Fundamentals of Corporate Sustainability

Law & Regulatory Compliance

Law and Regulatory Compliance

Risk

The operations of industrial estate businesses are subject to numerous laws and regulations due to their direct and indirect impacts on the economy, society, and environment. The Company and its stakeholders give high priority to compliance with all relevant laws and regulations. Non-compliance by the Company, its suppliers, or contractors can result in financial and reputational damage, loss of stakeholder confidence, and negatively affect the Company's relationships with neighboring communities and society. With recent changes in laws and regulations specific to industrial estate businesses, there is an increased need for prudent compliance risk management, which is recognized as one of the Company’s enterprise risks.

Opportunity

Compliance with laws and regulations enables the Company to operate transparently, gain credibility, and earn the trust of stakeholders. Monitoring changes in laws and regulations related to industrial estate and associated businesses closely will enable the Company to prepare for new legislation that may arise. Changes in customer requirements resulting from changes in domestic and foreign laws and regulations enable the Company to adapt and develop products and services to meet those needs in a timely manner.

Management Approach

The following risk management processes were developed based on compliance with applicable laws and regulations in order for the Company to conduct business legally and in compliance with numerous regulations:

1. Risk Identification

Analyzed and identified the legal and regulatory compliance risks throughout the business value chain, by referring to the laws and regulations of each municipality or country in which the Company conducts business.

2. Risk Management

Assessed the risks associated with non-compliance with laws, regulations, and international standards, and developed measures to manage these risks. The Legal Department and the department responsible for liaising with government agencies are tasked with monitoring changes in laws and regulations at each business location. The Company communicates with employees and stakeholders through various channels, including meetings, training sessions, emails, and the intranet, to ensure they are well-informed about changing laws and regulations and maintain rigorous compliance.

3. Compliance Monitoring

The executives of all departments are responsible for overseeing the Company’s employees and contractors to ensure that they strictly comply with all applicable laws and regulations. Also, the performance of statutory and regulatory compliance has been regularly audited and assessed.

4. Communication and Reporting

The Legal Department is responsible for compiling violation cases and assessing the performance of statutory and regulatory compliance, as well as reporting to the management team, the Corporate Governance and Sustainable Development Committee, the Risk Management Committee, and the Board of Directors, respectively. These reports help inform decisions to strengthen governance and compliance mechanisms. Additionally, the performance results are disclosed in the Annual Sustainability Report.

Performance

In 2023, the Risk Management Committee identified risks arising from changes in environmental laws and regulations as a corporate risk. The Company has assigned departments directly responsible for this matter, developed a risk mitigation plan, and determined its risk appetite to closely monitor and evaluate the risk. This effort has been undertaken in response to the enactment of numerous new environmental laws and changes in international multilateral environmental agreements over the past year, which may impact customers in the industrial estates engaged in export activities.

Furthermore, the Company had no incidents of non-compliance with laws related to the industrial estate business and no incidents of non-compliance with economic, social, and environmental laws by employees, suppliers, or contractors in 2023. In order to maintain trust among all stakeholders in its ability to conduct responsible and sustainable business, the Company continued to abide by laws, regulations, and international standards.

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