Internal Control System and Integrity

According to the Commercial Port Law, the planning, construction, management, operation, security, and pollution prevention of international commercial ports are the responsibility of state-operated enterprises established by the MOTC, while domestic commercial ports are managed by the Maritime and Port Bureau or designated agencies. The Company operates and manages 7 international commercial ports and is entrusted to operate 2 domestic commercial ports, executing related matters in accordance with the law.

For violations of the Commercial Port Law, TIPC is responsible for preserving relevant evidence and referring the case to the Maritime and Port Bureau for disposition in accordance with the law. TIPC implements integrity governance through its internal control system. During the reporting period, the Company made no political contributions and recorded no material violations relating to product health and safety, service information and labeling, marketing communications, or voluntary codes in the social and economic areas, nor were there any material violations of environmental laws and regulations. In 2025, however, there was one labor dispute case (see Note 2) and incidents relating to construction projects, general waste management, and occupational safety and health, resulting in total administrative fines of NT$1,101,200.

In response to construction-related penalties, TIPC has strengthened site management and the implementation of pollution prevention and control measures, and has proposed amendments to the Regulations and Penalty Standards for Contractors' Violations of Occupational Safety and Health Management Requirements and Occupational Accidents. Under the proposed revisions, contractors will be subject to more stringent penalties for violations of applicable pollution prevention and control requirements.

Note:

1. For the purposes of identifying material violations, TIPC follows the Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities, under which a single event resulting in accumulated fines of NT$1 million or more is deemed a material penalty event.

2. During 2025, the Company was fined NT$20,000 by the competent authority for a violation of Article 34 of the Labor Standards Act due to deficiencies in the administration of its employee leave system. As TIPC has submitted a formal statement to the original administrative authority in accordance with the law and the case remains under review, it has not been included in the labor dispute statistics.

3. Information on penalties imposed in 2024 is available in the 2024 ESG Sustainability Report.

Internal Control System

TIPC established the Risk Management and Internal Control System in accordance with the“Operating Principles for Risk Management and Crisis Handling of the Executive Yuan and its Affiliated Agencies”, “Handbook for Risk Management and Crisis Handling of the Executive Yuan and Affiliated Agencies” and “Highlights of the Government Internal Control and Surveillance Operations”. Regarding the company’s vision, key operational objectives, and overall as well as operational-level goals, all units review the importance and risks of their controlled business areas, conduct risk identification and assessment, analyze the impact and probability of risks, and formulate various risk evaluation items and internal control procedures each year. To ensure the continuous and effective operation of TIPC’s risk management and internal control, a self-supervision mechanism is implemented through routine monitoring, self-assessment, and internal audits.

Risk Management and Internal Control System

To strengthen corporate governance and risk control mechanisms, the Company annually updates key internal controls and operating procedures based on the previous year’s self-assessment results. Each department establishes operational objectives based on its respective responsibilities, assesses internal and external risks, and designs appropriate control activities accordingly. Through routine monitoring, self-assessments, and internal audits, TIPC implements a self-monitoring mechanism to ensure the effectiveness of its internal control system and mitigate operational risks. Each department conducts self-assessments based on their execution effectiveness, and after supervisor approval, the internal control statement is jointly signed by the Chairman, President, and Auditor General.

The Auditing Office conducts at least two audit operations annually for the headquarters and every branch, focusing on high-risk items and continuously tracking the progress of improvements. The audit results are compiled into internal audit reports, which are submitted quarterly  to the Chairman for approval and reported to the Board of Directors. This process ensures the effective operation of the internal control system and responds to the resolutions adopted by the Board of Directors.

Key Internal Controls and Operating Procedures of TIPC

In 2025, the Auditing Office audited a total of 46 internal control operations, of which 36 items were selected from the high-risk operations listed in the "Risk Management and Internal Control System", approved by the headquarters and every branch after ongoing reviews. 

The primary categories included the operations and collection cycle, port and warehouse operations cycle, procurement and payment cycle, information security cycle, investment cycle, and other management system cycles. The audit results complied with the core requirements of internal controls. 

In addition, the Procedures for Sustainability Report Preparation and Verification, an internal control procedure newly introduced in 2025, have been reviewed and approved by the Board of Directors for inclusion in the 2026 Audit Plan.

Ethics and Integrity

Upholding the four core values of "integrity and legal compliance", "transparency", "inclusiveness and Mutual Prosperity", and "fairness and justice", the company actively promotes various integrity initiatives such as the Procurement Integrity Platform. Internal codes of conduct are in place, strictly requiring employees to comply with relevant laws and regulations and to uphold professional ethics with loyalty when performing their duties.

Integrity Risk Management

For integrity risk-related operations, the Company has implemented seven internal control mechanisms: procurement supervision, Audits of high-risk operations, public servants' property declaration, Ethics Guidelines for Civil Servants cases, Handling of complaints and reports of corruption and malfeasance, early-warning measures and repeat-corruption prevention mechanisms. The Civil Service Ethics Department executes risk control and implements internal control mechanisms based on risk assessment results. Evaluations, audits, and improvements are conducted following the company’s risk management and internal control systems. Performance evaluations are conducted for specific business activities, and an annual integrity meeting is held to review the year’s integrity efforts.

To manage corruption risks, TIPC has established eight operational sites designated for corruption risk assessment. Subsidiaries have also set up dedicated integrity units and personnel as shown in the table below:

100% of operating sites have undergone corruption risk assessments.

The evaluation criteria for major corruption risks identified through risk assessment are based on factors such as the timing of incidents, the current position of the individuals involved, referrals for judicial investigation, inquiries by legislators, impeachment or corrective actions by the Control Yuan, accountability for administrative responsibilities, or job reassignment/suspension. If a case is assessed to have both a high likelihood of occurrence and a severe impact, it is classified as a significant corruption risk. In 2025, the Civil Service Ethics Department completed the Corruption Risk Assessment Report, which identified a total of 37 risk incidents. The categories of these incidents are as follows:

Chart of Risk Event Statistics-TIPC

Communication and Training on Anti-Corruption Policies and Procedures

Adhering to the principle of integrity management, TIPC places great emphasis on the implementation and communication of anti-corruption policies while promoting various operational activities. Each year, the Civil Service Ethics Department formulates an integrity work plan to carry out a series of integrity training sessions, anti-corruption activities, and discussion meetings. Through subtle and continuous efforts, it strengthens employees’ anti-corruption awareness, promotes honest governance and corporate culture, and timely expands corporate integrity and anti-corruption information to the public through social participation activities, actively seeking consensus and policy support from external stakeholders. Meanwhile, the company has established the Work Rules and Integrity-Related Regulations Notice, which regulate the conduct of employees and business partners to ensure all operations are conducted legally and compliantly.

To implement its integrity policy, TIPC incorporates a Notification of Integrity Regulations for Contracted Vendors into its procurement and tender documents, requiring suppliers and contractors to comply with applicable integrity and ethical standards. Any violations are handled in accordance with the relevant contractual provisions. In addition, TIPC conducts annual integrity education and training programs and ethics orientation sessions for new hires. It has also established internal control mechanisms covering procurement oversight, audits of high-risk operations, asset declaration, whistleblower complaint handling, and anti-corruption early warning and prevention measures. These mechanisms are implemented and regularly monitored by the Civil Service Ethics unit to further strengthen integrity governance.

Implementation of Anti-Corruption Initiatives Over the Past Three Years

In 2015, one incident involving the acceptance of improper benefits in the course of official duties occurred. Following judicial proceedings, a final court judgment was rendered in 2025. The case involved personnel at the Suao Port Operations Office who, during wharf asset disposal operations, violated procurement and environmental protection regulations and engaged in improper benefit-related conduct. As a result of the court's ruling, certain individuals were sentenced to imprisonment and deprivation of civil rights, and were subject to dismissal from office and disqualification from public service.

Procedure for Handling Complaints and Reports of Corruption Cases

To strengthen public service and enhance administrative transparency, the Company has established the "Guidelines for Handling Public Petitions" in accordance with Chapter 7 of the Administrative Procedure Act and relevant regulations of the Executive Yuan, standardizing the procedures for handling public petitions.

The Secretariat has designated a dedicated unit, using the official document management system and the "Case Monitoring Management System" to register, assign, and expedite the handling of various complaint cases. It closely coordinates with the MOTC's Citizen Service Center to continuously track the processing progress until case closure. Pending cases are compiled and published monthly on the internal website, with reminders sent to responsible personnel two days before the deadline to accelerate processing.

In 2025, the Company's public petition mailboxes received a total of 72 cases at Headquarters, 63 at the Keelung Branch, 42 at the Taichung Branch, 176 at the Kaohsiung Branch, and 19 at the Hualien Branch. All cases were processed and completed in accordance with the prescribed procedures.

Additionally, in compliance with the " Guidelines for Handling Public Petitions by the Executive Yuan and Its Subordinate Agencies", the Company conducts online and phone-based satisfaction surveys to assess case handling in terms of efficiency, attitude, and professionalism. The survey results serve as a reference for improving service quality and ensuring integrity-based governance and impartial service delivery.

The Company provides multiple reporting channels and has designated dedicated personnel in the Civil Service Ethics Department responsible for handling whistleblowing reports from employees and the public regarding illegal activities. A clear and standardized procedure has been established under the Company’s internal control system for the handling of corruption-related complaints and whistleblower cases.

TIPC uncovered fraud (prosecution) channel