Supply Chain Management System

Acer has been a member of the Electronic Industry Citizenship Coalition (EICC) since 2008, and actively participates in the coalition’s activities and conferences to better understand international trends in corporate social responsibility and share in the practical experience of its members. All Acer suppliers are required to comply with both the EICC Code of Conduct and local regulations. In addition, since 2008 we carried out on-site EICC Code of Conduct supplier audits, gaining a deeper understanding of each location’s working environment and the human rights conditions of the workers. We also encourage tier one suppliers to implement corporate responsibility and advocate for EICC code standards in their own suppliers, thus improving the working environment in the electronics supply chain worldwide.

In 2013, we began implementing vendor CSR scorecard assessment in order to look at performance in CSR and with regard to the environmental, social, and governance aspects. In 2014, we began to include the assessment result into quarterly business reviews, providing suppliers’ CSR evaluations to the senior management of Acer in the hopes that it becoming one of the driving force of the business relationship between Acer and suppliers. Since 2016 we have required our suppliers to implement risk assessment and management for their own suppliers based on the EICC Code of Conduct. For suppliers with higher risk, they should carry out on-site audits and management of follow-up improvement efforts.

We continue to communicate with suppliers and enhance their ability to respond to sustainability issues, as well as encouraging suppliers to incorporate sustainable development matters into their management agenda. We continue to hold annual supplier CSR communication meetings, providing the latest in CSR developments and trends, as well as analyzing supply chain issues and potential actions. These meetings also provide an opportunity for two-way communication between Acer’s management and the suppliers, continue strengthening the capability of entire supply chain in terms of environment and social responsibility.

Supplier Social and Environmental Management Process

Through the above process, Acer continues to work with suppliers on important social and environmental issues to establish a sustainable supply chain.

On-site Audit

Acer continues to audit supplier performance in terms of social and environmental responsibility. Auditing methods include audits led by management personnel, audits run by third parties, EICC Validated Audit process (VAP), and report review. We use different auditing methods to identify supplier non-compliance in the fields of environmental and social responsibility, and to maintain effective management of these issues in the Acer supply chain.

Acer is committed to ensuring that all suppliers treat their employees with respect, adopt manufacturing processes that demonstrate environmental responsibility, and provide safe working conditions. We have adopted the EICC Code of Conduct, which covers five major areas: Labor, Ethics, Health and Safety, Environment, and Management System.

On-Site Audit Results

In 2015, we conducted on-site audits of the manufacturing plants of 71 suppliers with higher risk. The workers at audited plants are over 100,000, of whom some 450 were interviewed. Between 2008 and 2015, a total of 352 supplier audits have been undertaken.

2015 Audit Results

Number and Type of Supplier Audits, 2008-2015

From the audit results, we see that the greatest proportion of non-compliance occurred in labor issues, followed (in order) by health and safety, management systems, environmental issues, and ethics. From 2016, where we find too high a number of priority non-conformance, too low an audit score, or questions regarding child labor, falsification of records, or discrimination, Acer then undertakes an unannounced audit to put an end to violations of the EICC Code of Conduct and more strictly require such suppliers to improve their environmental and social responsibility management. Suppliers are informed of an upcoming unannounced audit 12 hours prior to the audit taking place, and are not informed of the content of said audit.

Distribution of Non-Compliance Found in 2015 Audits

Improvement and Follow-up on Important Issues

We require suppliers to submit a Corrective Action Report (CAR) in response to any issues of non-compliance identified in the audit within 30 days. This CAR will be approved by management personnel and verified against the on-site audit the following year. With regard to high-risk suppliers, as found in the audits, Acer will make the necessary adjustments to our purchasing strategy to manage the issue.

In 2015, we continued focusing on managing overtime figures for our ODM suppliers, as well as on ensuring all workers receive at least one day off every seven days. To this end, we undertook bimonthly tracking and monitoring, and should any deviations for the targets be found, we shall require the supplier to implement an effective solution. In addition, to ensure that Acer’s suppliers clearly convey the EICC Code of Conduct to their own suppliers, and to ensure compliance with that same code in suppliers, from 2016 we require all tier one suppliers to conduct risk assessments of their suppliers. Where risk is found to be relatively high, our suppliers must also undertake review and tracking of improvement measures.

Major Issues and Corrective Actions

Improving Supplier Capabilities

Acer offers information and training regarding the latest trends and developments in social and environmental responsibility, thus helping improve their ability to confront the challenge of sustainable development. We continue to invite suppliers to participate in annual supplier CSR communication meetings, CDP project briefings, and major training programs on social and environmental responsibility. This helps them get access to the latest information on global trends, while also presenting opportunities for suppliers to engage in multidirectional communication with Acer senior management or relevant industry experts. In 2015, we focused on areas including training related to the latest EICC code provisions, the management of student workers and interns, and international trends in labor rights.

New EICC Provisions Training

In order to deepen the implementation of the EICC Code of Conduct in our supply chain, and to expand these efforts to upstream suppliers, in 2015 we worked with EICC-member supply partners to hold three “2015 Acer Supplier EICC Conferences”, one each in Dongguan, Guangdong; Chongqing; and Kunshan, Jiangsu. At these, we not only provided explanations of new EICC Code of Conduct provisions, announced the focal points of our audits, explained common oversights, and communicated Acer’s targets and evaluation methods, but also encouraged our suppliers to take responsibility for managing audits of their own suppliers. These three conferences were very well attended by supply partners, with a total of 165 participants from 67 suppliers in attendance, helping greatly in the promulgation and implementation of the EICC Code of Conduct.

Supplier CSR Communication Meeting

Every year, we invite representatives of our major suppliers to participate in annual CSR Communication Meeting, not only promoting global trends in CSR, but also explaining Acer’s requirements of and goals for supply chain CSR management. In 2015, we invited chairman George Huang to attend the meeting, as well as rewarding supply partners with awards to encourage the common creation of a top-flight sustainable supply chain.

Management of Student Workers and International Trends in Labor Rights

To help the supply chain gain insight into issues around student workers, in 2015 we invited senior trainer from the Labor Education and Service Network Ms. So, Sheung to present case studies on student worker management and examples of how it could been done well. Ms. So also provided illustrations of the management framework of the EICC's “Responsible Management of Student Workers.” All of this aimed to give suppliers an understanding not only of their responsibilities in regard to student workers, but also those of schools, as well as addressing how to identify and select vocational schools that are qualified to engage in industry-academia cooperation, an aspect many companies overlook.

Not only do we insist that the use of student workers 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:

Additionally, with labor rights gaining increasing attention on the global stage, not only have new laws been established in recent years to fight forced labor and human trafficking (e.g. the California Transparency in Supply Chains Act of 2010 and the United Kingdom's Modern Slavery Act 2015), public sector procurements have been required to incorporate environmental, social, and labor standards, fostering further sustainability in development. Ms. So also provided both Acer procurement staff and suppliers with an explanation of current international trends in labor rights law and management. Given developments in international human rights law, it is vital that both Acer procurement staff and suppliers understand that international trade and labor rights are inextricable from one another.