TexOps Assessment for Accreditation · Location San Juan Opico, La Libertad Province, El Salvador ... Francisco Chicas, Latin America Regional Manager Support: Tiffany Rogers, Business

TEXTILES OPICO, S.A. de C.V. ASSESSMENT FOR ACCREDITATION

June 2016

TEXTILES OPICO, S.A. de C.V.: ASSESSMENT FOR ACCREDITATION OF THE COMPANY’S SOCIAL COMPLIANCE PROGRAM

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TABLE OF CONTENTS

Introduction ............................................................................................................................... 3 Section 1: TexOps' Labor Compliance Program .................................................................. 6 Section 2: Analysis of TexOps' Labor Compliance Program Using the FLA Principles of Fair Labor and Responsible Production ................................. 9 Section 3: Conclusion ............................................................................................................ 33

APPENDIX: TexOps' Code of Conduct (Spanish and English) .......................................... 34


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INTRODUCTION FLA-accredited Participating Suppliers have demonstrated that they have the systems and procedures in place to successfully uphold fair labor standards. When joining the FLA, Participating Suppliers commit to implementing the FLA Workplace Code of Conduct, which ensures “respectful and ethical treatment of workers” and “promotes sustainable conditions through which workers earn fair wages in safe and healthy workplaces.”

While the FLA does not certify suppliers, it does evaluate them at the headquarter level – in addition to standard factory-level due diligence activities that are conducted annually – to determine whether they have social compliance systems in place to proactively identify and address risks or instances of noncompliance. Accreditation is the highest level of recognition for FLA-affiliated companies.

The FLA Board of Directors voted to approve the accreditation of TexOps’ compliance program on June 8, 2016 based on proven adherence to FLA's Workplace Code of Conduct and the Principles of Fair Labor and Responsible Sourcing. Details on FLA's accreditation methodology can be found at www.fairlabor.org/accreditation.

The FLA conducted one SCI factory assessment, two field observations, and one headquarter assessment at Textiles Opico’s facility in San Juan Opico, El Salvador.


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SUMMARY OF TEXOPS’ LABOR COMPLIANCE PROGRAM ACCREDITATION

Name of Company

Textiles Opico, S.A. de C.V. (TexOps)

Category Participating Supplier

Location San Juan Opico, La Libertad Province, El Salvador

Product/s Apparel – Specializes in four-way stretch active wear

FLA Affiliation Month/Year

June 2012 Current Number of Applicable Facilities

One facility located in El Salvador

Accreditation Month/Year

June 2016 Union Sindicato de Trabajadoras, Trabajadores, Sastres, Costureras y Similares (SITRASACOSI)

FLA Accreditation Lead/Support

Lead: Francisco Chicas, Latin America Regional Manager Support: Tiffany Rogers, Business Accountability Program Manager

Unique Company Characteristics

1) Investment in social programs and benefits that directly impact TexOps workers such as a certifying its childcare facility as a Montessori school, providing materials for workers to rehabilitate their houses, and offering medical and ergonomic support onsite;

2) Investment in social programs that benefit the community such as providing space for recreational activities such as soccer, softball, and BMX biking and programs to support rehabilitated women; and

3) Supplier to one FLA Participating Company and one Category B Licensee.

Key Strengths Summary

1) Clear commitment and support from the President to adhere to workplace standards and integrate standards into business operations;

2) Workplace standards are communicated to all employees and training data analysis is conducted to identify areas where employee knowledge needs to be improved;

3) Provision of training on freedom of association at the managerial level, with the purpose of ensuring respect for associational rights and preventing any form of discrimination or interference with workers’ right to join organizations of their own choosing;

4) Diversity of confidential grievance channels available for workers and different management-level personnel to receive and address grievances;

5) The internal collaboration in place to develop and implement TexOps’ Procedures for Responsible Production & Planning and TexOps’ commitment to developing responsible and competitive production practices; and

6) Execution of several social programs for the benefit of workers, in partnership with local CSOs and other relevant stakeholders.


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Key Suggestions for Strengthening Summary

1) Continued development and implementation of TexOps’ internal monitoring, including strengthening of worker interview techniques;

2) Development of a comprehensive approach to the analysis of assessment data;

3) Continued union engagement throughout the monitoring and remediation processes;

4) Continued implementation and strengthening of TexOps’ CSO Engagement Strategy, with a focus on gender, labor, and human rights, in order to gain understanding of labor issues in the country, and to inform the application of the workplace standards compliance program; and

5) Consideration to actively participate in FLA activities, such as attending future Monitoring Committee & Board Meetings, or participating in an applicable working group.

Relevant Violations or Campaigns

An FLA Independent Investigation was conducted in April 2013 due to the termination of union representatives during the formation of SITRACOSI at TexOps. TexOps remediated all findings from the investigation. Further details are included in the Accreditation Report.


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SECTION 1: TEXOPS’ LABOR COMPLIANCE PROGRAM TexOps is an active and sports apparel manufacturing company located in San Juan Opico, La Libertad Province, El Salvador and owned by partners Chief Executive Officer David Ha and President Juan Zighelboim, who also acts as General Manager. TexOps was formed in 2009, after a merger occurred between David Ha and the factory Juan Zighelboim formerly owned, Partex Apparel. TexOps specializes in manufacturing of four-way stretch apparel and has invested in automated-cutting and digital printing. Currently, TexOps has 1,318 employees and has experienced an annual average of 20 percent sales growth since its affiliation with the FLA in June 2012. TexOps consists of one cut, sew, and digital printing facility, which includes sampling and product development. Additionally, the TexOps campus includes a childcare facility, greenhouse, soccer and softball fields, bicycle motocross course (BMX), and healthcare, massage, and ergonomics facilities. TexOps was approved as a Participating Supplier (PS) in June 2012, originally selecting a two-year implementation period.

TexOps established its code of conduct in 2010 and revised its code of conduct in 2016 to align with the FLA Workplace Code of Conduct. The TexOps President oversees the implementation of its social compliance program, which is led by the Social Responsibility Manager and the Human Resources (HR) Manager. The Social Responsibility Manager, a well-known social compliance professional in El Salvador, reports directly to TexOps’ President and devotes 40 percent of his workweek towards the development and execution of TexOps’ social compliance program. The Health & Safety Manager, the Administrative Manager, and two HR assistants also support implementation of the social compliance program.

The owners of TexOps have invested in social programs and benefits for TexOps’ workers and the community. The childcare facility on the TexOps campus is provided for the children of TexOps’ workers and is a certified Montessori school. TexOps developed the “Garrobo Project” in partnership with the Secretary of Social Inclusion of El Salvador, to teach young women to sew. Women from this program are allowed to apply for TexOps jobs once they are of age. Workers are also able to request financial support for home improvements, such as roof construction, for which TexOps will provide the materials. Additionally, TexOps partnered with Pista BMX and the Salvadoran Cycling Federation to support Salvadoran cycling and youth by installing a BMX course for Pista BMX cyclists, young cyclists, and workers to use. TexOps also sponsors the Pista BMX cyclists with cycling uniforms. The following report provides more information on other social programs and benefits that TexOps provides to its employees.

In April 2013, Sindicato de Trabajadoras, Trabajadores, Sastres, Costureras y Similares (SITRASACOSI) formed a union sectional at TexOps. SITRASACOSI is affiliated with the union federation Federación de Unidad de Trabajadoras y Trabajadores de El Salvador (FUERSA). Both, SITRASACOSI and FUERSA raised public complaints against TexOps alleging violations to freedom of association due to the termination of the union leaders that promoted the formation of the union. TexOps and one FLA affiliated company sourcing from TexOps requested for the FLA to commission an independent investigation. As part of the independent investigation, the dismissed union representatives were reinstated with back pay. TexOps cooperated with the independent investigation process and has remediated the noncompliances identified.


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TexOps is a supplier to one FLA Participating Company, a FLA Category B Licensee, a non-FLA affiliated licensee of an FLA Participating Company, and several other apparel brands and retailers in the active wear market in North America.

The table below describes TexOps’ scope of affiliation over the period 2012-2015. During this period, TexOps was subject to one Independent External Assessment (IEA), in 2013, in the form of a Sustainable Compliance (SCI) assessment. Because TexOps is a one-facility PS, they receive one SCI assessment every three years as per FLA IEA procedures. During the two years after the SCI assessment, TexOps focused on implementing its remediation action plan and incorporating SCI remediation plans into its social compliance program for Accreditation. Information on the results of the assessment and the remediation undertaken by TexOps in response to findings of noncompliance are publicly available on the FLA website and are discussed, as appropriate, in the next section.

TEXOPS APPLICABLE FACILITIES* & FLA ASSESSMENTS, 2012-2015 YEAR APPLICABLE FACILITIES FLA ASSESSMENTS

2012 1 0** 2013 1 1 2014 1 0* 2015 1 0*

* TexOps’ only applicable facility is located in El Salvador. Since TexOps is a one-‐facility PS, one SCI assessment is conducted every three years at the facility. **FLA Affiliates do not receive FLA assessments in the first year of affiliation.


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SECTION 2: ANALYSIS OF TEXOPS’ LABOR COMPLIANCE PROGRAM USING THE FLA PRINCIPLES OF FAIR LABOR AND RESPONSIBLE PRODUCTION Information used in this assessment has been collected from documents submitted by TexOps to the FLA and through:

1) An assessment at TexOps headquarters conducted by FLA staff in November 2015; 2) Shadowing of a TexOps assessment at the facility in El Salvador, in May 2015; 3) Shadowing of a TexOps training for workers on workplace standards at the facility in El

Salvador, in June 2015; 4) Information gathered in person, via phone interviews, and through email

correspondence with TexOps staff; 5) Worker interviews conducted at the facility in El Salvador, from a sample selected by

FLA staff; 6) Results of the FLA Independent External Assessment at the facility of TexOps,

conducted by FLA assessors in 2013; 7) Interactions with TexOps and stakeholders in the context of an FLA Independent

Investigation, involving the facility in El Salvador, in 2013; and 8) Communication with stakeholders.

1. WORKPLACE STANDARDS: COMPANY AFFILIATE ESTABLISHES AND COMMITS TO CLEAR STANDARDS

1.1 Company Affiliate establishes and articulates clear, written workplace standards that meet or exceed those embodied in the FLA Workplace Code of Conduct. Actions Taken: TexOps adopted its first code of conduct in 2010. Since then, three revisions have taken place in order to meet the FLA’s expectations related to Code alignment. The last code revision conducted by TexOps was in March 2016, concerning its “Health, Safety and Environment” and “Compensation” standards to align it with the FLA Workplace Code of Conduct. The President of TexOps has signed the revised version of the TexOps Code of Conduct, which is applicable to all company employees, and references the International Labor Organization (ILO) standards.

TexOps has also adopted the FLA Compliance Benchmarks, as part of its internal workplace standards.

Verification by FLA: FLA reviewed the 2014 version of the TexOps Code of Conduct and provided recommendations for code alignment. TexOps submitted a revised code in April 2016, which FLA staff reviewed and confirmed the TexOps Code of Conduct meets or exceeds the FLA Workplace Code of Conduct. With the incorporation of the Salvadoran’s Ministry of Health regulations in its code, TexOps’ Health & Safety standard exceeds the FLA Health, Safety, and Environment Workplace Standard. The TexOps Code of Conduct can be found in Appendix A of this report in English and Spanish.


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1.2 Company Affiliate leadership formally commits to uphold workplace standards and to integrate them into company business practices. Actions Taken: TexOps has formally committed to upholding its Code of Conduct and the FLA Workplace Code of Conduct, and to integrate those standards into the company’s business practices through a commitment letter signed by both the Chief Executive Officer and the President. The letter includes the adoption of the FLA’s Compliance Benchmarks and Principles. This letter has been posted on a notice board in the sewing production floor, and TexOps management committed to integrate it into the new-‐hire orientation training and will be included in the revised version of the employee handbook.

Verification by FLA: FLA staff reviewed the TexOps commitment letter to uphold the company’s Code of Conduct, the FLA Principles, and the FLA Workplace Code of Conduct and Compliance Benchmarks. FLA reviewed evidence that the commitment letter has been posted on a bulletin board in the production plant. Additionally, through interviews at the headquarter assessment, FLA noted the President’s commitment to upholding workplace standards and improving the lives of TexOps’ workers through the implementation of its social compliance program, and other voluntary programs to benefit the workers, and training programs for workers to further develop career-‐building skills.

2. RESPONSIBILITY AND HEAD OFFICE/REGIONAL TRAINING: COMPANY AFFILIATE IDENTIFIES AND TRAINS SPECIFIC STAFF RESPONSIBLE FOR IMPLEMENTING WORKPLACE STANDARDS AND PROVIDES TRAINING TO ALL HEAD OFFICE STAFF

2.1 Company Affiliate identifies the person(s) responsible for implementing its workplace standards compliance program. Actions Taken: The TexOps Corporate Social Responsibility (CSR) Team is composed of the President, the Social Responsibility Manager, the Health & Safety Manager, the HR Manager, two HR assistants, and the Administrative Manager. The CSR Team works collaboratively to support the company’s social compliance program on a daily basis. The Social Responsibility Manager is a CSR and assessment consultant in El Salvador who devotes 40% of his time to managing TexOps social compliance program and reports directly to the President. The Social Responsibility Manager is responsible for implementing a social compliance program that is in compliance with local law, buyers’ standards and requirements, and follows the FLA Workplace Code of Conduct, Compliance Benchmarks, and the Principle Benchmarks. Additionally, the Social Responsibility Manager provides guidance and support to the HR and Production departments responsible for implementing procedures to support the social compliance program.

Verification by FLA: During the 2015 headquarter assessment and field observations conducted in 2015, FLA staff verified the structure of the TexOps’ CSR Team with the Social Responsibility Manager serving as primary point of contact with the FLA. FLA reviewed the TexOps Organizational Chart that shows the reporting channels within the various departments at the company, including all relevant staff responsible for developing and implementing TexOps’ social compliance program.


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FLA staff reviewed job descriptions for the CSR Team. The General Manager’s responsibilities include ensuring the safety and security of workers, authorizing overtime, and assessing production planning to avoid negative impacts on workplace conditions. Job descriptions of HR Manager and her assistants, Health and Safety Manager, and Administrative Manager include ensuring compliance with national labor law and internal policies; coordinating round table meetings with the union; ensuring the proper implementation of social programs for the benefits of workers, addressing workers’ grievances and handling discipline; regularly reviewing the occupational health and safety management system; providing training on workplace standards; and supporting the external social compliance assessments.

In 2007, the Social Responsibility Manager was hired as a consultant to support and prepare TexOps for buyers’ and FLA assessments. However, throughout the implementation period, the Social Responsibility Manager has become increasingly involved and responsible for operationalizing TexOps’ social compliance program and workplace standards. This transition has resulted in an evolution of integration of a consultant’s role in TexOp’s business practices to establish him as the Social Responsibility Manager. Due to this recent change, the Social Responsibility Manager does not have a job description to outline the responsibilities of the position.

Recommendations: FLA recommends TexOps to develop a job description for the Social Responsibility Manager that includes all responsibilities for TexOps’ social compliance program and includes the manager’s integration and collaboration with other departments.

2.2 Company Affiliate trains the person(s)/team(s) responsible for administering and implementing its workplace standards compliance program. Actions Taken: The Social Responsibility Manager has ten years of experience in the social compliance field, by conducting social compliance assessments for various companies – including three FLA Participating Companies, and by providing guidance to local suppliers on how they can prepare for buyers’ assessments and build their internal social compliance programs. Additionally, the Social Responsibility Manager completed a course on health, safety, and environment management systems in 2015.

The HR Manager was hired in 2007, and has completed various forms of formal and informal training on social compliance standards. The HR Team has received training on labor and environmental laws; some of these trainings were provided by Cámara de la Industria Textil, Confección y Zona Francas de El Salvador (CAMTEX) and Asociación Salvadoreña de Industriales (ASI), local private business associations in which TexOps has membership. The other company managers have received training on leadership, and environmental and labor issues.

Verification by FLA: FLA reviewed training materials, records, and certificates to verify the CSR team received training on workplace standards and social compliance. In April 2013, Sindicato de Trabajadoras, Trabajadores, Sastres, Costureras y Similares SITRASACOSI, affiliated with the union federation Federación de Unidad de Trabajadoras y Trabajadores de El Salvador (FUERSA), raised public complaints alleging violations of freedom of association related to the termination of the main union representatives and founders of SITRACOSI at TexOps. The FLA commissioned an investigation, which was conducted by an independent third party investigator, which concluded that TexOps had dismissed union members in breach of the



law and the FLA’s Workplace Code of Conduct and Benchmarks. In response, TexOps developed and implemented a remediation plan that reinstated dismissed union representatives with back pay and provided training on freedom of association to managers and supervisors. A verification visit conducted by a third party engaged by the FLA in January 2014 confirmed that most of the remediation items had been completed, including the reinstatement of dismissed workers and training on freedom of association for managers, supervisors and workers.1 An ombudsperson was appointed by TexOps in agreement with the union and the FLA to provide training on nondiscrimination, freedom of association, harassment, and sexual harassment which is discussed further in Benchmark 2.3. Recommendations: FLA recommends TexOps provide ongoing freedom of association and collective bargaining training to the management staff by an expert that has the support of the union and other local civil society organizations. Also, the FLA recommends TexOps develop a mechanism to ensure that training programs for managers are effective and include mechanisms to assess the knowledge gained from the trainings.

2.3 Company Affiliate ensures that training is provided to all head office and regional staff on the company’s commitment to workplace standards and the integration of standards into business practices. Training occurs at onboarding and refresher training is conducted annually. Actions Taken: TexOps has provided training to all managers, heads of departments, and supervisors on workplace standards, including the Production Manager, Planning Manager, and Director of Operations. This training was provided by the ombudsperson hired by TexOps as part of the implementation of the independent investigation Corrective Action Plan (CAP), and included the company’s Code of Conduct, disciplinary and grievance systems, freedom of association, and nondiscrimination. The HR Manager is planning to conduct annual refresher training for TexOps’ management staff.

Verification by FLA: Through interviews during the November 2015 headquarter assessment, FLA staff verified that training on workplace standards was conducted with senior-‐level management in Production and Planning Departments. Senior-‐level management demonstrated knowledge of TexOps’ compliance program and responsible production practices. FLA staff reviewed records of the training for managers provided in 2014 by the ombudsperson, including attendees’ lists and training material.

Additionally, FLA staff reviewed TexOps’ Procedure on Responsible Production and Planning, which highlights: a) a requirement to provide ongoing training on responsible production planning and workplace standards to the relevant staff involved in production and planning; b) relevant Key Performance Indicators (KPIs) to measure training effectiveness; c) a procedure for internal communication between different departments to review and assess the impact of production in working conditions, and d) the responsible planning procedures.

1 The independent verification report could be find here http://www.fairlabor.org/report/TexOps 2 Article 271 of Salvadoran Labor Code mandates employers negotiate a collective bargaining agreement with the union that has 51% of affiliated workers from the total company’s workforce. Negotiations may start upon the union’s request. 3 Under FLA standards, worker integration implies that workers are given the opportunity to provide their input/feedback into the creation,



3. PRODUCTION STAFF TRAINING: COMPANY AFFILIATE TRAINS ALL MANAGEMENT STAFF AND EMPLOYEES AT OWNED PRODUCTION SITES ON WORKPLACE STANDARDS AND TRACKS EFFECTIVENESS OF TRAINING

3.1 Company Affiliate ensures that workplace standards are accessible to workers, managers, and supervisors in written form and relevant languages. Actions Taken: All new employees receive a copy of TexOps’ Employee Handbook that describes the company’s policies and Code of Conduct, the additional benefits and social programs provided by TexOps, and the company’s certifications. Additionally, all internal policies and the Code of Conduct are posted on notice boards on the production floor. All information is provided in Spanish, the local language of the employees.

Verification by FLA: FLA staff interviewed a sample of production workers from different areas and departments during the headquarter assessment who confirmed having access to TexOps workplace standards upon hiring. During field observations of an assessment, a training, and the headquarter assessment, FLA staff verified that TexOps’ Code of Conduct and policies were posted at the production floor.

3.2 Company Affiliate (a) ensures that workers, managers, and supervisors are trained on workplace standards at regular intervals to take account of labor turnover, and (b) informs managers of the potential of FLA assessments and the Company’s expectation to remediate. Actions Taken: All new employees receive orientation training on workplace standards that includes TexOps’ policies and Code of Conduct. Refresher trainings are delivered annually among production and administrative workers and supervisors.

Additionally, the HR Manager informed relevant managerial staff about the 2013 SCI assessment and the expectation to remediate after the company received the final assessment report. In the case of internal and buyers’ assessments, the HR manager shares via email the assessment reports and the corresponding CAPs with all relevant managers communicating the expectation for remediation.

Verification by FLA: FLA staff observed worker and supervisor training on workplace standards in June 2015. In the resulting field observation report, the FLA took note of the efforts made to ensure an appropriate venue was utilized and that an appropriate communication style was used to describe the standards so that workers could understand the content. Recommendations for improving future trainings were provided to TexOps, such as revising the method used to include more interactive techniques, and to collect participants’ feedback about the training sessions.

FLA staff verified through interviews with production workers that they receive orientation training and ongoing refresher training on workplace standards. FLA also verified that the CSR Team and other relevant staff are notified of upcoming FLA assessments or other FLA activities. The CSR Team is also informed about buyers’ assessments to prepare for the assessments and to develop CAPs, and it is also mentioned in the company’s internal assessment procedure. FLA staff reviewed emails in which the HR Manager communicated with the Planning Manager regarding assessment results and the need for developing a CAP.



Finally, FLA staff also reviewed lists of attendees, training materials, and photographs related to workplace standards trainings to workers and supervisors.

3.3 Company Affiliate measures the effectiveness of training for workers, managers, and supervisors. Actions Taken: TexOps has developed and put in place a mechanism to measure the effectiveness of the trainings on workplace standards provided to workers and supervisors. The HR Manager administers a pre-‐test and a post-‐test for all participants to complete at each training session. Results are reviewed by the HR Manager and an analysis of the results is conducted to measure the progress participants have achieved in understanding the workplace standards. The HR Manager then develops a report with charts showing improvement of understanding the company’s workplace standards by production team. From this analysis, TexOps was also able to identify the areas production workers require further training, such as compensation, resignation, legal benefits and non-‐discrimination policies. Once the results review is completed at all departments within the company, focused trainings will be delivered to address standards on which workers require further training. TexOps is planning to conduct this data analysis on an annual basis.

Additionally, the HR Manager has engaged with the representatives of World Vision El Salvador, an organization that specializes in educating workers to provide empowerment and confidence, to provide guidance on delivering more interactive training sessions.

Verification by FLA: FLA staff reviewed relevant documentation including tests completed before and after trainings, as well as the report that included charts showing the test results for different production teams and departments. FLA staff observed the initial pre-‐ and post-‐ tests in practice during the June 2015 observation of TexOps training.

Recommendation: FLA recommends TexOps embed the analysis on training effectiveness and follow-‐up actions in HR Department operating procedures. In addition, once the analysis has been fully conducted, FLA supports TexOps to pursue additional training efforts on standards that require further worker understanding. FLA supports TexOps efforts to explore creative and interactive ways to ensure training on workplace standards is effective for all employees.

4. FUNCTIONING GRIEVANCE MECHANISMS: COMPANY AFFILIATE ENSURES WORKERS HAVE ACCESS TO GRIEVANCE MECHANISMS, WHICH INCLUDE MULTIPLE REPORTING CHANNELS OF WHICH AT LEAST ONE IS CONFIDENTIAL

4.1 Company Affiliate ensures there are functioning grievance procedures at owned production sites. Actions Taken: TexOps has established the following grievance mechanisms: i) suggestion boxes; ii) a cross-‐department Communication Committee; iii) an Open Door Policy; and iv) regular meetings with the union representatives.



The suggestion boxes provide confidentiality for workers when submitting grievances, and are available for all workers. Suggestion boxes have been placed in the bathrooms, which allows for workers to submit grievances confidentially and anonymously. Records of all grievances submitted through the suggestion boxes, the follow-‐up, and resolutions, are maintained by the HR Manager. The procedures of the suggestion box grievance channel are further discussed in Benchmark 4.2 below.

The Communication Committee is comprised by one representative worker from each work area or department, for a total of 21 members. The President meets with the Communication Committee on a monthly basis to receive all grievances that its members have collected and additional suggestions or feedback to improve the facility and work environment. The President provides responses to the grievances during the meeting with the Communication Committee members; however, if the resolution of the issue takes more time to determine, the resolution will be published later on a notice board and a follow-‐up conversation is conducted with the representative that presented that specific grievance. Representatives are responsible for reporting back to their colleagues in their work areas or departments on the resolutions from the meeting. Minutes of the meetings with the Communication Committee are also posted on notice boards so that workers can know what topics were discussed and their potential resolution. Every 6 months, workers are able to elect a new representative by submitting the names of three candidates. Candidates with the most votes are asked whether they are willing to be a representative on the Communication Committee. The invitation to participate in the election process is announced over the speaker system and verbally by each of the supervisors.

Under the Open Door policy all employees are able to raise grievances with their immediate supervisor or manager, the HR Manager, or the President. If a grievance can be immediately resolved, the worker with the grievance shall receive the answer verbally. If the grievance resolution takes longer to determine, the worker will be notified once the resolution is developed by the concerning parties. All grievances received under the Open Door policy system are recorded and maintained by the HR Manager.

Since the formation of SITRASACOSI in 2013, TexOps has held regular meetings with the union representatives at the factory and with representatives from the national federation, FUERSA. During these meetings, the union also acts as a grievance channel by presenting specific issues raised by the workers. The President, the Social Responsibility Manager, and the HR Manager participate in the meetings with the union representatives. The HR Manager is responsible for maintaining the minutes of all meetings held with the union.

The TexOps grievance policies and procedures include an escalating procedure, so that workers can go directly to the President, in instances where managers or supervisors do not resolve grievances or suggestions in accordance with workers’ expectations.

Verification by FLA: FLA reviewed TexOps’ Grievance Policies and Procedures and verified all channels are included in the policy and procedures. FLA staff interviewed management staff, union representatives, and production workers, who provided specific information about the functionality of the different grievance channels. Union leaders confirmed that some of the suggestions and requests they have made have been follwed by TexOps. For example, at the time of the headquarter assessment, TexOps was expanding their restroom facilities, and have had to install portable restrooms for its workers in the interim. The union representatives requested more frequent cleanings of the portable restrooms, which the President agreed to and instructed. It was also noted that production workers felt comfortable with using the different grievance channels available, with the Communication Committee as the most commonly



used channel. FLA staff also reviewed documentation and tracking of the grievances maintained by the HR Manager. FLA identified TexOps’ variety and functionality of grievance channels and workers’ confidence in the grievance mechanisms as a strength of TexOps’ social compliance program.

The FLA Americas field team had previous knowledge of the regular meetings between SITRASACOSI, FUERSA, and TexOps, as part of the follow-‐up to the remediation plan that resulted from the independent investigation. For over a year (July 2013-‐September 2014), an ombudsperson led the meetings between the union and management, based on a recommendation made by the FLA. These meetings have continued, which the FLA verified through interviews with union representatives and review of the minutes maintained by the HR Manager.

4.2 Where local mechanisms are not functioning, Company Affiliate provides alternative channels for workers to contact the brand directly and confidentially. Actions Taken: Since TexOps is a one-‐facility supplier, all grievance channels can go to head office staff with the suggestion box being an alternative channel that provides confidentiality and anonymity. All workers have accessibility to the suggestion boxes in the bathrooms to submit grievances. The HR Manager opens the suggestion boxes once a week and reviews submitted grievances with the Director of Operations, the Production Manager, and the President to discuss the grievances and their resolutions. If the complainant has included his or her own name, the resolution of the grievance is directly communicated to the worker. When the grievance is anonymous, the resolution is posted on the notice board.

Additionally, one of TexOps’ buyers, an FLA Participating Company, has established an email available for workers to report grievances; but so far, no worker has used it. Written information on how workers can contact this company is posted in the TexOps bathrooms.

Verification by FLA: During interviews with production workers, they confirmed the existence of suggestion boxes in the bathrooms. FLA staff also reviewed the general grievance tracker that includes follow-‐up actions and resolutions.

Upon FLA’s recommendations provided during the headquarter assessments, FLA confirmed through document review that TexOps revised its grievance procedure to include specific steps to be followed when a submitted grievance concerns managerial positions such as HR, Operations, Production Managers, or the President, so that the grievance can be objectively resolved. This procedure allows workers to confidentially report grievances against the HR Manager, through suggestion boxes or an email account that is reviewed by the President and the Social Responsibility Manager; workers have the option of verbally reporting those grievances directly to the President as well. The same grievance channels could be used to present grievances against the President or other managers, but in those cases the grievances are presented to and followed by the HR Manager.

4.3 Company Affiliate ensures training and communication is provided to all workers about the grievance mechanisms. Actions Taken: TexOps’ annual and new hire trainings to all workers include training on the facility’s various grievance channels. Consequently, the HR Manager measures and analyzes the effectiveness of these trainings. Supervisors and managers have been trained on how to handle grievances submitted through the open door policy.



Verification by FLA: The interviews FLA conducted with management staff, supervisors, and production workers, confirmed that workers received training and have comprehension of the different grievance channels. Through the worker interviews, it was clear that workers use the grievance mechanisms on various occasions, and that they feel comfortable with doing so.

During the field observation of workplace standards training to workers in June 2015, FLA staff confirmed that the company provides information to workers on the different grievance mechanisms. In addition, FLA confirmed that TexOps’ grievance system policies and procedures are posted in the notice board and are accessible to workers in the production floor. Grievance procedures are also posted in the bathrooms, next to the suggestion boxes.

4.4 Company Affiliate ensures that grievance mechanisms lack penalty and have at least one confidential reporting channel. Actions Taken: TexOps has a Non-‐Retaliation Policy, signed by the President, which explains that grievance channels are confidential and workers will not be penalized for submitting a grievance. This policy is posted on the notice board. The handbook provided to all new workers during the orientation training includes the Non-‐Retaliation policy.

As previously mentioned, the suggestion boxes are the main grievance channel offering confidentiality to workers, although the Communication Committee and the union leaders also serve as a means for workers to submit confidential and anonymous grievances to management.

Verification by FLA: FLA staff reviewed the Non-‐Retaliation Policy and verified the policy was posted on the notice board available for workers at the production floor and was included in the handbook. Training materials were also reviewed, however they do not include the non-‐retaliation element. Nevertheless, production workers, union representatives, supervisors, and managers interviewed during the headquarter assessment confirmed their confidence in using grievance channels, and no evidence of retaliation for submitted grievances or suggestions was found.

Recommendation: FLA recommends TexOps ensure that the Non-‐Retaliation Policy is included in the ongoing training for workers, supervisors, and managers.

5. MONITORING: COMPANY AFFILIATE CONDUCTS WORKPLACE STANDARDS COMPLIANCE MONITORING

5.1 Company Affiliate conducts annual assessments of compliance with workplace standards at every owned production site. Actions Taken: In 2015, the Social Responsibility Manager conducted the first full and formal internal assessment of working conditions at TexOps. Following the recommendations provided by the FLA, the Social Responsibility Manager developed an internal assessment procedure to standardize all future internal onsite assessments of working conditions. The company plans to conduct a full internal assessment every year.



Prior to 2015, the Social Responsibility Manager primary focus was to support the implementation of workplace standards and provide guidance to TexOps in preparation for assessments from multiple buyers. In preparation for a buyer’s assessment, the Social Responsibility Manager reviews the workplace conditions by conducting a factory walkthrough and an informal document review against the customer standards to ensure the factory is prepared for the assessment. Since TexOps may receive up to two assessments per month and has yet to experience a reduction in assessments from its buyers since affiliating with the FLA, the Social Responsibility Manager’s pre-‐buyer assessment process happens frequently.

Verification by FLA: In 2015, FLA staff conducted a field observation of TexOps’ internal assessment, and specific recommendations were provided to improve the assessment process, with a particular focus on worker interviews. Based on FLA’s feedback provided during the headquarter assessment, TexOps developed procedures governing its internal assessments. Additional feedback was provided by FLA staff and was taken into account to revise and update the internal assessment procedure. Due to the recent development of TexOps’ internal assessment procedures, TexOps has yet to develop a risk analysis approach within its own internal assessment.

Recommendation: FLA recommends TexOps to continue to develop its internal monitoring program throughout 2016 by testing the newly created internal assessment procedure, and to develop a risk analysis assessment approach within the internal assessment to focus on previously identified pressing or endemic issues.

5.2 Company Affiliate ensures that its monitoring program includes, but is not limited to: a. Worker interviews, b. Consultation with unions or worker representative structures, where applicable, c. Management interviews, d. Documentation review, e. Visual inspection, and f. Occupational safety and health review. Actions Taken: TexOps’ 2015 internal assessment, led by the Social Responsibility Manager, included worker interviews, management interviews, consultation with union representatives, documentation review, visual inspection, and occupational safety and health review. All activity requirements and regulations have been incorporated in the internal assessment procedure, including the participation of union representatives in the opening and closing meeting, and during the development and completion of remediation.

TexOps has adopted the FLA’s “In-‐FactoryPrompts” as its own assessment tool, which is in alignment with the FLA Compliance Benchmarks.

Verification by FLA: From the 2015 field observation of TexOps’ internal assessment, FLA staff verified that most of the components of monitoring were included in the assessment. FLA staff recommended that assessments include union representatives in the opening meeting and enhance the quality of worker interviews by building greater rapport and trust with interviewees. FLA staff also reported that the confidentiality and non-‐retaliation elements of the assessment were not explained to management and interviewed workers. Additionally, the time between the onsite



assessment and the completion of the final assessment report was significantly long – around two months. To improve upon this turnaround, TexOps has revised internal assessment procedures to include a 14-‐day deadline for writing and internally sharing the final report.

FLA staff reviewed TexOps’ revised internal assessment procedure, and verified that it includes relevant activities and processes of the social compliance assessment. FLA also reviewed and commented on the revised assessment report template, which will be used in future internal annual assessments to report on the noncompliances found during the assessment.

Recommendation: FLA recommends that TexOps:

1. Continue to integrate consultation with union representatives into the assessment process; 2. Provide training to the Social Responsibility Manager on how to build rapport and trust during worker

interviews; and 3. Ensure the final assessment report is completed and reviewed within a reasonable timeframe.

5.3 Company Affiliate ensures that, where relevant, monitoring is consistent with applicable terms in collective bargaining agreements. Actions Taken: SITRASACOSI has been active at TexOps since 2013, however it does not have the legally required percentage2 of unionized workers to begin the collective bargaining process. Therefore, no collective bargaining agreement currently exists in the facility.

Verification by FLA: Through interviews with TexOps management and union representatives at the factory as well as email communication sent by FUERSA, operating in El Salvador, FLA confirmed that TexOps does not have the legally required percentage of unionized workers to start the collective bargaining process.

Recommendation: In the event a collective bargaining agreement is reached in the future, FLA recommends TexOps consider revising internal assessment procedures.

5.4 Company Affiliate conducts pre-production assessment of new owned production sites to review compliance with workplace standards. Actions Taken: TexOps has experienced growth throughout its implementation period; hence, the company is looking to expand its facilities in the near future. TexOps’ internal assessment procedure includes a requirement to conduct pre-‐production assessments of any newly acquired production site in order to review compliance with workplace standards.

2 Article 271 of Salvadoran Labor Code mandates employers negotiate a collective bargaining agreement with the union that has 51% of affiliated workers from the total company’s workforce. Negotiations may start upon the union’s request.



Verification by FLA: FLA staff reviewed the latest updated version of TexOps’ internal assessment procedure and confirmed the inclusion of a requirement to conduct pre-‐production assessments of new facilities.

6. COLLECTION AND MANAGEMENT OF COMPLIANCE INFORMATION: COMPANY AFFILIATE COLLECTS, MANAGES, AND ANALYZES WORKPLACE STANDARDS COMPLIANCE INFORMATION

6.1 Company Affiliate maintains a complete and accurate list of contract facilities and collects and manages compliance and workplace information. Actions Taken: TexOps maintains complete and accurate workplace standards compliance information related to its production site. The Social Responsibility Manager manages all information related to social compliance assessments for both internal and buyers’ assessments, CAPs and remediation follow-‐up, and root cause analysis. The Health and Safety Manager keeps records on accidents and incidents, as well as other relevant information such as training on health and safety and periodic checks and inspections.

As discussed previously, the HR Manager is responsible for keeping the minutes of the meetings with union representatives and the Communication Committee meetings with the worker representatives and the President. The HR Manager also maintains the personnel files of its workers, including disciplinary actions and records related to grievances submitted through the different grievance channels available for workers.

Verification by FLA: FLA staff reviewed a tracker maintained by the HR Manager that included a sample of grievances received during October 2015. FLA staff also reviewed the 2015 internal assessment report that included root cause analysis and the remediation plans, minutes of meetings with the union leaders, minutes of meetings with the Communication Committee, records of trainings provided on workplace standards, and the accident log that is updated by the Health & Safety Manager.

6.2 Company Affiliate analyzes trends in non-compliance findings. Actions Taken: TexOps buyers have often emphasized their concerns to TexOps regarding overtime work and have stressed the importance of workers’ awareness of workplace standards. In response, TexOps conducts analysis of its own data to measure the occurrence of overtime hours and measures the effectiveness of the trainings provided to workers on workplace standards. TexOps has yet to conduct a comprehensive data analysis system that takes into consideration all workplace standards and assessment data.

Verification by FLA: FLA staff reviewed the monthly overtime hour trends analysis, which confirmed that while TexOps does experience the need for occasional excessive overtime, most cases are isolated incidents and not consistent trends due to peak seasons. Also, during the headquarter assessment, the TexOps management team explained that they use the results of buyer assessments to measure the extent to which workers comprehend workplace standards, although no formal analysis or procedures have been developed.



Recommendations: FLA recommends that TexOps:

1. Conduct regular compliance data analysis of both internal assessments and buyers’ assessments; and 2. Include overtime data analysis in the internal assessment procedure or the HR operating procedures.

7. TIMELY AND PREVENTATIVE REMEDIATION: COMPANY AFFILIATE REMEDIATES IN A TIMELY AND PREVENTATIVE MANNER

7.1 Company Affiliate provides regular follow-up and oversight to implement corrective action following assessments. Actions Taken: TexOps’ Social Responsibility Manager is responsible for following up the completion of remediation actions. This responsibility includes developing CAPs for internal and buyers’ assessments, reviewing the progress of remediation, and submitting remediation evidence to buyers. The internal assessment report establishes the staff responsible for executing each of the corrective actions, including the timeframes. Other relevant staff, such as the HR Manager and production and planning staff, may be involved in the implementation of corrective actions.

A copy of the 2015 internal assessment report was shared with the union representatives, who also provided input on the corresponding remediation. The union representatives have also been involved in the implementation of some corrective actions related to the 2013 independent investigation, including the review of the company’s freedom of association policy, discipline, and grievance procedures.

FLA staff noted that there are consistent practices in place for follow-‐up and oversight of remediation, and that these practices are included in the company’s internal assessment procedure.

Verification by FLA: TexOps presented a remediation tracker related to noncompliance findings reported during an internal health, safety, and document review. The remediation tracker includes the explanation of the finding, the specific corrective action to address the finding, the deadline for the completion of corrective actions, and the staff responsible for completing the corrective action. This was also confirmed during the interviews with the Social Compliance team, as part of the headquarter assessment.

FLA staff reviewed the updated version of TexOps’ internal assessment procedure, and noted that it does include details of the remediation process.

FLA corroborated the involvement of the union in the revision of TexOps’ policies and procedures through the independent external verification investigation commissioned in 2014. This practice is in line with the FLA’s standard known as Worker Integration,3 based on what employers shall ask for workers’ feedback on the different actions or decisions concerning the workplace.

3 Under FLA standards, worker integration implies that workers are given the opportunity to provide their input/feedback into the creation, implementation, and revision of policies and procedures, and that they are systematically integrated and consulted in the decision-‐making of issues concerning working conditions.



7.2 Company Affiliate shall conduct root cause analysis and take action to prevent future noncompliance in owned production sites. Actions Taken: Beginning in 2015, TexOps conducted root cause analysis of all findings described in its internal assessment report. The Social Responsibility Manager is responsible for conducting this analysis, and the process and methodology followed are described in the internal assessment procedure. TexOps uses the Five Whys method for root cause analysis, and based on it, multiple and consecutive questions are asked around a specific issue to determine the cause-‐and-‐effect relation.

Verification by FLA: FLA staff corroborated that TexOps’ internal assessment procedure describes the root cause analysis, and confirmed, through observation and review of the report, that analysis of root causes was included in the 2015 internal assessment.

Recommendations: FLA recommends that TexOps review and address the FLA’s recommendations provided in the Field Observation report to enhance the quality of the root cause analysis conducted.

7.3 Company Affiliate records and tracks the progress and effectiveness of remediation for internal assessments. Actions Taken: The Social Responsibility Manager tracks remediation progress until completion. The remediation tracking and follow up is done by updates that are documented in the same assessment reports – in the case of buyer’s assessments – and through an Excel tracker in the case of the internal assessments.

Verification by FLA: FLA staff reviewed TexOps’ remediation tracker of the 2015 internal assessment FLA also verified the completed remediation of many issues flagged during the 2013 independent investigation, as well as other health and safety issues reported during an internal inspection from 2013. Also, TexOps internal assessment procedures outline a requirement for tracking remediation progress until completion, including the process for analyze the effectiveness of remediation.

8. RESPONSIBLE PRODUCTION PRACTICES: COMPANY AFFILIATE ALIGNS SALES AND PLANNING PRACTICES WITH COMMITMENT TO WORKPLACE STANDARDS

8.1 Company Affiliate has formal written policies and procedures for production planning that: 1) articulate the many complexities involved in their global supply chains, including different customer (buyer) business models, and 2) require relevant internal representatives to work with customers (buyers) to reduce negative impacts on working conditions. These policies and procedures shall address the alignment of sales with capacity, based on working hours as defined by the FLA Workplace Code of Conduct.



Actions Taken: TexOps established internal communication channels on its production processes and with its buyers prior to developing formal policies or procedures. The TexOps President and CEO have invested in technology to support streamlining production processes and to advance TexOps production capabilities from cut and sew to include digital printing and product development. This investment also allows for TexOps to have better bargaining power with buyers on cost and lead time. TexOps has also implemented lean manufacturing modules that management believes allows for greater earning potential for workers and more efficient production capabilities. The President outlined four key values: Capacity, Capability, Technology, and Innovation, which are incorporated into the TexOps’ Policy and Procedures for Responsible Production & Planning and integrated into TexOps’ practices.

In April 2015, TexOps developed its Policy and Procedures for Responsible Production & Planning, to outline all of the expectations of TexOps Production and Planning practices. The policy includes accepting orders based on a 44-‐hour4 workweek and incorporates labor costs into TexOps’ costing practices. Additionally, top management will review the application of this policy quarterly to ensure compliance and assess the impact of planning and sales practices. Relevant positions referenced in the procedures include the Director of Operations, Internal Planning Chief, Planning Manager, Production Manager, and the Chief of Raw Materials.

Verification by FLA: At the time of the headquarter assessment, FLA staff discussed with the need to develop responsible production policies and procedures to articulate the investment TexOps has made in streamlining production practices to achieve efficiency and greater product development capabilities. In reviewing the developed procedures after the headquarter assessment, FLA staff verified the practices articulated in interviews with Production, Planning, Raw Materials, and Operations staff. FLA staff also reviewed the weekly working hour updates and a costing template to verify the consideration of working hours and labor costs as a component of TexOps production practices. Lastly, FLA recognized TexOps’ strong commitment to identifying production efficiencies and capabilities that could ultimately contribute to TexOps’ efforts to uphold workplace standards and provide greater benefits and opportunities for its workers.

8.2 All relevant business and compliance staff and any contracted agent/intermediary are trained and knowledgeable of the consequences of their sales and planning practices on working conditions in order to mitigate negative impacts on code compliance. Actions Taken: The HR Manager communicates the results of assessments reports and the progress of remediation to Production, Planning, Raw Materials, and Operation directors, and managers; and staff are informed of the legal requirements and standards of the FLA and TexOps buyers. All relevant staff received training on TexOps’ workplace standards through the ombudsperson as mentioned in Principle 2. Additionally, the Chief of Raw Materials is responsible for training all administrative production staff, as specified in TexOps’ Procedures for Responsible Production & Planning. To ensure all relevant staff are knowledgeable about the working hour requirements and whether TexOps is compliant, the HR Manager sends weekly reminders on the working hours.

4 A 44-hour workweek is in compliance with Article 161 of the Salvadoran Labor Code.



Verification by FLA: FLA staff verified through interviews that TexOps’ staff were knowledgeable of how production planning and operations can impact working conditions and were able to discuss the practices executed to mitigate excessive working hours. All relevant staff understood the legal working hours and how to plan accordingly to avoid overbooking orders that would result in excessive overtime. TexOps’ relevant staff also recognized the additional cost of overtime on workers’ overall health and well-‐being. While formal training efforts are minimal, FLA verified that informal training efforts through meetings and communication have supported relevant staff’s knowledge of the consequences of sales and planning practices on workplace conditions.

During the headquarter assessment, FLA staff recognized the need for the Social Responsibility Manager to be better integrated with the production staff and acquainted with TexOps production practices.

Recommendations: FLA recommends that TexOps continue to provide training on the impact of responsible production practices and to develop a mechanism to ensure the training is effective. Additionally, FLA recommends TexOps continue to integrate the Social Responsibility Manager on the production practices carried out at TexOps.

8.3 Company Affiliate holds relevant staff and any contracted agent/intermediary accountable for the implementation of planning and sales practices that help avoid negative impacts on workers and working conditions. Actions Taken: The top management for Production, Planning, Raw Materials, and Operations have been in place with TexOps for a range of 9 to 15 years, and understand that they are accountable for the overall success of TexOps, which includes planning and sales practices that avoid negative impacts. To uphold TexOps’ values, the President has driven the investment in manufacturing technology to support the changes in the market and to provide a competitive advantage for more negotiating power in selecting and working with its buyers.

Job Descriptions for the General Manager, Chief of International Purchasing, Director of Operations, and the Planning Manager all reflect the consideration of working hours when planning production and resolving production issues as they occur. The Planning Manager’s job description includes further details on analyzing capacity, addressing delays, and adjusting production planning to ensure working hours remain within the legal limits. All job descriptions include communication and cooperation with the other departments to ensure production efficiency.

Included in the Procedures for Responsible Production & Planning, the Director of Operations is responsible for holding three separate meetings with buyers to ensure that TexOps’ standards on capacity, availability, lead time, and working hours are communicated. Once the orders are confirmed by the buyer, the Director of Operations produces a Global Production Report, which is then reviewed and refined by the Internal Planning Chief and Planning Manager to ensure that the purchase order (PO) can be completed within a 44-‐work week on time. The final Global Production Report is then shared with the product development, quality, fabric lab, engineering, and warehouse departments. Planning staff hold regular meetings, every two weeks, to ensure on-‐time delivery of materials and that work-‐in-‐progress (WIP) is on track for on-‐time delivery.

Verification by FLA: FLA staff reviewed and verified the job descriptions for all relevant staff as well as the procedures to ensure relevant staff are held accountable to uphold responsible production practices. Through interviews, FLA recognized the



ownership each relevant staff member possessed to uphold the four values outline by the President. The knowledge and longevity of the top production and planning staff in place and their commitment to uphold these values was notable throughout the headquarter assessment. TexOps’ relevant staff also discussed that it is regular practice to under-‐book their production capacity, about 80%-‐85%, to allow room for delays by material suppliers and buyers’ specifications. The 2013 SCI assessment conducted at TexOps found no evidence of excessive overtime over 60 hours per week or the regular practice of overtime.

Included in the Procedure for Responsible Production & Planning is a quarterly review process to ensure implementation of the procedures. However, this process has yet to be implemented.

Recommendations: FLA recommends TexOps proceed with the implementation of the review process included in the Procedures of Responsible Production & Planning.

8.4 Company Affiliate staff responsible for planning and sales engage with their labor compliance colleagues, any contracted agent/intermediary, and customers in regular and constructive dialogue throughout the production process and when problems arise to support operations at the factory level and to seek to avoid or mitigate negative impacts on workers and/or compliance with code standards. Actions Taken: As discussed above, TexOps developed procedures to ensure the Director of Operations and all other production and planning staff communicates in an effort to mitigate negative impacts on working conditions. The procedures specify that in situations such as when delays may be caused, Planning and Production Managers shall work to find solutions, for example by requesting extensions from the buyer or adding more lean modules to complete the order.

In addition, TexOps is in regular communication with its buyers. The Director of Operations communicates TexOps’ standards on production planning and working hours during meetings with buyers. TexOps manages approximately 5 buyers, with 1-‐2 buyers that may be in the sampling or test-‐order stage. TexOps maintains a manageable number of buyers to ensure that communication and accountability are achievable for PO delivery. TexOps also facilitates meetings with its buyers’ product development staff at the TexOps facility so that they can understand TexOp’s practices and capabilities. Additionally, TexOps strives to maintain consistent and long-‐term relationships with its materials suppliers, especially with its’ textile mill which produces roughly 85% of TexOps fabric. The staff meets with this textile mill on a regular basis to ensure quality and on-‐time delivery.

Verification by FLA: FLA verified the Procedures for Responsible Production & Planning include communication channels between staff to ensure orders and issues are shared. During the headquarter assessment, TexOps shared that while they strive to maintain long term relationships with their buyers, changes in leadership in buyer sourcing departments can result in changes in the dynamic of the buyer and supplier relationship. As a result of buyers moving production to Asia and the Middle East, TexOps has invested in manufacturing technology, printing capabilities, and product development to remain competitive with suppliers in Asia. Additionally, TexOps leverages its location, digital printing, and under-‐booking of capacity to be able to offer shorter lead times in the case a buyer has an urgent sampling request. FLA noted TexOps’ investment in product development capabilities as a strength in TexOps’ efforts to achieve responsible production practices.



FLA notes that while buyer communication is included in the Procedures for Responsible Production & Planning, material supplier communication is not included. FLA was able to verify, however, that this communication takes place in practice.

Recommendations: FLA recommends TexOps incorporate material supplier dialogue into the Procedures of Responsible Production & Planning.

8.5 Company Affiliate provides positive incentives for suppliers and/or facilities producing in a socially responsible and sustainable manner. Actions Taken: TexOps is a one facility Participating Supplier, and thus does not provide internal incentives for producing in a socially responsible manner. While TexOps has not established a system to evaluate its material suppliers, TexOps has strived to maintain long-‐term relationships with them to meet TexOps’ standards in quality and on-‐time delivery. For TexOps’ buyers, while there is no formal evaluation or incentive system in place, TexOps emphasizes the value of long term relationships with its buyers.

Verification by FLA: Through interviews at the headquarter assessment, FLA verified TexOps’ efforts to maintain stable relationships with its buyers and suppliers. However, no system to evaluate and incentivize material suppliers to produce in a socially responsible and sustainable manner could be verified.

Recommendation: FLA recommends that TexOps develop a system to evaluate material suppliers on social compliance, quality, and on-‐time delivery. In addition, FLA recommends TexOps develop a system to incentivize material suppliers to produce in a socially responsible manner.

9. CONSULTATION WITH CIVIL SOCIETY: COMPANY AFFILIATE IDENTIFIEDS, RESEARCHES, AND ENGAGES WITH WITH RELEVANT LABOR NON-GOVERNMENTAL ORGANIZATIONS, TRADE UNIONS, AND OTHER CIVIL SOCIETY INSTITUTIONS

9.1 Company Affiliate develops a civil society organization (CSO) outreach strategy that reflects the geographical distribution of production. Actions Taken: In 2016, TexOps developed a CSO Engagement Strategic Plan which incorporated guidance from the FLA’s CSO Engagement Manager for Latin America. TexOps’ strategy focuses on promoting the company’s social responsibility culture with its employees and stakeholders by positioning TexOps as a socially responsible company at the national level.

The specific objectives the TexOps’ CSO Engagement Strategic Plan include: i) To identify, differentiate, and compare key CSOs; ii) Establish long-‐term relationships with CSOs, based on trust, mutual respect and understanding; iii) To develop and implement, jointly with the CSOs, strategies related to TexOps’ social compliance program; and iv) To promote, jointly with the CSOs, a socially responsible culture.



The key stakeholders identified by the TexOps’ CSO Engagement Strategic Plan are: unions, grassroots community organizations, women’s organizations, academic organizations, foundations, and religious organizations. In addition, TexOps developed a mapping of local gender and labor and human rights CSOs with which the company plans to engage in the future. The mapping also includes the other stakeholders that TexOps has engaged with in the development of social programs that benefit its workers.

Verification by FLA: FLA staff reviewed the CSO Engagement Strategic Plan and provided feedback and guidance. TexOps took into consideration FLA’s feedback, revised the plan, and completed a CSO mapping exercise with the support of FLA staff. The local CSOs included in the mapping have a focus on human and labor rights.

Recommendation: FLA recommends TexOps implement the CSO Engagement Strategy by engaging, consulting, and collaborating with CSOs working in the labor and human rights field identified in the company’s CSO mapping exercise.

9.2 Company Affiliate develops and maintains links to relevant civil society organizations (CSOs) to gain understanding of local labor issues. Actions Taken: TexOps is a participating member of the Cámara de la Industria Textil, Confección y Zonas Francas de El Salvador (CAMTEX), a national private sector association of the garment industry. TexOps has received awards from the Asociación Salvadoreña de Industriales (ASI) and the Fundación Empresarial para la Acción Social (FUNDEMAS), in recognition of the good practices the company follows.

In addition to its relationship with the factory-‐level union (SITRASACOSI), its federation (FUERSA), and the local labor CSO, Centro de Estudios y Apoyo Laboral (CEAL) that supports FUERSA, TexOps has also engaged with other local CSOs, governmental institutions, and relevant stakeholders to promote important social programs within its workforce. Some examples of the engagement conducted by TexOps include:

Garrobo Project, in partnership with Ciudad Mujer (Women’s City) Program, promoted by the Secretary of Social Inclusion of the Salvadoran Government

TexOps provides opportunities to young women in need to learn to sew simple pillow or handbags, so that they can after apply for a job at TexOps or other garment factories.

Partnership with Sí a la Vida (Yes to Life) Foundation

Young pregnant women who lack financial support are provided the opportunity to learn to sew, as part of the Garrobo Project. In the past TexOps has employed four women referred by Sí a la Vida Foundation.

National Cycling Federation

TexOps built a BMX racetrack to support young athletes and its own employees as well, so that they have a safe and appropriate area to learn how to ride BMX bicycles. Cycling uniforms are donated as well.

Partnership with the Instituto Técnico Centroamericano (ITCA) – (Central American Technical Institute)

TexOps provides scholarships for children of TexOps employees so they can pursue a technical career.



Moreover, TexOps has promoted the following social benefits among its workers:

• A childcare facility for the children of TexOps’ employees. This childcare is certified as Montessori school; • A safe area for workers to play football and softball on the company grounds; • A greenhouse that farms vegetables and tilapia for sale; the earnings are used to support the childcare

facility; in the past, workers could buy tilapia at a low price; • A clinic, in partnership with the Salvadoran Social Security Institute, where workers can receive medical

attention during regular hours of work, including specialized medical attention on gynecology and pediatrics for the children of TexOps’ employees. In July TexOps is planning to incorporate one nutritionist;

• A massage clinic that offers massage chairs and ergonomic guidance, available for workers during regular working hours (upon previous appointment);

• Provision of materials and services so workers can repair roofs at their houses; and • Financial support for a funeral when family members pass away.

As part of TexOps’ CSO mapping, the HR Manager has identified two long-‐standing human rights CSOs to continue TexOps’ expansion in CSO engagement in the future. Specifically, TexOps plans to engage with these CSOs for the provision of training on labor and human rights. Additionally, the company is planning to engage with another organization to explore opportunities for training on women’s rights and gender equality.

Finally, TexOps owners have engaged with the Vice President of El Salvador to understand the needs of the garment and textile sector and how private companies can contribute to the growth of this industry in the country.

Verification by FLA: During the interviews with the President and HR Manager, the FLA gained understanding of the CSO engagement activities that TexOps has conducted, and the knowledge the staff receives through local CSOs.

During the interview with TexOps management, FLA staff learned of the different social programs TexOps has undertaken for the benefit of their workers. Interviews with workers corroborated the availability of these programs to all employees. Presentations and photographs of the implementation of some social programs promoted by TexOps were also reviewed during the headquarters assessment. FLA staff was also able to observe the greenhouse, the Montessori childcare, the BMX racetrack, and the football and softball fields. In 2015, a delegation of the Americas Group visited TexOps to see first-‐hand the experience of managing a childcare facility. The Americas Group delegation included FLA staff, FLA Participating Companies, members from Concertación por un Empleo Digno para las Mujeres, a representative of the Independent Monitoring Team of Honduras, and a representative from Maquila Solidarity Network.

FLA acknowledges that while TexOps engagement has not been primarily focused in labor and human rights, FLA notes that many of the programs promoted by the company support the workers’ well-‐being and safety that has been affected by the rising gang violence occurring in El Salvador. Additionally, since 2013, TexOps has engaged with the national union federation, FUERSA and the local CSO CEAL, as part of the regular dialogue process with SITRASACOSI.



Recommendation: FLA recommends that TexOps implement the recently developed CSO Engagement Strategic Plan, with a major focus on gender, labor, and human rights CSOs, with the purpose of gaining further understanding of the labor issues in El Salvador.

9.3 Company Affiliate strategizes with CSOs and knowledgeable local sources in the design and implementation of workplace standards compliance programs. Actions Taken: TexOps’ CSO Engagement Strategic Plan pursues development and implementation of strategies related to TexOps’s social compliance program, such as the provision of training on human and labor rights, women’s rights, gender equality, nondiscrimination, and self-‐esteem.

TexOps has created personnel development programs for its employees to increase their skills and capabilities, such as English language classes and mechanic courses for women. These programs position employees to achieve better paid positions within TexOps and at other companies.

Additionally, and as previously mentioned, TexOps has also followed the Worker Integration as demonstrated through the joint revision of internal policies and procedures completed in consultation with the union representatives, as a result of the independent investigation corrective actions. The union leaders were provided with the opportunity to review and comment on the company’s freedom of association and disciplinary policies, as well as the grievance procedures.

Verification by FLA: The FLA corroborated that TexOps’ CSO Engagement Strategic Plan includes the company commitment to engage with local CSOs in the development of social compliance activities. Through interviews with production workers during the headquarter assessment, the FLA confirmed the execution of these social programs.

The 2014 independent external verification commissioned by the FLA to assess the implementation of the CAP after a previous independent investigation corroborated that TexOps had reviewed its internal policies and procedures jointly with the union representatives. FLA identified at the headquarter assessment that there is still an opportunity for the company to engaged with experienced CSOs on employee training and enforcement of workplace standards compliance programs as well.

Recommendation: FLA recommends that TexOps engage with local CSOs during the design and implementation of TexOps’ workplace standards compliance program. TexOps may also consider engaging with an experienced CSO to develop more interactive and engaging trainings on workplace standards for its workers.

9.4 Company Affiliate consults with legally constituted unions or worker representative structures at owned production sites. Actions Taken: Since the formation SITRACOSI in 2013, TexOps’ President, HR Manager and Social Responsibility Manager participate in regular meetings with union representatives to discuss different issues raised by the union representatives. The General Secretariat of FUERSA union federation and one representative of the local CSO, CEAL



– which provides support and guidance to FUERSA – have also participated in some meetings. Since the beginning of the dialogue process between the parties, an ombudsperson led the meetings between the union and the management, upon FLA’s recommendation for strengthening the CAP that resulted from the independent investigation. The ombudsperson provided guidance on the solution of specific cases raised by the union, and supported the provision of training on nondiscrimination and freedom of association.

Currently, union representatives are able to propose issues to be discussed during the regular meetings with TexOps management and they can also bring forward other employees’ suggestions or grievances to the meetings. TexOps management has taken into consideration some of those suggestions, and undertaken specific actions accordingly5. The HR Manager keeps minutes of the meetings with the union representatives. All participants sign off on these minutes, and copies are provided to them.

As a result of the CAP developed from the 2013 independent investigation, TexOps issued a written memorandum that was communicated to all workers and posted in production areas, in order to inform them about the union formation. This memorandum also included the company’s commitment to respect workers’ right to freedom of association. As mentioned above, the CAP also included the provision of freedom of association training to managers, leaders, and members of the Communication Committee.

Additionally, TexOps has included in its internal assessment procedure engagement with union representatives in the revisions and remediation of findings identified during TexOps’ internal assessment. As previously mentioned, Texops has shared with the union representatives the results of the 2015 internal assessment and requested feedback on remediation.

Verification by FLA: FLA staff reviewed the internal assessment procedures, which highlights the company commitment to engage with the union during the different phases of internal assessments, such as opening and closing meetings, consultations/interviews with union representatives, and revision of findings. FLA reviewed the minutes from the meetings with the union representatives that show the different topics discussed, including the grievances or suggestions raised by the union representatives, TexOps’ resolution of the issues, and the meeting in which TexOps shared the internal assessment report with the union. FLA staff interviewed union representatives, who confirmed that regular meetings have been held with TexOps management. In addition, FLA received email communications from FUERSA union federation about some of the developments of the dialogue meetings between the union and TexOps management.

The 2014 FLA’s external independent verification to assess the implementation of the CAP from the 2013 independent investigation shows significant progress in almost all of the items included in the CAP. FLA staff in Central America confirmed this through continuous and regular engagement with the ombudsperson who led the dialogue meetings between the parties.

5 From the interviews with union leaders and TexOps management, the FLA staff confirmed the following instances in which the company implemented specific actions suggested by the union: i) Request to conduct the workplace standards training in a room with appropriate physical conditions; ii) Request to clean the temporary bathrooms on a daily basis (while TexOps completed the construction of the new bathrooms).



10. VERIFICATION REQUIREMENTS: COMPANY AFFILIATE MEETS FLA VERIFICATION AND PROGRAM REQUIREMENTS

10.1 Company Affiliate maintains standard operating procedures related to FLA affiliation. Actions Taken: In 2016, TexOps developed a standard operating procedure related to FLA affiliation. The procedures include responsible staff for ensuring TexOps pays its dues, submitting its annual self assessment, updating company information on production site, facilitating SCI Assessments and field observations, and submitting SCI corrective action plans and remediation updates.

Verification by FLA: FLA staff reviewed TexOps standard operating procedures related to FLA affiliation.

10.2 Company Affiliate participates in FLA due diligence activities, including assessments at owned production sites and company headquarters, as applicable. Actions Taken: TexOps has participated in all FLA due diligence activities including: one SCI assessment in 2013; an independent investigation and remediation between 2013 and 2014; two field observations in 2015; and a headquarter assessment in 2015.

Verification by FLA: FLA confirms TexOps’ participation in all FLA due diligence activities.

Recommendation: FLA recommends that TexOps ensure that remediation updates to its 2013 SCI assessment and future SCI assessments be submitted to the FLA every 6 months.

10.3 Company Affiliate completes a standardized annual report on fulfillment of Principles of Fair Labor and Responsible Production. Actions Taken: TexOps has submitted its annual reports to the FLA covering activities from 2012-‐2014.

Verification by FLA: FLA confirms that TexOps submitted annual reports with information on activities from 2012-‐2014 in a timely manner. At the time of this report, the deadline for the 2015 annual report had not passed.

10.4 Company Affiliate maintains a complete and accurate profile and list of owned production sites with the FLA. Actions Taken: TexOps has provided a complete and accurate profile of its owned production site.

Verification by FLA: FLA confirms that TexOps has provided a complete and accurate profile of its owned facility.



10.5 Company Affiliate responds to FLA requests for documentation, contracts, information, and clarification in a timely manner. Actions Taken: TexOps has responded to FLA requests of information in a timely manner.

Verification by FLA: FLA confirms that TexOps has met all FLA requests for information. However, TexOps representatives have not regularly attended FLA Monitoring Committee & Board of Directors Meetings, with the exception of the Social Responsibility Manager attending the February 2016 Board and Monitoring Committee Meeting. To date, company representatives have not participated in a working group or committee.

Recommendation: FLA recommends that TexOps consider opportunities to further participation in FLA activities, such as submitting feedback to the Business Caucus on inquiries from the Monitoring Committee, Board of Directors, or working groups. Additionally, FLA recommends TexOps develop resources so that company representatives may attend more FLA activities and meetings to engage with FLA affiliates and provide valuable perspective as a Participating Supplier. The FLA recommends TexOps consider representing the FLA Business Caucus in a working group if possible.

10.6 Company Affiliate pays annual dues and applicable fees on schedule. Actions Taken: TexOps has paid its dues and applicable fees throughout its implementation period.

Verification by FLA: FLA confirms that TexOps has paid its dues and fees in full in a timely manner. Documentation is available at FLA headquarters.



SECTION 3: CONCLUSION Accreditation is an early measure of the capacity of a company’s labor compliance program to ensure respectful and ethical treatment of workers. While there are recommendations in this report designed to advance TexOps’ labor compliance program, the FLA staff finds that TexOps has built a labor compliance program that, on balance, supports the successful upholding of workplace standards, and promotes the respectful and ethical treatment of workers, under a safe and healthy workplace, and recommends to the FLA Board of Directors the accreditation of TexOps’ labor compliance program.

Strengths of TexOps’ labor compliance program include:

1. Clear commitment and support from the President to adhere to workplace standards and integrate standards into business operations;

2. Workplace standards are communicated to all employees and training data analysis is conducted to identify areas where employee knowledge needs to be improved;

3. Provision of training on freedom of association at the managerial level, with the purpose of ensuring respect for associational rights and preventing any form of discrimination or interference with workers’ right to join organizations of their own choosing;

4. Diversity of confidential grievance channels available for workers and different management level personnel to receive and address grievances;

5. The internal collaboration in place to develop and implement TexOps’s Procedures for Responsible Production & Planning and TexOps’ commitment to developing responsible and competitive production practices; and

6. Execution of several social programs for the benefit of workers, in partnership with local CSOs and other relevant stakeholders.

Suggestions for strengthening TexOps’ labor compliance program include:

1. Continued development and implementation of TexOps’s internal monitoring, including strengthening of worker interview techniques;

2. Development of a comprehensive approach to the analysis of assessment data; 3. Continued union engagement throughout the monitoring and remediation processes; 4. Continued implementation and strengthening of TexOps’s CSO Engagement Strategy, with a

focus on gender, labor, and human rights, in order to gain understanding of labor issues in the country, and to inform the application of the workplace standards compliance program; and

5. Consideration to actively participate in FLA activities, such as attending future Monitoring Committee & Board Meetings, or participating in an applicable working group.



APPENDIX: TEXOPS’ CODE OF CONDUCT

CODIGO DE CONDUCTA TEXTILES OPICO, S.A. DE C.V.

Textiles Opico, S.A. de C.V., cree en las relaciones basadas en la confianza, trabajo en equipo, honestidad y respeto mutuo.

La compañía aprecia su esfuerzo laboral y cree que es importante que usted sepa que sus derechos laborales están garantizados y protegidos por las leyes del país y este código de conducta. En caso de encontrarse diferencias o discrepancias entre las normas antes mencionadas, se tomará el estándar más alto. Por favor tome su tiempo para revisar la lista de enunciados abajo citados.

1. Textiles Opico, cumple y se adhiere a las normas y condiciones de empleo que respete a los trabajadores y, como mínimo, salvaguarde sus derechos laborales y de seguridad social bajo leyes y reglamentos nacionales e internacionales, como la Organización Internacional del Trabajo.

2. La compañía respeta la dignidad personal, y los derechos personales de cada empleado y está comprometido a mantener un lugar de trabajo en el cual no existan situaciones de discriminación. Por lo tanto, Ninguna persona podrá ser objeto de ningún tipo de discriminación en el empleo, incluyendo en la contratación, remuneración, ascensos, disciplina, terminación o jubilación, sobre la base de género, raza, religión, edad, discapacidad, orientación sexual, nacionalidad, opiniones políticas, grupo social u origen étnico.

3. Se prohíbe el acoso o abuso de jefe a subalterno o viceversa y entre compañeros de trabajo. Todos merecen trabajar en un entorno donde se sientan cómodos y seguros. Ese es el motivo por el que tratamos de fomentar un ambiente libre de acosos y conductas irrespetuosas. En esta empresa se guarda la debida consideración a los trabajadores, por lo que ningún empleado estará sujeto a ningún tipo de acoso o abuso físico, sexual (en la forma de contacto físico o gestos no solicitados, comentarios y bromas inapropiados), psicológico o verbal.

4. La empresa garantiza que nunca será obligado en ningún sentido, se prohíbe el trabajo forzado, tales como trabajo penitenciario, mano de obra bajo contrato acordado en pago de deudas, la servidumbre por deudas u otras formas de trabajo forzoso. todo el personal que labora en la empresa lo hace voluntariamente.

5. La empresa no fomenta el trabajo infantil de ninguna forma, por lo que en esta empresa se contrata personal de 18 años en adelante, en caso de contratar personas menores de 18 pero no menos de 15 años, se hará tomando en cuenta las disposiciones legales requeridas y previa aprobación del Ministerio de Trabajo, limitándolo a que no se contrataran personas menores de 15 años.

6. Todos los empleados tienen derecho de asociarse libremente y a negociar y celebrar convenios colectivos de trabajo.



7. La empresa está comprometida a velar por la Salud y Seguridad de todos los empleados. Cumpliendo con las normas de salubridad establecidas por el Ministerio de Salud. Verificando que los proveedores cumplan con dichas normas. Capacitando constantemente al personal para crear una cultura de seguridad previendo accidentes y daños dentro de la empresa y la comunidad.

8. La empresa cumple con las Leyes del Medio Ambiente y colabora en preservación y mantenimiento para mitigar impactos negativos en el ambiente. Se lleva a cabo la separación y reciclaje de desperdicios.

9. El máximo de horas normales a laborar en una semana son 44, y el número de horas extras máximas a laborar en una semana son 16, por lo tanto, no es permitido trabajar más de 60 horas durante una semana. Las horas extras se hacen únicamente cuando existen necesidades urgentes (terremotos, inundaciones, incendios, emergencias nacionales, fuerza mayor, o períodos de inestabilidad política prolongada); las horas extra son eventuales y voluntarias. Todos los trabajadores reciben un día de descanso en un período de siete. Todas las horas extras son pagadas de acuerdo a la ley local, y su valor no menor del ciento por ciento del salario básico por hora normal. Los trabajadores reciben 24 horas consecutivas de descaso por cada período de 7 días.

10. La empresa garantiza el pago de al menos el salario mínimo legal, y el cumplimiento con todos los requisitos legales en materia de salarios, efectuando únicamente descuentos contemplados en la Ley; las vacaciones y aguinaldos son pagados en base a la Ley y se hará en base al salario mínimo legal, o el correspondiente salario vigente, cualquiera que sea mayor. Todo trabajador tiene derecho a una compensación por un periodo de trabajo regular que es suficiente para satisfacer las necesidades básicas del trabajador y proporcionar un ingreso discrecional. Cuando la compensación no satisface las necesidades básicas de los trabajadores y no proporciona un ingreso discrecional, la empresa trabajará con la FLA para tomar las acciones apropiadas que busquen realizar progresivamente un nivel de compensación que lo logre.

11. Se cumple con las Leyes de Aduanas y existen controles de seguridad en nuestra empresa, especialmente en las áreas de portería y embarque.

12. Se establecen normas de seguridad para combatir el contrabando, de drogas, explosivos, riesgos biológicos, verificando la solvencia de los empleados. El área de embarque se mantiene como área restringida, para ofrecer a nuestros clientes un producto de calidad, seguridad y legalidad. Se cuenta con circuito cerrado de cámaras para seguridad de empleados y empresa.

Los empleados que perciban que su ambiente de trabajo no cumple con los principios mencionados arriba pueden plantear sus preocupaciones a través del sistema de puertas abiertas, sus jefes inmediatos o a Recursos Humanos.

Autorizado: Juan Zighelboim Presidente Elaborado y Aprobado el 14/06/2010 Revisado 01/2013



Revisado 08/2014 Actualizado Marzo/2016

[English Translation]

Textiles Opico, S.A. de C.V. believes in relationships based on trust, teamwork, honesty and mutual respect.

The company appreciates your effort, and it believes it is important that you know that your labor rights are guaranteed and protected by the laws of the country and this Code of Conduct. In case you find differences or discrepancies between the above standards, the highest standard will be applied. Please take time to review the list of statements cited below.

La compañía aprecia su esfuerzo laboral y cree que es importante que usted sepa que sus derechos laborales están garantizados y protegidos por las leyes del país y este código de conducta. En caso de encontrarse diferencias o discrepancias entre las normas antes mencionadas, se tomará el estándar más alto. Por favor tome su tiempo para revisar la lista de enunciados abajo citados.

1. Textiles Opico meets and adheres to the standards and conditions of employment that respects workers and at least safeguard their labor and social security rights under national and international regulations, such as the International Labour Organization rights.

2. The company respects every employee's personal dignity and rights and it is committed to maintain a workplace in which there are no situations of discrimination. Therefore, no person shall be subjected to any type of discrimination in employment, including hiring, compensation, promotions, discipline, termination or retirement, on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinions, social group or ethnicity.

3. Harassment or abuse from management to workers or vice versa and between co-workers is prohibited. Everyone deserves to work in an environment where they feel comfortable and safe. That's why we try to encourage an environment free from harassment and disrespectful behavior. In this company all workers are respected, so no employee shall be subjected to any form of harassment or physical, sexual (in the form of physical contact or gestures unsolicited comments and inappropriate jokes), psychological or verbal abuse.

4. The company guarantees that you will never be forced to work in any way, forced labor is prohibited such as prison labor, labor contract agreed in payment of debts, debt bondage or any other forms of forced labor. All personnel working in the company works voluntarily.

5. The company does not encourage child labor in any form, therefore this company hires staff 18 onwards if they hire people under 18 but not less than 15 years, will take into account the legal and required provisions prior approval of the Ministry of Labour, people under 15 will not be hired.

6. All employees have the right to associate freely and to celebrate collective bargaining agreements.



7. The company is committed to ensuring the health and safety of all employees. Compliance with health standards established by the Ministry of Health. Verifying that suppliers comply with these standards. constantly training staff to create a safety culture foreseeing accidents and damage within the company and the community.

8. The company complies with Environment Laws and collaborates on preservation and maintenance to mitigate negative impacts on the environment. The company carries out the separation and recycling of waste.

9. The maximum regular hours per week is 44 hours, and the maximum number of overtime hours to work in a week are16, therefore, it is not allowed to work more than 60 hours per week. Overtime is made only when there are urgent needs (earthquakes, floods, fires, national emergencies, mayor force, or periods of prolonged political instability); overtime is temporary and voluntary. All workers receive a day off in a period of seven. All overtime are paid according to local law, and not less than one hundred percent value of the basic salary. Workers are granted 24 consecutive resting hours per 7 days period.

10. The company guarantees at least a legal minimum wage payment, and compliance with all legal requirements regarding wages, only doing discounts approved by law; vacation and Christmas bonuses are paid based on the law and will be based on the legal minimum wage, or the corresponding prevailing wage, whichever is greater. Every worker is entitled to compensation for regular work period that is sufficient to meet the basic needs of workers and provide some discretionary income. When compensation does not meet workers' basic needs and does not provide a discretionary income, the company will work with the FLA to take appropriate actions that seek to progressively realize a level of compensation that succeeds.

11. The company complies with Customs Laws and there are security controls, especially in the company’s main entrance and Packing areas.

12. Safety standards are established to combat smuggling of drugs, explosives and biohazards risks by verifying the employees' criminal records. Loading area is identified as a restricted area, to offer our customers a product with quality, safety and legality. The factory has placed closed-circuit television.

Employees who perceive that their work environment does not meet the above principles can raise their concerns through the Open Doors Policy, their immediate supervisors or Human Resources.

Documents

TexOps Assessment for Accreditation · Location San Juan Opico, La Libertad Province, El Salvador ... Francisco Chicas, Latin America Regional Manager Support: Tiffany Rogers, Business