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Company Response

Mitsubishi Materials Corporation's response

22 February 2021

[English translation]

We would like to respond as follows to your inquiry regarding an article about a former employee of our consolidated subsidiary PT Smelting (60.5% stake, hereinafter referred to as "PTS") in Indonesia.

In order to realize our corporate philosophy and vision, we have established "rules that we should observe" as our "Code of Conduct", which also stipulates that we should respect the human rights of all people in our business activities. In addition to complying with the laws and regulations of the countries and local governments in which we operate, PTS also respects international human rights principles in conducting its business activities. We have received the following report from PTS regarding the matters of concern.

- In November 2016, PTS and the company's trade union, PUK SPL FSPMI PT Smelting ("PUK"), began negotiations to amend the existing collective agreement between the two parties.

- In January 2017, PTS and PUK agreed to continue the existing collective agreement for one year, in compliance with Indonesian laws and regulations and in line with the guidelines for renewal of collective agreements agreed by both parties. In July of the same year, PTS announced its intention to resume negotiations on the revision of the collective agreement, but despite the above agreement, PUK started a strike.

- Under Indonesian law and regulations, a strike by a trade union is allowed only if both the company and the union agree that the labor-management negotiations have broken down, but as mentioned above, the labor-management negotiations had not broken down.

- PTS therefore sent a letter to the PUK informing them of the illegality of the strike and requesting that the members participating in the strike return to work; however all rejected this request. As a result, as of January 31, 2017, PTS considered 308 members of the union to have voluntarily resigned in accordance with Indonesian laws and regulations.

- In December 2017, the labor court in Gresik province ruled that the strike by PUK was illegal and that the employment relationship was legally terminated as a result of the voluntary resignation of 308 union members. In addition, the Supreme Court decision in May 2018 upheld the content of the aforementioned labor court decision.

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