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Supplier Management

      The reason for TSC to operate so steadily is because we have reliable partners throughout the value chain. TSC’s suppliers, distributors, corporate customers, consumers and communities where our business is located are all the key elements for Taiwan Sugar to develop steadily. Therefore, through the stakeholder questionnaire survey, we can understand each value activity in the value chain and the concerned material topics. These topics can help TSC and its partners in the value chain understand and solve key issues to further improve and develop unique competitive advantages. After analysis, the four major issues of concern to TSC and its partners in the value chain are Product and Service Labeling, Customer Health and Safety, Marketing Communication and Product Compliance.



Supplier Compliance Management

      TSC signs contracts with all its suppliers. During the compliance period, the manufacturer acceptance is conducted before entering the factory. Upon acceptance, suppliers shall provide a Certificate of Origin, ingredient analysis documents, product inspection reports (inspection of heavy metal, E.coli. plasticizers and so on) or Import Certificate of Inspection issued by Bureau of Standards, Metrology & Inspection. If quality and quantity do not comply with the purchase contract after acceptance, the supplier will be notified of a deadline for improvement. The terms of each contract require the suppliers to provide labor and health insurance to their employees, shall not perform forced labor or employ child labor, and shall implement gender equality in work in accordance with the national human rights regulations and Labor Standards Act. Once suppliers are found to be in violation of gender equality in work, freedom of association, sexual harassment prevention, normal leave and non-payment of overtime, they will be immediately requested for improvement within a limited time and may be fined for breach of the contract. If they do not listen to advice or repeatedly violate the terms, the contract with such supplier may be terminated.
      The human rights protection requirements for major investment companies are the same as those of suppliers. We also strengthen the safety and health management of contract operations, and all units shall inform the work environment, hazard factors and safety and health related regulations of the units in advance when the project is delivered. In addition, TSC’s “Precautions for Occupational Safety and Health of Engineering and Labor Services” shall be specified in the contract and obligate the contractors to implement safety and health management and conduct automatic inspections to prevent accidents during construction operations in accordance with Occupational Safety and Health Act and relevant regulations. In order to protect the contractors’ labor rights, it is stipulated that the contracted project must cover the employer’s accidental liability insurance and the third-party accident insurance with an individual death and injury of at least NTD 4 million. For labor services or construction contracts below NTD 100,000, it is required to establish a simple contract and handle the prescribed safety and health management issues.


Food Supplier Assessment

      TSC conducts assessment of its partner suppliers in terms of the technical capacity, production performance, corporate image and responsibility and contract performance reliability so as to maintain its market sensitivity and keep abreast of the dynamics of supplier and if necessary, TSC will perform or entrust a third impartial inspection agency to conduct on-site inspection of the factory and the assessment results will be included in the score. Related defects will be asked to improve to ensure all the products and services the suppliers provide meet the needs of TSC. The assessment results are also used as reference for contract renewal.


Audit of OEM Factories

      To ensure the quality and safety of TSC branded foods, TSC conducts strict quality and safety management of the outsourced foods. In addition to sending non-scheduled staff from various units to station in the factories to supervise the manufacturing, the Quality Management Committee also organizes inspection teams irregularly to conduct on-site inspections without prior notice to thoroughly check and inspect the OEM factories from the raw materials, manufacturing processes, quality control, packaging materials, personnel and environmental sanitation to prevent the occurrence of food safety hazard. First, the domestic food factories TSC is cooperating with shall conduct at least one factory audit every year. The inspection team will conduct inspection of 19 domestic OEM factories outsourced by the Marketing Business Division, Biotechnology Business Division, Leisure Business Division and Animal Industry Business Division, and the inspection content shall follow the 72 items of inspection record of OEM factory listed in the Key Points for the Quality Management Operations of the Manufacturing Companies”, and the audit results shall be included in the reference for assessment scores for annual contract renewal. In 2015, the on-site audit items and the adjustment of assessment score of the Guidelines for Quality Management of Products Manufactured by Entrusted Manufacturers were revised, and the manufacturers with the total assessment score reaching 80 points are entitled to renew the contract.


Project Contractor Managemen

      For TSC’s project contractors, the principle of inspection scope of the construction quality inspection is no less than 10% of the ongoing construction projects exceeding the announced construction costs of the year, as prescribed in the Key Points for the Establishment of TSC’s Construction Quality Inspection Team. The selection of engineering contractors and product distributors is based on the prescriptions of the Government Procurement Act in an open, just and fair manner. Domestic companies are given priority, and contractors are screened by human right regulations. However, the conditions in each contract are the same as the requirements of suppliers in accordance with national human rights regulations and Labor Standards Act to protect human rights. In addition, the “Precautions for Occupational Safety and Health of Engineering and Labor Services” is formulated as part of the contract, and with the strategies of counseling, auditing and advocacy, TSC is actively engaged in the counseling of contractors’ safety management, strengthening the industrial safety counseling and reinforcing the safety awareness of the laborers in the workplace to safeguard the labor safety. If there is a breach of the contract, it will be handled in accordance with the supplier management model. There were no violations of relevant provisions of the contract in 2019.


Dealer Management

      The dealership is concerned with the quality of TSC products to consumers. We plan the dealership based on the overall marketing strategy and merchandise access strategies (access coverage, number of access levels, single access or multiple access, vertical marketing systems or horizontal marketing systems) and follow the Dealer Selection Criteria and the Government Procurement Act when selecting and auditing dealers. The performance management of dealers is handled in accordance with the principles of the management of suppliers and contractors.


Supplier CSR Evaluation

      TSC attaches great importance to the sustainable development of the Company. In addition to strictly demanding the self-implementation of CSR responsibilities and commitments, we also drive our suppliers to move toward sustainable development together. In 2019, TSC held the "Business Integrity Forum" and its suppliers and representatives from cooperative vendors were invited to the lectures related to anti-corruption policy. In addition, when handling various types of procurement tenders, the anti-corruption policies and reporting channels are also described in the contractual bidding instructions for the bidders to know. We have fully notified all our business partners of anti-corruption policies so as to work together to fight against corruption. We hope that we can commonly act for anti-corruption and implement the philosophy of “Honest TSC, Integrity Governance” for the demonstration of TSC’s determination of integrity and clean governance.
      TSC conducts a CSR evaluation system for suppliers with more than the amount of 5 million purchase to complete a self-assessment questionnaire, whose content would be adjusted annually based on the current situation of TSC, the international trends and reference to GRI provisions. In 2019, the supplier questionnaire was significantly revised. In addition to the introduction of GRI Standard Topics, specifications and regulations of RBA, Ecovadis and ISO 20400 were also referred in the revision of the questionnaire, which is divided into five aspects, including environmental, labor rights, human rights, social and product liability aspects. A total of 74 suppliers completed the self-evaluation in 2019.
      According to the self-evaluation results, the suppliers are divided into three levels, gold, silver and copper based on the scores. All the suppliers in this evaluation scored more than 60 points, with 100% of passing rate. Among them, 55 even scored more than 85 points, reaching gold level. In addition, further analysis of the five aspects was conducted, and each aspect scored more than 60 points averagely. The scores were lower only in the environmental aspect because TSC sets higher requirements in environmental management, leading to the lower scores among the suppliers. However, all the suppliers comply with relevant laws and regulations. We will refer to the results of the suppliers’ self-assessment and adjust the contents of the questionnaire. TSC will strengthen the management of suppliers with lower assessment scores to improve the procurement system and enhance the efficiency of procurement. In the future, we will also continue to promote the assessment of the five major aspects of corporate social responsibility in our suppliers of all categories to enhance our partners’ implementation and management of CSR.

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