THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

Control Union Certifications
Meeuwenlaan 4-68011 BZ ZWOLLE
Netherlands

October 2015

PMI Third Party Assessment

Control Union Certifications

TABLE OF CONTENTS
1. ALP PROGRAM BACKGROUND AND ASSESSMENT OVERVIEW .......................... 5
2. SADHANA ASSESSMENT: SCOPE AND METHODOLOGY ......................................... 9
2.1 SCOPE .............................................................................................................................................. 9
2.2 OPENING MEETING ........................................................................................................................ 10
2.3 STAFF INTERVIEWS AND ALP PROGRAM DOCUMENTATION ....................................................... 10
2.4 FARM SAMPLE SELECTION ............................................................................................................. 11
2.5 FARM VISITS .................................................................................................................................. 13
2.6 PERSONS INTERVIEWED ................................................................................................................ 14
2.7 CLOSING MEETING ........................................................................................................................ 15
2.8 PREPARATION OF THE FINAL REPORT ........................................................................................... 15
3. ASSESSMENT IMPLEMENTATION PHASE 1 OF THE ALP PROGRAM .............. 16
3.1 CONDUCT OF THE ASSESSMENT ................................................................................................... 17
3.2 PEOPLE AND PROCESSES TO MANAGE THE ALP PROGRAM ........................................................ 17
3.2.1 Internal structure for ALP implementation ................................................. 17
3.2.2 Internal communication and reporting ........................................................ 18
3.2.3 ALP training, roles and responsibilities ........................................................ 18
3.2.4 Engagement with the ALP Program ............................................................... 19
3.3 COMMUNICATING THE ALP CODE REQUIREMENTS TO ALL FARMERS ........................................ 19
3.3.1. The ALP communication strategy ................................................................. 19
3.3.2 ALP communication methods and materials .............................................. 20
3.3.3 Understanding and perception of the ALP Program ................................ 25
3.4 BUILDING FARM PROFILES FOR ALL CONTRACTED FARMS ......................................................... 26
3.4.1 Data gathering system for Farm Profiles .................................................... 26
3.4.2 Accuracy of Farm Profiles .................................................................................. 27
3.4.3 Analysis on information Farm Profiles .......................................................... 27
3.5 PROMPT ACTIONS .......................................................................................................................... 27
3.5.1 Prompt Action reporting mechanism ............................................................ 27
3.5.2 Understanding Prompt Actions ........................................................................ 28
3.5.3 Addressing Prompt Actions ............................................................................... 28
4. ASSESSMENT OF THE CURRENT STATUS OF PHASE 2 OF THE ALPPROGRAM ....................................................................................................................................... 30
4.1 ADDRESS WIDESPREAD AND/OR SYSTEMIC ISSUES ................................................................... 31
4.1.1 Initiatives to address widespread and/or systemic issues ................... 31
4.2 SUPPORT MECHANISM ................................................................................................................... 32
5. FARM LEVEL ASSESSMENT OF ALP CODE STANDARDS ...................................... 33
5.1 ALP CODE PRINCIPLE 1: CHILD LABOR ...................................................................................... 34
5.1.1 Prevalence of children working ....................................................................... 34
5.1.2 Awareness of legal minimum working age ................................................. 37
5.1.3 Awareness of hazardous work ......................................................................... 37
5.1.4 Age verification ..................................................................................................... 37
5.1.5 Underlying factors increasing risk of child labor ...................................... 38

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5.2 ALP CODE PRINCIPLE 2: INCOME AND WORK HOURS.............................................................. 38
5.2.1 Minimum salary ..................................................................................................... 39
5.2.2 Payment schedule ................................................................................................ 40
5.2.3 Regular and overtime hours ............................................................................ 40
5.2.4 Legal benefits ........................................................................................................ 41
5.2.5 Awareness of legal minimum wage ............................................................... 41
5.2.6 Awareness of legal work hours ....................................................................... 41
5.2.7 Record keeping ..................................................................................................... 41
5.2.8 Pay slips ................................................................................................................... 41
5.3 ALP CODE PRINCIPLE 3: FAIR TREATMENT ................................................................................ 42
5.3.1 Unequal payment men and women .............................................................. 43
5.3.2 Fair treatment ....................................................................................................... 43
5.4 ALP CODE PRINCIPLE 4: FORCED LABOR ................................................................................... 44
5.4.1 No evidence of workers unable to leave their jobs ................................. 44
5.4.2 Crew leader ............................................................................................................ 44
5.4.3 End of harvest payments .................................................................................. 44
5.5 ALP CODE PRINCIPLE 5: SAFE WORK ENVIRONMENT ............................................................... 45
5.5.1 Training and awareness of Green Tobacco Sickness (GTS) ................. 46
5.5.2 CPA handling and training ................................................................................ 46
5.5.3 Clean drinking and washing water ................................................................ 47
5.5.4 Worker accommodation ..................................................................................... 47
5.5.5 Re-entry period ..................................................................................................... 48
5.5.6 CPA storage and final disposal ........................................................................ 48
5.5.7 General safety measures .................................................................................. 49
5.6 ALP CODE PRINCIPLE 6: FREEDOM OF ASSOCIATION ............................................................... 50
5.6.1 Workers´ right to freedom of association................................................... 50
5.6.2 Awareness of freedom of association ........................................................... 50
5.7 ALP CODE PRINCIPLE 7: COMPLIANCE WITH THE LAW ............................................................. 51
5.7.1 Information on legal rights ............................................................................... 51
5.7.2 Employment contracts ....................................................................................... 51
6. CONCLUDING REMARKS .................................................................................................... 52
APPENDICES ................................................................................................................................. 54
APPENDIX 1. SADHANA RESPONSE AND ALP PROGRAM ACTION PLAN ............................................ 54
APPENDIX 2. ALP CODE ...................................................................................................................... 66

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GLOSSARY OF TERMS and ACRONYMS
ALP
ALP Code
ALP Code Principle
ALP Program
APM
ASP
CA
CU
CPA
Crew leader
DAC
Family farm
Farm Profiles

FCV
FS
FT
GAP
GTS
HM Sampoerna
Leaf tobacco supplier
Migrant labor

Measurable Standard

NGO
NTRM
OC
Phase 1
Phase 2
Piece work
PMI
PPE
Prompt Action

PTS
STP
Support mechanism

Agricultural Labor Practices
PMI’s Agricultural Labor Practices Code
Short statements that set expectations of how the farmer should
manage labor on his farm in seven focus areas
Agricultural Labor Practices Program
Area Production Manager
After School Program
Corporate Affairs
Control Union
Crop Protection Agents
Person responsible for managing a group of workers
Dark aired-cured tobacco
A farm that depends mainly on family members for the productionof tobacco
A data collecting tool developed by PMI with Verité to track thesocio-economic status of the farms, systematically gather detailed
information about, among other things, the type of labor employed,
farming activities that minors may be involved in, and hiring
Flue-cured Virginia tobacco
Field supervisor
Field technician
Good Agricultural Practices
Green Tobacco Sickness
Indonesian cigarette producer in which PMI has a majority stake
A company that has a contract with PMI to supply tobacco but is nota farmer
Migrant labor refers to labor that comes from outside the farm’s
immediate area. Migrant labor can come from a neighboring region
in the same country, or from a different country
A Measurable Standard defines a good labor practice on a tobacco
farm and helps determine to what extent the labor conditions andpractices on a tobacco farm are in line with each of the ALP Codeprinciples
Non-Governmental Organization
Non Tobacco Related Material
PMI Operations Center (Lausanne, Switzerland)Startup of ALP Program (training, communications, outreach)
ALP Program full implementation (monitoring, addressing problems)Payment at a fixed rate per unit of production/work
Philip Morris International, Inc. or any of its direct or indirect
subsidiaries
Personal Protection Equipment
A situation in which workers’ physical or mental well-being might be
at risk, children or a vulnerable group – pregnant women, the elderly- are in danger, or workers might not be free to leave their job
Perseroan Terbatas Sadhana
Sustainable Tobacco Production
A way for workers to access information and get support in difficult
situations and for workers and farmers to get support in mediating
disputes. Farmers have access to additional services to improve laborand business practices.

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1. ALP Program background and assessment
overview

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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In 2011, Philip Morris International Inc. (PMI)1 launched a worldwide Agricultural
Labor Practices (ALP) program to progressively eliminate child labor and other laborabuses where they are found and to achieve safe and fair working conditions on
tobacco farms. This program applies to all tobacco farms with which PMI or PMI´sleaf tobacco suppliers have contracts to grow tobacco for PMI and consist of fourmain components:(1) the Agricultural Labor Practices Code, setting clear standards for all
tobacco farms from which PMI ultimately buys tobacco;(2) for all PMI and leaf tobacco supplier’s staff directly involved with tobacco
growing, an extensive training program for with emphasis on the fieldtechnicians that provide regular visits to the farms;(3) a multi-layered internal and external monitoring system; and(4) participation of governmental and non-governmental (NGO) stakeholders
in improving labor practices and enhancing the livelihoods of tobacco
growing communities.
The ALP Program was developed and is being implemented in partnership with
Verité, a global social compliance and labor rights NGO. Working in tandem with
Verité, Control Union Certifications (CU) was commissioned by PMI to develop theexternal monitoring component of the ALP Program working to assess PMI leaf
tobacco suppliers and tobacco farms worldwide. All PMI leaf tobacco suppliers
submit internal, annual reports and are assessed regularly on their performance.
For the implementation of the ALP Program, internal reviews are also being
performed to assess the progress and challenges in the program’s implementation.
Third party assessments are periodic reviews CU undertakes of PMI leaf tobacco
suppliers and tobacco farms worldwide. In this initial stage of implementing the ALP
Program, these third party assessments focus solely on the implementation of the
ALP Program. They specifically focus on the progress of progress of each leaf
tobacco supplier to implement the ALP Code framed against the strategic objectives
set by PMI. The ALP Code contains seven (7) principles2:

1

For the purposes of this report, “PMI” means Philip Morris International, Inc. or any of its direct orindirect subsidiaries.
2
The full ALP Code is contained in appendix 2.

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1.

Control Union Certifications

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

2.

3.

4.
5.

6.
7.

For tobacco suppliers purchasing tobacco for PMI, implementing the PMI’s ALP
Program has been divided into two phases3:
Phase 1Management personnel and field technicians understand the ALP Code andthe implementation approach, ensuring capacity of people and the processes
in place to roll-out and manage the ALP Program;
Communicate the ALP Code, requirements and expectations to all farmers;
Document Farm Profiles for every contracted farm, identifying risk areas andtracking communication efforts to farmers;
Being aware and engaged to identify situations and incidents at farms thatshould be both reported and addressed immediately.

Phase 2 (full implementation of the program)








Collect detailed information about labor practices on every contracted farm;
Systemically assess each farm for status of the Measurable Standards
outlined in the ALP Code;Create and implement an improvement plan for each farm to improve theimplementation of all required standards;
Identify and implement corrective and/or preventive measures to identify
and address the root causes of potential situations not meeting thestandards and risks found on the farms;
Systemic reporting on the progress being made;Support mechanism in place.

3

Often, there is not a strict distinction between the two phases during ALP implementation. In practicesuppliers in many markets start to consider how to address and respond to situations that do not meet
the Code and to monitor changes before formally finishing Phase 1.

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Control Union Certifications(Source: Verité & PMI, 2011)8

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2. SADHANA Assessment: Scope and Methodology

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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2.1 Scope
In 2011 PMI launched the ALP Program globally. Sadhana is a leaf supplier to HM
Sampoerna, PMI’s affiliate in Indonesia. This specific report pertains to Sadhana’s
tobacco growing operations on the Indonesian island of Lombok and was the
fourteenth external ALP assessment performed by Control Union worldwide. The
assessment was conducted in October 2015 during the completion of Sadhana’s
third crop season implementing the ALP Program.
HM Sampoerna directly supported the ALP implementation by providing ALP
trainings and workshops to Sadhana while piloting and implementing initiatives toimprove on-farm practices.
2.2 Opening meeting
On 29 September 2015, CU held a meeting to initiate the assessment at Sadhana’s
offices in Purwosari attended by the Sadhana’s senior management and the
Sadhana ALP Team. The latter provided a short presentation with key informationon the local market including location of growing areas, achievements of their STP
initiatives, organizational structures supporting the ALP implementation andrelevant job descriptions. During the meeting, CU also presented the objectives of
the assessment.
2.3 Staff interviews and ALP Program documentation
The assessment of Sadhana’s work was based on individual interviews with the ALP
steering committee and the ALP Country Team. CU conducted interviews with twoarea production managers and two agronomy supervisors. In addition, three
representatives of the Mataram University were interviewed who were involved in astudy into the implementation of a support mechanism as required by Phase 2 of
the ALP Program (see page 8). All interviews were conducted individually sointerviewees felt comfortable to speak freely and raise any issues. The
conversations covered the following topics:












General awareness of the ALP Program and knowledge of the ALP Code;
Implementation of the ALP Program within Sadhana’s operations;
Responsibilities of management personnel;
Internal training and communication on the ALP Program;
Communication of the ALP Code to farmers;
Internal system to collect information through Farm Profiles;
Mechanism for reporting Prompt Actions;
Records showing the training of field technicians;
Relationship with external stakeholders;
Initiatives implemented to address widespread and/or systemic issues; andSupport mechanism.

Sadhana provided all the relevant documentation requested by CU relating to theimplementation of the ALP Program, including Farm Profiles, farmer communicationmaterials, purchase contracts and Prompt Action reports.

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2.4 Farm sample selection
In total, CU visited 28 farms. To constitute a meaningful sample, CU needed to visit
at least 26 farms; the square root of the total number of farmers directly
contracted on Lombok.4 100% of the farm visits were unannounced and farmselection was prioritized based on the following criteria:

Geographical spread
Farm size
Farms with reported Prompt Actions

For the assessment, the selection of field technicians was announced one day prior
to the first field day. The names of four field technicians were then communicatedto Lombok’s ALP manager. Each auditor was paired with a field technician for theday. In total, CU visited the field over five days with one auditor on the first twodays and two auditors over the last three days. To ensure effective communication,
each auditor was accompanied by a Sasak translator as some farmers were unable
to speak Bahasa Indonesian.
Within the scope of the assessment, all 651 farms on Lombok were producing
Virginia Flue Cured (VFC) tobacco with an average farm size of 2.3 hectares; 68
farms between 0 and 1 hectares, 401 farms between 1 and 2 hectares and 182
farms more than 2 hectares. To avoid confusion, the numbers in the graphs startingon page 12 only compare the sizes of the sampled 28 farms.
Approximately 30% of the tobacco volume bought by Sadhana on Lombok was
produced by non-contracted farmers, locally referred to as “free farmers” or“plasma volume”. These farmers were not contracted by Sadhana and did notreceive support or training. As it was unclear who these farmers were, CU could notassess these farmers. Sadhana openly discussed the challenges of contracting
100% of the farmers they sourced from, but have begun to explore communication
strategies to engage non-contracted farmers with ALP.
Sadhana response: “While the focus of PTS communication will be on contracted
farmers PTS note that the tobacco market is largely dominated by local
companies and the majority of tobacco production is beyond the reach of its ALP
Program. PTS remain committed to gradually increasing contracted farmer
coverage through the Integrated Production System (IPS) at a sustainable pace.
As part of the efforts to reach non-contracted farmers and increase awareness onfair and safe working conditions on farms, in 2016 PTS plan to continue andreplicate the contribution program of Community Learning Group (CLG) alongside
HMS and in partnership with the local NGO, focusing on increasing awareness onchild labor prevention, economic empowerment of women through alternative
income generating activities, and strengthening basic business skills at farmlevel. Through this effort, PTS expect to accelerate the dissemination of Good
Agriculture Practices, and at the same time improving their understanding andattitude towards GAP and the ALP Code.”4

At the time of the assessment, 651 farms were contracted by Sadhana.

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Sadhana classified their farmers into a range of grades from A to D. The A farmers
were considered the most reliable and often approached first with new initiatives.
Of all 651 contracted farms, 84 farms were classified as A-farmers, 339 farmers as
B-farmers and 228 farms as C farmers. Category D farmers were theabovementioned non-contracted, “free farmers”, and were not included in the
farmer list.
The graphs and tables below provide information on the 28 sampled farms.
Percentages refer to the demographic breakdown of this specific sample of farms.

Farm size (ha of tobacco)

Farms per region
11%
Central Lombok

21%

25%

28%
East Lombok

61%

0-1
1< - 2

54%
West Lombok>2

Farmer grade
29%

28%

Grade A
Grade B

43%

Grade CAt the time of CU’s assessment, 17 farmers (61% of the applicable and assessed
farms) had already completed harvesting and were curing, classifying or delivering
their tobacco to Sadhana. Nine farmers (32% of the applicable and assessed farms)
had already completed their full tobacco crop for this year.

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Stage of tobacco production
16
14
12
10
8
6
4
2
0

It was common for farmers to own a plot of land and lease an additional plot to
produce tobacco. One farmer (4% of the applicable and assessed farms) had asharecropping agreement with the farmer in which he paid 35% of the money
derived from selling the tobacco to the landowner.

Land ownership
4%

7%

21%
68%

Farm labor
7%

Owned

Farm with only local
workers

LeasedLeased + Owned
93%
Leased + Owned +Sharecropping

Farm with family
members and local
workers

On 26 farms (93% of the applicable and assessed farms) both family members andlocal workers were employed. On two farms (7% of the applicable and assessed
farms), only local workers were employed. One of these two farms also practiced
labor exchange which locally was referred to as “Gotong Royong” to transplant
tobacco. In this arrangement farmers worked on neighboring farms to support eachother during peak seasons.
2.5 Farm visits
CU employed a variety of methods to collect information. These included interviews
with farmers and workers, verification of farm related documentation and visualobservation of fields, storage rooms, curing barns, working areas and housing.
Before each interview, CU explained the objective of the assessment and assured
interviewees that their anonymity would be preserved at all times. As nine of the
farmers visited (32% of the applicable and assessed farms) had already finished all
tobaccco activities, some of the workers were interviewed in their houses.

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On each farm, CU conducted an individual interview with the farmer to assess theeffectiveness of Sadhana’s communication efforts to verify:The farmer’s awareness of the ALP Code;The farmer’s level of understanding and attitude towards the ALP Code;The key messages delivered by Sadhana;
The farmer’s willingness and ability to meet the standards of the ALP Code.

In addition, CU conducted individual interviews with external farm workers andfamily members working at the farms to verify:The worker’s awareness of the ALP Code;
The worker´s level of understanding and attitude towards the ALP Code;The labor practices at the farm.

2.6 Persons interviewed
In total, CU conducted 40 interviews with external workers and family members
including 37 adults and three children. To avoid any direct interference or influence,
CU conducted interviews with workers without the presence of the farmer. The
demographic profile of this sample has been summarized by graphs below.
All external workers were identified and confirmed as local workers travelling homedaily. During peak season, it was common practice for workers to move between
different farms for work. Consequently, CU identified that external workers were
employed an average of 1-3 months at the same farm.

Family status
Familymembers

42%
58%

Female35%
65%

External
workers

Age of interviewees
5%

Gender3%

Male

Duration of employment(external workers: 17)
6%

Adults (>18)< 1 month
15-17
93%

94%
13-14

1-3 months

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The graph below summarizes the frequency of work for all interviewed people.

Frequency of work
18%

Full shift full workweek

53%
30%

Full shifts several days a week
Only afternoons

2.7 Closing meeting
On 30 October 2015, the closing meeting was held at the premises of HM
Sampoerna at which CU presented its initial findings. This meeting was attended bymost of the ALP steering committee, ALP Country Team, representatives of HMS
Sampoerna, regional representatives of PMI, one representative of the OC and one
consultant from Verité.
2.8 Preparation of the final report
This final, public report is an important, external measurement of the progress ofglobal ALP implementation in all countries where PMI sources tobacco includingIndonesia. Public release demonstrates PMI’s commitment to transparency as animportant component of the ALP Program. CU authors the final assessment reportwith quality control provided by Verité. While drafting the report, PMI and the local
PMI entity or leaf tobacco affiliate may request clarifications on specific findings.
After both PMI and the local PMI entity or leaf tobacco supplier feel findings havebeen clarified and understood, a country action plan is prepared or the country
revises the existing GAP/ALP Program plans to respond to the findings.

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3. Assessment implementation Phase 1 of the ALP
Program

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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This chapter documents the findings of the assessment of Sadhana’s
implementation for Phase 1 of the ALP Program. In 2013, Sadhana began
implementing Phase 1 with training both its management personnel and fieldtechnicians focusing on:
1) Sadhana’s objectives and expectations;2) The meaning of the ALP Code Principles and Measurable Standards;
3) Techniques to communicate the ALP Code to farmers;
4) Tracking progress of communications and how to build a Farm Profile;5) Identifying issues when visiting farmers.
3.1 Conduct of the assessment
CU was satisfied with the cooperation and access to information provided by
Sadhana. In addition, all personnel interviewed demonstrated a willingness to
explain internal processes and provide their professional feedback. During theassessment, both management and field personnel were fully transparent andprovided all support requested by CU. Additionally, all farmers visited were willingto participate in the assessment while sharing the required documentation and/or
allow interviews with their family members and workers.
3.2 People and processes to manage the ALP Program
3.2.1 Internal structure for ALP implementation
Sadhana has implemented ALP with teams located in Surabaya and Lombok. These
teams encompassed a variety of expertise including agronomy, corporate affairs,
legal and operations. Overall, a specific team of six from Surabaya was responsible
for ALP implementation in all of Sadhana’s growing regions, including Lombok, andconsisted of the managing director, agronomist, project manager, STP/ALP
manager, ALP reporting manager and the ALP advisor.
The local team on Lombok was composed of an STP/ALP manager (responsible for
ALP implementation on Lombok) and two employees responsible for monitoring ALP
related procedures such as the collection of Farm Profile and Prompt Action
reporting, as well as the coordination and distribution of GAP/ALP materials tofarmers. The field team in Lombok consisted of two area production managers; fourmonitoring supervisors and 22 field technicians responsible for interaction andmonitoring of farms. The four supervisors regularly joined and supported fieldtechnicians on farm visits. When deemed necessary, the two area production
managers also joined farm visits.
HM Sampoerna and PMI regional supported the ALP implementation at Sadhana
and contributed by providing ALP trainings and workshops. As described in chapter
4.1.1, HM Sampoerna also contributed by developing and implementing several
initiatives to improve farm practices.

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Organizational chart for ALP implementation

3.2.2 Internal communication and reporting
At the time of the assessment, management level meetings regarding the ALP were
not organized on a fixed schedule. ALP was discussed when necessary andcommunication was informal primarily via email and phone. Simultaneously, fieldtechnicians met every Friday at the buying station on Lombok to discuss field
operations. During these meetings, ALP was also discussed and field technicians
could raise any ALP related issues. Additionally, the two area production managers
and four supervisors participated in these Friday meetings.
The combined GAP/ALP team on Lombok was responsible for the Farm Profile andPrompt Action reporting system. From the data collected and subsequent analysis,
they provided Sadhana’s management team with a monthly update.
3.2.3 ALP training, roles and responsibilities
PMI worked with HM Sampoerna to conduct the initial training on the ALP Programin 2013 and 2014. The ALP training program supported both management and fieldtechnicians. Two of the management employees involved in the ALP Program had
not received this training.
Field technicians received ALP training from Sadhana management (STP/ALP
manager) and also received an additional training from HM Sampoerna. All eight of
the interviewed field technicians had received training and regular ALP refresher
trainings were being provided. To test the design of its training program, Sadhana

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used a written test, pre and post training. Seven of the eight field technicians
interviewed declared they had participated in this test. A separate training was
conducted to familiarize field technicians with the digital system to collect FarmProfiles and report Prompt Actions.

Sadhana response: “To better clarify the gaps identified during the assessment,
PTS plans to do the following:•
Conduct a pre-test prior to refresher training for the FT/FS/APM/ and otherlocal teams to have a clear status of the current understanding on ALP principles
by each and to define the areas for improvement.
•
Coordinate with HMS to review current training materials to ensure they
are sufficient and clear so they can be delivered during the training and that they
focus on areas requiring improvement.
•
Conduct refresher training and ensure all of the local team involved with
ALP implementation participates in the training.
•
ALP understanding & communications to the farmer will be a part of the FT
performance appraisal. Starting 2016, additional resources will be allocated for
ALP Program deployment and specific ALP targets will be given to supervisors and
PTS field management which will be linked to their compensation.”

3.2.4 Engagement with the ALP Program
Sadhana had incorporated the ALP Program in their broader strategy which wascalled the ‘Integrated Approach farming concept’ and aimed at improving theoverall, economic viability of their registered farms. More details of this strategy
can be found in chapter 4.1.1.
In parallel, Sadhana’s management acknowledged the challenge of buying tobacco
from the non-contracted farmers, as they were not included in the ALP Program. At
the time of CU’s assessment, new strategies were being discussed to better engage
and educate these farmers on ALP, although initiatives had yet to be developed andimplemented.
3.3 Communicating the ALP Code requirements to all farmers
3.3.1. The ALP communication strategy
Sadhana had actively communicated and delivered training on the ALP program toits complete network of contracted farmers. In line with Sadhana’s strategy, fieldtechnicians primarily focused their discussions during field visits on two topics; childlabor and safety (GTS, CPA and PPE usage). As a result of these targetedcommunications efforts, 18 farmers (64% of the farmers visited) were aware of the
ALP Code.

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The following table records the farmers’ awareness of all seven ALP Code principles.
This data reflects the topics farmers related to the ALP Program.5
ALP Code Principle

Farmer awarenessChild labor18 (64%)

Safe work environment

17 (61%)Forced labor

9 (32%)

Fair treatment

6 (21%)

Income and work hours

5 (18%)

Freedom of association

3 (11%)

Compliance with the law

2 (7%)The majority of the farmers were familiar with the ALP, and 17 farmers (94%farmers aware of the ALP Code) considered ALP to be important. These farmers
were supportive about preventing children from working in tobacco, acknowledged
the importance of working in a safe environment and perceived this knowledge andskills as beneficial to them.
3.3.2 ALP communication methods and materials
A variety of methods and written materials were used to support communications
and training on ALP with Sadhana’s contracted farmers. As previously mentioned,
they initially focused their efforts on child labor and safe work environment. Except
for the ALP brochure, the information on the remaining posters and brochure wasclearly written and supported with photographs or animated pictures. This
combination made the information more easily understandable by farmers.
All materials were translated into the primary Indonesian language (Bahasa
Indonesia). As a number of older farmers only spoke Sasak and did not understandBahasa, they relied on verbal explanations from the field technicians. These
communication materials did not include non-prioritized principles and topics suchas the legal minimum wage and working hours.

5

Numbers between brackets refer to the total number of farmers visited.

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Child labor poster: This poster targeted a farmer’s understanding of the specificage appropriate activities. During interviews, some farmers reported their children
pointed to this poster to remind their parents that they were prohibited from doing
certain work activities on the farm.

Safety poster: This poster focused exclusively on explaining the requirements of asafe work environment. It covered five themes: (1) Farmer keeping a clean work
area (2) How to use Crop Protective Agents (CPA), how to prevent GTS and how to

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use PPE (3) Specific images of which PPE should be used during CPA application(4) Proper use of warning sign(s) after CPA application in the field, and (5) Accessto clean drinking and washing water.

Farmer book: This was produced as a brochure with useful information on tobacco
cultivation with specific references to the ALP topics of child labor and safe work
environment. This material was very good quality and provided farmers with anaccurate and comprehensive review of information.
CPA recommendation poster: this poster provided farmers with a complete listof recommended CPAs, their characteristics, and how best to store and apply them.

Green Tobacco Sickness (GTS) brochure: A short manual which explained GTS
including the cause, symptoms and how to protect against it.

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ALP Brochure: A brochure dedicated to the ALP Code referencing all sevenprinciples and 32 Measurable Standards. The brochure was a direct translation of
PMI materials and did not make specific reference to local Indonesian laws such aslegal minimum wage or legal work hours.
ALP Videos: Independently, Sadhana had developed two videos in Bahasa
Indonesian designed to educate farmers and workers about child labor and a safe
work environment. It demonstrated how farmers should work in a safe manner andwhich activities were allowed and not allowed for children. These videos wereshown to farmers at the buying station. In addition, two field technicians used theirhand held tablets to show these videos during field visits. CU identified three details
that could confuse farmers. First, the mask that was being used for CPA application
was being worn upside down. Second, the video could be misinterpreted assuggesting “recommended” CPAs can be ingested while the non-recommended
CPAs are dangerous, while both categories are dangerous to anyone ingesting
them. Finally, in the demonstration of CPA usage, cotton gloves for harvesting wereshown for spraying CPAs, instead of the recommended rubber gloves.
In addition to these specific communication tools, Sadhana incorporated five otherstrategies to engage with its contracted farmers. First, they included an ALP clausein the buying contract. This clause covered several ALP related topics including childlabor and safe working environment.
Second, a total of 22 field technicians trained farmers during their regular fieldvisits. The average ratio of field technician to farmer was 1:30 which supported
regular farm visits every two weeks. One farmer declared that field technicians
visited often during transplanting season but following this critical point, they
visited less often but continued to communicate via SMS.

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Group meetings were a third technique which specifically supported direct contact
and interaction with famers. In the 2014/2015 crop season, Sadhana supported
three rounds of group meetings. These included: (1) Five meetings organized for all
farmers in February where field technicians could invite their farmers. During thesemeetings among others topics, ALP was discussed. (2) In March and April, 22
separate farmer trainings were conducted. More details on ALP and Non Tobacco
Related Material (NTRM) were discussed. (3) In July, additional group meetings
were held when the field technicians deemed necessary.
In combination with these trainings, Sadhana’s fourth mechanism was their farmer
training center. Opened in Lombok, it offered farmer trainings as well as
demonstrations of best practices and new technologies to improve tobacco
harvests. These demonstrations included some ALP related initiatives such as theclips. See chapter 4.1.1 and 5 for information on implemented initiatives.
Finally, HM Sampoerna and Sadhana organized an annual farmer day. In the
2014/2015 crop season, this event was held in six areas over the course of threedays covering the whole of Sadhana’s Lombok tobacco production. This event wasused to communicate and explain GAP, NTRM and ALP as well as to demonstrate
best practices.
Sadhana response:• “In order to address the gaps identified by CU, PTSs communication efforts
going forward will be focused on bringing more clarity to farmers on child labor,
particularly regarding what constitutes hazardous work, and safe work
environment, and on increasing their levels of awareness on the other ALP CodePrinciples.”• “FTs will be equipped with updated media to communicate key ALP Code e.g.
updated posters (posters with typographical error will be removed), to be put up
on the farmer’s barn and brochures to be distributed during Q2 2016 to all PTS
contracted farmers. In order to address the gaps identified by Control Union,
updated GAP/ALP videos in local language will be installed on FT tablets to help
them demonstrate ALP Code during 2016.”• “To reach a wider audience on ALP, PTS in collaboration with HMS, will invite
farmers’ wives and related workers to farmer day events to be held in Q2 which
will involve approximately five hundred people during the four day event.”• “PTS plans to increase the scope of the Farmer Day events as it is one of the
training methods available to a wide range of participants including not only
farmers but also farmers’ wives and related workers.”• Focus topics to be communicated during Farmer Day events as of 2016: Safety
aspect on CPA application including PPE type and usage; Nicotine absorption(GTS) impact and ways to avoid it; Proper and sufficient PPE kits to be usedduring CPA application, fresh leaf handling to avoid nicotine absorption (GTS);
Empty CPA container recycling; CPA storage; Re-entry interval period after CPA
use.”

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The following table summarizes the communication methods which farmers
remembered to have either learned about or been educated on ALP6. These
numbers do not assume that farmers had been exposed to all six communication
techniques.
Communication method

Number of farmers

Regular field technician visit

18 (64%)

Group meeting

15 (54%)Video

8 (29%)

Poster/Calendar

5 (18%)

Farmer book

5 (18%)

Farmer training center3 (11%)

3.3.3 Understanding and perception of the ALP Program
Sadhana’s management team perceived child labor and safe work environment as
the main problem areas. While the management team was committed to improving
any issues around these principles, there were also gaps in their understanding ofthese challenges.
Several management employees declared that most of the ALP Code was alreadycovered by GAP and local law. CU identified three specific gaps in the
management’s understanding of the ALP principles. First, there was confusion about
which tobacco related activities were allowed for different age categories andwhether it was allowed to employ children below 18 or not. Second, they had
difficulties determining whether a task was hazardous or light work; stringing andsometimes harvesting were considered to be non-hazardous. Finally, several
management employees were not aware of legal work hours and legal minimum
salary.
In addition, CU could not document any method used to calculate daily and/or
hourly salaries. As workers most commonly were not paid a monthly wage, thiscalculation is important to compare the worker’s wage with the legal minimum
salary and ensure workers are provided with this minimum level of payment. Using
local law, this calculation can be made by dividing a monthly wage by 173 to
calculate an applicable hourly wage.
Most field technicians had a general understanding of the ALP Code and its sevenPrinciples. CU interviewed eight field technicians identifying clear strengths andweaknesses:o6Child labor: 50% of the interviewed field technicians (four of eight)
believed 18 years old was the legal minimum working age and 50% (four of

Numbers between brackets refer to the total number of farmers visited.

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PMI Third Party Assessment

o

o

o

o

o

o

Control Union Certifications

eight) were not aware of working conditions for children between 15 and 18
years old. For 75% of the field technicians (six of eight), the definition of“hazardous work” was not clear.
Income and work hours: 25% of the interviewed field technicians (two ofeight) were aware of the legal minimum wage. None of the interviewed fieldtechnicians (zero of eight) were aware of the legal work hours, legal benefitsof farm workers and the legal overtime rates.
Fair treatment: 100% of the interviewed field technicians (eight of eight)
stated that workers should be treated equally and fairly and nodiscrimination should take place on the farm.
Forced labor: 88% of the interviewed field technicians (seven of eight)
mentioned workers should not be forced to work. 71% of the interviewed
field technicians (five of eight) were aware of the risks associated withworkers being in debt to farmers. 38% of the interviewed field technicians(three of eight) mentioned prison labor was not allowed and 25% of theinterviewed field technicians (two of eight) mentioned the risks associatedwith a farmer retaining worker’s identity documents.
Safe work environment: As a priority in the implementation of Phase 1 of
the ALP Program, all eight interviewed field technicians had a goodunderstanding of this principle.
Freedom of association: All eight interviewed field technicians clearly
understood that workers should be free to join/build and/or lead a labor
union.
Compliance with the law: 63% of the interviewed field technicians (five ofeight) considered it mandatory to comply with all local laws. However, noneof the field technicians mentioned the farmer’s responsibility tocommunicate the legal rights to their workers.

3.4 Building Farm Profiles for all contracted farms
As a requirement of Phase 1, Sadhana employees were expected to build FarmProfiles for every registered farmer. PMI developed a global template to support
collection of information on socio-economic indicators including farm size, numberof workers, age and number of children in the farmer’s family, working status (forexample part time, full time, migrant), the pay period for workers and living
conditions.
3.4.1 Data gathering system for Farm Profiles
Sadhana started collecting Farm Profiles in 2013 using a paper form and in the
2014/2015 crop season implemented digital data collection with a proprietary
application.
As the usability and adoption of the system expanded, a portion of the Farm Profile
was still collected in paper form at the time of the assessment. The goal is toeventually collect 100% through digital data collection. During the first or second
farm visit, the field technician recorded all required information on the farm andthen submitted the form to the GAP/ALP team in Lombok. As described earlier, thismanagement team duo provided a monthly update to Sadhana’s management and26

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ALP reporting. Most important, a Farm Profile was available for every visited farmer
so efforts could be focused on the accuracy of the data.
3.4.2 Accuracy of Farm Profiles
Eighteen Farm Profiles (64% of the applicable and assessed farms) did not fully
match the situation found on the farm. CU identified four discrepancies. First, on 17
Farm Profiles (61 % of the applicable and assessed farms), the number of hectares
was inaccurate. This discrepancy could have been caused by a change in the fieldsize used during the planting season. Second, for two Farm Profiles (7% of theapplicable and assessed farms), the information on other commercial crops oranimals was incorrect. Third, there was a minor discrepancy between the number ofpeople working on the farm and the information provided on the Farm Profile at one
farm (4% of the applicable and assessed farms).
Finally, missing information was identified on two Farm Profiles (7% of theapplicable and assessed farms). For example, the specific tasks on two farms were
not correctly recorded. As field technicians only updated the Farm Profiles annually,a small minor number of incomplete or inaccurate profiles can be expected.
Sadhana response: “To improve the accuracy of Farm Profiles, FTs will be
requested to cross check the data at least three times during the season i.e.
during farmer registration, after transplanting and prior to harvesting. FSs andAPMs will also assess the farm profile recorded during their field visits to farmers
to check the accuracy of the data collected.”

3.4.3 Analysis on information Farm Profiles
Based on the information collected in the Farm Profiles, Sadhana conducted annual
analyses to support the design of initiatives to address widespread and/or systemic
issues.
3.5 Prompt Actions
PMI defines a Prompt Action as:“a situation in which workers’ physical or mental well-being might be at risk,children or a vulnerable group – pregnant women, the elderly - are indanger, or workers might not be free to leave their job.” (source: PMI, 2011)

Another Phase 1 requirement is to both identify and address Prompt Actions foundon farms contracted to supply tobacco to Sadhana. Any Prompt Action should bereported immediately to the ALP team who then provides guidance on how toaddress the issue or escalate it within the organization.
3.5.1 Prompt Action reporting mechanism
In the 2014/2015 crop season, Sadhana began the required reporting of Prompt
Actions. These were recorded into the same digital system as the one used for27

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Farm Profiles commonly referred to as the ‘GAP app’ or ‘aplikasi.’ This system
offered 11 categories of Prompt Actions even though ALP does not formally classify
all 11 as Prompt Actions. For example, the category “no training to workers” wasincluded as a Prompt Action. Additionally, it was not possible to add a level ofurgency to the recorded Prompt Actions to distinguish situations that required
immediate action from minor situations not meeting the standard. This made itdifficult for field technicians to distinguish between an actual Prompt Action andnon-urgent situations identified on a farm to either resolve or escalate.
During the review of the reporting system, CU identified four specific issues withthe potential to negatively impact field operations and reporting accuracy. First,
there was no predetermined deadline for follow-up a reported Prompt Action.
Second, the current system did not allow field technicians to escalate a Prompt
Action. Coupled together, these limitations only allowed the field technicians to
identify, report and close a Prompt Action without a documented escalation orfollow-up. After discussing an identified issue directly with the farmer, fieldtechnicians immediately closed the Prompt Action in the system. While the fieldtechnician had already consulted with the farmer, additional follow-up or support
was still needed to ensure the farmer was adopting the correct or safe practices.
Although follow up had not been integrated into the current system, fieldtechnicians, supervisors or area production managers declared they persisted in
explaining and stressing the importance of improvement of specific farm practices.
Third, field technicians could only tick boxes but were unable to add additional
information or qualitative comments to explain certain practices or deficiencies on
the farm. Finally but perhaps most important was the lack of historical data madeavailable to the field technicians. After a Prompt Action was closed, it was no longer
visible on the tablet. Consequently, a field technician could not review a farmer’s
specific history of previous visits and corresponding issues or official Prompt
Actions.
In combination, these technical deficiencies directly contributed to an elevatednumber of Prompt Actions with 11,794 reported between June and September
2015. This number may have been overstated because during a farm visit, fieldtechnicians could only report a recurring issue as a new incident.
3.5.2 Understanding Prompt Actions
The majority (75%) of the interviewed field technicians (six of eight) could easily
define a Prompt Action and were able to mention the three categories of Prompt
Actions referenced by PMI (chapter 3.5). The remaining 25% (two of eight),
considered all situations identified as not meeting the standard a Prompt Action.
3.5.3 Addressing Prompt Actions
Equally important to the reporting is the subsequent action taken to properly
correct any previously identified behavior or practices. At all 28 farms visited, CU
reviewed previously reported and closed Prompt Actions. In 12 cases (43% of theapplicable and assessed farms), CU identified that these farmers were not aware of
the reported Prompt Action. In 10 cases (36% of the applicable and assessed
farms) the Prompt Action had not been resolved. These cases included three cases

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Control Union Certificationsof incorrect CPA storage; four cases of children working on the farm; and threecases of incorrect or no PPE usage. Conversely, Prompt Actions relating to childlabor had gone unreported. For 6 of the farms where CU identified children involved
with tobacco related activities (55% of applicable and assessed farms), no Prompt
Action on child labor had been reported.
Sadhana response: “Accurate farm profiles and field monitoring are critical toidentify conditions related with GAP/ALP implementation at the farmer level. In
2015 PTS moved from a manual system to electronic tablets to collect farm
profiles and “Prompt Action” data. Since this was PTSs first year implementing
tablets it is acknowledged that there is room for improvement. To improve in2016 PTS having the following planned:• Align the current Prompt Action (PA) list with the HMS PA list and include a
template to derive a qualitative report, instead of just ticking the box.
• During ALP Code refresher training PTS will focus on ensuring all FTs
understand the situations occurring at a farmer level categorized as PA, how toutilize the tools and how to communicate the PA addressed horizontally tofarmers and vertically to higher level management.
• Clear records will be prepared on follow-up actions to be taken, to conclude PA
status (ongoing / solved) and these will be included in the monthly reports.
• Properly communicate the PA situation to farmers, get commitment fromfarmers to improve the current situation and make sure FT conducts follow up
visit(s) to ensure PA situation is not repeated by the same farmer.
All information updated from FTs monitoring will be summarized and provided to
HMS at the monthly discussion which will involve PTS management and HMS
representatives.”

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4. Assessment of the current status of Phase 2 of the
ALP Program

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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This chapter focuses specifically on Sadhana’s implementation of Phase 2 of the ALP
Program. As Sadhana had recently started with Phase 2 at the time of thisassessment, only initiatives addressing widespread issues and the support
mechanism had been included in this chapter.
PMI introduces leaf tobacco suppliers to Phase 2 when the required preparation to
implement the program has been taken. This does not necessarily mean that all
Phase 1 requirements have been achieved. PMI and Verité then provide training to
the ALP Country Team which includes:
1) Preparation of the ALP Country Team to train leaf technicians
systematically monitor labor practices on farms;2) ALP status update;3) Introduction to Phase 2;
4) General approach for monitoring before, during and after a farm visit;
5) Next steps and planning for the upcoming season.

to

4.1 Address widespread and/or systemic issues
Implementation of Phase 2 requires leaf tobacco suppliers to investigate the root
causes of various challenges found with the implementation of the ALP. Challenges
are first identified and then prioritized before specific initiatives can be developed
but are supported by two approaches. First, initiatives are implemented which aim
to mitigate specific risks and improve the overall socio-economic conditions ofcontracted farms. Second, initiatives should involve all the relevant stakeholders,with emphases placed at the community level.
4.1.1 Initiatives to address widespread and/or systemic issues
HM Sampoerna implemented three initiatives targeting women and youths at thefarms contracted by Sadhana: a women’s empowerment program, after school
activities and a scholarship program.
In addition, Sadhana developed several initiatives to improve the situation at thefarm. An overview of these initiatives and the number of farmers which CU visitedparticipating in these programs is summarized in the table below. This chapter
focuses specifically on the integrated approach farming concept and the women
empowerment program as these initiatives had an impact on the general situation
at the farms. The remaining initiatives targeted specific ALP Code Principles andtherefore will be discussed in chapter 5.
Sadhana response: “PTS will join Eliminating Child Labor in Tobacco Growing(ECLT) Foundation in the development of a new project to engage with a widerange of local stakeholders (e.g. government, ILO, industry, NGO, local
universities) to increase the awareness on and to build continued dialogue
towards a common approach against child labor.”

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Related Issue
Initiatives
Child Labor
Clips
Child Labor
After school activities programChild Labor
Scholarship program
Safe Work Environment PPE set
Safe Work Environment CPA recycling program
General
Women empowerment program
Integrated approach farming
Generalconcept

Control Union Certifications
FarmerParticipation
CU sample
16 (57%)5 (24%)
0 (0%)
27 (96%)25 (89%)0 (0%)
Not verified atfarm level

Implementation
98 farmers on Lombok
14 schools on Lombok
1 tobacco area Lombok
All farmers
All farmers
1 location on Lombok

Women empowerment program: Initiated in 2011, the project was managed by
the local NGO Transform7 and funded by HM Sampoerna. Its objectives were
twofold. First, was to help prevent child labor by raising the awareness of tobacco
farmers and their families. Second was offering advice and training on the
management of local resources to improve the livelihoods of local tobacco farmers.
To support these goals, Transform helped form community learning groups and also
identified farmer groups and then supported them with vocational training. The
NGO primarily supported and trained women on implementing better farming
techniques and personal financial management. The technical production trainings
also touched on ALP. None of the farmers visited by CU or their family members or
external workers had participated in this specific initiative.
The Integrated Approach farming concept: Sadhana designed this concept toincrease the overall economic viability of their tobacco farmers. Sadhana educatedfarmers to increase yields for crops outside the tobacco season including soybean,corn and rice. Additionally, by providing Turi trees, farmers could partly provide
themselves with curing wood. Finally, the leaves from both the trees and soybean
could be used to feed goats which were provided to several farmers by Sadhana. As
the program was not directly related to ALP this initiative was not verified at thefarm level.
4.2 Support mechanism
At the time of the assessment, Sadhana did not have an independent support
mechanism in place. The reason for this was that research done by the Mataram
University demonstrated that social structures existed on a community level
through which people usually report and resolve potential issues. This also occurred
when workers have problems with farmers as they have strong relationships witheach other. Workers typically report issues to their family members, village chiefs
and/or religious leaders who then escalate it to higher levels.
Sadhana did not want to disturb these strong social structures so requested
Mataram University to investigate the dynamics between farmers and workers,
potential conflicts between them, and to recommend solutions to these conflicts.
Additionally, Mataram University trained the community leaders and requested
them to report any conflicts. The first set of data from this reporting mechanism
was expected by the end of 2015.
7www.transform.co.nr

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5. Farm level assessment of ALP Code standards

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

AGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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Chapter 5 summarizes the field assessment of the current status of the ALP
implementation. At the time of the assessment, Sadhana was in the second year of
implementing Phase 1 and had recently started with Phase 2 of the ALP Program.
Subsequently, the farm assessment should be viewed as a baseline to support theimplementation of Phase 2.
Before presenting its findings, it is important to clarify the structure of the ALP
Code as this determines CU´s analysis of farmers´ practices. The ALP Code has
seven ALP Code Principles, each with several Measurable Standards. ALP CodePrinciples are short statements designed to guide farmers on specific practices
resulting in safe and fair working conditions.
A Measurable Standard defines a good practice and over time can be objectively
monitored to determine whether and to what extent the labor conditions andpractices on a tobacco farm are in line with each ALP Code Principle. Each chapter
covers one of the seven ALP Code Principles and CU’s findings. Risks, situations that
may lead to problems in the future or about which a conclusion cannot be reached
due to lack of evidence are also discussed.
5.1 ALP Code Principle 1: Child labor
Background
ALP Code Principle 1
Minimum age regulations: Law no. 20 of 1999
on Ratification of ILO Convention no. 138 ofChild labor
1973 on Minimum Age to Work (article 3)
prohibits employment of any person under the´There shall be no childage of 18. However, the Manpower Law
labor.´(article 69) states that a juvenile of 13 years
old and above may be employed to perform
light work duties which do not hinder theirpersonal development including physical,
mental and social health. Conversely, the ALP
code only allows children between the ages 15-17 to be employed for any tobacco
related activities. Younger children between the ages of 13-14 are only allowed tosupport a family farm. Children below 18 are only allowed to be involved in nonhazardous activities. As ALP requirements are stricter, the ALP Code prevails.
Child labor: Overall findings and challenges
5.1.1 Prevalence of children working
In total, on 11 farms (39% of the applicable and assessed farms), CU identified
15 children involved with tobacco related activities.8 There were no children below
the age of 15 employed in any tobacco related activities. At four farms (14% of theapplicable and assessed farms), four children aged between 15-17 years were
employed in tobacco related activities. Two were employed as stokers,9 responsible
for monitoring the curing process on a cycle of 7-9 days. At 11 farms (41% of the8

Three of these children were interviewed during the CU farm visits (see 2.6). The remaining children
were identified based on farmer, family member and/or external worker declarations.
9
Person responsible for monitoring the curing process.

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applicable and assessed farms), 15 children below the age of 18 were involved inhazardous activities. At three farms (11% of the applicable and assessed farms),
five children below the age of 13 were involved in tobacco related activities. These
specific children aged eight, nine, ten, eleven and twelve were involved in stringing,assisted with loading and unloading the barns, assisted with grading and assistedwith curing. While children were found working on farms in hazardous activities, allchildren below the age of 15 were also attending school.
The table below details the number of children both above and below the age of 15
and their specific activities (one child can do more than one activity).
5

Age:
15-17
Total = 9

4
3
2
1
0
5
4
3
2
1
0

Age:
13,14
Total = 1

5

4
3

Age:
<13
Total = 5

2
1
0

<

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The graph above demonstrated the frequency of work of the children identified.
Three children worked full shifts full workweek. These were all boys aged 16 or 17
either working as a stoker or involved in topping, harvesting, loading and unloading
the barn, bundling, grading and bailing.

Initiatives to address child labor
1) Clips
Sadhana was focusing efforts to improve farmer adoption of both metal and wooden
clips. By helping farmers improve their efficiency, Sadhana hoped farmers would
avoid children stringing. Sadhana primarily targeted Grade A farmers anddistributed clips to 100 farmers at the time of the assessment. Sixteen of the
farmers visited (57% of the applicable and assessed farms) participated in theinitiative. Of the eight Grade A-farmers visited, six had participated in the initiative(75% of the applicable and assessed farms).
Of these 16 farmers, two were positive towards the initiative. These farmers
specifically mentioned that the clips were meant to prevent children from being
involved in stringing. The remaining 14 farmers were less positive about theinitiative. Six mentioned that the clips were not strong enough to carry the weightof tobacco. Five mentioned that leaves fell down during curing increasing the risk offire. Four farmers reported that they returned the clips to Sadhana’s buying station.
One farmer declared he did not know how the clips should be used. On one farm,the workers complained that the clips were too heavy to lift and preferred stringing.
One farmer found the clips too expensive. Furthermore, the wife of one farmer wasupset because Sadhana had distributed the clips without providing information on
the purpose of the clips or the financial arrangement. She was concerned the clips
could be stolen and they would then be financially responsible for replacing them.
2) After school program
HM Sampoerna identified that children were primarily involved with stringing after
school hours. Consequently, HM Sampoerna funded programs in 14 schools acrossLombok primarily during the harvest season from August to December. Sadhana
supported HM Sampoerna by assigning preferred areas to launch the initiative.
Children were given the opportunity to participate in extracurricular activities suchas martial arts classes, traditional dance, painting and boy and girl scouts. By
staying at school after hours, children could not be involved with farm work.
Five farmers visited by CU (24% of applicable and assessed farms) participated in
the after school program. All five (100% of the participating farmers) believed thisinitiative will accomplish its desired mission to prevent children from being involved
with tobacco related activities by focusing their energies into new classes.
3) Scholarship program
An initiative designed and exclusively funded by HM Sampoerna had been trialed ina single location in Lombok. The program was intended for the children of financially

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disadvantaged farmers with a good academic record in senior high school to pursue
a higher education. Leaf suppliers of HM Sampoerna nominated specific children forfurther screening to be conducted by the Putera Sampoerna Foundation10. None of
the farms CU visited were participating in this initiative.

Sadhana response:• “PTS will continue providing clips to farmers, however farmer acceptance anduptake remains a challenge. PTS is targeting an additional two hundred farmer
beneficiaries for clips during 2016 which will cover total three hundred contracted
farmers receiving clips, with the assumption of same number of contracted farmers
as of 2015. Although this technique has the potential to reduce child labor
incidence, PTS is also mindful that children might be shifted to other activities suchas handling and sorting dried tobacco leaves. To address this risk, in 2014, PTS
rolled out non-tobacco bundling initiatives and today more than 90% of PTS
farmers in Lombok are not bundling the leaves.”• “It is important to mention that PSF assessed the impact of the after school
program in 2014 and found that students involvement in tobacco related activities
declined sharply from before the ASP commenced, it reduced up to 90% of thetime children spent on the farm. In 2016, together with a PSF, PTS will continue to
conduct further research to assess to what extent this is translating into a
reduction of child labor.”

5.1.2 Awareness of legal minimum working age
A minority of 12 farmers (44% of the applicable and assessed farms) were aware of
the legal minimum working age. At five of the farms visited (31% of the applicableand assessed farms) interviewed workers were aware of the legal minimum working
age.
Child labor: Risks
5.1.3 Awareness of hazardous work
The awareness of what constitutes “hazardous work” was relatively low. Ten of the
farmers visited (38% of the applicable and assessed farms) were aware of themeaning of hazardous work. In parallel, at five of the farms visited (31% of theapplicable and assessed farmers), interviewed workers were aware of the meaningof hazardous work.
5.1.4 Age verification
None of the farmers visited were able to verify the age of their workers. Farmers
did not perceive this as a critical check because workers were primarily recruitedfrom the local community rather than migrant labor. Conversely, CU identified four
10

www.sampoernafoundation.org

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children below the age of 15 directly contracted, demonstrating this risk was indeed
present.
Sadhana response: “PTS will encourage their farmers to verify the age of theirlabor to prevent child labor incidences despite illiteracy rates and the fact that
documented age evidence remains a challenge. Considering the strength of thesocio-structure, PTS will continue to promote working age restrictions to be
accepted by the community through all communications channels.”

5.1.5 Underlying factors increasing risk of child labor
Three main factors increased the risk of child labor at the visited farms. First,
children wanted to work to earn extra money to buy things. Second, farmers
explained that it was impolite to ask their workers not to bring their children to thefarm. Finally, farming was part of the day to day culture in the local community.
Children naturally walked around an area committed to tobacco production as thefarm area was also the living area. Consequently, on 10 farms visited (40% of theapplicable and assessed farms), children were walking around at the farm without
supervision.
Child labor: Analysis and Priorities
The abovementioned findings and initiatives demonstrate Sadhana’s commitment to
identify and address child labor. Sadhana had openly acknowledged the risk of childinvolvement in tobacco related activities. However, knowledge among its
management employees and field technicians on acceptable activities for children
as described in the ALP Code and their understanding of hazardous activities was
still insufficient. Simultaneously, the Prompt Actions reporting system did not
manage to escalate and follow up with farmers where children have been identified
as farm labor. Also, adoption among farmers to use clips, an initiative to mitigate
children stringing, was found to be low.
5.2 ALP Code Principle 2: Income and Work Hours
Background
Minimum salary regulations: The province’s legal minimum wage for employees is
1,330,000 IDR per month. The hourly rate is 7,688 IDR (the monthly rate divided
by 173). Wages are to be paid monthly. However, based on Regulation No. 7 from
the Ministry of Manpower and Transmigration on Minimum Wages, a twice-monthly
payment scheme is permissible provided that the net monthly payment is not lower
than the minimum wage. The minimum wage needs to be paid in cash and piece
rate payments are allowed if the wage is not less than the provisions for the legal
minimum wage according to the Manpower law (article 157).

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Work hours regulations: The Manpower Law(article 77) states that employees can work
regular working hours of 40 hours per weekwith a maximum of 8 regular hours per day. No
children are allowed to work between 6 PM and6 AM.
The Minister of Manpower and Transmigration
Decree No. 102 states if overtime is performed
during week days, the first hour is 1.5 times thehourly rate. Subsequent hours are 2 times thehourly rate. Higher rates are defined by law
when overtime is worked during weekends or
public holidays.11 The Manpower Law (article78) states overtime during the week is limited
to 3 hours per day and 14 hours per week.

Control Union Certifications

ALP Code Principle 2
Income and Work Hours‘Income earned during apay period or growing
season shall always beenough to meet workers’
basic needs and shall be ofa sufficient level to enable
the generation of
discretionary income.
Workers shall not work
excessive or illegal work
hours.’

Benefit regulations: In case an employer
employs ten or more employees or is paying atleast 1,000,000 IDR per month he is obliged to enroll his employees in a social
security program12. The Manpower Law (article 79) states workers employed for aminimum of 12 days are entitled to annual leave. Workers employed at least threemonths are entitled to receive religious holiday allowance (Ministry of Manpower
Decree No. Per-04). The law additionally contains regulations regarding salaryduring prolonged illness (Manpower Law article 93), permission to leave work withpay (Manpower Law article 93), Hajj pilgrimage leave (Manpower Law article 93)
and maternity leave (Manpower Law article 82).
Income and work hours: Overall findings and challenges
5.2.1 Minimum salary
On all farms visited, at least one worker was identified as being paid below the legal
minimum wage of 1,330,000 IDR per month. None of the stokers were paid
according to the legal minimum and they received between 1,500,000 and
4,000,000 IDR in total after completing the work, equating to 4,802 – 5,925 IDR
11

If the overtime is performed during weekends or a public holiday:
For those who have 6 working days: The first 7 hours of overtime, 2 times the hourly rate; the 8th hour,
3 times the hourly rate; the 9th hour, 4 times the hourly rate; the 10th hour, 4 times the hourly rate. If
the holiday falls on a Saturday and the employee is requested to work overtime: The first 5 hours ofovertime, 2 times the hourly rate; the 6th hour, 3 times the hourly rate; the 7th and 8th hour, 4 times
the hourly rate. For those who have 5 working days: the first 8 hours of overtime, 2 times the hourly
rate, the 9th hour, 3 times the hourly rate; the 10th and 11th hour, 4 times the hourly rate.
12Social security: The social security program should cover: (1) occupational accident security, (2) death
insurance, (3) old age benefits, and (4) health care security. The rate of the contribution to be paid by
the employer described in the Government regulations No. 14 (article 9): (1) Occupational accident
security: ranging from 0.24% - 1.74% of the employees monthly salary, (2) Old age benefits: 3.7% of theemployee(s) monthly salary, (3) Death insurance: 0.3% of the employee(s) monthly salary; (4) Healthcare security: 6% of the employee(s) monthly salary (married) or 3% of the employee(s) monthly salary(single).

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per hour (7,688 IDR minimum per hour). In addition, at 19 farms (86% of theapplicable assessed farms), at least one daily worker was paid below the legal
minimum wage.
Amongst both farmers and workers, it was understood that men and women would
be paid on different scales. On average, women were receiving 20,000 to 40,000
IDR per day (3,076 – 6,164 IDR per hour). Women were involved in all major
tobacco work activities including transplanting, production including fertilizer,
topping, harvesting and classification. The lowest daily payment recorded was
17,500 IDR for 6 hours of work equivalent to 2,917 IDR per hour. Conversely men
received daily payments ranging between 35,000 and 65,000 IDR representing a
range of 5,385 to 9,230 IDR per hour, partly above the legally minimum wage. In
one case, male workers received a daily payment of 80,000 IDR. Men were more
likely to be involved in soil mechanization, curing, spraying pesticide, loading andunloading the barn.
At 10 farms (83% of the applicable and assessed farms), workers were being paid
piece rates mostly for stringing and were not able to earn the legally required
minimum wage within regular work hours. Typically, workers received an averageof 200 to 300 IDR per completed stick. Within eight hours, they could only earn
20,000 to 24,000 IDR. At two farms (17% of the applicable and assessed farms),
female workers involved with harvesting were paid as a group. They received
payment based on the number of kilograms of harvested tobacco leaves. At the endof the day the payment was then divided equally among the group of female
workers equating to 33,000 and 42,000 IDR per worker. In comparison with thehourly legal minimum wage of 7,688 IDR, these women were earning almost 50%
of a full day’s payment of 61,504 IDR.
5.2.2 Payment schedule
At nine farms (32% of the applicable and assessed farms), at least one worker was
not being paid according to the legal payment frequency of at least once a month.
On these farms workers most typically employed as stokers, received payments
after 1.5 to 3 months. At one of these farms, daily workers received payment at theend of the harvest.
The majority of daily labor interviewed by CU were paid at the end of each day. In
three cases, the farmers declared they paid workers in advance (maximum oneweek) to ensure workers were available to work on their farms. These farmers werereacting to a shortage of skilled labor in Lombok.
5.2.3 Regular and overtime hours
At 12 farms (57% of the applicable and assessed farms), at least one worker was
identified as working more than the legal work hours of 40 hours per week. On
these farms stokers exceeded normal working hours because they monitored thecuring barn during the curing process day and night. The stokers were working 28
up to 72 days in a row with only short breaks when the curing barn was being
loaded and unloaded. At two farms the work was divided among three stokers
working eight hours daily. At the other farms, the farmer took over monitoring in

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between the workers shifts. In nine cases these shifts were ten hours or more, of
which in six cases workers completed 20 hours daily. Two boys of 17 years old were
working as stokers. These young men were both under 18 years of age and working
night hours, not allowed by law. Additionally, they were exceeding the 40 hour
work week.
CU found no other evidence of daily labor exceeding 40 working hours at the same
farm. It was common practice for workers to regularly work on more than one farmand some of them declared that during peak seasons they worked seven full days
without a day off. Furthermore, no evidence was found of involuntary overtime
hours. It was not common to work overtime. Although no farmers declared paying
overtime hours at the legal premium, four farmers said they were paying 5,000 IDR
per extra hour worked.
5.2.4 Legal benefits
None of the workers interviewed received any of the legal benefits which they wereentitled to by local law. None of the farmers and workers interviewed were aware of
the benefits to which workers were entitled by local law. Although no legal benefits
were provided it was common practice for workers to receive a daily meal in
addition to their salary. This meal could be valued between 5,000 – 10,000 IDR per
day. Six farmers (21% of the applicable and assessed farms) reported they gave
workers the choice to either have a meal during the day or to receive extra
payment of 5,000 IDR per day.
5.2.5 Awareness of legal minimum wage
None of the farmers or workers interviewed were aware of the legal minimum
wage. Farmers paid their workers the wage that was commonly used in theircommunity.
5.2.6 Awareness of legal work hours
Only two farmers interviewed (7% of the applicable and assessed farms) and theworkers interviewed at one farm (7% of the applicable and assessed farms) were
aware of the legal work hours.
Income and work hours: Risks
5.2.7 Record keeping
Thirteen farmers (46% of the applicable and assessed farms) recorded payments
made to workers as well as the hours/days worked or tasks completed.
5.2.8 Pay slips
None of the farmers visited were providing pay slips to their workers.
Income and work hours: Analysis and Priorities
Sadhana did not perceive any issues regarding this principle nor has this principle
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was a difficult principle for field technicians to discuss with farmers as farmers use
the topic to open discussions on the purchase price of their tobacco.
At the time of the assessment, this principle was only briefly mentioned in the ALP
brochure without reference to the applicable local laws and detailed rates forhourly, daily or monthly payments. However, as appeared from the above
mentioned findings, there are several common practices that result in situations notmeeting the standard. Therefore it is important that Sadhana increases attention tothis principle.
Sadhana response: “In order to gain a clear understanding on the current
standards applied in relation to workers income and work hours, PTS will conduct
a survey in Lombok, together with a local university. The survey will assess
workers’ payment against the regional minimum wage, payment schedule,
working hours and overtime pay, and benefits. Since current wages are not only
applied to tobacco workers but to all agricultural workers, the survey will also
include other crops to ascertain whether this is a systemic issue, as it will
determine the nature of the actions to be put in place to address it. The survey
will be started in Q1 2016 and to be concluded by end of 2016. PTS will thendevelop an action plan based on the results of the survey and to define a strategy
to communicate the regional minimum wage and entitled benefits to farmers. PTS
aim to do this during the 2016 crop season at its buying stations using visualcommunications and posters clearly stating the regional minimum wages andentitled benefits.”

5.3 ALP Code Principle 3: Fair treatment
Background
Regulations:
Indonesia’s Manpower Law provides generalprotection against physical punishment andverbal abuse of employees. Employee(s) may
request to be terminated in the event an
employer has battered, insulted or threatened
their employees (Manpower Law article 169).
Furthermore, the Manpower Law protects
employees from a variety of employer
misconduct.13

ALP Code Principle 3
Fair treatment‘Farmers shall ensure fairtreatment of workers. There
shall be no harassment,
discrimination, physical ormental punishment, or any
other forms of abuse.’

If an employee is exposed to one of theseactions, they have the option to file a criminal
13

The Manpower Law protects against the following employer misconducts: (1) enticing and/or
instructing the employees to act contrary to the prevailing laws and regulations, (2) not paying theemployee’s salary for three continuous months or more, (3) non-performance of the employer of its
obligation toward the employee, (4) instructing employees to conduct work outside the agreed scope ofwork, (5) engaging in work which endangers the employee’s life, safety, health and morals, and such is
not agreed upon in the employment agreement.

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report with the police in response to verbal or written defamation; unpleasantconduct; physical harassment or extortion and threats.
Pursuant to the Manpower Law, every employee has the right to have a job without
discrimination. It also states that every employee has the right to be treated fairly,
without discrimination. The employer is obliged to support these rights andobligations of the employee without discriminating based on sex, ethnic group,
race, religion, skin color and political views.
If these rights are violated, the Manpower Law imposes administrative sanctions on
a company. The Minister of Manpower and Transmigration or any appointed official
may impose any of the following eight sanctions14
Fair treatment: Overall findings and challenges
5.3.1 Unequal payment men and women
As mentioned in chapter 5.2.1, CU witnessed a clear division between the activities
performed by men and women. Farmers openly declared that they preferred men
and women to perform different work tasks. In all cases, women received lower
salaries than men, which could be considered as discrimination based on gender.
5.3.2 Fair treatment
No evidence was found of sexual, verbal or physical abuse or harassment at thefarms visited.
Fair treatment: Analysis and Priorities
Farmers and workers interviewed confirmed that physical, sexual and verbal abuse
was not taking place at their farms. Having said that, the practice of unequal
payments for men and women identified by CU clearly demonstrates that thisprinciple requires additional attention to ensure that all workers are being treatedfairly.
Sadhana response: “In 2015, PTS commissioned a local university (Mataram
University) to conduct a baseline study to understand the relationships between
farmers and workers, potential tensions and conflicts, and the approach taken to
resolving issues when they arise. Based on the findings on this baseline study
and given the existing social structures and their traditional role in mediating andresolving disputes, PTS will leverage on these informal mechanisms. In 2016, PTS
through the university will engage with the local stakeholders (village
representative and / or informal leaders) increasing their awareness of ALP Codeencouraging a better understanding of the resolution of potential issues raised byworkers or farmers is in line with the ALP Code Principle. PTS through theuniversity will also promote the existing mechanism to workers and farmers.
The result from the study mentioned in (Point D) shows, disparities in male and14

Eight sanctions: (1) verbal warning, (2) written warning, (3) limitation of business activities, (4)freezing business activities, (5) revocation of approval, (6) revocation of registration, (7) temporary
seizure of part or all production, (8) revocation of the business permit.

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female compensation, and the inputs from the support mechanism, will help PTS
understand issues concerning fair treatment. During the 2016 crop season PTS
will prepare visual communications and posters to raise awareness of fairtreatment at its buying stations.”

5.4 ALP Code Principle 4: Forced labor
Background
Regulations: In 1999, Indonesia ratified theInternational Labor Organization Convention No.
105 of 1957 through its own Law No. 19,‘Elimination of Forced Labor which ratified theILO Convention on the Elimination of Forced
Labor. Law No. 19 specifically identifies forcedlabor:ALP Code Principle 4
Forced labor‘All farm labor must be
voluntary. There shall be noforced labor.’

1) as a means of political coercion or
education or as punishment for having or
expressing political opinions or opinions
that are contrary to the ideology of apolitical, social or economic system that have been formed;2) as a method for mobilizing and using labor for economic development
objectives;3) as a means of labor discipline;4) as a punishment for having participated in strikes;
5) as a means of racial, social or religious repression.
Forced labor: Overall findings and challenges
5.4.1 No evidence of workers unable to leave their jobs
All 17 workers interviewed declared they were free to leave their employment withreasonable notice. In addition, all workers stated that they had not been required
to make any financial deposits or relinquish their original, identity or travel
documents.
5.4.2 Crew leader
At one farm (4% of the applicable and assessed farms), a crew leader arranged thework force. The farmer delivered payments via the crew leader to the workers andwas not in direct control of the payments made to the workers. During theinterview, the farmer did not know the workers and he declared they were from aneighboring village. Although this labor practice was only identified on a single farmthe extent of this risk would require further investigation.
5.4.3 End of harvest payments
The majority of farmers pay their workers daily or monthly. As previously
mentioned (chapter 5.2.1), 10 farmers (35% of the applicable and assessed farms)
paid workers at the end of harvest which lasted for more than 1 to 2.5 months. At

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one farm (4% of the applicable and assessed farms) workers declared they needed
to borrow money from family, friends or neighbors to pay for their basic needs. As
previously reported, also one farmer (4% of the applicable and assessed farms)
was financially unable to pay his workers because of insufficient cash flow and low
revenues from the tobacco harvest. This farmer reported he used inputs (such as
fertilizers) not recommended by the field technician and therefore the buying
station only paid a low price for his tobacco.
Forced labor: Analysis and Priorities
Despite the abovementioned findings, it can be concluded that forced labor was not
an issue at the farms visited. Only one farmer paid workers through a crew leader
and CU does not see the payment at the end of the harvest as a major risk offorced labor. The reason for this is that farmers and workers generally knew eachother for many years and had a good relationship. In addition, social structures
were typically very strong resulting in reliable community values and relationships.
Therefore, CU considers it sensible that Sadhana did not prioritize this principle.
5.5 ALP Code Principle 5: Safe work environment
Background
Regulations: While there are no specificrequirements for tobacco producers, there is an
expectation that occupation safety to be
implemented within all work places within the
Republic of Indonesia. The general obligations foran employer to provide occupational safetyinclude:1) Provide employees with routine healthchecks according to the nature of the job.

2) Explain and provide three fundamentals(1) the conditions and hazards within theworkplace (2) all safety devices andsafety equipment required in the work
place (3) personal safety equipment.

ALP Code Principle 5
Safe work environment‘Farmers shall provide asafe work environment toprevent accidents andinjury and to minimize
health risks.
Accommodation, where
provided, shall be clean,safe and meet the basic
needs of the workers.’

3) Report any occupational accidents to theregional office of the Ministry of Manpower and Transmigration.
In addition to the above, the employee is obliged to three additional requirements(1) to post written occupational safety conditions and a copy of Law 1/70 in a place
where it is accessible to all employees to see (2) to post pictures of occupationalsafety in a place for all employees to see (3) to provide at no cost personal safety
equipment to all employees and other parties who enter the work place and thenecessary instructions.

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Safe work environment: Overall findings and challenges
5.5.1 Training and awareness of Green Tobacco Sickness (GTS)At 13 farms (48% of the applicable and assessed farms) both famers and workers
had been trained on avoiding GTS. The following table reports the use of PPE during
harvesting, critical to avoiding GTS.15
Use of PPE for Harvesting

Number of farms

Long sleeves/gloves/long pants/socks

14 (52%)

Long sleeves/gloves/long pants

5 (19%)Long sleeves/long pants

1 (4%)Long sleeves/gloves

2 (7%)Long sleeves

5 (19%)

5.5.2 CPA handling and training
At 22 farms (81% of the applicable and assessed farms), the persons responsible
for applying CPA had been trained. The following table summarizes the use ofprotective equipment used to apply CPA.16
Equipment used
Overalls/Mask/Boots/Gloves/Goggles
Mask/Boots/Gloves/Goggles
Mask/Gloves/Goggles
Boots/Gloves
Mask/Gloves
Mask
GlovesNo equipment

Number of farms
1 (4 %)
11 (42%)4 (15 %)
4 (15 %)
2 (8 %)
2 (8 %)
1 (4 %)
1 (4 %)

Initiative to address safe work environment - PPE distribution
In 2014, Sadhana began distributing a full set of PPE to farmers for free. The PPE
set included five items: long sleeve shirt, rubber gloves, mask and safety glasses
for CPA application and cotton gloves for harvesting. CU found the safety glasses
were not appropriate for CPA application as they were open at the sides andtherefore did not properly protect against CPA spraying.

15
16

Numbers between brackets refer to the total number of assessed and applicable farmers.
Numbers in brackets refer to the total number of assessed and applicable farmers.

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SafetyglassesLong sleeve
shirt

Control Union Certifications

Rubbergloves

Cotton gloves

Mask

This distribution effort was supported by the field technicians. In addition, farmers
had access to PPE equipment when they returned their used plastic bottles fromthe CPA program at the buying station. Twenty-seven famers (96% of theapplicable and assessed farms) had received the PPE set. When asked about theinitiative, 24 of these farmers (89% of the participating farms) were very positive.
They believed the equipment directly helped establish a safer working environment
as it was good for both farmer and worker’s health to wear protective clothing.
Conversely, some farmers also mentioned that the mask was very hot anduncomfortable to wear which may explain the lower adoption rates of this item ofequipment.

Sadhana response:• “HMS EHS department will undertake a study during 2016 of PPE used by its
farmers (including that provided by their other suppliers in Indonesia) in order torecommend a single acceptable PPE standard. GTS is not recognized at a local
level and so PTS have decided to refocus this concern from the perspective of
nicotine absorption, which is easier to understand and communicate.”• “PTS plan to continue the distribution of PPE kits (mask, goggles, long sleevesand gloves) to cover all contracted farmers in 2016. At the same time PTS will
work with HMS to review the suitability of current PPE kits with the aim of rollingout any changes in 2017.”
5.5.3 Clean drinking and washing water
At all the farms visited by CU, clean water for both washing and drinking wasavailable.
5.5.4 Worker accommodation
All the daily labor were from the local community, returned home daily and did not
require accommodation. Because stokers had to monitor the curing barn day andnight, they did require accommodation. In general, they were provided with a small
place near the curing barn where they could lay down and intermittently rest during
the night. CU did not witness any unacceptable conditions provided for regular work

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hours, however as stokers had to work day and night for many days in a row, theaccommodation was found to be inadequate.
5.5.5 Re-entry period
Twenty-four of the farmers (89% of the applicable and assessed farms) did notensure that the re-entry period after CPA application was respected. However, one
farmer (4% of the applicable and assessed farms) reported use of a warning signand three farmers (12% of the applicable and assessed farms) reported a verbal
warning to their families not to enter the field after spraying.
5.5.6 CPA storage and final disposal
Nine farmers (33% of the applicable and assessed farms) did not lock or close their
CPA storage. Eleven of the farmers (42% of the applicable and assessed farms) did
not discard their empty CPA containers correctly and did not use the CPA recycling
program. At these specific farms, the empty CPA containers were found lying on the
ground, buried near the farm or stored in a plastic bag where children could reachthem. In one case, a farmer kept the containers under his bed.

Initiative to address safe work environment - CPA recycling program
Since 2013, Sadhana has been collecting empty CPA containers at the buying
stations and providing special plastic bags for the farmer to collect and then deliver
them in. As an incentive to deliver the empty containers, farmers received acomplete PPE set in exchange for the empty CPA containers.
As a result, 25 farmers (89% of the applicable and assessed farms) were aware ofthis initiative and said they had participated. Twenty-one farmers (84% of theapplicable and assessed farms) offered positive feedback about the initiative. They
declared that removing the empty containers, prevented their children fromplaying with them and helped keep their farms clean. As a secondary motivation,
the same farmers were also aware of the additional risks associated with not safely
disposing their empty CPA containers.

Sadhana response:• “PTS will ensure all contracted farmers in 2016 will have proper CPA storageboxes. PTS will establish a standard for CPA box placement and usage andprovide sufficient training and information during the distribution period to ensure
farmers know how to utilize the CPA boxes properly.”• “Empty CPA container collection is one of PTSs Sustainable Tobacco Production(STP) initiatives since 2013. In 2015, more than 75% of the farmers participatedin this program. In 2016, PTS will drive this initiative to promote farmer
participation to above 90% with at least 50% of empty CPA containers returned.”

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Control Union Certifications• “This year PTS will introduce re-entry interval (REI) signage to farmers throughfarmer day events and will also distribute REI signage to all contracted farmers in
Lombok.”Safe work environment: Risks
5.5.7 General safety measures
In order to ensure a safe and sanitary work environment for both workers andfamily members, it is important that farmers are aware of general safety hazards at
the farm and take measures to prevent accidents, injury and exposure to healthrisks. The following risks were identified at the farms visited:









High curing barns: At all farms visited by CU, high curing barns were usedposing the risk of a fall without any measures to prevent falling .
Equipment and tools lying around: At five farms (18% of the assessed
and applicable farms) the equipment and tools were found to be storedunsafely.
Transport to medical care: 16 farmers (57% of the assessed andapplicable farms) did not have means of transport to medical care (forexample motorcycle or car).
Resources to act in case of fire: At 27 farms (96% of the assessed andapplicable farms), no resources were available to act in case of fire.
First aid training: At 27 farms, (96% of the assessed and applicable
farms) workers had not received first aid training.
First aid kit: None of the farmers visited had a first aid kit at the farm nor
had any of them recorded their CPA application.

Sadhana response: “To address Safe Working Environment principles, PTS plans
to train its FTs in basic first aid techniques. To deliver this training PTS plan toengage experts from Industrial Clinic Services (ICS) and the Sampoerna Rescue
Team (SAR team). It is PTS expectation for its FTs to have a basic knowledge offirst aid to address some of the risks that might occur in the field when theyinteract with contracted farmers e.g. CPA application, injury due to sharp tools,
snake bites, etc.”

Safe work environment: Analysis and Priorities
The significant gaps in both understanding and practice explain why Sadhana had
made this principle a priority. As levels of awareness and adoption of practices
remain relatively low, additional efforts on the communications, training,
enforcement and monitoring of the farm practices to further improve the safety
practices of their contracted farmers will be crucial. In addition, CU identified visualtraining materials improperly demonstrated the use of a PPE mask as it was shown
upside down. Also, not all farmers and workers had access to the proper safety
equipment. Providing improper equipment may lead farmers to feeling they areprotected and adjust their behavior while potentially increasing their exposure.

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5.6 ALP Code Principle 6: Freedom of association
Background
Regulations: Pursuant to the enactment of Law No. 21 of 2000 on Labor Union,
workers freedom to join a union or other workers group is protected by law. Law
No. 21 prohibits obstructing or forcing employees to form or not to form, to becomeor not to become a functionary and a member of a union and/or to carry out or not
to carry out the activities of the union by way of(1) conducting termination of employment,
suspension,
demotionofposition,or
ALP Code Principle 6
mutation;(2) not paying or reducing salary; (3)Freedom of association
conducting intimidation in any forms; (4) runninga campaign against the formation of a union.
‘Farmers shall recognize
Law No. 21 further provides a sanction ofand respect workers’ rights
imprisonment ranging from 1 to 5 years and/or
to freedom of association
monetary fine in an aggregate of IDR
and to bargain collectively.’
100,000,000 up to an aggregate of IDR
500,000,000.
Furthermore, an employer is obliged to provide
the opportunity to union functionaries and/or members of the union to carry out
organizational activities within working hours to be agreed upon by the employer
and the union and/or stipulated in the collective labor agreement.
Freedom of association: Overall findings and challenges
5.6.1 Workers´ right to freedom of association
CU found no evidence of farmers disrespecting workers´ right to freedom of
association or to join and/or form labor unions. None of the farmers and workers
interviewed were aware of active labor unions in the region nor were there any
worker representatives at the farms visited. No evidence of labor unions operatingin these regions was found.
Freedom of association: Risks
5.6.2 Awareness of freedom of association
CU found that 17 farmers (61% of the total applicable and assessed farms) were
aware of the workers right to freedom of association. At 10 farms (67% of
applicable and assessed farms) interviewed workers were aware of the right tofreedom of association.
Freedom of association: Analysis and Priorities
Considering there are no worker or labor unions available in the region, awarenesson workers’ right to freedom of association among farmers and workers was
relatively high. It still remains important that workers are aware of their right toorganize themselves in order to discuss and review working conditions.

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5.7 ALP Code Principle 7: Compliance with the law
Background
Regulations: The Manpower Law (article 51) stipulates that an employment contract
may be made in writing or verbally. The following are the minimum requirements tobe contained in written employment contract,
namely: (1) Name, address of the company,
ALP Code Principle 7
and business activities, (2) employee’s name,gender, age and address, (3) position or type
Compliance with the lawof work, (4) work location, (5) salary andpayment procedures, (6) working conditions‘Farmers shall comply withwhich contain the rights and obligations of the
all laws of their country
employer and the employee, (7) the date ofrelating to employment.’
the commencement of the work and durationof the employment, (8) place and date of theemployment agreement, and (9) signatures ofthe parties to the employment agreement.
Compliance with the law: Overall findings and challenges
5.7.1 Information on legal rights
None of the workers interviewed were fully informed or aware of their legal rights
and employment conditions. In general, farmers only informed them about thesalary, working hours and tasks to be performed. While many rights are only
available to those workers employed for more than three months, social security
applies to all workers.
5.7.2 Employment contracts
Farmers and workers interviewed willingly engaged in verbal contracts. By law
written employment contracts are not required.
Compliance with the law: Analysis and Priorities
None of the farmers visited properly informed their workers of their legal rights,
demonstrating the need for additional support of Sadhana to the farmers. To enable
farmers to inform their workers adequately, their own awareness on legal aspects is
crucial.

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6. Concluding remarks

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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Sadhana was completing its third year of implementing the ALP Program andprogress had been made to support the two principles of child labor and safe work
environment. Throughout the implementation of Phase 1, Sadhana had clearlyprioritized and supported these two principles with significant investment andresources. Introducing programs into rural, farming communities to affect practical,
behavior change can take significant investment and time. From the feedback ofboth farmers and workers, all parties involved in general perceived these programs
and initiatives with a positive intention, although specifically the clip initiative wasperceived less positively by farmers.
CU identified room for improvement on four main topics. First, efforts were being
made to mitigate child labor and to improve safe work environment, however issues
were still found regarding those principles during farm visits. Second, gaps wereidentified regarding knowledge on the ALP Code for management and fieldtechnicians. Third, CU found issues on the visited farms regarding principles notprioritized by Sadhana, such as the extensive work hours of stokers, payments
below the legal minimum salary and differences in payments for men and women.
Fourth, at the moment of the assessment 30% of the total volume was bought from“free”, non-contracted farmers, which were not covered by ALP.
Although updates need to be made to some specific training aids, CU was
impressed by Sadhana’s catalogue of communication materials. In particular thechild labor and safety poster, videos and farmer book were found to be of excellent
quality. Also Sadhana provided several initiatives to the farmers, for which ensuring
farmers receiving proper material suitable for the job should be priority, such asproviding adequate safety goggles.
Sadhana’s IT based reporting mechanism for Prompt Actions did not support
escalation, level of urgency and farm-specific context to enhance the learning
experience of both the farmer and field technician. Amending the functionality ofthis proprietary tool could help to immediately reduce the reported number ofPrompt Actions and obtain a better understanding of each farm.
CU acknowledges efforts taken by Sadhana to implement the ALP Program and was
impressed by the level of transparency and positive attitude during the assessment
both in its offices and in the field. Moving forward, continual improvement could
enhance the benefits from further developing Phase 2 of the ALP Program.
Finally, Sadhana’s response and ALP Program action plan demonstrate that
Sadhana has analyzed CU’s findings and is undertaking steps to address issues
presented by CU in this report. Amongst others, the response shows Sadhana’sawareness on the necessity to conduct research towards issues in order to create
effective solutions.

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Appendices

THIRD PARTY ASSESSMENTSADHANA
LOMBOK, INDONESIAAGRICULTURAL LABOR PRACTICES PROGRAM

DRAFT

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Appendix 1. Sadhana response and ALP Program action plan

PT Sadhana’s response to the Control Union Third Party Assessment of the
Sadhana Lombok, Indonesia ALP Program.
PT Sadhana (PTS) welcomes Control Union’s (CU) report after their assessment of
the implementation of the ALP Program and the working and living conditions on
tobacco farms in Lombok. PTS appreciates the efforts of PMI and their support for
the implementation of the ALP Program and PTS has made this a priority with its
contracted farmers. PTS also respects and appreciates the contribution of CU, PMI’s
strategic partner for ALP, Verité. PTS believe CU auditors have conducted theirassessment in a professional and beneficial manner during the interviews with PTS
senior management team and staff, field visits, and the presentation of the findings
at the closing meeting.
CU findings are generally in line with PTS’ understanding of the problems faced by
farmers and workers in Lombok. Although CU acknowledges the progress made in
the implementation of the ALP Program, it also highlights areas needing
improvement.
Since 2012, PTS has implemented PMI’s ALP Program on its tobacco growing supply
chain. During the initial years, PTS worked on the first phase of the ALP Program,
focusing its efforts on: building internal capacity through the establishment of a
dedicated ALP Country Team, training all relevant staff including twenty two fieldtechnicians in Lombok, communicating the ALP Code to farmers, gathering socioeconomic data (farm profiles) as a baseline for defining priority areas, andaddressing issues requiring immediate action where found (“prompt actions”). In
the 2015 crop season, PTS moved into the second phase of the ALP Program andstarted to pilot the systematic monitoring of the ALP Code Principle. The following
action plan to address the findings in the CU Assessment report reflects PTS
continued commitment to improve living and working conditions of farmers andworkers, and to address labor issues where they’re found.
However, it is important to understand the challenges and limitations PTS faces toachieve this objective, from the market dynamics and local purchasing systems to
the rules and regulations less stringent than the ALP Code Principle, to theculturally accepted practices, to the religious and economic circumstances.
The degree to which there is a direct connection between PTS and the farmers
determines the impact of PTS efforts to implement ALP and the improvements on
the working and living conditions of farmers and workers. Direct contracts provide
greater economic stability to farmers and PTS to work together to improve thesustainability of the crop. Equally important, it enables PTS to have a greater
visibility into labor practices on farms, which is vital to preventing risk andaddressing issues. In Indonesia, tobacco is grown by smallholder farmers (wheremore than 50% of them own land less than 0.5 ha) geographically dispersed whichmake it difficult to reach them. Most importantly and probably the main barrier tothe implementation of the ALP Program is the typical “multi-layered” purchasesystem in the Indonesian agriculture sector, which includes a significant number of“poolers”, “intermediaries”, and “middlemen”. As a result of this system, it is55

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virtually impossible for PTS to gain visibility into working and living conditions onthese farms and support farmers adhering to the ALP Code Principle.
To overcome this limitation, PTS has progressively moved away from the multilayered purchase system and worked to implement an Integrated Production
System (IPS) in order to contract directly with individual farmers or farmer groups.
PTS is targeting 70% IPS farmers however with the number of players / buyers in
the market and considering both the multi-layered buying and direct contracting, it
is challenging and often farmers choose not to continue a contracting arrangementwith PTS if what is being offered elsewhere is less onerous. ALP and GAP initiatives
only work if farmer communities support these initiatives; however it is also
important that PTS hear their concerns so that PTS can develop sound strategies.
Regarding the current laws and regulations, it is important to mention that these
are not only less stringent than the ALP Code Principle, but also their enforcement
does at times conflict with religious and culturally accepted practices which areexacerbated by the vast demographics, economic disparities and ethnic diversitythat prevail across Indonesia. For example, the International Labor Organization(ILO)17 and the Organization for Economic Co-Operation and Development (OECD) 18
have highlighted a number of these issues in their ongoing surveys andassessments of Indonesia.
To highlight a few issues which affect us in Lombok and elsewhere:
1. The various Acts/Laws are contradictory. To name a few:
a. Law 20 of 1999 covered in the preceding CU assessment.
b. Marriage Act No 1 Year 1974, Article 7 clause 1. Minimum age ofmarriage for a man is 18 years and for women 16 years. This wasrecently upheld by the Constitutional Court — please refer tohttp://www.thejakartapost.com/paper/2015-06-09“Courtupholds status quo in Marriage Law”. This issue is further complicatedby the permissible marriage age in Sahih Muslim according to which
once someone is married it is generally accepted that they areentitled to work which in part contradicts the minimum age
regulations.
c. Human Rights Act No 39 Year 1999. Article 1 clause 5, defining aChild to be under 18 years old and yet not married.
d. Indonesian Demographic Administration Act 24 Year 2013, Article 63
clause 1, registration of an Indonesian above 17 years or married.
2. The definition of light work or hazardous work is again complicated by thecontradictions between what is accepted at a local level and PMI’s definitionof Hazardous work19.

17

Decent Work Country Profile Indonesia – ILO(http://www.ilo.org/wcmsp5/groups/public/---dgreports/---integration/documents/publication/wcms_167418.pdf)

Statistical update on employment in the informal economy – ILO(http://laborsta.ilo.org/applv8/data/INFORMAL_ECONOMY/2012-06-Statistical%20update%20-%20v2.pdf)
18

OECD Economic Surveys Indonesia March 2015 (http://www.oecd.org/eco/surveys/OverviewIndonesia-2015.pdf)
19
As part of PMI’s ALP Program, training and guidance includes specific information on child labor andhazardous work. PMI provides a non-exhaustive list of activities deemed hazardous, which include:
driving vehicles or operating machinery with moving parts; using sharp tools in movement (e.g. stalk56

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3. OECD March 2015 Economic Survey Indonesia puts the informal
employment at 60% across all sectors of employment. The informal labor
sector is exactly that - informal. The labor employed by farmers throughout
Lombok is informal. This is a challenge when benchmarking compensation
against what is legislated and also for changing what is deemed acceptable.
The problem is much greater than PTSs contracted growers as they are only
a percentage of the total tobacco farmers who are in turn only a percentageof the total population of farmers. PTS will continue its efforts to bridge
between the informal and formal sectors, understanding that progress
requires action for the other major local crops and agricultural areas acrossIndonesia.
PTS has implemented action plans which initially focused on child labor and safety
and agree with Control Union’s findings with regards to the farmers’ acceptance of
these and believe with sufficient reinforcement the awareness will continue toimprove.
PTS will continue to integrate GAP/ALP as part of its operational objectives and to
expand IPS systems as a tool to convey GAP/ALP Code to farmers in ways which
will improve the livelihood of tobacco farmers and workers involved in tobacco
growing areas.
In conclusion PTS is committed to the ALP Program and will continue to work withPTS contracted farmers to identify and develop practical solutions to address thefindings. This will be done through ever improving tools, communication andtraining / retraining, whilst at the same time strategies will be deployed to addressincreasing awareness with other non-contracted farmers, including initiatives
focused on the broader context of the community, such as the “Community
Learning Groups” implemented in partnership with HM Sampoerna (HMS).

cutting with a machete); handling and applying crop protection agents or fertilizers; carrying heavy loads(e.g. loading curing barns); working at heights; working long hours that interfere with health and wellbeing; working in extreme temperatures; working at night; harvesting, topping, and suckering.

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A. People and processes to manage the ALP Program
PeopleSince 2013 PTS has provided regular training and refresher training to all its
FTs. Understanding that these people have an important role and one of thekeys to ensure ALP messages are delivered to the farmer level, PTS plans to
conduct ALP Code refresher training to cover all of the local team in Lombok
consisting of area production managers (APM), warehouse manager, field
supervisors (FS) and Field Technicians (FT). At minimum one refresher training
will be conducted in Q1 2016 and thereafter annually.
PTS has actively communicated the ALP Code to the contracted farmers,
primarily focusing on two topics; child labor and safety. Although CU identified
that the majority of farmers are familiar with ALP Code and considered it to beimportant, it was also noted that there is some confusion about child labor age,hazardous work definition, and legal work hours and minimum salary. To better
clarify the gaps identified during the assessment, PTS plans to do the following:







Conduct a pre-test prior to refresher training for the FT/FS/APM/ andother local teams to have a clear status of the current understanding on
ALP principles by each and to define the areas for improvement.
Coordinate with HMS to review current training materials to ensure they
are sufficient and clear so they can be delivered during the training andthat they focus on areas requiring improvement.
Conduct refresher training and ensure all of the local team involved with
ALP implementation participates in the training.
ALP understanding & communications to the farmer will be a part of its
FT performance appraisal. Starting 2016, additional resources will beallocated for ALP Program deployment and specific ALP targets will begiven to supervisors and PTS field management which will be linked totheir compensation.

HMS will develop an ALP Program management processes (escalation process
and analysis) and provide guidance as well as training materials during the ALP
implementation by PTS. This coming February, HMS will facilitate an ALP
workshop that will involve participants from PTS management, HMS Leaf, HMS
CA Stakeholder Engagement, HMS CSR and HMS Legal team to discuss current
issues and define strategy going forward.
To address Safe Working Environment principles, PTS plans to train its FTs inbasic first aid techniques. To deliver this training PTS plan to engage experts
from Industrial Clinic Services (ICS) and the Sampoerna Rescue Team (SARteam). It is PTS expectation for its FTs to have a basic knowledge of first aid toaddress some of the risks that might occur in the field when they interact with
contracted farmers e.g. CPA application, injury due to sharp tools, snake bites,
etc.

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Process
As CU identified, PTSs FTs regularly meet with FSs on a weekly basis to discussvarious issues and updates in the field, but do not regularly discuss ALP topics.
PTS will maintain this mechanism to ensure its FTs have sufficient time to
update FSs. To address the lack of ALP topics currently discussed during thismeeting, PTS will ensure that, as of 2016, at least one ALP related topic israised per meeting e.g. farmer communication, field monitoring results, prompt
actions identified. An appropriate document template will be provided to all FTs
and FSs to track the issues, monitoring the progress and status of each issue
identified.
PTS will also conduct a monthly discussion at management level involving PTS
and HMS representatives to discuss issues and follow up actions with regards to
ALP implementation in the field. Through having a regular discussion, both PTS
and HMS can monitor field implementation of ALP more intensively and ensure
follow up actions are in place.
Tools
Accurate farm profiles and field monitoring are critical to identify conditions
related with GAP/ALP implementation at the farmer level. In 2015 PTS moved
from a manual system to electronic tablets to collect farm profiles and “Prompt
Action” data. Since this was PTSs first year implementing tablets it isacknowledged that there is room for improvement. To improve in 2016 PTS
having the following planned:
•
•

•

•

Align the current Prompt Action (PA) list with the HMS PA list and include a
template to derive a qualitative report, instead of just ticking the box.
During ALP Code refresher training PTS will focus on ensuring all FTs
understand the situations occurring at a farmer level categorized as PA, how
to utilize the tools and how to communicate the PA addressed horizontally tofarmers and vertically to higher level management.
Clear records will be prepared on follow-up actions to be taken, to conclude
PA status (ongoing / solved) and these will be included in the monthly
reports.
Properly communicate the PA situation to farmers, get commitment fromfarmers to improve the current situation and make sure FT conducts follow
up visit(s) to ensure PA situation is not repeated by the same farmer.

All information updated from FTs monitoring will be summarized and provided to
HMS at the monthly discussion which will involve PTS management and HMS
representatives.
Currently PTS management receives monthly submission on farm monitoring in
the areas as well as farm profiles collected by FTs. This data is analyzed andreported to HMS on a quarterly basis and determines focus points andimprovement plans, ensuring a comprehensive approach to address widespread
issues.

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To improve the accuracy of Farm Profiles, FTs will be requested to cross checkthe data at least three times during the season i.e. during farmer registration,
after transplanting and prior to harvesting. FSs and APMs will also assess thefarm profile recorded during their field visits to farmers to check the accuracy ofthe data collected.
Last year was the first year for PTS to pilot the electronic data collection system
to collect farmer profiles. While the accuracy of the farmer profiles is still to beaddressed, PTS will enforce the usage of this system to all contracted farmers in
Lombok.
B. Communication Strategy to farmers
As acknowledged by CU, PTS has been actively communicating the ALP Code tocontracted farmers. Although progress has been made, as reflected by the buyin among the farmers that were aware of the ALP Code (94%), there’s still room
for improvement regarding farmer’s levels of awareness (e.g. child labor
currently at 64%). As the approach taken seems to be the most effective way toconnect with the farmers, PTS will maintain the current practice whereby Field
Technicians communicate ALP Code to farmers during their daily field visits. In
addition to field visits, PTS will also maintain group meetings with the farmers.
In order to address the gaps identified by CU, PTSs communication efforts going
forward will be focused on bringing more clarity to farmers on child labor,
particularly regarding what constitutes hazardous work, and safe work
environment, and on increasing their levels of awareness on the other ALP CodePrinciples.
As acknowledged by CU, FTs use a variety of communication materials as partof their toolbox to educate farmers on ALP, most of these use photographs oranimated pictures, and therefore, make the messages more easily understoodby the farmers (e.g. poster and brochure). FTs will be equipped with updated
media to communicate key ALP Code e.g. updated posters (posters withtypographical error will be removed), to be put up on the farmer’s barn andbrochures to be distributed during Q2 2016 to all PTS contracted farmers. In
order to address the gaps identified by Control Union, updated GAP/ALP videos
in local language will be installed on FT tablets to help them demonstrate ALP
Code during 2016.
To reach a wider audience on ALP, PTS in collaboration with HMS will invite
farmers’ wives and related workers to farmer day events to be held in Q2 which
will involve approximately five hundred people during the four day event.
To help the Field Technicians to perform their daily field visits PTS plans to:••

Evaluate current FT territorial coverage to ensure that FTs have the mostefficient coverage area.
Pilot ALP phase 2 implementation to all FTs with selected farmers to conduct
systematic monitoring to capture conditions on the farm focusing on two
principles namely child labor and safe working environment.

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Hold discussions with HMS to evaluate current communication materials andrevise as necessary for the 2016 crop.

While the focus of PTS communication will be on contracted farmers PTS notethat the tobacco market is largely dominated by local companies and the
majority of tobacco production is beyond the reach of its ALP Program. PTS
remain committed to gradually increasing contracted farmer coverage throughthe Integrated Production System (IPS) at a sustainable pace. As part of theefforts to reach non-contracted farmers and increase awareness on fair and safe
working conditions on farms, in 2016 PTS plan to continue and replicate thecontribution program of Community Learning Group (CLG) alongside HMS and in
partnership with the local NGO, focusing on increasing awareness on child labor
prevention, economic empowerment of women through alternative income
generating activities, and strengthening basic business skills at farm level.
Through this effort, PTS expect to accelerate the dissemination of Good
Agriculture Practices, and at the same time improving their understanding andattitude towards GAP and the ALP Code.

C. ALP Principles : Child Labor
Eliminating child labor in Indonesia is challenging due to several factors
including the education level and the socio-economic condition of farmers andworkers, and the fact that tobacco post-harvest activities mainly occur infarmers’ homes. Although CU did not find any children below the age of 15
employed in any tobacco related activities and all children below 15 years old
were attending school, the involvement of children in hazardous activities
remains a challenge, for those helping their parents on the farms as well as
children employed aged between 15-17 years. Another risk PTS is mindful of isfarmers’ workers bringing their children when they are working at farmers’
premises.
PTS will continue efforts to communicate the ALP Code Principle regarding childlabor through farmer training, including to continue putting a clause in the
farmer’s contract and all contracted farmers will be made aware of which
activities are considered hazardous and the legal working age for children. PTS
will encourage their farmers to verify the age of their labor to prevent childlabor incidences despite illiteracy rates and the fact that documented age
evidence remains a challenge. Considering the strength of the socio-structure,
PTS will continue to promote working age restrictions to be accepted by thecommunity through all communications channels.
As in previous years, PTS will also continue to leverage on farmer’s traditional
events to celebrate harvesting and planting season to further communicate
about child labor, particularly on how to prevent the involvement of children inhazardous activities. These farmer day events will include economic
empowerment activities and sensitization on children education and child labor
prevention targeting farmers’ wives, edutainment sessions on child labor andwork safe environment, among other activities such as proper handling of CPA
and PPE usage. In 2016, the farmer day events will cover eight events in eight

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different locations, which PTS expect to involve approximately five hundred
people.
PTS will continue to evaluate its farmers by child labor incidences which will bequantified and addressed. PTS will continue to implement initiatives to reducelabor needs on farms, targeting particularly the tasks children are typically more
involved with on tobacco farms. In 2013, PTS initiated the introduction of clips
to eliminate the traditional sticking / stringing. PTS will continue providing clips
to farmers, however farmer acceptance and uptake remains a challenge. PTS istargeting an additional two hundred farmer beneficiaries for clips during 2016
which will cover total three hundred contracted farmers receiving clips, with theassumption of same number of contracted farmers as of 2015. Although thistechnique has the potential to reduce child labor incidence, PTS is also mindfulthat children might be shifted to other activities such as handling and sorting
dried tobacco leaves. To address this risk, in 2014, PTS rolled out non-tobacco
bundling initiatives and today more than 90% of PTS farmers in Lombok are notbundling the leaves.
Besides ALP communication and campaigns to IPS farmers, an After School
Program (ASP) has been implemented in Lombok in collaboration with local
government, schools, and PTSs NGO partner Putera Sampoerna Foundation(PSF). This program is providing extracurricular activities for children in theirschools since 2013. In 2015 alone, there were fourteen schools involved with
one thousand four hundred and eighty five students participating in various
activities such as sport activities, performing arts and marching band. PTS will
progressively increase the number of participating schools for this initiative andtarget to have twenty five schools involved in 2016.
It is important to mention that PSF assessed the impact of the after school
program in 2014 and found that students involvement in tobacco related
activities declined sharply from before the ASP commenced, it reduced up to
90% of the time children spent on the farm. In 2016, together with a PSF, PTS
will continue to conduct further research to assess to what extent this istranslating into a reduction of child labor.
PTS will join Eliminating Child Labor in Tobacco Growing (ECLT) Foundation in
the development of a new project to engage with a wide-range of local
stakeholders (e.g. government, ILO, industry, NGO, local universities) toincrease the awareness on and to build continued dialogue towards a common
approach against child labor.
D. ALP Principles : Income and Work Hours
As acknowledged by CU, it is common practice for workers to regularly work on
more than one farm, and as a result in some cases working full weeks without aday off during peak seasons. In order to gain a clear understanding on thecurrent standards applied in relation to workers income and work hours, PTS
will conduct a survey in Lombok, together with a local university. The survey
will assess workers’ payment against the regional minimum wage, payment
schedule, working hours and overtime pay, and benefits. Since current wages

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are not only applied to tobacco workers but to all agricultural workers, thesurvey will also include other crops to ascertain whether this is a systemic issue,
as it will determine the nature of the actions to be put in place to address it.
The survey will be started in Q1 2016 and to be concluded by end of 2016. PTS
will then develop an action plan based on the results of the survey and to definea strategy to communicate the regional minimum wage and entitled benefits tofarmers. PTS aim to do this during the 2016 crop season at its buying stations
using visual communications and posters clearly stating the regional minimum
wages and entitled benefits.
PTS conducted a pilot study of support mechanism last year in two villages inwhich these mechanisms are based on existing local traditional channels used
for dispute resolution and will complement the study mentioned above andenable PTS to quantify disparities going forward.
E. ALP Principles : Fair Treatment
In 2015, PTS commissioned a local university (Mataram University) to conduct abaseline study to understand the relationships between farmers and workers,
potential tensions and conflicts, and the approach taken to resolving issues
when they arise. Based on the findings on this baseline study and given theexisting social structures and their traditional role in mediating and resolving
disputes, PTS will leverage on these informal mechanisms. In 2016, PTS
through the university will engage with the local stakeholders (village
representative and / or informal leaders) increasing their awareness of ALP
Code encouraging a better understanding of the resolution of potential issues
raised by workers or farmers is in line with the ALP Code Principle. PTS throughthe university will also promote the existing mechanism to workers and farmers.
The result from the study mentioned in (Point D) shows, disparities in male andfemale compensation, and the inputs from the support mechanism, will help
PTS understand issues concerning fair treatment. During the 2016 crop season
PTS will prepare visual communications and posters to raise awareness of fairtreatment at its buying stations.
F. ALP Principles : Forced Labor
CU concluded that forced labor was not an issue identified during their farm
visits. In addition, social structures were typically very strong resulting inreliable community values and good relationships. However, this principle will
be monitored to ensure it continues and will be included in on-going training
and ALP materials.
Even though CU does not see the payment at the end of the harvest as a majorrisk of forced labor, PTS will use the survey mentioned in section D above todetermine the reason for end of season payment to ensure there is no potential
risk of bonded labor.

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G. ALP Principles : Safe Work Environment
As acknowledged by CU, significant progress have been made in terms of thelevel of awareness and training regarding CPA application (>80%). This result
suggests that PTSs communication efforts are having an impact; however, PTS
is mindful that much remains to be done, particularly regarding GTS prevention.
With regards to Control Union’s assessment of the PPE issued to the farmers,
HMS EHS department will undertake a study during 2016 of PPE used by its
farmers (including that provided by their other suppliers in Indonesia) in orderto recommend a single acceptable PPE standard. GTS is not recognized at a
local level and so PTS have decided to refocus this concern from the perspectiveof nicotine absorption, which is easier to understand and communicate.
CU also acknowledged the impact of communication through farmer day eventsand PTS believes this method is one of the most effective ways to convey themessage and change its farmers’ view on safety.
PTS plan to increase the scope of the Farmer Day events as it is one of the
training methods available to a wide range of participants including not only
farmers but also farmers’ wives and related workers.
Focus topics to be communicated during Farmer Day events as of 2016:• Safety aspect on CPA application including PPE type and usage;• Nicotine absorption (GTS) impact and ways to avoid it;• Proper and sufficient PPE kits to be used during CPA application, fresh
leaf handling to avoid nicotine absorption (GTS);• Empty CPA container recycling;• CPA storage;• Re-entry interval period after CPA use.
As verified by CU, almost all farms (96%) received PPE sets and farmers’
attitude towards PTS initiative of distributing PPEs for free was very positive.
However, one of the challenges PTS faces is the availability of PPE kits tofarmers and workers that offer protection and are comfortable. PTS plan tocontinue the distribution of PPE kits (mask, goggles, long sleeves and gloves) tocover all contracted farmers in 2016. At the same time PTS will work with HMS
to review the suitability of current PPE kits with the aim of rolling out any
changes in 2017.
Aligned with PTSs CPA initiatives and the roll out of the Integrated Pest
Management (IPM) program in 2016, aimed at eliminating completely the usageof class 1 toxicity CPA, PTS will continue to encourage farmers to move to lower
CPA toxicity classes and help them minimizing their application in tobacco
production.
PTS will ensure all contracted farmers in 2016 will have proper CPA storageboxes. PTS will establish a standard for CPA box placement and usage andprovide sufficient training and information during the distribution period toensure farmers know how to utilize the CPA boxes properly.

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Empty CPA container collection is one of PTSs Sustainable Tobacco Production(STP) initiatives since 2013. In 2015, more than 75% of the farmers
participated in this program. In 2016, PTS will drive this initiative to promote
farmer participation to above 90% with at least 50% of empty CPA containers
returned.
This year PTS will introduce re-entry interval (REI) signage to farmers throughfarmer day events and will also distribute REI signage to all contracted farmers
in Lombok.
H. ALP Principles : Freedom of Association and Compliance with The
Law
As acknowledged by CU and considering there are no worker associations orlabor unions existing in the region, awareness of workers’ right to freedom of
association among farmers and workers was relatively high.
Regarding the ALP Code Principle Compliance with the law, PTS acknowledges
CU findings that none of the workers were told their legal rights. This is related
to the use of informal sector workers across all agriculture areas in Indonesia.
PTS will continue targeting the reduction of the bridges between informal andformal sectors by having the labor law published at buying stations in 2016 to
inform farmers on the workers’ legal rights.

Concluding Remarks
PT Sadhana continues, committed to the ALP Program where it will start to move
Lombok towards phase two implementation in 2016 with the focus of eliminating ofchild labor and promote safe working environment to the contracted farmers andtheir workers. This can only be done through the implementation of Integrated
Production Systems (IPS) where PTS will continue to have direct contract with thefarmers. Therefore it is only reasonable that in order to increase the ALP Program
implementation PTS will also expand the number of IPSs in a sustainable mannerconsidering the challenges i.e. financial risk and no enforcement to the contracts.
While the above are steps towards the right direction, PTS recognizes that thisprocess takes time and there are many systemic issues in Indonesia that impact
effective implementation of ALP Program. Therefore PTS will continue its
engagement with multi stakeholders (HMS, NGOs, university, and local
government) to put in place programs to improve labor conditions not only forcontracted farmers but also non-contracted farmers.

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Appendix 2. ALP Code

ALP Code Principle 1: Child labor
There shall be no child labor.
Measurable Standards:
1) There is no employment or recruitment of child labor. The minimum age foradmission to work is not less than the age for the completion of compulsory
schooling and, in any case, is not less than 15 years or the minimum age
provided by the country’s laws, whichever affords greater protection. 202) No person below 18 is involved in any type of hazardous work.
3) In the case of family farms, a child may only help on his or her family’s farm
provided that the work is light work and the child is between 13 and 15 21
years or above the minimum age for light work as defined by the country’slaws, whichever affords greater protection.
ALP Code Principle 2: Income and work hours
Income earned during a pay period or growing season shall always be enough tomeet workers’ basic needs and shall be of a sufficient level to enable the generationof discretionary income. Workers shall not work excessive or illegal work hours.
Measurable Standards:

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

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

3) Work hours are in compliance with the country’s laws. Excluding overtime,
work hours do not exceed, on a regular basis, 48 hours per week.

20

As an exception, pursuant to ILO Convention 138, developing countries may under certain circumstances specify a minimum ageof 14 years.
21
The same ILO convention 138 allows developing countries to substitute “between the ages 12 and 14 in place of “between theages 13 and 15”.

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

6) All workers are provided with the benefits, holidays, and leave to which they
are entitled by the country’s laws.
ALP Code Principle 3: Fair treatment
Farmers shall ensure fair treatment of workers. There shall be no harassment,
discrimination, physical or mental punishment, or any other forms of abuse.
Measurable Standards:
1) There is no physical abuse, threat of physical abuse, or physical contact with
the intent to injure or intimidate.
2) There is no sexual abuse or harassment.
3) There is no verbal abuse or harassment.
4) There is no discrimination on the basis of race, color, caste, gender, religion,
political affiliation, union membership, status as a worker representative,
ethnicity, pregnancy, social origin, disability, sexual orientation, citizenship,or nationality.
5) Workers have access to a fair, transparent and anonymous grievancemechanism.

ALP Code Principle 4: Forced labor
All farm labor must be voluntary. There shall be no forced labor.
Measurable Standards:
1) Workers do not work under bond, debt or threat and must receive wages
directly from the employer.

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2) Workers are free to leave their employment at any time with reasonable
notice.
3) Workers are not required to make financial deposits with employers.
4) Wages or income from crops and work done are not withheld beyond thelegal and agreed payment conditions.
5) Farmers do not retain the original identity documents of any worker.
6) The farmer does not employ prison or compulsory labor.

ALP Code Principle 5: Safe work environment
Farmers shall provide a safe work environment to prevent accidents and injury andto minimize health risks. Accommodation, where provided, shall be clean, safe andmeet the basic needs of the workers.
Measurable Standards:
1) The farmer provides a safe and sanitary working environment, and takes all
reasonable measures to prevent accidents, injury and exposure to healthrisks.
2) No worker is permitted to top or harvest tobacco, or to load barns unlessthey have been trained on avoidance of green tobacco sickness.
3) No worker is permitted to use, handle or apply crop protection agents (CPA)or other hazardous substances such as fertilizers, without having firstreceived adequate training and without using the required personal
protection equipment. Persons under the age of 18, pregnant women, andnursing mothers must not handle or apply CPA.
4) Workers do not enter a field where CPA have been applied unless and until it
is safe to do so.
5) Workers have access to clean drinking and washing water close to where
they work and live.

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6) Accommodation, where provided, is clean, safe, meets the basic needs ofworkers, and conforms to the country’s laws.

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

ALP Code Principle 7: Compliance with the law
Farmers shall comply with all laws of their country relating to employment.
Measurable Standards:
1) All workers are informed of their legal rights and the conditions of theiremployment when they start to work.
2) Farmers and workers have entered into written employment contracts whenrequired by a country’s laws and workers receive a copy of the contract.
3) Terms and conditions of employment contracts do not contravene thecountry’s laws.

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