Levi	  Strauss	  &	  Co.	  	  California	  Transparency	  in	  Supply	  Chains	  Act	  	  	  1.	  Levi	  Strauss	  &	  Co.	  assesses	  the	  risk	  related	  to	  the	  apparel	  supply	  chain.	  Levi	  Strauss	  &	  Co.’s	  commitment	  to	  responsible	  business	  practices	  -­‐	  embodied	  in	  our	  Global	  Sourcing	  and	  Operational	  Guidelines	  -­‐	  guides	  our	  decisions	  and	  behavior	  as	  a	  company	  everywhere	  we	  do	  business.	  	  Since	  becoming	  the	  first	  multinational	  to	  establish	  such	  guidelines	  in	  1991,	  Levi	  Strauss	  &	  Co.	  has	  used	  them	  to	  help	  improve	  the	  lives	  of	  workers	  manufacturing	  our	  products,	  make	  responsible	  sourcing	  decisions,	  and	  protect	  our	  commercial	  interests.	  The	  guidelines	  are	  a	  cornerstone	  of	  our	  business	  relationships	  with	  hundreds	  of	  contractors	  worldwide.	  	  	  Levi	  Strauss	  &	  Co.	  utilizes	  Country	  Assessment	  Guidelines,	  which	  are	  part	  of	  the	  Global	  Sourcing	  and	  Operating	  Guidelines,	  to	  help	  assess	  any	  country-­‐level	  issues	  that	  might	  present	  concern	  in	  light	  of	  the	  ethical	  principles	  we	  have	  set	  for	  ourselves.	  The	  Guidelines	  assist	  Levi	  Strauss	  &	  Co.	  in	  understanding	  risks	  and	  opportunities	  associated	  with	  conducting	  business	  in	  specific	  countries,	  including	  forced	  and	  prison	  labor.	  	  Our	  Terms	  of	  Engagement	  (TOE),	  the	  contractor-­‐specific	  component	  of	  our	  Global	  Sourcing	  and	  Operating	  Guidelines,	  specify	  the	  requirements	  by	  which	  all	  of	  our	  contract	  factories	  and	  licensees	  must	  abide	  —	  including	  ethical	  standards,	  legal	  requirements,	  environmental	  requirements	  and	  community	  involvement.	  They	  also	  set	  out	  employment	  standards	  and	  specifically	  address	  issues	  of	  child	  labor,	  forced	  labor,	  disciplinary	  practices,	  working	  hours,	  wages	  and	  benefits,	  freedom	  of	  association,	  discrimination,	  and	  health	  and	  safety.	  Learn	  more	  about	  the	  TOE	  and	  our	  product	  sourcing	  requirements.	  Our	  risk	  assessment	  is	  performed	  internally.	  	  2.	  Levi	  Strauss	  &	  Co.	  conducts	  audits	  of	  our	  suppliers	  based	  on	  the	  conditions	  outlined	  in	  our	  Terms	  of	  Engagement.	  We	  employ	  full-­‐time	  factory	  assessors,	  located	  around	  the	  world	  where	  our	  suppliers	  are.	  
These	  experts	  understand	  the	  scope	  of	  our	  labor	  and	  environment,	  health	  and	  safety	  standards	  and	  know	  the	  local	  languages,	  laws,	  culture	  and	  business	  context	  of	  each	  country	  in	  which	  we	  operate.	  They	  conduct	  regular	  assessments	  of	  every	  factory	  contracted	  to	  manufacture	  our	  products.	  These	  assessments	  are	  based	  on	  standards	  found	  in	  our	  Social	  and	  Environmental	  Sustainability	  Guidebook,	  which	  all	  our	  suppliers	  receive	  in	  their	  local	  language.	  These	  assessments	  involve	  on-­‐site	  and	  off-­‐site	  discussions	  with	  workers,	  management	  interviews,	  review	  of	  factory	  records	  (such	  as	  timecards	  and	  payroll)	  and	  environment,	  health	  and	  safety	  inspections.	  Each	  assessment	  identifies	  areas	  for	  improvement	  and	  a	  detailed	  corrective	  action	  plan,	  including	  actions,	  responsible	  parties,	  and	  timelines.	  
Regular	  follow-­‐up	  visits	  are	  also	  conducted,	  to	  ensure	  suppliers	  are	  completing	  their	  corrective	  action	  plans	  on	  a	  timely	  basis.	  
We	  conduct	  both	  announced	  and	  unannounced	  audits	  that	  are	  performed	  by	  a	  third-­‐party	  monitors	  or	  trained	  employees.	  We	  use	  third-­‐party	  monitors	  for	  our	  product	  licensee	  suppliers	  of	  non-­‐core	  products,	  including	  belts,	  watches,	  glasses	  and	  other	  accessories,	  and	  to	  supplement	  our	  own	  monitoring	  efforts.	  	  All	  third-­‐party	  monitors	  used	  for	  our	  direct	  and	  licensee	  suppliers	  must	  be	  approved	  by	  Levi	  Strauss	  &	  Co.	  through	  a	  process	  that	  involves	  interviews	  and	  screening	  for	  proper	  qualifications.	  
Once	  screened,	  the	  candidates	  must	  attend	  a	  Levi	  Strauss	  &Co.	  assessor	  training	  and	  pass	  an	  assessment	  review	  that	  includes	  a	  one-­‐on-­‐one,	  post-­‐training	  interview	  with	  a	  Levi	  Strauss	  &	  Co.	  senior	  TOE	  assessor	  and	  a	  “shadow	  audit”	  in	  the	  field.	  	  Approximately	  70	  individual	  third-­‐party	  monitors	  currently	  are	  approved	  to	  conduct	  TOE	  assessments	  in	  licensee	  factories.	  	  	  3.	  Levi	  Strauss	  &	  Co.’s	  purchasing	  agreements	  require	  all	  suppliers	  to	  comply	  with	  applicable	  laws	  within	  the	  country	  of	  business,	  as	  well	  as	  our	  Global	  Sourcing	  and	  Operating	  Guidelines	  	  and	  our	  Terms	  of	  Engagement	  	  regarding	  forced	  	  and	  prison	  labor.	  	  4.	  Levi	  Strauss	  &	  Co.	  maintains	  and	  enforces	  internal	  accountability	  procedures	  for	  employees	  and	  contractors	  regarding	  company	  standards	  in	  slavery	  and	  human	  trafficking.	  	  In	  the	  case	  of	  non-­‐compliance,	  Levi	  Strauss	  &	  Co.	  reserves	  the	  right	  to	  examine	  the	  specific	  situation	  and	  develop	  a	  best	  possible	  strategy	  for	  resolution.	  	  If	  cases	  of	  non-­‐compliance	  are	  not	  resolved	  within	  a	  timely	  manner,	  Levi	  Strauss	  &	  Co.	  may	  terminate	  the	  business	  relationship.	  	  While	  Levi	  Strauss	  &	  Co.	  wishes	  to	  aid	  in	  the	  resolution	  of	  incidences	  of	  human	  trafficking	  and	  slavery	  within	  Levi	  Strauss	  &	  Co.’s	  supply	  chain,	  it	  is	  not	  possible	  to	  effectively	  solve	  the	  issue	  of	  noncompliance	  without	  the	  cooperation	  of	  the	  supplier.	  	  5.	  Levi	  Strauss	  &	  Co.	  conducts	  internal	  training	  on	  the	  Worldwide	  Code	  of	  Business	  Conduct	  annually	  to	  ensure	  we	  provide	  our	  employees	  with	  a	  clear	  set	  of	  standards	  and	  guidance	  for	  conducting	  our	  business	  with	  integrity	  and	  the	  highest	  degree	  of	  compliance	  with	  the	  law.	  	  Additionally,	  Levi	  Strauss	  &	  Co.	  conducts	  internal	  training	  of	  our	  supply	  chain	  management	  to	  ensure	  management	  are	  knowledgeable	  and	  aware	  of	  the	  issues	  and	  concerns	  surrounding	  the	  supply	  chain,	  including	  human	  trafficking	  and	  slavery,	  with	  a	  particular	  focus	  on	  mitigating	  risks.