Download - 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.
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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.
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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.
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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
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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.
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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
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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
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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
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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.
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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
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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.
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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.
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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.
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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/ -
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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
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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
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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.
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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.
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