Suppliers are important partners to the Company. Therefore, CWTC values the sustainable development of its suppliers. We implement “Sustainable Development Best Practice Principles” to encourage our suppliers to fulfill their corporate social responsibilities by protecting the environment, reducing carbon emissions, improving safety and health, valuing human rights, managing risk, and adhering to ethical compliance. Together, we aim to establish a stable and sustainable supply chain.
All new or existing suppliers are required to sign the “Responsible Business Alliance Code of Conduct (RBA Code of Conduct) Compliance Declaration,” the “Corporate Social Responsibility Statement,” and the “Conflict Minerals Declaration,” and complete the relevant background information survey forms. Additionally, we implement the RBA Code of Conduct, uphold the Human Rights Declaration, and comply with current laws, regulations, and customer requirements. In 2024, none of the Company's existing suppliers or contractors had any significant negative impact, either actual or expected, on the environment, labor conditions, human rights, or society.
CWTC has identified several key materials that pose potential operational risks, including copper alloys, iron-nickel alloys, and silver. Some of these materials are characterized by high price volatility or a high concentration of supply sources. In the event of geopolitical conflicts, trade restrictions, or stricter environmental regulations, there could be significant cost increases or supply chain disruptions. To reduce reliance on single sources and ensure supply stability, we have adopted a diversified procurement strategy. We prioritize collaboration with suppliers from regions with stable political and economic environments and have established supplier review and management mechanisms accordingly.
According to its supplier procurement management procedures, CWTC conducts a thorough review of each supplier's qualifications. This review covers basic company information, financial status, quality management, environmental management, and relevant system certifications. Where necessary, on-site factory audits are conducted to assess suppliers’ performance in areas such as quality control, delivery management, system integration, and sustainability risk control. Suppliers must be jointly reviewed and approved by the Procurement, Quality, Engineering, and other relevant departments before being included on the approved supplier list. In addition, Chang Wah Technology conducts regular on-site evaluations of suppliers each year to ensure continued compliance with company requirements and relevant standards. In 2024, no new major raw material suppliers were added, and all existing key suppliers had obtained internationally recognized quality management system certifications. Therefore, no on-site factory audits were conducted during the year.
To understand the current status of suppliers in depth, CWTC evaluates the performance of “key suppliers of the current year" or "key suppliers rated as Class C in the previous assessment." The assessment includes 11 aspects: document control, design control, quality systems, quality records, procurement, process control, management of non-hazardous materials, control of non-conforming products, verification management, product protection, storage, packaging and transportation, product identification, and batch tracking management. These aspects are covered in both the suppliers' self-assessments and the Company’s on-site evaluations.
To proactively manage risks and enhance overall supply chain quality, CWTC conducts sustainability risk assessments for suppliers. CWTC distributes self-assessment questionnaires to primary materials suppliers to investigate their potential environmental, social , and human rights risks. Based on the results, suppliers are categorized into five risk levels. High-risk suppliers are required to make improvements within a prescribed timeframe. Those who fail to make improvements on time will be disqualified from our supplier list. In 2024, we assessed 11 primary materials suppliers, and none of them were found to have significant or potential negative social impacts.
CWTC has long been committed to complying with the standards and initiatives of the Responsible Business Alliance (RBA), the Global e-Sustainability Initiative (GeSI) and the Responsible Minerals Initiative (RMI). We clearly state that conflict minerals originating from the Democratic Republic of Congo (DRC) and its neighboring areas, controlled by armed groups—such as gold (Au), tantalum (Ta), tungsten (W), cobalt (Co), tin (Sn), and other conflict minerals—are not accepted in our supply chain. Suppliers are also required to comply with the RBA Code of Conduct.
1.Do not use conflict minerals from illegal sources, and do not purchase conflict metals produced in conflict-affected and high-risk areas.
2.Encourage all suppliers in our supply chain to participate in programs such as the RBA (Responsible Business Alliance) and the RMI (Responsible Minerals Initiative).
3.Commit to conducting due diligence on conflict minerals to ensure more transparent sourcing of conflict metals and minerals.
CWTC has been committed to promoting local procurement to reduce carbon emissions from material transportation and improve procurement stability, while also fostering local employment and economic development. Local procurement also helps strengthen relationships with local suppliers, enhancing the flexibility and efficiency of the supply chain. In 2022, we expanded our facilities in Taiwan, increasing production capacity and gradually raising the proportion of self-produced materials while reducing overseas procurement. In 2024, the proportion of local procurement for raw materials reached 57%.