Policy Aspect
Chunghwa Telecom has formulated a Code of Conduct for Chunghwa Telecom Suppliers to strengthen suppliers' anti-corruption practices, requiring all suppliers to sign and abide by it when winning a bid. The Code of Conduct specifies:
- When performing business, suppliers shall not directly or indirectly provide, promise, request, or accept any form of improper benefits, including kickbacks, commissions, facilitation payments, or other means to customers, agents, contractors, suppliers, public officials, personnel or other interested parties. (note)
- Suppliers who make direct or indirect donations to political parties, organizations, or individuals involved in political activities must comply with political donation laws and relevant internal operating procedures of the company and must not seek commercial interests or trading advantages. Suppliers should comply with applicable laws and internal operational policies for charitable donations or sponsorships and must not engage in disguised bribery.
Management Actions
- Education and training: Chunghwa Telecom regularly arranges ESG education and training for essential suppliers, emphasizes formulating anti-corruption policies in corporate governance, and publicly discloses and communicates them to all employees.
- Second party audit: Chunghwa Telecom arranges for important suppliers to undergo ESG audits yearly, and anti-corruption policies and actions are included in the audit scope.
- All suppliers have completed the “Supplier ESG Status Self-Assessment Form,” which covers the requirements for suppliers to establish business ethics, codes of conduct, and anti-corruption policies, promote ethical management education and trainings, and maintain an open information transparency as well as surveys whether there have been any major violations of economic and social regulations in the previous year, including but not limited to accounting and tax fraud, money laundering, corruption, bribery, labor rights violations, anti-competitive or anti-trust practices, and significant illegal activities related to products and services, so as to reduce the procurement risks of the Company.
- Procurement terms: If the supplier violates its anti-corruption commitment, Chunghwa Telecom may cancel the supplier's qualification to bid or win the bid, confiscate the bid deposit, performance bond, warranty deposit, terminate or terminate the contract, impose a suspension, and request a 20 percent of the purchase amount in the case—punitive liquidated damages and damages.
Supplier Feedback Mechanism
To confirm the implementation of suppliers' anti-corruption policies and feedback on the compliance of the company's employees' behavior, Chunghwa Telecom requires suppliers with more than 5 million transactions to fill out a questionnaire in the Chunghwa Telecom electronic procurement system. In 2023, Chunghwa Telecom sent out 631 questionnaires, and 522 were received, with a response rate of 83%. The questionnaire is aimed at the following:
| Survey items | Measurement results（out of 10 points） |
|---|---|
| Compliance level with the Code of Conduct for Chunghwa Telecom personnel | 9.96 |
| Anti-corruption and prohibition of bribery promotion within suppliers | 9.96 |
| Whether the supplier has relevant anti-corruption policies | 9.86 |
| Whether the supplier is aware of Chunghwa Telecom’s ethics reporting hotline | 9.24 |
| Whether the supplier is willing to use Chunghwa Telecom’s ethics reporting hotline to report the illegal behavior of the company’s employees | 9.59 |
Note: Stakeholders refer to the directors, supervisors, managers, employees, agents, suppliers, contractors, or consultants of the company and group companies and organizations, as well as legal persons or natural persons with substantial control capabilities.