K TRA IN Global Business Platform THE 2011 KOTRA Sustainability Report W RLD

Bigger Market, Brighter Future 2011 KOTRA Sustainability Report 2

About this Report

KOTRA, which builds a global business platform by promoting trade and supporting investment by domestic and foreign companies, issues its first Sustainability Report for the purpose of win-win growth with stakeholders. KOTRA hopes that publication of this report will lay the cornerstone for its sustainable management and promote participation and development of stakeholders.

Management Assessment Team, Characteristics of the Report Planning & Coordination Dept., KOTRA According to the ISO 26000 procedures, i.e. international standards for social responsibility, the 13 Heonreung-ro, Seocho-gu, Seoul, Korea 2011 KOTRA Sustainability Report selected issues of report with participation by stakeholders. It also Tel.: 02-3460-7074 Fax: 02-3460-7908 disclosed performance concerning seven core themes. Following publication of its first sustainability Email: [email protected] report, KOTRA plans to issue this kind of report on a yearly basis.

Period, Scope and Boundaries of the Report The period subject to reporting is from January 1 to December 31, 2011. In case where a historical trend analysis was necessary, the trend of performance for three years was described. With respect to some materials of high significance, information on activities and performance in 2012 was included as well. The scope and boundaries of the report encompass information on KOTRA’s head office and overseas branches.

Criteria and Data The report was subject to G3.1, the latest International Sustainability Reporting Guidelines published by the GRI (Global Reporting Initiative) in the first half of 2011. Financial information was produced on the basis of accounting principles in 2011.

Verification The ISO 26000, GRI G3.1 and AA1000AS 2008 verification standards were applied to the report. Verification by the Korean Standards Association as a third-party verifier has confirmed that its GRI Guideline application level is ‘A+.’

Additional Information of the Report The report was published both in Korean and English. You may access the report among various information and reports posted on the webpage of KOTRA (http://www.kotra.or.kr). KOTRA is ready to listen to stakeholders’ opinions. If you have any opinion or inquiry as to its managerial activities and this report, please feel free to contact the following.

Declaration of GRI G3.1 Application Level KOTRA has prepared this report in accordance with G3.1, GRI’s International Sustainability Reporting Guidelines. KOTRA declares an application level of ‘A+.’ The Korean Standards Association confirms that it has independently verified KOTRA’s 2011 Sustainability Report and that its GRI G3.1 application level is ‘A+.’

According to the 2002 Guidelines C C+ B B+ A A+

Mandatory Independent declaration External External External ● verification verification verification Optional Third-party confirmation report report report ● Global Business Platform 3

2 About this Report 3 Contents 4 CEO Message Contents 6 Introduction to KOTRA 12 Global Network 14 Vision and Business Strategy 16 Governance 18 Risk Management 20 Materiality Test Process 22 Interview with Stakeholders

24 Human Oriented Management 01 26 Development of Core Global Talents Acquisition of Human Resources Development of Human Resources 31 Improvement of Employees’ Quality of Life Organizatonal Culture, Work and Life Balance

32 Responsible Organization 02 34 Respect for Human Rights and Diversity Creation of Respectful Workplace Win-Win Culture of Labor and Management 38 Leader in Ethics and Integrity Ethical Management 40 Expansion of Environment-Friendly Operations Reinforcement of Carbon Reduction Activities Environmental Performance Management

42 Sustainable Trade & Investment Partner 03 44 Substantive Development of Trade Investment Business Reinforcement of Overseas Marketing for Strategic Industries Bolstering Foreign Investment Attraction and Management 49 Exploration of Future Markets for Sustainable Growth Preemptive Occupation of New Industrial Markets Support for Exploration of Emerging Markets Support for Tapping Overseas Projects and Capturing Orders

54 Customer Oriented Service 04 56 Strengthened Role of SME-Supporting Infrastructure Support for Globalization of SMEs Support for Overseas Advance by Domestic Companies Strengthening of Function as Global Market Information Center 64 Customer Satisfaction Management Customer Satisfaction Activities

66 Social Contribution 05 68 Community Involvement and Development Global Social Contribution Activities Win-Win Growth

74 Appendix Third Party Independent Assurance Report ISO 26000 Compliance Assessment Report GRI Index & ISO 26000, UNGC Stakeholder Opinion Survey 2011 KOTRA Sustainability Report 4

Introduction Human Oriented Management CEO Message Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution Appendix

Welcome to the Sustainability Report 2011 of the Korea Trade-Investment Promotion Agency (KOTRA). Since its establishment on June 21, 1962 to bolster the Korean economy through trade, KOTRA has traveled alongside Korea on its journey of economic development. In the 1960s, in tandem with corporate entities, KOTRA began to develop overseas markets in the vanguard of export. In the 1970s, it took the initiative to fully expand export markets, laying the groundwork for Korea’s emergence as a leading exporter. In the 1980s, KOTRA led efforts to explore markets in Eastern Europe and the former Soviet Union. During and after Korea’s economic crisis in the 1990s and an IMF bailout, KOTRA attracted foreign investment to Korea as the national investment promotion agency and helped steer the nation out of the economic downturn. In the 2000s, it supported domestic companies making inroads into foreign markets through helping establish overseas factories, acquire project orders and more, enabling them to become global businesses.

We pledge to emerge as a 2011 marked a great moment for both Korea and KOTRA, as Korea became the 9th country in the world to reach a $1 trillion trade volume. This feat is extra significant when you consider that in 1962, Korea was public institution taking the “ a recipient of foreign economic aid, and KOTRA was established to build the national trade infrastructure lead for global sustainable as part of a five-year economic development plan. Today, in just half a century, Korea has become a trade powerhouse and role model for developing nations. management. Our country now feels a strong responsibility to contribute to the international community. We share with ” the developing world the lessons we have learned, recognizing the nations as partners for mutual growth, not as markets to be exploited for profits.

Bigger markets and a brighter future await. We are contributing towards a $2 trillion trade future in several ways: by increasing the competitiveness of SMEs; by expanding their export base and globalization; by developing emerging markets; by supporting exports by future industries; by creating jobs through increasing exports and investment; and by promoting the national brand.

CEO Message Global Business Platform 5

At our organization, we have a saying: “The sun never sets at KOTRA.” At 111 overseas branches called Korea Business Centers (KBCs) in 76 countries, KOTRA employees help Korean businesses increase exports, advance to foreign markets and draw investment. Simply put, KOTRA has been, and will continue to be a platform expanding Korea’s economic territory.

As we move forward, we are committed to giving back to the communities in which we operate. At home, we help multinational families get settled in Korea and engage in joint community service activities with foreign-invested companies. abroad, KOTRA plays a pivotal role in enhancing the image of Korea by teaching the Korean language and helping Korean companies pursue corporate social responsibility activities in local communities. This Sustainability Report is part The sun never sets at KOTRA.” With 111 overseas branches called Korea Business Centers (KBCs) of our engagement with the wider world. Serving in 76 countries, we are doing our utmost around the world to help Korean businesses increase at the helm of KOTRA, I pledge to fulfill our roles exports, advance to foreign markets and draw investment. and responsibilities as a national trade and invest- ment promotion agency through a commitment April 2012 to customer services and on-site management. Young-Ho Oh I ask for your support as KOTRA partners with you President for another fifty years, for the future of Korea. KOTRA 2011 KOTRA Sustainability Report 6

Introduction Human Oriented Management Introduction to KOTRA Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution As a driving force behind Korea’s exports for the past 50 years, KOTRA has nurtured new corporate Appendix exporters and helped SMEs in future growth industries and new industries make inroads into overseas markets. Providing information on foreign markets in a timely manner and presenting strategies for advancement into those markets, KOTRA also proactively attracts foreign-invested companies. In this way, KOTRA serves as a global business platform for a brighter future for Korea.

Corporate Overview

Korea Trade-Investment Organization Promotion Agency (KOTRA) Head of Organization Young-Ho Oh Agency in Charge Ministry of Knowledge Economy Quasi-governmental agency Nature of executing affairs commissioned by Organization the government Law Providing Rationale Korea Trade-Investment Promotion for Its Establishment Agency Act Number of Employees 767 Address of Head 13 Heonreung-ro, Seocho-gu, Office Seoul, Korea Industrial Classification Service industry Webpage www.kotra.or.kr Date of Establishment June 21, 1962 Total Assets KRW 140.9 billion Revenues KRW 277.9 billion Stockholder Composition Wholly owned by the government Investees KINTEX and BEXCO Capital Stock KRW 32 billion Front View of KOTRA’s Yeomgok-dong Building

1960 1970 1980 History Early phase of export : Era of export promotion : Era of export expansion : Five-year economic development plan Korean exports appear on world stage Export-driven economic growth

June. 1962 KOTRA established as the Korea Trade Feb. 1970 Export expansion meeting held at the central Sept. 1982 SITRA (Seoul International Trade Fair) held Promotion Corporation government complex May. 1988 A trade office in Hungary opened in line with Dec. 1964 The first Day of Export celebrated (reached Jul. 1975 Okinawa Expo held economic diplomacy with Eastern Bloc nations $100 million in trade) Dec. 1977 The 14th Day of Export celebrated (reached $10 Sept. 1968 The first Korea Trade Exhibition held billion in trade)

June. 21, 1962: Establishment of KOTRA Dec. 22, 1977: The 14th Day of Export Sept. 24, 1982: SITRA (Seoul International Trade Fair) Global Business Platform 7

· Support SMEs to advance into foreign markets in collaboration with domestic and overseas global companies Business Export Marketing · Function as infrastructure for overseas export by pursuing export marketing and branch office services and operating logistics support centers Areas · Offers differentiated export assistance according to growth phases of SMEs · Support overseas investment and advancement into digital SOC, ODA and supporting Advancement construction/plant project markets Into Overseas Markets · Support establishment of local subsidiaries, control of local management risks, and protection of intellectual property rights

· Engage in activities to explore foreign investment projects and draw foreign investment Foreign Investment · Resolve difficulties of foreign-invested companies in Korea, help them transition Attraction seamlessly into Korea and attract more investment · Alleviate unemployment and support economic galvanization by attracting strategic investment and subsequently creating new jobs

· Collect and disseminate information on foreign markets, publish data and give presentations Provision of Information on · Provide overseas marketing and investment consulting based on information Foreign Markets analysis · Support training aimed at bolstering global business competence of SMEs

Acquisition of Global · Attract foreign workers to address manpower shortage at SMEs Talents · Help outstanding domestic human resources find employment abroad

· Operate marketing infrastructure including KINTEX Carrying Out Government- · Support defense industry trade, pursue international development cooperation and Commissioned Projects improve national brand

1990 2000 2011

Era of trade liberalization and economic crisis : Era of global competition : Sept. 2008 Contact Korea opened to incorporate a function Launch of the WTO, and Korea’s economic Globalization of Korean companies to find and attract global talented professionals March. 2011 Functions added including support for defense crisis and its consequent resolution industry trade, international development Dec. 2003 Invest KOREA launched cooperation, and national brand enhancement Aug. 1995 Renamed the Korea Trade-Investment Sept. 2004 Overseas Advance Support Center established Promotion Agency Oct. 2004 Awarded the Best of the Best TPO Award by July. 1998 Foreign Investment Support Center established the WTO/ITC May. 1999 First Korean Fashion Textile Trade Fair held

May. 4, 1999: First Korean Fashion Textile Trade Fair Dec. 5, 2003: Launch of Invest KOREA May. 1, 2010: Korean pavilion at Shanghai Expo 2011 KOTRA Sustainability Report 8

Branch Office Service Business (USD hundred million) Business 12.96 9.70 Performance 7.43

2009 2010 2011

Support for Project Exploration and Order Receipt (Number of cases)

165 145 118

2009 2010 2011

Discovery of Promising Foreign Buyers (Number of companies)

3,990

2,862 2,099

2009 2010 2011

Utilization of Information (Number of cases)

3,185

2,227 1,634

2009 2010 2011

Amount of Foreign Investment Attracted (USD hundred million)

88.92 73.93 72.40

2009 2010 2011 Global Business Platform 9

(Based on closing financial statements) Condensed Statement of Financial Position (KRW million) Financial Description 2009 2010 2011 Current Assets 55,805 66,474 95,671 Non-Current Assets 40,437 41,164 45,211 Structure, Total Assets 96,242 107,638 140,882 Current Liabilities 25,810 28,364 22,751 Budget and Non-Current Liabilities 9,738 13,526 13,462 Total Liabilities 35,548 41,890 36,213 Government Capital Stock 16,000 16,000 32,000 Capital Surplus 2,037 2,037 2,037 Subsidies Other Cumulative Comprehensive Income -190 -137 -136 Earned Surplus 42,847 47,848 70,768 Total Stockholders’ Equity 60,694 65,748 104,669 Granted Total Liabilities and Stockholders’ Equity 96,242 107,638 140,882

Income Statement (KRW million) Description 2009 2010 2011 Sales 290,341 286,328 277,928 Cost of Goods Sold 195,775 190,644 177,588 Gross Margin 94,566 95,684 100,340 Selling, General and Administrative Expenses 87,557 95,288 95,776 Operating Profits and Losses 7,009 396 4,564 Non-Operating Revenues 25,996 7,950 37,656 Non-Operating Expenses 16,129 982 2,343 Income Tax Expenses 0 0 0 Net Income 16,876 7,364 39,877

Major Management Indexes (%)

Description 2009 2010 2011 Total Assets Growth Rate 10.89 11.84 30.88 Growth Tangible Assets Growth Rate -0.34 0.26 4.21 Potential Sales Growth Rate 23.66 -0.138 -2.93 Net Income Growth Rate 169.75 -56.37 441.56 Ratio of Operating Profits to Sales 2.41 0.14 1.64 Ratio of Net Profits to Sales 5.81 2.57 14.35 Profitability Ratio of Net Income to Total Assets 17.53 6.84 28.31 Ratio of Net Income to Stockholders’ Equity 27.80 11.20 38.10 Current Ratio 216.22 234.36 420.51 Debt Ratio 58.57 63.71 34.60 Stability Ratio of Net Worth to Total Capital 63.06 61.08 74.29 Interest Coverage Ratio 35.47 times 5.10 times 176.86 times Amount of Value Added 158904 149829 184465 Ratio of Value Added 54.73 52.33 66.37 Ratio of Compensation of Employees 47.76 55.70 44.76 Productivity to National Income Gross Value Added by Stockholders’ Equity 165.11 139.20 130.94

Gross Value Added to Property, Plant and Equipment 1224.48 1151.57 1360.43 2011 KOTRA Sustainability Report 10

Officers and Employees (Salaries, fringe benefits, allowances and severance pay) (KRW million)

Allocation 95,776 95,288 of Economic 87,557 Value 2009 2010 2011

Stockholders (Dividends; quasi-government agency wholly owned by the government) (KRW million)

6,859

2,363 957

2009 2010 2011

Creditors (Interest expenses) (KRW million)

198 77 26

2009 2010 2011

Government (Taxes & dues and corporate taxes) (KRW million)

3,052

1,848 1,801

2009 2010 2011

Donations (KRW million)

18 10 12

2009 2010 2011 Global Business Platform 11

Organization Chart PRESIDENT Comptroller Headquarters 5 executive vice presidents’ offices, 21 departments (centers) and 7 divisions Auditors’ Office Office of the Foreign Office of the President Overseas 9 regional head offices and Investment Ombudsman 111 overseas KBCs (76 countries) Public Relations Division Domestic 1 airport office Customer & Strategic Policy Department

KOTRA Defense Industry Trade Support Center

Senior Executive Vice President Executive Vice President Executive Vice President Executive Vice President for Commissioner of Invest Foreign Investor Support China Head Office for Management Support for SME Support for Strategic Marketing Global Business Information Korea Officer

Europe Head Office

Planning & Coordination Startup & Export Support Global Business Cooperation Business Information Investment Planning Investment Consulting North America Head Office Department Department Department Department Department Center Business Competence Industry & Resources Overseas Market Research Investment Promotion Investment Aftercare General Services Department Middle East Head Office Building Department Cooperation Department Department Department Division Human Resources Development Exhibition Convention Service Industry China Business Division Africa Head Office & Management Department Department Department Global Talent Recruiting Overseas Investment Information System Division IT Business Department Japan Head Office Center Support Department Overseas Investment Emergency Planning Division Asia Head Office Cooperation Center KOTRA Office, Incheon Central & South America KOTRA Global Academy International Airport Head Office

CIS Head Office

Membership to Major Organizations Organization Purpose Korea International Trade Association Day-to-day use of webpage trade information databases by the head office and KBCs Institute of Internal Auditors Korea Participation in major forums held by the Institute, and networking among institutions Auditors’ Forum for Progress Sharing of information on performance of audit affairs, enhancement of innovative mindset, and promotion of friendship among members Korea Productivity Center Training expense discount, CS-related information, business cooperation, data collection, and PCSI due diligence Korea Society of Public Enterprise Information sharing channel between related agencies Korea Accounting Association Improvement of transparency in financial budget management Exchange of information on training programs of each institution through annual breakfast forums and regular meetings, and PR activities for Korea Management Association KOTRA with its president invited as a lecturer at breakfast forums Association of Deputy Heads of Exchange of information among related institutions and participation in monthly meetings Invested Institutions (Hwayohwe) Korean Red Cross Participation in social settlement programs Seoul Foreign Correspondents’ Club Hosting of FDI meetings that invite foreign correspondents in Korea (January), and invitation to FDI meetings targeting prominent foreign media members (November) Attendance at ordinary monthly general meetings, ascertainment of the trends of HR and labor affairs at foreign-invested companies and hosting of a seminar Korea HR Club on labor-management relations of foreign-invested companies in collaboration with the HR Club in November UNGC Annual submission of a Communication on Progress (CoP) to the UN Global Compact Korean Society for Quality Management Knowledge-sharing network among leading quality experts to increase quality competitiveness Quality Leaders Forum Quality information sharing and networking, and formulation and publication of a quality roadmap for national and industrial development BEST Forum Ethical management Korean Marketing Association Publication of Marketing Research and Korea Journal of Marketing (published four times a year), and materials on seminars and various other events World Association of Investment Forum for exchange of opinions and information among investment promotion agencies from 174 nations; participation in regular conferences Promotion Agencies (WAIPA) UFI (Global Association of the Participation in top global exhibitions and government-subsidized exhibitions Exhibition Industry)

Awards Received 2008 Awarded a Best HRD first prize jointly by the Ministry of Education/ Ministry of Labor/Ministry of Knowledge Economy. Awarded a Great Workplace prize by Joongang Ilbo Awarded a grand prize for excellence in sustainable creation and management by Hankook Ilbo, Awarded an HR management grand prize by KMAC 2009 Awarded a presidential prize for job creation, Designated by the Ministry of Knowledge Economy as an outstanding agency in service quality 2010 Chosen as a True Company by the Ministry of Employment and Labor, Awarded a CEO grand prize by Money Today, Awarded a prize by Green Growth Korea 2011 Awarded a Best HRD prize 2011 KOTRA Sustainability Report 12

Introduction Human Oriented Management Global Network Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution KOTRA operates a global network of 111 overseas KBCs in 76 countries around the world, Appendix endeavoring to help Korean companies increase exports, advance into overseas markets and attract foreign investment.

CIS NORTH AMERICA

JAPAN

MIDDLE EAST CHINA MIDDLE SOUTH AMERICA

9 Head Offices and 111 Overseas KBCs (76 Countries)

Europe (21) Middle East (14) China (17) North America (10) Frankfurt (Germany) Copenhagen (Denmark) Dubai (UAE) Beijing (China) New York (USA) London (UK) Paris (France) Damascus (Syria) Guangzhou (China) Dallas (USA) Madrid (Spain) Prague (Czech Republic) Riyadh (Saudi Arabia) Nanjing (China) Detroit (USA) Muscat (Oman) Dalian (China) Los Angeles (USA) Munich (Germany) Hamburg (Germany) Baghdad (Iraq) Shanghai (China) Miami (USA) Milano (Italy) Helsinki (Finland) Alger (Algeria) Xiamen (China) Vancouver (Canada) Warsaw (Poland) Amman (Jordan) Shenyang (China) Chicago (USA) Budapest (Hungary) Istanbul (Turkey) Xian (China) Silicon Valley (USA) Bucharest (Romania) Casablanca (Morocco) Wuhan (China) Washington DC (USA) Brussels (Belgium) Cairo (Egypt) Zhengzhou (China) Toronto (Canada) Vienna (Austria) Kuwait (Kuwait) Changsha (China) Sofia (Bulgaria) Tehran (Iran) Chengdu (China) Stockholm (Sweden) Tel Aviv (Israel) Chongqing (China) Athens (Greece) Tripoli (Libya) Qingdao (China) Amsterdam (Netherlands) Taipei (Taiwan) Zagreb (Croatia) Hangzhou (China) Hong Kong (Hong Kong) Zurich (Switzerland)

SUSTAINABLE

ADMINISTRATION COMMERCE ENVIRONMENT EXCHANGE

INDUSTRYSYSTEM GLOBAL SHARE INFORMATION DEVELOP SERVICE SOCIAL MARKETING CONTACT ABILITY COMMUNICATION ACTIVITY GLOBALPROMOTETOGETHER FAIR PROPAGATION SUSTAINABLE KOTRA PROMOTE SOCIAL SERVICE

ENVIRONMENT SHARE MARKETING COMMUNICATION MARKETING TOGETHER G

L

CONNECTION O

B EXCHANGE

EXPO SHAREVOLUNTEER PROMOTE DEVELOP AL FUTURECONSULTING FAIR GLOBAL ADMINISTRATION FAIR ABILITY SHARE KOTRA EXPO COMMERCE SOCIAL VITALIZATION CONTACT VOLUNTEER ABILITYBRANDGROWTH ABILITY COMMUNICATION SERVICE DEVELOP ABILITY ENVIRONMENTCONSULTING

EXCHANGE SUCCESS TRUST NORHT AMERICA INDUSTRY FACTOR SOCIAL SOCIAL GLOBAL ADMINISTRATION GLOBAL EXCHANGEECONOMICSERVICE SH SHARE KOTRA

ARE CONNECTIONCIS RESPONSIBLE EUROPE ABILITYINFORMATION SUCCESS FAIR CONTACT KOREA EXPO COMMUNICATIONGLOBAL MARKETINGENVIRONMENT ORGANIZATION NETWORK DEVELOP HOPE MANAGEMENT CONTACT VOLUNTEER

ENVIRONMENT TOGETHER JAPAN LINK ESTABLISHMENTCONTACT GROWTH FACTOR NETWORK SOCIAL DEVELOPCONSULTINGMARKET FAIR EXCHANGE GLOBAL KOTRAEXPO COMMERCE SERVICE FAIR INFORMATION CONSULTING ACTIVITY SUCCESS ADM CONSULTING CHINA

INISTRATION INDUSTRY FRANCHISE MARKETING ECONOMIC GLOBALVOLUNTEER MARKETINGDEVELOP EXHIVITION FAIR

DEVELOP FAIR GROWTH FACTOR MANAGEMENTSUPPORT BRAND VOLUNTEER ENVIRONMENT ABILITY KOTRA ABILITY MIDEAST PROCESS DREAMINFORMATION SUSTAINABLE EXCHANGE MANAGEMENT

INFORMATION VOLUNTEER AFRICA GROWTH MANAGEMENT ABILITY

INDUSTRY

T OG GLOBAL SHARE ADMINISTRATION EXCHANGE BRAND COMMERCE

COMMUNICATIONPROMOTE TOGETHER ENVIRONMENT ETHE ASIA CONSULTING

TOGETHER R

ENVIRONMENT ABILITY COMMERCE GROW TH COMMERCE FAIR DEVELOP INDUSTRY

SOCIALESTABLISHMENT BRAND SOUHT CONTACT AMERICA FAIR SUPPORT GROWTH EXPO KOTRA ABILITY MARKET EXPO

INFORMATION Global Business Platform 13

CIS NORTH AMERICA

JAPAN

MIDDLE EAST CHINA MIDDLE SOUTH AMERICA

Central & South America (11) Asia (19) Africa (7) CIS (8) Japan (4) Mexico City (Mexico) Singapore (Singapore) Nairobi (Kenya) Moscow (Russia) Tokyo (Japan) Guatemala (Guatemala) New Delhi (India) Douala (Cameroon) Novosibirsk (Russia) Nagoya (Japan) Lima (Peru) Dhaka (Bangladesh) Manila (Philippines) Lagos (Nigeria) Baku (Azerbaijan) Osaka (Japan) Bogota (Colombia) Melbourne (Australia) Addis Ababa (Ethiopia) Vladivostok (Russia) Fukuoka (Japan) Buenos Aires (Argentina) Mumbai (India) Accra (Ghana) Almaty (Kazakhstan) Santo Domingo (Dominican Republic) Bangkok (Thailand) Johannesburg (South Africa) Kiev (Ukraine) Santiago (Chile) Vientiane (Laos) Khartoum (Sudan) Tashkent (Uzbekistan) Sao Paulo (Brazil) Sydney (Australia) St. petersburg(Russia) Havana (Cuba) Yangon (Myanmar) Caracas (Venezuela) Oakland (New Zealand) Panama (Panama) Jakarta (Indonesia) Chennai (India) Karachi (Pakistan) Colombo (Sri Lanka) Kuala Lumpur (Malaysia) Phnom Penh (Cambodia) Hanoi (Vietnam) Ho Chi Minh (Vietnam)

SUSTAINABLE

ADMINISTRATION COMMERCE ENVIRONMENT EXCHANGE

INDUSTRYSYSTEM GLOBAL SHARE INFORMATION DEVELOP SERVICE SOCIAL MARKETING CONTACT ABILITY COMMUNICATION ACTIVITY GLOBALPROMOTETOGETHER FAIR PROPAGATION SUSTAINABLE KOTRA PROMOTE SOCIAL SERVICE

ENVIRONMENT SHARE MARKETING COMMUNICATION MARKETING TOGETHER G

L

CONNECTION O

B EXCHANGE

EXPO SHAREVOLUNTEER PROMOTE DEVELOP AL FUTURECONSULTING FAIR GLOBAL ADMINISTRATION FAIR ABILITY SHARE KOTRA EXPO COMMERCE SOCIAL VITALIZATION CONTACT VOLUNTEER ABILITYBRANDGROWTH ABILITY COMMUNICATION SERVICE DEVELOP ABILITY ENVIRONMENTCONSULTING

EXCHANGE SUCCESS TRUST NORHT AMERICA INDUSTRY FACTOR SOCIAL SOCIAL GLOBAL ADMINISTRATION GLOBAL EXCHANGEECONOMICSERVICE SH SHARE KOTRA

ARE CONNECTIONCIS RESPONSIBLE EUROPE ABILITYINFORMATION SUCCESS FAIR CONTACT KOREA EXPO COMMUNICATIONGLOBAL MARKETINGENVIRONMENT ORGANIZATION NETWORK DEVELOP HOPE MANAGEMENT CONTACT VOLUNTEER

ENVIRONMENT TOGETHER JAPAN LINK ESTABLISHMENTCONTACT GROWTH FACTOR NETWORK SOCIAL DEVELOPCONSULTINGMARKET FAIR EXCHANGE GLOBAL KOTRAEXPO COMMERCE SERVICE FAIR INFORMATION CONSULTING ACTIVITY SUCCESS ADM CONSULTING CHINA

INISTRATION INDUSTRY FRANCHISE MARKETING ECONOMIC GLOBALVOLUNTEER MARKETINGDEVELOP EXHIVITION FAIR

DEVELOP FAIR GROWTH FACTOR MANAGEMENTSUPPORT BRAND VOLUNTEER ENVIRONMENT ABILITY KOTRA ABILITY MIDEAST PROCESS DREAMINFORMATION SUSTAINABLE EXCHANGE MANAGEMENT

INFORMATION VOLUNTEER AFRICA GROWTH MANAGEMENT ABILITY

INDUSTRY

T OG GLOBAL SHARE ADMINISTRATION EXCHANGE BRAND COMMERCE

COMMUNICATIONPROMOTE TOGETHER ENVIRONMENT ETHE ASIA CONSULTING

TOGETHER R

ENVIRONMENT ABILITY COMMERCE GROW TH COMMERCE FAIR DEVELOP INDUSTRY

SOCIALESTABLISHMENT BRAND SOUHT CONTACT AMERICA FAIR SUPPORT GROWTH EXPO KOTRA ABILITY MARKET EXPO

INFORMATION 2011 KOTRA Sustainability Report 14

Introduction Human Oriented Management Vision and Business Strategy Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution Over the last half century, KOTRA fulfilled its duties as a national trade and investment promotion Appendix agency, pursuing both export and investment attraction to promote Korea’s economic growth. It formulated a new vision to align its future with Korea’s elevated economic stature and the growing need of SMEs for globalization; to create a global economic system to achieve $1 trillion in trade and pursue a $2 trillion trade era; and to converge its multi-pronged efforts on the occasion of its 50th anniversary to usher in another 50 years of success.

Vision A Global Business Platform for the Future of Korea ＞ ＞

Customer Contribution Challenge Global Core Values

Enhance infra for supporting Strengthen trade and Pioneer future markets for Foster a creative and strong Strategic Goals SMEs investment services sustainable development organization

Create an organizational Support globalization Strengthen performance- Dominate new growing culture both rational and of SMEs oriented marketing industries emotion-oriented

Strengthen global market Upgrade-investment Foster creative global Strategic Tasks Target new strategic markets information center promotion business specialists

Provide differentiated Improve customer Innovate for management services according to market Enhance new functions service system efficiency characteristics Global Business Platform 15

Mission Raise the customer competitive Through providing global business support power with aim to develop the KOTRA will create new markets and values by developing and offering services that satisfy the global needs of Korean economy & Improve the companies, government and appropriate agencies in terms of trade promotion and investment attraction. national prestige and make the nation to live well Increasing customer competitiveness KOTRA wants not only to support SMEs as they pursue global business success, but also to increase their competitiveness to ensure their sustainable growth.

Contributing to national economic development and enhancement of national prestige KOTRA’s role and responsibilities as a public agency will contribute to developing the national economy through customer support and enhancing national prestige by expanding export and investment.

Enriching welfare KOTRA’s aim is to enrich lives by helping meet customers’ global needs and creating value.

Vision A Global Business Platform for the Another 50 years of success Future of Korea Marking its 50th anniversary in 2012, KOTRA will take the first step toward another 50 years of success.

Opening up the future of Korea KOTRA will usher in a future in which the Korean economy, led by its SMEs in particular, takes center stage in the world economy. Toward this end, KOTRA will set up a well-organized support system designed to increase the global competitiveness of SMEs.

Global business platform KOTRA will set up a national infrastructure to provide comprehensive overseas business support in global markets, and seek to constantly sophisticate its systems to create economic value for customers.

Core Values Customer, Contribution, Challenge, Customer Global · Provide, on the basis of a customer-oriented way of thinking, services of the highest possible quality that customers want. · Become a public organization that inspires and is loved by customers.

Contribution · Perform duties perfectly with a strong sense of responsibility and clear sense of morality. · Become a public institution that takes the initiative for social contribution with dedication and service.

Challenge · Be creative and passionate to lead change. · Open up a new future by dominating new markets and sectors.

Global · Foster global talents with global mindsets. · Secure global competitiveness by building a global network and management system. 2011 KOTRA Sustainability Report 16

Introduction Human Oriented Management Governance Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution As a public agency, KOTRA has built a rational and transparent decision-making system to pave Appendix the way to promote Korea’s trade and investment. Furthermore, it has endeavored to achieve business rationalization and boost its internal governance through autonomous and responsible management.

Composition of the Board of Directors Pursuant to the Act on the Management of Public Institutions and the Articles of Incorporation, KOTRA has a 13-member Board of Directors chaired by its CEO and comprising five standing directors and seven non-standing directors. To ensure balance, the standing comptroller and the commissioner of Invest KOREA participate in the Board of Directors as observers.

Appointment of Directors In accordance with the Act on the Management of Public Institutions, KOTRA selects candidates for its presidency and non-standing directorship through open invitation, and recommends candidates suitable for its mission through the Executive Nomination Committee. KOTRA’s non-standing directors are appointed by the Minister of Knowledge Economy while its president is appointed by the President of Korea at the request of the Minister of Knowledge Economy. Standing directors are directly selected and appointed by the president of KOTRA.

Support for Activities by Non-Standing Directors and Utilization of Their Expertise KOTRA renders proactive support for non-standing directors’ activities and takes advantage of their expertise for the rational and faithful deliberation of agendas and responsible operation of the Board of Directors. It promotes non-standing directors’ understanding of business by providing them with major management information and its publications from time to time, and helping them take part in its important projects. KOTRA also ensures the active participation of non-standing directors by supporting their agenda introduction and hosting workshops. It has set up advisory committees to ensure that the special expertise of each non-standing director may be fully utilized. This enables working-level units to obtain advice in ordinary times. In addition, KOTRA enhances the level of management participation of non-standing directors by allowing them to get involved in employee recruitment and deliver lectures for officers and employees.

Assessment of the Board of Directors According to the Act on the Management of Public Institutions, KOTRA’s president and standing Committee for the next 50 years directors are subject to performance evaluation in light of management goals. This serves as a basis for differential incentive payment. The Minister of Knowledge Economy evaluates job performance by non-standing directors and determines whether they will be allowed to serve consecutive terms. To boost the operation of the Board of Directors, its activity indexes have been independently developed and controlled. The level of satisfaction with its operation is surveyed on a regular basis for more improvement.

Process to Prevent Conflict of Interests For the sake of ensuring fairness, executive officers who have a stake in any agenda of the Board of

Support for non-standing directors’ activities Directors are not allowed to participate in decision-making. If remuneration for an executive officer (e.g. attending an exhibition in Vietnam promoting Hallyu, or is introduced as an item on agenda, the officer concerned is required to leave the meeting, which is the Korean Wave, meaning the broad popularity of Korean pop subsequently reorganized for deliberation and decision-making. The number of officers excluded from culture overseas) decision-making on a certain item on the agenda is not included in a quorum. Global Business Platform 17

Non-Standing Directors Trends in of Activity Index and Satisfaction Index Photo Name Term of Office Major Career Trends in of Activity Index for Three Years

· (Currently) Professor at the College of Economics, Inha University 90 In-Gyo Chung May 19, 2009 88 · Legislative supporter for the National Assembly (foreign affairs and trade) (senior ~ May 18, 2012 88 · Standing representative of the Headquarters for National Campaign to Pursue Proper FTAs (consecutive 86 non-standing · Deputy chairman of the Korean Association of Trade and Industry Studies 84 term) director) (chairman in 2010) 84 82 81 · (Currently) Chairman of Daham Tax Accounting and Law Corporation 80 · (Currently) President of the Federation of Homan Friendship Associations in Korea Hyang-Soon May 14, 2010 2009 2010 2011 · Commissioner of the Gwangju Regional Tax Office ~ May 13, 2012 Im · 22nd chairman of the Korean Association of Certified Public Tax Accountants * Activity Index - Definition: Index that comprehensively expresses activities by the · (Currently) Visiting professor at the College of Engineering, Seoul National Board of Directors in numeric terms by standardizing its quantifiable University Young-Sang May 14,2010 performance · Chairman of the Korean Standards Association Yoo ~ May 13, 2012 - Assessment Items: Composition indicators (30%), activity indicators · President of the Korea Automotive Technology Institute (60%), indicators on utilization of non-standing directors’ expertise (10%) · President of the Korea Integrated Components and Materials Research Laboratory · (Currently) President of Wooam Corporation · Member of Green Growth Korea Apr. 27, 2011 ~ Trends in of Operational Satisfaction Index for Three Years Hye-Ja Song · Deputy chairman of the Korea Smart Grid Association Apr. 26, 2013 · Chairwoman of the Korea Venture Business Women’s Association 96.9 97 96 95.7 · (Currently) Lecturer at the Department of Political Science and International 95 Relations, Seoul National University Heon-Gyu Apr. 27, 2011 ~ 94 93.1 · Public relations policy officer for the Ministry of Culture, Sports and Tourism Apr. 26, 2013 93 Jang · Policy development center at the Gyeonggi Research Institute · Reporter for the editorial department of Hankook Ilbo 92 2009 2010 2011 · (Currently) Trade policy officer at the Ministry of Knowledge Economy Jun. 16, 2011 · Head of the industrial competitiveness team of the Committee on National Un-Ho Lee ~ (ex officio Competitiveness of the Ministry of Knowledge Economy member) · Head of the trade relief policy team of the Ministry of Commerce, Industry Board of Directors’ Operational Performance and Energy Number of agendas passed (Unit : No. of cases) · (Currently) Adjunct associate professor at Department of Political Science, Dongeui University · Member of the 17th National Assembly 34 32 Seong-Gwon Sept. 23, 2011 · Standing comptroller for KOTRA 32 30 Lee ~ Sept. 22, 2013 · Secretary at the Office of the Chief Advisor on Social Integration, Office of 30 the President 28 26 25 24 2009 2010 2011

Status of the Non-Standing Director Advisory Committee Number of meetings convened (Unit : No. of meetings) Linkage to KOTRA’s Current Issues Advisory Committee Non-standing Directors Establishment of relations with agencies concerned with communication Communication Seong-Gwon Lee 20 18 17 Pursuit of IFRS introduction within the organization Finance Hyang-Soon Im 18 16 Consultation with the government Policy Un-Ho Lee 14 12 Support for advancement into global components & materials markets Components & materials Young-Sang Yoo 12 Emerging markets’ growing demand for electric power and IT infrastructure Electric power/IT Hye-Ja Song 10 2009 2010 2011 Expansion of FTA conclusion with major nations FTAs In-Gyo Chung Galvanization of investment attraction through nation branding CSR brand Heon-Gyu Jang

Attendance rate of non-standing directors (Unit : %)

93 91 92.9 90 91.7 88 86 87.9 85 2009 2010 2011 2011 KOTRA Sustainability Report 18

Introduction Human Oriented Management Risk Management Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution Our risk management system is designed to ensure that risks-ones we face in our daily business Appendix operations- are identified and instantly managed . In addition, we have an internal control system in place so as to minimize operational risks.

Risk Management System For the purpose of ERM (Enterprise Risk Management), KOTRA has kept its ‘Risk Management Guidelines’ intact. Regarding its risk management system, KOTRA categorizes potential risks into financial and non- financial risks to which it responds based on its risk response mechanism. Non-financial risks refer to the ones that have negative impacts on the achievement of our business goals- i.e. a sharp decrease in export and foreign investment ; financial risks pertain to budget management including exchange risks and budget reduction. Day-to-day risk identification and management occurs both online and offline, with the approach varying according to the severity of the risk we face. We resort to an ordinary decision making process for low-consequence risks, while we set up an emergency committee chaired by the president and operate a contingency unit for high-consequence risks. At the time of inter-Korean friction such as North Korea’s shelling of the South Korean border island of Yeonpyeongdo, or a global crisis in the wake of the European financial crisis, or the Jasmine Revolution in the Middle East, KOTRA recognized such situations as crises and simultaneously put a contingency unit into operation in response. In 2011, KOTRA occasionally identified the trends of buyers and investors in response to risks of export reduction due to political instabilities in the Middle East and North Africa and natural disasters including a massive earthquake in Japan. KOTRA provided the collected information to stakeholders such as companies and the government while pursuing new and alternative business projects reflecting changing market conditions. KOTRA also expanded its programs to overcome risks situations. The programs included urgent presentations on the Middle East and North Africa, consultation meetings that invited buyers from markets possibly replacing the Middle East, the dispatching of trade missions and the hosting of consultation meetings for corporate distributors involved in restoration works for Japan on the heels of an earthquake. These activities contributed to Korea’s seamlessly achieving 1 trillion in trade.

Operation of Internal Control System Contingency unit for the Middle East and North Africa KOTRA has a system to analyze and monitor control activities targeting 18 areas of external services and 12 areas of operational support. Based on independent review by business divisions and system diagnosis of an internal control department, KOTRA enhances the effectiveness and efficiency of its internal control system. In an internal control diagnosis conducted by external professionals in 2010 and 2011, 24 and 10 areas requiring improvement were found respectively. Necessary actions were taken to redress the need for improvement. KOTRA’s internal audit department selects monitoring systems as well as targets of risk- control assessment and audit. In 2011, We carried out an audit on the headquarters in collaboration with an external oversight body for the first time in public sector, which led to 70 institutional improvements. Urgent presentations on the Middle East and North Africa Likewise, KOTRA is striving for continuous improvement on the internal control system. Global Business Platform 19

KOTRA’s Risk Management Process Online Off-Line Tallying System Organizational Goal Classification Cycle Major Details Export performance; investment Overall business and outstanding Management CRM Management meetings Weekly attraction projects issues Issue Business review meetings presided INSC Investment attraction performance Quarterly Company-wide performance review Monitoring over by the president Business review meetings presided PMS Investment-making projects Weekly Business performance by each HQ over by HQ leaders Webpage providing Number of pieces of generated Business meetings by teams Time to time Business performance by team information (Global Window) information; number of searches Performance review meetings by area Performance by area including ERP Financial indexes including net sales Time to time of business export and investment

Risk management ＞＞ ＞＞ ＞＞ ＞＞ ＞＞ process

Identification of signs of a risk Risk recognition Working out a solution Response Performance review

Feedback

Risk Response System

Low Risk High Risk · Situation: Temporarily sluggish performance, · Situation: North Korean issue, financial crisis change in environment · Response: Creation of a special organization · Response : Use of an ordinary decision-making scheme - Operation of a contingency unit, task force - Working-level departments, executive teams and temporary organizations meetings, management committee 2011 KOTRA Sustainability Report 20

Introduction Human Oriented Management Materiality Test Process Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution KOTRA identified a variety of processes to determine sustainability issues in accordance with Appendix ISO 26000 procedures. The following presents major issues put forward through a media analysis, benchmarking, ISO 26000 assessment and stakeholder engagement, as reported by this Sustainability Report:

Recognition of Social Responsibility internal competences. An internal and external environment analysis Recognition of Social Responsibility Stakeholder Identification was carried out to derive core issues for Stakeholder Identification An internal and external environment analysis was and Engagement sustainability management that must be taken and Engagement carried out to derive core issues for sustainability In line with the standards presented by ISO into account regarding KOTRA’s management In line with the standards presented by ISO management that must be taken into account 26000, stakeholders were identified and major activities. 26000, stakeholders were identified and major regarding KOTRA’s management activities. issues were determined based on their interviews issues were determined based on their interviews and questionnaires. Analysis of related companies and questionnaires. ① Analysis of related companies ① Sustainability reports of five domestic and ① Sustainability reports of five domestic and ① Stakeholder Identification foreign companies, which are active in industries Stakeholder Identification foreign companies, which are active in According to ISO 26000, KOTRA grouped comparable to trade promotion and investment According to ISO 26000, KOTRA grouped industries comparable to trade promotion stakeholders into three categories: (i) those who or have exhibited excellent performance in stakeholders into three categories: (i) those who and investment or have exhibited excellent impact organizational performance; (ii) those who sustainability, were analyzed according to each impact organizational performance; (ii) those who performance in sustainability, were analyzed are impacted by organizational performance; detailed issue of the seven core subjects of are impacted by organizational performance; according to each detailed issue of the seven and (iii) those who have legal, financial and ISO26000. Based on this, relevant issues of and (iii) those who have legal, financial and core subjects of ISO26000. Based on this, operational accountability. KOTRA were ascertained. operational accountability. relevant issues of KOTRA were ascertained. ② Stakeholder Engagement Media Analysis Stakeholder Engagement ② Media Analysis In order to find out detailed issues concerning In order to examine external awareness of In order to find out detailed issues concerning In order to examine external awareness of KOTRA’s sustainability, seven core groups KOTRA and identify major issues pertaining to KOTRA’s sustainability, seven core groups KOTRA and identify major issues pertaining to were selected, and in-depth interviews were sustainability management, out of 21,515 news were selected, and in-depth interviews were sustainability management, out of 21,515 news conducted with representatives of each group. articles during the period from 2009 to 2011, conducted with representatives of each group. articles during the period from 2009 to 2011, In addition, 369 persons from each stakeholder 3,176 relevant articles were subject to analysis In addition, 369 persons from each stakeholder 3,176 relevant articles were subject to analysis group of KOTRA were asked to fill out in consideration of relatedness to sustainability group of KOTRA were asked to fill out in consideration of relatedness to sustainability questionnaires, which served as the basis for management activities. questionnaires, which served as the basis for management activities. materiality test. materiality evaluation. Diagnosis of ISO 26000 Implementation ③ Assessment of ISO 26000 Implementation According to the ISO 26000 diagnosis tool According to the ISO 26000 assessment tool developed under the auspices of the Ministry developed under the auspices of the Ministry of Knowledge Economy, the level of KOTRA’s of Knowledge Economy, the level of KOTRA’s fulfillment of social responsibility was assessed, fulfillment of social responsibility was assessed, and relevant issues were identified with a focus and relevant issues were identified with a focus KOTRA’s Stakeholders on vulnerable areas. Description Relevant Group on vulnerable areas. Core Employees, government and customers Trend & Impact Analysis Strategic Overseas local employees, domestic and ④ Trend & Impact Analysis Important issues for KOTRA concerning overseas related organizations, labor Material issues for KOTRA concerning sustainability unions, media sustainability were ascertained by asking were ascertained by asking department leaders Environmental Investee companies, non-regular workers, department leaders and employees to fill out and employees to fill out questionnaires in terms of administrative interns, vendors, social questionnaires in terms of a trend, impact, and enterprises, knowledge providers a trend, impact, and internal competences. Global Business Platform 21

Issue Identification Process

· Appropriate corporate data analysis Materiality test · Media analysis Identification of · Trend-impact analysis Significance test Relevance core issues · CSR level assessment (Questionnaires for internal/ (Contents of the Report) · Interview with stakeholders external stakeholders)

Materiality Test Materiality Assessment Results (Level of materiality: On a five-point scale) Materiality test was conducted based on relevance 4.1 and significance test of 106 initial sustainability issues. As a result, 33 ‘trend and impact’ 4.0 5 2 1 issues, which scored 3.9 on a five-point scale of 4 materiality, were chosen as final report issues. 3.9 10 Materiality to stakeholders Materiality 18 21 8 3 11 7 3.8 14 16 9 6 23 12 22 29 27 19 17 20 3.7 26 24 15 13 33 28 25 32 3.6 31 30

3.5

3.7 3.8 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6

Trend Impact Materiality to KOTRA

Final Report Issues (Level of importance: On a five-point scale) 01 SMEs’ growing needs for strengthened export capabilities 4.26 18 Market transfer to emerging economies 4.01 02 Diversification and increase of customer needs 4.15 19 Growing demand for fair competition 4.00 03 Globalization of markets, competitiveness and supply networks 4.15 20 Engagement of stakeholders and reflection of their opinions 4.00 04 Human development and training in the workplace 4.13 21 Increasing CSR requirements at the time of making inroads into foreign markets 3.99 05 Increasing worldwide mutual connectivity 4.11 22 Prevention of discrimination (treatment of local workers, etc.) 3.99 06 Increased significance of talent acquisition 4.08 23 Health and safety at work (stress management etc.) 3.99 07 Anti - corruption 4.08 24 Participation in public policy formulation 3.98 08 Expansion of free trade agreements (FTAs) 4.07 25 Growing concerns about an excessive emphasis on performance 3.95 09 Customer satisfaction activities and provision of information on goods/services 4.07 26 Compliance with domestic and foreign laws concerning service liability 10 Increasing public access to information (Internet, SMS, etc.) 4.06 (strengthening of certified brand management) 3.94 11 Consumer service, support, and complaint and dispute resolution 27 Environmental damage (air, water and soil pollution) 3.94 (introduction of a long-term customer management system, etc.) 4.04 28 Promoting social responsibility in the value chain 12 Growing significance of employees’ welfare, rights and roles 4.04 (Support for SMEs’ competitiveness regarding CSR, etc.) 3.93 13 Compliance with social norms 4.04 29 Climate change (global warming) 3.92 14 Consumer data protection and privacy 4.04 30 Increasing demand for customer information security 3.92 15 Recognition of social responsibility 4.03 31 Discrimination and vnlnerable group 16 Guarantee of fair employment and employment relations (provision of diversity and equal opportunities) 3.91 (recruitment, level of wages, etc.) 4.03 32 Resolving grievances 3.91 17 Increasing demand for corporate transparency 4.02 33 Commuinity involvement and development (global social contribution, etc.) 3.90 2011 KOTRA Sustainability Report 22

Introduction Human Oriented Management Interview with Stakeholders Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution For the purpose of communication with major stakeholders, KOTRA executed in-depth interviews. Appendix It selected stakeholders in various fields including government, customers, domestic and foreign institutions concerned, its labor union and media. KOTRA listened to their opinions to ensure that it fulfills its social responsibility to the fullest possible extent.

It is necessary to apply stringent standards in examining brands guaranteed by KOTRA. In addition, thorough follow- Description Association Customer President Han-Gyu Kim, H&H up management should be conducted regarding selected Labor Union Deok-Gyu Bok, chairman of the KOTRA products. labor union Brands guaranteed by KOTRA affect the image of not only KOTRA, but Government Gwang-Seok Yang, director at the Ministry of Knowledge Economy also Korean companies. KOTRA must contribute to enhancing the image Overseas Agency Osna Masako, head of the Seoul office of Korean businesses with strict deliberation criteria and strengthened Concerned of JETRO follow-up management. Domestic Agency Manager Eun-Hee Kim, Association of Concerned Korea Exhibition Industry In addition, it is important to pursue local social contribution in cooperation Media Reporter Nam-Gwon Kim, Yonhap News with Korean companies that have made inroads into overseas markets, which will facilitate the advancement of Korean businesses into those markets and lay the foundation for local confidence in Korea. Customer: President Han-Gyu Kim, H&H

KOTRA should organize and encourage local CSR activities by companies that have advanced to foreign countries. In order to empower companies that have made inroads into foreign countries to continue to grow in local markets and become leading members of the global community, KOTRA should organize and encourage local CSR activities. Toward this end, KOTRA needs to offer guidelines on environment, labor and human rights improvement by nation, and confer awards by discovering best practices with respect to local CSR activities. At the same time, KOTRA must disseminate those practices to other regions to establish and revitalize its global CSR-based model, which raises the level of CSR activities by Korean companies active in foreign markets. Labor Union: KOTRA Deok-Gyu Bok, chairman of the labor union

It is necessary to provide high-quality information and consulting to customers by building a strong and efficient infrastructure. The key to becoming a better KOTRA is to effectively use strong infrastructure in terms of hardware. It would be completely within KOTRA’s ability to appropriately use the network of KBCs around the world. On the basis of a strong and efficient infrastructure, higher-quality information and consulting must be provided in terms of software. Government: Gwang-Seok Yang, director at the Ministry of Knowledge Economy Global Business Platform 23

I hope that strengthening the fundamentals of SMEs will We always listen to our contribute to bridging the gap between large companies and SMEs. “stakeholders for mutual In an era of $1 trillion trade for Korea, there exist growing needs at the government level to reinvigorate domestic and foreign trade and communication and investment. Given that the growth of SMEs is being delayed, as the communion. Korean economy is mostly led by chaebols, KOTRA plays an important role in narrowing the gap between large companies and SMEs by ” strengthening the fundamentals of the latter. KOTRA will have a lot to do in the future. Foreign Institution Concerned: Osna Masako, head of the Seoul office of JETRO

It is necessary to respond in a timely manner to increasing customer needs as a result of growing public access to information by such means as Internet and SNS. Expansion of the Internet and SNS has facilitated access to all kinds of information and made it possible to disseminate information in an unlimited manner. Under these circumstances, the interests, monitoring and needs of customers are increasing. As KOTRA’s biggest strength has been providing service through its global network, such a change in environment may replace or weaken that function. KOTRA is required to further specify and differentiate the effect of its network. Domestic Institution Concerned: Manager Eun-Hee Kim, Association of Korea Exhibition Industry

In providing services to SMEs to develop their export capabilities, KOTRA must reinforce its follow-up management. How KOTRA achieves dominance in the face of a global trend of market transfer to emerging economies will determine Korea’s position as a trade powerhouse. In offering export consultation through consultation meetings or exhibitions, KOTRA performs foreign buyer matching. I hope KOTRA will further improve its follow-up management and accountability after such consultations, until contracts are concluded. In addition, KOTRA must further its efforts to discover talents by targeting emerging economies. Thus, it is necessary to find and make long-term investments in persons who have a command of exotic languages and local circumstances. Media: Reporter Nam-Gwon Kim, Yonhap News Introduction Human Oriented Management Responsible Organization Sustainable Trade & Investment Partner Human Customer Oriented service Social Contribution Appendix Oriented Management

Development of Core Global Talents

Improvement of Employees’ Quality of Life To foster core global talents as we head toward an era of $2 trillion trade, KOTRA has programs to develop experts by area of focus, including the subject matter expert system and expert training system for future growth engines. KOTRA’s performance-based fair evaluation and compensation scheme not only enhances employee engagement, but generates high performance and maintains a high level of employee satisfaction.

Related Issues of Materiality

Acquisition of Human Increased significance of talent acquisition Resources Development of Guarantee of fair employment and employment relations. Core Global Talents Development of Human (recruitment, level of wages, etc.) Resources Human development and training in the workplace

Improvement of Resolving grievances Organizational Culture, Employees’ Quality Growing significance of employees’ welfare, rights and roles Work-life Balance of Life Health and safety at work (stress managment, etc) 2011 KOTRA Sustainability Report 26

Introduction Human Oriented Management Acquisition of Human Resources Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution Marking its 50th anniversary in 2012, KOTRA recognizes the significance of acquiring and Appendix developing core global talents who will assume responsibility for its future. With 111 overseas branches in 76 countries, KOTRA provides immeasurable assistance to strengthen its employees’ global competency to help domestic companies pursue globalization and tap into overseas markets for new growth drivers.

Status of Employees As of the end of 2011, KOTRA had a total of 767 employees including 7 executive officers. In terms of work categories, 663 employees carry out trade affairs while 104 perform extraordinary civil services. Development With respect to gender breakdown, 567 employees are males while 200 employees are females, which puts the percentage of female workers at 26%. The number of employees hovers well above 1,300 of Core Global when the local workers of its overseas entities are factored in. About 42% of its employees work abroad at all times. After an overseas service period of approximately three to four years, they return to the head Talents office in Korea. The employee turnover rate remains at a relatively low level of 1.43%. As for a major cause of resignation, in the face of long-term overseas duties some female workers decide to leave the organization for reasons including marriage, child rearing and housework. The average period of service is 13.53 years and the level of job satisfaction stands at 4.3, which represents an improvement from the previous year. The starting annual salary for KOTRA’s newly recruited college graduates amounted to KRW 23.36 million until 2010, but was curtailed in 2011 according to government policy. Salary was restored to 70% of its original level on July 1, 2011 and will recover to 100% in 2012. KOTRA has a single pay system and does not differentiate between male and female employees.

Status of Local Employees Abroad KOTRA has an extensive overseas network of 111 KBCs in 76 countries. As of the end of 2011, 609 local employees are working for KOTRA. Especially in 2011, the opening of overseas KBCs in emerging markets and increase in local employees of developing countries pushed up the number of local workers.

Status of KOTRA’s Officers and Employees (단위 : 명) Description 2009 2010 2011 Officers 7 7 7 Trade & Professional Services 632 626 656 Current Staffing Employees Extraordinary Civil Services 107 101 104 Total 746 734 767 Male 570 563 567 Gender Female 176 171 200 Regular Workers 639 633 663 Type of Indefinite Contract Workers 80 74 77 Employment Contract Workers 27 27 27 Domestic 414 405 422 Workplace Overseas 312 311 325 Workers on Leave of Absence/ Dispatched Workers 20 18 20 Average Period of Service 13.03 years 13.46 years 13.53 years Turnover Rate Note 1) 2.14% 2.59% 1.43% Level of Job Satisfaction (On a five-point scale) 4.14 4.2 4.3 * Note 1) Criteria for turnover rate calculation includes dismissal at employees’ request and early retirement, and excludes honorable retirement, ex officio Online live recruitment presentation dismissal, etc. Global Business Platform 27

Effort to Secure Core Global Talents To secure outstanding human resources who will take responsibility for its future, KOTRA hires new and experienced workers on a regular basis. Through open recruitment, KOTRA employs 20 to 30 workers each year. It hires experts on specific affairs from time to time, focusing on stepping up its specialized capabilities. To attract more talent, KOTRA operates various preferential treatment schemes for high-quality human resources. It offers various optional subjects for a written test to solicit not only applicants who majored in business and commerce or languages and literature, but also those with degrees in social sciences or natural sciences and engineering. In addition, it exempts certified professionals Dialogue between the president and new recruits (lawyers, patent attorneys, and certified public accountants) from examination in optional subjects and grants bonus points to applicants with excellence in a second or third language as part of efforts to Description 2009 2010 2011 acquire outstanding personnel. Those who successfully served at KOTRA as young interns are subject Regular Workers 346 347 375 Employees Dedicated to Branch to preferential treatment when applying for open recruitment. 195 209 212 In addition, KOTRA is improving its local staff management abroad to ensure recruitment of outstanding Office Services Employees Dedicated to Logistics local human resources. So far, employees of the Korean head office have played a central role in the 20 23 22 operation of its overseas network. To develop local staff, the core asset of overseas KBCs, KOTRA has Support Services sought to improve treatment of its local staff, in stages, to the treatment level of employees of local top Total 561 579 609 conglomerates, beginning in 2011. Description 2009 2010 2011 Operation of Various Communication Channels New Workers 26 26 31 It is true that KOTRA’s variety of occupational categories entails difficulties. In an effort to listen to Employment Experienced Workers 16 - 7 employees’ opinions on a regular basis, the president has pursued a dialogue with all the staff of each Total New Employment 42 26 38 department since July of 2011. Employees hailed this unprecedented event, in which the president directly listens to their predicaments and orders improvements on the spot. These regular meetings remain in operation. Furthermore, KOTRA operates various in-house committees, public hearings, questionnaires and bulletin boards for suggestion. Thus, it collects employee opinions and reflects them in institutional improvements.

Description Preferential Treatment Remarks Enabled persons with varied majors to Increase of subjects in social sciences or Various optional subjects apply natural sciences and engineering Exempted from an optional subject in a Patent attorneys, lawyers, certified public Professional certificate holders written test accountants, etc. Persons with excellence in a second or Granted two or three additional points in third language a written test Persons chosen as outstanding young Granted five additional points in an interns interview

“I will Listen to Hard Truths Told by Companies with Patience” “KOTRA will become an institution loved by people, trusted by companies and most needed by the government.” On June 30, KOTRA’s then-new president Suk-woo Hong held a press conference at the organization’s headquarters in Seocho-gu, Seoul. He said, “I will place a managerial focus on establishing a framework of vision for another 50 years of success for KOTRA, which marks its 50th anniversary next year.” President Hong went on to say, “I feel privileged to join KOTRA, which has stood center stage for Korea’s economy and trade for half a century.” He said, “I plan to produce intended results through ceaseless innovation in the future,” adding, “I will do my best to find improvement opportunities from the perspective of companies and listen to hard truths told by companies on-site.” He unveiled a policy to aggressively pursue communication. President Hong also said, “Based on the expansion of vertical communication in the organization, we will concentrate on productive affairs. Changes will be introduced to HR management through the adoption of such systems as a consolation match scheme.” Regarding this, he said, “I believe there should be something like re-challenges and revival in every corner of society. We will give opportunities for re-challenges to employees who somewhat lag behind their colleagues.” ” The Asia Economic Daily; July 1, 2011 (Friday) 2011 KOTRA Sustainability Report 28

Introduction Human Oriented Management Development of Human Resources Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution To simultaneously promote individual growth and increase organizational competency, KOTRA Appendix implements multiple capacity building programs. To cultivate creative global professionals, it is fostering experts in future growth industry while strengthening links between performance and compensation.

Talents Envisioned by KOTRA

Development Slogan Business Creator with Global Mind

Talents who can demonstrate professionalism in their respective fields with a cosmopolitan outlook and of Core Global Statement networking ability as well as an open mindset embracing diversity Talents Global mind Challenging/frontier spirit Professionalism Enabler · Professional spirit · Cosmopolitan outlook · Innovative thinking · Independent business · Global networking · Leader of change capabilities

core values Customer Contribution Challenge Global

Talents Envisioned by KOTRA HR Development Mechanism and System Business Creator with Global Mind To accomplish its vision of being a “global business This year, we have refreshed our vision for human platform ushering in another 50 years of success resources - Business Creator with Global Mind. and a brighter future for Korea”, KOTRA set up We value people who are global minded, good at an HR development goal of “establishing a group networking and open to diversity. of experts by strengthening core competency.” It has been systematically fostering talents, with HR Management Principles Placing Top four strategic tasks at the center of the effort. Priority on Fairness and Transparency These four tasks refer to upgrading global KOTRA manages its human resources by putting competency, enhancing professionalism in the highest priority on fairness and transparency. alignment with career development, achieving To enhance fairness, it operates various opinion strategy-linked leadership and establishing an collection channels including the HR Committee, organizational culture of creativity and commu- Promotion Recommendation Committee and nication. These tasks have been rede-signed by

Provides Internal Assessment Committee. It also has an reflecting the four newly established core values: comprehensive Meets global “open HR bulletin board” aimed at increasing global, customer, contribution and challenge. services demand transparency and disclosing infor-mation on Focusing on these goals and capabilities, KOTRA r Spec eu ialis overall HR management such as recruitment, pursues customized education for each tier n t w re ith G p e e n promotion, assignment, transfer and resignation. of employees. To beef up core competency, it r e t r a n l P E e

r

l s As KOTRA consistently abides by the principles of conducts intense professional job training and

p

a

e

i

c

ti c

v

o e S fair and transparent HR management, an internal foreign language education. Each employee integrity survey con-ducted in 2011 showed that completes about 180 hours’ training per year. Kn or owled Creat Serves as a ge Creates value employees had no experience with offering bribes Such HR development efforts and outcomes have long-term in connection with personnel management. been highly recognized externally as evidenced partner Global Business Platform 29

KOTRA’s HR Development System

Vision To be a global business platform ushering in another 50 years of success and a brighter future for Korea

Goal of HR Create a group of persons with expertise by bolstering core competency Development

Enhance professionalism in alignment Establish an organizational culture of creativity Upgrade global competency Achieve strategy-linked leadership Strategic Task with career development and communication

Core Competences Capabilities by tier Job capabilities

Core Values Global Customer Contribution Challenge

by its receipt of an HR management grand prize KOTRA’s Subject Matter Experts Annual Education Hours Per Person in 2009, a Korea HRD award in 2010, and a Best Serial No. Name Area HRD award in 2011. 1 Han-Jin Park China 2 Gyeong-Mu Kwon Government procurement 234.4 hours Talent Development Program 3 Tae-Ho Kim Auto parts 4 Young-Seo Kim Exhibition Aligned with Strategy 181.9 hours Core Talents and Subject 5 Eun-Young Yang International trade 177.8 hours Matter Expert System 6 Chang-Hyeon Lee Brand There exist growing needs to explore emerging 7 Seong-Su Kim IT & electronics markets in Africa, CIS and Latin America while 8 Myung-Shin Kim China demand for new industries including IT, cultural 9 Jung-Min Roh Medical & bio industry content and bio industries is increasing by the 10 Jun-Gyu Park Cultural contents 11 Deok-Gyu Bok ASEAN day. Under these circumstances, KOTRA has run 2009 2010 2011 12 Ji-Hwan Eun Exhibition the subject matter expert system since 2007 in 13 Don-Gi Lee Environment/new & renewable energy an effort to strategically foster experts in relevant 14 Min-Jun Park India Annual Foreign Language Education Hours Per Person areas. Subject matter experts play a pivotal role in 15 Yoon-Hee Kim China accomplishing strategic goals of the organization 16 Gi-Won Park Russia or expediting its growth as well as performing 17 Do-Sook Chung China 62.0 hours appropriate duties. KOTRA offers full support 18 Yeon-Geon Kim Franchise 51.2 hours to subject matter experts in terms of career 19 Dong-Hyun Lee International development cooperation 39.2 hours development, education and compensation 20 Seong-Wook Cha Intellectual property rights to enable them to continuously cultivate their 21 Yeon Song Exhibition 2009 2010 2011

Awards for KOTRA Talent Development System Level of Satisfaction with Education and Training Survey of the Level of Satisfaction with 2009 2010 2011 4.13 Education for the Past Three Years Up 4.05 2.0% Up 4.6% 3.87

HR management grand prize Korea HRD award Best HRD award 2009 2010 2011 2011 KOTRA Sustainability Report 30

expertise. As of February 2012, ten subject matter experts remain active in KOTRA’s Performance Management System nine areas, playing central roles in executing KOTRA’s strategies and actively involving themselves in the galvanization of related business areas. Established the best evaluation scheme among public institutions. “Became the first public institution to introduce a balanced scorecard in 2001” Expert Training System in Future Growth Industry “Awarded the BSC grand prize in 2005” Each year, KOTRA selects about 20 detailed areas of focused development SAP+ WEB that are classified by new markets, new industries and new functions. i-HR BSC ERP Concentrating on areas that need to be vigorously developed from a mid- to long-term perspective, KOTRA pursues intensive expert training. It proactively Multi-dimensional Performance Educational Job evaluation evaluation evaluation evaluation · Multi-dimensional utilizes domestic and overseas training as a main tool for developing experts. · Introduced in 2001 · Real-time evaluation · Foreign language evaluation KOTRA chooses approximately 20 academic trainees on an annual basis, · 360-degree · Team evaluation · Duties and · Performance pouring up to 50% of its educational budget into their education. As a evaluation · Individual evaluation knowledge evaluation result, KOTRA has continuously produced experts on new markets, new · Personal capability · Information and · Educational assessment telecommunication evaluation industries and new functions. Recently, it has been fostering doctorate-level employees. KOTRA. Against this backdrop, KOTRA is developing a process internalizing its KOTRA’s Areas of Focused Development vision and core values. This process is expected to enhance local employees’ Description Area loyalty to KOTRA and maximize their engagement. China, Russia, Middle East, Africa, Latin America, ASEAN, India and North New Markets Korea Advanced employee reward program IT & electronics, cultural contents, medical & bio industries, environment/ New Industries new & renewable energy and franchise We have been a leader in merit-based salary system, since we have launched Exhibition, brand, logistics, e-commerce, economic development policy, an annual salary system in 2011 for the first time in public sector. KOTRA fully New Functions public policy, intellectual property rights, technology management, finance and consulting reflects evaluation results in compensation. The gap in incentives remains at 300% for team leaders and 250% for ordinary team members, the highest Performance-based HR System level among public institutions. Based on thorough performance-based HR management, KOTRA has built Following the implementation of the professional job scheme in 2007, the most sophisticated system among public enterprises. It carries out multi- KOTRA adopted a new performance-based annual salary system for officers faceted evaluation encompassing performance, job, multi-dimensional, and in 2010. Thus, it abolished its salary grade table and executed a job leveling educational evaluation. Such evaluation findings are systematically reflected system. Currently, it operates a two-track job classification wage system. in all aspects of personnel management such as promotion, compensation, We have been a benchmark for the system in public sector, as evidenced assignment and training. by the “Best Practice” award conferred by the President-chaired committee High performers enjoy differential monetary and non-monetary compensation comprising public sector organizations. in terms of total compensation while low performers are given an opportunity to ameliorate their performance based on participation in PIP (performance improvement program). Employees persistently recording low performance KOTRA’s Annual Salary System are required to leave the organization. Incentive · Maximum difference: KRW 22.400 million (the largest among public institutions) Training local employees · Application of differential incentive rates to all employees, To strengthen local employees’ business performance capabilities, KOTRA not a grade system has put into effect an exclusive education system for those workers by using 25% Salary Basic Salary the KOTRA Global Cyber Institute. This education is focused on marketing, structure for · Reduction of the portion of basic salary investment attraction, information research, job education intended to step domestic · Application of differential salary step increases to all employees up capabilities in existing foreign markets and foreign language education to employees according to performance evaluation improve employees’ command of Korean and English. · Disadvantage against low performers concerning an With the recent expansion of its overseas organizational network centering increase in basic salary 75% - Officers: Bottom 25% on emerging economies, an increasing number of local workers are joining - Employees: Bottom 10% Global Business Platform 31

Introduction Human Oriented Management Organizatonal Culture, Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Work-Life Balance Social Contribution Appendix KOTRA recognizes its employees as both core stakeholders and corporate value creators. KOTRA is doing its best to create an organizational culture featuring involvement and dialogue and offers a working environment balancing and harmonizing work and personal life so that all employees may have pride in their work and find it rewarding.

Creation of a Culture of Brisk Vertical work and family. It has created useful resting and Horizontal Communication areas including a lounge for female employees, Improvement At the heart of KOTRA’s corporate culture is open fitness center, medical room, and domestic and communication between employees. overseas resting gardens. At the same time, it of Employees’ KOTRA’s intranet system weaving together all operates a variety of flexible work programs its organizational components around the world such as flexible time, long-term domestic work Quality of Life enables two-way communication between the system, parental leave, spousal accompaniment CEO and employees including overseas local leave, couple overseas work, part-time work, workers. Thus, the management utilizes bottom- and at-home work. In addition, KOTRA has up and two-way decision-making. KOTRA relieves designated Friday as Family Day to ensure that employees’ stress and promotes their harmony its employees leave the workplace on time to through non-business communication channels harmonize work and family life. including 25 GWP (Good Work Place) programs, Yearly Deliberation and Adoption of Proposals Team Spirit Day for internal cohesion of the head Health and Safety For the purpose of employee health and safety, 117 179 office and each overseas KTC, and 109 employee

clubs and communities. KOTRA operates diverse health promotion

20 0 9 programs. It provides support for medical

1 Creation of Flexible and Creative checkups of employees and purchases group 1 Deliberation

0

2

of Proposals Organizational Culture accident insurance for them. For the sake of staff

KOTRA allows its employees to report to work working in dangerous areas overseas, KOTRA

2010 in casual wear all year round, rather than suits provides them with personal safety insurance 219 and neckties. To give a boost to the flexible work against war, etc. program, which was once limited to employees 70 43 who are pregnant, have young children or have Effort for Unity with Non-Regular

disability, KOTRA implemented the program on Workers 20 0 9 년 every Friday based on an agreement with the KOTRA promotes a workplace culture in which 년 1 Number of 1

0 labor union. Besides, KOTRA seeks to execute regular and non-regular employees work in

2

Proposals

organizational climate improvement programs unity. It has created HR cooperation officers, Adopted

such as Color Day (an expanded version of along with the operation of a help desk that

2010년 Casual Day; application of the red & blue dress listens to and resolves the complaints and 25 code once a month) and the Labor-Management distress of administrative interns and dispatched High-Five Day during office-going hours. workers. KOTRA also offers mementos and 59.8% 24.0% The Proposal Deliberation Committee involving appreciation plaques to its employees upon their

2 0 the CEO, junior board and the labor union adopts resignation or retirement. Since 2011, it has 0 9 년 년 1 70 proposals a year. KOTRA provides smart tabs expanded the application of the GWP program

1

0 Adoption

2

to all employees to conduct paperless meetings. to non-regular workers including Team Spirit

Rate (%)

support, the Welcome New Family program, and Commendation/Birthday Greetings program. 2010 Work and Life Balance 11.4% KOTRA strives to ensure harmonization between Introduction Human Oriented Management Responsible Organization Sustainable Trade & Investment Partner Responsible Customer Oriented service Social Contribution Appendix Organization

Respect for Human Rights and Diversity

Leader in Ethics and Integrity

Expansion of Environment-Friendly Operations The first step toward achieving sustainable growth and becoming an esteemed company is to trust and respect our members. Based on its management philosophy of respecting human beings, KOTRA is creating a GWP (Great Work Place) by providing fair opportunities to its members and respecting the diversity of all its employees.

Related Issues of Materiality Growing concerns about an excessive emphasis on performance Creation of Respectful Prohibition of discrimination against vulnerable groups Respect for Human Rights Workplace (provision of diversity and equal opportunities) and Diversity Prevention of discrimination (treatment of local workers, etc.) Win-Win Culture of Labor Guarantee of fair employment and employment relations (recruitment, level and Management of wages, etc.) Increasing demand for corporate transparency Leader in Ethics and Ethical Management prevention of corruption, Integrity and compliance with social norms Reinforcement of Carbon Climate change (global warming) Expansion of Environment- Reduction Activities Friendly Operations Environmental Performance Environmental damage (air, water and soil pollution) Management 2011 KOTRA Sustainability Report 34

Introduction Human Oriented Management Creation of Respectful Workplace Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution KOTRA pursues human-oriented management. As part of this initiative, it forges a win-win labor- Appendix management climate, builds a sensitive and sound workplace, and nurtures creative global professionals. Thus, it creates a working environment where all employees enjoy discrimination- free fair treatment and respect.

Increasing Employment of Persons with total new recruits for the first time. Disabilities Secondly, KOTRA pressed ahead with gender Respect for In September 2010, KOTRA was selected as equality through strengthened female workforce an outstanding performer of the memorandum management. KOTRA has consistently increased Human Rights of understanding on promotion of employment the number of female officers and imposed no of persons with disability. In 2005, the number discrimination against female workers regarding and Diversity of persons with disabilities working for KOTRA assignment to departments. For example, stood at merely four. Since 2007, however, KOTRA raised the ratio of female workforce in KOTRA has dramatically eased application its Planning & Coordination Department from 30 requirements for persons with disabilities for its percent in 2009 to 38 percent in 2010. new worker recruitment. Annually, KOTRA has Thirdly, KOTRA has aggressively improved its hired about 8 to 10 percent of its new recruits personnel management system to promote from among persons with disabilities through a welfare of female workers, including maternity separate selection process. As a result, KOTRA protection and harmonization between work increased its employment of persons with and family. KOTRA introduced a flexible work disabilities by approximately 500 percent in five program recommended by the government years. In 2010, the number of employees with and adopted other schemes enabling female disabilities rose to 23. employees to harmonize their work and family KOTRA also offers equal opportunities for life including spousal accompaniment leave, employees with disabilities in terms of personnel concurrent overseas dispatch of couples inside management. For instance, it assigns workers the organization, and a half-day off system. with disabilities to major departments. In 2010, At present, KOTRA continues to explore KOTRA dispatched employees with disabilities to improvement opportunities. its overseas branches for the first time. Improvement of Treatment Enhancement of the Status of Women for Local Employees and Realization of Gender Equality Local employees of overseas KBCs, the core In July of 2011, KOTRA received a citation competency of the overseas network, have from the Minister of Gender Equality and been subject to relatively ineffective personnel Family for “contributing to development of management. Since 2011, however, KOTRA the nation and society by raising the status of has endeavored to improve their treatment, women and promoting gender equality” in three eliminating any discrimination against them. In areas pertaining to gender equality including 2011, it derived improvement opportunities to management of female workforce. provide better treatment for local employees Firstly, KOTRA contributed to the creation of jobs under a plan to execute proposed improvements for women by proactively hiring female workers. from 2012. Of the 30 new employees hired during public As of 2011, the average service period of local recruitment in 2011, the number of women was employees remained at only 4.15 years. To ensure

Citation from the Minister of Gender Equality and Family 16, which accounted for over 50 percent of the that local employees work for overseas KBCs Global Business Platform 35

for an extended period of time, KOTRA intends Recruitment for the Past Three Years to improve, by region or in stages, their wages Description 2009 2010 2011 and fringe benefits to the level of compensation Employee quota 658 625 659 packages used by local conglomerates. Current employees 632 633 663 In addition, KOTRA plans to apply the same Females 13 10 19 evaluation and education systems as applicable Persons with disabilities 2 2 3 Recruitment of to employees of the head office to local Local talents 1 2 2 regular workers employees to thwart any discrimination against Persons with a degree in natural sciences and engineering 4 3 5 them in personnel management. Total 42 26 38 Young interns 167 339 357 Irregular workers Excellence in Job Creation Short-term workers - - 12 Number and ratio of females 97 (15.35%) 99 (15.8%) 125 (18.8%) Since 2009, KOTRA has implemented the young Of total current Number and ratio of females serving as team leaders or higher 1 (0.15%) 3 (0.47%) 5 (0.76%) intern system as an entity preferred by young job- employees Ratio of persons with disabilities 10 (1.58%) 12 (1.92%) 15 (2.28%) seekers. Since 2011, it has selected 20 percent of new recruits from those who have served as young interns. This translated into an increase in capabilities of high school graduates, including Exit Strategy for Retirees young intern applicants, as working for KOTRA the operation of a separate young intern system Establish an internal assistance system to as young interns is recognized as a channel to for them. prepare for retirement. become regular workers. In addition to the young Expand strategic partnership with enterprises intern system, KOTRA executes the branch office Further Consideration for Retirees and external institutions. Increase employment of retired employees in service intern program, operates a new division Facing an aging society, employees need line with business affairs. called Bachatsa, which is in charge of identifying retirement-related support. KOTRA expects its Fully utilize the government’s reemployment potential buyers, and holds employment expos number of retirees to surge beginning in 2013. support policy. for companies making investments overseas In preparation for this, it set up an exit strategy as well as foreign-invested companies in for retirees at the end of 2011. KOTRA will Recruitment System to Hire alignment with its unique mandates including boost the pride of its employees by conducting Various Employees trade promotion, support for making inroads systematic retirement management and creating into overseas markets and investment attraction. Description Details an organizational culture that takes responsibility Persons with disabilities Such efforts contribute to the creation of high- for employees even after their retirement. Since Local talents High school graduates quality jobs for the young and retirees in global 2009, KOTRA has hired a number of retired Independent selection Persons with a degree markets. process professionals to cope with a financial crisis. in natural sciences and It established a new division called Bachatsa engineering Increased Effort for Employment of High dedicated to identifying potential buyers. As of Young interns Operation of an employment School Graduates the end of 2011, 35 retired professionals worked Females target system Recently, the government has sought to increase for KOTRA as professionals specializing in export employment opportunities for high school (36 in 2009 → 28 in 2010 → 35 in 2011). Their Nationally meritorious Additional points for persons meritorious service graduates. Given the functional characteristics of knowhow and experience are being leveraged KOTRA requiring overseas work, however, most to the fullest extent. Since 2010, KOTRA has of its applicants are college graduates. Despite held employment expos for retired professionals. these constraints, KOTRA conducted an internal Its effort to arrange for their employment by review to identify any duties that can be carried companies active in foreign markets resulted in out by high school graduates and overhauled its the employment of 38 persons in 2010 and 44 personnel management regulations, establishing persons in 2011, in total. the rationale for their employment. This effort led to recruitment of high school graduates. KOTRA plans to make a consistent effort to reinforce the Employment expo for retired professionals 2011 KOTRA Sustainability Report 36

Introduction Human Oriented Management Win-Win Culture of Labor and Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Management Social Contribution Appendix KOTRA guarantees the free union activities of union members according to the Constitution, guaranteeing three basic labor rights, the Trade Union and Labor Relations Adjustment Act and its collective bargaining agreement with labor. KOTRA could serve as a driving force behind Korea’s foreign export and investment attraction thanks to its cooperative relationship with labor, which is deemed one of the best among public agencies.

Status of the Labor Union KOTRA’s labor union, which was launched in April 1988, has 436 members. Its members are Respect for employees of job grade 3 or below excluding those of departments related to managerial authority such as HR management, labor management, audit and planning. The ratio of unionized workers to eligible Human Rights employees is 91 percent. KOTRA’s labor union is affiliated with a higher organization, the Federation of Korean Trade Unions - Federation of Korean Public Service Trade Unions. Its labor union consists of a and Diversity general assembly, a board of representatives, executive department and accounting auditor.

Number of Union Members Compared to Total Number of Employees

767 735 436 415 56.8 56.4

20 20 20 0 0 0 9 9 9 년 년 년

년 년 년 1 1 1 1 Total 1 Number 1 0 0 0 Ratio of Union

2 2 2

of Union

Employees

Members (%)

Members

2010년 2010년 2010년 735 427 58.1

Achievement of Win-Win Labor-Management Culture in Which Labor and Management Grow Hand in Hand KOTRA’s labor-management relations have a unique environment. Working together at KOTRA are not only regular employees, but also administrative interns, dispatched workers and dispatched government officials. Second, its unionized employees working abroad account for 40 percent of the entire union membership. In addition, female employees account for 37 percent of all union members. In consideration of these conditions, KOTRA is transforming existing cooperative relations between labor and management into an upgraded sensitive partnership in which labor and management work together to create a flexible and creative organizational climate and to improve the working conditions of female and non-regular employees. To forge a companywide consensus, KOTRA operates the Competitiveness Bolstering Committee and the Proposal Deliberation Committee involving the labor union and junior board. Marking its 50th anniversary in 2012, KOTRA has held various labor-management workshops to prepare for the Global Business Platform 37

Operation of Labor-Management Communication Channels

Official Dialogue Channel Unofficial Dialogue Channel Labor-Management Committee, labor- Dialogue between management and executive management meetings, labor-management body of the labor union workshops, collective bargaining, employee welfare fund council

Labor-management workshop

On-Line Dialogue Channel Other Off-Line Dialogue Channels Forwarding of e-mails by the president (To Labor-management working-level council, KOTRA Family), intranet, union bulletin board, labor-management working-level exchange online meeting between management and meetings, labor-management joint task force overseas employees (KOTRA Talk) teams, and management’s participation in employee communities next 50 years. In particular, its CEO has been on very close terms with employees through sensitive monthly meetings, 100-day dialogues with teams, quick meetings with employees in each tier/team/ job category (50 times a year), letters to the KOTRA family (27 times) and online and offline meetings with overseas KBC employees.

Selection as Outstanding Public Agency Regarding Labor-Management Relations Reform Since the establishment of its labor union, KOTRA has concluded a collective agreement with the union without any dispute for 23 consecutive years. Distinct from other public agencies, KOTRA retains a companywide culture of communication that labor and management are one. As a result, in September of 2011, the Ministry of Employment and Labor chose KOTRA as an outstanding public agency in terms of labor-management relations reform. This indicates that KOTRA is vigorously taking the initiative in the new labor-management culture of public agencies. There have also been changes in the operation of the Labor-Management Committee. In the past, the committee exhibited serious friction between the labor union only demanding employee welfare improvements and management refusing to accept such requests. Currently, labor and management exchange frank opinions on management conditions. Management also proactively examines and Labor-Management Joint Event institutionalizes the labor union’s requests for better welfare to the extent that they are related with productivity enhancement. In the session of the Labor-Management Committee for the fourth quarter, labor and management made it a rule to conduct mutual monitoring of agreed-upon matters. Thus, in 2011, KOTRA provided assistance for medical checkups of the family members of employees who face hardship working in remote overseas areas. KOTRA also pushed for the galvanization of the flexible work program and half-day off system and creation of labor and management’s High-Five Day. In addition, it inserted a provision on union-corporate social responsibility in its collective bargaining agreement for the first time. Labor and management are joining hands to step up companywide CSR activities. Labor-Management Committee 2011 KOTRA Sustainability Report 38

Introduction Human Oriented Management Ethical Management Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Social Contribution Based on ‘contribution’, one of its core values, KOTRA seeks to increase its CSR activities and Appendix incorporate ethical management into its strategy. It engages in practical activities for ethical management suitable for its characteristics such as strengthening integrity education for employees dispatched abroad and local employees of KBCs and encouraging the overseas network’s participation in ethical behavior.

Infrastructure for Ethical Management Organization Leader in KOTRA has the Ethical Management Committee in place, its highest decision-making body comprised of management. Ethics officers appointed for each department lead ethics-related activities of that Ethics and department to ensure that an ethical climate will spread and gain ground. At the same time, KOTRA operates the Clean KOTRA Committee of 22 internal officers and 5 external Integrity non-standing members. This committee takes charge of rigorous anti-corruption and integrity affairs.

Norms Under its ethical code, the highest norm, KOTRA has formulated ethical principles, ethical regulations and conduct guidelines. To create a more substantive ethical value system, KOTRA revises these in a timely fashion according to changes in internal and external environments. Ethical principles are the basis of the employee code of conduct, which is used as a yardstick for employees’ ethical decision-making on as well as the ethical management regulations providing for KOTRA’s overall ethical management system.

Programs Transparent Management To meet the growing demand for corporate transparency, KOTRA strives to expand information disclosure and promote transparency of business including contracts, accounting and budgeting. To guarantee

Ethical Norms Organization in Charge of Ethical Management

Ethical Code KOTRA ethical code Ethical Open KOTRA Clean KOTRA Management Committee Committee Committee Ethical Employee code of conduct Principles Ethical Management Working-Level Ethical management regulations Committee Ethical Provisions of the employee integrity ＞ Regulations agreement Ethics officers Ethical (one officer per Management Auditors’ Office Whistleblower protection and department) Secretariat compensation guidelines Conduct Employees conduct guidelines concerning Monitoring Improvement recommendation Guidelines persons related to their performance of duties Social service corps activity guidelines Integrity Ombudsman

Increase consensus through ethical leadership education Clean KOTRA Committee Global Business Platform 39

customers’ right to know, KOTRA has increased items of voluntary management performance disclosure KOTEX with a focus on major areas of interest from the perspective of customers. It has also steadily expanded 86.2 the scope of information disclosure, disclosing business facilitation expenses of not only the CEO, but +2.6% 84.0 also the comptroller. In addition, KOTRA prohibits employees from using a Clean Card (corporate card) 79.9 on holidays and late at night to increase the transparency of card management and use. Beyond that, KOTRA forbade the purchase of securities such as gift certificates, and made it mandatory to use a

Clean Card in disbursing business facilitation expenses to address public concerns about possible 2009 2010 2011 reckless management of KOTRA. To promote the practices of fair contract conclusion, KOTRA amended its contract handling guidelines, prohibiting attendance by agents of external members at a meeting of KOTEX: Kotra Ethics Index the Bidding Deliberation Committee and rendering it obligatory for members of the Committee to sign a Areas of Evaluation: CEO’s management philosophy, written integrity pledge. As part of an effort to ensure fair Committee operation, KOTRA does not permit corporate governance, ethical management schemes the involvement of stakeholders and officials of the supervisory government authorities as evaluators. for employees, fair trade, customer satisfaction, community and environment

Anti-Corruption and Integrity Recognition of Norms (score) KOTRA has introduced stricter penalties against acts of corruption. It newly formulated standards providing for the punishment of employees who fail to perform an obligation to report corrupt practices. 99 99 99 In addition, it expanded the scope of targets subject to report corrupt acts to employees who have left KOTRA as well as civilians. KOTRA also added embezzlement of public funds in the amount of not less than KRW 30 million to the types of crimes to be reported. Further, KOTRA increased disadvantage in 2009 2010 2011 terms of personnel management against employees committing corrupt acts. For instance, the period in which employees who committed accounting-related irregularities shall not be dispatched abroad Compliance with Ethical Regulations (score) was lengthened from four years to five or ten years. For different types of stakeholders, KOTRA operates +3.1% 96 99 a total of five report channels (Clean Report Center, Anonymous Report Center, Clean Contract Report 95 Center, Corruption Report and Counseling Center, etc.). In 2011, KOTRA installed an additional hotline between employees and the comptroller, which would enhance efficacy of the whistle-blowing system by expediting reports. 2009 2010 2011

Education Efficacy of Whistle-Blowing System (score) KOTRA engages in preventive ethical activities deterring potentially corrupt acts in advance, steadily +7.6% 85 conducting online and offline education on ethics including education on anti-corruption, integrity and 76 79 sexual harassment prevention in an effort to increase employees’ awareness and enhance their ethical decision-making ability. KOTRA carried out online ethical/CS education for all domestic and overseas 2009 2010 2011 employees including the CEO. Of 747 employees in total, 720 persons completed the course. With overseas branches all over the world, KOTRA made it mandatory for employees dispatched abroad or returning to the head office in Korea to complete separate integrity education course. KOTRA also Adequacy of Determination for Integrity (score) conducted integrity education targeting the heads of KBCs set up in China in 2011. So as to reduce +8.1% 80 unethical conduct in the course of business that may arise due to employees’ lack of understanding of 72 74 appropriate regulations, KOTRA designated regulation education for junior employees as a requirement for dispatch abroad and promotion. It also implements regular education on accounting and contracts. 2009 2010 2011

Monitoring and Feedback of Ethical Management Performance Survey of Employee Awareness KOTRA independently monitors and evaluates its ethical management performance. To set the direction Survey areas: Awareness of norms, compliance for the following year by reflecting assessment findings, KOTRA introduced the KOTEX or KOTRA Ethics with regulations, unlawful and unfair practices in the Index in 2008. It also conducts surveys on employee awareness of ethics by using questionnaires course of business, actual experience, determination targeting employees in different positions. to utilize an internal report system, effectiveness of a whistleblower system, adequacy of determination to promote integrity 2011 KOTRA Sustainability Report 40 Global Business Platform 41

Introduction Human Oriented Management Reinforcement of Carbon Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Reduction Activities Social Contribution Appendix For greenhouse gas reduction and energy savings, KOTRA proactively creates environment- friendly office space and complies with the government’s energy saving measures.

Energy Use and Saving

Reduction Expansion of Description 2009 2010 2011 Rate during 2009/2011 Environment- Electricity (MwH) 4,329 4,077 3,892 △10.1% Gas (㎥) 183,884 174,126 163,732 △10.9% Friendly Water (㎥) 14,104 15,750 14,052 △0.4% * Limited to the Seoul head office building

Operations Energy Saving and endeavoring to increase employee awareness of Efficiency Management the importance of this effort. KOTRA pushed for the following measures: maintaining an appropriate indoor temperature Increased Employee Awareness to during summer and winter (i.e. 28°C or higher Enhance Energy Efficiency in the summer and 18°C or lower in the winter), In alignment with its GWP program, KOTRA turning off all office lights during lunchtime and presses for a variety of activities designed to after-work hours, refraining from using local improve energy efficiency and reduce carbon. cooling or heating systems, operating elevators · No smoking in all offices, Give-Up Smoking Campaign (provision of Onnuri gift certificates to successful employees), separately for electricity savings, purchasing challenge to shed 5kg’s weight (recommended use of and using high-efficiency energy devices, stairways instead of elevators), adjustment of the time turning off landscape lights and outer lights, to report to and from work by boosting the flexible work Greenhouse Gas Emission by program, etc. Type of Fuel (tCO2eq) implementing the fifth-day no-driving system and encouraging use of public transportation, Reduction Fuel Support for the Domestic Green Industry’s 2009 2010 2011 Rate During and allowing employees to wear casual clothes Classification Advancement Into Global Markets 2009/2011 year round (including casual wear during the To lead the initiative to create a global green Electricity 2,018.58 1,900.96 1,814.56 △10.1% summer in particular). City Gas 413.64 391.69 368.31 △11.0% environment, KOTRA offers active support for the domestic green industry’s overseas cooperation. Gasoline 112.65 134.40 108.78 △3.4% Purchase of Eco-Friendly Vehicles It opened the Global Green Cooperation Support Diesel 26.45 25.26 30.61 15.7% KOTRA has been aggressively expanding the Total 2,571.32 2,452.30 2,322.26 △9.7% Center last February. In cooperation with 15 purchase of eco-friendly vehicles including * · Electricity: Replacement of office fluorescent lights with LEDs, overseas green order capturing support centers, lights-out during lunchtime hybrid cars. Since the first purchase of such KOTRA helps domestic companies obtain orders · City Gas: Compliance with the standard cooling/heating a vehicle in 2006, KOTRA has replaced five temperature during summer/winter concerning green projects including CDM. · Gasoline and Diesel: Implementation of the fifth-day no-driving of its vehicles (i.e. 17 %) with environment- system, encouragement of use of public transportation friendly hybrid cars. It plans to raise the LED Replacement ratio to 30% by 2015. Description 2009 2010 2011 Total Lights 7,518 7,518 7,518 Reduction of Greenhouse Gas Emission Number of LED Lights 1,136 2,269 3,405 In an era of climate change and low-carbon green Ratio of LED Lights 15.1% 30.2% 45.2% growth, KOTRA is cutting down greenhouse gas emission of its head office building while 2011 KOTRA Sustainability Report 40 Global Business Platform 41

Environmental Performance Management

To prevent environmental destruction, KOTRA pursues proper management of the use of water supply/sewage treatment systems, control of wastes and creation of environment-friendly office spaces.

Management of the Use of Water Supply/ conference room and independent system Sewage Treatment Systems enabling video conferencing among its domestic Annual Use of Water Recycled from (㎥) The total quantity of water used by KOTRA in and overseas employees. With these devices, Subsurface Water 2011 was 14,052㎥. It recycled an average KOTRA holds video-conferences or strategy Description 2009 2010 2011 of 110 tons of used subsurface water daily, meetings between its CEO and overseas Subsurface Water 13,616 10,302 13,575 curtailing its water use by 10.8% from 15,750㎥ employees. About 200 meetings are held yearly Reused Water 1,266 174 1,494 in 2010. In addition, sewage collected in a septic in the teleconference room. Recycling Rate 9.3% 1.7% 11.0% tank is cleaned through excrement aeration. Thus, its pH is maintained at 7.0 at the time of Amount of Environment- (Unit: KRW thousand) Quality of Indoor Air (in Parking Lot) its discharge, which contributes to improving the Friendly Products Purchased Each Year Description Related Criteria 2009 2010 2011 water quality of the Han River. Year 2009 2010 2011 PM-10 180㎍/㎡ 71.0 109.6 97.8 Amount of Environment- CO 1,000ppm 332.5 749 678 317,808 410,112 368,000 2 Waste Disposal Friendly Products Purchased HCHO 100㎍/㎡ 23.4 25.7 43.4 KOTRA commissions the disposal of ordinary CO 20ppm 1.6 7.2 6.0 recyclable wastes, including paper, cans and Environment-Friendly Procurement * Limited to the Seoul head office building. bottles, to a professional cleaning service KOTRA is fully cooperating with the government provider on a daily basis. As for special wastes concerning its recommended procurement such as office fixtures, metal scrap and policy. It purchases environment-friendly discarded household appliances and storage products in the amount of KRW 368 million a batteries, KOTRA submits a report to a company year. Goods purchased are mostly related to designated by the district office of competent office environment improvement including PCs, jurisdiction for their disposal. office equipment and fixtures.

Environment-Friendly Office Space Labor-Management Joint Environmental KOTRA uses eco-friendly products as its furniture Cleanup Activities and IT equipment in customer meeting rooms, KOTRA has undertaken joint community conference rooms and office spaces at the head environmental cleanup activities between office. In January 2011, KOTRA created gardens labor and management or in collaboration with stakeholders including foreign-invested CSR activities by Invest KOREA at the lobby entrance and on the rooftop of its head office, providing environment-friendly companies and local governments. resting spaces. It also ensures that the quality of Together with highway surroundings and air in the parking lot for guests remains similar community cleanup activities in cooperation to that of the outside through natural ventilation with foreign-invested companies such as GM at its entrance and exit. Additionally, KOTRA Korea and Fuji Xerox and the Seocho District regularly operates aeration fans in the parking Office, KOTRA pursues environmental protection lot to maintain pleasant conditions. activities including the Foreign Marketing Division’s cleanup of Mt. Cheonggye and the labor-management joint cleanup of Yangjae Online strategic meeting by the CEO and the heads of Video Conference System Stream. KTCs (KOTRA Talk) KOTRA has a cyber consultation room, tele- Introduction Human Oriented Management Responsible Organization Sustainable Trade & Investment Partner Sustainable Customer Oriented service Social Contribution Appendix Trade & Investment Partner

Substantive Development of Trade-Investment Business

Exploration of Future Markets for Sustainable Growth KOTRA intends to contribute to sustainable development as a “sustainable trade and investment partner.” Based on this endeavor, KOTRA plans to offer the highest value to customers and create more sustainable value for the future, society and environment. It will do its best as a sustainable partner to serve as a global business platform for the next 50 years.

Related Issues of Materiality

Reinforcement of Overseas Marketing Substantive Development of Trade for Strategic Industries Expansion of free trade agreements Investment Business Bolstering Foreign Investment (i.e.FTAs) Attraction and Management

Preemptive Occupation of New Market transfer to emerging Industrial Markets economies

Exploration of Future Markets for Support for Exploration of Emerging Globalization of markets, Sustainable Growth Markets competitiveness and supply networks

Support for Tapping Overseas Projects Increasing worldwide mutual and Capturing Orders connectivity 2011 KOTRA Sustainability Report 44

Introduction Human Oriented Management Reinforcement of Overseas Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Marketing for Strategic Industries Social Contribution Appendix To increase global market shares of domestic players in strategic industries, KOTRA has been making multi-pronged efforts: expansion of cooperation projects based on development of partnership with global companies; establishment of a basis for export and reinforcement of performance-creating major businesses; development and expansion of complex business models including an R&D-linked model; and enhanced marketing to deal with changes in world markets.

Improvement of Efficiency of Overseas Major examples include establishment of Marketing by Promoting Cooperation partnerships with global finished automobile Substantive with Global Companies companies and the hosting of Korea Autoparts As part of an effort to sharpen the global Plaza, an exhibition and consultation meeting Development competitive edge of domestic strategic industries focused solely on Korean vehicle components, that have driven Korea’s exports, including inside the facilities of those companies. In 2011, of Trade automobiles, ships, aircraft, machinery, electric KOTRA developed six global finished automobile power, textile and fashion and consumer goods, producers including Germany’s Benz and Investment KOTRA changed the targets of its cooperation France’s PSA Peugeot Citroёn as new partners. with global companies from individual buyers to KOTRA pursued cooperation projects with 12 Business entire companies or organizational units. such companies in total.

Pinpoint or Global Cooperation Model with Global Companies

Targeting individual buyers of global companies Targeting entire global companies or their organizational units

Individual buyers of Corporate Pinpoint ＞＞ global companies＞＞ overseas marketing ＞＞ organization of ＞＞ overseas marketing business global companies business ＞

Cooperation with global companies in specific areas Cooperation with the worldwide network of global companies

Global Company A Global Company A Global ＞＞ Global Company A ＞ Global Company A Global Company A

Supply Push Type ＞ Focused on supply to domestic Demand Put ＞ Focused on demand of global companies ＞ TypeType companies domestic companies Business Type ＞＞ Inbound Business Invitation to Korea to global Outbound Visit to global companies Type ＞ companies + Business ＞ Global Business Platform 45

Enhancement of the Effect of Overseas companies were provided with KRW 8.95 billion Marketing by Strengthening Major in the government’s global corporate marketing- Businesses linked R&D funds. To build an export base for each industrial sector and produce desired outcomes, KOTRA has Strengthened Support for Win-Win selected major businesses for each strategic Overseas Market Advance by Large industry, such as Global TransporTech (auto Companies and SMEs parts), Global PowerTech (electric power) and KOTRA made an effort to diversify overseas Global Mobile Vision 2011 Global Mobile Vision (mobile communication) and marketing support models for domestic SMEs, strengthened its function as a core marketplace. based on its programs to help them make inroads Particularly, KOTRA increased the number of into global markets in alignment with large such major businesses from 12 in 2010 to 18 in companies, and to promote their win-win growth. 2011. Concerning projects for which contracts For instance, establishment of a consortium were concluded, KOTRA sharply raised the level between LG CNS and medium and small-sized of follow-up goals, compared with the previous SW/HW suppliers and tripartite cooperation by year. It also introduced an expanded exhibition the government, private companies and KOTRA function to bolster its marketing contents. for two years translated into the obtainment of an Toyota-Korea Autoparts Plaza 2011 These efforts are aimed at improving domestic order in July of 2011 concerning a $300-million companies’ overseas marketing results. As a ITS project (transportation card and bus operation result, follow-up initiatives for major business system) in Bogota, Colombia. projects regarding which contracts are likely to be concluded increased to 1,111 in 2011 from Stepped-Up Overseas Marketing to Deal 845 in 2010, up 31.5 percent. On the basis of with Changes in Domestic and Overseas this, export by major business projects rose 55.4 Conditions percent from $740 million in 2010 to $1.15 KOTRA enhanced its preemptive marketing billion in 2011. initiative to cope with contingencies at home and abroad. Major examples include the Buy Establishment of a Basis for Export Korea export consultation meeting, the largest Expansion in Conjunction with Global ever in KOTRA history (January); consultation Value Chain meeting with buyers invited from alternative In response to global companies’ increasing markets (April); emergency consultation meeting open innovation, KOTRA seeks to upgrade its with distributors of Japanese consumer goods cooperation programs with global companies on the heels of a massive earthquake in Japan to global partnering projects, going beyond (April); and the Korea Autoparts Plaza with Toyota mere export. Global partnering enables global (August). companies and domestic SMEs to pursue KOTRA also sought marketing that targeted cooperation from the product research and advanced markets by taking advantage of FTAs development (R&D) stage by using R&D funds of with the EU and U.S. KOTRA set up 12 KBCs, the Korean government. KOTRA helps domestic centering on China and Africa, as well. By holding SMEs acquire groundbreaking technology and 50 exhibitions, KOTRA strengthened overseas Overall, KOTRA attracted 1,423 global capture opportunities for stable, large-scale marketing for emerging economies that are buyers and 3,041 prospective buyers in export from a long-term perspective. In 2011, rising as an axis of the global market. strategic industries in 2011. By providing 20 GP consultation meetings including GP domestic companies with consultation Chicago led to 106 joint R&D consultations opportunities, KOTRA drove the attainment with global companies as well as $3.85 billion of $500 billion in exports and $1 trillion in in export consultation. In addition, 12 domestic trade. 2011 KOTRA Sustainability Report 46

Introduction Human Oriented Management Bolstering Foreign Investment Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Attraction and Management Social Contribution Appendix KOTRA strengthens national industrial competitiveness through attracting foreign investment. At the same time, it leads the country’s sustainable growth and the revitalization of the local economy. by helping 2to create jobs.

To expand its role as a national investment promotion agency Substantive DRIVE ＞＞ to attain $15 billion in FDI ＞ Bolster the investment attraction fundamentals and Increase contribution to the national economy by Development research functions of KOTRA attracting investment of Trade which perform investment attraction activities support for the formulation of foreign investment Investment targeting emerging nations, from four in three policies and strategies by local governments and countries to seven in five countries. KOTRA free economic zone authorities. KOTRA expanded Business also recruited new professionals and set up its customized support for institutions related to an experience-based customized job education investment attraction according to institutional and constant-training system to heighten its characteristics, including on-site FDI education Attracting foreign investment as manpower’s investment attraction capabilities. (39 times including education at the Seoul national IPA Such effort bore fruit in 2011: investment drawn Metropolitan Government), investment attraction Improvement of Investment Attraction per person increased 7.2 percent from the PM education (twice a year) and assistance for Performance by Boosting KOTRA’s previous year to $13.4 million. overseas IR and TFT dispatch (41 times). Competency KOTRA reshuffled its organization in line with Lead Investment Attraction as National IPA Reinforcement of Promising Potential changes in the global business environment to KOTRA has expanded its leading role as a Investor and Project Management strengthen its investment attraction fundamentals. national investment promotion agency by driving In the face of dwindling overseas investment It also bolstered the investment attraction the country’s investor relations and helping by global companies amid continued global competency of its employees. institutions attracting foreign investment improve economic uncertainty, KOTRA redefined its First, KOTRA has newly involved itself in the their business performance. It overhauled the investment attraction strategy by means of the Foreign Investment Committee, the country’s English webpage of Invest KOREA (http://www. CAGE Distance Framework often used in making highest policy coordination and decision- investkorea.org), which gives information about overseas investments, and detailed the strategy by making body on foreign investment. Thus, FDI in Korea. This improved access to information region and industry. Thus, KOTRA consolidated its KOTRA incorporates realistic on-site opinions on and promoted convenience. KOTRA also appointed effort to discover and manage promising potential investment attraction into its investment policy. additional “investment ambassadors” targeting investors and projects. KOTRA also set up the FTA Investment Attraction overseas opinion leaders, increasing the areas of Support Center in May of 2011 to maximize the coverage from four countries including the U.S., Region-specific Foreign effect of FTAs concluded with economic giants UK, Japan and China to seven countries, adding Investment Attraction strategy including the U.S. and EU. With the increasing Germany, France and India. KOTRA increased its Amid expectations about increasing foreign presence of emerging nations including China, social service activities as well in cooperation investment as a result of FTAs with economic India and Russia in the foreign investment with foreign-invested companies including giants including the U.S. and EU, KOTRA stepped market, KOTRA set up a new capital attraction the Adopt-a-Road program, concentrating up its investment attraction activities with a team in February as an entity dedicated to on improving public sentiment about foreign focus on areas most benefiting from FTAs. In investment attraction from those countries. In investment. In addition, KOTRA operates the addition, KOTRA bolstered its efforts to meet addition, KOTRA increased the number of KBCs, Foreign Investment Policy Council to increase blue-chip Japanese companies’ demand to Global Business Platform 47

Formulation of Investment Attraction Strategy Using CAGE Distance Framework

CAGE Distance Framework Indications Direction of Strategy to Attract Investment

· Difference in language, race, religion, conventional · Need to concentrate on regions with cultural · Pursue investment attraction marketing by taking wisdom, etc. similarities including China advantage of Hallyu (Korean Wave). Culture (C) ＞ → Impact on cultural contents, food, etc. · Need to employ investment attraction strategies · Diversify sources of investment to emerging nations ＞ using cultural homogeneity including China and India

· Difference in currencies in circulation, tariff rates, · Need to promote high-level intellectual property · Heighten marketing by leveraging the effect of FTAs government policy, regulation, etc. right protection and R&D development strategy · Meet Japanese companies’ increasing demand for Administration (A)＞＞ → Impact on power generation, communication · Link to effects of the Korea-U.S./Korea-EU FTAs overseas advancement as a result of the strong yen and defense industries, etc. and massive earthquake in eastern Japan

· Difference in distance between nations, lack of SOC · Need to promote Korea’s geographic advantage as · Use the country’s importance as a distribution hub infrastructure and weather a hub in Northeast Asia and its globally leading IT in Northeast Asia in attracting investment Geography (G)＞＞ → Impact on logistics, state-of-the-art industries, infrastructure, etc. · Expand development projects targeting Chinese finance, etc. tourists

· Difference in the level of income, costs/quality of · Need to promote the high competitiveness of · Expand joint R&D efforts with global companies labor and financing, level of knowledge, etc. Korea’s manufacturing industry, highly skilled · Bolster investment attraction linked to world-class Economy (E)＞＞ → Impact on automobiles, high-priced items, IT, etc. workforce, outstanding R&D competency, etc. industries including automobile and semiconductor industries

move abroad in accordance with their changing these companies, KOTRA engaged in intensive 30.8% from the preceding year. overseas investment strategy due to the strong investment attraction activities. With respect yen, massive earthquake in the eastern part of to the key manufacturing industries, KOTRA Supporting and Managing Foreign Japan and a flood in Thailand. Thus, KOTRA enhanced its investment attraction activities in Investors registered $7.9 billion in investment attraction the component materials industry, which shows One-Stop Support for Foreign Investors from traditional economic powers including the deepening dependency on foreign imports and and Assistance for Their Early Settlement U.S., Japan and the EU (up 41.1% from the increasing trade deficit, as well as the aerospace KOTRA strengthened its one-stop support for previous year). In addition, KOTRA diversified the industry, which is a strategic industry for the next foreigners investing in Korea. It also boosted sources of its investment attraction to emerging generation. KOTRA’s investment attraction in foreign-invested companies’ creation of new nations by holding a China IR event (May), the these fields in 2011 amounted to $1.71 billion, jobs. Korea-Abu Dhabi Investment Cooperation Forum up 6.3% from the preceding year. KOTRA also To provide foreign investors with close assistance, (May) and IR events in Russia (June) and India improved its activities to lure investment in new KOTRA integrated its foreign investment support (November). growth engines for the sustainable development organizations into a single channel called the of the national economy. In addition, KOTRA General Investment Consultation Center. Thus, Targeted Investment Attraction expanded GAPS (Global Alliance Project Series) KOTRA offered comprehensive consulting in Alignment with National between global companies and domestic services by area (20,886 cases) ranging from Industrial Development Strategy enterprises encompassing joint R&D, technology administrative assistance including visa issuance IIn an effort to tap more blue-chip foreign transfer and investment cooperation. As a and tariffs to initial business consultation including companies in its focused areas of investment result, industries serving as new growth drivers legal and tax affairs and assistance for a stable attraction, KOTRA’s head office and overseas attracted $1.96 billion in investment in 2011, up life in Korea. KOTRA provided on-site consultation KBCs jointly conducted a survey to discover 1,000 target companies in 10 areas. This resulted in the discovery of the following To minimize trial and error arising from insufficient investment attraction target companies: 255 in key manufacturing DRIVE ＞＞ experience of local governments and FEZs industries, 345 in high-tech industries, 317 in ＞ the highly value-added service industry and 100 Help strengthen investment attraction Reinvigorate local economy through investment capabilities of local governments and FEZs attraction in the financial industry. Placing a priority on 2011 KOTRA Sustainability Report 48

Increase review of global companies’ overseas investment plans amid DRIVE ＞＞ persistent global economic uncertainties ＞ Strengthen investment execution services and Increase job creation by foreign-invested managerial/life support companies

services by visiting 32 companies in Korea and 21 companies, operates a hotline for 100 major On-site consultation services to attract foreign investment companies abroad. It also stepped up support and foreign-invested companies and the Foreign monitoring of corporate entities in Invest Korea Plaza, Investment Ombudsman’s twitter account (SNS), an incubating facility for foreign-invested companies. and designates specialists who handle the KOTRA also expanded its support for the early complaints of foreign-invested companies and settlement of foreign-invested companies in Korea, who are dubbed “home doctors” for their visits offering assistance related to business administration to those companies. and life in the country. Automatic immigration KOTRA offers one-on-one, tailored, on-site clearance service (June) and the issuance of services from home doctors concerning financial, business registration certificates (September) for tax, accounting and tax affairs (711 entities). It Receipt of the Efficient Partner Award from the EUCCK foreign investors are major examples of KOTRA’s also expanded its one-stop complaint handling effort to improve the convenience of foreign-invested support for foreign-invested companies ranging companies concerning their business activities. In line from discovery to resolution of their complaints. with a change in its labor environment as a result of This led to support for the resolution of 403 cases the permission of multiple labor unions (July), KOTRA (up 4.7% from the preceding year) including 13 provided active support for better labor-management institutional improvements and the resolution relations. By helping foreign-invested companies of 63 administrative affairs. This attests to the stabilize their business at the earliest possible time, cordial services of KOTRA offered by means KOTRA created 9,814 new jobs (up 159% from the of direct visits to investors. In addition, KOTRA previous year), contributing to lowering unemployment hosted employment expos for foreign-invested rates and reinvigorating the local economy. Thus, companies looking for high-quality human it received the Efficient Partner award from the resources. KOTRA also held presentations on European Union Chamber of Commerce in Korea. the employment of foreign-invested companies at regional colleges to provide a forum where Expansion of Investment by local blue-chip foreign-invested companies Foreign-Invested Companies Based on with low brand awareness could meet with Early Complaint Resolution competent local human resources. As a result, To build up its channels for constant and KOTRA scored 97 in a PCSI (Public Customer regular communication with foreign-invested Satisfaction Index) survey in 2011 regarding companies, KOTRA intensified its effort to the handling of complaints of foreign-invested discover and resolve their complaints in advance, companies (up 0.2 point from the previous year). inducing their additional investment. As part This enhanced investors’ satisfaction and the of such endeavors, KOTRA hosts meetings on expansion of their additional investment. the complaints and issues of foreign-invested Global Business Platform 49

Introduction Human Oriented Management Preemptive Occupation of Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service New Industrial Markets Social Contribution Appendix KOTRA consolidated its foundation to help players in domestic future industries including cultural content, franchise, green and medical/bio industries to secure a foothold in world markets. As part of this initiative, KOTRA formulated strategy for each industry’s advance into overseas markets and established a platform to provide necessary support.

Formulation of Strategy Enabling Future Industries to Make Inroads into Foreign Markets The knowledge service industry, green industry and medical and bio industry have emerged as an axis Exploration that will support the future of the world economy. Regarding these future industries, KOTRA selected targeted areas and strategic markets by considering the overseas economic environment, domestic of Future industrial environment, government policy and so forth. It also formulated three main strategies toward that end: expansion of the foundation for advancement into foreign markets, nurturing of major Markets for businesses and reinforcement of customized business.

Sustainable Platform and Council to Support the Green Industry’s Overseas Advance Expansion of Foundation for Nurturing of Major Reinforcement of Customized Growth Advancement into Industries Business · Formulate a strategic road- · Explore channels for export of · Korea’s first franchise advancing to overseas map concerning advancement cultural content. markets into overseas markets by → Korea Media & Content - Provide focused support for high-quality four major knowledge-based Market (KMCM) franchises for their advancement into foreign Knowledge service industries. · Develop Hallyu, or the markets to ensure early business stabilization Service - Initially establish a roadmap Korean Wave, for expanded and produce success stories ＞＞ for cultural contents and advancement into overseas · Strengthen effort to make inroads into foreign Industry e-learning with bright markets markets by using the effects of the Korea-EU FTA → prospects for overseas → Korea Brand & ROK-EU Cartoon Connection advancement, and expand Entertainment Expo (KBEE) → ROK-EU Cartoon Connection the roadmap to other fields

· Build a platform to provide mid- · Achieve dominance in growing · Support feasibility studies and consulting for green to long-term nationwide support global green markets companies to green companies as they → Green Hub Korea - Verify feasibility by providing financial support to make inroads into overseas promising green projects or businesses Green markets · Hold presentations and consultation meetings to Industry＞＞ - Install the Global Green disseminate information on the green industry and Cooperation Support Center help appropriate companies make inroads abroad and establish a comprehensive support system to help green companies advance into foreign markets

· Pursue substantive operation · Strengthen the effort of · Select and develop small and strong enterprises of the Overseas Marketing medical and bio companies in the medical industry into leaders of overseas Support Center for the Medi- founded on highly value- advancement Medical & cal Industry and the related added technology to make → Medi-Star Project Bio portal, Kobio.org. inroads into foreign markets · Lay the foundation for advancement into foreign ＞＞ - Boost support for advance-ment → Global Bio & Medical markets by package-type hospital and medical Industry into foreign markets by players Forum. service providers in the industry in alignment with - Pursue advancement into foreign markets 23 overseas medical support by packaging hospital construction, medical centers in New York, Moscow, equipment, systems, manpower, medical Shanghai, etc. technology training, etc. Green Hub Korea 2011

Heightened Support for Future Industries’ Advance to Foreign Markets KOTRA selected 14 countries including the U.S., China, Japan, Russia and Vietnam as targets of overseas advancement for four industrial sectors, i.e. cultural contents, e-learning, medical services and engineering, which are highly likely to make successful inroads into foreign markets and enjoy a high level of demand in Korea. To increase the competitiveness of those sectors, KOTRA also produced a strategic map for their advancement into overseas markets. Additionally, in 2012, KOTRA plans to choose four industrial sectors including design and franchise and formulate a strategy for their entry into foreign markets. KOTRA also established a platform to provide mid- to long-term nationwide support to green companies for their advancement into overseas markets as well as a comprehensive assistance system. Thus, KOTRA expanded the foundation for its support of domestic companies that face limitations on entry into foreign markets despite their prowess in green technology. In addition, KOTRA designated 23 KBCs as medical support centers while operating a portal specializing in the medical industry (Kobio.org) to disseminate overseas marketing information including bidding and market information. 2011 KOTRA Sustainability Report 50

Platform and Council to Support the Green Industry’s Overseas Advancement

KOTRA’s Platform to Support the Green Industry’s Overseas Advancement Organization of the Green Industry’s Overseas Advancement Support Council

(Domestic) Green Industry’s Overseas ·Head of the Technology Innovation Bureau of the Small & Medium Domestic Domestic Chairman Advancement Support Council associations Business Administration green and related Secretary ·Head of the KOTRA Green Business Team companies organizations ·(Institutions) Small & Medium Business Corporation, Korea International Trade Association, Korea Eximbank, Korea Trade Insurance Corporation, Korea Technology Finance Corporation, Large & Global Green Cooperation Small Business Cooperation Foundation, etc. Support Center Participating ·(Associations) Korea Photovoltaic Industry Association, Korea Wind institutions Energy Industry Association, Korea LED Association, Korea CCS (Overseas) Foreign order Overseas and Association, Korea Electric Vehicle Industry Association, Korea Smart Green order capturing support centers issuers and related companies Grid Association, etc. organizations buyers ·(Companies) Participation by domestic green companies including Woosin Solar Tech, Dass Tech, Seoul Semiconductor and Dongguk based on outstanding issues

Comprehensive Assistance System for Green Companies’ Entry into Foreign Markets

Module 1 Information search, discovery and Module 2 Overseas partner networking Module 3 Feasibility study and consulting support dissemination

· Foreign market/industry information · Discovery of order issuers/buyers · F/S fund provision Project and order · Promising project information · Prior demand/intention survey · Consulting fund provision ＞＞ capturing · Buying offers by promising buyers, etc. · Arrangement of one-on-one consultation · Local monitoring/support, etc. Hosting of presentations and forums Consultation meetings/missions/exhibitions Financial support

Nurturing Major Businesses to Expand Support for Entry into Foreign Markets For the last three to four years KOTRA has consistently fostered major businesses including the Korea Media & Content Market (cultural contents), Green Hub Korea (green industry) and Global Bio & Medical Forum (medical and bio industry). As of 2011, it engaged in a total of seven major businesses, stepping up its assistance for domestic companies’ advancement into foreign markets. Thus, project export by major businesses in future industries rose 27 percent from $94 million in 2010 to $120 million.

Closer Support for Entry into Overseas Markets Reflecting Industrial Characteristics Considering needs of the government, regional clusters and domestic companies as well as characteristics of domestic future industries which are at an initial phase of entry into foreign markets, KOTRA helps individual companies make practical achievements. KOTRA offers close customized support including assistance for opening first franchises abroad, feasibility studies and consulting regarding green companies’ projects to make inroads into overseas markets, the Medi-Star Project to provide comprehensive support for entry into foreign markets by the Korean medical industry, and support for advance to overseas markets by packaged hospital and medical services.

Overall, KOTRA attracted 504 global buyers and 949 prospective buyers in future industries in 2011 and offered consultation opportunities to domestic companies. As a result, KOTRA consolidated the basis for entry into overseas markets by “Korean industries of the future” that are at a rudimentary level, and continued this effort to produce practical results. Global Business Platform 51

Introduction Human Oriented Management Support for Exploration Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service of Emerging Markets Social Contribution Appendix In the wake of the global economic crisis, the hub of global economic growth shifted from advanced economies to emerging markets. Against this backdrop, KOTRA is expanding Korea’s economic territory by tapping new markets ahead of others.

Creation of 12 Overseas KBCs, Core of Infrastructure Services, in Emerging Markets Exploration To proactively lead the exploration of emerging markets, KOTRA set up KBCs in Africa, Asia and inland China. Opened in 2011 Vientiane, Douala, Iraq, Addis Ababa, Shenyang, Nanjing, Xiamen, Changsha, Zhengzhou, Hangzhou, Chongqing, of Future Saint Petersburg Markets for To be opened in 2012 8 KBCs in emerging economies including Qatar and Ecuador Expansion of Support Infrastructure with Focus on Emerging Economies Sustainable In 2011, KOTRA opened 12 new overseas KBCs with an emphasis on emerging economies. It also created 6 new overseas logistics support centers, paving the way for Korean companies’ entry into Growth emerging markets. The number of KOTRA’s KBCs in emerging economies increased from 65 in 2010 to 77 in 2011, accounting for 69 percent of all KBCs (111). In addition, KOTRA plans to open 8 additional KBCs in 2012.

Customized Overseas Marketing Reflecting Characteristics of Emerging Markets KOTRA engaged in customized overseas marketing by selecting promising emerging markets for each type of industry. As for the key manufacturing industries, KOTRA tapped markets in new industrial countries including Kenya, Chile and South Africa. In automobile production bases such as Brazil, Thailand and India, KOTRA explored automobile part markets. Focusing on IT/SW, KOTRA sought to develop markets in underdeveloped countries where demand for e-government services is expected.

Market Development Activities in 2011 for Each Major Emerging Market

· Power generation: Road shows in 9 countries in Southwest Asia, Africa and South America (consultation on $1.21 billion in export by 64 domestic companies) · Molds: Road shows in Thailand and India (consultation on $50 million in export by 10 domestic Key companies) and export consultation meetings for visiting buyers (consultation on $630 million in Manufacturing export by 101 domestic companies) Industries＞ ＞ · Machinery : Korea Machinery Fair export consultation meetings (consultation on $490 million in export by 120 domestic companies) · Shipbuilding : MarineTech China (consultation on $130 million in export by 24 domestic companies), Global MarineTech (consultation on $270 million in export by 108 domestic companies)

· Joint exhibitions and consultation meetings with GM in Thailand and Brazil (new; consultation on $150 million in export by 62 domestic companies) Auto Parts ＞＞ · Joint exhibitions and consultation meetings with Tata and Mahindra in India (new; consultation on $340 million in export by 19 domestic companies) · Road shows in four countries including South Africa, Turkey, Indonesia and China (consultation on $690 million in export by 32 domestic companies) · ITS·U-City road show by the Ministry of Land, Transport and Maritime Affairs (5 countries) and medical IT/SW IT road show by the Ministry of Education, Science and Technology (1 country) (consultation on $520 ＞＞ million in export by 37 domestic companies) · Support for IT master plan formulation by Mozambique and Kenya (consultation on $50 million in export by 9 domestic companies) Chongqing KBC opening event 2011 KOTRA Sustainability Report 52

Korean Expo in South Africa Support for 1,268 Domestic Companies in Emerging Markets Including Africa KOTRA took part in 41 specialized exhibitions held in emerging economies concerning machinery and Duration July 4 – 6, 2011 Place Johannesburg electric/electronic products. It provided consultation services to 914 domestic companies contributing Scale 5,050 s/m to $4.94 billion in export. In particular, KOTRA held 9 general exhibitions in Vietnam, South Africa, Number of Participant Companies 80 Cameroon and Panama, in which KOTRA reflected market significance and national policy needs, offering consultation services to 354 domestic companies for $460 million in export.

Pursuit of Marketing Based on Formulation of Strategy to Make Inroads into Chinese Market China is Korea’s largest trade partner. Primarily, Korea’s export to China takes the form of processing trade. It is worth noting that the market in inland China remains largely untapped. Amid expectations that the Chinese market will further grow in line with the country’s economic development, KOTRA seeks to provide full support for exploring the inland market and tapping project markets arising from infrastructure development. Based on a partnership with Alibaba, the largest Internet shopping company in China, in particular, Korean Expo 2011 in Africa KOTRA helped domestic companies make inroads into the Chinese distribution market.

Support for Domestic Companies’ Entry into Major Chinese Markets in 2011

· Opened a Korean section in a prominent B2C online shopping mall and supported corporate participation (Redbaby shopping mall) · Participated in a Korean production exhibition in Alibaba (China’s number one Internet shopping mall) onsumer (60 companies) Goods ＞＞ · Supported export consultation between 39 distributors visiting from inland China and 176 domestic companies · Dispatched personnel to Korean fashion road shows three times, focusing on cities selected as a venue two or three times (Participation by 40 companies)

· Held Global Partnership in China Shanghai 2011. Component - Consultation to find Chinese partners for domestic companies regarding R&D technology cooperation Materials ＞＞ (participation by 17 Korean companies and 23 Chinese global buyers; 26 R&D consultation cases; consultation on $200 million)

· Consultation meeting that invited prospective project order issues from inland China Projects ＞＞ - Participation by 30 local order issuers and 57 domestic companies; 142 consultation cases; consultation on $130 million

· Energy saving partnering road show (Wuhan, Beijing) Industrial - 10 companies including SKT and Jingsung Energy Tech; 102 consultation cases; consultation on Services ＞＞ $20 million Global Business Platform 53

Introduction Human Oriented Management Support for Tapping Overseas Responsible Organization Sustainable Trade & Investment Partner Customer Oriented service Projects and Capturing Orders Social Contribution Appendix Based on questionnaires targeting overseas project-related service users, KOTRA sets the direction of its support reflecting customer needs and formulates necessary strategies. Contributing to the entry of domestic companies into overseas project markets, KOTRA stands at the vanguard of the country’s effort to attain $2 trillion in trade.

Examples of Proactive Response to Market Opportunities Exploration Global Issues Major Projects Hosted Japan Green Partnering Consultation Meeting focused on electricity-saving Massive earthquake in Japan products by considering difficulties associated with power supply in the wake of a large-scale of Future earthquake Flood in Thailand Hosted Thailand Project Plaza Hosted the Urgent Market Presentation on the Middle East and North Africa and the Libya Markets for Democratization in Libya Project Consultation Meeting Sustainable Financial crisis in Europe Hosted the Greece Privatization Investment Forum for M&As of the country’s public enterprises

Growth Paradigm Shift Concerning Further Exploration of New Project Exploration Project Markets As a project organizer, KOTRA established KOTRA sought to alleviate domestic companies’ its authority to lead projects. Concerning its financing difficulties stemming from the overseas project business, KOTRA adopted a European financial crisis by drawing international paradigm shift from discovery to development. development banks with stable capital and a Receipt of a $4.8 million order concerning a high international credit standing. feasibility study project for a textile industrial For this purpose, KOTRA held five presentations complex in Central Java, a province of Indonesia, introducing possible financing business for in December 2011 was its first success as an international development banks. For the first overall project organizer. time, KOTRA dispatched its employees to In the future, the textile industrial complex the Inter-American Development Bank (IDB), will be developed and then construction of endeavoring to expand its partnership with the adjunct facilities including its access roads and IDB in Latin America. training centers will be pursued as an additional assistance program. This is expected to boost Substantive Development of Order Thailand Project Plaza Korean SMEs’ entry into the foreign market and Receipt Support Process by Industry promote the welfare of Indonesians. Substantive development of the order receipt support process, for which KOTRA renders Organization of KOTRA-Led Consortium support by industry type, enhanced customer

Consortium Project Exploration Project Review Project convenience and produced practical results. Organization - Ensure that 76 - Conduct a project eligibility Dissemination In particular, operation of a KOTRA-led SW - Operate 25 lead overseas KTS tap SW- review by an advisory - Deliver a project to consortium led to the obtainment of an order managers and related projects group comprising six a consortium highly 70 consortiums ＞ ＞ institutions including the ＞ likely to win an order for a $300 million Korean ITS (Intelligent comprising large Korea Software Industry and support its order Transportation System) project, the largest ever companies and SMEs Association and National capture in its history. KOTRA takes the initiative to help Information Society domestic companies capture orders for overseas Agency projects. Introduction Human Oriented Management Responsible Organization Sustainable Trade & Investment Partner Customer Customer Oriented Service Social Contribution Appendix Oriented Service

Strengthened Role of SME-Supporting Infrastructure

Customer Satisfaction Management Differentiated customer value is at the heart of the value created by an enterprise. KOTRA recognizes the creation of customer value as the core of its management task. To constantly provide services enhancing customer value, KOTRA is engaged in ongoing customer satisfaction management activities.

Major Issues of Materiality Increasing CSR requirements when advancing to foreign markets Support for Globalization Promotion of social responsibility within areas influenced by of SMEs companies (Support for SMEs’ competitiveness regarding Strengthened CSR, etc.) Role of SME-Supporting Support for Overseas Infrastructure Advancement by Domestic Compliance with domestic and foreign laws concerning Companies service liability (strengthening of certified brand Strengthening of Function management) as Global Market Information Center Strengthened Role of SME-Supporting Infrastructure Diversification and increase of customer needs Compliance with domestic and foreign laws concerning Customer Satisfaction Customer Satisfaction product/service liability Management Activities Increasing demand for customer information security Customer information protection and security 2011 KOTRA Sustainability Report 56

Introduction Human Oriented Management Support for Globalization of SMEs Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Social Contribution In support of SME globalization in this $1 trillion trade era, KOTRA bolsters national export Appendix industries and supports the growth of SMEs.

Bolstering the Head Office Organization Centering on SMEs KOTRA reshuffled the organization of its head office with a focus on SMEs. With the creation of the Strengthened Executive Vice President for SME Support position, KOTRA has sharply increased its support for SMEs.

Role of SME- Executive Vice President for SME Support

Supporting Export Business Corporate Competence Exhibition & Global Talent Infrastructure Start-Up Office Enhancement Office Convention Office Business Unit SME Cooperation Team Medium Company Exhibition Supervision Single Business Units Transaction Support Team Development Team Team (Online Marketing PM) (Medium Company PM) Overseas Exhibition Team Market Development Team Design Brand Team

In charge of fostering In charge of nurturing new small but strong Core marketing support Support for employment of export businesses companies of medium devices overseas talent by SMEs standing

* Under the Executive Vice President for SME Support, there are 46 trade employees, 6 professional service employees, 20 regular workers, 5 employees of the Small and Medium Business Administration, 30 professional advisors, 50 dispatched workers, etc.

Performance of Role as Overseas Infrastructure for SMEs KOTRA provides diverse infrastructure support services to SMEs lacking in overseas infrastructure. KOTRA invigorates SME advancement into foreign markets with varied assistance. Branch office services allow its 111 overseas KBCs to serve as branches for SMEs; 30 logistics support centers serve as overseas logistics centers for SMEs; and 20 business incubators support overseas office space creation and early business stabilization.

Preparatory Steps for Launch of Export Export Revitalization Beginning of Direct Entry into Export Foreign Markets

KOTRA-provided 1. Branch office services 2. Overseas logistics 3. Business incubators infrastructure services · Buyer development/ support centers · Provision of overseas bases management · Establishment of an on-time (offices) · Support for export delivery system · Support for direct entry into agreement conclusion · Curtailment of distribution overseas markets - Operation of 111 branch costs - Operation of 20 incubators in service providers in 76 - Operation of 30 centers in 11 countries countries 17 countries - Supporting a total of 267 - Supporting a total of - Supporting a total of 390 companies 2,074 companies companies Global Business Platform 57

Sophistication of Overseas Marketing Support by Using Infrastructure KOTRA has developed and provided new services combining branch office services and the professionalism of each of its industrial support teams. KOTRA has also continuously expanded support for domestic companies’ advancement to local distribution channels based on its logistics support centers. In addition, KOTRA stepped up its marketing activities to help companies in its business incubators make inroads into local markets. KOTRA enhances the efficiency of its overseas marketing support by combining its infrastructure service and overseas marketing business.

Support for Entry Into Overseas Distribution Network in Alignment with Logistics Support Centers

Expansion of support for entry into overseas distribution networks on the basis of overseas logistics support centers enabling stock sale

KOTRA logistics support KOTRA and local Local distributors: Products with centers: Networking distributors: Discovery of Verification of verified marketability: with a local distribution ＞ promising companies by ＞ marketability with pilot ＞ Commencement of stock network holding joint exhibitions orders for promising sale by using KOTRA’s promoting Korean products products logistics support centers Korean product promotion campaign in Qingdao

Toronto: IT Vendor Fair in Canada (Nov. 2 - 3, 2011) New York: Advance to the dual-track online distribution market (November) through QVC, a large-scale home shopping company in North America Changsha: Korea Premium Plaza (June) Qingdao: Korean product promotion campaign (October) Beijing: Eight Korean product promotion campaigns including the one at Jiayougo, a Chinese home shopping company (December)

Establishment of SME Support System by Competence On the basis of a capability analysis of SMEs, KOTRA supports SMEs in connection with overseas marketing education by stage of growth, overseas market surveys, brand competency and overseas talent recruitment to promote their global growth.

KOTRA’s SME Support System

Provision of differentiated support service based on competence analysis by portion in export/size of company Company Small and Company Business meeting Promising ＞ ＞New exporter ＞ ＞strong ＞ of medium start-up domestic exporter company standing demand

Export Business Start-up Logistics service Business Attraction of Consulting Center (linked SME opening office centers incubators global talent Infrastructure to related institutions)

Trade tart-up Branch office Guaranteed Trade mission consultation Exhibition OBM education service brand meeting

Business Prospective Overseas market lobal small and Buyer discovery Export support company to be World champ survey strong company clustered 2011 KOTRA Sustainability Report 58

Guarantee of Brands to Enhance Credibility of SMEs KOTRA guarantees SME brands so they may take advantage of KOTRA’s credibility and reliability abroad. Such effort is deemed to greatly help SMEs strengthen their brand power, discover new buyers and increase their price bargaining chip. In addition, KOTRA offers diverse marketing support to brand- guaranteed companies, endeavoring to make a practical contribution to export by SMEs.

Pursuit of Business by Market CSR activities of an overseas KBC Contribute to expansion of Hallyu, or the Korean Wave, and link marketing for the expansion of the export market with Hallyu

Classification Strategic Items for Market Entry · Support for major entry into each market · Held 14 consumer goods export consultation meetings and presentations by using the distribution network in emerging Hallyu products/ markets services · Support for overseas advancement by indigenous franchises (support for opening of the first out of 10 franchises) Consumer goods/food · Hallyu star licensing product exhibition in Osaka, Japan, etc. · 2011 Hallyu expo in Paris (Korea Brand & Entertainment Award ceremony for companies active in Vietnam with best EXPO) Promising Market CSR practices · 2011 special exhibition on Korean products at Harrods Department Store in London, UK · Korea Media & Content Market 2011 (Hallyu contents B2B export consultation meetings) Initial Market Hallyu contents · Korea-EU Cartoon Connection 2011 (consultation meetings for joint contents production)

Conferment of CSR Award to Domestic Companies Making Inroads Into Foreign Markets and Publicity for Their CSR Activities KOTRA helps Korean companies, which advanced to overseas markets, emerge as social enterprises. By holding CSR forums in each country, KOTRA ensures that companies that have entered foreign markets share best CSR practices suitable for each relevant nation. To render support for the creation of an environment where those companies establish win-win relations with foreign countries, KOTRA selects and confers awards to best CSR companies.

Korea-Indonesia CSR Forum (October 2011)

Theme : Understanding global CSR management and best practices, best CSR practices by Korean companies that entered the Indonesian market and legal procedures and tax affairs for CSR activities

Host : KOTRA’s KBC Jakarta, etc. Global Business Platform 59

Introduction Human Oriented Management Support for Overseas Advancement Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service by Domestic Companies Social Contribution Appendix By using various monitoring schemes and conducting an external environment analysis, KOTRA formulates detailed strategies for the advancement of domestic companies into overseas investment markets and derives tasks for implementation. Thus, KOTRA is establishing its position as a one-stop service provider.

Reinforcement of Support for Overseas Operation of Korea Investor Company Advancement Support Centers Strengthened Strengthening of Korea Investor Company Serial Number Country Location Support Centers: In an effort to help domestic 1 Beijing companies make inroads into overseas markets Role of SME- 2 Shanghai and successfully pursue business abroad, KOTRA 3 China Qingdao opened the first Korea investor company support Supporting 4 Guangzhou center at the Beijing KBC in 2004. As of the end 5 Dalian of December 2011, KOTRA had 13 such support 6 Ho Chi Minh Infrastructure Vietnam centers in 8 countries. In cooperation with the 7 Hanoi Ministry of Knowledge Economy, those centers 8 Indonesia Jakarta are supporting the stable settlement of Korean 9 Philippines Manila companies abroad by providing investment 10 Russia Moscow consultation free of charge, varied local 11 Cambodia Phnom Penh 12 India New Delhi information and support for local marketing and 13 Poland Warsaw sales channel development by the companies. In particular, 5 professional desks comprising 61 dedicated staff members and experts including lawyers and tax accountants remain in operation in the support center to grapple with difficulties confronted by domestic companies in settling down in foreign countries. In 2012, KOTRA plans to set up two Korea investor company support centers in Myanmar, an emerging market in Southeast Asia due to the lifting of sanctions by the U.S., and in Sao Paulo, Brazil, which suffers a lack of assistance although many domestic companies are active in the region. With these endeavors, KOTRA plans to support more companies. 2011 KOTRA Sustainability Report 60

Korea Investor Company Support Center

Risk Management IP Desk Labor Desk Tax Desk Legal Desk Desk

* Appropriate Agencies: Ministry of Justice, Korean Intellectual Property Office, National Tax Service

Overseas investment seminar

Substantive Development of Overseas Advancement Support Process By improving its overseas advancement support process, which is classified into a total of five stages, KOTRA considerably enhanced customer convenience regarding their entry into foreign markets.

Basic Survey and Investment Consultation : Considering the growing demand for overseas investment information due to the recovery of investor sentiments and use of smartphones by most economically active populations, KOTRA expanded the dissemination of overseas investment information Overseas investment consultation using SNS. In addition, it carried out 3,349 investment consultations, up more than 49.4% from the previous year. Thanks to such bolstered investment consulting, KOTRA is acknowledged as an overseas investment information producer most favored by customers.

Local Survey and Incorporation : In the past, companies had to conduct independent surveys and reviews concerning multiple location candidates for investment. This required KOTRA to involve itself in numerous projects supporting entry into foreign markets. Against this backdrop, KOTRA established a process in which a customer selects a specific country of interest and KOTRA offers comprehensive assistance.

Management Stabilization : For the purpose of stable initial settlement of Korean companies advancing abroad, KOTRA engaged in advisory activities ranging from local marketing to labor, tax and legal consultation. In particular, KOTRA supported recruitment by SMEs that lacked experience in doing business abroad, tackling the social issue of unemployment.

Provision of Support for More Industries Making Inroads Overseas Support for the Service Industry by Using Hallyu: On the strength of global interest in K-pop, KOTRA broadened the scope of its support from the manufacturing industry to the service industry. It strove to develop ‘cultural Hallyu’ into ‘business Hallyu.’

Process to Support Establishment of Overseas Subsidiaries

KOTRA Customer KOTRA Customer Customer Support for Request for support Feasibility analysis Review of areas Investment decision- overseas subsidiary ＞＞ for overseas subsidiary＞ ＞ concerning overseas＞ ＞ ＞＞ suitable for investment making establishment establishment investment Global Business Platform 61

Introduction Human Oriented Management Strengthening of Function as Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Global Market Information Center Social Contribution Appendix Based on customer value, KOTRA operates an information agenda selection system to collect and analyze trade and investment information reflecting customer needs to the fullest extent. This is part of its effort to expand solutions for the overseas advancement of companies by setting the direction of its annual information investigation and providing information analyzed on the basis of professionalism.

Bolstering of Function as Global Market Center In addition, KOTRA generates timely, in-depth information on the status of foreign markets especially concerning future growth drivers. Based on market importance and value, KOTRA breaks down markets Strengthened into which domestic companies make inroads. It also collects differentiated information on each market Role of SME- and puts forward a method for the efficient entry of domestic companies into such markets. Supporting Infrastructure Stepped-up effort to collect and analyze customer-oriented trade and investment information Operate a two-stage scheme to select information agendas through customer needs analysis

· Set the basic direction of information agenda through customer surveys and market trend analyses. · Conduct surveys on customer satisfaction and information agenda by using the webpage, Global Window

Determine the basic direction of information agenda selection Stage 1

Preemptively respond to outstanding issues in Conduct information investigation directly linked to overseas markets business to secure a foothold in promising markets.

Generate and provide information that serves as a Select a theme beneficial to export and overseas basis for overseas advancement advancement

Prepare and finalize information agenda by reflecting the opinions of internal and external experts

Monitor current issues in overseas markets Ascertain environmental and import regulations

Stage 2 Cope with changes in foreign market trends Tap emerging and promising markets

Expand entry into overseas market concerning new Enhance the level of leveraging FTAs growth engines

Investment and development projects Others 2011 KOTRA Sustainability Report 62

Collection of Industrial Information Focused on Future Growth Drivers With respect to the green industry drawing keen attention, KOTRA collects the latest information on major outstanding issues of countries around the world. It also publishes a general quarterly magazine called Green Report to help domestic green companies enter foreign markets. In addition, Global Window, a trade information portal run by KOTRA (http://www.globalwindow.org), has a separate section titled ‘industrial information on new growth drivers’ through which KOTRA generates more information on overseas markets by area and publishes in-depth strategy reports.

Video market information briefing (GW Cast) Number of Information Pieces on Future Growth Industries (Number of pieces)

Industry 2009 2010 2011 Green Industry 32 703 712 New Growth Engines 1 591 682

Generation of Differentiated Information for Each Market Based on Market Value KOTRA categorizes major overseas markets according to the status of entry by domestic companies and strategic value of markets. For each market category, KOTRA presents market characteristics and market entry strategies. KOTRA Business Guide As for China, KOTRA has analyzed the status of its domestic market, untapped inland market and seven strategic industries. With respect to emerging markets including the Middle East, Africa and Russia, KOTRA has reinforced the collection of information on current issues including democratization movements. With respect to strategic Asian markets including Japan, India and Myanmar, KOTRA provides information on competition in line with changes in the global market environment, focusing on information directly related to business in particular. In addition, KOTRA consistently pushes for business and information exchange with foreign trade promotion agencies including Japan’s JETRO and Taiwan’s TAITRA in pursuit of mutual cooperation between major industries and the sharing of various business experience.

Provision of Total Overseas Advancement Solutions Based on High-Quality Analyzed Information KOTRA offers consulting services satisfying increasingly specialized customer service needs. Major examples are the KOTRA Consulting & Marketing Solution, which represents customized consulting service for SME entry into foreign markets, and the KOTRA Consulting & Research Service, which provides overseas market strategy surveys to analyze the industrial status of major nations. Recently, KOTRA has expanded the scope of its service to packaged total service combining consulting, marketing and road shows.

Consulting on overseas market advance strategy Marketing consulting Road show · Analyze the characteristics of · Provide one-on-one · Overseas road shows a target market ＞＞ overseas marketing ＞＞ (along with presentations · Discover prospective buyers assistance based on and consultation meetings) · Formulate marketing consulting strategy Global Business Platform 63

Efficiency of Trade/Investment Information Dissemination and Management System By expanding customer-friendly information dissemination channels, KOTRA pursues timely information dissemination on global issues. With an efficient information management and feedback system, KOTRA seeks to enhance the quality of information.

Information Dissemination and Management System

Alignment with a mid-to long-term ISP (Information Strategy Plan)

Government Prior On-site response Follow-up support Company/ Agency ＞ ＞ monitoring ＞ to urgent issues ＞ after a crisis ＞＞ Customer

Existing dissemination media + multimedia/mobile media

Improvement of information quality by upgrading an assessment and management system iness Africa, an information center on Africa

Operation of Global Issue Monitoring and Crisis Response System KOTRA annually holds presentations and business forums on global market entry strategies to present regional market prospects. KOTRA also issues early warnings concerning export conditions by publishing a KOTRA-SERI leading export indicator on a quarterly basis, and makes export forecasts on a semi-annual basis by area and major item of export, putting forward an effective response that companies may adopt. In the event of any urgent global issue, the KBC operates a channel for timely information dissemination based on close contingency coordination and cooperation between the head office and overseas KBCs.

Diversification of Contents and Increase in Customer Accessibility KOTRA has been proactively coping with recent changes in demand for multimedia information. It produced video business guides targeting emerging or remote markets including Myanmar and Ghana and uploaded them on Global Window (http://www.globalwindow.org). GW Cast in the form of podcast on Global Window uses professional anchors and interviews with experts by area to enhance content reliability. In December of 2010, KOTRA launched its mobile Global Window services, allowing customers to access information on overseas markets and various reports issued by KOTRA at home and abroad.

Provision of Integrated Market Information on Africa In order to increase information on Africa, an untapped market, KOTRA built Business Africa, an information center on the continent, in Global Window. Business Africa enables visitors to comprehensively search for information on 25 countries in Africa including country information, overseas market information and export inquiries. With the organization of the Africa Business Forum Committee comprising professionals who have experience working in Africa, KOTRA supplements its insufficient database on entry into African markets and proactively shares on-site information. 2011 KOTRA Sustainability Report 64

Introduction Human Oriented Management Customer Satisfaction Activities Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Social Contribution KOTRA pursues sustainable growth and contributes to national economic development by Appendix providing world-class trade and investment services. As part of such efforts, KOTRA places top priority on customer satisfaction.

Customer satisfaction strategy Under its vision of providing customer satisfaction to become a global success partner for customers, Customer KOTRA pursues companywide customer satisfaction management by determining appropriate strategy and action plans. Satisfaction KOTRA seeks to achieve the core values of customers, i.e. success, trust, convenience and contribution, Management by designating and implementing major tasks for customer satisfaction. Vision To be a global success partner for customers

Strategic Upgrade CS system and Support customers’ value Bolster customer-oriented Upgrade customer Direction competences creation activities relationship management

· Systemize the CS · Improve service capabilities · Step up customized · Strengthen two-way Strategic organization concerning new growth engines services according to communication with Task · Pursue development of CS · Develop VOC into management customer needs customers competency assets · Upgrade service quality · Strengthen CSR activities

· Strengthen the role of · Maximize utilization of VOC · Build and operate a · Systemize quality control of the CS organization as a in KOTRA management customer complaint customer contact service Major control tower · Expand projects concerning resolution system · Share created value and Performance · Make CS education promising future industries · Establish quality standards promote repayment to mandatory and emerging markets and upgrade quality control society

Realization of Customers’ Core Value

Success ＞＞ Trust ＞＞ Convenience ＞ ＞ Contribution

Effort for Customer Satisfaction Customer-Oriented CS System Improvement KOTRA upgraded its CS organization into a management control tower to build a customer-centered management base and provide high-quality services. Thus, KOTRA created the Customer & Strategic Policy Department, directly subordinate to the president, laying the foundation for companywide dissemination of CS management policy. To improve its CS management system, KOTRA built the Smart CRM (Customer Relationship Management) system, which performs integrated management of customer information, project participation history, VOC, etc.

Service Standardization In 1999, KOTRA formulated the Customer Service Charter to materialize customer-oriented management and provide high-quality public services. In an effort to manage the level of service implementation and take actions to improve, KOTRA has been undergoing annual ISO9001 reviews since 2007 and incorporating the results into its service improvement. In addition, KOTRA has in place customer officers to listen to customers on-site and reflect their opinions in its management. Customer officers visit corporate customers in person and convene the Service Advisory Council as part of their multi-pronged Global Business Platform 65

effort to listen to customers. In 2011, 613 customer opinions were reflected in customer satisfaction Bolstering of Operation of Customer management. Contact Organization

Voice of Customers (VOC) Service Advisory Council Going beyond listening to the voices of its customers, KOTRA systematically manages and analyzes customer Regions where the 13 regions around the nation opinions to develop them into management assets. KOTRA collects customer opinions by means of Smart meetings were held including Seoul CRM and classifies them by type. Then, a department in charge is designated automatically, enabling real- Number of particip- 558 time replies to customers. Customer needs collected through various channels are fully used in formulating ating companies business strategies, improving business processes and developing new businesses. · Collection of opinions on improvement of KOTRA’s services

Customer Information Protection · PR on KOTRA’s major business KOTRA has been exerting its utmost effort for customer information protection. With the effectuation of Major details plans and their utilization methods the Personal Information Protection Act on September 30, 2011, KOTRA formulated the KOTRA Internal · Identification of customers’ Management Plan to protect customers’ personal information, with its vice president as the officer in charge. difficulties and KOTRA’s business This clarified the responsibilities and authority to prevent customer information leaks. To enhance employee needs awareness of the importance of customer information protection, KOTRA regularly conducts education on personal information protection.

VOC Customers (External + Internal) Raised Online Off-Line · Homepage – Digital KOTRA · Visits to customers – Management and employees · Various websites operated by KOTRA · Meetings of customers and the Service Advisory · Online questionnaire – KCSI, questionnaire Council VOC · Customer suggestions – Proposal event · Voluntary visits by customers – Export Support Center Collection · Customer satisfaction survey – Ministry of Strategy and Finance

entification of the details and cause of VOC On-site or off-site handling Feedback

VOC Non-performance Impossible to conduct online Customer Inevitable occurrence On-site handling Classification of standards handling report and Handling system Request for compliance Identification of cause Handling by the with standards department concerned

VOC integration – CRM system VOC Analysis

Code analysis Ratio analysis Detail analysis

Determination of improvement opportunities

Utilization of management resources

· Service process improvement · Report to management · Business strategy VOC · New business development · Improvement of law and modification Utilization institutions · Organizational reshuffle and Sharing Sharing

· Dissemination inside KOTRA · Announcement of service changes to customers Introduction Human Oriented Management Responsible Organization Sustainable Trade & Investment Partner Social Customer Oriented Service Social Contribution Appendix Contribution

Community Involvement and Development With a deep awareness of its social responsibility, KOTRA has organized many social contribution activities for local communities in which we operate. We are supporting education, multiculturalism, disaster relief and more to thrive together with local communities. KOTRA pledges to further expand the areas of its contributory activities as a member of global communities.

Relevant significant issues Global social contribution Involvement in community development (global social contributions) Community activities Stakeholders’ involvement and opinion reflection involvement and Understanding social responsibility development Win-Win growth involvement in establishing public policies, increasing demand for fair trade 2011 KOTRA Sustainability Report 68

Introduction Human Oriented Management Global Social Contribution Activities Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Social Contribution Under the slogan “Korea in the World, the World in Korea”, KOTRA has demonstrated a long- Appendix standing commitment to serving our communities around the world. With 111 overseas branches in 76 countries, we have been and will continue to be a responsible corporate citizen by being involved in social contribution activities such as disaster relief, supporting the poor in countries where we operate and cleaning-up the environment. KOTRA’s social contribution activities can be divided into three areas: global sharing activity, knowledge sharing activity and community sharing activity.

Areas of social contribution activities and significant activities Community Involvement Lead differentiated social contribution activities with a strong global network and Practices Charitable knowledge Local community charitable Globally charitable Development contributions activities activities · CSR support for Korean investment · Pro bono educational activity that companies, including hosting an · Welfare supporting activities for the uses foreign human resources informative forum underprivileged such as poor, single · Pro bono educational activity for · Overseas contribution activities such parent families foreigners and overseas Koreans that as international relief, support for · Supporting multicultural families, support overseas Korean language Korean society and support for the joint volunteer activities with foreign institutes underprivileged in countries in which investment KOTRA resides

Charitable Knowledge Contributions Left Hands learning place We tap into a pool of ideas, talent and energy mostly through Left Hands, our global employee engagement and volunteerism program, to provide foreign language education to the underprivileged both at home and abroad. The employees of KOTRA teaches foreign languages- English, Chinese, Spanish, Japanese and French- to the students from low income families, in partnership with the 1318 happy zone, a children’s center in Gyeonggi Province. The language institute, which began in 2009, has become a small community that grows with the children by providing long-term mentoring/coaching and after-school outside activities as well as foreign language classes.

Pro bono educational activities for locals and Koreans abroad We are endeavoring to bring the world closer to Korea. KOTRA offers Korean language classes for both overseas Koreans and locals who want to learn Korean and helps them understand Korean culture. KOTRA also donates Korean books to and funds the Korean language institute (the King Sejong Institute). In Toronto, KOTRA supported a Korean culture festival in which a Tae Kwon Do demonstration was given for buyers interested in Korean culture. In Johannesburg, KOTRA has supported a local farmers musical band. Also, KOTRA is making an effort to nurture future overseas Korean traders by supporting a regular trade school with the Overseas Korean Trade Association (OKTA), in which KOTRA gives lectures and delivers

Support for King Sejong Institute in Nairobi onsite trade knowledge. Global Business Platform 69

Local Community Charitable Activities Volunteer activities and support to fund the underprivileged KOTRA has participated in regular funding activities including the following: support for a meal program called “Food Dishes of Love,” setting up a relationship with “Save the Children” and sponsoring poor children, giving science journals to elementary school children in farming areas and participating in the annual Red Cross bazaar. In addition, KOTRA is trying to build a good-deed doing corporate culture by eliciting involvement in expanding our donation culture. This allows for the provision of Knowledge Mileage after volunteering and donating to other institutes and having that mileage reflected in their compensation system. We have encouraged the employees to participate in volunteer projects Joint social contribution activity with a foreign-investment company including helping an agricultural village by signing an agreement with one village, joint activities by labor and management to clean up Mt. Cheonggye and Yangjae Stream near the main office, preparing Kimchi, delivering briquettes, serving rice in bowls and joint social contribution activities with foreign investment companies to reduce antagonism toward foreign capitals. To best fulfill its social responsibilities, KOTRA offers social companies and social charity organizations an opportunity, without cost, to participate in the Seoul International Food Industry Fair, the largest exhibition in the nation. All proceeds from the admission fees of attendees are donated to the Food Bank and Save the Children to give free meals to poor children and the elderly. Briquette Delivery Support for multicultural families both at home and abroad We have been active in many social contribution activities for multicultural families both at home and abroad, which helps the nation’s efforts solve the issues of multicultural families. By signing a charity agreement with foreigner centers of welfare institutes, in local communities, KOTRA is helping multicultural people settle into Korea through a mentoring system of KOTRA employees who have lived in China and other Southeast Asian countries composed of multicultural families. Also, KOTRA has established active support policies to provide children with job opportunities by operating a manpower pool for the children of multicultural families. Using its overseas network, KOTRA has organized many support activities for Korean societies globally including Korean residents in Japan, Koreans who were conscripted to Sakhalin and Korean overseas adoptees. For example, KOTRA has provided intercultural Korean families and conscripted overseas Koreans with opportunities to experience Korean culture by offering them chances to make Kimchi and taste traditional Korean food. KOTRA also supports the activities of the International Korean Adoptee Associations in Northern European countries such as the Netherlands and Sweden, where many Korean adoptees live. 2011 KOTRA Sustainability Report 70

Visiting and supporting an orphanage in Mumbai Supporting Novosibirsk Children’s Hospital (tuberculosis patients)

Globally Charitable Activities Supporting Korean companies’ CSR The Vietnam CSR Grand We have actively organized various activities such as forums disseminating Prize Awards information about good CSR cases and established many awards to bolster By presenting awards to the the CSR capabilities of Korean foreign investment companies. Particularly, excellent CSR Korean companies KOTRA has periodically held award ceremonies and hosted forums focusing in Vietnam, KOTRA has not only on newly emerging markets, including CSR seminars for Korean companies disseminated Korean companies’ in Hong Kong and the Korea-Indonesia CSR forum to promote excellent CSR CSR activities in Vietnam, but cases. KOTRA also supports Korean companies’ CSR activities in the regions also suggested a milestone according to which Korean companies can set of China and South Eastern countries where many Korean companies are up CSR strategic plans. These activities were positively reported by the local doing business. media, which showed a great interest in social contribution activities by The Vice President’s Office of Global Business Information has published Korean companies in Vietnam. books about CSR and a fair society such as “Practicing Cases of Global Fair Society” and “Ten CSR Lessons for Korean Companies to be Loved by Consumers in China.” They distributed these to Korean companies and related institutes. In this way, KOTRA has faithfully served as a global CSR center.

Community services abroad KOTRA has turned itself into a member of local communities by organizing a wide range of social contribution activities ones that are relevant to local needs. This includes donating money to support communities, giving goods, giving relief money for the victims of earthquakes in Turkey and Japan, visiting community centers and supporting the underprivileged, participating in clean-up activities and participating in local NGO activities. All of this has been made possible by voluntary participation through KOTRA’s global network. Global Business Platform 71

Introduction Human Oriented Management Win-Win Growth Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Social Contribution KOTRA designated the “fulfillment of social responsibility by public institutions through strategic global Appendix business performance” as an annual goal. Under this goal, it has fulfilled its social responsibility as a public sector organization and support the government’s on SMEs policy. KOTRA took advantage of its unique functions to contribute to the creation of more jobs for civilians and gave full consideration to the socially underprivileged in line with the government’s initiative for a fair society. With the establishment of a KOTRA- style win-win growth model, it rendered active support for concurrent entry into foreign markets by large companies and SMEs.

Establishment of Infrastructure Seoul Metro, Korea Land and Housing for Win-Win Growth Corporation, and the Korea Railroad Corporation. Community In July of 2011, KOTRA set up the Win-Win KOTRA summons the Council four times a year. Overseas Market Entry Support Center led by In its plenary sessions, participants shared involvement the head of the Foreign Marketing Division. Thus, information on the status of their overseas KOTRA has formulated strategies and business business and associated difficulties while holding and plans for concurrent entry into overseas markets coordination meetings by area (transportation by large companies and SMEs and operated and logistics infrastructure, MDB projects and development forums and subcommittees, building a scheme resources development) to explore specific ways to pursue effective win-win growth. to reinvigorate entry into foreign markets. In July of 2011, a forum for such concurrent In addition, working-level staff members of market entry was launched in the presence of the Council were subject to tailored education 30 large companies, 70 SMEs and 10 concerned (concerning financing and business feasibility) institutions. KOTRA has sought to create a win- for competence enhancement. win culture for large companies and SMEs by promoting the government’s strategy for their Support for Bolstering Global concurrent overseas market entry and promoting Competency of SMEs Partnering with the sharing of best practices. Such efforts by KOTRA KOTRA bore fruit, including the conclusion of an KOTRA offered differentiated support for SMEs MOU between Lotte Mart and its suppliers on by stage of growth, grouping them according to concurrent advancement into foreign markets. export volume and revenue. For new entrants KOTRA organized the Council on Overseas in export markets, the KOTRA Global Academy, Advancement of Public Enterprises for an in-house educational institution, conducted information exchange and business cooperation education on foreign market entry (education by and among 40 public enterprises aspiring hours increased from 547 in 2010 to 1,393 to make inroads into foreign markets including in 2011), supporting competence development

Event Participants Major Details Public institutions’ report on overseas investment trends Plenary session (April 6, 2011) 23 agencies including the Korea Coal Corporation Review of the status of overseas business and difficulties of each public enterprise Introduction to major overseas railway network Transportation and logistics 7 agencies including the Korea Land and Housing projects infrastructure Corporation, Korea Rural Community Corporation and Sharing of information on overseas projects of each (May 27, 2011) Korea District Heating Corporation public enterprise Korea Railroad Corporation, Korea Land and Housing Corporation, Korea Cadastral Corporation, Korea District Status of MDB project order obtainment by public MDB projects (Aug. 3, 2011) Heating Corporation, Korea Airports Corporation, enterprises Korea Hydro and Nuclear Power and Korea Southern Direction of KOTRA’s support for MDB order capture Power Exploration of the possibility of railway/transportation Overseas partnership projects Korea Railroad Corporation and Korea Resources system development in alignment with overseas (Oct. 7, 2011) Corporation resources development 2011 KOTRA Sustainability Report 72

KOTRA-Style Win-Win Growth Global Outsourcing Support for Large Companies and SMEs Seek to increase export by cashing in on the trend of increasing outsourcing by global Definition companies and consequently entering into their supply chains.

Bio industry (Global Bio & Medical Forum), electric power generation (Global & Power Tech), nuclear industry (nuclear road show in North America) Performance Expansion of business territories to auto parts (Global Autoparts Plaza), IT and overseas distribution networks in 2011

Major Outcome in Recording of $1.05 million in sales of over 20 Korean products by concluding an MOU with a Chinese home 2011 shopping company and conducting a special promotion campaign for about two months

Global Cooperation

Pursue global market entry in various forms by expanding cooperation with global companies to all stages of a Definition value chain

Engaged in global partnering; GP Europe (strategic partnership with a German global company in wind power Performance generation), GP USA (exploration of cooperation models with global companies in Chicago/Silicon Valley), GP China (reinforcement of cooperation with the Chinese LCD industry at all stages of the value chain)

Major Outcome in Caterpillar seeking to discover 30 domestic component makers by 2015 based on financing of KRW 600 billion 2011 from 2012

Strategic Investment Attraction

Attract strategic investment to increase SME competitiveness in terms of business administration, financing, Definition overseas marketing and R&D, expanding domestic markets and supporting entry into a third-country market

Pursuit of the Global Alliance Program Series (GAPS) project; participation by five global companies (BASF, P&G, Performance etc.) in GAPS Major Outcome in Advance to domestic and foreign markets through joint R&D efforts based on $14 million investment in 2011 Qualcomm and Pulsus; $35 million fund creation through Solvay and GAPS for investment in venture businesses

Concurrent Overseas Advance

Advance into foreign markets concurrently by using the brand power and marketing know-how of domestic large Definition enterprises and the network of KOTRA

Support for concurrent overseas market advancement by large companies and their suppliers in various fields including electric appliances (Global Electric PowerTech), logistics (Lotte Mart’s SME expo, conclusion of 18 Performance MOUs between GS Shop/suppliers and HomeShop, the largest home shopping company in India, and hosting of consultation meetings), automobiles, and information and telecommunication technology

Major Outcome in Symphony’s delivery of $1.86 million in goods to Italy 2011

Project Order Obtainment

Support large-scale project order obtainment including IT and industrial plants by organizing a consortium of large Definition companies and SMEs.

Advance to the European smart grid market including the UK and Finland (17 enterprises including KEPCO, Korea East-West Power and Sejin Electronic); win-win cooperation among Samsung Electronics, SME and Applied Performance Materials, a U.S. company; SMEs producing component materials scheduled to supply KRW 400 billion in parts by 2015

Major Outcome in Obtainment of a $300 million order regarding an ITS project of Bogota, Colombia (transportation card and bus 2011 operation system); pursuit of joint business with LG-CNS (HW and equipment) and SMEs (SW)

Cooperation with Foreign-Invested Companies

Make inroads into global markets by taking advantage of technical prowess and marketing capabilities of foreign- Definition invested companies and their relationship with global companies as their parent companies Entry into the Japanese OEM market through JATCO (a Nissan affiliate producing components); advance to Performance distribution markets by domestic companies through Samsung-TESCO (Homeplus) Major Outcome in 2011: Sale of 89 types of products in the amount of 25,092 British pounds by carrying out Major Outcome in Support for win-win overseas market advancement by large sale and sample-tasting events of Korean processed food at TESCO stores in July as a follow-up measure to the 2011 companies and SMEs TESCO MOU conclusion Global Business Platform 73

of SMEs’ human resources. Concerning companies whose exported sales are relatively small in comparison with revenues, KOTRA provided branch office services under which its overseas KBCs act as foreign branches of those SMEs. As for companies whose revenues are small in light of export sales, KOTRA used business incubators and IT support centers that served as overseas bases of the appropriate SMEs and helped strengthen their export infrastructure. With respect to export-leading companies with insufficient brand power, KOTRA engaged in activities to guarantee their brands by using its own strong brand power in overseas markets. KOTRA’s export support in the form of brand guarantee increased 16 percent from $6.56 million in Global PowerTech 2010 to $7.61 million in 2011. In a survey of corporate participants in such assistance programs, the contribution level by brand guarantee was put at 15.78%. This proved KOTRA’s efforts substantially contributed to enhancing the preference for and reliability of brand-guaranteed companies.

Support for Overseas Sales Channel Development by SMEs KOTRA provides SMEs with six-phased sales channel development services in overseas markets: (i) conducting overseas market research on behalf of SMEs and discovering potential markets and buyers to enhance the quality of information of SMEs; (ii) holding export consultation sessions and arranging meetings between SMEs and visiting buyers; (iii) supporting overseas business trips by SME staff so they may directly visit foreign markets; (iv) dispatching trade missions abroad to arrange consultation Global Bio & Medical Forum with buyers; (v) ensuring full-scale SME foreign market entry by arranging their participation in overseas exhibitions; and (vi) providing branch office services to SMEs. By accelerating their advancement into overseas markets as described above, KOTRA maximizes the effect of their concurrent foreign market Number of Assisted (Number of companies) entry with large enterprises. Companies and Related Performance

Description Performance in 2011 Expansion of Purchasing of SMEs’ Products Research on behalf of 2,360 Construction orders issued by KOTRA are largely related to equipment construction works for domestic companies and overseas exhibitions and consultation meetings. In most cases, such construction works are Export consultation meetings 7,481 performed on a small scale over a short period of time prior to and after the corresponding events. Sales trips 271 SMEs find it easy to participate in the order capturing process. In its invitation for bidding, KOTRA Trade missions 1,732 limits qualified bidders to SMEs and direct producers. Based on administrative simplification concerning Overseas exhibitions 1,918 documents, etc., KOTRA attained a 100-percent SME bidding rate for its construction works. There Branch office services 1,996 was also an improvement in its contract conclusion (62 contracts in the amount of KRW 8.35 billion in Amount of export contract conclusion subject to $1.3 billion 2010 and 71 contracts in the amount of KRW 14.9 billion in 2011). To lessen the financial burden on consultation SMEs, KOTRA fully complied with their requests to make advance payments. Besides, KOTRA set forth an advance payment rate in its payment conditions. These efforts pushed up its advance payment from KRW 760 million in 2010 to KRW 1.84 billion in 2011. In addition, KOTRA made only cash payments in purchasing SME products. KOTRA made such payments immediately after delivery inspection, contributing to the financial stabilization of SMEs. We are committed to complying with the govern-ment policy on purchasing and contracts. KOTRA reflected, in departmental performance evalu-ations, the purchasing of products from SMEs, social enterprises, women’s businesses and veterans’ villages as well as environment-friendly products. KOTRA has steadily increased such purchases. Furthermore, it boosted traditional markets by forging a sisterhood relationship with a nearby traditional market (Dolgorae Market) and increasing the use of Onnuri gift certificates. Introduction Human Oriented Management Responsible Organization Sustainable Trade & Investment Partner appendix Customer Oriented Service Social Contribution Appendix

Third Party Independent Assurance Report

ISO 26000 Compliance Assessment Report

GRI Index & ISO 26000, UNGC

2011 KOTRA Sustainability Report 76

Introduction Human Oriented Management Third Party Independent Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Assurance Report Social Contribution Appendix

Introduction Korean Stands Association (hereafter, ‘Assurance Provider’) received a request for the independent To the assurance engagement of ‘the 2011 KOTRA Sustainability Report’ (‘the report’) from the Korea Overseas Trade Investment Agency (KOTRA). Assurance Provider offers an independent third-party management opinion after having reviewed data, performance results and evidence and feasibility of the relevant systems presented in the report. KOTRA is responsible for collecting, analyzing, and organizing the and information necessary to generate the report as well as all the claims made therein. Stakeholders Independence The assurance provider offers nothing more than third-party assurance on the report. The assurance provider has no relationship with KOTRA for profit regarding KOTRA’s overall business. Also the of KOTRA assurance provider has no bias toward any stakeholders of KOTRA.

Scope The assurance was mainly carried out based not only on the entire contents of the report including the activities for making the annual report of KOTRA from January 1st, 2011 to December 31st, 2011, but also on the activities and system of KOTRA in the 2011 fiscal year. The assurance on the financial information was generated by comparing the financial information with the audit report to see whether they are the same.

Standards and level The assurance provider has conducted this assurance by applying the guidelines of GRI G3.1 and Accountability 1000, 2008 Assurance standards (hereafter ‘AA1000AS (2008)’). The principles of inclusiveness, materiality, and responsiveness as the principles in the AA1000AS (2008) assurance standards were used to assess the report. The reliability of the information in the report of KOTRA was verified at a moderate level of assurance.

Type The assurance provider conducted type 2 assurance according to AA1000AS (2008). The type 2 assurance under the principle of assurance statement responsibility of AA1000AS (2008) means that the quality and accuracy of the performance information of sustainability management given in the report and KOTRA’s opinion were evaluated.

Methodology The assurance provider used the following methods to collect relevant information, materials, and evidence within the scope of assurance and conducted this assurance:

- Review of the report process including stakeholder selection and engagement, and the materiality evaluation of relevant issues. Global Business Platform 77

- Examination of media and internet news data about KOTRA during the Economy period of the report The economic achievements of KOTRA are highly dependent on establishing - The main office of KOTRA national infrastructure to give comprehensive overseas business supports as - Review of the management system and process used when making the its foundation goals and creating customers’ economic values. Therefore, in report order to make connectivity stronger between economic achievements and - Tracing review of internal documents and basic data its business activities such as the expansion of export markets, strengthening - Interviews with those people in charge of sustainability management the support infrastructure for small and medium sized companies, solidifying the trade business solid, and developing future overseas business markets, Results and opinion it is recommended that the sustainability issues be connected with and The assurance provider has found that the contents in the report supplemented in its mid- and long-term strategic plans. authentically report KOTRA’s sustainability management activities without significant errors or biases. Environment It is suggested that KOTRA needs to establish and run an environment and Inclusivity energy management system in order to continue to carry out the policies, This evaluates whether the organization has stakeholders engaged in the strategies, goals, executive plans of a green support center and green development of responsible and strategic responses to the sustainability of industry council as well as strengthening their activities. The purpose of KOTRA and in achievement processes. KOTRA knows that there is a reporting this is to improve the achievements of green industry exports, investment, responsibility related to stakeholders who have an influence on KOTRA or investment attraction, and exhibits. Especially what is suggested is to who re influenced by KOTRA. The Agency also systematically works to establish a mid- and long-term roadmap to achieve the goals of green gas discover who the stakeholders are and their engagement procedures. reduction, energy savings, and green purchase.

Materiality Society This evaluates whether the organization has included materiality information It is desirable to carry out the mid- and long-term social contribution in the report which is needed for stakeholders to make good judgments, roadmap after supplementing it by closely evaluating those activities of make decisions, and take actions. KOTRA learned of the sustainability social responsibility based on the international ISO 26000 standard. This management issues through interviews with in-and-out stakeholders will help build an ecological global environment in order to leap up to an and the Agency established the processes of drawing out the issues that era of 2 trillion US dollars of export for the coming 50 years of the Republic stakeholders are interested in. All of these issues were found to be included of Korea. For this it is recommended that KOTRA should be recognized in the report. Also the Agency has established a process of continually both domestically and internationally as a valuable organization which leads monitoring and improving achievements relevant to the issues. social responsibility through its close evaluation and continual improvement of each topic area of social responsibility. Responsiveness This evaluates whether the organization has responded to the stakeholder’s concerns in the report. Also it evaluates whether the organization has March 15th, 2012 established relevant standards and policies to deal with important Kim Chang-ryong sustainability issues and concerns. KOTRA has responded to the stakeholders’ President of KSA concerns and reflected important sustainability issues in its policies and activities. The Agency has attempted to be consistent in its sustainability management activities and to deliver them to their stakeholders.

Opinions for each area and suggestions to improve The assurance provider suggests that KOTRA take into consideration the following to provide itself with a stable base in order to continue to respond to significant sustainability issues by reflecting them in sustainability management strategies. 2011 KOTRA Sustainability Report 78

Introduction Human Oriented Management ISO 26000 Assessment Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Compliance Report Social Contribution Appendix

direction for social responsibility. It has contributed of social responsibility to decision making and Assessment Criteria to the balanced development and growing- together action in a unified way in order to carry out its The Korean Standards Association has developed policy and made the global competitiveness of small social responsibility management and it also a assessment checklist for fulfillment level of and medium-sized companies stronger by making social responsibility as a service of The Korean the business of trade investment solid, developing Outcomes of Social Responsibility Agency for Technology and Standards under the the future market for sustainable growth, and Process Assessment Ministry of Knowledge Economy on the basis of enhancing the capability of supporting infrastructure Recognition of Social Responsibility 100 the international standard ISO 26000 for social for small and medium-sized companies. It is Improvement 80 Stakeholder Identificaton 60 and Engagement responsibility. This report contains the results however required that all the sectors of the 40 organization need to understand the significance 20 that KSA arrived at concerning the process of Verification 0 Analysis of Core KOTRA’s social responsibility management and of sustainability management and systematically Subjects and Issues its performance regarding its 7 core subjects put sustainability management plans into action. Communicaton Setting Priorities and according to KSA’s assessment checklist. Also KOTRA needs to approach ‘sustainable trade implementaion Strategy Implementaion and investment’ and develop its policies while Scope of Assessment applying the principles of social responsibility to KSA assessed the process to fulfill KOTRA’s its main decision makings as a prior criterion. It should be able to establish the goals of its social social responsibility and its performance results. is additionally suggested that KOTRA improves its responsibility and manage for its results. For this, we examined KOTRA’s mid-to-long term communication with the stakeholders by publishing strategies, social responsibility management an annual sustainability management report. Human Rights strategies, stakeholders’ participation, and socially KOTRA is making an effort to develop creative global responsible activities. Assessment Result by 7 Core Subject professionals and create an emotional organization of ISO 26000 culture by establishing ‘the development of creative Assessment Methodology Organizational Governance and strong organization’ as KOTRA’s strategic Based on an ISO26000 assessment standard of KOTRA is making an effort to get activate its board direction. Because KOTRA is an outstanding performance level, we conducted the following of trustees and to enhance its effectiveness. It is organization in operating its network of 111 overseas activities to collect proper and relevant data. recommended that KOTRA needs to operate a business centers in 76 countries, it is recommended - Examination of KOTRA’s mid- to long-term decision-making body that applies the principles that it establish the principles of affirmative action strategies and its management performance report Recognition of Social Responsibility Reviewing the current status of an organization based on topmanagement’s commitment - Interview with the staff in charge of KOTRA’s Stakeholder Identificaton Examining stakeholder’s interest and demand and formulating engagement strategy social responsibility management issues and and Engagement its performance report Analysis of Core Creating a list of issues through review of issues and analysis of organization’s internal Subjects and Issues capacity Result of Assessment by ISO 26000 Setting Priorities and Setting priorities, goals and implementation plans regarding issues to be improved and implementaion Strategy managed in consideration of organization’s capacity Social Responsibility Process Putting strategies, vision, goals and implementation plans into action and regularly KOTRA considers the accomplishment of its Implementaion monitoring accomplishments associated with social responsibility founding goals such as trade promotion, domestic communication Communicating with stakeholders by preparing performance reports and foreign company investment, and attracting Verification Taking action and reporting to enhance reliability of achievements overseas professional manpower as its basic Improvement Reviewing achievements regularly to ensure sustained improvement Global Business Platform 79

and develop a policy for respect for human rights when consumer profiles are browsed. It is contributing to the development of sustainable trade- and diversity. Moreover it is recommended that advised to further strengthen KOTRA’s internal investment.’ Also it is recommended that KOTRA KOTRA establish a mechanism for effectively management standard to protect consumers set a goal and establish a system of evaluation and taking care of the difficulties to which stakeholders against information leaks and to expand management in order to systematically manage are sometimes exposed in various ways and to do provision of CSR information applicable when those material issues revealed in the material test this with anonymity assured. domestic and foreign companies participate in concerning social responsibility. overseas trade or make an investment. Labour Practices Outcomes of Social Responsibility KOTRA has a personnel system focused on a Community Involvement and Development Perfomance Assessment balance of life and work achieved by expanding the KOTRA has organized many CSR activities Organizational Governance system of overseas leave of absence for a spouse related to the characteristics of each country 100 Community 80 Human Rights and establishing a system of flexible attendance in which KOTRA resides, as well as using the Involvement and 60 Development 40 to one’s work. What is remarkable is the early organizational nature of its global network, 20 0 establishment of gender equality culture with an developing many cultural education programs Labour Consumer Issues increase in the numbers of female managers for young people. What is remarkable is that Practices every year, accomplished by expanding promotion KOTRA has organized many activities to transmit Fair Operating The opportunities for females. What is also excellent is Korean culture and also participated in disaster Practices Environment KOTRA’s system of cultivating capable employees. relief activities and giving goods and money to the underprivileged class in the countries of March 15th, 2012 The Environment business. It is suggested that KOTRA pursue a Kim Chang-ryong There is a trend of reduced amount of both energy policy of getting stakeholders engaged together President of KSA used and greenhouse gas emissions because of in the development of local communities by the ongoing effort to control the temperature of giving them motivation with incentives in order both heating and cooling in offices in order to to activate their social contribution. reduce the consumption of energy. It is necessary to develop working plans in order to reduce Conclusions KSA is a special corporation established under the Korea greenhouse gas emissions due to business trips, KOTRA has contributed to the development of Industrial Standardization Act in 1962. KSA is a knowledge service agency that disseminates industrial standardization, transportation, and to make office spaces eco national economy by creating economic values quality management, sustainability management, and KS/ISO friendly. through promoting trade and investment. It certification to companies. KSA contributes to our society’s is recommended that KOTRA pursue global sustainable development as Korea’s ISO 26000 administrative Fair Operating Practices sustainability with customers by taking into account agency, certified GRI training partner, AA1000 assurance provider, Korean Sustainability Index(KSI) operating agency, UN KOTRA has strengthened its internal control by the balance between social and environmental CDM operating body, and greenhouse gas and energy target making up for some weak points of accounts aspects, in order to become ‘a global partner management verification body. and by periodically checking the management of overseas business centers through a special Activities to respect social responsibility principles and integrate these principles into existing Organizational Governance audit. It is advised to activate and operate a systems, policies and practices reporting channel, which guarantees anonymity Activities to respect, protect, observe and realize human rights within an organization and the Human Rights and eliminate the fear of revenge in order to sphere of influence Policies and practices that influence working environments of employees upgrade the usefulness of the ethics tip-off Labor Practices system. within an organization and partner companies Holistic approach that takes into account the implications of decisions made and actions taken in The Environment order to reduce organizatio’s impact on the environment Consumer Issues Activities that concern ethical behaviors regarding transactions between an organization and its Fair Operating Process KOTRA has introduced a KOTRA guarantee counterparts such as partner companies and suppliers brand in order to enhance the competitiveness Activities to protect consumer rights covering consumer training, fair and transparent marketing Consumer Issues of small and medium-sized companies’ brands. information and contracts and promotion of sustainable consumption And to protect consumer’s personal information Community involvement and Activities to recognize and respect community rights and to maximize its resources and it has a system of recording logging information Development opportunities 2011 KOTRA Sustainability Report 80

Introduction Human Oriented Management GRI Index and ISO 26000, UNGC Responsible Organization Sustainable Trade & Investment Partner Customer Oriented Service Social Contribution Appendix

●Reporting level: Fully Reported ◐Partially reported ○No Report ◎Not Applicable

Description ISO 26000 ISO 26000 Seven Core Topics Page Extent of Reporting Remarks Stakeholder Engagement Principle 6.62 Community involvement Boundary Protocol 6.6.5 Promoting social responsibility in the value chain Strategy and Analysis

Statement from the most senior decision-makers of the organization 1.1 (e.g. CEO, chair or equivalent senior position) about the relevance of 6.2 Organizational governance 4~5 ● sustainability to the organization and its strategy

1.2 Description of key impacts, risks, and opportunities 6.2 Organizational governance 11~12 ● Organizational Profile 2.1 Name of the organization 8 ● 2.2 Primary brands, products, and/or services 8 ● Operational structure of the organization, including main divisions, 2.3 6.2 Organizational governance 10 ● operating companies, subsidiaries, and joint ventures 2.4 Location of organization’s headquarters 6~7 ●

Number of countries where the organization operates, and names of 2.5 countries with either major operations or that are specifically relevant to 6~7 ● the sustainability issues covered in the report

2.6 Nature of ownership and legal form 8 ● Markets served (including geographic breakdown, sectors served, and 2.7 6~7, 8 ● types of customers/beneficiaries) 2.8 Scale of the reporting organization 8~9 ● Significant changes during the reporting period regarding size, structure, 2.9 _ ◎ or ownership 2.10 Awards received in the reporting period 10 ● Report Parameters 3.1 Reporting period (e.g., fiscal/calendar year) for information provided 2 ● 3.2 Date of most recent previous report (if any) - ◎ 3.3 Reporting cycle (annual, biennial, etc.) 2 ● 3.4 Contact point for questions regarding the report or its contents 2 ● 3.5 Process for defining report content 18~19 ● Boundary of the report (e.g., countries, divisions, subsidiaries, leased 3.6 2 ● facilities, joint ventures, suppliers) 3.7 State any specific limitations on the scope or boundary of the report 2 ●

Basis for reporting on joint ventures, subsidiaries, leased facilities, 3.8 outsourced operations, and other entities that can significantly affect 2 ● comparability from period to period and/or between organization

Data measurement techniques and the bases of calculations, including 3.9 assumptions and techniques underlying estimations applied to the 2 ● compilation of the Indicators and other information in the report

Explanation of the effect of any re-statements of information provided in 3.10 - ◎ This is the first report. the previous reports, and the reasons for such re-statement

Significant changes from previous reporting periods in the scope, 3.11 - ● boundary, or measurement methods applied in the report

3.12 Table identifying the location of the Standard Disclosures in the report 76~79 ●

Policy and current practice with regard to seeking external assurance 3.13 7.5.3 Verification 2 ● for the report Governance, Commitments and Engagement Governance structure of the organization, including committees under the highest governance 4.1 6.2 Organizational governance 14~15 ● body responsible for specific tasks, such as setting strategy or organizational oversight Global Business Platform 81

Description ISO 26000 ISO 26000 Seven Core Topics Page Extent of Reporting Remarks Indicate whether the Chair of the highest governance body is also an 4.2 6.2 14 ● executive officer For organizations that have a unitary board structure, state the number of 4.3 members of the highest governance body that are independent and / or 15 ● non-executive members Mechanisms for shareholders and employees to provide 4.4 6.2 14 ● recommendations or direction to the highest governance body Linkage between compensation for members of the highest governance 4.5 6.2 14 ◐ body, senior managers, and executives Processes in place for the highest governance body to ensure conflicts of 4.6 6.2 14 ● interest are avoided Process for determining the qualifications and expertise of the members 4.7 of the highest governance body for guiding the organization’s strategy on 6.2 14~15 ● economic, environmental, and social topics Internally developed statements of mission or values, codes of conduct, 4.8 and principles relevant to economic, environmental, and social 6.2 35~36 ◐ performance and the status of their implementation Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, Organizational Governance 4.9 and social performance, including relevant risks and opportunities, and 6.2 14 ◐ adherence or compliance with internationally agreed standards, codes of conduct, and principles Processes for evaluating the highest governance body’s own 4.10 performance, particularly with respect to economic, environmental, and 6.2 14~15 ◐ social performance Explanation of whether and how the precautionary approach or principle 4.11 6.2 16~17 ● is addressed by the organization Externally developed economic, environmental, and social charters, principles, 4.12 6.2 80 ● or other initiatives to which the organization subscribes or endorses Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization 4.13 has positions in governing bodies, participates in projects or committees, 6.2 10 ● provides substantive funding beyond routine membership dues, or view membership as strategic 4.14 List of stakeholder groups engaged by the organization 6.2 20~21 ● 4.15 Basis for identification and selection of stakeholders with whom to engage 6.2 18~19 ● Approaches to stakeholder engagement, including frequency of 4.16 6.2 18~19 ● engagement by type and by stakeholder group Key topics and concerns that have been raised through stakeholder 4.17 engagement, and how the organization has responded to those key topics 6.2 18~19 ● and concerns, including through its reporting Disclosure on Management Approach to Economy Direct economic value generated and distributed, including revenues, 6.8/6.8.3/ Community involvement and development/Community operating costs, employee compensation, donations and other community EC1 6.8.7/ involvement/Wealth and income creation/Social 9 ● investments, retained earnings, and payments to capital providers and 6.8.9 investment governments Financial implications and other risks and opportunities for the EC2 6.5.5 Climate change mitigation and action 51 ● organization’s activities due to climate change EC3 Coverage of the organization’s defined benefit plan obligations 6.4.4/6.8 - O EC4 Significant financial assistance received from government 9 ● Range of ratios of standard entry level wage compared to local minimum Conditions of work and social protection/Community EC5 6.4.4/6.8 24 ● wage at significant locations of operation involvement and development Promoting social responsibility in the value chain/ Policy, practices, and proportion of spending on locally-based suppliers at 6.6.6/6.8/ Community involvement and development/Employment EC6 9 ● significant locations of operation 6.8.5/6.8.7 creation and skills development/Wealth and income creation Community involvement and development/Employment Procedures for local hiring and proportion of senior management hired 6.8/6.8.5/ EC7 creation and skills development/Wealth and income 24~25 ● from the local community at significant locations of operation 6.8.7 creation/ 6.3.9/6.8/ Economic, social and cultural rights/Community Development and impact of infrastructure investments and services 6.8.3/ involvement and development/Community involvement/ EC8 provided primarily for public benefit through commercial, in-kind, or pro 6.8.4/6.8.5/ Education and culture/Employment creation and skills 68~69 ● bono engagement 6.8.6/ 6.8.7/ development/Technology development and access/ 6.8.9 Wealth and income creation/Social investment Economic, social and cultural rights/ 6.3.9/6.6.6/ Promoting social responsibility in the value chain/ Understanding and describing significant indirect economic impacts, 6.6.7/6.7.8/6.8/ Respect for property rights/Access to essential services/ EC9 9 ● including the extent of impacts 6.8.5/6.8.6/ Community involvement and development/Employment 6.8.7/6.8.9 creation and skills development/Technology development and access/Wealth and income creation/Social investment Disclosure on Management Approach to Environment EN1 Materials used by weight or volume - ◎ EN2 Percentage of materials used that are recycled input materials - ◎ 6.5/6.5.4 The environment/Sustainable resource use EN3 Direct energy consumption by primary energy source 40 ● EN4 Indirect energy consumption by primary source 40 ● 2011 KOTRA Sustainability Report 82

●Reporting level: Fully Reported ◐Partially reported ○No Report ◎Not Applicable

Description ISO 26000 ISO 26000 Seven Core Topics Page Extent of Reporting Remarks EN5 Energy saved due to conservation and efficiency improvements 40 ◐ Initiatives to provide energy-efficient or renewable energy based products EN6 and services, and reductions in energy requirements as a result of these 40 ◐ initiatives 6.5/6.5.4 The environment/Sustainable resource use EN7 Initiatives to reduce indirect energy consumption and reductions achieved 40 ◐ EN8 Total water withdrawal by source 41 ● EN9 Water sources significantly affected by withdrawal of water - ◎ EN10 Percentage and total volume of water recycled and reused 41 ● Location and size of land owned, leased, managed in, or adjacent to, EN11 protected areas and areas of high biodiversity value outside protected - ◎ areas The environment/Protection of the environment and 6.5/6.5.6 Description of significant impacts of activities, products, and services on biodiversity, and restoration of natural habitats EN12 biodiversity in protected areas and areas of high biodiversity value outside - ◎ protected areas EN13 Habitats protected or restored - ◎ Strategies, current actions, and future plans for managing impacts on EN14 The environment/Protection of the environment and - ◎ biodiversity 6.5/6.5.6 biodiversity, and restoration of natural habitats Number of IUCN Red List species and national conservation list species EN15 - ◎ with habitats in areas affected by operations, by level of extinction risk EN16 Total direct and indirect greenhouse gas emissions by weight 6.5/6.5.5 The environment/Climate change mitigation and action 40 ● EN17 Other relevant indirect greenhouse gas emissions by weight 40 ● 6.5/6.5.5 The environment/Climate change mitigation and action EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved 40 ◐ EN19 Emissions of ozone-depleting substances by weight - ◎ EN20 NOx, SOx, and other significant air emissions by type and weight 41 ◐ EN21 Total water discharge by quality and destination 41 ◐

EN22 Total weight of waste by type and disposal method 6.5/6.5.3 The environment/Prevention of pollution 41 ◐ EN23 Total number and volume of significant spills - ◎ Weight of transported, imported, exported, or treated waste deemed EN24 hazardous under the terms of the Basel Convention Annex Ⅰ,Ⅱ,Ⅲ and ◎ Ⅷ, and percentage of transported waste shipped internationally Identity, size, protected status, and biodiversity value of water bodies 6.5/6.5.4/ The environment/Protection of the environment and EN25 and related habitats significantly affected by the reporting organization’s ◎ 6.5.6 biodiversity, and restoration of natural habitats discharges of water and runoff

The environment/Sustainable resource use/Promoting Initiatives to mitigate environmental impacts of products and services and 6.5/6.5.4/ EN26 social responsibility in the value chain/Sustainable 40 ● extent of impact mitigation 6.6.6/6.7.5 consumption Percentage of products sold and their packaging materials that are 6.5/6.5.4/ The environment/Sustainable resource use/Sustainable EN27 ◎ reclaimed by category 6.7.5 consumption Monetary value of significant fines and total number of non-monetary EN28 6.5 The environment ◎ sanctions for non-compliance with environmental laws and regulations Significant environmental impacts of transporting products and other 6.5/6.5.4/ The environment/Sustainable resource use/Promoting EN29 goods and materials used for the organization’s operations, and 40 ● 6.6.6 social responsibility in the value chain transporting members of the workforce EN30 Total environmental protection expenditures and investments by type 6.5 The environment/ 40 ◐ Disclosure on Management Approach to Employment LA1 Total workforce by employment type, employment contract, and region 24 ● Labor practices/Employment and employment Total number and rate of employee turnover by age group, gender, and 6.4/6.4.3 LA2 relationships 25 ● region Benefits provided to full-time employees that are not provided to 6.4/6.4.3/ Labor practices/Employment and employment LA3 29 ● temporary or part-time employees, by major operations 6.4.4 relationships/Conditions of work and social protection

6.4/6.4.3/ Labor practices/Employment and employment LA4 Percentage of employees covered by collective bargaining agreements 6.4.4/6.4.5/ relationships/Conditions of work and social protection/ 34 ● 6.3.10 Social dialogue/Fundamental principles and rights at work Minimum notice period(s) regarding significant operational changes, 6.4/6.4.3/ LA5 Labor practices/Health and safety at work 34 ● including whether it is specified in collective agreements 6.4.4/6.4.5 Percentage of total workforce represented in formal joint management- LA6 worker health and safety committees that help monitor and advise on _ O occupational health and safety programs 6.4/6.4.6 Labor practices/Health and safety at work Rates of injury, occupational diseases, lost days, and absenteeism, and LA7 29 ◐ number of work-related fatalities by region

Education, training, counseling, prevention, and risk-control programs in 6.4/6.4.6/ Labor practices/Health and safety at work/Community LA8 place to assist workforce members, their families, or community members 6.8/6.8.3/ involvement and development/Community involvement/ 29 ● with respect to serious diseases 6.8.4/6.8.8 Education and culture/Health Global Business Platform 83

Description ISO 26000 ISO 26000 Seven Core Topics Page Extent of Reporting Remarks LA9 Health and safety topics covered in formal agreements with trade unions 6.4/6.4.6 Labor practices/Health and safety at work - O Labor practices/Human development and training in LA10 Average hours of training per year per employee by employee category 6.4/6.4.7 27 ● the workplace Programs for skills management and lifelong learning that support the 6.4/6.4.7/ Labor practices/Human development and training in the LA11 continued employability of employees and assist them in managing career 26~28 ● 6.8.5 workplace/Employment creation and skills development endings Percentage of employees receiving regular performance and career Labor practices/Human development and training in LA12 6.4/6.4.7 28 ● development reviews the workplace Composition of governance bodies and breakdown of employees per Discrimination and vulnerable groups/Fundamental 6.3.7/6.3.10/ LA13 category according to gender, age group, minority group membership, and principles and rights at work/Labor practices/ 32~33 ● 6.4/6.4.3 other indicators of diversity Employment and employment relationships Discrimination and vulnerable groups/Fundamental 6.3.7/6.3.10/ principles and rights at work/Labor practices/ LA14 Ratio of basic salary of men to women by employee category 6.4/6.4.3/ - O Employment and employment relationships/Conditions of 6.4.4 work and social dialogue No discrimination against vulnerable groups/ Ensuring LA15 Return to work and retention rates after parental leave by gender economic, social, and cultural rights of company and 29 ◐ community members/ Disclosure on Management Approach to Human Rights Percentage and total number of significant investment agreements and 6.3/6.33/ Human rights/Due diligence/Avoidance of complicity/ HR1 contracts that include clauses incorporating human rights concerns or 39 ◐ 6.3.5/6.6.6 Promoting social responsibility in the value chain that have undergone human rights screening 6.3/6.3.3/ Human rights/Due diligence/Avoidance of complicity/ Percentage of significant suppliers and contractors that have undergone HR2 6.3.5/6.4.3/ Employment and employment relationships/Promoting 39 ◐ screening on human rights and actions taken 6.6.6 social responsibility in the value chain Total hours of employee training on policies and procedures concerning HR3 aspects of human rights that are relevant to operations, including the 6.3/6.3.5 Human rights/Avoidance of complicity - O percentage of employees trained 6.3/6.3.6/ Human rights/Resolving grievances/Discrimination and HR4 Total number of incidents of discrimination and actions taken 6.3.7/6.3.10/ vulnerable groups/Fundamental principles and rights at - O 6.4.3 work/Employment and employment/Relationships 6.3/6.3.3/ Human rights/Due diligence/Resolving grievances/ Operations identified in which the right to exercise freedom of association 6.3.4/6.3.5/ Discrimination and vulnerable groups/Fundamental HR5 and collective bargaining may be at significant risk, and actions taken to - ◎ 6.3.8/6.3.10/ principles and rights at work/Employment and support these rights 6.4.3/6.4.5 employment relationships 6.3/6.3.3/ Human rights/Due diligence/Human rights risk situations/ Operations identified as having significant risk for incidents of child labor, HR6 6.3.4/6.3.5/ Avoidance of complicity/Discrimination and vulnerable - ◎ and measures taken to contribute to the elimination of child labor 6.3.7/6.3.10 groups/Fundamental principles and rights at work Operations identified as having significant risk for incidents of forced or Human rights/Due diligence/Human rights risk situations/ HR7 compulsory labor, and measures to contribute to the elimination of forced Avoidance of complicity/Discrimination and vulnerable - ◎ or compulsory labor groups/Fundamental principles and rights at work Percentage of security personnel trained in the organization’s policies Human rights/Avoidance of complicity/Employment and 6.3/6.3.5/ HR8 or procedures concerning aspects of human rights that are relevant to employment relationships/Promoting social responsibility - O 6.4.3/6.6.6 operations in the value chain 6.3/6.3.6/ Human rights/Resolving grievances/Discrimination and Total number of incidents of violations involving rights of indigenous HR9 6.3.7/6.3.8/ vulnerable groups/Civil and political rights/Respect for - O people and actions taken 6.6.7 property rights Percentage and total number of operations that have been subject to HR10 Due diligence/Human rights risk situations - O rights situation human rights reviews and/or impact assessment Number of grievances related to human rights filed, addressed and HR11 Resolving grievances - O resolved through formal grievance mechanisms Disclosure on Management Approach to Society Economic, social and cultural rights/Community 6.3.9/6.8/ Percentage of operations with implemented local community engagement, involvement and development/Employment creation and SO1 6.8.5/6.8.7*/ ● impact assessment, and development programs skills development/Wealth and income creation/Respect 6.6.7 for property rights Percentage and total number of business units analyzed for risks related SO2 6.6/6.6.3 Fair operating practices/Anti-corruption 36 ● to corruption Percentage of employees trained in organization’s anti-corruption policies SO3 35~36 ● and procedures 6.6/6.6.3 Fair operating practices/Anti-corruption SO4 Actions taken in response to incidents of corruption 35~36 ● Public policy positions and participation in public policy development and 6.6/6.6.4/ Fair operating practices/Responsible political SO5 46 ● lobbying 6.8.3 involvement/Community involvement Total value of financial and in-kind contributions to political parties, Fair operating practices/Responsible political SO6 - ◎ politicians, and related institutions by country involvement/Community involvement Total number of legal actions for anti-competitive behavior, anti-trust, and 6.6/6.6.5/ Fair operating practices/Fair competition/Respect for SO7 ◎ monopoly practices and their outcomes 6.6.7 property rights Monetary value of significant fines and total number of non-monetary 6.6/6.6.7/ Fair operating practices/Respect for property rights/ SO8 - ◎ sanctions for non-compliance with laws and regulations 6.8.7* Wealth and income creation 2011 KOTRA Sustainability Report 84

●Reporting level: Fully Reported ◐Partially reported ○No Report ◎Not Applicable

Description ISO 26000 ISO 26000 Seven Core Topics Page Extent of Reporting Remarks Operations with significant potential or actual negative impacts on local SO9 Community involvement and development 68~69 ◐ communities Prevention and mitigation measures implemented in operations with SO10 Community involvement and development 68~69 ◐ significant potential or actual negative impacts on local communities Disclosure on Management Approach to Product Responsibility Life cycle stages in which health and safety impacts of products and PR1 services are assessed for improvement, and percentage of significant Economic, social and cultural rights/Promoting social 69 ◐ 6.3.9/6.6.6/ products and services categories subject to such procedures responsibility in the value chain/Consumer Issues/ 6.7/6.7.4/ Protecting consumers’ health & safety/Sustainable Total number of incidents of non-compliance with regulations and 6.7.5 PR2 voluntary codes concerning health and safety impacts of products and consumption - ◎ services during their life cycle, by type of outcomes Consumer Issues/Protecting consumers’ health & safety/ Type of product and service information required by procedures, 6.7/6.7.3/ Sustainable consumption/Consumer service, support PR3 and percentage of significant products and services subject to such 6.7.4/6.7.5/ 56~65 ● and complaint and dispute resolution/Access to essential information requirements 6.7.6/6.7.9 services/Education and awareness

Total number of incidents of non-compliance with regulations and Consumer Issues/Protecting consumers’ health & safety/ PR4 voluntary codes concerning product and service information and labeling, Sustainable consumption/Consumer service, support and - ◎ by type of outcomes complaint and dispute resolution/Access to

Consumer issues/Protecting consumers’ health & safety/ 6.7/6.7.4/ Practices related to customer satisfaction, including results of surveys Sustainable consumption/Consumer service, support PR5 6.7.5/6.7.6/ 65 ● measuring customer satisfaction and complaint and dispute resolution/Access to essential 6.7.8/6.7.9 services/Education and awareness Consumer issues/Fair marketing, factual and unbiased Programs for adherence to laws, standards, and voluntary codes related 6.7/6.7.3/ information and fair contractual practices/Consumer PR6 to marketing communications, including advertising, promotion, and - ◎ 6.7.6/6.7.9 service, support and complaint and dispute resolution/ sponsorship Education and awareness Consumer Issues/Fair marketing, factual and unbiased Total number of incidents of non-compliance with regulations and information and fair contractual practices/Consumer PR7 voluntary codes concerning marketing communications, including - ◎ service, support and complaint and dispute resolution/ advertising, promotion, and sponsorship by type of outcomes Education and awareness Total number of substantiated complaints regarding breaches of customer PR8 6.7/6.7.7 Consumer issues/Consumer data protection and privacy 65 ● privacy and losses of customer data Monetary value of significant fines for non-compliance with laws and Consumer issues/Consumer service, support and PR9 6.7/6.7.6 - ◎ regulations concerning the provision and use of products and services complaint and dispute resolution

UN Global Compact The Ten Principles

Human Rights Principle 1 Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2 make sure that they are not complicit in human rights abuses. Labor Standard Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4 the elimination of all forms of forced and compulsory labor; Principle 5 the effective abolition of child labor; and Principle 6 the elimination of discrimination in respect of employment and occupation. KOTRA is a signatory to the Global Compact. Environment The Compact challenges business to operate Principle 7 Businesses should support a precautionary approach to environmental challenges; abiding by its ten principles covering the four areas Principle 8 undertake initiatives to promote greater environmental responsibility; and of labor standard, environment and anti-corruption. Principle 9 encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. 절취선 Stakeholder Opinion Survey

We welcome your invaluable feedback on our 2011 Sustainability Management Report. After reviewing your opinions and suggestions, we will attempt to fully reflect them in the next sustainability report. You can email your opinions to the KOTRA e-mail address ([email protected]) or fax them to us.

1. Which of the following groups do you belong to? ⇂ Customer (domestic) ⇂ Customer (overseas) ⇂ Employee ⇂ Overseas local employee ⇂ Domestic affiliates ⇂ Government ⇂ Media ⇂ Local resident ⇂ NGO ⇂ Other( )

2. How did you learn about KOTRA sustainability management report? ⇂ KOTRA’s Homepage ⇂ Seminars/Lectures/Exhibitions ⇂ Newspaper/Magazine ⇂ Other Website ⇂ KOTRA Employee ⇂ Others ( )

3. Which of the following did you find most interesting in this report? ⇂ Human Oriented Management ⇂ Responsible Organization ⇂ Sustainable Trade & Investment Partner ⇂ Customer Oriented Service ⇂ Social Contribution

4. Which of the following do you think should be improved in this report? ⇂ Human Oriented Management ⇂ Responsible Organization ⇂ Sustainable Trade & Investment Partner ⇂ Customer Oriented Service ⇂ Social Contribution

5. What is your evaluation of this report? Was the Report easy to understand? ⇂ satisfied ⇂ average ⇂ unsatisfied Was the amount of information sufficient? ⇂ satisfied ⇂ average ⇂ unsatisfied What is your level of overall satisfaction with this Report? ⇂ satisfied ⇂ average ⇂ unsatisfied

6. Please feel free to give us any opinions about the 2011 KOTRA Sustainability Management Report.

Management Supervision Team Planning & Coordination Department KOTRA (Korea Trade-Investment Promotion Agency) 13 Heonreung-ro, Seocho-gu, Seoul, Korea TEL. +82-2-3460-704 FAX +82-2-3460-7908 Email: [email protected] 2011 KOTRA Sustainability Report 86 Designed by storybeen.com T. 02-3453-2070 13 Heonreung-ro, Seocho-gu, Seoul, Korea (137-749) (formerly, 300-9 Yeomgok-dong, Seocho-gu, Seoul, Korea) TEL . 02-3460-7074 http://www.kotra.or.kr/