Human Rights Due Diligence

Since FY2016, INPEX has been conducting human rights due diligence with the assistance of outside human rights experts at its sites in Japan and overseas to enhance its human rights management. Conducted in line with the INPEX Group Human Rights Policy, as of the end of FY2024, we have applied this due diligence to eight of our operational sites in three countries, non-operator projects, and suppliers with significant monetary impacts.

In FY2024, we expanded the scope of reassessment to include not only our oil and gas business but also our renewable energy business. With the cooperation of external experts, we conducted a reassessment of human rights risks through our value chain. 

These reassessments will extend to all of the stakeholders in our value chain – our employees, indigenous peoples, migrant workers, suppliers and contractors, and local communities.

For Ichthys LNG , which we serve as the operator, we manage social and environmental risks – including human rights due diligence – based on the Performance Standards of the IFC, which are globally recognized guidelines for environmental and social risk management. We monitor compliance with these standards within the Ichthys LNG Project operations through regular reports and audits. IFC Performance Standard 2: Labor and Working Conditions covers forced labor, child labor, working conditions, and grievance mechanisms.

Desktop Assessment

In FY2024, we identified human rights issues, expanding the scope of our desktop assessment to include renewable energy business. We looked at the documents of survey institutions such as SASB and OECD, international norms, various guidelines, and industry-related documents. When identifying the risks in our businesses, our scope covered those to our employees, women, children, indigenous peoples, migrant workers, the employees of suppliers and contractors, and local communities.

Human Rights Risk Assessments

Regarding the human rights issues identified through our desktop assessment, we conducted human rights risk assessments to identify the issues (especially salient human rights issues) that need to be handled with priority.

Human Rights Risk Assessment Method

We conducted human rights risk assessments along the two axes of severity and likelihood for the human rights issues identified through our desktop assessment. We also used the knowledge of external consultants in our assessments.

Assessment of severity

We assessed the severity of our project’s impact on human rights issues based on the following three items:

1. Materiality of negative impacts (impacts on lives from human rights violations)
2. Scope of negative impacts (number of people affected)
3. Difficulty of remedy (possibility of remedy via compensation)

Assessment of likelihood

We assessed likelihood based on risks by country/industry (assessment using risks from external data), frequency taking into consideration the state of occurrence of cases related to human rights issues, and the state of management structure (vulnerability).

Implementation of Survey

We conducted a survey on state of management structure (vulnerability) and occurrence of cases related to each human rights issue and used the results to assess human rights risks.

Survey scope

The survey was conducted for the following targets in our business:

• All operator projects
• All non-operator project sites
• Suppliers with significant monetary impacts

Assessment of management structure vulnerability

For each survey target, we obtained responses regarding the state of their management structure for handling the human rights issues, we identified and assessed the vulnerability of that management structure. We used the results to assess human rights risks as factors for consideration in assessing likelihood.

Assessment of actual cases

For each survey target, we checked for the occurrence of human rights violations related to the human rights issues we identified. If such cases exist, we used them to assess human rights risks as factors for consideration in assessing severity and likelihood, after taking into account their details and the state of response.

Salient human rights issues identified in FY2024

The table below shows the human rights issues identified for our priority response based on the results of our human rights risk assessments.

We also investigated other areas of human rights risks – such as prohibition of discrimination and equality under the law, working hours, human trafficking, equal wages, women’s rights, and privacy – through our risk identification and assessment process. Considering geographical and other characteristics of our business operations, and the risk management already conducted, these areas were not deemed to be our salient human rights risks.

Responding to Human Rights Risks and Consideration of Response/Mitigation for Each Human Rights Issue

Responding to Human Rights Risks

We undertake the following initiatives in view of the above human rights risk assessment results.

• Discuss future actions, such as widely disseminating the INPEX Group Human Rights Policy and providing human rights education, after confirming the management structure for human rights issues and the likelihood and severity of each issue and providing feedback on the assessment results to each site
• Regularly review human rights risks to properly respond to them and their countermeasures
• Conduct human rights risk assessments through surveys every three years

Consideration of Measures and Corrective Actions for Each Human Rights Issue

For salient human rights issues identified as a result of risk assessments, we identified human rights issues to be prioritized and studied countermeasures, after considering the materiality and the state of management structure at each survey target.

1. Measures against human rights issues confirmed to have manifest risks

Through the survey conducted in FY2024, we confirmed several incidents, including fatal ones caused by fires at plants. For these cases, we have received responses indicating that preventive measures have already been implemented at the project level . Continuous monitoring will be undertaken going forward.

2. Measures against human rights issues with latent risks

For human rights issues that may have latent risks, we work to strengthen prevention measures, taking into consideration the materiality and the state of management structure at each survey target.

In FY2024, with no operational sites requiring a human rights-related corrective action plan, there were similarly no corrective actions required. We are implementing the measures to reduce human rights risks as detailed below.

Respect for Human Rights in the Workplace

The following salient human rights issues relate to human rights risks in workplace environments: non-complicity in human rights violations, compliance, social security, fair competition, prohibition of discrimination, equality under the law, child labor, forced labor, occupational health and safety, working hours (rights to breaks and days off), appropriate working environments (including access to water), wages (right to enjoy an adequate standard of living), freedom of association and right to collective bargaining, responsible safety management, and more.

We engage in the following activities with respect to these issues. Please refer to Establishment of Various Inquiry and Grievance Mechanisms for details on the whistle-blowing system.

Training to Raise Officers’ and Employees’ Awareness of Human Rights

In FY2017, to deepen awareness of the materiality of considering the human rights of various stakeholders as we go about our day-to-day business, we conducted human rights training for all officers and employees. Since FY2018, we have been providing this training every year to all new graduates and mid-career hires. This training emphasizes the importance of treating others sincerely, respectfully, and fairly, and all of our human rights training emphasizes respect for human rights. We also conduct training related to the handling of whistleblowing and harassment each year. Please refer to Performance Data for details.

Improvement of Working Environments

Aligned with our Code of Conduct, we strive to create sound working environments, which is in part achieved through fair working hours and wages. We ensure standard working hours at our sites in Japan and overseas are a maximum of 48 hours per week, and any overtime work is performed with the consent of the employee concerned and appropriate compensation provided. Furthermore, wages are set at a level that exceeds the living wage at each site, and we regularly monitor and review wage disparities between male and female employees. In addition to these measures, we conduct an annual survey to employees to monitor the working environment to ensure there are no human rights violations such as harassment.

Dialogue between Labor and Management

Our labor agreement with the INPEX Labor Union stipulates that the Union possesses the right to organize, the right to bargain collectively, and the right to act collectively. We strive to maintain and develop a sound labor and management relationship by regularly providing opportunities for these parties to exchange views and ideas on a wide range of issues, such as challenges faced by the Company and future prospects, in addition to labor issues (health and safety, working environments, compensation, working hours, training, human resource development, stress management, equal opportunities, etc.).

In particular, regarding mass terminations of employees due to business management reasons or other significant matters, as well as changes in business operations that significantly impact employees, the company and the union have stipulated in the labor agreement that an appropriate notification period must be established in advance, and any such matters must be notified beforehand and discussed towards a peaceful and amicable resolution.

Furthermore, since the formation of the labor union in FY2008, there have been no grievance handling occurrences.

External Stakeholders (Local Communities and Suppliers)

We are considerate of the human rights of all stakeholders in the value chains of our businesses. The following are the human rights risks and efforts for each group of stakeholders. In addition, please refer to Response to Feedback from Stakeholders for details.

Supply Chain

Thorough procurement practices involve human rights risks related to the freedom of association, collective bargaining, forced labor, child labor, workplace discrimination, working conditions (occupational health and safety, wages, working hours, access to water, etc.), impacts on local communities, worker rights, and more.

Measures to address them include the release of a statement based on the UK Modern Slavery Act 2015 and Australian Modern Slavery Act 2018, formulation of the Supplier Code of Conduct and Supplier Code of Conduct Guidelines, and conducting of ESG workshops for our business partners.

As part of our own supplier selection process, in FY2023 we introduced a self-assessment of modern slavery risks, formulated Supplier Code of Conduct Guidelines, and explained our initiatives at our supplier forum. In FY2024, we also conducted human rights training for suppliers at this forum.

Please refer to Supply Chain Management for details on our other efforts.

Local Communities

Human rights risks in local communities include social security, fair competition, prohibition of discrimination, equality under the law, rights of indigenous peoples and local residents, and responsible safety management. In impact assessments conducted before undertaking a project, to avoid incurring negative impacts on the local communities, we assess the following items after organizing an assessment team at an appropriate timing based on our environmental and social assessment plan.

• Relocation of residents: Briefings to residents on relocation and compensation for projects with non-voluntary relocation of residents; agreement before relocation; recovery in foundation for life after relocation; fair compensation; special consideration to relocating residents who are socially vulnerable
• Lives and livelihoods: Impacts of project on the residents’ lives
• Cultural heritage: Impacts on archaeological, cultural, religious, and historical heritage, sites, etc.
• Scenery: Impacts on scenery
• Ethnic minorities and indigenous peoples: Violations of the rights of ethnic minorities and indigenous peoples; impacts on their cultures and ways of life

We engage in stakeholder dialogue as part of impact assessments and integrate findings into our business plans. We also provide opportunities for ongoing dialogue with local communities, including response to inquiries and grievances.

For the Abadi LNG Project in Indonesia, which is currently in the development stage, we have examined and assessed the human rights requirements of the IFC’s Performance Standards, which are global environmental and social guidelines, using the processes shown in the table below as part of the environmental and social impact assessments we are currently conducting.

We confirm and manage social risks, including human rights, in accordance with internal regulations. These risks relate to the requirements of the Voluntary Principles on Security and Human Rights (VPSHR).

In Indonesia, we are using a private security company and carry out regular KPI monitoring and assessments. To strengthen compliance with the spirit of the VPSHR and its regulations on respecting human rights, in FY2025, we conducted a program to raise awareness about security and human rights for the local police, military, security company, and our security personnel. After the program, we also conducted an exchange of opinions between participants that included matters such as good practices.

We also have planned and are now implementing a wide array of activities with the cooperation of local communities and relevant institutions in the five focus areas (1. improvement of local economies; 2. education; 3. public health; 4. the environment; and 5. strategic community contribution) of the Social Investment Strategy. Of these, our primary initiatives related to public health and access to clean water are shown in the table below.

Assessment of Human Rights Risks in New Businesses

When we acquired a 50% share of Australia-based Potentia Energy Pty Ltd (former Enel Green Power Australia Pty Ltd, or EGPA) in September 2023 as our new business, we confirmed its human rights risk management structure. In our Human right DD conducted in FY2024, we also expanded the scope to include human rights risks at joint ventures.