TIPC abides by domestic and international laws and regulations, and has established an internal control system to ensure open trade and competition, and to prevent unfair competition, monopoly, and other unauthorized conducts. In the event that any related business operator or public organization violates The Commercial Port Law, the relevant evidence will be preserved and submitted to Maritime Port Bureau MOTC for the purpose of imposing penalties on the public authority. Along the year, TIPC complied with the relevant regulations and there was no incident of illicit marketing and publicity.

note:

1. The above mentioned are not major violations. According to the " Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities ", major fine is defined as an administrative fine of at least NT$1 million for a single event
2. The penalties for environmental, economic and social regulations are NT$480,500 in total.
3. Labor laws and regulations impose a total fine of NT$20,000.

Regarding the penalty for forced labor, Labor Affairs Bureau has conducted a labor inspection on April 19, 2023. TIPC was found violated Article 40 of the Labor Standards Act by failing to provide employees with compensatory time off within 7 days after work due to leave suspension on February 3, 2022 (the third day of Lunar New Year) because of natural disaster, sudden changes, or unforeseen incident, and failing to report to Labor Affairs Bureau within 24 hours after incident. On July 4, 2023, the corporate was fined NT$20,000.

Moreover, port operations have recently become more electrified, unmanned, automated, and large-scale, which will inevitably increase cyber security risks and also complicate disaster relief procedures. Therefore, ways to reduce the impacts of risks during transformation and improve the contingency procedures for emergencies are also important issues for port operations.

Tribunal Date:September 7, 2023

• Causes of the occurrence of the deficiency：
  On June 6, 2023, vehicles from Kaohsiung Branch entered the control area of Phase II of Kaohsiung City Air Quality Maintenance Zones. They were found to be in violation of Article 40 (3) of Air Pollution Control Act for not having a qualified record of smoke emission for more than two years prior to the date of inspection, and were sanctioned with a fine of NT$500 in accordance with Article 76 (2) of Air Pollution Control Act.
• Response and improvement measures：
  In this violation case, the vehicles have gone through emission inspection at the parking lot of Taiwan Sugar Corporation on July 5, 2023, and the result was a pass (supporting information such as the certificate of smoke emission compliance). Subsequent inspection on the old vehicles will be conducted, as well as emission inspection according to the regulations.

Tribunal Date:August 23, 2023

• Causes of the occurrence of the deficiency：
  The “Phase III and IV New Seawall Construction for Reclamation Project in Logistics and Warehouse Area of Taipei Port” organized by Keelung Branch violated Article 23 (2) of the Air Pollution Control Act on May 17, 2023, and was found to have 44 deficiencies according to the guidelines in “Management Regulations for Construction Project Air Pollution Control Facilities”, in which effectiveness of prevention and control were affected. The branch was subjected to a fine of NT$ 240,000 and a four-hour environmental lecture.
• Response and improvement measures：
  In this violation case, the construction company has complied with the required improvements, and the supervising unit has been requested to strengthen on-site environmental inspections and patrols. If any violations of environmental regulations are found, immediate or time-limited improvements are improvements are required. The entire project is expected to be completed by September 27, 2025.

Tribunal Date：June 17, 2023

• Causes of the occurrence of the deficiency：
  On May 17, 2023, “Construction Site of Taipei Port at Bali District, New Taipei city” under construction project of Keelung Branch violated Article 23 (2) of the Air Pollution Control Act. According to the guidelines in “Management Regulations for Construction Project Air Pollution Control Facilities, 24 deficiencies were found which affected the effectiveness of the prevention and control. The branch was subjected to a fine of NT$240,000 and a four-hour environmental lecture.
• Response and improvement measures：
  In this violation case, the construction company has complied with the required improvements, and the supervising unit has been requested to strengthen on-site environmental inspections and patrols. If any violations of environmental regulations are found, immediate or time-limited improvements are improvements are required. The entire project was completed on March 31, 2024.

Internal Control System

In order to implement corporate governance, TIPC annually performs business operation risk assessment through the “Risk Management and Internal Control Promotion Team”, reviews and revises internal control operations on a rolling basis. Besides, we also conduct self evaluation and implement plans for internal control to ensure that the system design can be executed effectively to achieve operational efficiency, with the Chairman, President, and Auditor General signing the internal control statement.

Risk Assessment

TIPC adopts the risk assessment tools in "Handbook for Risk Management and Crisis Handling of the Executive Yuan and Affiliated Agencies” to categorize the degree of impact and likelihood of occurrence into Level 1 to 3. The risk value is the product of degree of impact and likelihood of occurrence (i.e., Risk Value = Impact Level * Likelihood of Occurrence), in which the acceptable risk value range is below 2, and items with risk value greater than 2 are categorized as high-risk. The risk management will reduce the risk value of highrisk items to tolerable range, and each risk value location is labeled as a risk image distribution.

Risk Image Distribution Map of 2023

In March 2024, the Company completed a self-assessment report on the risk management and internal control system for the year 2023. The assessment and audit results showed that the establishment and implementation of the overall internal control of the Company were effective according to the definition of the degree of effectiveness of internal control as stated in the 5th point of the "Operating Guidelines for Signing the Statement of Governmental Internal Control", and the statement of internal control was signed by the Chairman, the President, and the Chief Auditor.

Internal Audit

At the end of each year, Auditing Office drafts an audit plan for the subsequent year based on the corporate’s operational goals, results of the management's risk assessment, After submission to Board of Directors for review and approval, the new year's internal audit will be conducted to assist the Board of Directors and management in reviewing the effectiveness of the implementation of internal control system, so as to reasonably ensure the operational effectiveness and efficiency, credibility of the financial reports, and compliance with relevant laws and regulations. Auditing Office also provides recommendations for improving the internal control system as a reference for ongoing reviews. If there are additional business needs, the audit plan's content may be adjusted, or special audits may be conducted upon approval by the Chairman.

In order to review that high-risk items comply with key requirements of internal control, Auditing Office conducts at least two audits per year on the headquarter and every branch, and follows up on the items to be improved to ensure that the audit recommendations or opinions approved by the Board of Directors are implemented. The audit results will eventually be compiled into an internal audit report, which discloses the audit findings, recommendations for improvement, and the implementation status of previous improvement recommendations. The audit report will be submitted to the Board of Directors every quarterly after approval by the Chairman.

In 2023, Auditing Office audited a total of 54 internal control operations, of which 44 were high-risk internal control operations, which were selected in accordance with the definition of high-risk operations listed in the "Risk Management and Internal Control System", approved by the corporate and every branch after ongoing reviews.

The categories mainly included operations and collections cycle, investment cycle, port and warehouse operation cycle, procurement and payment cycle, information security cycle, and the other management system cycles. The audit results complied with the key requirements of internal control. Additionally, two special audits were conducted upon Board of Directors' decision, including “Implementing Effectiveness of Smart Port” and “Effectiveness of Implementing Sustainable development towards Goals of Low Carbon, Net Zero”, which were issues of concern to the Board of Directors.

Ethics and Integrity

In order to enforce internal integrity management and to encourage employees to engage in operational activities with the highest ethical standards, TIPC, with reference to the "Operating Guidelines for Inspection by the Executive Yuan and Affiliated Agencies" and the "Ethics Guidelines for Civil Servants", has formulated in-house“work rules” to regulate employees’ ethics and responsibilities in conducting business practices. We also reinforce disciplinary requirements for employees and strictly prohibit employees from accepting improper hospitality, gifts, rebates or other inappropriate benefits, and from engaging in improper establishments, in order to consolidate the corporate culture of integrity, creating a credible reputation and positive image, as well as to establish a stable mutual partnership with our stakeholders.

Corruption Risk Management

TIPC is fully committed to promoting Integrity Action Plan and has seven internal control systems, including procurement supervision, risky business audit, public servants' property declaration, Ethics Guidelines for Civil Servants cases, receiving and reporting corruption and profanity cases, early warning behavior and re-corruption prevention mechanism. Through various risk assessments, Civil Service Ethics Department has gained an in-depth understanding of businesses that are prone to malpractice, and accordingly has implemented relevant risk control and internal control mechanisms to serve as early warning.

Corruption Risk Assessment

TIPC integrity risk assessment is conducted by Civil Service Ethics Department with reference to the time point of occurrence of past cases, current status of duties, letters of investigation, questions from public representatives, impeachment by the Control Yuan, correction, investigation of administrative responsibility, or transfer (suspension) of duties, etc., to evaluate the likelihood of corruption occurring in each operation, and the impact level. The "Integrity Risk Assessment Report" in 2023 listed a total of 53 risk events, with zero high-risk events (e.g., corruption and profanity cases).

Risk Event Exposure

• High Risk 0%
• Medium Risk 28%
• Low Risk 72%

Category of Risk Events

• Project Procurement 43%
• Labor Procurement 9%
• Property Procurement 4%
• Subsidies 2%
• Other Operations 42%

In addition, in order to establish a communication channel with business operators and to create a fair, just, and open bidding (business) environment, TIPC conducted a public opinion survey focusing on shipping companies that have participated in the company's procurement cases and have business dealings in 2023, to study the operators’ perception and evaluation of the company's "service effectiveness", " ethics and integrity", and "overall integrity indicators", as well as to provide feedback on the business revolutions, with the aim of providing specific recommendations as a reference basis for future progress. In 2023, a total of 45 valid samples were completed, of which 7 were interviewed face-to-face and 38 were surveyed by the representatives of shipping companies attending the Corporate Compliance and Integrity Governance Forum. Results revealed that the operators highly affirmed the company's "overall integrity" performance and indicated no incidents of staff implicitly soliciting for bonuses, kickbacks, or bids with restrictive specifications.

Corruption and Profanity Cases Report

TIPC has set up multiple reporting channels, which are announced on the Global Information Network/Main Theme “Integrity Set Sailing”, and assigns a specialized staff from Civil Service Ethics Department to take charge of accepting complaints from employees and the public. The "Regulations on the Confidential Handling of Whistleblowers' Identities of TIPC” is also established, plus a secure and strict confidential reporting and complaint mechanism for employees (citizens). In 2023, there was no lawsuits or corruption cases related to professional integrity or media coverage.

TIPC uncovered fraud (prosecution) channel

• On-site Report：During working hours (08:30-17:30), there is a person in charge of receiving on-site reports from the public.
• Phone Report：07-2136963
• Written report：Email: ethic@twport.com.tw
• Fax：07-531-8755

Integrity Work Plan

In compliance with anti-corruption regulations in Article 12 of the United Nations Convention against Corruption (UNCAC) on private sector, " Strengthen corporate integrity and build an anti-corruption consensus in the private sector" as stipulated in the National Integrity Building Action Plan, TIPC has set up Civil Service Ethics Department to promote the policy requirements of "Integrity in Government" and formulated annual “Integrity Work Plan”, and subsequently carried out integrity operations and campaigns. We also promote integrity and Ethics Guidelines for Civil Servants, and encourage our colleagues to make record entry through the online registration system in the event of public servants' integrity incidents. In 2023, we have implemented measures to optimize the Integrity Ethics Registration System, aiming to improve the efficiency of front- and back-end registrations and increase employees’ willingness to register by establishing a registration process control and error-proofing mechanism*1. Besides notifying the Chief Executive of respective units and Civil Service Ethics Department, the registration process will be completed only after the President's approval.

*1 The following table shows the integrity ethics event log for 2021-2023

The event log has increased significantly in the past three years, indicating that our colleagues are empowered to implement the Ethics Guidelines for Civil Servants, and have taken the initiative to make incident reports. Plus, the system has been improvised and optimized with good outcomes.
Besides making use of opportunities such as supervisors' reports and labor education organized by labor unions and Employees’ Welfare Committees to continuously educate employees on the use of the registration system, TIPC also enhanced the promotion of integrity ethics guidelines during the three festivals, and organized integrity awareness campaigns through multiple channels, such as TIPC intranet, “Integrity Window” column of TIPC e-newsletter, “Integrity Set Sailing” of Global Information Network, and “Integrity Prize Quiz” of on-the-job training program. TIPC also broadcasted short videos and slogans through media devices such as news ticker and TV walls.

Newcomers

Conduct education and training for newcomers:

• We conducted 3 sessions of "Integrity Ethics" training to propagate the Ethics Guidelines for Civil Servants and work rules-related requirements, regulations and log-in methods. 78 newcomers have participated in the training (100% of new recruits were trained).
• Two courses on “Protection of Official Secrets and Personal Data Protection”: To educate on the scopes and notes on Personal Data Protection Act, and to remind colleagues of their obligations in collecting, processing, and utilizing personal data while performing official duties. 71 new recruits enrolled in the training (100% training rate).

Supervisors

• We make use of the supervisors’ meeting to promote the concept of integrity laws such as the Act on Property-Declaration by Public Servants and Act on Recusal of Public Servants Due to Conflicts of Interest, and to conduct case studies on operations that are prone to malpractice (e.g., "Review of Public Servants' Legal Liability Cases and Prevention of Malpractice", "Highlights and Case Illustrations of Act on Recusal of Public Servants Due to Conflicts of Interest", "Highlights of Small Claims", "Highlights of the Management of the Use of Official Vehicles (Motor Vehicles and Motorcycles)", etc.). , so that the supervisors of each department can be aware of and convey the information to their colleagues in order to prevent illegal cases in advance, keeping them vigilant and compliant while performing operations. (100% of supervisors are trained).
• According to the scheduled timeline of the corporate's “Directions for Establishment of Integrity Reporting”, an annual integrity reporting meeting is held, presided over by each company's senior executive (President or Vice President) and attended by first-level supervisors of each unit, to review the corporate integrity status (propagation of integrity laws and regulations, project audit status, and integrity reporting statistics) and implementation of anti-corruption preventive measures in each unit. All subsidiaries hold meetings on schedule with all the supervisors (including proxy) attended (100% of supervisors participated).

Colleagues

• Pursuant to the corporate’s policy, integrity education and training courses are held annually, with priority given to unit supervisors, administrators, or those who have never participated in the training. The course content involves the promotion of integrity laws and regulations, as well as case study explanations and topics on integrity management, with the purpose of improving the professional knowledge and cultivating integrity among colleagues so as to jointly safeguard the integrity of TIPC and therefore lead Taiwan ports in sustainable development.
• Organized 8 courses on integrity and law, with a total of 393 employees participating in the courses.
  • March 2023 – Three levels of “How to Avoid Law Breach - Reminders and Care” course
  • April 24, 2023 – Seminar on “Procurement Act Breach Cases and Regulations-Profit Risk during Performance of Procurement Contract”
  • July 21, 2023 – Talk on “Introduction to Personal Data Protection Act and Practical Case Studies Analysis”
  • September 1, 2023 – “2023 Briefing on Act on Property-Declaration by Public Servants and Act on Recusal of Public Servants Due to Conflicts of Interest)
  • September 28, 2023 – “Lecture on Integrity and Rule of Law - Recognizing the Risks of Workplace Law Violations”
  • October 20, 2023 – “2023 Briefing on Act on Recusal of Public Servants Due to Conflicts”

Spreading Anti-Corruption Awareness

We have set up a dedicated webpage focusing on major issues of public concern and other rights-related issues to disclose important information to minimize information asymmetry and enhance the accessibility of public supervision. In order to implement major policies such as the “United Nations Convention Against Corruption” and “U.S.-Taiwan Initiative on 21st Century Trade”, and to promote the consensus on anti-corruption, integrity, and legal compliance among public and private sectors, we have provided a channel of communication and experience sharing among industry, government, and academia by organizing large-scale forums and activities, with the outcomes disseminated to general public, civil society organizations, shipping operators and our colleagues. We hope to earn public support and raise interest in joining the corporate’s anti-corruption awareness programs, as well as establish a good partnership to build a high-quality shipping operation and management environment.

In 2023, we organized 37 sessions of integrity promotions (including educational training and theme-based lectures) and community participation, with a total of 8,513 participants. Two corporate integrity forums were held in 2023 to convey the importance of integrity governance in conjunction with benchmark corporations and government agencies, and to provide a channel of communication between stakeholders in the port area through multiparty forums, aiming to reach a consensus on anti-corruption and create a clean yet quality operating environment in the port area.

Group photo of chief executives at "ESG Corporate Regulatory Compliance and Integrity Governance Forum" at headquarter.

"2023 Occupational Safety and Health Regulatory Compliance and Corporate Sustainability Forum" at Taichung Branch.

Taichung branch launched the first “Integrity Experience Judicial Series Activities”

Taiwan Taichung District Prosecutor's Office - Prosecutor Huang Yu-Feng was invited to give a lecture on the topic of “Knowledge and Rights of Colleagues Facing Litigation Cases in the Performance of Their Duties” to educate them on laws and relevant procedural regulations of criminal investigation, with the hope that in case of criminal investigation, interviews, summonses, etc., they would be able to cooperate and assist in investigations with a rational mind, and to understand the ways of utilizing resources and channels to protect their own rights and interests (500 copies of brochures on “Colleagues' Knowledge and Rights of Criminal Investigation” were distributed to every unit at all levels and forwarded to every colleague for reference). Visits to Taiwan Taichung District Court were organized in order to enhance knowledge of the court, understand the operation of the judicial affairs and adjudication process, and to eliminate the stereotypes of litigation with positive concepts.

Taiwan Taichung District Prosecutor's Office - Prosecutor Huang Yu-Feng gave a lecture on the topic of “Knowledge and Rights of Colleagues Facing Litigation Cases in the Performance of Their Duties”

Cyber Security Control

TIPC is a specific non-public authority according to the 'Cyber Security Management Act'. To control the cyber security risk of the leased space in the international (domestic) commercial port area under the management of the port, TIPC incorporated the cyber security regulations into the model contract in 2022. Corresponding to the trend of digitalization of port operations and billings, TIPC keeps on strengthening its cyber security protection and defense capability, establishes a comprehensive cyber security policy, appoints dedicated personnel, and organizes Cyber Security Management Committee. Through the implementation of ISO 27001 international information security standard, we continue to improve our information security management system and effectively implement our internal control mechanism to fulfill our responsibility of protecting customers' privacy.

Cyber Security Policy

Cyber Security Risk Assessment

TIPC's operation systems related to customer transactions use the Information Security Management System (ISMS) standard information asset management procedures, risk assessment and management procedures to conduct asset inventories to identify the Company's assets, and to assess the "availability", "integrity" and "confidentiality" of the assets.In addition, we estimate whether the risk value of each asset exceeds the acceptable risk value set by the Management Review Committee, and if it does, we formulate a risk management plan to reduce the likelihood of occurrence and impact of the risk and to protect the privacy of customers.

Pursuant to the “Cyber Security Management Act”, TIPC provides cyber security education and training. In 2023, each dedicated personnel received more than 12 hours of professional cyber security trainings per year, and each information personnel other than dedicated personnel received at least 3 hours of professional cyber security trainings every two years, while each general user and supervisor received an average of 3 hours of education and training in cyber security per year, in order to enhance cyber security and minimize the impact of personal data violation incidents. In 2023, we had no confirmed information leakage, theft or customers’ data loss, nor did we receive any complaints from customers or other third-party organizations about violation of customer’s privacy.

Data Security Applications

TIPC follows the Personal Data Protection Act and the Cyber Security Management Act in collecting, processing, and using customer data. The established Global InfoNet also adheres to a privacy policy and information security obligations. TIPC will not modify or delete any personal information or files without user consent, enabling visitors to use the services and information on this website with peace of mind.

TIPC has set up outsourced information and communication security terms and conditions to be used as a guideline for internal procurement of information and communication equipment, software or information and communication services, which clearly specify the information and security requirements that vendors should comply with. In addition, to control the information security risk of the leased space in the international (domestic) commercial port area under the management of the port, TIPC will incorporate the information security regulations into the model contract in 2022.

Customer’s Feedback Management

In response to the trend of mega ships and the digitization of global ports, TIPC continues to improve the capacity of commercial port facilities for relevant port operators and builds sustainable partnerships with these operators to maintain the international competitiveness of Taiwan's port group.

n addition to maintaining interaction with customers through daily phone conversations, email communication, and routine visits, we also organize port business seminars on a regular basis and set up customer service counters in each branch to promptly receive customers' needs and track and control the progress of processing customers' feedback. In 2023, TIPC branches held 10 port business seminars. Among them, 39 issues were related to “customer health and safety”, and 39 issues were improved or solved, with an improvement rate of 100%.

Port of Kaohsiung Business Seminar

Hualien Branch Shipping Business Seminar

Keelung Branch Shipping Business Seminar

Taichung Port Business Seminar

Port Emergency Response

With the increasing scale and frequency of extreme weather events, natural disasters, and potential hazards associated with global warming, the safety of port operations is being threatened. Due to the unpredictable nature of disasters, the Company not only conducts internal preparedness and organizational coordination during normal operations but also has established a robust emergency notification mechanism with various public and private stakeholders within the port, including government agencies, CIQS (Customs, Immigration, Quarantine, and Security), central and local disaster response units, and local authorities. Additionally, we conduct regular disaster response drills to enhance mutual support and cooperation, aiming to effectively strengthen emergency response processes, mitigate the threat of disasters, and prevent the escalation of incidents that could impact port operations.