About Nam Tai | Customers | Directors & Management | Compensation | Manufacturing Facilities | Products | Technologies | Environment, Health & Safety

Environment, Health & Safety
As a responsible and forward-looking corporation, Nam Tai appreciates the importance of environmental protection and high levels of employee health and safety. This section discusses these issues at our three principal manufacturing facilities in Shenzhen, China.

A Business Imperative
Our customers include some of the world’s leading OEMs of telecommunications and consumer electronic products. An integral part of our customers’ brand is to provide consumers with high-quality, high-performance products, which are designed for the entire life cycle. Such products consume less energy and resources during manufacture, transport and use, and can easily be reused or recycled. Our customers depend on Nam Tai to deliver such products. Furthermore, they expect Nam Tai to ensure the well being of our employees. At the same time, high levels of environmental, health and safety performance make sound commercial sense, helping us to reduce operational costs, maintain high productivity levels and stay ahead of evolving legislation in China and customer markets.

Key Environmental Issues
For our business, we need to ensure that:
- Products meet customer specifications on banned and restricted chemical substances and on design for reuse / recycling;
- Resources, including electricity, gasoline and water, are used as efficiently as possible;
- Solid waste and wastewater are adequately monitored, controlled and treated;
- Emissions of volatile organic compounds and particulates are reduced to improve the air quality in the Pearl River Delta;
- Chemicals and hazardous materials used in the manufacturing process are responsibly managed;
- We comply with local, regional, national and international legislation.

Environmental Management
We have established environmental management systems at our principal manufacturing facilities. The systems at NTEEP and Zastron have been certified to the international ISO14001 standard since 2001 and 2002 respectively and JIC’s system will be ISO14001-certified by the end of 2005. We have encouraged the continued effectiveness of our certified systems by asking two independent organisations to conduct surveillance and re-certification visits. The objectives embedded in these systems are regularly reviewed and tracked. For example, NTEEP and Zastron have key performance indicators and targets on a range of financial and manufacturing issues including the consumption of electricity, water, gasoline and paper. These are reviewed by NTEEP and Zastron on a regular basis. If performance is not on target, an action plan is developed and implemented. The systems also help us to achieve high levels of compliance. During 2004, we were not subject to any environment-related prosecutions or fines.

European Legislation is Changing Manufacturing Processes in China
Nam Tai works closely with customers to implement their environmental product specifications into our operations and those of our suppliers. The main driver for this has been new legislation in the European Union, such as the Directive on Waste Electrical and Electronic Equipment (WEEE) and the Directive on the Restriction of Hazardous Substances (RoHS). The latter is particularly relevant for Nam Tai and has led to a gradual change in our operations. The RoHS Directive states that all electrical and electronic equipment sold after July 2006 must not contain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and polybrominated diphenyls. Nam Tai has been helping customers to meet RoHS and similar country-specific requirements since 2003.

We have found that effective RoHS implementation requires a well-structured and comprehensive approach for both our own operations and to a greater extent, for those of our suppliers. Full compliance is achievable but complicated by issues of cross-contamination between components and between production lines. Furthermore, it is currently not feasible to use recycled metals in our products as these are often contaminated with trace amounts of substances covered by the RoHS Directive.

The implementation of these procedures is supported by declarations and third party test reports from our suppliers as well as our own in house testing. Furthermore, implementation is an agenda item during regular customer discussions and is included in customer audits and assessments of Nam Tai facilities.

Responsible Management of Electricity, Wastewater and Waste
The main source of electricity for our facilities is the municipal power grid. In order to allow continuous manufacturing, we have contingency plans that include back-up diesel powered generators. In order to reduce the emission of air pollutants, we check the quality of our diesel against applicable standards.

Sanitary wastewater generated from dormitories, toilets and the canteen is treated by on-site wastewater treatment plants prior to discharge to the municipal sewerage system. Process water is treated and either reused in manufacturing, used as grey water on site or sent to treatment facilities off site. Waste, such as cardboard, plastic and paper are collected by a recycling company. Hazardous waste is collected for treatment by the municipality. The municipal authorities also collect general refuse for disposal to landfill.

Water Consumption (m3)

Key Health and Safety Issues
For our business, we need to ensure that:

• Employee exposure to safety hazards are properly controlled;
• Machine guards are provided and properly maintained;
• Emergency situations are identified, assessed and prepared for;
• Occupational injuries and illness are reported, investigated and addressed;
• Physically demanding and repetitive tasks are identified and evaluated;
• Welfare facilities (e.g. toilets, potable water, clean dormitories) are provided;
• We comply with local, regional, national and international legislation.

Health and Safety Management
We provide a safe and healthy work environment for our employees and seek to comply with all applicable occupational health and safety statutory requirements. Furthermore, we aim to make ongoing improvements to our health and safety culture. For example, NTEEP’s key performance indicators include absenteeism rates, injury frequency and training hours. These are reviewed on a monthly basis and actions taken to address shortcomings.

Safety training is provided as part of our induction programme for new employees. In addition, on-the-job training is provided such that employees can acquire the necessary skills and safety awareness for specific activities. For example, designated teams of competent staff are responsible for carrying out potentially hazardous activities such as the maintenance of electrical equipment and operation of forklift trucks. Thanks to a partnership with our local hospital, there is a clinic providing professional medical care services within our manufacturing facilities.

As required by law, appropriate fire protection facilities are installed for both production and living areas. In addition, we ensure that employees are properly trained to respond in emergency situations. These skills are practised during regular emergency drills with the local fire protection authorities.

A large portion of our manufacturing processes is highly automated, thus minimising employee exposure to hazardous chemicals and dangerous machine parts. Where feasible, we fully enclose machines so as to isolate employees from moving parts.

We conduct regular air quality monitoring to ensure that volatile organic compounds are below recommended levels. In addition, the RoHS Directive will help further reduce employee exposure to hazardous substances.

With these occupational health and safety management practices in place, we were not subject to any related prosecutions or fines during 2006. However, four work-related injuries were reported in 2006. We take all incidents very seriously and have carefully investigated the root causes of each incident. As such, we will continue to develop a systematic approach to manage the occupational health and safety aspects of our operations.