Acer has always embraced a positive attitude when working with our suppliers to endeavor after mutually beneficial

goals, instituting management criteria while opening up multiple channels of communication with suppliers. Acer asked suppliers to sign "Acer Supplier Code of Conduct Declaration," added new evaluation and analysis items in the SAQ, and worked with third-party auditors to launch an on-site auditing mechanism for verifying suppliers' Social and Environmental Responsibility (SER) implementation effectiveness. We also offer necessary trainings to simultaneously bettering their ability to make improvements. We refer to the Electronics Industry Citizenship Coalition (EICC) Supplier Engagement Process by dividing our suppliers social and environmental management process into four stages: introduction, assessing, validation, and sustaining. We require all our major suppliers to completed the introduction and assessing stages, and all our manufacturing suppliers to sign a Declaration of Compliance with EICC Code of Conduct, pledging not only their compliance with Acer requirements to disclose social and environmental information, but also to confirm their operations and their suppliers operations adhere to the EICC Code of Conduct. We employ risk assessment tools to conduct risk assessments of suppliers, as well as on-site audits for high-risk suppliers.

In 2010, we conducted social and environmental responsibility on-site audits of 16% manufacturing suppliers primarily employing third-party audit methods. We commission third party audit firms to conduct audits, which are led by Acer audit managers using comprehensive EICC audit tools to achieve the dual purpose of Acer-led management and objective third party audits. All audits consist of five parts: 1. 2. 3. 4. Confidential worker interviews Management level interviews On-site audits of cafeterias, dormitories, and production lines Document review of labor, health, safety, ethical and environmental management systems 5. Systems framework validation of labor, health, safety, ethical and environmental management Systems Statistical results of audits in 2010 showed the highest percentage of supplier violations were in the five areas of working hours, young worker, environment, health & safety, wages and benefits. On-site Audit We believe on-site audits are the most direct and comprehensive way to confirm our suppliers are living up to their social and environmental responsibilities. We select suppliers to undergo on-site audits based on their self-assessment performances, the degree of risk at factory sites, their business relationship with Acer, and prior audit results, while also taking into

consideration the concerns of our stakeholders. We conducted social and environmental responsibility on-site audits primarily employing third-party audit methods. We additionally participated in the EICC Validated Audit Process (VAP), which employs an independent audit manager to inspect procedures and tools, and verify audit results. We have found that our participation in different auditing processes helps to reveal the strong points and shortcomings of each audit method. It also ensures suppliers violations of social and environmental responsibilities do not go unnoticed, thus enabling us to continually improve Acers supply chain.

Acer is committed to promoting social responsibility by improving the labor rights, business ethics, environmental safety and health practices of the electronics industry supply chain. We have carried out EICC on-site audits for 40 higher risk suppliers in 2011 and taken corrective actions for issues found.

Compliance of the EICC code of conduct

Follow-up and Response Audits of 40 suppliers showed the top five areas of non-compliance were: Working Hours, Child Labor Avoidance, Fair Business, Advertising and Competition. Other areas of particular concern were Plan Implementation, Improvement Objectives, and Industrial Hygiene. Top five areas of non-compliance Category EICC Provision Complianc e Mino r 10% Majo r 19% Major Suppliers are not implementing the appropriate procedure to establish performance objectives and implementatio n plans of labor and ethics. Acer response We require suppliers to develop specific labor and ethical performance objectives and implementatio n plans according to procedures, and implement and maintain records. We require suppliers to establish an overtime

L&E Improvemen 71% Managemen t Objectives t System

Labor

Young Workers

80%

20%

0%

Young workers exceeded the prescribed limit for

overtime hours. ( overtime exceeding 3 hours per day or 36 hours per month)

warning function in their staff management system and propose a working hours management and improvement plan. We also require suppliers to improve their change of shift and hire more workers to solve overtime problems. We require suppliers to establish a warning function in the staff management system and propose a rest management and improvement plan. We also require suppliers to improve their work shift planning and hiring in order to solve overtime problems. We require suppliers to build up a procedure of ethics and intellectual property

Labor

Working Hours

82%

15%

2%

Workers exceeded the prescribed limit for overtime hours and worked an average of seven days without a day off.

Ethics

Fair Business, Advertising and Competition

82%

18%

18%

Ethics and intellectual property protection procedure is not established.

protection, and implement and maintain records. Health and Safety Industrial Hygiene 79% 7% 14% Personal protective equipment missing or is not used (e.g no radiation meters; workers not wearing goggles, masks and appropriate protective gloves at glue station; earplugs not used in airconditioned room (noisy area), gloves not worn at tin furnace station; workers at ultrasonic wave bonding station not wearing earplugs.) We have told suppliers that workers must wear the required personal protective equipment and receive risk education to ensure the proper use of personal protective equipment as well as monitoring by managers and supervisors.

Acer selalu bersikap positif ketika bekerja dengan para pemasok dengan tujuan saling menguntungkan, melembagakan kriteria manajemen sementara membuka berbagai saluran komunikasi dengan pemasok. Acer meminta pemasok untuk menandatangani "Acer Pemasok Kode Etik Deklarasi," tambah evaluasi dan analisis item baru di SAQ, dan bekerja dengan auditor pihak ketiga untuk meluncurkan mekanisme audit on-site untuk memverifikasi pemasok Jawab Sosial dan Lingkungan (SER) efektifitas implementasi. Kami juga menawarkan pelatihan yang diperlukan untuk secara bersamaan memperbaiki kemampuan mereka untuk melakukan perbaikan.