ALPAGRICULTURALLABOR PRACTICESPROGRESS REPORT 2013

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EXECUTIVE SUMMARY

8

1 PMI’S TOBACCO SUPPLY CHAIN

11

2 ALP IMPLEMENTATION AND RESULTS

14

2.1 ALP Training
2.2 ALP Communication
2.3 Implementation Reviews: Key Findings
2.4 Tapping into Expertise and Sharing Best Practice
2.5 Feedback from Farmers

CONTENTSFOREWORD

2.6 Changing Techniques: Impact on ALP
2.7 Improving our Ability to Address ALP Problems Systematically
2.8 Expert Support to Tackle Issues
3 ASSESSMENT AND MONITORING

27

3.1 A Baseline to Measure Against
3.2 External Monitoring System
4 SUPPORT SERVICES: LEARNINGS AND PILOT PROJECTS

31

4.1 Experience in Kazakhstan
4.2 Progress Worldwide
5 EMERGING TRENDS AND CHALLENGES

34

5.1 GAP Revision: A Comprehensive Approach to Sustainable Tobacco Growing
5.2 The Role of Women, Fair Treatment for Vulnerable Workers,		 and Food Security in the ALP program
5.3 Implementing ALP in the Absence of a Direct Link to Farmers
6 SUSTAINABLE PRODUCTION AND COMMUNITY INITIATIVES

46

6.1 Integrated Approach
7 PARTNERING WITH STAKEHOLDERS
7.1

50

Malawi

7.2 North Carolina
7.3 Kazakhstan
7.4 Eliminating Child Labor in Tobacco Foundation
8 LOOKING AHEAD

54

NOTES

55

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FOREWORD

Labor abuse is a serious and lasting problem

Subsequently, we contracted Control Union

in many agricultural communities around theCertifications to commence third-party

world. Our1 objective is to eliminate child labormonitoring and evaluation of progress andand other employment abuses from all farms

effectiveness of our ALP program. We lookwhere we source tobacco. We have implemented

forward to their findings and recommendations

an operating culture and code that allows us tothat will provide invaluable feedback for theaddress this complex matter in a determined,

continuous improvement of this complex

systematic and effective manner.

undertaking.

We are mindful that certain behaviors are

Further to our supply chain efforts we have

deeply engrained in the economic, sociopoliticalrefocused our charitable contributions activities

and cultural fabric of many tobacco-growing

to directly support the agricultural communities

countries, and that we cannot be successful

concerned.

alone. As a company, we combine our own hard
work and perseverance with strong engagementwith governments and local communities. We also
partner with non-profit organizations specialized
in this field and the internationally renowned
expert, Verité2. We all know this is a long-term
journey but are pleased with the results alreadyachieved.

Although we are at the beginning, third parties
already recognize our tangible actions andprogress. To cite an example, we were very
encouraged that in November 2013 the US
Department of Labor decided to remove
Kazakhstan origin tobacco from the “List ofGoods Produced by Child Labor or Forced
Labor.” The related report acknowledges PMI’s

This report describes in greater detail our

progress over the last three years in dealing

Agricultural Labor Practice (ALP) program3, ourwith these serious issues in the Kazakh tobacco-progress to date and our plans going forward.

growing areas.

In 2012, the first full year of the ALP program4,

I would like to express my gratitude to ourwe established a strong foundation by adapting

employees, suppliers, members of the specialized

our internal systems and processes, enforcing thefield force who assist farmers on a daily basis

ALP Code5, and training all employees concerned(field technicians), and non-profit organizationworldwide. We also engaged with our tobacco

partners for their relentless work and support.

leaf suppliers and ran pilot programs.

In particular, Verité deserves our heartfelt

In 2013, we proceeded with an evaluation of
the individual conditions prevailing in the morethan 490,000 farms from where we source
tobacco, located in more than 30 countries6.
We communicated the Code and program torecognition. Without their expert advice, unfailingdedication and shared conviction that child laborand other labor abuses should be eradicated, wewould not have achieved the progress this report
describes.

all of these farmers and committed appropriate

Our road to final success will be arduous, but I am

resources to establish the infrastructure thatfully confident in our collective determination to

supports the farmers in meeting the standards

achieve our goals.

set by the Code.

André Calantzopoulos
Chief Executive Officer
Philip Morris International4

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In 2010, Verité entered into a strategic
consultative partnership with Philip MorrisInternational (PMI), assisting the company toimprove conditions for workers on tobacco
farms that supply tobacco for PMI products
around the world. Achieving this objective
would require qualified human resources,financial investment, and public reporting.
From Verité’s perspective, this year’s Progress
Report demonstrates that these commitments
have been kept and, as a result, PMI is on trackto achieve its objectives: to progressively
eliminate child labor, and to achieve safe andfair working conditions on direct contract
tobacco farms.
Several notable aspects stand out. PMI has
built on the success of communicating theAgricultural Labor Practices Code to almost
half a million smallholder farmers, and has
now developed a comprehensive picture of
who lives and works on each farm. Third-party
monitoring has been fully implemented inthree markets, leading to the developmentof market action plans to address issues
identified. Additionally, extensive training has
been conducted on a considerable scale, withquality assessment follow up on hundredsof thousands of employees, suppliers andgrowers, including substantial input fromthese constituencies.
Moreover, the company has committed all of
its affiliates and suppliers to act promptly toaddress the worst cases of child labor, abuseand hazard, where people are in danger—socalled “prompt action” situations—a strategy
that will bring about progressive and rapidchange to create better conditions on farms
that supply to PMI.

We are encouraged by PMI’s willingness to
openly and actively engage with stakeholders
and share information about the program.
This reflects our shared understanding thata company which faces challenges within its
supply chain cannot address such challenges
without collaborating with others.
PMI understands that meaningful change
in complicated systems like global supply
chains takes time. Yet, they are willing tomeasure impacts and demonstrate public
accountability for working conditions on farms,
not simply measure inputs. Our joint focus
on impact is demonstrated in the removal of
Kazakhstan tobacco from the U.S. Departmentof Labor’s annual list of goods producedwith child or forced labor. Such a change
could not have been accomplished without
consistent investment.
Verité and PMI understand that work hascommenced on the elimination of worst formsof child labor and labor abuses, but that much
more work is needed. In 2014 and onward,
Verité will continue to serve as an advisorand strategic consultant, trainer, critic, anda facilitator of dialogue with and between
PMI and others. The presence of clearlystated program objectives, against which thecompany communicates publicly, ensures that
we will continue to remain accountable to one
another and to external stakeholders, whose
support and continued involvement are vital.

Dan Viederman
Chief Executive Officer
Verité

Verité is a U.S.-based international not-for-profit organization, whose mission is to ensure people worldwide work under safe, fair, and legal
conditions. In the last 15 years, Verité has become a global leader in supply chain social responsibility. Verité’s assessment, consulting, training
and research programs leverage the power of multinationals to deliver positive change for vulnerable factory and farm workers in every sector.

6

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EXECUTIVE SUMMARY
Philip Morris International’s Agricultural Labor Practices (ALP) program aims to progressively eliminate child laborand other labor abuses found on all farms where we source tobacco. The program provides the tools to support
implementation of the ALP Code which is built on seven basic principles:• Addressing Child Labor• Fair Income and Work Hours• Fair Treatment of Workers• Providing a Safe Work Environment• Addressing Forced Labor• Freedom of Association• Compliance with the Law

All farmers who have contractual arrangements with PMI, our affiliates, or with third-party leaf suppliers from whom
we source tobacco, must work in a way that meets the ALP Code standards.

KEY ALP PROGRAM COMPONENTS
THE ALP CODECAPACITY BUILDINGAND SUPPORT IN
COUNTRIESCONTINUOUS
IMPROVEMENTMONITORING ANDASSESSMENTSTAKEHOLDERENGAGEMENT

The ALP Code sets out seven principles and 32 measurable standards5 to
be met on all farms from which we source tobacco
Provide training programs on ALP and issues related to agricultural labor
practices for tobacco crop professionals, suppliers, farmers and workers
Create and implement improvement plans for each farm to address theroot causes and change practices that do not meet ALP requirements
Establish internal and external monitoring and assessment systems,
including: individual farm progress assessments, third-party and worker
inputs (via independent assessments and support services)
Directly engage with stakeholders and relevant third parties to help us
improve labor practices on tobacco farms and enhance the livelihoods ofpeople in tobacco-growing communities

ALP: ITS DAILY APPLICATIONThis second Progress Report provides an insightwith some governments taking steps to address childinto PMI’s efforts to implement ALP during the 2013

labor issues in several countries including Kazakhstan,

tobacco-growing season. ALP is now woven into

Malawi and Tanzania.

our daily work in every country where we purchase
tobacco. The program is at the stage of bringing
practical and meaningful support to both farmers
and workers. This includes introducing labor-saving
harvesting techniques that deliver higher crop yields
and increase farm revenues, local community support
for farmers and their families through schools, healthand safety training, summer camps for children, andmuch more. We have also witnessed welcome change
to regulations and rules governing labor practices,

These positive developments are important, butmore work is needed if we are to see success inother countries. The ALP program has enabled PMI,
our suppliers and partners to identify the many
challenges at farm level. We have started to design
and pursue a range of approaches to address
them, including working one-on-one with farmers,
multi-stakeholder and industry initiatives, as wellas government and third-party engagements and8projects with specialized NGOs. The specific focus
of our efforts include reducing farm safety risks,
overcoming technical difficulties related to crop
rotation, ensuring fair working hours, and building
a better overall understanding of age-appropriate
tasks for children on farms.

TRAINING AND COMMUNICATION
Training our teams, suppliers, field technicians andfarmers is the cornerstone of the ALP program. Since
2011, almost half a million farmers in our supply chain
have been trained on the ALP Code. Today, all 3,700
field technicians are more knowledgeable on ALP

Moving forward, ALP will remain at the core of

topics, and they have a better understanding of the

improving not just the way we do business, butchallenges created by practices such as hiring andthe sustainability of our business for the long-paying workers through crew leaders (rather thanterm. It reflects our commitment to continuous

directly). They have been taught to build accurate

improvement on all farms where we or our

Farm Profiles, understand and detect problems andsuppliers source tobacco. In light of the positive

risks, and determine how to better support farmers

developments experienced to date, we believe theand improve conditions.

opportunities for farmers have never been greater
to grow quality tobacco and develop sustainablebusinesses to support their families for generations
to come.

2013 focused on refresher training for fieldtechnicians and an increase in their number, both
directly and through partnerships with NGOs,
suppliers and other PMI employees. For example, in
Ecuador social workers from local NGO, “Desarrollo

ALP PROGRAM
IMPLEMENTATION
Below is a brief summary of key aspects of the ALP
program implementation in 2013.

y Autogestion” (DyA), now work alongside fieldtechnicians to support ALP implementation. In Malawi
alone, more than 100 new technicians have been
added to our suppliers’ teams. PMI’s Environment,
Health and Safety team is also contributing to fieldtechnicians’ work helping farmers conduct farm

DIRECT CONTRACTS

safety assessments and understand the gaps.

Direct contracts with farmers mean our suppliers

Another important element in this year’s progress

or PMI has a direct contractual relationship with ais bringing our global resources together to meet

farmer. Direct contracts give PMI greater visibility

the specific challenges involved in implementation:

into labor practices on farms, which is important ininterdisciplinary ALP country teams now exist in allunderstanding, and vital to addressing labor issues

32 countries where we source tobacco. These teams

and problematic practices. PMI’s tobacco-growing

include a variety of skills and expertise from within

supply chain moved a step closer toward this model

PMI or our suppliers. They work together to plan thein 2013, as the share of tobacco sourced from small-approach, address the most serious situations, ensure

scale farmers rose from 80 percent to 87 percent. In

consistency in the implementation of the program,Indonesia, tobacco purchases through middlemen

and identify and address gaps in expertise. We havewere reduced from 10 percent to eight percent. In

seen the development and promotion of locally-

Malawi, where tobacco has been traditionally soldtailored ALP toolboxes, which include a combination

through an auction system, our suppliers establishedof printed information, specialist training materials,

appoximately 60,000 new direct contracts. As

referrals (to other projects and support services) anda result, pilot projects promoting harvesting andaccess to equipment that field technicians can offer

curing techniques in the Philippines, Indonesia,

farmers to help identify or solve the problems on

Pakistan as well as Malawi helped some of these

their farms.

farmers meet ALP standards more effectively by
reducing costs and minimizing the need for farmers’
families, particularly children, to be involved in
tobacco production.
9

MANAGING “PROMPT ACTION”
ISSUES AND SUPPORT SERVICES
FOR WORKERS AND FARMERS
From the outset PMI prepared all affiliates andsuppliers to manage situations where farmers, theirfamilies or workers are at risk and immediate action
to address the situation is required (otherwiseof ALP program implementation. In conducting theseassessments Control Union Certifications (CU) visited
farms, reviewed documents and interviewed farmers,
workers, field technicians and the supplier or affiliate
management. Publication of the CU assessments ineach of these countries is expected in the first half of2014.

known as “prompt action” issues). A prerequisite
for effectively addressing these challenges is toknow they exist in the first place. For this reason,
the record number of “prompt action” issues
reported in 2013 is evidence that we’ve taken a
step in the right direction. The greatest numberof these reports related to child labor, followed by“unsafe working environment”. The volume reflects agrowing understanding of, and willingness to reporton, the existence of “prompt action” issues by fieldtechnicians, which only improves our ability to takenecessary steps to help resolve problems.

INTEGRATED APPROACH
ALP is part of PMI’s Good Agricultural Practices(GAP)3 program, which encourages sustainabletobacco growing and is integrated into our tobacco
supply chain. On small, family-owned farms thesize of the land available (typically 0.5-2 hectares),coupled with financial limitations of farmers andtheir communities, make fully implementing GAP
difficult. PMI, our affiliates and suppliers increasingly
understand that the root causes of many poor
labor and environmental practices are intertwined

To resolve or prevent conflicts, we are in the processwith and, in many instances created by, antiquatedof establishing third-party managed “support

farming practices, lack of access to credit, andservices” for workers to voice concerns andinadequate social services and infrastructure. As

complaints related to working conditions on farms

a result, our efforts to help farmers improve thewhere we source tobacco. In 2013 we launchedprofitability, safety and sustainability of their farms

pilot programs in Mexico, Brazil and the Republicthrough the GAP program, are also improving laborof Macedonia, and that not only workers, but also

conditions. We also focus an increasing portion of

farmers, need this channel. Therefore, we have

PMI’s Contributions funding to support NGOs toexpanded the program to include a support element

expand infrastructure, services and education infor both farmers and workers.

tobacco-growing communities.

TRACKING PROGRESSLOOKING AHEAD

In 2013, we established, together with our suppliers,

The labor practices on every farm in every country

a global baseline of farm-related data and completed

from which PMI sources tobacco are being assessed,

Farm Profiles for more than 490,000 farms withand continuous improvement plans developed withwhich PMI or our suppliers have a contractual

farmers. When a reported problem is widespread,

relationship. Most of the data was initially collected

PMI and the ALP country teams are committed tomanually, but moving forward, a more efficient

identifying broader solutions to address the root

electronic data collection method will be used tocauses, recognizing some challenges may lie beyond

track changes on each farm. This is an essential

the ability of individual small farmers to solve. We will

step in fully implementing the ALP program, sincecontinue to work with NGOs and governments that

we cannot measure or tailor the program without

recognize that the progressive elimination of childunderstanding conditions on the ground today, andlabor and labor abuses in tobacco growing requires

year-over-year. This year, external assessments weretime, resources, transparency, and most of all, a realcompleted in Brazil, Mexico and Italy for the first timecommitment from us all.

and these reports will contribute to the transparency
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1

PMI’S TOBACCO SUPPLY CHAIN
Tobacco farmers are at the heart of PMI’s business.

to improve the sustainability of the crop, and support

They produce the primary input needed to makethe implementation of the ALP program. Auctions

our high quality tobacco products, and their well-and purchases through middlemen traders make it

being is integral to our long-term sustainability. For

virtually impossible for PMI affiliates and suppliers tothis reason, we have established the ALP program

establish direct relationships with farmers, creating

to improve working and living conditions in all thea barrier to supporting farmers and to assuring thecountries where we source tobacco.

implementation of the ALP Code on these farms.

While variations exist across the globe, the three

Across the globe, PMI’s and our suppliers’ direct

basic systems for the sale and purchase of tobacco

contracts with farmers increased from 80 percent

include (i) contract farming (direct contracts), (ii)to 87 percent in 2013. Over that same time period,

auction, and (iii) middlemen traders (more detailthe volume of tobacco purchases made via auction

on each of these systems is provided on the next

decreased from 10 percent to five percent in Malawi,page). In 2013, PMI sourced almost a third of ourand similarly, decreased purchases via middlemen

tobacco directly from farmers and the remainder

traders from approximately 10 percent to eight

through independent leaf suppliers who largely

percent in Indonesia (see page 13). This shift inwork through direct contracts with farmers. Direct

our tobacco supply chain is expected to continue, andcontracts provide greater economic stability towill help to support the long-term implementation of

farmers, enable farmers and buyers to work together

ALP globally.

			 PMI and our suppliersbought tobacco from

more than 490,000 farmers				 in 2013. The majority of tobacco is grown on

small-scale family farms (2 hectares or less).

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THREE TYPES OF TOBACCO SALE AND PURCHASE SYSTEMS
1. CONTRACT FARMING: Contract farming provides greater economic stability for farmers. By agreeing
to contract with PMI (via one of our affiliates) or suppliers directly at the beginning of the growing season, thefarmer has a secure buyer for a volume of his crop, which takes into account the cost of production. In return, thefarmer commits to sell the tobacco and follow the GAP program, including our ALP Code. In most countries, thesecontracts are backed up with technical assistance: trained agricultural field technicians who regularly visit farms
and provide advice and support to improve agronomic and labor practices.
Leaf supplier
Farmers
PMI affiliate

2. AUCTION SYSTEMS: Auction systems make it difficult, if not impossible, to establish direct
relationships with farmers. Farmers are often not present, instead selling to middlemen who in turn consolidate
and resell the tobacco at the auction. Affiliates or suppliers have traditionally been able to buy tobacco exclusively
through public auction in Malawi and India (flue-cured only), although a mixed system is now emerging in Malawi.

Farmers

Middlemen

AuctionLeaf supplier

PMI affiliate

3. MIDDLEMEN TRADERS: Tobacco grown by small-scale farmers is often sold through a series of
middlemen who consolidate and bulk up their purchases in the countryside. This is the dominant system inIndonesia, but can also be found on a much smaller scale in countries such as Thailand, the Philippines andIndia. The identities of the farmers who grow the tobacco are usually not known to the ultimate buyer.
Middlemen
Farmers

Middlemen

Leaf supplier

PMI affiliate

Middlemen

Our proactive efforts to foster closer links with farmers is changing the structure of our supply chain and giving
us a better understanding of how we can support tobacco farmers in their daily work to deliver safe, fair working
environments consistent with the ALP Code and its measurable standards. As a result, this helps bring socioeconomic benefits to the farmer and their community, and improvements to the long-term sustainability ofour business.

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INDONESIADIRECT CONTRACTING, DIRECT IMPACT
One of PMI’s suppliers recently extended the direct contracting system into the regions of Paiton
and Jember and, as a result, has been able to introduce the ALP program with farmers. Previously,
these tobacco farmers sold their crop to middlemen who did not provide any technical assistance ortraining to help farmers improve their businesses. While many farmers were aware of the symptomsof Green Tobacco Sickness (GTS), having experienced them in the past, they did not understand thecause or how to prevent the sickness until they were trained.
After the implementation of the ALP program in these two regions, farmers who were interviewed
consistently cited the positive impact that ALP training has had on their lives. Following theinitial training session, and with guidance from our suppliers’ field technicians, these farmers now
understand how to protect themselves and ‘not get sick’ during the harvest process by following
appropriate safety procedures.

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2 ALP IMPLEMENTATION AND RESULTS
Implementation of PMI’s ALP program is the responsibility of our affiliates and suppliers. They oversee the training of
those who help to communicate the Code and support farmers in the daily application of the program. Throughout
2013, PMI expected every affiliate and supplier to:✓

Ensure management personnel and field technicians understand the ALP Code✓

Assign staff and devise processes to manage the program✓

Ensure the requirements and expectations of the ALP Code are communicated to all farmers✓

Compile basic socio-economic profiles for every farm✓

Gain an understanding of the potential risk areas on each farm and be ready to identify and address
situations requiring immediate action

2.1 ALP Training
TRAINING FIELD TECHNICIANS
Field technicians are an invaluable point of contact

In 2013, we trained 100% of our more than 3,700

between the farmer and the supplier or PMI affiliate

affiliates’ and suppliers’ field technicians, including

in a country. They provide agronomic support to thearound 450 new field technicians who joined

farmer on a day-to-day basis, and therefore training

agronomy operations across our supply chain in thefield technicians is a critical element in achieving

past 12 months.

a consistent implementation of the ALP program.

ALP PROGRAM FIELD TECHNICIAN TRAINING GENERAL PRINCIPLES:• Be pragmatic: Situations are not always clear-cut• Establish clear priorities: Priority must always be to address potentially dangerous conditions andpractices affecting vulnerable workers• Be positive: Help farmers improve• Be inclusive: Involve farmers and workers in addressing issues• Focus on continuous improvement: Conditions and practices are changed step-by-step• Measure progress: Document the actions taken and how problems are being solved
14Building the necessary skills at the field technician

understanding of complex situations where third-level and effectively communicating the ALP Codeparty contracting7, end-of-harvest payments, orto farmers is an ongoing process. To accomplish

share-cropping arrangements8 are in place. This isthis, ALP training is integrated into our day-to-day

particularly important because of the risks associatedbusiness. We have, together with our suppliers,

with these practices and the fact that they can leadinitiated regular checks on the understanding field

to de facto forced labor situations.

technicians and farmers have of the Code and how
they are interpreting it in practice.

TRAINING ALP MANAGEMENT AND
ALP REGIONAL COORDINATORS

One-on-one interviews with field technicians andfarmers are one way we test the level of ALP

Training new staff on ALP takes time and is ongoing.

knowledge within our supply chain. Throughout

Internal rotation of regional coordinators or manager-

2013, both of these groups demonstrated variedlevel positions in affiliates’ and suppliers’ ALP country

degrees of understanding of the ALP Code. After

teams is quite common in most companies, and PMI

an initial classroom training for field technicians,

is no exception. However, internal rotation presents

regular discussions with local PMI and supplierconsiderable challenges to the global implementation

management teams proved essential to help clarify
questions about ALP program implementation, share
implementation experiences, and offer support toof the ALP program. This is because consistency iskey, and the learning curve is steep in every country
because every local situation is different. However,fine-tune the approaches to be taken with farmers.

in the mid-to long-term, internal rotation of PMI and

We have also found that further training reinforces

supplier staff can contribute to the success of ALP

field technicians’ understanding of some of the lessby helping to improve awareness across the supply

familiar areas of the Code’s principles and how thesechain, increase knowledge-transfer, and share best

can be applied in practice. For example, additional

practice.

training is part of improving field technician

TRAINING AND COMMUNICATION9 IN 2013
Total Field Technicians Trained

3,714(100%)

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Farmer Training Sessions

Total Farmer Outreach

2,288

484,840(98%)

2.2 ALP Communication
Approximately 43,000 farmers newly contracted
by us or our suppliers received initial training
in 2013, meeting our goals for the first wave ofcommunication with all contracted farmers, with the
exception of Lebanon10.
Field technicians must strike the right balance

As a result of our communication with farmers in thecourse of 2013, we learned that discussing child laborand other ALP Code topics often leads to tackling
deeper issues related to how the farm is run. By
understanding the challenges facing farmers we canwork to find solutions that enable farmers to become
more efficient and, in turn, lessen the pressure on
child labor demands.

when communicating with farmers given the time
constraints imposed by the number of farms they
support and the availability and openness of farmers
to the program. Feedback from field technicians
confirms that when communicating with farmers
about the ALP Code, if perceived as threatening,
farmers are less likely to give the complete pictureof what is happening on the farm and are lesswilling to change their practices. At the sametime, if expectations and goals are not clearly set,
experience shows improvements are unlikely tooccur, making finding the right balance a key successfactor. Often this comes down to the emphasis of thecommunication with farmers.
For example: field technicians’ feedback suggeststhat communication efforts with family farmers about
the issue of child labor should focus more on why

A PMI field technician discusses the ALP Code with afarmer in Santa Cruz do Sul, Brazil.

working with tobacco can be harmful to children,
while still emphasizing the requirements imposedby local law and the ALP Code. We have also heard
field technicians’ conclusions that involving farmers’
wives may be critical to promoting changes in childlabor practices.
Illustrated materials (see page 17), charts, andtables are tools to help field technicians explain tofarmers what work is inappropriate for children ina given country and to educate them about ageappropriate tasks for children (determined primarily
by age, state of physical development, etc.) on thefarm. In addition to farmers’ understanding why
a certain practice is incorrect, the field technician
has the opportunity to suggest practical solutions,tailored to fit their local environment, to help farmers
eliminate child labor abuses on their farms.

Poster campaign against child labor developed aspart of a sector-wide initiative (Brazil).

16

In Malawi, the Ministry of Labor and partners of the CLEAR project11 developed illustrations of the official
list of hazardous work for children, which our suppliers found very useful at the farm level. Partners
included: Save the Children, Total Land Care, YONECO, CRECCOM and the ELCT Foundation.

2.3 Implementation Reviews: Key Findings
An implementation review helps us and our suppliers

Center staff who oversee the implementation of theverify the status of rollout of the ALP program in

ALP program globally.

each country. These reviews involve checking that
farmers and field workers are receiving the rightinformation, collecting the right data for each farmand using the information to strengthen local ALP
teams’ efforts to address specific challenges. Reviews
are done via country visits from PMI Operations

17

As planned, most affiliates and suppliers received
ALP program implementation review visits in 201312
and the key findings are outlined in this report.

“ALP is an aid to me and atool that is helping local farmers.”
			Grace Mlenga, ALP field technician in Malawi

IMPLEMENTATION REVIEWS: KEY FINDINGS 2013

STRONG COMMITMENTGREATER KNOWLEDGE

Affiliates and suppliers, especially field technicians, invested significant
time in supporting ALP implementation

Field technicians demonstrated more knowledge and comfort discussing
labor issues in feedback interviews than in 2011-2012

Discussing and monitoring certain aspects of the ALP Code are planned

ALP INTEGRATED INTO
DAY-TO-DAY WORK

around the optimal time in the season, e.g., accommodation before
workers arrive for the peak season, assessment of working hours andGreen Tobacco Sickness (GTS) during labor-intensive harvest periods, andchild labor during school holidays
Several affiliates and suppliers checked field technicians’ understanding

CONTINUOUS LEARNING

of the ALP Code, using both formal testing and competitions, games andquizzes. Interactive exercises helped identify gaps in understanding andstrategies to remedy them
Implementing ALP meant more time was needed on farms and insupporting field technicians. This prompted a re-examination of ALP team

MORE TIME FOR
ALP COUNTRY TEAMS

resources, including the best field technician/farmer ratio13, and team skills
to evaluate if further training was needed. We learned that there is no‘one-size-fits all’ approach possible, but countries like Brazil are building a
way to work this out to avoid field technicians becoming overloaded

As buying became more direct in Malawi, the Philippines and Indonesia,

EXPANSION

therefore cutting out middlemen and auctions, the number of ALP
staff expanded

In Mozambique and Tanzania, suppliers added more than 90 new fieldtechnicians to their teams, both to cope with the workload and improve

ALP SPECIALIZATION

the existing skill set. In Malawi, more than 100 new ALP technicians were
hired and trained by our suppliers during the last tobacco-growing season
as direct contracting grew18

2.4 Tapping into Expertise andSharing Best Practice
The distinctiveness and complexity of the issues
identified in implementation reviews required input
from different areas in our company (Operations,Law, Corporate Affairs, etc.), as well as external
experts and stakeholders. For example, although
their remit is usually confined to PMI facilities, PMI’s(EHS) Department advised field technicians on
safety monitoring and helped farmers conduct farm
safety assessments. Cross-country collaboration has
also evolved into a structured, worldwide approachin which ALP teams introduce EHS to the farming
environment, and in turn, EHS staff survey perceived
risk and develop recommendations and training
materials for field technicians.

and our suppliers’ Environment, Health and Safety
Involvement of EHS professionals helps farmers andfield technicians understand farm safety practices.
These pictures were taken by field technicians
during farm assessments in the Philippines.

Together with EHS involvement, ALP actions to support and address safety issues on farms include:✓

Providing Personal Protective Equipment (PPE) for farmers and field workers✓

Offering lockable storage equipment for hazardous materials✓

Financial and logistical support for farmers to attend specialized training (e.g., by third✓

Assistance in extending existing credit lines for urgent repairs or implementation of safety✓measures

Distribution of first-aid kits and training for farmers by the Red Cross✓

Establishing medical facilities at farmers’ gatherings and disseminating information on Green✓

Working with chemical manufacturers and distributors to collect used crop protection agent✓

19

parties such as governmental institutions)Tobacco Sickness (GTS) for all farmers and their families(CPA) packaging and reduce the risk of household re-use

Expanding existing recycling programs

2.5 Feedback from Farmers
The feedback we get on ALP implementation

protection agent (CPA) and equipment.

from farmers is one of the most important inputs

We have also found that farmers are looking for

into improving the program moving forward.

solutions and to gain insights into best practices

Interactions with farmers indicate they are pleased

to help them meet ALP requirements, and overthat PMI is taking an interest in their farms andtime, many ideas and approaches have emergedthat we want to support them to be successful.

to support farmers (see examples below). While

However, as anticipated, feedback from farmers

group meetings were effective in introducing thealso revealed that understanding of certain parts

ALP program, discussions during individual visitsof the ALP Code and its real world application is

to farms were generally regarded as the only way

difficult. For example, despite training on theseto improve farmers’ understanding of the Code’s

topics farmers continue to ask a wide range ofprinciples and application to the way they run theirquestions about what is wrong with their farming

own farm. Visits have also made it possible to see

and labor traditions such as: setting rates for areal changes in farmer attitudes and practices as apiece of work14, using crew leaders, reliance on

result of the ALP training and communication fromfamily labor and customs involving community

field technicians (see page 21).

labor exchange15, and the dangers of crop

FINDING SOLUTIONS: TRIAL AND ERRORIn Colombia, the ALP team developed asimple record book for farmers to keep track ofworkers’ hours and tasks while at the same time
providing a duplicate copy for the worker. This
helped to avoid the possibility of workers being

Nombre del Productor:

Cosecha:Cédula de Ciudadanía:

Fecha de Inicio:

Nombre del Trabajador

Fecha de Terminación:

Cédula de Ciudadanía:

Afiliación al
Sistema deSeguridad Social:

Actividades

Jornada deTrabajo

Fertilización

DiurnaNocturna

SI

NO

Aporque

DiurnaNocturnaSI

NO

Recolección (hoja a hoja)

DiurnaNocturna

SI

NO

Hachado

DiurnaNocturna

SI

NO

HorneoDiurnaNocturna

SI

NO

Clasificación, revisión y empaque

DiurnaNocturna

SI

NO

Otras:

DiurnaNocturna

SI

NO

Otras:

DiurnaNocturna

SI

NO

Otras:

DiurnaNocturna

SI

NO

to help farmers formalize their relationships
DiurnaNocturna

SI

NO

hours than is safe.

Otras:(pangalan ng magsasaka)

ay sumasang-ayon na magbayad kay
PhP(barangay, bayan),(pangalan ng trabahador)taong gulang, sa halagang(edad)

kada-oras/araw/lingo, buwan, o matapos maipagbili ang tabako bilang kabarayan s trabahong(sweldo)mula(uri ng trabaho sa tabakohan)(pangalan at lagda ng magsasaka)(saksi)hanggang.

(tagal ng pagtatatrabaho)(pangalan at lagda ng trabahador)

No. de Horas
Dias
Trabajadas Trabajados

Valor do Pago
Acordado

Realizó la
Actividad

In the Philippines, forms were developed

KASUNDUAN SA PAGTATRABAHO SA TABAKOHAN
na kasalukuyang naninirahan sa

NOFinca:

underpaid for their work or of working more

Ako siSI

with their workers. However, this effort was only
Las actividades anteriormente enumeradas fueron realizadas a satisfacción y el pago de las mismas fue realizado segúnlo acordado entre ambas partes.

partially successful: many workers interpreted
this as a lack of confidence that they would honor
Firma Productor

Firma Trabaiador

their traditional verbal arrangements. We continue
to look for a more trusted, tailored solution.

(petsa ng paglagda)

20

TURKEY
LESS INTERNAL MIGRATIONIn the Adiyaman region (South Eastern
Turkey), one group of farmers wasparticularly receptive to the ALP Codeprinciples. In the past, many tobacco
farmers left their families and migrated to
the Northern plantations to collect nuts or
harvest apricots outside their own tobacco
harvest period. Their experience as workers
helped them appreciate the importanceof being treated fairly. The introduction ofOriental tobacco farming in the Adiyaman
region has provided these farmers with theeconomic opportunity to remain on theirland and with their families year-round. In
their new roles as full-time farmers, they
appreciate the importance of having fair,safe labor practices on their farm, as set out
in the ALP Code.

REDUCED CHILD LABORINCIDENCE
In 2013, our analysis of Farm Profile data
indicated a potential risk of child labor on
family farms in the Turkish regions of Hatay
and Adiyaman. Subsequent visits by fieldtechnicians revealed that farmers’ children
were working on a significant number offarms, prompting serious discussions with
farmers about the need to remedy thissituation. For example, when children were
found using sharp needles to string tobacco,field technicians explained the hazards
involved to the farm owner, and asked
whether or not the children could help ontasks more suited to their age. While morework is needed in this area, follow up visits
revealed real changes in work practices as
the incidence of children found stringing
tobacco fell from 19% to 8%.

21

2.6 Changing Techniques: Impact on ALP
We have seen that reducing the need for, and reliancetrained farmers on the ALP Code and introduced aon, family labor, mitigating exposure to health andsubstantial change in the tobacco-curing method,safety risks, and tackling labor shortages, means

moving from the traditional leaf stringing16 andreal progress can be made to reduce labor issues

hanging to a stalk-cutting system, and to curing

on farms. For example, a change in harvesting andbarns made from renewable resources (for example,

curing techniques improves efficiency and therefore

Guadua, a local tree similar to bamboo).

a farmer’s ability to comply with the ALP Coderequirements. In 2013, we saw many affiliates andsuppliers ready to rethink their own operational
practices as part of helping farmers to meet the
expectations of the ALP program.

To date, pilot projects involving more than 1,500
farmers demonstrate that the conversion to astalk cut system results in a reduction in labor(approximately 280 hours/man/ha or 35 days ofwages per hectare), which provides for more than

For instance, PMI’s affiliate in Colombia (Coltabaco)made a significant investment in tobacco-growing
areas, addressing challenges to improve thesustainability of the crop. One of the initiatives in the
Coastal and Santander areas supported traditional
dark-fired tobacco farmers—who typically sell their
tobacco to middlemen and who have no contractual
relationship with the final buyer—to switch to
producing Burley tobacco, which PMI then buys
directly from the farmer. Coltabaco’s field technicians$440 USD in savings per crop for each farmer.
The pilot projects show that farmers are willingto move away from traditional ways of curing
tobacco in their own homes. Further, the pilots
create conditions for farmers to adopt better overall
practices with regard to Green Tobacco Sickness(GTS) and crop protection agent (CPA) protection, as
they become more aware of the risks and are givenknow-how and access to means for leaving behindtraditional practices.

		 “We used to keep the tobacco in the house,						and I did not pay attention to				protective measures when I was using CPA …
		 Now I understand how foolish that was!
This has been a really good year! The changes we introduced

saved a lot of work and I am					 confident about the future …
					

Since I got married I had one idea in mind:				 give a proper education to my children …

With Coltabaco’s (PMI’s affiliate in Colombia) 										 support, my plans are coming together!”											Colombian Tobacco Farmer

22

PHILIPPINESNEW AGRICULTURAL PRACTICESTO MITIGATE RISKS AND
INCREASE PRODUCTIVITY
A 48-year-old farmer from San Emilio, a provinceof Ilocos Sur in the Philippines, has beenplanting tobacco for almost 30 years. She and

STRINGING, STICKING: HAZARDOUS,LABOR-INTENSIVE WORK• Local ALP country teams identified tobacco“stringing” or “sticking” as a tobacco-related
activity children often get involved inher husband work hard on their family-owned• Tobacco “stringing” or “sticking” is the process

hectare of land to make sure their three childrenof threading fresh green tobacco leaves onto

can continue their studies in college. They area string or a stick before being cured

third-generation tobacco growers.

• The needle or sharp stick used in the“I grew up seeing almost every family member

process makes it an inappropriate task forand everybody in our community busy tending

young children

tobacco farms during the months of October
to April. Tobacco is a labor-intensive crop.

By using “clip sticks,” this Philippine farmer

Every season, my husband and I would hire anneeded to hire only four people rather than eight.

additional eight people to help us in harvesting

The immediate result had a powerful impact, as

and sticking tobacco leaves. The whole family is

she explains: “The money savings I earned frominvolved; sometimes even children of our relatives

using “clip sticks” were used to buy more foodwould help out with tobacco sticking.”

for my family and for the school tuition fees ofFarms where this problem was identified received
additional visits and training as part of the ALP

Our teams estimate that ultimately, “clip sticks”

program. However, as the story above illustrates,

could reduce labor needs during the harvest

something more than training and monitoring isperiod by up to 80%, saving the farmer money

necessary to address this key driver of child labor.

and significantly reducing the risk of child labor.

In countries facing this challenge, ALP teams

In the Philippines, Indonesia, Pakistan, andbegan to replace the “sticking” or “stringing” ofMalawi, several pilots are underway. If these aretobacco leaves with a much less labor-intensive

successful, our goal is to have all farmers in theseprocess using a simple device called “clip sticks”

countries use “clip sticks” in the future.

(see illustrations below).

23

my children.”2.7 Improving our
Ability to Address ALP
Problems Systematically
Initially, a global training program was developed
to achieve consistency in the implementation of
the ALP Code across different countries. In 2013, a
new type of training was introduced to strengthen
ALP country teams’ abilities to address countryspecific issues, establish a common understandingof the most serious situations they face andto monitor progress in addressing these in asystematic manner. This new training approach
included:• Tailored workshops and mentoring formembers of ALP country teams

MONITORING AND ADDRESSINGISSUES: WORKSHOP APPROACH• Full day session on monitoring, introducing
tools and using role plays• Discussion of the risks and problems identified
by affiliates and suppliers• Review of plans to address issues• Training plans for field technicians• Integrated plan for rolling out ALP• Roles and responsibilities• Areas for stakeholder engagement• Preparation and consultation to develop

and discuss the best potential approaches
to problems• Sharing best practices• Understanding when and how to involve otherstakeholders in supporting vulnerable workers

While the new training program focuses on

FIELD TECHNICIAN TOOLBOX

Options To Tackle
Specific Issues

Support Materials

Existing Programs

Training Modules

Incentives(Crop Inputs, etc.)

Remedial Actiondelivering a more solutions-driven approach to
implementing the ALP program, we also knowthat no pre-defined list of solutions exists. To
acknowledge this, we have developed guidanceon how to develop a “toolbox” for field technicians(rather than a “one size fits all” set of tools). This
guidance has been shared worldwide, including
with our suppliers, and contains a range of locallydeveloped options to address various issues,
depending on factors such as the nature and theseverity of the problem, and the willingness andability of the farmer to change. All suppliers andaffiliates plan to have their full “toolbox” ready by
the end of 2014.

24

2.8 Expert Support to Tackle
IssuesIn 2013, PMI continued to reach out to third-party
experts for their support in addressing ALP issues –most notably, in tackling issues related to child labor.

child labor, to develop a “monitor-and-referral”
system. In practice, this means that DyA’s social
workers support Tanasa’s efforts in communicating
the ALP program with farmers, parents, andteachers and visit farms on a regular basis, providing

For example, following the publication of the 2012

direct support to field technicians when they have

U.S. Department of State’s “Trafficking in Persons

questions. They also follow up with farmers or(TIP) Report,” which cited child trafficking inworkers’ families when child labor situations aretobacco-growing areas in Mozambique, together

identified. In response, the local ALP team and social

with Verité and our suppliers, we met with the U.S.

workers meet once a month to exchange findings andEmbassy to better understand the problem. Duringfollow up on each case identified.

this meeting, we learned that the TIP Report’s
findings were associated with orphaned children
present on tobacco farms. In response, our suppliers’
ALP teams visited each farm in the country to gather
preliminary information and identify farms whereorphans might be found. Verité also developed amonitoring tool to track orphan children and coachedour colleagues in South Africa to carry out farm-byfarm assessments in Mozambique. These assessments
showed no evidence of orphans identified on thefarms having been trafficked, however the situation
continues to be closely monitored.

25

Autogestion” (DyA), an NGO specialized in tackling

These experiences demonstrate the absolutenecessity of collaborating with specialists to provide
support to field technicians when they are dealing
with complex child labor issues. This is especiallytrue when a child’s situation and vulnerability isdriven by a family’s poor socio-economic conditions,and is exacerbated when there is little to no social
assistance or even presence from governmental
institutions for needy families. For these reasons,
we and our suppliers are currently working to
identify NGO partners and increasing our charitable
contributions initiatives and support services in

Another example is in Ecuador where our local

countries where we identify systemic problems that

affiliate, Tanasa, joined efforts with “Desarrollo ylead to child labor and other labor issues.

ECUADOR
EXPERTS WORK ALONGSIDE FIELDTECHNICIANS TO TACKLE CHILD LABORIn Ecuador, Tanasa joined an initiative of the
Ministry of Labor to tackle child labor (“La Red deEmpresas”). All field technicians and members of the
ALP country team completed an online certification
on fighting child labor, developed by UNICEF.

In addition, to mitigate child labor risk
and provide alternative activities forfarmers’ children, local NGO, “Desarrollo y
Autogestion” (DyA), launched a comprehensive
extracurricular activities program with sports
activities, clubs tailored to specific interests(see illustration above) and hobbies, whichcurrently reaches nearly 80 percent of tobacco
farms and over 2,000 children. In November
2013, representatives from the Ministry ofLabor and UNICEF visited tobacco-growing
areas where this initiative took place and,as a result, Tanasa’s work is now shared
as a best practice within the “La Red deEmpresas” network.

26

3 ASSESSMENT AND MONITORING

3.1 A Baseline To Measure Against
As with any program, assessment and monitoringare essential to measure success and make
improvements to content, processes and practices,and the ALP program is no different. A considerable
element of this program is to track progress andchallenges, learn what has been effective in different
countries, and apply these learnings moving forward.

field technicians about the type of information torecord, potential biases in the information reported
by farmers (particularly regarding children’s
activities on the farm), and duplications or mistakes
in reporting. Some of these mistakes were made in
the process of manual data entry, but others were
factual errors (e.g., some information provided by
farmers was based on estimates for the year ahead
instead of providing current figures).

To accomplish this, we focused our efforts in 2013

Despite these challenges, more than 95% of Farmon developing a baseline level of data from which toProfiles were collected by early 2013 with themeasure progress.

remainder collected throughout the rest of the year
and used as a source of information for identifying

3.1.1 Developing Farm Profiles

risk areas and analyzing the root causes of problems
faced on some farms.

The Farm Profile17 is a tool developed by PMI,
along with the help of our partner, Verité, to gain
an accurate understanding of the socio-economic
status of the farms from which we source tobacco.
These profiles enable us to systematically gather
detailed information about the farms we contract
with, including the type of labor employed, farming
activities that minors may be involved in, and hiring
practices. Farm Profiles provide us with a solid basefrom which to work with affiliates and suppliers to
identify risks as well as improve and tailor their ALP
program plans for the future.

original Farm Profile template to include elements
relevant to their reality. For example, in the U.S.,
given concerns about undocumented migrant
workers, our team included questions to probe
whether hired workers were brought on the farm
through the U.S. government farm worker H-2A
Visa program, through a crew leader (registered or
unregistered), or hired directly. The ALP country
team followed up on the information collected,
visiting all farms that had hired workers throughcrew leaders (which are more likely to hire minors),

In 2013, we and our suppliers collected Farm Profiles

and provided information to farmers on how to

on more than 490,000 farms, which required field

prevent situations where undocumented workers

technicians to visit each and every farm to collectmight be abused.

the information. At first, most of these profiles werecollected on paper before being entered into a
database. To improve the process, electronic datagathering is being introduced. While reviewing thedata, we discovered misunderstandings among

27

Most of our affiliates and suppliers adapted the

Local ALP teams will continue to use FarmProfile data to define their focus areas for future
improvement and to update and revisit problem
areas in the coming tobacco-growing season.

3.1.2	Reporting “Prompt Action”
Situations

PROMPT ACTION: A situation in which workers’

Local ALP teams have an important role to play inchildren or a vulnerable group – pregnant women,creating an environment where problems can be

the elderly – are in danger; or workers might not bereported and to respond to individual situations

free to leave their job.

physical or mental well-being might be at risk;that require “prompt action.”
In 2013, we observed a growing trend in thenumber of “prompt actions” reported. We view
this trend as a reflection of success of our trainingof the local teams to identify and report on theseissues. In 2013 we focused efforts on clarifying“PROMPT ACTIONS” IDENTIFIED IN AFRICA(DIRECT CONTRACT FARMERS)CHILD LABOR

field technicians’ understanding of questionable

SAFE WORKENVIRONMENT

situations, handling situations that required

FORCED LABOR“prompt action,” providing guidance on steps
to take if such a situation arose, and helping
field technicians appropriately document theissues identified.

2%
17%

FAIR TREATMENT
INCOME &WORK HOURS

80%

TO ASSESS “PROMPT ACTION ISSUES,” ALP COUNTRY TEAMS:• Provide guidance on what is hazardous work under local laws as well as within traditional and accepted
practices in their respective country or region• Commend field technicians for reporting problems• Conduct unannounced visits to farms• Provide positive examples of PMI’s commitment to help farmers address and improve specific issues

3.1.3 Farm Monitoring and SelfAssessment
In 2014, in addition to updating Farm Profiles
annually, field technicians will systematically monitor
each practice covered in the ALP Code on each farm.
Over the course of a season, each field technician
will aim to know what is happening on each farm inaccordance with each ALP principle. To achieve this,field technicians are talking to farmers and workers,
observing how work is accomplished, and checking
records. This information will be compiled as a yearly
ALP program implementation self-assessment foreach of our affiliates and suppliers. Tracking ALP
action plan implementation is now part of annualinternal assessments and ongoing ALP program
reviews with PMI affiliates and suppliers.

INSIDE A FARM MONITORING VISITUNDERSTAND THE SITUATIONAGREE ON ACTIONS WITH THE FARMER

1 Talk to the farmer and workers

1 Document

2 Walk the farm

2 Report

3 Look for supporting documents

3 Follow up
28

3.2 External Monitoring System
The ALP program has an external monitoring
component developed in conjunction with
Verité. It involves periodic external reviews,
with the publication of a final report to achieve
program transparency.
To achieve this, PMI worked with Verité tocommission Control Union (CU) certifications
to develop and conduct the external third-party

In 2013, CU completed the first external assessmentsof the ALP program. The three assessments took
place at PMI’s affiliates in Brazil (January-February),
Mexico (March-April), and Italy (July-August).

monitoring element of ALP18. Currently, these

These affiliates were selected because together they

third-party assessments are solely focused on

represent the diversity within our supply chain. Philip

ALP implementation and are specifically aimed atMorris Brazil is home to a large number of contracted

reporting each affiliate’s and supplier’s progress

farmers and diverse farm types; Mexico and Italy

against ALP objectives. In the future, these third-

have fewer contracted farmers but grow a range ofparty assessments will be integrated into thetobacco varieties, vary in farm size, and employ bothwider routine assessment of PMI’s GAP, which also

migrant and local workers on their tobacco farms.

encompasses environmental and crop standards,
so that external monitoring of labor practices
becomes fully integrated into our day-to-day
business operations.

29

3.2.1 External Assessments

At the time of external assessment, all three affiliates
were about to complete their first tobacco season
under the ALP program and were in the process of
implementing its first phase of activities.

3.2.2 Scope and Methodology
The scope of these first external assessments was to

EXTERNAL ASSESSMENTREPORTING PROCESS

verify the affiliates’ progress in meeting the objectives
defined for the first phase of the ALP program.
The assessments also looked at the current statusof labor practices on farms compared to the ALPASSEMBLY OF INTERNAL DRAFT FOR REVIEW

Code. Finally, priority areas for the next phase of ALP
implementation are identified in these reports.
These assessments were conducted using interviews
with senior management, staff and farmers involvedin program implementation, coupled with verificationof all relevant documentation, including Farm Profiles
and contracts. The interviews were designed to assess
general awareness of the ALP program, knowledge

QUALITY CONTROL CHECK BY VERITÉof the ALP Code, effectiveness of internal training
and communication, and efficacy of processes forhandling and reporting “prompt action” situations
and incidents.
In each country, CU visited a statistically significant
number of farms, randomly selected to represent
the total number of farms in the different tobaccogrowing regions. As part of this process, CU collected
information on each farm’s practices in relation to the

AFFILIATE / SUPPLIER FEEDBACK

ALP Code through individual interviews with farmers
and workers, verification of documentation, and site
visits of tobacco fields, storage rooms, work stations,and workers’ housing.

3.2.3 Reporting
CU concluded each assessment with a meeting topresent a preliminary overview of their findings to
our affiliates’ management team. After this, each PMI

ALP ACTION PLANS CREATED

affiliate or supplier provided their ALP action plans
to CU for review and inclusion in the final assessment
report. The information CU has collected has enabled
PMI affiliates to develop concrete ways to:• Enhance their ALP implementation efforts• Develop comprehensive plans for the next
phase of the program

PREPARATION OF REPORT• Begin tackling problematic practices on asystematic basis

The final reports will be published in the first half of 2014.

30

4 SUPPORT SERVICES: LEARNINGS AND
			 PILOT PROJECTS
It is important for farm workers to feel comfortable

expert support to improve their labor practices.

raising concerns about their working conditions.

By providing services such as training on labor

For this reason, one of the ALP Code’s measurable

law, counseling on health and safety topics, andstandards states that “workers should have accesshelping farmers meet their tax obligations, register

to a fair, transparent and anonymous grievanceworkers, and apply for subsidies, some challenges

mechanism.”

can be addressed. In addition, creating a favorable

The vast majority of contracted farms in PMI’s supply
chain are smallholder family farms that hire a veryis essential.

limited number of workers, usually for short periods

For this reason, ALP country teams are starting toduring the season. On small farms, workers have

respond to both farmers’ and workers’ needs forfew options other than to bring their problems to

information and technical assistance via the help

the farmer’s attention. Therefore, it is essential thatof support services run by a third-party. This third-

farmers provide workers with a way to air theseparty support service can also serve as the grievancegrievances without fear of reprisal, even when formal

system in farming communities. The process isand structured grievance processes may not be

consistent with the United Nations’ “Guiding

realistic or suitable.

Principles on Business and Human Rights19,” as are

Experience shows that farmers are often unaware of
their obligations to workers as employers and need31

environment for an effective grievance process

all “support service” communication and protocols
related to expressing and resolving grievances
between workers and farmers.

4.1 Experience in Kazakhstan
In Kazakhstan, we learned how important it is to build
trust between workers, farmers, and the third-party
running the support service. In this instance, ourlocal NGO partner, Local Community Foundation(LCF), deploys experts trained in handling grievanceissues in the field. LCF runs the support service to

GRIEVANCE MECHANISM TO WORKERS

mediate disputes and provide other valuable support
to farmers and workers, such as helping migrant
workers and their families with documentation or
helping farmers to comply with local laws. Theseexperts have increased their effectiveness in thecommunity through regular farm visits, which has
given them a good understanding of, and a strong
relationship with, both farmers and workers.

ASSISTANCE SERVICES TO FARMERSAND WORKERSКООМДУК УЮМ «ЕНБЕКШИКАЗАХ
ЖЕРГИЛИКТУУ КООМДУК УЮМУ»«Фермерлерге жана эмгек мигранттарына
консультациялук жардам» жобосу

Енбекшиказак жергиликтуу кооудук
уюму фермерлерге жана эмгек мигранттарына консултациялук жардам
көрсетөт - консультация берет, эмгек нормалары

жана миграциялык ченем тураалуу маалымат берет,суроолоруңуздарга жооп берет,проблема пайда болгон
учурунда сизге акыл-кеңешин берет.

Егерде сизде суроолор пайда болсо ,же кыйынчылыктарга туушар болсуңуз, биздин

8 (777) 128 38 06
8 (72775) 4 07 25

телефонуна чалып, «Фермерлер жана емгек мигранттарына консультациялук жардам» аттуу
жобого байланышыныз.

32

In 2013, the support service in Kazakhstan ran for its

grievance mechanisms to inform decisions about thethird consecutive tobacco season20 and responded

right approach for their communities. In addition,

to a range of needs including providing information

we researched potential local NGOs to support theabout employment opportunities and migration

development and execution of these plans. While PMI

laws, answering 220 hotline calls from non-tobacco

works with many NGOs in tobacco-growing regions,farmers, accessing schools and securing passports.

unfortunately none had the experience of running

One successful initiative included recruiting

such a project with an ALP focus. Furthermore,volunteers from migrant worker communities toresearch carried out by our colleagues around theassist LCF in their outreach to other migrants inworld found that globally few organizations havetobacco-growing communities. LCF pays closethe expertise, the presence in rural areas, and theattention to wage and working hours calculations,standing in farming communities to tangibly assist in

helping both farmers and workers keep accurate

this effort.

timesheets and, after the tobacco is sold, conducts
farm visits to interview individual workers and verify
end-of-season payments.

While this presented challenges to implementing
effective grievance mechanism pilot projects in every
region in 2012, we made significant progress in mostcountries. In 2013, we launched three pilot projects

4.2 Progress Worldwide
Just as training in support of ALP country
implementation must be tailored to each local
context, there is no single global model for an
ALP support mechanism nor one single telephone
number to call. In light of this, each PMI affiliate
and supplier has now assessed current conditions,analyzed their Farm Profiles, consulted with farmers,
workers and stakeholders, and reviewed existing33

in the Republic of Macedonia, Brazil, and Mexico. In
the Republic of Macedonia, the pilot has involved
different stakeholders, including the municipality,
the Union of Tobacco Growers Association, andthe Tobacco Association of Krivogastani, and isbeing run by a local NGO, the Macedonian Center
for International Cooperation (MCIC). Detailed
results of these pilot initiatives, their impacts, anddevelopments in other countries will be provided infuture reports.

5 EMERGING TRENDS AND CHALLENGES
As identified in our 2012 Progress Report4, one

authorities. These efforts have helped farmersof the major challenges we face in all countries

become more sophisticated and productive, andwhere we source tobacco is the lack of clarity

allowed us to be flexible in adapting the program toand understanding amongst farmers, external

meet the needs on the ground.

commentators and observers about what work is,
and is not, appropriate for minors to perform ona small family farm. This is not a tobacco-specificissue, but one that exists for most crops. The informal
nature of labor arrangements on small family farms
is also a barrier to progress in addressing laborabuses. These barriers cannot be overcome overnightor solely as a result of our actions, but we arecommitted to doing our part and pleased with theprogress made in both areas.
This progress is the direct result of continued focus
on pragmatic, tailored approaches to addressing
problems at farm level through the support ofour own and suppliers’ field technicians and local
stakeholders, including NGOs and government

WAYS OF TACKLINGCHALLENGES THROUGH
PRACTICAL APPROACHES:• Defining age-appropriate tasks• Raising farmers’ awareness and knowledge of
specific hazards• Explaining labor-saving techniques• Developing simple tools to help farmers

formalize their relationship with workers(forms, notepads to keep track of working
hours, etc.)

34

PAKISTANCOMPREHENSIVE,
PRACTICAL PILOT PROJECTS
Philip Morris Pakistan Limited (PMPKL) identified
three main risk factors, beyond poverty, driving
child labor on tobacco farms in Pakistan:
1) Farmers’ reliance on family labor, including

2. Provide alternatives for children: Building
on an existing PMI-supported summer school
program for farmers’ children, the teams included
topics such as how to mitigate the risk of Green
Tobacco Sickness (GTS), recognizing child laborand health and safety practices, as part of thecurriculum.

their children
2) No alternative activities for children during
harvest time3) Uncertainty about what constitutes hazardous
work in tobacco farming
PMPKL’s ALP team designed a pilot program tohelp tackle these issues in a holistic way. They
worked with a local NGO and the Education

impacts of the pilot program show:• An immediate and significant reduction in childlabor as a direct result of the switch to using
labor-saving “clip sticks” on pilot farms• Measurable improvement in locations wherechildren attended the PMPKL summer camp

Department to engage local communities andas compared to areas where children did

secure their support to make two changes:

not attend

1. Change practices: Helping farmers switchfrom “sticking” tobacco methods, often done bychildren, to a much less labor-intensive processusing a simple device (“clip sticks”)22.

35

Monitoring is ongoing, but some preliminary• For the first time ever, 107 girls under the ageof 10 (out of a total of 254 children) attended
the summer school

“It was astonishing to see that when the
farmers of the local village come to school andsee the activities of the children, they are verysatisfied to see them involved in purposefulactivities, are more likely to allow theirdaughters to attend, and ultimately, seem more
mindful about the issue of child labor.”											A village teacher

365.1 GAP Revision: A
Comprehensive Approach To
Sustainable Tobacco Growing

at local level to help farmers attain land and water

Improving agricultural labor practices to deliverin perpetuating systematic labor, productivity andmore efficiency and higher productivity at thesustainability challenges on farms. A sustainable

farm level is only one piece of the puzzle to create

farm requires a cash flow to pay salaries in a timely

more sustainable tobacco production. As such, we

manner. When sales come at the end of the crop

view ALP as part of our GAP program aimed atseason, not weekly, farmers without access to credit

rights.
A lack of financial resources is another major factor

addressing the wider

often resort to profit-

range of challenges

sharing (e.g., share-facing sustainablecropping) agreements

tobacco farming.

with individuals who
would otherwise be their

While difficult on

workers. This is a fragile

a farm of any size,

arrangement especiallysmaller farms of 0.5-

for the share-cropper,

2 hectares struggle

given the reliance on goodwith having enoughclimatic conditions forland to rotate crops,

a good harvest. Instead,including tobacco, in

farmers must provide aa three-year cycle. To

regular fair salary and linkaccomplish this, thethe crop performance

farmer must own theto the workers’ bonus.

land and have access to

We realize that engaging

adequate water supply
for irrigation. Without
these key resources a farmer will not make the capital
investment needed to farm the land sustainably due
to the fear of being displaced one day. To help foster
more sustainable practices in tobacco production itis therefore essential to engage with stakeholders

37with stakeholders toassist farmers’ access to credit can support further
sustainability in tobacco production and reduces
the risks to workers and farmers inherent in sharecropping. Moving forward, we will continue to pay
careful attention to share-cropping farmers in our
supply chain.

5.2 The Role of Women, Fair
Treatment for Vulnerable Workers,
and Food Security in the
ALP Program
Women play a key role in addressing some of the mostcomplex and unsafe labor practices in agriculture. PMI
is actively working to grow the contribution of womenin our supply chain through farm contracts with womenby having fewer or no legal rights in their host country,
and crews are often hired by unregulated crew bosses.
PMI takes direct action with farmers, where possible, toensure that the basic rights of migrants and labor crews
are respected. However, given the many complexities
these workers confront, we cannot accomplish thisalone. Multi-stakeholder engagement and sector-wide
initiatives will be essential in effecting meaningfulchange in this area.

and their involvement in
ALP training sessions.

Improvements in farm

In the future, we willproductivity, no matter

increase our interaction

the crop, are alsowith women farmers andessential keys to future

women farmworkers. In

success. While we haveaddition, we will improve

focused solely on tobacco

gender balance within

so far, we will broaden

our field technician andour approach in theagronomy management

future, where appropriate,teams to improve ourto include other crops on

ability to facilitate lasting

the farm to help provide

change in addressing

for adequate nutrition,complex areas such as

improve farm incomes,

child labor, farm safety

and contribute to local

and improved farm

food security. Before

productivity.

launching a worldwide

To achieve fair and equitable treatment of farmworkers,
we pay particular attention to groups of farmworkers
that are potentially more vulnerable to labor abuse.
These groups are migrants and labor crews, where
migrants may be isolated due to language barriers or

initiative, we are learning and implementing the firststeps of this plan on a significant scale in Africa, where
our suppliers are providing the seeds and fertilizer totheir contracted farmers to grow food crops alongside
tobacco.

38

5.3 Implementing ALP in
the Absence of a Direct Link
to Farmers

leading to around 70% of our tobacco supply being
sourced through direct contracts with approximately
60,000 farmers, up from just 3% in 201123. The IPS
now coexists alongside the historically dominant

5.3.1 Malawi

auction process in the country. Nevertheless,In last year’s Progress Report21 we detailed thetremendous logistical feat for our suppliers given thechallenges in Malawi and our planned approach there,

new infrastructure and expansion in staff capacity

including:required to roll out the ALP program successfully.

• Engagement with the government to make

IPS implementation on a large scale presented a

it possible to establish direct contractual

SUPPLIER SUPPORT RECEIVED

relationships with farmers

BY FARMERS IN THE INTEGRATED• Support for multi-party efforts to improve theregulatory framework and define concrete actions
and accountabilities to implement Malawi’s
National Action Plan on Child Labor• Continued support for community-level initiatives
to tackle the root causes of child labor

The 2013 season was the first time that the Malawi
Government allowed an Integrated Production

PRODUCTION SYSTEM:• Crop protection agents and fertilizer for
tobacco and maize• Certified seeds for food security (soya, beans,groundnuts) and for tobacco• Access to credit with interest rates well below
the regular market level (3.5-14% insteadof 40%)

System (IPS) to be introduced by our suppliers,

IPS expansion in Malawi supports the ALP
program: New infrastructure and a strong firstseason of results24• Approximately 100 additional supplier fieldtechnicians were hired and trained• Hundreds of ALP village committees werecreated to raise awareness and establish aforum to discuss related issues• Average tobacco yields were around 1,600

kg/ha versus 900 kg/ha for farmers sellingat auction• Higher quality tobacco resulted in an averageincrease of 5% on price• IPS food support seems to have had a positive
impact of on farmers’ maize crop harvests
helping them reach 4,500 kg/ha up from aprevious average of 2,000 kg/ha

39

In 2013, all ALP country teams worldwide began

entities and third parties who can support our

to set in motion a more systematic ALP internal

suppliers in addressing this and other issues.

monitoring process, particularly for “prompt action”
situations. In Malawi, this was implemented on alarge scale by our suppliers. As a result, their fieldtechnicians there reported around 2,000 “prompt
action” situations, with nearly all (85%) of theconcerns registered relating to work being done byfarmers’ children.

ADDRESSING CHILD LABOR

MULTI-STAKEHOLDER INITIATIVES
On the policy front, there was also progress
following the landmark National Conference onChild Labor in Agriculture, with the government ofMalawi strengthening the Child Labor Unit under
the Ministry of Labor. However, important concernson key regulatory topics remain. The regulatory
framework has still not been incorporated into

During the 2013 season in Malawi, reports fromThe Tobacco Act25, nor has there been significant

supplier field technicians showed 55% of children

progress in addressing Malawi’s tenancy system,

were found doing work on their parents farms after

despite government intentions to do so, and tripartite

school hours, but 32% were absent from school on

discussions with stakeholders (with the International

the day the incident was detected, and 15% foundLabor Organization (ILO)’s support).

working on a given day were not enrolled in schoolat all. In fact, the Malawi government estimates thatnationwide, around 600,000 school-aged children
are not enrolled in school.

COMMUNITY-LEVEL INITIATIVES
Throughout the 2013 season, PMI continued
our support to Total Land Care (TLC) and theReporting will improve with time, but typically finding“Enhancing Rural Livelihoods Program26” in Malawi.

children working led to additional farm visits by our

We contributed an additional $1 million USD to

suppliers’ area supervisors and managers to verify

sustain a wide range of initiatives including building

the practice or determine if it was resolved by thefarmer. To sustain progress, it is critical to create
more options for farmers to send their children toschool and establish connections with governmental

school blocks, digging shallow wells in communities,
enhanced conservation agriculture efforts andcontinued tree planting. PMI also supported our
suppliers’ village projects, including building dams for
irrigation, providing vegetable seeds to farmers, andsupporting smallholder farmers’ efforts to diversify.
Despite the significant structural and societal
challenges in Malawi, we are encouraged by thedevelopments since the publication of the first ALP
Progress Report. We remain convinced the best
approach is to stay actively engaged in strengthening
all stakeholders’ efforts to improve the current
situation in the country.

Total Land Care bringing drinking water tolocal communities

Inauguration of village dam in Kabanga

40

5.3.2 India
In 2012, PMI purchased less than 3% of India’s total
tobacco production, mostly flue-cured and Burley,
through our leaf suppliers. Given PMI’s relatively
small scale in India’s large and very complex tobacco
selling system, ALP is implemented differently in
India than in other countries.

and returns for farmers are poor.
In January 2013, to begin addressing the uniquechallenges associated with the flue-cured tobacco
crop, PMI introduced the ALP program and our wider
sustainability efforts under the GAP program to the
ITB. In conjunction with our suppliers, PMI secured

Flue-cured tobacco is sold through an auction system

ITB’s permission to implement a “model farm”

run by the Indian Tobacco Board (ITB). Suppliers do

initiative. The aim of this initiative is to practicallynot contract with farmers directly and are therefore

demonstrate the opportunities for farm improvement

unable to verify that farmers know and follow thein labor practices and productivity within the current

ALP Code. While the ITB employs a number ofauction system. PMI’s expectation is that this “model

field technicians, they meet farmers infrequently,

farm” initiative will provide the proof of concept foroften in large group sessions, and provide only

a direct contracting system complementary to thelimited technical support. Farmers have access toexisting auction structure in this country (as it has

financial support at subsidized rates to cover crop

done in Malawi) bringing benefits to farmers andinputs but this is not targeted at farm infrastructure.

allowing labor abuses to be identified and addressed.

Consequently, yields are low, production is inefficient

INDIA MODEL FARM INITIATIVE: MYSORE REGION
Suppliers established contact with around 292 farmers (contracts were not permitted):• Introduction to the ALP program• Collection of accurate cost of production data

YEAR
ONE

• Ranking of priorities to improve farmer profitability• Identification of solutions to improve curing barn efficiency• Increasing technical support to improve yield and quality• Involvement of each farmer in the initiative for three years

The initiative is intended to grow over time as approximately 50 new farmers are added

BEYONDYEAR
ONE

by each supplier annually, upon condition of the continued support of the ITB

PMI will work with our suppliers to support ongoing discussions with the ITB and share
the results of this initiative41

By contrast, suppliers can agree direct contracts withfarm base in Vinukonda, Lal Chopadia and Kurnool,

Burley farmers. However, following initial assessments

including resources to service an additional 1,200

by PMI and our suppliers in the country, we realized

farmers. In 2013, the ALP program was rolled out tothat levels of technical support and interaction withthe remaining suppliers.

farmers throughout the season could be improvedin some cases. As a consequence, PMI started rollingout the ALP program in 2012 with one supplier who

5.3.3 Indonesia

has direct contracts with farmers and who focused

In Indonesia, our main challenge for theon improving the skill set of field technicians andimplementation of the ALP program is the size andoverall support levels to Burley tobacco farmers.

complexity of the tobacco-growing supply chain.
There are approximately 600,000 tobacco farmers

PMI trained the supplier’s field technicians to
introduce the ALP Code to the approximately 500
contracted farmers in the Vinukonda region. With
support and regular reviews, they were able to build
a solid basis for introducing the ALP program to theremaining suppliers, along with developing plans
to improve the quality and yields of their contract
farm base.

in the country (mostly family-run small farms withless than half a hectare), and the vast majority of
tobacco is bought and sold on the open market
without any direct contractual relationship with
farmers. From the farm to PMI’s supplier warehouses,
tobacco is typically handled by many middlemen,posing significant challenges to attempts to improve
production conditions, ensure farm profitability andThis effort has led to the expansion of the contracted

promote fair and safe conditions for workers.

TOBACCO SUPPLY CHAIN
Tobacco Suppliers

Middlemen

Middlemen

Middlemen

Middlemen

Farmers

42

ALP IN INDONESIA:SMALL BEGINNINGS WITH
PROMISING RESULTS
In past years, PMI’s local affiliate HM Sampoerna
sourced a portion of its tobacco from a local supplierthat had established direct contracts with farmers(around 10,000), mostly in the region of Lombok.
These farmers received technical assistance from thelocal supplier. In 2011, our affiliate began working with
suppliers in Indonesia to expand the direct contract
farm base in many existing tobacco-growing areas.
This involved a step-by-step approach requiring
direct engagement with the farming communities
to build trust and explain the potential benefits ofchanging existing practices, and ultimately, to get

All of this contributed to better yields, higher
quality and increased profitability for farmers. The
approach also created the conditions for suppliers
to implement the ALP program and to monitor anddirectly support the continuous improvement oflabor practices27.

buy-in from key stakeholders. As a result, full rollout

In 2013, HM Sampoerna began introducing the newof the ALP program began in Indonesia in 2012.

direct contract concept in “roadshows” with non-Direct contracts with PMI’s suppliers immediately
improved not only farmers’ earnings as the
middlemen were eliminated, but also brought themother new benefits, including:43• Increased economic stability for the farmer• Access to better technology• Protective equipment• Crop inputs• Technical assistance• Access to credit

contracted farmers, raising awareness about childlabor, health and safety, and the requirements of the
GAP program, which includes the ALP Code. These
events leveraged on traditional farmer gatherings
such as the planting (“Gelar Tanam”) and theharvesting (“Gebyar Panen Raya”) festivals. These

The outcome of this work speaks for itself: sincesocial gatherings brought together more than 20,000

2012, our suppliers have significantly increased their

farmers in approximately 20 tobacco-growing

capacity to provide support directly to farmers andcommunities. In those areas where there were

have expanded the direct contract farm base toalready contracted farmers, these events provided

around 18,000 farmers beyond the Lombok area.

an opportunity to recognize commitment and reward
farmers for ALP program implementation.

Direct contracting and support to farmers will remain
central to our ALP Code implementation approach

In the Indonesian context, the responsibility forin Indonesia. Meanwhile, we continue to work withpreventing children from doing hazardous work or

tobacco-growing communities where it is still not

ensuring they attend school falls to mothers andpossible to establish direct contracts. HM Sampoerna,

farmers’ wives, which makes them an obvious choice

is working with a local NGO, STAPA28, that promotes

for the focus of field technicians’ communication

community learning groups to empower tobacco-

efforts on issues related to children on tobacco farms.

growing families to improve their livelihoods throughFor this reason, during the 2013 planting festivals,

group discussions, training and field practices

a full-day event was organized for women in the(e.g., environmental-friendly farming practices,farming communities. Approximately 330 women infarm management, alternative income generatingeight locations attended information sharing sessions

activities). Since this initiative pre-dates the ALP

on children’s rights and workshops on safety and theprogram, we have significantly expanded the scope

environment.

of activities with the NGO to include all aspects of
our ALP Code, growing from three locations and 600
farmers in 2011 to nine locations and approximately
1,500 farmers in 2013.

WOMEN’S ROLE IN ALPIn Lombok, HM Sampoerna has supported more than 1,400 women since 2011 through a local NGO
community-based program to empower women on tobacco farms, providing them training on household
budget management, vocational skills, and promoting small home-based craft businesses to generate
additional income and secure their financial independence.

44

45

6 SUSTAINABLE PRODUCTION AND
			 COMMUNITY INITIATIVES
Across the globe, we have developed and implemented a wide range of initiatives to:• Improve the sustainable production of tobacco• Improve the livelihoods of tobacco‑growing communities

Below is a summary of the types of projects and investments we are making worldwide in support of tobacco farmers:

SUSTAINABLE TOBACCO PRODUCTION INITIATIVES
AREAS OF FOCUS (EXAMPLES)INVESTMENTS

Farmer training, personal protection equipment kits, curing structure
improvements, water and irrigation access, fertilizer, tools and agricultural
machinery, sanitary equipment, recycling CPA containers, tobacco-curing
clips, hazardous materials’ safe storage, and support services for workers
and farmers.

$18.9

Million USD

Source: PMI internal data

Through the PMI Contributions program (which provides charitable donations for specific projects to selectedorganizations)30, and through the Eliminating Child Labor in Tobacco (ECLT) Foundation31, we fund a wide range ofcommunity-based initiatives and support to NGOs in many countries to help create an environment conducive totackling complex and systemic issues on tobacco farms while encouraging changes in practices and the evolution of
tobacco-growing traditions.

PMI’S CONTRIBUTIONS PROGRAMSAREAS OF FOCUS (EXAMPLES)INVESTMENTS

Vocational training, access to education and entrepreneurship training
for farmers and migrant communities, empowering women, school
improvements, child labor prevention, migrant housing, daycare centers,
counseling for migrant workers, communal water and sanitation,
environmental and natural resources protection, and food sustainability.

$9.3

Million USD

Source: PMI internal data

46

INDIA
CHILD LABOR PREVENTION EFFORTS
In India, our work with the local NGO, ASSIST29, exemplifies our support worldwide to help
prevent child labor. ASSIST aims to:• Generate community awareness about the importance of children’s education and to prevent
early school drop-outs• Improve school infrastructure, which includes the provision of clean drinking water• Promote micro-enterprises for women to support their financial independence• Verify that children attend school
To support the successful rollout of ALP, PMI extended the geographic scope of the program to
12 villages in 2013, impacting on the lives of more than 3,200 children.

MEXICOCHILD LABOR PREVENTION EFFORTS
Since 2001, Philip Morris Mexico (PMM), in collaboration with the federal, state and municipal
authorities, and local NGO ‘the Rural Development of Nayarit’ (Dernay), has established Child
Care and Education Centers (CAEIs) for children of migrant workers in tobacco-growing regions.
Currently, there are nine CAEIs in operation, providing a safe and clean place for 400 migrantchildren to learn and play while their parents work in the tobacco fields.
This initiative has delivered positive results, and with the introduction of the ALP program, PMM isbuilding on our experience to improve its coverage and effectiveness. Over the last two years, PMM
has invested 6.5 million MXP and, in 2012 alone, three new CAEIs were opened and continued toreceive PMI support throughout 2013. During the upcoming season, PMM will extend CAEI opening
hours and partner with the Mexican Foundation for Child Support to strengthen the advocacy andoutreach work with the migrant community in tobacco-growing areas with the goal of increasing
the participation of migrant children in CAEI’s funded as part of the local ALP program.

47

“This cross-functional approach is creating
innovative solutions to help address farmers’
and workers’ challenges while improving
livelihoods and wellbeing.”

6.1		

Integrated Approach

Traditionally, PMI has funded many initiatives in

impact of our efforts in the community and along our
supply chain.

tobacco-growing communities, both at an operational

Currently, the local ALP country teams drive newlevel (GAP) and a corporate level (Contributions).

program development in response to specific needs

Today, ALP provides us with the opportunity to align all

identified through ALP program implementation.

these activities around a set of common goals, and tointegrate those goals as part of our day-to-day businessprocesses. In this way, we can maximize the potential

This cross-functional approach is creating innovative
solutions to help address farmers’ and workers’
challenges while improving livelihoods and wellbeing.
48

PHILIPPINESEFFECTIVE COLLABORATION TO
ADDRESS CHILD LABOR

activities

PMI’s local affiliate, PMFTC Inc., is trying to

PMFTC worked with the Child and Family Service

provide quick and simple solutions to help

Philippines, Inc.32 and the Jaime V Ongpin

farmers meet ALP standards step-by-step. WhenFoundation, Inc.33 to develop a program that

the ALP program was launched, PMFTC began

includes:monitoring the farms from which they purchase• Childcare• A summer youth camp during school holidays/

tobacco to better understand the situations ofboth farmers and workers, and they identified theneed to tackle child labor as a top priority.
PMFTC is now working on an integrated plan toaddress the issue by:• Reducing farmers’ reliance on family labor bychanging transplanting methods, using “clips”
instead of stringing tobacco, and stalk-cutting
instead of ripening leaves one-by-one• Shifting a significant part of PMFTC’s

contributions funding to communities where
there is evidence of more children being
involved in tobacco harvesting, and building

49

partnerships with others to implement further

the harvest• A backyard food-growing program• Computer literacy training• Education sessions for parents onchild development• A child protection advocacy campaign in thevillages (‘barangays’)7 PARTNERING WITH STAKEHOLDERS
7.1 Malawi
Last year, the landmark Malawi National Multi-

In addition, conference attendees agreed on an

Stakeholder Conference on Child Labor in

outcome document34 providing a comprehensive

Agriculture, supported by PMI and others throughframework for action. In 2013, the ECLT extended

Eliminating Child Labor in Tobacco Foundation

its existing public-private partnership with the(ECLT), raised awareness about the importanceInternational Labor Organization —Internationalof tackling child labor.

Program on the Elimination of

The conference alsoChild Labor (ILO-IPEC), andprompted the government

provided additional funds toto prioritize the formation

allow ILO-IPEC to continue

and convening of the

supporting the implementation

National Steeringof policies approved at theCommittee (NSC) on Childconference. This included two key

Labor, and facilitated theelements: (i) the strengthening

implementation of actionsof the NSC on Child Labor, and(such as technical assistance(ii) the creation of the Childregarding the Tenancy

Labor Unit within the Ministry ofLabor Bill, establishing aLabor, which aims to promote

contract farming system,

greater coordination between

and development of childlabor policy) by several

Child Labor National Steering Committee
first meeting in January 2013

the Ministries and stakeholders’efforts to tackle this problem.

institutions.

50

7.2 North Carolina
In 2012, a group including PMI met in Raleigh, North

While various initiatives are being explored under

Carolina, and agreed to set up a multi-stakeholder

each of these areas, the group recently agreed to:

dialogue to discuss improving working conditions• Execute a pilot program to deliver labor-

on tobacco farms and in the agricultural sector
more broadly. During 2013, we continued our active
engagement in this dialogue with representativesof other tobacco manufacturers, leaf merchants,
farmers, workers, faith-based investors, and the U.S.
Department of Labor. In 2013, three working groups
were established:
1. Farmworker and farmer training and education
2. Necessary government level policy changes
3. Worker access to effective grievance51

focused training for farmers at select GAP
program meetings in North Carolina, starting inJanuary 2014

• Promote the North Carolina Department ofLabor’s on-farm training program to help
increase the number of trained farmers
and workers
We believe that this ongoing dialogue is helping
to create favorable conditions to achieve progressin improving working conditions in the agricultural

mechanisms (and potentially related matters,

sector and we expect that the group will launchsuch as freedom of association)

additional initiatives during 2014.

7.3 Kazakhstan
In Kazakhstan, we continue to advocate for policy

In the face of ongoing practical challenges, Philipchanges that improve labor conditions for migrants

Morris Kazakhstan continues to implement a wide

working on tobacco farms. Over the past year,

range of initiatives in tobacco-growing communities

positive regulatory changes have occurred thanks

working together with local authorities, NGOs

to the work of many stakeholders and, ultimately,

and the International Labor Organization. NGOs

commitment from the local government.

Karlygash and the Local Community Foundation

One significant change is the regulatory framework

continue to play a key role in these efforts throughthat now allows migrant children to attend school,

regular farm monitoring, child labor prevention

just like any other child in Kazakhstan35. Additionally,

initiatives (local community and day-care centers,

there was also a simplification in the migrants’

vocational training, summer camps, and direct

registration procedure36. While the total number of

support to schools and vulnerable families), andmigrants and migrants’ children has declined because

cross-border cooperation with a Kyrgyz NGO,of a reduction in overall tobacco purchases, we haveBusiness Women, to help migrant workers from theseen an increase in the percentage of school-aged

Osh region (Kyrgyzstan) prepare their registration

children enrolled in school (from 21% in 2011 to 65% in

documents before leaving for Kazakhstan.

2013), and in legally-registered migrant workers (fromzero in 2012 to around 30% in 2013).

In October 2013, the U.S. Department of Labor (DOL) acknowledged
PMI’s continued efforts to address child labor and migrant workers’
issues when they removed Kazakhstan’s tobacco from their List ofGoods Produced by Child Labor or Forced Labor.
The U.S. DOL concluded that “child labor in Kazakhstan’s tobacco
sector has been significantly reduced” and “there has been no evidenceof forced labor in Kazakhstan’s tobacco sector in recent years”. Most
importantly, the U.S. DOL concluded that “if a case of child labor orforced labor were found in the sector, there are mechanisms in place
to address the situation in an appropriate manner”, highlighting Philip
Morris Kazakhstan’s “comprehensive and credible” monitoring system,and our partner NGO efforts which “have been highly effective in
educating agricultural workers about their rights, available grievancemechanisms, and educational opportunities as alternatives tochild labor”.
52

7.4 Eliminating Child Labor in
Tobacco Foundation (ECLT)The ECLT Foundation is anindependent multi-stakeholder
organization where farmers, workers

resulted in the development of local expertise andthe skills to help communities deal with child labor
issues (via community organization, the provision of
micro-loans, agri-business counseling for smallholder
farmers, etc.).

and companies —advised by the

During 2013, ECLT focused on creating synergies

International Labor Organization

between their programs and the companies thatand civil society organizations— join efforts tosource tobacco. The expertise developed in theaddress child labor. PMI has been a member of ECLT

context of ECLT’s programs can support thesince 2002. ECLT supports comprehensive child laborcompanies’ own efforts (such as our ALP Code),

elimination programs in areas where

expand the impact of their own programs,children are most vulnerable. Theseand produce sustainable results long after

programs typically involve multiple

ECLT financing is complete.

interventions to address the social andWith the Malawi national multi-

economic factors that fuel child labor,

stakeholder conference on child labor,

and are implemented by reputable

ECLT moved toward playing a more active

international NGO partners.

role in advocating and verifying that

ECLT has active programs in Malawi,

policies to protect children in tobacco-

Tanzania, Uganda and Kyrgyzstan,

growing communities are in place and are

and during 2013, a new program in

enforced. This resulted in a significant andMozambique was launched with Save the Children.

important expansion of ECLT’s scope and we expect

ECLT’s programs have helped remove thousands of

to see more of these policy initiatives going forward.

children from inapropriate work and have typically

TACKLING ROOT CAUSES OF CHILD LABOR IN MOZAMBIQUE: ANTICIPATEDPROJECT RESULTS
ECLT’s REACT Project began in January 2013, and will be rolled out over four years. By the end of 2016, the
REACT Project is expected to achieve the following results:• A systematic protocol to identify child labor, refer cases to the appropriate services and monitor
progress to tackle the problem• 4,500 children benefit from quality services and are not taking part in hazardous child labor• Attitudes and behavior toward child labor in tobacco growing is less accepted• Community and district structures have the capacity to implement and coordinate actions tocombat child labor in tobacco growing• 500 vulnerable families have increased their household income and food security53

8 LOOKING AHEAD
Going forward, our aim is to move every country from which we source tobacco into the next phase of the ALP
program. We expect this phase to include the following elements:• Systematic assessment of each farm’s labor practices and working conditions by our own and the suppliers’
field technicians as part of their normal business relationship with farmers• Improvement plans for every farm
• Design and implementation of comprehensive approaches to address the most widespread issues identified• Support services for farmers and workers implemented in all countries• External assessments by CU covering all regions• GAP projects promoting sustainable tobacco production in each growing region• Further collaboration with external stakeholders• Continued regular public reporting on ALP program implementation
WE ARE COMMITTED TO:✓

Timely updating of Farm Profiles and increased accuracy of information collected✓

Digital data gathering trialed or operational in all countries where we purchase tobacco✓

Integrated ALP program plans for each country, reflecting the problems identified during the✓Initiatives designed and underway to begin to address and eliminate the most serious and✓Effective, innovative and evolving “toolboxes” for field technicians to help farmers make changes✓✓✓

program start-up

widespread problems identified on all contracted farms

and address key challenges on their farms
Documented evidence of changes made and improvements at farm and country level
External assessments completed by CU which demonstrate how specific countries have
implemented the ALP program, the effectiveness of their ALP teams, the ALP program plans andinternal monitoring systems
Ongoing public reporting and transparency

54

Notes:1.

For the purposes of this report, “PMI”, “we”, “us” and “our”
refer to Philip Morris International Inc. and/or any of its
direct or indirect subsidiaries and “supplier” where used,means a company that has a contract with PMI to supply
tobacco but is not a farmer.

2. For further information about Verité, please visit: http://
www.verite.org.
3. See http://www.pmi.com/eng/sustainability/good_
agricultural_practices/agricultural_labor_practices/pages/
agricultural_labor_practices.aspx.
4. A detailed description of the program and these activities
can be found in PMI’s first progress published in 2012,
which can be downloaded here: http://www.PMI.com/eng/
sustainability/good_agricultural_practices/agricultural_labor_practices/pages/agricultural_labor_practices.
aspx, http://www.PMI.com/eng/media_center/company_
statements/documents/PMI_ALP_Progress_Report_2012.
pdf.

14. When farmers and workers agree a fixed amount to be paid
per task.
15. Where farmers make arrangements with their neighbors to
help each other during peak labor periods.
16. See page 23 for an explanation of stringing.
17. Tool developed by PMI with Verite to track the socioeconomic status of the farms and systematically gather
detailed information about, among other things, the typeof labor employed, hiring practices, and farming activities
minors might be involved in.
18. See http://www.controlunion.com/en for further information
on Control Union.
19. See http://www.ohchr.org/Documents/Publications/
GuidingPrinciplesBusinessHR_EN.pdf (see particularly
pages. 31-35).
20. 2013 season not finished, incomplete data.

5. See http://www.pmi.com/eng/media_center/company_
statements/documents/alp_code.pdf.

21. See http://www.pmi.com/eng/media_center/company_
statements/documents/pmi_alp_progress_report_2012.pdf.

6. A list of the countries is included in the 2012 report. To thiswe can add Kenya in 2013, where the local supplier had
started the implementation of the ALP program in 2012,even before our decision to source from this country. The
number of farmers growing tobacco PMI buys in countries
where the predominant sourcing system is auction or thatof middlemen traders cannot be accurately estimated andis understated here.

22. Clip sticks are being piloted for their economic and social
impact in other countries also.

7.

Bringing workers on the farm through a third-party labor
contractor or crew leader.

8. Some workers/tenants work a farm owners’ land, effectively
they are renting the land from the land owners. The “deal”
sets out the division of the direct farm expenses and adefined lump sum or a portion of the profits is paid upon
the sale of tobacco at the end of the season.
9. Total number of field techs trained, includes new hires
trained; training sessions includes both training for newhires and refresher trainings. Farmer outreach numbers
reflect all farmers have been trained at least once (withthe vast majority contracted in 2012 entering their second
ALP season).
10. In Lebanon (8,000 farmers) a state-run monopoly
contracts directly with farmers, providing financial supportand some level of technical assistance. The unstablesituation in the country because of the conflict in Syria
and various operational difficulties required us to delay
ALP implementation.
11. Save the Children, Total Land Care, YONECO, CRECCOM
and the ECLT Foundation.
12. The review teams were generally made up of PMI
Operations Center (OC) staff, PMI’s regional ALP
coordinators and representatives of Verité.

23. PMI internal estimates.
24. Based on internal estimates.
25. For example: rules pertaining to direct-contract, cost of
production forum discussions, the definition of who canoperate as a buyer or an association.
26. See http://www.PMI.com/eng/about_us/charitable_giving/environmental_sustainability/pages/malawi_total_landcare.
aspx.
27. Refer to the case study on page 13.
28. See http://stapacenter.org.
29. See http://www.assist.org.in.
30. See http://www.PMI.com/eng/about_us/charitable_giving/
pages/charitable_giving.aspx.
31. See http://www.eclt.org.
32. See http://cfspi.com.
33. See http://jvofi.org.
34. See http://www.ilo.org/wcmsp5/groups/public/---ed_
norm/---ipec/documents/meetingdocument/wcms_190327.
pdf.
35. Order issued by the Ministry of Education and dated from
October. 24, 2012.
36. Introduced in March 2013. New amendments (effectivefrom March 24, 2013) to the Rules and terms of providing
work permits for foreign citizens and providing permits for
attracting foreign employees for employers.

13. The ratio refers to the number of farms that each fieldtechnician is responsible to visit and support over the crop
season in the country.

All images copyright of Philip Morris International Inc. and/or their respective owners and used with permission. Local images arecourtesy of Philip Morris International employees and/or contacts in the tobacco regions featured in the report. Unauthorized use
prohibited. ©Copyright 2014 Philip Morris International Inc.

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