EXTERNAL ASSESSMENTGODFREY PHILLIPS INDIA LTD.
Burley farmers in Guntur and Prakasam

Agricultural Labor Practices Program

December, 2017

External Assessment

Table of Content
Executive summary. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3Market and company background .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 71. Implementation of the ALP Program .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 91.1. Commitment to the ALP Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2. Strategy and objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3. Communication of the ALP Code requirements to farmers. . . . . . . . . . . . . . . . . . . . . . . 14
1.4. Internal monitoring: data collection, accuracy, and addressing issues. . . . . . . . . . . . . . 16
1.5. Address systemic and/or widespread issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2. Farm-level assessment of working conditions regarding the ALP Code Standards .  .  .  .  .  . 22
2.1. ALP Code Principle 1: Child labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2. ALP Code Principle 2: Income and work hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.3. ALP Code Principle 3: Fair treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.5. ALP Code Principle 5: Safe work environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4. ALP Code Principle 4: Forced labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6. ALP Code Principle 6: Freedom of association. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.7. ALP Code Principle 7: Compliance with the law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3. ALP Program: feedback from farmers, workers, and other stakeholders .  .  .  .  .  .  .  .  .  .  .  .  .  . 36
Appendices .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 38
Appendix I – Godfrey Phillips India’s Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Appendix II – Scope and methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Appendix III – Legal information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Appendix IV – Communication materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Appendix V – Prompt Action Reporting and Verification forms . . . . . . . . . . . . . . . . . . . . . . . 69
Appendix VI – Monitoring forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Appendix VII – Initiative inputs provided by GPI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Appendix VIII – Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

EXECUTIVE SUMMARY

EXTERNAL ASSESSMENT
Burley farmers in Guntur and Prakasam

External Assessment

In December 2017, Philip Morris International(PMI) requested Control Union (CU) to conduct anexternal assessment of the Burley tobacco growing
operations of its supplier Godfrey Phillips India(GPI) in the Vinukonda region of Andhra Pradesh,
India. The assessment evaluated the labor practices
at contracted farms, and whether these weremeeting the standards of the Agricultural Labor
Practices (ALP) Code. 1 CU also evaluated GPI’s
internal capacity to implement the ALP Program,their understanding of farm practices, and how they
identified, recorded and addressed ALP-related
issues.
For this assessment CU interviewed 28 employees of
GPI (ten management staff and 18 field technicians)
and three employees of Assist, a local NGO involvedin the implementation and development of several
initiatives. Over a two-week period CU visited
63 farms in the Vinukonda region 2, interviewing
63 farmers, 22 family members and 21 external
workers. All farm visits were unannounced.
An
information
triangulation
methodology
was used to evaluate farm practices. The threesources included interviews, documentation, andobservation, together with a “Five Whys Analysis”
of issues found. The “Plan, Do, Check, Act” cycle wasadopted for analyzing GPI’s management approach.
GPI started with the ALP Program in 2012. Most of
their farmers were smallholders, who grew tobacco
on two hectares or less.
As a supplier to PMI, GPI had incorporated the ALP
Program in its processes and procedures. CU foundthe majority of GPI staff to be personally committed
to the program; they considered it an important
step forward in improving labor conditions at thefarms.

1.

2.

At the time of the assessment, GPI was monitoring
and communicating all seven ALP Code Principles,with a focus on eliminating child labor and improving
safe working conditions. Furthermore, investigating
gender discrimination in pay was mentioned as a
future focus area. GPI’s strategy for implementing
the ALP Code at the farm level focused on three
aspects:(1) implementation or further developmentof two initiatives annually, e.g. providing protective
equipment for handling hazardous substances andharvesting, or expanding the after-school activities
to more villages; (2) continuous training of farmers
and employees on the ALP Code; and (3) regular andsystematic farm-by-farm monitoring of all principles
and reminding farmers of good practices.
Roles and responsibilities were clearly defined, with
ALP-related tasks included in the job descriptions of
the personnel involved. Annual job reviews included
measurable key performance indicators (KPI’s)
such as the number of farmer trainings provided,
verification of data accuracy or progress in theimplementation of initiatives. GPI employed 49 fieldtechnicians, resulting in a field technician-to-farmer
ratio of 1 to 79 on average. This allowed the fieldtechnicians to visit their farmers on average every
week, and to thoroughly monitor the practices in thefield. The local field team held regular meetings, andboth management and field staff received regulartraining. However, CU found that many of the fieldtechnicians, though able to recite most of the ALP
Code by heart, lacked a practical understanding of
the ALP Code.
Farmers were informed about the ALP Code during
the regular visits by their field technician and duringbi-weekly farmer meetings, where each meetingcovered two to three Principles of the ALP Code.
Furthermore, GPI had distributed a leaflet, written
in the local language Telugu, describing the ALP
Code and the applicable labor laws. Among the

The main goal of the ALP Code is to eliminate child labor and other labor abuses progressively where they are found,and to achieve safe and fair working conditions on all farms from which PMI sources tobacco. For more informationon the background of the ALP Program see https://www.pmi.com/sustainability/good-agricultural-practices/
upholding-labor-rights-on-the-farms.
The minimum sample size was 63 farms, which is the square root of the total number of farms within the scope (3,884
at the time of the assessment).
4External Assessment

interviewed farmers, workers and family members,
the highest levels of awareness were found withrespect to the topics of child labor and safe work
environment, followed by income and work hours,
and, in the case of farmers, also fair treatment.
Across all groups, awareness levels were low withrespect to compliance with the law and freedom of
association.
At the time of the assessment, GPI was collecting
three types of ALP-related data from the farms:
socio-economic information (Farm Profiles);situations not meeting the standard (major andminor); and Prompt Actions. Data for the FarmProfiles was collected at the time of contracting(basic data) and updated annually with specificdata after transplanting. During farm visits the fieldtechnicians could access this information through a
computer tablet. Of the 63 Farm Profiles checked by
CU, 61 (97%) were updated for the current season.
The other two Farm Profiles belonged to farmers
who had not transplanted their tobacco yet. Noneof the Farm Profiles fully corresponded with farmer
declarations on field size, but in most cases there
were only slight deviations on field size, as well as
number of workers.
Monitoring data and Prompt Actions were reported
using paper forms, which were handed in to theoffice after completion. Different monitoring
forms had to be filled in for transplanting, CPA
application and harvesting. All forms had to besigned by all persons present in the field during
monitoring. GPI differentiated between major
and minor situations not meeting the standard. A
total of 2,378 major issues, defined as “directly notmeeting the standard”, had been reported for theprevious crop season. Most of these were related
to safe work environment, and some to missing
training of farmers to workers in regard to childlabor and forced labor. No minor issues had beenreported. GPI had established a clear procedure for
identification and follow-up of Prompt Actions. At
the time of the assessment a total of 132 Prompt
Actions had been reported by GPI for the current
crop season. All of these were on the topics of childlabor and safe work environment.

None of the issues observed by CU – regarding
payment below the legal minimum wage, unequal
payment between men and women, and lack ofsanitary facilities – had been reported by the fieldtechnicians, which demonstrates a gap in GPI’s
monitoring and reporting practices. In theory,
all seven principles were being monitored, but inpractice the focus was mainly on child labor and safe
work environment.
When a Prompt Action was identified, thefield technician and farmer had to agree on an
improvement plan to solve the issue, to be signed byboth parties. However, CU found that some of theseplans merely addressed the symptoms, rather than
the root causes.
Monitoring forms and Prompt Action reports had
to be handed in to the office after completion, andwere not available to the field technicians for the
rest of the season. This information gap could posea problem during farm monitoring, both for newly
hired field technicians and for field techniciansrecently assigned to new farms.
Based on their risk assessment, GPI launchedseveral initiatives to address widespread andsystemic issues. To reduce the risk of child laborand the number of unattended children in theafternoons, GPI and the NGO Assist offered afterschool activities at 20 elementary schools. To
increase safety at the farms, GPI provided metal
boxes for storing crop protection agents (CPA),
personal protective equipment (PPE) for CPA
application and for harvesting tobacco, and first-aid
kits. The low number of incidents found in relation
to safe work environment indicate that these
initiatives were paying off.
A support mechanism had been implemented
by GPI in three villages. It built upon the existing
structure of solving issues in a community council,
providing a platform for farmers and workers toaddress and solve issues with the help of this council.
CU found that even though this support mechanism
builds on existing community structures and cultural
traditions cannot be considered anonymous or
independent, as required by the ALP code.
5External Assessment

The main findings from CU’s farm visits wererelated to three ALP code Principles: income
and work hours, fair treatment, and safe work
environment. It was found that none of the farmers
paid (at least) the legal minimum wage to all workers
for all tasks; instead, locally agreed wages were
paid that differed per task. Furthermore, gender
discrimination in pay was found to be widespread;at the majority of farms women earned less thanmen for tasks in the same labor category or, in twocases, for the exact same work. Finally, none ofthe visited farmers provided sanitary facilities totheir workers. A general lack of sanitary facilities,
resulting in open defecation, is a common problem
in this region. Several villages had no sanitary
infrastructure and one village did not have access toclean drinking water.
Feedback received by CU from farmers, family
members and workers showed that work safety
and hazard awareness had improved since the startof the ALP Program, and that fewer children wereinvolved in tobacco production. Overall feedback
included that farmers were generally pleased withthe support provided by GPI and preferred to staywith them, even if it meant more effort in terms ofcomplying with the ALP rules.
The outcome of this assessment can be used asa tool to facilitate management with continuous
improvement. CU acknowledges GPI’s commitment
to addressing the issues identified and defining
areas of improvement through the implementationof an action plan (see Appendix I).

6

MARKET AND COMPANY BACKGROUND

EXTERNAL ASSESSMENT
Burley farmers in Guntur and Prakasam

External Assessment

India is the second largest producer and third largest
exporter of tobacco in the world. A large portionof the Indian economy depends on agriculture,and tobacco is the principal cash crop across
many states. Tobacco farming offers significant
employment opportunities. Nearly six million
farmers and 20 million farm workers are engaged inIndian tobacco farming. 3 The most popular tobacco
product is the traditional cigarette, the bidi, followedby chewing tobacco and cigarettes.
Many different types of tobacco are grown in
about 15 states of India, the main growing states
being Andhra Pradesh, Karnataka, Gujarat, Uthra
Pradesh, Tamil Nadu, Bihar and West Bengal.
Burley, Flue-Cured Virginia (FCV), and Oriental are
the main exportable tobacco crops, with Burley andFCV being the main varieties grown for cigarettemanufacturing. Whereas FCV tobacco is tradedthrough an auctioning system after harvesting,Burley farmers are contracted directly by thedifferent companies, guaranteeing the procurementof a specified amount of tobacco and giving the3.

companies the possibility to exert influence on
farmers’ field practices.
In the assessed region of Vinukonda in the state ofAndhra Pradesh, Godfrey Phillips India (GPI) is theone of two the main tobacco buying company. For
the 2017/2018 growing season GPI was expecting
to purchase 41% of the tobacco harvest in the state.
Established in 1936 and part of Modi Enterprises
since 1979, GPI is one of India’s largest cigarettemanufacturers, with brands including Marlboro,
Four Square, and Red & White. Its Agronomy
and Leaf Division has 226 employees directly or
indirectly involved in supporting farmers or tobaccoprocurement.
For the 2017/18 crop season GPI had direct growing
contracts with 3,884 Burley farmers, all of whomwere smallholders growing tobacco on an averageof 1 hectare. Most of them had been involved
with GPI for several years already. In 2017 GPI’s
farmers were supported by 49 field technicians, fivesupervisors and four area managers.

Source: Central Tobacco Research Institute (CTRI)
8

Chapter 1

IMPLEMENTATION OF THE ALP PROGRAM

EXTERNAL ASSESSMENT
Burley farmers in Guntur and Prakasam

External Assessment

1.1. Commitment to the ALP Program
On their website GPI committed publicly to theelimination of child labor and the improvement ofworking conditions in tobacco crop production. The
website provided information about the company’s
policies and initiatives on corporate social
responsibility (CSR).
GPI had several policies in place, including onsustainable tobacco production (STP), Agricultural
Labor Practices (ALP), Child Labor, and Health and
Safety, which were reviewed annually and signed by
the Management.
CU found the majority of GPI staff to be personallycommitted to the company’s ALP Program; theprogram was considered an important step forward
in improving labor conditions at the farms.

1.2. Strategy and objectives
At the time of the assessment, GPI had two main
focus areas for ALP implementation, as agreed
with PMI Regional: eliminating child labor, andimproving work safety. A formal process for setting
the strategy and objectives for ALP implementation
could not be identified. CU was informed that therisk assessment and “bottom-up input” from fieldtechnicians was included into the strategy setting,but this was not formally structured or recorded.
GPI’s response:“Issues related to ALP shall be discussed between FTs,
Supervisors and area agronomy managers including
ALP pillar coordinator to put the documented
structure in place for setting strategy.
Root cause of the issue will be analyzed andaccordingly

actionplan

prepared

shall

be

implemented to mitigate the issues which will betaken up as STP initiatives. Identified initiatives will
be discussed with PMI, GPI & ASSIST (NGO) andwill be finalized in consultation with the Steering

A risk assessment and root cause analysis of
the issues identified had been conducted by thecoordinator for sustainable tobacco production(STP) and the ALP coordinator, based on monitoringdata and the experience of several members of theAgronomy team. The risk assessment was used asa basis for the ALP action plan. GPI had identified
one risk as “unacceptable” (i.e. high probability
and high severity), pertaining to wages being too
low to sustain workers’ livelihoods. Seven risks
were classified as “tolerable”, which were mostly
related to safe work environment, but also toworkers’ payment below the legal minimum wage
and unequal payment between men and women. Allother risks identified were defined as “adequate”
or “acceptable”. This risk analysis showed that GPI
was aware of the main issues going on at the farms.
However, some additional risks were identified by
CU during the assessment: lack of sanitary facilities
and clean drinking water, and lack of awareness on
legal aspects.
GPI’s strategy for implementing the ALP Codeat the farm level focused on three aspects: (1)implementation or further development of two
initiatives per year, e.g. providing protective
equipment for handling chemicals or harvesting,or expanding the after-school activities to more
villages; (2) continuous training of farmers andemployees on the ALP Code; and (3) frequentand systematic farm-by-farm monitoring of all
principles, and reminding farmers of good practices.
The following initiatives and measurable targets
had been defined for the 2017/2018 crop year:• Expansion of after-school activities for childrenof 33% of the farmers;• Expansion of the availability of the support
mechanism to 15% of the farmers (eight villages);• Delivery of GTS aprons and first-aid kits to all
farmers.

Committee annually, in 3rd quarter.”10External Assessment

Internal capacity
1.2.1. Dedicated organizational structure
GPI had set up an ALP team involving all the steering committee and the local Leaf and Agronomy team(see graph below). The field technicians, who served as the link between the management and the farmers,
were also part of the internal structure for implementing the ALP Program. GPI worked in close contact
with PMI Regional, receiving regular guidance and financial support for the initiatives to implement the
ALP Program.

Internal structure for ALP implementation

Steering Committee

Corporate Affairs

Leaf & Operations

Environment,
Health and Safety

Human Resources

STP Coordinator

ALP Coordinator(people)Production
Manager (crop)

ALP (people pillar)
analystArea Manager

Area Supervisor
Farmers

Field teamJunior Agronomist

Legal

Field techniciansWorkers11

External Assessment

The current ALP Coordinator was appointed in2012, when GPI started the ALP Program. He hadparticipated in both the ALP trainings provided by
PMI regional (see Chapter 1.2.3).

1.2.2. Roles and responsibilities
Roles and responsibilities were clearly defined. Job
descriptions of involved personnel included ALPrelated tasks. Performance was evaluated annually,using measurable key performance indicators (KPIs)
such as the number of farmer trainings conducted,
verification of data accuracy, and progress in theimplementation of initiatives.
The steering committee, which consisted of
the upper management team located in New
Delhi, Guntur, and Ongole, was responsible forcommunicating ALP updates and projects to PMI,
and approving and supporting local projects for ALP
implementation.
The STP coordinator was responsible for the
implementation of all three pillars of sustainabletobacco production, namely people, crop andenvironment. The people pillar was based on
ALP, and each pillar had its own coordinator.
The STP coordinator was overseeing the threepillar coordinators, and reporting to the steeringcommittee on the progress of STP implementation,
including ALP.
The ALP (people pillar) coordinator was responsiblefor developing executive strategies for effective
ALP implementation and monitoring at the farmlevel, and for training of employees and farmers.
His work was supported by the ALP analyst, who
made sure that the collected data was accurate andentered properly, and who conducted analyses andprepared reports of the data.
The local field team consisted of several levels,
each with different tasks (see graph above). Overall
responsibilities included:• Rolling out the ALP Code and collecting up-todate farm data;• Training farmers and workers on ALP;• Verifying farmers’ knowledge and capabilities;• Creating and analyzing documentation for farmby-farm monitoring, including the creation andimplementation of action plans where necessary;• Guiding and supporting lower level field teammembers in their work.

1.2.3. Training and knowledge of the
ALP Program
Members of the local team received guidance on
ALP from PMI Regional. One formal training session,organized by PMI Regional, had been provided to
GPI in 2012. Furthermore, a two-day workshop
on ALP implementation had been provided by PMI
Regional, in collaboration with Verité, in 2015.
The local team organized monthly meetings,
including ALP refresher trainings for the local
managers, and bi-weekly training-meetings for fieldtechnicians. As a follow-up to the latter trainings,
the pillar coordinator regularly organized online
tests and interviews to check field technicians’
knowledge of the different Principles and thecorresponding measurable standards.
All field technicians had been trained by the pillar
coordinators, and all said that they found thetrainings useful and informative. All had beenaccompanied to the field and shadowed by theirsupervisor. However, interviews by CU revealed
that many of the field technicians, though able torecite the ALP code by heart, were lacking a practicalexamples of how to apply the code in practice. It is
important that GPI addresses this gap, because
practical understanding is essential for monitoringrisks and identifying situations not meeting thestandard in the field.

12External Assessment

CU’s assessment of field technicians’ knowledge theof ALP Code Principles showed the following: 4

others (56%) mentioned transportation to thefield 5 or were not aware that workers wereentitled to any legal benefits.

1. Child labor: All field technicians were awareof the meaning of this ALP Code Principle.
One field technician (5%) stated that 15 was
the legal minimum working age for tobacco
without differentiating hazardous and nonhazardous tasks. All other field technicians
knew the correct age limits for working. All
field technicians had an overall understandingof hazardous work and could provide several
examples. However, nine (50%) provided anincomplete description of hazardous work,with most of them failing to mention tobacco
stitching/usage of sharp tools, or fertilizer
application.

3. Fair treatment: All field technicians wereable to explain this ALP Code Principle;
namely, that there should not be any
discrimination based on caste, religion orgender, as well as no physical or verbal abuse.
However, none of them mentioned “no sexual
abuse or harassment” as a requirement offair treatment, nor that farmers must makethemselves available to workers who want todiscuss potential grievances.
4. Forced labor: Field technicians had a goodunderstanding of this Principle. However,
only five (28%) mentioned direct payment toworkers in the context of this topic.
5. Safe work environment: Knowledge on this
topic was good with regard to work safety at
the farms, but lower with regard to sanitaryfacilities. Thirteen field technicians (72%)
did not mention that farmers should provide
sanitary facilities, and nine (50%) did not
mention that farmers should provide clean
drinking water to their workers.

GPI’s response:“Training on light and hazardous work during Q4 every
year to all field technicians and create awareness on
how each hazardous activity poses risk to health andpossible ways to mitigate the risk.”

2. Income and work hours: In general, fieldtechnicians had a good understanding of
this ALP Code Principle and also knew the
wages being paid in their villages. Threefield technicians (17%) did not mention thatthe legal minimum wage differed between
tasks and income zones (See Chapter 2.2.1).
Furthermore, one field technician (5%)
incorrectly stated that the locally agreed
wage was the applicable minimum wage. All
were aware of the legal limit of six working
hours per day in agriculture, but four (22%)
did not mention the required overtime payof 1.5 times the regular pay. When asked
about legal benefits, eight field technicians(44%) correctly mentioned that workers
were entitled to one paid rest day after six
consecutive days of work for one farmer. The

4.
5.

6. Freedom of association: All field technicians
had an adequate understanding of this ALP
Code Principle.
7. Compliance with the law: This principle wasmostly understood as the requirement that
farmers inform workers of their legal rights,
which was mentioned by 13 field technicians(72%). None mentioned the requirement of
written contracts as per Indian law.
Several of the field technicians interviewed had only
recently started working with GPI. CU observedthat technicians who had been with the company
for a longer period of time generally had betterknowledge of the ALP Code.

For this assessment 18 field technicians were interviewed.
This is not a benefit that workers were entitled to legally.
13

External Assessment

GPI’s response:“Practical approach shall be designed in training
FTs [=field technicians] which would include group
discussion and role plays as part of the training.
This will facilitate the understanding of FTs on
ALP principles & measurables and equip them to
implement in the field.”“GPI will further strengthen its communication andtraining to hone skills of Field technicians on all ALP
measurable standards.”

1.2.4. Internal communication
GPI’s local managers held bi-weekly meetings
with the field technicians, in which ALP-related
topics were discussed and documented. Informal
communication among colleagues took place ona frequent basis. The ALP coordinator produced
weekly reports on training, implementation andprogress.
The Steering Committee and PMI Regional held
quarterly meetings. The ALP coordinator produced
quarterly reports of these meetings, including ananalysis of the progress on ALP implementation,
which were sent to PMI Regional after approval by
the management.

1.3. Communication of the ALP Coderequirements to farmers
1.3.1. Communication strategy and tactics
GPI started to communicate the ALP Code tofarmers in 2012. Initially, communication efforts
were focused mainly on child labor and safe work
environment, as these were considered the twomost important and applicable topics to start with.
At the time of CU’s assessment all ALP Principles
were communicated to the farmers. Farmer groupmeetings, organized by GPI’s area managers oragronomists, were on average held every two

6.
7.

weeks in the evenings. In order not to overload thefarmers with too much information at once, eachmeeting was limited to discussing two or three ALP
Code Principles. GPI data showed that all farmers
had attended meetings about each of the sevenPrinciples at least once, and all farmers confirmed
to regularly attend the meetings.
Field technicians visited the farmers regularly, on
average every week. During these visits they also
talked about ALP and made sure the Principles werebeing followed. At the time of CU’s assessment, theaverage field technician to farmer ratio was 1 to 79.
Most field technicians had farmers in one or twovillages only, which allowed for regular visits of all
farms in their area.
In terms of written communication material, GPI
had distributed a leaflet in the local language
Telugu, about the ALP Code and applicable laborlaws. This leaflet mentioned that casual (temporary)labor, hired for a short duration does not require awritten contract. As a general requirement Indianlaw provides for a written agreement. However,according to the local legal opinion a writtenagreement is not needed when the work is for not
more than one or two days. 6
Furthermore it remained unclear if GPI
communicated the correct minimum wage for
harvesting as the Andhra Pradesh law on minimum
wage was complex 7: The only two tasks or activities
specific to tobacco that are called out under the
local minimum wage law are “tobacco plucking”
and “tobacco curing.” The definition of tobacco
curing is not an issue as this assessment covered
only burley tobacco which does not involve curing.
However, the definition of “plucking” remains
undefined in the Andhra Pradesh law on minimum
wage, and the particular activity this may bereferencing is unclear from a legal perspective.
This law also set a minimum wage for a variety ofagricultural tasks including “harvesting” and “other

See Appendix III
Please see Chapter 2.2.1 or Appendix III for information on the applicable minimum wage table.
14External Assessment

unskilled manual labor.” The minimum wage forthese tasks is considerably lower than for tobacco
plucking.
GPI was unable to provide a documented definition
for plucking. Therefore CU concluded that thishigher wage paid for plucking should be applicableto the removal of individual leaves from the matureplant. This is a skilled activity that is potentiallyhazardous (exposure to GTS), and cannot be
considered “unskilled manual labor,” especiallywhen compared to other tasks workers perform.
Further, while “harvesting” is set under the law,
“tobacco plucking” is called out in particular as
its own activity. GPI posited during the closing
meeting that plucking refers to the final removalof the tobacco plant step after all leaves have been
harvested. However, as mentioned above GPI
has not yet provided either a documented sourceor stated this interpretation of the law to CU inwriting. Given the lack of clarity in the local law,and the reasoning noted above for the skill required
and possible hazard associated with tobacco leaf
harvesting, the minimum wage for “plucking”
should applied to this particular tobacco harvesting
activity.

GPI’s response:“The knowledge of all stakeholders will be updated
to ensure that harvesting of leaf and plucking aredifferent. Tobacco harvesting should be considered
as plucking and the wages of plucking should begiven by the farmer to worker irrespective of thegender.”As an additional form of communication, GPI usedwall paintings in the villages to communicate which
farmers in the neighbourhood received a first-aid
kit, and how to contact the support mechanism.
The following table shows the level of awarenessamong the interviewed farmers, family members
and external workers with regard to the ALP CodePrinciples. In general, awareness levels were muchhigher among farmers than among the other twogroups. Within each group, the highest levels ofawareness were found for the topics of child laborand safe work environment, followed by income
and work hours. Although more than half of the
farmers were aware of fair treatment, family
members and external workers had low awarenessof this ALP Principle. Topics that farmers did not
directly associate with the ALP Code were freedomof association, compliance with the law, and forcedlabor.

Level of awareness of ALP Code Principles*
Farmers (N=63)

Family members (N=22)

External workers (N=21)

Child labor

60 (95%)14 (64%)12 (57%)

Income and work hours

42 (67%)5 (23%)

6 (29%)

Fair treatment

38 (60%)3 (14%)

3 (14%)

Forced labor29 (46%)

1 (5%)

2 (10%)

Safe work environment

58 (92%)13 (59%)13 (62%)

Freedom of association

23 (37%)

1 (5%)

1 (5%)

Compliance with the law

25 (40%)00* Note that these data only show whether the interviewees remembered the principles, and not whether they fully
understood their meaning.
15External Assessment

Interviewees who were aware of (at least some aspects of) the ALP code were also asked how they hadlearned about it. As the table below shows, verbal communication efforts were generally more effective
than written materials.

Means of communication through which the ALP Code was received
Farmers (N=63)

Family members and workers(N=43)

Group meetings/trainings

61 (97%)2 (5%)

During regular visits by field technician

61 (97%)24 (56%)

Flyer/Poster

52 (83%)8 (19%)

Verbally from the farmern.a.

22 (51%)

1.3.2. Farmers’ responsibilities

1.4.1. Socio-economic data: Farm Profiles

At the beginning of each crop season, farmers
signed a growing contract with GPI which included
all seven ALP Code Principles, and additionallycontained specific clauses on child labor and safety
aspects on the farm. Field technicians read thecontracts to illiterate farmers and explained thecontent if needed. Two Prompt Actions in the same
issue would lead to a termination of the growing
contract for the next season. Although this had not
yet happened for ALP-related Prompt Actions, thishad been the case for crop-related Prompt Actions.

1.4. Internal monitoring: data collection,accuracy, and addressing issues
At the time of the assessment, GPI was collecting
three types of ALP-related data from the farms:
socio-economic information (Farm Profiles);situations not meeting the standard (major andminor); and Prompt Actions. Farm Profile data wascollected using a computer tablet, and this data wasdigitally available to the field technicians during
their visits. Monitoring data and Prompt Actions
were collected and reported on paper and handed
in to the office after completion (see Chapters 1.4.2
and 1.4.3).

The socio-economic information for Farm Profiles
was collected at the time of contracting (basicdata) and updated annually with specific data
after transplanting. Field technicians collected thedata through own observation and by interviewing
farmers. To assess field size and location, GPS data
was collected using the computer tablet. Of the
63 Farm Profiles checked by CU, 61 (97%) were
updated for the current season. The remaining two
Farm Profiles had not been updated because thefarmers in question had not yet transplanted their
tobacco. However, for one of these two farmers no
Farm Profile was available for the previous crop
season either, even though he had a contract at thattime. None of the Farm Profiles verified by CU fully
corresponded with farmer declarations on field size,
but in most cases these were only slight deviations.
The number of workers recorded was also not always
accurate, but these deviations were due to the labor
dynamics in this region (daily fluctuations in laborneeds). The Farm Profiles included a classificationof farmers based on their ability to understand andcommunicate the ALP Code, as judged by the fieldtechnicians. Although this classification did notalways match with CU’s observations of farmers’
ALP knowledge, it was found to be a useful tool for
GPI to identify farmers who needed more attention
from field technicians in this area.

16External Assessment

1.4.2. Systematic monitoring: situations
not meeting the ALP Code standards
Field technicians visited the farmers at least every
15 days, usually more often (every week). GPI had
paper-based monitoring sheets, which had to be
filled in during three crop stages:• During transplanting – 37 questions• During application of crop protection agents(CPA) – 8 questions

was not accurate for all Principles, since none of thecases observed by CU regarding payment below
minimum wage, unequal payment between men
and women, and lack of sanitary facilities had beenreported.

GPI’s response:“Equal focus will be given to all measurables and theimportance will be reinforced to Field technicians
during training that all measurables should be• During harvesting – 41 questions

monitored with equal priority.”

Each monitoring sheet had three different types ofquestions: “O” for own observation, “F” for asking
the farmer and “W” for asking the worker, which CU
identified to be a useful starting point for gaining
insight into the farm situation. Furthermore, thesheet had to be signed by all persons present, i.e.
farmer and workers, to ensure they all agreed
with what was written on the monitoring form,
and to prevent the field technicians from filling in
a form without actually having visited the farm ortalked to the persons involved. The questions on
the monitoring sheet were “yes or no” questions,
without asking for an explanation. Only if a situation
not meeting the standard was identified, this had to
be explained in a comment box on the back of the
page.

“From Q4 2018 FTs will be instructed to report the

GPI differentiated between major and minor
situations not meeting the standard. Major
situations were defined as “directly not meeting
the ALP Code”, e.g. indirect payment through crewleaders, or farmers not training their workers onsafety. Minor situations were defined as “indirectly
not meeting the ALP Code”, e.g. workers wearing
gloves the wrong way round. A total of 2378
major issues had been reported for the previous
crop season, most of them related to safe work
environment, and some to forced labor or childlabor, e.g. the farmer failing to train workers onlight and hazardous tasks. No minor issues had beenreported.

at farm level. A suitable question related to sanitary

Monitoring data was available for all the farms
visited by CU. However, it was found that monitoring

payment made below minimum wages and the same
will be captured in farm by farm monitoring sheet
which it would give an idea about as to for which
activity workers are being paid minimum wages andfor which other activities not being paid.
GPI has already started communicating to farmers
activity-wise, zone-wise minimum wages to be paid
and advising them the need to do so. A feasibility
study is also undertaken by Agriculture University
and GPI will implement the recommendations after
internal review.”“Data collection will be done to report the sanitaryconditions on the farms. Based on the report analysis,
decision will be taken at Steering committee to assess
the feasibility of providing portable sanitary facility
conditions on the farms will be included in farm byfarm monitoring sheet by people pillar coordinator
to know the sanitary facilities available on the farm.
Based on the report, the Steering Committee willtake decision whether or not to engage a NGO third
party to take up the feasibility study on providing
portable sanitary facility at farm level.

Furthermore, technicians had no access tomonitoring data collected previously during thecurrent season, as all (paper) monitoring forms had
to be handed in at the office after completion, andwere not made available in the digital system.

17

External Assessment

GPI’s response:“Farm by farm monitoring data will be made available
to FTs. Collated data of farmers coming under the FTs
will be made available in the excel sheet through FTtool kit. Once the collation is done the data will beavailable with the FT all the year round. Now sincedata is collected manually, the data monitoring sheet
will be made available to all FTs throughout the
cropping season.”

1.4.3. Prompt Actions
GPI had established a clear procedure for
identification and follow-up of Prompt Actions. If a
Prompt Action was identified it had to be stopped
immediately, and field technicians were required
to conduct a root cause analysis and agree with thefarmer on an action plan. If they could not agree ona plan this would be passed on to the next higher
level within GPI, e.g. the Junior Agronomist or the
Area Production Manager. Depending on the natureof the issue, the field technician had to verify within
30 days whether the improvement plan had been
implemented and whether the situation was notoccurring again. In case the Prompt Action was
related to a task that was not being performed
within these 30 days, the Prompt Action could only
be monitored and closed on the first occasion thistask was performed again. For example, in the caseof a Prompt Action related to CPA application, thefield technician would ask the farmer to inform
him when he was going to apply CPA again, so thefield technician could come by to monitor the farm
practices.
For each Prompt Action, field technicians had to filea paper-based report (questionnaire), describing
the incident itself, the root cause, the improvement
plan, the follow-up visit and the farmer’scommitment. This report had to be signed by boththe field technician and farmer. Among the reports
checked, CU found various examples where the root
cause analysis and corresponding improvement
plan did not solve or address the underlying
causes but only treated the symptoms. However,it was also observed that the field technicians put
considerable effort in the follow-up, e.g. by making
sure they were present when a farmer disposed his
empty CPA containers to verify this was being done
correctly. After closure of a Prompt Action, fieldtechnicians had to hand in their reports to the office,and these reports were not available to them for the
rest of the season (similar to the monitoring forms,
see Chapter 1.4.2). The Farm Profile informationin the tablet system only listed the Prompt Actions
raised during the previous season.
All field technicians interviewed were aware of
the Prompt Action follow-up procedure. Eight
field technicians (44%) inadequately defined
Prompt Actions as a general violation of the ALP
code, whereas ten (56%) correctly defined themas a violation of the code that required immediate
action. None of the interviewees mentioned thethree vulnerable groups (children, pregnant women,elderly) included in the Prompt Actions definition.
GPI’s response:“GPI has decided to reinforce training on prompt
actions to all the stake holders by including role play
and group discussion to ensure that FTs understandthe difference between prompt action issues andother non-conformance of ALP that do not necessarily
require prompt action.”

At the time of the assessment, 132 Prompt Actions
had been reported for the current crop season. All ofthese were on the topics of safe work environmentand child labor. During the assessment CU visitedseven farms with reported Prompt Actions. On oneof these farms the reported Prompt Action was
happening again during CU’s visit; here, an empty
CPA container that had not been punctured waslying around inside the farmers house, presenting
a risk of it being reused as a container for food or
drinking water. The farmer in question was notaware of any raised Prompt Action at his farm. In allother cases the farmers were aware of the Prompt
Actions raised for their farms, and the situations inquestion were solved at the time of CU’s visit.

18

External Assessment

1.4.4. Data management and analysis
Monitoring data was recorded on paper forms andverified by the ALP analyst in random samples. All
paper forms (farm monitoring and Prompt Actions)
had to be handed in at the office after completion.
This information was not available to the fieldtechnicians for the rest of the crop season. Whereas
Prompt Actions of previous seasons could be foundin the digital system, current Prompt Actions were
not visible for the field technicians. This gap in
information supply could pose a problem during farm
monitoring, both for newly hired field technicians
and for field technicians recently assigned to new
farms.
GPI’s response:“Current year Prompt action data after closure of PA
will be made available to FTs by updating the data in
the hand held device.”

1.4.5. Improvement plans for individual
farms
Improvement plans for individual farms were
included in the Prompt Action reports. Field
technicians conducted a root cause analysis, agreed
with the farmer on how to solve the identified
issue, and verified afterwards if the Prompt Action
was solved. All field technicians were aware that
this follow-up had to take place within 30 days.
As mentioned previously (Chapter 1.4.3), CU
identified some cases in which the improvement
plan addressed symptoms rather than root causes.
For example, for a farmer spraying CPA withouta PPE set who claimed he just forgot that day, theaction plan was to go get the set of PPE and put it on
immediately. This temporarily solved the issue, but
not necessarily the root cause if the farmer did notunderstand the underlying reason for wearing PPE.

8.

GPI’s response:“5 why” method of Training will be imparted to
FTs to investigate root cause and the rootcause
analysis training through Fish-Bone by a Six-sigma
certified expert, will be organized during Q4 2018
cropping season. […] Written test will be conducted
to evaluate effectiveness of training and prompt
actions submitted will be verified for clear root cause
analysis to ensure whether FTs have fully understood
the root cause analysis or not and take corrective
steps to bridge the gap if still exists.”

1.5. Address systemic and/or widespread
issuesBased on the risks and issues identified (seeChapter 1.2), PMI’s leaf tobacco suppliers are
expected to address systemic and/or widespread
issues through operational initiatives, community
programs (which may be supported by a financial
contribution from PMI), and engagement with key
stakeholders.
At the time of the assessment GPI had implemented
the following operational initiatives:• After-School Activities (ASA): Together with thenon-governmental organization (NGO) Assist, in2015 GPI and PMI had launched an after-school
program, reaching 33% of the farmerbase in2017. 8 This program offered elementary school
children the option to stay 90 minutes longer
after school, doing yoga and meditation andplaying sports together, with food provided.
Of the farmers visited by CU, twelve (19%) had
children who were attending a school offering
the ASA. All reported to be happy with theactivities. Records provided by Assist showedthat school attendance had increased from 85%
to 94% during the ASA program in the previous
crop season.

The after-school activities had not yet started for the current crop season and could therefore only be evaluated forthe last season.
19

External Assessment•

Provision of metal CPA storage boxes: As theirfirst initiative in 2012, GPI had provided all
farmers with a lockable, metal CPA storage box,with the instruction to mount the box on a wall ata height of six feet (183 cm) or, if the walls werelower, as high as possible. CU found these boxes
to be installed at all farms visited. In several
cases, especially when the CPA box was mounted
higher than instructed, the height of the box was
identified as a safety risk by CU. Farmers had toclimb on a chair or something else to reach inside
the box and even then would be handling thehazardous substances over their head without
being able to look inside the box. Several farmers
did not know if they were allowed to store nontobacco-CPA inside this box.9 All farmers were
happy that they had been provided with the box,
as it increased the safety at their farms; however,some complained about the small size of the box,
which did not allow to store bigger containers.

• Provision of PPE for CPA: As from 2013 GPI
provided all farmers with one set of PPE for
handling and spraying CPA at the beginning ofeach crop season. This set consisted of a pair of
gumboots, an apron, plastic gloves and a dust
mask. 10 All farmers had received the kit andclaimed to have used it for spraying, although insome cases CU found it looked unused. CU also
found that the dust masks were not appropriate
for spraying, as they did not sufficiently protectfrom health hazards. These masks potentially
increase the health risk, as farmers may beless careful with CPA when wearing the mask,
assuming they are adequately protected. All
farmers liked the PPE initiative and said that,
before the training from GPI, they had not beenaware of the safety hazards involved in spraying.
GPI’s response:“GPI will find out the root cause for not using
PPE and Create awareness on ill effects of nonusage of PPE while applying CPAs among farming

community. […] FTs will train the farmers crosschecked by Supervisors and and there will berandom checking by Area agronomy managers
to ensure trainings are conducted as scheduled.
Usage of PPE kits by farmers will be monitored
by FTs […]”
“EHS [environment, health and safety] person will
look into the standard of nose mask in Q3 2018
based on the MSDS. All masks will be replaced
before start of next season with nose masks ofstandard meeting MSDS requirements. EHS willconduct annual audit to verify the standard of thenose mask.”• Provision of PPE for green tobacco: Starting in2014 GPI provided all farmers with gloves forhandling green tobacco, at the beginning of eachcrop season. In 2017 this initiative was extended
to the provision of plastic aprons. Each farmer
was given eight pairs of cotton gloves and eightaprons. One farmer declared he had received
only four sets. Awareness about GTS among
farmers was high and complete sets of PPE
were worn by all workers at 95% of the farms
visited by CU. Farmers were happy that GPI had
provided the sets and mentioned that, before
the training from GPI, they had not been awareof the hazards of GTS.
GPI’s response:“GPI will take care to ensure that, all farmers areprovided with 8 pairs of GTS gloves during Q4
every year.”• Provision of first-aid kits: In 2017 GPI had
started to distribute first-aid kits, one for every
ten farmers per village. In each village thename and phone number of the farmer keeping
a kit was painted on the walls. Of the farmers
interviewed, 61 (97%) were aware who kept akit, the other two were not aware. In one village

9. See Chapter 2.5.2 for more information on the CPA boxes.
10. Please see Annex VII for pictures of the materials provided by GPI
20

External Assessment

the CU auditor did not see an informational wall
painting. Only one farmer found the first-aid kit
not useful, stating that he would go to a medical
facility if anything happened. Other farmers
reported that the kit was very helpful for minor
injuries in the field.
GPI’s response:“GPI will ensure that all farmers are made aware
about the location and responsible person having
first aid kit.”

Furthermore GPI implemented several CSR
initiatives that aimed at improving the general
infrastructure in the region, which were not directly
part of this assessment and therefore not evaluated.
These inter alia included the provision of Reverse
Osmosis (RO) plants, de-siltation of village ponds,
setting up of health camps, increasing awarenesson sanitation and hygiene, and installation ofhousehold toilets.

21

Chapter 2

FARM-LEVEL ASSESSMENT OF
WORKING CONDITIONS REGARDING
THE ALP CODE STANDARDSEXTERNAL ASSESSMENT
Burley farmers in Guntur and Prakasam

External Assessment

This chapter describes CU’s assessment of theworking conditions on farms with regard to the
ALP Code Principles and Measurable Standards.
ALP Code Principles are short statements designed
to guide farmers on specific practices, resulting insafe and fair working conditions. A Measurable
Standard defines a good practice and over time canbe objectively monitored to determine whether, andto what extent, the labor conditions and practices
on a tobacco farm are in line with each ALP CodePrinciple. 11

2.1. ALP Code Principle 1: Child labor
There shall be no child labor.
Main findings and challenges

2.1.1. Children working and activities
performed
No evidence was found of children below 18 yearsof age being employed at the farms or helping
with tobacco at their family farm. 12 Farmers had
an adequate awareness of the minimum age forworking in tobacco, but they did not always have afull understanding of hazardous tasks. Many farmers
considered stitching 13 a light (i.e. non-hazardous)
task.
GPI’s response:

addressed this issue (see Chapter 1.5). Child labor
was also one of the two most important ALP topics
in GPI’s communication efforts, as well as in farm
monitoring and reporting by field technicians. CU
did not find any cases where children were helping
with tobacco-related farm work. Throughout 2017
GPI field technicians had identified and reported
fourteen cases of minors being involved in tobacco,
showing that child labor was still an ongoing issue.
CU found that farmers and workers wanted theirchildren to be educated and go to school, in orderfor them to have a better life than their parents.
Furthermore, field technicians were very activein their communication to farmers about children
not being allowed in the fields, and the possible
consequences of involving children in tobaccorelated farm work (i.e. that their contract would beterminated).

GPI’s response:“Based on the prompt actions raised GPI still
considers the risk of children being engaged
during tobacco production, [and will] therefore
further strengthen the system to ensure thatchild labor is not engaged in tobacco production.
A more systematic risk assessment will be carriedout to identify and estimate the risks involved anddraw suitable action plans to mitigate the risk ofchild labor engagement in production chain.
[GPI will] continue to create awareness among
farming community about the importance of“[GPI will] create awareness about light andnon- engagement of child labor during tobacco

hazardous work amongst farmers and workers

production. Raising prompt actions and Farm

during Q4 every year and clearly explain theby farm monitoring will continue to ensure nonpeople working in the farm about GTS andengagement of children in tobacco production [...]

its symptoms and avoidance through training,
pamphlet and posters.”

Analysis and priorities
Elimination of child labor was one of the main focus
areas of GPI, and their ASA initiative specifically

After school activities is one more action plan
to bring down the incidence of child labor. STP
coordinator in consultation with Corporate Affairs
would make necessary budget provision to run the
program. Children will be engaged in school for 90
minutes after the school so by the time they reach

11. The scope and methodology of the assessment are described in Appendix II.
12. The ALP Code minimum age for employment in tobacco is 15 (See Appendix III for more detailed legal information).
13. The sticking of the green tobacco leaves on a thin rope, using a sharp pin.
23

External Assessment

home all farm activities will be complete thus
bring down the incidences of child labor. People
pillar coordinator in consultation with ASSIST(NGO) will finalize the schools [...] This program
will be run for 60 days during January to March
every year.”

None of the farmers (0%) paid the legal minimum
wage correctly, with cases largely falling into one ormore of the following scenarios on a given farm:• Workers were paid below the minimum wage forall tasks.
• Workers were paid at or above the minimum
wage for some tasks, and below for others.

2.2. ALP Code Principle 2: Income andwork hours
Income earned during a pay period or
growing season shall always be enoughto meet workers’ basic needs and shallbe of a sufficient level to enable thegeneration of discretionary income.
Workers shall not work excessive orillegal work hours.
Main findings and challenges

2.2.1. Payment of workers
The law on minimum wage in the state of Andhra
Pradesh is complex. As shown in the table below,
Indian law stipulates different minimum daily
wages for different agricultural tasks, with rates
additionally varying between income zones. 14

No.

Name of the category3• Among a group of workers performing tasks
within the same category as defined by minimum
wage law, some were paid at or above theminimum wage for tasks in that category, whileothers were paid below.
All farmers paid their workers rates agreed at thevillage level, which did not meet the legal standards
for all tasks. These local village wage agreements
were made at the beginning of each crop season
by a meeting of farmers and workers together. The
legal minimum wage for this sector in India is set bystate, and within each state, zones. While separate
village level agreements on wage payments do exist,
the law precludes these agreements from taking
precedent over the minimum rates set by the state.
Village agreements may provide for wages higher
than the legal minimum, but may not set lower ones.
Below table shows the daily wages being paid to theworkers on different farms. Unequal pay between
men and women was a common practice and had
its roots in the Indian cultural system. On 35 farms

Total daily wage (INR)*
Zone I

Zone II

Zone III

Sowing/ Transplanting/ Harvesting/ Weeding/ Grasscutting/ Any other unskilled manual labor

293.30288.30244.25

8

Sprayer of Pesticides/ Tobacco Curing operation

402.40353.35315.309

Tobacco plucking 15402.40353.35315.3010

Loading and unloading operations

304.30260.25244.25* INR = Indian rupee
14. These payments shall be made for six hours of work. See Appendix III for further information.
15. As discussed in Chapter 1.3.1 “tobacco plucking” refers to harvesting and this should be the applicable minimum
wage.
24

External Assessment(58%) wages for men and women differed significantly for tasks within the same labor category (e.g. No. 3,transplanting, weeding, harvesting). The table below shows the actual wages paid at the farms visited by
CU, divided by task, gender and village income zone. The marked fields show at how many farms the legal
minimum wage has been paid. Applying the rate of legal minimum wage for plucking, as identified by CU,
only the workers working at a piece rate payment received the correct wage.

Breakdown of calculated salaries*
0-293(INR/day)

293-402(INR/day)>402(INR/day)Male0

1 (100%)0300

Female7 (100%)

0

0

200

Male

0

5 (100%)0300

Female4 (100%)

0

0

200

0-288
(INR/day)288-353(INR/day)>353(INR/day)

Minimum(INR/day)Maximum(INR/day)Male

16 (76%)5 (24%)

0

150

300

Female14 (92%)2 (8%)

0

120

290

Male

18 (78%)5 (22%)

0

150

350

Female27 (93%)

2 (7%)

0

150

300

-

4 (27%)

4 (27%)

7 (46%)

266

462

0-244
(INR/day)244-315(INR/day)>315(INR/day)

Minimum(INR/day)Maximum(INR/day)Male

7 (78%)

2 (22%)

0

200

300

Female20 (100%)

0

0

100

240

Male

7 (37%)

12 (63%)

0

200

300

Female21 (100%)

0

0

200

240

Zone 1
Transplanting 16

Harvesting17

Zone 2
Transplanting

Harvesting

Piece rate 18

Zone 3
Transplanting

Harvesting

Salary range**

Maximum(INR/day)* Note: Data refer to number of farms, not number of workers. For example, in Zone 1, seven farms paid their female workers
200 INR per day for transplanting.
** Note: There has not been a range of payments in zone 1, the payments were all the same at the different farms.
16. During transplanting, women were usually handling the seedlings, while men were doing the irrigation.
17. During harvesting, women were usually plucking the leaves, whereas men were carrying the harvested leaves to thetractor.
18. Piece rate payment was observed at one farm for harvesting and stitching. In this case the calculated salaries in thetable are based on written records for 15 workers. The farmer in question paid 14 INR per string, independently of
the workers’ gender.
25

External Assessment

Wages paid for CPA application were generally
highest, ranging from 300 to 350 INR per spraying
task which typically involved no more than half a
day of work.
At a quarter (27%) of the farms visited by CU,
exchange of labor between different farmers in thesame village, where farmers helped each other out
without being paid for it, was common practice. No
cases could be identified where this practice led to
unfair practices.

GPI’s response:“Feasibility study is under taken by universityof agriculture and would collect data on wages
paid by farmer to workers for different activities.
Feasibility study also includes payment in othercrops, and pros and cons of paying minimum
wages in tobacco. This lends a greater clarity tomove forward for implementation of minimum
wages in tobacco.
Farmers paying below the minimum wage will bereported in the farm by farm monitoring sheet
from Q3 2018 onwards by including a questionin the farm by farm monitoring sheet under thegroup “Talk to the farmer” and “Talk to worker” toknow for which activity farmer is paying minimum
wage and the difference between the actual wages
paid and the existing minimum wage. Farmers not

2.2.3. Work hours and overtime pay
No evidence was found of farmers disrespecting thelegal work hours on a regular basis.20 In most cases
there was no scheduled workweek, as workers hadjobs on several farms at the same time. Rather thandetermining the exact amount of hours, farmers andworkers agreed upon the tasks to be completed. This
practice resulted in workers occasionally working
more than six hours per day, but overtime work was
not common and mostly the working day was of six
hours. No cases were identified where overtime
hours were involuntary.
In the occasional event of overtime, most of the
farmers did not pay the legal overtime rate basedon the legal minimum wage. 21 Four farmers declaredthat their workers never worked overtime but
also stated that they would not pay higher rates
if overtime occurred. Twenty-one farmers (75%)
occasionally paid overtime with an additional
50 INR per hour. The farmers were aware that
overtime pay should be 1.5 times the regular pay.
The overtime premium of 50 INR per hour only met
this requirement if the regular pay was below theminimum wage (which was the case for many tasks
and workers), but was too low in proportion to thelegal minimum wage. Only three farmers (10%) were
paying the legal overtime rate with 60-100 INR for
overtime.

paying minimum wages will be categorized in to“D” and no subsidy will be given after 2021.”

GPI’s response:“GPI will create awareness among farming

2.2.2. Payment schedule
No evidence was found of farmers not paying wages
regularly as required by the law. 19 Typically, workers
were paid daily or after the completion of their task,e.g. if transplanting took three days, workers would
be paid after these three days.

community about over time payment throughgroup training to famers and distribution oftraining materials to enhance knowledge on
over time payment measurable in income andwork hours. Training material will explain themethodology of calculation.”

19. Indian law states that wages should be paid regularly as agreed, but not later than monthly (see Appendix III for
more detailed legal information).
20. Legal working hours for agriculture in Andhra Pradesh are six hours daily.
21. Legal overtime rate is 1.5 times the regular pay
26

External Assessment

2.2.4. Legal benefits
According to Indian law, casual workers working for
more than six consecutive days on one farm wereentitled to one paid rest day per week.
Among the farms visited by CU, all workers werecasual labor, either employed per day or per task(e.g. harvesting), which in most cases did not exceed
more than five days. Only one farm was identified
where workers worked at the same farm for morethan six consecutive days. These workers did receive
paid rest days, although at a rate of 150 INR, which
is below the legal minimum wage for any category ortask in the Andhra Pradesh minimum wage law.
In all other cases, where workers worked less thansix consecutive days for a farmer, it depended on
the labor demand and the decision of the workers
how many days per week they wanted to work. As
all workers worked on different farms across theseason, they were able to plan their own (unpaid)
resting days in between jobs.
GPI’s response:“[GPI will] create awareness to farmers on legal

GPI’s response:“[GPI will] create awareness among workers
about

legal

minimum wages

for different

activities. Also, disseminate information onminimum wages for different activities in different
zones through mass media communication, likeusing loud speakers in villages. Training throughrole plays & motivating farmers to createawareness amongst workers on legal minimum
wage and explaining to them the impact of
payment of minimum wages on their standard ofliving. Check workers awareness during farm byfarm monitoring by including relevant questionsin the questionnaire.”

Furthermore, several farmers claimed that they
did not have enough money to pay more than theamount agreed in their community. With regard tounequal pay between men and women, the tasks
carried out by women were typically consideredlighter than the tasks done by men, and this was thereason why women were paid less. However, CU
generally found the women’s tasks not lighter thanthe men’s tasks (see also Chapter 2.3.1).

benefits of workers by conducting Group training
to famers and distribution of training materials.
Training material will include all benefits that thefarmer should give to workers.”

Although not a legal benefit, lunch was provided
to workers in case they forgot to bring theirown food, and, if needed, farmers would arrange
transportation of workers from neighboring villages
to the fields.

Underlying factors that increase risk
In addition to the underlying factors discussed
above, the awareness among workers regarding
the legal minimum wage was relatively low; nearly
two-thirds of the workers interviewed did not know
the legal minimum wage, as their actual wages wereagreed at village level.

Analysis and priorities
At the time of the assessment, the ALP CodePrinciple of Income and work hours was not a focus
area for GPI. However, CU identified widespread
issues regarding payment below the legal minimum
wage, particularly for women workers. Several
management employees mentioned to be awareof the gender gap in payment and to be planning a
study together with a local university to gain moreinsight into this issue, but no action had been taken
yet. This ALP Principle needs more focus by GPI
personnel.

27External Assessment

2.3. ALP Code Principle 3: Fair treatment

Farmers shall ensure fair treatment ofworkers. There shall be no harassment,
discrimination, physical or mental(58%) men and women received different wages
for different tasks within the same labor category.
On nine farms (15%) evidence was found that men
earned the legal minimum wage for at least oneof the tasks, 24 where women did not. All theseexamples indicate pay discrimination between men
and women.

punishment, or any other forms of abuse.
GPI’s response:“Field technicians will collect the Data on wages

Main findings and challenges

2.3.1. Treatment of workers
No evidence was found of verbal, sexual, or physicalabuse on the farms. 22 However, discriminatory
practices were identified in terms of unequal
payment between men and women. The level of pay
discrimination varied between farms.
On three farms (5%), men and women earned
different wages for the same work. On one ofthese farms men earned 50% more than women for
topping, on the other two farms this was the casefor stitching (the only difference here was that themen also tied the finished tobacco strings to thebarns). On the other farms, pay discrimination wasless conspicuous because men and women were
doing different tasks, with the women’s tasks being
considered ‘light work’ by the farmers. However,it can be argued that harvesting, one of the maintasks of women workers, should not be considereda light task because it involves exposure to green
tobacco leaves and bent-over working in the sunand heat. At 22 farms (36%) men earned more than
women for harvesting tasks because they also did
the loading and unloading of the tobacco. However,many of these farms were located in zone 2 or 3
where the legal wage for loading and unloading was
lower than, or equal to, the wage for harvesting (seeTable in Chapter 2.2.1). This concern is exacerbatedgiven that it appears that the higher wage for
tobacco plucking should be applied. 23 On 35 farms

paid to men and women for different activities(zone wise) to understand the difference between
wages paid to men and women. Simultaneously,
Agriculture University has also taken up a projectto see the feasibility of equal payment to men
and women for the same activity. Action plan will
be drawn based on the report from Agricultural
University. It is Planned to implement equal
wages to men and women in 3 villages on pilot
basis from 2018 (2019 crop).”No evidence was found of farmers not being
available to workers in case of any grievances or
issues to discuss. In some areas the workers wereextended family, friends or neighbor farmers who
worked on each other’s farms, which reduced therisk of unfair treatment. Also, in some other areas,
there was a scarcity of workers, which meant that
farmers had to treat their workers well to ensurethat they would keep working for them. All farmers
reported that, if they did not treat their worker well,
the workers would not show up again the next day.

2.3.2. Support mechanism
Support mechanisms facilitate workers’ access to
information, assist workers in difficult situations,and mediate disputes between farmers andworkers. PMI’s leaf tobacco suppliers are expected
to ensure that farmers and workers have access tosuch a mechanism.

22. See Appendix III for legal details on fair treatment.
23. See discussion in chapter 1.3.1
24. This does not include CPA application
28

External Assessment

Together with the NGO Assist, GPI had recently
started a support mechanism in three villages,
targeting to cover a total of eight villages in2018. This support mechanism was based on
the traditional Indian structure of a community
committee. In this set-up, ten respected members 25
of each village formed a committee, and workers
or farmers could raise grievances either through awalk-in office, a phone line (including the option of
text messages), or by talking to a social worker who
also visited the fields and homes. These grievances
would then be discussed by the committee together
with the farmer and worker(s) in question, untila solution was found. The committee members
ensured confidentiality and checked whether theagreed solution was actually adopted. All persons
interviewed in the villages where the support
mechanism was implemented had heard about the
support mechanism, but none had used it so far.
Documentation provided to CU by Assist showed
that, so far, the mechanism had been used in 21
cases by workers for grievances on income andwork hours, and safe working environment. In 20
cases the dispute had already been settled.
This system has several advantages, despite
currently only existing on a small scale. By using
locally appropriate, and familiar, cultural norms inthe village committee, trust is built in the system (andavoids the inherent distrust of outsiders in thesecommunities). The oversight of Assist ensures atleast a measure of indepenence, and CU recognizes
the importance of building on existing community
structures and cultural traditions to gain acceptancewithin local villages and enable support in caseof disputes. It is noted however that most of thecommittee members of the support mechanism werefarmers themselves, including farmers deliveringto GPI. This conflicts with the requirement in
the ALP code of the support mechanism having to
be independent and anonymous. The SMS option
presents a potentially anonymous mechanism(barring the potential for mobile number disclosure
to the committee). However, it is possible that for
more egregious problems, such as physical or sexual

abuse, identity exposure is a potential concern
under this system. While the committee members
are respected members of the community (including
GPI farmers), should a worker of one of those farmers
have a grievance to raise, he/she may be reluctant todo so since the employer could be responsible forresolving the problem. CU recognizes the numerous
advantages of a system that appears quite effective,
but further attention to identity protection andconfidentiality may be required, especially in theinitial reporting of an egregious case of abuse.
GPI’s response:“[GPI will] recommend ASSIST to continue to train
the committee members to retain the anonymityof the system and to function independently. Carewill be taken to ensure that women are part of IDR(Informal Dispute Resolution) committee whichfacilitates bringing women related issues. (Sexual
harassment). GPI will liaise with with ASSIST(NGO) to include women in IDR committee.
Include equal number of farmers and workers in
the IDR committee so that balance is maintained.
Mobile numbers of IDR members is written in
strategic location in villages so that grievances
can be reported anonymously.”

Analysis and priorities
CU identified widespread cases of gender
discrimination in pay. GPI management mentionedthat they were looking into options to address thisissue, but so far nothing had been done. Clearly,
more focus on this problem is needed. Though
not used so far by CU’s interviewees, the support
mechanism showed to have helped in settling
disputes between farmers and workers in several
cases documented by Assist, indicating acceptancein the local communities. However, the support
mechanism was available in only three villages at
the time of the assessment, and GPI should aim to
make it available to all villages where they procure
tobacco. In addition, more effort is needed toensure independency and anonymity of the support
mechanism.

25. Including elders, farmers or other professions
29External Assessment

2.4. ALP Code Principle 4: Forced labor
All farm labor must be voluntary. There
shall be no forced labor.
Main findings and challenges

2.4.1. Involuntary labor
No evidence was found of workers being unable toleave their employment or working against theirwill, or of contracted prison labor. Also, no evidence
was found of workers being obliged to hand overtheir original identity documents or pay a financial
deposit.

2.4.2. Indirect payment
At one farm (2%) evidence was found of indirect
payment. Here, the farmer employed a married
couple and two sisters, paying the wage of the wife
to her husband and the wage of one sister to theother sister.
GPI’s response:“GPI will train and educate all farmers to ensure
workers get direct payment.”

Nine farmers (14%) used the help of a crew leader
for hiring labor. In most cases, these crew leaders
were workers themselves, who helped the farmer tofind workers for a commission of five to ten rupees
per worker. This commission was being paid by thefarmer directly to the crew leader. No evidence wasfound of farmers paying their workers indirectly
through the crew leader.

Analysis and priorities
CU found no evidence for widespread issues related
to this ALP Code Principle. The risks are considered
low because most workers were relatives, friends orneighbors. Nevertheless, when working with crewleaders, farmers must stay aware of the need of
direct payment to workers, and GPI should ensurethat these practices are closely monitored.

2.5. ALP Code Principle 5: Safe work
environment
Farmers shall provide a safe work
environment to prevent accidents andinjury and to minimize health risks.
Accommodation, where provided, shallbe clean, safe and meet the basic needsof the workers.
Main findings and challenges

2.5.1. Training and awareness of GTS
At nine farms (14%) at least one person handlinggreen tobacco was not aware of the existence
and avoidance of Green Tobacco Sickness (GTS).
Although each of these interviewees knew that it
was required by GPI to wear the protective clothes,
they did not know why this protection was needed.
Three farmers (5%) were unaware of the existence
and avoidance of GTS. As a result, these farmers
either did not think it was necessary to train theirworkers, or were unable to train them. In general,farmers and workers were aware of the requirement
to wear the complete set of PPE handed out by
GPI, 26 plus a long sleeve blouse.
On 57 farms (95%) CU observed that persons
handling green tobacco did not wear shoes,
exposing their feet and lower legs to green tobacco(especially during stitching). Furthermore, on three
farms (5%) 27 at least one of the persons handlinggreen tobacco did not wear all of the required
clothes, lacking either gloves or long sleeves. When
harvesting, women generally wore a saree, a long
sleeve blouse, apron and gloves. On some farms,

26. Consisting of apron and gloves
27. Those were not necessarily the same farms as mentioned in the previous sentence30External Assessment

workers were observed wearing the gloves thewrong way round, with the cotton top side wornon the inside of the hand and the plastic-covered
palm section on the outside. Although this was nota breach of the ALP code (given that gloves werebeing worn), this practice increased the risk of
exposure to GTS, because the cotton side of the
glove is permeable.
GPI’s response:“[GPI will] increase awareness of workers on GTS
through posters and trainings. Impart training tofarmers and motivate farmers to create awarenesson existence and avoidance of GTS among
workers. Display of posters at strategic locationin villages on existence and avoidance of GTS. […]Farmers not compliant with GTS measurable will
be categorized into “D” and he will not be eligible
for any subsidies.”

2.5.2. Training and handling of CPA
Awareness and adoption of GPI’s safety
requirements regarding CPA was high among
the farmers. No evidence was found of persons
handling or applying CPA without proper training.
Many farmers applied the CPA themselves, using
their own sprayer or a borrowed one. If a worker
was hired for spraying he usually brought his own
sprayer and also did the spraying for several farmers
in the village.
No evidence was found of farmers not using therequired PPE for CPA spraying in tobacco fields.
Spraying was not observed during CU’s farm visits,
but all farmers interviewed knew that they should bewearing the PPE, were able to show the set provided
by GPI, and affirmed that the PPE was used forspraying. However, in several cases the set looked
unused, even though the farmer had already done
spraying. Furthermore, two farmers were observed
spraying CPA without protection in their othercrops. Even though it is not GPI’s responsibility toensure that their farmers use protection while

spraying crops other than tobacco, this practicedemonstrates that some farmers are not fully awareof the reasons for wearing protective equipment,
beyond it being required by GPI. Furthermore, CU
observed that the masks provided by GPI were dust
masks, which are not considered sufficient for CPA
spraying.
All farmers visited by CU had a lockable box
provided by GPI, and in all cases the box was foundto be locked when it contained CPA. However, at 17
farms (27%) not all CPA was stored in this box. In
nine of these cases (14%) farmers had big containersthat did not fit inside the box and were therefore
stored outside. In the other eight cases, containers
of non-tobacco related CPA were stored outside
the box; the farmers in question said that they did
not know whether they were allowed to store CPA
for other crops in the boxes provided by GPI. Thisfinding confirms CU’s impression that farmers were
not fully aware of the actual health risks, but only
did what GPI asked them to do.

Storage of CPA containers
Large CPA containers left outside
because they did not fit in the box

9 (14%)

Non-tobacco CPA stored outside
the box8 (13%)

Safe and locked storage of all CPA

46 (73%)

GPI’s response:“GPI takes steps to increase awareness of farmers
to store CPAs of all crops in CPA box by organizing
group

training,

materials

anddistributing
pasting

posters

communicationonstrategic

locations in villages during Q4 2018.”

31

External Assessment

At the instruction of GPI, all CPA boxes were wallmounted at a minimum height of six feet (183 cm)
or, if walls were lower than that, the highest possibleheight. However, CU found that the recommended
mounting height could pose a safety risk, as farmers
had to climb on chairs or something else to open
the box, and even then had to handle the hazardous
substances above their head. This was especiallytrue for cases where the boxes was mounted higher
than six feet
GPI’s response:“GPI will define the height for installation at 6’

GPI’s response:“GPI will educate the importance of puncturing theempty CPA containers to farmers by conducting
group trainings on safe disposal of empty CPA
containers and information through training
material and pasting of posters on strategic
location in villages.”

On all farms with own CPA application equipment,
this equipment was in good condition and free fromleaks. At two farms (3%) persons applying fertilizer
did not use gloves.

(six feet) and advice farmers not to install at morethan six feet for easy handling and visibility of

GPI’s response:

CPAs stored while ensuring safety of children and“[GPI will] increase awareness and ensure usage

domestic animals.”of gloves by farmers during fertilizer application

For disposal of empty CPA containers, GPI had
installed collection bins in several villages. All
farmers were aware of the presence and purposeof these bins. In villages without a collection bin,farmers said they would call the field technician
to come and collect empty containers for disposal.
Nevertheless, at two farms (3%) CU observed
empty, non-punctured CPA containers lying aroundinside the farmer’s house. Furthermore, 21 farmers(34%) did not puncture their empty containers
before disposal, which, especially in the absenceof a nearby CPA collection bin, increased the riskof these containers being reused for household
purposes. Thirty-nine farmers (63%) reported
correctly to wash and puncture their empty
containers before disposal.

as well through group training, communicationmaterials and posters.”

No evidence was found of farmers not owning a
red flag or not being aware of the re-entry period
after CPA application. 28 However, seven farmers(11%) did not use the red flag or any other warning
sign after CPA application. Additionally, in several
villages CU found that neighbors or family members
were not aware of the meaning of a red flag in thefield.
GPI’s response:
“GPI

will

createawarenessandeducateneighboring farmers and family members on theimportance of red flags. Awareness will be createdthrough word of mouth communication throughDisposal of CPA containers

progressive farmers, mass media communication

Rinsed and punctured

39 (63%)

Rinsed but not punctured

21 (34%)

Empty, non-punctured containers
found inside farmer’s house

2 (3%)

viz. loud speakers and display of posters on
strategic location in villages.”

28. GPI communicated a re-entry period of 24 hours for all CPAs.
32

External Assessment

2.5.3. Clean drinking and washing water,
sanitary facilities
The Vinukonda region has some very remotevillages without infrastructure for water andsanitary facilities. This was also the case in one ofthe villages visited by CU, where inhabitants had totravel three to four kilometers to the next village
to get drinking water, with motorbikes as the onlymeans of motorized transportation. In this village,
farmers did not provide drinking or washing water
to their workers; everybody was responsible forbringing their own water. None of the farmers inthis village hired paid workers, but farming theirland through exchange of labor with the neighboring
farmers and their families. At all other farms visitedby CU, no evidence was found of farmers notproviding drinking water to their workers.
GPI’s response:“During Q4 2018 RO plant will be provided to thevillage identified during audit, and subsequently
agronomy team will identify villages not having
access to drinking water. Once the villages
identified, budget provision will be made in
consultation with corporate affairs for subsequent2.5.4. Workers accommodation
All the workers interviewed were locals and lived intheir own home. Therefore none of the farmers was
required to provide accommodation to workers,
and no evidence could be found of inadequate
accommodation.

2.5.5. General safety measures
In 2017 GPI had started to distribute first-aid kits,
one for every ten farmers. In each village, the names
and phone numbers of the farmers keeping a firstaid kit were painted on the walls. The majority of
the farmers (62, i.e. 98%) were aware who in theirneighborhood kept a kit and therefore knew where
to go in case of emergency. Additionally, 27 farmers(43%) reported to have received a first-aid training.
GPI’s response:“Farmers awareness on availability of resources
during emergency will be further enhanced byorganizing trainings on first aid in the medical
camps during Q4 2018. Corporate affairs willorganize for medical camps in liaison with ASSIST(NGO). ”

implementation.”

Analysis and priorities
A general lack of sanitary facilities, resulting in open
defecation, is a common problem in this region.
None of the farmers provided (portable) sanitaryfacilities at the field. Eight farmers (13%) had thevisited fields close to their home.
GPI’s response:“GPI will study the feasibility of providing sanitaryfacilities at farms by working with NGO and thenidentify a fabricator to develop portable sanitaryfacility at farms during Q2 2018 and installationof number of portable sanitary facilities at farms
as prescribed by NGO during Q4 2018.”

Safe work environment was one of the focus areasof GPI. CU found that farmers were generally awareof the safety requirements, and that PPE was widelyused by both farmers and workers. However, theirunderstanding of the reasons why PPE should beworn was found to be limited; for example, some
farmers did not use PPE in their other crops, andtheir workers often harvested tobacco without PPE
when working for farmers supplying to companies
other than GPI. Awareness and understanding ofhealth risks is key to achieving behavioral change
and consistent adoption of farm safety measuresin tobacco and other crops, and should therefore
be targeted by GPI. Furthermore, the generallack of sanitary infrastructure and the problems

33

External Assessment

arising from this require further investigation.
As mentioned in Chapter 1.5 GPI already showed
efforts to improve sanitary infrastructure in theregion, and further improvements may be achievedin collaborative projects with other companies andthe government.

2.6. ALP Code Principle 6: Freedom of
association

2.7. ALP Code Principle 7: Compliancewith the law
Farmers shall comply with all laws of
their country relating to employment.
Main findings and challenges

2.7.1. Information on legal rights
Farmers shall recognize and respect
workers’ rights to freedom of association
bargain collectively.
Main findings and challenges

2.6.1. Workers’ right to freedom of
association
No evidence was found of farmers disrespecting
their workers’ right to freedom of association. 29
There were no active labor unions in the region of
the assessment. Farmers allowed their workers
to discuss common work goals and interests, or tobargain collectively. Various sources confirmed thecollective bargaining of wages between farmers andworkers at the beginning of the crop season.

Analysis and priorities
This ALP Code Principle was not a focus area for
GPI, as there were no active labor unions in theregion. Additionally, field technicians had adequate
knowledge of this topic.

Typically, farmers informed their workers about thebasic employment conditions at their farm, such as
the wage they would receive, the hours they needed
to work, their tasks, and payment conditions.
However, none of the farmers fully informed theirworkers about their rights in terms of legal benefits,
the legal minimum wage or the legal minimum rate
for overtime hours. This was found to be due to two
reasons: (1) farmers lacked the legal knowledge
to inform their workers properly, and (2) farmers
were unaware of their responsibility to provide thisinformation to their workers.
GPI’s response:“[GPI will] create awareness amongst farmers on
legal rights of workers & educate them to impartawareness to the workers by organizing a field day
for workers through NGO to communicate legal
rights to workers and train and motivate farmers
to create awareness among workers on their legal
rights.”2.7.2. Written contracts
None of the workers had a written contract for
their employment. The ALP information leaflet
distributed by GPI stated that casual (temporary)labor would not require a written contract, but asa general requirement Indian law provides for a
written agreement. However, according to the local
legal opinion a written agreement is not needed
when the work is for not more than one or twodays 30.

29. See appendix III for information on freedom of association and collective bargaining.
30. This information was only provided after the assessment, therefore no information has been collected on the amountof days worked, when less than a week.
34

External Assessment

GPI’s response:“[GPI] will work with government agencies andNGO’s to explore the possibility of having written
contract between farmer and the worker.”Analysis and priorities
While field technicians showed an adequate
understanding of this topic, farmers were mostly
unaware of the legal rights of workers. They did
not know that it was their responsibility to informworkers about their legal rights. GPI also did notprovide information on legal aspects to farmers. Inline with the incorrect information in the GPI leaflet,neither field technicians nor farmers nor workers
were aware of the legal requirement that casual
workers must also have a written contract. Clearly,
the knowledge of field technicians, farmers andworkers needs to be improved for this ALP CodePrinciple. In particular, more attention should begiven to the farmers’ obligation to inform workersof their legal rights.

35

Chapter 3

ALP PROGRAM: FEEDBACK FROMFARMERS, WORKERS, AND OTHERSTAKEHOLDERS

EXTERNAL ASSESSMENT
Burley farmers in Guntur and Prakasam

External Assessment

Control Union asked farmers, family members andworkers what had changed on their farms since thestart of the ALP Program. The general feeling wasthat the number of children working in tobacco
production had decreased and that work safety
had increased. Furthermore, it was reported thatthe relationship between farmers and workers had
improved in the entire region throughout the lastyears, parallel to the ALP implementation.
All farmers were very happy with the materials
provided by GPI (such as CPA storage boxes and PPEsets), as these were not provided by other tobacco
buying companies in the region. Despite the strict
requirements of the ALP program it was clear that
farmers preferred to deliver to GPI, even if it meant
more effort for them. Several farmers and workers
reported that the PPE for GTS slowed them down
and was very hot, and that they would appreciate amore suitable solution. One farmer was complaining
about the way GPI was enforcing the ALP Code, as
he felt too pressured.
Field technicians received feedback from farmers
as well as workers and family members during
their farm visits. They would discuss their findings
during meetings with their supervisors. However,there was no structured process for reporting thesefindings to the ALP team.

In addition to farmers, family members and workers,
CU also interviewed three employees of the NGO
Assist, two in the main office and one social workerof the support mechanism in his village. All werevery positive about the collaboration with GPI,and the efforts undertaken by GPI to improve thelivelihoods of tobacco farmers and workers in theregion – not only on the farms, but also in tobaccograding facilities. They also pointed out that GPI’s
projects in general infrastructure development
benefitted the development of the entire region.
Assist shared several reports and documents
showing the measured impact of the different
projects throughout the region.
The number of projects undertaken by GPI showedthat the company considered ALP not only as a
PMI requirement for Burley farmers, but also as anopportunity to improve general living conditionsin the region. Considering that local communities
in India tend to be very closed to outsiders, the CU
auditors from India, in particular, were impressedby the good relationship between farmers and fieldtechnicians and the willingness of farmers to answer
CU’s questions and talk about sensitive topics.

37

Chapter 4

APPENDICESEXTERNAL ASSESSMENT
Burley farmers in Guntur and Prakasam

External Assessment

Appendix I – Godfrey Phillips India’s Action Plan
1.	 Commitment to ALP Programme:
Strategy and Objective:
Audit Observation: No Documented structure for setting strategy
GPI Action Plan: Issues related to ALP shall be discussed between FTs, Supervisors and areaagronomy managers including ALP pillar coordinator to put the documented structure in place
for setting strategy.
Root cause of the issue will be analyzed and accordingly action plan prepared shall be implemented
to mitigate the issues which will be taken up as STP initiatives. Identified initiatives will be
discussed with PMI, GPI & ASSIST (NGO) and will be finalized in consultation with the Steering
Committee annually, in the 3 rd quarter. STP - coordinator will take the responsibility of setting
the strategy and will communicate to all stakeholders.
This would give clarity to all stakeholders about the initiatives and implementation and will beverified through internal audit by GPI once in the middle of the season. PMI will also audit thesame to ensure effectiveness.

2.	 Internal Capacity
Training and Knowledge of ALP Programme
Audit Observation: Practical understanding of FTs is always missing
GPI Action Plan: Practical approach shall be designed in training FTs which would include group
discussion and role plays as part of the training. This will facilitate the understanding of FTs on
ALP principles & measurables and equip them to implement in the field.
Training material and calendar will be prepared by ALP coordinator in Q2 2018 and training will
be conducted in Q3 2018 by Area agronomy managers which will be overseen by ALP coordinatorand this would be a continuous process. The effectiveness of training will be gauged throughwritten tests and ability of the FTs to explain the given context.
Eg.: During the field visit if it is observed that farmer is paying timely wages to workers throughthe crew leader – What is the FTs reaction ?
Eg.: During the field visit it is observed that a 16 year old labour fully trained in CPA application
is found applying CPAs – How do FTs deal with this situation ?

Appendix I - GPI’s Action Plan _ page 1 of 1539

External Assessment

3.	 Communication of the ALP code requirements to farmers
Communication strategy and tactics
Audit Observation: According to law tobacco plucking has same rate as spraying of pesticides Leaflet shows basic harvesting wage
GPI action Plan: The knowledge of all stakeholders will be updated to ensure that harvestingof leaf and plucking are different. Tobacco harvesting should be considered as plucking and thewages of plucking should be given by the farmers to workers irrespective of the gender.
This information will be disseminated to all stakeholders including farmers and workers throughposters and pamphlets. ALP coordinator is responsible to get the required information printed in
Q3 2018 and FTs will impart training to farmers subsequently in Q4 2018. This is going to be acontinuous process till all stakeholders acquire required knowledge on wages to be paid for thisactivity.

4.	 Internal monitoring data collection, accuracy and addressing issues.
Socio economic data (farm profiles)
Audit Observation: One farm profile (FP) was not updated as farmer has not taken up
transplantation.
GPI Action Plan: Farm profile Data collection commences only after farmer takes uptransplantation and it is not possible to collect any data before commencement of transplantation.
However, GPI will be vigilant to ensure that data collection is initiated once transplantationcommences. Data collection will be cross-verified by Supervisors and Area agronomy managers
to ensure all required data is collected accurately and in time. This is a continuous process
throughout the cropping season every year.
Systematic monitoring Situation not meeting the ALP code standard
Audit observation: Payment below minimum wage is not reported
GPI action Plan: Since farmers are not paying minimum wages for majority of the activities, apractice which is widely prevalent, was brought to the notice of the management in the steeringcommittee meeting. Country team made elaborate presentation on Minimum Wages and Gender
Discrimination to steering committee. Since this is a widespread problem and all stakeholders
knew about it, it was not reported in farm by farm monitoring.
From Q4 2018 FTs will be instructed to report the payment made below minimum wages andthe same will be captured in farm by farm monitoring sheet which it would give an idea about asto for which activity workers are being paid minimum wages and for which other activities not
being paid.
GPI has already started communicating to farmers activity-wise, zone-wise minimum wages tobe paid and advising them the need to do so. A feasibility study is also undertaken by Agriculture
Appendix I - GPI’s Action Plan _ page 2 of 1540

External Assessment

University and GPI will implement the recommendations after internal review. (Detailed action
plan is written in P12 and P13 – Income and work hours section).
This activity will be carried out in Q3 and Q4 every year. FTs will do the farm by farm monitoring
while supervisors and area agronomy managers will cross verify the activity to ensure regular
data capturing with precision.
Audit Observation: Lack of sanitary facility not reported
GPI action plan: Data collection will be done to report the sanitary conditions on the farms. Basedon the report analysis, decision will be taken at Steering Committee to assess the feasibility ofproviding portable sanitary facility at farm level. A suitable question related to sanitary conditions
on the farms will be included in farm by farm monitoring sheet by people pillar co coordinator toknow the sanitary facilities available on the farm. Based on the report, the Steering Committee
will take the decision of whether or not to engage a NGO third party to take up the feasibility
study on providing portable sanitary facilities at farm level. Action plan will be initiated in Q3 andQ4 of 2018 which gives an idea about the percent of farms having sanitary facilities and would
further pave the way to draw suitable action plans to install portable toilets.
Audit Observation: Data monitoring sheet not available to FTs once submitted to office
GPI action plan: Farm by farm monitoring data will be made available to FTs. Collated data of
farmers coming under the FTs will be made available in the excel sheet through FT tool kit. Oncethe collation is done the data will be available with the FT all the year round. Now since data iscollected manually, the data monitoring sheet will be made available to all FTs throughout the
cropping season. Data availability will facilitate better farm monitoring and FTs can be morevigilant while dealing with farmers with regard to ALP code violation if any. Issues followed
up as per target timeline and FT will not miss any issues to be closed results in more effective
implementation of ALP. Verification of FT tool kit by supervisor will be randomly crosscheckedby area agronomy managers to ensure that all farm by farm monitoring data is available to FTs all
the time for effective implementation.
Audit Observation: In theory, all seven principles were being monitored, but in practice thefocus was mainly on child labor and safe work environment.
GPI Action Plan: Equal focus will be given to all measurables and the importance will be reinforced
to Field technicians during training that all measurables should be monitored with equal priority.
This will be reviewed during steering committee meetings to ensure that all measurables aremonitored with equal importance. Field technicians monitor all measurables covering 100%
farmers during Q3 and Q4 every year. Area agronomy managers will cross monitor process toensure that all measurables are monitored with equal priority which results in overall improvement
in ALP implementation and compliance
Prompt Actions:Audit Observations: Prompt action is any violation ALP code, inadequate definition of prompt
action and not mentioning vulnerable group
Appendix I - GPI’s Action Plan _ page 3 of 1541

External Assessment

GPI action Plan: By definition prompt action is an activity in the field that calls for immediate
stoppage of the work or activity and not just violation of any ALP code. Trainings and role plays
comprise of focus on definition and understanding of prompt action and vulnerable groups.
There is a difference between prompt action and major issues.
Major Issues- Issues which directly deviate from measurable standards resulting in noncompliance but not prompt action. E.g. Payment to worker through crew leaders, Discrimination
against crew leader.
Minor Issues- Issues noticed on the farm, implementation of which results in farm improvementin terms of safety/worker treatment but are not violation of measurable standards. E.g. Incorrect
way of wearing GTS gloves, not providing soap on the farm.
Godfrey Phillips India Limited has decided to Reinforce training on prompt actions to all
the stake holders by including role play and group discussion to ensure that FT understands
the difference between prompt action issues and other non-conformance of ALP that do notnecessarily require prompt action.
This activity will be carried out in Q2 2018 People pillar coordinator is responsible to formulate
training material and calendar while area agronomy managers train FTs and supervisors which
results in better understanding of prompt action issues, major and minor issues.
This lends more clarity in raising prompt actions. 100% FTs with more than two years’ experience
will fully understand the definition and criteria of prompt action and will be fully equipped tohandle prompt action situation in field. The effectiveness of training and level of understandingof the stake holders will be evaluated through written tests.
Data management and analysis
Audit Observation: Current year’s prompt actions are not available to FTs after closure in thetabletGPI Response: Current year prompt action data after closure of PA will be made available to
FTs by updating the data in the hand held devices. Manager in-charge of Crop-in technology
will take the responsibility of uploading the current year’s data into hand held device during Q2
2018. Supervisors will ensure the availability of data in the hand held device and area agronomy
managers will cross check the availability and usage of data. This gives an edge to FTs during farmby farm monitoring to be more vigilant and monitor the farmers accordingly and all recurring PA
in a farms will be promptly observed and action would be initiated for effective implementationof ALP
Improvement plan for individual farms
Audit Observation: In some cases of PAs symptom is focused rather than root cause
GPI Response: “5 why “method of Training will be imparted to FTs to investigate root cause
and the Root cause analysis training through Fish-Bone by a Six-sigma certified expert, will beorganized during Q4 2018 cropping season. The training would enhance capability of FTs toAppendix I - GPI’s Action Plan _ page 4 of 1542External Assessment

do root cause analysis in identifying real cause and for more effective actions and improvement
plans to address the issue. Written test will be conducted to evaluate effectiveness of training
and prompt actions submitted will be verified for clear root cause analysis to ensure whether
FTs have fully understood the root cause analysis or not and take corrective steps to bridge thegap if still exists.

5.	 Address systemic and/or widespread issues
Audit Observation: Some PPE kits looked unused
GPI Response: We will find out the root cause for not using PPE and Create awareness on ill
effects of non-usage of PPE while applying CPAs among farming community. This will be achieved
through farmer interviews and trainings during Q3 and Q4 of 2018. FTs will train the farmers
cross-checked by Supervisors and there will be random checking by Area agronomy managers
to ensure trainings are conducted as scheduled. Usage of PPE kits by farmers will be monitored
by FTs and cross checked by Supervisors and area agronomy managers for regular usage of PPE
Kits. FTs will flag farmers who repeatedly spray without using PPE Kits while handling CPAs andit will be brought to the notice of steering committee to initiate more stringent action on errant
farmers. This action plan improves farmer usage of PPE kits while applying CPAs.
Audit observation: Nose mask not sufficient for CPA spraying
GPI response: We provide nose mask with required standard to give enough protection against
CPA application and review the standard of the nose mask annually to update ourselves on thestandard of nose mask. EHS person will look into the standard of nose mask in Q3 2018 basedon the MSDS. All masks will be replaced before start of next season with nose masks of standard
meeting MSDS requirements. EHS will conduct annual audit to verify the standard of the nose
mask.
Audit observation: One farmer complained that, he had received only 4 sets of GTS glove.
GPI Action plan: GPI will take care to ensure that, all farmers are provided with 8 pairs of GTS
gloves during Q4 every year. The current system of getting acknowledgement from farmers after
the receipt of the goods will be further strengthened to ensure that all farmers receive eightsets of GTS gloves. Further area agronomy managers will also cross check during regular visits
to ensure that all farmers received eight pairs of GTS gloves. This will ensure that all farmers arereceiving required number of GTS gloves and help in avoiding green tobacco sickness.
Audit observation: 03 per cent farmers are not aware about who had the first aid kit and in one
village wall painting containing the required information was not observed.
GPI action Plan: GPI will ensure that all farmers are made aware about the location andresponsible person having first aid kit. FT’s will make farmers aware of the person having first aid
kits while conducting meetings and also ensure that wall painting containing required information
is projected at strategic points. Supervisors and FTs will take the responsibility of educating thefarmers about the availability of first aid kits. Information on availability of first aid kits will begiven during farmer trainings in Q4 2018 and annually there on. People pillar co coordinator
Appendix I - GPI’s Action Plan _ page 5 of 1543External Assessment

will take necessary actions to ensure that wall painting have required information about thedetails of person having first aid kit will be painted in all villages. Area agronomy managers andSupervisors will cross-check the existence of the wall painting during their regular visits and incase of anomaly, will bring it to the notice of people pillar coordinator to take corrective steps.
Farmer awareness on the availability of first aid kit will be crossed checked during field visits byagronomy managers and the sample size will be decided based on the SRS (Systematic Random
Sampling) tool. This activity results in all farmers knowing the location & responsible person
having the first aid kit

6.	 Farm level assessment of working conditions regarding the ALP code standards
Crew leadersAudit observation: In one field risk of indirect payment is identified.
GPI action plan: Create awareness to the farmers individually about the measurables in forced
labour and risks of indirect payment. Train FTs to be alert during farm by farm monitoring to
identify issues (indirect payment). Farm by farm monitoring will be carried out during Q3 and Q4
2018 by FTs and supervisors which will be cross verified by area agronomy managers. This is an
ongoing process to ensure that there won’t be any indirect payment of farmers to workers.

7.	 Child labour:
Children working and activities performed
Audit observation: NONE (based on the prompt actions)
GPI action Plan: Based on the prompt actions raised GPI still considers the risk of children being
engaged during tobacco production and therefore further strengthen the system to ensure thatchild labour is not engaged in tobacco production. A more systematic risk assessment will be
carried out to identify and estimate the risks involved and draw suitable action plans to mitigate
the risk of child labor engagement in production chain.
Continue to create awareness among farming community about the importance of nonengagement of child labour during tobacco production. Raising prompt actions and Farm by farm
monitoring will continue to ensure non engagement of children in tobacco production.
Risk assessment will be done in Q2 2018 while training of farmers and field technicians will be
conducted in Q3 2018. Incidence of child labour in production chain will be escalated to higher
levels on top priority and suitable action plan will be put in place to avoid such incidencesin future. Training of all stakeholders on child labour measurable will continue as part of ALP
implementation programmes.
This activity will be a continuous process during Q3 and Q4. People pillar coordinator will takethe lead role while Supervisors and FTs continue to raise prompt actions and do farm by farm
monitoring which results in zero child labour incidence in production chain. Effectiveness will

Appendix I - GPI’s Action Plan _ page 6 of 1544

External Assessment

be evaluated through prompt actions, their closure and reporting, farm by farm monitoring andchecking farmer training records.
After school activities is one more action plan to bring down the incidence of child labor. STP
coordinator in consultation with Corporate Affairs would make necessary budget provision to
run the programme. Children will be engaged in school for 90 minutes after the school so by thetime they reach home all farm activities will be complete thus bring down the incidences of childlabor. People pillar coordinator in consultation with ASSIST (NGO) will finalise the schools. Area
agronomy managers during their field visits will also visit the schools to ensure the programme isrunning as scheduled and meets the objective. ALP pillar coordinator will submit a final reportgiving details of effectiveness of the programme. This programme will be run for 60 days during
January to March every year.
Others:Audit Observation: Harvesting and stitching is often considered as light work.
GPI action Plan: Create awareness about light and hazardous work amongst farmers andworkers during Q4 every year and clearly explain the people working in the farm about GTS
and its symptoms and avoidance through training, pamphlet and posters. Create awareness on
how it occurs (by getting in touch with wet tobacco) and the risk remains the same even if they
are handled in a cool and dry place, i.e. under shade. This activity will be conducted during Q4
every year.
Farmers not complying with child labour measurable twice during the season will not be awarded
contract in the subsequent season.
People pillar coordinator will be responsible to prepare training communication materials like
pamphlets and posters and FTs will conduct the training to farmers. This will be verified bySupervisors and Area agronomy managers to ensure that communication is taking place asscheduled. This would ensure awareness amongst farmers and workers on light and hazardouswork.
The effectiveness of the training programme and over all understanding level of farmers will
be assessed through evaluation tests and ALP coordinator will check on reported farms andagree a plan with FT and farmers to ensure that all stake holders have a complete knowledge
on light and hazardous tasks and farmers allocate work to workers based on the age to ensurethat no person under 18 years undertakes hazardous tasks. Farmers not complying with GTS
measurable (not training workers and not providing required PPE kits) will be down-graded into
“D” category and all subsidies will be stopped.
Others:Audit observation: Nine Field Technicians (50%) provided an incomplete description of
hazardous work.

Appendix I - GPI’s Action Plan _ page 7 of 1545

External Assessment

GPI action plan: Training on light and hazardous work during Q4 every year to all field technicians
and create awareness on how each hazardous activity poses risk to health and possible ways tomitigate the risk.
People pillar coordinator will be responsible to prepare training material and area agronomy
managers will conduct the training to Field technicians. This will be verified by ALP coordinatorto ensure that communication is taking place as scheduled. This results in enhanced awarenessto field technicians on light and hazardous work to monitor farms accordingly and ensure no
child below 18 years is involved in hazardous task.
The effectiveness of the training programme and over all understanding level of Field technicians
will be assessed through evaluation tests

8.	 Income and Work hours:
Payment to workers
Audit observation: Minimum wage is not being paid to workers, however all farmers pay
benchmark wages arrived through by collective bargaining between farmers and workers at the
beginning of the season
GPI action Plan: In 2016 MAR Country team made an elaborate presentation on Minimum Wageand Gender Discrimination to steering committee. They were also apprised of the fact that the
district labour commissioner (government authorities) knew of the situation well but, still kept
quiet because of the financial position of the farmers and inconsistent returns from agriculture
sometimes force farmers to take drastic steps.
Government authorities are also not getting any complaints on the subject and hence it is assumed
that all stake holders including workers are in agreement with the current system of collective
bargaining between farmers, workers and crew leaders and further opine that enforcing the law
forcibly will worsen the situation than doing a word of good to target community.
However in order to be ALP compliant, Godfrey Phillips India Limited has further taken up steps
to address this issue.
Feasibility study is under taken by university of agriculture and would collect data on wages paidby farmer to workers for different activities. Feasibility study also includes payment in othercrops, and pros and cons of paying minimum wages in tobacco. This lends a greater clarity tomove forward for implementation of minimum wages in tobacco.
Farmers paying below the minimum wage will be reported in the farm by farm monitoring sheet
from Q3 2018 onwards by including a question in the farm by farm monitoring sheet under
the group “Talk to the farmer” and “Talk to worker” to know for which activity farmer is paying
minimum wage and the difference between the actual wages paid and the existing minimum
wage. Farmers not paying minimum wages will be categorised in to “D” and no subsidy will begiven any subsidy after 2021

Appendix I - GPI’s Action Plan _ page 8 of 1546

External Assessment

People Pillar coordinator will take the responsibility of adding relevant question in the farm byfarm monitoring sheet while Field Technicians collect the data during the cropping season. The
action plan commences during Q3 2018. This results in greater clarity on minimum wages andfacilitates to draw suitable action plans. It is planned to take up implementation of minimum wage
on a pilot basis covering 03 villages during Q4 2018. Based on the implications of implementation
during 2018 will be gradually spread to other growing areas.
Others:Audit observation: Workers are mostly not aware of legal minimum wage but are aware of thebench mark wages which is prevalent in the VK BU growing region.
GPI action Plan: Create awareness among workers about legal minimum wages for different
activities. Also, disseminate information on minimum wages for different activities in different
zones through mass media communication, like, using loud speakers in villages. Training throughrole plays & motivating farmers to create awareness amongst workers on legal minimum wage
and explaining to them the impact of payment of minimum wages on their standard of living.
Check workers awareness during farm by farm monitoring by including relevant questions in thequestionnaire. The question will be included in the questionnaire by people pillar coordinator
while, farm by farm monitoring is done by FTs and crossed checked by Supervisors and areaagronomy managers. With this workers will be made aware about the minimum wages fordifferent activities. This activity will be carried out during Q3 and Q4 every year.
Others:Audit observation: Occasional overtime hours were paid with additional 50 INR
GPI action Plan: GPI will create awareness among farming community about over time payment
through group training to famers and distribution of training materials to enhance knowledge
on over time payment measurable in income and work hours. Training material will explain themethodology of calculation.
Eg:
Zone II
Activity: Weeding
Wages: 289 per day (Six hours) = 289 / 6 = INR 48.16
Over time: one hour = INR 48.16 X 1.5 = INR 72.25
Therefore for weeding in zone II an amount of INR 72.25 (INR Seventy Two and Paise Twenty
five is be paid for overtime work of one hour.
People pillar coordinator will take the responsibility of training and communication materials
while FTs start training the farmer in Q4 2018 and will be crossed verified by supervisors andarea agronomy managers. This enhances awareness of farmers on income and work hours “overtime payment” measurable results in 100% of farmers paying premium wages for overtime
work hours. Farm by farm monitoring by field technicians and unannounced farm visits by pillar
coordinators will ensure effective implementation.
Appendix I - GPI’s Action Plan _ page 9 of 1547

External Assessment

Others:Audit observation: Farmers unaware of legal requirements for benefits and it was identified
where workers worked more than six days without getting the prescribed legal benefit in only
one farm
GPI action plan: Create awareness to farmers on legal benefits of workers by conducting Group
training to famers and distribution of training materials. Training material will include all benefits
that the farmer should give to workers. People pillar coordinator will take the responsibility
training and communication materials while FTs start training the farmer in Q3 2018 and will becrossed verified by supervisors and area agronomy managers. This results in enhanced awarenessof farmers on income and work hours “Legal benefit” measurable results in 100% of farmers
aware of legal benefits to be provided to workers and implement the practice accordingly.

9.	 Fair Treatment:
Discriminatory cultural practice
Audit Observation: Discriminatory payment practices against women identified.
GPI action plan: Field technicians will collect the Data on wages paid to men and women fordifferent activities (zone wise) to understand the difference between wages paid to men andwomen. Simultaneously, Agriculture University has also taken up a project to see the feasibilityof equal payment to men and women for the same activity. Action plan will be drawn basedon the report from Agricultural University. It is Planned to implement equal wages to men andwomen in 3 villages on pilot basis from 2018 (2019 crop). Data collection on wages paid to men
and women for different activities and subsequent action plan for implementation will be done in
Q2 2018. Payment register at farmer end will be verified by FTs during farm by farm monitoring
to ensure equal payment to men and women for the same activity. Register will also be crossverified by supervisors and area agronomy managers to see the authenticity of the payment.
Farmers not complying with this measurable will be flagged and brought to the notice of thesteering committee to take more stringent actions including termination of contracts after 2021.
Support mechanism:
Audit observation: Not independent and not anonymous.
GPI action plan: GPI farmers being the committee members of SM initiative will not affect thetransparency and anonymity of the SM.
Presence of GPI farmer will make him responsible for the issue, advise or influence the respective
farmers to take necessary corrective actions.
Furthermore other farmers not being benefited out of GPI, neither wish to be in the committee
nor keen in resolving the issue. We recommend ASSIST to continue to train the committee
members to retain the anonymity of the system and to function independently. Care will betaken to ensure that women are part of IDR (Informal Dispute Resolution) committee which
Appendix I - GPI’s Action Plan _ page 10 of 1548

External Assessment

facilitates bringing women related issues (Sexual harassment). GPI will liaise with ASSIST (NGO)to include women in IDR committee. Include equal number of farmers and workers in the IDR
committee so that balance is maintained. Mobile numbers of IDR members is written in strategic
location in villages so that grievances can be reported anonymously. This activity will be carriedout during Q3 and Q4 every year.

10.	 Forced labour
Indirect payment:
Audit observation: Evidence of indirect payment was found (1 farm = 2%)
GPI action plan: GPI will train and educate all farmers to ensure workers get direct payment.
This will be ensured through group trainings to farmers, Distribution of training materials andcontinue to collect data from workers on this issue through farm by farm monitoring during Q3(distribution of information material) and Q4 (training of all stake holders) every year. People
pillar coordinator will be responsible for training and communication materials while FTs do thefarm by farm monitoring during the cropping season every year. Supervisors and area agronomy
managers cross verify to ensure effective monitoring to identity stray incidences of indirect
payment if any and resolve them immediately. This results in complete elimination of indirect
payment.

11.	 Safe work environment
Training and awareness on GTS
Audit observation: At 9 farms (14%) at least one person handling green tobacco was not awareof existence and avoidance of GTS
GPI action plan: Increase awareness of workers on GTS through posters and trainings. Imparttraining to farmers and motivate farmers to create awareness on existence and avoidance of GTS
among workers. Display of posters at strategic location in villages on existence and avoidanceof GTS. People pillar coordinator will take responsibility for printing of training material andposters while Field technician impart training to farmers during Q4 every year. Supervisors andarea agronomy managers cross check to ensure trainings are conducted as scheduled. Farmers
not compliant with GTS measurable will be categorized into “D” and he will not be eligible forany subsidies. This results in all workers and farmers attaining required knowledge on existence
and avoidance of GTS to ensure that all farmers and workers totally avoid GTS.
Training and awareness on GTS
Audit observation: At 57 farms 95% persons handling green tobacco did wear required
harvesting cloth – Shoes and in some farms GTS glove was improperly worn.
GPI response: Increase awareness of workers on GTS through posters and trainings. Imparttraining to farmers and motivate farmers to create awareness on existence and avoidance of GTS
among workers .Display of posters at strategic location in villages on existence and avoidance ofAppendix I - GPI’s Action Plan _ page 11 of 1549

External Assessment

GTS. People pillar coordinator will take responsibility for printing of training material and posters
while Field technician impart training to farmers during Q4 every year. Supervisors and areaagronomy managers cross check to ensure trainings are conducted as scheduled. This resultsin all workers and farmers attaining required knowledge on existence and avoidance of GTS toensure that all farmers and workers totally avoid GTS.
Sanitary facilities:
Audit observation: None of the farmers had (portable) sanitary facilities at work
GPI action plan: GPI will study the feasibility of providing sanitary facilities at farms by working
with NGO and then identify a fabricator to develop portable sanitary facility at farms during Q2
2018 and installation of number of portable sanitary facilities at farms as prescribed by NGO
during Q4 2018. Plant engineer will look at various models of sanitary facility suitable to growing
area and STP coordinator will work with corporate affairs for funding and implementation part.
Implementation will be tracked by CSR report and field technicians at ground level. This is resultsin availability of sanitary facility at work place for all workers.
Others:Audit observation: The majority of the farmers (1 farmer 2% unaware) were aware who in theirneighborhood kept a kit
GPI action plan: Farmers awareness on availability of resources during emergency will be further
enhanced by organizing trainings on first aid in the medical camps during Q4 2018. Corporate
affairs will organize for medical camps in liaison with ASSIST (NGO). Unannounced visits will
be conducted by area agronomy managers to check the knowledge of farmers on first aid byincluding a question on first aid in the unannounced questionnaire. This will enhance all farmers
to have access to resources in case of emergency
Others:Audit observation: At 17 farms (27%) CPA were not stored in a safe and locked storage- CPA forother crops was stored outside the box – farmers were not aware if they were allowed to store
them inside
GPI action plan: GPI takes steps to increase awareness of farmers to store CPAs of all crops in
CPA box by organizing group training, distributing communication materials and pasting posters
on strategic locations in villages during Q4 2018. People pillar coordinator will take care oftraining material and printing of pamphlet and posters while field technicians conduct trainings
to farmers to create required awareness on storage of CPA from all crops. Supervisors and area
managers cross check to ensure planned activities are being carried out accordingly. Farm byfarm monitoring by field technicians and unannounced visits by area agronomy managers willfurther strengthen the process. This is an ongoing process and will be conducted in Q4 every
year. This contributes in safe and secure storage of CPAs from all crops.

Appendix I - GPI’s Action Plan _ page 12 of 1550External Assessment

Others:Audit observation: It was observed that, CPA lock up boxes were installed at a very high heightposing risk at the time of storing CPAs.
GPI action plan: GPI will define the height for installation at 6’ (six feet) and advice farmers not
to install at more than six feet for easy handling and visibility of CPAs stored while ensuringsafety of children and domestic animals. Field technicians will verify the height of installation at
every farm and agronomy managers will cross check through random unannounced visits during
Q4 every year. Samples will be drawn based on the systematic random sampling tool (SRS). This
results in safe storage of CPAs and eliminate the risk of installing at a very high height.
Others:Audit observation: 39 farmers (63%) reported to wash and puncture the empty CPA containers
before disposal
GPI response: GPI will educate the importance of puncturing the empty CPA containers tofarmers by conducting group trainings on safe disposal of empty CPA containers and information
through training material and pasting of posters on strategic location in villages. People pillar
coordinator will take care of training material and printing of pamphlet and posters while fieldtechnicians conduct trainings to farmers to create required awareness on safe disposal of CPA
containers. Supervisors and area managers cross check to ensure planned activities are being
carried out accordingly. Farm by farm monitoring by field technicians and unannounced visits by
area agronomy managers will further strengthen the process. This is an ongoing process and will
be conducted in Q3 and Q4 every year. This results in safe disposal of CPAs from all crops.
Others:Audit observation: 17 farmers (27%) had fertilizer bags lying around openly in front of theirhome or in their home
GPI action plan: GPI creates awareness among farmers to ensure proper storage of fertilizer
bags. GPI trains farmers about the ill effects of direct contact of fertilizers and educate them tostore in a separate room where possible else ask them to cover fertilisers bags to avoid directcontact and empty fertilizer bags should be disposed immediately in the nearest empty CPA
container bin in consultation with field technician. This is an ongoing process and field technicians
train the farmer in Q3 every year. Supervisors and area agronomy managers cross check toensure trainings are conducted as scheduled. Farm by farm monitoring by field technicians andunannounced visits by area agronomy managers will further strengthen the process. This resultsin safe and secure storage of fertilizer bags and later safe disposal which reduces pollution andthereby reduce risk to environment.
Others:Audit observation: At 2 farms persons applying fertilizer were not wearing gloves

Appendix I - GPI’s Action Plan _ page 13 of 1551

External Assessment

GPI action plan: Increase awareness and ensure usage of gloves by farmers during fertiliser
application as well through group training, communication materials and posters. People pillar
coordinator will take care of training material and printing of pamphlet and posters, while fieldtechnicians conduct trainings to farmers to create required awareness on usage of glove while
applying fertilisers. Supervisors and area managers cross check to ensure planned activities arebeing carried out accordingly. Farm by farm monitoring by field technicians and unannounced
visits by area agronomy managers will further strengthen the process. This is an ongoing process
and will be conducted in Q4 every year. This results in increased awareness amongst famers andworkers and increased usage of glove while applying fertilisers.
Others:Audit observation: In several villages neighbors or family members were not aware of meaningof red flag
GPI response: GPI will create awareness and educate neighboring farmers and family memberson the importance of red flags. Awareness will be created through word of mouth communication
through progressive farmers, mass media communication viz. loud speakers and display of
posters on strategic location in villages. People pillar coordinator will take care of printing
posters while field technicians and supervisors will be responsible to create awareness on why
red flags are being posted through mass media communication. This is an ongoing process andwill be conducted in Q4 every year. Effectiveness of the communication and level of farmer
understanding will be verified through random questioning the villagers about the REI signage
during the regular visits. This results in increased awareness of all the villagers about red flags
resulting in safe Re-entry after CPA application.
Others:Audit observation: : One village did not have access to drinking water and no big vehicles, only
motorbikes; inhabitants had to go around 3-4 km to next village for water.
GPI response: Ensure availability of safe drinking water to villagers identified during audit
and also identify villages which do not have access to drinking water by providing RO plant tovillages. During Q4 2018 RO plant will be provided to the village identified during audit, andsubsequently agronomy team will identify villages not having access to drinking water. Oncethe villages identified, budget provision will be made in consultation with corporate affairs for
subsequent implementation. This leads to provision of drinking water to all villages which will bereflected in GPI’s CSR report.

12.	 Compliance with law
Information on legal rights:
Audit observation: None of the farmers fully informed their workers about their legal rights.
GPI action plan: Create awareness amongst farmers on legal rights of workers & educate themto impart awareness to the workers by organizing a field day for workers through NGO toAppendix I - GPI’s Action Plan _ page 14 of 1552

External Assessment

communicate legal rights to workers and train and motivate farmers to create awareness among
workers on their legal rights. Field technicians conduct trainings to farmers to create required
awareness on legal rights of workers and supervisors and area managers cross check to ensureplanned activities are being carried out accordingly and NGO will create awareness to workers
on their legal rights. This is going to be an ongoing process and will be carried out during Q3
every year. This results in creating awareness on legal rights of workers to farmers and workers
as well. Degree of awareness and effectiveness of training will be verified through unannounced
visits by area agronomy managers and farm by farm monitoring by field technicians.
Formalization of employment:
Audit observation: None of the workers had their employment documented/written contracts.
GPI action plan: In India, in case of tobacco cultivation and agriculture in general, the employee
employer relationship can be very different from organized industrial activity. The same casual
workers may be working with different farmers at the same time. Sometimes small farmers manage
their agricultural activity through family members only. There could also be a possibility thatsame worker may be working on daily wages with same farmer for a number of days. Therefore
it not possible to have written understanding for workers working with the farmer for a day or
two. However we will work with government agencies and NGO’s to explore the possibility of
having written contract between farmer and the worker.
Others – General
Audit observation: Field technicians knowledge on ALP measurable to be further honed:
GPI ation plan: GPI will further strengthen its communication and training to hone skills ofField technicians on all ALP measurable. ALP coordinator will prepare training material covering
all 32 measurable, prompt actions and farm by farm monitoring and also training schedule.
Area agronomy managers will conduct training as scheduled and ALP coordinator will conduct
written tests to measure the effectiveness of training. This activity will be carried out during Q3
and Q4 every year. This results in overall improvement of Field technician’s knowledge on ALP
measurable.

Appendix I - GPI’s Action Plan _ page 15 of 1553

External Assessment

Appendix II – Scope and methodology
Assessment team
The team responsible for conducting this assessment
consisted of three auditors from India, three TeluguEnglish translators, and two CU coordinators from
Germany and the Netherlands. 31 The auditors
conducted the farm assessments and interviewed
field technicians. The two coordinators interviewed
GPI management and external stakeholders. The
auditors as well as the coordinators had been trained
by Verité and Control Union. This qualification
process consisted of the following stages:• Selection of candidates by CU;• Webinars organized by CU to verify suitability ofcandidates;• Completion of online training provided by Verité;• Full week classroom training conducted by Verité
with CU;• Two-day refresher training by the CU coordinator
prior to starting the field visits; and• Shadowing during farm visits by CU coordinators.
The translators received one day’s training
prior to the field visits. This training focused onunderstanding the ALP Code and the translators’roles during the field visits. 32
Desk review
Prior to this assessment GPI was requested to send
documentation to CU to give the assessment team abetter idea about the market characteristics and the
management systems that were in place. The PMI
legal counsel for India provided the legal informationthat was relevant to the ALP Code (See Appendix
III for more detailed legal information). This wasimportant to ensure a thorough preparationof the assessment. Legal information regarding
casual labor was provided during the management
assessment by the legal counsel of GPI, as that was
not included in the legal information received prior
to the assessment.
Opening meeting
On 28 November 2017, CU started the assessmentwith a meeting at GPI’s Leaf office in Kalikivayu(Singarayakonda) close to Ongole, Andhra
Pradesh, India. This meeting was attended by GPI’s
management team (Executive Vice President, Headof Leaf, STP Coordinator, ALP coordinator, ALP
Analyst, Managers for Corporate Affairs, Human
Resources, Legal, and Health and Safety, and theProduction Manager) as well as PMI Regional.
CU presented the objectives and approach of theassessment, while GPI provided a brief overview ofthe market and company background.
Methodology for ALP implementation
review

system

The methodology used for evaluating GPI’s
implementation of the ALP Program wasbased on the widely used PDCA 33 cycle, which
is a management method for the continuous
improvement of processes and products. As partof this evaluation, CU spent two days (28 and 29
November 2017) at GPI’s Leaf office. CU interviewed
management staff, analyzed documentation, andevaluated GPI’s systems, to better understandhow the implementation of the ALP Program wasorganized. In total, CU interviewed ten management
personnel and 18 field technicians. Additionally, CUinterviewed one stakeholder: three employees ofAssist, the NGO involved in the implementation of
the support mechanism, the after-school program,and other CSR initiatives.

31. The coordinator from the Netherlands did not stay for the entire assessment, but only for the management
assessment and one field day.
32. The translator was requested to literally translate the conversation between auditors and the interviewees, in order
to avoid any type of interpretation.
33. Plan, Do, Check, Act
Appendix II - Scope and Methodology _ page 1 of 554

External Assessment

Scope and farm sampling
At the time of the assessment GPI mainly sourced Burley tobacco from the Vinukonda region in the districtsof Guntur and Prakasam in Andhra Pradesh. This region was chosen as the scope of the present assessment.

GPI Tobacco production in India

The average tobacco field size of the farmers in thescope of the assessment was around one hectare. Of
the farmers visited for this assessment, 80% grew
tobacco on an area of less than two hectares. In thisgroup, around one-third leased their land, one-third
owned the land, and one-third partially owned andpartially leased the land they were farming withtobacco.
In 2017, GPI had contracts with 3,884 Burley
farmers in Vinukonda. Among this group, 310
farmers had not yet transplanted tobacco this season
due to various reasons, but were neverthelessincluded in the scope of this assessment, as they
had valid contracts and also received training fromGPI. Two of the farmers visited by CU had not yet
transplanted tobacco this season.
GPI’s Burley farmers in Vinukonda were supported
by four area production managers, five supervisors
and 49 field technicians. To constitute a meaningful
sample, CU needed to visit at least 63 farms, thesquare root of the total population of farmers
within the scope. In total, CU visited 63 farmers,
which were sampled randomly or selected based on
Appendix II - Scope and Methodology _ page 2 of 5

geographical spread, with a preference for farms
that had transplanted tobacco.
Over a period of two weeks CU visited 9-12 farms
per day, where each field day was followed by areporting day.
The graphs below provide demographic information
about the farms visited.

Farm size (ha contracted by GPI)

20%
41%

39%
0-1
1<-2
>2

55

External Assessment

Previously contracted by GPI

Type of farm

3%

3%

24%

71%
97%

Yes
No
Farm with family members and local workers
Family farm with only family members

Stage of tobacco production

working
Farm with only local workers (no family

Nursery

members)

2

Transplanting

All external workers were from the local area andwere employed as casual labor, working full days
several days a week. Exchange of labor, i.e. farmers
helping each other out on their farms without
paying one another, was common practice on 27%of the farms visited by CU.

1

38

Growing

Topping

20

Harvesting

41

Curing

15

0

10

20

30

40

50

Note: Farms can be in several stages of tobacco production at
once, therefore the sum of the numbers shown in the graph ismore than the number of farms visited (63).

Appendix II - Scope and Methodology _ page 3 of 5

Thanks to the openness and collaboration of
GPI, CU managed to conduct all of the farm visitsunannounced. This meant that the farmers had notbeen informed about the visit and its objectivesprior to CU’s arrival. GPI did inform farmers in the
weeks before the assessment that a visit could takeplace within a certain period, but said nothing in
the days prior to the visits. However, CU auditors
noticed that farmers in neighboring villages
frequently communicated with each other andhence were informed about the auditors’ presencein the region and the type of questions they would
ask. CU informed GPI about the names of theselected field technicians the day before their visit
would take place (except for the first day, when thefield technicians were gathered for an introductory
meeting and the three technicians for the first day
were announced). The names of the farmers were
provided on the day of the visit in the car, and only56

External Assessment

for the next farmer. The reason for this was that
CU wanted to obtain a realistic picture of the farm
practices, which was most likely to be seen whenarriving unannounced.
Methodology for ALP farm practices review
The methodology used during the farm visits was
based on triangulation of information. Auditors
were instructed to seek at least two, preferably
three, sources of information. They used theirfindings to draw conclusions about whether farm
practices were meeting the standard of the ALP
Code. These sources could be interviews with
farmers, family members, or workers. Sources
could also include documentation and visualobservation of the farm area, field, storage facility,
and curing barns. This methodology was also
used to investigate the underlying factors that
increase the risk of not meeting the standard. In
addition to information triangulation CU also used
the “Five Whys” methodology, a commonly usedtechnique to obtain an understanding of problems,
to investigate the reasons behind certain issues.
Before every interview CU explained the objectiveof the assessment and assured interviewees that all
information would be kept completely anonymous.
Next to assessing labor practices, CU also verified
the impact of ULPI’s management systems and the
ALP Program, to see how this was perceived by fieldtechnicians, farmers, family members, and workers.

in several cases a group of relatives or neighbors
would show up at the farm, wanting to listen in to
the interviews or share some of their knowledge.
The following graphs show demographic informationof the family members and workers interviewed:

Gender

100%

14%

75%

50%

86%

25%

0
Male
Female

Age

100%

5%

People interviewed
In addition to the 63 farmers, CU interviewed
22 family members and 21 external workers.
Whenever possible, interviews with workers andfamily members were conducted individually andwithout the farmer, to avoid undue bias. For thesame reason, all interviews with farmers wereconducted without the field technicians. However,it was not always possible to conduct individualinterviews with the farmers’ wives, because ofcultural reservations about women being alone witha man (the auditor), even in the presence of another
woman (the translator). Furthermore, as the culturein the visited villages was very community-based,

Appendix II - Scope and Methodology _ page 4 of 5

75%

50%

95%

25%

0
15-17
Adults (>=18)

57

External Assessment

The high percentage of female interviewees isrepresentative of the number of female workers
in the field, where more women than men were
employed for labor intensive tasks such as
harvesting and transplanting.
The two interviewed minors were family members(one wife, one son) who were not involved in tobacco
production. They were interviewed at the farmers
house.
Closing meeting
On 15 January 2018 a closing meeting was held at
GPI’s Leaf office in Kalikivayu. Similar to the opening
meeting, this meeting was attended by GPI’s
management team and PMI Regional. From CU’s
side the meeting was attended by the coordinatorfrom Germany and one of the auditors from India.
Additional attendees were the Verité consultant
for Asia, Philip Morris India (IPM) personnel andhigher management of GPI. After CU presented
their initial findings, GPI requested clarification ofsome items, which was followed by a constructive
discussion on several topics. Overall, CU’s findings
were considered a useful base for taking action to
improve GPI’s implementation of the ALP Program.
Reporting procedure
During the assessment, auditors reported after eachfield day to the coordinator. The latter monitored
the auditors’ findings and provided feedback
whenever necessary. The coordinator compiled
all findings and combined these with the findings
from the management assessment. Public releaseof CU’s assessment report demonstrates PMI’scommitment to transparency, which is an importantcomponent of the ALP Program. CU authored thefinal report, which was evaluated by Verité. PMI
reviewed the report to ensure consistency of thepresentation of CU’s findings worldwide. Finally,
GPI reviewed the report to verify that all theinformation was correct, and to finalize their action
plan based on this report. 34

34. Leaf tobacco suppliers can start drafting their action plans after the closing meeting, as initial findings usually do notdiffer much from the final report.
Appendix II - Scope and Methodology _ page 5 of 558

External Assessment

Appendix III – Legal information
INDIA

GeneralAuthor:Arunabh Suman

Reviewed by: Victor Guerra
Date of analysis:

1.	

April, 2017.

Principle 1 – Child Labor
1.1

1.2

Items to be covered by your answer•

Minimum age for employment (in tobacco)•

Requirements applying to farmers’ own children or other family members such as nieces
and nephews helping on the farm•Age (or ages) limit for compulsory schooling•

Definitions of hazardous work (incl. agricultural activities that constitute hazardous work)
as well as any tasks that workers under 18 are specifically prohibited from participating inby law•

Other restrictions or requirements on the employment of workers under 18 years (e.g.
limit on work hours, work permits, etc.)
Applicable laws
Child Labour (Prohibition and Regulation) Act 1986 as amended in the year 2016.

1.3

Your answer
Section 2(a)(ii) The Act defines a child who has not completed 14 years of his age. As
per Section 3(I) prohibits a child to work in any occupation or process. ( Child Labour
is in any case prohibited, so may not be included in this document)
However, The Act permits a child to work to help his/ her family / family enterprisethat is not hazardous after the school hours or during vacations which does nothamper his/ her education. In relation to a child family would mean his mother,father, brother, sister and father’s sister and brother and mother’s sister and brother;
As regards the Adolescents who have completed fourteenth year of age but has
not completed eighteen year of age, is permitted to be employed except hazardous
employment that are mentioned in the schedule of the Act.

Appendix III - Legal Information _ page 1 of 959

External Assessment

The farming has not been notified as a hazardous activity whereas Tobacco
processing including manufacturing of tobacco, tobacco paste and handling of
tobacco in any form has been notified as Hazardous activity.
As regards the Child the employment is completely prohibited whereas theAdolescent can work in employment which is not hazardous in nature.
Since the Tobacco plantation would be a scheduled employment within the meaningof Minimum Wages Act 1948, the working hours of the persons employed would beprescribed as per Section 13 Of The Minimum Wages Act.
The Constitution (Eighty-sixth Amendment) Act, 2002 inserted Article 21-A in theConstitution of India to provide free and compulsory education of all children in
the age group of six to fourteen years as a Fundamental Right in such a manner as
the State may, by law, determine. The Right of Children to Free and Compulsory
Education (RTE) Act, 2009, which represents the consequential legislation envisaged
under Article 21-A, means that every child has a right to full time elementary
education of satisfactory and equitable quality in a formal school which satisfies
certain essential norms and standards.
Article 21-A and the RTE Act came into effect on 1 April 2010. The title of the RTE
Act incorporates the words ‘free and compulsory’. ‘Free education’ means that nochild, other than a child who has been admitted by his or her parents to a school
which is not supported by the appropriate Government, shall be liable to pay any
kind of fee or charges or expenses which may prevent him or her from pursuing andcompleting elementary education. ‘Compulsory education’ casts an obligation on
the appropriate Government and local authorities to provide and ensure admission,
attendance and completion of elementary education by all children in the 6-14
age group. With this, India has moved forward to a rights based framework thatcasts a legal obligation on the Central and State Governments to implement thisfundamental child right as enshrined in the Article 21A of the Constitution, in
accordance with the provisions of the RTE Act.
2.	

Principle 2 – Income and Work Hours
2.1

Items to be covered by your answer•

Laws on regular and overtime hours (e.g. maximum work hours)•

Requirements that employers must meet to request overtime from workers•

Laws on regular and overtime wages (e.g. minimum wages, minimum wages agreed with
unions)•Laws on basic entitlements to be paid to workers (e.g. social security, health care,holidays, other leave entitlements etc.)•

Wage and hours law specific to piece rate workers, seasonal workers, and migrant
workers

Appendix III - Legal Information _ page 2 of 960

External Assessment

2.2•

Laws on payment of wages relevant to the frequency of payment in agriculture, forexample, laws on whether end-of-season one-time payments are permissible•

Laws on in-kind payment•

Legal requirements for migrant workers to ensure they are legally permitted to work•

Other specific rules applicable to migrant workers
Applicable laws
The Minimum Wages Act 1948.
The Andhra Pradesh Minimum Wages Rules 1960 and notifications

2.3

Your answer
In respect of Scheduled Employment, The Minimum Wages Act 1948 provides that
number of hours of work should not exceed nine hours in a day including rest forhalf an hour and 48 hours per week and a day of rest in every seven days normallyon Sundays. However, the Andhra Government has issued a notification dated
18.7.2012wherein it has provided 5 hours working in ploughing and 6 hours inother processes in Agriculture.
The number of working hours in a day is also provided in Factories Act 1948 andShops and Establishment Act of the concerned states as would be applicable to a
specific business.
The restrictions on overtime are specific to the type of industry. In general, thefollowing limits must be met for overtime under the Factories Act, 1948:
The total number of hours of work in any day shall not exceed ten – Hencemaximum of 2 hours of overtime per day possible;
The total number of hours of work in a week, including overtime, shall not exceed
sixty – Hence, maximum of 12 hours of overtime permissible in a week;
The total number of hours of overtime shall not exceed fifty for any one quarter.
The Employer can ask the employees to work over time for certain exigencies.
The Minimum Wages Act requires the employers to pay minimum wages as are fixedby way of notification issued from time to time for a particular period. Link of theminimum wages notification issued by the Andhra Pradesh Government is given
here for reference. http://labour.ap.gov.in/documents/VDA_01102017_31032018/
1Agriculture.pdf
Besides the Minimum wages the employees would also be entitled to, overtime@1.5 times of wages . In the event the employee is working for six days in a week
he would be entitled to seventh day off/ weekly off. In the event twenty or more
employees are employed, the employee would be entitled to EPF benefits also

Appendix III - Legal Information _ page 3 of 961

External Assessment

irrespective of the fact whether the employee works for a day or more in a casual or
permanent basis.
Piece Rate workers would also be entitled to minimum wages for a normal working
day which shall not be less than 8 hours of work and to arrive at a daily rate,monthly rate shall be divided by 26, which includes rest day wages. Interstatemigrant workers are being employed only through contractors and it is the dutyof the contractor to ensure regular payment of minimum wages to such workmen
failing which the principal employer would be liable to pay. Besides the contractor
shall pay displacement allowance at the time of recruitment equal to 50% or 75% ofmonthly wages payable to him whichever is higher.
The payment of wages in Agriculture should be made before the expiry of 15 days
after the last day of wages period in respect of which wages are payable.
There is no law with respect to the payment in kind.
The Inter State Migrant Workmen (Regulations of Employment and Conditions ofService) Act 1979 applies to every establishment in which five or more inter-Statemigrant workmen are employed or were employed on any day of the preceding
twelve months. It will also apply to every contractor who employs or employed
five or more such workmen for such period and Inter-State migrant workman, hasbeen defined under the Act to mean any person who is recruited by or through acontractor in one State under an agreement or other arrangement for employment
in an establishment in another State, whether with or without the knowledge ofthe principal employer in relation to such establishment. In order to fall within
the category of inter-State migrant workman under The Act, the employment/
engagement would require to have taken state for rendering services in other state.
Maintain the registers indicating the details of interstate workers and makeavailable for scrutiny by the statutory authorities. Issue of passbook affixed with apassport-sized photograph of the workman indicating the name and the place of theestablishment where the worker is employed, the period of employment, rates ofwages, etc. to every inter-state migrant workman. Principal employer shall be liable
to bear the wages and other benefits to interstate workers in case of failure by thecontractor to effect the same.
3.	

Principle 3 – Fair Treatment
3.1

Items to be covered by your answer•

Laws defining and prohibiting verbal, psychological, physical punishment, and sexual
harassment and abuse•

Laws defining and prohibiting discrimination•

Protection of workers from discrimination (workers’ rights and employers’ obligations)•

Laws on resource for victimized workers, if applicable

Appendix III - Legal Information _ page 4 of 962

External Assessment

3.2

Applicable laws
Industrial Disputes Act 1947
Sexual Harassment of Women at Workplace ( Prevention and Redressal) Act 2013.
Equal Remuneration Act 1976
Indian Penal Code

3.3

Your answer
In case an employer discriminates against the employees, shall amount to unfair
labour practice within the meaning of Industrial Disputes Act 1947.
Prevention and redressal of complaints of sexual harassment of women aregoverned by Sexual Harassment of Women at Workplace (Prevention and Redressal) Act 2013 which provides for education on the subject and investigation ofcomplaints. The Act envisages that the Employer formulates a Policy and also
constitutes an Internal Complaints Committee. However, in case of smaller entities
employing less than ten persons or even servants for domestic purposes, there is norequirement to have a policy or a Committee. In the event a complaint is received,
the same would require to be referred to the Local Committee of the Government
for its redressal.
Equal Remuneration Act 1976 prohibits an employer to discriminate between themale and female employees while fixing their wages and conditions of employment.
Even The Minimum Wages notification issued under The Minimum Wages Act
also contain specific instructions that no employer will discriminate amongst theemployees for paying minimum wages who are similarly placed.
Any unfair treatment and victimization of employees if amounts to an offence would
be tried and punishable under Indian Penal Code.

4.	

Principle 4 – Forced Labor
4.1

Items to be covered by your answer•

Legislation on forced labor•

Laws on prison labor•

Legislation regulating the operation of labor brokers and other third party recruiters•

Laws relating to limits or prohibitions on recruitment fees and deposits workers may berequired to pay

Appendix III - Legal Information _ page 5 of 963

External Assessment

4.2

Applicable laws
Indian Penal Code.
Bonded Labour System (Abolition) Act, 1976.

4.3

Your answer
Forced labour is an offence and thus punishable under Indian penal Code.
The Bonded labour System (Abolition) Act 1976 is a legislation that provides forbonded labor, system with a view to prevent the economic and physical exploitationof the weaker section of the people. The Act provides for punishment of theemployer who indulges in bonded labour system.

5.	

Principle 5 – Safe Work Environment
5.1

5.2

Items to be covered by your answer•

Requirements for provision of medical protection, such as availability of first aid kit,
health & safety training, etc.

•

Requirements to report accidents and injuries•

Requirements for personal protective equipment needed for using, handling, storing,or disposing of crop protection agents (CPA). This might vary depending on the CPA inquestion•

Restrictions on CPA use, handling, storing, or disposing. Most countries will haverestrictions on vulnerable populations interacting with CPA (or prohibit this outright),
such as persons under 18, pregnant women, nursing mothers, etc.

•

Restrictions on farm equipment (such as maintenance and licensing for operators)•

Other legislation related to CPA, such as how and where they may be stored ortransported; more explicit restrictions for specific CPA; weather conditions under which
CPA may or may not be applied; and any other restrictions limiting contact or exposure
with CPA•

Requirements related to providing drinking water and safe housing for workers•

Specific requirements if worker accommodation is provided
Applicable laws
The Plantation Of Labour Act 1951 which is applicable only to specified scheduled
plantations provides for various requirements of providing safety. However, The Act
does not provide for its applicability to Tobacco Plantations and no notification has
been found whereby the Act has been made applicable to Tobacco Plantations.
There are not specific rules for tobacco activities.

Appendix III - Legal Information _ page 6 of 964

External Assessment

5.3
6.

Your answer ( Not applicable)

Principle 6 – Freedom of Association
6.1

6.2

Items to be covered by your answer•

Laws on organizing unions and their operation (workers’ rights and employers’
obligations)•

Requirements for collective bargaining•

Prohibitions on union discrimination and employer interference in their operations•

Requirements that worker representatives be in place
Applicable laws
Trade Union Act 1926
Industrial Disputes Act 1947

6.3

Your answer
Trade Unions are recognized in India under the Trade Unions Act, 1926. A “Trade
Union” means any combination, whether temporary or permanent, formed primarily
for the purpose of regulating the relations between workmen and employers
or between workmen and workmen, or between employers and employers, orfor imposing restrictive conditions on the conduct of any trade or business, andincludes any federation of two or more Trade Unions.
Under the Trade Union Act, 1926, any seven or more members of a Trade Union
may, by subscribing their names to the rules of the Trade Union and by otherwise
complying with the provisions of the Trade Union Act relating to registration, apply
for registration of the Trade Union.
These Trade Unions can espouse the cause of its members who are employed in an
Industry, establishment etc.
The Trade Union should be a representative body who are employed with anorganisation, Industry.
Any interference or any act to scuttle the trade union activities of employees
lawfully carried out by the Trade Union would amount to Unfair Labour Practice andresults into prosecution of an employer.
The Collective bargaining is a concept which is promoted in the Indian Labour Law
Jurisprudence and The Indian Courts. The same is enforced under The Industrial
Disputes Act 1947.

Appendix III - Legal Information _ page 7 of 965

External Assessment

7.	

Principle 7 – Compliance with the law
7.1

7.2

Items to be covered by your answer•

Legal requirements to constitute a labor/employment relation•

Laws and regulations on employment contracts (incl. necessity for written employment
contracts, and if is not what are the grounds to consider the existence of a verbal
employment agreement)•

Required content for written employment contracts•

Deadline for conclusion of the contract (e.g. on the date of hire or within 30 days of hire)•

Requirements for various types of contracts (indefinite term, definite term, temporary
workers, probationary workers)•

Requirements for termination of employment (termination with or without cause,
wrongful dismissal, notice periods required to end employment)•

Options for farmers to obtain legal assistance about their obligations (e.g. government
department, local labor office, farmers association etc.)•

Specific requirements for leaf growing contracts (government imposed templates,
government approval of contract, freedom to choose the terms of the contract)
Applicable laws
The Industrial Disputes Act 1947.
Shops and Establishment Act.

7.3

Your answer
The relation between Employer and Employee would primarily be governedby their contract of employment where under the rights and obligations of
employer and employee would be provided. However, besides the contract of
employment the relation of employer and employer would also be set out by wayof settlements that may be collectively entered between employees represented
by their Union / Representative body that would include on a periodical basis.
The concept of settlement as a collective bargaining on the terms and conditionsof the employment are duly recognized by the Courts and have even been given
supremacy over the judicial awards. The Indian Labour Law is not completely
codified and have been developed by way of legal pronouncements. The longterm settlements remain fundamental to the quality of relationship between theemployer and its employees. However, in most of the organisations particularly insmall, medium and the newly formed IT and Telecom and similarly placed Industries,
the concept of Trade Unions are yet to get introduced in India.
There is no concept of verbal contracts in India. However, there may be certain
customs and practices that may be in place for long and could in effect become the

Appendix III - Legal Information _ page 8 of 966

External Assessment

condition of employment that would require to be implemented and withdrawl of
the benefits and facilities may not be permitted. However, GPI has shared opinion of
the external counsel that indicates that in case of casual workers written contracts
are not required.
Contents of employment contracts would primarily require the position , the salaryand benefits, probation period, retirement age or duration of employment if it is on
casual basis, transferability clause etc.
As regards termination of the contracts the same would be possible only if the same
is for a temporary specified period and assignment. However, the termination of
employment at will is not available where the employees are employed in Workman
category i.e blue collared employees.
The contracts can be drafted differently for different kind of employees likepermanent basis, temporary and casual basis etc. However, probation could form
part of every employment on permanent or reasonable duration of contracts i.e totest the suitability of the employment of employees and can be incorporated in thesame contract and not separately otherwise.
Clause related to termination could be with or without cause. In respect ofterminations without cause, the same is not available for blue collared employees
but the clause could be incorporated in the contracts as would be required in caseof certain contingencies like medical grounds etc and notice could be from one
month to three months etc. The process as regards the termination with cause,the same will vary from state to state and in various states while treating theemployments in establishment and governed by The Shops and Establishment Act
of that particular state, where the termination of employment has to be preceded bya domestic enquiry when the employee would require to be granted opportunity topresent his/ her defence to the charges leveled against him/ her.
In case of a grievance of an employee the employee in agricultural activities, he /she can approach to Labour Department and then to Industrial Tribunal/ Labour
Courts.
There is no specific requirement for having a specific template of contracts for such
employments. However, there are some specific templates under The Shops andEstablishment Act, however an employer usually uses a better template on its own
fulfilling the requirements as contained therein.

Appendix III - Legal Information _ page 9 of 967

External Assessment

Appendix IV – Communication materials

Appendix IV - Communication Materials _ page 1 of 1

68

External Assessment

Appendix V – Prompt Action Reporting and Verification forms

Appendix V - Prompt Action Reporting and Verification forms _ page 1 of 269

External Assessment

Appendix V - Prompt Action Reporting and Verification forms _ page 2 of 270

External Assessment

Appendix VI – Monitoring forms

Appendix VI - Monitoring forms _ page 1 of 471

External Assessment

Appendix VI - Monitoring forms _ page 2 of 472

External Assessment

Appendix VI - Monitoring forms _ page 3 of 473

External Assessment

Appendix VI - Monitoring forms _ page 4 of 474

External Assessment

Appendix VII – Initiative inputs provided by GPI

1. PPE for CPA and GTS

2. First Aid Kits

Appendix VII - Initiative inputs provided by GPI _ page 1 of 275

External Assessment

3. CPA storage box

4. CPA collection bin

Appendix VII - Initiative inputs provided by GPI _ page 2 of 276

External Assessment

Appendix VIII – Glossary
ALP Code Principle

Short statements that set expectations of how the farmer should
manage labor on his/her farm in seven focus areas

ALP Code

PMI’s Agricultural Labor Practices Code

ALP Program

Agricultural Labor Practices Program

ALP

Agricultural Labor Practices

ASA

After-school activities

Casual labor

Temporary worker hired for a short period of time at different farms

CPA

Crop Protection Agents

CSR

Corporate Social Responsibility

CU

Control Union

FT

Field technician

GAP

Good Agricultural Practices

GPI

Godfrey Phillips India Ltd.

GTSGreen Tobacco Sickness

INR

Indian rupee

KPI

Key Performance Indicator

Leaf tobacco supplierCompany that has a contract with PMI to supply tobacco but is not a
farmerMeasurable Standard

A Measurable Standard defines a good labor practice on a tobacco
farm and helps determining to what extent the labor conditions andpractices on a tobacco farm are in line with the ALP Code Principles

NGO

Non-Governmental Organization

Piece rate

Payment at a fixed rate per unit of production/work

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

STP

Sustainable Tobacco Production

RO

Reverse Osmosis

Appendix VIII - Glossary _ page 1 of 177