Levi Strauss & Co., Code of Conduct

Global Sourcing & Operating Guidelines

Levi Strauss & Co. seeks to conduct its business in a responsible manner. In 1991, Levi Strauss & Co. was the first multinational company to establish comprehensive Global Sourcing & Operating Guidelines.

Business Partners

Our Global Sourcing & Operating Guidelines help us to select business partners who follow workplace standards and business practices that are consistent with our company's policies. These requirements are applied to every contractor who manufactures or finishes products for Levi Strauss & Co. Trained inspectors closely audit and monitor compliance among approximately 600 cutting, sewing, and finishing contractors in more than 60 countries.

Partnerships That Work

For Levi Strauss & Co., implementing our guidelines is a comprehensive and resource-intensive effort. Our goal is to achieve positive results and effect change in partnership with our contractors, rather than to punish contractors for transgressions. Through our guidelines, we seek long-term solutions that will benefit the individuals who make our products and will improve the quality of life in the communities in which they live.

The Levi Strauss & Co. Sourcing & Operating Guidelines include two parts:

I. The Business Partner Terms of Engagement, which deal with issues that are substantially controllable by Levi Strauss & Co.'s individual business partners.

II. The Country Assessment Guidelines, which address larger, external issues beyond the control of individual business partners (e.g., health and safety issues and political, economic, and social conditions). These help us assess the risk of doing business in a particular country.

These standards are an integral part of our business. Company employees have the authority and the responsibility to take any steps necessary to ensure compliance with all standards and policies. Our employees and our business partners understand that our guidelines are no less important than meeting our quality standards or delivery times.

Terms of Engagement

1. Ethical Standards

We will seek to identify and utilize business partners who aspire as individuals and in the conduct of all their businesses to a set of ethical standards not incompatible with our own.

2. Legal Requirements

We expect our business partners to be law abiding as individuals and to comply with legal requirements relevant to the conduct of all their businesses.

3. Environmental Requirements

We will only do business with partners who share our commitment to the environment and who conduct their business in a way that is consistent with Levi Strauss & Co.'s Environmental Philosophy and Guiding Principles.

4. Community Involvement

We will favor business partners who share our commitment to contribute to improving community conditions.

5. Employment Standards

We will only do business with partners whose workers are in all cases present voluntarily, not put at risk of physical harm, fairly compensated, allowed the right of free association and not exploited in any way. In addition, the following specific guidelines will be followed:

Wages and Benefits: We will only do business with partners who provide wages and benefits that comply with any applicable law and match the prevailing local manufacturing or finishing industry practices.

Working Hours: While permitting flexibility in scheduling, we will identify prevailing local work hours and seek business partners who do not exceed them except for appropriately compensated overtime. While we favor partners who utilize less than sixty-hour work weeks, we will not use contractors who, on a regular basis, require in excess of a sixty-hour week. Employees should be allowed at least one day off in seven.

Child Labor: Use of child labor is not permissible. Workers can be no less than 14 years of age and not younger than the compulsory age to be in school. We will not utilize partners who use child labor in any of their facilities. We support the development of legitimate workplace apprenticeship programs for the educational benefit of younger people.

Prison Labor/Forced Labor: We will not utilize prison or forced labor in contracting relationships in the manufacture and finishing of our products. We will not utilize or purchase materials from a business partner utilizing prison or forced labor.

Health & Safety: We will only utilize business partners who provide workers with a safe and healthy work environment. Business partners who provide residential facilities for their workers must provide safe and healthy facilities.

Discrimination: While we recognize and respect cultural differences, we believe that workers should be employed on the basis of their ability to do the job, rather than on the basis of personal characteristics or beliefs. We will favor business partners who share this value.

Disciplinary Practices: We will not utilize business partners who use corporal punishment or other forms of mental or physical coercion.

Evaluation & Compliance

All new and existing factories involved in the cutting, sewing, or finishing of products for Levi Strauss & Co. must comply with our Terms of Engagement. These facilities are continuously evaluated to ensure compliance. We work on-site with our contractors to develop strong alliances dedicated to responsible business practices and continuous improvement.

If Levi Strauss & Co. determines that a business partner is in violation of our Terms of Engagement, the company may withdraw production from that factory or require that a contractor implement a corrective action plan within a specified time period. If a contractor fails to meet the corrective action plan commitment, Levi Strauss & Co. will terminate the business relationship.

Our Commitment

Levi Strauss & Co. is committed to continuous improvement in the implementation of our Global Sourcing & Operating Guidelines. As these standards are applied throughout the world, we will continue to take into consideration all pertinent information that helps us better address issues of concern, meet new challenges, and, improve our guidelines.

Examples of Partnerships That Work:

In Bangladesh, our initial Terms of Engagement evaluations revealed that several underage girls were working in two contractors' facilities. Rather than dismiss the girls, which would have put them at risk of exploitation and economic hardship, Levi Strauss & Co. teamed up with the contractors to develop an innovative solution. The contractors agreed to stop employing underage workers, and to continue to pay a salary to the girls, provided that they attend school. Levi Strauss & Co. paid for tuition, books, and school uniforms for the girls. The contractors, in turn, pledged jobs for the girls after completion of their schooling.

In Pereira, Colombia, Levi Strauss & Co. worked with a contractor to redesign factory floor space, improve access to exits, and develop an effective emergency preparedness and evacuation plan. Several weeks after these improvements had been made, Pereira was rocked by a severe earthquake. Amidst extensive damage and injury to surrounding buildings and workers, all of our contractor's employees were able to safely exit the factory. The changes initiated under our Terms of Engagement policies are credited with preventing injury or death to the workers at this factory.

As a result of LS&CO.- contractor alliances, more than 35 water treatment systems have been built or upgraded at laundry and product finishing centers in countries such as Morocco, Thailand, Mexico, Brazil, Philippines, Guatemala and Pakistan. Many of these facilities have incorporated innovative programs to recycle treated water. For example, at one of our contracted laundries in El Paso, Texas, treated water is used to irrigate an adjacent field.

In Puerto Rico, a Levi Strauss & Co. contractor was the first on the island to retrofit factories with facilities accessible to the disabled. In these same three plants, doctors hold open office hours five days-a-week to treat the families of employees. Through a contractor/ LS&CO. alliance, the factories also sponsor summer work programs to help pay the college tuition of employees and their families.

Since the establishment of our Global Sourcing & Operating Guidelines, we have witnessed significant growth in community involvement programs sponsored by our business partners. In a small town in Mexico, one of our contractors started a program that purchases books and other school supplies for students costs which in the past limited basic education opportunities to children from wealthier families. As a result of this program, the overall education standards and level of school attendance has increased notably for all children in the community.

In Indonesia, our contractors have implemented changes to improve the health, safety, and workplace conditions for their employees. These changes include: production line redesigns that have reduced crowding and improved efficiency; improvements to ventilation systems; construction of new chemical storage systems; electrical wiring and lighting retrofits; the codification and enforcement of workers rights; and increased wages and benefits.

In response to a recommendation made during a Terms of Engagement evaluation, one of our business partners in Tunisia designed and implemented a program to promote worker diversity at sewing factories that have traditionally employed only women. In partnership with the Government of Tunisia, the contractor established an innovative job training program to create new opportunities for young men, including those with disabilities. Graduates of the program are qualified to hold skilled positions in a sewing factory. The contractor has been recognized in the community as an innovative employer actively encouraging diversity in the workplace and supporting the productive employment of disabled workers.