Supplier Strategy
Sustainable Supply Chain
Suppliers are important partners, so TXC formulates strategies with the concept of sustainable development, and actively guides suppliers to evaluate and assist in environmental, social and governance related issues in order to identify and respond to impacts. Meanwhile, in order to build green supply chains, TXC has promised to require main suppliers to conduct greenhouse gas inventories and calculate product carbon footprints, so as to reduce greenhouse gas emissions generated by the organization itself and its business activities.
01
Measures for Selecting Suppliers
Suppliers that TXC selects to cooperate with should expect to develop the awareness of accepting sustainable development and the determination to implement it, and absolutely take sustainable development as a business goal. Therefore, TXC will gradually incorporate environmental, social and governance related issues into specific review stages or documents, such as supplier evaluation forms and evaluation meetings to decide whether to add a certain supplier to TXC's Qualified Supplier List.
02
Procurement Strategy
TXC upholds the spirit of green procurement and gives priority to products or services certified by international/national green or environmental standards in the procurement stage. In addition to signing contracts with suppliers at the procurement stage, TXC will also continue to request suppliers to implement the Code of Conduct - Responsible Business Alliance (RBA) regular self-reviews as well as incorporate environmental, social and corporate governance into the contract, so that suppliers can share the concept of sustainable development and move towards a common goal.
03
Fair Procurement
Taking into account supply chain risks and avoiding centralized procurement, TXC has formulated comprehensive mechanisms for supplier selection and procurement based on ethics, integrity and regulatory compliance. Manufacturers who meet the Company's requirements of relevant qualifications, capabilities and relevant regulations can be TXC's supplier partners, so that fair procurement procedures can be practiced.
The following table shows TXC's investigation into the major suppliers
However, in view of the increasing importance of environmental, social and governance related issues, TXC has given priority to suppliers with the following systems.
| Visit for Confirmation | Number of Investigated Suppliers | Number of Eligible Suppliers | Percentage of Eligible Suppliers | ||
|---|---|---|---|---|---|
| Responsible Business Alliance standards | 47 | 47 | 100% | ||
| Certification System | Number of Investigated Suppliers | Number of Eligible Suppliers | Percentage of Eligible Suppliers | ||
|---|---|---|---|---|---|
| ISO 9001 quality management system | 47 | 46 | 98% | ||
| ISO 14001 environmental management system | 47 | 42 | 89% | ||
| ISO 28000 security management system for the supply chain | 47 | 23 | 49% | ||
|
ISO 45001 occupational safety and health management system
|
47 | 16 | 34% | ||
|
IECQ/QC080000 hazardous substance process management system
|
47 | 4 | 9% | ||
|
ISO 14064-1 greenhouse gas inventory
|
47 | 6 | 13% | ||
Supplier Management
Supplier Management
Even though preventive management in terms of qualifications or capabilities has been established in the selection and procurement stages, the implementation and supervision are even more important.
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Suppliers must regularly sign and return "Commitment to Integrity," "Environmental, Occupational, Safety, and Health Status Questionnaire," "Commitment to Industry Regulations," "Declaration on Green Products and Environmental Protection" and "Declaration of Conflict-free Metal," so that suppliers can be better guided in the scope of sustainable development as an enterprise.
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TXC adopts comprehensive evaluation mechanisms during contract periods. For example, professional employees are assigned by relevant organizations and units within the Company to form a professional, impartial and independent evaluation team to regularly carry out evaluations of labor, human rights, health and safety, environmental standards, business ethics and management systems every year and keep evaluation records and corroborating information as implementation records and evidence to ensure that suppliers’ safety of work environments, human rights protection, protection, and protection and respect of labor rights, regulatory compliance, integrity and ethics, and environmental protection are in line with the Company's medium- and long-term plans for sustainable development and relevant international standards, in order to maintain long-term high-quality partnerships, effectively control the possibility of related risks, and build a relationship of coexistence and prosperity with suppliers.
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TXC organizes supplier meetings and training activities from time to time every year
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If any shortcomings are found afterwards, TXC and suppliers will immediately implement corrective and preventive mechanisms followed by a follow-up on improvement and supervision measures to ensure the achievement of the rights and interests of both parties and the goal of sustainable development.
Supplier Code of Conduct
This Code of Conduct is formulated based on ISO 26000 Social Responsibility International Guidance, the Responsible Business Alliance (RBA) Code of Conduct, OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and relevant domestic and international laws and regulations. It serves as the foundation for TXC’s sustainable supply chain management and applies to all suppliers, subcontractors, third-party vendors, and business partners.
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Corporate Governance
- Suppliers shall establish sound corporate governance and compliance systems, including internal supervision, reporting mechanisms, information disclosure, and principles of integrity in transactions.
- They shall not engage in fraud, bribery, or unfair pricing practices, and shall ensure that transactions are open, transparent, and accountable.
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Human Rights
- Suppliers must respect and protect the human rights and humane treatment of all workers, including the prohibition of forced labor, child labor, discrimination, and harassment, as well as upholding freedom of association and the right to collective bargaining.
- They should implement responsible sourcing policies for conflict minerals, avoid using conflict minerals from conflict-affected areas, and conduct due diligence and supply chain management in accordance with OECD guidance.
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Labor Practices
- Suppliers shall provide fair working hours, wages, leave, and a safe and healthy working environment, and establish grievance mechanisms that allow workers to raise concerns without fear of retaliation.
- All employment conditions shall comply with laws and international standards, and any form of wage penalty or oppression of workers is prohibited.
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Environmental Protection
- Suppliers shall have environmental management systems in place and be committed to energy conservation, carbon reduction, waste management, water resource protection, and control of hazardous substances.
- Suppliers shall establish an environmental management system and commit to pollution prevention, energy conservation and emission reduction, waste management, water resource protection, and the control of hazardous substances and environmentally restricted or prohibited materials.
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Fair Business Practices
- Suppliers shall not engage in corruption, bribery, extortion, or improper exchange of benefits, and shall establish internal ethical codes.
- They should strictly comply with laws and regulations related to fair competition and intellectual property rights.
- Providing cash, non-standard gifts, travel hospitality, or engaging in lending, guarantees, investments, or other forms of benefit transfers to TXC employees or their relatives is strictly prohibited.
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Customer Issues (Product Responsibility)
- Suppliers shall provide products that meet quality and regulatory requirements, protect customer safety, and disclose information truthfully.
- They should proactively report and implement recall measures if significant product defects occur.
- Customer personal data and privacy must be properly managed.
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Community Involvement and Development
- Suppliers should respect local community cultures and rights, actively participate in charitable activities, and avoid negative impacts on society and the environment.
- They are encouraged to use local resources and create local employment opportunities.
Supply Chain Security Management
Construction of Supply Chain Security Management System
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Through the guidance of the government's integrated system, TXC has established Authorized Economic Operator (AEO) and Supply Chain Security Management System (ISO 28000), and thus built a supply chain security system to achieve substantial results like preferential customs clearance and improved service quality and efficiency in order to meet security needs of customers for industrial value chains.
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Through the education and training of AEO and ISO 28000 provisions, risk assessment, formulation of goals, objectives, and plans, high-quality enterprises’ verification via a self-assessment checklist, audits of business partners, internal audits, and management reviews, TXC obtained a certificate of security-certified high-quality enterprise issued by Customs Administration, Ministry of Finance in March 2012. Re-assessed in 2021, TXC obtained AEO qualifications and has maintained the validity of the AEO certificate after on-site verification by customs auditors followed by its internal reviews.
