Continued

Responsible Care
Elementis is committed to Responsible Care, the chemical industry's global voluntary initiative to continually improve performance in the areas of environmental protection, health and safety. Responsible Care is an important component of our strategy for sustainable development. It minimises the impact on the environment, conserves valuable natural resources and ensures responsible product stewardship up and down the supply chain.

Elementis is a member of the CIA and has signed up to the Responsible Care Guiding Principles, which are applied by Elementis worldwide. Additionally, Elementis Specialties in the US is a member of the ACC and complies with the ACC Responsible Care® requirements.

During 2002 Elementis Specialties, Livingston, UK, became the first business in Scotland, and the fourth in the UK, to be awarded third party certification for excellence in health, safety and environmental performance under the Chemical Industries Association Responsible Care initiative.

Product Stewardship
Elementis recognises that correct handling and use of products is vital even after they have left our direct control. The Company is taking steps through a range of Product Stewardship activities to protect the health and safety of people who transport or use our products, and those who might be affected indirectly. Included in these activities is technical advice on waste disposal and environmental protection from the effects of our products throughout their life cycle. Many Elementis products contribute to sustainable development. Chromium, for example, has properties that extend the life of articles such as leather, timber and metals.

All the Elementis businesses have proactive programmes to promote product stewardship.

Resource conservation
All sites are active in maximising yields through the formal "stable manufacturing" improvement process, which reduces variability. A number of Six Sigma improvement projects over the past two years have also contributed to resource conservation.

EU Chemical Regulations (REACH)
Elementis is taking an active role in the debate regarding the proposed new EU Chemicals Policy, REACH (Registration, Evaluation and Authorisation of Chemicals).

The declared aim of REACH is to increase the protection of human health and the environment, while maintaining and enhancing competitiveness and innovation.

Elementis supports this aim but following an in-depth study of the proposals Elementis has expressed reservations about the workability of the proposed regulations.

Overall if the proposals go ahead as drafted it would impact around 83 substances manufactured by Elementis. The cost to the Company is estimated to be €14-33 million ($16-37 million) over an 11 year period.

Community initiatives
Policy
It is the Elementis policy to actively promote the safety and well being of the communities in which we operate and to ensure that we conduct our business in a way that is open and transparent to our neighbours.

Strategic direction
We seek to engage positively with our local communities. It is our policy to operate as a 'good neighbour' and we, for example, encourage and facilitate employees volunteering for fund raising in support of local community organisations.

Implementation
Amongst the programmes ongoing in 2003 were:

• development of The Admiralty Ecology Site at Eaglescliffe, UK

• protection of a class one Tortoise Habitat, California, US

• support for children's homes, abused women's shelters, literacy training and a helpline and medical assistance for AIDS sufferers by employees of Specialty Rubber, South Africa.

Establishment of policy
Elementis takes a decentralised approach to working with the communities in which we operate. The Company sets guidelines but does not dictate any specific areas or priority for corporate support, since we are aware that needs and priorities vary from community to community.

Certain activities are excluded from Elementis involvement or support, such as:

• non profit organisations in the US not eligible for support under federal IRS code

• endowments

• fraternal and veterans groups

• individuals

• political organisations and campaigns

• sectarian or religious groups

• discriminatory groups.