Posted Statement on Modern Slavery and Human Trafficking (FY2021.3) (PDF: 411.9 KB)

Obayashi Corporation Statement on Modern Slavery and Human Trafficking (FY 2021.3)

Obayashi Corporation (hereafter, the "Company") is releasing the following statement about initiatives to prevent slavery and human trafficking in the Obayashi Group (hereafter, the "Group") and in our supply chain in FY 2021.3 (April 1, 2020 to March 31, 2021), based on Chapter 6, Section 54 of the UK Government's Modern Slavery Act 2015 and Modern Slavery Act 2018 of Australia.

"Slavery" and "human trafficking" are defined in both Acts, however, because the definitions may differ depending on local circumstances, we are disclosing our initiatives in preventing all forms of modern slavery and compliance with related laws and regulations and international norms in this statement.

1. Obayashi Group Business and Structure

Obayashi is a general construction contractor that was founded in 1892 and has its head office in Tokyo. We have 97 subsidiaries, 25 affiliated companies, and 15,267 employees at the consolidated level (as of March 31, 2021). We operate a construction business, real estate development business, and businesses in new areas such as renewable energy, PPP, etc. in 16 countries worldwide, mainly in Japan, North America, and Asia.

The Group operates its business in the following countries and regions:

U.S., Canada, Singapore, Malaysia, Thailand, Myanmar, Indonesia, Vietnam, Cambodia, Taiwan, Bangladesh, UK, United Arab Emirates, Qatar, New Zealand, and Australia

Obayashi has a Europe Office and a local subsidiary named OBAYASHI PROPERTIES UK Limited (established in June 2020) in London, inthe UK, which operates a real estate rental and development business mainly focusing on office buildings. We have an Australia Office in Sydney, Australia, which operates a construction business. The Group's total consolidated net sales were 1.7 trillion yen as of March 31, 2021. The UK and Australia account for roughly 0.06% and 0.33% of total consolidated net sales, respectively. The total number of Group employees at the consolidated level include 3 employees in the UK and 5 employees in Australia.

See the following website link for a profile of Obayashi and its businesses.

Company profile: https://www.obayashi.co.jp/en/company/

Office locations: https://www.obayashi.co.jp/en/company/group.html

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2. Overview of the Supply Chain

The Group recognizes all business partners involved in the supply chains for the Group's business as suppliers, and regards them as one of its important stakeholders. Suppliers for the construction business, the main business of the Group, are divided into two main categories: Labor subcontractors and suppliers of materials and equipment. We have an organization in Japan called the Obayashi Rin-yu-kai, which consists of approximately 1,100 main suppliers. The value of transactions with members of the Obayashi Rin-yu- kai accounted for 43% of all supplier transactions with the Company in the construction business in Japan, in FY 2021.3.

3. Group Corporate Policies 3-1. Basic Principles

The "Obayashi Basic Principles," which consist of the Obayashi Philosophy, Obayashi Code of Conduct, and Obayashi Three Pledges, specify contributing to the realization of a sustainable society, and these principles are shared with and implemented by all officers and employees in the Group. We believe that practicing our basic principles is the very essence of conducting our corporate activities. Based on this belief, we have clearly specified our social mission and responsibilities and are implementing many sustainability-related initiatives aimed at fulfilling CSR (corporate social responsibility) so that we will continue to be a company that is trusted by all of our stakeholders.

We have positioned respect for human rights as an important issue in fulfilling our corporate social responsibilities. The Obayashi Philosophy states that we "value each person with a stake in our business." The Obayashi Code of Conduct specifies the guidelines for putting the Corporate Philosophy into practice: "Value every one of our associates," "Build stronger mutual trust with suppliers," "Build good relationships with communities," and "Ensure strict adherence to corporate ethics."

See the following website link for further information on the Obayashi Basic Principles. https://www.obayashi.co.jp/en/company/philosophy.html

3-2. Human Rights Policy

The Group has set forth the "Obayashi Group Human Rights Policy" in accordance with the Universal Declaration of Human Rights. We support the ILO International Labor Standards and other international norms, and have specified the policy of respecting the human rights of all officers and employees and all people associated with our business.

See the following website link for further information on the Obayashi Statement on Human Rights. https://www.obayashi.co.jp/en/sustainability/employee.html#section1

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3-3. Obayashi Health and Safety Principles and Policies

The Group has set forth the "Obayashi Health and Safety Principles and Policies" based on its belief that ensuring the safety and health of all workers at construction sites, in its main construction business, is of the utmost importance.

See the following website link for further information on the Obayashi Health and Safety Policies. https://www.obayashi.co.jp/en/sustainability/safeenv.html#section1

3-4. Obayashi Group CSR Procurement Policy

The Group established the Obayashi Group CSR Procurement Policy to specify the actions aimed at realizingasustainablesociety described in the ObayashiBasic Principles. It includes compliance with laws and regulations, respect for human rights, assurance of safety and health, ensuring quality, and consideration for the environment. The Basic Policy on CSR Procurement Initiatives specifies items that Obayashi Group officers and employees need to comply with in promoting CSR procurement.

The CSR Procurement Guidelines prescribe items that the Obayashi Group expects its suppliers to implement and to make sure that everyone in the suppliers' own supply chains understand, in line with the Basic Policy on CSR Procurement Initiatives. Specific guidelines state that suppliers will "not discriminate . . . nor engage in harassment, or other activities that infringe upon human rights," "not engage in or permit misconduct such as the use of forced labor or child labor," "ensure equal employment opportunity, practice appropriate labor management, pay appropriate wages, and maintain and improve working environments so they are healthy and easy to work in," "guarantee freedom of association and collective bargaining rights for employees," "strive to understand and cooperate with the human rights due diligence performed by Obayashi Group companies," etc.

See the following website link for further information on the Obayashi Group CSR Procurement Policy and CSR Procurement Guidelines:

Obayashi Group CSR Procurement: https://www.obayashi.co.jp/en/sustainability/suppliers/csr_procurement.html

Obayashi Group CSR Procurement Guidelines: https://www.obayashi.co.jp/en/sustainability/suppliers/csr_procurement.html#section2

3-5. Participation in the United Nations Global Compact

The Group has been a signatory to the United Nations Global Compact since 2013. As a member of the Compact, we respect human rights and support the complete prohibition of forcedlabor andchildlabor inall forms, basedonthe principlesoftheGlobalCompact.

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４. Obayashi Group Initiatives

4-1. Due Diligence on Slavery and Human Trafficking in the Business and Supply Chain

The Group has begun conducting due diligence on human rights. In order to ensure the effectiveness of human rights due diligence, we have appointed the officer in charge of the Corporate Strategy Division as the chief person responsible for implementation and established a working group for human rights due diligence and supply chain management that includes cross-departmental personnel from relevant departments such as the Human Resources and Procurement, with personnel from the ESG & SDGs Department playing a central role.

The procedure for conducting human rights due diligence followed by the Group thus far is described below.

1. Divided the business and supply chain into the Group's main businesses of the

construction business, the real estate development business, and businesses in new areas,mainly the renewableenergybusiness,andidentifiedtherisksofeach stakeholder.

1. Consulted the reports by the governments and NGOs of each country and obtained the advice of an expert, then evaluated the risks identified.
2. Specified the human rights issues to be prioritized and addressed.

The main human rights issues of stakeholders are as follows:

1. Child labor
2. Forced labor and human trafficking
3. Reasonable consideration of people who are subject to discrimination or are in a vulnerable position
4. Harassment
5. Poor work and living environments
6. Establishment of appropriate labor conditions
7. Ensuring building and structure safety
8. Infringement of the lives and health of local residents
9. Infringement of privacy rights

The human rights issues related to modern slavery and human trafficking out of those listed above are (1) through (6).

4） We interviewed the corporate divisions, departments, and personnel responsible in our company to ascertain the actual state of the specified human rights issues to be prioritized ((1) through (9), above). These interviews revealed that the Group does not employ workers of an age considered to be child labor in Japan or foreign technical

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trainees based on Japanese laws, and there is little risk of modern slavery. However, we still need to continue investigations into the risk of human trafficking of foreign technical trainees under Japanese law, forced labor, child labor, and other types of labor that could potentially be considered modern slavery in regard to workers employed by suppliers to the Group.

We will continue to consider measures to mitigate and prevent negative impacts on human rights and implement concrete initiatives.

4-2. Occupational Safety Initiatives

Obayashi Central Health and Safety Committee chaired by the president was established for appropriate work environments. The committee meets at least twice a year to discuss and consider basic matters concerning health and safety, such as preventing occupational accidents, preventing impairment of health, and maintaining and improving health.

We operate Obayashi's Occupational Health and Safety Management System, which has systematized methods of safety management in order to ensure implementation of the following Health and Safety Principles and Policies in all our construction sites in Japan.

Health and Safety Principles

Ensure the health and safety of all workers at construction sites and create comfortable workplace environments.

Health and Safety Policies

1. Comply with the Industrial Safety and Health Act, other relevant laws, and
   Obayashi Corporation's internal rules.
2. Appropriately implement and use Obayashi's Occupational Health and Safety
   Management System.
3. Help improve independent health and safety management efforts of suppliers.

Obayashi'sOccupationalHealth and Safety Management System helpseach organization clearly delineate its own Health and Safety Policy. The system manages the operational structure, plan formulation, and procedures for the entire cycle, from implementation to achievement, revision, and maintenance. The Company specifies policies and goals and operates the PDCA cycle, monitoring regularly, with the goal of achieving continuous improvement.

Safety patrols at construction sites include daily patrols by our employees and subcontractors working at the site, as well as for construction sites with a large number

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