Human Rights Protection

The value of human rights is universally recognized. FENC vows to protect employees’human rights and their interests.

The scope of our dissemination of human rights issues applies to all business stakeholders including employees, subsidiaries worldwide, business partners, suppliers, contractors of FENC, and the communities in each operation base. At FENC, labor rights take precedence in policy considerations for human resources. We acknowledge and comply with the principles and spirit set forth by International Labor Organization and in UN Universal Declaration of Human Rights. The Company has well-established complaint channels. In cases of any human rights violation, employees may file such claims through the human resources units of all FENC sites.

2018	The Company established FENC Human Rights Policy, which is founded on the respect for local culture and customs at each FENC sites.
2019	Managers in charge of human rights promotion at all FENC sites have been fully informed of FENC Human Rights Policy, which has been signed and enacted. Meanwhile, the Company ensures employees’ understanding of this policy and awareness of their own rights through all means possible.
2020	FENC conducted human rights due diligence (HRDD) at all Company sites. Based on FENC Human Rights Policy, the risk assessment is further divided into 8 categories of human rights risks. HRDD focuses on “the likelihood of risks” and “the degree of impact on the Company”. A survey was administered to identify human rights risks, followed by investigation to determine their impacts on the Company. All FENC employees are covered in HRDD, and improvement measures have been implemented by human resources supervisors at all sites based on the HRDD report to protect employees’ human rights.
2021	In 2021, there were no grievance claims filed against human rights violations among employees and stakeholders. Nor were there human rights violations committed against employees and stakeholders. FENC production sites also conduct reviews on human rights, child labor and labor conditions through customers. Board supervision: The SOP for reporting on FENC Human Rights Policy has been in place. At least once a year, the corporate governance manager reports to the Board on human rights issues. The 2021 report was presented on November 11. Regular management: The highest ranking executives at FENC production sites present monthly special reports on major human rights issues, such as overtime and sexual harassment. Human rights education and training: FENC conducts human rights training for new recruits. For FENC sites in Taiwan, new recruits must sign FENC Human Rights Policy once the training concludes. In 2021, 285 employees have signed the policy. Among the permanent employees in Taiwan, 3,476 have completed human rights related training, covering 83%. For overseas locations, human rights training for new recruits is conducted through the orientation and employee manual. All of our supervisors had complete training on the awareness of illegal violations in the workplace and the prevention of workplace violence in 2021.
2022	To align with growing international awareness on corporate policies regarding human rights and anti-corruption, FENC has established the grievance policy in accordance with international ESG standards that are applicable to domestic and overseas FENC sites. With internal and external supervision, the Company continues to evolve within the scope of human rights protection. Setting forth clear goals and action plans, it is the Company’s aspiration to set in motion an array of improvements to fully implement FENC Human Rights Policy. In 2022, all managers completed the training on the awareness of workplace illegal violations and the prevention of workplace violence.On 11 July, 2022, managers and employees in purchasing departments, and plant supervisors who deal with communities are also educated on human rights policy, management of human rights and risk mitigation and remedy based on the company's human rights policy and external cases. Education and training on sexual harassment prevention was conducted for factory supervisors on 21 September, 2022. At the same time, we will educate, train and disseminate for the company's Speak Up policy and grievance mechanism to ensure that relevant stakeholders understand this channel: A. Employees：Conduct education and training through unions, welfare committee and monthly ordinance compliance meetings. B. Local Communities：We promote human rights awareness when participating in community activities. In addition, some of our employees live near the company/factory, we remind them to contact the company through the Speak Up mailbox when they discover cases related to human rights violations. C. Suppliers：All of our suppliers must complete education and training to ensure that they understand our commitment to and practices of human rights. We require suppliers to sign the commitment letter to jointly achieve the goal of safeguarding human rights. 85% of our suppliers have signed off as of 2021.

Framework for Human Rights Management

2021 FENC Salient Human Rights Risks and Implementation

Salient Human Rights Risks	Content	Target	Management Unit
No Forced Labor	Description FENC eradicates all forms of forced labor. Implementation in 2021 FENC complies with governmental labor regulations and international standards. The Company does not force or coerce employees to engage in any form of labor against their will. Interviews are conducted prior to hiring new employees and their full understanding of the job duties is ensured. Once onboard, employees undergo human rights training to enhance their labor rights awareness. There were no incidences of forced labor in 2021.	All employees	Each unit
Bans Child Labor	Description FENC bans child labor. Implementation in 2021 FENC clearly proclaims the ban on child labor and strictly adheres to the minimum hiring age set forth by the local regulations. Information concerning job candidates must be verified prior to employment. FENC did not employ any child labor in 2021.	Applicants	HR
Meeting Minimum Wage	Description Employees are entitled to just and proper compensation for the work performed. The compensation shall secure a life of dignity for the employee and his/her family, and supplemented with social security in other forms when necessary. Implementation in 2021 FENC aims to provide sensible salaries to employees, keeping it above the local minimum wage with benefits. The Company also tracks changes to the minimum requirement at all locations. Each year, changes are reported to the headquarters as a reference for payroll adjustment. In addition, it is clearly stated in the Company policy that FENC pledges to provide living wages. The payroll structures at FENC’s global production sites are reviewed annually against the local average. In 2021, average regular salaries from FENC production sites are 29% higher than the market average.	All employees	HR
Work and Break Hours	Description Employees are entitled to rest and leisure, including reasonable cap on work hours and regular paid vacation. Implementation in 2021 FENC complies with all local regulations, keeping daily working hours under the maximum and providing vacation and sick leaves accordingly. Shift workers at production units shall not work over 12 hours per day, including overtime, with adequate breaks between shifts, and 1 day of regular leave every 7 days. Each year, labor safety and health units conduct health risk assessments based on the outcome of the health check. The assessment report is provided to the management as a reference for shift assignments. FENC also established an alert system to warn against exceeding the overtime limit. Monthly meetings are held at production sites to discuss optimization plans covering reducing working hours and increasing manpower. In 2021, there were no disputes or grievance claims filed for overtime issues.	All employees	Each unit
Freedom of Association	Description Employees are entitled to form association and join labor union in order to protect their rights. Implementation in 2021 FENC respects and acknowledges employees’ rights to choose, organize, join or refuse to join labor unions or other forms of labor organizations; freedom of association; collective bargaining; protest in forms complying with local regulatory procedures. In 2021, APG Polytech in the U.S. finished signing the collective bargaining agreement.	All employees	Each unit
Equality and Respect	Description Employees are entitled to equal pay for equal work without any discrimination. Implementation in 2021 FENC offers work environments that are free of sexual, mental, physical and verbal harassment, abuse or threat. The Company dedicates efforts to build safe environments that respect employees’ safety, equality and dignity. In 2021, there were no disputes or grievances filed for harassment. As of 2021, the company had 402 ethnic minorities (2% of permanent employees) and 68 employees with disabilities (0.35% of permanent employees).	All employees	Each unit
Anti-Discrimination and Harassment	Description Employers should eradicate any hiring or occupational discrimination and fight against all forms of harassment. Implementation in 2021 FENC is devoted to maternity protection, establishing measures to safeguard maternity health for female employees against potentially harmful duties or work environment. Such measures include ensuring occupational safety for pregnant and nursing women, adequacy of work assignments and provision of ideal nursing space. Aside from the above, the Company also built gender neutral policy and environment. In 2021, there were no disputes or grievance claims filed for maternity protection issues.	All employees	Each unit
Maternity Protection	Description FENC protects female employees. Implementation in 2021 FENC complies with governmental labor regulations and international standards. The Company does not force or coerce employees to engage in any form of labor against their will. Interviews are conducted prior to hiring new employees and their full understanding of the job duties is ensured. Once onboard, employees undergo human rights training to enhance their labor rights awareness. There were no incidences of forced labor in 2021.	Female employees	Each unit

FENC makes every attempt to meet all labor standards and put them into practice. The Company participates in seminars and advocacy groups that address labor standards regarding children, gender, forced labor, discrimination, women’s protection, poverty as well as occupational safety and health. While keeping abreast of the latest labor standards and updates from international labor organizations, the Company ensures compliance and the protection of employees and their families.

Far Eastern New Century's human rights management process includes the establishment of human rights policies, due diligence on human rights risks, mitigation and remedial measures for salient risk issues, education and training on human rights issues, and operation of grievance mechanism. The scope of our management applies to all business stakeholders including employees, subsidiaries worldwide, business partners, suppliers, contractors of FENC, and the communities in each operation base.Whenever we expand or add new production bases, we will also assess the human rights risks associated with local personnel policies, suppliers, and communities.

Enhancing FENC Human Rights Policy and Human Rights Due Diligence

Defining the Scope of Human Rights and the Highest Commitment Corporate Management, procurement units and production sites	FENC assesses the current human rights management at all Company sites, conducts dialogue with managers at Corporate Management, procurement units and production sites, and fulfills human rights commitment with senior managers.
Identifying Human Rights Risks Human Resources Department	FENC compiles and lists human rights issues based on international standards, including: Universal Declaration of Human Rights (UDHR) United Nations Global Compact (UNGC) United Nations Guiding Principles on Business and Human Rights (UNGPs) International Labor Organization Conventions (ILO Conventions) International Bill of Human Rights Social Accountability 8000 (SA 8000) Responsible Business Alliance (RBA)
Analyzing Human Rights Risks and Collecting Data All units	Upon defining the human rights risks, the procurement, human resources and production units assess the risks, establish benchmarks; set up implementation measures and proposals for risk assessment; conduct discussions on gathering feedbacks from stakeholders including employees, suppliers and communities.
Conducting Due Diligence with Mitigation and Rectification All units	FENC conducts human rights training regarding key risks, performs human rights due diligence, establishes improvement measures based on the risk assessment and forms task forces as well as mechanisms for regular reviews and rectification.

⩥⩥ Human Rights Policy

Human Rights Due Diligence Process

Method: Through questionnaires, we collect human rights salient issues from stakeholders such as employees, suppliers, and community residents. Additionally, we wish to identify these issues with priority, through external information, internal meeting minutes, such as Management and Labor Council, supplier communication meetings, and meetings with community residents. We also reviewed these issues in collaboration with senior executive.

Salient Human Rights Issues Questionnaire Evaluation Scopes

Stakeholders	Issues
Employees	Child labor, free choice of employment/forced labor, freedom of speech, health and safety, statutory minimum wage/living wage, freedom of assembly and association, right to collective bargaining, right to privacy, acceptable living conditions, corporal punishment and penalties, elimination of excessive working hours, anti-discrimination/anti-harassment, equal pay for equal work
Suppliers
Local community residents	Air pollution, noise, waste management, water management and effluent discharge, free choice of employment/forced labor, freedom of speech

Identification Results of Salient Human Rights Risks in 2022

Stakeholders	Salient Human Rights Risk
Employees	► Eliminate excessive working hours ► Health and safety
Suppliers	►Health and safety
Local community residents	►Noise ► Waste management ► Air pollution ► Water management and effluent discharge

Identification of Human Rights Risks and Impact Assessment

Role of the Far Eastern New Century	Value Chain Nodes	Stakeholders Affected on the Value Chain	Salient Human Rights Risks	Impact Description	Impact Assessment Mechanism
Employer	Operations Process	Employee	Eliminate excessive working hours	The labor conditions and workplace environment provided do not properly protect employees' life, health and safety, shift break intervals that are too close, too many hours of continuous work, too low salary to support livelihoods, wage inequality, and a working environment that is too hazardous.	1. Every month, the company conducts a compliance assessment, and each relevant unit confirms compliance with laws and company regulations and compiles attendance statistics. 2. Monthly risk management meetings are held to review the overtime hours and manpower situation, and to evaluate the difference between employee wages and the overall prevailing average wage standards. 3. A salary equality review is conducted annually and announced on the company website. 4. The company conducts annual health checkups and biennial employee satisfaction surveys to review and improve the working environment, benefits and conditions based on feedback. 5. A 24-hour, multi-lingual grievance complaint mechanism is in place, and an anonymous reporting mechanism is provided to understand internal problems through the complaint mechanism, and to propose timely measures and improvements from a policy perspective.
Employer	Operations Process	Employee	Health and Safety
Responsible Purchasing	Upstream	Suppliers	Health and Safety	The labor conditions and environment provided pose a hazard to health or life that requires treatment to fully or partially restore the health of the person.	1. Written or on-site evaluation by the supplier. 2. Grievance mechanism.
Local Enterprises	Operations Process	Local community residents	Noise	Noise resulting from factory operations that exceed regulatory decibel control standards can seriously impact human health and daily life activities over a long period of time.	1. Noise is measured regularly. 2. Air quality monitoring. 3. Regular tracking of waste disposal and waste flow. 4. Evaluation and audit of waste disposal operators. 5. Monitoring of water quality and direction of discharge water. 6. Grievance mechanism.
			Waste management	Waste arising from the company's operating activities or suppliers' handling of purchased raw materials. If waste is not handled properly or in an environmentally-friendly manner, it may cause blockage of drainage and result in flooding, form toxic substances through burning of waste, and air and water pollution, affecting the surrounding environment and ecology, and even endangering human health.
			Air pollution	Air pollution caused by the company's operational activities may lead to respiratory and other diseases, or affect the surrounding environment and ecological damage and impact human health and daily life activities.
			Water management and effluent discharge	Failure to properly manage the use of water resources in the company's operations results in water wastage and affects the rights of other people or areas to the use of water. Pollution of wastewater (effluent) from the company's operations affects the habitat of aquatic organisms, the quality of water supply, and the company's relationship with surrounding communities and other water users, resulting in damage to the surrounding environment and ecology, and human health and daily life activities.

Human Rights Risk Mitigation and Remedial Measures

The Company operates numerous plants and sites in Taiwan and throughout the world. The following is a description of the measures implemented at the Company's headquarters in Taiwan. The mitigation and remedial measures developed for each salient human rights issue are supplemented or adjusted by each location in accordance with local government labor laws and regulations and relevant international standards.

Subjects Affected on the Value Chain	Salient Human Rights Risks	Mitigation Measures	Remedial Measures	Management Objectives
Employee	Eliminate excessive working hours	1. Recruit sufficient employees according to production demand to avoid excessive working hours due to insufficient manpower. 2. Establish a complete work hour management system and set up overtime alerts. 3. Ensure that wages are in line with the standard of living in Taiwan.	1. Implement the tracking mechanism of one day off for seven days of work and daily working hours not exceeding 12 hours, as well as extended working hours not exceeding 46 hours per month. 2. In major meetings, we ask supervisors to pay attention to the problem of excessive working hours, report the causes and solutions, and discuss whether to increase manpower in conjunction with the business objectives for the second half of the year. 3. Propose salary adjustment when the salary is lower than the market salary level in Taiwan.	1. Zero complaints from employees working excessively long hours.
Employee	Health and Safety	1. Develop occupational safety and health management policy. 2. Introduce the occupational safety and health management system ISO 45001 and obtain the certification. 3. "Occupational Safety and Health Committee" is set up in each production and operation site, and regular meetings are held every quarter to implement occupational safety and health management. 4. Occupational safety and health training for employees. 5. Establish chemical hazard management regulations and perform chemical and hazardous substance testing regularly.	1. Relevant departments investigate and analyze the causes of accidents and propose improvement and prevention policies. 2. Provide health care and improvement suggestions for employees with abnormal health conditions after health checkups. 3. Strengthen on-site protective devices and equipment and implement inspections of employee PPEs (personal protective equipment) on site. Increase hardware and equipment protection and enhance safety education for employees. 4. Carry out work arrangements for personnel with health check results suggesting high risks to avoid excessive shifts/overtime work.	1. Continuously pass ISO 45001 certification every year. 2. 100% of employees completed occupational safety and health training. 3. Zero occupational safety and health related violations.
Suppliers	Health and safety	1. Require suppliers to manage their employee occupational health and safety in accordance with the "Supplier Corporate Social Responsibility Commitment Statement". 2. Perform supplier risk assessments on labor practices and human rights, identify suppliers with (or likely to have) negative impacts, and assist in improving or terminating contracts as deemed appropriate.	Conduct on-site audits in accordance with the audit rules and safety and health management rules, and require suppliers who violate occupational safety to make improvements by the deadline and to follow up continuously.	1. Achieved 100% signing of "Supplier Corporate Social Responsibility Commitment Statement". 2. Achieved 100% improvement of suppliers’ with a negative impact assessment.
Local community residents	Noise	Perform regular perimeter noise testing.	1. Measure the sound of the factory plant(s), confirm the source of noise, and if it is confirmed to come from the factory plant, then eliminate the factors as soon as possible. 2. Request for improvement measures for major noise sources.	1. Achieved zero noise related complaints. 2. Perform annual perimeter noise inspections to ensure compliance with regulatory standards.
	Waste management	1. Develop waste management process. 2. Introduce package material recycling management mechanism to reduce package material waste generation. 3. Reduce the amount of waste at source and actively promote waste separation and recycling. 4. Strictly examine the qualifications of waste disposal companies. 5. GPS tracking of waste disposal vehicles. 6. Conduct random inspections of waste removal and disposal from time to time.	Set up an emergency response plan to reduce the scope of pollution by implementing contingency measures in the shortest possible time in the event of a pollution incident.	Achieved zero waste chemical related spills.
	Air pollution	1. Air pollution emissions are regularly checked and reported to the competent authorities. 2. Regular refresher training courses for specialized personnel. 3. Air pollution prevention and control promotion. 4. Set air pollution management goals. 5. Introduce pollution control equipment to reduce air pollution emissions.	1. Develop emergency response plans to reduce pollution in the event of a pollution incident and implement response measures in the shortest possible time. 2. Commission qualified organizations to perform regular testing.	1. Achieved zero incidents related to air pollution. 2. Regularly monitor the concentration of emitted gases every year and confirm that the emission standards are met.
	Water Management and effluent discharge	1. Strengthen the promotion of water use by all employees and implement water management measures. 2. Introduce innovative drainage water treatment equipment, improve the recycling rate of water resources, reuse recycled water steadily, and reduce volume of discharged water. 3. Set up treatment facilities for effluent discharge, implement effluent treatment improvement projects, and regularly monitor the flow of discharged effluent and whether the water quality meets discharge standards. 4. Implement water resource risk identification and set water resource management targets. 5. Regularly train relevant management personnel and obtain relevant licenses.	1. Establish a notification mechanism so that if an effluent discharge incident is detected or occurs, the discharge situation will be fully grasped and reported to the relevant units within the shortest possible time to track and improve the discharge process. 2. Commission qualified organizations to perform regular testing.	1. Achieved 0 incidents related to waste water discharge. 2. Regularly monitor the water quality of discharged effluent every year and confirm that it meets the discharged standard. 3. Achieved full treatment and recycling of water in the production process with zero discharge of effluent.

Gender Equality

FENC values gender equality. We are keen on creating gender-friendly workplace and system. While the conglomerate spans across industries from the upstream to downstream, the up- and midstream industries rely more on chemical related expertise where a higher concentration of the work force is male. The downstream, which consists mainly of the textile industry, is composed of a higher percentage of female employees. Overall, the ratio between female and male supervisors are 2:3, which is consistent with the industry chain distribution. Corporate expansion also expanded the number of supervisors by 52% in the recent decade. Among them, the number of female supervisors grew by 64%. The statistics reflect the Company’s acknowledgement of and fair treatment to the hard work put in by female supervisors with the reward they deserve. The Company is also determined to incorporate gender equality as part of its corporate system and culture.Each year, FENC measures its average annual regular salary of the company against the official statistics of average annual regular salary. In 2021, the average annual regular salary of the company offered by FENC is 29% higher than the local average. Average regular earnings for female employees, especially, averaged 36% higher than the local numbers, while those for male employees are 26% higher, which demonstrate FENC’s contribution to pay equity.

Salary Comparison to Market Rate by Gender

Note: Sources of market pay rates are: average salary in the manufacturing sector and minimum wage released by Directorate-General of Budget, Accounting and Statistics in Taiwan; average salary and minimum wage released by National Emblem of the People's Republic of China; average salary and minimum wage of District 1 released by the General Statistics Office of Vietnam; Bureau of Labor, Ibaraki prefecture in Japan; United States Census Bureau in the U.S. All numbers are compared with the data of the current year.

Gender Comparison by Position

Note: The percentage is derived by dividing number of female permanent employees by number of male permanent employees for the same rank of job.

Gender equality and applicable regulatory mandates are respected at all FENC business sites. We are consistent with the spirit of Act of Gender Equality in Employment in Taiwan as well as Regulations Concerning the Labor Protection of Female Staff and Workers in Mainland China. We protect the rights of female employees, offering parental leave and breastfeeding room at our facilities. We also limit overtime and prohibit tasks that may potentially harm mothers and their babies. Employees returning after maternity leave receive equal pay for equal work. We provide workplace environment ideal for pregnant employees, such as avoiding tasks that might affect their health and using specially designed chairs to reduce discomfort at work. FENC goes beyond the minimum regulatory requirements. As early as July 2021, the Company offered 7 days of leave for female employees to get prenatal checkup, which is more than the 5-day minimum stipulated in Act of Gender Equality in Employment at the time. It was not until December 2021 that a legislative amendment was passed to expand the 5-day minimum to 7 days. Female employees in Vietnam who are 7-month pregnant may reduce working time by 1 hour per day while receiving full pay. They are also entitled to 5 days off for prenatal checkups and 6-month maternity leave. The factories also designate lactation rooms as well as areas for storing breastmilk.

Application of Parental Leave and Returning Statistics in Taiwan

		2019	2020	2021
Entitled to Parental Leave	Male	332	317	304
	Female	149	143	130
	Total	481	460	434
Number Applied	Male	4	2	6
	Female	22	48	21
	Total	26	50	27
Number Should Returned	Male	1	0	4
	Female	19	41	19
	Total	20	41	23
Number Returned	Male	0	-	4
	Female	19	35	17
	Total	19	35	21
Return Rate	Male	0%	-	100%
	Female	100%	85%	89%
	Total	95%	85%	91%
Returned over One Year	Male	1	-	-
	Female	15	12	16
	Total	16	12	16
Retention Rate	Male	33%	-	-
	Female	83%	63%	46%
	Total	76%	63%	46%

Note:
1. Return Rate = Number Returned ÷ Number Should Return

2. Retention Rate = Returned over One Year ÷ Number Returned Last Year

FENC has established measures to prevent, control and reprimand sexual harassment and provides channels for filing grievances. Employees may file such grievance claims through departmental supervisors or Human Resources Department. The unit receiving the claim shall establish a team within 5 days of receiving the claim with over 50% female members to initiate the investigation. The investigation shall conclude within 2 months and all information shall be kept confidential. The individual against which the claim is filed shall have the opportunity for rebuttal. We also conduct regular training for the entire staff to prevent any occurrence of sexual harassment.

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