Corporate Governance Back to list
Supply chain management
Supplier Code of Conduct
1.Law-abiding operations and business ethics
1) Suppliers should comply with national and local laws, regulations and applicable requirements, including but not limited to labor laws, environmental laws, corporate and commercial laws, anti-corruption and monopoly laws, etc.
2) Suppliers should abide by the business ethics of the company and industry, including but not limited to honesty and trustworthiness, protection of intellectual property rights, protection of consumer rights, etc.
3) Suppliers should establish a sound internal control system and promptly discover and report any violations of business ethics.
4) Suppliers should provide training and education on business ethics to employees to improve their moral awareness and professional ethics.
5) Suppliers should also exert influence on their supply chains and fulfill their due social responsibilities.
2. Anti-corruption
1) Suppliers shall abide by anti-corruption laws and regulations and shall not engage in illegal activities such as bribery, facilitation payments, fraud, extortion, collusion, and money laundering.
2) Suppliers shall not offer or accept any gifts, loans, fees, rewards or other benefits from anyone as an inducement to act dishonestly, illegally or in breach of trust in corporate business conduct.
3) Suppliers should provide anti-corruption training and education to employees to improve their anti-corruption awareness and professional ethics.
4) Suppliers should establish a sound reporting mechanism and promptly report any violations of anti-corruption laws and regulations to the company.
3. Antitrust and competition:
1) Suppliers shall abide by anti-trust and anti-competition laws and regulations and shall not engage in unfair competition behaviors such as price monopoly, geographical monopoly, and elimination of competition.
2) Suppliers should provide employees with antitrust and anti-competition training and education to improve their legal awareness and professional ethics.
4. Conflict of interest:
1) Suppliers should avoid conflicts of interest and shall not use their status to engage in activities that conflict with the interests of the company.
2) Suppliers should provide employees with training and education on conflicts of interest to improve employees' professional ethics and moral standards.
5. Ensure human and labor rights
1) Suppliers shall respect and protect the basic human rights of all employees, including but not limited to freedom of speech, equal rights and dignity.
2) Suppliers shall prohibit the use of forced labor, child labor and discriminatory employment practices.
3) Suppliers shall not inflict physical harm on employees or perform any other form of forced labor, and shall not force any person to perform work or services that the person does not perform voluntarily under the threat of any punishment.
6. Ensure freedom of association, collective bargaining and the right to appeal
1) Suppliers should respect employees' right to form and join industry trade unions, and have the right to negotiate collectively in a peaceful and legal manner under applicable laws.
2) Suppliers shall comply with all applicable laws regarding freedom of association and collective bargaining.
7. Ensure fair and equal treatment of employees
1) Suppliers shall ensure that all employees are treated with respect and dignity.
2) Suppliers should ensure that there is no workplace discrimination based on race, age, gender, class, political stance, religion, marital status, sexual orientation, disability, pregnancy, or other discrimination unrelated to work ability.
3) Suppliers shall comply with all applicable laws regarding harassment and abuse.
4) A series of harassing remarks and behaviors, including sexual harassment, rioting and bullying, shall be eliminated within the supplier's operating system.
8. Ensure reasonable salary and benefits
1) Suppliers shall pay wages and provide benefits to all employees fairly and in accordance with the requirements of applicable laws and without unfairness.
2) Encourage employees' career development and provide training and promotion opportunities.
3) Suppliers shall comply with all applicable laws regarding regular working hours, overtime hours and benefits.
4) Suppliers should provide statutory rest days, public holidays and paid holidays.
9. Ensure workplace safety and employee occupational health and safety
1) Suppliers should comply with applicable national or local environmental, health and safety laws and regulations, and should continuously strive to improve environmental, health and safety performance.
2) Suppliers should provide a safe and healthy working environment, which includes providing necessary safety equipment and tools, ensuring the safety of facilities and equipment, and providing necessary training and guidance.
3) Suppliers should develop contingency plans to deal with emergencies, such as fires, earthquakes, etc. The emergency plan should include emergency evacuation procedures, emergency contact information, etc.
4) Suppliers should continue to improve occupational health and safety management, such as conducting regular safety inspections, assessing risks, etc.
10. Protect the environment and reduce waste
1) Suppliers should abide by environmental protection laws and regulations and take necessary measures to avoid pollution, such as rational use of chemicals, control of pollution sources, control of noise, reduction of waste water and exhaust gas emissions, etc.
2) Suppliers should minimize emissions, such as by using clean energy, optimizing production processes, using environmentally friendly materials, etc. Suppliers shall take necessary measures to manage and dispose of waste generated from business operations, including non-hazardous and hazardous waste.
3) This includes the process of sorting, storing, transporting and treating waste.
4) Suppliers should regularly report on their environmental performance, such as emissions, wastewater treatment, waste treatment, etc.
5) Suppliers should provide environmental protection training to employees to improve their understanding and awareness of environmental protection.
11. Reduce greenhouse gas emissions and energy consumption.
1) Suppliers should take measures to reduce greenhouse gas emissions, including reducing emissions of six major greenhouse gases such as carbon dioxide, methane, and nitrous oxide by using clean energy, improving production processes, optimizing logistics, etc.
2) Suppliers should take measures to reduce energy consumption, including purchasing or producing and using renewable energy, such as hydropower, wind energy, solar energy, geothermal energy, bioenergy, etc., and by reducing energy waste/loss or upgrading lower energy consumption equipment to use energy efficiently.
12. Improve resource efficiency
1) Suppliers should take measures to reduce the use of raw materials, including improving the utilization efficiency of raw materials by optimizing the production process, using environmentally friendly materials, recycling and reusing.
2) Suppliers should take measures to reduce water use, including improving water utilization efficiency by improving production processes, using water-saving equipment, recycling and reuse.
3) Suppliers should take measures to reduce energy use, including improving energy efficiency by using clean energy, optimizing production processes, and using energy-saving equipment.
4) Suppliers should regularly report their resource utilization in order to monitor and evaluate their environmental performance.
5) Suppliers should provide environmental protection training to employees to improve their understanding and awareness of resource efficiency.
13. Biodiversity, non-deforestation and land conservation
1) Suppliers shall take steps to protect and promote natural habitats and biodiversity to avoid nutrient loss, erosion and land contamination. This includes managing biodiversity risks by setting targets to offset any losses (no net loss), or aiming to achieve a net positive impact on biodiversity.
2) Suppliers should prohibit operating in sites containing globally or nationally important biodiversity to protect forest ecosystems and biodiversity.
Supplier screening system
The Company acknowledges that suppler sustainability and risk management are inevitable elements to our sustainable development, and has been dedicated to incorporating sustainable development issues into the selection of suppliers so as to realize responsible and highly effective supply chain management. According to the Company’s latest sustainability goals and sustainable supply chain plan, we allow suppliers to participate in the new measures and management model for sustainable development - promotion of supply chain management, code of conduct of suppliers. Through compliance with and application of the business ethics, occupational health, safety, environment, social and corporate governance (ESG) and supplier code of conduct (SCOC), good performance of suppliers will be ensured to maintain a fair and transparent relationship with the suppliers.
1. Supply Chain ESG Plan
Supply Chain ESG Plan aims at promoting SCOC to the procurement staff of the Company. The SCOC is the basis of the Supply Chain ESG Plan, which help facilitate the implementation and development of ESG, and also the basis for the evaluation of supplier ESG performance by the Company.
Apart from that, based on the level of MSCI industry importance, for suppliers who could proof their significant contribution to the reduction of toxic emission and waste discharge, carbon emission and increase the level of health and safety of the Company, they will be listed as outstanding case or our preferred choice of cooperation under supply chain ESG plan.
All suppliers must pass and accept promotion of supply chain management and SCOC as stipulated by SITC, share and comply with the principles of environment, ethics and social responsibility of SITC, and abide by the Company’s economic, financial and legal ethics and anti-corruption requirements. These requirements will be verified during the preliminary selection stage of the suppliers’ qualification and will be monitored throughout the supplier relationship.
We have adopted the following standardized and structured procedure to evaluate and select suppliers: 1) turnover; 2) supply risk (difficulty in finding alternate suppliers); 3) financial status and reliance on the Company; 4) business performance of suppliers (the delivery quality and punctuality, product quality and safety); 5) ESG evaluation results of the suppliers; 6) specific supplier risks (including specific risks of the countries, industries and commodities).
The preliminary selection of suppliers is conducted by procurement and supply chain risk evaluation department which is in charge of risk evaluation. Case study and analysis, selection and examination will be carried out based on the suppliers’ ESG rating questionnaire, financial and other documents provided by the suppliers. For any key or doubtful suppliers, on-the-spot evaluation such as interview, document verification and discussion will be executed. We will proactively provide trainings and suggestions to suppliers to help them understand the plan formulation, risk mitigation measures and the implementation arrangements, in order to ensure that the operation conforms to sustainable development and the expectations of the Company.
We have formulated specific risk mitigation measures tailored for the strategic/key suppliers (i.e. suppliers with high business-related risk or risk arising from negative effect of supply chain ESG) or specific suppliers with high risks (selected based on country, industry and commodity), and will discuss the future cooperation direction on a regular basis.
Supplier ESG Assessment Form | Yes (+1) | No （-1） | Uncertain（0） |
1) Comply with national and local laws, regulations and applicable requirements as well as business ethics and social obligations. | |||
2) Respect and protect the basic human rights of all employees, including but not limited to freedom of expression, freedom of association, equal rights and dignity. | |||
3) Forced labor, child labor and discriminatory employment practices are prohibited. | |||
4) Provide a safe and healthy working environment and provide necessary training and guidance. Classify and manage hazardous materials and waste to ensure they do not pose a threat to employee health and safety. | |||
5) Comply with environmental protection laws and regulations and take necessary environmental protection and energy-saving measures. | |||
6) Take steps to protect and promote natural habitats and biodiversity. | |||
7) Comply with anti-corruption laws and regulations. | |||
8) Comply with anti-monopoly and anti-competition laws and regulations and eliminate unfair competition. | |||
9) The supplier can help SITC improve its ESG management level and provide proof. | |||
total score | |||
2. ESG assessment measures
We prepare supplier questionnaire to be filled in by the procurement staff to reflect if suppliers have met their code of conduct. During the selection of suppliers and when signing the contract, with the lowest weighting on ESG standards, suppliers with better ESG performance will be considered as preferred choice.
In addition, we will provide trainings for our procurement staff or internal stakeholders in relation to their role in the supplier ESG plan. Detailed guidelines for supplier ESG Plan are provided to procurement staff and the parties who have signed the contract to clearly state their accountability to the accuracy of the content of the questionnaire.
Suppliers’ ESG performance will be evaluated based on the ratings in the questionnaire. In case there are several suppliers with similar conditions, suppliers with better ESG performance will be considered as preferred choice.
In addition, we will prioritize suppliers who can demonstrate a significant contribution to reducing our company's toxic emissions and waste levels, carbon emissions and improving health and safety.
Supplier Development and Correction Plan
1. Supplier ESG development plan
SITC values the environmental, social and governance ("ESG") sustainable development of its supply chain partners. We are also committed to providing ESG information, improvement opinions and training to suppliers. We hope that through this plan, we can build a stronger and more responsible supply chain network, promote sustainable development and social responsibility awareness throughout the value chain, and improve suppliers' understanding and ability to respond to ESG issues.
Steps in the Supplier ESG Development Process:
1) Provide ESG plan information:
Purchasing companies provide suppliers with information about their own ESG plans, including their importance to ESG, the company's ESG goals and strategies.
2) Scope of training content:
Specific advice on specific topics: for example, training on environmental protection, employee rights or ethical business practices.
Opinions on multiple ESG topics and best practices: covering multiple ESG areas, such as reducing carbon emissions, promoting social equity, and implementing good governance, etc.
Company assessment and development process information: Explains the company's ESG assessment criteria, the indicators and assessment methods used, and the details of the ESG development plan.
3) Training format:
Training can be delivered through a variety of media, such as online courses, training seminars, documentation, video tutorials, etc.
This training and messaging should be delivered in an accessible and engaging way to ensure suppliers can understand and apply ESG principles to their businesses.
4) Regular updates and communication:
Provide regular updates and communications to ensure suppliers are aware of any ESG program or policy changes.
Encourage two-way communication and collect feedback and suggestions from suppliers to continuously improve ESG training and support measures.
2. Suppliers’ access to ESG benchmarks
SITC is committed to providing relevant ESG information in the supply chain to suppliers so that they can understand best practices and cases in the industry and encourage them to take appropriate measures to improve their own ESG performance. By sharing information and case studies, we hope to work with our suppliers to drive more sustainable and responsible business practices.
We provide the following ESG information to our suppliers whenever possible:
1) Provide performance information in specific areas:
Purchasing companies can provide suppliers with performance data and metrics on other suppliers in the industry in specific ESG areas. For example, for environmental aspects, data such as carbon emissions and energy utilization can be provided; for social aspects, data on employee benefits, diversity and inclusion, etc. can be provided.
2) Share supplier case studies:
Provide case studies on how other providers have successfully achieved good ESG performance. These case studies can demonstrate measures taken, successful implementation strategies and results achieved in specific ESG areas, providing actionable reference and learning for suppliers.
3) Industry standards and rating information:
Provide ESG standards and rating information within the industry to let suppliers understand the industry's expectations and evaluation standards for ESG, including industry reports, rankings of rating agencies and other information, to help suppliers understand the performance standards within the industry.
4) Expert opinions and guidance:
Provide expert advice and guidance, such as from professional consulting or industry organizations, to help suppliers understand ESG standards, trends and best practices.
3. Supplier support (remote/onsite) in implementing corrective/improvement actions
SITC provides guidance and support to key suppliers in implementing corrective and improvement actions, either remotely or through on-site visits. We hope that in this way, we can ensure that suppliers can effectively implement corrective measures and improvement measures to improve the quality and sustainability of the supply chain, and establish long-term and stable cooperative relationships to promote ESG and other aspects between suppliers and companies. achieve the common goal.
3.1.Remote support
1) Remote guidance and consultation:
Provide guidance and consultation on corrective actions to suppliers via telephone, video conference or email, including discussion of problems, suggestions for solutions and transmission of relevant documents.
2) Online training and resources:
Provide online training courses, training videos, or online resources to help suppliers understand and implement corrective actions. Includes guides, templates, best practice examples, and more.
3) Remote supervision and evaluation:
Track and review suppliers' implementation of corrective actions through remote monitoring and evaluation. Collect necessary data and information via remote means to evaluate the effectiveness of improvement measures.
3.2. On-site support
1) Supplier on-site visit:
The company may send professionals to visit the supplier's site to directly assist in implementing corrective measures and provide more direct and real-time support and guidance.
2) On-site training and guidance:
Provide training and guidance at supplier sites, provide on-site support for specific issues or improvement projects, and adjust corrective actions in real time.
3) Assist in the implementation of improvement measures:
Assist suppliers in implementing improvement measures, including providing manpower, technique or other resources to ensure corrective actions are implemented on time and as planned.
4. Supplier Corrective Action Plan (“CAP”)
SITC is committed to managing the quality of suppliers' goods and services. Our purchasing department regularly records supplier non-compliance issues, searches for their root causes, and determines measurable, achievable solutions and realistic deadlines in order to continuously improve supplier management and quality control processes to ensure the high quality of goods and services in the supply chain, enhancing the company's competitiveness and customer satisfaction.
We require our procurement department to follow these steps for supplier corrective action planning:
1) Identify problems and analyze causes:
Procurement records the specific details and circumstances of noncompliance issues.
Conduct root cause analysis of issues to identify specific factors leading to non-compliance.
2) Develop measurable and achievable solutions:
Determine feasible and measurable solutions to problems.
Make sure these solutions are practical and can be implemented in practice.
3) Set implementation deadlines and monitoring measures:
Determine timelines and deadlines for corrective actions.
Set measurable and monitorable metrics to track how your solution is performing.
4) Implementation and supervision:
The responsible department is responsible for implementing the corrective actions identified in the CAP.
Monitor and track the implementation of corrective actions to ensure they are implemented as planned.
5) Review and continuous improvement:
Regularly review the implementation of CAP and confirm the effectiveness of corrective actions.
Based on the review results, necessary revisions and improvements are made to ensure that similar problems do not occur again.