HP to monitor Taiwan suppliers' SER compliance condition

Dec 25, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Quincy, CENS
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Taipei, Dec. 25, 2003 (CENS)--Hewlett-Packard Co. (H-P) of the U.S. started early this month to monitor major suppliers' compliance with the company's Social and Environment Responsibility (SER) program.

All of HP's major contract suppliers in Taiwan and their facilities in mainland China are carefully awaiting HP's monitoring group to secure their contract supply business with the big international customer.

HP has had a commitment to social and environmental leadership around the world. The company claimed that its global and corporate citizenship commitment is not only limited to what's going on inside the company walls but is also extended to its suppliers. HP expects its suppliers to act as responsible corporate citizens and take a positive, proactive stance regarding environmental, occupational health and safety and labor issues.

Under the SER program, Hsiao Kuo-kun, HP's Asia-Pacific procurement president, said that all of HP's contract suppliers are required to comply with the SER-relevant regulations, including fair treatment with company employees, various environment-protection regulations, and obedience of local government's laws and orders.

All of HP's major contract suppliers in Taiwan have moved their production to mainland China, a high-risk region for violating HP's SER requirements, including Hon Hai Precision Ind. Co. Ltd., Asustek Computer Inc., Quanta Computer Inc., Compal Electronics Inc., and Inventec Corp. etc. All of them were also asked by HP to comply with the SER program especially at their mainland facilities.

Industry insiders said that all of the said Taiwan companies are healthy makers with good corporate images and are expected to meet HP's SER requirements except for some arguments in employees' over-time working issues.

According to Hsiao, HP informed its contract suppliers in Taiwan of the SER program in early second half and asked them to conduct self-evaluations first. HP began dispatching a monitoring group from early this month to inspect the plants of various suppliers worldwide and even talk with production line workers to gauge their compliance with the SER program. The investigation results might affect suppliers' future business ties with HP, the president added.

Industry sources said that both HP and Dell put great emphasis on the corporate image. In addition to their advantageous position in price negotiation through big-volume procurement, the multinational enterprises also set strict requirements for their suppliers in internal management to escape any damage on its corporate image generated from the suppliers.

In addition to HP and Dell, the sources added, more and more multinational enterprises are paying intensive attention to the labor-right protection issues in mainland China and beginning evaluating contract suppliers' compliance with the Social Accountability (SA) 8000 standard, a universal code of practice for labor conditions in manufacturing industry jointly mapped out by multinational enterprises in the U.S. and Europe.

According to Hsiao, HP's procurements from Taiwan will grow next year due to the strong global demand for entertainment-oriented consumer electronic and notebook PC products.

Industry analysts predicted that HP would greatly increase the procurement volumes of liquid crystal display (LCD) monitor panels, notebook PCs, servers ad consumer digital entertainment multimedia center products next year and the value is expected to reach about US$20 billion.

HP will procure about US$16 billion worth of products from Taiwan this year, compared with its global procurement value of about US$40 billion.
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