beyond factory walls 2009 timberland report

8/13/2019 Beyond Factory Walls 2009 Timberland Report

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Responsibility Beyond Factory Walls:

Engaging Factory Workers & Strengthening Communities

2009 REPORT


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Table of Contents

EXECUTIVE SUMMARY 1

CEO LETTER 3

I. TIMBERLANDS CODE OF CONDUCT & FACTORY MONITORING PROGRAM 4

Why We Focus on Factory Conditions 4

Management & Oversight of Code of Conduct Program 4

Timberlands Sphere of Influence on Social and Human Rights Issues 5

Radical Shift in Practice 5

Challenges We Face 6

II. BEYOND MONITORING 6

Engaging Workers 7

Establishing Trust and Two-Way Dialogue 7

Worker Code of Conduct Committees 8

Engagement Outside of Assessments 10

Strengthening Communities 10

Worker-Engaged Community Service 11

III. SUSTAINABLE LIVING ENVIRONMENTS 13

Living Wage Overview 13

Alternative Approach: Sustainable Living Environments 14

Scaling the Sustainable Living Environment Approach 15

Case Study: Improving Health Services & Providing Access to Microfinance in Bangladesh 17

Case Study: Improving Womens Health in China and Vietnam 20

IV. CONCLUSION 21

The Timberland Company has permission of all factories and workers mentioned in this paper to publish the information herein.



Timberland is committed to ensuring that the workers who produce our products are provided with fair, safe and non-

discriminatory workplaces. Our products are produced in factories across the globein 38 countries by roughly 300

factories and approximately 247,000 workers.1One of these factories, located in the Dominican Republic, is owned and

operated by Timberland. Our Code of Conduct team is made up of 11 Assessors and two contractors who each have

different numbers of factories they must assess. In countries where we dont have a local assessor, we employ an external

monitoring firm to assess factories producing Timberlandproduct.

Whether we are focusing on our own factory or on our third-party contract

manufacturers, we work to ensure that all factories comply with our Code

of Conduct. But we also seek to do more. We define Earthkeeping as our

mission to put commerce and justice at the center of our business platform.

In the spirit of Earthkeeping, we believe it is important to go beyondfactory walls by protecting the environment in which we operate and the

individual workers who produce our products.

By engaging workers directly in our factory assessment process,

we believe it is possible to establish trust and a two-way dialogue that

ensures factory workers voices are heard. Weve helped train workers and

cultivated support from factory management so workers can establish their

own Code of Conduct Committees. This enables them to participate in the

process of identifying improvement areas and to take part in initiatives to

achieve positive change. Weve also encouraged factory owners and workers

to establish and promote home-grown training programs that encourage

workers to share ideas and implement improvements. And weve learnedthat seeking input from community members, local NGOs, government,

industry organizations, other area factories, and other brands that source

from the same factories is integral to ensuring sustainable improvements.

We seek to engage workers in the communities where they live

and work so that they too may create better quality-of-life conditions for

themselves and their communities. We aim to ensure that workers live

EXECUTIVE SUMMARY

FACTORY LOCATIONS (YEAR END 2008)1

1. Timberlands factory list is updated quarterly at www.earthkeeper.com/csr.



WORKPLACE KEY PERFORMANCE METRICS

RESULTS

WORKPLACES INDICATOR 2007 2008

Purchasing Practices Percentage of Footwear Production in High Risk Factories 34% 1%

Percentage of High Priority Factories 38% 38%

Scoring Average Assessment Score 61.9 62.0

Average Environmental Score (not including tanneries) 1.88 2.1

Average Environmental Score (including tanneries) 2.53 3.17

Improvement Percentage of Continued Factory Partners with Improved Score 51% 69%

and work in Sustainable Living Environments, an approach that considers

the fact that paying higher wages may not always help workers realize

improved access to basic needs or opportunities for betterment. We believe

that while minimum wages in many places may not be sufficient, wages

alone will not guarantee that every worker has food that meets universal

nutritional standards, affordable and accessible health care, or educational

opportunities. As a result, we have increased the focus of our work beyond

assessments to finding practical solutions that aim to improve available

infrastructure so that Timberlands presence creates fair, safe, and non-

discriminatory conditions inside and outside of work.

CURRENT PROGRESS & NEXT STEPS

Over the course of 2007 and 2008, we have worked toward measurable

factory improvements to scale the lessons learned through various pilot

programs instituted during those years. The results from our remediation

efforts also support our belief that going beyond monitoring and beyond

factory walls is critical to addressing workers needs. For example, we

have nearly eliminated high risk issues from our footwear sourcing

channels, and weve seen our continued business partners achieve higher

scores on our Code of Conduct assessments, demonstrating that improved

working conditions is a long-term journey that requires both time and

resources to see measurable results. Weve also continued to include

environmental aspects as a priority in focus our Code of Conduct program

and have seen measurable improvements based on factories implementing

Environmental Management Systems. Our commitment to improve

environmental conditions in tanneries is also on track, whereby we seek

to have all tanneries achieve a Silver rating according to the standards of

the Leather Working Group by 2010; weve already seen this program have

significant impacts, reducing tanneries overall environmental footprints.

While weve partnered with factories to improve their assessment

scores, their status within our Code of Conduct assessment process, andthe conditions in which workers perform their jobs, weve also experienced

challenges. We did not meet our 2008 target for improving our average Code

of Conduct Assessment Score, as this metric incorporates the scores of new

suppliers who are often unaccustomed to the rigor and high standards

that Timberland demands. Nonetheless, we have increased our 2010 target

assessment score because we expect that increased remediation assistance

at our lowest-scoring factories and continued improvement of assessment

scores for our long-term business partners will drive year-over-year

improvements. Increasing direct remediation assistance, engaging workers,

and strengthening communities are objectives that support the tangible

performance improvements we seek.

One voice can and must make a difference. We believe that speaking up

for a courageous idea or voicing a grievance strengthens and builds a

community. This premise is the foundation for our approach of placing

workers at the center of our monitoring process, empowering them

with the knowledge and skills to better their lives inside and outside

the factory walls. We present this paper as a stand-alone report that

explains our commitment to improving the lives of workers. We believe

that the accomplishments and challenges we face are not unique to our

brand and that collaboration and engaging stakeholders are necessary

to scale our efforts. This document discusses our current programs

and complements our 20072008 printed CSR reportas an in-depth

look at our Workplace pillar. While we have included key performance

metrics here, you can also learn more about our performance by

reading the printed CSR report. Finally, we hope this paper presents

ideas for future innovationfor Timberland, for our industry, and

for other stakeholdersthat can help us build more sustainable

working environments that allow all of us to participate in a universal

Earthkeeping agenda.
http://www.timberland.com/csrreporthttp://www.timberland.com/csrreport


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As a third-generation CEO, Im reminded often of my grandfather, who was a craftsman and role

modelsomeone I looked up to while growing up in Timberlands original New Hampshire factory.

In 1994, we published our Code of Conduct to officially formalize the pursuit of human dignity

in the manufacturing process. We have never questioned whether or not to invest in the lives of

workers making our shoes, apparel, and accessories. Instead, the question is how best to serve our

various stakeholdersfrom a demanding shareholder or discerning customer to an employee who

wants to make a living with purpose.

Timberland is only successful if we maintain our license to operatethat is, our contract

with various vendors, suppliers, customers, and local communities to create our products. We

must do much more than adhere to environmental and human rights laws. As a result, our Code

of Conduct requires much more than the minimum industry-standard requirements. For example,

we define child labor as 16 (which is higher than the law in some countries where our products are

manufactured today), and we insist on environmental standards that go beyond compliance. We

also require overtime be paid at a premium despite local laws that may say otherwise, and we have

zero tolerance for working hours over 60 hours per week.

While our Code of Conduct is strong, good enough is never good enough. And so, Timberland

listens to stakeholder voices and constantly works to improve our assessment and human rights

programs. In 2005, we made a radical shift away from generating lists of violations for factory

owners to resolve (which we then checked back to verify improvements). Instead, we challenged

ourselves to work more closely with factory management to solve the root causes of problems

occurring in factories. In other words, we have taken on the challenge of helping factories build

new and different management systems and improves staff knowledge about corporate social

responsibility issues.

Timberland has also incorporated items that often fall beyond factory walls into our

assessment program. Basic things like nutritious food, medical services, housing, child care,

schooling, and transportation are all taken into account during our evaluation. We try to ensure

that there are ways for workers to learn and grow, such as opportunities for recreation, skills

development, and savings or creditall essential for ensuring the dignity of workers in the global

supply chain.

Without question, factory workers face extremely complex social challenges, especially indeveloping economies. We must strive to use our influence and buying power to help improve their

lives as a consequence of Timberlands doing business with them.

Jeffrey Swartz

President and CEO

CEO LETTER



WHY WE FOCUS ON FACTORY CONDITIONS

Timberland is an organization driven by belief. One of our principal guidingbeliefs is that business can and must emerge as a force for positive change

in society. Commerce and Justice. Doing Well and Doing Good. One justice

is ensuring that the workers who produce our products, no matter how

big the order or where they are made, are provided with fair, safe, and

non-discriminatory workplaces. We respect and promote the Universal

Declaration of Human Rights and the International Labor Organization (ILO)

Conventions that establish international human and labor rights. We seek

to apply both the letter and the spirit of all applicable laws and to promote

continuous improvement in our operations. We also believe that companies

must provide opportunities for employee development. We actively seek

business partners who share our beliefs, as we hold them to the same high

standards to which we hold ourselves accountable.To formalize these beliefs, we issued our official Code of Conduct2

to our supply chain vendors in 1994. Today, it is available online and posted

in our factories. In 2002, we expanded the view of our accountability in

the value chain to include environmental matters, beginning with legal

compliance and now including proactive efforts to manage scarce natural

resources and to eliminate toxins from the manufacturing process. While

we are acutely focused on factory compliance, remediation to improve

working conditions, and an approach that goes beyond factory walls to

provide opportunities for workers betterment, we also recognize that

brands contribute to issues in our supply chain. As a result, we ask that our

own design, development, and value chain teams consider ramifications

down the line if the need arises to place fast-tracked orders and/or requestsamples with tight turnaround times. In fact, we even published another

white paper on the topic of Working Hours to demonstrate how seriously

we take these issues and consider the complexity of brand responsibility.3

There are many complexities in the field of human rights, and Timberland

believes brands, factories, and individual workers share in the power to

make a difference in the world.

MANAGEMENT & OVERSIGHT

OF CODE OF CONDUCT PROGRAM

Timberlands Code of Conduct and Global Human Rights program is one

of the four pillars of Timberlands corporate social responsibility (CSR)

strategy.

4

This strategy was developed over a year-long process of footprintmapping, internal and external stakeholder engagement, and executive

and Board of Director-level evaluation. The CSR Committee within the

Board of Directors oversees all CSR strategy and execution. All four pillars

I. TIMBERLANDS CODE OF CONDUCT

& FACTORY MONITORING PROGRAM

are managed on a day-to-day basis by Timberlands Corporate Social

Responsibility team. Our Code of Conduct program is focused on promoting

and creating fair, safe, and non-discriminatory workplaces. We take an

impacts-driven approach, measuring factory conditions, working to go

beyond compliance, and setting targets as part of the long-range plans of

Timberland business units, including Licensing. Ownership of these targets

is spread throughout the organization and carried up to the CEO level.

The backbone of Timberlands Code of Conduct program is the

11 Code of Conduct Specialists and two contractors (together making up

our group of Assessors) who work in the field conducting assessments

for all of our factories worldwide. Our Assessors are responsible for 10-40

factories in their regions. Managed by corporate CSR staff, we rely on these

champions to execute our strategy within Timberlands global supply chain

As a part of their formal annual performance review process, Assessors

are expected to have a minimum of 30% of their factories showing

improvement from the prior year. We also expect that, in at least 50% of

their factories, they will engage workers during the assessment process

beyond interviews. Finally, their performance reviews are also tied to

managing at least one community service event with at least one factory by

end of 2009. In countries where we dont have a local assessor, we employ

Specialty Technology Resources (STR),5an external monitoring firm, to

assess factories producing Timberlandproducts. This external monitoring

accounts for less than 20% of our factories. Our independent contractors

and STR monitoring staff receives the same training as Timberland

Assessors and are expected to execute our factory monitoring and

remediation process in accordance with Timberlands global procedures.

BOARD OF DIRECTORS

CEO AND EXECUTIVE COMMITTEE

CORPORATE SOCIAL RESPONSIBILITY

{TIMBERLAND CSR MANAGEMENT }

ENERGY PRODUCT WORKPLACE

ASSESSORS

SERVICE

EMPLOYEES

2.http://www.timberland.com/corp/index.jsp?page=codeOfConduct3. http://www.timberland.com/include/csr_reports/Make_It_Better_Brief-Working_Hours.pdf4. For more information on our comprehensive CSR strategy and four pillars, please seehttp://www.timberland.com/csr.5. Specialized Technology Resources is an external monitoring firm that works to help ensure the safety, quality, and social responsibility of clients products at every stage of the supply

chain. www.strquality.com.
http://www.timberland.com/corp/index.jsp?page=codeOfConducthttp://www.timberland.com/include/csr_reports/Make_It_Better_Brief-Working_Hours.pdfhttp://www.timberland.com/csrhttp://www.strquality.com/http://www.strquality.com/http://www.timberland.com/csrhttp://www.timberland.com/include/csr_reports/Make_It_Better_Brief-Working_Hours.pdfhttp://www.timberland.com/corp/index.jsp?page=codeOfConduct



TIMBERLANDS SPHERE OF INFLUENCE

ON SOCIAL AND HUMAN RIGHTS ISSUES

Timberlandproducts are produced in factories across the globein 38

countries by roughly 300 factories and approximately 247,000 workers.6We

have published the factory names and addresses where our products are

made on our website since 2005 (and we were among the first companies

in our industry to do so). One of these factories, located in the Dominican

Republic, is owned and operated by Timberland. Whether the product is

produced in our own facility or in contract factories, we live by the same

beliefs. We know firsthand that we can make high-quality products in a

way that respects the basic human rights of the craftspeople who work on

the factory line. As we work with third-party contract manufacturers, our

Code of Conduct is just as important as our product specifications and our

quality requirements. From the beginning of the process, we only work with

factories that commit to the standards our Code insists onno matter how

challenging those standards appear to be.

We assess and work on remediation plans with all factories that

produce our products, regardless of order volume, value, or factory size.

Not only do we require our finished product manufacturers to abide by our

Code, but we also require their subcontractors and material suppliers to

do the same. All Tier 1 suppliers (finished good manufacturers) are assessed

by our Code of Conduct team for compliance with our Code, as well as

Tier 2 material suppliers such as tanneries, major subcontractors, and

global contract non-leather suppliers.7Additionally, our suppliers are

required by contract to ensure that Timberlands Code of Conduct is applied

to their suppliers and subcontractors that we do not assess. All workers

deserve to work and live with dignity. Whenever and wherever Timberland

can influence and drive improved working and living conditions, we will

seek opportunities to do so.

We also consider our sphere of influence beyond Timberlands

supply chain and the success of our program linked to other brands. We

actively seek to engage and work collaboratively with brands that share

factories. We engage with multi-brand working groups to employ best

practices and sustainable solutions industry-wide. Consistent messaging

to suppliers by brands is critical for sustainable and scaled impacts.

RADICAL SHIFT IN PRACTICE

In 2005, partly because stakeholders pushed us, we made a radical shift

in practicefrom the posture of compliance police, with audits andchecklists, to a different posture. Instead of leaving a list of violations for

factory owners to resolve and then checking back to verify improvements,

we challenged ourselves to work more closely with factory management

to understand the root cause of workplace issues in our factories. This

commitment further involved helping factories take responsibility for

workers experiences, building new and different factory management

systems and increasing staff awareness, from floor supervisors to top

management.

Our collaborative approach positions all sides working together for

the same goal. Rather than relying on documents and factory managers/

supervisors to tell us the conditions of the factory, we put the workers

themselves at the center of the process. Instead of compliance being the goalthe worker as stakeholder has become our goal. This is a radical shift, which

necessitates increased engagements with factory workers to obtain their

opinions, feedback, ideas, and input. Since 2005, we have engaged workers

as a primary and critical aspect of the assessment process and we now work

with factories to establish formal worker committees to monitor issues and

identify solutions alongside factory management (see Section II for more

information).

GOAL OF SHIFTING COMPLIANCE-BASED AUDITING TOCOLLABORATIVE ASSESSMENTS (AND THE PROGRESSIONS ALONG THE WAY):

6. These statistics are based on our Q2 2009 factory list. Our factory list is updated quarterly at www.earthkeeper.com/csr.7. We include tanneries as key suppliers given the volume of leather that we utilize in our products and the environmental risks associated with the tanning process. We include subcontractors when they

are the primary manufacturer of the product. We include footwear component suppliers for which Timberland at a corporate level has determined their selection.

1 2 3 4AUDIT FOR COMPLIANCE

a. Manager focused

b. Snapshot visit by company/external

auditing team to verify Code

compliance

c. Focus on documentation, physical

inspection, responses of managers

d. Audit checklists, corrective

action plans

INFORM & CONSULT

a. Managers + Workers

b. Informing and consulting with

managers and workers to i) raise

awareness of obligations, rights,

and Code auditing processes; and

ii) improve the breadth, depth, and

quality of Code audit data

c. A core focus remains on managers,

but workers are involved too

d. Semi-structured interviews, focus

group discussions with workers

INVOLVE, ENABLE,COLLABORATE

a. Managers, Workers + External

Stakeholders/Community

b. Go beyond Code checklist to active

involvement, capacity building, and

partnering to: 1) enable workers to

identify the rights and problems theysee as important; 2) ensure managers

have knowledge and resources to

address workers rights; 3) draw on

external stakeholders expertise for

capacity building and problem solving

c. Increased focus on worker support

and involvement

DELEGATE & EMPOWER

a. Managers, Workers + External

Stakeholders/Community

b. Ongoing, day-to-day process where

workers are empowered to articulate

their needs, engage with managers,

and monitor workplace conditions

c. Core focus on workers and onpermanent activities for skills building

and worker-management dialogue

d. Where appropriate, multi-stakeholder

initiatives raise worker/supplier

capacity and improve workplace and

community living



Through the collaborative assessment process, Timberland assessors

forge positive and powerful relationships with both factory management and

workersa partnership that continues after the assessment is completed.

During the remediation process, assessors assist factory management in

analyzing root causes, identifying system gaps, and developing action plans

that dont simply address the findings but also aim to prevent the recurrence

of the same or similar issues. Our action-planning process is comprehensive

and includes consideration of those impacted by the changes, how to

overcome obstacles or potential resistance, how to communicate change,

and how to measure and celebrate success along the way. We embed projectmanagement and change management methodologies in the action-

planning tools our assessors provide to the factory, and the assessors further

assist factory management in developing action plans. Our Assessors

then continue to partner with the factory through the completion of the

remediation process; they assist in capacity building based on an analysis

of management knowledge and skill levelsensuring adequate awareness,

desire, knowledge, ability, and reinforcement.

As a result of this shift, Timberlands Code of Conduct Specialists

(Assessors) are now called on as capacity builders, rather than compliance

police. This approach requires a new and different set of skills and training

for our team. Our investment in these skills has resulted in the teams

ability to create a collaborative and worker-engaged approach and improved

relationships/rapport. We have immediately seen a return on investment.

For example, in 2008, we saw 69% of continued business partners showing

improved assessment scores from 2007, a direct result of our assessors

ability to partner with factories and focus on sustained improvements.

Timberlands Code of Conduct mission is a bold goal and something that

monitoring alone can only partially accomplish. In full pursuit of our

mission, we have incorporated additional elements both within and outside

of the monitoring process to emphasize our focus on engaging workers and

strengthening communities. These elements include:

Formal engagements with workers during the assessment process on

a global basis.Based on pilot projects in 20062007 initiated with

Verit9in select factories in China, these formal engagements

empower workers with the knowledge, skills, and tools to

self-monitor their factory for basic rights and continuous

improvement. (See pages 8-9 for more information.)

Expanding our assessment program to include civic engagement. In

2007, we added questions to our assessment process regarding

suppliers community investment and service activities. Through

this dialogue with factory management and workers, we believe

were creating an opportunity to inform, inspire, and engage

each other. Were able to recognize and acknowledge factory

partners who share our passion to make a difference in their

communities. We can also identify opportunities to further

civic engagement worldwide by offering Timberlands firsthand

knowledge and experience in engaging in community service.

(See pages 11-12 for more information.)

II. BEYOND MONITORING

TIMBERLANDS CODE OF CONDUCT

To create measurable and sustainable impactin the lives

of our workers, the communitieswhere we live and work, and

the environment we cherish through strategic relationships

and investments that unleash civic potential, build

capabilities,and convene stakeholdersin common purpose.

Analysis of the adequacy of workers wages in meeting their basic

needs (including opportunities to better their lives).This component

of our assessment process enables us to determine whether or

not workers can address their basic needs such as food, shelter,

child care, etc. and development needs, such as recreation and

education, given the wages they are paid. (See Section III for

more information.)

As we pursue our mission to its fullest, we face many challenges

from limited resources, to the fears of factory management that workers

will strike or organize should they hold more knowledge of human rights,

or that workers might quit as they develop new skills and knowledge. With

8. Timberland is a member of Social Accountability International. One of our member benefits is access to best practice trainings and tools such as the Supplier Toolkit.www.sa-intl.org9. Verit is an independent nonprofit o rganization monitoring international labor rights with which Timberland has worked on various factory-based projects throughout the years. www.verite.org

Over time, weve seen our continued business partners begin

to embrace our new approachalthough it is more intensive

and time consuming (2-5 days)as demonstrated by their trust,

transparency, and shift in mindset by seeing the process as an

added value to their overall business. However, with new suppliers

we often begin with a thick, high wall of distrust and lack of

transparency, which initial visits often cannot overcome. Another

challenge we continue to face is unauthorized subcontracting;

whether intentionally or not, we do find that it happens from time

to time as factories seek to meet production needs during peak

seasons. To help mitigate the occurrence and/or compliance risks

of unauthorized subcontracting, we have increased our messaging

to business units internally and vendors to assist them in

establishing their own supply chain social compliance monitoring

program using Social Accountability Internationals Supplier Toolkit

as the recommended approach.8We also ask that our own design,

development, and various value chain teams consider ramifications

for the factory production schedule should they need to place

fast-tracked orders and/or request samples with tight turnaround

times, etc.

CHALLENGES WE FACE
http://www.sa-intl.org/http://www.verite.org/http://www.verite.org/http://www.sa-intl.org/



this document, we share the accomplishments of our approach as well as

the challenges, gaps, and opportunities for collaboration. We look forward

to dialoguing with you, our stakeholders, as we continue to push for

improved working conditions globally.

ENGAGING WORKERS

We believe the people who best understand the issues and troubles faced

by factory workers are the workers themselves. Thats why Timberland is

committed to engaging workers in the assessment process. This belief is

not new. Even with our previous compliance-only approach to monitoring,workers have always played a part in the process, as one source of data

(via interviews). However, as Timberland and other brands have found, the

information workers share in interviews is not always truly reflective of

factory conditions. Workers were often coached by factory management to

provide the right answers, coerced by factory management not to disclose

anything negative, and/or were fearful that a negative image of the factory

would result in the brand pulling its orders and thus risking the financial

stability of the factory and their jobs.

So the question became, how do we engage workers more

effectively? And how does one get to the truth? Truth is not black and

white. Rather, it is complexa blend of perspective, knowledge, and

understanding that is generally only volunteered in situations of trustand comfort. To better engage workers to uncover true factory conditions

(whether perceived or real), we must address the formula of truth by

looking to comprehend workers perspectives, ensure adequate knowledge

and understanding, and establish trust and comfort. While we seek to

engage workers as much as possible, Timberland only engages with workers

based on their own free will. We work hard to ensure participants do not

experience retribution for doing so, and we purposefully engage multiple

subsets from different departments (with a diversity of characteristics, such

as gender, tenure, job functions, pregnancies, shifts, etc.) to mask specific

data points or feedback.

Establishing Trust and Two-Way Dialogue

Because they are key stakeholders in our collaborative monitoring process,

we want to ensure factory workers understand the goals and objectives of

the process, of the subjects the process covers, and of their role in it. We

also want workers to feel firsthand that their input, issues, and concerns

their voiceis important and valued. In treating workers as the key

stakeholder, our Assessors create a greater level of two-way information

sharing, which develops a level of mutual respect, understanding, and trust.

To engage workers as stakeholders, Timberland has incorporated the

following steps into the assessment process:

Opening and Closing Meetings.With each assessment, Timberland

Assessors hold an Opening and Closing meeting to outline

the goals and objectives of the assessment process, ensure

understanding and agreement of the assessment process and

methodology, and set clear expectations regarding outcomes and

next steps. In the past, only factory management and supervisors

were asked to attend these meetings (and, where applicable, the

union representative). However, beginning in 2008, we started

inviting floor workers to these meetingsrecognizing them as a

key stakeholder in the process.

Group Discussions.Generally speaking, there is safety (and

comfort) in numbers. Rather than one-on-one interviews with

workers, we choose to gather information from workers via group

sessions. Timberland Assessors take various approaches to build

rapport and trust with the workers, create two-way sharing of

information, and uncover workers perceptions, aspirations,

and needs. They use specially designed techniques such as

participatory discussions and free-flowing chat to facilitate open-

ended dialogue, rather than prescribed question-and-answer

sessions with predetermined ends. We have adapted these

techniques from the participatory methodologies developed by

the Institute of Development Studies at the University of Sussex

in the United Kingdom.10Designed to enhance the awareness and

confidence of workers and to empower them to take action, this

approach positions workers as creative, capable change-makers.

With these techniques, the Assessors role is that of catalyst and

facilitator, as opposed to interviewer.

Code Trainings.Whether during the onsite assessment or at

another convenient time for the factory and/or Assessor, we also

provide formal trainings for workers (full workforce or subsets

within) outlining the detailed elements of Timberlands Code of

Conduct to ensure full and widespread understanding of workers

rights and their role/responsibility in identifying, addressing, and

seeking resolution. We believe these trainings generate knowledge

for action and empowerment.

The biggest challenge we face in establishing trust through these

mechanisms is overcoming or gaining factory managements buy-in and

support. Our assessors are constantly working to change factory managers

mindset from seeing worker knowledge and empowerment as a negative, to

instead considering informed workers as assets and a business advantage.

For some factories, persistent persuasion is needed for their management

team to see how these engagements can be an opportunity to improve

their business. Additionally, we can face challenges in gaining the trust of

workers so they feel safe and free to truly open up. It is also important to

note that once trust is established, it requires ongoing care to maintain.

10. www.ids.ac.uk/ids/particip



Worker Code of Conduct Committees

In July 2006, in collaboration with Verit, Timberland launched a pilot

project in two large Chinese factories designed to create a mechanismfor factory workers to conduct ongoing Code of Conduct assessments

themselves. The premise of this project was that involving workers in

identifying and solving Code of Conduct issues will ultimately improve

workplace labor conditions, worker morale, and in turn improved worker

retention and lower absenteeism. We forecast that these improvements

could lead to increased quality and productivity.

The process of creating the Worker Code of Conduct Committees consists

of three phases:

1. Surveys.Surveys are given to factory management andsupervisors to ascertain their perceptions in three areas:

organizational culture, CSR management systems, and

communication practices. Additional surveys are given to

workers to ascertain their level of awareness of Code of Conduct

topics and their perceptions of key issues. The committee then

uses the information gathered from these surveys to identify

the baseline for implementing improvements customized to the

needs of the individual factory.

Stella International, a footwear factory in Dong Guan, China, employing

roughly 6,300 workers, has been producing Timberlandfootwear since

1995. Stella presents an interesting case of involving workers more

actively in the assessment process. Over the years, our Code of Conduct

assessments found typical issues with respect to remuneration,

excessive hours, and overall health and safety management. While

we had engaged workers in the assessment process in the past via

interviews and limited static trainings, we felt that with more formal

and active engagement, the short-lived improvements that we had

been seeing might become sustainable. During the factorys annual

assessment in 2008, Timberlands China Assessor engaged the

workers more formally. First, she randomly selected workers from each

department to attend the Opening/Closing meetings to hear firsthand

the purpose of the assessment and its importance to Timberland. After

the Opening Meeting, the Timberland Assessor asked participants to

provide feedback about what they learned and whether or not they

had benefited from the meeting. One worker indicated that he now

had more awareness of the importance of environmental issues in

the factory; another stated that she now knew of the importance of

Timberlands social responsibility program and how she might strive

to exercise or enforce her rights in the factory in a deeper way. All of

the workers that attended indicated their willingness to pass what they

had learned from this meeting on to their workmates.

In addition to these meetings, on the third day of the assessment, the

Timberland Assessor organized a formal training for 25 workers who

were selected from different floors and different sections. During this

training, workers took an active part in group discussions on a series of

topics (translated from Chinese):

What factors do you think will promote a harmonious interpersonalrelationship in a factory?

What are your top three concerns when choosing a job?

Why do you choose this factory as your employer?

To what extent do you have knowledge about human rights?

Are there any aspects with which you feel quite satised

with your factory?

What do you think the factory should do to become better

in some aspects?

Workers put forward many valuable suggestions, ideas, and

thoughts about these topics. They reported being satisfied with

the content, timing, and frequency of the factorys Health, Safety,

and Environmental course and the fact that timely pay could be

guaranteed. They also found convenience in several automats but

that had been installed inside the factory and a library that provides

opportunity for enhancing recreational reading, knowledge, and

self-improvement. Workers also reported being pleased about receiving

coupons for public holidays and gifts on their birthdays.

Workers openly shared and discussed their thoughts on areas

where they felt there was room for improvement. By sharing these

perceptions in an open format, the workers determined they could

solve some issues themselves based on new learnings and shared

experiences. Coming together as a group also enabled the workers

to present a united front for the few things they did want to askmanagement to improve. For example, workers were looking for

increased communication, supervisor and worker training on

interpersonal skills and team building, and some improvements to the

canteen and entertainment facilities. Workers also had suggestions

for improvements in the overtime scheduling process and the medical

services process.

While some of these perceived issues and suggestions for

improvement may have been uncovered during an audit, the impacts

of the 25 workers learning, understanding, and brainstorming together

will more likely result in long-term improvements because they have

been a part of the process for identifying issues and seeking solutions.

To thank the workers for their active participation in the training and

discussions, Timberlands Assessor gave the participants a small token

of appreciation (Timberland key chains made from leftover leather

scraps). Our final feedback report stated that all participants expressed

interest in attending trainings in future assessments, and they would

encourage their workmates to attend as well.

INVOLVING WORKERS IN THE ASSESSMENT PROCESS AT STELLA INTERNATIONAL



2. Worker Elections & Trainings.Elections are held for workers to

select which of their peers they want representing them on

the Code of Conduct Worker Committee. Factory managers,

supervisors, and the newly elected committee members then

take part in a series of training sessions. The goal of these

courses is to equip participants with a solid understanding

of Code of Conduct matters, as well as the leadership and

interpersonal skills necessary for participants to conduct social

compliance assessments effectively.

3. Plan, Do, Check, Act.The worker committee then uses a set oftools, such as guidance and reference materials, audit checklists,

corrective action tracking, and follow up procedures, to conduct

social compliance assessments of the factory. They also establish

management systems for ongoing oversight of the process,

including a mechanism for adding workers to the process and

revisiting its effectiveness for continuous improvement.

From the lessons learned through the pilots in three factories in

China, Timberlands Code of Conduct team now aims to apply this program

to factories globally. Each of our Assessors is expected to implement

worker committees and/or otherwise increase worker engagement in the

assessment process in at least 50% of their factories in 2009, aiming for

100% of continued business partners in 2010. One challenge identified

in establishing such committees is overcoming the fears of factory

management that workers will strike or organize should they hold more

knowledge of human rights or even quit as they develop new skills and

knowledge. Additionally, ongoing support from factory management oftendepends on a return on investment, which can be difficult to quantify or

directly link to the efforts/activities of the committee.

Pou Yuen Manufacturing Company (PY) is a footwear factory locatedin Guangdong, China with roughly 6,600 workers. Timberland has

sourced from this factory for over nine years. Timberland selected

PY as a participant for the Verit pilot project because over the years

we found limited sustainable improvements with respect to issues

related to wages, hours, and health & safety management (emergency

preparedness, procedures for properly maintaining personal protective

equipment, and chemical storage/handling). Following surveys, worker

elections, and a series of trainings, Timberlands China Assessors

worked with the newly formed Worker Committee to implement the

following Plan/Do/Check/Act steps:

1. Chats with Workers.As a routine, PYs Worker Committee collected

workers opinions once or twice per month regarding the factory

and surrounding community. This helped the committee and

factory management better understand workers needs, issues, and

stressesreal or perceived.

2. Monthly health and safety checks.Each month a rotating group of

committee members reviewed the health and safety issues of the

factory with department-specific audit checklists.

3. Discussions about findings and action plan.The factorys CSR

department met with committee representatives to review

information gathered by the checking and chatting routines every

1-2 months. The CSR department then reviewed this feedback with

factory management and reported back to the worker committee onactions taken, planned, and/or reasons for not being able to address

issues. The worker committee then communicated this information

to their workmates.

4. Worker activities.The committee also assisted the factorys CSR

department to organize activities for improving worker morale and

CSR understanding.

Feedback from workers,

the Committee, and the

CSR department at PY

indicated that the pilot

project was successful,

as it increased workers

knowledge and active

engagement. The result is

an improved relationship

between workers and factory management, as well as an increased

interest in proactively suggesting solutions to issues. The factorys

CSR department also reported that absenteeism and turnover had

improved and that employee surveys demonstrated improved morale.

They attribute this improvement in part to the increased involvement

of workers and the demonstration that workers voices are desired

and valued. Given these indicators of success and impact, the Worker

Committee continues to this day.

POU YUENS WORKER CODE OF CONDUCT COMMITTEE



Engagement Outside of Assessments

Knowing that information dissemination, heightened awareness, and

training should take place in many forms and more frequently than once

per year (via annual assessments), Timberlands Code of Conduct Assessors

encourage factories to take ownership of disseminating information by

assisting them in identifying new and different ways of capturing workers

attention throughout the course of the year. A Code poster hanging in the

workplace is not enough. We have found worker-led training courses to be

quite successfulwhether they occur via a worker committee established

and trained to monitor compliance throughout the year (as described

earlier) or through peer training. Experience has shown that workers tend

to trust their co-workers more easily than management and are thus more

willing to share their views and opinions with their peers. It can be difficult,

however, for factory management to balance the time and resource demands

they face in day-to-day production to allow for regular, frequent opportunities

for workers to engage in trainings and focused discussions. These time

demands can often result in managements falling back on relying on brands

to be the impetus and source for such training, as opposed to ensuring ongoing

trainings proactively themselves. The result is less frequent trainings and

engagements, as well as a failure to discuss issues as they occur.

At a minimum, Timberlands assessors ask factories to incorporate

Code of Conduct training into their new-hire training modules. We encourage

factories to conduct confidential annual employee surveys to confirm

perceived workplace conditions and treatment of workers. Additionally, we

encourage factories to seek input from outside parties such as community

members, local NGOs, other area factories, and governmental or industry

organizations regarding their factory, worker needs, and training expertise.

It is not enough to sit passively and presume that all is well because there

are no suggestions or complaints in a suggestion box or being received via

managements open-door policy. We believe that worker understanding

must be confirmed and validated; and, as one would imagine, the larger the

factory, the more challenging the task of sharing information throughout the

entire workforce and efficiently collecting feedback/input from the workforce

in full. A continuing stream of ideas and awareness of issues requires

ongoing solicitation from multiple sources.

STRENGTHENING COMMUNITIES

At Timberland, community service has always been a part of our

heritage. In 1992, inspired by our relationship with City Year11, Timberland

formalized that value and launched the Path of Serviceprogram to

ensure all employees were afforded time and opportunities to serve in

the community.12We believe that if employees have one positive and

powerful service experience, they will be more likely to serve and engage

in their communitiesperhaps even on their own time. As a company, we

encourage employees to be active citizens and civic leaders. Engaging as

a company in community service over the years has produced a variety of

benefits, including the following:

Augmented employee development.Our service projects are employee-

organized and led. Employees who step up to lead service projects

receive training in project management, team motivation, and

presentation skills, which they can transfer from their service roles

into a professional capacity.

Timberlands engagement at the Pou Yuen factory also provides

an example of creative engagement outside of the assessment

process. In 2008, one of the ideas generated by discussions

with the Worker Code of Conduct Committee was to hold a CSR

Carnival for the workers as part of the factorys plans to honor the

10th anniversary of CSR programs. The goal of the Carnival was toexhibit PYs commitment to and evolution of their CSR program,

increase interaction between the CSR department staff and

workers, raise awareness of CSR topics, enhance workers sense of

belonging, honor, and accountability, and promote CSR impact. The

CSR department carefully selected different methods of teaching,

disseminating information, and engaging workers in informative

and entertaining ways. They organized 25 different activities,

including a competition to develop a creative way to convey the

environmental message of Reduce, Reuse, Recycle. For example,

one group of female workers created dresses out of newspapers.

The Carnival was attended by nearly 50% of PYs workforce

(3,000 workers), which was higher than anticipated given the

rainy weather on the day it took place. Survey results indicated

that the top three topics of interest were Individual and Worker

Rights; Environmental, Health & Safety knowledge; and general

information about daily health. Additionally, Timberlands

assessors received important input from interviews with PYs

management team, in which management stated that having

good labor relationships is important because they believe it

results in increased productivity. PYs factory management also

conveyed that improving workers leisure life with more activities

was important to the factorys productivity because it would help

reduce workers stress levels.

POU YUENS CSR CARNIVAL

11. City Year is a nonprofit organiza tion dedicated to building a stronger democracy by engaging diverse groups of 17- to 24-year olds in national service:www.cityyear.org12. Timberlands Path of Service program benefit gives full-time Timberland employees 40 paid community service hours per year. For more information about our community service program,

objectives, implementation, and employee engagement, seewww.timberland.com/csr.
http://www.cityyear.org/http://www.timberland.com/csrhttp://www.timberland.com/csrhttp://www.cityyear.org/



Heart & Mind is a childrens-wear garment factory located in

Nakhonpathom, Thailand, with roughly 220 workers. Timberland

has sourced from this factory for over nine years in partnership with

our long-term licensee, Childrens Worldwide Fashions (CWF). While

Heart & Mind has kept its compliance status at an acceptable level,

it struggled over the years with employee morale, high turnover,

and high absenteeism. With encouragement and guidance from our

local Code of Conduct Specialist, Heart & Mind agreed to engage the

workforce in service activities to try to improve worker relations.

Increased employee attraction and retention.Responses to our global

employee survey consistently indicate that the Path of Serviceprogram

benefit is a factor in our employees decision to work for and stay

at Timberland.

Strengthened business partnerships.Since we are a relatively small

company, we encourage employees to share our service ethos with

business partners, vendors, and customers, to increase the impact we can

make in communities. Sharing in service experiences provides insight

into our company culture and valuesan asset in building ongoing

business relationships.

Reinforced commitment to community building and goodwill. We have

seen positive and lasting impacts in the communities in which we serve,

as our contributions linger long after the specific service event.

As weve found great benefits from community service for our

own company and the communities in which we operate, we realize that

Timberlands influence and footprint extends beyond our owned and

operated facilities. Our contract factories are important stakeholders.

We seek opportunities not only to engage factory workers in factories

producing Timberland products, but also to engage them in the

communities where they live, so that they too may create better

quality-of-life conditions for themselves and their communities.

Worker-Engaged Community Service

In 2007, following the third year of our new collaborative approach to

assessing factories, Timberland proved that our assessment process

could be effective in creating measurable and sustainable impact. With

positive factory worker/Assessor partnerships being formed and workplace

improvements realized, we began focusing on the last piece of Timberlands

Code of Conduct missioncivic potential. We felt that many suppliers had

shifted their mindset regarding the value of improving conditions within

the factory, and therefore the time was right to bring what Timberland had

learned from community service to dialogue with our factories globally.

We added questions to Timberlands assessment questionnaire to gather

information regarding factories community investment and service

activities. By inquiring in this way, we create an opportunity to inform,

inspire, and engage each other; to recognize and acknowledge those factory

partners that share our passion to make a difference in their communities,

and to identify opportunities to further civic engagement worldwide.

With this addition, Timberlands Code of Conduct assessment

process has evolved to an overall CSR assessmentencouraging factories

to improve conditions both inside and outside their walls. Our goal for 2009

is for each Assessor to engage at least one factory in a community service

event by year end. In doing so, our Assessors will gather feedback, lessons

learned, and understanding of factory and community impacts so we can

then create a collection of factory service experiences worldwide. We aim to

use these learnings to scale our program going forward.

HEART & MIND COMMUNITY ENGAGEMENT

BEFORE AFTER

Heart & Mind established a worker committee to monitor workplace

conditions, ensure worker grievances were managed properly, and

identify creative means of disseminating Code of Conduct information

and training to workers. The committee identified many creative ideas

for community engagement, such as taking scrap fabric material and

making bags that displayed messages about using re-usable bags as

opposed to paper or plastic bags. The workers, now armed with the

bags and a strong understanding of the issue, spread the message in

the community. And they didnt stop there.

The workers brought their environmental message to a community

improvement project in their own facility. Heart & Mind has an outdoor

recreation and relaxation space intended for workers to use as a place

of congregation and enjoyment before or after work and during lunch

and breaks. This space was unappealing and not in good condition.

As a result, few workers used it. In an effort to improve this space, the

worker committee worked with management to establish a budget and

planned a community service project. Supported by management, the

committee members arranged for tools, materials, food, and time

both on and off the clockto re-green the space. Together, factory

workers, community members, supervisors, and management lent a

hand to create a space that both factory workers and the community

could be proud of and enjoy.

The improved space is a living testament to the power and passion

of everyones heart & mind. And the outcome goes beyond just re-

greening this outdoor space. As found at Timberland, the factory realizedimproved employee morale, retention, productivity, and loyalty as a

result of civic participation. Turnover, for instance, went from over 9%

to less than 5% from 2007 to 2008, and survey results demonstrate that

81% of workers were pleased with the factorys efforts to engage them on

environmental and service initiatives. Seeing that factory management

cares about the community translates into knowing that they care about

the workers. Workers understand there is a genuine interest in their

needs and in seeking solutions for improved quality of life.



At Timberlands owned manufacturing plant in the Dominican Republic

(The Recreational Footwear Company or RFC), we have approximately

1,900 workers, 1,400 of whom work on the production floor. Like our

other employees around the world, our workers in the Dominican

Republic take great pride in Timberlands values and aim to provide

benefits to their local communities through civic engagement. Since

1996, the factory has executed many service events and partnered with

local organizations to benefit thousands in Santiagos local population,particularly children. Many ideas for service projects are sparked by

individual employees.

One example is a project that provides affordable and good-quality

education for young children. In 1998, Josefa Rodriguez, a RFC employee

since 1985, recognized a problem in her community. Having personally

struggled to find a local school for her young children without solution,

Josefa ultimately sent them great distances for quality education. She

felt passionately about changing the local educational environment and

established a low-cost school in her garage for those who were not able

to send their children away to school. After two years of meetings and

contacts with different government agencies, the government donated

funds for material and labor to construct the foundation for a school

to be built in a donated lot. With community support and service, the

school was no longer in a garage. It now had its own land, first-floor

walls and a canvas ceilinga strong start for the 112 students of the

Escuela Basica Emmanuel School.

With more building work to be accomplished and a growing need in the

community, Josefa enlisted RFC co-workers, neighbors, family, and friends

to further increase community awareness, support, and funding to finish

construction and staff the school. The RFC provided modest financial

support ($15,000 USD) and 400 employee service hours. As of 2009,

the two-story building is now almost complete, with nine classrooms,

two bathrooms, a directors room, and a cafeteria servicing its current

enrollment of 524 students. The Emmanuel School, passionately created

by one and now adopted and supported by many, will continue to be one

of RFCs dedicated service sites in 2009 and beyond.

I feel a great satisfaction and pride that Timberland, the company

where Ive been working half of my life, has persistently helped to

solve a great education problem in my community, says Josefa. Very

poor parents are constantly preoccupied by the education of their

little children. Thanks to the support of Timberland, this urgent need

is almost covered. I take pride in belonging to this family and

working for a company that is translating employee aspirations into

community benefits.

COMMUNITY ENGAGEMENT AT TIMBERLANDS OWN FACTORY

Community service engagements can also serve as another means

of creatively engaging workers on issues and demonstrating that their

ideas, thoughts, cares, and concerns matter. Grassroots ideas coming from

passionate and invested workers can lead to greater community benefits,

through which workers can build an ongoing interest in serving and staying

involved. The biggest challenge in establishing factory or worker-owned

community service events is the time and financial resources required.

However, with creative thinking, solutions can be foundeven in times of

economic downturn and increased financial stress. Just this year, weve

seen workers at the Heart & Mind factory in Nakhonpathm, Thailand,

creatively recycle waste and use funds from its sale to budget and execute

a community service project to plant 1,000 trees on Earth Day 2009. Their

efforts reflect previous community engagement success stories in other

parts of our supply chain. See page 11 and the sidebar below for stories

about additional community service performed at Heart & Mind and our

own factory in the Dominican Republic.



Ensuring workers are paid a wage that at least allows them to meet basic needs is a complex subject,

especially given the local economies in which they live. Timberland upholds all minimum wages in countries

where we operate, but we also recognize that minimum wage in many places is not sufficient to meet

workers basic needs or opportunities for betterment. We believe that higher wages alone do not necessarilycreate improved living conditions. It is within this context that we have defined our approach to support and

facilitate sustainable living by addressing the environment (societal infrastructure) that workers live within

rather than focus on wages alone.

II. SUSTAINABLE LIVING ENVIRONMENTS

their families, but also provide for setting aside money for participation in

culturally required activities and planning for future bettermenttermed a

Sustainable Living Wage.16

Critics argue that basic economic theory suggests that a mandated

minimum price for labor (such as a living wage) is harmful to low-wage

workers and increases unemployment. Artificially fixing a price for labor

above the market price causes a decrease in the overall demand for labor,

leading to increased unemployment and deadweight loss.17Workers who

lose their jobs would not receive the living wage. Furthermore, such wage

increases can cause inflation, increasing the cost of living and decreasing

the relative buying power of the living wage, which leaves the minimum

wage earner no better off. Critics of living wage ordinances further assert

that the government should not intervene in the marketplace, because

well-intentioned interventions are usually detrimental to the economy as

a whole. Rather, the society-wide benefit of reducing poverty becomes the

responsibility of those who hire the least educated, least experienced, least

skilled, and most vulnerable workers.18

We know that the cost of living varies within and among countries,

and controversy exists about the definition of a living wage and how best

to calculate it. Questions arise about whether a single wage earner should

be expected to support the entire family, how many dependents would be

supported, whether income from other sources should be considered, how

to include non-wage benefits, and how to deal with regional differences in

costs of living. Questions also arise regarding how living wage is assessed

for example, use of a food/needs baskets, purchasing power parities, and

trade unions negotiated wages, all of which may be subjective.

LIVING WAGE OVERVIEW

To understand Timberlands focus on sustainable living environments, it is

useful to understand the concept of a living wage. The International Labor

Organizations Minimum Wage Fixing Convention 131 (1970)13specifies in

Article 3 (a) and (b) that the following two elements are to be taken into

consideration when establishing a legal minimum wage:1) the needs of workers and their families taking into account the general

level of wages in the country, the cost of living, social security benefits,

and the relative living standards of other social groups; and

2) economic factors, including the requirements of economic development,

levels of productivity, and the desirability of attaining and maintaining

a high level of employment.

Convention 131 aims to address the fact that, oftentimes, to

attract foreign investment and international buyers, countries emphasize

economic growth and development. Minimum wages are often set

to compete with low-cost suppliers in other countries, as opposed to

promoting workers interests. It is for this reason that many countries have

minimum-wage levels that do not meet the basic needs of workers andtheir families. These wages frequently do not reflect inflation and other

factors that affect actual standards of living.14

As opposed to minimum wage, living wage is the minimum hourly

wage necessary for a person to achieve some specific standard of living.

Social Accountability International (SAI) defines a Basic Needs Wage

as a living wage that enables workers to support half the average-sized

family above the poverty line, based on local prices near the workplace.15

The Center for Reflection, Education, and Action (CREA) goes further,

calling for wages that not only meet the basic needs of the workers and

13. Available at http://www.ilo.org/ilolex/cgi-lex/pdconv.pl?host=status01&textbase=iloeng&document=132&chapter=1&query=%23status%3D01&highlight=on&querytype=bool&context=014. As discussed in Social Accountability Internationals Guidance Document for SA8000 (www.sa-intl.org) and by CREA atwww.crea-inc.org15. According to SAI, basic needs include essential expenses such as food, clean water, clothing, shelter, transportation, education, and a discretionary income beyond any legally mandated social benefits

as discussed in Social Accountability Internationals Guidance Document for SA8000. www.sa-intl.org16.www.crea-inc.org17. As discussed in Defining and Measuring a Global Living Wage: Theoretical and Conceptual Issues by Mark Brenner, April 2002, and Wages in the Apparel Industry: What Constitutes a Decent

Standard by Gustavo Setrini and Richard Locke, July 2005.18. As discussed in Defining and Measuring a Global Living Wage: Theoretical and Conceptual Issues by Mark Brenner, April 2002, and Wages in the Apparel Industry: What Constitutes a Decent

Standard by Gustavo Setrini and Richard Locke, July 2005.
http://www.sa-intl.org/http://www.crea-inc.org/http://www.sa-intl.org/http://www.crea-inc.org/http://www.crea-inc.org/http://www.sa-intl.org/http://www.crea-inc.org/http://www.sa-intl.org/



ALTERNATIVE APPROACH:

SUSTAINABLE LIVING ENVIRONMENTS

Timberland agrees that every person is entitled to food that meets universal

nutritional standards, clothing that reflects the persons innate dignity,

housing that allows privacy as well as shelter, affordable and accessible

health care, and education that cultivates innate gifts and talents and

enables the person to contribute to his or her community. We also

agree that all factory workers should be paid a fair wage; we uphold the

minimum legal wage in every country we operate in, and we also requirethat overtime be paid at a premium rate even when not legally required.

While we recognize that in some countries or regions the legal minimum

wage is insufficient to support sustainable living, what we dont know is

whether simply raising wages for workers will ensure that their basic needs

are met. What if the issue involves more complex questions, such as the

cost and accessibility of basic human services like health care or education?

In our experience, we have seen these specific limitations in the real world,

from monopolistic control of basic foodstuffs in developing economies,

causing food prices to be artificially high, to lack of access to kindergarten

or affordable and accessible health care. These are real-life examples of

problems that are simply not addressed by raising a workers wage rate.

At our own manufacturing plant in the Dominican Republic, the

Recreational Footwear Company (RFC), weve seen firsthand that paying

the workers higher wages does not necessarily change their l ives. From

talking with workers, we have learned that many wouldnt necessarily

spend the additional money on better food or housing or seek education,

as access to these services has not been easily or readily available. But if

these services were available, workers indicated that they would likely

take part in programs aimed at improving their livesif within theirmeans of affordability. As a result, the RFC began a Literacy Program in

1999, which continues today, and also worked collaboratively with its

trade zone association to establish a co-op program to provide good-

quality and affordable food, prescription drugs, and appliances to all trade

zone workers. Similarly, weve learned from workers at White House, a

childrens-wear apparel factory located in Chennai, India, that some of

their most basic needs were not being met, regardless of the wages paid.

Through persistent discussions with factory management, workers made

the business case for establishing an on-site facility to meet their needs.

Based on worker feedback, management at Timberlands factory in

the Dominican Republic (the RFC) knew that if services were offered

to workers in an accessible fashion, workers would utilize such

services as a means to better their lives. So, in 1999, Timberlands

RFC office staff introduced a literacy program to 45 employees and

their families. That initial effort has since developed into a program of

basic education courses for which employees can receive government

certification in grades 1- 12. With RFC funding, teachers from local

schools provide classes to employees at the factory after work. As

a natural evolution of the literacy program, the RFC funded the

creation of a high school equivalency course in 2005. This program

enables employees to form study groups after work to prepare for

their general education diploma (GED). In 2006, the RFC increased the

number of employees participating in this program to 116, and 18 of

these students graduated with their high school degree in 2007. As of

December 2008, 120 employees were participating, of which 52 were at

high school level and nine at intermediate level.

In addition to programs targeting increased literacy, the RFC listened

to workers feedback about the lack of affordable, good-quality,

healthy food available to them. In 2004, the RFC worked with its

trade zone association to establish a co-op program with discounted

prices for all trade zone workers. At that time, inflation was high inthe Dominican Republic, and food prices were rising considerably.

The Co-op purchased food stuff in high quantities at a discount and

offered workers the opportunity to purchase food supplies at an

affordable price. The program was initially funded by fees paid by the

RFC and other companies in the Pisano Industrial Park. The Co-op

program then expanded to include offerings of good-quality, affordable

prescription drugs and also appliances (as these, too, were identified as

lacking availability in the area). To allow more flexibility and increase

participation, the RFC established a process with the Co-op that now

allows workers to borrow funds from the RFC for their personal Co-op

purchases. Workers pay back the RFC through payroll deductions in

four-week increments based on the amount purchased. In 2008, anaverage of 366 RFC workers participated in the program. As of March

2009, roughly 500 workers were participating. The RFC hopes to

increase participation in 2009 to more than 600 workers (roughly 40%

of the workforce) to further drive down prices; the more participants,

the more purchases, the higher quantities purchased from wholesalers,

providing lower prices for all.

TIMBERLAND RFC EDUCATION AND COOP PROGRAMS



White House is a

childrens-wear apparel

factory located in

Chennai, India, with

roughly 525 workers.

Ninety-nine percent

of these workers are

women from interior

villages of Tamil Nadu,

and Timberland has sourced from the factory since 2001. Through the

course of Timberlands Code of Conduct assessments, discussions with

workers, and interviews with management, Timberland Assessors

understood that most of the workers left their children at home to be

tended to by the elders otherwise they would have to leave work if they

wanted to raise a family, as there was not adequate or affordable child

care in the area. While elder care was traditionally the preferred means

of child care, that alternative was increasingly a struggle for workers.

Through patient and persistent discussions with factory management,

the business case for the factory to establish a day-care facility on

the premises was agreed to, and an onsite crche was established

in 2008. M. Amsa, a female factory worker, finds this benefit valuable:

I leave my child daily in the company crche. Looking after my child

by the staff of the company crche has become very useful to me. My

child is being given milk, biscuits, and midday meals. I am permitted

to visit the crche and see my child at any time I want, she says.

Enrollment at this initial stage has been low, but is expected to increase

as workers are gaining confidence in the quality of care provided by the

center. Management has taken many steps to encourage the use of the

center and believes the return on investment will be a dedicated, loyal

workforce committed to higher performance for the company, with

lower turnover and lower absenteeism.

Our experiences at the RFC in the Dominican Republic and White

House in India demonstrate our ability to help improve the lives of workers

beyond wage increases; they also show that paying higher wages is not

necessarily the answer. After seeing firsthand the value in understanding

and addressing the infrastructure available to workers, we wanted to

expand the model of thinking to our contract supply chain globally.

Rather than asking factories to pay a living wage, we began working with

them to understand the infrastructure available to their workersinside

and outside the factoryto determine whether or not the infrastructure

provided a sustainable living environment for workers. Where such

infrastructure is lacking, we look to work with the factory for a sustainable

solution to address the missing link. In challenging economic times, this

can be a difficult sell to factory management; however, as with community

service events, creative solutions can be found for addressing limited

resources and funding. The key to securing factory buy-in and financial

support is to demonstrate to factory management that a return on their

investment is inherent.

SCALING THE SUSTAINABLE LIVING

ENVIRONMENT APPROACH

Based on our experience and using SAI and CREAs definitions of what

constitutes a basic needs wage and a living wage, we have added questions

to our assessment process in 2008 that drive to a greater understanding of

workers basic needs and opportunities for a better life.

Determining the adequacy of the options and infrastructure

available to workers is subjective, requiring input from multiple sources

and an understanding of the cultural norms. Our Assessors start by

discussing these issues with workers to gain first-person understanding of

their perspectives. The Assessors not only speak with workers, but they also

TIMBERLAND ASSESSMENT QUESTIONS

FOR SUSTAINABLE LIVING ENVIRONMENTS

A. BASIC NEEDS

Do workers have access to adequate medical facilities/services at no cost to workers

for workplace illness/injuries and at affordable rates for personal needs?

Are workers well-aware of HIV/AIDs risks and precautions, and do they have access

to related medical services?

Do workers have access to adequate and affordable nutrition/food both in and out

of work?

Do workers have access to adequate and affordable housing?

Do workers have access to adequate and affordable means of transportation (if

applicable)?

Do workers have access to adequate and affordable child-care options?

B. BETTERMENT OF LIFE

Are workers in need of and do they have options for low- or no- cost means of

developing life skills?

Do workers have access to adequate savings/credit services?

Are affordable opportunities for leisure activities available to workers?

WHITE HOUSE DAY CARE FACILITY



research and analyze the local infrastructure with factory management,

community members and organizations, trade unions (where applicable),

other brands producing in the area, and local NGO organizations to validate

what workers convey. We might find that the disparity of perceived versus

real needs is a result of workers not being well-informed, or the disparity

may very well be confirmedaffordable, adequate options or services are

not readily available.

In either case, action is neededthe former clearly having a simpler

solution than the latter. While solutions to the latter are complex and

multi-faceted, requiring long-term investments and the involvement ofmultiple stakeholders, this is not cause for ignoring the needs of workers.

And to address disparities sustainably, the solution must be one similar

to that of the notion of monetary donations versus community service.

As the old adage goes, teaching a hungry man to fish is of greater value

than simply giving the hungry man fish to eat. Easier said than done, as

this requires a multi-stakeholder approach with a universal commitment

to establish solutions with financial and resource independence to create

long-term sustainability.

Timberland has engaged in various projects to help promote

Sustainable Living Environments. Where possible, weve partnered with

local organizations as an opportunity to drive relevant information and

training. We have seen that it is indeed possible to leverage Timberlands

business influence to help create positive improvements for the lives of

workers who produce our products. These projects have also helped to

demonstrate that a living wage is not always what workers need most.

The case studies in the following pages illustrate Timberlands approach to

Sustainable Living Environments in depth:

1. Improving Health Services & Providing Access to Microfinance

in Bangladesh

2. Improving Womens Health in China and Vietnam

Whereas the case study about our work in Bangladesh highlights

a public-private partnership that we think can be a model for creating

Sustainable Living Environments in the future, the case study about our

work in China and Vietnam shows that collaboration can further efforts and

impacts beyond Timberlands reach alone, and it can also deliver a sizable

return on a relatively small investment.


19/24



The YoungOne workers formed a Workers Representation

and Welfare Committee (made up of community volunteers and

worker-elected representatives) who learned participatory and

social mapping techniques from CARE and MAMATA staff. These

tools equipped the Committee to conduct outreach to factory

workers and community members to help spread awareness and

generate participation in and advocacy for training and services.

During 2008, 4,739 new participants attended one-on-one sessions,

group meetings, and film screenings on topics such as labor law,

health and hygiene, gender rights, abuse, trafficking,

HIV/AIDS, inheritance law, and reproductive health. Women

attended these sessions at a ratio of four to one, as compared to

men. After these communications, the committee conducted a

project survey and found that more than half of the participants

(55%) gained a better understanding of overtime calculation,

maternal and sick leave, safety, security, basic hygiene,

reproductive rights, marriage registration, and joint family

decision making.

MEDICAL REVOLVING FUNDTo help low-income workers and community members afford the

medicines and medical services they need, CARE, Timberland,

and MAMATA created a program to provide them with discounted

services and medicines. With initial funding from Timberland,

factory-based clinics were staffed, and affordable medications

stocked. Participants (trade zone workers and community

members) pay modest fees that enable CARE to restock medications

and continue staffing the factory-based clinics. Immunization

Days have reached over 3,000 children with polio vaccines, vitamin

supplements, and de-worming medicines.

Roughly 560 patients received treatment in 2008, with

55% being YoungOne workers and their family members, and 45%

from the community or other garment factory workers. Almost

81% of clinic patients are women. With an increase in fees per

visit (from roughly three cents to seven cents) and continuing

logistical support from the factory, the program is on track to

be self-sustaining, including the addition of new services such

as a Hepatitis-B vaccination program and the refurbishment

of a mother-and-child health center for factory employees and

community members.

MICRO-FINANCE PROGRAMIn order to make savings and credit opportunities more available

to factory workers, CARE created a flexible program specifically

for YoungOne employees. In response to complaints of robbery on

paydays, the program provided savings booths inside the factory,

where employees can make deposits and withdrawals during their

breaks and in the safety of the workplace. In addition, the program

allowed workers access to small loans for health care, education,

or income-generating activities to improve living conditions for

themselves and their families. The average loan amount is $95

USD, and borrowers receive a favorable rate of interest (over 10%

lower than other credit options in the area), which is paid back

into the savings plan to ensure sustainability of the fund. As of the

end of 2008, the micro-finance program has had more than 17,500

participants and granted over $2.6 USD million in loans with a 99%

payback rate.

Pictures and translated quotes provided by CARE.

Although she is not a YoungOne employee, Shapna (pictured here with herchild receiving care at the clinic) is an example of how the CEPZ projectbenefits the larger community.

Because of the CEPZ project in our community, we now have regular health care. Whenever my

children are sick, I can take them easily to a doctor nearbyand the fees are half the price of other

clinics. The drop-in clinics are convenient, too. I work during the day, but the clinic is open at night. Ido not have to lose income to take my child to the doctor, Shapna says.

beyond factory walls 2009 timberland report

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