Supply Chain Management Performance

Reduction of Environmental Footprint
Safe Chemical Substances

We start with 3 major aspects: hazardous substance management; components approval and supplier management; and manufacturing process control to ensure the green quality of our products and to confirm our management strategies in compliance with the safe chemical substance policy through auditing operations. In 2018, a total of 22 on-site audits were performed. The total number of findings was 204, and the proportion that passed the audits was 100%. The analyzed audit results showed that most findings were in the hazardous substance management system. The average passing rate of each aspect in the audits is shown in the figure below:

For the findings identified, we launched assistance and counseling improvement plans, including provision of advice by third-party entities and holding of small forums for peer-to-peer exchanges in the same industry to share experience of excellent management, which would guide suppliers to make improvements. Through tracking and counseling, the suppliers’ passing rate of the process control audit in 2018 improved from 83% to 89%, and all the findings identified in the audit were completely improved.

Ethical Management
Corporate Integrity and Ethical Management

We require all suppliers to sign the ASUS Code of Conduct Compliance Declaration to communicate the requirements of integrity governance and to review the extent to which it is implemented by suppliers through audits. In the assistance and counseling plan to strengthen the improvement of findings, we discuss the issue of integrity governance and share excellent management cases in the industry.

Through performing audits, ASUS has ensured that suppliers meet the requirements of the management strategy for safeguarding labor rights and interests and preventing occupational safety hazards. We identified high-risk suppliers for auditing based on special labor employment, labor intensity in production lines, and ergonomics operations in the processes. In 2018, a total of twenty on-site audits were performed. The total number of findings identified was 260, and the proportion that passed the audits was 75%. For the findings identified, ASUS has required suppliers to continue to improve; tracked the progress until the completion of cases; and launched assistance and counseling improvement plans for unqualified suppliers, while including them in the list of on-site audits for the following year.

The analyzed audit results showed that the greatest number of findings were in the health and safety aspect:

Under the continuous management over the years, more than 350,000 employees’ rights and interests have been duly protected.

Prohibition of Child Labor

Many children lose their chances to receive education, are deprived of childhood, and are forced to enter workplace in advance in order to solve the family economic problems. Therefore, most countries around the world consider the employment of child labor is illegal. ASUS strictly requires suppliers not to employ child labor and conducts onsite audits to ensure that suppliers have implemented proper measures to prevent child labor. Audit criteria include: review the management mechanism of suppliers and human resources intermediaries, the effectiveness of forged identity prevention mechanism (such as: face identification system, identity authentication system, family background information check), and sampling interviews with workers onsite. ASUS pays serious attention to child labor issue and formulate the following management approaches:

  1. ASUS reports to both ASUS’ and supplier’ sales management teams, and supplier shall immediately remove the children from the position as well as send them home.
  2. Supplier shall arrange health examination for the children, and bear the medical expenses for any affected health from the work.
  3. Supplier shall monitor the return home of children and their school attendance to legal age of employment.
  4. Supplier shall propose improvement plans in child labor management mechanism.
  5. ASUS arranges onsite audit and confirm the corrective action.

According to 2018 CSR audit results, no case of child labor was identified in the supply chain.

Management of Underage Labors

According to China legislation, employees of at least 16 but less than 18 years of age are underage employees. Specific protective measures have to be taken for these individuals still in puberty. ASUS requires suppliers to take the following measures when hiring underage employees to ensure their proper physical and mental developments:

  1. Underage employees must not be assigned to duties requiring intensive labor and exposing to extreme temperature operation or to hazardous substance such as lead, benzene or formalin.
  2. Conduct annual health examination on underage employees. ASUS will ensure the compliance by random interviews with underage employees and by reviewing their annual physical examinations.

According to 2018 CSR audit results, no case of overtime and night shift for underage employees.

Safeguarding the Rights of Female Employees

Female employees may experience pregnancy and breastfeeding while pursuing their careers, and ASUS pays great attention to the impacts of working environment on their health and thus proactively formulate protective measures for these future mothers. We include clauses that protect female employees from the voluntary social responsibility standard (Social Accountability 8000 International Standard, SA8000) into ASUS Supplier Code of Conduct and require our suppliers to take the following measures:

  1. For pregnant and nursing employees, the risk assessment of the operating environment to health
  2. Change their job positions when any risk exists
  3. No overtime and night shift for pregnant and nursing employees

According to 2018 CSR audits, no case in which the working environment had significant impacts on the health of female employees, and no pregnant and nursing employee was found to work overtime and night shift.

Summary of Annual Audit Results

The 2019 audit results were summarized as below:

Geographic:China
Number of facilities audited 20
Aggregate number of nonconformities 284
Total percentage of nonconformities 25.5%
Percentage of completion of corrective actions 95%
a) The International Labor Standards identified in the ILO Declaration on Fundamental Principles and Rights at Work and defined in the following Conventions:
 1) Freedom of association and collective bargaining (C. 87 and C. 98) 20
 2) Forced labor (C. 29 and C. 105) 0
 3) Child labor and the worst forms of child labor (C. 138 and C. 182) 0
 4) Discrimination (employment and occupation) (C. 111) 19
b) Domestic law in the legal jurisdiction regulating:
 1) Minimum wages 0
 2) Working hours 13
 3) Overtime compensation 0
 4) Employment contractual relationships 0