In the global Information and Communications Technology (ICT) industry, there are regular discussions about concerns related to trade compliance, cyber security, data and privacy protection, environmental protection, and anti-corruption and anti-bribery policies. Industry leaders must address the issues in order to build a healthy business ecosystem. Meanwhile, ICT companies need to address these issues if they want to survive and thrive in the market.
Since its establishment in 2011, Huawei’s enterprise business has grown rapidly worldwide, even in the face of uncertainty. Huawei’s enterprise business, with the support of its global customers and partners, has grown 10-fold in sales performance and achieved a compound annual growth rate of 40 percent since it was established. In this context, Huawei’s operational compliance has become even more important for Huawei Enterprise Business Group (EBG) to sustain its business growth. To address future challenges, Huawei EBG will optimize its operational compliance systems.
Compliance Management Systems: Building the Foundation for Huawei’s Global Operational Compliance
Huawei conducts its business with integrity and abides by international conventions as well as all applicable laws and regulations in the countries and regions in which it operates. This is the cornerstone of Huawei’s operational compliance, and it has long been a core principle of Huawei’s management team. With the guidance and oversight of the company’s top executives, the efforts to strengthen a culture of operational compliance are ongoing. Huawei takes the following measures to establish its global operational compliance culture:
- Establishing dedicated organizations: Huawei establishes dedicated compliance and oversight teams to further bolster the management and oversight of its global business operations. By providing its employees with training and awareness programs, performance appraisals, and accountability management sessions, Huawei consistently reinforces the awareness of laws and operational compliance among its employees at all levels.
- External communication: Huawei actively and openly shares its operational compliance journey with its business partners, providing insight into its experience developing global operational compliance systems.
- Construction of overseas compliance systems: Huawei continuously optimizes its operational compliance systems in its overseas subsidiaries. To date, Huawei has drafted legal compliance handbooks in more than 100 countries to ensure compliance with local laws and regulations after analyzing local legal requirements as well as the requirements raised by industry associations.
- Internal management supervision: Huawei defines its compliance responsibilities by selecting and training compliance officers in all of its subsidiaries. Huawei has also established oversight-oriented subsidiary boards that manage and oversee the subsidiaries operational compliance. This ensures that Huawei’s subsidiaries’ compliance work aligns with local legal requirements as well as its own compliance strategies.
- Inviting external consultants: Huawei invites external consultants to review its compliance in key domains and proactively works with relevant stakeholders through its compliance initiatives to foster mutual understanding and trust.
Huawei is committed to strengthening compliance in multiple business domains, including trade, cyber security, data and privacy protection, anti-corruption practices, and trade secrets protection. By increasing its compliance investment, Huawei continues to optimize its global operational compliance systems to meet industry standards.
Huawei also regularly collaborates openly and proactively with government agencies, passing governmental audits in Europe and Japan. By strengthening its compliance and increasing its compliance transparency, Huawei continues to earn the respect and recognition of more and more governments and partners around the world.
Trade Compliance: Establishing a Complete Internal Compliance System Through More Than a Decade of Efforts
Huawei was one of the first companies in China to establish a comprehensive trade compliance system. Huawei has been developing its trade compliance system with industry best practices for more than 10 years. The system complies with all applicable laws and regulations of the countries and regions in which it conducts business, including the export controls and sanctions imposed by the United Nations, the US, and the European Union.
- Organization and regulation development: Huawei aligns its trade compliance system with the industry’s best practices, and it has established an integrated trade compliance management organization to manage trade compliance across multiple regional offices. Huawei has also established dedicated specialist teams to ensure trade compliance in its global offices. These teams help the trade compliance system adapt to local law changes, while they also integrate trade compliance into global offices’ rules and processes, and manage and oversee trade compliance at each stage of business operation, including procurement, R&D, and sales, as well as supply and services.
- Third-party audits and evaluation: Huawei invites independent consulting firms to provide external audits and trade compliance advice to ensure the trade compliance system’s suitability and effectiveness. Huawei was among the first few companies in China to invite consultants from the US to design, audit, and evaluate its own trade compliance system. In 2007, Huawei invited authoritative consultants from the US to provide instructions on how to better ensure trade compliance. Since then, Huawei has invited independent third parties from the US to evaluate, review, and refine its trade compliance system based on feedback. Upon request, these audit reports are provided to government agencies and partners to enhance mutual understanding and trust.
- Employee training: Huawei continuously raises its employees’ trade compliance awareness by holding more than 100 trade compliance training sessions for managers and employees across the company every year. The format varies from session to session, and the sessions allow employees to fully understand their export control responsibilities and obligations as well as the company’s. Huawei’s employees must also agree to and sign the Business Conduct Guidelines (BCG) every year. The BCG includes the commitment to observe applicable export control laws and regulations.
Security and Trust: Investing US$2 Billion Over Five Years to Ensure Industry-leading Security and Privacy Protection
A fully connected, intelligent world is built on security and trust. Additionally, cyber security — crucial to building an intelligent world — is a responsibility that is shared by industry competitors, value chain suppliers, and the wider society. Huawei, as an industry leader, has made cyber security and privacy protection its top priorities, and continues to invest in an ongoing basis while also ensuring openness and transparency with its partners and customers. Huawei’s cyber security and privacy protection compliance is best demonstrated by its desire to continuously optimize its software engineering capabilities and practices, and develop resilient networks and high-quality products for its customers. Huawei supports stable network operations and ensures business continuity under all circumstances.
- US$2 billion over five years: Huawei plans to invest US$2 billion over the next five years to enhance its software engineering capabilities. This investment will help improve its response to the cyber security and privacy protection challenges affecting the ICT industry. It will also help position Huawei as an industry-leading supplier with compliant cyber security systems.
- 11 security certifications: Huawei actively works toward achieving the industry’s mainstream cyber security and privacy protection certifications. In 2018, Huawei’s major products were awarded 11 international mainstream security certifications.
- 100 percent certified: Huawei requires its key staff members to obtain cyber security and privacy protection certification.
- 2,778 evaluated suppliers and 582 DPAs: Huawei has evaluated 2,778 of its mainstream suppliers for possible cyber security risks, and their corrective action plans have also been verified. Huawei has signed Data Protection Agreements (DPAs) with 582 suppliers to ensure privacy protection, and performs regularly checks on these suppliers to ensure they remain compliant.
- 170 countries and regions, 1,500 networks, 3 billion people: Huawei is committed to providing uninterrupted network services to more than 3 billion people around the world and delivering stable operations to more than 1,500 networks in over 170 countries and regions. Huawei has delivered network services for about 300 major events, including the 2018 FIFA World Cup in Russia, and the 18th Shanghai Cooperation Organization (SCO) Summit in Qingdao, China. Huawei has also provided network services during natural disasters such as the magnitude 7.7 earthquake in Sulawesi, Indonesia.
Prohibiting Compliance System Manipulation with Anti-Corruption and Anti-Bribery Policies
With integrity at the core of the company’s operations, Huawei strictly enforces a zero-tolerance policy for bribery and corruption. Huawei has launched various programs to improve its anti-corruption and anti-bribery management system. Huawei’s employees and its third-party business partners are required to comply with the laws and regulations of the countries and regions in which its conducts business, as well as customers’ anti-corruption and anti-bribery requirements. Moreover, all employees must understand and agree to the company’s Business Conduct Guidelines (BCG). Huawei also shares its anti-bribery requirements with its partners, requiring them to sign an “honesty and integrity” agreement. Huawei has also established complaint channels that employees can use to report possible violations.
Huawei complies with all applicable laws and regulations in the countries and regions in which business is conducted, as well as all relevant international conventions. Following the company’s guiding principles, Huawei continues to improve its anti-corruption and anti-bribery processes and management systems. Huawei has also established anti-corruption and anti-bribery practices in 145 subsidiaries worldwide. Based on these efforts, Huawei continues to improve its anti-corruption and anti-bribery management system in the following ways:
- Culture of integrity and compliance: Huawei has adopted multiple initiatives to foster a culture that is anti-corruption and anti-bribery. These include oaths taken by managers, anti-corruption and anti-bribery training programs for employees and partners, and disciplinary action for violators. These initiatives aim to increase employees’ compliance awareness and deter possible violators.
- Compliance management: Huawei regularly conducts compliance audits to identify potential risks in its business scenarios. It develops corresponding control measures and oversees its implementation. Its compliance management system is regularly reviewed by examining its possible risk control points. Based on the review’s results, corrective measures are taken to improve the anti-corruption and anti-bribery compliance management system.
- External communications: Huawei actively seeks communication with its industry peers, consultants, partners, and NGOs to discuss security compliance, making its anti-corruption and anti-bribery stance clear. Huawei ensures that its stakeholders clearly understand the company’s compliance regulations and policies.
Intellectual Property Rights and Trade Secret Protection: Strictly Complying With and Applying International Conventions
Huawei applies international Intellectual Property Rights (IPR) rules and handles IPR affairs in accordance with international conventions. It proactively addresses IPR issues through various channels, including cross-licensing and business partnerships.
By December 31, 2018, Huawei’s total number of patents granted had reached 87,805, of which 43,371 were granted in China, and 44,434 were granted outside of China. More than 90 percent of these patents are for inventions. In addition, Huawei investment in R&D continuously enriches the company’s IPR portfolio. Indeed, Huawei is one of the world’s largest owners of patents.
Huawei strictly complies with laws and regulations that protect trade secrets, and the company embeds requirements to protect trade secrets into its policies, instructions, and processes. Huawei has proactively built a global system for tracking related legislation, and actively communicates with judicial bodies, associations, law firms, and other consulting firms through workshops and other formats. Huawei, through this collaboration, has built a comprehensive trade secret protection system, and it remains resolute against any practices that infringe on the trade secrets of others.
Adhering to Operational Compliance and Business Ethics
It is appropriate that Huawei, as an industry leading ICT infrastructure provider, prioritizes in its responsibilities as a corporate entity, and actively collaborates with its customers, employees, and industry partners to create a healthy ecosystem.
Huawei’s global operations are built on compliance management. It remains committed to delivering business integrity and compliance. Following more than a decade of sustained investment and hard work, Huawei has built global compliance systems that meet industry standards. More than 100 of Huawei’s subsidiaries have aligned their own systems with local laws and the requirements of local industry associations, and have drafted legal compliance handbooks. These steps ensure that Huawei remains within the boundaries of the law wherever the company operates.