its mitigation. During this period,
    procurement team leader will monitor the progress of this action plan regularly.

2. Adopt risk management plan
    Company will devise and adopt a risk management plan, using a risk management strategy as defined in the OECD Guidance Annex II Model Supply Chain Policy.
    Appropriate stakeholder will be engaged when developing risk management plan.

    Risk mitigation strategies include:
    1) Continuing trade throughout the course of measurable risk management efforts
    2) Temporarily suspending trade while pursuing ongoing mitigation effort
    3) Disengaging with a supplier in cases where mitigation appears not feasible or unacceptable or evidence that human rights abuses are occurring

3. Implementation
    Company will implement the risk management plan, monitor and track performance of risk mitigation, report back to senior management and consider suspension or
    discontinuation of the business relationship with the supplier(s) after failed attempts at mitigation

7. Report Approval by Senior Management (ALL SOURCES)

This report has been reviewed and approved by the company’s Managing Director.