Soon after the DPF incident was discovered, Mitsui implemented a thorough review and overhaul of our compliance mechanism on a consolidated basis. We also improved our internal control systems on a consolidated basis to achieve standards that meet the rigors of external auditing in line with the Sarbanes-Oxley Act.

In January 2005, all of Mitsui's officers and general managers were requested to comprehensively examine the status of compliance throughout their organizations on a consolidated basis. Subsequently, they formally reported to the president on the result of such examination.

In addition to our existing routes for reporting and consulting on compliance issues, Mitsui in Japan added a third-party consultant, providing whistle-blowers with complete anonymity if requested, along with an auditing contact, and its Japanese subsidiaries added the third-party consultant route Employees of Mitsui in Japan now have a total of eight methods available to report issues of concern, aimed at protecting anonymity as well as being reinforced and easy to access.

Mitsui came to recognize certain types of new business as having particular risks requiring increased control. Such business includes: (i) new business in the specific areas of R&D manufacturing (for the development of new technologies and operations), the environment, and areas with high public involvement, such as those qualifying for government subsidies; and (ii) other business closely related to issues of public order and morality, Mitsui's management philosophy, or other CSR-related matters. The implementation of such business requires the approval of Mitsui's representative directors. The aim of this move is to carefully consider and investigate from the perspective of qualitative risk assessment, regardless of the quantitative aspects of such new business, matters that until now fell outside the scope of administrative assessment under quantitative standards, with participation from outside experts on various committees providing directives.

Mitsui's Internal Auditing Division, which reports directly to the president, had its staff boosted to approximately 60 people. Moreover, Mitsui has strengthened the auditing of our organizational control environment, including compliance, with a more diverse range of auditing methods.

Mitsui revised its disciplinary regulations and is enforcing them strictly in order to encourage an awareness change on compliance among employees and to clarify the responsibilities of management in supervising their organizations, including subsidiaries.

Appointments to managerial positions, which were previously decided by the individual business unit heads (COOs) at their own discretion, now require the approval of the general manager of the Human Resources and General Affairs Division at headquarters, which is a measure to ensure that those appointed are truly qualified as managers from a company-wide perspective. In addition, we have revised the individual behavioral appraisal standard in Japan, incorporating more focus on employees' behavior to meet Mitsui's management philosophy stated as our corporate value which encourages our employees to act with lofty aspirations, humility and fairness. The employee grading system in Japan, which was previously based only on job-size and job-role, was also revised as a hybrid of competency-based grading and job-based grading. Competency-based grading is now being applied to employees who are in non-managerial positions, with an emphasis on personal development at each employee's career stage. A multi-faceted review process (called MMR) has also been introduced for people in managerial positions in order to elevate their awareness of aspects of their management style that should be improved.

In consideration of our concern that the previous organizational performance evaluation, which was 100% quantitative (short-term result oriented), might have been a remote cause of some of the disgraceful incidents brought about by Mitsui employees obsessed with short-term profit making to achieve organizational goals defined by financial figures, Mitsui (Japan) revised its organizational performance evaluation criteria in 2006 to create a qualitative-based system (process-oriented) in order to enhance the formulation of business objectives that aim for long-term profit. The new criteria are 80% qualitative measures and 20% quantitative measures, with appraisal ratings changed from relative to absolute. This mechanism is being incorporated into broad-sense CSR (corporate social responsibility) oriented management and business execution.

The management of Mitsui has continued to take every opportunity to communicate the importance of compliance to employees. A range of measures has been implemented to optimize internal communication with regard to compliance matters. For example, in Japan, there is a Compliance Conference in collaboration with the Mitsui Employee Council, and monthly Active Talk Wednesday sessions, at which executives and employees gather after work to talk about a range of topics.

The Mitsui & Co., Ltd. Environment Fund supports and promotes a range of internal and external efforts to resolve global environmental problems. The fund was established by a donation from the company and, in order to build environmental awareness throughout the company, is also funded through contributions from executives, employees, and retirees. A volunteer leave program has also been established in Japan, enabling executives and employees to reflect on the relationship between the company, society, and their own work.

Among the measures taken by Mitsui to prevent recurrences and ensure continued application of the lessons learned from the DPF incident, we have one of the returned DPF units on display at our human resources development center in Yugawara, Japan, and a booklet summarizing the incident has been distributed to Mitsui employees. Mitsui has been strengthening awareness of compliance through a variety of programs during Compliance Week every November in Japan.

A compliance awareness survey is now carried out annually, during which employees, while remaining anonymous, assess the effectiveness of measures to build compliance awareness and note whether any compliance problems have arisen.