VALUE CREATION

Supply Chain Management

FET has established its Supply Chain Management Policy as the basis for supplier management, and the Supplier Corporate Social Responsibility Guidelines have also been introduced to encompass economic, social, and governance requirements in supplier standards. On top of requiring suppliers to sign the Corporate Social Responsibility Self Declaration and Integrity Management Agreement, FET has also established the supply chain sustainability risk identification, management, and evaluation mechanisms, and initiated the new supplier ESG screening process in July 2019. All newly registered suppliers are required to fill out the ESG quantitative assessment table and to be scored accordingly. Moreover, ESG supplier screening have been implemented on all important projects valued over 15 million since October 2019. All suppliers participating in the bid need to pass the ESG risk assessment, and those who fail the assessment will not be eligible.
Supply Chain Management Strategy
FET Supply Chain Management Processes
In addition, all FET procurement contracts clearly stipulate that all vendors are required to comply with applicable regional, environmental, and labor safety and health laws and regulations. Construction suppliers are required to sign the Contractors Labor Health and Safety and Environment Commitment, Declaration on Announcement of Contractors Worksite Environmental Hazards and to carefully read the Labor Health and Safety Management Implementation Points for Contractors. These suppliers are also required to carry out applicable management and hazard prevention tasks pursuant to the Regulations for Labor Safety and Health Organization Management and Self-Check to prevent occupational hazards to workers' safety and health. In addition to regularly conducting supplier assessment to ensure that suppliers comply with the aforementioned regulations in practice, FET also suspends the accounts of vendors who have not transacted with the Company for three years or more. To ensure information on suppliers' creditworthiness and corporate social responsibility are up-to-date, in case transaction shall be restarted, such suppliers are required to offer new credit reports, proof of no bounced checks, and self-declaration. In 2019, transactions with 299 suppliers were suspended.