Factory Relationship
Beginning the Factory Relationship >
In the Factory – A Philosophy of Cooperation and Responsibility >
Factory–Level Education >
Beginning the Factory Relationship:
Prior to engaging with a prospective supplier, Levi Strauss & Co. (LS&CO.) informs the supplier of our Terms of Engagement (TOE) requirements and provides them with copies of the Terms of Engagement Guidebook, which defines specific factory-level practices, policies and LS&CO. expectations. The specific facility that will produce the LS&CO. products is then assessed to ensure that it meets the TOE guidelines. In order for production orders to be placed at the facility, any zero-tolerance or immediate-action items identified during the initial assessment must be corrected.
All suppliers are required to sign a document acknowledging their intent to comply with the TOE as part of the purchase or licensing agreement with LS&CO. They must agree to follow the TOE and any corrective action plans as a condition for continuing the manufacturing relationship.
In the Factory — A Philosophy of Cooperation and Responsibility:
LS&CO.’s approach to TOE implementation is based on a philosophy of cooperation with our contractors. We work on-site with our contractors to develop strong alliances dedicated to responsible business practices and continuous improvement. We work with our suppliers to identify and resolve problems in their factories and to improve working conditions for their employees. We learn from their successes and share best practices across our supplier base.
We understand that our standards are higher than many in our sector and that our suppliers will be challenged at times to meet them. As long as a supplier is willing to or capable of meeting our terms, we will work with and support that supplier.
We impress upon suppliers the importance of TOE performance to our business relationship. Poorly performing suppliers are warned that they are in danger of having their production orders reduced unless they are able to improve their TOE performance. In most cases, such notification motivates the supplier to quickly improve.
If performance does not improve, we will reduce production orders with the supplier until they can bring it up to an acceptable level. If TOE performance does not improve after the order reduction, we exit the supplier and end our relationship with them. Such a situation rarely occurs, as most suppliers are interested in keeping our business.
Should we find it necessary to withdraw orders or exit production at a facility, we work to do so responsibly so that factory employees receive their proper wages and benefits.
Factory-Level Education:
The TOE are specified at the factory level through a detailed TOE Guidebook, which defines specific factory-level practices and policies, and provides examples of violations, recommended remediation timeframes and specific steps required to address violations. All suppliers are provided copies of the TOE Guidebook.
Periodically, groups of suppliers in various countries are provided with a half-day orientation to the TOE. As part of corrective action plans, suppliers may be requested to conduct supervisor training on codes of conduct or work with local NGOs or labor specialists to provide such training.
In addition to educating factory management on TOE requirements, LS&CO. believes it is critical to educate factory employees on their rights in the workplace and our company’s expectations of factory management.
In some cases, LS&CO. assessors provide direct education to workers on the TOE. In others, we partner with or, through the Levi Strauss Foundation, fund local nongovernmental organizations to educate workers on their rights.
Additionally, the TOE guidelines are prominently displayed in both English and the prevalent local language in the factories.