Philip Morris releases second progress report on implementation of company's Agricultural Labor Practices program, which aims to progressively eliminate child labor, other labor abuses on the 490,000 farms where company buys tobacco worldwide

Nevin Barich

LAUSANNE, Switzerland , April 2, 2014 (press release) – Philip Morris International Inc. today released its second Progress Report on implementation of the company's Agricultural Labor Practices program, which aims to progressively eliminate child labor and other labor abuses on the 490,000 farms where PMI buys tobacco worldwide.

'With our ALP program, we have implemented an operating culture and practices code that allows us to address this complex matter in a determined, systematic and effective manner. We are mindful that certain behaviors are deeply ingrained in the economic, sociopolitical and cultural fabric of many tobacco-growing countries and that we cannot be successful alone,' said PMI's Chief Executive Officer Andre Calantzopoulos.

'We combine our own hard work and perseverance with strong engagement with governments and local communities, as well as, partnerships with non-profit organizations specialized in this field and the internationally-renowned expert, Verite. We all know this is a long term journey but are pleased with the results already achieved.'

Leading global NGO in supply chain social responsibility, Verite, partners with PMI on its ALP program and has been involved in the program's design as well as its ongoing implementation, and, crucially, the monitoring of the program.

'In our experience, companies that publicly share social responsibility achievements and challenges make faster progress. For that reason we are encouraged by PMI's willingness to openly and actively engage with stakeholders and issue these annual reports on the ALP program.

We share with PMI an understanding that a company which faces challenges within its supply chain cannot address such challenges without collaborating with others. In 2014 and onward, Verite will continue to serve as an advisor and strategic consultant, trainer, critic, and a facilitator of dialogue between PMI and others,' said Verite Chief Executive Officer Dan Viederman.

The latest report describes the efforts made in 2013 throughout PMI's global leaf tobacco supply chain to understand the complex daily realities and challenges faced at farm level that can lead to labor abuses on farms. In addition, the report outlines company's efforts to address issues when they are identified as well as to develop a systematic approach to progressively eliminate these abuses from its leaf tobacco supply chain.

Since the ALP program's inception in 2011, efforts have focused on achieving that each and every farmer with whom PMI has a contractual arrangement (directly or indirectly) works in a way that meets the standards of the ALP Code, which is the foundation of the program. Highlights from the latest report include:

Communicating the ALP Code widely to farmers and compiling socio-economic data (Farm Profiles) for all farms with whom PMI does business, coupled with putting in place an internal monitoring system on program implementation;

Dedicating significant resources for training and refresher courses to help build the knowledge and skills needed by the 3,700 field technicians who help farmers each day in meeting ALP Code standards, as well as training new field technicians on ALP implementation;

Conducting the first wave of third-party assessments using external contractors (Control Union Certifications) to evaluate the program's application in three markets (Brazil, Italy and Mexico) and

Broadening PMI engagement with stakeholders to foster partnerships with governments, NGOs, local community groups and others in the tobacco industry to help address key challenges.

PMI believes a holistic, supply-chain wide approach is essential to successfully eliminating labor abuses on farms. To achieve this, the company has undertaken several initiatives including making the adoption of labor-saving techniques which provide higher yields and revenues for farmers possible, working more closely with governments and NGOs to seek policy changes to tackle child labor effectively, and ensuring PMI's charitable contributions are used to provide support and services to tobacco-growing communities. Malawi is one such example of this.

In the future, PMI will continue to implement ALP through the commitments mentioned in the report, incorporating pragmatic adaptations as needed in the way the global program is applied on the ground.

Media Contact:

Philip Morris

Tel: +41 (0)58 242 4500

Email: media@pmi.com

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