Not only are quality, delivery, and price our considerations regarding raw material supplier management, we also try our utmost to urge suppliers to focus on and comply with labor rights, all aspects of environmental protection and safety, and health while facilitating corporate social responsibility. By jointly pursuing corporate sustainable management and growth, the goal of a win-win sustainable supply chain can be reached.

In terms of facilitating sustainable supply chain management, we require new suppliers to fill in the “Non-use Guarantee for Environmental Substances," “Integrity and Confidentiality Commitment," “Declaration of Non-Conflict Minerals," “Procurement Quality Contract for Suppliers," and “Contact Letter for Commodity Quality Requirements." We demand suppliers to meet quality requirements and guarantees as a means to fulfill corporate social responsibility and meet regulatory requirements as well as protecting the occupational safety of employees. Items about environmental protection and occupational safety will be included in the checklist of supplier audits, enabling suppliers to have a more thorough implementation. A total of 12 new suppliers were accepted in 2020.

A monthly performance evaluation is conducted on major raw material suppliers regarding aspects such as quality, delivery, services, hazardous substance management, and requirements of environmental protection laws and regulations. Annual evaluation results will be compiled based on monthly evaluation results. A total of 46 suppliers were evaluated in 2019 and all evaluation results reached supplier standard score with an average score of over 80.

An audit is conducted on major raw material suppliers according to annual auditing plans and 2 suppliers were audited in 2020. But due to the effect of COVID-19, the Company conducted on-site audit on 2 suppliers and documentary audit on 7 suppliers in 2020. . No suppliers were disqualified due to non-improvement regarding audit deficiencies.

In response to the needs of the automotive industry, the Company improves system performance using the automotive process method and monitoring indicators which has simultaneously enhanced the level of quality management system while at the same time obtaining business opportunities in the automotive industry and expanding the Company’s business and competitiveness. In September 2019, the Company held a supplier summit to provide guidance regarding the quality management system of the automotive supply chain and the importance of IATF16949 to supplier management. A total of 19 people from 11 suppliers took part in the summit. We hope suppliers will cooperate with us to enhance the quality management system level (obtaining IATF16949 quality system certification). However, this event was suspended in 2020 due to the pandemic.

【2019 Supplier Summit】

ABC Group’s production bases are located in Taiwan, China, and Malaysia; suppliers are mainly located in Taiwan, China, and Malaysia. We continue to promote the notion of supplier localization not only to reduce transportation costs, reduce carbon emission and spreading risks, we also hope to help local businesses, and create more job opportunities for the locals.

Suppliers that are scheduled for annual audit would be required to provide answers to the following question on occupational safety:
A commitment from the executive management and a publicly announced and documented occupational safety and health policy on providing employees with a safe and healthy work environment, including all necessary health promotion and first-aid facilities, as well as actions toward reducing safety and health risks and occupational hazards, and any work suspension or penalty imposed by the authority in the last 3 years.

Integrity and Confidentiality Commitment Letter
These letters signify commitments from ABC's suppliers/business partners on integrity, anti-bribery, and confidentiality with respect to all business dealings (including trade negotiation, supply of goods, service, logistics, payment, and other acts of contract fulfillment) with ABC's employees and all information obtained. Specifically, commitments are made on the following aspects: 1. Compliance with principles of integrity and trust; 2. Compliance with principles of anti-bribery and transparency; 3. Compliance with confidentiality obligations; 4. Default liabilities; and 5. Others.