Agricultural Labor Practices (ALP) program
2014 - 2015 Progress Report..........................................................................................................................................................................

450,000
smallholder
farms

2.5 million
people on
tobaccofarms

3,500 Field
Techniciansmonitoring
farms
STRATEGICPARTNER

Transparency

External evaluation of working
conditions and progress

More than
30 Not-for-profit
Organizations
supporting local
communities

Our Commitment: To progressively eliminate child labor and other labor abuses, and to achieve safe and fair working conditions on all farms where PMI sources tobacco worldwide.

Contents
1. Foreword

4-7

1.1 PMI

4-5

1.2 Verité

6-7

2. Our commitment

8-11

2.1. Our focus

10-11

3. What happened during 2014 and 2015

12-27

40-47

6.1 Mexico 					42-436.2 Italy 					44-456.3 The USA 					46-477. ALP program impact and evaluation

			

48-49

8. Challenges ahead 					

50-51

		

52-53

					

54-55

3.1 Farm Profiles: North America, Africa, Oriental Tobacco Region,
Europe and Latin America

14-17

9. Continued commitment: looking ahead

3.2 Systematic monitoring and addressing issues in practice

18-27

10. References

3.2.1 Africa: Malawi and Mozambique

18-19

3.2.2 Latin America: Ecuador and Brazil

20-22

3.2.3 Asia: The Philippines

22-23

3.2.4 Oriental Tobacco Region: Turkey

24-25

3.3 Support services for farmers and workers

26

3.3.1 Republic of Macedonia

27

3.3.2 Tanzania

27

4. External monitoring

28-29

5. Integrated ALP plans to address systemic and widespread problems

30-39

2

6. Approaches to address systemic and/or
widespread issues: migrant workers in tobacco

5.1.1 Regional overview: Operational investments (STP) and Community
initiative (Contributions): North America and Latin America										32-335.1.2 Regional overview: Operational investments (STP) and Community
initiatives (Contributions): Africa										34-355.1.3 Regional overview: Operational investments (STP) and Community
initiatives (Contributions): Asia										36-375.1.4 Regional overview: Operational investments (STP) and Community
initiatives (Contributions): Europe and Middle East (Oriental Region)										38-39PMI’s Agricultural
Labor Practices(ALP) program• Provide technical assistance (agronomy support, finance,crop inputs, fertilizers, certified food crop seeds, etc.)

ode Standar
C
P
ds
AL

450,000

TOBACCO FARMERS

3,500• Train farmers on ALP Code requirements• Monitor ALP implementation on farms• Small-scale family farms• The vast majority of
tobacco is grown on
2 hectares or less
• Help farmers develop
improvement plans toaddress labor issues• Connect farmers andworkers with local services
and resources• Liaise with ALP Country
Teams to implement
community initiatives

THE ALP PROGRAM CODE:No child labor
No forced labor
Fair treatment
Safe work
environment
Fair income andwork hours
Freedom of
association
Compliance withthe law

Independent Assessment– External evaluation ofprogress made andeffectiveness, withtransparent, public
disclosure

FIELD TECHNICIANS
And dedicated ALP Country Teams
implement the program

OVER 30
TobaccoGrowing
Countries

IMPLEMENTATIONOver 50 organizations implementing ALP(PMI affiliates and leaf suppliers)

STRATEGICPARTNER

Our approach is to work collaboratively and transparently with all
stakeholders to achieve tangible progress over time.

Over
30 Not-for-profit
Organizations
worldwide working
on community
initiatives
3

1.1 Foreword PMI

4

As the world’s leading international tobacco company, Philip Morris International, Inc.
(PMI) has an agricultural supply chain spanning nearly 30 countries. Global in scale,our day-to-day operations are more than just a commercial transaction between
our affiliates or suppliers and the farmers we source from; they also embody ourcommitment to implement Good Agricultural Practices (GAP) that support farmers in
improving the quality and productivity of their crops, respect for the environment, andin achieving safe and fair labor practices on their farms.
Initiatives in these three areas are most of the time complementary and range from theintroduction of new agricultural techniques to providing tailored community programs intobacco-growing communities. Take the use of crop protection agents (or CPA), where
our efforts to reduce health and safety risks for farmers and workers through the provisionof protective equipment and training are supplemented by the introduction of innovativeenvironmentally-friendly techniques to reduce or eliminate CPA usage where possible.
Another example is the work we do to improve food security, supporting direct contract
farmers with seeds and know-how to grow food both for household consumption and asa source of income. In our farm base in Africa, 81% of our contracted farmers are growing
food crops for household consumption and 20% are growing food as an additional sourceof income (ranging from corn and nuts to vegetables and fruits).
Our specific efforts to improve labor practices in tobacco-growing are grouped underthe Agricultural Labor Practices (or ”ALP”) program (one of the pillars of GAP) and thisThird Progress Report is the latest in-depth account of what we have learned so far andour efforts in 2014 and 2015.
Our results show strong progress, for example with significant reductions in childlabor incidence in several of the countries where we are sourcing, but clearly that is
not enough and more remains to be done to accomplish our vision. While we will not
rest on our accomplishments, this progress invigorates us to continue to tackle themany complex challenges we face, be they related to child labor or vulnerable migrant
workers. I truly believe PMI is doing something special and unique.

Strong partnerships with stakeholders guide the development of tailored solutions
to local challenges. The steadfast support from our global ALP partner and leading
NGO in supply chain responsibility, Verité, has been fundamental in guiding us toensure that our actions are delivering against our goals. In addition, we have reached
out to more than 30 not-for-profit organizations, governments, farmers and worker
representatives, as well as many others to gain valuable input on our approach.
The release of reports such as this one and external assessments from auditors,
Control Union, demonstrate an unparalleled level of transparency. This will continue
to be a cornerstone of our program and I hope that by taking the lead in sharing
detailed information about how we are addressing complex labor issues in our supply
chain, acknowledging both successes and shortcomings, more companies will follow, notonly in tobacco but also across other agricultural supply chains.
On a last note, the strength of our ALP program and our progress to datedirectly relates to the efforts made by every individual involved in this process.
I want to thank everyone for their valuable contribution to promoting better livelihoods
for farmers, farmworkers and their families. Thanks to your passion and hard work,
PMI and our suppliers can continue to support tobacco farmers into the future andassist them in growing their crop in a sustainable way.
I wish you a pleasant read of our learnings.
André Calantzopoulos
Chief Executive Officer
Philip Morris International

The global scale and detailed scope of our ALP program is, to my knowledge,
unprecedented within the agricultural sector. Comprehensive information and data isgathered for more than 450,000 direct contract farmers across the globe by over 3,500
trained field staff. This is a significant undertaking and major strength of the program
giving us greater visibility than ever before into the living and working conditions ofmore than 2.5 million people.

51.2 Foreword Verité

6

PMI first engaged Verité in 2010. Since then, Verité and PMI have collaborated to build
and implement a system that aims to progressively eliminate child labor, and to achievesafe and fair working conditions on direct contract tobacco farms. Verité’s role has
primarily been to structure, advise and build the company’s knowledge and capability.
PMI’s responsibility has been to implement and sustain the system that leads tocompliance with the Agricultural Labor Practices code.
A key aspect of PMI’s overall program is the company’s commitment to report on andshare what it knows and what it has learned. This Progress Report can be usefully readas a description of the complexity of rolling out a comprehensive program to improvelabor practices within a vast and complex global supply chain.
Verité continues to experience PMI as a partner that is open to external input,
responsive to stakeholder suggestions, valuing of others’ expertise, strategic in
its thinking, committed in its resourcing, and reflective on the need to adapt. The
company’s approach to the serious problems in its tobacco production over the past
five years puts it at the leadership level among multinationals.
During the last five years PMI has:
• Created a robust and sustained internal governance structure to address ALP;
• Developed an unusually detailed knowledge-base about the farmers and families
who grow its tobacco;• Created internally a sophisticated and decentralized skill set to address ALP
requirements; and• Followed through on its commitment to allow independent sources to reporton its progress.
This effort to identify conditions on farms has reached a scale that is notable. PMI’s Report,
covering 2014 and 2015, demonstrates that the company has now attained a significant
level of knowledge about the farms from which it is buying tobacco. In 2015 around 3,500
Field Technicians have gathered approximately 410,000 ’Farm Profiles’ (information about
who lives and works on the farms), comprising approximately 90% of the farms in the PMI
global footprint. This Progress Report includes specific data from those Farm Profiles, andabout what has happened on the farms during the year, disclosure that is uncommon andunusually detailed for a global company. These farm-level data analysis highlights the risks
faced by farmers, employers, workers and buyers by region.

The resulting ability to distinguish the problems in Africa (food security for example)
from those in the United States (where labor contractors present special concern),means the company can tailor solutions to the specific characteristics of a region, andenhance and focus monitoring efforts too.
With this substantial level of detail in place, the company has turned its attention toaddressing the problems identified. The problems that face PMI’s farmers are endemic tosmallholder agriculture. The company’s effort to address them has been worldwide, flexible
and progressive. It has led to considerable achievement, but as should be expectedin such a large and multifaceted set of production processes and locations, serious
challenges remain. This Progress Report outlines both successes and ongoing challenges.
One vital commitment made by the company in the ALP program is to ensure access forworkers to a grievance mechanism. The company has organized or accessed ’support
services’ provided by independent third parties in 13 PMI leaf-sourcing markets so far.
As a result, workers and farmers have access to help in solving problems as they ariseon farms. Verité believes this is the first time a major agricultural buyer has implemented
such tailored and locally oriented mechanisms at such a scale.
PMI continues to achieve a commendable level of disclosure. During this reporting
period, the company published on its website third-party assessment reports on ALP
implementation in Brazil, Mexico, Italy, the Philippines and the United States withadditional reports from audits conducted during 2014-2015 forthcoming. Importantly,
these assessments were carried out by assessors from the company Control Union
who were specifically trained to deliver high quality measurement against the ALP
code. This monitoring is done against 32 measurable standards on over 450,000 farms
in approximately 30 countries – a massive undertaking that bolsters the credibility andvalidity of PMI’s problem-solving interventions.
And yet we all agree that numerous and serious problems remain. Verité and PMI
must and will move from building program infrastructure and basic knowledge
to scaled problem-solving. Only then will we have met the imperative to address
the varied and serious risks faced by farmworkers, farmers, farm families and thecompany. Verité will collaborate with PMI to measure progress and impact, andthereby to ensure interventions are effective, to remove blind spots, to facilitate
internal learning, and to continue to share progress with external stakeholders.
Dan Viederman
Chief Executive Officer
Verité

7

2. Our commitment

PMI’s Agricultural Labor Practices (ALP) program aims toprogressively eliminate child labor and other labor abuses
found on all farms where PMI’s affiliates and our leaf
suppliers source tobacco worldwide.
Starting in 2011, we have communicated our standards
and expectations to all farmers, and have established theprogram’s infrastructure with appropriate resources tosupport farmers in continuously improving agriculturallabor practices.

8

PMI’s affiliates and leaf
suppliers continue working toensure every farm where wesource tobacco is monitored
by Field Technicians andthird-party organizations.
Integrated plans continue to be
put in place to address systemic
issues that are identified.

9

2.1 Our focus

10Our focus during 2014-2015
As with our last progress report, PMI set specific priorities to guide our affiliates andsuppliers in their progress towards implementing the second phase of the ALP program
and to achieve measurable results.
These included:This progress report provides insight into the efforts made so far to deliver against theseobjectives during 2014 and 2015, and covers practical, meaningful achievements that
we have noted on the ground as well as challenges at farm level requiring continuous
improvement plans and the involvement of additional groups of stakeholders.
The report also illustrates the diversity and breadth of activities across regions andtobacco-growing countries, implemented by PMI’s affiliates directly and our suppliers,
together with the support of local stakeholders.

Systematic
monitoring offarms by Field
Technicians
Furthercollaboration
with external
stakeholders

Improvement
plans forevery farmTransparent,
regularreporting on
progress
Comprehensive
approaches toaddress widespread
issuesExternal
assessment reports
covering
each region
Supportmechanisms forfarmworkers
and farmers

113. What happened during 2014/15

In 2014-2015, PMI sourced tobacco from approximately 30 countries in different
regions of the globe, from a range of international and local suppliers, and for a variety
of tobacco leaf types (e.g., Flue Cured Virginia, Burley and Oriental).
PMI’s aim is for Agricultural Labor Practices (or ALP) to become fully embedded in
all tobacco suppliers’ and farmers’ business and day-to-day farm practices. In 2015,
approximately 82% of the tobacco-growing countries in PMI’s supply chain were
well advanced in implementing the ALP program and were engaged in work on
Phase 2 activities (see graphic on page 13).
Not all countries are at the same stage of ALP program implementation. Around 64%
of our tobacco-growing countries can be considered fully in Phase 2 with all basic
components of the program in place or already with maturity in their approach (e.g.,some have 100% farm coverage for the rollout of ALP program activities). Around 18%
of countries are engaged in a pilot or trial stage of Phase 2 implementation, testing out
methods of rolling out the full ALP approach in a cross-section of farms before final
review and widespread application.

........................................................................

82% of tobaccogrowing countries
are engaged in Phase
2 activities.
18% of countries
have suppliers inPhase 1.
........................................................................
12

In countries where we source from more than one tobacco leaf supplier, there aresometimes differences in the status of implementation between different companies.
Approximately 18% of sourcing countries have suppliers in Phase 1. These areadvancing too, even where we note complex situations and challenges (e.g., in India
where there is a public auction system and where a pilot selective-site program isunderway), or where Phase 2 activities are due to start in 2016.

ALP program implementation: Status overview
PHASE
PHASE ..... 2.. .....
.................................................................................................................................
..... 1.. ....
..
• Dedicated ALP Country Teams in place• All relevant staff trained• ALP Code communicated to all farmers• Compilation of Farm Profiles• “Prompt action” issues addressed• Systematic monitoring underway
farm-by-farm• Improvement plans in place for every
farm• Systemic issues being addressed Operational and Community initiatives• External assessments being conducted• Support services available

CANADAPOLANDFRANCESPAIN

USA

TURKEYGREECE

PHASE 1EARLY STAGE

KAZAKHSTANSWITZERLAND
ITALYSERBIA
MACEDONIALEBANONCHINA

PAKISTAN
INDIA

MEXICOTHAILANDPILOT/PARTIAL PHASE 2
TRANSITION
PHASE 2FULL
IMPLEMENTATION

COLOMBIAUGANDAECUADORTANZANIABRAZIL....................................

INDONESIA

MALAWIMOZAMBIQUE

EXTERNALASSESSMENTSUPPORT
MECHANISMPHILIPPINESSOUTH AFRICA

ARGENTINA

13

3.1 Farm Profiles

North America: United States

Farm Profiles1 provide insights into the socio-economic status of farms where we source ourtobacco. They allow affiliates and suppliers to assess areas of risk on the farms with which
they contract directly. Systematic monitoring of our ALP program involves the periodic
assessment of an individual farmer’s performance vis-à-vis the 32 measurable standards of
the ALP Code.2 Gathering this information on a farm-by-farm basis is a huge undertaking.

In the United States, hiring workers through labor contractors (crew leaders) was
considered an area of concern due to lack of visibility into farmers’ relationships withworkers. Additional questions were included in the Farm Profiles to better understandthis risk and determine the impact of related efforts to improve visibility into thepractices of both farmers and labor contractors.

The total number of people living and working on approximately 450,000 farms where
PMI and its leaf suppliers source tobacco worldwide is estimated3 at more than 2.5
million. This includes over 1 million adult family members, nearly 712,000 farmers’
children, 765,000 hired workers, and approximately 15,000 others or minors.
Farm Profiles are essential to guide and support the daily engagement of 3,500 Field
Technicians with farmers. They underpin PMI’s approach to continuous improvement at
farm level and inform the design of initiatives to address systemic challenges by PMI and
its leaf suppliers.

From 2012 until 2015, farm monitoring results reflected a rise in the levels of labor
sourced through the H-2A federal visa program, which sets the standards andparameters for workers and farmers: 10% on flue-cured farms (from 51% to 62%), and a
14% increase on burley farms (from 10% to 24%). In the same period, direct payments
to workers (as opposed to farmers paying workers via their crew leaders), increased
from 56% to 84% for flue-cured farm workers and from 25% to 88% for burley
grower farmworkers.

Much of the initial Farm Profile information was collected in paper format when the
ALP program began, however, there were challenges with assuring the accuracy of theinformation collected, which reflected both the cumbersome process of translating
millions of data points into digital format, and also the early stages of the program rollout (e.g., some standards and related information were not fully understood, there werebiases in farmers’ self-reporting in some areas of the profile). In 2014-2015, approximately
410,000 Farm Profiles were collected and updated, both manually (64%) andelectronically (36%). As the process has matured, the latest external assessment reports
in several tobacco-growing countries have shown an increase in both the accuracy andcompleteness of Farm Profile information.
Farm Profiles cover approximately 91% of farms in PMI’s buying footprint globally, as aresult of the continuous training efforts and introduction of specially-adapted digital datagathering tools. These tools have now been trialled in almost every country where PMI
buys tobacco and are fully operational in most of those with larger scale operations.
In different farming contexts and geographic situations, an overview of information that isotherwise clear and standardized does not always have the same relevance. So, in somecases, standardized Farm Profiles have been adapted to include additional information
pertinent to a given country, specific localized terminology and vocabulary, and evenadditional fact-finding components and areas of significance The examples provided on
the following pages illustrate the breadth of information collected every year throughFarm Profiles and show how, in many cases, this information is being used to understandand address problems on farms.

14........................................................................

Over 2.5 million people
live and work on the
tobacco farms where
PMI sources worldwide,
including over 1.7 millionfamily members and765,000 hired workers.
........................................................................

TYPE OF FARM

WORKERSDefine how many workers are hired, their status,
pay, duration of employment, how they reached
the farm (e.g., use of labor brokers),
and other employment conditions.

Gathering s
oci
o-e
c

PEOPLEON THEFARM

ta on approx. 4
a
d
50
ic
,00
m
o
n
o

SCHOOL

Farm Profile Includes:
General information
Type of farm and size
Commercial crops grown
ALP code communication
People on the farm
School attendance
Living conditions

Monitor communicationand training sessions on
ALP. Includes dates ofvisits, the ALP CodePrinciples covered and othertopics during each visit.

Determine numberof farms using
guest-worker
program (H2A)4and farm labor
contractors (crewleaders) to monitor
payment practices.

AFRICADigiytal or hard cop
Assess risk groups
LATIN(including orphans
and migrants), school AMERICA
attendance, andpromote foodsecurity by monitoringalternative crop
production.

Monitor and check
temporary andmigrant workers,
working and living
conditions, andensure ALP CodePrinciples are met.

Assess and follow-up on
school attendance. Recordchildren’s age and whether
they are family members or
farmworkers’ children.
Provide baseline for promoting
access to education.

SCHOOLATTENDANCETASKSON THE
FARM

Captures tasks performedby the individuals involved
in tobacco production on
the farm, allowing Field Technicians
to determine who does what,
including tasks consideredsafe/appropriate and those which
are hazardous
It also captures ages of all workers
to tackle instances of child labor.

Tasks on the farm

ALP
CODE
COMMUNICATION

USA

Understand whether housing
is provided to workers and if
amenities such as drinking
and washing water, a cooking
area, toilets and electric
power are available.

Worker accommodation

Identify who lives andworks on the farm fromfamily members (monitor
school attendance) to local
and migrant labor workers(understand their origin
and language
spoken).

HOW WE
USE THEFARMPROFILELIVING CONDITIONS

Collect general
information about thefarmer including name,age, address, contract startdate, farm type, size, etc.

wide
world
ms
far

Collect data on the type of
tobacco grown, the size of the
farm and tonnage produced.
Include data on othercommercial crops and food grown
for household consumption.

FARMERS0COMMERCIAL
CROPS

Provide farm description,
including whether it is ownedby the farmer, leased,
communal or part of asharecropping agreement.

....................

Farm Profiles

ASIA

Develop mostefficient andeffective
communication
strategy to educate
farmers on the ALP
Code and program.

EUROPE &ORIENTALSREGION

Identify type ofcontract (e.g.,seasonality) andnumber of hired
workers, their origin(e.g., migrant
workers), and tasks
performed.

15

Africa: Malawi and Mozambique
Assuring farming communities’ food security alongside cash crop production is of vital
importance in Africa. Monitoring other crops that are grown on tobacco farms not only
helps to gain a better understanding of food insecurity risks, but is also an important
way to measure progress of various ongoing initiatives to promote food security andcrop diversification that are implemented by PMI’s suppliers. In 2014, more than
300,000 tons of maize was produced on farms supported by PMI’s suppliers.
In 2015, approximately 180,000 tobacco farmers in Mozambique, Malawi, and Tanzania
grew food crops for household consumption, and more than 43,000 grew other nontobacco cash crops, ranging from maize to nuts, vegetables and grains.
Worldwide, nearly 320,000 (71%) tobacco farmers in PMI’s and/or our leaf
suppliers’ supply chain grew food for household consumption and approximately
160,000 (35.6%) grew other non-tobacco cash crops.

Given international reports about the trafficking of orphan children in rural areas ofMozambique and Malawi6, the Farm Profile tool in these countries was updated toinclude a questionnaire to closely monitor the presence and situation of thesechildren and to address any concerns about their treatment.
In addition, special training on this sensitive subject was provided to field teams on
how to monitor and record this information. As a result, it was possible to establish thepresence and location of orphans, and, from regular monitoring activities, to discoverthat less than 1% (59 children across the region) were treated differently to otherchildren living in their host household and potentially at risk. Relationships with theauthorities and NGOs mean that additional support is mobilized in these instances.
In 2014, approximately 4,500 orphan children were identified in Mozambique andalmost 690 in Malawi. Based on the information gathered for the 2015 crop season, thenumber of farms in both Mozambique and Malawi with orphaned children changed(falling in Mozambique by 40%, but rising in Malawi from 2% to 7%).

...........................................................................
Farmers growing food forhousehold consumption(per region)

81%

51%

Africa Americas

Farmers with other cash crops(per region)

77%

55%

20%

Asia

Europe &Middle East

43%

Africa Americas

71%

35%

Asia

Europe &Middle East

Tobacco farms: other cash crops5
AfricaAmericas(North America & Latin America)

Asia
Europe & Middle EastCorn, nuts, grains, vegetables, fruits
Grains and cereals, forestry, yerba mate, tea,sugarcane, cocoa, cotton, sweet potatoes, yam(plus raising livestock)
Rice, other grains, cassava, chili, red gram,cotton, sugarcane, vegetables
Grains and cereals, forestry, olives, berries
fruits, potatoes...........................................................................
16

Oriental Tobacco Region7
Concerns about the specific kinds of activities that children perform on family farms
across over 56,000 farms in 5 countries growing tobacco for PMI in this region led to theinclusion of a detailed questionnaire in 2014 about the number and age of the family’schildren, school attendance, and the kind of farming activities carried out, together with adetailed list of tobacco tasks.

EuropeMigration phenomena in Europe make its inclusion as a theme in the Farm Profile usedin this region particularly relevant with regards to migrant workers. For example, in Italy
more than 50% of contracted farmers hire migrant workers for some time during thegrowing season. These workers come from various countries, but predominantly from
Eastern Europe and North Africa. Philip Morris Italia has taken a number of steps togain more visibility into the potential problems faced by these migrants, and has recently
announced a new partnership with the International Organization for Migration (IOM)8
to provide assistance to the most vulnerable migrants, and to mitigate risks of humanrights abuses and any other forms of exploitation in tobacco-growing regions.

Latin America
Under the ”Compliance with the law” section of the ALP Code (Principle 7), we havenoted challenges based on whether a farmworker is temporary or permanent in Latin
America on the grounds of different types of contractual agreements involved in
the hiring of farmworkers and based on different traditions. Although the ALP Coderefers specifically to local legislation on contractual arrangements between farmers
and workers, one of its measurable standards clearly reflects the ultimate objective ofensuring that ”workers are informed of their legal rights and conditions of employment
when they start to work.”
In Colombia, as in many other countries, written labor agreements are not a legal
requirement and verbal employment agreements are permitted. Nevertheless, since2013, PMI’s affiliate, Coltabaco, has been supporting farmers to keep records oftheir verbal employment agreements with their workers. A total of 1,975 growers(approximately 50% of the directly contracted farm base) received the ”Labor Task
Diary” coupled with training by Field Technicians on how to use it to keep track of
the duration of employment of workers, working hours, wage, and tasks performed.
However, due to high levels of illiteracy among farmers, the uptake in 2014 and 2015
was rather low requiring the ALP Country Team to reassess and redefine the 2016
action plan to find alternative ways to support growers in keeping records.

........................................................................

According to our FarmProfiles, the total numberof migrants in our global
tobacco-growing supply
chain is close to 100,000.
........................................................................
17

3.2 Systematic monitoring & addressing
issues in practice
Monitoring labor practices and how they relate to the 32 measurable standardsof the ALP program, on a farm-by-farm basis on over 450,000 farms spread overapproximately 30 countries is a complex exercise. The vast majority of farms are
small-scale family farms (of less than 2 hectares). Contrary to commercial operations,
smallholder farms often lack clear procedures and organization, and are located inunderdeveloped rural areas lacking basic infrastructure (good communications, roads,
schooling, and business services). This makes the monitoring process more challenging.
PMI’s approach to overcome these challenges is to leverage Field Technicians’ visits tofarms to do the monitoring and continuous training, and internal procedures to ensure
full transparency and accountability. PMI and its suppliers employ over 3,500 Field
Technicians, each supporting on average 128 farmers. However, Field Technicians are
generally trained in agronomy and are not social audit experts. They spend a specificbut ultimately limited amount of time on each farm, at regular intervals throughout thewhole season. The approach to surfacing problematic issues is anchored on therelationships these Field Technicians establish with farmers: being firm and clear
about the company’s expectations but also building trust, discussing issues together
and taking sensible approaches to resolve problems, bringing concrete support tofarmers when they are faced with real barriers and problematic practices.
Considering all the complexities involved, PMI opted to progressively introduce
systematic monitoring with each PMI affiliate and supplier organization starting eitherwith a prioritized set of principles in the ALP Code or targeted geographical area.
The aim of first farm-by-farm monitoring efforts was to give a clear picture of thereality and to ensure monitoring was not a perfunctory exercise. Despite the inherent
limitations of such an approach, PMI believes that great progress has been made inunderstanding what is happening on each farm in relation to the application of the ALP
Code principles. To some extent, the external assessments that have been done also
support this conviction, as most of the findings of these reports have been aligned with
the internal insights and information generated through the systematic monitoring work.
Notwithstanding our confidence in the work done so far, the internal monitoring data should
be interpreted for what it is: the outcome of an internal process, a first trial of methods andsystems, and not a scientific assessment. Definitive conclusions about the overall incidenceof issues or trends require crosschecks and validation by other information sources9.

18

3.2.1 Africa: Malawi and Mozambique
The rollout of monitoring efforts in Africa focused first on recognizing and reporting”prompt action” issues. ”Prompt actions” are situations requiring an immediate
intervention because of the exposure to risk or danger to somebody on the farm.
This usually means a resolution or an improvement plan has to be put in place toaddress the issue or prevent its re-occurrence. The ability to monitor ”prompt actions”
now covers farms involved in the program in Africa (more than 220,000 and in total,
about 49% of all farms where PMI sources tobacco worldwide). Many different factors
make data collection and analysis complex in this region, namely the changing numberof farmers, hiring and training of many new Field Technicians, as well as a lower levelof education among farmers. Despite this, some preliminary conclusions can be drawn
from the data collected so far.
The overall number of problems and situations encountered on farms requiring a ”prompt
action” stabilized in 2014-2015 at around 4,600 cases (or a 2% incidence across our African
farm base). Increases in the numbers of reports during the implementation stage (20122013) may reflect improvements in monitoring capacity, while last season’s stabilization
perhaps reflects the maturity of the monitoring process and mitigation or resolution ofproblems. It is probably still too soon to see overall reductions across all issues identified
across the continent, but some data points suggest farmers have understood the programand are moving in the right direction towards changing behaviors.
For example, safety of the work environment was prioritized during the roll-out,
including the systematic distribution of Personal Protective Equipment (PPE) tocontracted farmers and multiple initiatives to improve awareness and promote the useof safety equipment. In 2015, Field Technicians provided PPE kits to approximately
127,000 farmers in Mozambique (100% of the farm base), more than 25,000 farmers
in Malawi (87%), and approximately 44,000 farmers in Tanzania (80%). These efforts
also include some innovations and specially-adapted approaches such as debate
and discussion sessions through drama groups, and risk assessment training. In 2015,
approximately 174,000 training sessions mainly focused on safe work environment (ALP
Code Principle 5) were delivered to tobacco farmers in Mozambique. Despite incidents
related to health and safety remaining the second most prevalent category (afterchild labor) across the continent, these dropped by around 40% during 2014-2015.
Unfortunately, the same overall downward trend is still not evident as regards child labor.
However, there have been improvements in levels of farmer awareness.

External assessments in 2014 and 2015 in Tanzania and Mozambique show farmers’levels of awareness of child labor is getting close to 100%, and country-specificmonitoring suggests farmers are taking child labor standards more seriously.
Mozambique is the clearest example of this. Here, the data from 2014 and 2015 showsa significant reduction of around 30% in ”prompt action” situations related to childlabor (amounting to a total incidence of 1.3%) and falling levels of child labor incidents
involving the hiring of minors in Mozambique and Tanzania (-4% and -7% respectively).
Also, looking at the specific circumstances of reported incidents, we see a change in thenature of the situations being reported, with a greater than 50% reduction in incidents
involving children performing the most hazardous tasks in tobacco farming, such as
harvesting or topping (see figure 1, ”Global guidance on the definition of hazardous tasks
on a tobacco farm”).
In Mozambique, we see yet another example of the impact of our supplier’s systematicefforts to address another complex issue. When the ALP program started, worker
accommodation was an area of concern identified by local suppliers, PMI and Verité
during field visits. During the first year for which we have data available, thanks to oursystematic monitoring, ”prompt action” issues relating to a lack of safe/adequate worker
accommodation accounted for 47% of all issues reported. Since then, our supplier has:
• Put in place intensive farmer training on the basic requirements for decent
worker accommodation;• Implemented productivity schemes to enable farmers to generate additional
profits to invest in better facilities; and• Guided the process to include working toilets, drinking water, cooking areas, andbuffer zones for farmworkers.
An external assessment conducted in 2015 suggests a significant improvement in thisarea, with 91% of farms where worker accommodation is provided deemed in line withlocal standards.
Nevertheless, there are many challenges involved in the wide-ranging Safe WorkALP Code Standards. Small-scale farmers do not have the funds to buy and provide
full PPEs for themselves or workers, or for the most vulnerable on the farm, such as
pregnant women and older family members. Poor school infrastructure particularly inMozambique impacts school attendance and contributes to higher rates of child labor.
The global spread of child labor coupled with limited Field Technician-to-farmer ratios
in Africa (currently at 1:159 compared with the global average of 1:128), makes this a very
challenging issue to address.

In Mozambique, however, the Field Technician-to-farmer ratio is 1:203, which makes it
difficult to implement extensive farm-by farm support and monitoring. In Africa, many
farmers face literacy barriers as employers, both in understanding and abiding by the law,and also by the ALP Code. Aligning pay with work hours and encouraging formal rather
than informal contracts and agreements is a long-term challenge. The implementation ofelectronic data collection systems by our tobacco leaf suppliers will certainly help us tomonitor, learn more about, and overcome some of these problems.

Figure 1:
Global guidanceon the definitionof hazardous
tasks on a tobacco
farm
While PMI has developed guidance on which tasks are deemedhazardous on a tobacco farm, there is a lack of consensus on thismatter and regulatory frameworks vary significantly across theglobe. To address the lack of a common sectorial approach, theEliminating Child Labor in Tobacco Growing Foundation (ECLT),
which PMI supports, established a public private partnership with
the International Labor Organization to develop global guidance on
this issue. Several pilot programs will be carried out to encompass
the different conditions in production and the final guidance will be
informed by expert and stakeholder input. We expect this guidance
to become available in 2017. In the meantime, PMI will continue
to develop its programs and tackle this issue in line with its policythat has been acknowledged as rigorous and detailed by the US
Department of Labor and Human Rights Watch.

193.2.2 Latin America: Ecuador and Brazil
EcuadorA preliminary third-party assessment done in 2012 showed that after implementing the
ALP program for the first season, although farmers’ levels of awareness on the standard
to address child labor were very high (100%), this awareness had not yet changed
attitudes or behavior. On around 24% of farms, children below 18 years old were still
involved in some sort of activity related to tobacco, including tasks deemed hazardous
for their age. As described in our previous Progress Report10, the local team then put inplace a comprehensive plan to address this. It involved close cooperation with, among
others, a local NGO (Centro de Desarrollo y Autogestión – DyA) who were engaged
to provide educational programs and extra-curricular activities for farmers’ children
together with systematic monitoring and follow-up support for children at risk. To date,
the program has included 130 adolescents in accelerated education programs, 1,550
boys and girls under 15 years of age in extra-curricular activities, and extended school
hours, and 40 teachers received specialized training. Seventy-eight workshops for 800
tobacco farmers and their families have also taken place.
Feedback from these activities now shows that attitudes towards addressing child labor
improved significantly and, most importantly, the systematic monitoring carried out byField Technicians shows a significant change in practices with an 18% reduction in childlabor incidents during the 2014-2015 crop season vis-à-vis the 2012 preliminary assessment.

........................................................................

Ecuador: Systematic monitoring
conducted by Field Techniciansshows an 18% reduction in childlabor incidents during the 20142015 crop season vis-à-vis the2012 preliminary assessment.
........................................................................
20

BrazilDuring 2014-2015, there was an increase in the number of ALP issues reported by Field
Technicians across all ALP Code Principles, with the notable exception of child labor.
Firstly, this seems to be due to more effective monitoring after Philip Morris Brazil’s(PMB) intensive training efforts to improve their field staff’s ability to identify problems
relating to each of the ALP principles. These efforts included monthly meetings, annual
meetings to do role-plays and to discuss practical examples with farmers, and offering
recognition for Field Technicians who were reporting and taking action on the problems
they encountered.
Child labor prevention and communication has been a priority for PMB since it began
contracting directly with farmers (in 2010). This is also reflected in the contracts andcommercial relationship of PMB with tobacco leaf suppliers and farmers. However, childlabor monitoring was introduced only with the second phase of implementation of the
ALP program and is showing an encouraging fall in the level of child labor cases year-onyear. Brazil’s legislative framework prohibits any activities by minors related to tobacco,even those that would not be deemed hazardous in other crops or jurisdictions, such as
watering seedbeds. In 2012, a Control Union external assessment11 from our independent
auditor on the program, also showed farmers’ negative attitude towards the legislative
framework and how the issue has become a matter of political contention. This has
influenced the ability to detect problems in the field.
The latest internal monitoring data is very encouraging; it indicates an incidenceof 0.4% of child labor cases during the last crop season (2015). This data shows
a dramatic improvement vis-à-vis the levels reported in the external assessment
conducted in 2012, and, although we believe that this is the result of PMB’s staff
efforts to prevent and eradicate child labor practices, we also acknowledge that there
are inherent limitations to a purely internal monitoring process in documenting such
behavioral change in addressing this complex issue. As part of PMB’s commitment to
the program, the ALP Country Team developed a specific follow-up procedure forall child labor situations reported, together with clear guidelines in line with theseverity of the issue and farmer’s attitude: more frequent follow-up visits wereconducted for more serious situations and even closer monitoring carried out when
the farmer had a negative attitude about the changes needed. In one case PMB felt
it was appropriate to terminate a contract with a farmer. In this instance, the farmer was
found to be knowingly hiring a minor to harvest tobacco.

In 2013 PMB began the implementation of a comprehensive action plan to address
all issues identified during the Control Union external assessment12. The introductionof systematic monitoring for each of the principles of the ALP Code during 2014-2015(conducted over seven visits throughout the season) allowed PMB to start gathering
their own data for each of the measurable standards. While it is still too early to observeyear-on-year progress (although, as noted on page 20, the increase in reporting instances
over the last two seasons reflects the improvement of the monitoring process), it isnevertheless possible to contrast some of the data from the last season with the external
assessment conducted in 2012, particularly for those measurable standards that are
objective and easier to check on the farm. Workers’ income and regularity of pay are good
examples. Whereas the external assessment identified 3% of workers receiving pay in linewith the minimum national wage instead of the state wage (a higher amount), the remaining
97% were paid above both benchmarks. During 2015 this was down to 0.5%. With regards
to regularity of pay, the external assessment identified 19% of workers with agreements
for end-of-season payments (due to profit sharing), and this practice is now down to 4%.
In both cases, the changes reflect PMB’s direct outreach efforts with farmers and otherstakeholders, including local unions, to address these issues.
With regards to a safe work environment, two main areas of concern were highlighted
in the 2012 external assessment. Firstly, farmers’ and workers’ training and adoption of
preventative measures when harvesting (reducing the risk of Green Tobacco Sickness),and secondly, safe handling or application of pesticides. PMB has put in place acomprehensive set of initiatives to improve on this, including providing farmers with:• Access to formal training delivered by SENAR (National Service of Rural
Apprenticeship) following the Ministry of Labor norm NR-31. Currently over 200
training courses and over 3,000 farmers have been trained; and• New Personal Protective Equipment (PPE) for farmers and workers, made up of lightermaterial, more suited to the high temperatures experienced during peak season.
Monitoring the evolution of the impact of PMB’s actions to address these concerns is acomplex exercise as it involves analyzing the knowledge and attitudes towards risk andthe actual practices in the field, some of which take place during very short periods oftime and are therefore difficult to check (e.g., preparation of pesticides).
With this in mind in April 2014, PMB commissioned the regional university, UNISC13 to
conduct an independent survey on how and when farmers use PPE. Farmers reported
supplying PPE to all workers to handle pesticides in 87% of cases, and PPE to all
workers for harvesting tobacco in 68% of cases.

Field
Technicians
ToolkitDuring farm monitoring visits, Field Technicians will typically havematerials available to help them address or discuss the mostcommon types of issues faced on farms.
In the US, the toolkit of field staff during the 2015 crop season
included:• Green Tobacco Sickness (GTS) information
sheet and poster (English and Spanish)• Department of Labor (DOL) worker training DVD”Making Safety a Priority” (English and Spanish)• DOL suggested timesheet (English and Spanish)• DOL Press Releases• DOL Youth Agricultural Pocket Guide• 2015 Good Agricultural Practices (GAP)
Connections Labor Management Guide14• University of Kentucky Introductory Safety
Training for Tobacco Workers Handout• Example of a Worker Training Log• DOL Worker Terms and Conditions form (English and Spanish)• Examples of Personal Protective Equipment• List of potential hazardous tasks for child labor21

3.2.2 Latin America (cont): Brazil

3.2.3 Asia: The Philippines

Regarding the use of PPE, over 70% of farmers report using nitrile gloves(more puncture-resistant than natural rubber gloves), rubber boots, protective trousers
and a jacket when handling or applying pesticides, whereas only 23% used goggles
or a hood. According to farmers, over 70% of workers use impermeable shirt andtrousers and nitrile gloves when harvesting, but 12.1% of farmers still reported not using
PPE when harvesting tobacco. Although the survey reports directly what farmers
say they do, it was anonymous and suggests some improvement in attitudes andpractices towards the use of PPE, even if these are still far from the desired scenario.
The internal monitoring during the 2015 season seems to corroborate this improvement,with incidents related to the inadequate use of PPE reported on just 1.8% of farms.

As in other countries, the progressive introduction of systematic monitoring in thePhilippines started in 2013, focusing on addressing child labor and providing a safe work
environment (two of the ALP Code principles15). Both Principles had been prioritized in
the communication efforts on the initial roll-out of the ALP program and, subsequently,
PMI’s local affiliate, PMFTC implemented a set of initiatives to tackle the root causes ofproblems identified on farms.

While PMB’s efforts seem to be paying off, there is still a long way to go in this area.
In addition to the initiatives foreseen in the plan introduced in 2013, last year (2015),
PMB launched another initiative to improve health and safety practices on tobacco farms.
The program ”+Campo” consists of a mobile training unit: a vehicle with media andpractical training capabilities, driven by experts, which visits tobacco-farming
communities to provide information and practical training on health and safety
practices to farmers and rural workers alike. Over 112 training sessions for 1,560
farmers in all three tobacco-growing States have been carried out (since May2015). This initiative is generating strong interest and very positive feedback from thecommunities and farms where they have been present.
One area where we have seen ’little or no progress’ is in the formalization of employment
relations between farmers and workers, particularly among smallholder farmers who
typically hire 1-3 workers for a limited period of time. Culturally there is a reluctanceto implement labor contracts, mainly due to a lack of awareness of legal labor rights
and obligations, and what farmers see as burdensome, bureaucratic procedures forstandard labor contracts. To address this issue, PMB together with two local labor
unions, assessed the applicability of simplified, short-term contracts for seasonal
workers, as foreseen under Brazilian labor law. In 2015, the local labor unions and PMB’s
Field Technicians started promoting the adoption of these simplified contracts across agrouping of 665 farms in the municipality of Venâncio Aires (the main tobacco-growing
area in Brazil), and Vera Cruz using a procedures manual as a standard contract.

22

With regards to child labor, efforts have been focused on eliminating those farm
activities involving hazardous work and mitigating the risk of farming families’ children
being involved in them, while at the same time, providing less labor-intensive curingand harvesting methods for farmers to try out. In support of these initiatives, broader
interventions to educate, provide alternative activities, promote economic opportunities,
and empower tobacco-growing communities have also been implemented by the local
NGO, The Jaime V. Ongpin Foundation, Inc16.
During the last two seasons (2014-2015), the number of child labor-related incidents
reported in Santa Cruz and Mindoro, two out of three tobacco-growing regions, has been
relatively low (43 and 25 respectively) considering the number of farmers (approximately
3,900), their small farm size, geographical location, local traditions, and the general
acceptance of child labor as an important part of a child’s development. Factors that
may have played a role in the last season’s reduction include both the various child labor
prevention efforts underway and also the reduction in the number of farmers contractedin Mindoro. Discerning the real impact of ongoing ALP-related activities is challenging, andpin-pointing any causal relations which explain change is difficult. Recognizing this, the ALP
Country Team in the Philippines is taking a more structured approach to understanding
the whole process, gathering information alongside (and separately) the farm-by-farmmonitoring conducted by Field Technicians during their regular farm visits.
In the Philippines, as elsewhere, PMI and our suppliers are aligning community
interventions with the introduction of technology or farm-level initiatives tomitigate risks and support the uptake up of improved practices.

Reducing child labor through labor-saving techniques:monitoring and evaluation protocol in the Philippines
In addition to the internal monitoring and external monitoring systems inplace, in the Philippines, our affiliate (PMFTC) has been the first to develop acomplete monitoring and evaluation protocol (M&E) to assess the impact of
introducing a labor-saving technique (devices called ”clips” that may reduce therisk of children being involved in hazardous activities) and running this initiative
together with a summer school program. The school break period coincides
directly with the peak of the harvest season, which is when there is a higher riskof child labor.

PMFTC Study:
2,800 farmers were divided into four groups.
A random sample of farms from each group received unannounced visits, aminimum of 8 times during peak season.
Visits were scheduled to happen at different times of the day: regular working
hours, early in the morning (before 8AM), late in the afternoon (after 5PM), on
holidays and during weekends (the day after the previous visit).
Findings: Four child labor incidents were reported on the 193 sampled farms asfollows:
1. Farmers that received only clips: 1 child labor incident (old techniques stillused with new);
2. Farmers whose children were involved in the summer school program: nochild labor incidents;

The study provided the ALP Country Team with important insights for devising
future strategies to address child labor and the results so far suggest a goodlevel of success in the implementation of both types of initiatives, particularly
when combined. However, further validation is necessary given the number ofincidents reported, and this study will be repeated in the next crop seasonsin the Philippines and trialled in other tobacco-growing countries in Asia (e.g.
Pakistan, Indonesia and Thailand). The objective is to continue to evaluate theimpact of these interventions over time in preventing child labor.

......................................................................

The objective is to continue
to evaluate the impact ofoperational interventions
and community initiatives overtime in preventing
childlabor.
...............................................

3. Farmers that benefited from both interventions: no child labor incidents;
and
4. Control group with no intervention: 3 child labor incidents.

23

3.2.4 Oriental Tobacco Region: Turkey
In Turkey, tobacco is sourced from three suppliers and from three very distinct regions(the Aegean, Black Sea and the South East), each with their particular set of ALP
challenges. Recently, a significant effort to improve the level of technical support provided
to contracted farms and, simultaneously, to improve the capacity to monitor farm level
practices was introduced, leading to the hiring of 12 new Field Technicians in 2015. Women
play a central role in farm activities, and as there are cultural barriers to men talking directly
to women on the farm (mainly in the South East region), suppliers have hired two additional
female technicians, bringing the total number of female Field Technicians in 2015 to six.
ALP Code Standards on eradicating child labor and having a safe work environment wereprioritized after a risk assessment was conducted during the first phase of the program in
Turkey. Several initiatives have been taken to improve awareness and tackle root causes.
Systematic monitoring was, as in other countries, progressively introduced in Turkey
starting in 2013, also focusing on these two principles and later expanding the monitoring(in 2014) to all ALP Code Principles.
The main concerns related to child labor are around traditional family practices whichlead to a reliance on family members for the critical stages of the production process:harvesting and preparing the tobacco leaves for the curing process. Curing is typicallydone by sewing small oriental-type tobacco leaves onto a rope-like string using a sharp
needle. These activities are deemed hazardous because of the potential exposure to GTS
during harvesting and the use of a sharp instrument.
A Control Union external assessment conducted in October 201417 showed that 90% of
the farmers could easily remember ”No child labor” as one of the Principles of the ALP
Code. However, only 73% could remember the minimum work age that was communicatedto them by suppliers, and 30% of farmers still lacked awareness of hazardous activities
related to tobacco production. Although there is no baseline against which we cancompare this data, the findings suggest some progress is being made with communication
efforts but a lot remains to be done for farmers to have a fuller understanding of how thisPrinciple and its standards translate into practice.

24

By contrast, the systematic monitoring conducted by suppliers during 2014 and2015 has shown a reduction in child labor incidence from 24% to 15%. This is an
important result. As noted previously in this report, there are limitations to data frominternal monitoring and we need to interpret them carefully. Validation over subsequentseasons, together with a crosschecking from other sources, is needed before definitive
conclusions can be drawn. However, given the degree of focus and the concrete
initiatives implemented by Turkish suppliers, we believe their efforts are playing arole in addressing the problems. In addition to the communication and awarenessraising initiatives on addressing child labor and providing a safe work environment, oursuppliers in Turkey (with deep-rooted local practices in the important production areas),
have focused on modernizing the cultivation process. Specifically, this has targeted
activities in the production process where families are more reliant on their own familylabor. In particular, suppliers have introduced:• Mechanization of the harvesting process: on a very limited scale (two prototypes)
where the difficult mountainous terrain and small size of farming plots makes it
necessary for farmers to share equipment to be viable.
• Alternative tobacco curing techniques: ”vento” machines18 and curing frameseliminate the need to use a sharp needle in the preparation for curing. In the last
two years, 615 ”vento” machines were introduced and curing frames are currently
used for 8% of tobacco purchased in the Aegean region.
Although these efforts do not entirely eliminate the risks of children being involved in
tobacco work, they can reduce the chances of hazardous tasks carried out by children
on family farms and the overall amount of labor needed, making the whole process
more efficient for the farmer.
With regards to a safe work environment, suppliers initially identified the lack ofawareness about GTS and low adoption levels of preventive measures for safe
keeping, handling or applying Crop Protection Agents (CPAs). The external assessment
conducted by an independent third party, Control Union (CU) showed that after the
initial two seasons of program implementation, most farmers were storing CPA kitscorrectly and declared that they use protection and have had the appropriate training
on CPA application. Although most interviewed farmers also declared an awareness of
GTS and its symptoms, a low level of knowledge transfer and good practice was noted(e.g., the wearing of long sleeves both among farmers and workers).

The 2014 external assessment of Control Union took place after suppliers implemented
an intense communication campaign focused on these issues: the provision of PPE, safe
locking boxes, and log books to register CPA training sessions and application on all farms.
Although the assessment showed there were still many areas for improvement, it alsosuggested that the initiatives were having an effect on the levels of awareness and graduallychanging practices on the ground. The systematic monitoring done by our suppliers
over the last two seasons seems to confirm this trend, with a significant reduction in theincidence of issues related to safe work environment standards from 40% to 15%.
Finally, it is important to note that since 2014, Turkey’s labor market is absorbing
significant numbers (although precise figures are difficult to obtain) of informal workers,
many being refugees from the intensifying war in Syria19. Tobacco suppliers in the
country have generally not contracted farmers hiring Syrian workers. However, in otheragricultural sectors we note that unregistered workers are paid below the minimum
wage and this remains an area of concern.

........................................................................

Turkey: Systematic
monitoring carried out
by suppliers during
2014 and 2015 has
shown a reduction ofchild labor incidence
from 24% to 15%.
........................................................................
25

3.3 Support services for farmers and workers
One of PMI’s ALP Code 32 Measurable Standards requires that ”workers have accessto a fair, transparent and anonymous grievance mechanism”. PMI recognized that thisspecific Standard is beyond the direct means of most farmers. So, PMI is working
with our suppliers and affiliates to provide effective and targeted support services forworkers and farmers in all countries where these do not already exist, in a suitable andaccessible form, wherever tobacco is being sourced.
In 2013, PMI guided and supported the launch of three pilot projects in Republicof Macedonia, Brazil and Mexico. Since 2014, 10 additional pilot projects werelaunched with different operating models to suit different local contexts.
These pilots vary greatly: from promoting the use of existing government services (e.g.,
COLabora20 run by Colombia’s Ministry of Labor), to supporting the development ofan entirely new service with a multi-stakeholder approach (e.g., in the Philippines, apartnership between PMI’s affiliate, the Department of Labor and Employment, worker
representatives and a local NGO), to leveraging and/or building the capabilities of
local NGOs. Currently, PMI and our suppliers are working to establish six additionalpilot projects in Malawi, Indonesia, India, Pakistan, Thailand and Ecuador. In some ofthese countries, our affiliates and suppliers are first conducting baseline assessments
to gain a better understanding both of the most salient issues and risks, and theexisting formal and informal dispute resolution mechanisms. The baseline assessments
include consultations with farmers, workers, local experts, governments and otherlocal stakeholders. This process is helping PMI’s affiliates and suppliers to design andimplement pilots that are fully tailored to the local reality and challenges there.
PMI believes that for grievance mechanisms to succeed in a context of mainly smallholder
farming, they need to be more than just a channel for workers to file their complaints andgrievances. Therefore, PMI has reshaped the approach and introduced the concept offarmer and worker ”support services” based on a combination of two components:
1. Solving conflicts and problems: enabling workers to raise questions and/or issues
about labor practices to a trusted and neutral third-party that can advise andfollow-up when appropriate (e.g., mailboxes, toll-free lines, visitor centers, and/or specialized field staff that can visit farms, talk to farmers and workers, makereferrals to relevant official agencies, to local mediators, ”ambassadors”, etc.); and2. Providing additional services: providing assistance to workers and farmers to build
trust, capacity, and improve labor and business practices through services tailoredto their needs (e.g., training on labor laws, help with health and safety topics,
registering workers, psychological, legal or other counseling support).

26

This approach is the result of a learning from the first experience implemented by PMI’s
affiliate in Kazakhstan where they provided workers with an avenue to raise concerns
about their working conditions without fear of retribution but also found that smallscale farmers often needed help too. This was a key element of the program from 2010
onwards to prevent and resolve labor abuses, as acknowledged by several stakeholders
such as the ILO21, UNHCR22, the IOM, and the US Department of Labor (DOL) when
they removed Kazakhstan tobacco from their ”List of Goods Produced by Child Labor
or Forced Labor23.
PMI has continued to further explore this approach and tailor its implementation to
local circumstances. PMI and our suppliers have been engaging with many stakeholders(e.g. NGOs, government unions, grower and farmer associations, local authorities, etc.).
The aim is to design and implement support services which work at several levels: tounderstand better local problems and needs, ensure people can get the advice theyneed and mediate disputes, and to provide support, particularly to the most vulnerable
groups present on farms, normally less able to access help such as migrant workers.
In most cases, the first year of implementation has focused on communicating theavailability of the support service to both farmers and workers and on building trust.
Although the number of issues raised in each pilot project are still relatively low, someresults are encouraging and, importantly, allow PMI and our affiliates to learn how tomake these mediation and dispute resolution services more effective and easy-to-use
for workers. The examples on page 27 illustrate the kinds of services and information
provided through these projects.

........................................................................

Since 2014,10 additional pilots werelaunched, with different
operating models to suit
local contexts.
........................................................................

3.3.1 Republic of Macedonia

3.3.2 Tanzania

Run by a local NGO, the Macedonian Center for International Cooperation (MCIC)
is a support service staffed by a social worker and a legal counselor. The workers
and farmers have at their disposal two different ways to ask for support: a local
office and a toll-free line. In addition, MCIC also visits farms regularly to engage with
farmers and workers and to give them the opportunity to speak up. In the first yearof implementation (October 2013 - October 2014), MCIC visited 787 farmers in 29
villages from 5 different municipalities. MCIC received 424 queries: 73% at the local
office or during field visits, and 27% through the toll-free line.

In Tanzania, family farms predominate, yet many farms also employ internal migrant
and/or local workers. In 2014, the local NGO Tabora Development Foundation Trust(TDFT) implemented a support service pilot program in seven areas in the Tabora
region. TDFT selected dedicated staff for each area to work with farmers, workers,
village executive officers, area managers and other local officials, including at village
and ward levels. The staff were trained and introduced to ALP by PMI’s suppliers, andassigned the role of ”Community Activist” (CA). This name was intended to reflect
their role of active mediators between farmer, workers and local community officials.

Almost all queries were submitted by farmers and were not related to ALP or labor
topics (e.g., tobacco subsidies, contract details with suppliers). Approximately 5%of queries were information requests on ”labor contracts with farm workers”, 4%
regarding ”children working on family farms”, and 3% on general information about
the support mechanism. Men accounted for 86% of total queries while only 14% werefrom women. MCIC also organized meetings with more than 100 workers to explain
the support mechanism in more detail and engaged in conversations with children andtheir parents at the farm to screen their involvement in farm activities. For farms withchildren (mostly family members), unannounced follow-up visits were conducted tocheck that children were not performing inappropriate and/or hazardous tasks.

A toll-free line was created to allow workers and farmers to raise their concerns, andboth the CAs and the suppliers distributed information about the support mechanism.
After three months, refresher training for TDFT’s Community Activists and support
staff was held to increase awareness on ALP and improve reporting with a new datacollection tool. It also re-emphasized several known grievance areas, specifically: unfair
payment, discrimination and a hazardous working environment. TDFT also reports on
how CAs are mediating and educating farmers directly in situ in cases of hazardous
work by under-18s.

...........................................................................
In the second year of implementation (October 2014 – October2015), the number of queries increased to 536, 49% of which wereduring field visits, 30% at MCIC’s local office, and 21% via the tollfree line.
...........................................................................
Building on the engagement with farmers, workers, and their families during theprevious crop season, MCIC continued paying special attention to the risk of children’s
involvement in hazardous work. In 2015, MCIC conducted 415 visits to farms with farmers
and workers with children. Although the majority of queries were still not related tolabor or ALP topics (56.8%), the number of queries on ”child labor” rose significantly
from 4% to 41.4% (e.g., including ”drastic measures for families who use children”, andrisks associated with tasks such as ”stringing tobacco”, ”driving a tractor”, ”going to thefield during harvesting”, and ”helping at home”). Information requests decreased from 5%
to 1.8% (e.g., ”labor contracts with workers”, ”services for workers”).

...........................................................................
Although the number of issues raised through the toll-free line wasinitially relatively low (38 users), approximately 80% of all calls
received (i.e., 31 calls) were directly related to ALP Code Standards,
ranging from ”workers not being paid what was agreed” (19),”physical abuse” (4), ”working outside contract terms” (3), ”unequalpay between men and women” (1), ”accommodation and delay or
failure of food provision” (3), and ”other issues” (1).
...........................................................................
It is worthwhile mentioning the good social mix of users of the TDFT service: farmers,
workers and other persons, namely relatives, and even local Primary School officials.
The overall number of workers using the service is relatively high (75%), considering
the initial doubts workers had about how effective such services could be to address
their concerns. Farmers also have used the service to help resolve pay and contractual
disputes with their workers, which is in line with our internal monitoring data showing
there is a general lack of awareness among farmers about how to hire workers
correctly and avoid disputes.

27

4. External monitoring........................................................................

The public release of
independent assessmentsshows an unprecedented
level of transparency andcommitment, which PMI hopes
will mobilize other stakeholders
to work collaboratively inaddressing the complex issues
facing farmers, as more often
than not, they are common to
the whole agricultural sector.
........................................................................
28

External assessments conducted by an independent third party are a cornerstoneof the ALP program and clearly show the issues, risks and challenges faced on farms.
These assessments also include PMI’s affiliate’s and/or suppliers’ plans and commitments
to change conditions on farms and help farmers to continuously improve.
The public release of the reports of these assessments shows an unprecedented level oftransparency and commitment, which PMI hopes will mobilize other stakeholders to work
collaboratively to address the complex issues facing farmers and our company, as more
often than not, they are common to the whole agricultural sector.
So far we have published on our website24 and shared with stakeholders the external
assessment reports of independent auditor, Control Union (CU), on the status of the
ALP program implementation by PMI’s affiliates in Brazil, Mexico, Italy, the Philippines,
and the United States. Each of these reports includes a detailed action plan developedby the local PMI affiliate or suppliers to address the problems identified on farms,
as well as any shortcomings identified in the program’s management processes.
Action plans have been developed locally by affiliates’ or suppliers’ ALP Country Teams,
with input from PMI and its strategic partner, Verité. These plans reflect the specificfindings of each CU report, building on the ALP Country Team’s ongoing efforts andinitiatives where possible, taking an integrated approach to address issues raised,
including involving stakeholders such as local authorities, government, unions, NGOs andother labor and human rights experts.

Comparisons between assessments conducted so far are difficult because the context
in each country is very different and the assessments took place at different stages of
ALP program implementation. However, three common aspects can be highlighted:

1. High levels of commitment and transparency were noted by Control Union’s
assessors in each organization, starting with Field Technicians all the way up
to senior management.
2. Significant progress within suppliers’/affiliates’/organizations in putting
in place the right people, knowledge and management processes for the
program to succeed. The external assessments also show that:a) All relevant personnel have been trained;b) ALP training is now an ongoing, standard practice; andc) Discussions on all ALP-related matters have become a feature of day-today activities of field staff and supporting functions.
3. Each ALP Country Team is taking steps to identify and clearly understandthe issues on farms, and, rather than trying to identify ”quick fixes”, they
are developing sensible, in-depth approaches to address complex problems.
Plans are now more comprehensive, targeting root causes and going beyond
providing purely material assistance. They focus on impact and behavioral
change, and integrate social support, direct involvement of communities andrelevant stakeholders, as well as the companies’ business activities.

Action plans after the recent assessments completed by CU in Poland, Turkey,
Mozambique, Tanzania, Argentina, Colombia, Spain and Indonesia are being concluded.
We expect these to be published in 2016. We have received positive feedback fromstakeholders for the public release of these third-party ALP assessment reports and in
future, we intend to provide updates on the execution of each action plan on our website.

29

5. Integrated ALP plansto address systemic andwidespread problems

30

PMI understands that successful implementation of ALP requires a combination of time,effort, and local and global partnerships, and that transparency and trust are vital. We
are committed to addressing and mitigating adverse impacts in our tobacco-growing
supply chain, however no company can fix all of the issues alone. PMI’s affiliates andsuppliers face many complex problems in tobacco-growing communities. These may
be widespread, and even systemic, arising from long traditions, current conditions or
regulations. PMI concertedly engages with other stakeholders to address the challenges
faced by communities, such as poverty and exclusion, child labor, domestic violence, alack of economic opportunity, and an absence of education or training programs.
Over the last few years, PMI has made a conscious effort to support the convergence of
our operational investment initiatives (to promote Sustainable Tobacco Production) andgrant-financed community initiatives (Corporate Contributions). This approach is stillat an early stage but is leading to a new and creative framework for project design andreporting, and a purposeful focus on supporting change and addressing ALP-related
problems as they are identified.

Sustainable Tobacco Production(STP) Initiatives:
Operational investments focus on three areas:
1. People (labor practices);
2. Crop (quality, productivity, farm economics); and3. Environment (soil, water, recycled and reusable materials,
and energy consumption).

STP initiatives aim to:• Test and introduce new agricultural techniques;• Support infrastructure or modernization investments;• Provide training and technical assistance to farmers;• Provide equipment and materials to farmers; and• Provide farmers and workers with support.

In each region, ALP-related initiatives supported through STP projects or as
Contributions-funded Community Initiatives have been developed around areas
considered to be significant ALP priorities. This has meant that in the first few years ofinvestment work has focused on addressing child labor and safe work. The following
regional maps (on pages 32-39) show region-by-region an overview of what has been
done within the STP/Contributions investment framework.

PMI Operational investments
and Corporate Contributionsin 2014 (millions US$)25

Sustainabletobacco production

Corporate
contributions

Total

$23.7

$7.4

$31.1

Contributions Programs:
PMI’s key areas of grant giving and community focus:
1. Enabling access to education;
2. Providing economic opportunity;
3. Empowering women; and4. Disaster relief and preparedness.
In 2014-2015, PMI and Verité reviewed all of the Contributions
programs to help improve the quality and effectiveness of ALP-related
projects to be funded in the future. Generally, it was found that across-section of the ALP-related projects are fairly well aligned with
ALP plans, priorities and objectives. However, there is still work to do
to ensure there is comfort and familiarity with the ’best’ approaches toaddress complex ALP problems.
2014: supported 28 Not-for-profit Organizations
2015: supported 31 Not-for-profit Organizations31

5.1.1 Regional overview: Operational investments(STP) and Community initiatives (Contributions):
North America and Latin America

01

02

04
05

2014 (in millions US$)STP = $11.3
Contributions = $2.7
Total = $14.....................................

26
32

CPA & GTS exposure
North Carolina State University (NCSU)
Cooperative Extension27:• Training sessions for 1,350 workers andfamilies (2014 - 2015)28• 9 “Family and Community” events totaling
225 participants
Farm Labor Practices Group (FLPG):• Worker training guide for 4 different tobacco
types29
Lack of visibility into crew leader’s
practices
Farm Labor Practices Group (FLPG):• “2015 Agricultural Labor Management
Guide30” to educate 10,000 growers,
contractors and workers on labor laws, H-2A
visa program and direct payments to workers
Verité and Polaris:• Pilot support service in Kentucky (2014)03.....................................

01 THE USA

06

02 MEXICOChild labor, working conditions andlabor rights among migrant communities
Rural Development of Nayarit:• Childcare centers provide education, medical
services and meals to 450 migrant
farmworkers’ children (2014)
Save the Children:• Childcare centers for 450 farmworkers’
children• Activities and workshops on human rights,
gender equality and environment
Fundación Origen:• Support mechanism and community
development services involving 6,500 people(1,500 direct and 5,000 indirect beneficiaries)

Family members <18 doing hazardous work
• Increased farm visits by tobacco leaf
suppliers in 2015
• 4-year university/community colleges
scholarships for over 75 tobacco farmers’
children (since 2012)

1,350

workers and families
trained by the North
Carolina State University(NCSU)

6,500
People benefiting froma support mechanism andcommunity development
services03 COLOMBIA

04 ECUADOR

05 BRAZIL

06 ARGENTINA

Family members <18 doing hazardous work
• Improving and simplifying production
processes to reduce reliance on family labor
Dividendo por Colombia - “Sembrando
Futuro”:• Early childhood education involving 3,050
children and 165 teachers• Bespoke curriculum in multi-grade schools forstudents from rural disadvantaged
communities• Approximately 500 storybooks about childlabor developed by ILO

Family members <18 doing hazardous work
“Desarrollo y Autogestión” (DyA):• Educational and extra-curricular activities for
1,047 farmers’ children• Systematic monitoring and follow-up support
to children at risk

Family members <18 doing hazardous work
Gaucho Association Pro-Agricultural Family
Schools:• Scholarships for over 49 tobacco farmers’
children (since 2012)
Center of Digital Inclusion (CDI):• IT training programs for 1,088 youths from 13
schools (2014)

Seasonal workers’ children present inareas of work
• Pre-finance bulk curing barns and eliminate
grading to simplify production processes andreduce child labor risk
• Daycare facilities for 3,000 children(since 2009)
Associacion Conciencia:• “Porvenir”: educational/recreational activities,
and awareness workshops to farmers andworkers, teachers and parents• “Somos capaces”: vocational youth training
program for nearly 8,000 youth (since 2008)

Workers’ prevention of GTS and CPA• New PPE materials for all farmers• New training approach focused on workers

GTS and CPA exposure• Provision of CPA safe storage boxes• PPE equipment for harvesting and handling
CPA on all farms• Comics (Captain GAP) to raise families’
awareness of GTS exposure

2,210
Students benefitingfrom bespoke curriculumin multi-grade schools

1,047
Farmers children
benefitingfrom educational andextra-curricular
activities

Handling CPA and green tobacco
without PPE kits
National Service for Rural Apprenticeship:• Over 3,000 farmers trained on CPA handling• Provision of PPE kits on all farms• Mobile training units (+Campo) covering over
600 farms in 3 States

49
3,000

Scholarships for tobacco
farmers’ children

Seasonal workers’ housing below
standards• Sanitary facilities’ improvements with PMI
financial support (51 in 19 farms)
Children below 16 helping parents in
tobacco production31• Eliminated bundling and simplified grading to
reduce risk across all farms• Prevention through access to education• UNEFAM - “Schools of the Agricultural Family
Union”: From 2008 to 2014, more than 3,700
farmers’ children benefited from scholarships
Associacion Conciencia - “Porvenir”:• Support for nearly 17,500 primary school-aged
children, 145 schools, 631 teachers and over
200 parents (since 2012)
CPA exposure• CPA storage (90% of farms) and collection
center for empty containers (30% of farms)• Over 5,500 new PPE kits provided during
2014 - 2015

Farmers trained on CPA handling31

5.1.2 Regional overview: Operational investments (STP)and Community initiatives (Contributions): Africa

01 MOZAMBIQUE
Children <18 involved in hazardous work
• Labor-saving techniques to reduce highly time-consuming
activities• Awareness campaign involving 776 teachers and 35,000
children• School food program benefited more than 1,000 children
Eliminating Child Labor in Tobacco Growing Foundation (ECLT):• Identified 1,600 children in child labor• Improve access to education• 421 change agents raise awareness of child labor• Strengthen local capacity, and providing occupationalsafety/health training for 2,300 people• 350,000+ beneficiaries since 2008
Exposure CPA and GTS• Distribution of PPE kits to 100% of farms in 2015
• Training on usage, application and handling of CPA
Vulnerable women exposed to hazardous working
environment• 450 gatherings with 8,000 farmers’ wives to prevent risk,
address issues, and promote enrollment of children in school04
03.....................................

2014 (in millions US$)STP = $5.3
Contributions = $1.6
Total = $6.4.....................................

0201

130,000
8,000

PPE kits distributed on all farms

Farmers’ wives engaged as change agents34

02 MALAWI

03 TANZANIA

04 UGANDA

Children <18 involved in hazardous work
• Labor-saving techniques aimed at reducing highly
time-consuming activities performed by children, i.e.,
semi-stalk cutting, no bundling, barn conversions• Awareness campaign involving 206 teachers and 15,000
children
ECLT (since 2011):• 16,000 children withdrawn and over 40,000 children
prevented from child labor• Supported 4,925 vulnerable households, and indirectly,
13,000 people• More than 3,000 caregivers joined ‘Village Savings and Loans’• 350,000+ beneficiaries

Children <18 involved in hazardous work
ECLT (since 2011):• 5,000 children withdrawn from child labor and child labor
prevention for over 2,000 children through scholarships• Allowed 1,800 vulnerable households to pursue alternative
income activities• Over 1,000 mothers received conditional loans and weretrained in business methods• 350,000+ beneficiaries

Children <18 involved in hazardous work
ECLT (since 2013):• 24 Child Labor Committees established and training of local
leaders conducted• Over 4,800 children identified in or at risk of child labor andlinked to referral systems• More than 5,000 benefited from services to retain them inschool• Close to 7,000 people educated about the risks of childlabor

Exposure CPA and GTS• Distribution of PPE kits to 87% of farmers in 2015 (25,770)• Training on usage of PPE kits and application and handlingof CPA
Vulnerable women exposed to hazardous working
environment• Gatherings with farmers’ wives to prevent risk and address
issues (approximately 1,500 women trained) and promote
enrollment in school for children

15,0001,500Children and
206 teachers
involved in childlabor prevention
awareness
campaign

Women trained on health and safety

Exposure CPA and GTS• Distribution of PPE kits to 80% of tobacco farmers in 2015
(44,341)• Training on usage of PPE kits and application and handlingof CPA
Other risks of labor abuse including payment of workers,
sharecropping, and forced labor
Tabora Development Fund Trust (TDFT):• Support mechanism pilot focused on 7 villages/75,000 people• Toll-free line and dedicated staff to work with farmers, workers,
village executive officers, area managers and other local
officials, including village and ward levels

5,000
1,000

Childrenwithdrawn fromchild laborthrough ECLT
efforts

Mothers received conditional loans

24
4,800

child labor committees establishedChildren identified in or at risk of child labor5.1.3 Regional overview: Operational investments (STP)and Community initiatives (Contributions): Asia

Family members <18 doing hazardous work
• Techniques to improve productivity/reducereliance on family labor• Approximately 194,000 clip sticks distributed
to 166 farms
Putera Sampoerna Foundation (2015-2015):• After-school programs for 2,240+ children in 24
schools• 1,800 scholarships in tobacco-growing
communities
STAPA - Social Transformation and Public
Awareness (since 2011)• Learning groups on <18’s right to education,safe work/living conditions• Vocational training on income-generating
activities for female beneficiaries• 1,013 beneficiaries

06

03
04

05

...............................

2014 (in millions US$)STP = $3.9
Contributions = $1.6
Total = $5.5.....................................

36

01 INDONESIA

02

01

Exposure CPA and GTS• 26,000+ PPE kits distributed for harvesting• 7,600 PPE kits distributed for handling CPA• Provision of CPA safe storage boxes• Annual event to communicate ALP CodePrinciples to 1,421 farmers/family members

1,800
1,421

Scholarships in tobacco-growing communities
Farmers andfamily members
at annual
ALP event

02 THE PHILIPPINES
Involvement of children <18 in hazardouswork• Techniques to reduce labor and involvementof children in hazardous tasks• Clip sticks to 900+ farmers since 2013
• Stalk-cutting on approximately 500 farms
since 2013
• After-school programs for 1,513 children• 300 teachers trained on ALP program• Barangay Council for the Protection ofChildren and the Local Councils for theProtection of Children: 4,291 children, 3,266
adults (2015)• School supplies to tobacco growers’ children
promoting access to education: 5,225
pre-elementary and elementary children,and 2,497 high-school and college students
Workers’ pay set by Barangay below
national minimum wage
• Collaboration with the Department of Laborand Employment (DOLE) to train farmers
and workers on minimum wage andemployment rights
Exposure CPA and GTS• 11,700+ PPE kits distributed• Communication materials on GTS and CPA
management (e.g., comics, posters)• CPA lockup provided• CPA container collection program targeting
approximately 2,400 farms (2015), coupledwith awareness-raising campaign on

1,513

Children in After-School Programs

03 PAKISTAN

04 INDIA

05 THAILAND

06 CHINA

Involvement of children <18 in hazardouswork• 247,000+ clip sticks distributed on
approximately 380 farms (2014-2015)• Off-farm activities and after-school programs
involving 2,775 children (boys and girls) and 72
teachers in 36 different locations

Involvement of children <18 in hazardouswork• Community program to improve school
facilities/promote enrollment in 15 villages,
benefiting nearly 13,000 families and over
4,100 children (since 2011, over 12,600
children)• Vocational training targeting 880 womenfrom tobacco-growing communities onleadership and financial skills

Family members <18 doing hazardous
work• Stringing and Venture machine trials to
reduce number of workers required
Population and Community Development
Association (PCDA) - “Farming For Life”:• Financial support to vulnerable families,
including 2,500+ scholarships (2014)• Since 2002, approximately 11,100
scholarships awarded in 17 tobacco-growing
provincesChildren <18 doing hazardous work
• Baseline study on loose-leaf buying toeliminate bundling• ALP handbook distributed to 22,356 farmers
in Baosahan

Farmers’ payment to workers below theminimum wage and based on gender
Baseline assessment in 46 villages by local NGO.
Stakeholder consultation included:• 400+ farmers, 1,600 workers and 100
community members to design andimplement a tailored support mechanism

Exposure CPA and GTS• Provision of approximately 3,500 PPE kits
for CPA application• 3,300 CPA boxes to all direct contracted
farms32

Exposure CPA and GTS• Gloves to approximately 12,000 farmers• Full set of PPE kits and CPA lockups provided
to 2,150 model farms

2,775

CPA handling• 5,076 CPA wooden boxes replaced withnew plastic CPA lockup boxes (2015)• Wall mounts for proper installation• Training on hazards of CPA exposure
and prevention measures (PPE).
Approximately 5,076 PPE kits distributed
for CPA application

Exposure to CPA• PPE kits distributed to 1,750 farmers in
Baosahan• CPA plastic boxes replaced with newaluminum CPA lockup boxes• Wall mounts for proper installation• Training explaining the hazards of CPA
exposure and prevention measures (PPE)13,000 2,500+ 22,356
247,000+ 880
Children benefiting from farm activities
and after-school programs

Families benefiting from
community programs

Clip sticks distributed

Women trained on leadershipand financial skills

Scholarships forelementary education,high school anduniversity

ALP handbooks
distributed in Baosahan

5.1.4 Regional overview: Operational investments (STP)and Community initiatives (Contributions): Europe
and Middle East (Oriental Region).....................................

2014 (in millions US$)STP = $3.3
Contributions = $1.5
Total = $4.8

01 ITALY

02 POLAND

Exposure to Crop Protection Agents(CPA) and Green Tobacco Sickness (GTS)• 3,500 PPE kits for harvesting for family
members and workers• Technical support on how to use PPE kits
• Annual survey on CPA storage type andcondition• 93 first aid kits distributed to farmers

Farmers/workers not keeping records of
payments/hours worked• Simplified form for calculating costs ofproduction distributed to all farms• Farmer training sessions on record keeping• Support mechanism for farmers and workers

Crew leaders practices and vulnerable
migrant workers (unregistered migrant
workers, payments, fees, working hours,
living conditions)International Organization for Migration (IOM):• 2-year partnership providing assistance tovulnerable migrants and victims of labor andhuman rights abuses
Vita Makers and Cesvol:• Support mechanism with toll-free line andlocal offices for workers and farmers in
Umbria and Veneto33.....................................

Exposure CPA and GTS• PPE kits distributed to all farms• Warning signage for CPA warehouse/cabinets
General safety on farms• Farm safety assessments• Training and first aid kits for all farms

03 TURKEY

02

04

08
01
07

06

05
03
09

3,500
2

PPE kits for harvesting forfamily members and workers-Year partnership providing
assistance to vulnerable migrants

38

Involvement of children <18 in hazardous
work particularly harvesting andstringing/sticking• Alternative productivity techniques to reducelabor requirements and involvement ofchildren in hazardous tasks• 615 Vento machines to replace stringing(2014-2015)
Exposure CPA and GTS• 17,350 PPE kits distributed (78% of farms in2014 and 37% of farms in 2015), coupled withtraining• Provision of over 13,000 CPA lockup boxes
covering 44% of farms in 2014 and 39% in 2015
• First aid kit distributed to over 18,000 farms(all farms)

04 SPAIN

06 GREECE

08 SERBIA

09 LEBANON

Exposure CPA and GTS• Over 2,000 PPE kits distributed• Bulletin and posters on ALP Code Principles• 3 different leaflets about general safety on
farms
University of Extremadura:• Entrepreneurship training program for
tobacco growers, focused on farmmanagement• 90 students and 15,000 training hours

Family members <18 doing hazardous work,
particularly stringing and harvesting• Alternative productivity techniques to reducelabor requirements and involvement ofchildren in hazardous tasks (50 Vento
machines)

Family members <18 doing hazardous
work, particularly stringing andharvesting• Alternative productivity techniques to reduce
the labor requirements and the involvementof children in hazardous tasks
GreenKey - “Edu Caravan”:• Educational workshops for 500 tobacco
farmers’ children (2014-2015)• Support mechanism for farmers and workers
with a toll-free line, two local offices andregular field visits

Family members <18 involved in hazardous
work, mostly harvesting and stringing• Alternative productivity techniques toreduce labor requirements and involvementof children in hazardous tasks:• Trial with 4 Vento machines to replacestringing (2015)• 8,100 brochures on child labor and safe
working environment distributed
Lebanese Tobacco Growers’ Union“Education assistance to tobacco growers’
children”:• Scholarships to prevent school dropout
rates provided to approximately 150
children

05 KAZAKHSTAN
Exposure CPA and GTS
Child Labor Prevention program:• Summer camps for 50 children• Daycare centers for 50 pre-school-aged
children• Vocational training for 40 teenagers• Support for a community center• Public campaign to promote access to
education
Local Communities Foundation (LCF) –“Rural development program”:• Improve socio-economic conditions of
tobacco-growing communities
Verité and The University of Florida:• Research project on accelerating rural
economic development in the Almaty region
Local Communities Foundation:• Support mechanism covering all farms with atoll-free line and locally-recruited volunteers(migrant workers: peer-to-peer approach)

Exposure CPA and GTS• Approximately 6,800 PPE kits distributed• Provision of 500 CPA lockers• Training on general safety on farms, including
PPE kit usage and CPA management• 2,610 first aid kits distributed
Thessalonica Agricultural & Industrial Institute(American Farm School) - “Precision
Agriculture Program”:• 370 training sessions in 2014 and 2015

07 REPUBLIC OF
MACEDONIA
Family members <18 doing hazardous work
• Alternative productivity techniques to reduce
the labor requirements and involvement ofchildren in hazardous tasks• Trial with 22 Vento machines to replacestringing
Macedonian Center for International
Cooperation (MCIC):• Support mechanism for workers and farmers
with a local office and a toll-free line, andregular farm visits
Exposure CPA and GTS• Provision of 2,100 PPE kits in 2014 and 2,650
in 2015• Over 20,500 leaflets on GTS prevention
distributed in 2014-2015• 300 CPA lockup boxes distributed in 2015
• 1,500 first aid kits distributed in 2015

Exposure CPA and GTS• PPE kits distribution to 75% of farms• CPA disposal and recycling program covering
70% of farms• Certified company collected over 2,300
containers (over 300kg)

Exposure CPA and GTS• Provision of 8,100 PPE kits to farmers in2014 and 2015
• Provision of 2,700 CPA lockups in 2015

2,300 150
CPA containers collectedby a certified company

Scholarships
to prevent school
dropout rates

6. Approaches to address
systemic and/or
widespread issues: migrant
workers in tobacco

40

According to the IOM34 ”at the international level, no universally-accepted definition
for ”migrant” exists. (…) The United Nations defines ”migrant” as an individual who has
resided in a foreign country for more than one year irrespective of the causes, voluntary
or involuntary, and the means, regular or irregular, used to migrate. Under such a
definition, those traveling for shorter periods as tourists and businesspersons would
not be considered migrants. However, common usage includes certain kinds of shorter
term migrants, such as seasonal farm-workers who travel for short periods to work
planting or harvesting farm products”. The IOM also defines migration as ”the movementof a person or a group of persons, either across an international border or within aState. It is a population movement encompassing any kind of movement of people,
whatever its length, composition and causes; it includes migration of refugees, displaced
persons, economic migrants, and persons moving for other purposes, including family
reunification.” In the context of ALP, ”migrant” can mean people who work or come with
their families during the cycle of tobacco-farming activities. This is a broader definition
so as to include internal migration phenomena, where cultural differences become
relevant when analyzing agricultural labor practices.
Migration is not a problem for ALP per se. Actually, migrants typically make up
for a scarcity of locally available workers, particularly in countries where rural
populations have migrated (or are migrating) to large urban centers, and are
therefore critical for the local economy of their host communities.
However, migrants are typically a vulnerable population when it comes to labor rights
as is abundantly documented across many sectors and geographies35. When we
started our journey with the ALP program in Kazakhstan, the challenges we had toface there were those affecting a migrant population, namely Kyrgyz migrants working
on Kazakhstan tobacco farms36. This alerted us early on in the ALP program to thespecific problems migrant populations face in the agricultural sector and it has shaped
our approach in many ways: starting with the decision to gather information each year
in Farm Profiles to find out where these vulnerable groups are present across thecompany’s global farming footprint.

According to the data gathered in our annual Farm Profiles, we estimate that worldwide,
approximately 27,000 tobacco farms in PMI’s supply chain (approximately 6%) hiremigrant labor at some stage during the crop cycle37. This represents almost 100,000
migrants, 75% of whom are in Africa, followed by 11% of farms in the USA, 10% in
Europe & Middle East (Oriental Region)38, and 4% in Latin America. Migration acrossborders can occur along both different and common ethnic and linguistic backgrounds(e.g., Chichewa speaking migrants moving between Mozambique and Malawi).
Yet migration within countries can also happen against very distinct ethnic and linguistic
backgrounds (e.g., the Cora and Huichol people from the highlands in Mexico move tocoastal areas during harvest season to work in tobacco and other cash crops), or withno distinctive background between the host farmer/employer and migrant worker at all(e.g., unemployed workers in Brazil’s southern cities are found migrating to rural areas
during the peak harvest season). Despite some common features, namely the role oflabor brokers (more commonly known as ’crew leaders’), the fact is that each country, or
each migrant community, faces its own very specific challenges which are complex andneed to be well understood so that problems and specific needs can be addressed in aholistic way.
On the following pages we provide the profile of three very distinct migrant populations
in our supply chain, the issues or risks they face, and how we are working to addressthese issues insofar as they relate to labor practices.

........................................................................

An estimated 100,000 migrants
work in our supply chain at somestage during the crop cycle:
75% in Africa, 11% in the USA,
10% in Europe & the Middle
East (Oriental Region), and 4%
in Latin America.
........................................................................
41

6.1 Mexico
Building trust and knowledge as a basis for
improvement
In 2014, Philip Morris Mexico (PMM) bought tobacco from more than
1,000 farmers employing 13,000 workers in the State of Nayarit, NorthWest Mexico39. Around 25-30% of the tobacco workers are migrants
from Mexico’s highlands. These Cora and Huichol workers settle infields with their families for around five months of the year working in
tobacco and other crops. Field Technicians and independent assessors
noted a range of serious problems related to the child labor, safe work
environment, and income and work hours ALP Code Principles. Bothfarmers and workers lacked knowledge of basic labor laws, rights,
definitions of hazardous work and other safe working practices.
These migrants represented a particular concern because of theproximity of their whole family to green and harvested tobacco during
the season, and to the risks of child labor. PMI’s local affiliate developed
a multi-pronged approach to the complex issues facing this community
involving stakeholders such as Mexico’s National Ministries of Social
Development, Health, and Public Education, and local NGOs Desarrollo
Rural de Nayarit, Fundación Mexicana de Apoyo Infantil, and Fundación
Origen. We highlight two particular initiatives that were at the coreof the engagement with the Cora and Huichol migrant community, tounderstand their needs and to provide them with concrete support.

42

1. Provision of childcare services
PMM set out to increase the number of migrant children attending the local ”childcare
and education centers” (CAEIs, previously set up with PMM support) and to involvemigrant families in the activities of the center. Through the work of Fundacion Mexicana
de Apoyo Infantil, the centers extended their operating hours and introduced an
additional curriculum including human rights protection, nutrition, first-aid and the
ALP Code. Parents were invited to attend special events on Saturdays so they could
familiarize themselves with the facilities and services offered, and discuss issues related
to their children’s wellbeing. Feedback from migrant families showed a greater
willingness to allow their children to attend the available CAEIs, which witnessed a
13% increase in attendance (450 children) in 2014.

2. Advancing migrant worker well being and ALP
awareness through a support-mechanism andcommunity development work in Nayarit
With PMM support, the NGO Fundación Origen, set up a support line for farmers andworkers to help raise their understanding and ability to implement the ALP program. To
do this, Fundación Origen focused efforts on Field Technicians, farmers and workers. The
NGO established a daily presence and activities with the workers’ communities in situ
in the fields (through a mobile office unit). Their field staff also accompanied the migrantcommunity off-season back to their origin communities reaching around 4,000 people.
The project ran group and individual discussions there, workshops to learn new skills andmeetings to enhance migrants’ knowledge, confidence and ability to speak out about theirconcerns. The efforts particularly engaged with women, who are significantly marginalized
and vulnerable to abuse. Building up dialogue and trust, Fundación Origen launcheda free, confidential helpline, staffed by legal and counseling experts. Despite earlier
skepticism, use of the helpline grew towards the end of the year, particularly by workers
who felt empowered by Fundación Origen’s efforts.
As part of the approach, Fundación Origen developed a comprehensive curriculum ona wide range of topics introducing the ALP Code Principles in the context of traditional
community life, and held regular meetings with PMM field staff to develop mutually
supportive strategies. The aim was to improve adherence to ALP Principles throughknowledge transfer by the communities - from information to action – and to prevent or
mediate conflicts.

Calls to the helpline ranged from requests for general information (22%) and medical
assistance (6%), to personal problems (40%) and requests for legal assistance (22%).
Significantly, given Fundación Origen’s focus on women’s empowerment, around one thirdof the helpline’s users were women.
By December 2014 the project had achieved measurable improvements in creatingawareness and understanding of all critical ALP issues, especially child labor, safe work
(GTS and CPA handling) and minimum wage standards (over 70% against the 2013
initial benchmarks). Moreover, many targeted workers and their families had had newopportunities to discuss their own or wider family challenges, learn new skills, understandthe law, their rights, and build up their confidence and future perspectives.
However, the research carried out by Fundación Origen also notes that better awarenessmay not automatically transfer into practices that meet the ALP Code and cautions
that the intervention had not yet reached the stage where they could demonstrate
what was and was not being translated into action in the fields. Nevertheless, datafrom the Fundación’s activities with farmers and workers during the 2014 harvest
showed fewer under 18-year-olds present in the fields (less than 5% of workers theyinteracted with and under 1% of farmers). These outcomes need to be verified andcross-referenced with Farm Profiles and Field Technicians’ monitoring efforts to get a morecomprehensive picture of the situation.
In 2015, the shift of tobacco leaf purchases in Mexico to a supplier limited the systematic
monitoring for this season but both PMM and PMI’s new supplier continue to support thisprogram and we expect that in the upcoming season we will have more robust data on the
progress we are making in addressing the challenges of these migrant workers’ communities.

........................................................................

Fundación Origen established a dailypresence and set of activities withworker communities through a mobile
unit. The NGO also accompanied
the migrant community during the offseason back to their origin communities,
reaching around 4,000 people.

........................................................................
43

6.2 Italy
Preventing risks associated with large
migrant movements
The political and economic instability in the Middle East, and North andEast Africa are generating an unprecedented migration flux towards
Europe. According to the UN Refugee Agency (UNHCR) and theInternational Organization for Migration (IOM), in 2015, the vast majorityof the estimated 1 million migrants and refugees who arrived in Europe
were coming via the Aegean Sea from Turkey into Greece (800,000), or
crossing from North Africa into Italy (150,000)40. The number of migrants
and refugees entering Europe by sea in the single month of October
2015 was roughly the same as the total for 2014 (approximately 216,000).
According to Eurostat, EU Member States received 626,000 asylum
applications in 2014, the highest number since the 672,000 applications
received in 1992, and a further 395,000 asylum applications in the first halfof 2015. The total number of forcibly displaced people worldwide at theend of 2014 was almost 60 million, the highest level since World War II.
The numbers of Syrian and other refugees in Europe are low comparedto other neighbors, including from two PMI tobacco-growing countries:
Turkey exceeding 2 million, Lebanon 1 million, and Jordan 600,000
respectively. Globally, 60 million people are refugees or displaced within
their own country, excluding economic migrants.

44

Even though these migrants have expectations of a more prosperous future, an entirely
new set of challenges awaits them upon arrival. They are in a vulnerable position andmany fall victim to criminal groups or unscrupulous labor brokers, finding themselvestrapped in situations of abusive labor practices and even forced labor. Although
exacerbated by the increased migration flows of the last couple of years, this is not a
new problem and it has been well documented by the International Organization for
Migration (IOM)41 and many others.
As with other agricultural sectors, migrant workers make up a large percentage of theworkforce on tobacco farms. Work in tobacco requires experience and expertise (toget the best value out of the crop) and is typically better paid than in other agriculturecommodities. This is relevant in that it usually means that is not the most vulnerable
or recently arrived migrants that find work on tobacco farms, but rather the moreexperienced and established migrants. Despite this, and even with field staff visiting farms
regularly and specifically monitoring labor practices, the external assessment by Control
Union of farms supplying to Philip Morris Italia did identify migrant workers in tobacco.
They found that in a small percentage of farms, particularly in the Southern Campania
region, migrant workers were contracted and paid through crew leaders, with payment
settled only at the end of the harvest and without farmers having any visibility intocrew leaders’ practices. To be clear, the external assessment by Control Union did
not identify any clear situations of abuse, suggesting that the situation of workers in
tobacco-growing indeed might not be as precarious as in other sectors42. However, PMI
acknowledges that these sorts of arrangement are risky and can lead to abusive forcedlabor situations for these workers.

Since the external assessment, PM Italia has developed additional initiatives to gain
more visibility into labor practices involving migrants, including setting up a support
service for farmers and workers with the assistance of a local NGO. This support service
includes a grievance mechanism for workers to voice their concerns and to have themaddressed. PM Italia understands that the success of such initiatives depends on thetrust built over time and the project is still in its pilot stage with still limited adhesion
from workers. On the other hand, PM Italia acknowledges that in the wider context
of large scale migration and the movement of peoples into Europe, its efforts alone
are clearly not enough and it is committed to involve a wider group of stakeholders infinding practical solutions for addressing migrant workers’ problems.
One of the positive outcomes of these ongoing efforts has been the recent
announcement of a public-private partnership with the International Organization for
Migration, aiming to promote the integration and prevent the exploitation of vulnerable
migrants. This partnership entails the provision of emergency support to recently arrived
migrants, and strengthening the registration processes to prevent trafficking. This is apilot program that PMI is starting in Italy, but expects to extend to other countries in due
course. It will also involve research amongst the migrant communities to prevent andaddress conditions of labor exploitation, and will be fully operational from 2016.

........................................................................

Public-private partnership with theInternational Organization for Migration(IOM): To promote the integration andprevent the exploitation of vulnerable
migrants, the provision of emergency
support to recently arrived migrants,
and to strengthen registration
processes to prevent trafficking.
........................................................................
45

6.3 The USA
Addressing risks associated with the use of farmlabor contractors
PMI has been implementing the ALP program in the U.S. with a strong
focus on the following three risk areas: use of farm labor contractors(crew leaders), child labor43, and health and safety on farms. These issues
are consistent areas of risk and concern in U.S. agriculture supply chains
and are exacerbated by U.S. government immigration policy and the lackof flexibility provided under the ”visa guest work program” (H-2A).
We believe that securing farmers’ access to a reliable and sustainable
workforce fostered and supported by U.S. immigration policy, would
eliminate many of the challenges faced by farmers and migrant
farmworkers in the United States today. One of the most salient problems
is the use of farm labor contractors, which adds an additional layer
between workers and the farmer (employer), requiring additional steps
to monitor and enforce fair treatment and payment practices when alabor contractor is used. With this in mind, PMI has been working to
improve farmers’ knowledge about the composition of crews and labor
management practices, including hiring, payments and working hours.

46

In 2014, Human Rights Watch (”HRW”) released a report (”Tobacco’s Hidden Children”44)
about hazardous child labor in U.S. tobacco farming in Virginia, North Carolina, Kentucky
and Tennessee. The locations (i.e., counties) identified by HRW as having ’at risk’ farms
were consistent with the prior preliminary assessments conducted by our global strategic
partner, Verité, and the basic socio-economic profiles collected for every farm where wegrow tobacco, which mentioned the use of farm labor contractors and the lack of visibility
into crew composition and practices, as well as hazardous child labor mainly on family
farms. Although HRW’s report acknowledged PMI as the company with the most ”detailed
and protective set of policies and procedures, including training and policy guidance onchild labor and other labor issues which it is implementing in its global supply chain”, ourefforts alone are not enough. HRW’s findings and recommendations to the industry, theU.S. government and others on how to address these abuses enabled additional progress
and further stakeholder alignment in 2014 and 2015.
In 2015, PMI supported, together with HRW, a multi-stakeholder meeting with the U.S.
Secretary of Labor and the White House Domestic Policy Council, a constructive forum
to discuss farm labor issues and the industry’s ongoing efforts, including PMI’s ALP
program, and to explore potential areas where government support or intervention
would be critical in order to improve conditions on farms and, particularly, to address
the problem of child labor.
In 2015, PMI adopted a new leaf-buying model in the United States45, moving frompurchasing tobacco through direct contracts with U.S. growers to purchasing throughtwo international leaf tobacco suppliers, Universal Leaf North America (ULNA) andAlliance One International, Inc. (AOI). Notwithstanding, PMI’s commitment to theimprovement of farm labor conditions remains unchanged, and the recent Control
Union assessment report for the U.S.46 included a detailed action plan developed byour suppliers in collaboration with us, to tackle the issues identified and to continue
improving the implementation of safe and fair labor practices.

PMI is following a multi-pronged approach, collaborating with other manufacturers,
farmers’ organizations, and government and worker advocacy groups on efforts that
include:• Labor broker certification models to monitor and assess labor broker processes both in
the U.S. and in the country or origin;• Worker hotline and multi-stakeholder grievance mechanisms that enable workers to
obtain information on their rights and responsibilities and to speak up about laborabuses (e.g., unfair treatment, living conditions, broker fees, freedom of association);and• H-2A labor pooling services (similar to the North Carolina Growers’ Association model)that enable growers to access workers through a transparent and monitored system.
PMI will also remain committed to the Farm Labor Practices Group (FLPG) to advance
this agenda and make progress on its ongoing work streams, namely those relating to
public policy, alternative activities to child labor in tobacco-growing, grievance mechanism,and training and education of workers, farmers and farm labor contractors. However,progress with this multi-stakeholder effort has been slow, and in parallel, we will continue
to engage with potential NGO partners, the U.S. Department of Labor and otherstakeholders to provide further support and continue to ensure ALP implementation on
the ground.
Given the systemic nature of the issues in the United States, these can only be solved aspart of a collective sector-wide approach that includes all relevant stakeholders, in orderto strengthen U.S. standards to become aligned with recognized international standards.
PMI will continue to support policies that reform U.S. immigration policies and further
improvements of the H-2A system to allow more farmers to maintain a reliable, sustainable
workforce and to help prevent abuses even before migrant workers move to the U.S. towork, such as illegal recruitment fees paid by migrant workers.

.....................................................................................................................

Given the systemic nature of the issues in the United States, thesecan only be solved as part of a collective sector-wide approach that
includes all relevant stakeholders, so as to strengthen U.S. Standards
to become aligned with recognized international standards.
.....................................................................................................................
47

7. ALP program impact
and evaluation

48

Going forward, systematic evaluation of the effectiveness and impact of the ALP
program will continue to be one important area of focus for PMI and a significant
challenge. As indicated in this report, the challenges of building up and using data
have been considerable in these early years of the ALP program. Ongoing impact
assessment is essential to enable the identification of best practices and any
missteps, so that the ALP program may be continually improved in the years to come.
Conducting accurate evaluation of the impact of large scale and complex development
projects is notoriously difficult to do in practice. This is particularly true in the
agricultural sector, where causal connections are often highly complex, and key
practices tend to be embedded in multiple cultural and institutional frameworks47.
Factors such as crop cycles and seasonality can also lead to challenges in evaluation
design and timing; context-dependent variables such as weather and political factors
may distort the measurement of effects of specific interventions48; demonstration andself-selection biases may skew results; and changing national policies or programs
may amplify or undermine program impacts, making it difficult to isolate the effects ofparticular interventions. In the case of the ALP program, the different realities andstages of implementation in the approximately 30 countries involved, and the sheer
scale and complexity of a program involving over 50 organizations and 3,500 people
providing support to farmers and workers on over 450,000 farms, make thesechallenges particularly significant.
To address these challenges, PMI and Verité have developed a broad strategy for
ALP impact assessment that will draw upon multiple methodological approaches
in combination, in order to fill gaps and triangulate findings. PMI is committed tocommunicating both the methods used and the results obtained, regularly andtransparently, and to build evaluation capacity over time, including involving
independent stakeholders and experts.
Specific evaluation strategies to be used will depend on the level of intervention or
program being evaluated, and will necessarily reflect the kinds of data available orpossible to obtain. For example:• For assessing the impact of narrowly-focused, programmatic interventions suchas the deployment of clips and after-school programs to reduce child labor, ALP
staff are currently generating case studies to track the experience of particular
projects. In some countries (such as the Philippines or Pakistan), ALP staff have also
begun exploring intervention effects through experimental or quasi-experimental
methods comparing participating populations with those in control populations.
Additional participatory techniques, such as the collection of performance stories,
may be deployed in the future as well.

• To assess the impact of more general ALP implementation at the level of entire
countries, trends in the internally-generated data will continue to be assessedby local management teams. In countries where support services with grievancemechanism procedures exist or have been implemented in conjunction with theprogram, data on program impact will be gleaned from them and compared withinternally generated data. Independent external assessments conducted by Control
Union (CU) will continue to provide a crucial counterpoint to the narratives emerging
from the internal monitoring systems.
Generating impact data at the level of the entire worldwide ALP program is even morechallenging than at the level of specific programs or individual countries. Although notpossible currently given the variable accuracy of the monitoring data coming out ofmany different countries, PMI will continue working to aggregate and analyze high-levelmonitoring data in order to equip us to tell a cross-cutting, program-wide story about
the impact of the ALP program on key goals such as the reduction of child labor across
PMI’s supply chain. Additional methods and indicators that might enable the tracking
of aggregate program impact are also currently being explored by PMI and Verité.

Sources of data
for evaluating
program impact• Baseline socio-economic information on all farms (Farm Profiles)• Farm-by-farm monitoring by Field Technicians• ”Prompt actions” management to address situations requiring
immediate intervention• Support services with grievance mechanism procedures• Independent external assessments• Community-level programs implemented by third party NGOs
• Participatory initiatives, such as the collection of performancestories• Management reports• Regional reviews by Verité and Regional ALP Coordinators

49

8. Challenges ahead?
50

After nearly five years of implementation, PMI is pleased with the evidence anddegree of incorporation of ALP standards and processes into our day-to-day businesspractices worldwide. All suppliers and affiliates are engaged at some level, manyare innovating, building new dedicated and knowledgeable teams, acquiring skills,
developing partnerships and approaches, and actively learning what works best andwhat works less well in the local context. Specifically, experience is showing that full
ALP implementation is complex and hard to do, involving less ’input-based’ solutions
but increasingly, the challenge of turning awareness into knowledge, knowledge into
application and action, particularly to achieve safe working environments for all who live
and work on the tobacco farm.
The greatest challenges to overcome by ALP Country Teams in the medium-term mainly
relate to:
1. Finding and tailoring approaches to affect and sustain behavior change over time;
2. Continuing to make farmers fully aware of and ready to meet their responsibilities
as employers towards all of their workers;
3. Ensuring that technical information and knowledge from training sessions gets
transferred to all workers, particularly in cases of seasonal and fluctuating
populations, and specifically around workers’ knowledge of their rights, their ability
to complain, and the importance of using PPE kits;
4. Maintaining cohesion and trust in suppliers’ relationships with family farmers, evenwhile taking a necessarily strong line on child labor; and5. Continuing to support family farmers to understand hazardous child labor and toensure children are not involved in activities that might harm their development or
prevent them from attending school, and supporting farmers to ensure the futureof the farm itself as a family asset.
Finally, many of these implementation challenges, by their nature, will make practicalcooperation with other local and international stakeholders yet more vital in the years
to come. PMI’s multi-stakeholder participation, its partnerships, STP projects and ALP
Community Initiatives will make a critical difference to success in the next three to five
years of our ALP program implementation.

........................................................................

All suppliers and affiliates areengaged: many are innovating,building new dedicatedand knowledgeable teams,
acquiring skills, developing
partnerships and approaches,
and actively learning whatworks best and what works
less well in the local context.
........................................................................
51

9. Continued commitment:
looking ahead

52

Over the past five years, PMI’s affiliates and suppliers have built up their internal
capacity, incorporated processes to monitor and support farmers to meet the ALP
Code Standards, and most importantly, integrated the ALP program into their businessstrategy and day-to-day practices. Going forward, our objective is to continue to buildon the work of the last five years. In particular, we want to sustain and strengthen
our ability to identify risks and develop effective responses to address the issues
we encounter on farms in our tobacco-growing supply chain. To achieve this, we arecommitted to:• Collect and update socio-economic information for all farms (via
Farm Profiles);• Support farmers’ understanding to help them meet their
responsibilities as employers;• Systematically monitor working and living conditions of eachcontracted farm through the efforts of the Field Technicians;• Develop practical improvement plans for every farm;• Implement comprehensive action plans to address the mostwidespread issues;• Continue to provide workers and farmers with access toindependent support services tailored to their needs;• Complete external assessments of the implementation of the
program and conditions on farms, and develop action plansreflecting key priorities and any improvements that are needed;• Expand and extend our collaboration with key stakeholders;• Evaluate the impact of the program, through internal and externalmonitoring data, and participatory techniques; and• Ongoing public reporting on progress.

53

10. References

1. ALP Progress Report 2012. See Appendix 2: http://www.pmi.com/eng/media_center/company_
statements/documents/PMI_ALP_Progress_Report_2012.pdf
2. ALP Code: http://www.pmi.com/eng/media_center/company_statements/documents/alp_code.pdf
3. Source: PMI internal data and PMI’s Tobacco Leaf Suppliers’ data shared with PMI and its
affiliates, excluding China.
4. H2-A Temporary Agricultural Workers
http://www.uscis.gov/working-united-states/temporary-workers/h-2a-temporary-agricultural-workers
5. Source: PMI internal data, excluding China.
6. The U.S. Department of Labor’s (USDOL), 2014 report on ”Findings on the Worst Forms ofChild Labor”, http://www.dol.gov/ilab/reports/child-labor/findings/2014TDA/2014TDA.pdf
7. The ”Oriental” region includes the following countries: Turkey, Kazakhstan, Lebanon, Republic ofMacedonia, and Serbia, and its name derives as much from the type of tobacco (Oriental) as thegeographic area covered
8. IOM – International Organization for Migration http://www.iom.int/
9. See section 7 on ALP program impact and evaluation (pages 48-49).
10. ALP Progress Report 2013, see page 26: http://www.pmi.com/eng/media_center/Documents/
PMI_Progress_Report_FINAL_not_watermarked_low_res_0328.pdf
11. Control Union External Assessment Report – Philip Morris Brazil: http://www.pmi.com/eng/
sustainability/good_agricultural_practices/agricultural_labor_practices/Documents/CU_Third_Party_
Assessment_Final_Report_Brazil%20%20July%202014.pdf
12. Full details of this plan can be found here: Control Union External Assessment Report – Philip
Morris Brazil: http://www.pmi.com/eng/sustainability/good_agricultural_practices/agricultural_labor_
practices/Documents/CU_Third_Party_Assessment_Final_Report_Brazil%20%20July%202014.pdf
13. UNISC – Universidade de Santa Catarina do Sul: www.unisc.br/portal/en
14. GAP Connection Labor Management Guide
http://www.gapconnections.com/resources/labor-management-guide
15. The selection of ALP Code areas was based on the preliminary and internal risk assessment
and prevalence of issues in these areas, or because they were perceived as easier to introducewith farmers.
16. Jamie V. Ongpin Foundation, Inc: http://jvofi.org
17. Report to be released in 2016 on: http://www.pmi.com/eng/sustainability/good_agricultural_
practices/agricultural_labor_practices/Pages/external_monitoring-.aspx
18. Instead of having to string the tobacco leaves together to hang them for curing.
The loose leaves gathered from the field are directly fed into a long woven net with the use of a
special ventilator machine, and this net can be hung directly in the curing barn.
19. Del Carpio, Ximena Vanessa; Wagner, Mathis Christoph, 2015. The impact of Syrians refugees
on the Turkish labor market. Policy Research working paper; no. WPS 7402. Washington, D.C.:
World Bank Group. http://documents.worldbank.org/curated/en/2015/08/24946337/impactsyriansrefugees-turkish-labor-market
20. COLabora – Centro de Orientación y Atención Laboral http://www.mintrabajo.gov.co/colabora5421. ILO-IPEC Kazakhstan Newsletter, February 2012:”The use of child labor in tobacco has rapidly
decreased in Almaty oblast due to the active involvement of tobacco purchasing company Philip
Morris Kazakhstan in the elimination of child labor.” February 2013: ILO-IPEC and its partners
have identified the work of Philip Morris Kazakhstan in Almaty oblast as one of the examples ofGood Practices in the area of socially responsible business. PMK’s project will be submitted to
ILO HQ in Geneva for further dissemination.”
22. September 2012:”Since 2009, when practices such as worst forms of slavery, forced andbonded labor were found in the tobacco plantations, the government together with the strong
commitment and support from tobacco industry and civil society organizations, made great efforts
to eradicate contemporary forms of slavery.”
23. US Department of Labor’s 2014 report on ”Goods Produced by Child Labor or Forced Labor”
www.dol.gov/ilab/reports/pdf/TVPRA_Report2014.pdf - p.9-10
24. http://www.pmi.com/eng/sustainability/good_agricultural_practices/agricultural_labor_practices/pages/external_monitoring-.aspx
25. Source: PMI internal data.
26. NCSU CALS News Center, February 5, 2015, ”Extension farmworkers health and safety
education program connects growers, immigrant farm workers and communities” http://www.
cals.ncsu.edu/agcomm/news-center/perspectives/extension-farmworkers-health-and-safetyeducationprogram-connects-growers-immigrant-farm-workers-and-communities/Growing
Magazine, June 2015, ”Setting the standard”, http://www.growingmagazine.com/growing-magazine/
setting-the-standard/

36. See PMI’s press release on strategic cooperation with Verité, May 2011, http://www.pmi.com/
eng/media_center/company_statements/Pages/verite.aspx
37. This data was gathered in May 2015 and is an underestimation as it reflects only partial
information regarding U.S. farms (given our recent change in business model we did not yet havecomplete information from our suppliers).
38. This geographies are grouped together reflecting our internal regional coordination.
39. In 2015, PMM changed its business model and began to source tobacco through an affiliate of
Universal Leaf Tobacco. The commitment to this initiative and to tobacco-growing communities, aswell as the approach to ALP implementation, remained unchanged.
40. Joint statement from UNHCR and IOM, December 22nd, 2015. https://s3.amazonaws.com/
unhcrsharedmedia/2015/2015-1-million-arrivals/2015-12-22-press-release-1m-arrivals_ENG.docx
See also UNHCR’s data portal: http://data.unhcr.org/mediterranean/regional.php
41. For a wealth of resources/articles and information, see https://www.iom.int
42. Control Union Assessment report available at http://www.pmi.com/eng/sustainability/
good_agricultural_practices/agricultural_labor_practices/Documents/CU_Third_Party_Assessment_
Report_%20PM%20IT.pdf
43. The ALP Code standards are generally stricter than U.S. federal law and relevant state
laws, both in types of activities deemed hazardous and age limits for performing such activities(e.g., PMI’s policy prohibits hazardous work for individuals under 18, whereas the U.S. defines 16
as the general minimum age).

27. Data provided by NCSU includes the results from the support provided by PMI’s tobacco leaf
supplier, Universal Leaf North America (ULNA), in 2015: 115 workers trained, 3 training sessions, 14
farmers involved.

44. HRW report: https://www.hrw.org/report/2014/05/13/tobaccos-hidden-children/
hazardouschild-labor-united-states-tobacco-farming ; and PMI response http://www.pmi.com/eng/
media_center/press_releases/Pages/201405140648.aspx

28. Farm Labor Practices Group (FLPG) is a multi-lateral initiative effort involving representativesof tobacco manufacturers, leaf merchants, farmers, workers, faith-based investors, and the U.S.
Department of Labor.

45. http://www.pmi.com/eng/media_center/press_releases/Pages/philip_morris-international-inc-announces-new-u-s--tobacco-purchasing-model.aspx

29. GAP Connections, Worker Training Guides: http://www.gapconnections.com/resources/
worker-training-guides

46. Control Union Assessment. Report available at: http://www.pmi.com/eng/sustainability/
good_agricultural_practices/agricultural_labor_practices/Documents/CU_Third_Party_Assessment_
PMIM_LLC.pdf

30. GAP Connections, Labor Management Guide: http://www.gapconnections.com/resources/
labor-management-guide47. Haddad, Laurence et al, 2010. ”The Sorry State of M&E in Agriculture: Can People-Centered
Approaches Help?,” IDS Bulletin Vol. 41, No.8: 6-25.

31. The country’s law defines 16 years as the minimum age for light work.

48. Farley, Katherine et al, 2012. ”Impact Evaluations of Agricultural Projects,” Millennium
Challenge Corporation, Principles into Practice. https://assets.mcc.gov/reports/paper2012001116901-principles-impact-evaluations.pdf. Accessed November 2015.

32. Localized phenomenon (Southern Italy). For more information please see the external
assessment conducted by Control Union, http://www.pmi.com/eng/sustainability/good_
agricultural_practices/agricultural_labor_practices/Documents/CU_Third_Party_Assessment_
Report_%20PM%20IT.pdf
33. India: public auction purchasing system for flue-cured tobacco, accounting for approximately
90% of the total of PMI’s local suppliers’ purchases. Approximately 10% of PMI’s suppliers’
purchases were made via direct contracts, only allowed for burley tobacco.
34. IOM website, ”Key Migration Terms”, http://www.iom.int/key-migration-terms
35. ILO website – Labour Migration, http://www.ilo.org/global/topics/labour-migration/lang--en/index.htm

55