Our Approach: The Factory Level — Our Terms of Engagement
Our Terms of Engagement (TOE) is our supplier code of conduct and provides guidance for certain business practices of our suppliers, such as fair employment, worker health and safety, and environmental standards, among others.
A Historic Beginning, and Always Evolving:
According to Business for Social Responsibility CEO Aron Cramer, the Levi Strauss & Co. (LS&CO.) code of conduct, introduced in 1991, was "the code that launched a thousand codes." Our original code of conduct was the first of its kind for a multinational company in any sector, and it was LS&CO.'s first significant step toward developing a comprehensive responsible global sourcing program.
The TOE specify requirements by which all LS&CO. contract factories must abide. They include ethical standards, legal requirements, environmental requirements and community involvement. They also include employment standards and specifically address issues of child labor, forced labor, disciplinary practices, working hours, wages and benefits, freedom of association, discrimination, and health and safety.
The TOE are based on our company values, standards set by the United Nations (particularly the Universal Declaration of Human Rights) and many of the International Labor Organization's Core Conventions.
In the spirit of continuous improvement, we have enhanced our guidelines over the years to reflect the suggestions of nongovernmental organizations, U.S. and international health and safety standards, and what we have learned through our own experience.
We added strict wastewater effluent standards to the implementation guidelines for contract laundries in 1995. In 1998 and again in 2005 we strengthened the TOE freedom of association provisions. We developed a comprehensive TOE assessor training program for our factory monitors and a detailed TOE Guidebook as a reference for factories, monitors and external stakeholders with an interest in factory working conditions.
We extended TOE requirements to our licensees in 2001 and are investigating models that will allow us to move toward a program that encourages and focuses on supplier ownership and capacity building at the factory level.
We are continually refining the way we measure supplier performance with regard to our standards, and we consider supplier TOE performance ratings as we make sourcing and other critical business decisions.
Performance on the TOE is an explicit goal in the annual performance reviews of leaders in the company's global sourcing operation including global, regional and country sourcing leaders and the global TOE team.
Our responsible sourcing program has come a long way since the first Global Sourcing and Operating Guidelines were put in place in 1991. While the guidelines and our Terms of Engagement will always be the core of the LS&CO. program, we are committed to modifying our approach and implementation methods as necessary while we navigate the path toward a sustainable, supplier-owned program.