Taiwan – Corporate law & corporate governance

III. The state duty to protect human rights

B. Actions taken

• Voluntary commitment to implementation of international covenants (page 6)

‘The Taiwan government has committed to fully implement human rights both at home and abroad. […] although Taiwan is not a member of the United Nations, it has nevertheless signed and ratified important United Nations human rights covenants in recent years, including the […]”Convention against Corruption.”’

• Business-related human rights safeguards in Taiwanese legislation (page 7)

The Taiwan government has already incorporated the […] “Convention against Corruption,” and other such UN covenants and conventions into domestic legislation, so they can be directly applied as Taiwan law.’

 

IV. The corporate responsibility to respect human rights

B. Actions taken

• Greater information transparency (page 13)

‘Since 2014, the Taiwan government has used legislation to require listed companies matching a certain description to prepare a CSR report each year, and as of 2020 our government — making reference to the non-financial disclosure rules and practices of financial markets around the world — has included […] corporate governance matters in its disclosure requirements in order to ensure that the key performance indicators in non-financial disclosures are more closely linked to the way a company is managed.’

This information is also covered under Appendix 4: Overview of the implementation of the state duty to protect and the access to remedy, The state duty to protect, UNGP3, Actions taken (page 41).

[…] In response to the Taiwan government’s call for companies matching a certain description to prepare a CSR report each year, many private groups and organizations have also begun to assess the quality of CSR reports. For example: (a) A well-known magazine that has adopted the IFRS reporting standards carries out annual assessments of the quality of company CSR reports and presents awards to recognize the best ones. (b) There is a private think tank that collaborates with academia to issue the Taiwan Corporate Sustainability Awards each year, encourage the public to accept volunteer training and participate in the evaluation of enterprise sustainability reports and ESG comprehensive performance, spur enterprises to improve information transparency. Also, in response to the Sustainable Development Goals (SDGs), our government has set up a number of corporate excellence awards to recognize strong performance in such areas as transparency and business ethics, gender equality, and talent development. The purpose is to get companies to strengthen disclosure of non-financial information and implement human rights policies.’

 

C. Actions planned

• Advocate for disclosure of non-financial information (pages 14-15)

‘In addition to studying the feasibility of expanding the range of businesses subject to a compulsory requirement to prepare CSR reports, the Taiwan government will also advocate for disclosure by businesses of non-financial information (related issues will include important environmental, social, and governance (ESG) topics — such as the use of consumer information, the use of energy, waste handling, labor conditions, environmental protection, forced evictions, indigenous land rights, gender equality, and consumer protection measures — all of which are matters of concern to stakeholders). The goal of such a policy would be to ensure that businesses understand that the disclosure of non-financial information can make up for the shortcomings of financial information, thus enabling businesses to effectively identify and manage risks. This would facilitate the formulation of better business policies, and contribute to the achievement of forward-looking objectives, thus enabling the adoption of sustainable business practices.’

This information is also covered under Appendix 4: Overview of the implementation of the state duty to protect and the access to remedy, The state duty to protect, UNGP3, Actions taken (page 41).

 

V. Access to remedy

B. Actions taken

• Actions taken

Extraterritorial jurisdiction (page 18)

‘With respect to any human rights abuses that occur overseas, Taiwan already has laws and regulations which provide that such abuses are subject to the jurisdiction of Taiwan’s judicial authorities no matter where the abuses have taken place. For example, if a responsible person or an employee of a company […]offers a bribe to a public servant from Taiwan or a foreign nation in connection with cross-border trade, investment, or other business activities (as referred to in Article 11 of the “Anti-Corruption Act”), the offense will be subject to the jurisdiction of Taiwan’s judicial authorities regardless whether the offense is punishable or not under the law of the land where the crime is committed.’

 

Appendix 1: Concrete actions taken by Taiwan to fulfill the state obligation to protect

•  Taiwan’s commitment to human rights and international participation (pages 23-24)

‘The “Act to Implement the United Nations Convention against Corruption,” which entered into force on 9 December 2016, was enacted in response to international trends and challenges in the fight against corruption. Our government issues periodic reports on the state of Taiwan’s implementation of the UN Convention against Corruption.’

• Promotion of corporate social responsibility (pages 26-28)

‘The government may incorporate legally binding non-financial reporting requirements to ensure that companies conduct human rights due diligence. Article 10, subsection 4, item E of the “Regulations Governing 27 Information to be Published in Annual Reports of Public Companies” provides that corporate governance reports shall address CSR elements, such as environmental protection, community participation, social contribution, social services & welfare, consumer rights, human rights, and health & safety.’

[…]

‘The Taiwan Stock Exchange (TWSE) has issued the “Taiwan Stock Exchange Corporation Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports by TWSE Listed Companies,” and the Taipei Exchange (TPEx) has issued the “Taipei Exchange Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports by TPEx Listed Companies.” If a listed company is in any of the following circumstances, it shall prepare and file a corporate social responsibility report in Chinese according to these Rules: (a) the company is in the food industry, chemical industry, or financial industry; (b) no less than 50 percent of the company’s total operating revenue is derived from food and beverages; or (c) the company’s capital stock is not less than NT$5 billion. A listed company to which the above descriptions apply shall prepare a corporate social responsibility report for the preceding year, making reference to the Global Reporting Initiative (GRI) Standards and the Sector Disclosure documents issued by the GRI.’

[…]

‘To strengthen corporate governance, the TWSE and the TPEx have issued several codes of best practice, including the following:

“Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies”: Listed companies are expected to implement CSR measures to manage their economic and environmental risks and impacts.

“Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies “: Listed corporations are required to establish a corporate culture built upon good management and integrity. Corporations shall also consider the background of their suppliers. Corporations are expected to act with high integrity.

“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”: Listed companies are expected to establish good corporate governance systems and respect the rights and interests of all stakeholders.’

 

Appendix 2: Concrete actions taken by Taiwan to ensure respect by businesses for human rights

• In order to strengthen enterprises’ CSR implementation and enhance human rights awareness, the Taiwanese government and civil society have implemented a number of support measures, including the following: (page 33)

‘In order to promote the development of a sustainable investment environment, TWSE subsidiary Taiwan Index Plus Corporation and FTSE Russell jointly released the “FTSE4Good TIP Taiwan ESG Index,” the first ESG index that fully integrates environmental, social, corporate governance, and financial indicators in Taiwan.’

 

Appendix 3: Concrete actions taken by Taiwan to provide effective remedy systems

• Extraterritorial jurisdiction

Article 11 of the “Anti-Corruption Act” provides that a public servant who offers (in connection with cross-border trade, investment, or other business activities) to bribe a public servant from Taiwan, the Chinese mainland, Hong Kong, or Macao shall bear criminal liability, and the offender will be dealt with according to the provisions of the “Anti-Corruption Act” regardless whether the offense is punishable or not under the law of the land where the crime is committed.