The Company procures products and services from suppliers and contractors for the main activities of industrial estate business operations and the work that supports the management of industrial estates. As a result, the quality of products and work of suppliers and contractors have a direct impact on the Company and its stakeholders, both positively and negatively. Suppliers and contractors with substandard performance or high ESG risks are likely to cause non-compliance with laws and regulations. They may also create negative social and environmental impacts, such as poor waste management, and risks to the safety of people and property. Furthermore, without a good audit process, the Company's suppliers and contractors may contribute to labor and human rights violations, which can create risks to the Company's reputation and credibility beyond the direct economic impact on the Company from the quality of work and delivery time.
Effective supplier and contractor management is crucial for the Company to mitigate risks and minimize social and environmental impacts in its supply chain, as well as the impacts on surrounding communities of the industrial estate, both in the short and long term. Additionally, it will increase the quality and efficiency of its work, leading to greater customer satisfaction with the Company's products and services. Screening and developing high-quality suppliers and contractors will help elevate the standard of business partners, supporting the Company's business expansion for long-term mutual growth.
The Company has established a “Sustainable Procurement Policy” to enhance supply chain management towards greater responsibility, transparency, and alignment with sustainable development principles. The policy emphasizes sourcing and procurement of raw materials, equipment, and services with consideration for environmental, social, and governance (ESG) impacts alongside economic efficiency. The Company places importance on the selection and development of suppliers and contractors to ensure fair labor practices aligned with relevant standards, efficient resource use, and the reduction of environmental impact. Additionally, the Company promotes collaboration with business partners across the supply chain to increase resilience, reduce risks, and generate shared value that benefits society, the economy, and the environment in the long term.
The Company has appointed the AMATA Procurement Working Committee, which is chaired by the Chief Financial Officer. The Working Committee consists of senior executives from the Company and its subsidiary companies and is responsible for developing procurement best practices that comply with international and ethical standards. The Committee also sets the procurement standards of the AMATA Group, prepares, and disseminates the “Supplier Code of Conduct” on the Company’s website as well as directly notified each supplier. This is to communicate the Company’s commitment to ethical and responsible business practices that take economic, social, and environmental impacts into consideration. The contents of the Supplier Code of Conduct are as follows:
Comply with laws and regulations, conduct business with accuracy and integrity, uphold anti-corruption practices, ensure transparency, and provide verifiable information disclosure.
Ensure accurate and lawful employment, provide fair treatment, and prohibit child or forced labor in any form.
Comply with occupational health and safety laws, provide appropriate and adequate safety equipment, maintain records of work-related illnesses and accidents, and communicate clearly and effectively to ensure understanding and compliance.
Provide channels for receiving stakeholders’ complaints and be aware of the impacts arising from the operation.
Comply with environmental laws and regulations, prepare measures to prevent and reduce environmental impacts from the operation, and promote environmentally friendly technologies and products.
The Company requires all suppliers and contractors identified as critical tier-1 suppliers, as well as all new suppliers and contractors, to acknowledge and comply with the AMATA’s Supplier Code of Conduct and Procurement Manual. These requirements are in line with the Company’s sustainable supply chain management approach, aiming to promote awareness and responsible business practices among suppliers. The guidelines emphasize the importance of operating socially and environmentally responsibly, with integrity, fairness, and transparency. In 2024, the Company communicated these documents to all 140 critical and new suppliers. All recipients (100%) acknowledged and submitted the signed acknowledgement form in full compliance.
The Company has established the following guidelines for implementing sustainable supply chain management:
The Company has implemented its established guidelines through defined criteria and processes, including the identification of critical suppliers, sustainability risk assessment of suppliers and contractors, and the formulation of appropriate supplier management strategies. Efforts also include capability-building initiatives for suppliers and contractors to mitigate sustainability risks and reduce the negative impacts of business operations in both the short and long term. Key performance outcomes in 2024 are as follows:
The Company identified critical suppliers from two groups: those that do business directly with the Company (tier-1 suppliers) and those that do not directly engage with the Company (non-tier 1 suppliers). An analysis was conducted to identify these critical suppliers using the following criteria applied to both groups:
In 2024, the Company engaged with a total of 732 tier-1 suppliers and contractors who maintained ongoing business relationships within its supply chain. An analysis identified 51 of these as critical tier-1 suppliers, accounting for 82% of the Company’s total procurement value. These critical suppliers were categorized into three key business segments: 18 in the real estate and leasing business, 11 in the utilities and services sector, and 22 in the goods and services sector—representing 40%, 40%, and 20% of procurement value by business segment, respectively. In addition, there were 18 critical non-tier 1 suppliers who are essential to the supply chain, but not directly conducting business with the Company.
The Company has established a sustainability risk assessment process for its suppliers, with priority given to critical tier-1 suppliers. This process utilizes an ESG Risk Evaluation Form covering environmental, social, and economic dimensions. All new suppliers are required to complete a comprehensive Self-Assessment Questionnaire (SAQ), which encompasses key issues related to the economy, environment, society, and corporate governance. Suppliers are then categorized into four risk levels, with corresponding assessment details and monitoring frequencies tailored to each risk level. In addition, the Company conducts annual supplier performance evaluations, jointly undertaken by the Procurement Department and the relevant end-user units, with varying frequencies depending on the supplier’s risk level. For suppliers identified as high or very high risk, a corrective and preventive action plan is required. The Company supports its suppliers by providing guidance, as needed, in developing improvement plans to foster and maintain good relationships.
The Company set targets for all critical tier-1 suppliers and new suppliers to undergo risk assessments covering both economic and sustainability aspects, including environmental, social, and governance (ESG) risks. In 2024, the Company successfully assessed all 51 critical tier-1 suppliers (100%) and 89 new suppliers (100%), achieving the established target.
The supplier risk assessment revealed that one of the Company’s critical tier-1 suppliers—representing 1.96% of all critical tier-1 suppliers—was identified as having a high level of social and environmental risk. This was due to the absence of formalized policies and procedures for managing environmental impacts, as well as the lack of documented safety policies concerning working conditions and the provision of protective equipment for workers. In response, the Company conducted an immediate on-site audit and required the supplier to develop written policies and best practices which were formally adopted within the supplier’s organization and communicated to employees for strict compliance. The procurement team and the relevant business unit conducted a follow-up site visit and confirmed that the necessary improvements had been made in accordance with the Company’s requirements. A subsequent audit is scheduled to take place in 2025. No suppliers were found to have high or very high risks in the areas of economic or governance practices.
The Company requires all critical suppliers and contractors that have already passed the economic and sustainability risk assessment by using the Self-Assessment Questionnaire (SAQ) to have an audit on the economic, environmental, social, and governance topics at their workplaces (on-site ESG audit). The patterns and frequency of the on-site ESG audit depend on the risk level. The critical suppliers with very high and high risk will have an on-site audit as soon as possible; those at moderate risk will be audited once a year; and those at low risk will be audited every two years. The auditing items are set according to the Company’s criteria and the environmental management system (ISO 14001) standards and will be conducted by examining relevant documents and an on-site audit by the AMATA Procurement Working Committee.
In 2024, the Company had 21 critical suppliers required to undergo on-site ESG audit according to the established criteria. The Company successfully completed the audits for all 21 suppliers (100%).
Additionally, the Company mandates that suppliers and contractors who have business transactions with the Company undergo an annual performance evaluation and relationship assessment following the delivery of their goods or services. The results will be taken into account for the subsequent procurement.
The Company has implemented risk management measures for each supplier and arranged supplier development activities to reduce the likelihood of risk and the impact of such risks. However, the Company has not yet terminated business relationships with any assessed suppliers or contractors (0%).
The new supplier selection process includes reviewing the qualifications and past performance of suppliers and contractors to determine whether they meet the Company's requirements. All new suppliers are required to complete an ESG risk assessment using a self-assessment questionnaire prior to new supplier registration. If a passing score is achieved and no economic, social, or environmental risks are found, the new supplier will sign the Supplier Code of Conduct Acknowledgement and be registered as a new supplier. If a passing score is not achieved or there are risks, the supplier must develop and submit a preventive or corrective plan and implement it until the score is acceptable before it can be registered as a new supplier.
In 2024, there were 89 new suppliers. All of them passed the specified new supplier selection process (100%).
The Company is committed to conducting business fairly with its suppliers to support their liquidity and capital management, benefiting both parties. It adheres to all supplier agreements and commitments and treats all suppliers equitably. The Company has established policies for screening and evaluating suppliers, including manufacturers, contractors, and subcontractors, ensuring that these processes are effective, standardized, and uphold social responsibility. Additionally, the Company has implemented procurement policies and procedures and formed a procurement committee to ensure transparency, verifiability, and strict adherence to the selection processes.
Regarding supplier payments, the Company adheres to agreements and commitments by offering fair and appropriate trade credit durations, which fosters business collaboration and is crucial for sustaining long-term growth. A Credit Term Policy has been established, specifying payment to suppliers within 30-60 days through a banking channel. This method builds trust with suppliers and ensures timely payments within the policy framework. However, the actual payment period may vary due to specific business limitations, such as product types, service specifications, contract terms, and quality standards. Details on the average account payables days for purchasing products and services are as follows.
Furthermore, the Company emphasizes the development of suppliers and contractors throughout its supply chain, particularly those providing critical utility and industrial services, to mitigate social, environmental, and compliance risks. It encourages these partners to enhance their efficiency and align with the Company's standards by developing management systems and obtaining certifications in internationally recognized standards, such as ISO 9001, ISO 14001, ISO 17025, and OSHA 18000.
Regular reviews and updates of safety training have enhanced the safety of waste management contractors, resulting in no severe accidents, injuries, or fatalities among their staff in 2024. These practices have also contributed to maintaining a clean and orderly environment in the industrial estate, thereby reducing the risk of waste pollution and environmental contamination.
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