Disclosure on management approach:

We manage our Health & Safety performance using OHSAS 18001, which is widely seen as the most rigorous international standard for occupational Health & Safety. All of our 16 manufacturing sites and 4 non-manufacturing sites have been certified to OHSAS 18001 since 2003.

We have a corporate EHS Steering Committee and each manufacturing site has a Health & Safety Steering Committee responsible for implementing the Corporate Health & Safety Policy. Each local committee covers 100% of ST employees in that manufacturing site. 86% of our employees are covered by these committees – the remaining 14% of employees are in functions and locations unrelated to manufacturing.
| LA6 |

Our performance data presented in this section covers 89% of our employees. The remaining 11% work in functions and locations unrelated to manufacturing.

2006 Health & Safety results

We are pleased to report that since we began keeping company-wide records in 2004, there were no work-related fatalities within ST, and there were also no Health & Safety fines or penalties. | LA7 |

In comparison with our excellent results in 2005 and the steep decrease of the Recordable cases rate in the previous years, 2006 showed some deterioration of our performance; however, the overall improvement trend since 2002 is close to 40%, or 10% per year. Our Severity rate decreased by 2% in 2006, below our 10% target, but the overall improvement since 2002 is an impressive 45%. The impact of these results can be seen in the increase of the estimated cost to the company by 15% in 2006 compared with 2005, while the improvement since 2002 has resulted in a $2.5 million saving. This estimate includes the following costs: wage, medical, indirect wage, administrative, material losses/damage, production and other hidden costs.

This performance should also be considered in the context of the US semiconductor and overall industry. Our Recordable cases rate was 0.59 in 2006, versus 1.5 for the US semiconductor industry average in 2005, and 6.3 for the US industry in general. In addition to this, the red dotted line on the graphs showing our results represents the performance we would have achieved without any action, taking 2002 as a baseline.
| LA7 | STHS6 |

So what explains the increase in our Recordable cases rate in 2006?

Our reporting results show that there has in fact been a 10% decrease in the rate of ‘industrial’ Recordable cases, that is cases involving chemicals, mechanical apparatus, machines or machine parts, electrical current etc. The overall increase of the Recordable cases rate is due to a 57% increase in ‘domestic’ cases, that is cases involving a fall or slip or being struck by or against a door, chair, building, tree etc (see breakdown of cases by type). A number of actions and programs have been launched in 2006 to address this issue, in particular in the area of communication and training to help raise employee awareness and prevent such cases. We are continuing to develop the ‘proactive’ approach we adopted a few years ago, which involves anticipating and predicting risks and recording near-misses with the objective of preventing accidents and injuries. We have also launched a Behavioral Risk Improvement program in a pilot site in this context, in which both managers and unions are involved.

In 2006 our Singapore site at Ang Mo Kio received the Singapore Silver Award for its safety performance from the Ministry of Manpower and our Toa Payoh site won the Singapore Health Gold Award.

Chemical workstation risk | STEV67 | STEV68 |

In 2006 we have made considerable progress in our goal to reach zero cases of ‘significant’ risk related to chemicals in our workstations (our internal standard is more stringent than any local legislation). In 2005 over 20,000 workstations were assessed and 1,400 (7%) were identified as falling into the ‘significant risk’ category. At the end of 2005 just 658 cases remained. Although we did not reach our goal of zero cases by the end of 2006, only 120 cases remain to be eliminated by mid 2007. These last cases have taken us longer to solve because they involve work on site infrastructure.

Health plan | LA8 |

In 2005 our CEO Carlo Bozotti announced a new focus on employee health stating that ST should go “beyond the traditional concept of safety, working to protect the health of our employees inside and outside their workplace”. In 2006 we reached our objective to define and initiate this health plan, based on a global strategy that allows for a customization of programs to address local needs and cultures. Programs include early diagnosis and disease prevention efforts, such as clinical screenings, immunizations, nutrition and weight counseling. In 2006 the Plan has been deployed in the Asia Pacific region and the 2007 target is to implement the Plan in all sites, covering all employees.

Health & Safety topics covered in formal agreements with trade unions | LA9 |

At present, we do not follow this indicator at worldwide level.

(See more in the Disclosure on Management Approach section)