Novatek’s conflict minerals sourcing policy and efforts

Gold, Tantalum, Tin, and Tungsten are listed as minerals regulated by the U.S. Conflict Minerals Act, which originates from the mining and trade of fruit in the Democratic Republic of Congo. The mining activities are controlled by local activist groups and lead to serious human rights violations, forced labor and child labor, etc. Novatek has formulated a responsible mineral procurement policy(Conflict minerals sourcing policy), and cooperated with suppliers to require suppliers to only purchase non-conflict raw materials from environmentally and socially responsible suppliers, and sign the "Conflict Minerals Declaration", through the conflict minerals form every year. Conduct investigations to avoid problems such as labor oppression, coercion, abuse of child labor, and ecological damage caused by illegal operations.


Responsible minerals management process

Statement of Conflict minerals

Novatek supports the Responsible Business Alliance (RBA) and the Global e-Sustainability Initiative (GeSI)’s “Responsible Minerals Procurement” proposition. Based on the “Responsible Minerals Assurance Process (RMAP)”, suppliers are required to only purchase non-conflict raw materials from suppliers who are responsible for the environment and society, and sign the “Conflict-Free Minerals Declaration”. Every year, surveys are conducted through the Conflict Minerals Reporting Template (CMRT) to identify the source of minerals and information of smelters in the supply chain.

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Responsible minerals management performance

Novatek Supply Chain Smelter Refiner List

In 2022, Novatek surveyed a total of 28 suppliers related to manufacturing and packaging services. According to the survey results, 126 smelters have been identified, covering 27 countries. 100% of the suppliers adopted RMI (Responsible Minerals Initiative) approved smelters to provide products that meet the requirements.

In addition to paying attention to the 3TG conflict minerals, Novatek has followed the international trend and acted in concert with the RMI and customer requirements to list cobalt as the management target for responsible mineral procurement. It conducts due diligence on suppliers and requires disclosure of smelters from which they are sourced. Smelter information and investigation results are disclosed for customers who have cobalt investigation needs. Novatek continues to pay attention to the management requirements of international organizations for cobalt, and communicate with suppliers in a timely manner.


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Partner’s Co-Prosperity Spotlight

Sustainable Supply Chain Management Forum

In 2022, Novatek held its first "Sustainable Supply Chain Management Forum", which was conducted virtually due to the COVID-19 pandemic. This event brought together important representatives from our supply chain partners, including wafer manufacturing, packaging, and testing companies from home and abroad. This year's theme was climate change, and experts of suppliers were invited to share global carbon reduction trends, waste reduction, and circular economy achievements. Through this forum, Novatek expressed sincere gratitude to our supplier partners and presented the ESG Excellent Supply Chain Award to recognize suppliers' efforts in sustainable action. We also communicated the requirements of the "Novatek Supplier Code of Conduct" and worked together with our supply chain to promote greenhouse gas inventory and green operation targets (annual electricity savings rate≧1% compared to the previous year; zero production downtime days due to water shortage). A total of 70 participants attended the forum, serving as the exchange and learning platform for supplier partners. In the future, we will continue to focus on energy conservation, carbon reduction, environmental protection, pollution prevention, and circular economy issues. We hope to deepen supply chain competitiveness through this forum and work together with suppliers towards the ultimate goal of net-zero emissions and sustainable operations, creating a green and sustainable environment.

Supplier Sustainability Risk Assessment

To gain insights into the current situation of suppliers, Novatek has not only followed the “Responsible Business Alliance (RBA) Code of Conduct”, but also required its suppliers to take the “self-assessment questionnaire for sustainability management”, covering five major areas of labor rights protection, occupational safety, environmental protection, compliance with ethical requirements and management systems. The assessments are used to identify the compliance with the “Responsible Business Alliance (RBA) Code of Conduct” and evaluate its sustainability risks. In 2022, a total of 45 suppliers responded to the sustainability management questionnaire, with a response rate of 100%, and the suppliers’ scores of the “self-assessment questionnaire for sustainability management” were all above 87 points. In addition to the self-assessment scores, Novatek also reviewed the suppliers’ responses. If there are incomplete responses to individual items or documents that require additional supporting evidence, the suppliers are requested to provide explanations in regular meetings to grasp the risks of suppliers. Among them, 8 suppliers have accepted the RBA-verified audit process (VAP) and have corrected the deficiencies during the audit process.

Supplier Code of Conduct

Novatek pays attention to international sustainable development issues and believes that suppliers need to have a certain system to fulfill corporate social responsibility. Therefore, in 2022, based on the "Responsible Business Alliance Code of Conduct," Novatek formulated the "Novatek Supplier Code of Conduct" and required suppliers to comply with and sign it. In addition, new suppliers must also sign the Supplier Code of Conduct to ensure that they understand and agree to comply with it before they can qualify for cooperation. In 2022, a total of 45 suppliers completed the signing, with a signing rate of 100%.

Responsible Minerals Management Performance

In 2022, Novatek surveyed a total of 28 suppliers related to manufacturing and packaging services. According to the survey results, 126 smelters have been identified, covering 27 countries. 100% of the suppliers adopted RMI (Responsible Minerals Initiative) approved smelters to provide products that meet the requirements.

Feedback of Customer Satisfaction

Novatek has established the “Customer Application Service Operating Procedure” to ensure that our customers are satisfied with the products and services provided by Novatek, and the internal activation and execution of opinions of customers. We review and evaluate customer satisfaction periodically in order to propose a responsive improvement plan for analysis and improvement based on the management cycle of P-D-C-A. Through participating in regular customer meetings (acquired by customer evaluation) or customer satisfaction surveys, and after comprehensive analysis, review and feedback of relevant improvement measures are proposed at the management review meeting. In 2022, customer satisfaction reached 94%, achieving the target of 90%. This shows that the Company has gained recognition from customers in terms of quality management and improvement.