EXTERNAL ASSESSMENT
PT. SADHANAWONOGIRI AND REMBANG REGIONS IN INDONESIA

Agricultural Labor Practices Program

October 2022

External Assessment

Table of Content
Glossary of terms and acronyms. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4Executive summary. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 51. ALP Program background and assessment overview .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10
1.1. Training and knowledge on the ALP Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.2. Scope and methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2. Management Assessment. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 15
2.1. Pre-contractual due diligence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.2. Consequence Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.3. Monitoring System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4. Prompt Action System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.5. Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.5.1. Farmers Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.5.2. Farmers’ Spouses Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.5.3. Farmers’ Children Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5.4. Calendar Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5.5. Communication via digital platform – My Tani app. . . . . . . . . . . . . . . . . . . . . . . . 20
2.5.6. PPE Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3. Findings per KPI. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22
3.1. Child Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.1. Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.2. CU Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.3. Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.4. Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1.5. Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2. Minimum Wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2.1. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2.2. CU Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2.3. Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.2.4. Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.2.5. Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

External Assessment

3.3. Worker Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3.1. Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3.2. CU Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3.3. Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3.4. Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3.5. Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4. Personal Protective Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4.1. Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4.2. CU Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.4.3. Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.4.4. Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4. Findings on ALP Measurable Standards.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28
4.1. ALP Code Principle 1: Child Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.2. ALP Code Principle 2: Income and Work Hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3. ALP Code Principle 3: Fair Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.4. ALP Code Principle 4: Forced Labor and Human Trafficking. . . . . . . . . . . . . . . . . . . . . . 30
4.5. ALP Code Principle 5: Safe Work Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.5.1. Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.6. ALP Code Principle 6: Freedom of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.7. ALP Code Principle 7: Terms of Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5. Appendices.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
Appendix I – Sadhana´s Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Appendix II – ALP Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Appendix III – Summary of the Legal Information Questionnaire. . . . . . . . . . . . . . . . . . . . . . 45
Appendix IV – Scope and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Appendix V – Overview of Farms Visited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

External Assessment

Glossary of terms and acronyms
ALP

Agricultural Labor Practices

ALP Code

PMI’s Agricultural Labor Practices Code

ALP Code Principle

Short statements that set expectations on how farmers should manage
labor on their farms, in seven focus areas

ALP Program

Agricultural Labor Practices ProgramBP

Regional acronym for Sanitation Team

CPA

Crop Protection Agents

Family farm

A farm that depends mainly on family members for the production of
tobaccoFarm Profiles

A data collecting tool developed by PMI with Verité to track thesocio-economic status of the farms, systematically gather detailed
information about, among other things, the type of labor employed,
and farming activities that minors may be involved in

GAP

Good Agricultural Practices

GTS

Green Tobacco Sickness

ILO

International Labour Organization

ITS

Institut Teknologi Sepuluh Nopember

KPI

Key Performance Indicators

Leaf tobacco supplierCompany that has a contract with PMI to supply tobacco but is not a
farmerMigrant labor

Labor that comes from outside the farm’s immediate area. Migrantlabor can come from a neighboring region in the same country, or froma different country

Measurable Standard

A Measurable Standard defines a good labor practice on a tobacco farmand helps determine to what extent the labor conditions and practices
on a tobacco farm are in line with each of the ALP Code principles

NGO

Non-Governmental OrganizationOC

PMI Operations Center (Lausanne, Switzerland)

PMI

Philip Morris International, Inc. or any of its direct or indirect
subsidiaries

PPE

Personal Protective Equipment

Prompt Action

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

REI

Restricted Entry Interval

SADIS

Sadhana Agriculture Database Information System

STP

Sustainable Tobacco Production

Support mechanism

A way for workers to access information and get support in difficult
situations, and, for workers and farmers to get support in mediating
disputes. Farmers have access to additional services to improve theirlabor and business practices.

4

EXECUTIVE SUMMARY

EXTERNAL ASSESSMENT
Pt. Sadhana Wonogiri and Rembang Regions in Indonesia

External Assessment

Philip Morris International (PMI) is committed toeliminating child labor and other labor abuses andto achieving safe and fair working conditions on
all farms from which they source tobacco. In linewith this commitment, in July 2022 PMI requested
Control Union to conduct a Focused assessment of
the Sun-Cured Tobacco growing operations of its
supplier PT Sadhana in the Wonogiri and Rembang
regions of Central Java, Indonesia. The assessment
was aimed at evaluating the labor practices on
tobacco farms contracted by Sadhana and whether
these were meeting the standards of the Agricultural
Labor Practices (ALP) Code, 1 focusing on theimplementation of PMI’s Step-Change-Approach. 2
Control Union (CU) also evaluated Sadhana’s
internal structure and systems for implementing thisapproach, their understanding of farm practices,and how issues were being identified, recorded, andaddressed.
As part of this assessment CU interviewed sevenof Sadhana´s management employees and 23
field personnel (field technicians and sanitationteam staff). Over a four-week period, CU visited
88 farms 3 and interviewed 88 farmers and 40
family members in total. Most of these farms were
small-scale family farms, growing one hectare of
tobacco on average. Information triangulation
was adopted to evaluate farm practices. The threesources included interviews, documentation, andobservation, together with a “Five Why’s” problem
analysis. The “Plan, Do, Check, Act” cycle was used
to analyze Sadhana’s management approach.
At the time of the assessment, no external workers
were present at the farms as it was an unusual
period for farmers to hire labor for tobacco-related

1.

2.

3.
4.

activities but rather exchange labor activities
amongst themselves. Additionally, the 2022 crop
experienced bad weather conditions, resulting in alesser amount of tobacco leaves to be harvested in
the fields, leading to a decrease in the labor hired forthe season, which was reflected in the assessment.
The majority of farm visits were unannounced, with
only five being announced on the day of the visit.
Most farmers stated to be expecting an external
assessment as it had been planned prior to the
COVID pandemic and had already been postponed
twice. However, due to the assessment occurring
during an unusual season where workers were thefarmers themselves and the pandemic-induced
rescheduling, CU´s process to identify labor-related
issues during ALP assessments was affected.
1. Sadhana´s systems implementation
Sadhana had implemented the ALP program since2014 and more recently had adopted PMI´s StepChange approach, focusing its efforts on two of
the four key performance indicators (KPIs): Child
Labor, and Personal Protective Equipment, as they
were identified as a high priority. Sadhana had foursystems in place to achieve these KPIs:• Pre-contractual due diligence checks wereconducted at the beginning of each crop season
to assess whether farmers were eligible for acontract and communicated on the four key
performance indicators (KPI’) that become partof the check parameters along the season.
This check was done for all new and previously
contracted farmers and included two questions
related to the global KPIs 4: (1) are children below
18 involved in hazardous work (if so, no contract),

The main goal of the ALP Code is to eliminate child labor and other labor abuses where they are found, and toachieve safe and fair working conditions on all farms from which PMI sources tobacco. For more information on
the background of the ALP Program see https://www.pmi.com/sustainability/good-agriculturalpractices/upholdinglabor-rights-on-the-farms
The Step-Change-Approach is an implementation strategy initiated by PMI in 2018 in specific markets to address
the root causes of the main recurrent issues, in order to establish long-term sustainable solutions. The approach
focuses on four key performance indicators (KPIs) related to the ALP Code: Child Labor, Minimum Wage, Worker
Accommodations, and Personal Protective Equipment.
See Appendix IV for explanation of the sample size.
The four key performance indicators (KPIs) are: KPI 1 Child Labor; KPI 2 Minimum Wage; KPI 3 Accommodation;
KPI 4 Personal Protective Equipment
6External Assessmentand (2) does the farmer hire external workers(if so, additional checks needed throughout
the season). For the current crop season, there
are four farmers in Wonogiri and two farmers
in Rembang that did not have their contracts
renewed.
• Farm monitoring: Each year, Sadhana monitoredaround 30% of its entire farmer base, mainly
focusing on compliance and progress on two KPIs
(Child Labor and Personal Protective Equipment).
The selected farms were monitored at least
twice during the crop season to check whether
the farms were meeting the standards. Data wascollected digitally with the use of tablets, using a
dedicated application called “Sadhana Agriculture
Database Information System” (SADIS). Sadhana
also had a data validation process in place toensure completeness and accuracy of datacollected by the field technicians and sanitationteam.
• Prompt Action reporting was linked to themonitoring system. Field technicians andsanitation team personnel had to raise a
Prompt action if they observed an issue which
is classified as a Prompt Action according torelevant guideline. An action plan was agreed
with the farmer in question and follow-up visitswere made to check whether the issue wassolved before closing the case. However, root
causes and action plans were not recorded in
the system.
• Consequence
management:
Sadhana’s
consequence management was linked to its
Prompt Action system. If, at the end of theseason, farmers had a Prompt Action related
to Child Labor, Sadhana evaluates the overall
farmers performance and may not renew theircontract for the next crop year.

2. CU´s findings on the KPIs
KPI 1 – Child Labor: Sadhana has implemented
PMI´s global KPI for Child Labor and collected data
through monitoring and Prompt Action reporting to
track progress on this target. CU found that thesesystems had extensive processes and proceduresin place, and that awareness on minimum age
requirements and hazardous work was high among
the field personnel. In both Wonogiri and Rembang,
CU found no evidence of child labor on the farms
assessed. Sadhana had five initiatives to target
child labor, which included providing informationand trainings to farmers, spouses, and children to
reinforce awareness of the minimum working age.
One of the initiatives also encouraged farmers
to use tools and machines to optimize work andeliminate the chances of having children involved
in tobacco-related activities. As CU did not findany children present on the farms, only the level ofawareness on the initiatives was verified.
KPI 2 – Minimum Wage Sadhana’s approach tomonitoring this global KPI internally involved
relying on a third party, specifically the Institut
Teknologi Sepuluh Nopember (ITS), to identify any
risks associated with minimum wage. Surveys by
ITS are conducted annually upon request. By thetime the Control Union assessment was in place,the report for 2022 results were not yet available.
According to Indonesian law, wages in the
agriculture or informal sector could be determinedthrough community arrangements and agreements
between farmers and employees. In most cases, theworkers themselves are the farmers.
Post assessment, it was notified that the minimum
remuneration standard followed by Sadhana isbased on government regulation no.36, which
stipulates that remuneration in micro-enterprises
should be at least 25% above the poverty line and
50% of average expenditure. The assessment datashows that all farmers who hired workers were
paying above the minimum remuneration set by thisregulation.
At the time Sadhana had no initiatives related tocommunication or training to address the global KPIof minimum wage, as it was not a risk identified by
the third-party assessment from ITS.

7

External Assessment

SD Comment:“The wages agreed to, at the community level, aretypically determined with consideration given to
the difficulty of the work to be performed and assuch, heavy work (e.g., heavy lifting) has greater
remuneration than light work. Furthermore, theminimum wage recommendation by Omnibus law islower than farmers’ actual payment. Based on this,SAD made the decision to not communicate the
Omnibus minimum wage to farmers, as they wereconcerned this would encourage farmers to decrease
current levels of payment. PTS did however engage
a third party to conduct monitoring on whether
farmers were paying minimum wage and used this as
the basis of their minimum wage reporting.”

KPI 3 – Worker Accommodation: Sadhana had not
adopted this KPI because it had been establishedthat farmers only hired local workers, who did notneed accommodation. This information was verified
periodically, both by Sadhana and a third-party. CU
found this KPI not applicable for this assessment.
KPI 4 – Personal Protective Equipment (PPE):
Sadhana had adopted PMI’s global KPI for PPE
and made use of monitoring, Prompt Actions andone initiative to achieve this target. CU foundthat Sadhana’s efforts on this KPI focused on
improving PPE availability, and that all farmers in
Wonogiri and Rembang had received PPE kits.
However, there were two unsolved Prompt Actions
on incomplete PPE usage, and CU observed five
additional Prompt Action situations during its farm
visits that had not been captured by Sadhana. In the
Prompt Action cases related to incorrect PPE use
for GTS, the farmers were handling green tobacco
without wearing gloves and long sleeves. In two ofthese cases, the farmers did not know what GTS
or nicotine intoxication was or how to avoid it andin the other three cases, although the farmers did
know about GTS, they were not using the correct
PPE even though it was available on their respective
farms.

5.

The company´s initiative to distribute and promote
PPE usage were not based on specific root cause
analysis but sustained by previous farmer feedbackon the improvement of the equipment material.
CU’s farm findings indicate that the intended aims
and outcomes of this initiative were only partly
achieved, since many farmers still did not use thecomplete set provided and complained about thetype and material of the equipment.
Regarding the Prompt Actions raised on incorrect
CPA storage, two cases were observed on farms
in Wonogiri, where CPA containers were found allover the farm and being repurposed for other farm
activities. In Rembang, CU found one farm where
empty, unpunctured CPA containers were lying
around the farm and the CPA box was not being
used; two farms where full CPA containers wereleft unattended in the field; and two farms where
the CPA box was within reach of children and notproperly closed with a lock.

SD Comment:“Sadhana appreciates the need for comprehensive
PPE program, however we need to accept that it will
be a long road ahead to achieve> 95% acceptanceand adherence, as such Sadhana will continue toprovide focus in this area.”

3. CU´s main findings on ALP requirements
Principle 2: Income and Work hours: Among thefarmers visited by CU, 26 (65%) farmers in Wonogiri
and 29 (60%) farmers in Rembang did not know the
wage agreed within their regions. While Indonesianlaw 5 does not prescribe a minimum wage andpermits local payment agreements, Sadhana has
not communicated a particular benchmark for
local wages and therefore did not monitor farmers’
compliance with local wage agreements on theirown monitoring system, since those terms are
accepted by Indonesian law.

See Appendix II for legal information
8

External Assessment

SD Comment:

implemented the Support Mechanism program,“It needs to be understood that the local agreements

engaging local university for five areas to establish

pertaining to the agreed wages not only impact

a formal grievance mechanism among the farmer

tobacco but are relevant to all crops. In the tobacco

community. After the fourth year of implementation,

growing areas, typically the farmers are able to growthe result shows that farmers are more comfortable totwo or more crops a year and during the tobacco

raise their issue to the elderly in the village (including

growing period/season less than 50% of the available

village head and religious leader) or directly solve it

arable land is used to grow tobacco. Sadhanawith the conflicted parties amicably.”

monitors

minimum

wage

thoughassessments

conducted by a third party.”

Sadhana does not directly monitor this global KPIinternally, but rather rely on assessments by a third
parties to identify any risks regarding this topic.
In addition, 20 (50%) farmers in Wonogiri and 18(38%) farmers in Rembang did not know the amountof legal working hours. Based on farmer interviews,
CU found that a common underlying reason was
farmers’ unawareness of the legal requirements.
SD Comment:“In order to increase awareness besides publishing
Regional Minimum Wages and work hours in the
farmer handbook, going forward, Sadhana will also

Principle 5: Safe Work Environment: On nine(23%) farms in Wonogiri and 20 (42%) farms in
Rembang, farmers did not know how to avoid
GTS. Moreover, in both regions, 3 (8%) of farmers
did not use any type of protection (PPE) forhandling wet green tobacco. This was partly due tounawareness and partly due to the discomfort ofwearing the required PPE during long hours in hightemperatures. Furthermore, CU identified the lackof safety measures to prevent accidents, injuries,and exposure to health risks; such as flagging theareas where CPA was applied, removing sharp tools
and other CPA containers that were not being usedfrom being spread around the field and not on theproper CPA box; on 21 (53%) farms in Wonogiri andnine (19%) farms in Rembang.

include in the Sadhana farmer app.”
SD Comment:

Principle 3: Fair Treatment: None of the farmers
and family members interviewed by CU were able
to identify a grievance mechanism for workers,
provided by Sadhana or any third-party organization.
Issues between farmers and workers were mediatedby the local authorities and village leaders, but thispractice does not meet the PMI ALP requirementof access to a fair, transparent, and anonymous
grievance mechanism.

“Typically, in Sadhana´s engagement with thefarmer´s communities, the term GTS is referred to as‘nicotine absorption’ as it is more easily understood/
comprehended by the farmers. The challenge
remains to establish better understanding as towhich are the levels of nicotine absorption during
the different stages of the crop growth and handlingof tobacco. Farmers that smoke have an even greaterdifficulty to understand GTS or the concern aroundthe nicotine absorption.”

SD Comment:“Indonesia Law and Culture recognizes fair andtransparent mechanism to raise the labor issue within
the community but not necessarily anonymous asprescribed in PMI ALP requirement. Indonesian
Law requires every submission of a complaint tobe accompanied by identification and evidence tobe valid. In 2016, SAD in collaboration with PMI

4. Feedback and follow up
The outcome of this assessment can be used asa tool to facilitate management with continuous
improvement.
CU
acknowledges
Sadhana´scommitment to addressing the issues identified
and defining areas of improvement through theimplementation of an action plan.
9

Chapter 1

ALP PROGRAM BACKGROUND
AND ASSESSMENT OVERVIEW

EXTERNAL ASSESSMENT
Pt. Sadhana Wonogiri and Rembang Regions in Indonesia

External Assessment

In 2011, Philip Morris International Inc (PMI) 6
developed and launched a global Agricultural
Labor Practices (ALP) program with the objective
to eliminate child labor and other types of laborabuses where they are identified and to achievesafe and fair working conditions on tobacco farms.
This code is based on the labor standards of theInternational Labour Organization (ILO), Declaration
on Fundamental Principles and Rights at Work, andother relevant ILO conventions.
The ALP program applies to all tobacco farms withwhich PMI or PMI´s leaf tobacco suppliers havecontracts to grow tobacco for PMI, and consists offour main components:
1. The Agricultural Labor Practices Code, which
establishes clear standards for all tobacco farms
supplying tobacco to PMI;
2. Training program for all PMI and leaf tobacco
supplier´s staff who are directly involved
with tobacco growing; in particular, the fieldtechnicians that conduct regular visits to thefarms;

implementation, internal reviews are also being
performed to assess progress and challenges in the
program’s implementation. Thirdparty assessments
are periodic reviews undertaken by CU to assess
PMI leaf tobacco suppliers and tobacco farms
worldwide. In this stage of implementing the ALP
Program, these third-party assessments focus on
the ALP Program implementation by PMI affiliates
and suppliers and evaluate the current status offarm labor practices and risk areas. They specificallyassess each leaf tobacco supplier´s progress in
implementing the ALP Code framed against thestrategic objectives set by PMI. The ALP Codecontains seven principles 7:

1. Child Labor

There shall be no child labor.
2. Income and Work Hours

Income earned during a pay period or

3. Multi-layered internal and external monitoring
system; andgrowing season shall always be enough

4. Involvement of key stakeholders, bothgovernmental and non-governmental (NGO),
in improving labor practices and enhancing the
livelihoods of tobacco growing communities.

be of a sufficient level to enable theto meet workers´ basic needs and shallgeneration of discretionary income.
Workers shall not work excessive orillegal work hours.

The ALP Program was developed and is being
implemented in partnership with Verité, a global
social compliance and labor rights NGO. Control
Union Certifications (CU) was commissioned by
PMI to develop the external monitoring componentof the ALP Program, and work in tandem with Verité
to assess PMI leaf tobacco suppliers and tobacco
farms worldwide. All PMI leaf tobacco suppliers
submit internal, annual reports and are regularly
assessed on their performance. For the ALP Program

6.
7.

3. Fair Treatment

Farmers shall ensure fair treatment ofworkers. There shall be no harassment,
discrimination, physical or mental
punishment, or any other forms of abuse.

For the purposes of this report, “PMI” means Philip Morris International, Inc. or any of its direct or indirect
subsidiaries.
The full ALP Code and its standards are presented in Appendix I.
11

External Assessment

4. Forced Labor and Human Trafficking

All farm labor must be voluntary.
There shall be no forced labor.
5. Safe Work Environment

Farmers shall provide a safe work
environment to prevent accidents andinjury and to minimize health risks.
Accommodation, where provided, shall beclean, safe and meet the basic needs ofthe workers.
6. Freedom of Association

Farmers shall recognize and respect
workers´ rights to freedom of
association and to bargain collectively.
7. Terms of Employment

Farmers shall comply with all laws of
their country relating to employment.
In 2018, PMI initiated a “step change” approach
to solve the root causes of the most prevalent andpersistent issues in their supply chain structure
over the years. As a result, the monitoring of ALP
has focused on these step change areas, also known
as key performance indicators (KPI´s):• KPI 1. Child Labor

1.1. Training and knowledge on the ALP
Program
Sadhana’s ALP Team (ALP Advisor and ALP reporting
personnel) received regular trainings and guidanceon ALP from PMI. In turn, Sadhana provided trainings
sessions on the ALP principles and related topics
every year to all its field technicians and sanitation
teams, both at the beginning of the year (in February)
and before re-contracting the farmers (in July). (AtSadhana, the field technicians were responsible foragronomic matters and the sanitation team were
responsible for monitoring all ALP-related matters,
including initiatives and trainings).
In both Wonogiri and Rembang, CU found that
Sadhana’s management level employees generally
had sufficient understanding of the ALP Code.
However, their knowledge on the Principles ofIncome and Work Hours and Terms of Employment
was limited, as these topics were not monitored intheir own system on the routine field visits by FT´s
and sanitation team, but monitored by ITS - a third
party, instead. In addition, their understanding of
the meaning of Prompt Actions, another important
aspect of the ALP Program, was also found to beincomplete. The ALP Team correctly considered
Prompt Actions to be any situation in which thephysical or mental well-being of workers, children,
or a vulnerable group (pregnant women and elderly
people) might be at risk, which would have to be
stopped immediately. However, because the main
focus of Sadhana’s monitoring system was on
Child Labor and Safe Work Environment, Prompt
Actions related to the other ALP Principles were notremembered or mentioned. In particular, Prompt
Action issues regarding workers’ income and work
hours; were not mentioned as it is expected that
local authorities and/or leaders from Sadhana’s
regional tobacco farmer groups would handle thosesituations.

• KPI 2. Minimum Wage
• KPI 3. Accommodation

SD Comment:• KPI 4. Personal Protective Equipment (PPE)“Minimum wage principle monitored by third party
annually. During CU visit, the 2022CY monitoring
were ongoing, thus the report was not available yet.”12External Assessment

During weekly meetings, held at each regional
station (Wonogiri and Rembang), the area
coordinators and supervisors discussed specifictopics and issues raised in relation to the ALP Codewith the field technicians and sanitation team.
The sanitation team were responsible for monitoringall ALP-related matters, including initiatives andtrainings, while Field technicians take responsibility
on technical agricultural matters and its respective
monitoring process.
CU’s assessment of the knowledge of Sadhana’s
field personnel (field technicians 8 and sanitationteam members 9) of the ALP Code Principles:• Child labor: All field personnel interviewed were
aware of the legal minimum age for working inIndonesia. However, three (13%) were not able
to describe the age categories for which lightwork is allowed. Additionally, only four (17%)
could clearly explain, and provide examples of,the concept of hazardous activities.
• Income and Work Hours: This ALP Code Principle
was not well understood by the field personnel.
Only 12 (52%) could recall the regionally agreed
salary for agricultural workers, while 17 (74%)
did not know the maximum regular daily work
hours, and none could provide the correct
answer regarding the overtime rate.
• Fair Treatment: All field personnel provided agood explanation of this ALP Code Principle,
i.e. that workers should be treated fairly andwithout discrimination. However, none of themmentioned that farmers must make themselves
available to workers who want to discuss
potential grievances; rather, they declared thatissues and complaints related to this topic must
be dealt with by the local leaders.
• Forced Labor: All field personnel were awareof this ALP Code Principle and could givevalid examples for risks of forced labor, suchas retaining workers’ identity documents anddelaying payments.

8.
9.

• Safe Work Environment: Field personnel
generally had a good understanding of therequired safety measures on tobacco farms,
such as the use of PPE for CPA application andhandling wet green tobacco, and the correct
procedures for CPA storage and recycling ofempty containers. However, none of them
could inform the correct re-entry period after
CPA application; give examples of measures
to prevent accidents, injuries, and exposure to
health risks; or mentioned the need to provide
access to clean drinking and washing water.
• Freedom of Association: All field personnel had
an adequate understanding of this ALP CodePrinciple.
• Terms of Employment: All field personnel
correctly understood this ALP Code Principle
as the farmers’ obligation to comply with allapplicable laws. Although all interviewees knewthat Indonesian law does not require written
contracts, none of them could list the legal topics
that farmers should communicate with workers
when they enter into a verbal agreement.
It was not possible for CU to establish whether the
ALP knowledge of field technicians and sanitationteam members had improved as there were no
evaluation records available of the trainings
provided.

1.2. Scope and methodology
Between August and September of 2022, CU
conducted a focused assessment of Sadhana’s Suncured tobacco growing operations in the regionsof Wonogiri and Rembang on Central Java. As partof this assessment, CU visited Sadhana’s officein Surabaya to interview Sadhana’s management
personnel responsible for ALP Program coordinationand implementation, and conducted farm visits in
the regions of Wonogiri and Rembang.

CU interviewed eighteen field technicians (eight in Wonogiri and ten in Rembang)
CU interviewed five sanitation (BP) team personnel (three in Wonogiri and two in Rembang). The percentages in theassessment above refer to the total number (18+5=23) of interviewed field personnel
13External Assessment

The management interviews were conducted on 23
and 24 August 2022 and involved four management
personnel, two supervisors and two area managers.
In addition to these interviews, documentation was
analysed and Sadhana’s systems were evaluated tobetter understand how the implementation of ALP
was organized10. In addition, CU also interviewed
23 field personnel (18 field technicians andfive sanitation team personnel) to assess theirknowledge and skills to implement the ALP program
on-farm.
In addition to the management interviews, CU
visited 40 farms in Wonogiri (in the week of 28
August) and 48 farms in Rembang (in the firsttwo weeks of September). To ensure a meaningful
sample reflecting the full scope of farm types andrelevant issues, farms were selected randomly 11. CU
auditors visited an average of four farms per day,with a reporting day after two days of visits. On
each farm, both farmer and family members wereinterviewed, and findings were reported based
either on direct observation or triangulation of
information via interviews.
The overall findings were presented to Sadhana in
an online meeting on 13 October 2022.
A detailed description of the assessment scope andmethodology is presented in Appendix III.

10. Interviews with management and supervisors were held in groups, in accordance to CU Focused assessment
methodology (see Appendix II)
11. An overview of the farms visited is presented in Appendix IV.
14

Chapter 2

MANAGEMENT ASSESSMENT

EXTERNAL ASSESSMENT
Pt. Sadhana Wonogiri and Rembang Regions in Indonesia

External Assessment

2.1. Pre-contractual due diligence
Sadhana had included ALP requirements in theirpre-contractual due diligence process. These werechecked every year as all farmers that supply
tobacco to Sadhana had to establish a new contractfor every crop season. For farmers that were being
re-contracted, Sadhana evaluated their status in themonitoring system and checked whether they had
Prompt Actions in the previous crop season. The
company’s policy was to not renew contracts with
farmers who had Prompt Actions regarding Child
Labor.
For farmers who were signing up for the firsttime, Sadhana conducted an informal evaluationand informed the farmer about the ALP principles
and other conditions to establish the contract.
After agreeing upon all conditions and signing
the contract, the farmer would receive further
information and training from the field technicians
and the leader of the regional Sadhana tobacco
farmer group.
The main KPIs checked during this due diligenceprocess were Child Labor and availability of
Personal Protective Equipment (PPE), because of
the increased risk in relation to these issues, inboth Wonogiri and Rembang. In addition, all ALP
Principles would be discussed with the farmers
during this process.
• CU findings:
CU did not find any irregularities regarding precontractual due diligence. None of the re-contracted
farmers in Wonogiri and Rembang had unsolved
Prompt Actions, and all signed contracts included
clear information on the ALP topics.

2.2. Consequence Management
Sadhana´s consequence management was linked
to its Prompt Action system. If a Prompt Action
pertaining Child Labor issue was observed to berecurring despite mitigation measures and action
plan; and the farmer in question persistently ignored
the requirement; the contract with the company
was not renewed for the following crop season.

• CU findings:
At the time of the assessment, only two Prompt
Actions were open in SADIS (Sadhana’s Agriculture
Database Information System): one for a farm in
Wonogiri and one for a farm in Rembang. However,
the issues had already been solved on the respective
farms. Nonetheless, in the Wonogiri case, the farmer
in question was not aware of having a Prompt Action
and declared not having been informed by the fieldtechnician or sanitation team about the issue.
The four other Prompt Actions raised in the current
crop season had already been closed in the system.
In one of these cases (in Wonogiri), the farmer inquestion also declared not being aware of the issue.
In the remaining cases, farmers were fully aware of
the raised Prompt Action and were able to describe
the followed action plan (see also Chapter 2.4 andTable 3).
In terms of farmers’ awareness, CU found that 23(58%) farmers in Wonogiri and 29 (60%) farmers in
Rembang were not fully aware of the consequencesof a Prompt Action not being solved and the steps
involved in solving a Prompt Action at the farmlevel.

2.3. Monitoring System
Sadhana’s monitoring system became fully digital in
2019, when all Farm Profiles and monitoring data
became available in SADIS (Sadhana Agriculture
Database Information System). At the beginningof each crop season, when farmers had finishedtransplanting tobacco seedlings to the field and thecontracts were being signed, the field technicians
and sanitation team collected farmers information
and uploaded it into SADIS. In addition to theseannual Farm Profiles of all farmers, Sadhanaeach year monitored about 100% of its farmers’group base across the crop season, which stands
for approximately 30% of the total number offarmers; with the farmers monitored being sampled
randomly within the groups. When a recurring issue
was observed with a farmer, this sample could beenlarged to check whether similar issues occurredon other farms within the same tobacco farmers
group.
16

External Assessment

The field technicians were responsible formonitoring agronomical practices, checking specificactivities and issues according to the tobacco season
and crop growth stages. The sanitation team were
responsible for monitoring all ALP-related matters,
including initiatives and trainings. The management
personnel had access to the full monitoring data
entered in SADIS, while the field technicians andsanitation team could only access the parts, they
were responsible for.
A considerable amount of information was collectedon the principles of Child Labor and Safe Working
Environment, including details on the farmer’s family
composition, activities performed by each member,children´s school attendance, PPE availability, and
CPA storage box availability. For each farm visit,
SADIS showed previously collected informationand provided the points to be monitored next in a
logical theme sequence.
• CU findings:
Of the 88 farms visited by CU, 56 (63%) weremonitored by Sadhana in the current crop year.
One farm (3%) did not have a Farm Profile in SADIS(Table 1).
CU auditors were not able to check all farm
monitoring information during the farm visits,
because the full data could only be accessed by
the management personnel and the amount of
information was too extensive to check on farm.
However, the auditors were provided all information
after the farm visits.
Table 1. Number of farms visited by CU that were monitored
by Sadhana in the current crop season, and identified profile
issues.

Regions

Farms
monitored

Profileissues

Wonogiri(N=40)

31 (78%)1 (3%)

Rembang(N=48)

25 (52%)none

With regards to the monitoring data on trainings andinitiatives recorded in SADIS, no information discrepancies
were found on the farms visited by CU.

2.4. Prompt Action System
Sadhana’s Prompt Action system was integrated into
SADIS and comprised all Farm Profiles plus the issues
raised during field visits by the field technicians andsanitation team. The system distinguished eleventypes of Prompt Action situations that could beraised at any moment during the crop year (Table 2).
Table 2. Types and subjects of Prompt Actions in SADIS
system.

Sadhana´s
PA System

Subject

PA01

Family member below 12yo - light
work

PA02

Worker below 15yo - light work

PA03

Children below 18yo - hazardous
work

PA04

Incomplete/no PPE for CPA

PA05

Pregnant/breastfeeding woman
involved in CPA application

PA06

Incomplete/no PPE for GTS

PA07

No access to clean water

PA08

Empty CPA container reused as
drinking bottle

PA09

Incorrect CPA storage/use of CPA
Box

PA10

Issue with workers
accommodation

PA11

Other

According to Sadhana’s procedures, Prompt Actions
had to be solved immediately at the farm, together
with the farmer. Upon verbal agreement, the fieldtechnician or sanitation team member who had
identified the issue had to formulate an action planand communicate this with the farmer to address
the situation. Action plans were verbally agreed andnot recorded into the system. Next, the sanitationteam had to conduct follow-up visits to check
whether the issue was solved and provide further
training and information when needed.
17External Assessment• CU findings:
For the current crop season, SADIS showed a total of six Prompt Actions related to the farmers in CU’s
farm sample, with four of these cases already solved and closed in the system (Table 3). In two cases,
both in the Wonogiri region, the farmers in question declared not being aware of having a raised Prompt
Action. One of these cases was on not using proper PPE for handling wet green tobacco, and the other on
incorrect CPA storage. Further information on these two issues and the followed action plans could not bechecked by CU because Sadhana did not record this information in the SADIS system.
Table 3. Prompt Actions recorded in the SADIS system for the current crop season, for the farms in CU’s farm sample.

RegionPAs recorded

Issue

Communication tofarmers

PAs solved

Wonogiri

4

PA04 (incomplete PPE for CPA)
PA06 (incomplete PPE for GTS)
PA09 (incorrect CPA storage)

2 farmers were notaware of the PA

3

Rembang

2

PA04 (incomplete PPE for CPA)

all aware1

CU checked the Prompt Action issues recorded by SADIS on the farms in question and did not findevidence that these issues were reoccurring. However, on other farms CU observed twelve Prompt Action
situations that had not been recorded by Sadhana (Table 4). Following internal protocol, the Prompt
Actions identified by CU were confirmed by triangulating information.
Table 4. Prompt Actions identified by Control Union auditors during the farm visits in the regions assessed.

Region

PA´s

Issue

Wonogiri

5

PA06 (incomplete PPE for GTS) = 3
PA09 (incorrect CPA storage) = 2

Rembang

7

PA06 (incomplete PPE for GTS) = 2
PA09 (incorrect CPA storage) = 5

In all five cases where CU identified a Prompt Action related to incorrect PPE use for GTS (PA06), thefarmers, while talking to CU auditors, were handling green tobacco without wearing gloves and long
sleeves. In two of these cases (both in Wonogiri), the farmers in question did not know what GTS or
nicotine intoxication was or how to avoid it. In the other three cases the farmers did know about GTS andcould explain how to avoid it, but nonetheless were not using PPE for GTS even though they had this PPE
available on their farms.
Of the seven cases where CU identified a Prompt Action related to incorrect CPA storage (PA09), two wereobserved on farms in Wonogiri, where CPA containers were found all over the farm and being repurposedfor other farm activities. In Rembang, CU found one farm where empty, unpunctured CPA containers werelying around the farm and the CPA box was not being used; two farms where full CPA containers were left
unattended in the field; and two farms where the CPA box was within reach of children and not properly
closed with a lock.
18

External Assessment

2.5. Initiatives
Sadhana had implemented various initiatives related to ALP, from increasing awareness on child labor bytraining farmers and their families, to providing PPE to farmers and implementing a recycling program for
empty CPA containers. Sadhana’s list of ten initiatives included seven initiatives that targeted the StepChange KPIs, focusing on Child Labor and Personal Protective Equipment (Table 5).
Table 5. Sadhana´s initiatives targeting PMI´s Global KPIs.

Initiatives

Step-Change KPIs targeted by the initiative

Farmers Training

Child Labor; Personal Protective Equipment

Farmers’ Spouses Training

Child Labor

Farmers’ Children Training

Child Labor

Calendar Distribution

Child Labor; Personal Protective Equipment

Communication via Digital Platform

Child Labor; Personal Protective Equipment(My Tani app)
PPE Distribution

Personal Protective Equipment

2.5.1. Farmers Training
The aim of this initiative was to train all farmers atleast twice a year, at the time of contract renewal
and in the middle of the crop season. An additional
three to four sessions were provided to the farmers
included in the monitoring group of that year (100%of the farmer´s groups – around 30% of the total of
farmers are monitored each crop year). Each session
addressed a different agronomical topic, withfield technicians providing technical informationaccording to the stage of tobacco production andrelated activities. Additionally, the ALP topics ofChild labor and PPE usage were discussed andreinforced by the sanitation team. Thus, thesetrainings aimed to increase farmers’ awareness on
tobacco production topics and address ALP-related
topics such as child labor, hazardous tasks, and PPEusage for applying CPA and handling wet green
tobacco.
The root causes targeted by this initiative were thelong-standing regional practice of allowing children
to participate in tobacco activities, and the lackof protection while applying CPA and handling
tobacco. Throughout the crop season the trainings
session materials had to be updated and adapted asnecessary.
Of the farms visited by CU, 36 (90%) farmers in
Wonogiri and 44 (92%) farmers in Rembang hadparticipated in the training sessions. All farmers that
had attended the trainings were able to identify atleast one ALP topic discussed, citing the standards
and local laws applied to the referred standard.

2.5.2. Farmers’ Spouses Training
The aim of this initiative was to train farmers’
spouses once a year, between transplanting andfield maintenance activities, to raise awarenesson child labor and promote correct use of PPE for
applying CPA and handling wet green tobacco. The
trainings were provided within Sadhana’s regional
tobacco farmer groups.
Of the farms visited by CU, spouses of 36 (90%)
farmers in Wonogiri and 45 (94%) farmers in
19

External Assessment

Rembang had participated in a training session andwere able to describe its importance and the topics
discussed. The field technicians and sanitationteam members interviewed by CU confirmed theimportance of this initiative, as farmer’s families are
directly involved in tobacco activities.

2.5.3. Farmers’ Children Training
This initiative complemented the farmers training
and spouses training to increase awareness on the
topic of child labor at the farms that supply tobacco
to Sadhana. The target was to train farmers’ children
once a year, during the transplanting period. The
focus of these training sessions was to address
the topic of child labor with interactive lecturesand games, teaching children not to engage in any
tobacco production activities.
Within the farmers and spouses’ statements, for theones who did have children living inside the farms,
all of them confirmed on knowing the initiative andits purpose.

2.5.4. Calendar Distribution
As part of the awareness initiatives described above,
the aim of the Calendar Distribution initiative was toprovide communication material to all farms, free ofcost. The calendars contained detailed informationin the local language, including elaborate drawings
and pictures, about the ALP Principles of Child
Labor and Safe Work Environment. This educational
material was distributed to all farmers at the
beginning of the crop year.
All farms visited by CU had received the calendar.
However, it was observed that some farmers were
not able to describe the content or purpose of thematerial provided. Also, eight (20%) farmers in
Wonogiri and 16 (33%) farmers in Rembang said
that they did not use the calendar (Table 6).

Table 6. CU’s farm findings regarding Sadhana’s Calendar
Distribution initiative: availability, awareness, and usage.

Calendar distribution
Initiative

Wonogiri

Rembang

Farms that hadreceived thecalendar40 (100%)

48 (100%)

Farmers
understanding theinformation on thecalendar35 (88%)46 (96%)

Farmers using thecalendar32 (80%)32 (67%)2.5.5. Communication via digitalplatform – My Tani app
Sadhana had created an application for mobile
phones, called My Tani (“my farmer”), to provide
farmers with agronomical information, raiseawareness on the ALP principles, and provide a
direct communication channel between farmers
and the company. This initiative targeted farmers
who owned a cell phone; among the more than
20,000 farmers supplying to Sadhana, there were3,240 active users of the app.
Farmers who owned a cell phone and were willingto use the My Tani application were advised by theirfield technician or sanitation team on how to use
the app. Among the field technicians and sanitationteam members interviewed by CU, six (23%) statedthat farmers had difficulties in using the app andaccess information.
Among the farms visited by CU, 28 (70%) farmers
in Wonogiri and 27 (56%) farmers in Rembang were
aware of this initiative and had used the app. When
asked which features of the app they had used,
these farmers mainly mentioned using the weather
forecast, while other features were not mentioned.

20External Assessment

2.5.6. PPE Distribution
The aim of this initiative was to provide farmers
with the necessary PPE for CPA application andhandling wet green tobacco. The underlying reason
for this initiative was that Sadhana had previously
found that farmers were not purchasing and/or using proper PPE; therefore, the company had
started to subsidize the equipment and provide it
at a lower cost to all its farmers at the beginning ofeach crop season.
The PPE kit provided by Sadhana contained a longsleeves shirt, apron, goggles, rubber gloves, mask, are-entry (REI) sign, 24 pairs of cotton gloves, a firstaid kit, two packs of soap, and two plastic bags forrecycling empty CPA containers.
According to CU’s farm findings, all farmers in
Wonogiri and Rembang were aware of this initiativeand had received the PPE kit. However, three(8%) farmers in Wonogiri and two (4%) farmers
in Rembang declared that they were not actuallywearing any of the PPE sets provided (see Chapter
4.5 for details).

21

Chapter 3

FINDINGS PER KPI

EXTERNAL ASSESSMENT
Pt. Sadhana Wonogiri and Rembang Regions in Indonesia

External Assessment

This chapter describes CU’s findings in relation to
the four KPIs of PMI’s Step-Change approach: Child
Labour, Minimum Wage, Worker accommodation,
and Personal Protective Equipment. For each KPI,
the supplier’s management systems, procedures,and relevant initiatives are assessed and comparedwith CU’s farm findings to analyse the effectivenessof these systems and initiatives toward achieving
the KPIs.

farms visited and was not able to interview farmer´schildren during the assessment; as no children were
found on the farms; it was not possible to verify
whether the initiatives were targeting the root
causes, through information triangulation.
Table 7. Sadhana’s awareness initiatives on Child Labor

Sadhana initiative

Targeted root
causes

Farmers training
Farmers Wives training
Farmer children training
Calendar distribution
Communication Via Digital
Platform (Apps My Tani)

Lack of awarenesson children
involved in
tobacco activities,
legal minimum
working age andhazardous tasks

3.1. Child Labor
3.1.1. Summary
Sadhana has adopted PMI’s global KPI for eliminating
child labor. Their strategy to achieve this target
included monitoring and Prompt Action systems
and awareness initiatives to tackle persisting issues.
CU found that the design of Sadhana’s monitoring(Chapter 2.3) and Prompt Action systems (Chapter
2.4) were adequate for monitoring and reportingchild labor. The field technicians and sanitationteam members interviewed by CU were all awareof these systems and of Sadhana’s policy regardingchild labor and hazardous activities in tobacco.
CU did not find any evidence of child labor at thefarms assessed, and there were no Prompt Actions
on child labor in the SADIS system.

3.1.2. CU Findings
CU did not find any evidence of children involved
in tobacco production on the farms assessed.
According to the SADIS system, no Prompt Actions
on child labor had been raised this crop season. As
pointed out during the field visits by farmers andother field staff, harvesting activities do not usuallyrequire additional assistance in the field, hence
reducing the likelihood of encountering workers
and associated labor issues.

3.1.3. Initiatives
At the time of CU’s assessment, Sadhana was runningfive awareness initiatives to specifically target childlabor: farmers training; farmers’ spouses training;
farmers’ children training; calendar distribution;and communication through the “My Tani” app. As
CU did not find any issues with child labor on the

3.1.4. MonitoringChild labor was covered by Sadhana’s farm
monitoring system with questions related to thisissue. After completing these questions, the fieldtechnicians had to indicate whether they found any
irregularities and indicate possible issues using theoptions provided by the system (from a pre-defined
list and/or their own entry in a text box).
All field technicians and sanitation team personnel
interviewed by CU were found to be aware of theminimum working age in tobacco, were able to list
the hazardous tasks, and knew the age at whichchildren were allowed to perform light tasks.
All farms that were monitored by Sadhana in thecurrent crop year were being checked for thepresence of child labor. According to the SADIS
system, no evidence of child labor had been foundthis crop season.

3.1.5. Prompt Action reporting
Sadhana had defined three Prompt Actions related
to Child Labor (PA 01 to 03, see Table 3). At thetime of CU’s assessment, none of these Prompt
Actions had been raised in the SADIS system forthe current crop season. In addition, CU did not findany evidence of child labor during its farm visits.
23

External Assessment

3.2. Minimum Wage
3.2.1. Summary
Sadhana had not adopted PMI´s global KPI
regarding minimum wage for internal monitoring, as
Indonesian law does not prescribe a legal minimum
wage or set a benchmark for the agricultural sector.
As an alternative to monitor the risk on this topic,
Sadhana has relied on a third-party assessment
from a local organization called Institut Teknologi
Sepuluh Nopember (ITS). Within the methodology
used, the remuneration standards were based on
the government regulation no.36 of 2021, thatstablished payments threshold of 25% above
the poverty line and 50% average expenditure.
Therefore, following each province calculations,
East Java daily rate would be IDR 22,260, while
Central Java would be Java IDR 20,640 per day.
While Sadhana does not communicate a specificbenchmark or payment rate for farmers, thepractice observed during the assessment wasof farmers following the local agreements madebetween themselves and workers within therespective regions, which commonly exceeded therates verified by ITS.
SD Comment: Sadhana does not directly monitor
this global KPI internally, but rather rely on
assessments by a third parties to identify any risks
regarding this topic. Based on Indonesian law,wages for agriculture and the informal sector are
determined by arrangement within communityand based on agreement between the farmers(employer) and the employee (worker). In Indonesia
due to “Gotong Royong” (work sharing), the farmers
and the workers are farmers, and they share thework between their farms.
Farmers were expected to follow the local wage
agreements made within the villages where tobacco
is grown (see Chapter 4.2). As this topic was not
actively monitored for hired workers in the past crop
season, village leaders were the ones appointed by
farmers to intervene if any issue regarding workers’
wages were raised.

3.2.2. CU Findings
The assessment conducted by CU revealed
limitations in fully verifying whether workers were
properly paid. While the wage amounts reported by
all farmers in both regions exceeded the stipulations
outlined in government regulation no.36, there
was a lack of explicit communication regarding a
specific minimum wage rate provided to farmers.
Furthermore, due to the absence of workers during
CU’s farm visits, it was not possible to directlyinterview them about wage payments.
Although this matter is subjected to annual
monitoring by a third-party entity, farmers
primarily rely on community-based arrangements
when it comes to understanding wage payment
practices, which often surpass the aforementioned
government regulation but are based on regional
consensus.
As observed during the assessment, farmers did
not receive clear guidance on whether to adhere
to national or regional regulations. Additionally,
as most of the labor-hiring happens for short term
periods and within farmers themselves, it becomesdifficult to detect the compliance of farmers to theminimum wage KPI, as there´s no track of suchinformation throughout the year.

SD Comment:“Indonesia has nationally defined minimum wage
regulating formal sector, and exempted for small
and micro enterprise, such as small-scale farming.
Instead of using the legal minimum wage, it issuggested to pay the worker at minimum 50% above
consumption rate and 25% above poverty rate in theregion. In consideration that wages for agriculture or
informal sector determined by arrangement withincommunity and based on agreement between the
farmer and the employee which most of the caseworker is the farmer and farmer is worker. Therefore,
Suppliers cannot intervene the setting of workers
wage in the village.”24External Assessment

3.2.3. Initiatives
Sadhana had no initiatives in place to address this
KPI.

3.2.4. Monitoring
Since Sadhana had not adopted this KPI for theirinternal monitoring, minimum wage compliance
was only being monitored by a third-party (ITS)
assessment, on a yearly basis. The 2022 report fromITS was only available after CU´s assessment.
SD Comment:“Third party monitoring has been reinitiated in
the year of 2022, but limited with government
restrictions regarding the pandemic still being inplace. The monitoring for minimum wage refers to
the recent Omnibuslaw regulation as regulated in GR
36/2021, which regulates the minimum thresholdwages that must be paid by micro and small
businesses, namely:• 50% from the average public consumption at theprovincial level; and• The agreed wage should be at least 25% above
the poverty line at the provincial level.”

The information about ‘average public consumption’and ‘poverty line’ obtain from Government Statistic
Institution (BPS). Based on the monitoring, theactual payment by farmers is double the above
recommendation.

3.2.5. Prompt Action reporting
The company’s Prompt Action system had not
defined a Prompt Action related to this topic, since
this was monitored by ITS, a third party.

3.3. Worker Accommodation
3.3.1. Summary
The PMI´s global KPI regarding Workers
accommodation is not applicable based on thecompany’s own analysis and assessment by a thirdparty. Workers were locally sourced and thus did
not require on-farm accommodation.

At the time of CU’s assessment, no hired workers
were present at the farm or living there. This KPI
was therefore not applicable.

3.3.2. CU Findings
As this KPI was not a current priority for Sadhana
and no workers were present at the farms at thetime of the assessment, CU found this KPI to be notapplicable.

3.3.3. Initiatives
Sadhana had no initiatives in place for this KPI,
because workers in Wonogiri and Rembang weresourced locally and therefore did not require onfarm accommodation.

3.3.4. Monitoring
Although it had been identified by Sadhana thatworkers hired by farmers in the regions of Wonogiri
and Rembang were sourced locally and did not needon-farm accommodation, the SADIS monitoring
system nevertheless included questions on this
topic, in case hired workers indicated a need foraccommodation.

3.3.5. Prompt Action reporting
Sadhana’s Prompt Action system did include a
Prompt Action code (PA10, see Table 2) to flagissues related to worker accommodation. However,no Prompt Actions had been raised on this matter
during the current crop year.

3.4. Personal Protective Equipment
3.4.1. Summary
Sadhana had adopted PMI´s Global KPI for PersonalProtective Equipment. Their strategy to achieve thistarget included monitoring (Chapter 2.3) and Prompt
Action systems (Chapter 2.4), and an initiative toimprove PPE availability and usage (Chapter 2.5.6).
CU found that Sadhana’s efforts on this KPI weresatisfactory with regards to improving availability,
since all farmers in Wonogiri and Rembang hadreceived the PPE kits. However, in the SADIS
25

External Assessment

system CU found several open Prompt Actions on
incomplete PPE usage. In addition, during the farm
visits CU identified five Prompt Action situations(incomplete PPE use for handling green tobacco on
three farms in Wonogiri and two farms in Rembang)that had not been observed or recorded by Sadhana(see Chapter 2.4).
Sadhana’s initiative to promote PPE availability
and usage was based on previous root cause
analysis. However, CU’s farm findings indicate thatthe intended aims and outcomes of this initiative
were only partly achieved. While the initiative had
improved PPE availability, it did not actively improve
farmers’ understanding of GTS or communicate theimportance of using proper PPE while handling wet
green tobacco.

3.4.2. CU Findings
At the time of CU’s assessment, the SADIS systemshowed that, in the current crop season, two
Prompt Actions had been raised for incomplete
PPE use for handling wet green tobacco (both casesin Wonogiri), and three Prompt Actions had beenraised for incomplete PPE usage for CPA application(one case in Wonogiri, two cases in Rembang).
Of these five Prompt Actions, four were alreadyclosed and the issues were not found to reoccur
in the field. However, in none of these cases hadroot causes been identified and/or recorded in thesystem; there were also no records of action plansin the system.
Furthermore, CU identified five additional Prompt
Action situations related to incomplete PPE use on
three farms in Wonogiri and two farms in Rembang,which were different farms than the ones reported in
Sadhana´s system. All cases concerned incomplete
PPE for GTS (PA06), with farmers handling green
tobacco without gloves and long sleeves. On twoof these farms in Wonogiri, the farmers in question
did not know what GTS was or how to avoid it. In
the other three cases the farmers were aware of
GTS and how to avoid it, but nonetheless were notusing complete PPE (see also Chapter 3.4.3).

3.4.3. Initiatives
Sadhana’s initiative of PPE distribution (see Chapter
2.5.6) focused on improving PPE availability for all
farmers, family members and workers involved in
CPA application and or handling wet green tobacco.
All farmers visited by CU were aware of thisinitiative and had received the PPE sets for CPA
and GTS, in both Wonogiri and Rembang. However,
CU also found three (8%) farmers in Wonogiri andtwo farmers (4%) in Rembang who declared thatthey were not actually using the PPE sets provided.
Several reasons were given for not wearing some or
all the provided PPE items:• Some farmers did not believe that GTS was realsince they had never experienced GTS-related
symptoms;• The gloves provided were found to be
uncomfortable for handling tobacco leaves andslowed down the harvesting process;• The material of the PPE for CPA application was
found to be uncomfortable and inadequate in
hot and humid weather, making it difficult towork in this PPE for long periods of time;• The goggles provided limited the vision of users
because they fogged up easily, and farmers did
not know how to prevent this.

3.4.4. Monitoring
Sadhana´s monitoring system included a section on
PPE availability and usage of PPE items. The SADIS
application contained questions on both typesof PPE, including questions to check whether the
farmers had received the PPE kits and had attended
a training for CPA application. Although this KPI was
actively monitored, root causes were not identified
in the cases where farmers did not use PPE.
All field technicians and sanitation team members
interviewed by CU were aware of the PPE
requirements for handling green tobacco andapplying CPA, and declared that they checked PPEusage and availability on every visit to the monitored
farms throughout the crop season.

26

External Assessment

3.4.5. Prompt Action reporting
Sadhana raised Prompt Actions when farmers wereobserved handling green tobacco or applying CPA
without using complete PPE. All field technicians
and sanitation team members were aware of thePrompt Action procedure for PPE use. Prompt
Actions related to PPE could only be closed when
the sanitation team identified that the issue wassolved, during an unannounced follow-up visit(within six weeks).
During CU’s farms visits, the auditors identified
some Prompt Actions related to incomplete PPE
use for GTS, on three (8%) farms in Wonogiri andtwo farms (4%) in Rembang.

27

Chapter 4

FINDINGS ON ALP MEASURABLE STANDARDSEXTERNAL ASSESSMENT
Pt. Sadhana Wonogiri and Rembang Regions in Indonesia

External Assessment

This chapter describes CU’s assessment of theworking conditions on farms with regards to the
ALP Code Principles and Measurable Standards notcovered by the four KPIs described in Chapter 3.
ALP Code Principles are short statements designed
to guide farmers on specific practices, resulting
in safe and fair working conditions. A Measurable
Standard defines a good practice and over time canbe objectively monitored to determine whether, andto what extent, the labour conditions and practices
on a tobacco farm are in line with each ALP CodePrinciple.

4.1. ALP Code Principle 1: Child Labor
There shall be no child labor.
CU found no evidence of child labor on thefarms visited. Most farmers and family members
interviewed by CU were aware of the legal minimum
working age and tasks considered hazardous forminors (Table 8). Awareness was higher among
farmers than among family members.

Table 8. Farmers’ and family members’ awareness on Child Labor topics.

Regions

Farmers aware oflegal minimum age

Farmers aware of“hazardous work”

Family members
aware of legal
minimum age

Family members
aware of“hazardous work”

Wonogiri

35 (88%)39 (98%)23 (85%)22 (81%)

Rembang

44 (92%)43 (90%)11 (85%)8 (62%)

In both Wonogiri and Rembang, all field technicians
and sanitation team personnel interviewed by CU
showed a very good understanding of this ALP
Principle, being able to describe all measurable
standards, the legal minimum working age, thelist of hazardous tasks and the age for light work
activities.

4.2. ALP Code Principle 2: Income andWork Hours
Income earned during a pay period or
growing season shall always be enoughto meet workers´ basic needs and shallbe of a sufficient level to enable thegeneration of discretionary income.
Workers shall not work excessive orillegal work hours.

For this Principle, CU was not able to verify all
measurable standards because Indonesia did not
specifically regulate the legal minimum wage
for informal and agriculture sector. Wage rates
followed by farmers were the ones determinedby arrangements within the community and basedon agreements between farmer and the workers,
when hired. In addition, no workers were present
on the farms visited, hence CU could not interview
workers about working hours compliance, overtime
work and entitled benefits. Nonetheless, based oninterviews with farmers and family members, thefollowing information was collected:• Wonogiri– 26 (65%) farmers did not know the community
arrangement on payment amount– 20 (50%) farmers did not know the amount oflegal working hours• Rembang– 29 (60%) farmers did not know the community
arrangement on payment amount– 18 (38%) farmers did not know the amount oflegal working hours
29

External Assessment

In terms of workers’ wages and working hours,
the following was found, as unofficial benchmark
values:• In Wonogiri, hired workers were paid between
IDR 60K and IDR 100K daily, depending on thetask and crop period. Furthermore, male andfemale workers were paid different amounts
during the same crop period because theirtasks were different, with male workers being
involved in heavy lifting activities. According to
the farmers and family members interviewed,
hired workers worked less than 48 hours a week.
• In Rembang, hired workers were paid between
IDR 40K and IDR 80K daily, with male workers
being paid more than female workers because
their tasks involved more physical effort.
According to the farmers and family members
interviewed, working hours of hired workers did
not exceed 48 hours a week.

CU found that there was no grievance mechanism
provided, not by Sadhana nor by a third-party
organization. Hired workers were expected tocontact the local community leader if they had any
issues.

4.4. ALP Code Principle 4: Forced Laborand Human Trafficking
All farm labor must be voluntary.
There shall be no forced labor.
This assessment has no findings on this Principle.
Since it was an unusual season, there were lesshired labor in the field, due to bad weather andless harvesting. Therefore, there were no workers
present on the farms to be interviewed.

4.5. ALP Code Principle 5: Safe Work
Environment
Finally, in both regions, all farmers and family
members interviewed were found to be unawareof overtime rates, holidays and other benefits towhich workers were entitled by law.

4.3. ALP Code Principle 3: Fair Treatment

Farmers shall provide a safe work
environment to prevent accidents andinjury and to minimize health risks.
Accommodation, where provided, shall

Farmers shall ensure fair treatment of

be clean, safe and meet the basic needs

workers. There shall be no harassment,of the workers.

discrimination, physical or mental
punishment, or any other forms of abuse.

This assessment has no findings on abuse,discrimination, or harassment of workers. Since it
was not the hiring season there were no workers
present on the farms to be interviewed. Although
farmers statements could not be verified, CU
identifies the difference of wages regarding maleand female tasks as a possible risk, stressing theimportance to monitor and check that payments
are done according to the designated tasks,
independently of the worker´s gender.

For this Principle, CU verified the following
measurable standards:• Farmers should provide a safe and sanitary
working environment, providing toilets and or
sanitary facilities and clean drinking water toworkers– Wonogiri – 17 (43%) farmers did not meetthis requirement;– Rembang – 15 (31%) farmers did not meetthis requirement.

30External Assessment• Farmers should take all reasonable measures
to prevent accidents, injury, and exposure to
health risks.
– Wonogiri – 21 (53%) farmers had no measuresin place;– Rembang – 9 (19%) farmers had no measuresin place.
• No person is permitted to top or harvest tobacco,or to load barns, unless they have been trainedon avoidance of green tobacco sickness.
– Wonogiri – 9 (23%) farmers did not know
how to avoid GTS– Rembang – 20 (42%) farmers did not know
how to avoid GTS
Regarding the usage of PPE for handling green
tobacco, most farmers interviewed mentioned touse all the items required. Three farmers (8%) in
Wonogiri and four farmers (8%) in Rembang did
not mention any PPE for handling green tobacco(Table 9).
Table 9. PPE items used by farmers for harvesting andhandling wet green tobacco.

PPE items used
for harvesting andhandling wet green
tobaccoFarmers in
Wonogiri(N=40)

Farmers in
Rembang(N=48)All Items (Longsleeves, longpants, shoes, andgloves)28 (70%)Long sleeves, longpants, and gloves

9 (22%)

7 (15%)

No protection (noitems)

3 (8%)

4 (8%)

37 (77%)

During the farm visits, CU directly observed threefarmers in Wonogiri and two farmers in Rembang
who were harvesting tobacco leaves withoutwearing gloves and long sleeves (see Chapter 3.4).

• No person is permitted to use, handle, or apply
crop protection agents (CPA) or other hazardous
substances such as fertilizers, without having
first received adequate training.
– All farmers from both regions declared thatthey had received training for CPA application.
While all farmers interviewed by CU had been
trained in CPA application, ten (25%) farmers
in Wonogiri and four (8%) farmers in Rembang
declared not to use the complete set of PPE
required for applying CPA (Table 10). The main
reason given for not wearing complete PPE wasthat the material was too hot and made it difficult
to work (see also Chapter 3.4.3).
Table 10. PPE items used by farmers for CPA application.

PPE for CPA
application

Wonogiri(N=40)

Rembang(N=48)

Complete (all items)

30 (75%)44 (92%)

Mask, gloves,
goggles

2 (5%)

1 (2%)Overall, mask andgloves2 (5%)-

Gloves and goggles

1 (3%)-Overall, gloves andgoggles

3 (7%)-none

2 (5%)

3 (6%)• No person should enter a field where CPA havebeen applied unless and until it is safe to do so.
– Wonogiri – 37 (93%) of farmers knew thespecific re-entry period of the CPA they used.
– Rembang – 47 (98%) of farmers knew thespecific re-entry period of the CPA they used.

31External Assessment

4.5.1. Initiatives
Sadhana had developed several initiatives to cover
the Principle of Safe Work Environment. These
were aimed at improving awareness on this topic
by training farmers and family members (Chapter
2.5.1 and 2.5.2), improving PPE availability (Chapter
2.5.6),
providingenvironment-friendly CPA,
recycling empty CPA containers, providing CPA
storage boxes, and helping tobacco farmer groups
to purchase a cutting and spreading machine
together. The initiatives not described in Chapter 2
are detailed below.
• Initiative: Environment-friendly CPA
This initiative aimed to provide farmers with a crop
protection agent formula that was less toxic forhumans and the environment. The choice of CPA
product had to be evaluated every crop season, andhad to be updated when a better product became
available on the market. The root cause for thisinitiative was not identified and no information on
the current CPA formula was provided to CU.
All field technicians and sanitation team members
interviewed by CU were able to describe thisinitiative and its importance. In both regions
assessed, 98% of the farmers were aware of thisinitiative. The initiative was implemented on all
farms. Farmers and family members stated using theprovided CPA as it was a requirement from Sadhana,and that proper instructions were provided by thefield technicians when needed, on how to apply the
product.
• Initiative: Recycling empty CPA containers
This initiative was designed to properly dispose of
empty CPA containers after usage, reduce littering
around the farm, prevent poisoning from remaining
residues, and prevent on-farm repurposing ofcontainers. The root cause addressed by thisinitiative was incorrect disposal of CPA containers
and hazardous re-use of empty containers on thefarms, e.g., for storing drinking water.

This initiative targeted all of Sadhana´s farmer
base. Plastic bags were provided to all farmers tostore empty CPA containers after triple rinsing, as
instructed by the field technicians. These bags were
included in the PPE sets distributed to all farmers(see Chapter 2.5.6).
All field technicians and sanitation team members
interviewed by CU were able to describe theimportance and impacts of this initiative, showing
the good results over the years. Most of the farmers
and family members interviewed were able toidentify the initiative; however, in Rembang, eight(17%) farmers were not fully aware of the initiative´spurpose and impact and four (8%) farmers did not
implement the initiative on their farms.
• Initiative: CPA Box Distribution
This initiative aimed to provide all Sadhana’s
farmers with a safe storage box for CPA containers,
to prevent easy access to CPA and thus reduce CPA
exposure risk. These storage boxes were provided
by Sadhana below market price and distributed
to all contracted farmers at the beginning of crop
season, as needed.
CU checked this initiative on all assessed farms in
Wonogiri and Rembang, and found that all farmers
had received the CPA storage box. However, CU also
observed that two (5%) farmers in Wonogiri and five(10%) farmers in Rembang were not properly using
the storage box, leading to Prompt Action situations
which had not been captured by Sadhana’s systems(See Chapter 2.4). In both Wonogiri cases and threeof the Rembang cases, CPA containers were notstored in the box but were left around the farm; inthe other two Rembang cases, the CPA boxes had
not been installed at proper height and were notlocked; available for children and other people toaccess and manipulate the CPA´s (see Table 4).
All field technicians and sanitation team members
interviewed by CU were able to describe theimportance and impact of this initiative and statedthat farmers were constantly advised in trainings on
how to correctly store CPA containers.

32External Assessment• Initiative: Cutting and Spreading Machine
To help farmers reduce labor costs at the end of
the crop season, Sadhana advised and subsidized
farmers to use machinery for chopping tobacco
leaves within the farmer´s group as part of an
expansion area, considering that previously, themethod for chopping tobacco was designated fora skilled worker. Later, Sadhana also introduced
the spreading mechanism as an extension for the
cutting machine. This initiative was created to
improve effectiveness and to reduce the risk ofchild labor, within the task of spreading the chopped
tobacco. The machines were to be purchased andshared within the tobacco farmers groups formedby Sadhana in the Wonogiri and Rembang regions,and their use be coordinated by the leaders of thesegroups.
According to the field technicians and sanitationteam personnel interviewed by CU, this initiative
had indeed reduced end-of-season labor costs
for the farmers participating in the initiative.
However, they also stated that the cost of buying
the machine was high, even when shared by a large
group of farmers. Among the farmers interviewed
by CU, awareness of this initiative and usage of themachine was low. In Wonogiri, 19 farmers (48%)
were aware of this initiative but only eight (20%)
were using the machine. In Rembang, 19 farmers(40%) were aware of the initiative but only one (2%)
was using the machine. The farmers who were using
the machine all declared that it was very useful andhad a positive impact on the final product.

4.6. ALP Code Principle 6: Freedom of
Association
Farmers shall recognize and respect
workers´ rights to freedom of
association and to bargain collectively.
CU was not able to verify compliance with thisPrinciple, because no hired workers were present
on the farms at the time of the assessment.

4.7. ALP Code Principle 7: Terms of
Employment
Farmers shall comply with all laws of
their country relating to employment.
No workers were present to verify the measurable
standards of this Principle. During the management
assessment it was observed that employment
agreements between farmers and workers weredone verbally, as written contracts are not requiredby Indonesian law. None of the field technicians
and sanitation team personnel interviewed by
CU could list the legal topics that farmers should
communicate with workers when they enter into averbal agreement.

33

Chapter 5

APPENDICESEXTERNAL ASSESSMENT
Pt. Sadhana Wonogiri and Rembang Regions in Indonesia

External Assessment

Appendix I – Sadhana´s Action Plan

Introduction
PT Sadhana (PTS) welcomes Control Union’s (CU) report of their 2022 assessment of the implementationof Agricultural Labor Practices (ALP) Program; and working and living conditions on tobacco farms in both
Rembang and Wonogiri regencies in the province of Central Java, Indonesia. PTS appreciates the effortsof Philip Morris International (PMI) and their support for the implementation of the ALP Program, which isa priority for PTS with its contracted farmers. PTS also respects and appreciates the contribution of CU
and Verité; PMI’s strategic partners for ALP implementation and assessment. PTS believes CU auditors
have conducted their assessment in a professional and beneficial manner during interviews with PTS’s
senior management team and staff, field visits, and the presentation of the findings at the closing meeting.
CU findings are generally in line with PTS’s understanding of the problems faced by farmers and workers
in Rembang and Wonogiri. In its assessment, CU acknowledges the progress made in the implementationof the ALP Program and highlights areas in which improvements can be made. The Action Plan that follows
summarizes PTS’s plans to address the findings in CU’s Assessment report which reflects PTS’s continued
commitment to improve the living and working conditions of both farmers and workers, and to address
labor issues where they are found.
Indonesia is a vast, vibrant country which is ethnically and culturally diverse, made up of some of thehappiest people on the planet, where wealth is not the only measure of success. Strong family andcommunity values are well established and respected especially in the rural areas. PT Sadhana is an
Indonesian-owned and -operated company, which gives us a unique perspective and ability to operate
within Indonesia.
The local values in play may seemingly appear to contradict PMI’s ALP initiatives. However, they are agood foundation to move the objectives forward when the localized cultural, religious, and social values
are properly understood. The fundamental complication of ALP implementation in Rembang, Wonogiri, andIndonesia in general is the fact that the Rule of Law in Indonesia is less stringent than the ALP Code. To
further complicate matters, the Indonesian Constitution, which dictates the Rule of Law, also recognizes
the Religious Law, which at some instances contradicts the Constitution. In addition, the socio-economic
circumstances also have a large bearing on how the farmer communities operate and think. To betternavigate through these complications, PTS approaches the religious values (laws) with a high degree ofrespect as these values typically drive the social and cultural practices which are followed by our farmer
communities. PTS believes that we would risk to alienate the farmers and their communities if we chose toignore these local values, putting us at odds with the local leaders who are politically elected or appointed
from the religious hierarchy. Having this in mind, PTS is committed to a comprehensive approach using
ALP as one of our tools to effectively improve the localized economies and the well-being of our farmers
and their communities.
PTS also appreciates the significance of tobacco as it relates to the farmer communities in Rembang,
Wonogiri, and elsewhere. PTS’s contracted farmers represent 2% of the adult population in Rembang and0.35% in Wonogiri. Tobacco is only one of the many crops planted annually. Total hectarage of arable
land in Rembang and Wonogiri is 103.000 and 190.000 hectares, respectively. Therefore, the farmers
that have successfully produced tobacco for us in 2022 only made up 8% of the arable land in Rembang
and 1% in Wonogiri. For the most part, the farmers in Rembang are able to plant 2 crops a year and in

Appendix I – ALP Program Action Plan _ page 1 of 735

External Assessment

Wonogiri 3 crops, further diluting the significance of tobacco in the eyes of the communities and farmers.
Notwithstanding the importance of tobacco, PTS needs to understand what bearing it has on the localized
communities in totality.
PTS’s contracted tobacco farmers are made up of geographically dispersed smallholder farmers (wheremore than 50% of them own land less than 0.5 ha), which has its practical limitations. In an effort toovercome this limitation, PTS has structured our approach around Farmer Groups, which has enabled us
to move ALP initiatives forward in a positive manner. We approach our strategies from two directions
simultaneously: (a) PMI’s ALP Code and (b) by engaging with the farmer communities to find out what isdesirable or practical as any progress towards ALP goals is only possible with the buy-in from the farmer
communities.

Action plan to address Control Union assessment findings
Training and Knowledge of the ALP program
PTS appreciates CU’s positive feedback confirming that involved management personnel generally had
sufficient understanding of the ALP Code.
PTS will address the concerns in CU’s findings about the insufficiencies on the knowledge of Principles
of Income and Work Hours and Terms of Employment by conducting a Refresher Training on all fieldtechnicians and sanitation team. Income and working hours principles are sensitive topics, especially when
considering the socio-economic impact to the community from tobacco farmers making up a small part of
the farmer community. Previously, the income and working hours in agriculture was not well defined inIndonesia’s Law. The legal confirmation of Omnibus Law in 2020 gave clarity that defined minimum wage
regulating formal sector, which is exempted for small and micro enterprise, such as small-scale farming.
Furthermore, to determine the minimum amount of the two types of wages mentioned above, it can referto the wage mechanism as regulated in GR 36/2021, which regulates the minimum threshold wages thatmust be paid by micro and small businesses, namely:
a. 50% from the average public consumption at the provincial level; andb. the agreed wage should be at least 25% above the poverty line at the provincial level (Article 36
para 2 of GR 36/2021).
In Indonesia, “Gotong Royong” (work sharing) is widely practiced and accepted, which, essentially, labels
farmers as both farmers and workers from time to time as they share the work between their farms.
For the year 2023, PTS will include income and working hours and freedom of association in the revamped
training for all field technicians and sanitation teams. With the Omnibus law being clear that the wages areby agreement (written or verbally) between the farmers and workers, our training material will emphasizeon this, as well as acceptable Income and working hours.

Appendix I – ALP Program Action Plan _ page 2 of 736

External Assessment

Communication of the ALP Code requirements to farmers
As recognized by CU, PTS communicates ALP Code requirements to farmers via several channels, including:• Group training to farmers, farmers’ spouse and farmers’ children,• Field technician visits,• Farmer handbook & Calendar, and• Via Digital Platform (Mobile Applications)
PTS appreciates the need for comprehensive ALP understanding in the farmer level. Achieving a > 95%
acceptance and adherence will take a substantial amount of time, especially when we consider our
production hectarage continues to expand, as well as farmers switching from tobacco to other crops andvice versa. As such, PTS will continue to provide focus in this area with updated training material and toa wider audience (currently PTS targets more than 50% of farmers’ spouse and children especially those
who have yet to be trained). In addition to making our training more accessible, we are working towards
presenting materials to be more interesting and attractive to the audience (Via Apps etc.) which makes
them relevant.

Internal monitoring: data collection, accuracy, and addressing issues
PTS’s monitoring system became fully digital in 2019, when all Farm Profiles and monitoring data became
available in PTS’s Sadhana Agriculture Database Information System (SADIS). The farmer information(Farmer Profile) is uploaded by both field technicians and sanitation teams which takes place when farmers
have finished transplanting tobacco seedlings to the field and the contracts are signed. PTS each year
monitors close to 100% of its farmer groups during the crop season. The farmers are randomly sampled
within the farmer group, for monitoring (essentially making PTS monitoring 30% of its farmers) and if
issues are identified at the time of the visits, then the monitoring is expanded within the farmer group(and possibly adjacent groups) to understand the extent of the identified issues and to then implement
the correct actions and remedies.

Systematic monitoring
The field technicians are responsible for monitoring agronomical practices, checking specific activities andissues according to the tobacco season and crop growth stages. The sanitation team are responsible formonitoring all ALP-related matters, including initiatives and trainings. The management personnel haveaccess to the full monitoring data entered in SADIS, while the field technicians and sanitation team only
access the portion of SADIS that is relevant to them.
PTS collects a considerable amount of information, with our primary focus being related to Child Labor and
Safe Working Environment. The data collected includes details regarding the farmer’s family composition,
activities performed by each member, children´s school attendance, PPE availability, and CPA storagebox availability. During field visits, PTS representatives, through their tablets, are able to see the SADIS
information previously collected as well as SADIS providing points to be monitored or followed up on.
PTS also has a data validation process in place to ensure completeness and accuracy of data collected by
our field technicians and sanitation team. With regards to the monitoring data on training and initiatives
recorded in SADIS, PTS appreciate CU’s findings that no discrepancies were found.

Appendix I – ALP Program Action Plan _ page 3 of 737

External Assessment

Prompt Action
PTS’s Prompt Action system is integrated into SADIS and comprises all Farm Profiles plus the issues raised
during field visits by our field technicians and sanitation team.
According to PTS’s procedures, Prompt Actions are to be solved when they are identified at the farmand together with the farmer in question. The field technician or sanitation team member who identified
the issue are required to formulate an action plan and communicate this with the farmer to address
the situation. This is often done verbally considering the level of literacy. Subsequently, the sanitationteam conduct follow-up visits to check whether the issue was solved and provide further training andinformation when needed.
In regards to the farmer awareness (or lack of) regarding Prompt Actions and Consequences, PTS will
improve our communication to the farmers to obtain a higher level of comprehension.
During the pre-recruitment stage, any outstanding/unresolved Prompt Actions will be documented,
explained and signed off by both a member of the sanitation team and a farmer.

Management Assessment
PTS includes ALP requirements in our pre-contractual due diligence process. At the start of each growing
season, every contracted farmer who supplies tobacco to PTS signs a new contract for the upcoming crop.
For re-contracted farmers, PTS reviews and validates their status in the system including any Prompt
Actions pertaining to the previous season. When it comes to Prompt Actions pertaining to Child Labor,
PTS’s policy is to not renew the contract with the farmer(s).
CU did not find any irregularities regarding pre-contractual due diligence. None of the re-contracted
farmers in Rembang and Wonogiri had unsolved Prompt Actions and all signed contracts included clear
information on the ALP topics.
In terms of farmers’ awareness, PTS appreciates CU’s feedback which indicates farmers are not fully awareof the consequences of a Prompt Action not being solved and the steps involved in solving a Prompt Action
at the farm level. We will make sure that training materials and Prompt Action methods are improved tomitigate this concern going forward.

Appendix I – ALP Program Action Plan _ page 4 of 738

External Assessment

Farm-level assessment of working conditions regarding the ALP
Code standards implementation
The response to CU’s findings on farmer level assessment include the following:Child Labor
PTS has adopted PMI´s global Key Performance Indicator (KPI) for Child Labor and collected data throughmonitoring and Prompt Action reporting to track progress on this target. CU found that these systems
had extensive processes and procedures in place. CU also found that the awareness on minimum age
requirements and hazardous work was high among the field personnel.
In both Rembang and Wonogiri, CU found no evidence of Child Labor on the farms assessed. PTS
approaches Child Labor by focusing on eliminating farming practices which are commonly done by children(leaf grading, etc.) and continuing to raise awareness by providing information and training to: the farmers,
their spouses, and their children to reinforce awareness of the minimum working age.
PTS appreciates CU’s findings and PTS will continue to provide focus in this area.

Minimum Wages
Indonesia has a nationally defined minimum wage regulating formal sector, which is exempted for small
and micro enterprise, such as small-scale farming.
In consideration that wages for agriculture or informal sector are determined by arrangement withincommunity and based on agreement between the farmer and the employee, which in most of the case, thefarmers and the workers are both farmers and they share the work between their farms, PTS and otherTobacco Suppliers cannot intervene the setting of workers’ wages in the village.
The Indonesian Law is clear (i.e by local arrangement) but the disparities in play between individual villages
from year to year make any form of benchmarking impractical. It needs to be understood that the local
agreements pertaining to the agreed wages does not only impact tobacco but also to all crops. In tobacco
growing areas, farmers typically are able to grow two or more crops a year and during the tobacco growing
period/season, less than 10% of the available arable land is used to grow tobacco.
PTS does not directly monitor this global KPI internally but, rather, rely on assessments by reputable
Universities as a third party to identify any risks regarding this topic. Based on the 2021-2022 assessment,
farmers paid worker above the minimum payment regulated by law (50% from the average public
consumption at the provincial level; and the agreed wage should be at least 25% above the poverty line
at the provincial level). Going forward, PTS will include minimum wage monitoring in Sadhana farmer app.

Safe Work Environment
Personal Protective Equipment (PPE) usage
PTS’s initiative to promote PPE availability and usage was based on previous root cause analysis. However,CU’s farm findings indicate that the intended aims and outcomes of this initiative were only partly
achieved. CU found that all farmers in Rembang and Wonogiri had received PPE kits. While the initiative
had improved PPE availability, it did not actively improve farmers’ usage of comprehensive PPE.

Appendix I – ALP Program Action Plan _ page 5 of 739

External Assessment

PTS appreciates the need for comprehensive PPE program; however, we need to accept that it will be along road ahead to achieve> 95% acceptance and adherence. As such, PTS will continue to provide focus
in this area
Green Tobacco Sickness (GTS) Training and Awareness
CU’s assessment identified that farmer and family members’ awareness of GTS risks and prevention
measures was not at the desired level, yet all farmers have been trained through a number of training
sessions and had also received educational material distributed by PTS.
Typically, in PTS´s engagement with the farmer´s communities, the mention of GTS is avoided as it is
not easily explained to (or understood by) the audience. PTS prefers to center their discussion aroundthe term ‘nicotine absorption,’ which is easier to comprehend. The challenge remains to establish better
understanding as to which are the levels of nicotine absorption during the different stages of the crop
growth and handling of tobacco. Farmers who smoke have an even greater difficulty to understand GTS or
the concern around nicotine absorption.
Training and handling of CPAs
PTS’s initiative is primarily aimed to provide farmers with less toxic crop protection agents (CPA) or
formulations for both humans and the environment. CPA products are evaluated every crop season, andare updated when better products become available in the market. PTS also works closely with Agrochemical suppliers in Indonesia to roll out better formulations and to expand the availability of these in
our tobacco growing communities.
PTS believes in continuous improvement wherein we address the root of the issue, which in this case aresafer CPAs, as well as appreciating that adherence to the wearing of PPEs will be a perpetual issue:. Working
in the fields in the tropics is hot humid work which makes farmers’ desire to wear PPEs encumbered.
In other words, PTS stands better to focus on safer CPAs and limit the application of those CPAs towhen strictly necessary as opposed to only focusing on PPEs, which adoption rate will always remain a
discussion point. PPE adherence is much like motorbike helmets and car seat belts where people know it
is safer to use them but from time to time choose not to.
Empty CPA container handling before collection by field technicians was identified by CU as a challenge as
the containers were not punctured or triple-rinsed. PTS will include the proper procedure for empty CPA
container handling as a focus for future trainings.
General safety measures
CU checked on all assessed farms in Rembang and Wonogiri and found that all farmers have received CPA
storage boxes but found a general lack of safety measures as the boxes are not locked and CPA containers
are properly stored. All field technicians and sanitation team members interviewed by CU were able todescribe the importance and impact of this initiative and stated that farmers has been and will continually
be advised through training to correctly store CPA containers. We will also, during the course of the 2023
farm visits, focus on getting technicians and sanitation teams to examine CPA boxes and then put in placean Action Plan for 2024 wherein damaged boxes will be replaced/repaired.

Appendix I – ALP Program Action Plan _ page 6 of 740

External Assessment

Fair Treatment
All field personnel provided a good explanation of Fair Treatment i.e., that workers should be treatedfairly and without discrimination. However, none of them mentioned that farmers must make themselves
available to workers who want to discuss potential grievances; rather, they declared that issues andcomplaints related to this topic must be dealt with by the local leaders.
None of the farmers and family members interviewed by CU were able to identify a grievance mechanism
for workers, provided by PTS or any third-party organization. Issues between farmers and workers
were mediated by the local authorities and village leaders, but this practice does not meet the PMI ALP
requirement of access to a fair, transparent, and anonymous grievance mechanism.
Indonesia Law and Culture recognizes fair and transparent mechanism to raise labor issue within thecommunity but not necessarily anonymous as prescribed in PMI ALP requirement. Indonesian Law requires
every submission of a complaint to be accompanied by identification and the evidence to be validated.
It is also worthwhile to understand the civil administrative functions already established and in place oneach street/village/sub district/district: RT, RW, Kecamatan, Kelurahan, Dispendukcapil as well as themechanism in place through Police and Religious institutions.
PTS remains steadfast in its view that an independent anonymous grievance mechanism will bring novalue and will not be supported by the farmer communities.

Conclusion
PTS greatly appreciates CU’s acknowledgement of the positive progress made to implement ALP.
Meanwhile, the assessment also identified opportunities for improvement with regards to ALP program
implementation.
PTS is committed to the ALP Program and will continue to work with PTS’s contracted farmers to identify
and develop practical solutions to address the findings.
At the same time, PTS recognizes, respects, and works to maintain and enhance the cultural andcustomary mechanisms that are already inherited in the communities. By respecting and partnering withthe communities enables PTS to deliver ALP program in a broader and more meaningful context to thecommunities.
PTS’s long-term goal is to ensure happy, healthy, and sustainable farmer base and the ALP program will be
continually used as one of the tools to achieve this goal.
PTS will continue to use reputable local third parties (Universities) to give us invaluable, unbiased feedback
which helps us in the evaluation and management of our ALP implementation and monitoring.
In summary, PTS believes that we are aligned and we will continue to make efforts to maintain ALP
implementation. We appreciate the support, commitment, and contribution of PMI, CU, Verité and our
local third-party providers.

Appendix I – ALP Program Action Plan _ page 7 of 741

External Assessment

Appendix II – ALP Code

ALP Code Principle 1: Child Labor
There shall be no child labor.
Measurable Standards• There is no employment or recruitment of child labor. The minimum age for admission to work is notless 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.
• No person below 18 is involved in any type of hazardous work.
• 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 153 years or above the minimum age for light work as
defined by the country’s laws, 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 to meet workers’ 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.
Measurable Standards• Wages of all workers (including for temporary, piece rate, seasonal, and migrant workers) meet, at aminimum, national legal standards or agricultural benchmark standard.
• Wages of all workers are paid regularly, at a minimum, in accordance with the country’s laws.
• 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.
• Overtime work hours are voluntary.
• Overtime wages are paid at a premium as required by the country’s laws or by any applicable collective
agreement.
• All workers are provided with the benefits, holidays, and leave to which they are entitled by thecountry’s laws.

ALP Code Principle 3: Fair Treatment
Farmers shall ensure fair treatment of workers. There shall be no harassment, discrimination, physical ormental punishment, or any other forms of abuse.
Measurable Standards• There is no physical abuse, threat of physical abuse, or physical contact with the intent to injure or
intimidate.
• There is no sexual abuse or harassment.
• There is no verbal abuse or harassment.

Appendix II – ALP Code _ page 1 of 342External Assessment• 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.
• Workers have access to a fair, transparent and anonymous grievance mechanism.

ALP Code Principle 4: Forced Labor & Human Trafficking
All farm labor must be voluntary. There shall be no forced labor.
Measurable Standards• Workers do not work under bond, debt or threat and must receive wages directly from the employer.
• Workers are free to leave their employment at any time with reasonable notice, without threat or
penalty.
• Workers are not required to make financial deposits with farmers, labor contractors, or any other thirdparty, at the time of their recruitment or at any point during their employment, and shall not be charged
recruitment fees or other related fees for their employment by labor contractors.
• Wages or income from crops and work done are not withheld beyond the legal and agreed payment
conditions.
• Farmers do not retain the original identity documents of any worker. Where farmers are legally required
to hold documents, they shall provide secure storage, protected from unauthorized access, and ensure
workers have access to their original identity documents upon end of employment.
• Where labor contractors are used, farmers verify their labor practices and ensure they’re in line withthe standards stated in this Code.
• 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 and to minimize healthrisks.
Accommodation, where provided, shall be clean, safe and meet the basic needs of the workers.
Measurable Standards• The farmer provides a safe and sanitary working environment, and takes all reasonable measures toprevent accidents, injury and exposure to health risks.
• No person is permitted to top or harvest tobacco, or to load barns unless they have been trained on andtaken adequate protection to avoid green tobacco sickness.
• No person is permitted to use, handle or apply crop protection agents (CPA) or other hazardous
substances such as fertilizers, without having first received adequate training and without using therequired personal protection equipment. Persons under the age of 18, pregnant women, and nursing
mothers must not handle or apply CPA.
• No person enters a field where CPAs have been applied unless and until it is safe to do so.
• Every person has access to clean drinking and washing water close to where they work and live.
• Accommodation, where provided, is clean, safe, meets the basic needs of workers, and conforms to thecountry’s laws.
Appendix II – ALP Code _ page 2 of 343External Assessment

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

ALP Principle 7: Terms of Employment
Farmers shall comply with all laws of their country relating to employment.
Measurable Standards• At the time of hire, farmers have informed workers of their legal rights, the essential aspects of thework relationships and work place safety such as work to be performed, working hours, wages paid,
period of hire, and all legally mandated benefits.
• Farmers and workers have entered into written employment contracts when required by a country’s
laws and workers receive a copy of the contract.
• Terms and conditions of employment contracts do not contravene the country’s laws.

Appendix II – ALP Code _ page 3 of 344

External Assessment

Appendix III – Summary of the Legal Information Questionnaire
INDONESIA
Agricultural Labor Practices

LEGAL INFORMATION QUESTIONNAIRE
Summary & Guidance
Understanding the legal situation in the markets from which PMI sources tobacco leaf is critical for ALP
Code implementation. With this goal in mind, PMI produces a Legal Information Questionnaire (LIQ).
The LIQ is a key document for third party assessments of the ALP Program in your country.
Your review should cover all laws/decisions/regulations applicable to tobacco. This may include any
relevant federal, state, municipal laws, collective bargaining agreements, and court precedents (collectively‘Laws’).If there are no Laws related to an items covered, please also indicate this. We have also provided aseparate document (Matters to consider when completing your LIQ) with further guidance.
PLEASE KEEP IN MIND THAT THE LIQ WILL BE READ AND USED MOSTLY BY LEGAL LAYPERSONSStructure
The LIQ is divided into 7 sections which correspond to the 7 ALP Code principles. For each, you will findthe following:
Structure• In a few words, provide an overview of the Market’s legal standards which match, exceed, or
oppose the ALP measurable standards for each principle.
• Make comments (if any) including any local particularities or variations within your country.
These can also be referenced in footnote format where a more detailed discussion is required.
• Where no related market legal standard can be referenced, write NA (non-applicable) in thecells that apply.
Applicable laws
• Provide a list of the applicable laws (i.e. Constitution, Employment regulation etc.) included inyour answer.
• References may be repeated if the same laws apply to more than one principle.
• Please include, if possible a link to the official or reliable websites for the references.
• It is no problem if the same laws appear in more than one section.

Appendix III – Summary of the Legal Information Questionnaire _ page 1 of 1545

External Assessment

Your answer• Provide comprehensive yet concise answers to each listed item as identified by subheadings.
Please avoid pooling items together as much as possible.
• Answer in bullet point format. Please do not use lettered or numbered bullets.
• Provide context as needed.
• Limit your answers only to tobacco or agricultural sectors, or explain the general rules applying
to these sectors.
• Include any authority references in footnote format to facilitate reading.
• Avoid discussions of superseded law at national or international levels. References to current
directly applicable law are all that is needed.

Principle 1 – CHILD LABOR
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSMATCHES

EXCEEDSOPPOSESCOMMENTS

Minimum age foradmission to work
is not less than age
for completion of
mandatory schoolingüCompulsory education is 9 years from
7-15 years old, while the minimum age
for employment is 18 years old.

In any case, minimum
age for admission
to work is not lessthan 15 years OR theminimum age provided
by law, whicheveroffers greater
protection

üArticle 68

No person under 18
involved in hazardousworkü

Entrepreneurs are not allowed to
employ children.
Article 69(1) Exemption from what is stipulated
under Article 68 may be made for theemployment of children aged between
13 (thirteen) years old and 15 (fifteen)years old for light work as long as
the job does not stunt or disrupt
their physical, mental and social
developments.

Appendix III – Summary of the Legal Information Questionnaire _ page 2 of 15

An employer is prohibited from
employing a child employee aged
under 18 to perform hazardous works
that has a health, safety or moral
impact.

46

External Assessment

A child may only help
on the family farm if
it is light work AND if
the child is between
13-15 years OR above
the minimum age forlight work defined bylaw, which ever affords
greater protectionü

Under law No 13 Year 2003 regarding
Manpower, article 69,
In case of family business, children
aged between 13-15 can be employed
no longer than 3 hours, only during
day without disturbing their schooling,
and occupational safety and healthrequirements.

Applicable laws
• Law No. 20 of 1999 on Ratification ILO Convention No. 138 concerning Minimum Age for
Admission to Employment (“Law 20/1999”): http://fisipku.tripod.com/ipec/uuno20.htm• Law No. 23 of 2002 concerning Child Protection (“Law 23/2002”), as lastly amended with
Government Regulation in substitute of Law No. 1 of 2016 (”Law 23/2002”):https://peraturan.bpk.go.id/Home/Details/61883/perpu-no-1-tahun-2016• Law No. 13 of 2003 concerning Manpower (“Law 13/2003”): http://www.ilo.org/dyn/travail/
docs/760/Indonesian%20Labour%20Law%20-%20Act%2013%20of%202003.pdf• Law No. 20 of 2003 concerning National Education Systems (“Law 20/2003”):
http://www.flevin.com/id/lgso/translations/Laws/Law%20No.%2020%20of%202003%20
on%20the%20National%20Education%20System%20(BKPM).pdf• Minister of Manpower and Transmigration Decree No. KEP.235/MEN/2003 concerning WorkClassification which Hazardous to Children Health, Safety or Moral (“MoMT 235/2003”):
http://portalhr.com/wp-content/uploads/data/pdfs/pdf_peraturan/1204195139.pdf• Law No. 1 of 2000 concerning the prohibition and immediate action for the elimination of theworst forms of child labor, ratified ILO convention No. 182 of 1999 (“Law 1/2000”)
http://www.kpai.go.id/files/uu/UNDANG-UNDANG-REPUBLIK-INDONESIA-NOMOR1-TAHUN-2000-TENTANG-KONVENSI-ILO-NO.-182-MENGENAI-PELARANGAN-DANTINDAKAN-SEGERA.pdf• President Decree No. 59 of 2002 concerning the Plan of National Action for the elimination of
the worst forms of child labor (“PD 59/2002”):
http://storage.jak-stik.ac.id/ProdukHukum/DalamNegri/pd59.pdf• Law No. 11 of 2020 concerning Job Creation (“Law 11/2020”):https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020• Government Regulation No. 36 of 2021 concerning Wage (“GR 36/2021”):https://jdih.kemnaker.go.id/data_puu/PP362021.pdf• Law No. 39 of 1999 concerning Human Rights (“Law 39/1999”): https://www.komnasham.
go.id/files/1475231474-uu-nomor-39-tahun-1999-tentang-$H9FVDS.pdf• Government Regulation No. 47 of 2008 concerning Compulsory Education (“GR 47/2008”):
https://peraturan.bpk.go.id/Home/Details/4861/pp-no-47-tahun-2008• Government Regulation No. 78 of 2021 concerning Special Protection for Children:
https://jdih.bumn.go.id/unduh/PP%20Nomor%2078%20Tahun%202021.pdf

Appendix III – Summary of the Legal Information Questionnaire _ page 3 of 1547

External Assessment

Principle 2 –INCOME AND WORK HOURS
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSMATCHES

EXCEEDSOPPOSESü
Wages of all workers
meet, at a minimum,
national legal standards
or agricultural benchmark
standard.

COMMENTS
Employment regulations for the formal
sector have been clearly defined in Law No.
13 of 2003 and its derivatives (Law No 11
Year 2020). Employment regulations for the
agricultural sector, especially micro and smallscale agriculture, still overlap, although inreality customary/cultural laws and traditions
are mostly applied by farmers.
In November 2020, the Government of the
Republic of Indonesia passed Law 11/2020.
This law, amon.g other things, provides theprocedure for wages between workers andemployers.
Pursuant to the Law 11/2020, the wages canbe determined based on (i) time unit and/or (ii)output unit.
Furthermore, to determine the minimum
amount of the two types of wages mentioned
above, it can refer to the wage mechanism as
regulated in GR 36/2021, which regulates theminimum threshold wages that must be paid bymicro and small businesses, namely:
a. 50% from the average public consumption
at the provincial level; andb. the agreed wage should be at least 25%
above the poverty line at the provincial
level (Article 36 para 2 of GR 36/2021).
There are NO any agricultural benchmark
standards applicable in Indonesia

Wages of all workers
are paid regularly, at aminimum, in accordancewith the country’s laws.

ü

Wages must be paid by Employer at least 1time in a week or 1 time in a month except
where the Work Contract cites that it can be
paid in less than one week

Work hours are incompliance with thecountry’s laws.

üWorking days are 7 hours per day and 40
hours per week for 6 working days or 8 hours
per day and 40 hours per week for 5 working
days

Excluding overtime, work
hours do not exceed, ona regular basis, 48 hours
per week.

üWorking hours do not exceed 40 hours per
week

Overtime work hours arevoluntary.

üOvertime work is expected to be performed
but cannot be forced against the workers

Overtime wages arepaid at a premium asrequired by the country’s
laws or by any applicablecollective agreement.

üOvertime wages are paid at a premiumof between 1 and 4 times regular wages
depending on the time of the overtime.

Appendix III – Summary of the Legal Information Questionnaire _ page 4 of 1548

External Assessment

All workers are provided
with the benefits,holidays, and leave towhich they are entitledby the country’s laws.

ü

Benefits include: social security, healthsecurity, work accident security, old age
security, pension security, holiday, maternal,
illness, and annual leave.
Worker of informal sector is included in the
category of Not Recipient of Wages (Bukan
Penerima Upah - BPU), whereas the premium
payment of social security is conductedindependently. 12

Applicable laws
• Law No 11 of 2020 concerning Job Creation (“Law 11/2020”):https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020• Law No. 13 of 2003 concerning Manpower (“Law 13/2003”): http://www.ilo.org/dyn/travail/
docs/760/Indonesian%20Labour%20Law%20-%20Act%2013%20of%202003.pdf• Law No. 40 of 2004 on System of National Social Security (“Law 40/2004”):
https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020• Government Regulation No. 44 of 2015 concerning the Management of Work Health Security
and Death Security (“GR 44/2015”), as amended with Government Regulation No. 82 of 2019
on Amendment of Government Regulation No. 44 of 2015 concerning the Management ofWork Health Security and Death Security (“GR 82/2019”):
http://www.bpjsketenagakerjaan.go.id/assets/uploads/tiny_mce/
PERATURAN/19012016_143835_Permenaker%20Nomor%2044%20Tahun%202015.pdf
https://peraturan.bpk.go.id/Home/Details/127681/pp-no-82-tahun-2019• Government Regulation No. 45 of 2015 concerning the Management of Pension Security
Program (“GR 45/2015”): http://www.bpjsketenagakerjaan.go.id/assets/uploads/tiny_mce/
PERATURAN/15122015_104556_PP 45 Tahun 2015.pdf• Government Regulation No. 46 of 2015 concerning the Management of Old Age Security
Program (“GR 46/2015”), as amended with Government Regulation No. 60 of 2015
concerning Amendment of Government Regulation No.46 of 2015 concerning theManagement of Old Age Security Program (“GR 60/2015”):
https://peraturan.bpk.go.id/Home/Details/5634/pp-no-60-tahun-2015• Government Regulation No. 34 of 2021 concerning Utilization of Foreign Workers (“GR34/2021”):https://jdih.kemnaker.go.id/katalog-1722-Peraturan%20Pemerintah.html• Government Regulation No. 35 of 2021 concerning Temporary Employment Agreement,
Outsourcing, Working Hours and Breaks and Termination of Employment Relationships (“GR35/2021”):https://peraturan.bpk.go.id/Home/Details/161904/pp-no-35-tahun-2021• Government Regulation No. 36 of 2021 concerning Wages (“GR 36/2021”):https://peraturan.bpk.go.id/Home/Details/161909/pp-no-36-tahun-2021
http://www.apbi-icma.org/wp-content/uploads/2015/11/PP-78-2015-32-131-chrs32-pagessan.pdf

12. Article 9 of Ministry of Manpower Regulation No. 1 of 2016 and based on our research at BPJS Manpower.
Appendix III – Summary of the Legal Information Questionnaire _ page 5 of 1549

External Assessment• Government Regulation No. 37 of 2021 on Unemployment Insurance Program(“GR 37/2021”):https://jdih.kemnaker.go.id/katalog-1725-Peraturan%20Pemerintah.html• Presidential Decree No. 82 of 2018 on Health Security (“PD 82/2018”), as lastly amended
with Presidential Decree No. 64 of 2020 on Second Amendment of Presidential Decree No.
82 of 2018 on Health Security (“PD 64/2020”):https://peraturan.bpk.go.id/Home/Details/136650/perpres-no-64-tahun-2020• Minister of Manpower Regulation No. 10 of 2018 concerning the Procedure for the Utilizationof Expatriate Worker (“MR 10/2018”);
https://jdih.kemnaker.go.id/abstrak-1561-Peraturan%20Menaker.html• Minister of Manpower Regulation No. 6 of 2016 concerning Religious Holiday Allowance in
the Company (“MR 6/2016”):
https://klipingbekasi.files.wordpress.com/2016/03/permenaker-no-06-tahun-2016-thr.pdf• Decree of Governor of East Java No. 188/803/KPTS/013/2021 on Region/City Minimum
Wages in East Java of 2022.
https://www.dokumjdih.jatimprov.go.id/upload/43144/2021KEPGUPJATIM803.pdf

Principle 3 – FAIR TREATMENT
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSNo physical abuse,
threat of physicalabuse, or physicalcontact with theintent to injure or
intimidate

ü

MATCHES

EXCEEDSOPPOSESCOMMENTS
Forced Labor and Human Trafficking is underprotection of Indonesian Law, and all Indonesian
citizen shall be equal before the law.

No sexual abuse or
harassment

For the enforcement and protection of humanrights in accordance with the principle of ademocratic state based on law, the execution ofhuman rights shall be guaranteed, regulated, andset out in statutory rules and regulations.

No verbal abuse or
harassment

LAW NO 13 YEAR 2003 concerning Manpower
Every worker has the right to receive Protection
against immoral and indecent Treatment

No discriminationon the basis ofrace, color, caste,
gender, religion,
political affiliation,
union membership,
status as a worker
representative,
ethnicity,pregnancy, social
origin, disability,
sexual orientation,
citizenship, or
nationality

ü

LAW NO 13 YEAR 2003 concerning Manpower
Everyone has the right to equal pay for equal workand to equal work conditions

Appendix III – Summary of the Legal Information Questionnaire _ page 6 of 1550External Assessment

Worker access tofair, transparent andanonymous grievancemechanism

ü

N/A

N/A

Article 27
1. All citizens shall be equal before the law andin government and shall uphold the law andgovernment without exception.
Article 28D
1. Every person shall have the right of recognition,
guarantees, protection and certainty before law,and of equal treatment before law.
2. Every person shall have the right to work andto receive fair and proper remuneration andtreatment in employment.
Article 28F
Every person shall have the right to communicate
and to obtain information for the purposeof the development of his/herself and social
environment, and shall have the right to seek,
obtain, possess, store, process and convey
information by employing all available types ofchannels.
Despite the grievance mechanism are available
and accessible for all citizen, it is farmers andworkers preference to whether or not utilized thechannel.
Culture and “Adat” Law recognize village leader /religious leader as traditional grievance mechanism
to solve any dispute in the community.

Applicable laws
• The 1945 Constitution of the Republic of Indonesia (“UUD 1945”) http://www.ilo.org/
wcmsp5/groups/public/---ed_protect/---protrav/---ilo_aids/documents/legaldocument/
wcms_174556.pdf• Law No. 39 of 1999 concerning Human Rights (“Law 39/1999”) https://www.google.co.id/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=10&ved=0ahUKEwikw_70sqLMAhVVCY4KHVCLDK
0QFghYMAk&url=http%3A%2F%2Ffl.unud.ac.id%2Fblock-book%2FPerkembangan%2520Hukum%2520dan%2520Hak%2520Asasi%2520Manusia%2FBB%2520Perkembangan%2520Huku
m%2520%26%2520Ham%2520English%2520Version.doc&usg=AFQjCNEvrRs6CjBTozROmBP
LNKfTkQODA&sig2=Z7oIeBnjoMnTck5GDlvnHQ&bvm=bv.119745492,d.c2E&cad=rja• Law No 11 of 2020 concerning Job Creation (“Law 11/2020”)
https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020• Law No. 13 of 2003 concerning Manpower (“Law 13/2003”): http://www.ilo.org/dyn/travail/
docs/760/Indonesian%20Labour%20Law%20-%20Act%2013%20of%202003.pdf• Law No. 21 of 1999 concerning The Ratification of Convention No. 111 of ILO Concerning
Discrimination in Respect of Employment and Occupation (“Law 21/1999”):
http://www.dpr.go.id/dokjdih/document/uu/UU_1999_21.pdf• Criminal Code : https://www.wipo.int/edocs/lexdocs/laws/en/id/id039en.pdf• Civil Code : https://www.refworld.org/pdfid/3ffbd0804.pdf• Government Regulation No. 36 of 2021 concerning Wage (“GR 36/2021”):https://jdih.kemnaker.go.id/data_puu/PP362021.pdf
Appendix III – Summary of the Legal Information Questionnaire _ page 7 of 1551

External Assessment

Principle 4 – FORCED LABOR AND HUMAN TRAFFICKING
Summary
ALP MEASURABLE
STANDARDS
No work under bond,debt or threat

MARKET LEGAL STANDARDSMATCHES

EXCEEDSOPPOSESüCOMMENTS
Forced Labor and Human Trafficking isunder protection of Indonesian Law, and all
Indonesian citizens shall be equal before thelaw.
For the enforcement and protection of humanrights in accordance with the principle of ademocratic state based on law, the executionof human rights shall be guaranteed, regulated,and set out in statutory rules and regulations.

Workers must receiveü
wages directly or througha bank from the employer

LAW NO 13 Year 2003 concerning Manpower

Workers are free to leave
their employment at any
time with reasonable
notice, without threat or
penalty

LAW NO 13 Year 2003 concerning Manpower

Wages must be paid directly to workers or
through a bank.

üWorkers are free to leave their employment at
any time with 30 days prior notice
ARTICLE 154A PARAGRAPH (1) (i)The termination of employment may occur for
the following reason that the worker resigns of
his own accord and must meet the following
requirements:
1.submit a written application for resignationno later than 30 (thirty) days prior to the startdate of the resignation
2. not bound by official bonds; and3. continue to perform their obligations until
the date of resignation.

Workers are not required
to make financial
deposits with farmers,
labor contractors, or
any other third party at
the time of recruitment
or at any point during
employment

N/A

Workers are not charged
recruitment fees or otherrelated fees for theiremployment by labor
contractors

N/A

N/A

N/A

Appendix III – Summary of the Legal Information Questionnaire _ page 8 of 15

There are no rules on this matter.

In Indonesia, the crew leader is part of the
farmers community, and the regulation of thejob placement agency is not relevant to thispractice

52

External Assessment

Wages or income fromcrops and work done are
not withheld beyond thelegal and agreed payment
conditions.

ARTICLE 63 OF LAW 13 OF 2003
CONCERNING MANPOWER

ü

1. Wage deduction by Employers may be
conducted for the payment of:a. fine;b. compensation;c. Wage down payment;d. lease of company-owned houses and/or
goods which are leased by Entrepreneurs
to Workers;
e. debts or debt instalments of Workers/
Laborers; and/or
f. overpayment of Wages.
2. The Wage deduction as referred to inparagraph (1) letter a, letter b, and letterc shall be conducted in accordance with
the Employment Agreement, Company
Regulation, or Collective Employment
Agreement.
3. The Wage deduction as referred to inparagraph (1) letter d and letter e must be
carried out based on a written agreement or
written contract.
4. The Wage deduction as referred to inparagraph (1) letter f shall be conductedwithout Workers’ approval.

Farmers do not retain
the original identity
documents of any worker

ARTICLE 42 OF vREGIONAL REGULATIONOF EAST JAVA CONCERNING MANPOWER
MANAGEMENTü

Employers are prohibited from withholding
or keeping original documents attached toworkers as collateral. The original documents
in question are Identity Card (KTP), Driving
License (SIM), birth certificate, family card,
passport, diploma and certificate.
Where farmers arelegally required to retain
the original identity
documents of workers,
they provide securestorage protected fromunauthorized accessand ensure workers
have access to their
documents upon end of
employment

N/A

N/A

N/A

There are no rules on this matter

Where labor contractors
are used, farmers verify
their labor practices andensure they are in linewith the ALP standards

N/A

N/A

N/A

There are no rules on this matter.

No employment of prison N/Aor compulsory labor

N/A

N/A

There are no rules on this matter.

Appendix III – Summary of the Legal Information Questionnaire _ page 9 of 1553

External Assessment

Applicable laws
• Indonesian Civil Code: http://www.refworld.org/pdfid/3ffbd0804.pdf• Law No. 19 of 1999 concerning The Ratification of ILO (International Labour Organization)
Convention No. 105 Concerning The Abolition of Forced Labour (“Law 19/1999”) :http://www.dpr.go.id/dokjdih/document/uu/UU_1999_19.pdf• Law No. 13 of 2003 concerning Manpower (“Law 13/2003”): http://www.ilo.org/dyn/travail/
docs/760/Indonesian%20Labour%20Law%20-%20Act%2013%20of%202003.pdf• Law No. 21 of 2007 concerning Human Trafficking (“Law 21/2007”):
http://www.ykai.net/dokumen/perundangundangan/uuno21th2007.pdf• Government Regulation No. 32 of 1999 concerning Requirements and Procedure to Exercise
the Rights of Inmates of Correction Institutions, as lastly amended with Government
Regulation No. 99 of 2012 concerning Second Amendment of Requirements and Procedure to
Exercise the Rights of Inmates of Correction Institutions (“GR 32/1999”):
http://www.hukumonline.com/pusatdata/detail/13297/node/2http://www.hukumonline.com/
pusatdata/download/fl9378/node/13297• Law No. 11 of 2020 concerning Job Creation (“Law 11/2020”):https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020• Government Regulation No. 35 of 2021 concerning Temporary Employment Agreement,
Outsourcing, Working Hours and Breaks and Termination of Employment Relationships (“GR35/2021”):https://peraturan.bpk.go.id/Home/Details/161904/pp-no-35-tahun-2021• Government Regulation No. 36 of 2021 concerning Wages (“GR 36/2021”):https://peraturan.bpk.go.id/Home/Details/161909/pp-no-36-tahun-2021

Principle 5 – SAFE WORK ENVIRONMENT
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDS

Farmers provide a safe andsanitary working environment

ü

MATCHES

EXCEEDSOPPOSES

Government Regulation No. 50 of 2012
regarding Application of Management
System for Work Safety and Health
Employers must create a management
system for work safety and health, anddocument the training of work safety andhealth activities.

Farmers take all reasonablemeasures to prevent
accidents, injury and exposure
to health risks.
No person is permitted to top
or harvest tobacco, or to loadbarns unless they have been
trained on avoidance of green
tobacco sickness.

COMMENTS

N/A

N/A

N/A

Appendix III – Summary of the Legal Information Questionnaire _ page 10 of 1554

External Assessment

No person is permitted touse, handle or apply crop
protection agents (CPA) orother hazardous substancessuch as fertilizers, without
using the required personal
protection equipment.

üNo person is permitted touse, handle or apply crop
protection agents (CPA) orother hazardous substancessuch as fertilizers, without
using the required personal
protection equipment.

ü

Minister of Health Regulation Number
258/1992 regarding Health Management
Terms of Pesticides
Employers must have responsible
technical personnel for management ofpesticides
LAW NO 13 Year 2003 concerning
Manpower
Article 86
1. Every worker/labor has the right toobtain protection for:a. occupational Health and Safety;
b. morals and decency; andc. treatment in accordance with humandignity and values and religious
values.
2. In order to protect the safety ofworkers/laborers to realize optimal
work productivity, work safety andhealth efforts shall be conducted.

Persons under the age of 18,
pregnant women, and nursing
mothers must not handle orapply CPA.

LAW NO 13 Year 2003 concerning
Manpower, as further regulated under
Schedule of Minister of Manpower andTransmigration Decree 235/2003

ü

Minors are prohibited from interactingwith CPA
No person do not enter a field N/Awhere CPA have been applied
unless and until it is safe to
do so.

N/A

N/A

There are no SPECIFIC rules on thismatter.

N/A

N/A

N/A

There are no SPECIFIC rules on thismatter.

N/A
Accommodation, where
provided, is clean, safe, meetsthe basic needs of workers,
and conforms to the country’s
laws.

N/A

N/A

There are no SPECIFIC rules on thismatter.

Every person has access toclean drinking and washingwater close to where theywork and live.

Applicable laws
• Law No. 1 of 1970 regarding Work Safety (“Law 1/1970”):
http://gallery.mailchimp.com/36baaf7c780c0dd19987f5031/files/Safety_Act_No_1_1970.pdf• Law No. 24 of 2011 regarding Social Security Agency (“Law 24/2011”):
http://www.flevin.com/id/lgso/translations/Laws/Law%20No.%2024%20of%202011%20
on%20Implementing%20Agency%20of%20Social%20Security%20%28MoF%29.pdf• Government Regulation Number 7 of 1973 regarding the supervision of the circulation
handling of storage use of pesticides (“GR 7/1973’): https://www.google.com/url?sa=t&rct=
j&q=&esrc=s&source=web&cd=6&ved=0ahUKEwje0qHx26LMAhWnJ6YKHSTpAUsQFgg5M

Appendix III – Summary of the Legal Information Questionnaire _ page 11 of 1555

External Assessment

AU&url=http%3A%2F%2Fchm.pops.int%2FPortals%2F0%2Fdownload.aspx%3Fd%3DUNEPPOPS-NIP-Indonesia-1.English.pdf&usg=AFQjCNHGfW6wpRsQEJiqK0DJ9MeeYNjcUg&sig2=
xjuwHPUhu63QMUEQwQpHLA&cad=rja• Government Regulation No. 74 of 2001 regarding Hazardous and Toxic Materials (“GR74/2001”):https://www.minerba.esdm.go.id/library/sijh/PP7401_BahanBahaya.pdf• Government Regulation No. 81 of 2001 regarding Tools and Equipment for Plant Cultivation(“GR 81/2001”):https://docs.google.com/file/d/0B8IgLqxIru8eNm5BakFhWkxYYmM/edit?pref=2&pli=1• Government Regulation No. 50 of 2012 regarding Application of Management System forWork Safety and Health (“GR 50/2012”):
http://upma.vokasi.ui.ac.id/sites/default/files/PP%20No%2050%20tahun%202012%20
tentang%20Penerapan%20Sistem%20Manajemen%20Keselamatan%20dan%20Kesehatan%20
Kerja.pdf• Government Regulation No. 44 of 2015 regarding Application of Work Accident and Death
Securities (“GR 44/2015”):
http://www.bpjsketenagakerjaan.go.id/assets/uploads/tiny_mce/
PERATURAN/19012016_143835_Permenaker%20Nomor%2044%20Tahun%202015.pdf• Ministry of Health Regulation No. 258 of 1992 regarding Health Management Terms of
Pesticides (“MoH Regulation 258/1992”):
http://jdih.pom.go.id/produk/peraturan%20menteri/PERMENKES_NO.258_Menkes_Per_
III_1992_Tentang%20PERSYARATAN%20KESEHAT_1992.pdf• Minister of Manpower and Transmigration Decree No. KEP-235 / MEN / 2003 Regarding
Types of Work that are Hazardous to the Health, Safety or Moral of Children (“Ministry
Decree No KEP-235 / MEN / 2003”):
http://portalhr.com/wpcontent/uploads/data/pdfs/pdf_peraturan/1204195139.pdf• Ministry of Agriculture Regulation No. 05/Permentan/OT.140/1/2007 regarding Test andCertificate Granting Requirements and Procedures for Tools and Machines of Plant Cultivation(“MoA Regulation 5/2007”):
http://perundangan.pertanian.go.id/admin/file/Permentan-05-07.pdf• Ministry of Environment Regulation No. 3 of 2008 regarding Procedures of Symbolling andLabelling Hazardous and Toxic Materials (“MoE Regulation 3/2008”):
http://storage.jak-stik.ac.id/ProdukHukum/LingkunganHidup/IND-PUU-7-2008-No.%20032008%20%28SIMBOL%20DAN%20LABEL%29.pdf• Minister of Manpower and Transmigration Regulation No. 15 of 2008 (“Minister Regulation
15/2008”):
http://betterwork.org/in-labourguide/wp-content/uploads/p3k-permenaker-no-per-15-menviii-2008.pdf• Minister of Manpower and Transmigration No. PER.09/MEN/VII/2010 regarding Operator andOfficer of Lift and Haul Equipment (“MoMT Regulation 9 of 2010”):
http://betterwork.org/in-labourguide/wp-content/uploads/permenakertrans_9_2010.pdf• Minister of Manpower and Transmigration Regulations No. 19 of 2012 regarding Outsourcing(“MoMT Regulation 19/2012”):
http://luk.staff.ugm.ac.id/atur/tk/Permennakertrans19-2012PengalihanTK.pdf

Appendix III – Summary of the Legal Information Questionnaire _ page 12 of 1556

External Assessment• Minister of Agriculture Regulation No. 39/Permentan/SR.330/7/2015 regarding Pesticide
Registration (“MoA Regulation 39/2015”):
http://perundangan.pertanian.go.id/admin/file/Permentan%2039-2015%20Pendaftaran%20
Pestisida.pdf• Law No. 11 of 2020 concerning Job Creation (“Law 11/2020”):https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020

Principle 6 – FREEDOM OF ASSOCIATION
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDS

Farmers do not interferewith workers’ right tofreedom of association.

ü

MATCHES

EXCEEDSOPPOSESCOMMENTS
Law No 13 Year 2003 regarding Manpower
An employer is prohibited from interferencewith unions
Employment regulations for the formal
sector have been clearly defined in Law No.
13 of 2003 and its derivatives. Employment
regulations for the agricultural sector,
especially micro and small-scale agriculture,
still overlap, although in reality customary/cultural laws and traditions are mostly applied
by farmers.

Workers are free to join
or form organizations
and unions of their own
choosing.

ü

Workers are free tobargain collectively.

N/A

Worker representatives
are not discriminatedagainst.

ü

Law No 13 Year 2003 regarding Manpower
ARTICLE 104
Every worker has the right to form and become
member of Labor Union
N/A

N/A

Worker representatives
have access to carryout their representative
functions in theworkplace.

There are no SPECIFIC rules on this matter.
Law No 13 Year 2003 regarding Manpower
ARTICLE 153 (G)The entrepreneur is prohibited fromterminating the employment of a worker/
labourer because of the following reasons
The worker/labourer establishes, becomes a
member of and or an official of a trade/labour
union, the worker/ labourer carries out trade/labour union activities outside working hours,
or during working hours with approval from theentrepreneur, or according to that which has
been stipulated in the work agreement, or thecompany regulations, or the collective labour
agreement.
Employers have an obligation to provide theopportunity to the officials and members of aLabor Union to carry out Labor Union activities
during working hours that are agreed upon byboth parties and or arranged in the Collective
Labor Agreement.

Appendix III – Summary of the Legal Information Questionnaire _ page 13 of 1557

External Assessment

Applicable laws
• Law No. 20 of 2001 concerning Labor Union (“Law 20/2001”):
http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=57553• Law No. 13 of 2003 concerning Manpower (“Law 13/2003”): http://www.ilo.org/dyn/travail/
docs/760/Indonesian%20Labour%20Law%20-%20Act%2013%20of%202003.pdf• Decree of President of Republic of Indonesia No. 83 of 1998 concerning The Ratification ofConvention No. 87 of The ILO Concerning Freedom of Association And Protection Of The
Right To Organise (“Decree 83/1998”):
http://webcache.googleusercontent.com/search?q=cache:sUtgrVjRkqUJ:www.hukumonline.
com/pusatdata/downloadfile/lt4eafedefaa209/parent/12584+&cd=2&hl=en&ct=clnk• Ministry of Manpower and Transmigration Decree No. KEP-16/MEN/2001 of 2001
concerning Procedure of Registration of Labor Union (“Decree 16/2001”):
http://www.hukumonline.com/pusatdata/detail/586/node/167/keputusan-menteri-tenagakerja-dan-transmigrasi-no-kep-16_men_2001-tahun-2001-tata-cara-pencatatan-serikatpekerja_serikat-buruh• Ministry of Manpower Decree No. 28 of 2014 concerning Procedures to Draft and Ratify
a Company Regulation and to Draft and Ratify a Joint Employment Agreement (“Decree
28/2014”):
http://www.hukumonline.com/pusatdata/detail/lt54bcc3c46f069/node/171/peraturanmenteri-ketenagakerjaan-no-28-tahun-2014-tata-cara-pembuatan-dan-pengesahanperaturan-perusahaan-serta-pembuatan-dan-pendaftaran-perjanjian-kerja-bersama• Law No. 11 of 2020 concerning Job Creation (“Law 11/2020”):https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020

Principle 7 – TERMS OF EMPLOYEMENT
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSMATCHES

EXCEEDSOPPOSESAt the time of hire, farmers
inform workers of their legal
rights

ü

N/A

N/A

COMMENTS
Only applicable if work agreement inwriting. Law No 13 Year 2003, work
agreement can be made orally.
Government Regulation no 35-year 2021
Chapter 2 – Article 2
1) Employment relationship commence
due to working agreement
2) Working agreement can be made both
written and verbal
In agriculture sector, worker hired in daily
and paid daily. Working agreement was
verbally made between two parties andfarmers explain type of task assigned to
the worker, along with the duration, andwage.

Appendix III – Summary of the Legal Information Questionnaire _ page 14 of 1558

External Assessment

At the time of hire, farmers
inform workers of theessential aspects of the work
relationship and work placesafety such as work to be
performed, working hours,
wages paid, period of hire,
and all legally mandated
benefits

ü

Farmers and workers
have entered into written
employment contracts whenrequired by a country’s laws
and workers receive a copy ofthe contract.

ü

N/A

N/A

Only applicable if work agreement inwriting. Law No 13 Year 2003, work
agreement can be made orally.
Article 108
The employer who employs 10 or more
employees shall provide the work rules.
If there are less than 10 employees at aworkplace, the employer is not required by
the law to provide a written work rules.

N/A

N/A

LAW NO 13 Year 2003 concerning
Manpower
Article 51
1. Work agreements can be made either
orally or in writing.
2. Work
agreements
thatspecifyrequirements in writing shall be carriedout in accordance with valid legislation.
Employment contract under IndonesianLabor Law may be made either in written
form or unwritten/implied depending on
the type of the employment relation.

Terms and conditions of
employment contracts do
not contravene the country’s
laws.

ü

N/A

N/A

Only applicable if work agreement inwriting. Law No 13 Year 2003, work
agreement can be made orally.

Applicable laws
• Indonesian Civil Code: http://www.kuhper.com/• Law No. 11 of 2020 regarding Job Creation (“Law 11/2020”)
https://peraturan.bpk.go.id/Home/Details/149750/uu-no-11-tahun-2020• Law No. 13 of 2003 regarding Manpower (“Law 13/2003”): http://www.ilo.org/dyn/travail/
docs/760/Indonesian%20Labour%20Law%20-%20Act%2013%20of%202003.pdf• Minister of Manpower and Transmigration Decree No. KEP.100/MEN/VI/2004 regarding
Stipulation on Implementation of Employment Agreement for Definite Period (“MoMT Decree
100/2004”):
http://www.ilo.org/wcmsp5/groups/public/@asia/@ro-bangkok/@ilo-jakarta/documents/
publication/wcms_149906.pdf

Appendix III – Summary of the Legal Information Questionnaire _ page 15 of 1559External Assessment

Appendix IV – Scope and Methodology

Assessment team
The team responsible for conducting this assessment
consisted of three auditors from Indonesia, one
coordinator from Brazil and one coordinator fromthe Netherlands. The auditors conducted farmassessments, interviewed field technicians andsanitation team personnel, and were accompanied
by one of the coordinators during most of thevisits. The coordinators interviewed Sadhana´smanagement and senior field staff (including field
supervisors). Both the auditors and coordinators
had been trained before the assessment. Thisqualification process consisted of the following
stages:• Selection of candidates by CU;• Check the candidates’ experience with auditing
programs and ALP assessments;• Two-day preparation training by CU directlyprior to starting the field visits.
Desk review
Prior to the assessment, Sadhana was requested tosend documentation to CU to provide a better ideaof the market characteristics and the management
systems in place. Sadhana also provided the legal
information that was relevant to the ALP Code (seeAppendix II for more detailed legal information). Thiswas important to ensure a thorough preparation of
the assessment.
Opening meeting
On 23 August 2022, CU started the assessmentwith an opening meeting at Sadhana´s head officein Surabaya, Indonesia. This meeting was attended
by Sadhana´s ALP/STP Country Team. CU presented
the objectives and approach of the assessment,
while Sadhana provided a brief overview of thecompany and team.

Methodology for ALP implementation systemreview
The methodology used for the evaluation of
Sadhana´s implementation of the ALP Program
was based on the widely used PDCA 13 cycle. This
cycle is a management method for the continuous
improvement of processes and products. CU spent
two days (23 and 24 August 2022) at Sadhana´shead office to interview management staff, analyze
documentation, and evaluate the company´s systems
to better understand how the implementationof the ALP Program was organized. In total, CU
interviewed seven management personnel and 17
field personnel.
Scope and farm samplingThis assessment focused on Virginia Sun-cured
tobacco farmers in the regions of Wonogiri andRembang on the Island of Java. Sadhana had
contracts with 3,645 farmers in Wonogiri and
8,740 farmers in Rembang, from which the CU teamrandomly selected 40 and 48 farmers, respectively,
for the farm visits. This number was derived fromthe square root of the total farmers in scope androunded down to maximize resource efficiency andtiming for both CU and Sadhana.
In both Wonogiri and Rembang, the majority offarmers were small-scale farmers, growing an
average of one hectare of tobacco (see Appendix
IV). However, the regions differed in languages andcultural aspects.
Over a period of one week, CU visited an averageof four farms per day, with a reporting day after two
consecutive field days.

13. Plan, Do, Check, Act
Appendix IV – Scope and Methodology_ page 1 of 160

External Assessment

Appendix V – Overview of Farms Visited

Farm sizes in the regions assessed:
Farm size (Wonogiri)

Farm size (Rembang)
10%

12%

40%

46%
0 - 0,5 ha

48%

0 - 0,5 ha

44%

0,5 - 1 ha

0,5 - 1 ha

>1 ha

>1 ha

Stages in tobacco (Wonogiri)

25

22

20
15

13

10
5

1

2

2

CuringDelivery ofTobacco0
Growing

Topping

HarvestingStages in tobacco (Rembang)

23

25
20
15

14

10

8

5

3
0

0
Growing

Topping

Appendix V – Overview of Farms Visited_ page 1 of 4

Harvesting

CuringDelivery ofTobacco61

External Assessment

Types of land ownership on the farms assessed:
Type of land use (Wonogiri)

Type of land use (Rembang)

5%

10%
30%
42%

53%

60%
Communal

Leased or rented

Leased or rented

Owned

Owned

Owned and leased

Communal: Arrangement between farmers. Usually, groups of farmers who use same plot of land forfarming activities.

Types of labor arrangements commonly found in each region:
Type of labor (Wonogiri)

Type of labor (Rembang)

3%
6%
37%
54%

60%

40%

Exchange labor

Exchange labor

FamilyFamilyHired Labor

Hired Labor

Exchange of labor: Arrangement between farmers. Usually, neighboring farmers who work on each other´sfarms (often with their family members) without receiving payment.

Appendix V – Overview of Farms Visited_ page 2 of 462

External Assessment

Persons interviewed during the assessment.
People Interviewed

Wonogiri

Rembang

Farmers

40

48

Family Members

27

13

Total

67

61

CU did not interview any hired workers, because at the time of the assessment there were no workers
present at the farms.
Work duration and frequency for family members working in tobacco production in Wonogiri:
Work duration for family
members (Wonogiri)

Work frequency for family
members (Wonogiri)

15%
41%

41%

59%
44%
2 to 3 days a week

4 hours

Full time (6 days)

5 hours
6 to 7 hours

Work duration and frequency for family members that work in tobacco production in Rembang:
Work duration for family
members (Rembang)

Work duration for family
members (Rembang)

31%
38%
62%
69%

2 to 3 days a week

5 hours

Full time (6 days)

6 to 7 hours

Appendix V – Overview of Farms Visited_ page 3 of 463

External Assessment

Closing meeting
On 13 October 2023 a closing meeting was held via
web conference. As with the opening meeting, theclosing meeting was attended by the ALP Country
Team. Furthermore, representatives of PMI Regional
joined the web conference call. CU presented theinitial findings, and Sadhana requested clarificationof certain items. A constructive discussion took
place on several topics. Overall, CU’s findings
were considered a useful base for taking action to
improve the implementation of the ALP Program.
Reporting procedure
During the assessment, auditors reported after eachfield day to the coordinator. This person monitored
the auditors’ findings and provided feedback
whenever necessary. The coordinator compiled
all findings and combined these with the findings
from the management assessment. Public releaseof CU’s assessment report demonstrates PMI’scommitment to transparency, which is an importantcomponent of the ALP Program. CU authored thefinal report, which was evaluated by Verité. PMI
reviewed the report. Finally, Sadhana reviewed thereport to verify that all the information was correct,
and to finalize their action plan that was based on
this report 14.

14. Leaf tobacco suppliers can start drafting their action plans after the closing meeting, as initial findings usually do
not differ much from the final report.
Appendix V – Overview of Farms Visited_ page 4 of 464