CSER Code of Conduct

This document has been officially approved by Group CEO, authorized by the Board of Directors, as the corporate-wide guideline for CSER deployment.

As an ethical and responsible enterprise, LITE-ON is striving to be a company of world class excellence. We believe that doing good by taking care of our stakeholders and environment will finally contribute back to our long term growth and profitability. With company growth and profitability achieved, LITE-ON holds to the spirit of giving back to the society that sustains it and is committed to implementing CSER (Corporate Social and Environmental Responsibility) for sustainable operations.

Scope

We have a strict Code of Conduct that requires LITE-ON operation sites and supply chain provide safe working conditions, the workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible. The Code of Conduct is based on International Labour Organization (ILO) and Responsible Business Alliance (RBA, formerly EICC) standards, and applied to LITE-ON entities, subsidiaries, subcontractors, and supply chain that employ staff.

Objectives

The objective of this Code of Conduct is to help the company to practice good corporate citizenship and social responsibility wherever we operate and do business. In LITE-ON we act in such a way that the effects on nature, people and society are both ecologically and ethically acceptable. LITE-ON CSER Code of Conduct has been built according to the spirit of SA8000 (Social Accountability 8000) and RBA CoC (Responsible Business Alliance Code of Conduct).

Relationship to other policies

This CSER Code of Conduct is a key Code of Conduct regarding ethics, labor, environment, health & safety, management system, corporate governance and community involvement for all LITE-ON companies. Some regions or countries may have stricter guidelines or their own additional policies concerning social responsibility issues, but they should not contradict this CSER Code of Conduct.

CSER organizations and responsibilities

The CSER Committee is the highest organization in LITE-ON consisting of board members and the CEO´s of each LITE-ON Group companies. Each Business Unit/company and site has nominated responsible persons for CSER related matters. The CSER Committee reviews this Code of Conduct periodically and is committed to making changes to its content and implementation when changes or further clarification so demand.

It is the responsibility of each LITE-ON employee to promote the CSER Code of Conduct. Questions about the application or meaning of any provisions of this Code of Conduct should be reported to superiors. In case of serious allegations regarding potential violations of the CSER Code of Conduct, a fair and comprehensive investigation will be conducted by the management closest to the issue with the company's legal department. Internally, the company has hotlines, e-mail and opinion letter boxes available for employees to raise complaints; externally, the company makes public disclosures on its CSR web page regarding any unethical or illegal conduct found over the course of its business. Grievance hotlines, e-mail, and mailboxes have been made available for outsiders to raise complaints or report their concerns.

1. Business Ethics

LITE-ON is committed to complying of all applicable national and international laws as well as ethical code and commonly accepted practices in the countries in which it operates. This includes, for example those relating to promoting fair competition, safety in the intended use of the products and services LITE-ON delivers to customers, complying labor laws and practices, the universal declaration of human rights, internationally recognized standards and protecting copyright, company assets and other forms of intellectual property. We also respect local traditions and values in all countries where we operate.

To meet social responsibilities and to achieve success in the marketplace, LITE-ON is committed to uphold the highest standards of ethics including:

1.1 Business Integrity: The highest standards of integrity are to be expected in all business interactions. Any and all forms of corruption, extortion and embezzlement are strictly prohibited resulting in immediate termination of employment and legal actions.
1.2 Conflict of Interest Avoidance: LITE-ON employees must avoid all activities that lead to a conflict of interest. Any agreement or understanding regarding favors or benefits in exchange for gifts must be avoided.
1.3 No Improper Advantage: Briberies or other means of obtaining undue or improper advantage no matter for business or social/political contribution are not to be offered or accepted. Insider trading on or disclosure of material not published in LITE-ON or any other company securities are prohibited.
1.4 Intellectual Property: Intellectual property rights are to be respected; transfer of technology and knowhow is to be done in a manner that protects intellectual property rights.
1.5 Fair Business, Advertising and Competition: Standards of fair business, advertising and competition are to be upheld. Appropriate means to safeguard customer/partner information and security should be available.
1.6 Protection of Identity: Programs that ensure the protection of supplier and employee whistleblower confidentiality are to be maintained.
1.7 Employee personal data protection: The company follows the local laws and regulations as well as confidentiality concerning the storage and usage of information concerning employee´s personal data, assessment results or health related data.
1.8 Disclosure of Information: Information regarding business activities, structure, financial situation and performance is to be disclosed in accordance with applicable regulations and prevailing industry practices.

2. Labor

LITE-ON is committed to following the applicable labor and employment laws wherever it operates, and international standards, which includes observing those laws that pertain to freedom of association, privacy, the prohibition of forced, compulsory and child labor, and those laws that pertain to the elimination of any improper employment discrimination.

2.1 Freely chosen employment: LITE-ON shall not use any forced labor and all work will be voluntary. Employees are free to leave upon reasonable notice.
2.2 Child Labor Avoidance and Protection of young employees: Child labor is not to be used in any stage of manufacturing. The term "child" refers to a person younger than 15 (or 14 where local law allows) or, if higher, the local legal minimum age for employment or the age for completing compulsory education. The use of legitimate workplace apprenticeship programs, which comply with all laws and regulations, is supported.
Employees under the age of 18 should not perform hazardous work and may be restricted from night work with consideration given to educational needs.
2.3 Working Hours: Working overtime needs to be voluntary, and should be managed effectively to try to limit working hours which exceed local legal limits. Employees will be entitled at least one day off in every seven days period of work, except of extraordinary business circumstances.
2.4 Wages and Benefits: Compensation provided to employees shall comply with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits. Deductions from wages as a disciplinary measure shall not be permitted.
2.5 Human treatment: LITE-ON is committed to ensure that there is to be no harsh and inhumane treatment, including any sexual harassment, sexual abuse, corporal punishment, threatening, exploitative, mental or physical coercion or verbal abuse of employees. Threats of violence, intimidation or possession, sale of weapons are not allowed.
2.6 Non-Discrimination: LITE-ON is committed to recruit, hire, train, compensate, promote, terminate, retire and provide other conditions of employment without regard to race, color, religion, national origin, gender, sexual orientation, age, disability or other characteristic protected by law. LITE-ON is striving to become a workplace where workforce diversity and equal opportunity is respected and implemented.
2.7 Freedom of association: LITE-ON shall respect the rights of employees to associate freely, join or not join labor unions, seek representation, join employees' councils in accordance with local laws. Employees shall be able to communicate openly with management regarding working conditions without fear of reprisal, intimidation or harassment.
2.8 Competence Development: LITE-ON shall ensure that employees at all levels and with equal opportunity have the education, training and competence required for their positions and tasks.

3. Health and Safety

LITE-ON recognizes that the quality of products and services, consistency of production, and employees’ morale, are enhanced by a safe and healthy work environment. LITE-ON also recognizes that ongoing worker input and education is a key to identifying and solving health and safety issues in the workplace. LITE-ON is committed to establish and maintain an Occupational Health and Safety Management System to define operational procedures for health and safety control, to monitor the progress of its implementation and to continually improve health and safety performance. In addition, LITE-ON complies with applicable health and safety legal and other requirements.

LITE-ON is committed to reducing injury and ill-health through the following requirements:
3.1 Occupational Safety: Worker exposure to potential safety hazards (e.g., electrical and other energy sources, fire, vehicle, and fall hazards) are to be controlled through proper design, engineering and administrative controls, preventative maintenance and safe work procedures(including lockout/tagout). Where hazards cannot be adequately controlled by these means, employees are to be provided with appropriate personal protective equipment. Employees shall not be disciplined for raising safety concerns.
3.2 Emergency Preparedness: Emergency situations and events are to be identified and assessed, and their impact minimized by implementing emergency plans and response procedures, including: emergency reporting, employee notification and evacuation procedures, worker training and drills, appropriate fire detection and suppression equipment, adequate exit facilities and recovery plans.
3.3 Occupational Incident and illness: Procedures and systems are to be in place to manage, track and report occupational incidents and illnesses, including provisions to: (a) encourage employee reporting; (b) classify and record incident and illness cases; (c) provide any necessary medical treatment; (d) investigate cases and implement corrective actions to eliminate their causes; and (e) facilitate return of employees to work.
3.4 Industrial Hygiene: Employee exposure to chemical, biological and physical agents is to be identified, evaluated, and controlled. When hazards cannot be adequately controlled by engineering and administrative means, employees are to be provided with appropriate personal protective equipment.
3.5 Physically Demanding Work: Employee exposure to physically demanding tasks, including manual material handling and heavy lifting, prolonged standing and highly repetitive or forceful assembly tasks is to be identified, evaluated and controlled.
3.6 Machine Safeguarding: Physical guards, interlocks and barriers are to be provided and properly maintained for machinery used by employees.
3.7 Dormitory and Canteen: Employees are to be provided with clean toilet facilities, access to potable water and sanitary food preparation and storage facilities. Worker dormitories provided by LITE-ON or a labor agent is to be clean, safe, and provide emergency egress, adequate heat and ventilation and reasonable personal space.

4. Environmental

LITE-ON is committed to designing and manufacturing products that preserve the Earth’s ecology, and educating employees on the importance of environmental protection. To minimize our impact on the environment, LITE-ON and its subsidiaries are fully engaged in environmental management to control the creation of air pollution, hazardous waste material, energy use and noise during the design and manufacturing process. In addition, LITE-ON is committed to establish, maintain and continually improve on our Environmental Management System to define operational procedures for environmental control and to monitor the progress of its implementation.

Specifically, LITE-ON is committed to:
4.1 Environmental protection: Improving energy-saving, environmental protection against pollution in all of our sites.
4.2 Resources usage reduction: Reducing paper, water and all the kind of natural resources usage in office operations and in all of our sites.
4.3 ISO14001 implementation: Defining, maintaining and improving related standard operating procedures based on ISO14001 regulations for the effective implementation of controls on air pollution, hazardous waste material and noise.
4.4 Harm Reduction: Reducing air pollution, hazardous waste material and noise in all applicable sites.
4.5 Requirement comply: Complying fully with applicable environmental legal, customer and other requirements.
4.6 Internal and external communication: Communicating with employees, suppliers and customers to provide a more complete understanding of LITE-ON's environmental policy and efforts.

LITE-ON is committed to reducing its impact on the environment through the following strategies:
4.7 Supply Chain Management: LITE-ON continually encourages the development of innovative business models that help reduce environmental impact.
4.8 Product Design: LITE-ON applies design-for-the-environment principles for all of its products and services to minimize impact on the environment.
4.9 Manufacturing Processes and Site Management: LITE-ON continuously improves environmental management systems at both manufacturing and non-manufacturing sites.
4.10 After Sales Service: LITE-ON strives to minimize the environmental impact of product packaging and business activities, such as distribution and sales. When possible, LITE-ON also provides environmental information to customers.

5. Management System

LITE-ON shall adopt or establish a management system whose scope is related to the content of LITE-ON CSER Code of Conduct. The management system shall be designed to ensure (a) compliance with applicable laws, regulations and customer requirements related to LITE-ON's operations and products; (b) conformance with the LITE-ON CSER Code of Conduct; and (c) identification and mitigation of operational risks related to the LITE-ON CSER Code of Conduct. It should also facilitate continuous improvement.

Specifically, the management system should contain the following elements:
5.1 Company Commitment: Corporate social and environmental responsibility statements affirming LITE-ON’s commitment to compliance and continuous improvement.
5.2 Management Accountability and Responsibility: Clearly identified company representative[s] responsible for ensuring implementation and periodic review of the status of the management systems.
5.3 Legal and Customer Requirements: Identification, monitoring and understanding of applicable laws, regulations and customer requirements.
5.4 Risk Assessment and Risk Management: Process to identify the corporate governance, community involvement, environmental, health, safety and labor practice risks associated with LITE-ON's operations. Determination of the relative significance for each risk and implementation of appropriate procedural and physical controls to ensure regulatory compliance to control the identified risks.
5.5 Performance Objectives with Implementation Plan and Measures: Written standards, performance objectives, targets and implementation plans including a periodic assessment of Participant's performance against those objectives.
5.6 Training: Programs for training managers and employees to implement LITE-ON's policies, procedures and improvement objectives.
5.7 Communication: Process for communicating clear and accurate information about LITE-ON's performance, practices and expectations to employees, suppliers and customers.
5.8 Employee Feedback and Participation: Ongoing processes to assess employees' understanding of and obtain feedback on practices and conditions covered by this CSER Code of Conduct and to foster continuous improvement.
5.9 Audits and Assessments: Periodic self-evaluations to ensure conformity to legal and regulatory requirements, the content of the CSER Code of Conduct and customer contractual requirements related to social and environmental responsibility.
5.10 Corrective Action Process: Process for timely correction of deficiencies identified by internal or external assessments, inspections, investigations and reviews.
5.11 Documentation and Records: Creation of documents and records to ensure regulatory compliance and conformity to company requirements along with appropriate confidentiality to protect privacy.

6. Corporate Governance

To realize sustained growth and boost corporate value, LITE-ON works to maintain the flexibility of its operations while promoting management transparency. These endeavors are supported by an efficient corporate governance structure that clearly defines and reinforces the supervisory functions of management while ensuring that the Company is responsive to the expectations of customers, shareholders, and all of our stakeholders.

LITE-ON is committed to:
6.1Financial transparency: Ensuring financial transparency in accordance with information disclosure regulations – completeness, promptness, fairness and transparency.
6.2 Audit committee establishment: Inviting independent directors to directorate and establishing audit committee to provide the direction and guidance to management and perform the oversight responsibility with the highest standard of corporate governance.
6.3 Stakeholder communication: Implementing mature stakeholder’s communication mechanism with employees, stockholders, suppliers, unions of industry, social community, and government through legitimate communication channels and approaches.
6.4 Law complying: Complying with relative corporate governance laws and policies in the countries where LITE-ON operates.
6.5 Public Report: Reporting publically on the performance of LITE-ON’s financial and CSER performance periodically.

7. Community Involvement:

To provide tangible and sustainable benefits and enhancements wherever LITE-ON operates, LITE-ON is committed to:

7.1 Community service: Being a responsible corporate citizen and serving the community by providing products and services efficiently and profitably, and by providing employment opportunities;
7.2 Contribution making: Contributing to the economic well being and social development of the communities where we conduct business;
7.3 Local environment enhancement: Safeguarding and enhancing local environments within the communities in which we operate;
7.4 Particaipation encouragement Encouraging our people to participate in community and civic affairs.

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