In order to fulfill our customers’ expectations for high quality, innovative products, Acer works with service and manufacturing partners from around the world. Our components suppliers are concentrated around our system ODM sites, and through just-in-time production, we can rapidly provide ICT products like personal computers, tablet computers, smartphones, servers, projectors, and LCD displays, as well as BYOC and cloud-based value-creating products, enabling us to quickly meet market demands with our products.
We identify the critical suppliers based on the purchase spending, non-substitutable, and strategic material, product or business. Acer’s tier one suppliers can be categorized according to the products or services they supply: ODM/OEMs, key components, assigned vendors, logistics, and services. Our manufacturing suppliers are distributed around the globe, including China, Malaysia, Thailand, the Philippines, Indonesia, Vietnam, India, Brazil, and Hungary, although our primary production base is located in China. Looking at our vendors’ production locations, we see that local procurement in the China region accounts for 84% of the total procurement value. In terms of other vendor business locations, Taiwanese manufacturers account for more than 60% of procurement value.
We require all manufacturing suppliers should obey EICC Code of Conduct, that workers are treated with respect and dignity. We haves taken multiple actions to ensure social responsibility and labor rights in our supply chain.
Acer requires the management processes related to supplier risk evaluations, on-site audits, and education & training be in accordance with Acer’s requirements for social and environmental responsibility. We use the following methods to eliminate the possibility of forced labor or human trafficking taking place:
Child labor refers to the employment of children in any work that deprives the children of their childhood, interferes with their ability to attend regular school, and that is mentally, physically, socially or morally dangerous and harmful. The term “child” refers to any person under the age of 15, or under the age for completing compulsory education, or under the minimum age for employment in the country, whichever is greatest. Acer believes that the wellbeing and education of our future generations are of utmost importance. Therefore, Acer prohibits child labor in its supply chain and conducts routine audits to verify conformance to these requirements. If child labor is discovered in the supply chain, Acer will remedy the impacts of this atrocious condition by implementing the following measures.
Child Labor Remediation Measures:
If child labor is found at an Acer supplier factory, the factory must immediately remove the child from the workplace.
The factory where the child labor was found must send the child to have special labor health check to make sure his/her health is not affected by the work. If affected, all the fees, including medical treatment cost and living cost, must be covered by the factory.
The factory where the child labor was found must contact the family and send the child home. All expenses related to transporting the child home must be covered by the factory.
The factory where the child labor is found shall continue to pay the wages until the child is of legal working age.
The factory where the child labor is found shall make sure that the child completes compulsory schooling. The factory shall provide Acer with the name and address of the school in which the child is enrolled.
The Corporate Sustainability Officer of Acer should notify the related head of the Acer BU and BG to discuss this core non-conformance situation.
Acer shall identify the risk of repeated child labor conditions through an unannounced audit of the affected factory within 6 months.
Forced labor refers to situations in which persons are coerced to work through the use of violence or intimidation. Forced labor takes on many forms that included debt bondage, human trafficking, and other forms of modern slavery. Acer believes that all work shall be voluntary and workers shall be free to leave work at any time or terminate their employment. Through its Code of Conduct, Acer prohibits any form of forced labor in its supply chain. Acer requires its suppliers to adhere to its Code of Conduct and verifies the conformance with routine audits. If forced labor is identified in the supply chain, Acer will take action to remedy the situation through the implementation of the following measures.
Forced Labor Remediation Measures:
Acer shall review and investigate the findings and relevant regulation to find the gaps and problems.
Acer shall communicate with supplier factory management and collect supplemental information.
If confirmed that human trafficking, slavery and/or any form of forced labor exists at an Acer supplier factory, Acer will work with experts and authorities to ensure that the worker is offered a safe place to live and provided with financial assistance, the cost of which shall be covered by the factory for a period of time deemed to be sufficient by the authorities
The Corporate Sustainability Officer of Acer will notify the related head of the Acer BU and BG to discuss this core non-conformance situation.
Acer shall identify the risk of repeated forced labor conditions through an unannounced audit of the affected factory within 6 month.
Management of Student Workers and Interns
To ease labor pressure while also cultivating new employees, some suppliers in China employ student workers or interns to meet production needs in their factories. With regard to education, internships for students are a wonderful opportunity for students to learn to integrate theory and practice, preparing them better for the business world and helping them become better problem-solvers. In practice, though, internships are often considered a means to make up for a shortfall in labor, with education rarely a consideration, and student interns are sometimes even not afforded special protections.
In 2013, we and selected suppliers participated in an EICC/Labor Education and Service Network (LESN)/Nanjing University survey of student and intern labor. The goal of this was to explore the problems facing student labor and interns in China and find optimal approaches for ICT industry. In 2014, the EICC-sponsored Labor Education and Service Network (LESN) and Nanjing University published " Responsible Management of Student Workers: From Compliance to Best Practice - A Toolkit for Companies," providing electronics plant management in China with a valuable tool regarding student interns. In our CSR communication meetings with suppliers, we ensure that those suppliers are aware that management of student labor involves not only management of manufacturing, but also the planning of student internships, pre-employment training, plant management, and working closely with schools. Not only do we insist that the use of student interns be in accordance with relevant laws and regulations, not involve the use of child labor, and provide the proper protections, we also insist that it adhere to the following five-stage management system:
Our hope is that students interning in Acer's supply chain will all have access to the highest quality of internship opportunity, and we will continue to expand our requirements regarding management of student internships.
California Transparency in Supply Chain Act
In 2010 the California Transparency in Supply Chains Act of 2010 (SB 657) was passed and has been into effected on January 1, 2012. This law requires large retailers and manufacturers who do business in the state of California and have annual gross worldwide sales of over $100 million U.S. dollars to be transparent about the efforts they have undergone to eradicate slavery and human trafficking in their supply chain.
As Acer is a member of the EICC, we require our suppliers to abide by the EICC code of conduct, especially with regards to their workforces. The EICC code of conduct specifically forbids malpractices such as using forced labor, underpaid labor, involuntary prison labor, or binding workers to unreasonable contracts. Acer also conducts risk management, on-site factory inspections, training courses, and other management procedures to ensure that our suppliers’ manufacturing operations accord with Acer’s social and environmental responsibilities. We have adopted the following measures to prevent the possibility of any of our suppliers engaging in forced labor or human trafficking:
Supplier Risk Assessments
Acer’s suppliers’ risk assessments are based on the following:
The results of the suppliers’ self-assessment performance;
The degree of risk associated with the location of the factory;
The nature of the business relationship between Acer and the supplier;
The results of previous audits.
Acer also takes into account the primary concerns of all of the stakeholders involved.
After the risk assessment – based on the above criteria – has been conducted, Acer then draws up a list of suppliers that require an on-site social and environmental responsibilities audit to be undertaken by an accredited 3rd party verification agency. We also take part in EICC’s VAP. Adopting a variety of audit models allows us to see the discrepancies in our suppliers’ implementation of their social and environmental responsibilities. We can then suggest what improvements can be made.
Acer requires all components suppliers to sign our Declaration of Compliance with Acer Supplier Code of Conduct. Suppliers must not only provide us with relevant information on social and environmental responsibilities, but must also verify that their own and their suppliers’ operations conform to Acer’s human rights standards, meaning that their workers are treated with respect and dignity.
In order to fulfill our responsibility to educate our suppliers so that they can remain abreast of the latest international trends, Acer holds its CSR communication meetings each year. The meeting provides an opportunity to discuss the latest international trends as they affect supplier social and environmental responsibilities. During the meeting we examine the EICC code of conduct, which forbids malpractices such as using forced labor, underpaid labor, or involuntary prison labor, and binding workers to unreasonable contracts. We will continue to communicate and cooperate with our suppliers in the future as we know that combining resources is the best way to effectively improving each aspect of our mutual social and environmental responsibilities.
Internal professionals training
Acer requires all employees to comply with the Acer Group Standards of Business Conduct (SBC). The SBC includes provisions relating to supply chain issues, including the use of child and forced labor. Any offense or violation against the articles in the SBC will result in corrective action proceedings according to the gravity of the offense committed. Serious offenders will face disciplinary action or be asked to leave the company accordingly. This set of standards is the highest-level behavioral criteria for all Acer employees engaged in corporate activities. Furthermore, all new employees are enrolled in orientation training and asked to honor these behavioral requirements when they first join the company.
We are committed to a programme of continuous improvement in our practices to combat slavery and human trafficking in our supply chains and in our business.
It is our policy to conduct all our business ethically and in accordance with the UK Government's Modern Slavery Strategy, as amended from time to time, and as outlined in the UK Home Office Guidance "Transparency in Supply Chains: a Practical Guide" published on 29 October 2015.
We therefore take a zero-tolerance approach to slavery and human trafficking both in our business and in the businesses of our suppliers. We are committed to acting ethically in all our business dealings and relationships wherever we operate and implementing and enforcing effective systems to counter slavery and human trafficking.
Our Policies on Slavery and Human Trafficking
We are committed to ensuring that there is no modern slavery or human trafficking in our supply chains or in any part of our business.
Our Acer Group Standards of Business Conduct (SBC) reflects our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking is not taking place anywhere in our supply chains.
As a member of the Electronic Industry Citizenship Coalition (EICC) -- a nonprofit coalition of electronics companies committed to supporting the rights and well-being of workers and communities engaged in the global electronics supply chain -- we demonstrate our commitment to environmental and social responsibility. EICC members commit publicly to the EICC code of conduct (the “Code of Conduct”) and are expected to actively pursue conformance to the Code of Conduct and its standards as a total supply chain initiative.
We require all manufacturing suppliers to abide by all applicable laws and regulations and by the EICC Code of Conduct, by treating employees with respect and dignity. We haves taken multiple actions to ensure social responsibility and labor rights in our supply chain.
Acer believes that all work shall be voluntary and workers shall be free to leave work at any time or terminate their employment. Through the Code of Conduct, Acer prohibits any form of forced labor in its supply chain. Acer requires its suppliers to adhere to its Code of Conduct and verifies the conformance with routine audits.
Acer has released the Slavery and Human Trafficking Statement of 2016, which includes the policies on slavery and human trafficking, organization’s structure, our supply chains, due diligence processes for slavery and human trafficking and effectiveness.
Responsible Sourcing of Minerals
We are deeply concerned about the social and environmental issues related to the materials contained within product parts and to the manufacturing process. The rich mineral resources in the Democratic Republic of Congo (DRC) have fueled one of the world’s deadliest conflicts. We understand we have the opportunity to have a positive impact on this complex issue as an individual company, Acer’s Policy on Conflict Minerals outlines our commitment to ensuring that working conditions in our supply chain are safe and that workers are treated with respect and dignity, while sourcing minerals from the Great Lakes Region.
Since 2009, Acer has engaged its suppliers to educate them on the issue and begin tracing its supply chain back to the source of cobalt, gold, palladium, tantalum, tin, and tungsten. Along with the survey, we also provided our suppliers with references including usage, major producers and consumption in the electronics industry of the minerals in question. The survey took six months and the response rate from our suppliers was over 90%. The survey indicated gold was sourced mainly from China, South Africa, Australia and Japan. They reported China, Malaysia and Indonesia as major tin producers. The major sources of tantalum are reported as China and Australia. Tungsten, on the other hand, is sourced mainly from China. This engagement has given Acer an initial understanding of its supply chain with respect to these metals, and has prepared the foundation for future management of mineral sources. It has also helped us understand that only through industry collaboration can we be successful in managing mineral sources.
In 2010, Acer began participation on the EICC/GeSI Extractives working group and Extractives Due Diligence sub-working group. Acer contributed to the development of the Conflict Minerals Reporting Template tool (Template), which facilitates disclosure and communication of information regarding smelters that provide material to a company’s supply chain.
In 2011, we participated in the template pilot by conducting a test-run with Acer's suppliers and gathering feedback for further refinement of the template, and in the same year, we started to use the tool to launch a survey with our suppliers on smelting plants. The preliminary analysis indicated the companies that refine gold, tantalum, and tin are mainly located in China, Japan and USA. Tungsten, on the other hand, is located mainly in China and Indonesia. We’ll continue to cooperate with the EICC/GeSI Extractives working group to support EICC/GeSI Conflict-free Smelter (CFS) Program.
In 2012, following the initial identification of the smelters in our supply chain, we submitted our smelter lists into the EICC/GeSI CFS program to facilitate the creation of an industry smelter master list, which would be used going forward to target smelter companies for CFS Program participation. We also published the initial results on the website. Furthermore, we began a targeted effort to verify smelter status and then to reach out to certain smelters to encourage them to participate in the CFS Program. The effort included sending encouragement letters, direct contact via telephone, and smelter facility visits in China. This effort will continue in the future as necessary until we have a critical mass of participating smelters in the CFS program for each of the four metals Acer also sought to further develop its due diligence program to ensure that it would employ best practices and would be effective at improving the situation in the region. We also continue to hold meetings with suppliers to ascertain progress on the issue of conflict minerals, to explain Acer's commitments and supplier requirements, and to ensure they have a greater awareness and more thorough understanding of the issues. Acer joined the "Implementation Programme of the Supplement on Gold to OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-affected and High-risk Areas" in November of 2012. Acer will continue to participate by implementing the OECD Guidance and participating on discussions to build due diligence capacity in our supply chain and in the region and to share experiences on program implementation.
In 2013, Acer joined the Public- Private Alliance (PPA) for Responsible Minerals Trade, and started to use the version 2 due diligence tool to launch a survey with our suppliers on smelting plants. We’ll continue to publicize our progress on due diligence and hope to be able to contribute along with other companies, governments, and civil societies to support solutions to supply chain challenges and to enable the future sourcing of legitimate, conflict-free minerals from the region. In the meantime, we will search for other opportunities for due diligence to ensure best practices and to effectively ameliorate the mineral conflict between the DRC and its neighbors.
In the first quarter of 2014, we evaluated our second full cycle of Conflict Mineral Reporting Template responses that were collected from our suppliers in 2013. We also began publishing a Smelter List with the name and location of the smelters/refiners of tantalum, tin, tungsten, and gold that was identified in our supply chain as part of Acer’s conflict minerals due diligence efforts. We feel that publishing this list will provide better visibility to our stakeholders and help increase awareness of the EICC Conflict Free Sourcing Initiative (CFSI) and participation on the Conflict-Free Smelter Program (CFSP). In the second quarter, we released Acer’s 2013 Conflict Minerals Report, which provides our due diligence efforts conducted during the 2013 calendar year and planned for 2014.
In the first quarter of 2015, following the evaluation of our third full cycle of Conflict Mineral Reporting Template responses that were collected from our suppliers in 2014, we published a revised Smelter List for 2014. In addition to identifying the name and location for each smelters/refiners identified in our supply chain, this year we added a smelter status to the list. We believe that by including the smelter status, it will provide our stakeholders with increased transparency and a better understanding of the progress Acer is making with respect to smelter/refiner identification and compliance validation. Acer’s goal through participation in the CFSI is to help the industry members identify the smelters in our collective supply chains, get them introduced to the CFSI, and to have them ultimately participate in the CFSP. Acer released its 2014 Conflict Minerals Report at the end of the second quarter and it included our due diligence efforts conducted during the 2014 year and those activities planned for 2015.
Acer has completed the review of its fourth cycle of conflict minerals reporting template responses from its suppliers. As a result, we have released Acer’s 2015 Conflict Minerals Report, which includes a summary of Acer’s due diligence efforts in 2015 and plans for 2016, along with an updated smelter list. Now that Acer has several years of data, this year’s report begins to show a trend of forward progress due to the efforts of Acer and the industry as a whole. As part of the review of our CMRT responses this year, we provided detail smelter status feedback to each supplier along with a score of their conflict minerals reporting template performance. In addition, Acer has finalized its risk management plan this year and is confident that its implementation along with our improved supplier feedback will further drive us in a positive direction. In order to continue promoting responsible sourcing, Acer has been a pioneer signatory to the EICC/CFSI Responsible Raw Materials Initiative, participating in related working groups and taking a responsible attitude toward materials mining and the social and environmental impacts thereof.
As a result of its conflict minerals due diligence measures in 2016, we were able to identify 295 unique smelters in its supply chain. The number was a negligible decrease over the previous year. However, Acer saw an increase in compliant smelters from 213 to 244 in 2016. Compliant smelters now represent 83% in Acer’s supply chain. The data shows the continued trend toward engaging and driving more smelters toward the Conflict-Free Sourcing Initiative’s (CFSI) Conflict-Free Smelter Program. Also, in order to continue promoting responsible sourcing, Acer has been a pioneer signatory to the EICC/CFSI Responsible Raw Materials Initiative, participating in related working groups and taking a responsible attitude toward materials mining and the social and environmental impacts thereof. We have released Acer’s 2016 Conflict Minerals Report, which includes a summary of Acer’s due diligence efforts in 2016 and plans for 2017. A summary of our progress year-over-year can also be found below.
Acer communicates the following expectations to its suppliers with respect to the responsible sourcing of minerals:
Acer suppliers must conduct their operations in a socially and environmentally responsible way.
Acer suppliers are expected to make sure that the products they are supplying to Acer are DRC conflict-free and do not contain metals derived from minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country. These minerals include columbite-tantalite (tantalum), cassiterite (tin), gold, and wolframite (tungsten)
Acer suppliers shall exercise due diligence based on national or international recognized standards or guidance on the source and chain of custody of these minerals (such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas) and make their due diligence measures available to Acer upon request. These measures shall include the completion of the EICC/GeSI Due Diligence Template tool and the support of the EICC/GeSI Conflict-Free Smelter (CFS) Program.
Once CFS program smelter lists are sufficiently available, Acer suppliers must only accept metals from smelters that have been audited and are deemed compliant by the EICC/GeSI Conflict-free Smelter (CFS) Program.
From 2017, all 3TG smelters supplied to Acer must be included on the Conflict Free Smelter Program List. To confirm that suppliers implement our requirements, we work with third-party auditing companies. On-site audits check that minerals are sourced with due diligence and according to our policies. We make all efforts to verify that the materials used to make Acer products are not from conflict minerals.
Indonesia Tin Mining
Acer is aware of the poor labor conditions and environmental degradation associated with tin mining on the Indonesian Bangka and Belitung Islands. Therefore, Acer will commit to the following activities regarding addressing this situation in Indonesia:
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Acer works with its suppliers throughout the product lifecycle, from design, manufacture, assembly, use and end-of-life treatment to reduce the environmental impact of its products. With Acer products, consumers are able to reduce their own environmental impact by reducing their energy consumption, and waste generated through a recycling plan, which ensures products are properly handled for reuse or recycling.