Sustainable Supply Chain Management

To ensure the integrity and sustainability of business cooperation, OUCC has set up management policies such as "Rules Governing Suppliers" and "Environmental Safety and Health Policy" for supplier management. Suppliers must comply with the "Petrochemical Industry Code of Conduct," ensuring that our suppliers comply with the relevant regulations and set higher environmental and occupational safety and health standards for the petrochemical industry, and build a solid and sustainable chemical supply chain.

• Before contract signing：review the "Supplier ESG Survey Form" during the review phase, and inform supplier to refer to OUCC's code of conduct and publicize it to their internal employees.
• After contract signing：understand and evaluate the integrity management or code of conduct implementation status via the "on-site audit.”

① Strengthen Sustainable Communication and Promotion

To strengthen the awareness and execution of ESG of the suppliers and contractors, whom we have worked closely with on labor, health and safety, environment, management, and business ethics to establish a comprehensive supply chain mechanism, aiming to lead supplier partners to commit to sustainability.
We proactively communicate with our suppliers, encourage them to enhance their sustainability management in breadth and depth, and make every effort to contribute. In the future, we will continue to maintain a good partnership with our suppliers, and actively invite our suppliers to respond to social welfare activities and join hands as a positive force in society.

② Sustainable Management Mechanism

To ensure that suppliers can understand and assist OUCC to strive for supplier sustainable development, we have designed a CSR self-assessment questionnaire for all our new suppliers, who are required to sign a letter of commitment, so to join us in a commitment to ESG and its implementation.

③ Evaluation Management Audit

This OUCC audit process includes record and field evaluations to ensure that suppliers are in compliance with all the relevant laws and regulations. Existing suppliers must receive and complete an annual evaluation, which includes company management, quality, delivery time, price, service, and environmental safety. Suppliers will only be listed as qualified as their rating scores reach the specific standard.

Should an evaluation or material incident occur and also result in damage to the company's reputation, labor safety, product quality, or manufacturing operation, the supplier would be listed as disqualified and suspended. In 2022, 658 trading suppliers underwent written evaluations with none disqualified, and the qualification rate is 100%.

⑤ Preference for Local Suppliers

In addition to its own production, OUCC prioritizes the procurement of its main raw materials such as ethylene, oxygen, ethylene oxide, liquid ammonia and fatty alcohol from selected domestic suppliers and uses imports as a supplement. In 2022, local procurement amounted to NT$1.06 billion, accounting for 76%(Note 2), which effectively promoted economic development in Taiwan.

Note:
1.Domestic suppliers are defined as manufacturers registered in Taiwan, conducting transactions in the local currency (New Taiwan Dollar, TWD).
2.The purchase amount does not include raw and auxiliary materials.
3.2022 percentage of procurement amount from domestic suppliers = procurement amount from domestic suppliers in 2022 / total procurement amount in 2022 x 100%