THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

Control Union Certifications
Meeuwenlaan 4-68011 BZ ZWOLLE
Netherlands
April 2013

1

TABLE OF CONTENTS

1. ALP PROGRAM BACKGROUND AND ASSESSMENT OVERVIEW.......................................... 5
2. PMM ASSESSMENT: SCOPE AND METHODOLOGY .................................................................... 9
2.1 OPENING MEETING .........................................................................................................................................10
2.2 STAFF INTERVIEWS AND ALP PROGRAM DOCUMENTATION ........................................................................10
2.3 FARM VISITS ...................................................................................................................................................10
2.4 FARM SAMPLE SELECTION ..............................................................................................................................11
2.5 WORKER INTERVIEWS ....................................................................................................................................12
2.6 CLOSING MEETING..........................................................................................................................................13
2.7 PREPARATION OF THE FINAL REPORT ............................................................................................................13
3. ASSESSMENT IMPLEMENTATION PHASE 1 OF THE ALP PROGRAM.............................. 14
3.1 CONDUCT OF THE ASSESSMENT.....................................................................................................................15
3.2 PEOPLE AND PROCESSES TO MANAGE THE ALP PROGRAM..........................................................................15
3.2.1 Farm assessments by PMM ..................................................................................................... 15
3.2.2 Internal structure for ALP implementation and responsibilities ................................ 15
3.2.3 Training of management and field personnel................................................................... 16
3.3 COMMUNICATING THE ALP CODE REQUIREMENTS TO ALL FARMERS .........................................................173.3.1 Understanding of the ALP Code Principles ......................................................................... 17
3.3.2 Interpretation of relationship between farmers and daily workers ......................... 17
3.3.3 The ALP communication strategy ......................................................................................... 18
3.3.4 ALP communication materials ................................................................................................ 19
3.4 BUILDING FARM PROFILES FOR ALL CONTRACTED FARMS...........................................................................19
3.4.1 Data gathering system for Farm Profiles ........................................................................... 20
3.5 PROMPT ACTIONS ...........................................................................................................................................20
3.5.1 Prompt Action approach ........................................................................................................... 21
3.5.2 Understanding and reporting Prompt Actions .................................................................. 21
3.5.3 Support mechanism for workers ........................................................................................... 22
4. FARM LEVEL ASSESSMENT OF ALP CODE STANDARDS ...................................................... 23
4.1 ALP CODE PRINCIPLE 1: CHILD LABOR .......................................................................................................24
4.1.1 Awareness of legal minimum working age ........................................................................ 26
4.1.2 Children working and helping on the farm ........................................................................ 26
4.1.3 Children involved in hazardous activities ........................................................................... 27
4.1.4 Child access to working areas of the farm ........................................................................ 28
4.1.5 Age verification ............................................................................................................................ 28
4.1.6 Contracting through a crew leader / the head of a family .......................................... 28
4.2 ALP CODE PRINCIPLE 2: INCOME AND WORK HOURS ................................................................................29
4.2.1 Minimum salary ........................................................................................................................... 29
4.2.2 Regular payment ......................................................................................................................... 30
4.2.3 Regular and overtime hours ................................................................................................... 302

4.2.4 Overtime payment ...................................................................................................................... 30
4.2.5 Benefits ........................................................................................................................................... 30
4.2.6 Awareness of legal rights ......................................................................................................... 30
4.2.7 Record keeping ............................................................................................................................ 31
4.2.8 Piece work rate ............................................................................................................................ 31
4.2.9 Contracting through a crew leader / the head of a family .......................................... 31
4.2.10 Advance payments to farmers ............................................................................................ 31
4.3 ALP CODE PRINCIPLE 3: FAIR TREATMENT .................................................................................................32
4.3.1 No evidence of widespread practices of unfair treatment ........................................... 32
4.3.2 Contracting through a crew leader / the head of a family .......................................... 32
4.4 ALP CODE PRINCIPLE 4: FORCED LABOR ....................................................................................................33
4.4.1 No evidence of workers unable to leave their job .......................................................... 33
4.4.2 Payment schedule ....................................................................................................................... 33
4.4.3 Indirect payments to workers ................................................................................................ 34
4.4.4 Contracting through a crew leader / the head of a family .......................................... 34
4.5 ALP CODE PRINCIPLE 5: SAFE WORK ENVIRONMENT.................................................................................34
4.5.1 Awareness on the use of PPE ................................................................................................. 36
4.5.2 General safety hazards ............................................................................................................. 36
4.5.3 Training and awareness of Green Tobacco Sickness (GTS)........................................ 36
4.5.4 CPA handling and training ....................................................................................................... 36
4.5.5 Clean drinking and washing water ....................................................................................... 37
4.5.6 Accidents ........................................................................................................................................ 37
4.5.7 Health and safety risks for migrant workers .................................................................... 37
4.5.8 Worker accommodation ............................................................................................................ 38
4.5.9 Contracting through a crew leader / the head of a family .......................................... 38
4.5.10 Record keeping .......................................................................................................................... 38
4.6 ALP CODE PRINCIPLE 6: FREEDOM OF ASSOCIATION ................................................................................39
4.6.1 Awareness of freedom of association .................................................................................. 39
4.6.2 Contracting through a crew leader ....................................................................................... 40
4.7 ALP CODE PRINCIPLE 7: COMPLIANCE WITH THE LAW ..............................................................................40
4.7.1 Awareness of legal rights and employment conditions ................................................ 41
4.7.2 Written employment contracts .............................................................................................. 41
4.7.3 Contracting through a crew leader / the head of a family .......................................... 41
5. CONCLUDING REMARKS .................................................................................................................... 42
APPENDICES ................................................................................................................................................. 44
APPENDIX 1. PMM RESPONSE AND ALP PROGRAM ACTION PLAN.....................................................................45
APPENDIX 2. ALP CODE .......................................................................................................................................673

GLOSSARYALP
ALP Code
ALP Code Principle

Agricultural Labor Practices Program
PMI’s labor practices code with seven ALP Code Principles
Short statements that set expectations of how the farmer manages his farm in sevenfocus areas
ALP Country Team (or CT) Inter-department group charged with ALP implementation
ALP Program
Agricultural Labor Practices Program
ARIC
Asociación Rural de Interés Colectivo de Productores de Tabaco (Rural Association ofCollective Interest of Tobacco)
CA
Corporate Affairs
CAEI
Centro de Atencion y Educacion Infantil (Center for Attention and Education of YoungChildren)
CU
Control Union
CPA
Crop Protection Agents
EHS
Environment, Health, Safety and Security Department of a PMI entity
EjidalAn area of communal used for agriculture on which community members individuallypossess and farm a specific parcel. Ejidatarios do not actually own the land, but areallowed to use their allotted parcels indefinitely as long as they do not fail to use theland for more than two years. They could even pass their rights on to their children.
Family farm
A farm that depends mainly on family members for the production of tobacco.
Farm Profiles
A data collecting tool developed by PMI with Verité to track the socio-economic status of
the farms, systematically gather detailed information about, among other things, thetype of labor employed, farming activities that minors may be involved in, and hiring
FCV
Flue-cured Virginia tobacco
Fundación Origen
Origin Foundation (https://www.origenac.org/)
GAP
Good Agricultural Practices
GTS
Green Tobacco Sickness
IMSS
Instituto Mexicano del Seguro Social (Mexican Social Security Institute)
MAP
Managing and Appraisal Performance (annual agreement on job objectives)
Migrant labor
Migrant labor refers to labor that comes from outside the farm’s immediate area.
Migrant labor can come from a neighboring region in the same country, or from adifferent country.
Measurable Standard
A Measurable Standard defines a good labor practice on a tobacco farm and help us
determine to what extent the labor conditions and practices on a tobacco farm are inline with each of the ALP Code principles
NGO
Non-Governmental OrganizationOC
PMI Operations Center (Lausanne, Switzerland)Pequeña propriedad
Literal translation: small property. These are properties that are passed on from one
family to another. These families own the property and can use or rent it (source: PMM).
Phase 1
Startup of ALP Program (training, communications, outreach)Phase 2
ALP Program full implementation (monitoring, addressing problems)
Piece work
Payment at a fixed rate per unit of production/work
PMI
Philip Morris International, Inc. or any of its direct or indirect subsidiaries
PMM
Philip Morris Cigatam Productos y Servicios, S. de R.L. de C.V.
PPE
Personal Protection Equipment
Prompt Action
A situation in which workers’ physical or mental well-being might be at risk, children or avulnerable group – pregnant women, the elderly - are in danger, or workers might not befree to leave their job
STP
Sustainable Tobacco Production
Leaf tobacco supplier
A company that has a contract with PMI to supply tobacco but is not a farmer41. ALP Program background and assessment overview

THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

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In 2011 Philip Morris International Inc. launched a worldwide Agricultural Labor Practices(ALP) Program aiming to progressively eliminate child labor and achieve safe and fairworking conditions on tobacco farms. This program applies to all tobacco farms with which
PMI or PMI's suppliers have contracts to grow tobacco for PMI and consists of (1) an
Agricultural Labor Practices Code, setting clear standards for all tobacco farms growing
tobacco that PMI ultimately buys, (2) an extensive training program for all PMI and
supplier’s staff that are directly involved with tobacco growing, in particular the fieldtechnicians that provide regular visits to the farms, (3) a multi-layered internal and externalmonitoring system, and (4) involvement of governmental and non-governmental
stakeholders in improving labor practices and enhancing the livelihoods of tobacco growing
communities. The ALP Program was developed and is being implemented in partnership with
Verité, a global social compliance and labor rights NGO. Control Union Certifications wascommissioned by PMI, to develop the external monitoring component of the ALP Program
working in tandem with PMI’s strategic partner Verité; and to carry out these assessments
at PMI leaf tobacco suppliers and tobacco farms worldwide. All PMI leaf tobacco suppliers
report annually on an internal basis and are assessed regularly. For the ALP Program
implementation internal reviews are also being done in all countries where tobacco issourced to assess initial progress and challenges. Third party assessments are periodic
reviews undertaken by CU at PMI leaf tobacco suppliers and farms worldwide.
In this initial stage of the roll out of the ALP Program, these third party assessments aresolely focused on the ALP Program implementation and are specifically aimed to report oneach supplier´s progress in starting to work on ALP against the objectives set for Phase 1.
by PMI.
The ALP Code contains seven ALP Code Principles:
1.
2.
3.
4.
5.
6.
7.

Child Labor
There shall be no child labor.
Income and Work Hours
Income earned during a pay period or growing season shall always be enough to meet workers’ basic needs and shall be ofa sufficient level to enable the generation of discretionary income. Workers shall not work excessive or illegal work hours.
Fair Treatment
Farmers shall ensure fair treatment of workers. There shall be no harassment, discrimination, physical or mental
punishment, or any other forms of abuse.
Forced Labor
Farm labor must be voluntary. There shall be no forced labor.
Safe Work Environment
Farmers shall provide a safe work environment to prevent accidents and injury and to minimize health risks.
Accommodation, where provided, shall be clean, safe and meet the basic needs of the workers.
Freedom of Association
Farmers shall recognize and respect workers’ rights to freedom of association and to bargain collectively.
Compliance with the Law
Farmers shall comply with all laws of their country relating to employment.

The full ALP Code is contained in appendix 2.

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1

The implementation of PMI’s ALP Program has been divided into two phases :Phase 1••••

Management personnel and field technicians understand the ALP Code and theimplementation approach, and have the people and the processes in place to roll-out
and manage the Program
Communicate the ALP Code requirements and expectations to all farmers
Build Farm Profiles for every contracted farm, identifying risk areas and tracking the
ALP Code communication to farmers
Keeping eyes and ears open to identify situations and incidents at the farms thatshould be reported and addressed immediately

Phase 2
•
•
•
•
•
•

Collect detailed information about labor practices on every contracted farm
Assess systematically each farm for status with the ALP Code and its measurable
standards
Create and implement an improvement plan for each farm to remedy situations notmeeting the standards
Identify and implement corrective and/or preventive measures that can address theroot causes of the issues and risks found on the farms
Report systematically on the progress that is being madeSupport mechanism in place(Source: Verité & PMI, 2011)

1

Often, there is not a strict distinction between the two phases during ALP implementation. In practice many
countries start to consider how to address and respond to situations that do not meet the Code and to monitorchanges before formally finishing Phase 1.

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Phase 1 encompasses a first wave of training for management personnel and fieldtechnicians globally to include:
1) the company’s objectives and the expectations placed on them;2) the meaning of the ALP Code Principles and measurable standards;
3) ways to communicate ALP topics to farmers;4) how to keep track of progress and build a Farm Profile;5) spotting problems when they are visiting the farmers they support.
After this initial ALP training, all leaf tobacco suppliers begin their outreach to farmers andstart to put in place the processes to manage the various Phase 2 components of the ALP
Program. The implementation of Phase 1 started worldwide in late 2011 when Verité and
PMI began holding the first training sessions with the management personnel of leaf tobacco2
suppliers .

2

PMI described the details of this roll-out process in their “ALP progress report” released in the fall of 2012:
http://www.pmi.com/eng/media_center/company_statements/documents/PMI_ALP_Progress_Report_2012.pdf

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2. PMM assessment: Scope and methodology

THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

9

This report covers the second external assessment of the ALP Program since the launch in2011. Mexico was selected as the second Latin American market to be assessed. At the timeof the assessment, March 2013, PMM was implementing Phase 1 of the ALP Program andwas about to complete the second crop season under the ALP Program.
2.1 Opening meeting
On Monday 4 March 2013, CU started the assessment with an opening meeting with PMM
senior management, the ALP Country Team representatives and coordinators, and a
representative of PMI’s Operations Center in Switzerland. In this meeting CU presented theassessment’s objectives and plan and PMM provided an overview of the work done to dateon ALP.
2.2 Staff interviews and ALP Program documentation
The assessment of PMM’s work during Phase 1 of ALP was done through individualinterviews with PMM’s senior management and the staff involved in the ALP Program
implementation. All interviews were conducted individually to ensure that the interviewees
felt comfortable to talk freely and raise any issues if so desired. In total, 12 field technicians(71% of the total number of field technicians) and three field supervisors were interviewed.
These interviews covered the following topics:
•
•
•
•
•
•
•
•
•
•
•

General awareness of the ALP Program and knowledge of the ALP Code
Implementation of the ALP Program at PMM level
Responsibilities of management personnelInternal training and communication on the ALP Program
Communication of the ALP Code to farmers
Internal system to collect information through Farm Profiles
System for Prompt Action situations and incidents
Efforts undertaken to mitigate risks
Internal procedure to report Prompt Action situations/incidents
Records showing the number of field technicians trained
Records showing the number of farmers included in ALP communication

PMM provided all the relevant documentation related to the ALP Program implementation
requested by CU, namely: Farm Profiles, farmer communication materials, purchase
contracts, training records and personnel records.
2.3 Farm visits
On each farm CU conducted individual interviews with farmers to assess the effectiveness of
PMM’s communication efforts during Phase 1, verifying:•••whether farmers had received information about the ALP Code,their level of understanding and attitude towards ALP Code Principles, andthe key messages received.

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CU used a variety of methods to collect the information presented in this report on eachfarm’s practices in relation to all the ALP Code’s Measurable Standards including: farmer
interviews, an interview with the coordinator of one of the CAEI´s, individual interviews withworkers, verification of documentation and visual observation of fields, storage rooms,
working areas and housing. In every interview CU briefly explained the intention of theassessment.
2.4 Farm sample selection
In total, CU visited 35 farms. According to the standard procedure adopted by CU, theminimum number of farms that needed to be visited in order to constitute a meaningful
3
sample was 36 as this is the square root of the total number of contracted farms . However,
due to time constrains, one visit could not be conducted. Nevertheless, the diversity of thefarms visited in terms of size, location, tobacco type, and presence of workers, means thatthe 35 farms included in this sample are considered adequate for PMM´s entire farm base.
In total, 24 pre-selected and 11 unannounced farms were visited. All farms were randomly
selected by CU. Whereas the pre-selected farms were made known to the ALP coordinator
one week before the assessment, the farms for the unannounced visits were only
announced on the day of the visit.
The farms contracted by PMM were divided over three regions: Santiago (72%), Jala (7%),
and Platón Sanchez (21%). The Jala region produced only Burley tobacco and the Platón
Sanchez region only Dark Air-Cured tobacco. In the Santiago region, three types of tobacco
were being produced: Virginia Sun-Cured, Virginia Flue-Cured, and Burley. Regarding farmsize, 64% of the farmers were growing between 0,1 and 1,5 hectares, 29% between 1,51
and 3 hectares, and 7% more than 3 hectares. While the selected farm sample represented
the total universe of farms in the different tobacco growing regions, the assessment
selection was purposely skewed towards larger farms, as a larger number of workers were
expected to be present on such farms. Therefore, the numbers presented in this reportcannot be taken as a measure of prevalence without considering and adjusting for thisfactor.

3

This was 1.324 at the time of the assessment. A pilot project of 41 farmers in the State Chiapas was excluded
from the scope.

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The graphs below provide demographic information on the farms visited.

RegionType of tobacco
6%

Santiago
34%

Jala

34%

57%
PlatónSanchez

9%

20%

VFC

26%

Dark
Mixed

Type of farmWith migrant workers
from the highlands*

26%

0 - 1.5ha
1.51 - 3ha

40%

VSC

17%

Farm size

40%

Burley
17%

65%

>3ha*

With migrant workers
from nearby village**

9%With local labor*Migrant workers from the Mexican highlands who bring the entire family and work several weeks/months on one
or more farms. They are from a number of indigenous ethnic groups.
**Migrant workers from nearby village: work individually and return each weekend to their homes.
2.5 Worker interviews
In total, 81 workers were interviewed during the farm visits. The graphs below demonstrate
the demographics of this sample.
100%

100%

80%

80%

60%

60%
temporary40%

permanent*

20%Children **40%

Adults20%0%0%Type ofemployment

Age*Permanent = working for more than 1 consecutive month at a particular farm**Children = persons below 18 years old

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100%

100%

80%

80%

60%

60%

Migrants fromnearby village

40%

Migrants fromthe highlands

Women
40%

Men

20%

20%

0%

0%

Gender

Local

OriginJust like the interviews at PMM level, the interviews with workers were conducted without
the farmer and field technician present so that workers felt comfortable to talk freely. On
each farm, CU aimed to interview different “types” of workers i.e. permanent and temporary
workers, men and women, migrant and local. Observation and verification of documents
were important assessment techniques used on the farms.
2.6 Closing meeting
On Friday 15 March 2013, the closing meeting took place at PMM´s head office in Mexico
City. During this meeting CU conducted a presentation to provide the initial findings of theassessment. Like the opening meeting, the closing meeting was attended by PMM senior
management, the ALP Country Team representatives and coordinators, and a representativeof PMI’s Operations Center (Switzerland).
2.7 Preparation of the final report
The final public report of the assessment is an important, external measurement of the
progress of ALP implementation in all countries globally where PMI sources tobacco, and its
release to the public contributes to the full transparency of the ALP Program.
Quality control by Verité, review and feedback by PMI and PMM, and market action planning
are key components of the reporting process. Control Union, as the company conducting theassessments, is mainly responsible for authoring the report, with Verité overseeing theprocess. PMI and the local leaf tobacco supplier may request clarifications on findings during
the drafting process. After both PMI and the local leaf tobacco supplier feel findings are
sufficiently clear, they begin preparing a market action plan or revising existing ALP
Program plans to reflect and respond to the findings.

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3. Assessment implementation Phase 1 of the ALP Program

THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

14

This chapter describes the findings of the assessment of PMM’s implementation of the ALP
Program Phase 1.
3.1 Conduct of the assessment
CU was satisfied with the cooperation and level of access to information provided by PMM´smanagement and field technicians. All persons interviewed demonstrated willingness to
explain internal processes and provide information. Full transparency given by PMM resulted
in a successful assessment that reflects the reality at PMM and the contracted farms. CU
was also satisfied that farmers were open during farm visits and accepted CU’s request tointerview their workers.
3.2 People and processes to manage the ALP Program
3.2.1 Farm assessments by PMM
The PMM ALP Country Team had conducted their own assessments of several farms in
Nayarit and Veracruz. This proved to be an effective method for obtaining a detailed pictureof the situations at farm level, and served as a basis for undertaking efforts to mitigate
risks.
3.2.2 Internal structure for ALP implementation and responsibilities
At the time of the assessment, PMM had built a strong internal structure for the
implementation of the ALP Program with:
•
•
•
•
•

clear lines of communication set between the employees involved,
effective collaboration between the ALP Country Team and field personnel,
representation by other PMM departments such as Operations, Law, and Corporate
Affairs,
PMM Senior Management Team was actively involved, and,
responsibilities relating to the ALP Program made clear to practically all employees
and included in almost all their annual agreement on job objectives.

Furthermore, members of the ALP Country Team were engaged with the ALP Program andbelieved it would bring benefits to all parties involved; the company, the farmers, and theworkers. This internal structure, visualized in the organizational chart below, is crucial for
implementing the ALP Program.
PMM response (for full text see Appendix 1.): “…to further improve the efficiency of the team andestablish a solid base for the next phase of the program the ALP Country Team will add a new element to thecurrent structure to better coordinate the activities related to combatting child labor. Further, the position of ALP
Field Coordinator will be created to reinforce training for field technicians and farmers, and to support farm-byfarm systematic monitoring.”

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(Organizational Chart ALP Program PMM)

3.2.3 Training of management and field personnel
In April 2012, the Latin America ALP regional coordinators introduced the ALP Program to
PMM by training members of the ALP Country Team, the field supervisors and fieldtechnicians. This was followed up by a visit and review by the OC and Verité in November
2012. Since then, the PMM ALP coordinator ensures that all involved employees maintain
updated on the developments of the program.
Field technicians are important to PMM as they are responsible for maintaining close contact
with the farmers so that the tobacco is produced in accordance with PMI´s standards. In
April 2012, all (100%) of the field technicians were trained by the ALP regional coordinators.
Depending on the experience level of a given field technician, the size of farms, distances
between farms, and curing methods, each field technician is assigned between a range of 75
to 150 farmers to support. They visit farmers once approximately every fortnight. All fieldtechnicians interviewed declared that they had sufficient time to promote the ALP Codealongside their other responsibilities. However, some field technicians informed CU thatadministrative duties make it more difficult to perform all of their field tasks, including ALP,
during the busy harvest period, which is exactly the time that requires most attention to the
ALP Code Principles as most workers – especially the vulnerable ones – are contracted inthis period. To engage the field technicians with the ALP, PMM was planning to implement
an incentive program to reward them for their achievements.
PMM response: “In order to engage all PMM employees with the ALP Program, a corporate communication
campaign will be launched in January 2014 during which the ALP Country Team will provide information on the
ALP Program in general and the specific initiatives taken by PMM.”

16

3.3 Communicating the ALP Code requirements to all farmers
3.3.1 Understanding of the ALP Code Principles
More than two thirds (71%) of PMM´s field technicians had limited understanding of four ofthe seven ALP Code Principles and due to this insufficient guidance is provided to farmers.
Specifically:
1. Several key Measurable Standards of ALP Code Principle 2 (income and work hours)
were not understood correctly. Namely: legal limits to work hours and overtime
hours were not considered applicable to piece workers; benefits were not consideredapplicable to temporary workers.
2. Field technicians generally considered that farmers meet the standards of ALP CodePrinciple 3 (fair treatment) when they have no conflicts with their workers. However,a practice such as payment of different salaries for the same task done by a man ora woman should also be considered as a form of unfair treatment (i.e.
discrimination).
3. ALP Code Principle 6 (freedom of association) was generally understood as the
freedom to be affiliated with a political party or to practice any type of religion.
Finally,
4. ALP Code Principle 7 (compliance with the law) was understood as generalcompliance with all applicable laws, whereas the focus of the ALP rests onunderstanding workers’ legal rights and employment conditions.
Another ALP Code Principle that CU noted was not fully understood by both management
and field personnel was ALP Code Principle 4 (forced labor). In general, PMM had a narrow
understanding of forced labor as being those situations in which workers are physicallyunable to leave their employment. Payment to a crew leader or head of a family was not
being recognized as a practice that increases the risk of a worker not being paid and so, in
certain circumstances, can lead to forced labor.
PMM response: “A review of the position of field technician will be conducted to identify the abilities andknowledge required for this job. After this, intensive preparation and training to fulfill their duties will be provided
to the field technicians by August 2013. In this way, the agronomy team will ensure that field technicians will:• have the required knowledge of the seven principles of the ALP Code to detect any potential issue thatexists on the farm• have the required skills to address it• have the tools available to support the farmer, and• record their findings in order to work on a sustainable solution.”
3.3.2 Interpretation of relationship between farmers and daily workers
According to PMM, daily workers do not have a formal employment relationship with thefarmers, but are rather considered to be independent service providers mainly because they
are not subordinate to the farmers because they “already know what to do”. In PMM’s view,
the Federal Labor Law does therefore not apply to daily workers. However, based on a legal
analysis obtained by Control Union, CU does not share PMM´s view and believes that PMM

17should re-examine its interpretation as the situation might not be as clear cut in instances inwhich subordination and therefore an employment relationship between farmers and daily
workers could exist. It is important that PMM re-examines this matter as it greatly
influences the responsibilities farmers have towards their workers and, thereby, theguidance to be provided by the field technicians to help farmers assume and meet these
responsibilities and obligations in practice.
In any event, regardless of PMM subsequent assessment of these complex legal issues, thefindings presented in this report are generally based on CU’s view that an employment
relationship exists between these tobacco farmers and many of their workers.
PMM response: “In order to further investigate the relationship between farmers and daily workers, PMM´slegal counsel and an external counsel specialized in labor law visited several growing region in the State Nayarit.
During their visits they interviewed farmers, workers, crew leaders, field technicians and employees of PMM. This
investigation will continue until May 2014 at which PMM will deliver its final decision and action plan to PMI andCU.”
3.3.3 The ALP communication strategy
At the time of the assessment, 100% of the farmers
had been included in the communications on the ALP,
which were done by means of both group andindividual meetings (see PMM photo, right). The firstround of communication took place in June andAugust 2012. A “reinforcement round” wasconducted in February 2013. All larger groupmeetings were led by the ALP coordinator. Field
technicians communicated the ALP Code in small
groups or individually to the remaining farmers.

PMM: meeting with farmers

From 35 farmer interviews, it can be concluded that, in general, the farmers visited were
not yet familiar with the ALP Code and did not understand the importance of each ALP CodePrinciple for their farm. The communication efforts on child labor and safety were mosteffective, as practically all farmers were aware of the minimum working age and therequirement to use PPE for CPA application. This awareness reinforces the statement of the
ALP Country Team that priority had been given to ALP Code Principles 1 and 5 because,
according to PMM, these issues are most difficult. The challenge now is to increase
understanding and attention to the other five ALP Code Principles so that farmers gain moreawareness of those requirements.
Another means of communicating the ALP Code to the farmers used by PMM was byincluding the ALP Code Principles in the growing contract. Having conducted analysis of thecontract, CU can confirm PMM´s statement that all ALP Code Principles have been includedin the growing contract. However, whereas child labor and safe working environment are
explained in detail in two separate paragraphs, the other five ALP Code Principles are
mentioned only once all together in one sentence.

18

3.3.4 ALP communication materials
PMM produced clear communication materials that included theseven ALP Code Principles; the poster and flyer had been
distributed to all farmers. However, due to lack ofinfrastructure at the farms, most farmers had no adequate
place to keep these materials. Therefore, PMM´s Corporate
Affairs department created a new booklet that farmers can
carry with them and write down useful information. This

ALP poster

booklet was planned to be distributed in March 2013 and toinclude GAP related questions for the farmers.
CU noted that the book could
be yet more adapted to ALP
needs. For example:
In order to familiarize farmers
more with the ALP Code andencourage them to record
ALP flyer
important
ALP
information,
PMM could add questions requesting the name and age ofeach worker, enrollment of migrant children in the4´s, and the number of hours or days worked. In the
CAEI
New booklet
new booklet the translation of ALP Code Principle 2 used theterm “reasonable hours” instead of “work hours” which is an incorrect translation whichrisks misleading the reader on the meaning of the Code and the Measurable Standards
involved.
PMM response: “In order to increase engagement and understanding of the ALP Code among field technicians,
farmers and workers, the ALP Country Team will implement the following actions:• Develop new communication materials with simple language and graphic representations by September
2013.
• Launch a widespread communication campaign (including radio, leaflets, and training videos) directed
at workers from October 2013 to May 2014.
• Reinforce farmer training so that farmers develop a stronger sense of ownership and responsibility of theactivities at their farms. The objective is that farmers manage and operate their farms as small
entrepreneurs and understand the benefits of investing in labor conditions. This will take place from
August 2013 until May 2014.

3.4 Building Farm Profiles for all contracted farms
In Phase 1 of the ALP Program PMM is expected to build Farm Profiles for every contracted
farm. PMI has developed a global template for leaf tobacco suppliers to use for thecollection of information on socio-economic indicators such as farm size, number of workers,
4

Centro de Atencion y Educacion Infantil (Center for Attention and Education of Young Children). For more
information, see chapter 4.1.

19

age and number of children in the farmer’s family, working status (for example part time,
full time, migrants), the pay period for workers and living conditions. PMM´s Farm Profile
has been translated into Spanish and adapted to the local situation by adding several more
options e.g. “ejidal” and “pequeña propriedad”. PMM is expected to analyze this information
to better understand the main risk areas, and track progress in communicating the ALP
Code to farmers.
3.4.1 Data gathering system for Farm Profiles
At the time of the assessment, all (100%) of the Farm Profiles were completed. Even whenno Prompt Action situation was witnessed or identified, field technicians often recorded risks
such as child presence at the farm. This is an effective method of monitoring the situation at
the farms. PMM had also analyzed the information provided through the Farm Profiles.
Rapid change in the local employment environment on the farms meant obtaining accurate
information was reported as a challenge. CU understands that the information obtained
through the Farm Profiles can never be 100% accurate and slight variations in the numberof workers or children present are inevitable. However, two errors were identified that point
to a need to review and correct these areas across the Farm Profiles as a whole:• Permanent workers were registered as temporary workers on 14% of the FarmProfiles reviewed.
• On 37% of the Farm Profiles reviewed field technicians recorded that clean drinking
and washing water were provided while in fact this was not the case.
PMM response: “Instead of only collecting information for Farm Profiles at the beginning of the harvest, the
ALP Country Team changed their strategy and will start collecting information at difference crop stages, allowing
field technicians to validate the information provided by the farmers. This will take place from September 2013
until May 2014. In addition, a new format of the Farm Profile will be introduced in June 2013 and includes
additional information requests that will help the ALP Country Team develop more effective action plans.”
3.5 Prompt Actions
PMI defines a Prompt Action situation as:“a situation in which workers’ physical or mental well-being might be at risk, children
or a vulnerable group – pregnant women, the elderly - are in danger, or workers
might not be free to leave their job.” (source: PMI, 2011)
Phase 1 of the ALP Program implementation is mainly focused on training andcommunication. However even at this stage of the Program it is PMI’s expectation that its
leaf tobacco suppliers will address Prompt Action situations found on farms contracted tosupply tobacco to PMI. A section of the Phase 1 training in May 2012 was devoted toresponding to Prompt Action situations. Field technicians are expected to report immediately
any Prompt Action situation to the ALP coordinator, who, in turn, should provide them withguidance on how to address the issue or escalate it further up within the organization if
need be.

20

3.5.1 Prompt Action approach
After three months implementing the ALP Code, PMM´s field technicians had reported 74
Prompt Action situations/incidents. Although this also shows that many situations at thefarms do not yet meet the standards of the ALP Code, this is an outstanding achievement as
it demonstrates the internal transparency and willingness of the field technicians to engage
with the ALP Program and report problems at the farms under their responsibility. This
openness is likely due to PMM´s internal policy to rotate field technicians every three years
so that they do not develop a personal relationship with the farmers. Furthermore, it showsthat internal training and communication on this subject had been effective.
Of the 74 reported Prompt Action situations/incidents, 48% were related to child labor(children harvesting) and 52% to safe work environment (CPA application without PPE andchild presence in the vicinity of the application area). The graphic below demonstrates theactions recommended by the supervisors, ALP coordinator and/or ALP Country Team. In
total, 34% of the cases were reported to the ALP Country Team because the ALP
coordinator did not have an immediate suggestion for action in these cases (e.g. cases ofchild labor in areas that are not yet covered by CAEI´s and people working at heights).
A special form was created by PMM to report Prompt Action situations or incidents. Field
technicians carry this form with them at all times. The form includes the data of the farm, adescription of the situation or incident, a potential solution provided by the ALP Country
Team, and follow-up information. The follow up information should be filled in during thenext visit, which must take place within two to ten days after recording the situation or
incident.

3.5.2 Understanding and reporting Prompt Actions
The fact that none of the field technicians mentioned the third type of Prompt Action
situations/incidents, “Workers might not be free to leave their job”, when interviewed,
implies that they are unaware of this category. This could, however, be due to PMM´sgeneral perception that forced labor is an extreme situation and not a problem in Mexican
tobacco production and lack of awareness of the contributing factors and of the ALP Code.

21

In addition, by analyzing the Farm Profile provided for each farm, CU was able to identify
several cases in which field technicians had recorded a risk that had turned into a Prompt
Action situation by the time of the assessment. For example, field technicians had identified
the presence of a child as a risk, but during the visit CU was able to verify that the children
were actually working.
PMM response: “The ALP Country Team is planning two actions to improve the understanding and reporting ofPrompt Actions:• Between October 2013 and May 2014 a new farm monitoring form will be implemented to complement
the current form. The new form will allow a better evaluation of the Measurable Standards and a better
identification of risk situations that can lead to Prompt Actions.
• In August 2013 reinforcement training for field technicians will be conducted with more practicalexamples of issues and risks.”
3.5.3 Support mechanism for workers
In cooperation with the NGO Fundación Origen PMM launched a hotline through which
workers can anonymously file grievances related to their work on the farms. A pilot for a
support mechanism for workers was planned from March to May 2013. As part of this pilot,
the NGO will communicate the hotline to 185 farmers and their workers in the Santiago
region. Furthermore, the NGO will provide lawyers and psychologists to attend workers whocall the hotline. In addition to providing a grievance mechanism for workers, PMM is
expected to provide other relevant support 5 to both farmers and workers, for example,
assistance on legal issues for farmers and information on legal rights for workers. This was
not yet included in the plan presented during the assessment.
PMM response: “As planned, PMM launched a pilot grievance mechanism in April 2013. This pilot attained avery low level of adhesion which PMM believes is due to the timing of the pilot, skepticism of workers, lack ofaccessibility, low involvement of field technicians, and suspicion among farmers. For this reason, from December
2013 to May 2014 the scope of the services will be broadened and community based work will be conducted.
Amongst others, the following services will be provided:• financial counseling for farmers and workers,• personal development workshops and professional training for farmers and workers,• alternative income generating activities for families in financial stress or for migrant families relying
solely on the head of the household work in tobacco.”

5

The ALP Code aims for workers to have access to a mechanism for support and redress. In some countries where
PMI buys tobacco the farmers also need help to meet their obligations under the law or the ALP Code and so, inmost places, pilots and efforts are being focused on a mechanism that can support both workers and farmers i.e. a
support line.

224. Farm level assessment of ALP Code standards

THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

23

Chapter 4 describes the findings of the field assessment and the current situation at farmlevel in relation to the ALP Code. At the time of this assessment PMM was implementing
Phase 1 of the ALP Program and, with the exception of Prompt Action situations, was notexpected to engage with farmers or address situations on farms that do not meet the ALP
Code standards in a systematic way. That is the expectation from 2014 as PMM moves into
Phase 2 of the ALP Program.
Before presenting CU´s findings, it is important to clarify the way in which the ALP Code isstructured as this determines CU´s analysis of farmers´ practices. The ALP Code (appendix
2) has seven ALP Code Principles and each one has several Measurable Standards (32 in
total). The ALP Code Principles are short statements that set expectations of how thefarmers manage their farms in seven focus areas to achieve safe and fair working conditions
for everyone on a tobacco farm. A Measurable Standard defines a good practice on a
tobacco farm and can be objectively monitored over time to determine whether and to what
extent the labor conditions and practices on the farms meet each of the ALP Code Principles.
Each section of this chapter covers one of the seven ALP Code Principles and in it CU
presents its findings (the extent to which the practices on farms contracted to supply
tobacco currently meet the requirements of the Measurable Standards) and discusses therisks (situations that may lead to problems in the future or about which a conclusion cannot
be reached due to lack of evidence).
In the Mexican tobacco market, it is important to note that although most farmers dependon one or more family members to produce tobacco, all farmers visited during theassessment contracted external workers as well: 65% of these farmers contracted local
workers, 26% contracted migrant workers from the highlands and 9% contracted migrant
workers from nearby villages. Local workers were found to be both permanent andtemporary. The permanent workers worked for one farmer during the entire harvest or
several months, whereas the temporary workers worked several days or weeks on one
farm. Local workers were contracted both directly by the farmer or through a crew leader.
Migrant workers from nearby villages generally worked for several weeks or months at one
farm. These workers were generally contracted directly by the farmer, who picked them up
on Mondays and brought them back to their villages on Saturdays. They slept at the farms
on which they worked. Migrant workers from the highlands worked for several weeks ormonths at one farm and, in some cases, moved to other farms. They usually work with their
entire family and live on the farm on which they work. These families are contracted directlyby the farmers, but the farmers only communicate with the heads of the family.
4.1 ALP Code Principle 1: Child labor´There shall be no child labor.’
Child labor: Background
Minimum age regulations: Article 176 of the Federal Labor Law determines that theminimum age for working in the Mexican tobacco industry is 16 years. However, Article 17of the General Tobacco Control Law overrules this law by forbidding employment of children
under the age of 18 years in the tobacco growing and production process. However, children

24

of farmers can help on the farm from 14 years onwards provided that they do not work after
10pm and or more than six hours a day (Articles 175 and 177 of the Federal Labor Law).
Scarcity of rural workers: Many farmers declared that they had to drive to nearby villages or
the highlands to look for workers because rural workers are scarce in their region. Migrant
workers from the highlands generally bring their entire family, including children, to livewith them temporarily on the farm.
Child Labor initiatives: PMM has undertaken several efforts to mitigate risks:
1) Prioritization of child labor in communication to farmers
PMM prioritized ALP Code Principle 1 in its communication with the farmers. Field
technicians were aware of the importance of verifying whether children were working at thefarms and informing farmers of the fact that the minimum age for working in tobacco is 18.
2) CAEI 6´s in Nayarit
PMM has set up nine day care centers, or CAEI´s in the State of Nayarit. These centers were
set up in collaboration with several governmental and non-governmental organizations,
namely FMDR 7, SEDESOL 8, SSN 9, SEPEN 10, and CDI 11. These organizations provide food,clothes, education, health care, and sanitary facilities to migrant workers’ children who
attend the centers. The children are picked up every day around 7am at the farm where
their parents work and brought back around 3pm. They attend classes from professional
teachers and receive a certificate at the end of the period to show their teachers backhome. PMM provides financial support to make the centers possible and evaluates theperformance and effectiveness of the centers to enable continuous improvement. CU visited
one of the centers and can confirm that they are providing educational activities, sanitaryfacilities, and nutritious meals to the children.

Center for Attention and Education of Young Children (CAEI)

6

Centro de Atencion y Educacion Infantil (Center for Attention and Education of Young Children)
Fundación Mexicana para el Desarrollo Rural (Mexican Foundation for rural development)
8
Secretaría de Desarrrollo Social (Social Development Secretary)
9
Secretaría de Salud de Nayarit (Secretary of Health of Nayarit)
10
Servicios de Educación Publica del Estado de Nayarit (Public Education Services for the Nayarit State)
11
Commission for the Indigenous Rights
7253) Promotion of stalk cut harvesting for Burley tobacco
50% of the Burley tobacco is sun-cured and 50% harvested through stalk cutting and thencured in open curing barns. Sun-curing means stringing tobacco leaves together using aniron skewer, which is typically done by children. By eliminating this type of curing, PMM
seeks to minimize the incidence of children helping their parents at Burley farms. The
objective is to have 100% of Burley tobacco harvested by the stalk cut method which
eliminates danger and a traditional child’s task. However, a significant proportion of Virginia
tobacco will always be sun-cured and the risk cannot be totally eliminated from the tobacco
supply chain in Mexico.
Child labor: Overall findings and challenges
4.1.1 Awareness of legal minimum working age
The focused communication on child labor by PMM meant that 100% of the farmers visitedwere aware of the minimum age for working in tobacco. Therefore, the expectations for
Phase 1 of the ALP Program were met. 31% of the workers interviewed, however, were
unaware of the minimum age for working in tobacco. Especially migrant workers from thehighlands lacked awareness on this topic; they believed that children can start working
around 10 years old.
4.1.2 Children working and helping on the farm
Despite the farmer awareness of the minimum working age, on 31% of the farms visitedchildren below 18 years were found working in tobacco. All children (15 in total) were
employed indirectly; four were contracted through a crew leader and 11 were helping theirparents who worked at the farm.
Further, four farmers declared that their child family members (5 in total) helped on thefamily´s farm, which is permitted under Mexican law. However, 50% of these farmers did
not respect age and/or work restrictions determined by law:••

One child was younger than 14 years (11 years)
One child of 16 was helping the entire day (did not attend school) with all activities
on the farm, including heavy work

Several farmers declared that they did not understand that working in tobacco can be
hazardous to children as they themselves had been working in tobacco since theirchildhood. Furthermore, many children of 15 or 16 years old already had families of theirown and therefore need to work to earn an income. These cultural perceptions werereported to be extremely difficult to overcome. In addition, farmers and field technicians
explained that it is difficult for farmers to forbid the children of migrant workers to help theirparents, as the workers might get offended and leave. Due to the scarcity of rural workers,
farmers feel that they cannot take this risk and, therefore, are reluctant to prohibit migrantchildren helping their parents.

26

PMM response: “The ALP Country Team will implement the following action plans to address child labor on the
tobacco farms:
12• In partnership with NGO Save the Children PMM will conduct a study to better understand the needs of
migrant families and develop an approach to reach those families currently not covered by the CAEI
program. This will take place from December 2013 until May 2014.
• Together with Save the Children search for sustainable alternatives for children between 15 and 17 who areparents and need to earn money for their families.
• Until November 2013 reach out to relevant stakeholders at different levels of government, other tobaccocompanies and wider agricultural sectors, as well as civil society stakeholders, to establish a common
platform of dialogue and for coordinating initiatives to address the needs of migrant families and improveliving and working conditions on the farms.
• Identify all crew leaders / heads of families working at the farms by November 2013.
• In collaboration with other stakeholders PMM will investigate the possibility of training and certifying bonafide crew leaders between July 2014 and May 2015.
• Together with farmers PMM will establish a robust process to manage and train their workforce in line withthe expectations of the ALP Code, including dealing with crew leaders. Field technicians will schedule groupmeetings so that farmers can share their experiences with other farmers. This so-called “Ideal farm project”
is scheduled for October 2013 to May 2014.”
4.1.3 Children involved in hazardous activities
75% of the children reported working or helping on the farms visited (20 in total) wereinvolved in activities that are considered hazardous as they present health risks and areharmful to children:•••

40% were between 4 and 14 and were harvesting and stringing tobacco leaves,
30%, aged between 15 and 17, were, next to harvesting and stringing tobacco
leaves, also (un)loading and monitoring curing barns,
one child (5%) declared to assist in topping, which includes applying growth
inhibitor.

Furthermore, 11 of the 20 children worked full shifts which is considered an excessive
amount of hours for minors. One of these children worked during the night, which is
specifically prohibited by law.
One potential reason for these results could be the low level of awareness of hazardous
activities among both farmers and workers; 66% of the farmers and 71% of the workers
interviewed were unaware of the meaning of “hazardous work”. The majority only
considered CPA application and working at heights hazardous, but other safety hazards suchas GTS and harvesting were not mentioned.

12

http://www.savethechildren.mx/

27

Child labor: Risks
4.1.4 Child access to working areas of the farm
As all migrant families identified during the assessment lived in the middle of the tobacco
field, their children had free access to the working areas of the farm. This is considered arisk as farmers were unable to verify whether these children were helping their parents.
Even when migrant children attended a CAEI, they still returned to the farm in theafternoon during which they could help their parents. Furthermore, the children of 25% of
the migrant families interviewed were unable to participate in the CAEI program as there
was no center in their region.
PMM response: “From the start of the next crop season onwards, PMM will extend the opening hours of the
CAEI´s to 4pm and also on Saturdays to reduce the time that children of migrant workers spend in tobacco fields.”
4.1.5 Age verification
None of the farmers visited verified the age of their workers by requesting identity
documents. They claimed that they know the workers and that they can see whether they
are above 18 and, therefore, did not need to check their documents.
4.1.6 Contracting through a crew leader / the head of a family
In total, 26% of the farmers visited contracted workers through a crew leader and 20%
through the head of a family. As farmers lack insight in the recruitment practices of thecrew leaders and do not communicate directly with each family member, crew leaders orheads of families could employ children without the farmer´s knowledge. At these farms CU
identified nine cases in which children (15 in total) were either contracted directly by a crewleader, helping their parents who were contracted by a crew leader, or helping their parents
who were working with the entire family on a farm.
Child labor: Conclusion
Despite the communication efforts and provision of several day care centers in the tobacco
growing regions by PMM, children working at the farms were common practice on the farms
contracted by PMM. 100% awareness on the legal minimum working age among farmers isa great achievement, however, only some of the workers were aware of this minimum age
and farmers were reluctant to refuse children due to the cultural perception that children
can start working during their childhood. This resulted in farmers contracting children
indirectly; either through crew leaders or working in a group of family members. Scarcity ofrural workers made it difficult for farmers to find another source of labor. Finally, lowawareness levels among both farmers and workers on what constitutes hazardous activities
resulted in children being involved in activities such as harvesting, stringing tobacco leaves,(un)loading and monitoring curing barns, and working excessive hours.

28

4.2 ALP Code Principle 2: Income and work hours‘Income earned during a pay period or growing season shall always be enough to meetworkers’ basic needs and shall be of a sufficient level to enable the generation of
discretionary income. Workers shall not work excessive or illegal work hours.’
Income and work hours: Background
Minimum wage regulations: At the time of the assessment, the minimum daily wage was
MXN 61,38 in Nayarit and MXN 64,76 in Veracruz. Article 88 of the Federal Labor Law
determines that agricultural workers must be paid at least weekly. Overtime hours must be
paid at a premium of 100% on top of the regular salary for the first nine overtime hours in aweek and 200% for overtime hours exceeding the maximum nine hours of overtime per
week. Articles 73 and 75 of the Federal Labor Law state that Sundays must be paid at apremium of 100% on top of the regular salary if this is the employee´s off day, as well as
national holidays.
Work hours regulations: The Federal Labor Law sets a standard six day, 48 hours’ work
week for the day shift, although both parties may agree to distribute the weekly hours in alesser number of days in order to allow employees to enjoy additional rest days. Daily work
shifts vary depending on whether they are day shifts (8 hours), night shifts (7 hours) ormixed shifts (7,5 hours). Article 64 of the Federal Labor Law states that workers must haveat least half an hour break per day to eat or rest. The maximum amount of overtime hours
is three per day and nine per week.
Benefits regulations: Articles 76, 80, 87, and 117 of the Federal Labor Law determine that
all employees are entitled to the following basic package of benefits:
•
•
•
•
•

Annual paid vacation (six days first year, increase with two days per year, as of fifth
year increase of two days every five years)
Vacation premium (payment of 25% on top of regular wage on vacation days)
Christmas bonus (15 days of salary or proportion thereof)
Profit sharing (10% of the annual pre-tax profit for all employees together)Social security (farmers should pay 25% and workers 3% of the salary)
Income and work hours: Overall findings and challenges

4.2.1 Minimum salary
Practically all farmers visited – only one exception – paid more than the minimum wage toall workers; the average was MXN 100 – MXN 180 per day. In the case of piece workers
monitoring curing barns of VFC tobacco, the payment was higher as these workers weregenerally paid to monitor several curing barns. Daily salaries for these workers ranged fromMXN 200 to MXN 500 per day.

29

4.2.2 Regular payment
No evidence was found of irregular payments as all farmers and workers interviewed
declared that workers were paid every week on Saturdays, which is in accordance with theFederal Labor Law.
4.2.3 Regular and overtime hours
62% of the farmers visited did not respect the limit of eight regular work hours per day or
48 regular work hours per week, particularly during peak season. This involves mainly piece
workers who, given the nature of this arrangement, did not have fixed work hours but selecttheir own. Both local piece workers responsible for harvesting and migrant piece workers
responsible for stringing tobacco leaves worked as much as possible to earn maximum
wages during the peak periods. Local piece workers responsible for monitoring curing barns
worked in shifts of 12 hours a day, seven days a week for one or two consecutive months.
In the latter case, the four hours overtime per day were implicit in their 12 hour daily shift.
Although they agreed to this work schedule beforehand, they were unaware of the fact thatthey were accruing four overtime hours.
4.2.4 Overtime payment
None of the farmers on whose farm overtime hours were worked paid overtime hours at thelegal overtime rate. Two farmers paid a premium of approximately 100% extra to workers
paid a daily wage, but not to piece workers; and five farmers paid overtime hours at apremium but this amount was not defined.
4.2.5 Benefits
None of the farmers visited provided their workers with benefits, holidays, and leave.
Regarding the holidays, it is important to note that the majority of the workers do not work
the entire year; they either work eight consecutive months or several weeks or months ayear at one farm.
Income and work hours: Risks
4.2.6 Awareness of legal rights
Both farmers and workers significantly lacked knowledge on important legal issues which
resulted in an inability to implement correct labor practices. The percentages of the level of
unawareness of legal rights and ALP Code standards were as follows:

Minimum SalaryWork Hours
Overtime Payment
Legal Benefits% of workers unaware
69%
77%
89%
91%

% of farmers unaware
74%
74%
66%
83%

30

4.2.7 Record keeping
Keeping records of hours worked, the number of tobacco strings completed, and pay rates
reduces the risk of conflict between farmers and workers and enables the farmer todemonstrate his/her practices meet legal and ALP Code standards. However, 80% of the
farmers visited did not record salary or piece work payments made to their workers and
86% of the farmers visited did not record the hours or days worked. Further, none of the
farmers visited provided pay slips to their workers.
PMM response: “In order to increase transparency at the farms, special templates will be distributed among
all farmers on which they should keep records of payments. The objective is to guide farmers on which
information about labor rights they should know and communicate to all workers (including those contracted
through crew leaders and heads of families.”
4.2.8 Piece work rate
On 11% of the farms visited migrant children were helping their family members who
worked as piece workers to harvest and string Virginia Sun-Cured tobacco. As thecalculation of piece work rate is based on the tasks completed by these families, thechildren helping are not taken into account in this calculation. This is considered a risk asworkers´ wages depend on the help of their children whereas it should be based only on the
output of the adults.
4.2.9 Contracting through a crew leader / the head of a family
From the 46% of farmers who contracted workers through a crew leader or head of family,
only 6% ensured that all workers were paid at least the minimum wage by being present at
the moment the payment was being done. The remaining 40% declared that they gave thetotal amount of money to the crew leader or head of family and had no insight into
subsequent payment practices. This presents a risk as farmers do not guarantee that all
workers are paid a minimum wage on a weekly basis, that overtime hours are voluntary andpaid at overtime rates, and that workers receive their legal benefits.
4.2.10 Advance payments to farmers
Due to the farmers´ inability to pay for crop inputs and labor costs, PMM provides advancepayments to all contracted farmers. As it is important that farmers invest their own money
as well so that they have ownership of their business, PMM covers approximately 70% of
the investment.
However, farmers were unaware of this approach and did not understand why PMM did notcover 100% of the costs. Furthermore, farmers were unaware of the fact that the advancepayments for labor costs should cover all legally required costs. As such, the money wasused in its entirety as regular salary for the workers and it was unclear whether the advancepayments should also be used for things like overtime and benefits on top of the regularsalary.

31

Income and work hours: Conclusion
Practically all workers hired by farmers that sell tobacco to PMM were receiving more thanthe legal minimum wage. However, PMM´s communication efforts so far have notsignificantly improved the awareness levels regarding other key labor obligations such as
work hours, overtime and benefits, resulting in situations that do not meet the standards of
the ALP Code. Also, the purpose of the advance payments from PMM must be clarified to thefarmers. For these reasons, further efforts and attention from PMM is required so that theissues and risks identified above can be effectively addressed.
4.3 ALP Code Principle 3: Fair treatment‘Farmers shall ensure fair treatment of workers. There shall be no harassment,
discrimination, physical or mental punishment, or any other forms of abuse.’
Fair treatment: Background
Regulations: Both Article 3 of the Federal Labor Law and Article 259 of the Federal Criminal
Code prohibit verbal, physical and sexual harassment and abuse. In addition, Articles 2 and
3 of the Federal Labor Law and the Federal Law to Prevent and Eliminate Discriminationprohibit discrimination, which is defined in Article 4 of the Federal Labor Law as “anydistinction, exclusion or restriction that, based on the ethnic or national origin, gender, age,disability, social or economic condition, health conditions, pregnancy, language, religion,
opinions, sexual preferences, civil status or any other, has as an effect to prevent or annul
the acknowledgement or exercise of rights and the real equal opportunity for the people…”.
Scarcity of rural workers: Due to the aforementioned scarcity of rural workers, according to
the field technicians, workers are generally in a strong position and do not accept any formof harassment, discrimination, physical or mental punishment, or any other forms of abuse.
Fair treatment: Overall findings and challenges
4.3.1 No evidence of widespread practices of unfair treatment
All farmers and workers interviewed confirmed that physical, sexual and verbal abuse was
not a problem at their farms. Also, no evidence was found of any form of discrimination.
Interviews with 16 female workers confirmed this.
Fair treatment: Risks
4.3.2 Contracting through a crew leader / the head of a family
The practice of contracting workers through a crew leader or head of family, which occurredat 46% of the farm visited raises concerns about workers´ treatment. Given that farmers do
not communicate directly with these workers and do not provide a way to follow up any
grievances, they are not in a position to prevent abuses and ensure that the standards
under this principle are being met. The level and type of risk varies depending on the typeof crew (group of local workers, migrant family, etc.), however the farmers' lack of visibility
into the crew's relationships is always a matter of concern, moreover when none of the32

farmers visited was aware of his obligations under the ALP Code to provide an avenue forgrievances.
Fair treatment: Conclusion
Despite the lack of guidance for farmers on how to deal with incidents such as harassment,
discrimination, physical or mental punishment, or any other forms of abuse, the findings
suggest that workers were generally treated fairly on the farms visited. However, one
important risk of unfair treatment was the practice of contracting workers through a crewleader or head of family and the lack of contact between the farmer and the crews' workers.
This risk can be mitigated, at least partially, by PMM's ongoing efforts to set up a grievancemechanism for workers (see chapter 3.5.3).
4.4 ALP Code Principle 4: Forced labor‘All farm labor must be voluntary. There shall be no forced labor.’
Forced labor: Background
Regulations: The Mexican Constitution prohibits forced labor and the Federal Penal Codepunishes anyone who forces another person to perform work without consent or without
proper payment.
Scarcity of workers: According to PMM´s management and field personnel, forced labor isunusual in Mexican tobacco production due to the scarcity of rural workers. Workers would
likely move to another farm if they became discontented with their employer or labor
conditions.
Forced labor: Overall findings and challenges
4.4.1 No evidence of workers unable to leave their job
All farmers and workers interviewed confirmed that workers were free to leave theiremployment at any time with reasonable notice. As none of the workers had a formal
employment contract, they all felt free to leave their employment at any time. Also, workers
all declared that they were not required to make any financial deposits or hand in their
original identity documents.
4.4.2 Payment schedule
23% of the farmers visited did not always pay their workers´ salaries on the agreed day. In
all cases, the farmers were able to pay their workers the following week. Three farmers
stated that the reason for being unable to pay on the agreed day, Saturday, was because
PMM´s advance payments were transferred to their bank account on Friday late afternoon.
As they were unable to go to the bank at that moment, they could not pay their workers ontime as the bank was not open on Saturdays.

33

4.4.3 Indirect payments to workers
46% of the farmers visited paid their workers indirectly: 26% through a crew leader and
20% through a head of family. Of these 16 farmers, only two had insight in the payment
practices and ensured that all workers were getting paid. The remaining 40% of the farmers
visited gave the total amount of money due to the crew leader or head of the family without
knowing whether all workers were being paid or how family members were remunerated.
The cases of migrant families were more delicate since it can be argued that it is neither
necessary nor appropriate to pay each family member separately for work done, as it ispresumed that the entire family benefits from the total salary. However, the latter might notalways be the case and the farmer is responsible for all workers at the farm and mustensure that they are being paid for work on tobacco production.
PMM Response: “Over the next season PMM will take steps to improve the transparency of the practices ofcrew leaders to ensure that the rights of all workers are respected and that those workers contracted throughcrew leaders receive the same working conditions as those contracted directly by the farmers.”
Forced labor: Risks
4.4.4 Contracting through a crew leader / the head of a family
The practice of contracting workers through a crew leader or head of a family presents arisk as farmers do not verify the identity of workers; crew leaders and heads of families
could bring different people to the farm without the farmer´s knowledge, which represents arisk for all standards under this ALP Code Principle.
Forced labor: Conclusion
No evidence of workers being unable to leave their job was found at any of the farms
visited. Also, all workers interviewed declared that they were not required to make any
financial deposits or hand in their original identity documents. However, the practice of
hiring and paying workers indirectly presented a risk of forced labor. Indirect payment was
identified in two forms at the farms visited: through a crew leader and through the head ofa family. Only some of these farmers ensured that all workers were paid; the majority had
no insight in the payment practices. PMM's efforts to improve crew leaders' practices andthe transparency of the relations within the crews, as well as the setting up of the grievancemechanism will be key to address these risks.
4.5 ALP Code Principle 5: Safe work environment‘Farmers shall provide a safe work environment to prevent accidents and injury and tominimize health risks. Accommodation, where provided, shall be clean, safe and meet thebasic needs of the workers.’

34

Safe work environment: Background
Regulations: Article 488 of the Federal Labor Law states that it is an obligation of theemployer to provide first aid and take employees home or to a hospital in case of an
accident. Employers who have registered their employees with the IMSS and paid theworkers´ contributions are relieved from these obligations and can depend on ambulancesof the IMSS in case of accidents.
Article 151 of the Federal Labor Law determines that, in case accommodation is provided toworkers, the rent cannot be higher than 0,5% of the value of the property. Furthermore,
the following rules apply:•••

Employers are responsible for maintaining the accommodation and pay for any
repairs in a timely mannerWorkers have the following obligations:o Pay the rento Treat the accommodation as if it were their own
o Inform the employer of any defects or damageo Leave the accommodation within 45 days after termination of theemployment
Workers are prohibited to:o Use the accommodation for other purposeso Sublet the accommodation

Safety initiatives: PMM had undertaken several steps to mitigate risks:
1) Prioritization of safe work environment in communication with farmers
PMM prioritized safety in their communication with the farmers. The focus of the safety
instructions were mainly targeted at using PPE during CPA application as this wasconsidered the most urgent safety measure.
2) PPE for a symbolic price of MXN 5
To encourage farmers to use PPE during CPA application, PMM provided the complete set of
required PPE for a symbolic price of MXN 5. In this way the farmer is able to provide PPE to
all workers involved in CPA application.
3) Fundación Comunitaria Veracruz
In the Veracruz region, PMM is working together with Fundación Veracruz on the distributionof water purifiers. Analysis of the area demonstrated that the lack of clean drinking water
was the main health issue for farmers and workers and, therefore, PMM decided to focus on
this issue. At the time of the assessment, 700 water purifiers had been distributed among
all farmers and some workers. However, since the water purifiers needed electricity tofunction, they were located at the farmers´ homes instead of at the farm. Among the 12
farmers visited in Veracruz, only four provided purified drinking water to their workers.

35

Safe work environment: Overall findings and challenges
4.5.1 Awareness on the use of PPE
The focused communication on safety measures resulted in 100% of the farmers visited
being aware of the need to use PPE during CPA application. Therefore, the expectations for
Phase 1 of the ALP Program were met for this topic.
4.5.2 General safety hazards
Both farmers and workers were generally unaware of the main safety hazards involved with
their work such as harvesting, working in high curing barns without protection (see photos
below), and lack of fire prevention in curing barns (see photos below). Together with theadditional findings presented throughout this chapter, these practices resulted in the
conclusion that none of the farmers visited met all the basic conditions of a safe andsanitary work environment.
PMM Response: “In the period of December 2013 to May 2014 PMM will work together with its Environmental,
Health and Safety (EHS) experts to conduct an assessment on the current conditions at the farms in order todevelop a special safety training for field technicians. This training will provide field technicians with the required
knowledge to conduct risk assessments at the farms and advise farmers on how to improve the situation. In
addition, the EHS experts will analyze the currently used PPE to identify potential improvements both in terms ofquantity and usage.”

4.5.3 Training and awareness of Green Tobacco Sickness (GTS)
82% of the farmers visited did not provide training on avoidance of GTS to their workers
involved in topping or harvesting tobacco, or loading curing barns. Especially workers
harvesting FCV tobacco declared they experienced GTS symptoms on a daily basis because
they started working early in the morning. At 97% of the farms visited workers were
harvesting tobacco without adequate protective clothing and this included 15 children (seechapter 4.1) and two breastfeeding women.
The reason for these results is that the majority of the farmers (66%) and workers (71%)
interviewed were unaware of the existence of GTS and the methods that can be used toprevent it. Those farmers who did have knowledge about GTS had worked in the USA where
they had received training.
88% of the workers interviewed were temporary workers who worked less than one monthat each farm. This extremely high turnover made it difficult for farmers to maintain their
entire workforce trained.
4.5.4 CPA handling and training
Despite the awareness of the need to use PPE among 100% of the farmers visited, 77% did
not provide training on handling of CPA to their workers responsible for this task and/or did
not use PPE for CPA application. Most persons responsible for CPA application – usually the36

farmer, a family member, or a permanent worker – only used a mask, boots and a cloth tocover their mouth. Two cases of intoxication due to CPA had been reported and one farmer
stated that his child (16) assists him in application of growth inhibitor without using PPE.
According to the farmers and workers, the PPE provided by PMM are uncomfortable andunsuitable for working in high temperatures.
In addition, 74% of the farmers visited did not have an adequate CPA storage as they kept
CPA in an open place, in an unlocked storage area or spread across the farm. None of the
farmers punctured empty CPA containers to render them unusable; 89% did triple washthem and delivered them to the field technicians when they organized the campaign “Campo
Limpio 13”. Two farmers stated that they burned their empty CPA containers.
Finally, 86% of the farmers visited did not guarantee that the re-entry period after CPA
application was respected by workers and/or external persons. On one farm workers wereapplying growth inhibitor while other workers were harvesting the first layer of tobacco
leaves 50 meters farther. As migrant workers lived in the middle of the tobacco field andgenerally arrived before the application of the growth inhibitor to harvest the first layer ofleaves, they were in the middle of the field when growth inhibitor was applied. The majorityof the farmers declared that they warn their workers verbally, but none of them used
warning signs on recently sprayed fields and 89% were unaware of the exact re-entry
period.
PMM Response: “From August 2013 to May 2014 PMM will provide specialized training on CPA application tofarmers and investigate the possibility of farmers contracting a third party for CPA application on their farm.”
4.5.5 Clean drinking and washing water
71% of the farmers visited did not provide clean drinking and/or washing water close towhere the workers work and live. For migrant workers sleeping on the farm, farmers didbring clean drinking water as they were unable to buy it themselves. However, clean
washing water was not available in these cases, resulting in workers having to bathe in ariver or canal nearby the farm. These farmers also did not provide washing water and soap
for workers to clean themselves after CPA application and harvesting.
4.5.6 Accidents
Small scale tobacco farmers are expected to have the basic resources to act in case of an
emergency such as transportation, knowledge about the nearest hospital or health post, andthe ability to call or communicate with emergency responders. 91% of the farmers visited
did have these resources, although almost none had a first aid kit available to the workers.
4.5.7 Health and safety risks for migrant workers
Migrant workers from the highlands typically worked and lived on the farm for several
weeks or months until all tobacco leaves are stringed. Once they arrived at the farm they13

Campo Limpio = clean field (literal translation) is a campaign organized in the local community

37

constructed their own makeshift housing in the middle of the tobacco field. A field technician
explained that these families wanted to live in the middle of the field to not lose any timethey could be working. As they were paid at piece rate, the more tasks they finished, themore they earned. Another field technician, however, stated that they needed to safeguard
their finished strings of tobacco to prevent them from being stolen by workers from otherfarms.
In any case, their living conditions presented severe health and safety risks due to theconstant exposure to (wet) tobacco, CPA, dirt, extreme temperatures, and lack of sanitaryfacilities. These health risks were especially dangerous for children and breastfeeding
women. According to the coordinator of one of the CAEI´s, the main health issue among
migrant children was respiratory problems due to exposure to the elements and dust. In
addition to health risks, this way of living did not provide any security – people could easily
take all their belongings – and privacy. Also, when the parents were working, the children
were not being supervised so, as they lived in the middle of the tobacco field, they could
easily be exposed to safety hazards.
PMM tried to improve this situation by providing tents, blankets and lamps for the workers,
but apparently this initiative did not meet its objective as families were still exposed tohealth and safety risks.
4.5.8 Worker accommodation
90% of the accommodation inspected by CU (10 in total) was considered inadequate as
they were unsafe, dirty, and without bathrooms. CU identified two cases in which workers
slept in the same space where CPA were stored. Further, in one case a worker slept in the
open air without any protection and privacy.
Safe work environment: Risks
4.5.9 Contracting through a crew leader / the head of a family
As these farmers did not register their workers or communicate directly with each one ofthem, they were unable to ensure that the workers received safety training from the crewleader or head of family.
4.5.10 Record keeping
None of the farmers visited recorded the precise day/time of CPA applications, which
increased the risk of farmers forgetting the day on which they applied CPA and the productthey had used. Also, none of the farmers visited recorded accidents and illnesses that
occurred at the farm, which is recommended to prevent them from happening in the future.
Safe work environment: Conclusion
Despite PMM's communication efforts and the ongoing initiatives to provide PPE, challenges
remain. Awareness levels seem to have improved (particularly on CPA) but these are stillinsufficient (particularly on GTS) and have not yet translated in farmer's and worker's

38

adoption of safer practices. Also, the migrant worker's living conditions pose many difficultand complex challenges which will require further attention from PMM.
PMM Response: “In August 2013 PMM will provide a so-called ALP Bonus to those farmers who comply withthe following three requirements of the ALP Code: no child labor, PPE usage, locked CPA storage. The policies forthis bonus will be reviewed annually. Furthermore, PMM has entered into a partnership with the Mexican affiliate
of Save the Children in order to strengthen the advocacy and outreach towards migrant families to increase theparticipation of migrant children in the CAEIs program. This NGO will conduct a study to investigate the needs of
migrant families. Finally, in order to tackle the root causes of the problems migrant face, PMM will engage all
relevant stakeholders to ensure broader commitment and intervention. These include stakeholders at different
levels of the government, other companies in the tobacco and wider agricultural sectors, as well as civil society
stakeholders.”

4.6 ALP Code Principle 6: Freedom of association‘Farmers shall recognize and respect workers’ rights to freedom of association and to
bargain collectively.’
Freedom of association: Background
Regulations: Article 356 of the Federal Labor law regulates the organization of unions andexecution of collective bargaining agreements. Article 132 of the Federal Labor Law
determines that employers are prohibited to intervene in any matter of the internal regimeof a union.
Farmers associations: Farmers in the Nayarit province have an active association called
ARIC which performs several duties for the farmers. All contracted farmers in Nayarit areassociated to this organization. The Veracruz region did not have a farmers’ association.
Workers associations: At the time of the assessment, no workers´ associations or labor
unions were active in the tobacco growing regions where PMM operates. Several farmers
and workers declared that there used to be labor unions for tobacco workers, but they nolonger exist.
Freedom of association: Overall findings and challenges
4.6.1 Awareness of freedom of association
CU found no evidence of farmers disrespecting workers´ right to freedom of association.
However, 23% of the farmers and 37% of the workers interviewed declared that they did
not know what freedom of association was and what purpose it serves. This is likely due tothe fact that there were no workers associations or labor unions active in the tobacco
growing regions and, therefore, these farmers and workers had no practical examples.

39

Freedom of association: Risks
4.6.2 Contracting through a crew leader
As the farmers who contracted workers through crew leaders had no insight in their
recruitment practices, they also lacked transparency in their freedom of association
practices.
Freedom of association: Conclusion
No associations or unions for workers were active in the tobacco growing regions at the timeof the assessment. This could be the reason for the lack of awareness of freedom of
association rights among farmers and workers. In any case, no evidence was found of
farmers disrespecting workers´ right to freedom of association. One risk, however, wasidentified, namely that farmers who contract workers through a crew leader did not ensurethat their right to freedom of association was respected.
4.7 ALP Code Principle 7: Compliance with the law‘Farmers shall comply with all laws of their country relating to employment.’
Compliance with the law: Background
Regulations: Article 24 of the Federal Labor Law states that all employment agreements in
Mexico should be executed in writing and failure to do so is directly attributable to theemployer. According to Article 25 of the Federal Labor Law, the following terms should be
included in employment agreements:
•
•
•
•
•
•
•
•

Name, nationality, age, gender, civil status, tax registration and address for both theemployer and employee
Type of employment: fixed, indefinite, trial period, training period, seasonal
Description of services
Place of work
Duration of work shift
Form and amount of salary & day and place on which payment is done
Training provided by employer
Benefits and other conditions

Article 39 of the Federal Labor Law states that seasonal agreements may be used when theactivities for which an employee is hired are not permanent during a week, month or year
time, in which case the employees will have the same rights as other employees for the
proportional part of the time in which they render their services. This type of agreements issuitable for the workers contracted by the farmers visited.
Nature of the employment relationship between farmers and daily workers: As mentioned inchapter 4.3.2, PMM´s analysis suggested that daily workers do not have a labor relation
with the farmers and, subsequently, these farmers are not obliged to enter into a written
employment contract with their daily workers. However, CU believes that the assumptions
on which this interpretation is based should be re-examined and, therefore, the above-40

mentioned article of the Federal Law that states that all employment agreements should beexecuted in writing will be upheld in CU’s findings in this chapter.
Compliance with the law: Overall findings and challenges
4.7.1 Awareness of legal rights and employment conditions
Workers were generally aware of the remuneration conditions and some farmers had
informed them about the daily work hours. On the other hand awareness about relevantlaws was low, with only 11% of farmers and 23% of workers meeting this criterion. Farmers
stated that they expect workers to already know their legal rights and the employment
conditions at the farm because they had been working in tobacco for a long time.
PMM Response: “In August 2013 PMM´s Legal department will provide training to the field technicians toimprove their ability to advise farmers and workers on their legal rights. Also, specific communication materials
will be prepared for farmers and workers.”
4.7.2 Written employment contracts
None of the farmers visited had entered into a written employment contract with theirworkers. The lack of written employment contracts can be prejudicial for both farmers andworkers. Farmers run the risk that workers go to court to claim their salary and benefits
retrospectively for the period during which they worked on the farm, even though thefarmer has paid every week. Workers, on the other hand, may work without social security
and other benefits.
As stated above, PMM's initial assessment was that the type of relationship establishedbetween farmers and workers did not legally warrant such written contracts, however, CU'sfindings suggest that this might not be the case and therefore such assessment needs to berevisited.
Compliance with the law: Risks
4.7.3 Contracting through a crew leader / the head of a family
As with other areas of the ALP Code, this practice (identified at 46% of the farmers visited)raises concern because of the farmer's limited ability to ensure that workers, working aspart of crews or family groups, are informed about their legal rights.
Compliance with the law: Conclusion
In Phase 1, communicating this ALP Code Principle was not a priority and PMM was assessed
to have limited understanding of this area. Although workers generally were aware of the
remuneration they would get for their work, awareness about legal rights was low for both
farmers and workers. The issues identified are not unique to tobacco and stem from theinformal nature of labor relations in Mexico's small-holder agriculture sector. PMM can (andshould) invest more time and efforts in improving awareness levels, and tackling situationsof potential abuse but, realistically, sustainable change will require the involvement of othersectors and from key stakeholders.

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5. Concluding remarks

THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

42

CU notes that despite the well-known difficulties in the Mexican tobacco market, PMM
managed to ensure the required transparency and relationship with the farmers to makesignificant progress in the ALP Program implementation.
As soon as the CU assessment was concluded, PMM´s ALP Country Team started to work on
the action plans and, as part of the standard assessment process PMM provided CU with its
response to the field assessment and findings on the current situation at farm level,
together with its ALP Program action plan. These have been reviewed by CU for the
preparation of this final report and excerpts have been incorporated throughout the report.
Since PMM was being assessed at this stage only for Phase 1 of the ALP Program, theresponse and action plan, which show in detail how PMM is preparing for Phase 2, whichareas are targeted and considered a priority, as well as the planned approach are includedin Appendix 1 below.
Having reviewed PMM´s response and ALP Program action plan, CU can confirm thecompany’s positive approach to the assessment. Several activities had already been
undertaken as a follow up to the assessment before the response was delivered to CU e.g.
farm visits in several growing regions to investigate the relation between daily workers andfarmers, the introduction of a new format for Farm Profiles, and the launch andimprovement of a grievance mechanism.
The PMM plans themselves are comprehensive, built directly on the insights provided by
CU’s assessment, and show a constructive analysis of both the systemic and the less deeprooted types of challenges ahead to achieve the desired impact in critical areas such as childlabor and safe work going forward.
PMM has set in process a wide-reaching and integrated set of actions, taking in thechallenges articulated in the Control Union assessment. Significant progress is expected by
PMM in most of these action areas. CU considers that this is feasible as PMM has a strong
multi-disciplinary team in place, it is well organized and its ALP Program plans aresupported by management.

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Appendices

THIRD PARTY ASSESSMENT
Philip Morris Mexico

AGRICULTURAL LABOR PRACTICES PROGRAM

44

Appendix 1. PMM response and ALP Program action plan

Table of Contents
Introduction

P. 1

ALP Program Implementation at Affiliate Level

P.4

2.1 Personnel

P.4

2.2 Communication of ALP Code to farmers

P.6

2.3 Farm profiles

P.8

2.4 Prompt action situations

P.9

ALP Code standards at farm level

P.11

Child Labor

P.11

Income and Work Hours

P.14

Fair Treatment / Forced Labor

P.16

Safe Work Environment

P.18

Freedom of Association / Compliance with the Law

P.20

Conclusion

P.22

Appendix A – New Internal Structure

P.23

Appendix B – Farm Monitoring Form

P.24

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Introduction
The commitment of PMI is to progressively eradicate child labor and other laborabuses where they are found and to achieve safe and fair working conditions on all
farms from which PMI sources tobacco.
In Mexico, through its affiliates Philip Morris Cigatam Productos y Servicios, S. de R.L.
de C.V. (PMCPS) and Tabacos Desvenados S.A. de C.V. (TADESA) 14 in April 2012 theimplementation of the Agricultural Labor Practices Code (ALP) was initiated. The ALP
Code promotes 7 basic principles:1)

No Child Labor.

2) Fair Income and Work Hours.
3) Fair Treatment.
4) No Forced Labor.
5) Safe Work Environment.
6) Freedom of Association.
7) Compliance with the Law.
The implementation program considers the two states of the Mexican Republic whichhave traditionally produced tobacco, Nayarit and Veracruz. They mainly produce thefollowing types of tobacco: Burley (BU), Virginia Flue Cured (FC), Virginia Sun Cured(SC), and Dark (DAC). Beginning in 2013, the implementation of the ALP Code has been
extended to the state of Chiapas, where TADESA began a pilot program of Burley (BU)
tobacco production.
Presently, TADESA purchases around 26% of the total national production and is the
only company operating under a code relating to the agricultural labor practices within
the farms which source the tobacco.
The business model followed by TADESA includes a commercial contract with thegrowers for the production and sale of tobacco with financing, in cash and materials,
for most of the costs of production. Our business partners in the tobacco growing
communities typically have low access to credit or financing. The financing and support
that comes with our growing contract allows farmers to have the sufficient economic
resources to cover most of the cost of production, including the capacity to pay thesalaries of the workers involved in tobacco growing within their farm; this model also
provides better assurance to the company about the farmer’s ability to align theirpractices to ALP Code requirements.

14

PMCPS is the PMI Affiliate that manufactures all the different cigarette brands in Mexico. TADESA is the PMI Affiliate that produces the tobacco
sued for some of the cigarette brands manufactured by PMCPS. In the document, PMM will be used to refer to either of the PMI Affiliates
constituted in Mexico.

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Furthermore, TADESA offers permanent technical assistance to the Farmers, thusincreasing the probability of growing high quality and quantity tobacco, and thereforeof a successful investment for the farmer. In Mexico tobacco is one of the bestcommercial crops as it provides competitive returns; the growing contract includes thetotal financing amounts (in cash and materials), the purchasing price per quality andstalk position and the estimated production yield so, by the time our business partners
sign TADESA’s growing contract, they are able to estimate their next season profit.
It has been more than ten years that PMM began to develop efforts to improve theliving conditions of workers in tobacco growing in coordination with local Nongovernmental Organizations (NGO’s). Some of the projects have focused on immediate
relief and material support for migrant workers (e.g. providing tents, mattresses andblankets), others were meant to provide community support for migrant workers’
families and started with the development and outfitting of day-care and community
development (Child Care and Education Centers - CAEI´s per its acronym in Spanish)2
which provide health care, nutrition and education to the children of migrant field
workers that live on the farms during the periods of transplanting and harvesting
between the months of January to May. These CAEI’s operate in collaboration with thefederal, state and municipal authorities such as the Department of Social Development(SEDESOL 15), the Department of Public Education (SEP2), the Department of Health(SSA2), and with the support of Rural Development of Nayarit, A.C. (DERNAY2, a local
NGO).
Since 2001 these CAEI’s have become core to PMM strategy to address child labor andimprove the livelihoods of migrant workers in tobacco. Currently, nine CAEI´s are in
operation in the State of Nayarit (which is where the majority of migrant workers canbe found). In 2012 alone three new CAEI´s were opened in the region, with the total
investment over the last two years reaching 6.5 million MXP. Each year these CAEI’s
support about 400 children and over the years more than 5,500 children of thetobacco growing regions of the state of Nayarit have benefited from this project.
The implementation of the ALP program has strengthened PMM’s policies andpractices with regards tobacco growing, but also allowed the company to build onprior efforts with its grower base: both to improve the overall conditions of thebusiness for all the parties involved, and to work with the community to tackle issues
such as child labor.
The ALP Country Team feels very comfortable with the positive results achieved so far
in the implementation of the first phase of the ALP program. As highlighted by Control
Union (CU) in its assessment “TADESA had a strong internal structure for the
implementation of the ALP program; clear lines of communication were set between
the employees involved; collaboration between the ALP Country Team and the15

per its acronym in Spanish

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Tobacco Production Team was effective; the required departments such as
Operations, Legal and Corporate Affairs were represented (…) Furthermore, it could be
evidenced that the members of the ALP Country Team were engaged with the ALP
Program and believed it would bring benefits to all parties involved; the company, thefarmers and the workers”.
The results achieved so far required great commitment from a cross functional groupof people in the ALP Country Team (Corporate Affairs, Legal, Leaf, Agronomy of PMM– henceforth simply designated as Country Team) but would not have been possible
without the great effort done by the Field Technicians (FT’s) and the whole agronomy
team, who were on the farms talking to farmers and workers, collecting information,transferring knowledge and getting the crucial buy-in for the successful program
implementation. The team is committed and we will describe below the steps that will
be taken over the next season to continue improving the internal processes to manage
the program.
We are confident that the new skills and strengths, developed by our staff over the lastseason, will serve us well as we move into the second phase of the program and start
tackling the issues and risks at the farm level on a systematic basis.
CU’s assessment of the labor practices situation at the farm level (second part of thereport, relative to ALP Phase 2) is a valuable resource as it helps setting the baseline
for future action. It highlights risks already identified by the FT’s, or identified throughthe analysis of the Farm Profiles (FP’s) (which reflects the thorough work done by theteam during phase 1), but also provides a clearer focus and framework for our plans
going forward.
The following document will explain the action plans that will be implemented in
Mexico to work in the areas of improvement. In order to facilitate its reading, it will be
divided into two sections: 1) ALP Program Implementation at PMM Level, will focus on
the actions to improve on the implementation aspects related with the first phase of
the program; and 2) ALP Code Standards at farm level, aims to describe the future
action plans and next steps that the ALP Country Team will develop during the phase 2
implementation of said Code in order to mitigate the identified risks.
The complete team feels confident and counts with enough elements to start thisjourney and give the first steps towards meeting ALP measurable standards.
ALP Program Implementation at Affiliate Level
With regards to the ALP Code phase 1 roll-out, the affiliate was expected to do an internal andexternal communication of the ALP Code, fill in the Farm Profiles and keep eyes and ears open to
detect any potential prompt action situations. Notwithstanding CU’s overall positive feedback on thework done to achieve those objectives there are some areas for improvement. These mainly relate to48

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the limited understanding of some of the ALP Code’s principles and measurable standards, both by
FT’s and Farmers.

2.1 Personnel
Organizational structure, according to CU this was a clear strength during phase 1. However,the ALP Country Team believes that some adjustments will be necessary to further improvethe efficiency of the team and establish a solid basis for the next phase of the program.
Namely, the introduction of a new element that will allow a better coordination of theactivities related with child labor, including timely responses when prompt action issues are
identified. Further, a new position of ALP Field Coordinator will allow reinforcing all the Field
Technician’s and Farmer’s training activities and supporting the implementation of the ALP
Code’s standards systematic monitoring farm-by-farm (See Appendix A).
As soon as the assessment was concluded by Control Union (CU), the Country Team began towork on the action plans, based on the findings and risks detected and reported by CU in theclosing meeting. Meetings and workshops were held with FT’s and farmers in each area of
production in the states of Veracruz, Nayarit and Chiapas (not included in the scope of CU’s
assessment because this is a new tobacco growing area for TADESA). During these meetings,
the findings and risks included in the CU report were reviewed with the supervisors, fieldtechnicians and also farmers (the ones that during the implementation of Phase 1 showed agreater openness, cooperation and support for the Code). The purpose of these workshops
was to identify and brainstorm new ideas or proposals that could improve the implementationof the ALP program. In total 342 ideas were generated. These were then analyzed andprioritized by the Country Team leading to 36 concrete proposals.
During the Phase 2 workshop with OC, the regional ALP team and Verité most of the initiatives wereanalyzed and prioritized, and are included in this document as part of the action plan.

Internal training and communication strategy
Until last year the job description of Field Technicians included a series of activities related tothe production, technical consultation, inputs administration and farmer financing, and theirobjectives were directly related to the yield per hectare and the quality of the tobacco
obtained from the farmers in their charge. However, the daily activities of the field technicians
have since been significantly expanded with the implementation of the ALP Code and therequirements of new information technologies for administering the tobacco production
process. Thus, prior to the beginning of the new production cycle, the ALP Country Team ismaking an extensive review of the field technicians´ day to day activities. Likewise, going
forward, it will be necessary to develop a new detailed description of the position of Field
Technician and to precisely identify the abilities and knowledge required to completely
accomplish their duties. Some of this will be new to the Field Technicians, for which it will be
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necessary to consider an extensive process of preparation and training in order that they
comprehend in totality their new role in the field,
This intensive training for FT’s and supervisors will be held before the start of the new season
in order to guarantee that the Agronomy Team will have:••••the required knowledge of the seven principles of the Code to detect any
potential issue that exists on the farm
the required skills to address it
the tools available to support the farmer, andrecord their findings in order to work on a sustainable solution.

The new training will include all the possible findings, issues and risks that a FT’s could
potentially detect during his day-to-day activities on the farms. This will be achieved bydoing a team analysis, evaluation, record keeping exercise and possible action plans tosimulate a possible solution to every issue and for FT’s to understand how to use all theavailable printed materials. An initial training session will be held during the Field
Technicians Phase 2 workshop, but further sessions will continue during the length of
the season in the regular ALP monthly meetings (depending on which ALP related
activities take place during the different phases of the season), a complete set of casestudies cases will be developed by the Country Team.
Based on the learnings from ALP Phase 1 implementation, new communication materials will
be developed. The goal will be to improve the engagement and understanding of FT’s, farmers
and workers, by using simple language and graphic representations (in the past, the samelanguage used in the Code was used in the leaflets), and also to help the FT’s with referencematerials on how to proceed, what to do, which document to fill and whom to contact in casethey detect any issue or risk to people living or working on the farm.
A complementary project being launched is an ALP Code corporate communication campaign
for all PMI employees in Mexico. The Country Team thinks it is really important to share withall the company’s employees in Mexico the ALP goals, principles, measurable standards, aswell as the initiatives developed by the ALP Country Team and the benefits on the living
conditions of farmers, workers and their families.

Labor relationship assessment
Similarly, derived from the concerns raised by Control Union (CU) with respect to thepossibility that there exists a labor relationship between the farmers and the laborers, thePMM Law Department created an action plan which was led by a group which consisted of a
PMM in-house counsel and an independent outside counsel specialized in Labor Law. This
group visited sites in some growing regions in the state of Nayarit in order to interview thefarmers, laborers, crew leaders, Field Technicians and a diverse group of TADESA employees.
Up to day, efforts of this team have been taking place in order to have enough information to50

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deeply analyze the current relationships existing in Mexican fields (i.e.: between the farmer
and independent workers, the farmer and the crew leader and finally the work relationshipbetween the crew leader and his workers). As soon as the evaluation is finished, the final
opinion of the outside counsel and PMM´s action plan (including its economic impacts) will bedelivered to both, PMI OC and CU, in a separate document for its individual analysis anddiscussion.

Actions

Complete by

1. Reinforce Field Technicians (FT’s) training with more practical examples that
illustrate relevant issues and risks

August 2013

2. Continue regular assessments of knowledge using practical cases

Sept. 2013 –May 2014

3. Develop new communication materials to be included in tool box

September2013

4. Launch ALP corporate communication campaign

January 2014

5. Perform legal assessment

June 2013 –May 2014

2.2 Communication of ALP Code to farmers
The implementation of the ALP Program started in full-force in all relevant tobacco growing
regions during the last months of 2012 and the first months of 2013. The entire FT’s attended atleast two formal trainings and the communication with farmers was done both in group meetings(small groups of neighboring farmers or bigger groups with farmers from a whole region) andindividually during the FT’s regular season visits.

Despite our efforts in this first season under the ALP program, CU identified situations where
farmers were not familiar with aspects of the ALP Code. We believe this was to be expected at
this stage and will reinforce the communication efforts for the next growing season as
described below.
External training and communication strategy
In order to complement the formal training of farmers we plan to develop a greater number ofmaterials and different communication strategies that will permit us to better position the ALP
Code and improve its understanding by farmers. The Country Team will adapt thecommunication materials to the local language, culture and customs without changing or
modifying the meaning or scope of any one of the ALP Code´s principles and/or measurable
standards.
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Furthermore, considering the significant number of farmers and growers in TADESA’s supply
chain, the significant distances between farms, and the wide range of potential issues to be
tackled, the Country Team is considering launching a widespread communications campaign(in successive waves - radio spots, leaflets, training videos, etc.) particularly directed atworkers, so they recognize and familiarize themselves with the ALP Code and the farmers
commitment to uphold it.
However, the communication and training efforts can only operate sustained improvements if
both farmers and workers change their mind set, understand the rationale for changing
practices and behavior, and believe in the positive impact that good labor practices will haveon all the parties involved in the supply chain.
With the implementation of the second phase of the ALP program we expect farmers todevelop a stronger sense of ownership and responsibility with respect to all of the activities
which take place within their farms. This includes aspects related to production, administrationof resources and farmer-worker labor relations, where we expect farmers to manage andoperate their farms more as small entrepreneurs, understanding the risks and opportunities
for improvement, and looking at the business benefits that labor improvements can bringabout.

Actions

Complete by

1. Develop new communication materials to be included in tool box

September
2013

2. Reinforce farmer’s training with more practical examples that illustrate relevant
issues and risks

August 2013 –May 2014

3. Start ALP Code communication throughout the workers

October 2013
– May 2014

2.3 Farm profiles
Compiling the Farm Profiles data of the 1324 farmers, farms and the associated workers was areal challenge. This was the first time that such an activity was conducted, there was a limited
understanding of the real benefits and usage of this information and the team had to learn
from its own mistakes. The information had to be gathered over a short period of time during aslow period of the season, and therefore there was a limited ability to validate the information
given by the farmer (in some regions the farmers were no longer working with tobacco or were
not available at their farms).

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Data collection strategy
In this first year the data collection was done through farmer interviews prior to theharvesting season but, going forward, it will be collected at different crop stages,
incorporating new information and allowing for FT’s to validate the information
provided by the farmer.
In conjunction with the ALP Regional Team, we developed a new format of FarmProfile so as to include specific information on certain topics, (for example: civil stateof adolescents aged 15-17, attendance of children through CAEI´s, etc.). We believethat the collection of this additional information will help us develop more effective
action plans for each of the risk areas identified.

Actions

Complete by

1. Develop new farm profile template

June 2013

2. Recollate farm profile data

September2013 - May2014

2.4 Prompt Action situations
We are confident about the internal process set up to identify, report and address Prompt
Action situations in a timely fashion, which CU acknowledged as an “outstanding achievement”.
We believe this result is a reflection of the internal training efforts and the commitment of
everybody in PMM involved with the ALP program. There is still room for improvement withregards FT’s ability to recognize risk factors for forced labor that can lead up to Prompt Action
situations and this will be addressed as we introduce the second wave of training for the next
crop season and move on to the second phase of the program.

Increase risks and issues awareness
The workshop for introducing the second phase of the program took place in May
2013 and since then the Country Team developed a new farm monitoring form. This
tool will be provided to the field technicians and will complement the Prompt Action
form currently in use, allowing an evaluation of each of the ALP Code’s measurable
standards and a better identification of the risk situations that can lead to Prompt
Actions.

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Also, the training of FT’s for the second phase of the program will include morepractical examples of the relevant issues and risks so FT’s are in a better position to
discuss with farmers the concerns that some practices might raise (e.g. crew leaders)and get their commitment to change or, at a minimum, to provide sufficient evidence
that abuses are not occurring (e.g. proof of worker’s payment).

Actions

Complete by

1. Reinforce Field Technicians (FT’s) training with more practical examples that
illustrate relevant issues and risks

August 2013

2. Reinforce farmer’s training with more practical examples that illustrate relevant
issues and risks

October 2013
– May 2014

3. Implementation of farm monitoring form

October
2013 – May
2014

ALP Code standards at farm level

This section of the document will explain the different actions that TADESA is developing inorder to address the most relevant labor practices risks and issues currently present at farmlevel. These have been highlighted in CU’s assessment which serves as a baseline for moving to
the second phase of the program but also by TADESA’s FT’s and the Country Team during theimplementation of phase 1.
However, the Country Team would like to emphasize that the issues and risks identified are
not exclusive to the tobacco production but are common to all the different agricultural crops
present in Mexico. One of the principal characteristics of tobacco production in the country is
the fact that most of the growers are small scale, the vast majority with 0.5 to 3 hectares and a
few bigger farms that can go up 10 to 15 hectares. Furthermore, some of the farmers have torent their land which adds to their production costs. As a consequence, TADESA faces a highrotation of farms every year which creates a more challenging environment for tracking
physical improvements to the farms and the working and living conditions of farmers andworkers.

Furthermore, during the high labor demand periods, most of the workers (in tobacco andother crops) are indigenous migrants from mountainous areas. The significant culturaldifferences warrant a tailored approach but there is a real constraint in reaching out to these54

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Control Union Certificationsgroups of workers as they spend no more than 1 week at each farm and by the end of theharvest they leave tobacco activities to work in another crops or to return to their home.
Where our proposed actions are common we have grouped the ALP Code’s principles tosimplify the reading of this document.
3.1 Child Labor
The main risks identified under this principle relate to potential indirect employment ofchildren on tobacco farms when farmers are hiring through crew leaders.
A common practice in agricultural sector (not exclusive to the production of tobacco) is thecontracting of local workers through a crew leader (or through the head of the family in thecase of migrant workers). There are crews of local workers which are normally establishedamongst peers in a same nearby community to carry out specific activities that require (or are
better done through) a group’s coordinated work (e.g. harvesting tobacco). These groupsinternally elect a representative (the so-called crew leader) who is responsible to enquire
farmers about potential work and negotiate the terms and conditions of the group’s services.
The risk of child labor here is related with the ages of the workers in the crew. Although thecrew members will normally be adults there is lack of age verification by the farmers.
This practice assures the farmer of the availability of workers during their most labor intensive
season, and it also facilitates the management of the farm as the farmer only needs to deal
with one person who is responsible for the group. By itself, this practice is not inherently bad
however, at this time, neither the FT’s nor the farmers know what truly happens within thework crew, so it is not possible to ensure that all workers are being treated fairly. One of ourprincipal objectives in the coming cycle is to provide the necessary “transparency” to thisprocess, in such a way that the FT or the farmer is able to know with certainty that the rights ofevery single member of the crews that are working on their farm are being respected.
On the other hand, there are crews of indigenous migrant workers travelling together acrossthe tobacco growing areas in extended family groups (normally lead by the head of the family).
These groups include children and the risk here is that when farmers are contracting thesecrews, the children will be involved in tobacco work together with their parents.
The contracting of indigenous migrant families to perform the most labor intensive activities,
such as the harvesting of tobacco, is a common feature of the whole agricultural sector in thestate of Nayarit. For several generations these indigenous families have been migrating fromthe most remote parts of the mountainous region of various neighboring states to theagricultural production area of the Nayarit coast, where the temporary work they can find has
become the only means of income and subsistence. Typically the whole family migrates during
the agricultural season and these families’ children are often involved in child labor.
Throughout the years, PMM has developed various initiatives to tackle this problem.
Most significantly PMM established nine Child Care and Education Centers (per its
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acronym in Spanish CAEIs) in collaboration with the federal, state and municipal
authorities. These centers currently support about 400 migrant children providing asafe and clean place to learn and play while their parents work on the tobacco fields.
For the next season PMM will be extending the CAEIs opening hours until 4PM and also
on Saturdays (this one still as a pilot project) which we believe will significantly mitigate
the risk of child labor. Currently, the children that do attend the CAEIs return to thefarm (where there are no other activities for them) around 3PM and the risk that they
still get involved with tobacco related activities is high (CAEIs will remain closed on
Sundays as this is normally the migrant families day off for their personal activities andalso for going to the closest town for recreation).

Multi-party collaboration
Whilst our CAEIs program has delivered good results in minimizing the presence of children in
tobacco fields and we intend to continue to build on our experience, more can still be done toimprove its effectiveness. PMM has identified the need to strengthen the advocacy and outreachwork with the migrants’ community to increase migrant children participation in the CAEIs
program. Migrant families do not necessarily come spontaneously to the CAEIs and many preferto keep the children with them in the fields. This issue prompted PMM to partner with the
Mexican affiliate of Save the Children to do a complete study so as to better understand theneeds of these migrant families and develop an approach that can effectively reach thosefamilies currently not covered by the CAEIs program. Our partners are currently doing the
research for this project (based on field visits, focus groups, interviews, market analysis, othercrop comparison) which includes an analysis of the current living situations of these migrantfamilies in their original communities, as well as the conditions during the period that they are
working in non-tobacco related activities. For next season, Save the Children will focus oncommunity outreach work based on the outcomes of this project in order to raise awarenessabout the importance of avoiding the use of children in tobacco related activities, the benefits ofsending them to school and, ultimately, strengthening the adhesion to our CAEIs program.

One specific concern of the Country Team is the fact that it is relatively common to findchildren, between 15 and 17 years old, who are heads of family and that come with their wifeand sometimes children to work in agriculture. These agricultural activities (which include
work in tobacco growing) constitute the only working skill and life experience they have andare the only source of income for the family. In these particular cases, when identified, ourfocus will be to work with the Mexican affiliate of Save the Children to find a sustainable
alternative for these children and their family, so they can move from tobacco activities toother economic income alternatives.
However the problems associated with this migrant community are complex andmultidimensional and include also their ability to satisfy basic needs and the poor living
conditions, both during the migration periods and in their original communities. Tackling theroot causes of these problems requires a broader commitment and intervention from all
relevant stakeholders, as they go way beyond PMM’s capacity and responsibility. In addition to56

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our own individual initiatives to tackle child labor and improve living and working conditions on
the farms we contract with, PMM will reach out to the relevant stakeholders at the different
levels of government, other companies in the tobacco and wider agricultural sectors, as well ascivil society stakeholders, to establish a common platform of dialogue and for coordinating
initiatives to address the needs of these migrant communities and for improving living andworking conditions on the farms.

Identifying the key players and getting support from stakeholders
In the beginning of the next season, the first step we will take is to conduct a census of crewleaders working on tobacco farms (this will include the crews of local workers but also themigrant crews so that this information will feed into the initiative described above with the
Mexican affiliate of Save the Children). Until we collect this data, there is no real baseline todevelop any major project to address the risks highlighted in CU’s report. However one
potential approach that we will explore in consultation with other stakeholders (namely
Government entities and other companies) is the possibility to establish a process to train andcertify bona fide crew leaders, as exists in other countries.

Also in this case the FT’s will play a key role collecting the information and working with thefarmer to develop their awareness about both the potential problems of hiring through crewleaders, as well as the farmer’s responsibility to ensure there are no abuses. We will also
develop a complementary project to provide practical and positive living examples of how
farmers can best address the concerns raised by this practice. In a few selected farms, ideal
farms, we will work with the farmers to help them establish a robust process to manage andtrain their work force in line with the expectations set in the ALP Code, and to align all thefarms’ practices with the wider GAP program’s requirements. . Each FT will then schedulegroup visits for the farmers they supervise so they can see the improvements and hear about
the benefits from a fellow farmer.

Actions

Complete by

1. Reach out to other companies for common approach

November2013

2. Identification of crew leader/head of family (FT’s to do a census)

December
2013

3. FT’s to sensitize farmers and provide materials to reach crew leader/head offamilyOctober
2013 – May
2014

4. Request farmers to require crew leader to check/prove ages of workers

October201
3 – May57

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Actions

Complete by

2014
5. System to train and eventually certify “bona fide” crew leaders

July 2014 –May 2015

6. Enlarge the scope and outreach activities of CAEI’s, including a mapping of
coverage areas

December
2013 – May
2014

7. Prioritize changes in harvesting/curing practices (stalk cut)

October201
3 – May
2015

8. Unannounced visits throughout the season (farms with migrant families)

September2
013 – May2014

9. CAEI’s operation diagnosis and improvement action plan.

October
2013 – Dec.
2013

10. Ideal farm project

October201
3 – May2014

3.2 Income and Work Hours

As a result of the high rate of migration to the United States in search of better work
opportunities and better living conditions, there is great labor demand in the Mexican
countryside (also highlighted by CU during the assessment). There is a general scarcity ofagricultural workers and the cost of labor has risen to historic levels, reaching nearly threetimes the minimum salary in tobacco growing areas. Consequently, in all the activities related
to transplanting, harvesting and curing tobacco there is currently no work that is performed
for about or below the minimum salary.

Workers on a pay per Diem basis, only work a shift of six to seven hours, including one hour toeat, (starting very early in the morning until midday when the sun becomes too intense) andearn approximately two minimum daily wages.
On the other hand workers on a piece rate tend to generate even greater incomes thanworkers paid per diem, but they also work more hours. Generally, piece rate workers in
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tobacco are working in harvesting and stringing the tobacco for curing where, for example,
they can produce 25 to 30 strings of tobacco in an 8 hour work day, for a minimum of 250
pesos/day in the state of Nayarit, where the minimum salary is around 62 pesos/day.
Transparency on working conditions
As previously mentioned, a common practice in the agricultural sector is the contracting of
local workers through a crew leader or the head of a migrant family, which raises questions
about the transparency of payment to the crew members.
During the regular visits the FT’s will also help farmers to understand the benefits of keeping
these records, e.g. for ensuring an accurate cost of production (comparing it with the amountthat is financed by the company) 16 as well as keeping track of the costs and yield ratio. In thosecases where the farmer contracts through crew leaders, he will be responsible for passing theinformation and templates to the crew leaders and for ensuring its use. Even if the farmers do
not formally have a direct labor relationship with the workers on these crews, we will strive tocreate among the farmers a stronger sense of responsibility for every activity performed intheir farm.

16

Actions

Complete by

1. Reach out to other companies for common approach

November2013

2. Identification of crew leader/head of family (FT’s to do a census)

December
2013

3. FT’s to sensitize farmers and provide materials to reach crew leader/head offamilyOctober201
3 – May
2014

4. Request farmers to require crew leader to demonstrate payment (ie: by being
physically present or providing copy of payslip)

October201
3 – May
2014

5. Reward “transparent farms” (farmer/crew leader)–June 2014

6. System to train and eventually certify “bona fide” crew leaders

July 2014 –May 2015

This is very important because every season TADESA performs an evaluation of the cost of production versus the tobacco purchase price in order

to assess the expected farmer profit. With this TADESA wants to ensure that the financing provided to the farmer covers the basic monetary needs
throughout the season (including to cover worker’s salaries) and that at the end of the season our business partner will have an attractive profit, as
well as to have available money to invest on is farm.

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3.3 Fair Treatment / Forced Labor
The scarcity of agricultural workers has given workers greater bargaining power and is also
reflected in the treatment that they receive in the daily interactions with farmers. Typically if aworker is not comfortable with the treatment he receives from the part of the farmer, he willabandon his position without notice, knowing beforehand that there will be other farmers
interested in his services.
CU’s assessment did not identify any relevant finding within the scope of the principles dealing
with forced labor and fair treatment, and that seems to corroborate this hypothesis. On theother hand, the hiring through crew leaders was identified as a risk factor which should not beignored. As noted above, over the next season, we will be focused on taking steps to improvethe “transparency” of how crews operate in order to ensure that crew leaders are respecting
workers’ rights and offering the same conditions to workers that the farmer would offer had
he contracted them directly.
Community support project and grievance mechanism for workers

During April 2013, a pilot grievance mechanism program of was launched in Santiago, Nayarit.
It was done in collaboration with the NGO Fundación Origen S.C. (a national NGO specialized insupport lines), who was in charge of developing the project, making the toll-free hot line
number and services known amongst farmers and workers (distributing printed material
containing the necessary information of the services provided), and managing any incoming
requests through specialized personnel hired for this effect. Unfortunately, the results of thispilot did not meet our expectations. There was a very low level of adhesion which we believe
was due to several reasons:•

The project was implemented at the end of the harvest period and did not fully reach
the whole targeted population.

•

Workers seemed skeptical about the project.

•

Communication infrastructure was not accessible to the whole target population(distances, mobile coverage).

•

Field technicians were not actively involved in the pilot.

•

Farmers perceived the hotline as a suspicion upon them

The support line will continue functioning for the rest of the year but for the next crop season
we intend to broaden the scope of the line’s services and to complement it with community
based work. From a focus solely on farmer-worker grievances to a comprehensive community
project starting with a FT’s sensitization workshop and then providing labor and social services
for farmers, workers, crew leaders, and migrant families. We will continue to work with
Fundación Origen who will establish a regular presence of their personnel in the tobacco
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growing communities, developing trust amongst the target audience by providing added value
services to the community. Amongst the services that are currently being developed wehighlight:•

Financial counseling for farmers and workers on how to manage their incomesand maximize the benefits of their work.

•

Personal development workshops and professional training for farmers andworkers (including literacy classes, nutrition, education, emotional health for
women and their families, etc.)•

Alternative income generating activities for families in financial stress or for
migrant families relying solely on the head of the household work in tobacco.

This project will start in Santiago (Nayarit area) but we envision its extension to Jala (also in
Nayarit) and Platón Sánchez (Veracruz).

Actions

Complete by

1. Reinforce FT’s awareness, proximity and effectivenessAugust 2013 –May 2015

2. Build on current help-line experience and increase contact with crewleaders/workers

December
2013 – May
2014

3. Invest on outreach activities (to better understand target audience) andadditional services to create trust with both farmers, crew leaders/head of family
and workers (potential impact/usefulness for dealing with issues under otherprinciples)

December
2013 – May
2015

3.4 Safe Work Environment
Agricultural practices and traditions in small holder farms in Mexico have been transmitted
from generation to generation with little to no innovation and keeping a generally low level ofsophistication and professionalism. PMM’s efforts to improve health and safety conditions oncontracted farms started with the Good Agricultural Practices (GAP) program and while wehave seen much progress much still remains to be done, particular with regards ensuring thatknowledge and best practices on topics like Green Tobacco Sickness (GTS) and Crop Protection
Agents (CPA) protection indeed reach the workers and not just the farmers.
Some of the barriers we face have to do with farmers and workers knowledge, perception ofrisk and the willingness to adopt simple safety practices (e.g. use of protective equipment
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when applying CPA, basic measures to avoid GTS, etc.) so as to avoid hazards, but otherbarriers are related with structural problems common across all agricultural sectors in Mexico:••••

Age and conditions of the existing farm infrastructure;
Farmers lack of financial capacity to invest and improve the productive
infrastructure, including housing for the temporary migrant workforce;
No access to land ownership for many farmers
Low education levels

Whilst PMM is committed to strengthen its programs and initiatives to improve healthand safety conditions these are challenges that we cannot address alone and require theinvolvement of other stakeholders. For the next season our focus will be to address
those risks and activities that may involve potential harm to the health and physical ormental integrity of farmers, workers and families living on the farm.

Safety as a working culture

The majority of our FT’s area agronomy engineers who during their time at university received
only general training relative to the general risks that are present on a farm (given byagronomy teachers and not by safety experts). They have thus a limited ability to identify risks
and hazards on the farm and to engage with farmers and workers on discussions about safety
topics. For this reason, the Country Team decided to work together PMM’s Environmental,
Health and Safety (EHS) experts (whose normal remit is limited to PMM’s facilities). In a firststep our EHS colleagues will conduct an assessment of the current conditions on the farms(also to develop their knowledge about the farm’s reality) with a view to develop a specifictechnical training for FT’s. This training will be included as a separate section of the training forthe implementation of the second phase of the program and will prepare FT’s to conduct risk
assessments during their regular farm visits. Moreover our EHS colleagues will analyze theexisting personal protection equipment (PPE) on the farms to identify potential additional
requirements, both in terms of quantity but also to devise strategies to improve farmers andworkers adhesion to its use.
Moreover, we will work with the relevant authorities to provide farmers specialized training on
CPA application and explore the possibility of farmer’s using a specialized third party for doing
CPA application on their farms. We will also create a monetary incentive for the farmers thatcomply with the following 3 requirements: no child labor, use of PPE and CPA locked storage.
This incentive will be called ALP Bonus and as the farm conditions improve with time, therequirements will also be adapted to the most relevant issues to address at that moment.
According to PMI’s best practices, these kinds of bonus policies have to be reviewed yearly
and, depending on the market conditions and implementation results.
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Actions

Complete by

1. Short term - Involve EHS in assessing the most practical, cost effective andimmediate measures to implement (harnesses, platforms) – work in heights

December2013– May 2014

2. Long term - safe barn designs, link maintenance investments with safety plans

July 2014 – TBD

3. Work with EHS to improve FT’s capacity to help farmers to identify risks/hazards
in the farm and develop tailored improvement plans

October 2013

4. Provide movable safe lock boxes to all farms

July 2013 –December 2013

5. Short term – Farmers and migrant families awareness of re-entry periods(including signage of CPA application)

October 2013 –May 2014

6. Group meetings with farmers that “share” same migrant families to identify moresuitable locations

December 2013
– May 2014

7. Long term – create a multi-stakeholder forum (Government, other industry
players, indigenous community organizations, etc.) to find permanent solution toaccommodation

January 2014 –TBD

8. Short term –Official specialized training on CPA application for FT’s and farmers

August 2013 –May 2014

9. Short term – Ensure GTS/CPA knowledge and protective gear is reaching workers

October 2013 –May 2014

10. Washing water sensitization

October 2013 –May 2014

11. Long term – Explore the possibility of third party service for CPA application

August 2014 –May 2015

12. Link PPE use to bonus

August 2013

3.5 Freedom of Association

CU identified no particular issues in relation with this principle.
In the state Nayarit, the Asociación Rural de Interés Colectivo (ARIC 17) represents the state
tobacco farmers, while in the case of Veracruz and Chiapas there is currently no organizationthat represents the interests of farmers.

17

ARIC is the association that represents the tobacco farmers of the state of Nayarit

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We are not aware of the existence of a union or association that represents the workers incollective bargaining of their working conditions with the farmers. However, the majority of
the workers we have interviewed throughout the season consider that they are empowered to
conduct their labor negotiations individually (see discussion above about labor scarcity andworkers income) thus do not perceive any need to join together to form some type of
association to represent them.
3.6 Compliance with the law

The issues raised by CU with regards this principle are a reflection of the level of informality of
the Mexican agricultural sector, where agreements between farmers and workers are verbal
and their arrangements follow the traditions but not necessarily the requirements establishedby the local law.
Nonetheless, we believe that the action plans already described under the previous sections of
this document will make a significant contribution to establish clearer relations between
workers and farmers and introduced a level of formality that is non-existent today.
Furthermore, to improve FT’s ability to advise farmers and workers regarding doubts orquestions about their legal rights PMM’s Law Department will include a specific section on thisprinciple in next season’s training and will prepare specific communication materials forfarmers and workers about rights and obligations..

Actions

Complete by

1. Distribute communication materials to workers

October 2013
– May 2014

2. FT’s to sensitize farmers and provide materials to reach crew leader/head offamily/workers

October
2013 – May2014

3. FT’s training by Legal department

August 2013

4. Distribute communication materials to farmers

October
2013 – May2014

5. FT’s to sensitize farmers

October
2013 – May
2014

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4 Conclusion
While CU’s assessment clearly highlights the good work done by our team during the ALP
Phase 1 implementation, the assessment of the current farm level reality is a soberingreminder of the challenges that still lay ahead for our team. This document describes theCountry Team’s commitment and main priorities for the coming years leveraging on thelearnings from the Phase 1 implementation, PMM’s experience over the years, as well as theinsights provided by CU’s farm level assessment, which will provide our baseline going
forward.
We believe our greatest strengths are the unconditional support of PMM’s Senior
Management Team, the excellent internal communication between the ALP Country Team andthe great commitment from our agronomy people. We feel confident that the plans laid out inthis document will bring about significant improvements in the working and living conditions in
Mexico’s tobacco growing, which will extend far beyond PMM’s supply chain.

Appendix A – New Internal Structure

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Appendix B – Farm Monitoring Form
Fa rmer ID

Productor

TRABAJO INFANTIL

Empleo de niños menores de 18 años

Niños mayores de 13 años ayudando en laparcela familiar

Trabajos peligrosos

Riesgos identificados:

Fecha
DetallesPrompt action

Fecha
DetallesPrompt action

Fecha
DetallesPrompt action

Observaciones e
información de soporte

Fecha

Fecha

Fecha

Plan de acción yseguimiento

Folio prompt action
Cumple con el estandarSN

No estoy seguro

SN

No estoy seguro

SN

No estoy seguro

Fecha de visita
Comentarios adicionales

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Appendix 2. ALP Code

ALP Code Principle 1: Child labor
There shall be no child labor.
Measurable Standards:
1) There is no employment or recruitment of child labor. The minimum age foradmission to work is not less than the age for the completion of compulsory
schooling and, in any case, is not less than 15 years or the minimum age
provided by the country’s laws, whichever affords greater protection. 182) No person below 18 is involved in any type of hazardous work.
3) In the case of family farms, a child may only help on his or her family’s farm
provided that the work is light work and the child is between 13 and 15 19
years or above the minimum age for light work as defined by the country’slaws, whichever affords greater protection.
ALP Code Principle 2: Income and work hours
Income earned during a pay period or growing season shall always be enough tomeet workers’ basic needs and shall be of a sufficient level to enable the generationof discretionary income. Workers shall not work excessive or illegal work hours.
Measurable Standards:

1) Wages of all workers (including for temporary, piece rate, seasonal, andmigrant workers) meet, at a minimum, national legal standards oragricultural benchmark standards.

2) Wages of all workers are paid regularly, at a minimum, in accordance withthe country’s laws.

18

As an exception, pursuant to ILO Convention 138, developing countries may under certain circumstances specify a minimum ageof 14 years.
19
The same ILO convention 138 allows developing countries to substitute “between the ages 12 and 14 in place of “between theages 13 and 15”.

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3) Work hours are in compliance with the country’s laws. Excluding overtime,
work hours do not exceed, on a regular basis, 48 hours per week.

4) Overtime work hours are voluntary.
5) Overtime wages are paid at a premium as required by the country’s laws orby any applicable collective agreement.

6) All workers are provided with the benefits, holidays, and leave to which they
are entitled by the country’s laws.
ALP Code Principle 3: Fair treatment
Farmers shall ensure fair treatment of workers.

There shall be no harassment,

discrimination, physical or mental punishment, or any other forms of abuse.
Measurable Standards:
1) There is no physical abuse, threat of physical abuse, or physical contact with
the intent to injure or intimidate.
2) There is no sexual abuse or harassment.
3) There is no verbal abuse or harassment.
4) There is no discrimination on the basis of race, color, caste, gender, religion,
political affiliation, union membership, status as a worker representative,
ethnicity, pregnancy, social origin, disability, sexual orientation, citizenship,or nationality.
5) Workers have access to a fair, transparent and anonymous grievancemechanism.

ALP Code Principle 4: Forced labor
All farm labor must be voluntary. There shall be no forced labor.
Measurable Standards:

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1) Workers do not work under bond, debt or threat and must receive wages
directly from the employer.
2) Workers are free to leave their employment at any time with reasonable
notice.
3) Workers are not required to make financial deposits with employers.
4) Wages or income from crops and work done are not withheld beyond thelegal and agreed payment conditions.
5) Farmers do not retain the original identity documents of any worker.
6) The farmer does not employ prison or compulsory labor.

ALP Code Principle 5: Safe work environment
Farmers shall provide a safe work environment to prevent accidents and injury andto minimize health risks. Accommodation, where provided, shall be clean, safe andmeet the basic needs of the workers.
Measurable Standards:
1) The farmer provides a safe and sanitary working environment, and takes all
reasonable measures to prevent accidents, injury and exposure to healthrisks.
2) No worker is permitted to top or harvest tobacco, or to load barns unlessthey have been trained on avoidance of green tobacco sickness.
3) No worker is permitted to use, handle or apply crop protection agents (CPA)or other hazardous substances such as fertilizers, without having firstreceived adequate training and without using the required personal
protection equipment. Persons under the age of 18, pregnant women, andnursing mothers must not handle or apply CPA.
4) Workers do not enter a field where CPA have been applied unless and until it
is safe to do so.

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5) Workers have access to clean drinking and washing water close to where
they work and live.
6) Accommodation, where provided, is clean, safe, meets the basic needs ofworkers, and conforms to the country’s laws.

ALP Code Principle 6: Freedom of association
Farmers shall recognize and respect workers’ rights to freedom of association andto bargain collectively.
Measurable Standards:
1) The farmer does not interfere with workers’ right to freedom of association.
2) Workers are free to join or form organizations and unions of their own
choosing and to bargain collectively.
3) Worker representatives are not discriminated against and have access tocarry out their representative functions in the workplace.

ALP Code Principle 7: Compliance with the law
Farmers shall comply with all laws of their country relating to employment.
Measurable Standards:
1) All workers are informed of their legal rights and the conditions of theiremployment when they start to work.
2) Farmers and workers have entered into written employment contracts whenrequired by a country’s laws and workers receive a copy of the contract.
3) Terms and conditions of employment contracts do not contravene thecountry’s laws.

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