2015 Formosa Plastics Corporation Corporate Social Responsibility Report Contents 01 A Message from the Management Team 1. About the Report 3. Transparent and Honest Corporate Governance 05 1.1 Overview 37 3.1 Shareholders: A Trustworthy Corporation 05 1.2 Report Guidelines for Investors 06 1.3 Report Compilation Process 45 3.2 Customers: A Corporation that Grows with Its Customers 07 1.4 Stakeholder Identication and Communication 47 3.3 Suppliers and Contractors: Creating a Business Relationship based on Mutual 09 1.5 Identication of Critical Issues Trust and Interests 13 1.6 Risk Management 14 1.7 Corporate Social Responsibility Objectives 15 1.8 CSR Achievements at a Glance 2. Company Overview 23 2.1 Company Prole 4. A Happy and Healthy Work Environment 25 2.2 Management Philosophy 26 2.3 Main Products and Market Share 53 4.1 Protection of Human Rights and Recruitment 34 2.4 Participation in External Associations 56 4.2 Rights and Welfare of Employees 34 2.5 Economic Performance 62 4.3 Human Capital Cultivation 64 4.4 A Safe and Healthy Work Environment 5. Environment Sustainability 7. Social Welfare 71 5.1 Commitment to Environmental 119 7.1 Charitable Donations Protection 121 7.2Promotion of Medical Services and Education 74 5.2 Environmental Accounting 126 7.3 Social Assistance 75 5.3 Water and Energy Conservation and Greenhouse Gas Reduction 82 5.4 Energy Conservation in the Ofce 82 5.5 Environmental Protection at the Plant 90 5.6 Product Safety and Health Responsibility Appendix 135 1. Global Reporting Initiative 146 2. CSR Best Practice Principles for TWSE/GTSM-Listed Companies 6. Prosperous Prospect with Local Community 147 3. ISO 26000 Guidance on Social Responsibility 95 6.1 Eco-Friendliness 150 4. United Nations Global Compact 102 6.2 Healthcare 151 5. Afliated Organizations in the Consolidated Annual Report 110 6.3 Local Industry Development 152 6. Company Products Ranked in the Top 113 6.4 Community Relations 10 for Global Production Capacity 153 7. Company Organization Chart 155 8. Independent Assurance Opinion Statement A Message from the Management Team The Company mainly specializes in the production of plastics, chemical products and ber materials. Due to the drastic drop This Social Responsibility Report has been in international crude oil prices in 2015, which led to conducted in accordance with the Global decreased petrochemical product prices, the sales turnover Sustainability Reporting Initiative (GRI G4) to showed a decline compared to 2014. However, due to the take a comprehensive inventory of the imple- gradual recovery of the global economy, the sales volumes of mentation results of the Company in social the main products has shown an increase compared to 2014. responsibility issues in good faith and complete- Furthermore, due to the sharp drop in the costs of ethylene ly disclose information pertaining to environ- and propylene that accompanied international oil prices, the ment sustainability, workplace environment, increase in sales proportion of high-priced differentiated corporate governance and social welfare. niche products, and the injection of stable prots from company reinvestments, the pre-tax prots have shown The report was sent to the British Standard signicant growth when compared to 2014. Institution (BSI) for verication in May 2016. By Over the years, we have adhered to the philosophy of balanc- issuing this report, the Company hopes to gain ing environmental protection and industrial development so the mutual trust and recognition of its stake- actively pursued pollution prevention and control, energy holders, which will further allow the Company conservation and waste reduction, greenhouse gas emission to continue its balanced development, fulll its reduction, and industrial safety and re-ghting, among corporate responsibilities, and achieve its goal other efforts. As of 2015, the Company has invested NT$ of sustainable development. 17.6 billion in such efforts. The Company’s handling and discharge of pollutants are now better than the national restriction standards and have earned commendation and acknowledgement from government departments at various levels, fully demonstrating our respect for and commitment to environmental sustainability. Furthermore, in 2015, the Company cooperated with government departments at various levels to co-host seven emergency response drills to strengthen disaster response capabilities. Meanwhile, the Company has also maintained its efforts in industry promo- tion endeavors, such as the promotion of agricultural and shery counseling and the releasing of sh fry, to ensure the livelihood of local residents. In conjunction with the health promotion and health education offered to the local residents by Chang Gung Memorial Hospital, the Company hopes that during the process of economic development, local develop- ment can also be promoted to bring about the common prosperity and development of the Company and the community. 1 Formosa Plastics Corporation Corporate Social Responsibility Report Based on the management philosophy of “Taking from Society, Giving Back to Society”, the Company has cooperat- The Formosa Plastics Corporation was founded by ed with its afliated companies and joined forces with brothers Wang Yung-Ching and Wang Yung-Tsai governmental and non-governmental organizations to in 1954. In 2001, the Administration Center was dedicate efforts to welfare activities. As of 2015, over NT$ established as a decision-making department for 51.8 billion has been invested in social charity events, includ- the major company policies and investment ing education, medical and social welfare activities. Further- projects. All proposals will be rst discussed in the more, through the healthcare services of Chang Gung Memo- Center before presenting the discussion results to rial Hospital, various forms of medical assistance, care for Chairman Wang Yung-Ching and Vice Chairman vulnerable groups, and emergency relief can be provided to Wang Yung-Tsai for nal decisions. society. Efforts have also been dedicated to improving the th performance of Ming Chi University of Technology, Chang On June 5 2006, brothers Wang Yung-Ching and Gung University, and Chang Gung University of Science and Wang Yung-Tsai handed over the decision-making Technology to nurture professionals with outstanding knowl- powers to the Administration Center and took a edge and skills for society. The Company has also continued step as the founders. With the continued develop- to sponsor touring performances of some of Taiwan’s ments of the Formosa Plastics Group, the commit- traditional cultural arts performance troupes and extended tee members of the Center are comprised of the sponsors to develop outstanding athletic talents to elevate highest management in Formosa Plastics, Nan Ya, Taiwan’s performance in both cultural and athletic areas. Formosa Chemicals & Fibre, Formosa Petrochemi- cal, Formosa Ha Tinh Steel Corp., and the Group Looking back at the Company’s sixty years of development, Administration Ofce while all major decision-mak- our employees have consistently abided by the management ing are still conducted according to above princi- philosophy of “Diligence & Frugality, Ultimate Excellence, ples, and will be implemented after approval by Sustainable Operations and Dedication to the Society” the Administration Center. established by the Company’s two founders. All employees have also been dedicated to elevating the Company’s management performance in order to ensure good competi- tiveness in the rapidly changing international markets. The Formosa Plastics Corporation Company simultaneously fullls its commitments in the various aspects of social responsibility, thus promoting the Chairman Jason Lin progress of society while advancing towards improvement and prosperity. As we look forward to the future, faced with 2016 the sluggish growth of the global economy and the uncer- tainties of the management environment, in addition to adopting appropriate management measures and a revolu- tionary and innovative spirit to elevate international competi- tiveness, the Company shall also continue to improve its utilization of limited social and natural resources, production safety, water conservation, energy conservation and environ- mental protection through stakeholder communication. Meanwhile, social charity activities, such as medical services, education and care for vulnerable groups, will also be contin- ued in the hopes of contributing to the sustainable develop- ment of Taiwan. 2 3 1. About the Report 1.1 Overview 05 1.2 Report Guidelines 05 1.3 Report Compilation Process 06 1.4 Stakeholder Identication and Communication 07 1.5 Identication of Critical Issues 09 1.6 Risk Management 13 1.7 Corporate Social Responsibility Objectives 14 1.8 CSR Achievements at a Glance 15 4 1. About the Report 1.1 Overview This Corporate Social Responsibility Report, published in 2016, was pursuant to the G4 Sustainability Reporting Guidelines (GRI G4) published in the 2013 Global Reporting Initiative, this report provides an accurate and detailed introduction to our sustainability actions within the corporate governance, environmental protection, community prosperity and social welfare sectors. Information Period: 2015 (January 1st 2015 to December 31st 2015) Report Scope and Boundaries: The information recorded herein mainly focuses on Formosa Plastics Corporation and does not include the subsidiaries or investment companies in Taiwan, China or the U.S. The social welfare section refers