THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

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

PMI Third Party Assessment - PM Brazil

TABLE OF CONTENTS

1. ALP PROGRAM BACKGROUND AND ASSESSMENT OVERVIEW................................ 5
2. PHILIP MORRIS BRASIL ASSESSMENT: SCOPE AND METHODOLOGY ................ 9
2.1 OPENING MEETING ....................................................................................... 10
2.2 STAFF INTERVIEWS AND ALP PROGRAM DOCUMENTATION .......................................... 10
2.3 FARM VISITS .............................................................................................. 11
2.4 FARM SAMPLE SELECTION ................................................................................ 11
2.5 WORKER INTERVIEWS .................................................................................... 12
2.6 CLOSING MEETING ....................................................................................... 13
2.7 PREPARATION OF THE FINAL REPORT ................................................................... 13
3. ASSESSMENT IMPLEMENTATION PHASE 1 OF THE ALP PROGRAM .................... 14
3.1 CONDUCT OF THE ASSESSMENT ......................................................................... 15
3.2 PEOPLE AND PROCESSES TO MANAGE THE ALP PROGRAM ........................................... 15
3.2.1 Internal structure for ALP implementation ....................................................... 15
3.2.2 Field technicians ALP responsibilities .................................................................. 16
3.3 COMMUNICATING THE ALP CODE REQUIREMENTS TO ALL FARMERS ............................... 17
3.3.1 Preparation and training .......................................................................................... 17
3.3.2 Understanding of Forced Labor and Compliance with the Law ................. 17
3.3.3 The ALP communication strategy ......................................................................... 18
3.3.4 ALP communication methods and materials .................................................... 19
3.4 BUILDING FARM PROFILES FOR ALL CONTRACTED FARMS ........................................... 19
3.4.1 Accuracy of Farm Profiles ........................................................................................ 20
3.4.2 Date gathering system for Farm Profiles .......................................................... 20
3.5 PROMPT ACTIONS ........................................................................................ 20
3.5.1 Prompt Actions reporting mechanism ................................................................ 21
4. FARM LEVEL ASSESSMENT OF ALP CODE STANDARDS ............................................ 23
4.1 ALP CODE PRINCIPLE 1: CHILD LABOR ............................................................... 24
4.1.1 Farmer awareness of minimum age for working on tobacco .................... 26
4.1.2 Family farms ................................................................................................................ 26
4.1.3 Hiring workers under 18 years old ...................................................................... 27
4.1.4 Awareness of hazardous work ............................................................................... 27
4.1.5 Age verification ........................................................................................................... 27
4.1.6 Third party labor brokers ........................................................................................ 27
4.1.7 Exchange of labor between farmers ................................................................... 28
4.2 ALP CODE PRINCIPLE 2: INCOME AND WORK HOURS ............................................... 29
4.2.1 Minimum salary........................................................................................................... 31
4.2.2 Regular payment ........................................................................................................ 31
4.2.3 Work hours ................................................................................................................... 31
4.2.4 Wage and overtime calculations ........................................................................... 31

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PMI Third Party Assessment - PM Brazil

4.2.5 Legal benefits .............................................................................................................. 32
4.2.6 Record keeping ........................................................................................................... 33
4.2.7 Third party labor brokers ........................................................................................ 33
4.3 ALP CODE PRINCIPLE 3: FAIR TREATMENT ........................................................... 34
4.3.1 Fair treatment ............................................................................................................. 35
4.3.2 Grievance mechanism .............................................................................................. 35
4.3.3 Large farmers .............................................................................................................. 35
4.3.4 Third party labor brokers ........................................................................................ 35
4.4 ALP CODE PRINCIPLE 4: FORCED LABOR ............................................................. 36
4.4.1 Indirect payments to workers ............................................................................... 36
4.4.2 Ability to leave; reasonable notice ...................................................................... 37
4.4.3 Financial deposits ....................................................................................................... 37
4.4.4 End of the harvest payments ................................................................................ 37
4.4.5 Partnerships ................................................................................................................. 37
4.5 ALP CODE PRINCIPLE 5: SAFE WORK ENVIRONMENT ................................................ 38
4.5.1 General safety hazards ............................................................................................ 39
4.5.2 Harvesting wet tobacco ........................................................................................... 40
4.5.3 Water to drink/for washing .................................................................................... 41
4.5.4 Protection from CPA and GTS ................................................................................ 41
4.5.6 Safety while exchanging labor or third party contracting .......................... 42
4.6 ALP CODE PRINCIPLE 6: FREEDOM OF ASSOCIATION ............................................... 44
4.6.1 Union affiliation ........................................................................................................... 44
4.6.2 Third party labor brokers ........................................................................................ 44
4.7 ALP CODE PRINCIPLE 7: COMPLIANCE WITH THE LAW .............................................. 45
4.7.1 Awareness of the law ................................................................................................ 46
4.7.2 Worker registration and written contracts........................................................ 46
4.7.3 Third party labor brokers ........................................................................................ 46
5. CONTROL UNION CONCLUDING REMARKS .................................................................... 48
APPENDICES ....................................................................................................................................... 50
APPENDIX 1. PMB RESPONSE AND ALP PROGRAM ACTION PLAN 2013-2014........................ 51
APPENDIX 2. THE ALP CODE ................................................................................ 63

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PMI Third Party Assessment - PM Brazil

TERMS and ACRONYMS
AFUBRAALP
ALP Code
ALP Code Principle

Brazilian Tobacco Growers´ Association
Agricultural Labor Practices Program
PMI’s labor practices code with seven ALP Code Principles
Short statements that set expectations of how the farmer manages his farm inseven focus areas
ALP Country Team (or CT) Inter-department group charged with ALP implementation
CDI
Centro de Desenvolvimento Informatico = Centre for Development Informatics
CLT
Consolidação das Leis do Trabalho = Consolidation of Labor Laws
CA
Corporate Affairs
CU
Control Union
CPA
Crop Protection Agents
EHSS
Environment, Health, Safety and Security Department of a PMI entity
A data collecting tool developed by PMI with Verité to track the socio-economic status
Farm Profilesof the farms, systematically gather detailed information about, among other things,
the type of labor employed, farming activities that minors may be involved in, andhiring
FCV
Flue-cured Virginia tobacco
FT
Field technician
FGTS
Fundo de Garantia do Tempo de Serviço = Guarantee Fund for Length of Service
GAP
Good Agricultural Practices
GTS
Green Tobacco SicknessMS
Measurable Standards (ALP Code Principle)NGO
Non Governmental OrganizationOC
PMI Operations Center (Lausanne, Switzerland)
Phase 1
Start up of ALP Program (training, communications, outreach)Phase 2
ALP Program full implementation (monitoring, addressing problems)
PMB
Philip Morris Brasil Indústria e Comércio Ltda
PMI
Philip Morris International Inc. or any of its direct or indirect subsidiaries
PPE
Personal Protection 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
SindiTabaco
Tobacco Industry Interstate Association
STP
Sustainable Tobacco Production

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PMI Third Party Assessment - PM Brazil

1. ALP Program background and assessment overview

THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

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PMI Third Party Assessment - PM Brazil

In 2011 Philip Morris International launched an Agricultural Labor Practices worldwide
Program aiming to progressively eliminate child labor and achieve safe and fairworking conditions on tobacco farms. The ALP Program is compulsory for all suppliers
to PMI and consists of 1) an Agricultural Labor Practices Code, setting clear standards
for all tobacco farms growing tobacco that PMI ultimately buys, 2) an extensive
training program for all PMI and supplier’s staff that are directly involved with tobacco
growing, in particular the field technicians that provide regular visits to the farms, 3) a
multi-layered internal and external monitoring system, and 4) involvement ofgovernmental and non-governmental stakeholders in improving labor practices andenhancing the livelihoods of tobacco growing communities. The ALP Program wasdeveloped and is being implemented in partnership with Verité, a global social
compliance and labor rights NGO. Control Union Certifications was commissioned by
PMI, to develop the external monitoring component of the ALP Program working intandem with PMI’s strategic partner Verité; and to carry out these assessments at PMI
affiliates, suppliers and farms worldwide. All PMI affiliates and suppliers report annuallyon an internal basis and are assessed regularly. For the ALP Program implementationinternal reviews are also being done in all countries where tobacco is sourced to assess
initial progress and challenges. Third Party Assessments are periodic reviews
undertaken by CU at PMI affiliates, suppliers and farms worldwide.
In this initial stage of the roll out of the ALP Program, third party assessments aresolely focused on the ALP Program implementation and are specifically aimed to reporton each affiliate and supplier´s progress in starting work on ALP against the objectives
set for Phase 1. by PMI 1. In the future, third party assessments will be integrated into
the wider routine assessment of PMI’s Good Agricultural Practices Program, which also
encompasses environmental and crop guidelines under one Sustainable Tobacco
Production strategy.
The ALP Code contains seven ALP Code Principles:
1.
2.
3.
4.
5.
6.
7.

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

The full ALP Code is contained in Appendix 2.
1

The division of ALP implementation into two Phases (1 and 2) is not a permanent one. In practice many
countries start to consider how to address and respond to situations that do not meet the Code and tomonitor changes before formally finishing Phase 1.

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PMI Third Party Assessment - PM Brazil

The implementation of PMI’s ALP Program in the affiliates or suppliers that purchase
tobacco for PMI has been divided in two phases, which can be summarized as follows:
Phase 1••••

Ensure that management personnel and field technicians at affiliate or supplierlevel understand the ALP Code and the implementation approach, and have thepeople and the processes in place to roll-out and manage the ALP Program
Communicate the ALP Code requirements and expectations to all farmers
Build Farm Profiles for every contracted farm, identifying risk areas and tracking
the ALP Code communication to farmers
Keeping eyes and ears open to identify situations and incidents at the farms
that should be reported and addressed immediately

Phase 2•••••

Collect detailed information about labor practices on every contracted farm
Assess systematically each farm for compliance with the ALP Code and its
measurable standards
Create and implement an improvement plan for each farm to remedy situations
not meeting the standards
Identify and implement corrective and/or preventive measures that can address
the root causes of the issues and risks found on the farms
Report systematically on the progress that is being made(Source: Verité & PMI, 2011)

Phase 1 encompasses a first wave of training for affiliate’s and supplier’s management
personnel and field technicians globally to include:
1) the company’s objectives and the expectations placed on them2) the meaning of the ALP Code Principles and Measurable Standards

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3) ways to communicate ALP topics to farmers4) how to keep track of progress and build a Farm Profile5) spotting problems when they are visiting the farmers they support
After this initial ALP training, all affiliates and suppliers begin their outreach to farmers
and start to put in place the processes to manage the various Phase 2 components of
the ALP Program. The implementation of Phase 1 started worldwide in late 2011 when
Verité and PMI began holding the first training sessions with the management
personnel of third party suppliers and PMI affiliates 2.

2

PMI described the details of this roll-out process in their “ALP progress report” released in the fall of 2012:
http://www.pmi.com/eng/media_center/company_statements/documents/PMI_ALP_Progress_Report_201
2.pdf

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2. Philip Morris Brasil assessment: Scope andmethodology

THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

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PMI Third Party Assessment - PM Brazil

This report covers the first external assessment of the ALP Program since the launch in2011, and took place in January-February 2013 in Brazil. Philip Morris Brasil, PMI´slocal affiliate, was selected for this assessment due to the large number of contracted
farmers and diversity of farm types. At the time of the assessment, PMB was still
implementing Phase 1 of the ALP Program and was about to complete the first season
under the ALP Program.
2.1 Opening meeting
CU started the assessment with an opening meeting with PMB senior management, the
ALP Country Team representatives (from the Leaf, Corporate Affairs and Law
departments), PMI’s regional coordinators of the ALP Program and a representative of
PMI’s Operations Center in Switzerland. In this meeting CU presented the assessment’s
objectives and plan and PMB provided an overview of the work done to date on ALP.
2.2 Staff interviews and ALP Program documentation
The assessment of PMB’s work during the Phase 1 of ALP was done through individualand group interviews with PMB’s senior management, the staff involved in the ALP
Program implementation, and, during farm visits, through individual interviews with
farmers.
In total 37 field technicians were interviewed individually (on the days of the farm
visits). In addition, one field manager and one field supervisor from each of PMB’s
buying stations, and the members of the ALP Country Team were interviewed. Allinterviews were conducted individually to avoid bias. These interviews covered thefollowing topics:
•
•
•
•
•
•
•
•
•
•
•

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

As requested, PMB provided CU with all the relevant documentation related to the ALP
Program implementation, namely: Farm Profiles, farmer communication materials,
purchase contracts, training records and personnel records.

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PMI Third Party Assessment - PM Brazil

2.3 Farm visits
On each farm CU conducted individual interviews with farmers to assess theeffectiveness of PMB’s communication efforts during Phase 1, namely verifying:whether farmers had received information about the ALP Code, their level ofunderstanding and attitude towards the ALP Code Principles and the key messages
received.
CU used a variety of methods to collect the information presented in this report oneach farm’s practices in relation to all the ALP Code’s measurable standards including:farmer interviews, but also through individual interviews with workers (when thesewere present), verification of documentation and visual observation of fields, storage
rooms, working stations and housing. In every interview CU briefly explained theintention of the assessment and assured the interviewees that all information would betreated with complete confidentiality.
In order to plan the logistics of the farm visits, a list of selected farms was provided by
CU to the ALP coordinator on the Thursday before each assessment week. Each day CU
randomly chose one field technician and four farms of different sizes. Two of thesefarms were chosen from the pre-selected list by CU. The other two were kept as
options for unannounced visits, which were made known only on the day of the visit.
In total, CU visited 128 farms, of which which 94 were pre-selected and 34 wereunannounced. The minimum number of farms that needed to be visited in order toconstitute a representative sample, was 125 as this is the square root of the total
number of contracted farms.
2.4 Farm sample selection
At the time of the assessment, PMB had contracted to buy tobacco from 15,662
farmers from three States: Rio Grande do Sul (RS), Santa Catarina (SC) and Paraná(PR). Tobacco was being collected at five buying stations (located in Rio Grande do Sul
and Santa Catarina). One, the Maravilha buying station, sourced almost exclusively
Burley tobacco, while the others only Virginia tobacco.
Amongst PMB’s contracted farmers, 40% of the farmers grow between 0,3 and 1,5
hectares of tobacco, 43% between 1,51 and 3 hectares, and 17% grow more than 3
hectares. While the selected farm sample represents the total universe of farms in the
different tobacco growing regions, the assessment selection was purposely skewed
towards larger farms, being where a larger number of workers are expected to bepresent. Therefore, the numbers presented in this report cannot be taken as ameasure of prevalence without considering and adjusting for this factor.
The graphs and tables below provide demographic information on the farms that werevisited during the assessment.

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PMI Third Party Assessment - PM Brazil

Type of Farm
Farms with permanent or temporary workers
Family farms without contracted workers (may exchange labor)

Farm size

%
50%
50%

Type of tobacco
2%

16%
21%

0,3-1,5ha
53%

31%

Virginia

1,51-3ha>3ha*

Burley77%

Mixed

2.5 Worker interviews
In total, 38 workers were interviewed during the farm visits 3. The table below
demonstrates the demographics of this sample.
Demographic data of workers interviewed
Type of worker
33 permanent *5 temporary
Gender
8 women
30 menOrigin38 local0 migrantAge
38 adults
8 children*** Permanent = working for more than 1 consecutive month at a particular farm**Persons under 18 years old that are hired on the farm as workers , or are family members
helping at the farm.
Like interviews on affiliate level, to avoid bias, interviews with workers were conductedwithout the presence of the farmer and field technician. The majority of the interviews
were conducted individually and some were group interviews. On each farm, CU aimed
to interview different “types” of workers i.e. permanent and temporary workers, men
and women, and children (if any) and adults. Observation was an important
assessment technique used on the farms.

3

Due to the timing of the assessment (curing phase), CU found a relatively low number of workers at thefarms visited. If no workers were present at all CU interviewed the farmer about the practices regarding theworkers he/she had contracted earlier in the season

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PMI Third Party Assessment - PM Brazil

2.6 Closing Meeting
On Friday 15 February 2013, at the closing meeting at PMB’s offices, CU conducted apresentation to provide the initial findings of the assessment. Like the opening
meeting, this closing meeting was attended by PMB senior management, the ALP
Country Team representatives (from the Leaf, Corporate Affairs and Law
departments), PMI’s regional coordinators of the ALP Program and a representative of
PMI’s Operating Center (Switzerland), CU and Verité.
2.7 Preparation of the final report
The final public report of the assessment is an important, external measurement of
the progress of ALP implementation in all countries globally where PMI sources
tobacco, and its release to the public contributes to the full transparency of the ALP
Program. Assessment reporting broadly follows the five steps below:

1. Assembly ofInternal Draft
for Review

2. Quality
Control Checkby Verité

3. Feedback
PMI & PMB

4. Action Plan
Created by
Local Market

5. Preparationof Public
ReportQuality control by Verité, review and feedback by PMI and PMB, and market action
planning are the key components of the reporting process. Control Union, as thecompany conducting the assessments, is mainly responsible for authoring the report,with Verité overseeing the process. PMI and the local affiliate or supplier may request
clarifications on findings during the drafting process. After both PMI and the local
market affiliate or supplier feel findings are sufficiently clear, they begin preparing an
ALP Program Action Plan or revising existing GAP/ALP Program Plans to reflect andrespond to the findings.

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PMI Third Party Assessment - PM Brazil

3. Assessment implementation Phase 1 of the ALP
Program

THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

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PMI Third Party Assessment - PM Brazil

This chapter describes the findings of the assessment of PMB’s work during the ALP
Program Phase 1 implementation.
3.1 Conduct of the assessment
CU was satisfied with the cooperation and level of access to information provided by
PMB´s management personnel and field technicians. All persons interviewed
demonstrated willingness to explain internal processes and provide information. CU
was also satisfied with the openness of the farmers during farm visits and theiracceptance of CU’s request to interview their workers. However, some of the farmers
visited during the first three days of field work in the Santa Cruz do Sul region seemed
to have been “coached” by their field technician; the farmers repeatedly said that theirchildren were not involved in any tobacco related activities and one of them declaredthat the field technician had come the day before to attach the ALP poster to a wall.
However, after reporting this to the ALP Coordinator the situation seemed to havebeen addressed as no further problems were detected through the remainder of theassessment.
3.2 People and processes to manage the ALP Program
3.2.1 Internal structure for ALP implementation
At the time of the assessment, PMB had a strong new internal structure for the
implementation of the ALP Program; clear lines of communication were set between
the employees involved; collaboration between the ALP Country Team and the tobacco
production team was effective; the required departments such as Operations, Legal,
and Corporate Affairs were all represented; and the Senior Management Team was
actively involved. Another reason for considering this new internal structure to bestrong is that the responsibilities related to the ALP Program were made clear to all
employees and included in their objectives for the year.
CU can confirm that the members of the ALP Country were engaged with the ALP
Program and believed it would bring benefits to all parties involved; the company, thefarmers and the workers. CU believes that with this strong internal structure,visualized in the organizational chart below, PMB is well positioned to complete the firstphase of the ALP Program and initiate the roll-out of Phase 2 from 2013 into 2014.

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PMI Third Party Assessment - PM Brazil

Organizational chart: PMB’s ALP Program team

3.2.2 Field technicians ALP responsibilities
The ALP Program brings additional workload to the field technicians which PMB needs
to look into. Currently, depending on the experience level of a given field technician,the size of the farms to be supported, and the distance between these farms, eachfield technician is assigned a range of between 120 to 160 farms. They visit the farms
they support five to seven times a year.
At the time of the assessment, field technicians had conducted only one visit dedicatedto the entire ALP Code and this took place during the harvest period which is when
farmers are very busy. At the time of the assessment, 100% of the farmers had been
included in PMB’s outreach efforts and had received information about the ALP Codebut 60% of the field technicians interviewed declared that they do/did not havesufficient time to properly communicate the ALP Code to the farmers.
PMB response (for full text see Appendix 1.): ”The Country Team also perceives that time
constraints could be a challenge going forward as field technicians begin the second phase of the ALP
Program, systematically monitoring and addressing issues on each farm. PMB conducted an internal study toassess whether and to what extent adjustments where needed for field technicians, to allocate the necessary
time to execute all the expected ALP Program activities, together with all the other tasks within their job’s
scope. This study containing a recommendation of ideal arrangements of work load per growing region was
already submitted to PMB’s senior management team and it was implemented in Q3 2013.”

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3.3 Communicating the ALP Code requirements to all farmers
3.3.1 Preparation and training
PMB’s managers were involved early on with the ALP Program while it was still in its
design stage at PMI and were included in PMI’s first global training for the ALP
Program’s regional coordinators. Subsequently, starting in September 2011, PMB
organized two rounds of training in which 100% of the field technicians participated.
The first round was an introduction to the ALP Program, and the training given followed
the global structure and content of the global training program. The second roundconsisted of a workshop during which the ALP Country Team asked the fieldtechnicians to list the main questions and comments provided by farmers whencommunicating the ALP Code. Once all answers were recorded, the field technicians
were asked to think about ways in which they could respond to these questions andcomments. This seemed to be an effective approach as all field technicians interviewed
evaluated the second training positively. A third training for field technicians wasplanned to start in 2013 to focus on filling in the form for reporting Prompt Action
situations and incidents, and any preparations for Phase 2 of the ALP Code roll-out.
3.3.2 Understanding of Forced Labor and Compliance with the Law
While all the relevant personnel had received the appropriate training for Phase 1 andhad a good general understanding of the ALP Code, both PMB’s management and fieldtechnicians had a limited understanding of the ALP Code Principles dealing with forcedlabor and compliance with the Law.
oo

In general, PMB personnel had a narrow understanding of forced labor as thosesituations when workers are physically unable to leave their employment. They
were not yet able to correlate the Forced labor ALP Code Principle with a rangeof every-day practices that constitute risk factors for, or contributors to,situations of forced labor, such as: third party contracting and end-of-theharvest payment.
While the measurable standards dealing with Compliance with the Law (ALP
Code Principle 7) are clearly focused on the agreements established between
farmers and workers, PMB personnel did not seem to be focused on this aspectof the labor law, but rather on the more general concept of all the relevant
applicable laws.

The Country Team had thus a limited ability to provide guidance to farmers on thesematters as well as a limited ability to identify these risk factors when they do occur.
Regarding the law, the field technicians instruct farmers to consult labor unions
because, PMB does not want field technicians to provide complex legal information.
However, CU identified several pieces of incorrect advice given by labor unions as will
be discussed below.

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PMB response: “In the context of the rollout of the second phase of the ALP Program, the Country Teamdelivered specific training on topics related to the ALP Code Principles of Forced Labor and Compliance with
the Law to all field technicians and their supervisors.... Also, during the crop season, from August to
December, at staff meetings… the field technicians will be asked to present and discuss specific practicalexamples …which can illustrate the points of concern and how they can be addressed (starting Q3 2013).”3.3.3 The ALP communication strategy
In the Maravilha region around 20% of the farmers had been included in groupmeetings about the ALP Code organized by the field technicians. Additionally, fieldtechnicians stated that they always try to include the family members in thecommunication as they generally participate in the activities on the farm. During
interviews with farmers, CU noticed that many family members were indeed aware of
the ALP Code. In their outreach efforts PMB prioritized specific communication with thefarmers on the ALP Code Principles related with child labor and safe work environment.
This was driven both by the commitments made in the agreement signed with theLabor Prosecutor 4 in November 2012 and the fact that, according to PMB, these topics
are the ones that are more difficult to tackle.
CU considers the communication strategy of PMB on child labor, PPE usage and GTS
was effective but there still is a challenge in raising awareness and understanding
among farmers of how the specific requirements and ALP Code Principles are relevant
for their farm. Giving priority to child labor and safe work environment also means
there is now a need to increase attention to other five ALP Code Principles and to
improve the awareness and understanding of all seven ALP Code Principles andstandards. There is a need to improve field technicians own understanding of certain
ALP Code Principles especially in regards to forced labor and compliance with the law.
PMB response: “Training sessions were conducted during the rollout of the second phase of the ALP
Program (July and August 2013), more practical exercises were shared connecting farm practices and the
ALP Code measurable standards as well as regular staff meetings (every two months) with real cases related
to each ALP Code Principle provided. The Country Team is also implementing a regular quiz testing during
training sessions to keep track of knowledge improvements and identify areas of focus.”
Agreement between the Tobacco Industry Interstate Association (SindiTabaco), the Brazilian Tobacco
Growers´ Association (AFUBRA), and the Labor Prosecutor of the Ministry of Labor for the Municipality of
Santa Cruz do Sul. This agreement is in place since 2009 (initial signatories were Souza Cruz (British American
Tobacco), Universal Leaf, and Alliance One) and after having established its leaf buying operation PMB also
signed the Agreement in December 2012. Among others, the Agreement foresees:• That tobacco companies include a clause in their purchase and sale agreements prohibiting the useof labor below 18 years and to provide guidance for farmers on matters pertaining to child labor.
• Sets rules for safety requirements, namely on the use of pesticides, requiring companies to provide
guidance and the necessary personal protective equipment to farmers• Requires that tobacco companies register and monitor school attendance of all children below 18
who live on the farms (PMB were able to provide the requisite school enrollment documents
requested by CU for all farms visited).

4

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3.3.4 ALP communication methods and materials
PMB produced clear communication materials – a poster anda folder – that included the seven ALP Code Principles andhad been distributed to all farmers. Field technicians believedthat these materials would be more effective if bearing theacronym “ALP” instead of “GAP” in order to increaseawareness of the ALP Program among the farmers. Therefore,
the ALP Country Team produced a calendar with the acronym“ALP” which was to be distributed to all farmers in 2013 (seeinset). The majority of the farmers received information on
the ALP Code individually from the field technicians during
their regular visits.
PMB response: “The Country Team also identified as a point of improvement after the roll out of the ALP
Code communication, namely the need for setting up a “brand” that farmers could easily recognize and that
could framework farm improvement plans required under the ALP Program. Starting in this 2013 season,the “ALP” logo has been used in all the new communications materials to be provided to farmers.”

CU confirmed that ALP Code requirements have been incorporated in the growing
contracts for both Burley and Virginia tobacco farmers. However, whereas child laborand safe working environment are explained in detail in two separate paragraphs, theother five ALP Code Principles are mentioned only once all together in one sentence.
While it is important to have the ALP Code requirements reflected in the contractual
relation established with farmers, the contract itself is of limited value as acommunication tool as CU verified that farmers generally do not read the growing
contract.
Finally, PMB´s Corporate Affairs department plans to promote the ALP Program in the
media and among labor unions so that farmers will receive information about the ALP
Code Principles from additional sources 5. Other multinational companies with factories
or processing facilities in the region are implementing programs with similar principles
as the ALP Program. Where there is overlap between farmers and workers between
buyers, as reported to CU, this is a positive development, as the various
communication efforts will reinforce each other.
3.4 Building Farm Profiles for all contracted farms
In Phase 1 of the ALP Program PMB is expected to build Farm Profiles for every
contracted farm. PMI has developed a global template for affiliates and suppliers to use
for the collection of information on socio-economic indicators such as farm size,
number of workers, age and number of children in the farmer’s family, working status(for example part time, full time, migrants), the pay period for workers and living
5

The media component of this outreach efforts is also a requirement of the Prosecutor’s Agreement PMB signed in
December 2012, which was further elaborated in Footnote 7.

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PMI Third Party Assessment - PM Brazil

conditions. PMB´s Farm Profile which has been translated into Portuguese and is
adapted to the local situation and combined with other information PMB alreadycollects during farmer registration. PMB is expected to analyze this information tobetter understand the main risk areas, and track progress in communicating the ALP
Code to farmers.
3.4.1 Accuracy of Farm Profiles
At the time of the assessment, 100% of the Farm Profiles were complete. Given thelarge quantity of contracted farms, the manual compilation of data in Excel proved to
be a great challenge for the ALP Country Team, which acknowledged inevitable errors
in the process. CU verified accuracy of the Farm Profiles by comparing the data in
specific Farm Profiles to the information provided by the farmers during the visits. The
following kinds of errors were identified: duplication, estimates (pre-harvest versus
actuals), incorrect facts. For example:oooDuplication of the number of people at the farm: on 10% of the revised FarmProfiles family members were reported twice – once as family members andonce as temporary workers.
Estimated or incorrect numbers of contracted workers: on 35% of the revised
Farm Profiles the number of contracted workers was incorrect, which is likely
due to the fact that an estimate was done before or during the harvest.
Factual errors: on 50% of the revised Farm Profiles children were said only toperform domestic duties instead of also helping with tobacco related activities.

PMB response: “PMB has developed an electronic Farm Profile form which allows the collection of data
directly into a database (work completed in June 2013) and field technicians were trained on the process ofcollecting the Farm Profile (July and August 2013).”3.4.2 Date gathering system for Farm Profiles
The Farm Profile data errors detected were likely not driven only by problems in the
manual input of data, but rather, by the way that the information was collected. That
could be related to a poor understanding of the Farm Profile itself, and also with amisunderstanding of what information to note down. For example: One of the fieldtechnicians stated that he knew he was filling in incorrect information, but as he wasinstructed to report the information provided by the farmer, he wrote it down anyway.
3.5 Prompt Actions
PMI defines a Prompt Action situation as:“a situation in which workers’ physical or mental well-being might be at risk,children or a vulnerable group – pregnant women, the elderly - are in danger,
or workers might not be free to leave their job.” (source: PMI, 2011).
Phase 1 of the ALP Program implementation is mainly focused on training andcommunication. However even at this stage of the ALP Program it is PMI’s expectation

20

PMI Third Party Assessment - PM Brazilthat its affiliates and suppliers will address Prompt Action situations found on farms
contracted to supply tobacco to PMI.
3.5.1 Prompt Actions reporting mechanism
A section of the Phase 1 training was devoted to responding to Prompt Actions
situations. Field technicians are expected to report immediately any Prompt Action
situation to the ALP Coordinator, who, in turn, should provide them with guidance on
how to address the issue or escalate it further up within the organization if need be.
To facilitate field technicians’ understandingof the situations that might fall under thecriteria laid out above, and to help them
identify these situations in the field, the ALP
Country Team created a list of Prompt Action
situations and incidents. Furthermore, PMB
issued two special forms, one to report
Prompt Action situations and one to reportother irregularities (i.e. situations notmeeting the standards of the ALP Code).
Clearer guidance to field technicians on“Prompt Actions” is needed because:

Prompt Action case: a child that wasapplying CPA without using PPE. The
responsible field technician took immediate
action by saying to the farmer that the childshould stop applying CPA and reported thecase to his supervisor, who reported it tohis manager. The field technician andsupervisor also reported the case to the
Ministry of Labor, which sent a government
official to the farm to monitor the situation.

(i) Low level of reporting: At the time of the assessment, only one case had beenreported as a Prompt Action situation according to the internally established procedure,
which is not in line with CU’s observations in the field where several Prompt Action
situations were observed, such as children harvesting tobacco, children applying CPA,
children working at heights, workers working excessive hours, CPA application without
PPE, and end-of-the-harvest payments (see below for more details).
(ii) Warnings: Field technicians, who have strong relationships with many of the
farmers they support, declared that they generally first warn the farmer so that he/she
can improve the situation and then verify progress during the next visit.
(iii) Prompt follow up: As field technicians visit the farmers five to seven times a year,
the next visit after a incident and a warning could be two months later, which is not inline with the procedure for Prompt Action situations and incidents. If, however, thenext field technician’s visit to a farm is normally to be only in two months’ time, theactivity noted as serious and potentially dangerous to somebody living and working on
the farm, could already be over and finalized and so, also, the situation or incident that
required Prompt Action which is not what is intended for Prompt Actions under the ALP
Program.
(iv) Possible Confusion: CU analyzed both reporting forms and while they are a valid
initiative, the form for reporting other (non Prompt Action) irregularities also contained
the words “Prompt Action” which could be confusing to the field technicians21

PMI Third Party Assessment - PM Brazil(v) Understanding of ALP Code: a field technician may not recognise a Prompt Action
situation in areas of the Code and measurable standards where there is further training
or awareness raising to do.
For example a limited awareness among field technicians of ALP Code Principle 4.
(Forced Labor) and specifically “workers unable to leave their employment” meant thatnone of the field technicians mentioned this category when asked for a definition ofPrompt Action situation. In the case of forced labor situations, nevertheless, fieldtechnicians might indeed need more time and capabity to investigate the situation as
generally several risk factors must be analyzed. However, practices that increase therisk or can lead to forced labor situations, such as third party contracting and end-ofharvest payments, must usually, because of the potential implications for workers if thearrangements are not in good faith, be reported by field technicians as Prompt Action
situations, which had not been done.
PMB response: “In addition to the guidance provided initially, since April 2013...the ALP Country Teamwill:

1. follow-up each case with formal letters to the field technicians (copying by email their supervisors)
highlighting the steps to address the issue reported and commending the field technician for the report.

2. [bearing in mind that field technicians too are members of the community…] continue to reinforce thenotion that field technicians have nothing to fear regarding the amount of issues they flag, on thecontrary, PMB expects them to be transparent about the situations found in farms, setting clear
management and appraisal objectives

3. provide positive examples of PMB’s commitment to help the farmer’s improvement
4. promote better understanding of Prompt Action situations and how to address them by regular
discussions with their field technicians to analyze the “Prompt Actions” being reported, support for fieldteams to clarify doubts and help them address the issues, and,5. the regular sharing of information about “Prompt Actions” reported between the teams in the different
tobacco growing areas and6. highlighting identifying Prompt Action situations in the next season’s preparation training.”

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PMI Third Party Assessment - PM Brazil

4. Farm level assessment of ALP Code standards

THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

23

PMI Third Party Assessment - PM Brazil

Chapter 5 describes the findings of the field assessment and the current situation at
farm level in relation to the ALP Code. At the time of this assessment PMB was still
implementing Phase 1 of the ALP Program and, with the important exception of thePrompt Action situations, was not expected to be engaging with farmers andaddressing all situations on farms that do not meet the ALP Code standards in asystematic way. That will be the expectation from 2013-2014 as PMB moves into Phase
2 of the ALP Program.
To recap, first, however, what exactly do CU field assessments reference? The ALP
Code (appendix 2) has seven ALP Code Principles and each one has several Measurable
Standards. The ALP Code Principles are short statements that set expectations of how
the farmer manages his farm in seven focus areas. The ALP Code Principles aredesigned to guide the farmer on specific practices that will result in safe and fairworking conditions for everyone on a tobacco farm. A Measurable Standard defines agood practice on a tobacco farm and can be objectively monitored over time,
determining whether and to what extent the labor conditions and practices on a
tobacco farm are in line with each of the ALP Code Principles. Each section of thischapter covers one of the seven ALP Code Principles and in it CU presents its findings(the extent which the practices on farms contracted to supply tobacco currently meetthe requirements of the Measurable Standards) and discusses the risks (situations that
may lead to problems in the future or about which a conclusion cannot be reached due
to lack of evidence).
In order to provide a picture of the Brazilian tobacco market, it is important to notethat the farmers contracted by PMB greatly depend on family labor. However, bothBurley and Virginia farmers typically contract several workers during labor-intensive
periods. These workers work for several days, weeks or months, depending on the sizeof the farm. A small number of farmers had one or two permanent workers living at
the farm. Those farmers who did not contract workers often relied on exchange oflabor with other farmers during labor intensive periods. In total, 16% of the farmers
visited exchanged their labor with neighboring farmers, a practice apparently accepted
as normal not just by the community but also by the Ministry of Labor.
4.1 ALP Code Principle 1: Child labor´There shall be no child labor.´Child labor: Background
Legal Minimum Age: Article 7 of the Brazilian Constitution determines that the legal
minimum working age is 16 years, with an exemption for apprentiships at age 14.
However, Decree 6.481/2008 lists 93 hazardous activities within specific occupational
categories from which children are barred from working under age 18. Tobacco
growing (together with pineapple and sisal) is among these occupational categories
and, therefore, persons below 18 are forbidden to work in tobacco related activities.
Having said that, this same Decree states that the Ministry of Labor has the authority
to grant work authorizations for adolescents of 16 and 17 to perform work in tobacco

24

PMI Third Party Assessment - PM Brazil

growing, as long as it is not harmful to their development and it is vital for theirfamily´s survival.
Multistakeholder tobacco agreement: PMB is party to the industry-wide agreement
between SindiTabaco, AFUBRA, and the Labor Prosecutor of the Ministry of Labor for
the Municipality of Santa Cruz do Sul (see Footnote 7 for more information on theterms of the agreement). The agreement is likely to have a positive impact on PMB´s
implementation of the ALP Program because it seeks to reinforce similar principles andapplies to all tobacco companies operating in a very competitive market. Specificallythis will mean that farmers cannot choose between companies who do and do not seek
to contract from farms where standards of the ALP Code Principles are being met, andthat all actors will be communicating similar messages to farmers and workers.
Small-scale agriculture and child labor: In most agricultural settings worldwide,children help on the family farm and young people may work alongside, or instead of,attending school or higher education. A child often has an obligation to work to help
the family meet its basic needs and where this might involve hazardous activities, insome agricultural sectors, a definition of ‘light’ or acceptable work versus hazardous
work is developed. Under the agreement signed with the Labor Prosecutor there are anumber of initiatives 6 to raise farmers and community awareness and to train thecompanies’ field technicians on matters related with child labor and health and safety.
Labor scarcity: As people are leaving the country side to live in the city, farmers areunable to find workers, particularly during labor intensive periods. This labor scarcity
increases the costs of contracting workers (salaries are higher than the minimum
wage, involve provision of food, and in some cases transport). In turn the higher costs
may lead farmers to produce only the amount of tobacco that they can manage with
their family’s help, thereby increasing the dependence on their children for the
production of tobacco.
Child labor initiatives: CU noted a number of intiatives, projects and ongoing activities
of PMB that are or will contribute to achieving practices that meet the standards of the
ALP Code including, for example:
1) Prioritization of child labor in communication to farmers
For the Phase 1 ALP communication roll out, PMB prioritized ALP Code Principle 1 Child
Labor in its communication with the farmers. Field technicians are aware of theimportance of verifying whether children are working at the farms, or are attending
school (if school age) per the agreement with the Labor Prosecutor and informing thefarmers of the fact that the minimum age for working in tobacco is 18.
6

Projects “Cartilha do Sinditabaco/AFUBRA” and “Crescer Legal”: both were lead and developed by theSindiTabaco, of which PMB is a member, and AFUBRA. Activities related to these projects involve:•••

Distribution of informative flyers to farmers
Farmers participation in awareness raising seminars
Field technicians participating in training provided by Sinditabaco/AFUBRA

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PMI Third Party Assessment - PM Brazil
2) Projects “Cartilha do Sinditabaco/AFUBRA” and “Crescer Legal 7”
As a member of SindiTabaco, PMB participates in these two
projects focused on Child Labor and Safe Work. Both projects aim
at preventing child and adolescent labor in the cultivation of
tobacco, through raising the awareness of integrated farmers andsociety. Activities related to these projects involve:•••

Distribution of informative flyers to farmers
Field technicians participating in training provided bySinditabaco/AFUBRA
Inviting farmers to participate in awareness raisingseminars

3) “Programa de Inclusão Digital 8”Together with the local NGO CDI 9, PMB is in the process of setting up a program toprovide training in information technology, sports, and arts classes to children of
tobacco farmers during after school hours. At the time of the assessment, threeschools in the Santa Cruz do Sul region had been participating in the program andplans were made to expand the program to the State of Santa Catarina in 2013.
Child labor: Overall findings and challenges
4.1.1 Farmer awareness of minimum age for working on tobacco
The focused communication on Child Labor resulted in 100% of the farmers visited
being aware of the minimum age for working in tobacco therefore the expectations forthe first phase of the ALP Program were met.
4.1.2 Family farms
Farmers do not seem to fully subscribe to the limits imposed by
the current legal framework and PMB considers farmers’
perception and cultural beliefs as one of the main challenges toovercome (see box on this page). One of the main reasons forthis is that farmers want their children to take over their farm in
the future and, therefore, they believe it is important to involve
them in farm activities during their adolescency. As a result,more than half (54%) of the farmers visited declared that they
do not agree with the total prohibition of work in tobacco for
those under 18.

7
8
9

Farmers interviewed
children:







think

their

should be allowed to help themon the farm
have nothing to do after school inremote areas
would become lazy if they did no
work
will lack of interest in agriculturein the future threatening thefuture of their farms
are subject of unjustifiable
restrictions

Crescer Legal = Growing Up Right
Programa de Inclusão Digital = digital inclusion program

www.cdi.org.br

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PMI Third Party Assessment - PM Brazil

On 21% of the farms visited children below 18 years were found working or helping in
tobacco. All the children identified working (28 on 26 farms) were said by farmers to
help after school hours and during holidays. Only one child of eight years old, below
the acceptable age for helping on the farm, was found working on the farm.
Half of these children were involved in activities that are considered hazardous in all
agricultural sectors because they present health risks and are especially harmful tochildren; 12 children between 13 and 17 were involved in harvesting or loading curingbarns and two children, aged 16 and 17, were doing the full range of activities involved
in tobacco production, including CPA application.
4.1.3 Hiring workers under 18 years oldThis farmers’ negative perception of the current legal framework seemed to relatesolely to children working on the family farm and not with the recruitment of children
to work. There was one case of a 16 year old hired worker found but three cases ofchildren being part of ‘labor exchanges’.
Child labor: Risks
4.1.4 Awareness of hazardous work
The fact that farmers and workers do not understand hazardous work creates anadditional risk for children to be involved in hazardous activities. 59% of the farmers
and 72% of the workers were unaware of the meaning of “hazardous work”. The
majority did mention CPA handling and application as a hazardous activity, but tobacco
related activities in general were never mentioned as being hazardous to children, norwere working at heights or harvesting wet tobacco. Contact with wet tobacco is
considered hazardous as it can cause Green Tobacco Sickness.
4.1.5 Age verification
Altough 34% of the farmers visited declared to check the identification documents of
their workers, the majority (66%) does not. Farmers tend to contract workers they arefamiliar with and state that they know their ages. There is a risk that farmers might
unintentionally hire minors.
4.1.6 Third party labor brokers
17% of the farmers visited contracted workers through a third party without verifying
worker idenfication and were thus unaware of the age of the workers brought to thefarm. Farmers need and rely on third party brokers to secure sufficient workers duringlabor intensive periods. However, farmers generally were found to have no insight into
the payment and recruitment practices of the third-party labor brokers and did not feelthat they had to worry about payments and employment practices for these workers.
In this way, while not intrinsically a problem, the practice of hiring workers through athird-party here presents risks vis-a-vis not only Child Labor - i.e. the unintended

27

PMI Third Party Assessment - PM Brazil

hiring of somebody under 18 years of age - but several other ALP Code Principles andMeasurable Standards. The other challenges and risks of using third party brokers tohire workers are further discussed below in the other relevant ALP Code sections.
4.1.7 Exchange of labor between farmers
16% of the farmers visited exchanged labor with other farmers. This is a common
practice in the Brazilian agricultural sector and works well for the farmers involved asthey do not need to contract any workers. However, this practice does create a risk ofhazardous work on a farm not run to meet the ALP Code and children working on
another farm (i.e. not the family farm) which is specified in the Measurable Standards.
CU identified three cases in which children worked on neighbouring farms as part oflabor exchange.
Child labor: Conclusion
Despite the widespread declarations by farmers that their children provide help on thefarm the findings suggest that employment and recruitment of child labor practicallydoes not exist among the farmers visited as only one case was identified among 128
farmers. However, the practice of contracting workers through a third party without
verifying their age, which was being done by 17% of the farmers visited, presents arisk of indirectly employing children as farmers could unknowingly contract children
through the third party. Indirectly too, where family teams exchange labor with otherneighboring farmers (16% of farmers visited report doing this), this represents childlabor risk and three cases were identified where children were part of these teams.
Given that none of the children found working or helping on the farms visited wereauthorized to work in tobacco by the Ministry of Labor, it could be concluded that they
were all performing hazardous activities according to Decree 6.481/2008. However, adistinction can be made between the different activities observed being done bychildren under 18 years of age. Around half of the children found working on the family
farm were involved in activities which would be considered hazardous in all agricultural
sectors, because they present health risks and can be especially harmful to children
such as carrying heavy loads, working long hours, harvesting, loading barns or CPA
application. Perhaps there is a link between this finding and the finding that the
majority of farmers and an even a larger number of the workers did not fully
understand which activities on the farm could present health and safety hazards. The
majority did mention CPA handling and application, but tobacco related activities likeworking at heights in the barns or harvesting wet tobacco were never mentioned,
which increases the risk of children being involved in activities that present specifichazards and should be a focus of PMB’s action going forward in the area of child labor.
PMB response: “The ongoing challenge PMB faces…is changing the mindset in these ruralcommunities…as many tobacco farmers perceive the legal limitation for their children to provide help on thefarm as being at odds with the family’s interest. The following actions are planned to change the current
situation:
1. In order to avoid children doing hazardous tasks…PMB’s field technicians will start by helping
farmers to make a basic assessment of the safety hazards on the farm including identifying the28

PMI Third Party Assessment - PM Brazil

type of activities that pose particular risks for them and their children (Q4 2013- Q3/2014).
2. PMB’s field technicians will continue to convey that children shall not work on tobacco and will
focus their efforts on correcting any situation identified as in no conformity with the law. Everysituation identified will be reported to PMB by the field technicians and will have a specific followup.
3. PMB will also monitor [the practice of exchange labor] and in the field technicians’ communications
to farmers and educational materials will include a specific mention to raise farmers’ awarenessand ensure that only adults are involved in this [practice].
4. [In the cases of contracting workers through a third party] PMB will require farmers to engage
directly with the workers that are brought onto the farm and check their identification documents.
5. PMB will extend its existing credit lines to ensure that farmers have the necessary cash-flow to hire
adult workers, not having to rely on their own children (2013/2014).
6. Providing after school activities to farmers´ children such as learning digital and computer skills(2013 and 2014) and granting scholarships for an agricultural education (during 2013 PMB willaward 42 scholarships to children of PMB contracted farmers).
7. Together with local schools, field technicians will make an overview of school attendence of thechildren of the farmers in their region in order to better monitor those children with high school
absence and investigate the reasons for which these children do not go to school (June 2013
onwards).”
4.2 ALP Code Principle 2: Income and work hours‘Income earned during a pay period or growing season shall always be enough to meetworkers’ basic needs and shall be of a sufficient level to enable the generation of
discretionary income. Workers shall not work excessive or illegal work hours.’
Income and work hours: Background
Regulations: The majority of the national regulations related to income and work hours
are determined by the Federal Constitution and the Consolidação das Leis do Trabalho
or CLT 10. These regulations clearly apply to large companies with fulltime workers, buthave not been adapted to the reality of small scale farmers who employ daily workers.
Therefore, common practice in the Brazilian agricultural sector – and in many othersectors in which daily labor is common – is that daily workers and farmers agree upona salary without providing legal benefits as this is generally results in a higher daily
wage and less costs for the farmer.
The Constitution determines that:
-

10
11

a full working week consists of 44 hours,
overtime hours should be paid at least 50% on top of the regular salary,
annual holidays payment is 33% of the monthly salary,
all workers are entitled to a 13th monthly salary, and
8% of the salary should be paid to a fund (FGTS 11) that is activated in case aworker can no longer work or is fired without due cause.

Consolidação das Leis do Trabalho = Consolidation of Labor Laws
Fundo de Garantia do Tempo de Serviço = Guarantee Fund for Time of Service

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PMI Third Party Assessment - PM Brazil

The CLT states that workers:-

should get a break after six hours of work
should rest at least 11 hours between each work day,should have at least 1 resting day per week,salaries should be paid at least monthly,
should work a maximum two hours overtime per day, andhave the right to take 30 days of holidays per year.

Furthermore, Law 605/49 determines that Sundays and holidays should be paid with
100% on top of the regular salary and Law 8.213/91 states that 8% of the salaryshould be paid to the INSS 12, which is activated when workers get ill or are involved ina work related accident.
Minimum salary and deductions: In addition to national regulations, States also
determine the minimum salaries for rural workers. The States of Rio Grande do Sul
and Santa Catarina have set the minimum salary for rural workers on R$ 700,00 13 permonth, whereas the State of Paraná has set the minimum salary on R$ 783,20 per
month. This is substantially higher than the national minimum salary, which is set on
R$ 622,00 per month.
The labor union of each municipality can establish a collective agreement with farmers
to raise the minimum salary or improve labor conditions. However, CU’s field researchdemonstrated that 60% of the labor unions of the municipalities of the visited farmers
were promoting the national minimum salary instead of the State minimum salary forrural workers at the time of the assessment. 20% of the labor unions were promoting
a salary that was higher than the minimum salary determined by the State, and theremaining 20% the minimum salary determined by the State.
Finally, Article 458 of the CLT determines that deductions for accommodation cannot
be more than 25% of the salary and deductions for food cannot be more than 20%.
Who qualifies for labor benefits: The assessment observed that both farmers andworkers believe that workers who do not work fulltime during the entire year at thesame farm have no right to benefits. Some also think that these benefits only apply toworkers of large companies and not to workers on small scale farmers.
Impact of labor scarcity: CU noted that farmers generally pay more than the minimum
wage even though the official minimum wage may not be known and some information
may be confusing or contradictory.

12
13

Instituto Nacional de Seguro Social = National Institute of Social Security
The salaries mentioned in this paragraph were valid in January 2013.

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PMI Third Party Assessment - PM Brazil

Income and work hours: Overall findings and challenges
4.2.1 Minimum salary
97% of the farmers visited who contracted labor paid more than the legal minimum
wage yet 95% of the farmers visited who contracted workers and 97% of the workers
interviewed were unaware of the legal minimum salary for rural workers determined by
the particular state.
This leaves 3% of the farmers visited who contracted workers and did not pay themthe state or national minimum salary for rural workers 14. In one case the farmer was
paying the national minimum salary (lower than the local benchmark) and in anothercase CU was unable to verify whether the minimum salary was paid as the farmer paid
R$60 per day to the entire family that worked on his farm plus a percentage of theharvest at the end of the harvest. However, the farmer did not want to inform thepercentage shared with the family.
4.2.2 Regular payment
81% of the farmers visited who contracted workers provided regular payments; either
daily or monthly. However, the remaining 19% of the farmers visited who contracted
workers provided end-of-the-harvest payments of which advanced payments for basic
needs were made during the harvest. The payment at the end of the harvest was
generally 10% to 12% of the profit, which is usually higher than the minimum wage.
However, workers were not receiving at least the minimum wage on a monthly basis.
4.2.3 Work hours
Although all farmers and workers interviewed declared that overtime hours were
voluntary, 50% of the farmers visited who contracted workers did not respect the limitof eight regular work hours per day. Especially during the harvest period many farmers
and workers exceed this amount and work approximately 10 to 12 hours a day. At theremaining 50% workers did not work any overtime hours. On many farms, especiallyfamily farms without hired workers, no fixed work hours are established as they
continue working “until the job is done”.
4.2.4 Wage and overtime calculations
None of the farmers visited who contracted workers paid overtime hours at a premiumof 50% on top of the regular salary. Daily workers who only work once at the same
farm and, therefore, do not receive labor benefits because they are considered not tohave an employment relation with the farmer (12,5% of the workers interviewed) areexcluded from this sample. Farmers calculated a daily salary or end-of-the-harvest
payment, regardless of the number of hours worked. 72% of the farmers visited who
14

Namely: of R$ 700,00 in the States of Rio Grande do Sul and Santa Catarina and of R$ 783,20 in the Stateof Paraná. One farmer paid the national minimum salary of R$ 622,00 per month.

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PMI Third Party Assessment - PM Brazil

contracted workers and 81% of the workers interviewed were unaware of the legal
requirements regarding overtime hours; they did not know when overtime hours start,
what the maximum number of overtime hours is, and that they should be paid at an
overtime rate of 50% on top of the regular salary.
4.2.5 Legal benefits
As explained in the beginning of this chapter, the current national regulations on legal
benefits are not adapted to the reality of small scale farmers contracting daily workers.
This complex regulatory situation contributes to many farmers being unable to provide
labor benefits to workers, and, conversely, workers being unable to claim them due tolack of awareness. As a result, none of the farmers visited who contracted workers
provided their workers with benefits, holidays, and leave. Daily workers who only work
once at the same farm and, therefore, do not receive labor benefits because they are
considered not to have an employment relation with the farmer (12,5% of the workers
interviewed) are excluded from this sample.
Regarding the holidays, it is important to note that the majority of the workers do notwork the entire year; they either work eight consecutive months or several weeks ormonths a year at one farm. However, during these periods workers are legally due toreceive all the benefits mentioned in the introduction of this chapter. Furthermore,
several cases were identified in which permanent workers worked on the farm theentire year and did not receive paid holiday and other benefits because they were paid
per day worked. 86% of the farmers visited who contracted workers and 91% of theworkers interviewed were unaware of the legal requirements regarding the benefits,holidays, and the leave to which workers are entitled by the country´s laws.
PMB response: “PMB concluded that they need to encourage farmers´ entrepreneurial behavior, remindthem of their obligations as employers under Brazilian law, and support them to uphold their obligations as
business partners to PMB. This will be in the following ways:• PMB´s Law Department and field technicians will provide information to farmers on key legal
aspects such as employment conditions, minimum salary, work hours, overtime, and benefits, and• PMB will support reference materials made by Sinditabaco/AFUBRA, labor unions, and the relevant
authorities. (Q4 2013).
• This is a complex issue and it is being addressed by the Ministry of Labor with the associations
representing the tobacco sector (Sinditabaco and Farmers’ Unions) who are mapping out all the
implications of changing current practices, namely the registration of sharecroppers as employees[just as the issues of daily workers]. PMB will closely monitor any potential developments and will
incorporate recommendations as appropriate.”

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PMI Third Party Assessment - PM Brazil

Income and work hours: Risks
4.2.6 Record keeping
Keeping records of hours worked, what rates arepaid and how often, reduces the risk of conflict
between farmers and workers and enables thefarmer to demonstrate his/her practices meet thestandard. So, the widespread lack of awarenessand recording is a high risk. For example: 93% of
the farmers visited who contracted workers did
not provide pay slips to their workers. 86% did
not record salary payments and could notdemonstrate what they pay workers. 95% of the
Payment receipt
farmers visited who contracted workers did notrecord the hours worked which could result inworkers working more hours than the legally determined eight regular hours plus two
overtime hours per day, or farmers failing to track which hours are overtime andrequire additional overtime premium.
Records are needed for both permanent and temporary workers. The 7% of farmers
who provided pay slips or recorded wages did so only for their permanent workers
being paid at the end of the harvest to avoid conflicts. Temporary workers are
generally paid per day but without records.
PMB response: “The Country Team will develop and distribute template models for pay slips andtimesheets to the farmers so they can use them with the workers on their farm (Q4/2013).”4.2.7 Third party labor brokers
The farmers visited who contracted workers through a third party had no insight in thepayment and recruitment practices of the third party, and so they did not guarantee or
have no way of showing that their workers receive at least the minimum wage and arepaid regularly, that overtime hours are voluntary and paid at a premium, and that theworkers are provided with benefits, leave and holidays.

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PMI Third Party Assessment - PM Brazil

PMB response: “PMB will encourage farmers to reach out and have regular contact with the workers
that are brought onto their farms by a third party. In particular, field technicians will:
1. raise farmers´ awareness about the potential issues that unscrupulous brokers could create,
2. raise farmers´ awareness about the potential risks and liabilities they would face if workers werebeing victims of abuse, and
3. encourage farmers to start paying the workers directly themselves (as required in the ALP Code), orat a minimum to ask brokers for more accountability and for a more transparent process, e.g.
providing credible proof of what they are paying to the workers through pay slips (Q4 2013).
Finally, PMB also reach out to the relevant stakeholders in the sector (brokers, farmers organizations,
unions, other companies and local authorities) to discuss the best approach to formalize the brokers’ roleand practices or at least to create minimal standards which can provide some level of confidence (Q3 2013).
Income and work hours: Conclusion
Labor scarcity means that nearly all workers received at least the minimum wage. The
majority of the workers were being paid regularly although 19% of the farmers visited
paid their workers at the end of the harvest, which is the main area of concern for this
ALP Code Principle and therefore requires additional attention from PMB. These
workers did receive advanced payments for basic needs.
Communication efforts implemented by PMB to raise awareness on legal topics such as
the legal minimum wage, overtime hours, and benefits have not yet achieved thedesired results. This is understandable given that these efforts aim to generate
behavioral change among farmers by moving from established common practices tofull compliance with laws on income and work hours, while these same regulations are
not adapted to the reality of small scale farmers, as explained before. In addition, PMB
is still in the first season of the implementation of the ALP and therefore expecting
such great behavioral change at this point would be unrealistic. However, these results
demonstrate that communication efforts must be intensified and farmers need moreassistance on topics related to income and work hours. Finally, workers need to bemade aware of their rights as the current lack of awareness makes them vulnerable.
4.3 ALP Code Principle 3: Fair treatment‘Farmers shall ensure fair treatment of workers. There shall be no harassment,
discrimination, physical or mental punishment, or any other forms of abuse.’
Fair treatment: Background
Regulations: Article 7 of the Federal Constitution prohibits abuse or threat of physicalor verbal abuses. Furthermore, Article 3 of the Federal Constitution prohibits
discrimination on the basis of origin, race, gender, color, age, sexual orientation, civil
state, political affiliation, or any other form of discrimination. Finally, Article 7 of theFederal Constitution and Article 373-A of the CLT prohibit the use of gender, age,color, family situation, or pregnancy in job advertisements, as grounds for refusing
employment, promotion or dismissal, and for purposes of determining salary andprofessional development.

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PMI Third Party Assessment - PM Brazil

Labor scarcity: Due to scarcity of rural workers, workers contracted by tobacco farmers
were generally in a strong position and farmers and workers visited confirm thatworkers do not accept any form of harassment, discrimination, physical or mental
punishment, or any other forms of abuse.
Fair treatment: Overall findings and challenges
4.3.1 Fair treatment
All farmers and workers interviewed confirmed that physical, sexual and verbal abuse
was not a problem at their farms. Interviews with eight female workers confirmed this.
Just one farmer expressed a preference for hiring men rather than women because of
the nature of the work. While PMB does not provide any information to farmers on how
to deal with incidents such as harassment, discrimination, physical or mental
punishment, or any other forms of abuse, both farmers and workers told CU that insuch cases, incidents could or most likely would be discussed in an informal mannerwithout being documented.
4.3.2 Grievance mechanism
PMB had investigated options for supporting the set up of a support line for farmers
and workers but work is still ongoing on this.
4.3.3 Large farmers
For 31% of the farmers with large farms and several contracted workers, no formal
process for workers to bring problems to the farmer’s attention was identified.
Fair treatment: Risks
4.3.4 Third party labor brokers
16% of farmers who contract workers do so through a third party and do notcommunicate directly with the workers. In these cases workers have neither a formal
mechanism nor the opportunity, as in small farms, to speak directly with the farmer.
Contracting workers through a third party creates risks for the first four Measurable
Standards of this ALP Code Principle as the farmers who use a third party do not knowwhether the third party uses physical, sexual or verbal abuse or harassment or
discriminates between workers.
Fair treatment: Conclusion
No signs of physical, sexual or verbal abuse or harassment were found during theassessment. One case of gender discrimination was identified; this farmer did not wantto contract female workers because he believed that men and women working together
would not be successful. Furthermore, he did not want to provide sanitary facilities tofemale workers. A more structured support line or grievance mechanism envisioned
under this ALP Code Principle and currently being investigated, could facilitate,

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PMI Third Party Assessment - PM Brazil

however, that even if incidents are considered rare, all workers on large or small
farms, or contracted by a broker, would be assured of the opportunity to address casesof abuse or harassment. PMB would need to consider how to communicate effectively
with farmers on this.
PMB response: “In order to provide an independent support line to workers, the ALP Country Team will15
conduct a pilot program in three municipalities which will be managed by FETAG (Q4/2013). After thispilot, the plan is to extend this support line to other tobacco growing regions.”

4.4 ALP Code Principle 4: Forced labor‘All farm labor must be voluntary. There shall be no forced labor.’
Forced labor: Background
Regulations: Brazilian Criminal Law (Normative Instruction 91 of the Ministry of Labor)prohibits forced labor, exhausting work in degrading conditions, and limiting theworker´s right to leave employment because of bond. According to Brazilian Law
5.889/73 third party contracting is not permitted. However, an exception is made forthe agricultural sector as Regulatory Norm 31/2005 states that third party recruitment
can be done by farmers provided that the third party is a legal entity registered at the
Ministry of Labor.
Labor scarcity: the scarcity of rural workers makes forced labor less likely as,
according to PMB, workers would likely move to another farm if they became
discontented with their employer or labor conditions.
Forced labor: Overall findings and challenges
4.4.1 Indirect payments to workers
16% of the farmers visited who contracted workers did not pay their workers directly;
14% contracted workers through a third party and paid only the third party and 2%
used workers sent by the landowner of the piece of land on which he was working
without knowing whether they were paid. Several farmers who contracted workers
through a third party were unable to mention the official name and contact details of
the third party. None of the farmers had entered into a written contract with the third
party 16.

15

Federação dos Trabalhadores na Agricultura no Rio Grande do Sul = Federation of Agricultural Workers in
Rio Grande do Sul
16
In addition to being a risk factor of forced labor, this practice also causes risks for other ALP CodePrinciples as the farmer does not know whether the third party (1) contracts children, (2) pays the minimum
wage to workers, (3) treats the workers fairly, and (6) respects the right to freedom of association.

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PMI Third Party Assessment - PM Brazil

4.4.2 Ability to leave; reasonable noticeAll farmers and workers interviewed stated that the workers were free to leave theiremployment at any time. As none of the workers had a formal employment contract,they all felt free to leave their employment at any time. Daily workers were paid eachday. One worker from another region was found working at a farm without
documentation. The worker was unable to talk and possibly had a mental or physicaldisability.
4.4.3 Financial deposits
Farmers and workers interviewed all confirmed that workers do not make financial
deposits.
4.4.4 End of the harvest payments
Although most workers paid at the end of the harvest are eventually paid more thanthe minimum wage, being paid a percentage of the profit could result in a salary lower
than the minimum wage if the harvest is not successful. In total, 19% of the farmers
had agreed with their workers to pay them at the end of the harvest. All these workers
received advanced payments for basic needs.
Forced labor: Risks
4.4.5 Partnerships
Different forms of “partnerships” between landowners and farmers, also called “sócio
parceiro 17”, occur in the Brazilian tobacco sector. This practice exists when a farmer
works on a piece of land that is owned by someone else with whom the farmer has
established a partnership that states a division of the profit and/or production costs but
the details are often not formally laid out. According to PMB, in some cases the “sócio
parceiro” agreements indeed provide a way to disguise an employment relation, but inmany cases real partnerships exist that are beneficial to both farmers and landowners.
The latter occurs when the farmer is unable to purchase land and, by entering in apartnership agreement, he/she can make a living.
In addition to workers, “partners” (“sócio parceiro” or farmers working with/for PMB
contracted landlords) often receive end-of-the-harvest payments as well and are
exposed to similar risks of forced labor where there is not a real partnership. These
farmers depend completely on the landowner as they usually live with their entire
family in a house provided by the landowner, the farmer could in fact be a worker whogets paid at the end of the harvest and pays 50% of the production costs. If theharvest does not go well and the profit is low, the farmer and their family run the riskof not receiving any payment. In some cases, landowners have several farmers
working on small pieces of land. 6% of the farmers visited had such an agreement with
17

Sócio parceiro = partner

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PMI Third Party Assessment - PM Brazil

a landowner, but even a written contract may not be legally binding if the farmer is nota legal entity.
PMB response: “The ALP Country Team will:
1. Map out the existing sharecropping agreements in order to better understand them and find asuitable solution for each case (Q1 2013),
2. Aim to establish contract agreements directly with the sharecropper to reduce the risks of indirect
or inequitable arrangements more generally,
3. Extend its credit line for farmers to these situations; where farmers don’t have enough cash flow toprovide for the regular payment of their worker’s wages (starting in Q4 2013), andClosely monitor any potential developments and will incorporate any practices or recommendations thatcome out of the pilot exercise of the Ministry of Labor and the industry associations in Santa Catarina that
aim to map out the implications of registering of sharecroppers as employees.”

Forced labor: Conclusion
All farmers and workers interviewed stated that the workers were free to leave theiremployment at any time, require and pay no deposits, do not hire prison orcompulsory laborers. However, 17% of the farmers visited did not pay their workers
directly. Furthermore, 19% of the farmers visited did not pay part of their workers’salaries until the end of the harvest. The various agreements, often informal, between
landowners and farmers, farmers and workers represent risks of forced labor also as
they often involve payments based on a profit share at the end of the harvest and so
the farmer/workers may not ultimately receive a minimum if the harvest is not
successful. End of the harvest payments can force farmers/workers to stay working
until the end of the harvest even if they want to leave earlier, in order to receive their(full) salaries if the landowner/farmer is unable or unwilling to pay their salaries before
the end of the harvest. However, in the cases at the farms visited, all farmers/workers
receiving end of the harvest payment declared that they had agreed to this payment
schedule and received advanced payments from the landowner/farmer whenever theyneeded.
In line with PMB´s limited understanding of forced labor mentioned in Chapter 4,communication efforts have yet to be targeted towards mitigating the risks to “sócio
parceiros” and workers, and field technicians have not been asked to monitor thesesituations as these practices were not being recognized as indicators of potential forcedlabor by PMB.
4.5 ALP Code Principle 5: Safe work environment‘Farmers shall provide a safe work environment to prevent accidents and injury and tominimize health risks. Accommodation, where provided, shall be clean, safe and meet
the basic needs of the workers.’
Safe work environment: Background
Regulations: Brazilian Law sets strict safety requirements for work environments.

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PMI Third Party Assessment - PM Brazil

o
o
o
o
o

o
o

Law 7.802/89 states that CPA containers should be triple washed, punctured torender them unusable, stored safely, and recycled.
Article 22 of Law 8.213/91 states that work related accidents and illnesses must
be communicated to the INSS 18 by means of a special form (CAT 19).
Normative Resolution 31 determines that people above the age of 60 years are
not allowed to handle or apply CPA.
The same Normative Solution provides extensive requirements for workers´housing.
Brazilian Norm 9843 states that the floor and shelves of CPA storage must be
waterproof and the buffer zone between houses and CPA must be at least 30
meters.
Article 458 of the CLT determines that migrant workers may not be charged foraccommodation.
Ministerial Directive 2914/2011 states that farmers who contract workers must
provide water from the collective sanitation system or, in case such system isunavailable, from a well of which the water has been tested for purity.

In addition to these regulations and laws, the agreement with the Labor Prosecutor
also sets several safety requirements for the practices of the farmers. Requirements inthe agreement that complement the law and the ALP Code are:••••Tobacco companies must provide required PPE at cost to contracted farmers.
CPA storage must be equipped with warning display signs.
Farmers must not use any pesticides or similar products that have not beenregistered with and authorized by the relevant government authorities.
Farmers must not handle any pesticides or similar products in a manner that
does not comply with the formulas and instructions on labels and manuals.

Awareness and training on PPE use: Farmers are resistant to wearing PPE for either
handling CPAs or harvesting wet tobacco because most they find them too warm whileworking in the heat. Farmers stated that the PPE material is not suitable for working in
extreme temperatures. Training on the risks can be effective at changing practices.
Some farmers in the Araranguá region had participated in training on CPA handling andapplication from a specialized institution, which was provided by another tobaccocompany. This training proved effective as these farmers and their family members
properly handled and applied CPA, and provided training to their workers.
Safe work environment: Overall findings and challenges
4.5.1 General safety hazards
This standard is considered to apply to all people who live and work on the farm. Noneof the farmers visited during the assessment provided a completely safe and sanitary
working environment, which is mainly due to lack of awareness on general safety
18
19Instituto Nacional de Seguro Social = National Institute of Social Security
Comunicação de Acidente de Trabalho = Communication of Work Related Accident

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PMI Third Party Assessment - PM Brazil

hazards on the farm. All farms visited had at least one, but in general several of the
below mentioned issues:
•

•

•

•

•

Insufficient meaures to prevent accidents: farmers
do not take all necessary precautions or measures
to prevent accidents on their farm. For example:
None of the farmers visited had safety harnesses forworking at heights. Curing barns can be high (up to
approximately seven meters - see photo in box
right).
Failure to register and report accidents: several
farmers declared they had experienced GTS several
Burley curing barn of 7
times. One farmer informed CU that his son, (agedmeters17), had been bitten by a snake while working in
the field. No workers were registered with the INSS, and so farmers wereunable to report formally any work related accidents or illnesses to thisgovernment institution. However, recording accidents and illnesses that happen
on the farm internally in order to learn from them and prevent them fromhappening in the future is a good practice and helps to reduce risks over timeby prevention.
Lack of resources to act in case of emergency: none of the farmers visited tooka first aid kit to the field and the majority did not have one at the farm either.
Many farmers declared they preferred not to provide any first aid to contracted
workers because if they would do something wrong the worker could file acomplaint afterwards. Instead, the farmers prefer to go to the nearest hospitalor health post. This lack of knowledge on first aid is disturbing because in many
emergencies first aid is crucial.
Safety risks for children: none of the farms visited had any restrictions onaccess to farm sites in place for children, which is particularly undesirable forthe bigger farms where such separation would be feasible. Given that many
farmers do not lock their CPA storage facilities, child access to working areas on
the farm causes severe safety risk for children. In 47% of the cases the children
were not being supervised while both their parents were working in the field.
Equipment and tools laying around at the farm: in many cases tools were notstored safely and were laying around at the farm with a risk of, amongst others,
children getting injured (see picture below).

4.5.2 Harvesting wet tobacco
67% of the farmers visited did not provide training on avoidance of GTS to theirworkers and/or family members. This is largely due to lack of awareness on how toprevent GTS. Many farmers declared they did not harvest wet tobacco because it loses
quality when harvested wet or because working in the morning is more comfortable
than in the afternoon due to the lower temperature; and not because of the possibility

40

PMI Third Party Assessment - PM Brazilof contracting GTS. This poses severe health risks for the families and especially for
their children 20.
4.5.3 Water to drink/for washing
All farmers and workers interviewed declared that they had clean drinking water at thefarm and in the fields and washing water and soap was available at the farms. Farmers
generally used a thermos to keep drinking water cool in the fields. According toBrazilian law (Ministerial Directive 2914/2011), only collective system or tested water
can be called “potable” but where the farmer provides the same water he/she drinks to
the workers on the farm, it can be considered adequate insofar as the ALP Code isconcerned. At 6% of the visited farms, the farmers could demonstrate the purity of thewater source after testing by a government institution.
4.5.4 Protection from CPA and GTS
o

o

o

o

Green Tobacco Sickness: The majority of the farmers declared they did not use
the PPE provided by PMB for harvesting wet tobacco because they find them too
warm while working in the heat. Farmers further stated that the material ofwhich the PPE are made is not suitable for working in extreme temperatures.
Those farmers who did use PPE generally did not wash them after usage, used
the same PPE during the entire harvest, and stored PPE inadequately (forexample, together with CPA causing contamination). Several workers wereidentified harvesting wet tobacco without PPE.
Inadequate CPA storage: 87% of the CPA storage facilities were inadequate
because of one or more of the following points: lack of waterproof floor and/or
shelves, unlocked, disorganized, lack of ventilation. CU noticed that practicallyall farmers had a similar CPA storage with a wooden door and wooden shelves(see photographs below). This storage facility does not comply with the legal
requirements. One farmer had CPA stored in pigsties and another one stored
CPA in a hen coup, causing health risks to the farm animals. One farmer
declared he had been robbed and therefore stored CPA in the garage of his
house.
CPA: 70% of the farmers visited did not provide adequate training to theirworkers and/or family members and/or did not use the required PPE for CPA
application. One worker was applying CPA without PPE during CU´s visit at thefarm. In the remaining cases, CU relied on the declaration of farmers andworkers and analysis of the PPE at the farm. Also, two children of 16 and 17
declared they assisted in CPA application, which presents severe health risks.
Fertilizers: 61% of the farmers and 70% of the workers interviewed were
unaware of the health risks involved with handling fertilizers. They declared
they did not wear any gloves and not to store them in a locked place.

20

Generally the recommended action is to stop exposure - by resting, showering or washing, changing
clothing, ceasing to work and drinking water. A doctor should be consulted if the symptoms persist. For
further information see: http://tobaccocontrol.bmj.com/content/7/3/294.full

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PMI Third Party Assessment - PM Brazil

o

o

o
o

Containers: None of the visited farmers punctured empty CPA containers to
render them unusable. The majority did triple wash the containers and handed
them in at the central point indicated by Sinditabaco and AFUBRA, the twoorganizations responsible for proper disposal of the products. Several farmers
reused empty CPA containers to fill them up with water for mixing CPA or as
drinking water for farm animals.
Re-entry period: At 61% of the farms visited CU was unable to confirm that thecorrect re-entry period after CPA application was respected as farmers did notuse any warning signs on recently sprayed fields and/or were unaware of thecorrect re-entry period. The majority of the farmers stated they verbally warn
their workers, but this does not prevent external persons entering the field.
Buffer zone: No farmers´ houses comply with the norm requiring a buffer zone
of at least 30 meters between living areas and CPA storage.
CPA applications and re-entry periods: None of the farmers visited recorded
CPA applications, so they might forget on which day CPA were applied, which
product they used and what the re-entry times would be.

CPA equipment stored inadequately
Letter informing thedate and place for
disposal of empty
CPA containers

Average CPA storage

4.5.5 Worker accommodation
33% of the accommodations provided to workers were found inadequate because they
had no windows, no bathroom, or were generally in poor condition.
Safe work environment: Risks
4.5.6 Safety while exchanging labor or third party contracting
Farmers contracted by PMB receive communication on safety measures as a part of the
ALP Program, but the farmers with whom they exchange labor are not necessarily
contracted by PMB and thus might not receive such instructions. Also, the brokers
through whom some farmers contract workers might not pass on instructions given by

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PMI Third Party Assessment - PM Brazil

the farmer to the workers. In these cases, workers, farmers and their family members
might be exposed to safety risks and field technicians should be aware of this practice.
Safe work environment: Conclusion
In Phase 1 PMB prioritized the ALP Code safe work ALP Code Principle in the ALP
communications with the farmers, and all field technicians were trained on this 21. This
had led to 100% farmer awareness of the requirement of PPE usage, the existence of
GTS and awareness of the CPA container-recycling program in their region. Further, allfarmers and workers interviewed declared that they had clean drinking water at thefarm and in the fields, and washing water and soap available at the farms.
However, this awareness did not necessarily result in farmers meeting the ALP
standards. Farmers still lack awareness on general and specific safety hazards on thefarms such as:••working in high curing barns without harnesses,
the Brazilian legal requirement of having a first aid kit at the farms and/or in
the field,

the way accidents and danger can be reduced by limiting farm and particularly
curing barn access for children and/or by adults supervising children at the farm,
•
•
•
•
•
•

knowing methods to prevent GTS,
knowing the health risks involved with fertilizers,
training for all who handle or apply CPA,
recording CPA application,observing the recommended re-entry times after CPA application, andhaving a buffer zone of 30 meters between all houses and CPA storage areas.

These observations resulted in CU´s conclusion that none of the farmers visitedprovided a fully safe and sanitary work environment for those who live or work on thefarm and a third of workers’ accommodation was found to be inadequate.
PMB response: “The ALP Country Team has listed several action plans to improve the stituations at thefarms in relation to safety:
1. Foster farmer participation on a specialized training program providing financial support for theofficial regulation training that defines the standards for health and safety in agriculturaloperations (NR 31) (starting in Q4/ 2013),
2. Provide credit lines for urgent repairs or implementation of safety measures (e.g. harnesses orprotection, equipment, machinery and barns),
3. Establish improvement plans for workers´ housing if necessary (2014 crop),
4. Supply CPA storage boxes that are in compliance with the legal requirements (Ongoing)
5. Field technicians will provide PPEs (for GTS and CPA) for all family members and workers working
on the tobacco fields (Q4 2013) and continue to provide advice to farmers on how to use PPE
21

All field technicians who work at PMB have received training in the requirements set by Normative
Resolution 31. When PMB contracted its field technicians in 2010, the majority already received thistraining; the 13 field technicians who had not received the training, did so in 2012 as part of an initiative ofSinditabaco.

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PMI Third Party Assessment - PM Brazil

6.

adequately and to disseminate Sinditabaco’s information materials.
Field technicians will explain to farmers why it is important to use PPE, the problems it can prevent,and to use more effective communication materials, specifically for PPE and CPA. PMB will seek forexpert assistance in developing more effective communications materials (Q4 2014).

4.6 ALP Code Principle 6: Freedom of association‘Farmers shall recognize and respect workers’ rights to freedom of association and to
bargain collectively.’
Freedom of association: Background
Regulations: The Federal Constitution in Brazil states that:ooooall are free to establish a professional or labor association (Article 5),
all have the right to negotiate collective agreements to improve their social
conditions (Article 7),
no governmental organ has the right to interfere with labor union activities(Article 8), andworker representatives should not be prevented from exercising their functions(Article 11).

Labor scarcity: Workers are generally in a strong position due to the scarcity of rurallabor. Therefore, it is less likely that farmers would interfere with workers´ right tofreedom of association.
Freedom of association: Overall findings and challenges
4.6.1 Union affiliation
Although labor unions were present in the majority of the municipalities visited, noneof the workers were member of any union. When asking the workers about theirreasons for not being affiliated with a labor union, they declared they had no interestin such affiliation because they did not want to pay the required fees and the labor
unions did not provide adequate support. Also none of the farmers were member ofany farmers union. The only organization that they regarded positively was AFUBRA
because it provides an insurance against hail and other environmental risks for tobacco
crop.
Freedom of association: Risks
4.6.2 Third party labor brokers
Farmers lack insight into the recruitment practices of crew leaders and, therefore, do
not take the responsibility that the right to freedom of association is respected.

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PMI Third Party Assessment - PM Brazil

Freedom of association: Conclusion
CU found that farmers and workers are well aware of the right to freedom of
association and the existence and purpose of labor unions. However, workers generally
reported dissatisfaction with the support provided by the labor unions, which may be
why there was no labor union affiliation on the farms visited. This worker perception isperhaps supported by CU´s finding that 60% of the labor unions in the municipalitiesof the farmers visited were promoting incorrect minimum salaries for rural workers ofthat State (Chapter 5.2.1).
4.7 ALP Code Principle 7: Compliance with the law‘Farmers shall comply with all laws of their country relating to employment.’
Compliance with the law: Background
Regulations: Articles 442 and 443 of the CLT determine that written employment
contracts are not mandatory. However, as stated in Article 13 of the CLT, all workers,
including temporary rural workers, should have their employment registered in their“carteira de trabalho 22” and receive social security. The terms included in thisdocument are:
•
•
•
•
•

Type of employment (indefinite, definite, temporary, piece work)
Start date of the employment
SalaryWork hours
Function

Who should be registered: According to PMB, the main challenge is to determine
whether temporary rural workers have an employment relation with a particular farmer
as they typically work for short periods of time on several farms. To determine
whether an employment relation exists, CU and PMB agreed to reference Articles 2 and
3 of the CLT. This law states that an employment relation exists in the following
situations:workers work with a certain frequency or regularity at a farm (e.g. once or
twice a week, or one or two weeks a year)• a subordinate relationship exists between the farmer and the workers, and• payment is involved.

•

As a consequence, in these situations, workers should have their employment
registered and receive social security.

22

Carteira de Trabalho = Work Portfolio

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PMI Third Party Assessment - PM Brazil

Compliance with the law: Overall findings and challenges
4.7.1 Awareness of the law
None of the farmers visited who contracted workers had properly informed theirworkers of their legal rights and employment conditions. The majority of the farmers
only informed workers about the daily wage they would earn, and some farmers
informed the amount of work hours. 87% of the farmers visited who contracted
workers and 80% of the workers interviewed, were unaware of the law regarding
minimum salary, payment conditions, work hours, benefits, and employment
contracts.
4.7.2 Worker registration and written contracts
None of the farmers visited who contracted workers registered the employment ofworkers with an employment relation in their “carteira de trabalho”. 76% of the
farmers who contract workers and 85% of the workers interviewed were unaware of
the legal requirement to do this, or believed that only permanent workers have thisright. Several “partnership” contracts giving workers the responsibility to manage asmall piece of land as an independent service provider were written contracts.
However, none of these contracts established an employment relation between the
farmer and the workers.
One farmer declared the risk associated with not registering the employment ofworkers in their “carteira de trabalho” is that workers can go to court and claim theirsalary and benefits retrospectively. This farmer’s previous seasonal worker had
threatened him and his family that he would go to court after working and living on thefarm the entire harvest and being paid monthly. From the perspective of the workers,
the problem of working without registration is the lack of benefits, holidays, and leave
to which they are entitled by law.
Compliance with the law: Risks
4.7.3 Third party labor brokers
17% of the farmers visited who contracted workers through a third party did not verify
whether workers are informed of their rights and how to claim them.
Compliance with the law: Conclusion
In Phase 1, communicating this ALP Code Principle was not a priority and PMB wasassessed to have a poor understanding of this area. None of the farmers visited who
contracted workers properly informed their workers of their legal rights and none of
the farmers visited who had an employment relation with their workers registered theemployment of their workers in the “carteira de trabalho”. The lack of awareness on
legal rights, labor conditions, the legal requirement to register the employment of
temporary workers in the “carteira de trabalho”, and the resistance among farmers to

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PMI Third Party Assessment - PM Brazil

register workers implies more than just communication efforts may be needed going
forward.
PMB response: “The following action plan applies to ALP Code Principle 2 as well as ALP Code Principle
7: PMB concluded that they need to encourage farmers´ entrepreneurial behavior, remind them of their
obligations as employers under Brazilian law, and support them to uphold their obligations as business
partners to PMB.”

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PMI Third Party Assessment - PM Brazil

5. Control Union concluding remarks

THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

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PMI Third Party Assessment - PM Brazil

CU notes that although PMB has been contracting farmers for only three years, manyof the issues identified in the Control Union´s report were already known by PMB fieldtechnicians and agronomy teams. CU notes that since beginning to source tobacco
directly from farmers, PMB has made significant efforts to develop a relationship,
support and improve conditions on each farm they buy from and to join industry wide
initiatives.
During the closing meeting PMB´s management personnel stated that they understood
the feedback and were satisfied with the work done by CU. They declared that theresults provided a clear and realistic picture of the current situation and a goodstarting point for implementing Phase 2 of the ALP Code roll-out. The Senior
Management Team concluded that the next step would be to set priorities for
improvements and evaluate which other organizations, such as labor unions and theMinistry of Labor, could be involved to help PMB to address the problems identified.
As part of the standard assessment process PMB provided CU with its response to thefield assessment and findings on the current situation at farm level, together with its
ALP Program action plan. These have been reviewed by CU for the preparation of thisfinal report and excerpts have been incorporated throughout the report.
Since PMB was being assessed at this stage only for Phase 1 of the ALP Program, theresponse and Action Plan, which show in detail how PMB is preparing for Phase 2,
which areas are targeted and considered a priority, as well as the planned approach
are included in Appendix 2 below. As shown in the annex of the document, all planned
actions are based on a three-step process: design, implementation and review.
Having reviewed PMB´s response and ALP Program action plan, CU can confirm thecompany’s positive approach to the assessment. Some activities had already been
undertaken as a follow up to the assessment before the response was delivered to CU
e.g. a study to establish what time allocations the field technicians would need toinclude ALP responsibilities alongside their other activities, further work on areas of theCode where knowledge was still limited, and reinforcement for field technicians torecognise ‘Prompt Action’ situations and standardize their responses.
The PMB plans themselves are comprehensive, built directly on the insights provided
by CU’s assessment, and show a constructive analysis of both the systemic and theless deep rooted types of challenges ahead to achieve the desired impact in criticalareas such as child labor and safe work going forward.
PMB has set in process a wide-reaching and integrated set of actions, taking in thechallenges articulated in the Control Union assessment. Significant progress is
expected by PMB in most of these action areas. CU considers that this is feasible as
PMB has a strong multi-disciplinary team in place, it is well organised and its ALP
Program plans are supported by management.

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Appendices

THIRD PARTY ASSESSMENT

PHILIP MORRIS BRAZILAGRICULTURAL LABOR PRACTICES PROGRAM

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PMI Third Party Assessment - PM Brazil

Appendix 1. PMB response and ALP Program action plan 2013-2014

Introduction
PMB began to purchase tobacco directly from farmers in Brazil just three years ago. Since then
PMB allocated significant resources to support farmers and improve the overall conditions of eachfarm PMB contracts with. The elimination of child labor and the improvement of labor practices havebeen an integral part of these efforts and the implementation of the PMI Agricultural Labor Practices(ALP) Program has added to the ongoing efforts clear standards, processes and an approach formaking concrete improvements on farm conditions over time.
This third party assessment comes immediately after PMB’s first steps in setting up the ALP
Program (Phase 1), providing great insights into the areas of improvement and setting a baseline interms of the labor practices’ on farms, which will guide PMB’s work into the full implementation of
the ALP Program (Phase 2) on all farms.
PMB is comfortable with Control Union’s positive appreciation of the internal work that has been
done so far regarding the implementation of the first phase of the ALP Program and is conscious of
the many challenges that lie ahead.
First we will discuss the assessment of PMB’s work during the first phase of ALP and how this work
can be improved. Secondly we will address the findings and the risks described in Control Union’sreport, reflecting what we perceive as being the main priorities and how to address them going
forward.
Many of the issues found during the assessment are a reflection of the systemic problems small
scale farming present and of the informal nature labor arrangements are made in rural Brazil.
Farmers are independent entrepreneurs with deep-rooted cultural practices and it is beyond PMB’s
capabilities to change them overnight (PMB holds contracts with around 10% of Brazilian tobacco
growers). Notwithstanding, we believe that the actions being proposed reflect PMB’s strong
commitment to take decisive action and to work with all relevant stakeholders in improving thecurrent situation and achieving tangible, measurable impact over time.
For ease of reference we include an annex with a summary table of the planned action points,
accountabilities, timeline for execution and assessment of the results. The actions proposed always
encompass a three-step process: Design, Implementation and Review. They will be periodicallyassessed and expanded or redefined according to their effectiveness.

Philip Morris Brasil (PMB) progress with the ALP Program implementation
Overall we believe that Control Union’s assessment of PMB’s work during the first phase of ALP
was extremely positive. As Control Union highlights: “PMB had a strong internal structure for the
implementation of the ALP Program; clear lines of communication were set between the employees
involved; collaboration between the ALP Country Team and the Tobacco Production Team waseffective; the required departments such as Operations, Legal, and Corporate Affairs wererepresented; and the Senior Management Team was actively involved”. We believe putting this51

PMI Third Party Assessment - PM Brazil

structure in place was key for meeting the ALP phase one objectives in terms of training,communication and collecting information at farm level, as it is also acknowledged in the report.
However, there are areas for improvement as follow:•

Personnel awareness and understanding of the practical situations that might
configure forced labor and the standards of the ALP Code Principles dealing withcompliance with the law.
Control Union acknowledged PMB’s ALP Country Team commitment and the many training
sessions conducted in 2011 and 2012 for all the relevant personnel. Notwithstanding, Control
Union also points out the need to improve personnel’s knowledge and understanding of someof the ALP Code Principles, namely the ones dealing with forced labor and compliance withthe law.
During the Phase 2 workshop in March 2013, Philip Morris Brazil’s ALP Country Teamfocused these ALP Code Principles with representatives from PMI Operations Center andVerité, clarifying areas of knowledge that needs to be improved (e.g. connection between
different types of sharecropping arrangements, hiring through crew leaders and risk ofpotential forced labor situations) and defining the best way to deploy this knowledge to thefield technicians. As an outcome of these discussions, the Country Team will develop a list ofpractical examples that can highlight potential risks relevant to the daily work of fieldtechnicians. Also, PMB’s Law Department has prepared guidelines and trained fieldtechnicians on legal obligations under the scope of the ALP code standards dealing with
Compliance with the Law. Information material to support field technicians understanding will
be prepared and distributed by Q4 2013.
In the context of the rollout of the second phase of the ALP Program, the Country Teamdelivered specific training on topics related to the ALP Code Principles of Forced Labor andCompliance with the Law to all field technicians and their supervisors, covering the different
tobacco growing regions during mid-2013. Also, during the crop season, from August to
December, at staff meeting´s participation, the field technicians will be asked to present anddiscuss specific practical examples every two months, which can illustrate the points ofconcern and how they can be addressed (starting Q3 2013).

•

Field technicians’ time allocation to the ALP Program
Through interviews with the field team, Control Union concluded that field technicians do nothave sufficient time to communicate the ALP Code properly during their regular visits to thefarmers. Additionally, the Country Team also perceives that time constraints could be achallenge going forward as field technicians begin the second phase of the ALP Program,systematically monitoring and addressing issues on each farm.
PMB conducted an internal study to assess whether and to what extent adjustments where
needed for field technicians, to allocate the necessary time to execute all the expected ALP
Program activities, together with all the other tasks within their job’s scope. This study
containing a recommendation of ideal arrangements of work load per growing region was
already submitted to PMB’s senior management team and it was implemented in Q3 2013.

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PMI Third Party Assessment - PM Brazil•

Communications materials used during Phase 1
Control Union reported that communication materials distributed to farmers during 2012 did
not have the “ALP” acronym on it and therefore farmers did not properly recognize PMB’s
initiatives as being related to ALP Program. The Country Team also identified as a point of
improvement after the roll out of the ALP Code communication, namely the need for setting
up a “brand” that farmers could easily recognize and that could framework farm improvement
plans required under the ALP program.
Starting in this 2013 season, the “ALP” logo has been used in all the new communications
materials to be provided to farmers.

•

Farmers understanding of the ALP CodeControl Union concluded that PMB’s communication efforts on child labor and safe working
conditions were effective in building a high awareness on these two topics. However, thesehigh awareness levels did not fully translate into practical terms and PMB will carefully
consider on the implementation of the second phase of the ALP Program. The country teamwill revisit communication strategies to promote behavior change, in the context of thespecific initiatives under the ALP Code Principles Child Labor and Safe Working
Environment. Also, there’s the need to improve the farmer’s knowledge and understanding of
the ALP Code’s standards of all the other ALP Code Principles.
PMB will develop new tools and communication materials to reinforce equally the importanceof all ALP Code Principles as was done for Child Labor and Safe Working Conditions during
2012. In order to support farmers to improve their understanding of the ALP Code, thecountry team will also reinforce the training of field technicians. Training sessions wereconducted during the rollout of the second phase of the ALP Program (July and August2013), more practical exercises were shared connecting farm practices and the ALP Codemeasurable standards as well as regular staff meetings (every two months) with real cases
related to each ALP Code Principle provided. The country team is also implementing a
regular quiz testing during training sessions to keep track of knowledge improvements andidentify areas of focus. Through Sinditabaco (tobacco companies association) PMB
continues to support an annual awareness campaign in local media to promote farmers
awareness on two of the ALP Code Principles in the ALP Code, Child Labor and Safe
Working Conditions, started in July 2013. Also, PMB’s Corporate Affairs will reach out to local
labor unions for support and active involvement in the process of improving farmer’sawareness about the ALP Program and farmers obligations regarding workers on their farms.

•

Farm profile data collection
Considering the number of contracted farmers and the fact that all the data had to be input
manually in an ALP database, completion of 100% of the Farm Profiles during 2012 was agreat logistic effort, as verified by Control Union. PMB acknowledges that the process wasprone to errors and not very time efficient. Moreover, field technicians need to better
understand the purpose of this information so they can make a critical judgment of theinformation being provided by the farmer and not record information known as not accurate.
PMB developed an electronic Farm Profile form which allows the collection of data directly
into a database (work completed in June 2013) and field technicians were trained on theprocess of collecting the Farm Profile (July and August 2013).

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Farm Profiles will be incorporated in PMI’s new information system called Green Leaf System– (GLS), which among other benefits will aggregate all information collected at farm level.
Implementation of this new system is expected to begin within the 2014 /2015 crop.
•

Prompt Action Situations
Situations that demand immediate action due their highly potential risk for the people
involved are deemed Prompt Action. If one of the three following situation are identified - *workers’ physical or mental well-being might be at risk; ** children or a vulnerable group likepregnant women or old people are in danger; *** workers might not be free to leave their job;
- a Prompt Action protocol must be initiated. When PMB’s field technicians observed asituation in the farm that fits into a category of Prompt Action, they are required to
immediately use a Prompt Action Form to describe the situation observed, the action taken toaddress the issue and the accomplishment resulted from the instruction given to the farmer.

Creating positive incentives for field technicians
In addition to the immediate guidance provided initially, as of April 2013 all “Prompt Action”
situations reported, the country team to follow-up each case with formal letters to the fieldtechnicians (copying by email their supervisors) highlighting the steps to address the issue
reported and commending the field technician for the report.
PMB believes it is important to continue to reinforce the notion that field technicians havenothing to fear regarding the amount of issues they flag, on the contrary, the company
expects them to be transparent about the situations found in farms, setting clear
management and appraisal objectives (Q4 2013). Bearing in mind that the field technicians
too are members of the community and for many times they establish personal relations with
farmers, it is important to clarify any potential fear about what might happen to the farmer
supervised by them and to provide positive examples of the company’s commitment to help
the farmer’s improvement.

Promoting a better understanding of Prompt Action situations and how to addressthemStarting in Q3 2013, the area managers will promote regular discussions with their fieldtechnicians to analyze the “Prompt Actions” being reported. Representatives of the Country
Team will support field teams to clarify doubts and help them address the issues that will
inevitably come up from the situations found. PMB will also promote the regular sharing of
information about “Prompt Actions” reported between the teams in the different tobacco
growing areas.
Also, the list of Prompt Action situations created by the Country Team and the “Prompt
Action” reporting process will be further highlighted in the next season’s preparation training(July-August 2013). This coming season’s training will be particularly focused on the fieldtechnician’s monitoring process as PMB will move into the second phase of the ALP
Program. We expect to reinforce field technician’s ability to identify “Prompt Actions” and webelieve the introduction of the new Farm Monitoring Form for the ALP phase two will
corroborate the reporting process. We are preparing for a high degree of effort around“Prompt Actions” and the systematic follow up as we believe it is a strong priority to act on all

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urgent problems found on farms (within the definition of Prompt Action); and we aim to workwith farmers directly to help them make their farms safe for all who live and work on them.

Assessment of the current situation at farm level
PMB understands that the findings and risks highlighted in Control Union’s report are not comments
on PMB’s work in the full implementation of the ALP Program, but rather an assessment of thecurrent situation at farm level, meaning the report serves as a reference point for the ALP work
going forward. We believe the report provides valuable insights into the main issues faced at farmlevel and proposals to address them are as follows:•Child Labor
As acknowledged in Control Union’s report, “PMB is aware of the existence of child labor in
the Brazilian tobacco sector and has taken several steps to address this issue, such asprioritizing child labor in the communication with farmers, participating in the projects“Cartilha do Sinditabaco /AFUBRA” and “Projeto Crescer Legal”, and by working together
with an NGO (CDI) to develop projects of digital inclusion to farmer´s children. Indeed,
PMB’s programs to tackle child labor in tobacco growing communities pre-date theagreement with the Labor Public Prosecutor signed in December 2012, the introduction of
the ALP Program in the 2011/2012 crop season, and even the start of support for production
and contracting directly with farmers three years ago. During 2012 PMB communicated the
ALP Code Principle of “no child labor” to all contracted farmers, distributed educational
materials to all farmers, monitored school attendance of farmer´s children, provided
educational seminars for farmers, and promoted media campaigns to raise farmers’
awareness about the issues of child labor. In addition to the ALP training, PMB’s fieldtechnicians attended a specific three-day training session, promoted by Sinditabaco andPositivo University, to build their skills and ability to be convincing in their approaches tofarmers on use of child labor on their farms.
All this notwithstanding, PMB is fully aware that child labor remains a challenge in rural
areas in Brazil, as stated by the Brazilian coordinator of the Child Labor Eradication
23
Committee , and tobacco is no exception. The findings in Control Union’s report reinforce
this notion and the importance of continuing to tackle this issue as a matter of priority, butthey also provide insights into the nature of the problems on tobacco farms and specificareas of focus as described below.
Focus on children doing hazardous tasks

From the report’s findings it is clear that the main issue regarding PMB’s contracted farms
lies on children working with their parents on family farm. The majority of the farmers
interviewed stated that they “do not agree with the minimum working age of 18 years old”
(reasons are highlighted in the Control Union´s report) and the cultural perception of
farmers regarding minimum working age is an ongoing challenge for PMB to overcome.

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http://www.trt4.jus.br/portal/portal/trt4/comunicacao/noticia/info/NoticiaWindow?action=2&destaque=false&cod=746059

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PMI Third Party Assessment - PM Brazil

Indeed in 28 of the 29 cases identified in the report, children were helping their parents
after school.
However in some cases children were doing activities that present specific risks for them,
the report points out that the majority of the farmers and workers seem to lack a goodunderstanding of safety hazards on the farm. These findings suggest an increased risk ofhazardous child labor which will be tackled as a matter of priority in PMB’s plans going
forward.


The role of field technicians

As PMB moves into the second phase of the ALP Program, PMB’s field technicians willplay a key role in monitoring and tackling the potential involvement of children executing
dangerous work. PMB will arrange that field technicians have enough time in their regularfarm visits to monitor and discuss labor practices on the farm. Over the next season,
PMB’s field technicians will start by helping farmers to make a basic assessment of thesafety hazards on the farm including identifying the type of activities that pose particularrisks for them and their children and why (e.g. harvesting, loading barns handling andapplying CPA, etc.). For that, specific training will be required and PMB will involve theinternal Environment, Health, Safety & Security experts in developing specific materials tobuild field technician’s capacity to conduct this exercise with farmers (Q4 2013- Q3/2014).

PMB’s field technicians will continue to convey that children shall not work on tobacco
and will focus their efforts on correcting any situation identified as in no conformity withthe law. Every situation identified will be reported to PMB by the field technicians and will
have a specific follow-up. PMB’s response will vary according to the nature and severityof the situation; it will range from formally notifying the farmer (reminding him of his legal
obligations) to requiring the farmer to undergo trainings and even to non-renewal of thecontract in the most serious circumstances. In every instance, farms where issues wereidentified will be monitored more closely to ensure situation is being remediated.
PMB will continue to support industries’ initiatives under the scope of the agreement with
the Labor Public Prosecutor, namely supporting Sinditabaco’s seminars for thecommunity, media campaigns and the dissemination of the educational materials 24
among our farmer base. All this notwithstanding, given the farmers perception on
Brazilian´s law, we believe the key for the success of the field technicians’ work is throughbuilding the farmers’ detailed understanding about why tobacco related work can be
dangerous for their children. In this sense, PMB’s field technicians will monitor and takespecific actions to remedy every situation identified, with the broader objective of

24

PMB, through Sinditabaco, is committed: (i) To organize or subsidize talks and courses on the rights ofchildren and adolescents and occupational health and safety standards three times annually from 2013 to 2015
and twice annually from 2016, with at least 200 growers at each event; (ii) During the period between
transplanting tobacco shoots into the field and the tobacco harvest, between July and December of each year,
run tobacco grower awareness campaigns on the importance of using individual protection equipment andcorrectly applying pesticides, as well as the ban on child labor, using two radio and two TV broadcasters withthe biggest audience in the regions comprising the 10 biggest tobacco farming regions in the State of Rio
Grande do Sul, with a total duration of 5 minutes on TV and 10 minutes on the radio, every week, as well as
newspaper ads in the publications with the biggest circulation among tobacco growers in the same region, withidentical content and covering at least 1/4 page.

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PMI Third Party Assessment - PM Brazil

enhancing the farmer´s understanding on practices to empower them to make the rightdecisions for their children.
Additional risks

The Control Union’s report also highlights the risk presented by the exchange of labor
between farmers, namely when farmers go to work on their neighbor’s and bring theirchildren along. PMB will also monitor this practice and in the field technicians’
communications to farmers and educational materials will include a specific mention toraise farmers’ awareness and ensure that only adults are involved in this type of laborexchange. Another risk flagged in the Control Union’s report is the farmer’s lack of age
verification when hiring workers, which PMB sees as a concern mainly when the farmer iscontracting workers through a third party (found on 17% of the farms visited) and there islittle or no contact between the farmer and the workers. Particularly in these cases, PMB
will require farmers to engage directly with the workers that are brought onto the farm andcheck their identification documents. This practice of hiring workers through a third party
brings other risks that will be further discussed below together with PMB’s initiatives toaddress those risks.


School attendance

Even if in almost all instances identified in the Control Union’s report children wereattending school, PMB considers that school absenteeism, particularly during the peakharvest season, is also a risk that needs to be closely monitored. PMB will continue tocollect the school attendance records of the contracted farmers’ children and will increase
the monitoring on the farms where children have an historical record showing problems
with school attendance in the previous year. Each field technician will be responsible formapping the contact point in the educational institutions located in the geographic areas
he supervises, in order to narrowly monitor and understand the reasons for school
absence and how to address them. At the end of each crop season, the Country Teamwill reevaluate this plan in order to make any necessary adjustments (starting in Q42013).


Credit lines

The Control Union’s report also mentions labor scarcity and farmers ability to contract
workers as a potential problem. Over the next season PMB will extend its existing credit
lines to ensure that farmers have the necessary cash-flow to hire adult workers, nothaving to rely on their own children. To guarantee that expansion of these existing linesof credit has the desired effect on hiring and child labor prevention, field technicians will
monitor these farmers through the Monitoring Form to measure the impact.
Preventing child labor with community initiatives

It is clear from the Control Union’s report that there are two particular moments of risk:
when children return home from school and during summer time school vacation breaks.
PMB will continue to support programs that can mitigate this risk by promoting extracurricular school activities and further learning opportunities for children of tobacco
farmers contracting with PMB:(i) developing digital and computer skills classes in twelve schools in the surroundingarea of its buying stations in Rio Grande do Sul and Santa Catarina States, through a57

PMI Third Party Assessment - PM Brazil

NGO called CDI (Committee for Democratization of Computing). This program isongoing and will be expanded in 2013 and 2014 to benefit children fromapproximately 1300 tobacco farming families located in regions where PMB has
contracted growers.
(ii) assessing SENAR’s (Rural National Apprenticeship Services) availability to promote
short term computer courses through in the municipality of each tobacco growing
region (During 2013 and 2014);
Many tobacco farmers perceive the legal limitation for their children to provide help on thefarm as being at odds with the family’s interest in the long term because it does not allow
their children to prepare for the future which many still see as being connected with theirland and the potential economic opportunities it provides. This is part of the ongoingchallenge PMB faces in terms of changing the mindset in these rural communities. This
challenge can only be fully addressed in the long-term with better educated farmers and amore sophisticated farm base. To this end PMB will continue to support tobacco growing
families by providing grants for their children to attend an agriculture technical school
called “Escola da Família Agrícola (Rural Family School)” located in Santa Cruz do Sul,state of Rio Grande do Sul. During 2013 PMB will award 42 scholarships to PMB farmers´children.

•

Income and work hours / Fair treatment / Forced labor / Compliance with thelaw
According to Control Union’s assessment, workers were being paid above the local minimum
wage, and in any case always above the national minimum wage. There was no situation thatsuggested any form of discrimination, physical, sexual or verbal abuse, nor any potential
situation of forced labor.
Notwithstanding, several issues were raised in connection with the standards under these
ALP Code Principles and we analyze them here jointly to show our proposed actions, given
the significant overlaps in terms of dealing with the potential risks.
Payment and farmers obligations under the law

Whilst the overall scarcity of rural workers is a reality and a matter of concern for farmers,
also pointed out by Control Union, it creates a dynamics where workers have a greaterbargaining power. This might help to explain why, despite farmers and workers generallack of awareness about the minimum salary for rural workers defined by the States,
there was only one verified case where the farmer was paying the national minimum
salary rather than the State’s rural minimum wage (which would be higher). Somewhat
surprising was also the fact that among the labor unions in the municipalities there
seemed to be also different levels of understanding about the applicable minimum salary.
This shows to PMB a concrete focus area, namely the need to raise awareness among
farmers and workers regarding the minimum labor rates defined by law. In fact, this isalso true for a number of other aspects that have to do with obligations under the law,where farmers’ lack of awareness is also raised in the report as a risk area. Even with thisreality today, with small scale family farms in Brazil, PMB believes it is important tostimulate farmers’ entrepreneurial behavior, reminding them of their obligations as

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employers under Brazilian law and supporting them to uphold their obligations as
business partners to PMB. This should be done both directly and by working with relevant
stakeholders. Specifically, PMB’s Law Department trained Field Technicians to provide
information to farmers on key, straightforward aspects of their obligations towards
workers, e.g. basic employment conditions that need to be agreed upfront, applicableminimum salary, working hours, legal requirements for overtime, benefits for permanent
workers and will support development of reference materials by sector associations(Sinditabaco /AFUBRA), labor unions and the relevant authorities, to support this effort
and improve farmers’ and workers’ overall understanding of their legal rights andobligations (Q4/2013).


Working hours, payment and demonstration of actual practices

Another common theme raised by Control Union’s report was farmers’ ability todemonstrate their practices regarding payment and hours worked. Further, the report also
points out that the majority of the farmers did not respect the limit of eight regular hours
per day, this happens during the peak harvest season reflecting the great seasonality ofwork on a small family farm, and that in every circumstance there was an agreement
beforehand with the workers, and no evidence of involuntary overtime.
A good starting point both for PMB to develop a better understanding of the actual
situation and also to help farmers become better organized and able to demonstrate theirpractices, is to provide farmers with simple, basic tools for them to record payments andthe number of hours worked. As such the Country Team will develop and distributetemplate models for pay slips and timesheets to the farmers so they can use them withthe workers on their farm (Q4/2013).
Farmers and workers - informal arrangements: minimum conditions andobligations under the law

With regards to the regularity of payment, an issue was identified only for situations wherea profit sharing or a sharecropping between farmers and workers was agreed. Althoughsuch risks situations can raise further considerations, we have to consider that the farm
sample was purposefully skewed towards farms with workers to give PMB’s a better
understanding of potential issues.
The Control Union’s report suggests there are some different practices, also confirmed byinterviews with PMB’s field technicians, which may be real sharecropping agreements ora “labor relation in disguise”. These will need to be mapped out and better understood sothey can be appropriately tackled case by case (Q1 2014). PMB does not rule out thepossibility that some of the profit sharing agreements between farmers and workers canbe driven by farmer’s cash flow limitations and therefore will also extend its credit line forfarmers to these situations; where farmers don’t have enough cash flow to provide for the
regular payment of their worker’s wages (starting in Q4 2013). In any case, PMB will aim
to establish contract agreements directly with the sharecropper to reduce the risks ofindirect or inequitable arrangements more generally.
Another specific issue which is sometimes connected with these profit sharing or
sharecropping agreements is the non-payment of benefits, holydays and leave toworkers. Control Union acknowledges in the report that observing these standards is notcommon on small scale farms. Most of the time there is no labor relation and therefore

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such obligations do not exist, while in other cases the labor relation is not evident (asmight be the case in profit sharing agreements) or at least not perceived as such by both
farmers and workers, who have their own traditional arrangements, adapted to thepractical reality (e.g. occasional nature of the work on a small farm, sharing of land forown produce, etc.). This is a complex issue and it is being addressed by the Ministry ofLabor with the associations representing the tobacco sector (Sinditabaco and Farmers’
Unions) who are mapping out all the implications of changing current practices, namely
the registration of sharecroppers as employees. PMB will closely monitor any potential
developments and will incorporate recommendations as appropriate.
Use of third party brokers

Another practice that raises concern is farmers’ use of third party brokers to bring workers
onto the farm, which happens during the busy periods of the season. While this practiceis limited to few tobacco growing areas and only to a small number of farms, the farmers´lack of visibility into the brokers’ relation with his workers (e.g. in terms of actual payment)
is of concern to PMB. As acknowledged in Control Union’s report there is scarcity of laborin some tobacco growing areas. In those areas close to urban centers where labor isavailable, workers from urban areas can go and work on the farms during peak season.
This practice of using brokers tends to happen in the vicinity of the bigger urban areas(not mentioned in the Control Union’s report, this is PMB’s overall understanding).
Although brokers are simply responding to a market need, this practice raises concern
because there is lack of transparency in the process - farmers normally do not pay theworkers directly and have little or no contact with these workers, meaning they do notknow whether there are issues with the way workers are being treated.
A first but necessary step to address the concerns raised by this practice is to encourage
farmers to reach out and have regular contact with the workers that are brought onto theirfarms by a third party. Currently this contact does not happen and PMB’s field technicians
could help by:
1) Sensitizing farmers about the potential issues that unscrupulous brokers could create;2) Raising farmers’ awareness about the potential risks and liabilities they would face ifworkers were being victims of abuse;
3) Orientate farmers to start paying the workers directly themselves (as required in the
ALP Code), or at a minimum to ask brokers for more accountability and for a moretransparent process, e.g. providing credible proof of what they are paying to the workers
through pay slips (Q4 2013).
Bring transparency and accountability to the process

Third party brokers operate in a totally informal system and even if the payment practices
are changed, this does not fully addresses all the concerns. Acknowledging, thepotentially important economic role that these brokers can play - both for farmers and forworkers looking for a job - PMB will also reach out to the relevant stakeholders in the
sector (brokers, farmers organizations, unions, other companies and local authorities) to
discuss the best approach to formalize the brokers’ role and practices or at least to create
minimal standards which can provide some level of confidence (Q3 2013).

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PMI Third Party Assessment - PM BrazilSupport line mechanism
An operational support line mechanism can be an effective way of address or at least
minimize the concerns raised during the assessment, and its availability at farm levelis a requirement of the ALP Code. As such, the Country Team will develop a pilot
program with FETAG (Rural Workers Union of Rio Grande do Sul) in a relevant
tobacco municipality (Q4 2013). PMB will monitor and assess the results of this pilot,
in terms of efficacy and design, before expanding it to other areas.

•

Safe working environment

PMB is generally aware of the poor safety conditions on tobacco farms and particularly during theselast three years the vertical integrated PMB has made significant efforts to improve the situation, as
acknowledged in Control Unions’ report. However, many concerns remain and the report raises
significant issues that require particular attention.
Improve farmer’s adoption of general safety standards

None of the farms visited met all the basic requirements, mainly due to lack of awarenessabout the general safety standards. In addition farmers were failing with simple things
such as protection for working at heights, proper Crop Protection Agents (CPA) storage
or Personal Protective Equipment (PPE) use, both provided by PMB. The generalawareness about safety standards is a matter of particular concern with regards tochildren, and will be addressed specifically as describe under “child labor”. Control
Union’s findings suggest that PMB’s communication efforts (which are in line with those of
the industry and with the Labor Public Prosecutors agreement) per se are not sufficient todrive the necessary behavior change, so new and additional approaches are necessary
to change farmers mindset. The report suggests that specialized training by an external
entity can be an effective complement to PMB’s current efforts. Therefore, this year
(starting in Q4/ 2013) PMB will foster farmer participation on a specialized training
program providing financial support for the official regulation training that defines thestandards for health and safety in agricultural operations (NR 31) which will be held by
the National Rural Apprenticeship Service (SENAR). For 2013 crop, PMB’s expectation is
to have each of PMB’s Field Technician organizing at least one training session with agroup of farmers under their supervision. The farmers selected and encouraged to attend
these training sessions by the technicians will all be:a) volunteers and,b) farmers which have experienced or have challenges with their practices andinfrastructure.


Help farmers assess hazards and support for concrete improvements

In parallel with having field technicians helping farmers assess dangers and risks on theirfarms (supported by PMB’s internal health and safety experts – as describe under “childlabor”), PMB will also provide credit lines for urgent repairs or implementation of safetymeasures (e.g. harnesses or protection, equipment, machinery and barns). Typically onlya small number of workers live on the farms but Control Union’s report mentions thatwhen housing is provided, a significant number was found to be inadequate. The specificsituation of each farm with regards to the status of worker’s housing will also be

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determined as part of the risk assessment process, so that an improvement plan can be
agreed with the farmer on a case by case basis (2014 crop).
Specific Crop Protection Agents (CPA) and Green Tobacco Sickness issues(GTS)

PMB will continue to supply CPA storage lockers that are in line with best practices, toensure that over the next two years all contracted farmers are meeting the requirementsof the ALP Code. PMB field technicians will provide PPEs (for GTS and CPA) for all
family members and workers working on the tobacco fields (Q4 2013). PMB fieldtechnicians will also continue to provide advice to farmers on how to use PPE adequately
and will continue to disseminate Sinditabaco’s information materials, in line with theagreement signed with the Labor Public Prosecutor.
However, the issue reported by Control Union’s is not about the awareness of therequirement to use PPE when harvesting, or applying CPA (100% of the farmers knew
about these requirements), but that this knowledge is not translating into behavior
change. In this regard, further to the SENAR training mentioned above, a key aspect tochange the current attitudes will be to focus PMB’s field technicians discussions with
farmers on why it is important to use PPE, the problems it can prevent, and to use more
effective communication materials, specifically for PPE and CPA. We will seek for expert
assistance in developing more effective communications materials (Q4 2014).

Concluding Remarks
It is important to highlight that PMB has been contracting farmers for only three years now
and although recent, it has constantly promoted better practices regarding agriculturalactivities in its vertically integrated farms.
There are several challenges to be faced not only by PMB, but also by all other integrated
tobacco companies, in the path of educating farmers to reach the ideal farm standard inboth economic and cultural aspects. In these terms, the improvements to be achieved infarming practices are especially relevant if compared to the number of farmers PMB
currently contracts, with a total of 15,662 farms (crop 2013) with their own individual
realities and demands.
PMB has already set in process a wide-reaching and integrated set of actions to address
and reduce or eliminate many of the issues identified in the Control Union´s report oralready known by our own field technicians and agronomy teams. Significant progress is
expected in most of the action areas, and PMB hopes to make important steps and learn
from own experiences and those of others about some of the challenges, which often
involve promoting education, change in practices and attitudes rather than the provisionof something physical such as making equipment available or accessible.
PMB´s Country Team is formed by a multidepartment group from Legal, Leaf andCorporate affairs, allowing proper background to respond to challenges and according toControl Union´s report, is well organized and supported by senior management topromote the necessary actions. The following action plan is originated from Control Union
assessment analysis and from PMB´s previous commitment to a safe and fair ruralcommunity through its programs.

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Appendix 2. The ALP Code

ALP Code Principle 1: Child labor
There shall be no child labor.
Measurable Standards:
1) There is no employment or recruitment of child labor.

The minimum age foradmission to work is not less than the age for the completion of compulsory
schooling and, in any case, is not less than 15 years or the minimum age
provided by the country’s laws, whichever affords greater protection. 252) No person below 18 is involved in any type of hazardous work.
3) In the case of family farms, a child may only help on his or her family’s farm
provided that the work is light work and the child is between 13 and 15 26 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 meetworkers’ basic needs and shall be of a sufficient level to enable the generation of
discretionary income. Workers shall not work excessive or illegal work hours.
Measurable Standards:

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

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

25

As an exception, pursuant to ILO Convention 138, developing countries may under certain circumstances specify a minimum age of
14 years.
26
The same ILO convention 138 allows developing countries to substitute “between the ages 12 and 14 in place of “between the ages
13 and 15”.

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3) Work hours are in compliance with the country’s laws.

Excluding overtime,

work hours do not exceed, on a regular basis, 48 hours per week.

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

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

There shall be no harassment,

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

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ALP Code Principle 4: Forced labor
All farm labor must be voluntary. There shall be no forced labor.
Measurable Standards:
1) Workers do not work under bond, debt or threat and must receive wages
directly from the employer.
2) Workers are free to leave their employment at any time with reasonable notice.
3) Workers are not required to make financial deposits with employers.
4) Wages or income from crops and work done are not withheld beyond the legal
and agreed payment conditions.
5) Farmers do not retain the original identity documents of any worker.
6) The farmer does not employ prison or compulsory labor.

ALP Code Principle 5: Safe work environment
Farmers shall provide a safe work environment to prevent accidents and injury and tominimize health risks. Accommodation, where provided, shall be clean, safe and meet
the basic needs of the workers.
Measurable Standards:
1) The farmer provides a safe and sanitary working environment, and takes all
reasonable measures to prevent accidents, injury and exposure to health risks.
2) No worker is permitted to top or harvest tobacco, or to load barns unless they
have been trained on avoidance of green tobacco sickness.
3) No worker is permitted to use, handle or apply crop protection agents (CPA) orother hazardous substances such as fertilizers, without having first received
adequate

training

andwithout

using

the

required

personal

protection

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PMI Third Party Assessment - PM Brazil

equipment.

Persons under the age of 18, pregnant women, and nursing

mothers must not handle or apply CPA.
4) Workers do not enter a field where CPA have been applied unless and until it issafe to do so.
5) Workers have access to clean drinking and washing water close to where theywork and live.
6) Accommodation, where provided, is clean, safe, meets the basic needs ofworkers, and conforms to the country’s laws.

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

ALP Code Principle 7: Compliance with the law
Farmers shall comply with all laws of their country relating to employment.
Measurable Standards:
1) All workers are informed of their legal rights and the conditions of theiremployment when they start to work.

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2) Farmers and workers have entered into written employment contracts whenrequired by a country’s laws and workers receive a copy of the contract.
3) Terms and conditions of employment contracts do not contravene the country’s
laws.

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