Huawei has always been attaching great importance to the social responsibility of its suppliers and partners and insisting on purchasing goods based on business ethics unswervingly. According to international standards, such as SA8000, ISO14001, and OHSAS18001, Huawei has issued the Sourcing with Social Accountability to all its suppliers. All the suppliers of Huawei are required to observe the rules specified in the preceding procurement guide. If a supplier fails to meet the requirements specified in the Sourcing with Social Accountability, improvement should be made within three to six months. Otherwise, Huawei will restrict the cooperation with the relevant supplier or even end the cooperation if necessary.

According to the Sourcing with Social Accountability, Huawei has made the following prompt handling on the Wintek CSR Event reported by media:

1. Huawei has made an emergent conference call to the management of Wintek.

After the strike by the employees of Dongguan Masstop Liquid Crystal Display from April 16 to April 17, Huawei made an emergent conference call to the management of Wintek on April 20 (April 18 and April 19 are weekends). During the conference call, Huawei has learned the process, reasons, handling, and results of the strike. Meanwhile, Huawei has demanded that Wintek should handle this event appropriately. Otherwise, Huawei would take necessary measures according to the Sourcing with Social Accountability. In addition, the management of Wintek was required to report the progress of the CSR Event in Huawei.

2. The management of Wintek reported the progress of the CSR Event in Huawei.

On May 13, the management of Wintek came to Huawei, reporting the solution to and progress of the CSR Event and communicating with Huawei about later measures. It was reported that the strike by Wintek employees had been properly handled and the production had been restored. In that communication, Huawei again emphasized its requirements on suppliers for sourcing with social accountability and demanded an immediate internal review of CSR-related issues and improvement in these issues from Wintek. It was determined that Huawei conduct an on-site CRS auditing on Wintek's Dongguan Masstop Liquid Crystal Display one month later and that the management of Wintek participate in the 2009 CSR Training for Huawei's Suppliers to be held on June 5 by Huawei to learn and understand Huawei's CSR requirements on its suppliers.

3. Huawei has reduced the orders placed for Winteck products, to urge Winteck on the CSR construction.

Due to the Winteck's bad behavior regarding to social responsibilities and the adverse effect caused by the CSR Event to Huawei's brand of social responsibilities, Huawei has determined to reduce the orders placed for Winteck products, exerting pressure to Winteck and urging Winteck on the CSR improvement.

The fact is that at the beginning of 2008 Huawei had already reduced the order proportion from 50% to 45%. Because of the CSR Event happened in April, Huawei has reduced the order proportion to 15%.

4. Strengthen the Auditing on the CSR of the Wintek

Wintek is required to conduct a one-month self-examination of its social responsibility management system starting from May 14 to June 14. A report on the self-examination result should be handed over to Huawei for evaluation. Huawei will then conduct an on-site CRS audit on Wintek's Dongguan campus on about June 19. Huawei will determine whether to continue the cooperation with Wintek according to the audit result.

Attachment: Strike Parade of Wintek Employees Induced By Laying Off Employees at Wintek Headquarter by the End of 2008

After Huawei found out the reasons, process, and result of the strike, it is believed that Wintek laid off its employees according to Taiwan's legal process; however, the laid-off process was carried out in a rash and rude manner. As a consequence, Wintek is required to make improvements regarding its social responsibility management system.

Huawei Supplier CSR Management Team
June 14, 2009
 

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