[2015]

FAIR LABOR ASSOCIATION INDEPENDENT EXTERNAL VERIFICATION REPORT

COMPANY: Syngenta COUNTRY: Hungary VILLAGES: Fábiánsebestyén, Murony, Szarvas, Tiszaföldvár MONITOR: Mr János Nagy, FLA AUDIT DATE: 13-15 July, 2015 PRODUCTS: Corn NUMBER OF WORKERS: 71 NUMBER OF WORKERS INTERVIEWED: 27 NUMBER OF FARMS VISITED: 4 TOTAL AREA COVERED IN AUDIT: 543 hectares (1342 acres) PROCESSES: Detasseling

IEM reference reports:



Syngenta Hungary Corn, 2013

http://portal.fairlabor.org/fla/go.asp?u=/pub/zTr5&tm=5&Rid=1499&Fdn=13&Fna=SYN+Hungary+Corn +2013%2Epdf

Context: In the Hungary context, verification visits are conducted in the same farms where previous assessments took place. Data are collected by conducting interviews, observation and record review at four levels: (1) Syngenta Internal Monitoring System (IMS) level, (2) growers in the verified farms, (3) workers in the verified farms and (4) other influential stakeholders at the community level.

To view more about the FLA’s work with Syngenta, please visit the FLA website here.

1

Table of Content

1. Code Awareness

GEN 2

Page

Ensure that all Company growers as well as supply chain Organizers inform their workers about the workplace standards orally and through the posting of standards in a prominent place (in the local languages spoken by workers) and undertake other efforts to educate workers about the standards on a regular basis. 2013 IEM FINDINGS

4

IEV FINDINGS (JAN 2015)

4

2. Forced Labor F.3

Employment Terms/Voluntary Agreement 2013 IEM FINDINGS

6

IEV FINDINGS (JAN 2015)

6

3. Child Labor CL.2

Child Labor

CL.3

Proof of Age Documentation

CL.4

Other Means of Age Verification

CL.5

Government Permits and Parental Consent Documentation

CL.10

Removal and Rehabilitation of Child Laborers 2013 IEM FINDINGS

8

IEV FINDINGS (2015)

9

4. Harassment or Abuse H&A.3

Discipline/Worker Awareness

H&A.4

Discipline/Training

H&A.12

Grievance Procedure 2013 IEM FINDINGS

11

IEV FINDINGS (2015)

11

2

6. Health and Safety H&S.4

Health and Safety Management System

H&S.5

Communication to Workers

H&S.7

Personal Protective Equipment

H&S.12

Medical Facilities

H&S.14

Rest Area 2013 IEM FINDDINGS

13

IEV FINDINGS (2015)

14

8. Hours of Work HOW.1

General Compliance Hours of Work

HOW.2

Rest Day

HOW.4

Overtime 2013 IEM FINDINGS

15

IEV FINDINGS (2015)

15

9. Wages, Benefits and Overtime Compensation WBOT.3

Timely Payment of Wages

WBOT.6

Worker Wage Awareness

WBOT.7

Record Maintenance 2013 IEM FINDINGS

17

IEV FINDINGS (JAN 2015)

17

3

CODE AWARENESS Previous IEM Finding (2013):

Company Plan of Action:

GEN.2

The (seasonal) workers do not receive information about the Code of Conduct (CoC) despite the two trainings per year that are provided to growers. Therefore, Syngenta decided to improve the communication in the coming year. Syngenta believes that the most efficient tool is to place simple visual materials about the CoC on the shuttle bus in order to catch workers’ attention.

In the first year of the program’s implementation, the company provided training to seed contractors and growers related to the Code of Conduct. However, workers have barely any information on workplace standards. The company did not organize trainings or create visual materials in order to inform. However, there are placards for health and safety requirements. Deadline Date:

Furthermore, due to the high turnover rate among field workers, the agronomist assistant will hold a short training session (10 minutes) before each workday to make sure all workers are aware of the CoC. This training will include the following topics: the location of the first aid box, emergency phone numbers and their location, child labor prohibition, the toll-free telephone number provided by Syngenta to communicate grievances, and the importance of rest days. February 15, 2014

IEV FINDINGS (2015) Syngenta has organized “FLA-days” for corn producing growers in order to raise CoC-awareness among them in March, 2015. Syngenta usually organizes meetings and trainings for their growers every spring in order to share industry-related information, such as new trends. “FLA-days” were included in this series: Syngenta held a CoC related training session where growers and seed organizer’s representatives were invited. In 2015, Syngenta introduced a new type of visual materials in order to raise workers’ attention and CoC-awareness in the fields: protective caps, long-sleeved shirts with CoC-information and new types of white placards. Most of the new visual materials just started to be piloted in E-category farms (where Syngenta has a direct contract with the labor contractors, representing about 15% of the full production list) and the colorful, valuable Personal Protective Equipment (PPE) reached a high popularity among workers. This resulted in a slight increase in workers’ CoC-awareness; however, most of them could only name one or two elements of the CoC correctly. The short morning training sessions for casual workers are held by the labor contractors and are usually taskfocused (technical) only. These morning “kick-outs” include the most basic Health & Safety concerns on the corn field but not the CoC-standards. Agronomists are not involved in holding training sessions for workers, who are in contact either with the growers or the labor contractors. The Verification Team has observed a slightly higher awareness level among workers where the growers directly hire his workers. At a general level, there is still no real measurable improvement in workers’ CoC-awareness. None of the interviewed workers were aware of the grievance channel due to the lack of training and the incomplete communication of the grievance hotline by Syngenta. The white placards utilized by Syngenta on the visited farms to display the toll-free “green phone number” does not indicate the purpose of this number, which therefore remains unknown by the workers. Syngenta is trying to implement new visual materials to raise CoC-awareness among workers; however, this seems to be a costly solution with limited outreach. As a comparison, the white placard applied and placed by Agromag (the Seed Organizer in charge of the sunflower supply chain) on every farm contains seven informative sentences on Syngenta CoC and the purpose of the toll-free number. Syngenta’s placards are less informative, as they mainly focus on Health, Safety & Environment (HSE) recommendations. Shuttle-bus window-stickers were issued in 2014 with limited result: the Verification Team has not found any labor-contractors implementing them on their vehicles, neither in 2014 nor in 2015.

4

Overall Conclusion: Sustainable Improvement Still Required New findings: The labor contractors have very limited awareness of the CoC. They do not receive sufficient training from Syngenta. Consequently, they do not provide any CoC-related training to workers. Follow-up Company Action Plan: 1. Syngenta will increase the efficiency of the trainings organized for the labor contractors 1.1. Syngenta will invite all the labor contractors for trainings on the CoC, reaching a minimum of 90 % of the labor contractors in terms of training participation 1.2. After the training the participants will be asked to complete a test 1.3. Syngenta will emphasize gaps in knowledge identified by the test results in the following next training 1.4. Syngenta will improve attractiveness of the visual materials 1.4.1.Syngenta will increase the size of the symbols on the bus stickers 1.4.2.Syngenta will increase the visibility of the information printed on the PPE shirts 1.4.3.Syngenta will print information and training materials on the resting tents 1.4.4.Syngenta will ensure a printed version of CoC for the labor contractors and the growers 1.5. Syngenta will develop a bonus system using points as an incentive and increase the vested interest of the growers in order to improve the efficiency of the information flow 1.5.1.Through internal monitoring, Syngenta will check the availability of the printed CoC and the awareness of the workers. The growers will get point deductions if the CoC is missing or the workers are uninformed regarding the CoC. 1.6. Syngenta will improve communication of the grievance phone number, the so called “green number” 1.6.1.Syngenta will explain the function of the “green number” during trainings of the labor contractors and growers 1.6.2.Syngenta will publish the “green number” on the visual materials 1.6.3.If the 2/3 of the interviewed workers during internal monitoring do not know the function of the “green number” the grower will get point deductions which can decrease the FLA bonus. Deadline Date: May 2016

5

FORCED LABOR/EMPLOYMENT TERMS Previous IEM Finding (2013):

Company Plan of Action:

F.3 Employment Terms/Voluntary Agreement

In the case of E category growers (in this category, Syngenta contracts with labor contractors to find seasonal workers) Syngenta plans to introduce a contract for seasonal workers. Approximately 20% of the fields fall into this category. As for the other grower categories, Syngenta can only raise awareness and suggest the same.

The labor contractors use registration sheets instead of contracts. On the registration sheets, there is no information on the terms and conditions related to Hours of Work and Compensation. In most cases, workers have a certificate instead of a contract, which shows that they work on the mentioned farm. However, this certificate can only be taken at the end of the day. In some cases, it was observed that labor contractors and growers only register the head of the family. Deadline Date:

When whole families (including children) take part in detasseling work, we face a special case. In these fields, the families are shareholders of the particular seed producing stock companies and therefore have a contract with the stock company. The children participated in the work as members of the family.

January 20, 2014

IEV FINDINGS (2015) Duties on employment terms for seasonal workers (including their social security coverage) are easy to be fulfilled for any employer by reporting workers through the “simplified seasonal employment scheme” on a daily basis to the Tax Authority. In this case, there is no legal obligation for them to issue contracts for seasonal workers. All employers, labor contractors or growers should report all of their seasonal workers on a daily basis (through their accountants or themselves by using a mobile application issued by the Tax Authority) and pay 500HUF “daily tax fee” – in order to cover workers’ taxing and social security duties. By using this system, Tax Authority is in charge of screening seasonal workers’ age, legal, social security and taxation status. In case if any discrepancy found, employer will face with a “joint check by a set of Authorities”. Syngenta has issued sample contracts for growers which they can utilize for registering their seasonal workers. Furthermore, Syngenta has also issued an additional type of registration sheet for registering seasonal workers with focus on young workers and hours worked. As far as the examined farms are concerned, workers were properly reported to the Tax Authority where they were directly hired by the grower. All type of other farms – where seasonal workers were provided by a labor contractor – seemed to have issues with proper employee registration, as Verification Team found no evidence on registering personal data for each worker (birth date, address, social security ID, etc.) and reporting them to the Tax Authority on a daily basis. Furthermore, each labor contractor signs a contract either with the grower or with the seed organizer (in case of E-category farms) which passes all legal responsibility to the labor contractors in fulfilling any legal obligations towards seasonal workers. The examined labor contractors could not show any evidence on their employees are being reported to the Tax Authority. Their registration sheet (which is usually a simple notebook with a handwritten name list) usually contains the workers’ names and the current date only. One of the examined farms signs a “contract agreement for services” with individuals (whom are known adults from the local social network), therefore that cannot be considered as an employment contract from a legal

6

point of view. Such contracts do not originate any legal employment term; therefore there are neither social security nor taxation duties are covered in them. Such type of contract does not prevent workers to bring their family members to help them on the field. However, this might results in young or under-aged workers performing detasseling activities on the field up to 7 days on the field. A solution could be to change the contract forms and include the reference of child work prohibition in the contracts. Overall Conclusion: Sustainable Improvement Still Required New findings: The verification team found no evidence on registering personal data for each worker (birth date, address, social security ID, etc.) and reporting them to the Tax Authority on a daily basis. The examined labor contractors could not show any evidence on their employees are being reported to the Tax Authority. Their registration sheet (which is usually a simple notebook with a handwritten name list) usually contains the workers’ names and the current date only. Follow-up Company Action Plan: Syngenta will expand the usage of the registration sheet created by Syngenta to 60% of the fields; the ultimate goal being to gradually increase the usage to 100%. 1.1. Syngenta will give instructions to the growers and labor contractors on how to fill the registration sheet during trainings 1.2. Syngenta will distribute the printed registration sheets until 10 June 2016 to all the growers 1.3. Syngenta will check the usage of the registration sheet through internal monitoring. The growers who do not use this sheet will get point deductions, which can decrease the FLA bonus. Deadline Date: June 2016

7

CHILD LABOR Previous IEM Finding (2013): CL.2 Child Labor During the farm visits, it was observed that children are working on detasseling. In some cases, growers make contracts on a hectare basis, in which families can also bring their children. These contracts have no provision on working conditions or child labor; therefore, workers have limited knowledge of child labor. CL.3 Proof of Age Documentation There is no system in place for age verification and there are different ways to employ workers. Some growers contract directly with families or workers on a hectare basis while others work with labor contractors. In cases where growers make contracts with families, there is no possibility of checking workers’ ages. While labor contractors keep workers’ records with names and tax numbers when they work with families, it is common to only register the head of the family. CL.4. Other Means of Age Verification There is no system in place to conduct age verification; therefore, not all records are completed concerning worker registration.

CL.5. Government Permits and Parental Consent Documentation During the farm visit, it was observed that some young workers come with their families to the field. Not all young workers are registered and, in some cases, parents do not allow young

Company Plan of Action: Syngenta will inform growers on working conditions related to child labor regulations. Growers will then have to distribute this information to their involved family members. Syngenta will conduct trainings twice per year, one in March and one before sowing in April. FLA standards will be included into both trainings and will focus on the prohibition of child labor.

Syngenta will make sure that growers are trained about child labor rules. Detasseling takes place during summer holidays; therefore, children are not taken away from school, but instead escort their parents to the fields in lieu of staying at home alone. If a child under the age of 15 is detected working on the fields, Syngenta will demand the child to stop working and sit in the resting area until their parents take them back home.

Syngenta will make sure that growers are trained about child labor rules. Syngenta will also put in place a new policy, where each morning before starting to work, the head of the detasseling workers will check everyone's ID card and not accept potential workers under the age of 15. Furthermore, the head of the workers will prepare an accurate attendance list. Labor contractors are required to report every detasseling worker to the tax office. During the trainings, producers will be informed that the requirements mentioned above are strictly required from the employer for every detasseling worker. Syngenta will make sure that growers are trained about child labor and young worker regulations. Syngenta will also further inform labor contractors, so that they know they must obtain parental consent in cases of young employees (under 16 years old) and other necessary proof regarding being a certified employee. During trainings, producers will be informed of the aforementioned requirements.

8

workers to participate in interviews. CL.10 Removal and Rehabilitation of Child Laborers Detasseling takes place during the summer; therefore, none of the children are removed from the school system. However, there is no system in place at either the company or the grower level, in which they could intervene if such a case were to occur. Deadline Date:

Detasseling takes place during the summer, when there is no school. As detasseling is done during the summer holiday, children are not taken from school; therefore, they escort their parents to the fields instead of staying at home alone. Syngenta Hungary is searching for alternative solutions to avoid employing underage individuals. Possible social projects can be created in the near future.

April 2014

IEV FINDINGS (2015) All interviewed growers seemed to be informed on issues related to child labor and the importance of preventing child labor in the fields since this issue was raised in 2013 with high publicity. Syngenta has introduced a new policy for cases when underaged children are found on the field (regardless of the reason). The new policy was communicated to growers: if a young child is found on the field (no matter if they are opting for work or just accompanying a family member), then the Governmental Custodian Office is to be alerted immediately, according to the action plan. However, this stage has never been implemented so far. There are special regulations for young workers as per the Hungarian Law of Labor in terms of working hours and rest days. Syngenta has introduced certain documents and equipment to distinguish young workers in the field (red bracelet for identification) – which are to be piloted on E-category farms only. The Verification Team has identified only one young worker (just reached the age of 15) on examined farms, but has not seen any precaution, special preparation or sign of distinction for young workers on any of the examined fields – in terms of working hours, wages and rest days. Due to the aforementioned contractual arrangements with labor contractors, age verification, checking parental consent documentation and special treatment of young workers belongs to the responsibiliites of labor contractors. Similarly to seasonal workers’ reporting to the Tax Authority, labor contractors lack a wellfunctioning, systematic age-verification system and do not sufficiently pay attention for young workers’ special needs. One of the examined farms signs a “contract agreement for services” with individuals (whom are known adults from the local social network). Such type of contract does not prevent workers to bring their family members to help them on the field. This might results in young or under-aged workers performing detasseling activities on the field up to 7 days a week. The agreement does not include any reference to child work prohibition. Overall Conclusion: Sustainable Improvement Still Required New findings: The Verification Team has identified only one young worker (just reached the age of 15) on the examined farms, but has not seen any precaution, special preparation or sign of distinction for young workers on any of the examined fields – in terms of working hours, wages and rest days. Syngenta has some equipment to distinguish young workers in the field (red bracelet) on E-category farms only.

9

Follow-up Company Action Plan: Syngenta will ensure to distinguish the young workers before hiring in the fields (between age 15 to 16) 1. See action plan above under Forced Labor 2. Syngenta will expand the usage of the distinguishing bracelet for young workers to 60% of the fields 2.1. Syngenta will check the usage of the distinguishing bracelet through internal monitoring. The growers who do not implement it will get point deductions, which would decrease the bonus. Deadline Date: June 2016

10

HARASSMENT OR ABUSE Previous IEM Finding (2013):

Company Plan of Action:

H&A.3 Discipline/Worker Awareness

The (seasonal) workers do not receive information about the CoC, despite the 2 trainings per year that are provided to growers. Therefore, Syngenta has decided to improve this communication in the coming year. Syngenta believes that the most efficient tool is to place simple visual materials about the CoC on the shuttle bus in order to catch workers’ attention. Furthermore, due to the high turnover rate among field workers, the agronomist assistant will hold a short training session (10 minutes) before each work day to make sure all workers are aware of the CoC. This training will include the following topics: the location of the first aid box, emergency phone numbers and their location, child labor prohibition, the toll-free telephone number provided by Syngenta to communicate grievances, and the importance of rest days.

There is neither a disciplinary system in place nor related written documents. H&A. 4 Discipline/ Training There is no training on disciplinary system for workers.

H&A.12 Grievance Procedure Syngenta Hungary has a toll-free number; however, none of the workers are aware of the number or its purposes. The number was written below the H&S placards which majority of the workers associate with the placards with Health & Safety issues, such as injuries. Deadline Date:

Syngenta will work on distributing its toll-free “green number” to workers to allow them to confidentially communicate employment grievances. The number was already seen on the field boards that were used in summer 2013. Syngenta will also include the grievance number in the training plan as described in the Plan of Action for GEN 2.

June 2014

IEV FINDINGS (2015) There is still no training and actual implementation of the disciplinary system, policy or recommendation in practice. Interviewed workers were unaware of any grievance channel without exception due to the lack of training and the incomplete communication of the grievance channel provided by Syngenta. The white placards utilized by Syngenta display a toll-free “green phone number” is not even noticed by the workers since it is not indicated that it is a grievance line to reach Syngenta staff in case of labor related issues. The Verification Team has not found Syngenta’s bus-window stickers posted on any of workers’ vehicles neither in 2014 nor in 2015. The toll-free “green number” keeps changing year-by year. Furthermore, there were no attempts to call to communicate grievances reported during the past years. This clearly indicates the dysfunction of Syngenta’s grievance channel. Overall Conclusion: Sustainable Improvement Still Required Follow-up Company Action Plan:

11

See action plan under Code Awareness Deadline Date: June 2016

12

HEALTH & SAFETY Previous IEM Finding (2013):

Company Plan of Action:

H&S.4 Health and Safety Management System

The Hungarian Health & Safety legal requirements are highly related to Health, Safety and Environment. Syngenta provides written materials (booklet), presentations, and on the spot tables to raise attention regarding the most important risk elements, such as: 1. Raising grower awareness during presentations before the season 2. Listing requirements in the contracts (in order to build long-term partnership with Syngenta, growers need to show commitment regarding: a) keeping these terms and conditions and b) requesting to share such requirements with work providers) 3. Place information boards on the fields to visualize requirements (already completed in 2013) 4. Checklists that are filled out by Syngenta’s agronomists based on grower interviews can give feed-back about dangerous situations, accidents or near- miss accidents

Subcontractors do some tasks, such as application of pesticides. A majority of the farms do not have an Health & Safety management system.

H&S.5 Communication to Workers Workers have only received limited information regarding Health & Safety requirements via clipboards in the field.

H&S.7 Personal Protective Equipment Workers bring their own Personal Protective Equipment PPE to the fields. During the field visit, it was observed that a majority of the workers work without PPE in the fields.

Syngenta will organize a daily 10 minutes training provided by the temporary agronomist during the peak season, as described under the Plan of action for GEN 2. This will be done for growers in the C, D and E categories. For Category E, the seasonal workers are provided by Syngenta’s direct supplier (labor contractors). For categories C and D Syngenta has long-term contracts with the growers, meaning we can put more pressure on them and request better handling of our FLA standards. In categories A and F, Syngenta has short-term contracts. Syngenta will organize a daily 10 minutes training provided by the temporary agronomist during the peak season, as described under Plan of Action for GEN 2. This will be done for growers in C, D and E categories. Due to the high rotation rate (20-80%) of the seasonal workers, Syngenta is not able to ensure high value PPE for workers. It is not workable to maintain hygienic solutions regarding PPE distribution if 20-80% of seasonal workers change daily (shoes, shirts hats) and the 1-day equipment is not usable. With growers from the C, D and E Categories, Syngenta tries to create common action to improve working conditions and for the returning work groups (mainly in category E) to ensure PPE usage.

H&S.12 Medical Facilities Some field areas are located far away from the center. In some cases, workers come with their bicycles or either the labor contractor or grower picks them up and takes them to and from the field. Workers do not know

All working groups (in all fields) have a first-aid box that is placed at the meeting point. The emergency telephone numbers are displayed on the notice boards at the meeting point (these notice boards were used in Summer 2013). In addition, the temporary agronomist will further raise worker awareness regarding placement of the first-aid box and the emergency phone numbers during the daily training. The Hungarian ambulance service can theoretically reach an injured person within 15 minutes.

13

how to proceed in case of an emergency. Given the location of the farms and that, in some cases, workers lack transportation, access to medical facilities is very limited. H&S.14 Rest Areas There are no rest areas in the field. Workers are working from 5am until 2pm under extreme weather conditions. Deadline Date:

For growers’ seasonal workers in category E, Syngenta is going to place trial versions of shade tents in 2014.

June 2014

IEV FINDINGS (2015) As far as generic Health & Safety issues in the fields, the growers and Syngenta have to meet a set of standards regulated by local and international laws regarding pesticides, chemical appliances, working with machinery, and keeping technical distances. Seasonal workers are employed in the most labor-intensive period, when such risks are practically excluded. Workers do not use any tools and there is no machinery on the fields during this vegetative period. Health & Safety issues are also extensively covered in the signed contracts between Syngenta, the Grower and the Grower-Labor Contractor relation. Growers or Labor Contractors usually provide a short Health, Safety & Environment HSE-training for workers each morning, so that workers are informed on the potential risks of corn leaves and the soil. Workers were equipped with PPE on a sufficient level. There were no outstanding negative cases observed, meaning that clothes worn by workers were functionally meeting their protective purpose (they were mostly wearing long-sleeve shirts or overalls). Caps and gloves were worn by workers based on their personal needs and preferences (workers usually bring their own PPE from home). Seasonal workers were also wearing Syngenta’s new FLA-long-sleeve-shirt on the examined E-category farm, which were better equipped with Syngenta’s PPE-materials. As far as Medical Facilities are concerned, all the examined farms were compliant. Interviewed workers were aware on what to do in an emergency situation. Examined fields had sufficient first aid equipment in place. All examined farms had shade tents set up on the fields. Buses, cars and natural shelters provide additional shelters for workers during extreme weather conditions. Syngenta is searching for alternatives in order to replace the known “white shelters”, since they are light (not stable enough) and keep being stolen in certain areas. Overall Conclusion: Issue Closed New findings: The provided shading tents are fragile. Follow-up Company Action Plan: Syngenta will test other tents available on the market. 1.1. Syngenta will purchase new, hard-wearing tents. 1.2. Syngenta will print information and training materials onto the side of these tents. Deadline Date:

June 2016

14

HOURS OF WORK Previous IEM Finding (2013):

Company Plan of Action:

HOW.1 General Compliance

In 2014, Syngenta will start using contracts for seasonal workers that are prepared by a lawyer, and will also provide a payment list per person that will be signed by workers in category E (forming maximum 15% of the total area).

In cases where workers are paid hourly, their working hours are registered through registration sheets. However, for workers who work on a daily basis, in most cases, there is no such record related to their hours of work. HOW.2 Rest Day During the peak season, seasonal workers try to work as much as possible. During the on-site visit, it was observed that some workers work 7 days a week without a rest day. HOW.4 Overtime

The Hungarian Labor Code allows work more than 7 days in a row. During trainings, Syngenta informs the growers of all FLA standards related to this and they also receive a FLA brochure. Nevertheless, as Syngenta recognizes the communication gap between growers and seasonal workers, Syngenta will place visual materials about these regulations on the buses and include this in the training to be held by the temporary agronomist.

In particular, workers who get their salary on a daily basis do not receive overtime payment. In urgent cases due to weather conditions, they might work more than 10 hours a day detasseling.

The visual materials that will be placed on the shuttle buses will contain information about the overtime regulations, such as how workers have the right to request extra payment in cases where they work more than 8 hours per day. For seasonal workers of growers in category E, Syngenta is going to start using a payment list that will be signed by the workers when the daily payment is made. This payment list will also show the overtime if there is any. Besides this, Syngenta will use the visual materials described earlier in the Plan of Action for HOW. 4 for all categories of works.

Deadline Date:

June 2014

IEV FINDINGS (2015) Syngenta has introduced a new type of registration sheet as per the company plan of action. The new document meets most legal and CoC-related recommendations, and is to be piloted at the E-category farms first. However, the Verification Team has experienced that this document is not prudently and functionally administered by the labor contractor: on the examined E-category farm, there were only two workdays administered by the labor contractor with an incomplete workers’ list (there are at least 12 different fields to be filled out in order to complete the form on a daily basis). This clearly indicates that labor contractors do not primarily use Syngenta’s new registration sheet and they are not properly trained on the importance of properly and prudently registering their workers. Syngenta prepared a new CoC-booklet with the extract of the relevant sections from the Labor Law for the growers. Weekly mandatory rest days are still not respected by the labor contractors: the Verification Team interviewed workers who consistently stated that they worked at least 11 days in a row without break. This is a noncompliance not only with regard to Syngenta’s CoC but with regard to the Hungarian Labor Law. The interviewed workers stated they were working this much on a voluntary basis and not forced to do so by their employers. Weekly rest-days are clearly regulated by the Hungarian Law of Labor 106. §. Therefore, workers

15

are entitled to have at least one rest day per week (by continuously spending at least 40 hours by resting). Workers must be provided with at least 48 hours of weekly rest on average during the period of their employment contract. One of the rest days must be set on a Sunday, at least once per month. Rest days are not paid by the Employer. The Verification Team has found that workers do not work more than 10 hours per day on the examined farms (meaning that usually there is not more than 10 hours between their arrival and departure). Seasonal workers usually start between 5 AM and 6 AM and finish their working hours around 2-3 PM. Daily working hours are regulated by the Hungarian Law of Labor 92. §. As stated in the law, regular working time is 8 hours per day (daily breaks and travelling time are not included). Examined farms seem to meet the local legal standards in this respect, since workers usually do not spend more than 8 hours actually working on the field. Eventual overtimes are compensated time-wise: on some days, workers finish earlier, but the same wage is paid for them. In some cases, due to unforeseen weather conditions, workers leave earlier. Such early departures might be compensated with affording some minimum overtime in the days after, according to the general practice. Daily breaks are usually as follows: 20 minutes morning break (breakfast), 5-8 minutes hourly break, 30-40 minutes of lunch break. Labor Contractors are to put more effort in prudently administering daily in-outs, tracking overtime and rest days for workers, as weekly working time exceeds 48 hours for a significant number of workers on the examined farms (including the E-category farm). Syngenta’s window stickers, other visual materials and simplified CoC indeed contain exact reference on daily/weekly working hours and on the necessity of overtime-compensation. However, by having these materials utilized by E-category farms only, this information is not visualized for workers on other farms. Overall Conclusion: Sustainable Improvement Still Required New findings:

1. Verification Team has observed that the new type of registration sheet is not functionally administered by the labor contractor.

2. The Verification Team interviewed workers who consistently stated that they worked at least 11 days in a row without break, they has found that workers do not work more than 10 hours per day.

3. Syngenta’s window stickers, other visual materials utilized by E-category farms only, this information is not visualized for workers on other farms. Follow-up Company Action Plan: 1. Syngenta will prepare information material to re-enforce the rights and obligations of employees and employers. 1.1. See detailed action plan under Code Awareness 2. See also action plan under Forced labor for details on the registration sheets process Deadline Date: June 2016

16

WAGES, BENEFITS AND OVERTIME COMPENSATION Previous IEM Finding (2013):

Company Action Plan

WBOT.3 Timely Payment of Wages

For growers’ seasonal workers in category E, Syngenta is going to start using a payment list that will be signed by the workers when the daily payment is made. This payment list will also show overtime if there is any. Besides this, Syngenta will use the visual materials described earlier in the Plan of Action for HOW.4 for all the categories.

There are limited records of payments; therefore, it is not be possible to determine if the payments are timely made. WBOT.6 Worker Wage Awareness Workers do not receive any training or information regarding wages and terms of employment.

Visual materials describing all regulations of the Labor Code regulations related to seasonal work will be placed on the shuttle buses. Furthermore, Syngenta will present these regulations to the growers in the trainings that are held twice per year.

WBOT.7 Record Maintenance

Target category E workers to create full documentation procedure.

In cases where workers are employed directly by the grower, they sign a registration sheet upon receiving their salary at the end of the day. However, no records were available for cases regarding labor contractors.

In 2014, Syngenta will start using contracts for seasonal workers that are prepared by a lawyer. Syngenta will also provide a payment list per person that will be signed by the worker in category E (forming maximum 15% of the total area).

IEV FINDINGS (2015) Syngenta has introduced a new type of registration sheet as per the company plan of action. The new document meets most legal and CoC-related recommendations, and is to be piloted at the E-category farms in the first phase. The Verification Team has experienced that this document is not prudently and functionally administered by the Labor Contractor: on the examined farm, there were only two workdays administered by the Labor Contractor with an incomplete name list only (there are at least 12 different fields are to be filled out in order to complete the form on a daily basis). This clearly indicates that labor contractors do not primarily use Syngenta’s new registration sheet and they are not properly trained on the importance of properly and prudently registering their workers. Therefore, full documentation procedure has still neither functioned at E-category (pilot) farms nor at other examined farms, where seasonal workers are provided by labor contractors. The Verification Team has received no complaint on the time frame of wages’ payments. Interviewed workers are paid at the end of each day at the examined farms. The farm that signs a “contract agreement for services” with individuals pays after the successful completion of the task (60 000HUF per 1 hectare for the period of 10 days). Seasonal workers employed by Labor Contractors are typically paid in cash at the end of the workday on the shuttle buses when travelling home. Payment of wages is not documented or signed neither on behalf of Labor Contractors nor by the workers. Workers sign a pay sheet on the farm where they are directly hired and supervised by the grower. Contracted individuals are also to sign a pay-sheet when receiving their payment as per their contracts. Regarding workers’ awareness on wages, they are aware of the amount of minimum wage and more or less of the wages in the agricultural industry and at the potential competitors in the labor market. Due to recent

17

changes in the Labor Law, seasonal workers are not entitled to receive a 50% salary bonus for works performed on Sundays, except for official holidays. There were no efforts made neither by Growers nor by Labor Contractors to further raise workers’ wage awareness. Syngenta provided sufficient wage-related trainings to corn-producing growers. However, there is no proof that labor contractors and workers have received such training neither from Syngenta nor by the growers. According to the new regulation by the Hungarian Government, as of 2015, most potential seasonal workers are obliged to participate in the Government’s “Public Work Program”, in which they regularly receive a small salary. However, they need to perform some public works organized by their local governments, state-owned companies or participate in some basic trainings organized in local schools. These are mostly simple jobs done a few hours per day, such as park-cleaning, street-cleaning, and road repairs instead of paying a long-term unemployment benefit for inactive people, and somehow push the crowds of unemployed and economically inactive people back to the “world of employment”. The salary paid by this governmental program is significantly smaller than the one seasonally earned for detasseling activity, but targeted unemployed people are still forced to take that, otherwise they will not be eligible for social benefits. Although this governmental program indeed has some beneficial effects on the group of permanently unemployed and inactive people, participants are not allowed to take any seasonal jobs, otherwise they will lose their earned social benefits. As a result, it is difficult to find seasonal workers for farms, since potential workers are participating in the “Public Work Program”. In addition, workers have to be transported from greater distances and their wages had to be slightly raised in comparison to 2014. Syngenta is aware of this issue, and negotiations lead to a direction of integrating Private Employers into Government’s “Public Work Program”, so that companies like Syngenta (and its subcontractors) will most likely not lose their seasonal workforce during the next summer period. However, the whole agricultural industry has to face the lack of available workforce due to long-term demographical trends (eldering population). All workers are paid above the minimum wage. However, there is no proof that their dues are paid to the Tax Authority by the labor contractors (including the examined E-category farm). Growers who directly hire their workers usually provide some proof to the Verification Team on dues paid to the Tax Authority. Overall Conclusion: Sustainable Improvement Still Required New findings: The documentation procedure is still not functioning at E-category (pilot) farms and at other examined farms where seasonal workers are provided by labor contractors. Payment of wages is not documented or signed on behalf of Labor Contractors by the workers. Follow-up Company Action Plan: See action plan under Forced labor for details on the registration sheets process Deadline Date: June 2016

18