DAQO NEW ENERGY : LABOR DUE DILIGENCE REPORT

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DAQO NEW ENERGY LABOR DUE DILIGENCE REPORT

Daqo New Energy Corp.

DaHui Lawyers Shanghai

22 September 2023

Labor Compliance Assessment of Xinjiang Daqo New Energy Co., Ltd. and its Affiliates

To whom it may concern,

DaHui Lawyers Shanghai ("DaHui" or "we") has been requested by Daqo New Energy Corp. ("Daqo") to conduct an independent third-party labor compliance assessment in relation to Daqo's routine operations and compliance program. The targets of this assessment include: Xinjiang Daqo New Energy Co., Ltd. ("Xinjiang Daqo"), Daqo, Chongqing Daqo New Energy Co., and other affiliated companies and organizations of Xinjiang Daqo (referred to collectively as the "Daqo Companies").

1. ASSESSMENT METHOD
   The methods of this assessment include:
2. 1. Legal Analysis. We have researched and analyzed the applicable laws and regulations regarding labor compliance, human rights protections and other relevant issues, including but not limited to the United Nations Guiding Principles on Business and Human Rights.
   2. Document Review. We have organized, reviewed and analyzed the information and materials provided to us by the Daqo Companies, including but not limited to the relevant labor contracts, employee handbooks, company policies, employment records and other documentation relevant to human resources.
   3. Online and On-siteInterviews. We have visited Xinjiang Daqo's facilities and conducted on-site and online interviews with employees hired by the Daqo Companies.
   4. On-siteVisit. We visited Xinjiang Daqo and conducted on-site due diligence at the manufacturing workshops, offices, cafeterias and employee accommodations at Xinjiang Daqo.

1. CONCLUSION
   The scope of our assessment includes a review of the Daqo Companies' policies in relation to the management framework, documentation system, ethnic minority protection, employment discrimination, forced labor, child recruitment, wages and benefits, working hours, vocational training and occupational protection.
   Having conducted the relevant labor due diligence, we found no evidence of forced labor of any kind. More specifically, our audit results and analysis show that the Daqo Companies have never employed anyone of Uyghur origin. In addition, our assessment indicates that the Daqo Companies have never participated in any government-sponsored employment program or government-sponsoredlabor-transfer program of any kind. Furthermore, no evidence shows any discrimination, harassment, disputed wages, child recruitment, restrictions on employee movement or any other illegal acts that violate the human rights of employees on the part of the Daqo Companies, nor have the Daqo Companies engaged in any discriminatory treatment of ethnic minorities in general, or Uyghurs in particular.
   Our assessment did not identify any existing activities that constitute a violation of the applicable laws or regulations relevant to the abovementioned issues. The Daqo Companies therefore appear to operate in compliance with all relevant and applicable laws and regulations.
   Additional details about our labor compliance assessment can be found in the following sections of this report.

Sincerely yours,

DaHui Lawyers Shanghai

DAQO NEW ENERGY LABOR DUE DILIGENCE REPORT (DETAILED VERSION)

1. ASSESSMENT METHOD
   1. The methods used in this assessment include：
2. 1. Legal Analysis. We researched and analyzed the applicable laws and regulations regarding labor compliance, human rights protections and other relevant issues (see Annex 1: Laws and Regulations);
   2. Document Review. We organized, reviewed and analyzed the information and materials provided to us by the Daqo Companies, including but not limited to the relevant labor contracts, employee handbooks, company policies, employment records and other documentation relevant to human resources.
   3. Online and On-siteInterviews. We visited Xinjiang Daqo's facilities and conducted on-site and online interviews with employees hired by the Daqo Companies.
   4. On-siteVisit. We visited Xinjiang Daqo and conducted on-site due diligence at manufacturing workshops, offices, cafeterias and employee accommodations.

   2. This report has been compiled through the following steps:

   1. We researched and analyzed foreign laws and regulations applicable to this project, including but not limited to the United Nations Guiding Principles on Business and Human Rights.
   2. We communicated with the managers of the Daqo Companies to decide on the scope of work and our strategy for approaching the project.
   3. We prepared questionnaires and document checklists based on previous communication with the Daqo Companies and delivered the abovementioned documents to the Daqo Companies.
   4. We reviewed the documents and responses provided by the Daqo Companies.
   5. We prepared supplemental questionnaires and document checklists.
   6. We reviewed supplemental documents and responses provided by the Daqo Companies.
   7. We determined key points of assessment and focus areas for our interviews.

1. 1. We conducted online interviews.
   2. We visited Xinjiang Daqo at No. 16, Weiliu Road, New Chemical Materials Industrial Park, Shihezi Economic Development Zone, Xinjiang to conduct on-site interviews.
   3. We visited Xinjiang Daqo to conduct on-site due diligence at the manufacturing workshops, offices, cafeterias and employee accommodations, and interacted face-to-face with Xinjiang Daqo employees.
   4. We reviewed and analyzed all interview responses and evaluated the working papers from the on-site visit to produce the final assessment report.
2. KEY FINDINGS

Based on our assessment of potential legal liabilities and consequences, we did not identify any existing activities by the Daqo Companies which constitute or may be deemed to constitute a violation of the applicable laws or regulations relevant to human rights and labor practices.

1. MANAGEMENT STRUCTURE
2. 1. A sound labor management structure has been set up by the Daqo Companies.
      Our assessment identified that a sound labor management structure has been set up by the Daqo Companies which runs across the entire human resources management structure of the Daqo Companies.
3. MANAGEMENT SYSTEM
4. 1. A sound labor management system has been adopted by the Daqo Companies, and the employee handbook is regularly reviewed and updated.
      Based on information provided by the Daqo Companies and the employee interviews, the Daqo Companies have formulated and promulgated the employee handbook, recruitment management policies, attendance management policies and other related labor management policies.
5. HUMAN RIGHTS PROTECTION OF ETHNIC MINORITIES
6. 1. The Daqo Companies have never employed anyone of Uyghur origin.1

1 The Uyghur Human Rights Policy Act of 2020 and the Uyghur Forced Labor Prevention Act issued by the United States Congress prohibit abuse, discrimination, forced labor and human rights violations against Uyghurs.

（1） According to the Staff List of December 2022 provided by the Daqo Companies, there are no ethnic Uyghurs among the current employee population of the Daqo Companies.

（2） According to the interviewees, the Daqo Companies have never employed anyone of Uyghur origin. Xinjiang Daqo is located in Shihezi City, where the ethnicity of the local population is primarily Han Chinese (accounting for more than 95% of the total local population) and there are very few Uyghurs or other ethnic minorities residing at this location. Although the Daqo Companies have never set forth any ethnic restrictions in their internal and external recruitment and management processes, for demographic reasons, there were no Uyghur applicants when the Daqo Companies recruited employees through open channels. The Daqo Companies have never employed anyone of Uyghur origin, and hence, have never been involved in any human rights or labor disputes associated with employees of Uyghur origin.

（3） Our assessment identified that since inception, the Daqo Companies have neither employed anyone of Uyghur origin, nor have there been any employee incidents involving people of Uyghur origin.

3.2 The Daqo Companies have not set forth any special restrictions against ethnic minorities in their recruitment and other labor management processes.

（1） According to the Staff List of December 2022 provided by the Daqo Companies and the interviews, Xinjiang Daqo currently has 2,484 employees, with ethnic minorities constituting about 2% of the employee population.

（2） According to the interviewees, the Daqo Companies have not set forth any special restrictions on ethnic minorities in their labor management process, nor have they set forth any discriminatory measures or exhibited any discriminatory tendencies against ethnic minorities.

（3） Our assessment identified that the Daqo Companies have not set forth any special restrictions against any ethnic minority in their recruitment and other labor management processes, and that there has never been any violation of human rights of ethnic minorities working at the Daqo Companies.

4. FORCED LABOR