The Group’s Value Chain

Supply Chain Management

The Group conducts SER risk assessments of new suppliers on five key areas (including product quality, green products, social and environmental responsibility, commodity and financial health) on an annual basis along with continuous on-site supplier audits. For the Group’s existing suppliers, they are required to have a sustainable and hazardous materials and product management system in place, with third-party certification, to ensure the suppliers observe sustainable supply chain practices. Moreover, the Group incorporates a list of environmental criteria into its procurement standards, including low GHG and energy consumption, a high level of recyclability, and green logistics.

A progressive grading approach is adopted via a Scorecard Platform, in which points are awarded or deducted based on performance in order to motivate suppliers to take actions to improve their standards to fulfill the Group’s requirements. Also, The Group follows the RBA management model which encompasses four phases in the management of suppliers, namely introduction, assessment, verification and continuous improvement to strength the process of supplier management.

Product Management

The Group’s commitment to sustainability can be seen across its entire supply chain, from product design to material sourcing and procurement measures. The Group has set up specialised divisions to study the environmental requirements of regulators, customers, industry and other key stakeholders, including compliance with the “Law of the People’s Republic of China on Product Quality”, the European Union’s “Restriction on Hazardous Substances Directive” (RoHS) and the European Union’s Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation, restrictions on the use of conflict minerals as well as HF (Halogen-Free) certifications and GHG emission reduction expectations.

Under the Design for Environment program set up by the Hon Hai Group, the Group integrates the five key principles — environmentally friendly, energy and resource efficiency and reduction, recyclability, and ergonomics — into its product design process.

If the Group’s customers suspect any environmentally-abnormal substances/materials in the products, the Group will immediately upon notification initiate its recall procedures which provide for (among other things) the segregation of the suspected products and inventory for further investigations. The Group does not accept, and does not use, conflict minerals in its operations, and also requires suppliers to trace the origin of products potentially containing conflict minerals, including gold (Au), tantalum (Ta), tin (Sn) and tungsten (W), and report to the Group.

Data Privacy

The Group strictly complies with relevant laws and regulations in relation to the collection, holding, processing, use, transfer and disposal of such data. Personal data are collected only for lawful and relevant purposes, and appropriate steps are taken to ensure that personal data held by the Group are accurate. Moreover, the Group strives to protect personal data from unauthorised access and abuse.

Intellectual Property Rights

The Group strives to follow Intellectual Property Right (IPR) and ensure that the products and services it provides do not involve any act of IPR infringement. The Group’s policy on IPR protection stipulates that employees are prohibited from revealing any protected information to competitors or any third parties without the direct authorisation by the disclosing party.

The policy also clearly prohibits infringement through copying or cribbing, whether directly or indirectly, of the intellectual property and trade secrets of the Group, stakeholders or third parties. Incorporated within the policy are procedures for the investigation of possible violations, and review by the Group’s legal department to decide on the appropriate legal actions.

Customer Complaint

The Group has established customer complaint handling procedures to respond to product-related and service-related complaints in a systematic manner. Once the factory/business units receive complaints from customers, they will immediately verify the complaint information followed by a check on the production process to investigate into the circumstances underlying and leading to the complaint. If the complaint is evidenced to be valid, the factory/business units will propose remedial measures to customers and conduct performance tracking.

Anti-Corruption and Whistle-Blowing Policies

The Group strictly prohibited employees from involving in all types of conduct listed on the internal rule of “Anti-Corruption Code of Conduct”. In addition, the Group has an internal audit function that is under the supervision and management of the Group’s Chief Internal Auditor to handle investigation in relation to any allegations of improper business conduct and bribery. The Group also requires its suppliers and customers to strictly enforce the high standards of anti-corruption, which is a prerequisite to the establishment of business relationship.

The Group has established its whistle-blowing policies and the related procedures. Complaints concerning fraudulent acts, unethical acts or improper business conduct can be raised through established hotlines and other channels. Also, whistle-blower identities are protected without fear of reprisal, victimisation, subsequent discrimination or any other unfavourable prejudice.