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CHC focuses on developing the group strategies, optimizing the allocation of resources, and governing member companies to enhance operational agility and efficiency. With business ethics and integrity built into our DNA, we uphold the highest standards of corporate governance and risk management to enhance operational sustainability.

Business Ethics and Integrity

Establish corporate culture and risk management with integrity and discipline

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Supplier Management

Develop long-term partnerships based upon the principle of mutual benefit

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Business Ethics and Integrity

Supplier Management

All members of CHC Group strictly abide by the Group’s procurement policies. Through supplier selection standards, risk identification, supplier management practices, supplier evaluations, the annual selection of excellent suppliers, and active management guidance for high-risk suppliers, the Group asks all suppliers to follow ethics code of conduct and procurement policies, as well as to comply with relevant domestic and foreign regulations regarding environmental protection, occupational safety and health, and human rights and labor rights. Making use of CHC Group’s business influence, the Group works together with supply chain partners to promote sustainable development. The audit results for the implementation of the Group's procurement policy in 2023 indicate that there were no significant violations and no instances of suppliers violating relevant regulations.

Supply Chain with Integrity

All of CHC Group’s suppliers sign the Declaration of Compliance & Questionnaire and assist with the assessment of the compliance with business ethics and determination of conflict of interest. The business ethics clause has been added to subcontracting and procurement contracts, which include anti-corruption, avoidance of conflict of interest, and rules for ethical management. Meanwhile, the procurement standards were amended to include the commitment to ethical management as a requirement for supplier evaluation and management, and to provide suppliers with consultation channels in order to help them understand the Group’s guidelines for business ethics. On the other hand, sustainability performance indicators, such as human rights, employee care, occupational safety measures, waste management, energy-saving measures, and integrity, are used for evaluating and managing suppliers' performance. Outstanding suppliers can earn additional points in the evaluation and increase their chances of winning bids, thereby promoting sustainability management throughout the supply chain.

Implementation of Supplier Management

 Supplier RegistrationSupplier Qualification AssessmentSupplier Evaluation
• Supplier data record filing
• Five-Year Contract Performance Record
• Receipt and Confirmation of Communication:
o Corporate Culture Declaration
o Business Execution Standards
o Occupational Health and Safety Policy		• Contract Agreement Record
• Performance Credit Evaluation Status
• Interview with the Responsible Person
• Financial Condition
• On-site Survey
• Regulations for the Management of
Safety and Health on Construction Sites
• Risk Identification Label
• Peer Reviews		• During the Project, the Construction Unit
Conducts Initial and Re-Evaluations of
Suppliers:
o A Grade – Recognized as a trustworthy
and excellent supplier
o B Grade – Recognized as a trustworthy
supplier
o C Grade – Suppliers requiring
improvement and guidance
o D Grade – Suppliers classified as non-
cooperative and placed under observation
Suppliers are required to fill out a Supplier
Information Card and a Five-Year Contract
Performance Record according to the Supplier
Screening Process and New Supplier
Registration Agreement. The procurement unit
verifies the information provided by the
suppliers, communicates the company's
corporate culture declaration, business
execution standards, code of ethics and
business conduct, and occupational health and
safety policies. Once the verification is
complete and the basic information is
confirmed by the supplier's signature, the
supplier is registered into the system.		For potential suppliers under consideration
for contracts, the procurement unit will
conduct risk identification operations
based on company regulations and key risk
management in various aspects of ESG
(Environmental, Social, Governance). If the
supplier is involved in major projects or
raises safety and health concerns, due
diligence investigations and site visits may
be conducted as necessary, possibly in
collaboration with relevant departments.
ESG factors related to suppliers will be
included in the selection assessment
criteria.		During project execution, suppliers
undergo assessment conducted by the site
manager for initial evaluation. The project
department supervisor performs a
comprehensive review and final
assessment, approving the evaluation
results, which are then recorded in the
supplier database system. We assess
individual suppliers for financial capability,
quality issues, safety and health
deficiencies, project delays, non-
performance risks, contract disputes within
the supply chain, price fluctuations,
shortages of goods and services, among
other risks. We also emphasize human
rights management, especially in
occupational health and safety. If a
supplier receives a D grade in safety and
health assessments, they are required to
complete improvements within a specified
timeframe. Failure to meet these
improvement deadlines will prompt the
company to convene a review meeting to
consider placing the supplier on a non-
cooperation list.

2023 Assessment Result

GradeGrade AGrade BGrade CGrade D
Number of Suppliers2516781325
Percentage1.4%91.2%7.2%0.3%

Local Procurement

Supporting local procurement is a way of fulfilling corporate social responsibility. Except for the Environmental Project Development Business, where water treatment equipment is primarily supplied by foreign manufacturers and thus must be purchased from abroad, the rest of the Group members practice local procurement. In 2023, the CHC Group achieved an overall local procurement rate of 88.78%. Specifically, CEC, CDC, and HDEC Corp achieved local procurement rates of 99.43%, 92.77%, and 55.93%, respectively.