EXTERNAL ASSESSMENTMASSALIN PARTICULARES ARGENTINA
Burley farmers in North and South Misiones

Agricultural Labor Practices Program

March, 2020

External Assessment

Table of Content
Executive summary. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4Market and company background .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8Scope and methodology .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10
1. Systems implementation .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 12
1.1. Pre-contractual due diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.2. Consequence Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.3. Monitoring system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.4. Prompt Action system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Findings per KPI. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17
2.1. KPI 1: Child Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.1. Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.2. Targets and strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.3. CU’s farm findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.4. Initiatives on Child Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.5. Monitoring Child Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.1.6. Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.2. KPI 2: Minimum Wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.2.1 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.2.2 Targets and strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2.3 CU’s farm findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2.4 Initiatives on Minimum Wage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2.5 Monitoring Minimum Wage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2.6 Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3 KPI 3: Worker Accommodation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3.2 Targets and strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3.3 CU’s farm findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3.4 Initiatives on Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.3.5 Monitoring Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.3.6 Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

External Assessment

2.4 KPI 4: Personal Protective Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.4.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.4.2 Targets and strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.4.3 CU’s farm findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.4.4 Initiatives on Personal Protective Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.4.5 Monitoring Personal Protective Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.4.6 Prompt Action reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3. Farm findings on other ALP Measurable Standards .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 42
3.1 ALP Code Principle 2: Income and work hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.2 ALP Code Principle 3: Fair treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.3 ALP Code Principle 4: Forced labor and human trafficking . . . . . . . . . . . . . . . . . . . . . . . 44
3.4 ALP Code Principle 5: Safe Work Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.5 ALP Code Principle 6: Freedom of association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.6 ALP Code Principle 7: Terms of employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4. ALP Program: Feedback from Farmers, Workers, and other stakeholders .  .  .  .  .  .  .  .  .  .  .  .  . 48
4. Appendices.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 50
Appendix I Action plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Appendix II – Scope and methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Appendix III – Legal Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Appendix IV - MCE Workers Accommodation Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Appendix V – Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

3

EXECUTIVE SUMMARY

EXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

Philip Morris International (PMI) is committed
to progressively eliminate Child Labor and otherlabor abuses and to achieve safe and fair working
conditions on all farms from which they source
tobacco. In line with this commitment, in November
2019 PMI requested Control Union to conduct a
Focused assessment of the Burley Tobacco growing
operations of its supplier Massalin Particulares(MCE) in the province of Misiones in Argentina. The
assessment aimed at evaluating the labor practices
at MCE contracted tobacco farms, and whether
these were meeting the standards of the Agricultural
Labor Practices (ALP) Code 1, focusing on theimplementation of PMI’s Step-Change-Approach. 2
Control Union (CU) also evaluated MCE’s internal
structure and systems for implementing thisapproach, their understanding of farm practices,and how issues were being identified, recorded andaddressed.

Methodology:
As part of this assessment CU interviewed five MCE
management employees, 14 field personnel (12field technicians, two supervisors), one employee
from PMI regional, two NGO representatives
and three representatives of MCE’s finance andplanning team. Over a one-week period, CU visited
453 farms and interviewed 45 farmers, 69 family
members and 10 external workers. Most of thesefarms were small-scale family farms, growing two
hectares of tobacco on average. All farm visitswere unannounced. Information triangulation was
adopted to evaluate farm practices. The threesources included interviews, documentation and

1.

2.

3.

observation, together with a “Five Why’s” problem
analysis. The “Plan, Do, Check, Act” cycle was used
to analyze MCE’s management approach.

1. MCE’s systems implementation
MCE first introduced the ALP program in 2012 andwas first assessed by CU in 2015. More recently,
the company had adopted PMI’s Step-Change
approach and focused its efforts on the four
key performance indicators (KPIs): Child Labor,
Minimum Wage, Accommodation, and PersonalProtective Equipment. MCE had four systems inplace to achieve these KPIs:• Pre-contractual due diligence checks wereconducted at the beginning of the crop season
to assess whether farmers were eligible fora contract. Two criteria related to the global
KPIs were included: absence of Prompt
Actions related to ALP, and adequate worker
accommodations. Overall, CU found the due
diligence process unsuitable to capture issues
on newly contracted farms due to the focus onrecurrent Prompt Actions. For the 2019-2020
season two contracts had not been renewed
because of farmers non-meeting the ALP Coderequirements.
• Consequence management: MCE had an
escalation procedure for reoccurring Prompt
Actions. Reoccurrence of ‘Type 1’ Prompt
Actions, such as child labor, would eventuallylead to non-renewal of the farmer contract.
Payment below the minimum wage (a ‘Type
2’ Prompt Action) was not considered to be
grounds for non-renewal.

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-agriculturalpractices/
upholding-labor-rights-on-the-farms
The Step-Change-Approach is an implementation strategy initiated by PMI in 2018 in specific markets to address
the root causes of the main recurrent issues, in order to establish long-term sustainable solutions. The approach
focusses on 4 key performance indicators (KPIs) related to the ALP Code: Child Labor, Minimum Wage, Worker
Accommodations, and Personal Protective Equipment.
The minimum sample size was 45 farms, which is calculated as the square root of the total number of farms within
the scope (approximately 2,025 farms at the time of the assessment), assuming that this sample size constitutes ameaningful sample.
5External Assessment• Farm-by-farm monitoring: MCE covered all
four KPIs in its monitoring process. Each farm
was monitored at least three times during thecrop season to check whether the farms weremeeting the standards. Data were collected indigital form using a tablet application, and wereused for strategy development and tracking
progress on KPI achievement. MCE also had
a data validation process in place to ensure
accuracy and completeness of the data collectedby the field technicians.
• Prompt Action reporting was linked toconsequence management. Field technicians
would raise a Prompt Action in the digital system
if they directly observed an issue listed as Prompt
Action, except for payment below minimum wage
(see below4). An action plan would be agreed
with the farmer in question and unannounced
follow-up visits were paid to check whether theissue was solved before closing the case. If thePrompt Action was related to one of the KPIs,
it could only be closed by a field supervisor or
member of the ALP team.

2. CU’s findings on the KPIs
KPI 1 – Child Labor: MCE had adopted PMI’s global
KPI for Child Labor and collected data throughmonitoring and Prompt Action reports to trackprogress on this target. CU found these systems
to have extensive processes and procedures inplace, supported by field technicians’ awarenessof minimum age requirements and hazardous
work. Nevertheless, CU identified child labor onseven farms (15%) 5, six cases of which had notbeen captured by field technicians. Of MCE’s three
initiatives to address child labor (which focusedon encouraging school attendance and training
farmers), two were based on root cause analysis.

4.
5.
6.

CU found that the initiatives did not fully address
all root causes of child involvement in tobacco
production, with child labor still being identified
by CU on some of the farms participating in theinitiatives.
KPI 2 – Minimum Wage: MCE had adopted
PMI’s global KPI regarding Minimum Wage andcommunicated to farmers a locally approved
benchmarked 6 minimum wage. Although payment
below minimum wage was considered a Type 2
Prompt Action (whereby MCE recognized the needfor longer-term approaches to solve this issue atthe contracted farms), cases of underpayment
were adequately captured and reported throughthe monitoring system. CU observed payment
below the benchmarked minimum wage on 17 of
the 23 farms with hired labor (74%), all of which
had already been reported by the field technicians.
MCE’s three initiatives to address this issue (which
included distribution of pay slips and mechanization
solutions to reduce labor needs) were all based onroot cause analysis. However, CU identified several
underlying reasons for payment below minimum
wage that had not been identified as root causes
by MCE and hence were not addressed by MCE’s
initiatives. As a result, payment issues persisted,also on farms participating in the initiatives.
KPI 3 – Worker Accommodation: MCE had adopted
PMI’s global KPI for Worker Accommodation andmade use of monitoring, Prompt Actions and duediligence processes to achieve this target. Relatively
few farmers needed to provide accommodation
because most hired local workers, if hiring any.
Hence, based on MCE’s risk assessment, specificinitiatives were not considered necessary. CU foundthat MCE’s accommodation checklist was complete
and that their systems were adequate to address theSee section 2.2 for more information on Prompt Action process
CU directly observed children working on four farms, while on three farms child labor cases were detected throughinterviews with persons on farm
The aim of this benchmark was to better align the minimum national wage to the local conditions in Misiones, as thenational minimum wage prescribed by Argentinean law at the time of CU assessment was considered too high andnot applicable to more rural areas such as Misiones. The benchmarking involved farmer representatives and local
governmental institutions, and adopted the minimum wage set for the yerba mate crop of 755,25 ARG pesos per 8hours of work, which was the main crop produced in Misiones.
6External Assessment

issue. Among the farms providing accommodation
visited by CU, one farm (10%) did not meet two of
the critical requirements. On this farm, no shower
was available for workers, and electrical wires were
exposed and in poor condition. On all other farms,
accommodation issues had been identified andsolved by the field technicians.

Principle 4: Forced labor and Human Trafficking:End-of-season payment was identified on three ofthe farms with workers (13%). Although the workers
had agreed to this form of payment, one worker was
not sure whether he would be paid if he left his job
before the end of the season, constituting a risk offorced labor.

KPI 4 – Personal Protective Equipment (PPE): MCE
had adopted PMI’s global KPI for PPE and made useof monitoring, Prompt Actions and two initiatives
to achieve this target. CU found that the global
target of PPE availability had been achieved on
the farms visited, as all farmers had received PPE.
Nonetheless, evidence was found of incomplete
PPE use for handling green tobacco on 51% of
farms, and incomplete PPE use for handling CPA
on 75% of farms. Many of these cases had notbeen captured in MCE’s systems. The company’s
two initiatives to distribute and promote PPE
use were based on root cause analysis and usedfarmer feedback for improvement. However, CU’s
farm findings indicate that the intended aims andoutcomes of these initiatives were only partly
achieved. In particular, the focus of one initiativeon providing aprons for handling wet green tobacco
had created the widespread misunderstanding that
PPE was not needed for handling green tobacco
when it was dry.

Principle 5
Safe Work Environment: On 20
farms (45%) farmers did not dispose of empty
CPA containers correctly. This was partly due
to unawareness and partly due to failure of local
authorities to collect chemical waste. Other
important issues identified by CU included a lackof safety measures when loading high barns (31%of farms), and application of fertilizer without using
gloves (62% of farms).

3. CU’s main findings on other ALP requirements

4. Feedback and follow-up
According to the feedback received by CU fromfarmers, workers and family members, fewer
children were involved in tobacco production since
the start of the ALP program.
The outcome of this assessment can be used asa tool to facilitate management with continuous
improvement. CU acknowledges MCE’s commitment
to addressing the issues identified and defining
areas of improvement through the implementationof an action plan. 8

Principle 2: Income and Work hours: Twenty-threeof the farms visited by CU made use of hired labor.
On three of these farms (13%) workers were notpaid according to the frequency prescribed by
Argentinean law, as they were paid only at the endof the season, and on 13 farms (56%) they were
working overtime without compensation. On 21
farms (91%) workers were not provided with thebenefits, holidays and parental leave they wereentitled to by Argentinean law. 7 Based on farmer
interviews, CU identified farmers’ unawareness of
the requirements as a common underlying reason.

7.
8.

See appendix III for legal information
See appendix I
7

MARKET AND COMPANY BACKGROUND

EXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

In 2019 Argentina produced an estimated 103,000
tons of tobacco, of which 32,000 tons were Burley.
At the time of CU’s assessment Burley production
was concentrated in Misiones. In this province, forthe 2019-2020 crop season, Massalin Particulares(MCE) had contracted 3,154 farmers across three
growing areas: 1,211 farmers in the northern zone,
881 farmers in the southern zone and 1,062 farmers
in the central zone. This assessment focused on
the northern and southern zones (2,092 farmers intotal).
In Misiones the tobacco season lasts from June until
April, with harvest activities peaking in November
and December. The farms within the scope were
mostly located in remote hilly areas and werepredominantly small-scale family farms (averaging
approximately two hectares, rain-fed production,
35,800 tobacco plants per farm). Popular
alternatives for tobacco cropping included yerbamate, tea, forestry-based wood production, andanimal husbandry. Most of the tobacco produced
was exported into foreign markets.
On most of the farms, exchange of labor was common
practice: farmers and their family members worked
on surrounding farms in exchange for help on theirown farm. Relatively few farms used hired labor,
mostly during harvesting days, soil preparationand transplanting. The hired workers were mainly
local workers; therefore, most of the farms did notneed to provide accommodations, as workers could
travel home after work. On the few farms where
accommodations were provided, workers camefrom nearby towns or other areas of Misiones andcould travel home during weekends or off-season.

9

SCOPE AND METHODOLOGY

EXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

Between November and December 2019, CU
visited MCE’s office in Leandro L. Alem in Misiones
to perform an assessment of MCE management
personnel responsible for ALP Program coordinationand implementation, and subsequently conductedfarm visits in the northern and southern areas of
Misiones.
The management interviews were conductedon25-26 November 2019 and involved five
management personnel and two supervisors.
During the farm visits, 12 field technicians wereinterviewed to assess their knowledge and skills to
implement the ALP program on-farm. The purposeof the management assessment was to interview
management staff, analyze documentation, andevaluate MCE’s systems to better understand how
the implementation of ALP was organized 9.
In the week of 2 December 2019, CU visited 45
farms divided between north and south Misiones.
To ensure a meaningful sample reflecting the fullscope of farm types and relevant issues, farms
were selected partly randomly and partly basedon geographical spread, size and participation in
ALP program initiatives. CU visited an average of
16 farms per day, with a reporting day after each
visit day. On each farm, interviews with farmers
and family members were conducted, and findings
reported based on either direct observation or
triangulation of information via interviews.
The overall findings were presented remotely to
MCE on 30 January 2020.
A detailed description of the assessment scope andmethodology is provided in Annex II.

9.

The interviews to management as well as supervisors were held in groups, in accordance to CU methodology for
Focused Review assessments (see Appendix II for more information).
11

Chapter 1

SYSTEMS IMPLEMENTATIONEXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

1.1. Pre-contractual due diligence
MCE had included ALP requirements in its precontractual due diligence process. For the 20192020 crop season, due diligence criteria included
several topics related to the four global KPIs 10: (1)reoccurrence of Prompt Actions related to ALP, and(2) quality of worker accommodations. For the next
crop season MCE was planning to include all four
KPIs and related monitoring results in their precontractual risk evaluation.
Pre-contractual due diligence checks wereconducted by MCE’s field technicians at all farms,
irrespective of whether these were new contracts
or contract renewals. All field technicians were
found to be aware of the due diligence process andconfirmed conducting due diligence checks at thestart of the season. For the 2019-2020 crop season,
two contracts had not been renewed based on the
results of the due diligence check: one due to failure
to meet accommodation requirements, and one due
to recurrence of a Prompt Action.
CU found the pre-contractual due diligence processof MCE to be incomplete. The focus on recurrent
Prompt Actions meant that farms not previously
contracted automatically qualified for a contract
because they had no track record of Prompt Actions.
Moreover, CU found that MCE’s Prompt Action
process did not capture all issues occurring on
farms (see Chapters 2.1.3; 2.3.3; 2.4.3). Therefore,
for previously contracted farmers, relying solely onrecurring Prompt Actions meant that some issues
at farms were not captured by the due-diligenceprocess.

CU’s farm findings for due diligence
All farms (100%) had had their practices verified
before the start of the season. On one farm (2%)
CU observed inadequate worker accommodation
which had not been captured by the due diligence
check, as two critical criteria listed in MCE’s
accommodation checklist had not been reported by
the field technicians (see Chapter 2.3.2).

MCE’s response:“The Due Diligence process will be adapted andaligned to PMI Global Guidelines: “Step Change ALP:Due diligence, consequence management & rewards
guidelines (2019) “. All Step Change priority areas
will be included to assess 100% of farmers prior to becontracted, as well as other indicators considered apriority at a local level. This process will be reviewed
on yearly basis and updated, if needed. Due diligenceprocess takes place every year before contracting
period”

1.2. Consequence Management
MCE’s consequence management was linked
to its Prompt Action system. If a Prompt Action
was found to be recurring despite of mitigation
measures and actions plans, an escalation process
was initiated. This process initially would involve
MCE’s ALP team and step up to involving PMI if the
problem persisted. Recurrence of a ‘Type 1’ Prompt
Action (see Chapter 1.4), such as child labor, would
eventually lead to non-renewal of the farmer
contract after an escalation process involving
MCE’s ALP country team as well as PMI Regional
personnel. Payment below the minimum wage (a‘Type 2’ Prompt Action) was not considered to be
grounds for non-renewal.
All field technicians interviewed by CU were
aware of the consequence management process.
Farmers were informed about the consequencesof not meeting the ALP requirements in two ways:
verbally, by the field technician during the initial
contracting visit, and in writing in the form of aclause in their contract with MCE. For the 20192020 season, although there were two cases ofPrompt Action escalation due to recurrence, these
had been solved in time and therefore no contract
had been terminated or not renewed as a result ofconsequence management.

10. The four key performance indicators (KPIs) are: KPI 1 Child Labor; KPI 2 Minimum Wage; KPI 3 Accommodation;
KPI 4 Protective Equipment
13External Assessment

CU’s farm findings for consequence
management
Thirty-two farmers (71%) were able to explain thepossible consequences of not meeting the ALP
Code. All farmers in this group mentioned having
been informed by their field technician, with 18
mentioning that they had also been informed byConcencia, 11 and three mentioning that they had
also read the information in the contract.
MCE’s response:“To increase farmers’ awareness on the consequencesof not meeting the ALP Code standards, MCE
will implement clear and strong communication
to farmers about the ongoing ´Consequence
management’ process by providing summarizedcommunication material to Field Technicians (FT).
FT will clearly inform and communicate the farmers
about MCE´s requirements regarding the ALP
compliance and the consequences linked to notcomplying with critical standards. Consequence
management policies include two consecutive
crop seasons. The consequences of not complying
with the standards could include a non-renewal ofcontract for the following season or an immediate
contract cancelation, depending on the severity ofthe situation. For this purpose, MCE had developed aseverity matrix which describes ALP non-compliances
and the consequences that a farmer could face by
not complying with them. Each individual case isdiscussed and analyzed within the ALP Country team
before making the final decision. The severity matrix
is reviewed on yearly basis and adjusted if needed.”

1.3. Monitoring system
MCE covered all four KPIs in its monitoring system.
Field technicians had to monitor each farm at least
three times during the crop season. Situations
not meeting the standard were reported as an‘irregularity’.

Root cause analysis was part of the monitoring.
Field technicians had to identify and report on
root causes for each requirement, both when therequirement was met or not met. In the digitalapplication used for monitoring, they could choose
from a list of pre-defined root causes or use a text
box to enter causes not otherwise listed. Root
causes were compiled and analyzed by the ALPteam using a business intelligence tool.
For data entry, field technicians were equipped witha tablet, which enabled them to record information
also when not connected to internet. In most cases
the tablet was working adequately, but some fieldtechnicians mentioned that the application could
be slow at times and that they had experienced
data loss when the application was first launchedin 2017. Some field technicians also mentioned
not being able to save their entries in the text box
for root causes. Although the system combined
monitoring of ALP requirements with checks related
to other topics, the field technicians said they haveenough time to conduct the monitoring. Each fieldtechnician was responsible for 150 farmers on
average.
If an irregularity was identified, the field technician
had to formulate a mitigation measure and verbally
inform the farmer of the measure(s) to be taken.
For each ALP requirement the tablet application
included suggestions for possible mitigation
measures.
Validation of the monitoring data took place throughunannounced farm visits conducted by MCE’s
field supervisors and members of the ALP team.
Any discrepancies with the data reported by fieldtechnicians were documented in the monitoring
system and discussed with the field technician
responsible. If necessary, the latter would begiven an individual training and be accompanied
during farm visits to improve their monitoring
practice. To select farms for unannounced visits

11. Concencia is an NGO active throughout Argentina that is specialized in employability, community development,
education and sustainability. Concencia supported MCE since 2017-2018 with the implementation of several
initiatives and activities to address child labor issues in the tobacco production in Misiones. For more information
see www.concencia.org
14External Assessment

for data validation, MCE had identified risk groups
among the contracted farms based on specific risk
factors 12. For the regions in the scope, this risk groupconsisted of 754 farmers (29% of the farm base), of
which 5% received unannounced visits by MCE. 13
In addition to validation by MCE, monitoring data
were also validated by a third party other than CU.
At the time of CU’s visit, this external verification
had just been conducted but the results were not
yet available.
Field technicians received an average of four
trainings per year, one of which was dedicatedspecifically to monitoring, including a written exam.
Farmers were informed during the pre-contractualdue diligence visit that regular monitoring would
be conducted at their farm. Their contract with
MCE included a clause stating that MCE would beallowed to monitor their farm.
MCE used the monitoring data for the following:• Root cause analysis of farmers’ meeting or nonmeeting the ALP Code requirements in relation
to the four KPIs;• Identification of farm risk groups to prioritize
unannounced farm visits;• Formulation of strategies for KPI achievement
and target setting;• Risk assessments to identify and prioritize
actions;• Definition of baselines against which progress
was measured;• Input for global reporting templates such as
Progress reports or End of season reports.

1.4. Prompt Action system
MCE covered all four KPIs in its Prompt Action
system and had guidelines and procedures in place.
For each KPI, MCE had defined which situations
were considered a Prompt Action and had linked
these to consequence management in case ofPrompt Action reoccurrence.
MCE distinguished two types of Prompt Action:• Type 1 Prompt Actions were defined as situations
where a person’s physical or mental integrity
and well-being is at risk, children or vulnerable
groups are in danger, or workers might not befree to leave their job. These situations had to
be stopped immediately. Child labor, involuntary
overtime, unfair treatment, forced labor, humantrafficking, and unsafe working environment
were all considered Type 1 Prompt Actions.
Follow-up visits for Type 1 Prompt Actions had
to be conducted within six weeks of detection.
These Prompt Actions could not be closed on
the same day because MCE wanted to ensurethat the action plans put in place by the farmers
would still be working in the longer term. If thePrompt Action was related to an activity limited to
one or a few days per season, the Prompt Action
would remain open until the following year toensure it was solved. At the time of detection,
farmers had to sign an agreement indicating
they accepted the Prompt Action. Farmers who
did not sign the agreement were given priority
for follow-up visits. A paper copy of the agreedupon action plan would be left with the farmer inquestion. Type 1 Prompt Actions could be closedby the field technician independently, except for
Prompt Actions related to KPI 1 (child labor) andKPI 4 (use of personal protective equipment),

12. The following farmers were identified as risk group: farmers providing accommodations; farmers not living at theirfarm; farmers with sharecroppers; farmers with Prompt Actions in the current crop season, related to child labor or
PPE usage for CPA and GTS; farmers over 65 years old; farmers who purchased more than 30,000 plants (approx.
2 hectares) but according to the records had no hired workers; farmers whose children were not going to school
13. Given the large number of farmers in the risk group, 5% was selected as a threshold because it would enable MCE
to visit 100% of the 5% population with the number of staff available. Increasing the threshold would lead to certain
categories in the risk group to be visited more than others with the risk of not having a representative sample forthe validation.
15

External Assessment

which could only be closed by supervisors or
members of the ALP team during unannounced
visits. Prompt Actions were closed if the agreedupon action plans were implemented, if norecurrence was observed during an unannounced
visit by the field technicians, and if the farmers
had confirmed that they understood the issue
and would prevent its recurrence in the future.
• Type 2 Prompt Actions were defined as
situations where the workers’ well-being was
at risk because they were not paid at least theminimum wage or had no access to adequate
accommodation. MCE considered these issues
more systemic and therefore the action plan
timelines and mitigation measures were agreed
upon individually with the farmer. Prompt
Actions for inadequate accommodation could
only be closed in the presence of a member ofthe ALP team or a field supervisor. At the time ofCU’s visit, MCE was only raising Prompt Actions
for inadequate accommodation and not for
payment below the minimum wage. According
to MCE, the latter was not covered in thecurrent season’s Prompt Action system because
the benchmarked minimum wage had just been
officialized, but it would be included as from thefollowing season.

Field technicians were aware of the Prompt Action
procedure and the different types of Prompt
Actions. One of the four trainings they received
each year specifically focused on the Prompt Action
system. Farmers were informed about the Prompt
Action procedure during contracting and duediligence visits. In addition, their contract included
a clause on Prompt Actions and a list of situations
considered a Prompt Action.
MCE used the Prompt Action data for the following:• Formulationofstrategies
achievement and target setting;towardKPI• Risk assessments to identify and prioritize
actions;• Pre-contractual due diligence;• Consequence management.

If a field technician witnessed an irregularity
directly, they had to stop the issue immediately,raise a Prompt Action in the system, and agree onan action plan with the farmer. Prompt Actions
were reported using the same tablet application as
used for monitoring, requiring a description of thesituation as well as information such as date, crop
stage, and actions agreed. Similar information had
to be entered during the follow-up visit, together
with an explanation of why the Prompt Action could
be closed or not. Root causes for Prompt Actions
were recorded within the monitoring application.
MCE kept an overview of all Prompt Actions andanalyzed them using a business intelligence tool.
A member of the ALP team kept track of ongoing
Prompt Actions and timelines for follow-up andreminded field technicians and supervisors via
WhatsApp when a follow-up visit was due.
16

Chapter 2

FINDINGS PER KPI

EXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

This chapter describes CU’s findings in relation to
the four KPIs: Child Labor (Chapter 2.1), Minimum
Wage (Chapter 2.2), Worker accommodation(Chapter 2.3), and Personal Protective Equipment(Chapter 2.4). Each of these sections assesses the
supplier’s management systems, procedures, andrelevant initiatives and compares these with CU’s
farm findings to analyse the effectiveness of thesesystems and initiatives toward achieving the KPIs.

2.1. KPI 1: Child Labor
2.1.1. Summary
MCE had adopted PMI’s global KPI for child labor.
Their strategy to achieve this target included
monitoring and Prompt Action systems and three
initiatives to tackle persisting issues. CU foundthat MCE’s monitoring system (Chapter 2.1.5)

and Prompt Action system (Chapter 2.1.6) wereadequate for monitoring and reporting child labor.
All field technicians interviewed by CU were awareof these systems and of MCE’s policy regarding childlabor and hazardous activities in tobacco. However,CU’s farm findings (Chapter 2.1.3) showed that,on six of the seven farms where CU had foundevidence of child labor, this had not been capturedby the field technicians. Of MCE’s three initiatives
to address child labor, two were based on rootcause analysis. However, CU found evidence ofunderlying causes of child labor that had not been
identified as root causes by MCE and hence were
not addressed by MCE’s initiatives (Chapter 2.1.4).
As a result, child labor issues persisted, also on
some of the farms participating in these initiatives,
despite the available resources, implementationand distribution strategies.

Finding

Source:Observation
and/orInterview

NumberofChildren

Numberof Farms

% of
farms
visited(N=45)

Total

Both

9

7

15%

Observation

2

2

4%

Remarks

evidenceof children
performing
hazardous
tasks
ChildrenChild labor

below 18
employed in
tobaccoChildren- One 16-year-old brother-inlaw throughout the tobaccoseason in all activities
except CPA application- One 17-year-old boy(neighbor’s son, laborexchange) worked full-day
shifts during harvesting time

Interview

4

3

7%

Children (age 9-17) were

below 18

helping several days a week

helping on

for full shifts

the family
farm

Observation

3

2

4%

Children (age 9-17) were
helping several days a week
but not full days, usually forspecific tasks

18

External Assessment

2.1.2. Targets and strategy

through FT during the field visits and Mas Chacra

PMI’s global KPI target for Child Labor is to eliminate
child labor by 2025 on all farms contracted by its
suppliers. At the time of CU’s assessment, MCE
had adopted this global target and formulated
a local strategy towards achieving this KPI. This
strategy was updated annually and described yearlytargets, actions and systems, including an annual
risk assessment to prioritize actions. MCE’s risk
assessment, which made use of monitoring andPrompt Action data, had identified a high risk score
for child labor, which is in line with CU’s findings.

program, an itinerant training program that MCE
runs within a tobacco industry approach. The
topics are assessed on yearly basis, according to
the priorities. Moreover, communication materials
such as flyers/leaflets/posters will be redesigned
accordingly.
• Implement and follow the Due Diligence &Consequence management guidelines which statethat farmers hiring children to work on tobacco
will get a contract cancelation.
• Even though farmers found hiring children for
tobacco tasks will get a contract cancellation,

2.1.3. CU’s farm findings

MCE will include critical cases into the ChildCU found evidence of nine children involved in
tobacco production on seven farms (15%).
On two of these farms (4% of total farm sample)
children below 18 were being employed in tobacco
production. In one case, the farmer employed his
16-year-old brother-in-law throughout the tobaccoseason in all activities except CPA application; in theother case, a 17-year-old boy worked full-day shifts
during harvesting time, both in the field and in thebarn. He was a neighbor’s son who came along withhis father as part of informal labor exchange. On
both farms, the children were observed working in
the field during CU’s visit.

Labor Remediation program in partnership with
Conciencia NGO to assist and give support tothese families.”

On the other five farms (11%), child family members
below 18 were helping with tobacco production.
They were 9 to 17 years of age. On three of thesefarms, children were helping several days a week
for full shifts, while on the other two farms children
were helping several days a week but not full days,
usually for specific tasks. On two farms the children
were observed working during CU’s visit, whileon the other three farms, child involvement was
confirmed via interviews 14.

MCE’s response:“MCE expects to eliminate the risk of farmers

MCE’s response:

employing/hiring children by implementing the“In order to eliminate child labor related to family

following actions:children performing tasks on tobacco, MCE will

• On top of the ongoing communications on theimplement the following actions:prohibition by law of children below 18 y.o.

• On top of the ongoing communications on theworking on tobacco, MCE will launch a strong

prohibition by law of children below 18 y.o.

communication campaign to increase knowledge

working on tobacco, MCE will launch a strongon hazardous tasks among farmers and to makecommunication campaign to increase knowledge

them aware that they are responsible of any

on hazardous tasks among farmers and to makechildren present or working at their farm, eventhem aware that they are responsible of any

the ones brought along with the ´Cambio de día´children present or working at their farm, even(labor exchange). This message will be delivered

the ones brought along with the ´Cambio de día´

14. See Appendix II for more information on CU’s methodology
19External Assessment(labor exchange). This message will be delivered
through FT during the field visits and Mas Chacra
program, an itinerant training program that MCE
runs within a tobacco industry approach. The
topics are assessed on yearly basis, according to
the priorities. Moreover, communication materials
such as flyers/leaflets/posters will be redesigned
accordingly.
• Implement and follow the Due Diligence &Consequence management guidelines which statethat farmers whose son or daughter under 16 arefound for a second time involved in any activity
related to tobacco or for family children under
18 y-o performing a hazardous task, contract
cancelation will be applied. For children between
16 and 18 y-o family members performing any
non-hazardous task in tobacco, found for thesecond time, the contract will not be renewed.
• After the Child Labor Remediation pilot ran during
Crop 2019 in Misiones, MCE decided to expandand strengthen it to cover 100% of farms wherechildren family members involved in tobaccotasks. The aim of the initiative is to solve childOn all seven farms (15%) persons below 18 wereinvolved in hazardous tasks. 15
CU identified several underlying factors that
increased the risk of child labor:• Several farmers did not perceive tobacco-related
farm activities as being hazardous. In particular,plant hanging operations (such as hanging
leaves on sticks) and assistance in barn loading
and unloading were erroneously not consideredhazardous;• Many farmers considered children aged between
15 and 17 old enough to carry out most tobaccorelated tasks. This included children who wereattending the EFA schools;• Most farms were small family farms without hired
workers, which encouraged farmers to involve
children in many stages of tobacco production;• Exchange of labor between neighbors was acommon practice in the area. Neighbors would
work on one another’s farms for free andsometimes bring along their children. Farmers
did not perceive children brought by neighbors as
being their responsibility.

labor issues in a lasting and sustainable way
by assessing and tackling the root causes withspecific actions. These actions are tailormade to

MCE’s response:

every case taking into consideration the context“In the Misiones region, tobacco production is carried

and the underlying reasons. This initiative is doneout mostly by the farmer and his/her adult family

in partnership with Conciencia NGO. Whenever amembers. Harvesting is the most labor demanding

child labor Prompt action is identified by MCE, theperiod and overlaps with school summer vacations,

NGO is informed by the local ALP Coordinator totherefore whenever a child labor case is reported, it

visit the farm in different instances to assess theusually occurs during this time of the year involving

root causes, agree an action plan with the family

children helping their parents with specific tasks.

and follow up its implementation. This procedure

MCE will develop new training materials, guidelines

is reviewed and approved by the ALP coordinator.”and tools for Field Technicians aiming to improvethe data gathering process and have an accurate
description of Child Labor within the contracted
farmers in line with PMI’s Monitoring Guidelines tohave a clear understanding of each situation and themain drivers. Field technicians and supervisors willbe trained on yearly basis and update trainings will
be delivered during the crop season“

15. According to Argentinean Law, children below 18 are not allowed to work in tobacco. For this assessment, CU
considered any tobacco-related task performed by children below 18 as hazardous, without distinguishing between
hazardous and non-hazardous practices in tobacco production.
20

External Assessment

2.1.4. Initiatives on Child LaborAt the time of CU’s assessment MCE was running
three initiatives, together with the NGO Concencia,
to specifically target child labor: distribution ofschool kits; training of farmers on topics such as
health and safety in tobacco production and legal
minimum working age; and provision of scholarships.
Two of these initiatives were designed to target one
or more of the root causes of child labor identified
by MCE (see table below).
MCE initiative

Root causes targeted

School kits

[no specific root cause
targeted)

Farmers trainings

Low awareness of healthand safety and child labor
in tobacco production

Scholarships
provision

Short school days andprolonged presence ofchildren on farm

In addition to the root causes targeted by these
initiatives, MCE had identified other root causes ofchild labor for which they had not yet developed
initiatives. This included the lack of alternative
places for children to stay during the harvestingseason (other than at their parents’ farm) which
increased the likelihood of them being involved in
tobacco-related tasks.
However, MCE’s root cause analysis had not
captured one of the underlying reasons identified
by CU (Chapter 2.1.3), namely that farmers did not
perceive children brought by neighbors during laborexchange as being their responsibility. Hence, thisroot cause was not targeted by the initiatives.

On three of these seven farms, the main underlying
reasons of child labor were being targeted by the
initiatives, although child labor was still present.
Here, the farmers in question were still not fully
aware of the minimum age requirements anddefinition of hazardous work, and still involved
children in lighter tobacco-related tasks, despite
having received training on preventing childinvolvement in tobacco production.
On the four other farms where CU identified
child labor, the main underlying reasons of childlabor identified by CU were not being targeted by
MCE’s initiatives. On two of these farms, the mainunderlying reason was that farmers did not consider
it their responsibility if neighbors brought theirown children to work during labor exchange. On
the other two farms, the farmers’ children attended
the EFA school but were still involved in tobaccorelated tasks when they were home because thefamily needed their help (despite hiring workers for
harvesting).

MCE’s response:“After an internal analysis, showing a low impact
on child labor issues, MCE decided not to include´School kit delivery’ and ´Farmers´ training at
buying stations´ into 2020 Porvenir program. MCE
will continue delivering trainings on child laborthroughout the season during farm by farm visits,
by delivering training materials and Mas Chacra
program.
These activities were replaced by different, more
focused initiatives, based on root cause analysis,
with a bigger contribution to child labor eliminationsuch as:• School infrastructure reinforcement: 34 primaryschools and 16 high schools from El Soberbio and
San Pedro receiving materials to improve theirfacilities and services provided to 800 children

On five of the seven farms where CU identified
evidence of child labor, farmers had received theschool kit; on four, farmers had received the farmers’
training; and on three, children were attending an
EFA with support of an MCE scholarship.

from MCE contracted growers. This activity aims
to increase school attendance and therefore
reduce the child labor risk on the benefited
families.

21

External Assessment• Mentoring for life projects for 50 unschooled
adolescents:

A

tutor

engagescovered. Also, all benefited farmers will sign a ‘No

unschooled

child labor’ agreement to strengthen complianceadolescents and run periodic sessions with him/with the child labor measurable standard. Field

her and the rest of the family aiming to enroll thetechnicians and supervisors will be trained onchild back to the educative system.

yearly basis to keep them updated on the ongoing

Regarding EFA Scholarships, MCE decided tocontinue supporting farmers whose children attend
to EFA schools aiming to cover up to 180 students (ormore when needed). However, the process to selectbeneficiaries will be streamlined using Farm Profile
data to ensure that all famers needing support are

initiatives done with Conciencia in the Porvenir
Program (and whenever the program is modified).
This will help the field technician to link farmers withdifferent initiatives offered by the program to revertchild labor cases (when found) and mitigate childlabor risks.”

Additional information on the initiatives is provided in the tables below.

School kits initiative

School kit initiative
Description

Provision of school kits to all farmers with children attending
kindergarten, primary or secondary school

Aim

Provide economic support to farmers and facilitate their children’s
school attendance, thus increasing education and reducing the risk ofchild labor

Expected outcome

Increased school attendance by all children receiving the school kit[,
and reduced risk of child labor]

Resources

Kindergarten kit: t-shirt, color pencils, watercolors, and educationalcards; Primary and secondary school kit: t-shirt, two notebooks, pencil,
pen, coloring pencils, eraser, ruler, water bottle

Root cause analysis

CU found no evidence that this initiative was linked to MCE’s root
cause analysis. Hence it could not be verified whether the aim andintended outcome of this initiative was tackling a prevailing root causeof child labor

Implementation strategy

Target: 100% of farmers with children Result in assessment area:
100% of farmers with children (1680 school kits delivered) All fieldtechnicians were aware of this initiative and the content of the school
kits Among the farmers visited by CU, 31 (69%) had heard about thisinitiative and 25 (61%) had received the kit (100% of farmers withchildren in the sample)

22External Assessment

Distribution strategy

The school kits were distributed at the end of the season by Concencia,
at MCE’s tobacco buying facilities

Farmers’ feedback

All farmers were positive about receiving the school kit. However, many
pointed out that the content of the school kit did not always match withwhat the children needed at school. None of the farmers considered theschool kit an incentive for school attendanceContinuous improvement

CU did not find evidence of feedbacks from the initiative
implementation being collected by MCE to advise future design andimplementations of the initiative

Farmer training initiative

Farmers training
Description

Providing training to farmers with children in kindergarten, primary or
secondary school

Aim

Inform all farmers with children about the risks of child labor

Expected outcome

Increased farmers’ awareness of child labor and safe work environment

Resources

The training addressed topics such as health risks of working in
tobacco, legal minimum working age, farm tasks allowed for children,and consequences of involving children in tobacco production

Root cause analysis

Low awareness among farmers of the risk of child involvement in
tobacco production

Implementation strategy• Target: 100% of farmers with children• Result in assessment area: 710 farmers (100% of farmers with children)• All field technicians were aware of this initiative and the content of
the training• Fourteen (31%) of the farmers visited by CU could recall receiving
training from Concencia

Distribution strategy

Trainings were provided at the end of the season by Concencia, at
MCE’s tobacco buying facilities

Farmers’ feedback

Ten of the 14 farmers who remembered having received the training(71%) mentioned that the information provided in the training was not
new to themContinuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative23

External Assessment

EFA (Escuela De Campo) Scholarship initiative

EFA (Escuela de Campo) Scholarship
Description

Provision of scholarships to all farmers with children attending
an EFA (Education For All) school. At these [agricultural] schools,
children board for two to three consecutive weeks (depending on theschool), alternating with one to two weeks at home [for studying andhomework]

Aim

Provide economic support to farmer families and encourage enrollmentof children in agricultural boarding schools

Expected outcome

Increased school attendance and reduced presence of children at thefarms, leading to a reduced risk of child labor

Resources

Scholarships

Root cause analysis

Short school days, prolonged presence of children on farm during
tobacco season

Implementation strategy• Target: 100% of farmers with children of EFA school age• Result in assessment area: 126 farmers (100% of farmers with childrenof EFA school age)
• All field technicians were aware of this initiative; two (17%) could
explain how the scholarships were administered• Fifteen (33%) of the farmers visited by CU knew about the initiative
and 13 (29%) had children who received the scholarship

Distribution strategy

At the end of the school year, a lump sum was paid directly to theschool, who divided the money over scholarships in the form of school
fee discounts

Farmers’ feedback

All farmers receiving EFA scholarships were positive about this initiative

Continuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative

2.1.5. Monitoring Child Labor
Child labor was covered in MCE’s farm monitoring
system with three questions related to this issue.
For each question the field technicians had toindicate whether they found any irregularities andindicate possible root causes (from a pre-defined
list and/or their own entry in a text box). CU foundthe pre-defined list of root causes of child labor inline with CU’s farm findings.

All field technicians interviewed by CU were foundto be aware of the minimum working age in tobaccoand of MCE’s policy regarding child labor. All knew
what tobacco activities were considered hazardous
according to PMI global list and were able to use
the tablet application for entering monitoring data.
Most (83%) field technicians declared to speak to
all people on the farm, such as family members
and workers, and to verify statements with farm
evidence (e.g. volumes of tobacco harvested vs.
24

External Assessment

reported people working by the farmer). Two (17%)
said to speak to family members individually toconfirm information and avoid people influencing
each other’s statements (see CU methodology,
Appendix II).
All farms visited by CU had been monitored for thepresence of child labor. However, for six (85%) of
the seven farms where CU had found evidence ofchild labor, no risk of child labor had been reported
in the monitoring system.
MCE’s response:“Also, the ALP monitoring (focused on Step Changeareas) survey structure, questions and dropdown
lists will be updated to increase data reliability. The
main changes will include;• increase the number of optional answers to geta more detailed description of the status of the
farm at the moment of the visit; andupdate the root causes to give specific support to thefarmer to mitigate and fix the issues when they occur
MCE will apply the changes on the farm by farm
monitoring to the current unannounced visits
program. These visits are done by field supervisors,leaf buyers and ALP coordinator to 5% of farmers
constituting a risk group. MCE will make adjustments
and calibrations on this program to turn it into aninternal auditing process enabling the ALP team tofind discrepancies and areas for improvement. The
unannounced visits will be focused during harvesting
to capture as many risks as possible. After eachunannounced visit, when discrepancies are found,individual calibration sessions will take place with
the FT and minutes of the meetings will be recorded”

2.1.6. Prompt Action reportingChild labor was covered in MCE’s Prompt Action
procedure. In contrast to the monitoring system,
where field technicians would report a risk of childlabor if they found indirect evidence (referred toas ‘irregularity’), the Prompt Action procedurerequired field technicians to raise a Prompt Action
if they directly observed a child working. Within

15 to 21 days of the observed Prompt Action the
NGO Concencia would visit the farm in question
to identify root causes and formulate an action
plan and mitigation measures. The questionnaire
used for identifying root causes (which included
elements related to the socio-economic situation,family composition, roles and tasks) was found tobe adequate by CU, as was the case for the actionplans and mitigation measures established on thefarms where Prompt Actions on child labor had
been raised. However, CU did observe that on manyof these farms the action plans were extended over
several months, with Concencia needing more farm
visits to solve the issue than the five visits agreed
upon with MCE. This was due to the complexityof the root causes, but meant that some Prompt
Actions on child labor could not be closed before
the end of the crop season.
All root cause analyses and farm specific actionplans were stored in an online dashboard, which
was regularly updated by Concencia and accessible
to MCE’s ALP team. CU found that not all root
causes identified by Concencia matched the causes
identified by CU; in particular, they overlooked therisk of labor exchange where neighbors would bringalong their children (see Chapter 2.1.3).
All field technicians interviewed by CU were awareof the Prompt Action procedure. At the time of CU’svisit, 18 Prompt Actions related to child labor had
been raised among the farms within the scope. Twoof these were checked by CU. In both cases, thePrompt Actions had been reported correctly, andthe farmers in question were aware of the reported
Prompt Action. One case had been solved, but inthe other case the Prompt Action had only recently
been reported and Concencia had yet to make theirfirst visit. Here, no mitigation measures had been
implemented yet, and the issue was recurring.
MCE’s response:“MCE will review and make the following adjustmentson the protocol agreed with Conciencia for Child
Labor remediation to ensure it is implemented
correctly:

25

External Assessment• Conciencia will perform a maximum of 3 visits
to each family (exceptional cases can have one
extra visit) within a period of 9 weeks since thePA opening.
• Once Conciencia concludes the visits, a final
report will reflect the status of the child laborcase: Open (when there´s still a risk of recurrence)and Close (when there´s no risk of recurrence)• Cases taking over 9 weeks or 4 visits (whichever
happens first) and open cases will be escalated to
the ALP Country Team to take a final decision.
The review of the protocol will also include adding
specific objectives (making emphasis on the root
cause analysis), roles & responsibilities and deadlines
for reporting.
These changes will enable MCE to have more visibilityon the progress of each family under the initiative,
make on-time decisions and keep the ALP Country
Team updated on the Child Labor remediation

Minimum wage payment

program.”

2.2. KPI 2: Minimum Wage
2.2.1 Summary
MCE had adopted PMI’s global KPI regarding
minimum wage and communicated the locallybenchmarked minimum wage to its farmers. Their
strategy to achieve this KPI included monitoring(Chapter 2.2.5) and three initiatives to tackle
persisting issues (Chapter 2.2.4). Although notcovered in the Prompt Action system, payment
below minimum wage was adequately captured
and reported through the monitoring system.
MCE’s three initiatives to address payment below
minimum wage were all based on root cause analysis.
However, CU identified several underlying reasonsfor payment below minimum wage that had notbeen identified as root causes by MCE and hence
were not addressed by MCE’s initiatives (Chapter
2.2.4). As a result, payment issues persisted, also on
some of the farms participating in these initiatives,
despite the available resources, implementationand distribution strategies.

Finding

Number of Farms
where minimum
wage was not
being paid

% of visited
farms with hired
labor (N=23)

Total number of
farms

17

74%

Farms with
Temporary workers

15

60%

These workers mostly
worked on farm during
harvest days andoccasionally during
soil preparation andtransplanting

Farms with
Permanent workers

2

9%These workers workedon the farm throughout
the tobacco season

Remarks

26

External Assessment

2.2.2 Targets and strategy
PMI’s global KPI for Minimum Wage is to have all
workers paid at least the applicable minimum wage
on all contracted farms by 2022. At the time of CU’s
assessment this amount corresponded to 755.25
Argentinean pesos per day and 94.40 Argentinean
pesos per hour, following the agricultural benchmark
for the province of Misiones. 16 MCE had adopted
PMI’s global target and formulated a local strategy
towards achieving this KPI, including yearly targets

and an annual risk assessment to prioritize actions.
MCE’s targets and the risk score assigned to
Payment of Minimum Wage were found adequate
and in line with CU’s farm findings for this KPI.

2.2.3 CU’s farm findings
On 17 of the 23 farms with hired labor (74%), workers
were paid below the benchmarked minimum wage. 17
Table 1 provides a breakdown of the calculated
hourly wages and payment frequency.

Table 1. Overview of wages paid on visited farms and payment frequency
Breakdown of calculated hourly salaries(N=23 farms)

Salary range

0-60(pesos/hour)

60-94.40(pesos/hour)>94.40(pesos/hour)(benchmarked
minimum
wage)

Lowestsalary(pesos/hour)

Highestsalary(pesos/hour)

Daily, fortnightly,
monthly

-

14

6

10

125

End of season

3

-

-

Payment frequency

MCE’s response:“At the time that CU assessment was performed inby hired workers, especially during harvesting andoccasionally, transplanting.

Misiones, there was not a legal local benchmark for

MCE is engaging with key stakeholders in Misiones

tobacco workers and Yerba Mate salary was usedsuch as: other tobacco companies, farmers´ unions,instead, as the hiring of labor for this activity is minor

workers´ unions and local and national government

compared to other activities in the area. Aroundbodies to agree and establish a specific salary for BU

50% of MCE farmers hire labor. Most of the tobacco

tobacco. As part of this strategy agreement with thetasks are done by adult family members and/or

stakeholders, in the meantime, it has been agreed to´Cambio de día´. Less than 20% of the total labor

use the national minimum wage as a reference forrequirements along the crop season are provided

compliance monitoring and communications.

16. The benchmarked minimum daily wage of 755.25 ARG pesos amounted to a minimum hourly wage of 94.40
ARG pesos. This rate was communicated by MCE as the hourly wage to be paid by farmers to workers, excluding
social security contributions. Including contributions, the daily minimum wage was 950.76 ARG pesos (see Legal
Questionnaire, Appendix II)
17. The aim of this benchmark was to better align the minimum national wage to the local conditions in Misiones,
as the national minimum wage prescribed by Argentinean law at the time of CU assessment was considered too
high for rural areas such as Misiones. The benchmarking involved farmers representatives and local governmental
institutions, and followed the minimum wage agreed for yerba mate (the main crop in Misiones) of 755.25 ARG
pesos per 8 hours of work.
27External Assessment

During farm by farm monitoring, when a farmer is
not paying the national minimum vital salary, thepayment gap is recorded. This information will be
used by MCE to build a baseline and define thedifferent segments of farmers currently paying below
the minimum wage. The baseline will help MCE to

3. Farmers were not aware of the benefits of record
keeping and lacked record-keeping skills;
4. In-kind payments, mostly in the form of provided
lunch meals, were considered by the farmers ascompensation for the lower wages paid to theworkers.

develop specific strategies for each segment.
Additionally, for all farmers not paying the national
minimum vital salary, prompt actions will berecorded, and action plans will be agreed upfront
following PMI Prompt Actions Global Guidelines.
The field staff will be trained accordingly on how
to raise and follow up Prompt Actions related to

MCE’s response:“MCE is engaging with key stakeholders in Misiones
such as: other tobacco companies, farmers´ unions,workers´ unions and local and national government
bodies to agree and establish a specific salary for BU

minimum wage. MCE expects that 100% of farmers

tobacco.

with minimum wage prompt actions will implement a

In the meantime, it has been agreed as an industry

concrete action plan to address the issue. Ultimately,

to consider the national minimum wage as a legal

consequence management will be applied for thosereference for communications and compliancefarmers not willing to address the issue: after two

enforcement.

recurrences, the contract won´t be renewed for thefollowing season. The severity matrix is reviewed on
yearly basis before each crop season as part of thestrategy.”

All trainings and communications will be immediately
updated and aligned to the national minimum vitalsalary to reach all tobacco farmers and workers
using the different existing streams: through fieldtechnicians, printed and digital material and Mas

On 20 of the farms with hired labor (87%), workers
were provided with food in addition to their salary.
None of the farmers had a method to calculate thecosts of these meals or to account for these in-kindpayments in their calculation of the wage paid. 18
CU found several underlying reasons for farmers
paying below the benchmarked minimum wage:
1. Although farmers were generally aware of theminimum wage to be paid according to theagricultural benchmark, they paid the rate that
was accepted by local workers, which in mostcases was lower than the benchmarked minimum
wage;
2. Most workers were unaware of the minimum
legal wage;

Chacra training program. The communication will
also include hourly rates. Communications andtrainings will be immediately updated and refreshedwhenever the minimum wage rates increase.”

2.2.4 Initiatives on Minimum Wage
At the time of CU’s assessment, MCE was running
three initiatives to specifically target payment
below the benchmarked minimum wage: pay slips,
ergonomic harvest machines, and mechanized soil
preparation (see tables below). MCE had conducteda root cause analysis to identify the root causes
for farmers paying below the minimum wage, andall three initiatives were designed to target one ormore of these root causes.

18. Argentinean law allowed in-kind payment, provided this would not exceed 20% of the total salary. However, MCE’s
policy was stricter, requiring farmers to pay at least the full minimum wage (755.25 ARG pesos/day) besides any
in-kind payment.
28External Assessment

MCE initiative

Root causes targeted

Pay slips

Lack of record-keeping skills among farmers

Ergonomic harvest machineHigh number of hired workers for harvesting, and farmers’
unawareness of the minimum wage requirements

Mechanized soil preparation

High number of hired workers for soil preparation, and farmers’
unawareness of the minimum wage requirements

However, MCE’s root cause analysis for payment
below minimum wage had not captured two
underlying reasons identified by CU (Chapter 2.2.3),
namely that in-kind payments were considered tocompensate for the lower wage paid by the farmers,
and that many workers were unaware of the legal
minimum wage, resulting in farmers paying the ratethat was accepted by local workers. These root
causes identified by CU were not targeted by MCE’s
initiatives.

MCE’s response:“In order to increase the correct usage of the pay
slip forms, MCE will develop training material andinstructions to support the farmer on how to input
figures into it and how to calculate hourly rates toassess the correct payment of minimum wage.”To evaluate the effectiveness of the initiatives,
CU compared its farm findings with the aim andexpected outcomes of the initiatives implemented
on farms. Regarding the pay slip initiative, CU foundthat five of the 23 farmers with hired workers
were using the pay slips, but that two of these fivestill paid below the benchmarked minimum wage.
Although the provision of pay slips helped to create
more transparency and make the issue of payment
more visible and verifiable for field technicians,
many (52%) of the farmers with hired labor visitedby CU did not fully understand how and why to use
the forms, particularly when exchanging labor. As
for the ergonomic harvesting machine initiative, CU
found that, on the one farm where the machine had
been purchased, temporary workers were still being
hired for harvesting and were still being paid below

the benchmarked minimum wage. Finally, for the soil
preparation service, CU found that, on three of theseven farms where the mechanization service had
been used, workers were still being paid below thebenchmarked minimum wage. Although these farms
no longer needed hired labor for land preparation,
they still needed workers during harvesting season.
The other four farmers no longer employed workers,
indicating that this initiative was succeeding in (atleast partly) reducing the need for hired labor.
When comparing the underlying reasons forunderpayment identified by CU versus the root
causes targeted by MCE’s initiatives, CU foundthat on six of the 17 farms where workers were
paid below the minimum wage, the main underlying
reasons were at least partly targeted by the
initiatives of MCE. On these farms, an importantreason for farmers not paying the minimum wage
was that they lacked record-keeping skills and were
unaware of the minimum wage (causes which wereaddressed in the pay slip initiative). Nevertheless, allof these farmers also considered in-kind payment
as a compensation for the lower wage they paid,
and this root cause was not targeted by any of theinitiatives. Furthermore, on the 11 other farms
where workers were paid below the minimum wage,
the main underlying reasons were not targeted by
MCE’s initiatives at all. In five of these cases, thefarmers were aware of the minimum wage but paid
the rate asked by unaware local workers, which
was lower than the benchmarked minimum wage inmost cases. On the six other farms, the main reason
for payment below the minimum wage was that inkind payment, mostly in the form of provided lunch
meals, was considered compensation for the lower
wages paid by the farmers.
29

External Assessment

MCE’s response:

farmers can only be entitled to the bonus if the pay“The production of Burley Tobacco in Misiones
has been mainly based on family workforce withvery little investment in technology. In 2018
MCE developed a project for farmers to introduce
mechanization through a service providers scheme.
The service is paid by the farmer but they can geta bonus at the end of the season if they comply
with a set of requirements such as not having any

minimum wage to workers during the crop season.
This initiative has a positive impact on ALP due tothe replacement of family workforce with machinery,by more efficient use of time, reduction of laborhiring and increased profitability. These benefits arealso key enablers to ensure minimum wage and legal
requirements are met when a worker is eventually
hired.

open Prompt Action, good practices to control soil

By 2025 100% of MCE tobacco growers will haveerosion in place, tobacco volume delivery above 90%

access to soil preparation, 2,000 hectares will be

regarding the latest estimation and compliance on

covered with mechanized transplanting and 1,500

CPA green leaf results. In order to enforce compliancehectares with mechanized harvesting (approximately

on minimum wage payment on farmers benefited

between 25-30% of the current growing area).

with the mechanization program, this criteria will be
included as a specific condition to receive a bonus
at the end of the season. Meaning that mechanized

Also, MCE will yearly communicate all the farmers
participating in the initiative about the requirements
and MCE´s expectations on ALP compliance.”

Additional information on the initiatives is provided in the tables below.

Pay slips initiative

Pay slips
Description

Delivery of pay slips for record keeping to farmers with hired workers
and farmers participating in labor exchange

Aim

Encourage farmers to maintain records and evidence of payment

Expected outcome

Better record keeping between farmers and workers (also in case of
exchange of labor) and improved monitoring by field technicians ofwage payments

Resources

Paper-based pay slips, including a receipt for the worker, allowing
record-keeping on the type of agreement, tasks done by the worker, thehours/ days/ weeks worked and the amount paid

Root cause analysis

Lack of recording-keeping skills among farmers

Implementation strategy• Target: 100% of farmers• Result in assessment area: data not available at the time of CU’s visit,
as the ALP team had not yet received an overview of the number ofpay slips delivered by individual field technicians• All field technicians were aware of this initiative and the content of
the pay slips• Among the farmers visited by CU, 35 (77%) had heard about thisinitiative, and 33 (73%) had received the pay slips
30External Assessment

Distribution strategy

Pay slips were provided to the farmers by the field technicians at thestart of and during the season

Farmers’ feedback

Most farmers were positive about receiving the pay slips; their main
reason for using the pay slips was to have written proof in case of any
disputes with their workers. However, 17 of the 33 farmers (52%) who
had received pay slips did not fully understand how and why to use theforms, particularly when exchanging labor

Continuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative

Ergonomic Harvest machines initiative

Ergonomic Harvest machine
Description

Helping farmers to buy an ergonomic machine for tobacco harvestingby advancing the costs of purchase and deducting the costs from thefarmers’ tobacco profits at the end of the season

Aim

Facilitate harvest practice by enabling a more ergonomic postureand faster cutting of the plant, reduce the need for hired labor, andminimize contact with green tobacco.

Expected outcome

Reduced risk of farmers not paying minimum wage by reducing the needfor hired labor during the harvesting season, and reduced risk of GTS

Resources

Ergonomic harvesting machine with a fixed top component and aremovable bottom element allowing to cut tobacco plants at the base

Root cause analysis

High number of hired workers during harvest and farmers’ unawarenessof the minimum wage requirements

Implementation strategy• Target: 3000 farmers across Misiones• Results in assessment area: 49 farmers purchased the machine• All field technicians were aware of this initiative• Among the farmers visited by CU, 25 (55%) had heard about thisinitiative and one (4%) had purchased the machine

Distribution strategy

Throughout the season. Demonstration during field trainings

31External Assessment

Farmers feedback

The one farmer who had purchased the machine was not satisfied
with the result (the machine’s sharp cut to the plant base did not allow
hanging the tobacco to dry) and therefore no longer used the machine.
Of the other 24 farmers who had heard about the initiative, many
mentioned that they could not afford the machine and that replacement
parts were not easily available. Of the 20 farmers who had not heard
about the initiative, three said they would be interested in buying themachineContinuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative

Mechanized soil preparation initiative

Mechanized soil preparation
Description

Encouraging farmers to make use of a mechanized service for soil
preparation, provided by nine external parties

Aim

Facilitate soil preparation, reduce the need for hired labor, and improve
crop quality

Expected outcome

Reduced risk of farmers not paying minimum wage by reducing the needto hire workers for soil preparation

Resources

Mechanized soil preparation service provided by external parties. The
use and cost of the services provided were monitored by MCE

Root cause analysis

High number of hired workers during soil preparation and farmers’
unawareness of the minimum wage requirements

Implementation strategy• Target: 500 selected farmers across Misiones• Result in the assessment area: 137 farmers had made use of theservice• All field technicians were aware of this initiative• Among the farmers visited by CU, 32 (71%) had heard about thisinitiative, and seven (14%) had made use of the service

Distribution strategy

The service was offered at the start of the season, to selected farmers.
Qualification criteria included farm size, number of tobacco plants,
barn size and type, land characteristics, amount of tobacco delivered
the previous season (if applicable), and no outstanding debts from theprevious season (if applicable).

32

External Assessment

Farmers feedback

Of the seven farmers who had used the service, six mentioned that
this initiative had helped them to save time and money during land
preparation, while one mentioned that he had not benefitted from theservice because his land turned out to be unsuitable for mechanized
tillage. Of the 19 farmers (60%) who had heard about the service but
had not used it, six owned a tractor, while seven did not have suitableland (uneven or stony terrain). Four mentioned that their land was too
small to make the investment. The remaining six farmers (who had
heard about but not yet implemented the service) would be interested
in trying it in the next season.

Continuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative

2.2.5 Monitoring Minimum Wage
MCE monitored whether farmers were meeting
the requirement of paying the minimum wage
according to the agricultural benchmark (see Legal
questionnaire Appendix III). The monitoring system
included one question related to minimum wage
payment and a pre-defined list of root causes forthe field technicians to select from. CU found thatthe root causes included in this list were not in linewith the main underlying reasons identified by CU.
All field technicians interviewed by CU were awareof the minimum wage as defined by the agricultural
benchmark, the in-kind payment policy set by MCE(see footnote 18, and the monitoring process forthis standard. They provided adequate examples of
how to check whether payments were meeting thestandard, and most mentioned to also crosscheckthe hours worked with the workers and to verify
pay slips when available.
The available monitoring data on wage payment
were in line with CU’s farm findings. In all cases themonitoring forms had been filled in correctly, andon all farms where CU found farmers not paying theminimum wage this had also been reported by thefield technicians (as an ‘irregularity’, see Chapter
1.3).

2.2.6 Prompt Action reporting
Payment of workers below the benchmarked
minimum wage was not covered by the Prompt
Action system. Although MCE considered this issuea ‘Type 2’ Prompt Action (see Chapter 1.4) they
dealt with it via their monitoring system. All fieldtechnicians were aware of this procedure and were
not raising Prompt Actions for this KPI.

2.3 KPI 3: Worker Accommodation
2.3.1 Summary
MCE had adopted PMI’s global KPI for Worker
Accommodation and made use of monitoring,
Prompt Action, and due-diligence processes toachieve this target. No initiatives were put inplace for this KPI. Relatively few farmers needed
to provide accommodation because most hired
local workers, if any. Hence, based on MCE’s risk
assessment, specific initiatives were not considerednecessary. CU found that the monitoring and Prompt
Action systems were adequate to address the issue.
The accommodation checklist developed by MCE
to evaluate workers accommodations was found to
be complete and relevant to local conditions. CU’s
farm findings show that accommodation issues
were adequately captured by the field technicians,
except for one farm where accommodation was notmeeting two of the checklist’s critical indicators,
which had not been reported.
33

External Assessment

Accommodations

Finding

Numberofworkers

Numberof
Farms% of visited
farms withaccommodations(N=10)

Remarks

Total cases where
accommodation
was found to beinadequate

19

1

10%

-

Used bytemporaryworkers

1

1

10%

The
accommodation
lacked showers
and was unsafe
due to exposed
electric wiring

2.3.2 Targets and strategy
PMI’s global KPI for Accommodation is to provide
adequate housing to all workers on all contracted
farms by 2020. At the time of CU’s visit MCE had
adopted this global target, with the addition thatworker accommodations, if not adequate, had to
be at least comparable to the farmer’s housing
conditions. MCE’s strategy towards achieving thistarget included monitoring, Prompt Actions, andannual risk assessments. They had classified the riskof inadequate accommodation as low probability
and severity, which is in line with CU’s findings.
Since most farms hired only local workers, if hiring
workers at all, only a few farmers needed to provide
accommodation.

2.3.3 CU’s farm findings
Among the farms visited by CU, ten (22%) had
accommodations where workers could stay whenworking on farm. On one of these farms (10%),
the accommodation was found to be inadequate
and also not comparable to the farmer’s housing
conditions. This accommodation had no showers,

and the electric wiring was exposed. At four otherfarms the accommodations did not post emergency
phone numbers. 19
MCE’s response:“MCE will continue communicating the minimum
accommodation standards to be met when it’s
provided to workers through field visits, Mas Chacra
trainings and leaflets/digital flyers.
As well, field technicians will continue monitoring
accommodation using the 34 standards checklists toassess whether the accommodation is compliant or
not, and if not, action plans will be agreed upfront
with the farmers with a clear deadline.
For farmers not willing to improve the workers´
accommodation

theconsequence

management

policies will be applied according to the severity
matrix which states that after one recurrence, thecontract will be canceled.
MCE checklist to monitor accommodation standards
will be reviewed and adapted to PMI’s Global
Accommodation Standards by Q1 2021.“

19. CU used MCE’s checklist to assess worker accommodations (see Appendix IV)
34

External Assessment

2.3.4 Initiatives on Accommodation
At the time of CU’s visit, MCE did not have any
specific initiatives in place to target inadequate
accommodation. Based on their risk assessment,
MCE considered their monitoring and Prompt
Action systems and pre-contractual due-diligence
checks sufficient to achieve the accommodation
KPI by 2020.

2.3.5 Monitoring Accommodation
MCE covered worker accommodation in theirmonitoring system. In addition to reporting in thetablet application whether the accommodation was
adequate or not, field technicians had to complete
a paper checklist of 34 criteria, twelve of whichwere considered critical for meeting basic living
conditions (see Appendix IV). If one or more of these
critical conditions were not met, the field technician
had to report an irregularity in the monitoring
system and leave an action plan with the farmer.
Non-critical issues were reported only through thepaper checklist, and farmers had to correct theseissues before the next visit. CU found the checklist
to be complete and relevant to local conditions.
All field technicians were aware of the monitoring
requirements and content of the accommodation
checklist. However, on four of the ten farms
with worker accommodations (40%) CU foundirregularities that had not been reported by thefield technicians. On one of these farms, theirregularities related to two critical indicators (seeTable below).

MCE’s response:“With the purpose of bringing more accuracyonaccommodation

monitoring,

each

of

the

farmers providing accommodation will receive
an unannounced visit by an internal auditing
team. When discrepancies are found, the FT will
be informed and trained, and the findings will berecorded accordingly on the monitoring system.“

Table 2. Number of farms where CU foundirregularities not captured by MCE
Indicator

Number offarms notmatching

Is the emergency number
clearly posted?

4

Is there at least one shower for
every 20 persons?*1

Do showers guarantee privacy?

1

Are the electric system andcables kept in good condition?*

1*Critical indicators

2.3.6 Prompt Action reporting
MCE covered worker accommodations in their
Prompt Action system. Field technicians had toraise a Prompt Action if one or more of the twelve
critical indicators (see Appendix IV) were not met.
Inadequate accommodation was considered a ‘Type
2’ Prompt Action (see Chapter 1.4), meaning thatthe farmer and field technician had to agree on anaction plan and that a follow-up visit was conductedto check whether the issues were solved. MCE
recognized that some accommodation criteria
could not be solved within six weeks because of thenecessary investments and construction work. In
those cases, they required that the issues be solved
before the start of the following season.
All field technicians were aware of the Prompt Action
procedure in case of inadequate accommodation:
they knew which indicators were considered criticaland that they had to report a Prompt Action if one ofthese was not met. At the time of CU’s assessment,
no Prompt Actions had been reported for inadequate
accommodations in the assessment area. However,among the farms with accommodations visited by
CU, one (10%) was not meeting two of the criticalindicators. This case had not been captured by thefield technician or reported in the system.

35

External Assessment

2.4 KPI 4: Personal Protective Equipment
2.4.1 Summary

PPE useMCE had adopted PMI’s Global KPI for PersonalProtective Equipment. Their strategy to achieve
this target included monitoring (Chapter 2.4.5) and
Prompt Action systems (Chapter 2.4.6) and two
initiatives to tackle persisting issues (Chapter 2.4.4).
CU found evidence that the global KPI was being
achieved, as all farmers visited had received PPE.
Nonetheless, evidence was found of incomplete

PPE use for handling green tobacco on 55% of
farms, and for handling CPA on 67% of farms. Manyof these cases had not been captured by MCE’s
systems. The company’s two initiatives to promote
PPE use were based on root cause analysis andused farmer feedback for improvement. However,CU’s farm findings indicate that the intended aims
and outcomes of these initiatives were only partly
achieved. In particular, the focus of one initiative on
aprons for handling wet green tobacco had createdthe widespread misunderstanding that PPE was notneeded for handling green tobacco when it was dry.

Finding

Source: Interview
with farmer and/or Interview withworker or family
memberNumber
of
Farms

% of
visitedfarms(N=45)

Total cases
whereincomplete
or no PPE
was used

Both

30

67%

PPE forhandling
green
tobacco

Both

25

55%

Gloves were the most common
item missing. On many farms,
persons handling green tobacco
did wear the required PPE, plus
apron and gloves, when handling
wet tobacco (after rain or morningdew), but used incomplete or no
PPE when it was dry

PPE forhandling
and applying
CPA

Both

30

67%

Face shields and masks were
often not used

2.4.2 Targets and strategy
PMI’s global KPI for Personal Protective Equipment(PPE) is to ensure availability of PPE for handlinggreen tobacco and crop protection agents (CPA) on
all contracted farms by 2020. At the time of CU’s
assessment MCE had adopted the same global KPI
for their contracted farms. MCE had formulated a
local strategy to achieve this KPI, including yearly

Remarkstargets, an annual risk assessment to prioritize
actions, and two initiatives to tackle persisting
issues. Both the targets set and risk scores assigned
were found to be adequate and in line with CU’s
farm findings.
Regarding the usage of PPE, MCE’s policy was asfollows. For handling green tobacco, farmers wererequired to wear long sleeves, long trousers, gloves,
36

External Assessment

and closed shoes. Additionally, when the green
tobacco was wet due to rain or morning dew, they
had to wear the apron and gloves provided by MCE(see Chapter 2.4.4). For handling or applying CPA,
farmers were required to wear the full set of PPE
provided by MCE (see Chapter 2.4.4), plus boots.

2.4.3 CU’s farm findings
PPE use for handling green tobacco
On 25 of the farms visited (67%), at least one person
was handling green tobacco without wearing thecomplete set of required PPE. Gloves were often
not used (see Table 3).

Table 3. Incomplete or no PPE used for handlinggreen tobacco
Type of protective
clothing

Number of farms
where used (N=45)

Long sleeves

37 (82%)

Gloves20 (44%)Long-pants

37 (82%)

Closed shoes

37 (82%)

MCE’s response:“To ensure PPE availability on the farms, MCE willcontinue delivering PPE for GTS to cover all farmers
and workers as a crop input.
100% of farmers will be trained on GTS avoidance
and the risks related with the non-usage orincomplete usage of PPE when handling green
tobacco, highlighting and clarifying that gloves must
be used whether the green tobacco is dry or wet.
Specific communication material on GTS will be
developed by MCE so farmers can train workers
at the time of hiring them. These trainings will berecorded on the pay slip forms.
Moreover, MCE will research on yearly basis andcollaborate with local providers to develop new andmore comfortable products to increase PPE usage.

Ultimately, farmers not complying with complete
usage of PPE will not get a contract renewal after one
recurrence following the Consequence management
policies.“

In addition, CU found a discrepancy in PPE use whengreen tobacco was wet: on 23 farms (51%) persons
handling green tobacco did wear the required PPE,
plus apron and gloves, when handling wet tobacco(after rain or morning dew), but used incomplete or
no PPE when it was dry (see Table 4).

Table 4. Number of farms where PPE was used
when the green tobacco was wet, but not when
it was dry
Type of protective
clothing

Number of farms
where used (N=45)

Long sleeves

6 (13%)

Gloves23 (51%)Long-pants

6 (13%)

Closed shoes

8 (18%)

CU identified several underlying reasons why
persons did not use the required PPE at all times:
1. Many farmers were under the misunderstandingthat PPE for handling green tobacco was meant
to be used only when the tobacco in the field
was wet, after rain or morning dew. Although
this was true for the apron, the remaining PPE(long sleeves, long trousers, gloves, closed shoes)
always had to be used when working with green
tobacco;2. Many farmers were not fully aware of the risk ofcontracting green tobacco sickness (GTS) whenworking with ‘dry’ green tobacco, i.e. leaves not
wet from rain or dew;
3. The set of gloves provided were found to be
uncomfortable when handling a machete for
harvesting.
37External Assessment

PPE for handling and applying CPA
On 30 of the farms visited (75%), at least one
person handling or applying CPA did not wear thefull set of required PPE. On five farms (11%) no PPE
was used at all by any of the persons handling or
applying CPA. In particular, face shields and mouthmasks were often not used (see Table 5).

Table 5. Incomplete or no PPE used for handlingand applying CPA
Type of protective
clothing

Number of farms
where used (N=45)

Long sleeves

40 (89%)Gloves38 (84%)

Long pants

40 (89%)Closed shoes

40 (89%)Face shield

19 (42%)

Mouth mask

29 (64%)

MCE’s response:“To ensure PPE availability on the farms, MCE will

CU identified several underlying reasons why
persons did not use the required PPE at all times:
1. Although persons handling and applying CPA
were aware of the associated risks, they were
not fully aware of how to prevent exposure.
Consequently, they did not use the full set of
PPE at all times;
2. The face shield provided by MCE limited thevision of users because it fogged up easily, andusers did not know how to prevent this.

2.4.4 Initiatives on Personal Protective
Equipment
At the time of CU ‘assessment, MCE was running two
initiatives to specifically target PPE use on farms:
distribution of PPE for handling green tobacco,and distribution of PPE for handling and applying
CPA. MCE had conducted a root cause analysis to
identify the root causes for farmers not utilizing
PPE on farms. Both initiatives were targeting one
or more of these root causes.

MCE initiative

Root causes targeted

PPE for handlinggreen tobacco

Low awareness of GTS
risk, discomfort of PPE
materials, and lack of PPE
at farms

PPE for handlingand applying CPA

Low awareness of CPA
risk, discomfort of PPE
materials, and lack of PPE
at farms

continue delivering PPE for CPA to cover all farmers
and workers as a crop input.
100% of farmers will be trained on the risks relatedwith the non-usage or incomplete usage of PPE whenhandling/applying CPA.
Specific communication material on the correct
usage of PPE for CPA will be developed by MCE so
farmers can train workers at the time of hiring them.
These trainings will be recorded on the pay slip forms.
Moreover, MCE will research on yearly basis andcollaborate with local providers to develop new andmore comfortable products to increase PPE usage.
Ultimately, farmers not complying with complete
usage of PPE will not get a contract renewal after tworecurrences following the Consequence management
policies.“

During the farm visits, CU identified several
underlying reasons for incomplete PPE use by
persons handling green tobacco or CPA (seeChapter 2.4.3). Three of these had not been
identified in MCE’s root cause analysis, namely: (1)many farmers were under the misunderstandingthat PPE for handling green tobacco was meant to
be used only when the tobacco in the field was wet,after rain or morning dew; (2) although persons
handling and applying CPA were generally aware of38

External Assessment

the associated risks, they were not fully aware of
how to prevent exposure; and (3) the face shieldprovided by MCE for handling and applying CPA
limited the vision of users because it fogged up
easily, and users did not know how to prevent this.
On the 25 farms where CU identified incomplete
PPE use for handling green tobacco, the mainunderlying reasons were only partly being met by
MCE’s initiative. Although MCE’s provision of PPEtargeted the lack of PPE on farms as a root cause,the focus of the initiative on providing aprons forhandling wet tobacco had created a widespreadmisunderstanding that PPE was only needed inwet conditions. As a result, on most farms, persons
handling green tobacco only used complete PPE

when handling wet tobacco (after rain or morningdew), but used incomplete or no PPE when it wasdry (see Table 4).
Likewise, on the 30 farms where CU identified
incomplete PPE use for handling CPA, the mainunderlying reasons were only partly being met by
MCE’s initiative. Although MCE’s provision of PPEtargeted the lack of PPE on farms as a root cause,
CU found that persons handling and applying
CPA, although aware of the associated risks,were not fully aware of how to prevent exposure.
Consequently, they did not use the full set of PPE at
all times. In particular, the face shield was often not
used because it fogged up and users did not know
how to prevent this.

Additional information on the initiatives is provided in the tables below.

PPE for handling green tobacco

PPE for handling green tobacco
Description

Providing all contracted farmers with a PPE set (apron and gloves) for handlinggreen tobacco

Aim

Reduce the incidence of GTS among persons working in tobacco, and increasesafety on farms

Expected outcome

Increased PPE use for handling green tobacco, reduced risk of GTS

Resources

PPE set consisting of an apron and a pair of gloves. The gloves weremeant to be used at all times when handling green tobacco, and theapron only when the tobacco was wet.

Root cause analysis

Low awareness of GTS risk, discomfort of PPE materials, and lack of
PPE at farms

Implementation strategy• Target: 100% of contracted farmers• Result in assessment area: 100%
• All field technicians were aware of this initiative• All farmers visited by CU (100%) had received the PPE set

Distribution strategy

Sets were distributed at the start of the season by the field technicians.
Farmers received two PPE sets for every 30,000 tobacco plants planted.
The cost (circa 2,200 Argentinean pesos per set) was deducted from thefarmer’s tobacco sales at the end of the season

39

External Assessment

Farmers feedback

All farms visited by CU (100%) had received the apron and gloves
for handling green tobacco. However, the initiative’s focus onproviding aprons for handling wet tobacco had created a widespreadmisunderstanding that PPE was needed only in wet conditions: on
23 farms (51%), persons handling green tobacco only used complete
PPE when handling wet tobacco (after rain or morning dew), but used
incomplete or no PPE when it was dry (see Chapter 2.4.1)

Continuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative

PPE for handling and applying CPA

PPE for handling and applying CPA
Description

Providing all contracted farmers with a PPE set for handling andapplying CPA

Aim

Reduce exposure to hazardous chemicals and increase safety for
persons handling or applying CPA

Expected outcome

Increased PPE use and reduced risk of chemical exposure

Resources

PPE set consisting of long pants, a long-sleeved shirt, a pair of gloves, amouth mask, and a face shield, plus instructions to wear closed shoes orboots

Root cause analysis

Low awareness of CPA risk, discomfort of PPE materials, and lack of
PPE at farms

Implementation strategy• Target: 100% of contracted farmers• Result in assessment area: 100%
• All field technicians were aware of this initiative• All farmers visited by CU (100%) had received the PPE set

Distribution strategy

Sets (one per farm) were distributed at the start of the season by thefield technicians. The cost per set was deducted from the farmer’s
tobacco sales at the end of the season

Farmers feedback

All farms visited by CU (100%) had received a PPE set for handlingand applying CPA. However, on 30 farms (75%), at least one person
handling or applying CPA did not wear the complete PPE set, while onfive farms (11%) no PPE was used at all by any of the persons handlingor applying CPA (see Chapter 2.4.1).

Continuous improvement

CU found evidence of feedbacks from the initiative implementation
being collected by MCE to advise future design and implementations of
the initiative40

External Assessment

2.4.5 Monitoring Personal Protective
Equipment
At the time of CU’s assessment, MCE wasmonitoring PPE use for handling green tobaccoand for handling and applying CPA. The monitoring
application included two questions (one for each
PPE use) and a pre-defined list of root causes forthe field technicians to select from. However, CU
found this list to provide mere descriptions of theissues, rather than their root causes. According to
MCE, collecting root causes was not their priority;
persons handling green tobacco or applying CPA
simply had to wear the required PPE.
All field technicians interviewed by CU were awareof the PPE requirements for handling green tobaccoand applying CPA. However, CU found that not alltechnicians were adequately monitoring PPE use by
all people on the farm: eight field technicians (66%)
reported that they checked this issue only with thefarmer, not with the family members or workers.
When comparing CU’s farm findings to MCE’smonitoring data, CU found that not all findings
matched. On ten (40%) of the 25 farms where CU
found evidence of persons not using complete PPE
for handling green tobacco, the field technician had
not reported an irregularity. The same was true
for nine (30%) of the 30 farms where CU foundevidence of persons not using complete PPE for
handling and applying CPA.

2.4.6 Prompt Action reporting
MCE was raising Prompt Actions when farmers
were observed handling green tobacco or applying
CPA without using complete PPE. Failure to wear
complete PPE was a ‘Type 1’ Prompt Action linked
to one of the KPIs (see Chapter 1.4), which could
only be closed by a field supervisor or member ofthe ALP Team in an unannounced follow-up visit(within six weeks). All field technicians were awareof the Prompt Action procedure for PPE use. For
the 2019-2020 season, nine Prompt Actions had
been raised in the assessment area for farmers notusing complete PPE for CPA application, and 16 forfarmers not using complete PPE for handling green
tobacco.
Two of the farms visited by CU had a Prompt Action
related to PPE use. Both cases were still open;
the farmers in question were aware of the Prompt
Action raised, and mitigation measures (training)
had already been implemented. However, on both
farms the Prompt Actions were reoccurring at thetime of CU’s visit.

41

Chapter 3

FARM FINDINGS ON OTHER ALP
MEASURABLE STANDARDSEXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

This chapter describes CU’s assessment of theworking conditions on farms with regard to the
ALP Code Principles and Measurable Standards notcovered by the four KPIs described in Chapter 2.
ALP Code Principles are short statements designed
to guide farmers on specific practices, resulting
in safe and fair working conditions. A Measurable
Standard defines a good practice and over time canbe objectively monitored to determine whether, andto what extent, the labor conditions and practices
on a tobacco farm are in line with each ALP CodePrinciple.

3.1 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.
Payment scheduleOn three of the farms with hired labor (13%),
workers were paid at the end of the season, which
is not in accordance with Argentinean national law.
On two of these farms the end-of-season payment
was for hired relatives, while on the third farm it
applied to a permanent worker. No evidence wasfound of these workers dis-agreeing to this form of
payment.

On 13 farms (56%), workers were working overtime,either by working one more hours in the afternoon
or by working on weekends. None of these workers
were paid overtime in accordance with the nationallaw. No evidence was found of overtime being
involuntary.

Legal Benefits
On 21 farms (91%) workers were not provided withthe social security benefits, holidays, and parental
leave they were entitled to by Argentinean law. On
five farms (22%), workers were registered to receive
social security (see ALP Code Principle 7), but on
only two of these farms did they receive holidays
and parental leave.

Main underlying reasons
Most farmers did not perceive relatives as workers
and agreed with them on the most convenient
form of payment for both sides, which was end-ofseason. Furthermore, farmers said they would notconsider end-of-season payment if the worker did
not agree with this form of payment.
Farmers were not aware of the requirement to pay
overtime to their workers. In most cases, farmers
and workers agreed on the tasks to be completed,
and if this work took slightly longer than plannedor needed to be done over the weekend, farmers
would pay the same rate. Most farmers were also
not aware of the requirement to provide benefits.
MCE’s response:“MCE will develop a focused monitoring to be done
to farmers hiring permanent workers with specificquestions related to frequency of payment, overtime

Work hours and overtime pay

payment and workers´ legal benefits. In parallel,

No evidence was found of work hours not being inaccordance with the national law. On all applicable
farms with hired labor, the workers would generally
start at 7 am in the morning, break for lunch around
11 am, and start again around 2 pm in the afternoon,
until 6pm.

mentioned above will be redesigned and reinforced

training and communication related to the topics
during field visits. These measurable standards will
also be assessed during the unannounced visits.
To ensure that all risks related to payment frequency
are mitigated, MCE will continue monitoring43

External Assessment

sharecropping and putting agreements in place tobring transparency to this commercial relationshipwhen it is identified.
In addition, to strengthen compliance regarding thefrequency of payment, the severity matrix will beapplied to farmers paying at the end of the season
according to the consequence management policies:
after two recurrences, the contract is not renewed
for the following season.“

3.2 ALP Code Principle 3: Fair treatment
Farmers shall ensure fair treatment ofworkers. There shall be no harassment,
discrimination, physical or mental
punishment, or any other forms of abuse.

No evidence was found of indirect payment or
wages being withheld beyond the agreed date ofpayment.
No evidence was found of farmers retaining
workers’ documents
No evidence was found of prison workers.

Main underlying reasons
The farmers did not perceive any risks associatedwith end-of-season payment if their workers had
agreed to being paid this way. Among the workers
interviewed, none of them dis-agreed to this formof payment as they had a longer-term relationshipwith the farmer.
MCE’s response:“MCE will develop a focused monitoring to bedone to farmers hiring permanent workers withspecific questions related to frequency of payment

No evidence was found on farms of physical, sexualor verbal abuse.
No evidence was found on farms of discrimination.
All workers mentioned to be able to communicate
to their farmer in case of need.

3.3 ALP Code Principle 4: Forced laborand human trafficking

to identify and mitigate any forced labor risk. Thismeasurable standard will also be assessed during theunannounced visits.
Moreover, training and communications related tothe topic mentioned above will be redesigned andreinforced during field visits.
To ensure that all risks related to payment frequency
and forced labor are mitigated, MCE will continue
monitoring sharecropping and putting agreements
in place to bring transparency to this commercial

All farm labor must be voluntary. There
shall be no forced labor.
On three of the farms with workers (13%) CU
identified a risk of forced labor, as the workers
were paid at the end of the season. Although theseworkers had agreed to this form of payment andwere free to leave their employment, a worker on
one of these farms was not sure whether he would
receive the agreed-upon wage if he left his job
before the end of the season.
No evidence was found of workers having to makefinancial deposits to be employed.

relationship when it is identified.
In addition, to strengthen compliance regarding thefrequency of payment, the severity matrix will beapplied to farmers paying at the end of the season
according to the consequence management policies:
after two recurrences, the contract is not renewed
for the following season. This will also contribute to
mitigate any risks associated with forced labor orworkers not being free to leave the farm until they
get paid.
Ultimately, when MCE identifies that workers are
not free to leave their employment due to debts
or pending payments, the contract is immediately
canceled.”
44

External Assessment

3.4 ALP Code Principle 5: Safe Work
Environment

Chemical storage and disposal, equipment andapplication

Farmers shall provide a safe work

On 28 farms (62%) evidence was found of persons
applying fertilizers without using gloves.

environment to prevent accidents andinjury and to minimize health risks.

MCE’s response:

Accommodation, where provided, shall“Gloves usage for applying fertilizers will be

be clean, safe and meet the basic needs

monitored and communicated to farmers to increaseof the workers.
General safety measures
On 13 farms (29%), the barns were high and lacked
protection measures for persons climbing the walls
to load tobacco.

the adoption of this practice”

On 41 farms (92%), CPA containers and chemical
equipment were stored safely in locked storage on
the farm. On the four remaining farms (8%), CPA
and chemical equipment were kept in storage thatwas not locked.

On 44 farms (98%), resources were available incase of emergency. Forty-one farms could provide
transport to a medical facility. Thirteen farms had
a first-aid kit, and one farm had a person who hadreceived first-aid training. Nineteen farms had
contact details of health institutions, and three had
resources to act in case of fire.

MCE’s response:On 40 farms (89%), sharp tools were properly
stored, but on five farms (11%) these tools were left
around the farm or barn area where children andother family members had access.

Consequence management policy, which states that

MCE’s response:“Aiming to increase the usage of PPE when working
at heights, MCE will continue:• Monitoring farms to assess harness availability
and its correct usage, reinforcing the importanceof the PPE availability at farms; andDelivering trainings to farmers through Mas Chacra
and communication material”“MCE will continue monitoring CPA storage at farms
to assess if they comply with all the safety measures
recommended including the correct lockage of it andwarning signs. Field technicians will continue raising
prompt actions when CPA are not safely stored.
This standard is also included in Due Diligence &after one recurrence, the contract won´t be renewed
for the following season.”On 20 farms (45%), farmers did not dispose of
empty CPA containers correctly (the correct method
is to triple rinse and puncture the container before
safe disposal). On three of these farms the empty
containers were burned in the field, while on two
farms they were left in the field and around the farm.
On the other 15 farms they were kept in the storage
but without being rinsed or punctured first. Some
farmers mentioned reusing the empty containers
for other purposes, mostly to carry gasoline tomachines in the field. One farmer mentioned
refilling empty CPA containers with drinking water
to take to the field when working in tobacco.

45External Assessment

MCE’s response:“MCE will continue training farmers on how

On six farms (12%), people handling or applying
chemicals had not received training on how to do
this.

to correctly dispose the CPA empty containers(including triple rinse and puncturing the container).

MCE’s response:

Additionally, MCE will actively participate in“100% of farmers will be trained on the risks related

CoTTaProM (Comisión Técnica de Tabaco de lawith the non-usage or incomplete usage of PPE when

Provincia de Misiones – is a technical committee

handling/applying CPA.

that engages tobacco key stakeholders such as
tobacco companies, unions, technical entities andgovernment bodies to discuss and address common
issues) empty containers collection program toensure that 100% of farmers get their containers

Specific communication material on the correct
usage of PPE for CPA will be developed by MCE so
farmers can train workers at the time of hiring them.
These trainings will be recorded on pay slip forms.

collected by 2021.
Field technicians will continue reporting CPA empty

Main underlying reasonscontainers being reused for domestic purposes
as a prompt action and this practice will be linked
to consequence management policy: after one
recurrence the farmers’ contract will be cancelled.”

On 44 farms (98%), the equipment for CPA andfertilizer application was in good condition and freefrom leaks. On one farm the sprayer was leaking
and was found fixed with a rubber tie.
On seven farms (15%), farmers were not aware of
the correct re-entry period after CPA application.

MCE’s response:

Most farmers did not consider fertilizer applicationa hazardous practice and therefore did not see theneed to use gloves during this task. Many farmers
were not aware of the correct disposal procedure
for empty chemical containers. Furthermore,
many farmers mentioned that it was impossible todispose of the empty containers because the local
waste collection authority had not collected theirchemical waste for a long time. One of the farms
had been storing empty containers for almost ten
years.

3.5 ALP Code Principle 6: Freedom of
association“MCE will keep on monitoring and training farmers
on the minimum period to re-entry a field after a CPA
application.”

On 15 farms (33%), no warning sign was available touse after CPA application.

Farmers shall recognize and respect
workers’ rights to freedom of
association bargain collectively.

No evidence was found on Freedom of association.
MCE’s response:“MCE will redesign and distribute warning signs to
100% of farmers to be placed on the tobacco field
after a CPA application to alert people from entering.”

No evidence was found of workers not being able tojoin or form organizations of their own choice. No
evidence of active unions was found in the region
where the assessment was conducted.
No evidence was found of worker representatives
being discriminated against for their functions.
46

External Assessment

3.6 ALP Code Principle 7: Terms of
employment
Farmers shall comply with all laws of
their country relating to employment.
On 11 of the farms with hired labor (48%), farmers
did not inform their workers of their legal rights andbenefits to be received; mostly they only discussed
topics such as tasks, working hours, and wage. Noneof the farmers gave their workers an introduction
about on-farm safety measures.
Written contracts are not required according
to Argentinean law ( see Legal Questionnaire in
Appendix III). On 22 of the farms with hired labor(96%), farmers had a verbal contract with theirworkers.
On 18 of the farms with hired labor (78%),
employment conditions contravened the country’s
law; on these farms none of the workers had beenregistered with the AFIP (Administracion Federal
de Ingresos Publicos) for social security andemployment benefits as prescribed by Argentinean
law.

Main underlying reasons
Farmers were not aware of the need to informworkers, upon hiring, of their legal rights andbenefits or farm safety measures. As most of thehired workers were local, farmers assumed thatthey had already been informed about these topics
during previous jobs at other tobacco farms.
Farmers thought that registration with the publicauthorities was not necessary for temporary
workers. Some of the workers did not want toregister because this would result in their loss of
unemployment benefits.
MCE’s response:“MCE will develop a focused monitoring to be done tofarmers hiring workers with specific questions related
to workers´ legal benefits and labor registration.
In parallel, training and communication related tothe topics mentioned above will be redesigned andreinforced during field visits.“

47

Chapter 4

ALP PROGRAM: FEEDBACK FROMFARMERS, WORKERS, AND OTHERSTAKEHOLDERS

EXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

As part of this assessment, CU asked farmers, family
members and external workers what had changed
since the start of the ALP Program. Most farmers
reported positive changes with the implementationof the ALP Program, mostly related to the usage of
PPE when handling green tobacco and to prevent
exposure to CPA. Many farmers also reported
fewer children working in tobacco. Many farmers
expressed concerns over the costs of the PPE
provided by MCE, mentioning that in most cases
these were too high, and that on occasion too much
PPE was provided per farm, which was later notneeded by the farmer as fewer workers were hired
than expected.
Of the 69 family members interviewed, all had
heard about at least one Measurable Standard of
the ALP Code. Twenty-four (35%) mentioned thatfewer children were involved in tobacco production
since the start of the program; three (4%) mentioned
improved conditions for the workers, particularly interms of wage payment. Thirty (43%) mentionedthat they felt better protected thanks to theprovided PPE.
Of the 10 workers interviewed, seven (70%) had
heard about at least one Measurable Standard of
the ALP Code. Four (40%) mentioned that children
could no longer work on tobacco farms. Five (50%),
mentioned that their payment conditions had
improved and on-farm safety had increased. Three(30%) were aware of the possibility to associatewith farmer unions if these were available.
Overall, all farmers gave positive feedback regarding
the field technicians, mentioning that they were
mostly available whenever they needed something.
Finally, all the stakeholders (NGOs, schools)
interviewed as part of this assessment appreciatedthe collaboration with MCE and the efforts put inplace to address some of the persisting issues intobacco production in Misiones.

49

Chapter 4

APPENDICESEXTERNAL ASSESSMENT
Burley farmers in North and South Misiones

External Assessment

Appendix I Action plan
Control Union focused assessment - MCE Argentina (Misiones)
Pre-contractual due diligence
CU’s farm findings for due diligence:
All farms (100%) had had their practices verified before the start of the season. On one farm (2%) CU
observed inadequate worker accommodation which had not been captured by the due diligence check, as
two critical criteria listed in MCE’s accommodation checklist had not been reported by the field technicians(see Chapter 2.3.2).
MCE response:
The Due Diligence process will be adapted and aligned to PMI Global Guidelines: “Step Change ALP: Due
diligence, consequence management & rewards guidelines (2019) “. All Step Change priority areas will be
included to assess 100% of farmers prior to be contracted, as well as other indicators considered a priority
at a local level. This process will be reviewed on yearly basis and updated, if needed. Due diligence process
takes place every year before contracting period.
Implementation date: Q2 2020
Responsible: Sustainable Agriculture manager & ALP Coordinator
Consequence Management
CU’s farm findings for consequence management:
Thirty-two farmers (71%) were able to explain the possible consequences of not meeting the ALP Code. All
farmers in this group mentioned having been informed by their field technician, with 18 mentioning thatthey had also been informed by Conciencia, and three mentioning that they had also read the informationin the contract.
MCE response:
To increase farmers’ awareness on the consequences of not meeting the ALP Code standards, MCE will
implement clear and strong communication to farmers about the ongoing ´Consequence management’process by providing summarized communication material to Field Technicians (FT). FT will clearly
inform and communicate the farmers about MCE´s requirements regarding the ALP compliance and theconsequences linked to not complying with critical standards. Consequence management policies include
two consecutive crop seasons. The consequences of not complying with the standards could include a
non-renewal of contract for the following season or an immediate contract cancelation, depending on theseverity of the situation. For this purpose, MCE had developed a severity matrix which describes ALP noncompliances and the consequences that a farmer could face by not complying with them. Each individual
case is discussed and analyzed within the ALP Country team before making the final decision. The severity
matrix is reviewed on yearly basis and adjusted if needed.
Implementation date: Q2 – Q3 2020
Responsible: ALP Coordinator & Field Technicians
Appendix I – MCE Action Plan _ page 1 of 1551

External Assessment

Findings per KPIKPI 1: Child Labor
SummaryCU´s farm findings:
CU’s farm findings (Chapter 2.1.3) showed that, on six of the seven farms where CU had found evidenceof child labor, this had not been captured by the field technicians.
MCE response:In the Misiones region, tobacco production is carried out mostly by the farmer and his/her adult family
members. Harvesting is the most labor demanding period and overlaps with school summer vacations,
therefore whenever a child labor case is reported, it usually occurs during this time of the year involving
children helping their parents with specific tasks.
MCE will develop new training materials, guidelines and tools for Field Technicians aiming to improve thedata gathering process and have an accurate description of Child Labor within the contracted farmers
in line with PMI’s Monitoring Guidelines to have a clear understanding of each situation and the main
drivers. Field technicians and supervisors will be trained on yearly basis and update trainings will bedelivered during the crop season.
Implementation date: Q3 of every year
Responsible: ALP Coordinator
Also, the ALP monitoring (focused on Step Change areas) survey structure, questions and dropdown lists
will be updated to increase data reliability. The main changes will include;
increase the number of optional answers to get a more detailed description of the status of the farm at
the moment of the visit; andupdate the root causes to give specific support to the farmer to mitigate and fix the issues when theyoccur.
Implementation date: Q3 2020
Responsible: ALP Coordinator/Leaf planning analyst
MCE will apply the changes on the farm by farm monitoring to the current unannounced visits program.
These visits are done by field supervisors, leaf buyers and ALP coordinator to 5% of farmers constituting arisk group. MCE will make adjustments and calibrations on this program to turn it into an internal auditing
process enabling the ALP team to find discrepancies and areas for improvement. The unannounced visits
will be focused during harvesting to capture as many risks as possible. After each unannounced visit, whendiscrepancies are found, individual calibration sessions will take place with the FT and minutes of themeetings will be recorded.
Implementation date: Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator/Field supervisors/Leaf buying teamAppendix I – MCE Action Plan _ page 2 of 1552

External Assessment

CU’s farm findings
CU´s farms findings:
CU found evidence of nine children involved in tobacco production on seven farms (15%).
On two of these farms (4% of total farm sample) children below 18 were being employed in tobacco
production. In one case, the farmer employed his 16-year-old brother-in-law throughout the tobaccoseason in all activities except CPA application; in the other case, a 17-year-old boy worked full-day shifts
during harvesting time. He was a neighbor’s son who came along with his father as part of informal laborexchange. On both farms, the children were observed working in the field during CU’s visit.
MCE response:
MCE expects to eliminate the risk of farmers employing/hiring children by implementing the following
actions:
On top of the ongoing communications on the prohibition by law of children below 18 y.o. working on
tobacco, MCE will launch a strong communication campaign to increase knowledge on hazardous tasks
among farmers and to make them aware that they are responsible of any children present or working attheir farm, even the ones brought along with the ´Cambio de día´ (labor exchange). This message will
be delivered through FT during the field visits and Mas Chacra program, an itinerant training programthat MCE runs within a tobacco industry approach. The topics are assessed on yearly basis, according
to the priorities. Moreover, communication materials such as flyers/leaflets/posters will be redesigned
accordingly.
Implementation date: Q3 2020
Responsible: ALP Coordinator/Field Technicians/Mas Campo trainers
Implement and follow the Due Diligence & Consequence management guidelines which state that farmers
hiring children to work on tobacco will get a contract cancelation.
Implementation date: Q3 2020
Responsible: ALP Coordinator/Field supervisors/Leaf agronomy manager
Even though farmers found hiring children for tobacco tasks will get a contract cancellation, MCE will
include critical cases into the Child Labor Remediation program in partnership with Conciencia NGO toassist and give support to these families.
Implementation date: Q3 2020
Responsible: ALP CoordinatorCU´s farm findings:
On the other five farms (11%), child family members below 18 were helping with tobacco production. They
were 9 to 17 years old. On three of these farms, children were helping several days a week for full shifts,
while on the other two farms children were helping several days a week but not all day but for specifictasks. On two farms the children were observed working during CU’s visit, while on the other three farms,
child involvement was confirmed via interviews.

Appendix I – MCE Action Plan _ page 3 of 1553

External Assessment

MCE response:
In order to eliminate child labor related to family children performing tasks on tobacco, MCE will
implement the following actions:
On top of the ongoing communications on the prohibition by law of children below 18 y.o. working on
tobacco, MCE will launch a strong communication campaign to increase knowledge on hazardous tasks
among farmers and to make them aware that they are responsible of any children present or working attheir farm, even the ones brought along with the ´Cambio de día´ (labor exchange). This message will
be delivered through FT during the field visits and Mas Chacra program, an itinerant training programthat MCE runs within a tobacco industry approach. The topics are assessed on yearly basis, according
to the priorities. Moreover, communication materials such as flyers/leaflets/posters will be redesigned
accordingly.
Implementation date: Q3 2020
Responsible: ALP Coordinator/Field Technicians/Mas Campo trainers
Implement and follow the Due Diligence & Consequence management guidelines which state that farmers
whose son or daughter under 16 are found for a second time involved in any activity related to tobacco
or for family children under 18 y-o performing a hazardous task, contract cancelation will be applied. For
children between 16 and 18 y-o family members performing any non-hazardous task in tobacco, found forthe second time, the contract will not be renewed.
Implementation date: Q3 2020
Responsible: ALP Coordinator/Field supervisors/Leaf agronomy manager
After the Child Labor Remediation pilot ran during Crop 2019 in Misiones, MCE decided to expand andstrengthen it to cover 100% of farms where children family members involved in tobacco tasks. The aimof the initiative is to solve child labor issues in a lasting and sustainable way by assessing and tackling theroot causes with specific actions. These actions are tailormade to every case taking into consideration thecontext and the underlying reasons. This initiative is done in partnership with Conciencia NGO. Whenevera child labor Prompt action is identified by MCE, the NGO is informed by the local ALP Coordinator to visit
the farm in different instances to assess the root causes, agree an action plan with the family and follow
up its implementation. This procedure is reviewed and approved by the ALP coordinator.
Implementation date: Q3 2020
Responsible: ALP CoordinatorCU´s farm findings:
On 7 of the farms (15%) persons below 18 were involved in hazardous activities
MCE response:
Refer to previous findings (Pages 5 & 6)
CU´s finding:Child labor remediation: Most of the open PAs for CL were open for long time (some almost 1 year).
Procedures in place on how many visits possible by Conciencia per PA, but not followed by Conciencia(more visits made than agreed).
Appendix I – MCE Action Plan _ page 4 of 1554

External Assessment

MCE response:
MCE will review and make the following adjustments on the protocol agreed with Conciencia for Child
Labor remediation to ensure it is implemented correctly:
Conciencia will perform a maximum of 3 visits to each family (exceptional cases can have one extra visit)
within a period of 9 weeks since the PA opening.
Once Conciencia concludes the visits, a final report will reflect the status of the child labor case: Open(when there´s still a risk of recurrence) and Close (when there´s no risk of recurrence)
Cases taking over 9 weeks or 4 visits (whichever happens first) and open cases will be escalated to the ALP
Country Team to take a final decision.
The review of the protocol will also include adding specific objectives (making emphasis on the root cause
analysis), roles & responsibilities and deadlines for reporting.
These changes will enable MCE to have more visibility on the progress of each family under the initiative,
make on-time decisions and keep the ALP Country Team updated on the Child Labor remediation program.
Implementation date: Q3 2020
Responsible: ALP CoordinatorCU´s finding:On five of the seven farms where CU identified evidence of child labor, farmers had received the school
kit; on four, farmers had received the farmers’ training; and on three, children were attending an EFA withsupport of an MCE scholarship.
MCE response:
After an internal analysis, showing a low impact on child labor issues, MCE decided not to include ´School
kit delivery’ and ´Farmers´ training at buying stations´ into 2020 Porvenir program. MCE will continue
delivering trainings on child labor throughout the season during farm by farm visits, by delivering training
materials and Mas Chacra program.
These activities were replaced by different, more focused initiatives, based on root cause analysis, with abigger contribution to child labor elimination such as:
School infrastructure reinforcement: 34 primary schools and 16 high schools from El Soberbio and San
Pedro receiving materials to improve their facilities and services provided to 800 children from MCE
contracted growers. This activity aims to increase school attendance and therefore reduce the child laborrisk on the benefited families.
Mentoring for life projects for 50 unschooled adolescents: A tutor engages unschooled adolescentsand run periodic sessions with him/her and the rest of the family aiming to enroll the child back to theeducative system.
Regarding EFA Scholarships, MCE decided to continue supporting farmers whose children attend to
EFA schools aiming to cover up to 180 students (or more when needed). However, the process to selectbeneficiaries will be streamlined using Farm Profile data to ensure that all famers needing support are

Appendix I – MCE Action Plan _ page 5 of 1555

External Assessment

covered. Also, all benefited farmers will sign a ‘No child labor’ agreement to strengthen compliance withthe child labor measurable standard. Field technicians and supervisors will be trained on yearly basis tokeep them updated on the ongoing initiatives done with Conciencia in the Porvenir Program (and whenever
the program is modified). This will help the field technician to link farmers with different initiatives offeredby the program to revert child labor cases (when found) and mitigate child labor risks.
Implementation date: Q3 2020 – 2021 & 2022
Responisble: ALP Coordinator

KPI 2: Minimum wages
CU´s Farm findings:
In Misiones there is still not a legal local benchmark for tobacco workers, as the hiring of labor for thisactivity is minor compared to other activities in the area. Around 50% of MCE farmers hire labor. Most of
the tobacco tasks are done by adult family members and/or ´Cambio de día´. Less than 20% of the totallabor requirements along the crop season are provided by hired workers, especially during harvesting andoccasionally, transplanting.
MCE is engaging with key stakeholders in Misiones such as: other tobacco companies, farmers´ unions,workers´ unions and local and national government bodies to agree and establish a specific salary for BU
tobacco.
In the meantime, it has been agreed as an industry to consider the national minimum wage as a legal
reference for communications and compliance enforcement.
CU´s farm finding:On 6 (26%) of the farms, farmers were not aware of the minimum wage.
MCE response:
MCE is engaging with key stakeholders in Misiones such as: other tobacco companies, farmers´ unions,workers´ unions and local and national government bodies to agree and establish a specific salary for BU
tobacco.
In the meantime, it has been agreed as an industry to consider the national minimum wage as a legal
reference for communications and compliance enforcement.
All trainings and communications will be immediately updated and aligned to the national minimum
vital salary to reach all tobacco farmers and workers using the different existing streams: through fieldtechnicians, printed and digital material and Mas Chacra training program. The communication will also
include hourly rates. Communications and trainings will be immediately updated and refreshed whenever
the minimum wage rates increase.
Implementation date: Q3-Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator

Appendix I – MCE Action Plan _ page 6 of 1556

External Assessment

CU´s farm findings:
On 17 of the 23 farms with hired labor (74%), workers were paid below the benchmarked minimum wage
MCE response:At the time that CU assessment was performed in Misiones, there was not a legal local benchmark for
tobacco workers and Yerba Mate salary was used instead, as the hiring of labor for this activity is minor
compared to other activities in the area. Around 50% of MCE farmers hire labor. Most of the tobacco tasks
are done by adult family members and/or ´Cambio de día´. Less than 20% of the total labor requirements
along the crop season are provided by hired workers, especially during harvesting and occasionally,transplanting.
MCE is engaging with key stakeholders in Misiones such as: other tobacco companies, farmers´ unions,workers´ unions and local and national government bodies to agree and establish a specific salary for BU
tobacco. As part of this strategy agreement with the stakeholders, in the meantime, it has been agreed touse the national minimum wage as a reference for compliance monitoring and communications.
During farm by farm monitoring, when a farmer is not paying the national minimum vital salary, thepayment gap is recorded. This information will be used by MCE to build a baseline and define the different
segments of farmers currently paying below the minimum wage. The baseline will help MCE to develop
specific strategies for each segment.
Additionally, for all farmers not paying the national minimum vital salary, prompt actions will be recorded,
and action plans will be agreed upfront following PMI Prompt Actions Global Guidelines. The field staff
will be trained accordingly on how to raise and follow up Prompt Actions related to minimum wage. MCE
expects that 100% of farmers with minimum wage prompt actions will implement a concrete action plan
to address the issue. Ultimately, consequence management will be applied for those farmers not willingto address the issue: after two recurrences, the contract won´t be renewed for the following season. The
severity matrix is reviewed on yearly basis before each crop season as part of the strategy.
Implementation date: Q4 2020
Responsible: ALP Coordinator / Sustainable Agriculture Manager / Head of Leaf AR
CU´s farm finding:
16 of the farmers (48%) who received the pay slips understood how to use them.
MCE response:
In order to increase the correct usage of the pay slip forms, MCE will develop training material andinstructions to support the farmer on how to input figures into it and how to calculate hourly rates toassess the correct payment of minimum wage.
Implementation date: Q4 2020 – Q1 2021
Responsible: ALP CoordinatorCU´s farm finding:On 3 of the farms (42%) were mechanization was implemented, farmers were paying below the legal
minimum salary (for harvesting).
Appendix I – MCE Action Plan _ page 7 of 1557

External Assessment

MCE response:
The production of Burley Tobacco in Misiones has been mainly based on family workforce with very little
investment in technology. In 2018 MCE developed a project for farmers to introduce mechanization
through a service providers scheme. The service is paid by the farmer but they can get a bonus at theend of the season if they comply with a set of requirements such as not having any open Prompt Action,
good practices to control soil erosion in place, tobacco volume delivery above 90% regarding the latest
estimation and compliance on CPA green leaf results. In order to enforce compliance on minimum wage
payment on farmers benefited with the mechanization program, this criteria will be included as a specificcondition to receive a bonus at the end of the season. Meaning that mechanized farmers can only beentitled to the bonus if the pay minimum wage to workers during the crop season. This initiative has apositive impact on ALP due to the replacement of family workforce with machinery, by more efficient useof time, reduction of labor hiring and increased profitability. These benefits are also key enablers to ensure
minimum wage and legal requirements are met when a worker is eventually hired.
By 2025 100% of MCE tobacco growers will have access to soil preparation, 2,000 hectares will be covered
with mechanized transplanting and 1,500 hectares with mechanized harvesting (approximately between
25-30% of the current growing area).
Also, MCE will yearly communicate all the farmers participating in the initiative about the requirements
and MCE´s expectations on ALP compliance.
Implementation date: Q4 2020
Responsible: ALP Coordinator
KPI 3: Accommodation
2.3.3 CU´s farm findings:
CU´s farm findings:
In 1 farm out of 10 (10%) the accommodation lacked showers and was unsafe due to exposed electric
wiring.
In 4 farms out of 10 (40%) the accommodations did not post emergency phone numbers.
MCE response:
MCE will continue communicating the minimum accommodation standards to be met when it’s provided
to workers through field visits, Mas Chacra trainings and leaflets/digital flyers.
As well, field technicians will continue monitoring accommodation using the 34 standards checklists toassess whether the accommodation is compliant or not, and if not, action plans will be agreed upfront withthe farmers with a clear deadline.
For farmers not willing to improve the workers´ accommodation the consequence management policies
will be applied according to the severity matrix which states that after one recurrence, the contract will
be canceled.
MCE checklist to monitor accommodation standards will be reviewed and adapted to PMI’s Global
Accommodation Standards by Q1 2021.
Appendix I – MCE Action Plan _ page 8 of 1558

External Assessment

Implementation date: Q3-Q4 2020
Responsible: ALP Coordinator/Field Technicians
CU´s finding:Among the farms with accommodations visited by CU, one (10%) was not meeting two of the criticalindicators. This case had not been captured by the field technician or reported in the system.
MCE response:With the purpose of bringing more accuracy on accommodation monitoring, each of the farmers providing
accommodation will receive an unannounced visit by an internal auditing team. When discrepancies arefound, the FT will be informed and trained, and the findings will be recorded accordingly on the monitoring
system.
Implementation date: Q3-Q4 2020
Responsible: ALP Coordinator/Field Supervisors/Leaf buyers
KPI 4: Personal Protective Equipment
CU’s farm findings:
PPE use for handling green tobacco
CU´s farm finding:On 25 of the farms visited (67%), at least one person was handling green tobacco without wearing thecomplete set of required PPE. Gloves were often not used.
MCE response:
To ensure PPE availability on the farms, MCE will continue delivering PPE for GTS to cover all farmers andworkers as a crop input.
100% of farmers will be trained on GTS avoidance and the risks related with the non-usage or incomplete
usage of PPE when handling green tobacco, highlighting and clarifying that gloves must be used whether
the green tobacco is dry or wet.
Specific communication material on GTS will be developed by MCE so farmers can train workers at thetime of hiring them. These trainings will be recorded on the pay slip forms.
Moreover, MCE will research on yearly basis and collaborate with local providers to develop new andmore comfortable products to increase PPE usage.
Ultimately, farmers not complying with complete usage of PPE will not get a contract renewal after one
recurrence following the Consequence management policies.
Implementation date: Q3-Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator/Sustainable agriculture manager/Field technicians

Appendix I – MCE Action Plan _ page 9 of 1559External Assessment

PPE use for handling and applying CPA
CU´s farm findings:
On 30 farms (75%) persons handling CPA did not wear the required PPE
On 6 of the farms (13%) not all people handling or applying chemicals received training
MCE response:
To ensure PPE availability on the farms, MCE will continue delivering PPE for CPA to cover all farmers andworkers as a crop input.
100% of farmers will be trained on the risks related with the non-usage or incomplete usage of PPE whenhandling/applying CPA.
Specific communication material on the correct usage of PPE for CPA will be developed by MCE so farmers
can train workers at the time of hiring them. These trainings will be recorded on the pay slip forms.
Moreover, MCE will research on yearly basis and collaborate with local providers to develop new and more
comfortable products to increase PPE usage.
Ultimately, farmers not complying with complete usage of PPE will not get a contract renewal after tworecurrences following the Consequence management policies.
Implementation date: Q3-Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator/Sustainable agriculture manager/Field technicians

Farm findings on other ALP Measurable Standards
3.4 ALP Code Principle 2: Income and work hours

CU´s farm findings:
Payment scheduleOn three of the farms with hired labor (13%), workers were paid at the end of the season, which is notin accordance with Argentinean national law. On two of these farms the end-of-season payment was for
hired relatives, while on the third farm it applied to a permanent worker. No evidence was found of theseworkers dis-agreeing to this form of payment.
Overtime payment
12 farmers (52%) did not pay the legal overtime rate.
Legal benefits
On 5 of the farms (22%) workers were provided registration at AFIP (Administracion Federal de Ingresos
Públicos). Only on 2 they were provided with the full benefits provided by law, such as holidays, sick leave,paternity etc.

Appendix I – MCE Action Plan _ page 10 of 1560

External Assessment

MCE response:
MCE will develop a focused monitoring to be done to farmers hiring permanent workers with specificquestions related to frequency of payment, overtime payment and workers´ legal benefits. In parallel,
training and communication related to the topics mentioned above will be redesigned and reinforced
during field visits. These measurable standards will also be assessed during the unannounced visits.
To ensure that all risks related to payment frequency are mitigated, MCE will continue monitoring
sharecropping and putting agreements in place to bring transparency to this commercial relationship when
it is identified.
In addition, to strengthen compliance regarding the frequency of payment, the severity matrix will beapplied to farmers paying at the end of the season according to the consequence management policies:
after two recurrences, the contract is not renewed for the following season.
Implementation date: Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator /Field technicians/Sustainable agriculture manager

3.5 ALP Code Principle 3: Fair treatment
No evidence was found on farms of physical, sexual or verbal abuse.
No evidence was found on farms of discrimination.
All workers mentioned to be able to communicate to their farmer in case of need.

3.6 ALP Code Principle 4: Forced Labor and Human Trafficking
CU´s farm findings:
On three of the farms with workers (13%) CU identified a risk of forced labor, as the workers were paid atthe end of the season. Although these workers had agreed to this form of payment and were free to leave
their employment, a worker on one of these farms was not sure whether he would receive the agreedupon wage if he left his job before the end of the season.
MCE response:
MCE will develop a focused monitoring to be done to farmers hiring permanent workers with specificquestions related to frequency of payment to identify and mitigate any forced labor risk. This measurable
standard will also be assessed during the unannounced visits.
Moreover, training and communications related to the topic mentioned above will be redesigned andreinforced during field visits.
To ensure that all risks related to payment frequency and forced labor are mitigated, MCE will continue
monitoring sharecropping and putting agreements in place to bring transparency to this commercial
relationship when it is identified.

Appendix I – MCE Action Plan _ page 11 of 1561

External Assessment

In addition, to strengthen compliance regarding the frequency of payment, the severity matrix will beapplied to farmers paying at the end of the season according to the consequence management policies:
after two recurrences, the contract is not renewed for the following season. This will also contribute to
mitigate any risks associated with forced labor or workers not being free to leave the farm until they get
paid.
Ultimately, when MCE identifies that workers are not free to leave their employment due to debts or
pending payments, the contract is immediately canceled.
Implementation date: Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator /Field technicians/Sustainable agriculture manager

3.7 ALP Code Principle 5: Safe Work Environment
CU´s farm findings:
General safety measures
On 13 farms (29%), the barns were high and lacked protection measures for persons climbing the walls to
load tobacco.
MCE response:
Aiming to increase the usage of PPE when working at heights, MCE will continue:
Monitoring farms to assess harness availability and its correct usage, reinforcing the importance of the
PPE availability at farms; andDelivering trainings to farmers through Mas Chacra and communication material.
Implementation date: Q1 2021
Responsible: ALP Coordinator/Field technicians

CU farm finding:
On 40 farms (89%), sharp tools were properly stored, but on five farms (11%) these tools were left aroundthe farm or barn area where children and other family members had access.
MCE response:
Field technicians will communicate and agree action plans with farmers when dangerous or sharp tools arepresent in areas where children or other family members could be injured.
Implementation date: Q4 2020
Responsible: ALP Coordinator/Field technicians

Appendix I – MCE Action Plan _ page 12 of 1562External Assessment

Chemical storage and disposal, equipment and application
On 28 farms (62%) evidence was found of persons applying fertilizers without using gloves.
MCE response:
Gloves usage for applying fertilizers will be monitored and communicated to farmers to increase theadoption of this practice.
Implementation date: Q1 2021
Responsible: ALP Coordinator/Field technicians
On 41 farms (92%), CPA containers and chemical equipment were stored safely in locked storage on thefarm. On the four remaining farms (8%), CPA and chemical equipment were kept in storage that was notlocked.
MCE response:
MCE will continue monitoring CPA storage at farms to assess if they comply with all the safety measures
recommended including the correct lockage of it and warning signs. Field technicians will continue
raising prompt actions when CPA are not safely stored. This standard is also included in Due Diligence &Consequence management policy, which states that after one recurrence, the contract won´t be renewed
for the following season.
Implementation date: Q3 – Q4 2020
Responsible: ALP Coordinator
On 20 farms (45%), farmers did not dispose of empty CPA containers correctly (the correct method is to
triple rinse and puncture the container before safe disposal). On three of these farms the empty containers
were burned in the field, while on two farms they were left in the field and around the farm. On theother 15 farms they were kept in the storage but without being rinsed or punctured first. Some farmers
mentioned reusing the empty containers for other purposes, mostly to carry gasoline to machines in thefield. One farmer mentioned refilling empty CPA containers with drinking water to take to the field whenworking in tobacco.
MCE response:
MCE will continue training farmers on how to correctly dispose the CPA empty containers (including triple
rinse and puncturing the container).
Additionally, MCE will actively participate in CoTTaProM (Comisión Técnica de Tabaco de la Provincia deMisiones – is a technical committee that engages tobacco key stakeholders such as tobacco companies,
unions, technical entities and government bodies to discuss and address common issues) empty containers
collection program to ensure that 100% of farmers get their containers collected by 2021.
Field technicians will continue reporting CPA empty containers being reused for domestic purposes as aprompt action and this practice will be linked to consequence management policy: after one recurrence
the farmers’ contract will be cancelled.
Implementation date: Q3 – Q4 2020
Responsible: ALP Coordinator/Environmental Coordinator/Sustainable Agriculture Manager/ Field
Technicians
Appendix I – MCE Action Plan _ page 13 of 1563

External Assessment

On seven farms (15%), farmers were not aware of the correct re-entry period after CPA application.
MCE response:
MCE will keep on monitoring and training farmers on the minimum period to re-entry a field after a CPA
application.
Implementation date: Q3 2020
Responsible: ALP Coordinator/Field Technicians
On 15 farms (33%), no warning sign was available to use after CPA application.
MCE response:
MCE will redesign and distribute warning signs to 100% of farmers to be placed on the tobacco field after
a CPA application to alert people from entering.
Implementation date: Q1 2021
Responsible: ALP Coordinator/Field Technicians
On six farms (12%), people handling or applying chemicals had not received training on how to do this.
MCE response:
100% of farmers will be trained on the risks related with the non-usage or incomplete usage of PPE whenhandling/applying CPA.
Specific communication material on the correct usage of PPE for CPA will be developed by MCE so farmers
can train workers at the time of hiring them. These trainings will be recorded on pay slip forms.
Implementation date: Q3-Q4 2020 – 2021 - 2022
Responsible: ALP Coordinator/Field technicians

3.8 ALP Code Principle 6: Freedom of association
No evidence was found on Freedom of association.
No evidence was found of workers not being able to join or form organizations of their own choice. No
evidence of active unions was found in the region where the assessment was conducted.
No evidence was found of worker representatives being discriminated against for their functions.

3.9 ALP Code Principle 7: Terms of employment
CU´s farm findings:
On 11 of the farms (48%) the farmer did not inform the workers of their legal rights and benefits to bereceived. Topics such as hours to be worked and pay were discussed with the farmer.
Appendix I – MCE Action Plan _ page 14 of 1564

External Assessment

On none of these farms gave an introduction regarding safety on farm
On 40 farms (78%) the terms and conditions contravened the country’s law, because farmers did notregister their workers for AFIP (Administracion Federal de Ingresos Públicos)
MCE response:
MCE will develop a focused monitoring to be done to farmers hiring workers with specific questions
related to workers´ legal benefits and labor registration.
In parallel, training and communication related to the topics mentioned above will be redesigned andreinforced during field visits.
Responsible: ALP Coordinator/Field technicians
Implementation date: Q3 2021

Appendix I – MCE Action Plan _ page 15 of 1565

External Assessment

Appendix II – Scope and methodology
Assessment team
The team responsible for conducting this assessment
consisted of three auditors from Argentina, one
auditor from the United States, one coordinator from
Italy, and one coordinator from the Netherlands. The
auditors conducted farm assessments, interviewed
field technicians, and were accompanied by oneof the coordinators during most of the visits. The
coordinators interviewed MCE management andsenior field staff (including field supervisors). Boththe auditors and coordinators had been trained
by Verité and CU before the assessment. Thisqualification 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; and• Two-day preparation training by CU directlyprior to starting the field visits.
Desk review

Methodology for ALP implementation
review

system

The methodology used for the evaluation of
MCE’s implementation of the ALP Program wasbased on the widely used PDCA 20 cycle. This
cycle is a management method for the continuous
improvement of processes and products. CU spent
two days (25 and 26 November 2019) at MCE‘shead office to interview management staff, analyze
documentation, and evaluate MCE’s systems tobetter understand how the implementation of the
ALP Program was organized. In total, CU interviewed
five management personnel, 14 field personnel(12 field technicians, two supervisors), two NGO
representatives, and three representatives of MCE’s
finance and planning team.
Scope and farm samplingThis assessment focused on Burley farmers locatedin the northern and southern areas of the provinceof Misiones, Argentina (see graph below). These twoareas were considered homogenous and comparable
based on farm size, geographical spread, language
spoken, and cultural aspects, and were therefore
assessed together within the same scope.

Prior to this assessment CU requested that MCE
send documentation to CU to give the assessment
team a better idea of the market characteristics andthe management systems that were in place. MCE
provided the legal information that was relevant to
the ALP Code (see Appendix III for more detailed
legal information). This was important to ensure athorough preparation of the assessment.
Opening meeting
On 25 November 2019, CU started the assessmentwith an opening meeting at MCE’s head office inLeandro N. Alem, Misiones, Argentina. This meeting
was attended by MCE’s ALP Country Team. CU
presented the objectives and approach of theassessment, while MCE provided a brief overview
of the market and company background.
20. Plan, Do, Check, Act
Appendix II - Scope and Methodology _ page 1 of 4

Figure 4. Scope of assessment: Burley farmers in northernand southern Misiones in Argentina. Source: MCE.
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External Assessment

The majority of the farmers contracted by MCE in
Misiones were small-scale family farms growing 1.7
hectares of tobacco on average.
For the 2019-2020 crop season, MCE had contracts
with 3,154 farmers across Misiones: 1,211 farmers
in the northern area, 1,062 farmers in the centralarea, and 881 farmers in the southern area. To
constitute a meaningful sample CU needed tovisit at least 45 farms, which was calculated as thesquare root of the total number of farms within thescope (2,092). In total, CU visited 45 farmers, whichwere either sampled randomly or selected based on
the following criteria:

Farm size farms visited by CU andcontracted by MCE

22%

54%
24%

1<2
2<3
>3

• Geographic spread• Farm size: different farm sizes selected to ensure
diversity, but a focus on the larger farms toensure labor practices could be assessed.

Total number of visited farm previously
contracted by MCE• Participation in ALP Program initiatives, to allow
assessment of the initiatives’ implementation.

11%

Over a period of one week, CU visited an averageof 16 farms per day, with a reporting day after eachfield day. The graphs below provide demographic
information about the selected farms.

Yes
No

89%

Stages in tobacco production on the visited farms

29

30
20
10

21

9

7

0
Growing

Appendix II - Scope and Methodology _ page 2 of 4

Topping

Harvesting

Curing67

External Assessment

Farm ownership break down andfarms compositions of visited farms

Methodology for ALP farm practices review

4%LeasedOwned
96%

Farm composition
2% 2%

49%
47%

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, workers, and/or crewleaders. Sources could also include documentationand visual observation of the farm area, field,
storage facility, and curing barns. This methodology
was also used to investigate the underlying factorsthat increase the risk of not meeting the standard.
In addition to information triangulation CU used
the “Five Why’s” 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 MCE’s management systems at thefarms, to assess how these were perceived by thefield technicians, farmers, family members, andother people working at the farms.

Farms with only family members working

People interviewed

Farms with family members and local workers

Wherever possible, interviews with family members
and workers were conducted individually andwithout the presence of the farmer, to avoid undue
bias. For the same reason, all interviews with
farmers were conducted without the presence ofthe field technician.

Farm with only local workers (no family members)
Family farms with family members and migrant
workers

CU informed MCE about the names of the selected
field technicians and selected farmers the same
day the visit would take place. The reason for thiswas that CU wanted to obtain a realistic pictureof the farm practices, which was most likely to be
seen when arriving unannounced. CU conducted 45
visits (100%) unannounced.

Appendix II - Scope and Methodology _ page 3 of 4

In total, CU interviewed 45 farmers, 69 family
members, and 10 workers. The relatively low
number of workers interviewed was due to farmcomposition and stage in tobacco production: many
farms were family farms without hired labor, while
farms that did hire labor often only did so for laborintensive tasks such as transplanting and harvesting.
However, most of the farmers visited by CU werestill at the topping stage of tobacco production.

68

External Assessment

Demographic information on the family members
and external workers interviewed is shown in thegraphs below:

Workers duration of employment

25%

Total number of peopleinterviewed on farms

50%
External persons

10

Family members

69

0

20

40

60

1-3 months
Less than 1 month

80

Breakdown of gender of total
number of people interviewed

Permanent

Closing meeting
On 30 January 2020 a closing meeting was held via
web conference. As with the opening meeting, theclosing meeting was attended by the ALP Country
Team. Furthermore, representatives of PMI OC andPMI Regional joined the web conference call.

35%

65%
Male
FemaleFamily members’ involvementin farm activities

8%

25%

CU presented the initial findings, and MCE requested
clarification of certain items. A constructive
discussion took place on several topics. Overall,CU’s findings were considered a useful base fortaking action to improve the implementation of the
ALP Program.
Reporting procedure

2%
2%
4%

12%
Less than 1 month
1-3 months
6-9 months
9-12 months
Permanent

During the assessment, auditors reported after eachfield day to the coordinator. This person monitored
the auditors’ findings and provided feedback
whenever necessary. The coordinator compiled all
findings and combined these with the findings fromthe management assessment. Public release of CU’s
assessment report demonstrates PMI’s commitment
to transparency, which is an important componentof the ALP Program. CU authored the final report,
which was evaluated by Verité. PMI reviewed thereport. Finally, MCE reviewed the report to verify
that all the information was correct, and to finalize
their action plan that was based on this report. 21

21. Leaf tobacco suppliers can start drafting their action plans after the closing meeting, as initial findings usually do
not differ much from the final report.
Appendix II - Scope and Methodology _ page 4 of 469

External Assessment

Appendix III – Legal Questionnaire

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

Applicable laws
• Provide a list of the applicable laws (i.e. Constitution, Employment regulation etc.) included in youranswer.
• References may be repeated if the same laws apply to more than one principle.
• Please include, if possible a link to the official or reliable websites for the references.
• It is no problem if the same laws appear in more than one section.

Appendix III - Legal Information _ page 1 of 1870

External Assessment

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

Appendix III - Legal Information _ page 2 of 1871

External Assessment

Appendix III – Legal Questionnaire
Agricultural Labor Practices
LEGAL INFORMATION QUESTIONNAIRE
ARGENTINA
Author: Tamara Cañete Chadra
Date of Original Analysis: Q1 2017
Date of Updated Analysis: Delfina De Elizalde & Tamara Cañete Q4, 2019

Principle 1 – Child Labor
Summary

ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSMATCHES

EXCEEDS

Minimum age foradmission to work is
not less than age forcompletion of mandatory
schooling

Education canbe finished atage 17. Theage for working
with tobacco
is greater at 18
years

In any case, minimum age
for admission to work is
not less than 15 years OR
the minimum age provided
by law, whichever offers
greater protection

The age forworking withtobacco is 18.
Minors areprohibited.

No person under 18
involved in hazardous
work

OPPOSESCOMMENTS

Minors of
18 years areprohibitedfromhazardous
work
includingtobaccoproduction.

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

Appendix III - Legal Information _ page 3 of 18

Minors cannot
work at all onfamily farms.

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External Assessment

Applicable laws
• Argentine Constitution: http://infoleg.mecon.gov.ar/infolegInternet/anexos/0-4999/804/norma.htm• Several International Treaties ratified by Argentina• Child Labor Law, No. 26,390: http://www.infoleg.gob.ar/infolegInternet/
anexos/140000-144999/141792/norma.htm• Agricultural Labor Law, No. 26,727: http://servicios.infoleg.gob.ar/infolegInternet/
anexos/190000-194999/192152/norma.htm• Federal Education Law, No. 26,206: http://www.infoleg.gob.ar/infolegInternet/
anexos/120000-124999/123542/texact.htm• National Decree 1117/2016: http://servicios.infoleg.gob.ar/infolegInternet/
anexos/265000-269999/266668/norma.htm
Your answer
Minimum age for employment (in tobacco)• The minimum age for working with tobacco is 18 years old.

Age (or ages) limits for compulsory schooling• Primary and secondary school education are structured based on a scheme that should be finished by
the age of 17.
• Despite social programs to encourage school attendance, there are no specific obligations or
punishments applied to parents whose children do not attend school.

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 in by law• It is forbidden to employ minors of 18 years old in dangerous, hazardous or unhealthy work, andtobacco production is considered hazardous work.

Requirements applying to farmers’ own children or other family members such as nieces and nephews
helping on the farmers• Minors, whether a family member or not, cannot work in activities related to tobacco, except when
they are 18 years old or older.

Appendix III - Legal Information _ page 4 of 1873

External Assessment

Other restrictions or requirements on the employment of workers under 18 years (e.g. limit on work
hours, work permits, etc.)• Minors under the age of 16 are prohibited from working in any type of activity, whether it is for profit
or not 23.

Principle 2 – INCOME AND WORK HOURS
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSMATCHES

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

EXCEEDSOPPOSESCOMMENTS
National Legal Standards (Labour
Law): AR$ 16.875 per month or AR$
84,37 per hour.
National Commission for Agricultural
Work (CNTA): The current minimum
wage for agricultural work is AR$
24.445, 89 per month or AR$
1.075,45 per day for a lower scale
worker (a peon).
Salta and Jujuy applicable Legal
Standards: CNTA Resolution N°
219/19 establishes the current
minimum wage for tobacco in AR$
23.923,35 per month or AR$ 1052,44
per day.
In Misiones there is no a specifictobacco salary, so the agricultural
benchmark MP uses is from yerbamate (CNTA Resolution N° 48/19)
that establishes that the current
minimum wage is AR$ 21.607,73 permonth or AR$ 950,76 per day.

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

Monthly workers are paid at end of
calendar month and within the first
4 days of the next month. Weekly or
daily workers are paid every week or
15 days. Performance workers arepaid every week or 15 days in relation
to work finished.

Work hours are incompliance with thecountry’s laws.

Agricultural Law: Working hours are 9hours per day OR 44 hours per week.

Appendix III - Legal Information _ page 5 of 18

Farmers must to enroll daily workers
and permanent workers (more than
1 month) in the AFIP (Administración
Federal de Ingresos Públicos.

74

External Assessment

Maximumworking hours
are 9 hours
per day OR
44 hours per
week.

Excluding overtime, work
hours do not exceed, on aregular basis, 48 hours per
week.

Overtime work hours arevoluntary.

NA

NA

NA

Special request to the Employment
Ministry is needed only when an
employee works more than 30 extra
hours a month or 200 extra hours ayear.

Overtime wages are paid
at a premium as requiredby the country’s laws or by
any applicable collective
agreement.

Every overtime hour is paid with a
50% increase or with 100% if on
Sundays.

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

Licenses are provided for maternity/
paternity, vacation, exam and family
death leaves. Healthcare and social
security provided. It applies toall employees, even weekly/daily
workers and performance workers

Applicable laws
Laws on regular and overtime wages including laws on in kind payment (e.g. minimum wages, minimum
wages agreed with unions, agricultural wage benchmark standards). If a minimum monthly wage isreferenced, please indicate how many hours this wage represents• Regarding to working hours less than 8 hours, the law state: when employees work less than 2/3 ofthe working hours, the salary can be proportional to the time worked. If you work more than 2/3 ofthe working hours and the day is calculated in hours, the company must pay the full day although theemployees hadn´t worked 8 hours. So, if the employee’s daily workday is 6 hours but the usual working
hours per day are 8 hours, it is necessary to pay 8 hours as it is exceeding 2/3 parts. On the other hand,
if you work 5 hours you can pay 5 hours.
• Every overtime hour shall be paid:– with a 50% increase, if it takes place from Monday to Saturday until 01:00 pm– OR with a 100% increase, if is takes place on Saturday after 01:00 pm or on Sundays.
• In Salta and Jujuy, the current minimum wage for tobacco growing activities is AR$ 23. 923, 35 permonth or AR$ 1052,44 per day.
• In Misiones we don´t have a specific tobacco salary but we have yerba mate CNTA Resolution N°
48/19 that establishes the current minimum wage in AR$ 21.607,73 per month or AR$ 950,76 per day.
• If an employee has been working for the same employer for more than one year, an additional amountof 1% must be added as a ‘seniority’.
• Payments in-kind are allowed provided they do not exceed 20% of the total payment.

Wage and hours laws specific to piece rate workers, seasonal workers, and migrant workers• No rules on these matters.
Appendix III - Legal Information _ page 6 of 1875

External Assessment

Other specific rules applicable to migrant workers including any legal requirements to ensure they arelegally permitted to work
• To be legally allowed to work in Argentina, migrant workers shall obtain a working visa .
• Upon the issuance of a working visa, migrant workers have the same rights and obligations as local
workers.
• Any difference in treatment of migrant workers with a working visa is illegal.

Laws on payment of wages relevant to the frequency of payment in agriculture, for example, laws on
whether end of season one-time payments are permissible• Payment intervals are as follows:– For monthly workers, wages shall be paid at the end of each calendar month and within the next 4
days;– For weekly or daily workers, wages shall be paid every week or every 15 days;– For work-performance workers, wages shall be paid:a. Every week or every 15 days in relation to the work finished during the mentioned periods
b. AND an amount proportional to the value of the rest of the job performed.
c. The employer may hold as guarantee a sum not exceeding a third of the total amount.
• End-of-season wage payments are not allowed.

Laws on regular and overtime hours (e.g. maximum work hours, requirements for overtime hours to be
voluntary)• Maximum working hours are 9 hours per day OR 44 hours per week, from Monday to Saturday at
01:00 pm .
• Such a schedule excludes tasks that, because of their nature, are usually performed on Sundays. For
these cases, employers shall allow workers to take a compensatory rest day during the following week.
The compensatory rest day aims at providing the worker physical and psychological rest and thus
cannot be waived or exchanged for any monetary benefit (not even if the workers chooses to).
• Night work (from 9:00 pm to 6:00 am) cannot exceed 7 hours per day or 42 per week.
• For work schedules that combine day and night hours, every night hour implies a proportional reductionof the total work shift of 8 minutes or for these 8 minutes to be paid as overtime.
• The maximum overtime allowed is 30 hours per month or 200 hours per year.

Requirements that employers must meet to request overtime from workers• There are no specific requirements to be met by employers in order to request overtime from workers.
• The employer has an obligation to comply with the employee’s resting time between each working day.

Appendix III - Legal Information _ page 7 of 1876

External Assessment

Laws on basic entitlements or benefits to be paid to workers (e.g. social security, health care, holidays,
other leave entitlements etc.)• Workers are covered by regular social security provisions and have their own health care system.
• The employer must perform the following 3 deductions from the employee’s gross salary so that 17%
of entitlements are paid by employees:– 3% for Elders’ Social Services Association (PAMI);– 3% for the worker’s Health Association; and– 11% for Pension Plan contributions.
• Salaries may also have special deductions set by specific collective agreements for a specific purpose.
In the provinces of Salta, Jujuy and Mendoza, UATRE (collective agreement) sets a deduction of 1.5%
for burial insurance and 2% for solidary contributions.
• If food is not provided by the employer, an additional amount must be paid to the employee. Such
payment is not subject to any salary deduction.
• There are licenses for vacations, leaves for exams, parental deaths etc.
• Maternity licenses are for 90 running days. Paternity licenses are for 30 running days.
• Employees may retire at the age of 57 provided that they comply with 25 years of service with social
contributions.

Principle 3 – FAIR TREATMENT
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSNo physical abuse, threatof physical abuse, or
physical contact with
the intent to injure or
intimidate

Any kindof abuse isprohibited

MATCHES

EXCEEDSOPPOSESNA

NA

COMMENTS

No sexual abuse or
harassment
No verbal abuse or
harassment
No discrimination on
the basis of race, color,caste, gender, religion,
political affiliation, union
membership, status as aworker representative,
ethnicity, pregnancy, social
origin, disability, sexual
orientation, citizenship, or
nationality

All people equal
before the law
and protectedfrom arbitrary
discrimination,
especiallywomen.

Worker access tofair, transparent andanonymous grievancemechanism

NA

Appendix III - Legal Information _ page 8 of 18

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External Assessment

Applicable laws
• Argentine Constitution : http://infoleg.mecon.gov.ar/infolegInternet/anexos/0-4999/804/norma.htm• Anti-Discrimination
Law,No.
anexos/20000-24999/20465/texact.htm

23,592:

http://www.infoleg.gob.ar/infolegInternet/• Law for the Comprehensive Protection of Women, No. 26,485: http://www.infoleg.gob.ar/
infolegInternet/anexos/150000-154999/152155/norma.htm
Your answer
Laws defining and prohibiting physical, sexual, or verbal threats, abuse, contact, or harassment• Any kind of abuse (physical, verbal, etc.) or mistreatment is prohibited.
• The employer has a duty to ensure decent working conditions and is required to observe the regulations
on health and safety at work

Laws defining and prohibiting discrimination• All inhabitants are equal before the law and admissible to employment without any requirement otherthan their abilities• Employees are protected from arbitrary discrimination• Discrimination and violence against women is specifically punishable

Protection of workers from discrimination (workers’ rights and employers’ obligations)• Under identical situations, the employer shall treat all workers equally, avoiding arbitrary discrimination
based on sex, religion, race etc.
• Workers are allowed to formally request their employers to cease any discriminatory behavior

Laws on resources for victimized workers including any access to grievance mechanisms• Employees are entitled to claim damages as compensation for discrimination

Appendix III - Legal Information _ page 9 of 1878

External Assessment

Principle 4 – FORCED LABOR AND HUMAN TRAFFICKING
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDS

No work under bond, debt or
threatSlavery is a crimeand includes any task
performed against aperson’s will undermenace of penalty.

Workers must receive wages
directly from the employer.

NA

Workers are free to leave theiremployment at any time withreasonable notice, without
threat or penalty

Forced labor isforbidden

Workers are not required tomake financial deposits with
farmers, labor contractors, or
any other third party at the timeof recruitment or at any point
during employment

MATCHES

EXCEEDSOPPOSES

NA

NA

NA

NA

NA

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

NA

NA

NA

Wages or income from crops
and work done are not withheld
beyond the legal and agreed
payment conditions.

NA

NA

NA

Farmers do not retain theoriginal identity documents ofany worker

NA

NA

NA

Where farmers are legallyrequired to retain the originalidentity documents of workers,
they provide secure storage
protected from unauthorizedaccess and ensure workers haveaccess to their documents uponend of employment

NA

NA

NA

Where labor contractors areused, farmers verify their labor
practices and ensure they are inline with the ALP standards

NA

NA

NA

No employment of prison orcompulsory labor

Forced labor isforbidden

Appendix III - Legal Information _ page 10 of 18

COMMENTS

79

External Assessment

Applicable laws
• Argentine Constitution : http://infoleg.mecon.gov.ar/infolegInternet/anexos/0-4999/804/norma.htm• ILO Forced Labor Convention• Agricultural
Labor
Law,
No.
26,727:
anexos/190000-194999/192152/norma.htm

http://servicios.infoleg.gob.ar/infolegInternet/

Your answer
Legislation on forced labor (including any regulation on identity document retention or wage withholding)• Forced labor is forbidden and shall only be admitted as an exceptional measure.
• Slavery is a crime and all workers are protected from this practice, which includes any task performed
by a person against their will under the menace of penalty

Legislation relating to limits or prohibitions on recruitment fees and deposits workers may be required topay• There are no specific laws relating to limits or prohibitions on recruitment fees and deposits workers
may be required to pay.

Legislation regulating the operation of labor brokers and other third party recruiters• Any personnel agency is prohibited from recruiting workers for certain activities

Laws on prison labor• No specific rules on this matter.

Appendix III - Legal Information _ page 11 of 1880External Assessment

Principle 5 – SAFE WORK ENVIRONMENT
Summary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDS

Farmers provide a safe and sanitary
working environment

Agricultural work shallbe performed underadequate hygienic andsecure conditions

Farmers take all reasonablemeasures to prevent accidents,
injury and exposure to health risks.

Employers shall adopt
every necessary
measure to protect
the workers’ dignity
and personal safety

No person is permitted to top or
harvest tobacco, or to load barns
unless they have been trainedon avoidance of green tobacco
sickness.

EXCEEDSOPPOSES

NA

NA

NA

No person is permitted to use,
handle or apply crop protection
agents (CPA) or other hazardous
substances such as fertilizers,
without having first received
adequate training.

NA

NA

NA

No person is permitted to use,
handle or apply crop protection
agents (CPA) or other hazardous
substances such as fertilizers,
without using the required personal
protection equipment.

Workers in Misiones
must use appropriate
PPEs (clothes, masks,
gloves)

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

Minors under 18 andpregnant women are
forbidden from CPA
use

No person do not enter a field
where CPA have been applied
unless and until it is safe to do so.

NA

NA

NA

Every person has access to cleanNAdrinking and washing water close towhere they work and live.

NA

NA

Accommodation, where provided, isclean, safe, meets the basic needsof workers, and conforms to thecountry’s laws.

MATCHESCOMMENTS

If worker
accommodation
is provided, theemployer shallprovide adequate andsufficient conditions
regarding hygiene,
security, light,
adequate spaces
for each family
member and separate
bathrooms

Appendix III - Legal Information _ page 12 of 18

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External Assessment

Applicable laws
• Agricultural
Labor
Law,
No.
26,727:
anexos/190000-194999/192152/norma.htm

http://servicios.infoleg.gob.ar/infolegInternet/• Hazardous Waste Law, No 24,051: http://infoleg.mecon.gov.ar/infolegInternet/anexos/0-4999/450/
texact.htm• Agro-chemical Law, No 2,980 (Provincial Law – Misiones): http://www.minagri.gob.ar/site/agregado_
de_valor/gestion_ambiental/05-Legislacion/02-Provincial/_archivos/000001-Agroquimicos/000014Misiones/002980-Ley%202980%20AGROTOXICOS.pdf• Implementing Decree to Provincial Agro-chemical Law, No. 1701/04 (link not available)
Your answer
Requirements for provision of medical protection (availability of first aid kit, health & safety training etc.)• Agricultural work shall be performed under adequate hygienic and secure conditions in order to avoid
diseases and accidents• Employers shall adopt every necessary measure to protect the workers’ dignity and personal safetyincluding avoiding detrimental effects for risky or unhealthy tasks• Employers shall comply with every regulation regarding hygiene and safety at the workplace

Requirements to report accidents and injuries• All accidents and injuries must be reported to the company.

Requirements for green tobacco sickness training or awareness• No rules for these matters.

Requirements for PPE needed for using, handling, storing, or disposing of crop protection agents (CPA).
This may vary depending on the CPA in question.
• Employers shall provide workers with clothes and/or protection elements and instruct workers on
specific usage when necessary (ex. CPA manipulation)

Restrictions on CPA use, handling, storing, or disposing (e.g. restrictions on vulnerable population such as
under 18s, pregnant women, nursing mothers interacting with CPA)
• Workers in Misiones must
– Use appropriate PPEs (clothes, masks, gloves, etc.)– Follow any provided instruction– Avoid manipulating CPAs near houses or animals– Avoid storing empty CPA containers inside houses
Appendix III - Legal Information _ page 13 of 1882

External Assessment– Avoid eating/drinking/smoking while applying CPA– Take a shower and change clothes after finishing working with CPA– Pay special attention to weather conditions– Respect recommended dose
• Minors under 18 and pregnant women are forbidden to manipulate or intervene in any task related to
CPA• After appropriate draining, washing and rendering empty CPA containers useless, such containers
must be disposed of correctly• Empty CPA containers are considered as hazardous waste and are subject to special treatment

Other legislation related to CPA, (e.g. where they may be stored or transported, explicit restrictions on
specific CPAs, weather conditions under which CPA application may or may not occur, other restrictions
limiting contact or exposure with CPA)
• Only persons or companies registered by the Federal Registry of Generators, Carrier, and Operators ofHazardous Waste are allowed to store, treat, transport or dispose of hazardous waste, provided they
follow the practices determined by the Hazardous Waste Law

Requirements related to providing drinking water and safe housing• No specific rules on these matters

Requirements for worker accommodation if provided• If worker accommodation is provided, the employer shall provide adequate and sufficient conditions
regarding hygiene, security, light, adequate spaces for each family member and separate bathrooms.
• CNTA shall determine the infrastructure conditions and control their compliance.

Restrictions on farm equipment (e.g. maintenance and licensing for operators)• The National Commission for Agricultural Work (CNTA) shall determine the hygiene and security
conditions for each workplace, machinery, and working tools in addition to other specific regulations.

Appendix III - Legal Information _ page 14 of 1883External Assessment

Principle 6 – FREEDOM OF ASSOCIATION
Summary
ALP MEASURABLE
STANDARDS
Farmers do not interfere withworkers’ right to freedom of
association.

MARKET LEGAL STANDARDSMATCHES

EXCEEDSOPPOSESNA

NA

COMMENTS

Freedom of association
guaranteed

Workers are free to join or form Workers have totalorganizations and unions of their freedom to join or leave
own choosing.
a union or an association
provided that theychoose one related tothe activities or tasks
that they carry out.
Workers are free to bargain
collectively.

NA

Worker representatives are notdiscriminated against.

Employers are prevented
from performing any
discriminatory practiceWorker representatives haveaccess to carry out theirrepresentative functions in theworkplace.

Employers shall allow
workers’ representatives
to use certain amountsof their working hours
for their union duties
and meet regularly withrepresentatives

Applicable laws
• Argentine Constitution: http://infoleg.mecon.gov.ar/infolegInternet/anexos/0-4999/804/norma.htm• Unions Law, No. 23,551: http://www.infoleg.gob.ar/infolegInternet/anexos/20000-24999/20993/
texact.htm• Agricultural
Labor
Law,
No.
26,727:
anexos/190000-194999/192152/norma.htm

http://servicios.infoleg.gob.ar/infolegInternet/

Your answer
Laws on organizing unions and their operation (e.g. protections in place for freedom of association,
protection against employer interference)• Freedom of association is guaranteed .
• Workers have total freedom to join or leave a union or an association provided that they choose one
related to the activities or tasks that they carry out.
• Trade unions may provide employers with workers to perform temporary tasks based on thedetermination of the National Commission for Agricultural Work (CNTA) .
Appendix III - Legal Information _ page 15 of 1884

External Assessment

Laws or requirements for collective bargaining• Law 23.551 establishes that only unions with trade union personality can bargain collectively

Laws related to worker representatives (e.g. requirements for representatives to be in place, protection
from discrimination, access to carry out functions in workplace)• Employers must meet periodically with workers representatives• Employers shall allow workers’ representatives to use certain amounts of their working hours for theirunion duties• Workers’ representatives cannot be suspended or dismissed without fair cause

Other prohibitions on union discrimination and employer interference• Union discrimination of affiliates based on sex, religion, political ideology, race, etc. is prohibited• Employers are prevented from performing any discriminatory practice .

Principle 7 – TERMS OF EMPLOYMENTSummary
ALP MEASURABLE
STANDARDS

MARKET LEGAL STANDARDSMATCHES

EXCEEDSOPPOSESCOMMENTS

At the time of hire, farmers
inform workers of their legal
rightsFor fixed-term
employees, it
is usual to sign
contracts todetermine theAt the time of hire, farmers
inform workers of the essential beginning andaspects of the work relationship ending of thelabor relationshipand work place safety such as
work to be performed, working
hours, wages paid, period ofhire, and all legally mandated
benefits
There is no legal
obligation to execute
written contracts
between employers
and employees, andthere are no specificrequirements forregular workers of anindefinite term

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

Terms and conditions of
employment contracts do notcontravene the country’s laws.

NA

Appendix III - Legal Information _ page 16 of 18

NA

NA

85

External Assessment

Applicable laws
• Agricultural
Labor
Law,
No.
26,727
anexos/190000-194999/192152/norma.htm

http://servicios.infoleg.gob.ar/infolegInternet/

Your answer
Legal requirements to constitute labor/employment relation• There is no regulation for this matter

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)• There is no legal obligation to execute written contracts between employers and employees, and there
are no specific requirements for regular workers of an indefinite term.

Required content for written employment contracts• Fix term contract (Art. 93/95 Law 20.744) or contingency employment contract (art. 99/100 Law
20.744) require the written form.

Deadline for contract conclusion (e.g. on date of hire or within 30 days of hire etc.)• Only the fixed-term contract has an end date agreed by the parts

Requirements for various types of contract (indefinite term, definite term, temporary workers, andprobationary workers)• For fixed-term employees, it is usual to sign contracts to determine the beginning and ending of thelabor relationship• As tobacco production has peaks during the year, it is usual to sign fixed-term contracts for seasonal
production.

Requirements for termination of employment (termination with or without cause, wrongful dismissal,
notice periods required to end employment etc.)• The notice period required to end an employment agreement varies based on the type of contract(indefinite, temporary, cyclical, etc.).
• If the employer does not comply with the correspondent notice period, he should pay a monetarycompensation to the former employee.

Appendix III - Legal Information _ page 17 of 1886External Assessment

Options for farmers to obtain legal assistance about their obligations (e.g. government departments, local
labor offices, farmer associations etc.)• Farmers can obtain legal assistance from their Union and the Ministry of Labor, which has specificoffices for agricultural work

Specific requirements for leaf growing contracts (e.g. government imposed templates, government
approval of contracts, freedom to choose terms of contract)• The parts have freedom to choose terms of contracts.

Appendix III - Legal Information _ page 18 of 1887

External Assessment

Appendix IV - MCE Workers Accommodation Checklist
ALP 7 Principles including measurable standards

Appendix IV - MCE Workers Accommodation Checklist _ page 1 of 488External Assessment

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External Assessment

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External Assessment• Monitoreo y monitoreo de vivienda: monitoreo, permite seguimiento en cada visita. Monitoreo vivienda:
permite seguimiento del plan de acción.
• Visita anunciada aunque sea el mismo día que se realiza una visita o monitoreo• Se realiza también a personas que viven en la chacra y no trabajen para el productor, mientras no seanparientes• Productor que da tierra para que trabajador se haga su tierra, se monitorea porque es tierra delproductor, al menos que trabajador tenga los papeles del título.
• TC encuentra irregularidad en la vivienda del trabajador, no levanta AI.
• Si definen con productor 3 planes de acción con tres plazos diferentes: 7-30 y 60 días. Ir dos veces, alos 15 y a la 30 días.
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External Assessment

Appendix V – Glossary
ALP

Agricultural Labor Practices

ALP Code

PMI’s Agricultural Labor Practices Code

ALP Code Principle

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

ALP Program

Agricultural Labor Practices Program

CU

Control Union

Correction

Any action that is taken to eliminate a situation not meeting thestandard

Corrective action

Steps taken to remove the causes of a situation not meeting thestandard

CPA

Crop Protection Agents

Crew leader

Person responsible for managing a group of workers

EFA

Education for All agricultural secondary schools for children
between 13 and 18 present throughout the region of Misiones,
where children boarded for either two or three consecutive weeks
alternating with one or two weeks at home for studying andhomework.

Family farm

Farm that depends mainly on family members for the production of
tobaccoGAP

Good Agricultural Practices

GTS

Green Tobacco Sickness

Leaf tobacco supplierCompany that has a contract with PMI to supply tobacco but is nota farmer

Measurable 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

Migrant labor

Labor coming from outside the farm’s immediate geographic areaNGO

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

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Preventive action

Steps taken to remove the causes of potential situations notmeeting the standard

Prompt Action

A situation in which workers’ physical or mental well-being might
be at risk, children or a vulnerable group – pregnant women, theelderly - are in danger, or workers might not be free to leave theirjob

Root cause

The underlying reason that caused a situation not meeting thestandard

Root cause analysis

A set of analyzing and problem solving techniques targeted at
identifying the underlying reason that caused a situation notmeeting the standard

Sharecropping

A system of agriculture in which the farmer has a partner (“socio”)
who either works together with the farmer or manages a plot of
land. Costs of inputs and/or revenue are shared.

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