Supply chain policy

Zhuzhou Gaoli New Material Co., Ltd.

Responsible Mineral Supply Chain Policy

Recognizing that mining, trading, processing, and exporting minerals in conflict-affected and high-risk areas may have major negative impacts, and that we have the obligation to respect human rights and not contribute to conflicts, we are committed to adopt and widely promote the following benefits Policy for responsible sourcing of minerals in conflict-affected and high-risk areas. We promise not to engage in any activities that will fund conflicts, to comply with relevant UN sanctions resolutions or, where applicable, to comply with domestic laws implementing such resolutions, and to not participate in any behavior that will provide assistance or convenience to conflicts.

1. Serious violations related to mineral mining, transportation, or trade:

We will neither tolerate nor directly or indirectly support the following behaviors in any way when carrying out procurement or business activities in areas affected by conflict and high-risk:

1. Any form of torture, cruel, inhuman and degrading behavior;

2. Any form of forced or compulsory labor. Forced or compulsory labor refers to any labor or service that is squeezed out of any individual under the threat of punishment and is not provided voluntarily by that person;

3. The worst forms of child labor;

4. Other serious violations and violations of human rights, such as widespread sexual violence;

5. War crimes, crimes against humanity, genocide or other serious violations of international humanitarian law.

Risk management of serious infringements:

If we have reasonable grounds to believe that the upstream supplier has any of the above serious infringements to purchase or is associated with it, we will immediately suspend or interrupt the cooperation with that supplier.

2. Direct or indirect support for non-state armed groups:

We will not tolerate any direct or indirect support for non-state armed groups through mineral mining, transportation, trade, processing or export. Providing “direct or indirect support” to non-state armed groups through mineral mining, transportation, trade, processing or export includes but is not limited to the purchase of minerals from non-state armed groups or their affiliates, payment to them, or other means It provides logistical support or equipment, etc. These armed groups or related parties:

1. Illegal control of mine sites, or other means to control transportation routes, mineral trading points, and upstream actors in the supply chain;

2. Illegal taxation or extortion at the entrance of the mine site, along the transportation route or at the mineral trading point;

3. Illegal taxation or extortion of middlemen, export companies or international traders.

Risk management supported by non-state armed groups directly or indirectly:

If we have reasonable grounds to believe that any party that an upstream supplier provides direct or indirect support to a non-state armed group makes purchases or is related to it, we will immediately suspend or discontinue cooperation with that supplier.

3. Public or private security forces:

We prevent illegal control of mining sites, transportation routes, and upstream actors in the supply chain, illegal taxation or demand for money or minerals at the entrance of the mine site, along the transportation route, or mineral transaction points, or illegally from middlemen, export companies or international traders Public or private security forces that collect taxes or extortion provide direct or indirect support.

We recognize that the role of public or private security forces at the mine site or its surrounding area and or along the transportation road is only to maintain the rule of law, including the protection of human rights, the protection of miners, the safety of equipment and facilities, and the protection of mine sites or transportation routes for legal mining And trade is not disturbed.

We will support or take measures to interact with local governments, international organizations and civil society organizations to avoid or minimize the negative impact of public or private security forces stationed on mining sites on vulnerable groups, especially for small workshop miners. Negative impact, in this case, the minerals in the supply chain are small workshops mined through small workshops or small-scale mining.

Risk management of public or private security forces:

If we find that such risks exist to a certain extent, we will immediately formulate, adopt and implement risk management plans for upstream suppliers and other stakeholders based on the company’s specific position in the supply chain, so that the The risk of providing direct or indirect support for public or private security forces mentioned above is contained or reduced. If the risk management plan does not take effect for six months, we will temporarily suspend or discontinue cooperation with upstream suppliers.

4. Bribery, money laundering and various fees paid to the government:

We do not offer, promise, conduct or demand any bribes, and resist the temptation. We will not falsely report the taxes, fees and concessions paid to the government for mining, trading, processing, transportation, export and other activities in order to cover up or falsify the origin of minerals. Expenses and bribes.

If we have reason to believe that there are minerals caused by or related to mining, trading, processing, transportation or exporting illegally taxed or extorted at the entrance of the mine site, along the transportation route, or the upstream supplier’s mineral transaction place For money laundering risks, we will support or take measures to contribute to the effective elimination of money laundering.

We will ensure that all legal taxes, fees and royalties related to mining, trade, and export of minerals in conflict-affected and high-risk areas are paid to the government, and we promise to disclose such payments based on the company's location in the supply chain.

Risk management of bribery, money laundering and various fees paid to the government:

According to the company's specific position in the supply chain, we promise to cooperate with suppliers, central or local government agencies, international organizations, civil society, and affected third parties as appropriate, and take significant measures within a reasonable time span The purpose of preventing or reducing risks with negative impacts, and improving or tracking performance. Risk reduction measures have not taken effect, and we will temporarily suspend or suspend cooperation with upstream suppliers.

5. Land rights, emissions and small workshops:

We do not participate in, do not tolerate, and do not benefit from the exploitation of resources on land without the free, prior and informed consent of locals and indigenous peoples, including those who hold legal ownership, lease rights, concessions or license rights. We do not participate in, do not tolerate, and do not benefit from local and indigenous culture and heritage that are not respected and protected or damage the local people’s traditional culture.

We do not participate in, do not tolerate, or benefit from the exploitation of resources on land that has illegally obtained legal ownership, lease rights, concessions, and permits or violates domestic laws. We ensure that we avoid causing significant adverse effects on the surrounding soil, air and water conditions, and serious violations of relevant local laws and regulations, including manufacturing, trading, and use that are subject to international bans due to high toxicity to organisms, environmental persistence or potential irreversible ecological effects Chemicals and hazardous substances or emissions.

We agree to ensure compliance with applicable legal requirements for the management of chemicals and toxic substances, and avoid the manufacture, trading, and use of chemicals and hazardous substances that are subject to international bans due to high toxicity to living organisms, environmental persistence, or potential irreversible ecological effects.

We prohibit the exploitation of resources in world heritage sites or legally protected areas, and this threatens the outstanding universal value of these heritage sites.

Risk management related to land rights, emissions and small workshops:

If we have reasonable grounds to believe that such risks exist, we will immediately formulate, adopt and implement risk management plans with suppliers and other stakeholders based on the company’s specific position in the supply chain to prevent or reduce land infringements Rights, cause significant adverse environmental impacts, or specific risks associated with small workshops or small-scale miners.

Zhuzhou Gaoli New Material Co., Ltd.

May 2, 2020