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Diagnostic study of social compliance initiatives

in the textile and clothing sector in Morocco

ReportJune 2008

Arianna Rossi et Frdrique El Kaddioui


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Table of Contents

INTRODUCTION .............................................................. ................................................................... ................ 3

1. COMPARISON OF THE FC CODE WITH OTHER RELEVANT BUYERS CODES OF LABOURPRACTICE ............................................................... .................................................................. ........................... 4

I.CONTENT OF THE CODES ............................................................................................................................... 41. Child Labour ........................................................................................................................................ 42. Forced Labour ...................................................................................................................................... 43. Discrimination...................................................................................................................................... 54. Health and Safety ................................................................................................................................. 65. Remuneration and social benefits........................................................................................................ 66. Working hours...................................................................................................................................... 77. Freedom of Association ....................................................................................................................... 88. Disciplinary measures and harassment ............................................................................................... 99. Regular employment .......................................................................................................................... 1010. Subcontracting ................................................................................................................................... 10

11. Environment ....................................................................................................................................... 1112. Implementation..................................................................................................................................... 11

II.SUMMARY AND CONCLUSIONS ................................................................................................................... 12

2. FIELD STUDY ................................................................................................................................................ 16

I. METHODOLOGY ..................................................................................................................................... 16II. OUTCOMES............................................................................................................................................. 17

1. Management Interviews ..................................................................................................................... 17a. Motivation .................................................................................................................................................... 17b. Advantages of the FC................................................................................................................................... 18c. Disadvantages............................................................................................................................................... 20d. Relationship with clients.............................................................................................................................. 21e. Expectations for the future.......................................................................................................................... 22f. Recommendations for the promotion and improvement of FC ............................................................... 24

2. Workers interviews............................................................................................................................ 25a. Changes before and after FC ............................................................................................................................. 25b. Outstanding issues .............................................................................................................................................. 26

3. RECOMMENDATIONS ................................................................................................................................ 27

FOCUS AREAS ................................................................................................................................................... 27RECOMMENDATIONS....................................................................................................................................... 27


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Introduction

The present study aims at analysing and understanding in detail social complianceinitiatives in the textile and clothing industry in Morocco. In particular, it focuses on the code

of labour practice elaborated by the Moroccan Association for Textiles and Clothing Industry(AMITH) and its related label, Fibre Citoyenne (Citizen fibre). The objective of the report isto compare the Fibre Citoyenne code with other buyers codes of labour practice and tounderstand its impact since its introduction at the factory level.

The issue of social compliance has gained considerable attention in the past decades,as a natural counterpart to globalisation and its opportunities and challenges. Many initiativeshave been launched in order to ensure that globalisation and economic development takeplace in accordance with human rights and international labour standards. Such initiativeshave occurred both at the international level and the local level, by a variety of actors, such asinternational organisations (e.g. International Labour Organisation (ILO)), multi-stakeholder

initiatives (e.g. Ethical Trading Initiative (ETI)) and private companies operating in amultinational environment. Such companies have invested largely in corporate socialresponsibility initiatives to ensure that their outsourced production takes place underconditions that comply with international standards. In order to do that, most multinationalenterprises issue a code of labour practice to be respected by their suppliers.

At the national level, the AMITH has introduced a sector-wide code of conduct in2003. The code is based on the principles of civism and compliance with legal requirements,social ethics, protection of the environment and sustainable development. The AMITHcreated a related label, called Fibre Citoyenne (FC), to assess enterprises compliance to thecode, as well as to increase the visibility of the initiative and to market it with internationalbuyers active in Morocco. The FC label is awarded to companies based on independentmonitoring.

After five years from the introduction of the FC, the MFA Forum commissioned thepresent study to compare the FC to other relevant buyers codes, to evaluate its impact onMoroccan enterprises and to understand possible avenues for its improvement and evolution.

The first section of the report concerns the detailed comparison of the FC code withselected buyers codes, as well as with the Moroccan Labour Code and the ETI base code.

The second section of the report presents the outcomes of the field study carried out inMorocco at the factory level. It provides insights in management and workers perspectives

on social compliance initiatives, their motivations, the advantages and disadvantages derivingfrom the FC, the changes that it brought about, and their expectations and recommendationsfor its future.

The third section identifies focus areas that constitute particular challenges andprovides recommendations for the development of the Fibre Citoyenne.


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1. Comparison of the FC code with other relevant buyers codes oflabour practice

The present section aims at analysing the FC code in comparison with the MoroccanLabour Code, as well as with other relevant buyers codes of labour practice. The codes that

will be considered for comparison are those of the international buyers that constitute thebuyers group within the MFA Forum. The buyers group is composed of Nike, Levis Strauss&Co. (henceforth Levis), Next, Marks & Spencer (henceforth M&S) and Inditex. The codesof labour practice of Next and M&S are aligned with the Ethical Trading Initiative (ETI) basecode. Therefore, the FC code will also be compared to the ETI code.

After analysing in detail every chapter of the FC code and how they compare withother codes, the monitoring system will also be assessed.

I. Content of the Codes

1. Child Labour

FC Code :

The minimum age for recruitment is of 15 years of age, including the apprenticeship

training centres (CFA).

The age verification system at the moment of hiring must be rigorous.

The personnel, including trainees and apprentices, must be recorded on an updated

register.

The provisions in the FC code are based on the Moroccan labour code. Under thearticle 143, it is stated that underage individuals cannot be employed nor being admitted on

the enterprises premises before the age of 15.

The ETI code states at its point 4 that There shall be no new recruitment of childlabour. () Children and young persons under 18 shall not be employed at night or inhazardous conditions.

The Nike code states: The contractor does not employ any person below the age of 18to produce footwear. The contractor does not employ any person below the age of 16 toproduce apparel, accessories or equipment. If at the time Nike production begins, thecontractor employs people of the legal working age who are at least 15, that employment maycontinue, but the contractor will not hire any person going forward who is younger than theNike or legal age limit, whichever is higher.

The Levis code underlines that the company will not utilize partners who use childlabour in any of their facilities. It is stated that Use of child labour is not permissible.Workers can be no less than 15 years of age and not younger than the compulsory age to be inschool.

The Inditex code states that The External Manufacturers and Workshops shall notwork with minors. We define as minors those people who are under the age of 16 ()

2. Forced Labour

FC Code :

The enterprise guarantees respect of the fundamental principles of human rights and iscommitted not to use any form of forced labour.


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The formulation of the working contract should not force in any way the employee to

perform work against his or her will.

The FC code is based on the Moroccan labour law, which asserts in art.10 that it isforbidden to request employees to perform forced labour or labour against their will.

The ETI base code has prohibition of forced labour as its first point, stating thatemployment is freely chosen and that there is no forced, bonded or involuntary prisonlabour.

The Nike code affirms that The contractor does not use forced labour in any form --prison, indentured, bonded or otherwise.

Levis declares in its code that the company will not utilize or purchase materialsfrom a business partner utilizing prison or forced labour.

The Inditex code also affirms that the company will not allow any form of forced orinvoluntary labour in the production centres and/or facilities of its external manufacturers,suppliers and their subcontractors. It also forbids bonded labour by stating that External

manufacturers, suppliers and their subcontractors may not require their employees to makeany kind of deposits, nor are they entitled to retain their identity papers.

3. Discrimination

FC Code:

Recruitment, compensation, promotion and training will be based on the unique criteria

of competence and capability of the employee.

Contracts, hiring procedures and internal regulation exclude all forms of discrimination.

The Moroccan labour code mentions discrimination in two articles. At art. 9 it isstated that () it is [equally] forbidden all discrimination based on race, colour, sex,disabilities, marital situation, religion, political opinion, union affiliation, national or socialorigin, that has the effect of violating or altering the principle of equality of opportunities andtreatment, concerning the recruitment process, work conduct and repartition, professionaltraining, salary, promotion, assignment of social benefits, disciplinary measures anddismissal.Gender discrimination is also regulated by art. 346: All discrimination between sexes relatedto the salary for a job with the same value is forbidden.

The ETI base code affirms: There is no discrimination in hiring, compensation,access to training, promotion, termination or retirement based on race, caste, national origin,religion, age, disability, gender, marital status, sexual orientation, union membership orpolitical affiliation.

The Nike code states that There shall be no discrimination based on race, creed,gender, marital or maternity status, religious or political beliefs, age or sexual orientation.

The Levis code states that while the company recognizes and respects culturaldifferences, it believes that workers should be employed on the basis of their ability to do the

job, rather than on the basis of personal characteristics or beliefs.The Inditex code declares that External manufacturers, suppliers and their

subcontractors shall not apply any type of discriminatory practice as regards the recruitment,

compensation, access to training, promotion, termination of the employment agreement orretirement, based on race, caste, creed, nationality, religion, age, physical or mental disability,gender, marital status, sexual orientation and/or union membership or political affiliation.


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4. Health and Safety

FC code:

Employees work under conditions that guarantee hygiene and safety.The Health and Safety committee and the Medical Service will focus on the specific

dangers resulting from the activity of the enterprise.

The fourth title of the Labour Code (art. 281-344) is dedicated to the health and safetyprovisions for employees, covering in detail a wide range of issues. It is beyond the scope ofthis study to analyse individual articles.

The ETI base code has specific provisions concerning health and safety issues:A safe and hygienic working environment shall be provided, bearing in mind the

prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be

taken to prevent accidents and injury to health arising out of, associated with, or occurring inthe course of work, by minimising, so far as is reasonably practicable, the causes of hazardsinherent in the working environment.

Workers shall receive regular and recorded health and safety training, and suchtraining shall be repeated for new or reassigned workers.

Access to clean toilet facilities and to potable water, and, if appropriate, sanitaryfacilities for food storage shall be provided.

Accommodation, where provided, shall be clean, safe, and meet the basic needs of theworkers.

The company observing the code shall assign responsibility for health and safety to asenior management representative.

The Nike code stresses the importance of providing a safe and healthy work place andof promoting the health and well-being of all employees. In addition, it specifies that Thecontractor has written environmental, safety and health policies and standards, andimplements a system to minimize negative impacts on the environment, reduce work-relatedinjury and illness, and promote the general health of employees.

The Levis code states that the company will only utilize business partners whoprovide workers with a safe and healthy work environment. Business partners who provideresidential facilities for their workers must provide safe and healthy facilities.

The Inditex code asserts that External manufacturers, suppliers and their

subcontractors shall provide a safe and healthy workplace to their employees, ensuringminimum conditions of light, ventilation, hygiene, fire prevention, safety measures, andaccess to a drinking water supply.

5. Remuneration and social benefits

FC code:

Employees receive a fair remuneration, and at least equal to the legal minimum wage.

All worked hours are paid according to regulation. The wage calculation should mention

in detail all earnings and deduction, be transparent, understandable and verifiable.

All employees benefit at least from the compulsory social security and from all othersocial benefits prescribed by the law or by collective conventions.


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The Moroccan labour code states at art.345 that wage is fixed through a directagreement among the parties, or by collective bargaining, subject to the legal provisionsconcerning legal minimum wage.

Provisions regarding the remuneration of overtime are found at art. 201: ()overtime should be compensated with an increase of salary of 25% if they take place between

6 am and 9 pm for non-agricultural activities, () and of 50% if they take place between 9pm and 6 am (). The increase is raised respectively to 50% and 100% if overtime is carriedout on the weekly day off, even if the employee receives a compensatory day off. Overtimepremium rate may also be paid on an annual basis if the company adopts the annualisationsystem, which means that premium rate will be paid only for hours exceeding the yearly quotaof 2288 hours.

The ETI base code refers to the concept of living wage, affirming that Wages andbenefits paid for a standard working week meet, at a minimum, national legal standards orindustry benchmark standards, whichever is higher. In any event wages should always beenough to meet basic needs and to provide some discretionary income. All workers shall be

provided with written and understandable information about their employment conditions inrespect to wages before they enter employment and about the particulars of their wages for thepay period concerned each time that they are paid. Deductions from wages as a disciplinarymeasure shall not be permitted nor shall any deductions from wages not provided for bynational law be permitted without the expressed permission of the worker concerned. Alldisciplinary measures should be recorded.

The Nike code prescribes contractors to provide each employee at least the minimumwage, or the prevailing industry wage, whichever is higher; to provide each employee a clear,written accounting for every pay period; and to not deduct from employee pay for disciplinaryinfractions. In addition, contractors should provide each employee all legally mandated

benefits.The Levis code affirms that the company will only do business with partners who

provide wages and benefits that comply with any applicable law and match the prevailinglocal manufacturing or finishing industry practices.

The Inditex Code states that External manufacturers, suppliers and theirsubcontractors shall ensure that wages paid for a standard working week shall meet at leastthe minimum legal or collective bargain agreement, whichever is higher. In any event, wagesshould always be enough to meet at least the basic needs of workers and their families andany other which might be considered as reasonable additional needs.

6. Working hours

FC Code:

Working hours respect local regulation. In the event of overtime, the limit of 60 hours per

week determined by international standards will be respected.

All employees benefit from one day off per week.

Recording of all working hours for each employee will be carried out daily through a

reliable, equitable and verifiable scorecard.

Art. 184 of the Labour Code affirms: In non-agricultural activities, the normal

duration of work is fixed at 2288 hours per year, or 44 hours per week. The global yearlyduration can be divided according to the needs of the enterprise, provided that the normalduration of work does not exceed 10 hours per day.


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The ETI base code states that working hours should not be excessive: Working hourscomply with national laws and benchmark industry standards, whichever affords greaterprotection. In any event, workers shall not on a regular basis be required to work in excess of48 hours per week and shall be provided with at least one day off for every 7 day period on

average. Overtime shall be voluntary, shall not exceed 12 hours per week, shall not bedemanded on a regular basis and shall always be compensated at a premium rate.

The Nike code asserts: The contractor complies with legally mandated work hours;uses overtime only when each employee is fully compensated according to local law; informseach employee at the time of hiring if mandatory overtime is a condition of employment; andon a regularly scheduled basis provides one day off in seven, and requires no more than 60hours of work per week on a regularly scheduled basis, or complies with local limits if theyare lower.

The Levis code states that the company will identify local legal limits on work hoursand seek business partners who do not exceed them except for appropriately compensated

overtime. While the company favours partners who utilize less than sixty-hour work weeks,they will not use contractors who, on a regular basis, require in excess of a sixty-hour week.In addition, Employees should be allowed at least one day off in seven.

The Inditex code conforms to the provisions of the ETI base code: Externalmanufacturers, suppliers and their subcontractors shall adjust the length of the working day tothe provisions of the applicable laws or of the collective bargain agreement for the sector inquestion, should this latter afford greater protection for the workers. At no event shall externalmanufacturers, suppliers and their subcontractors require their employees to work, as a rule ofthumb, in excess of 48 hours a week and workers shall be granted at least one day off forevery 7 calendar day period on average. Overtime shall be voluntary, shall not exceed 12hours per week, shall not be demanded on a regular basis and shall always be compensated at

a premium rate, pursuant to the provisions of the prevailing regulations in force.

7. Freedom of Association

FC Code :

Freedom of association, guaranteed by the law, is respected. In any case, elections for

employees representatives are organised according to regulation.

At art. 9 of the Labour code it is asserted that it is forbidden to limit freedoms and

rights related to unionisation within the enterprise.

The ETI base code affirms: Workers, without distinction, have the right to join orform trade unions of their own choosing and to bargain collectively. In addition, Theemployer adopts an open attitude towards the activities of trade unions and theirorganisational activities. Finally, Workers representatives are not discriminated against andhave access to carry out their representative functions in the workplace.

The Nike code states that management practices of contractors should respect therights of all employees, including the right to free association and collective bargaining.

The code of Levis declares that the company expects suppliers to respect the right to

free association and the right to organize and bargain collectively without unlawfulinterference. Business partners should ensure that workers who make such decisions orparticipate in such organizations are not the object of discrimination or punitive disciplinary


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actions and that the representatives of such organizations have access to their members underconditions established either by local laws or mutual agreement between the employer and theworker organizations.

The Inditex code states: External manufacturers, suppliers and their subcontractorsshall ensure that their employees, without distinction, have the right of association, union

membership and collective bargaining. No retaliation may arise from the exercise of suchright and no remuneration or payment whatsoever may be offered to the employees in order tohinder the exercise of such right. External manufacturers, suppliers and their subcontractorsshall adopt an open and collaborative attitude towards the activities of Trade Unions.

The FC code, unlike the ETI and buyers codes, does not explicitly mention collectivebargaining.

8. Disciplinary measures and harassment

FC Code :Disciplinary measures are gradual, according to regulation, and the level of sanction is

adapted to the misconduct.

Internal regulation defines rights and obligations for employers and employees, and it is

circulated among all employees.

The employer engages in the formalisation of a communication system for employees

anonymous information, suggestions and complaints.

The first provision of the FC is based on art. 38 of the Labour Code, which prescribesthat disciplinary measures should be applied gradually.

Art. 36 of the Labour Code states that disciplinary sanctions or layoffs should not bebased on invalid motives such as union membership, participation in union activities, being aworkers representative, any form of discrimination.

Art. 40 lists possible misconducts on the side of employers, company heads andmanagement, including grave insults, any form of violence and aggression towards theemployee, sexual harassment and incitement to immoral behaviour.

The ETI base code states that no harsh or inhumane treatment should be allowed.Physical abuse or discipline, the threat of physical abuse, sexual or other harassment andverbal abuse or other forms of intimidation shall be prohibited. In addition, it also states thatDeductions from wages as a disciplinary measure shall not be permitted nor shall any

deductions from wages not provided for by national law be permitted without the expressedpermission of the worker concerned. All disciplinary measures should be recorded.

The Nike Code asserts that contractors must recognize the dignity of each employee,and the right to a workplace free of harassment, abuse or corporal punishment.

The Levis code affirms that the company will not utilize business partners who usecorporal or other forms of mental or physical coercion.

The Inditex code states that External manufacturers, suppliers and theirsubcontractors shall treat their employees with dignity and respect. Under no circumstancesshall physical punishment, sexual or racial harassment, verbal or power abuse or any otherform of harassment or intimidation be permitted. In addition, it also states that External

manufacturers, suppliers and their subcontractors shall not proceed to any withholdings and/ordeductions from wages for disciplinary purposes ().


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9. Regular employment

FC Code :

The employment will be formalised by a contract or at least by a work card [carte du

travail]. The contract corresponds to the employees situation within the enterprise.The enterprise does not take advantage of the apprenticeship training programmes to

avoid paying the minimum wage to positions that require a low level of qualification.

It is forbidden to use repeatedly temporary contracts or any practice aimed at keeping the

employee in a precarious employment situation.

The ETI base code is explicitly mentions the issue of regular employment: To everyextent possible work performed must be on the basis of recognised employment relationshipestablished through national law and practice. Obligations to employees under labour orsocial security laws and regulations arising from the regular employment relationship shallnot be avoided through the use of labour-only contracting, subcontracting, or home-working

arrangements, or through apprenticeship schemes where there is no real intent to impart skillsor provide regular employment, nor shall any such obligations be avoided through theexcessive use of fixed-term contracts of employment.

The Inditex code is aligned with the ETI code, affirming that External manufacturers,suppliers and their subcontractors undertake that all the employment formulas they use arepart of the ordinary labour practice and the applicable local laws. External manufacturers,suppliers and their subcontractors shall not impair the rights of workers acknowledged underthe labour and social security laws and regulations by using schemes of: subcontracting,homeworking, training and apprenticeship contracts or any other like formula which preventspromotion of regular employment in the framework or regular employment relationships.

10. Subcontracting

FC Code :

The enterprise verifies that the employees of service providers (security, cleaning,

temporary workers) in their premises benefit from lawful working conditions

The Labour code specifies in art. 87 that the subcontractor must comply with allprovisions of the code including those related to social security and work injury.

The ETI base code does not have specific provisions concerning subcontracting.

M&S specifies that suppliers must agree with the company in advance the productionsite or sites to be used for each order: subcontracting of its orders is not allowed.

Next affirms in its code of practice that Where a supplier wishes to usesubcontractors or outworkers this must be approved in advance by NEXT. It is the suppliersresponsibility to ensure and provide evidence that any subcontractor or outworker used,conforms to the standards outlined in this code.

The Nike code mentions that the contractor should not use any form of homework forNike production.

The Inditex code specifies that External manufacturers and suppliers shall notsubcontract any work without the prior written authorisation of Inditex. Externalmanufacturers and suppliers, which subcontract work for Inditex, shall be responsible for the


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subcontractors compliance with the Code. External manufacturers, suppliers and theirsubcontractors shall apply the principles of the Code to any homeworker involved in theirsupply chain, and they shall give transparency to the locations and working conditions of saidhomeworkers.

11. Environment

FC Code :

In order to protect the environment, waste disposal will be organised, rational and

adapted to the product, and will privilege reutilisation and recycling.

Stocking and handling of hazardous chemicals will follow basic safety rules for

environment protection.

While the Labour code and the ETI base code do not include provisions concerningthe environment, the FC code is aligned with buyers codes in its provisions regarding this

issue.

M&S states that suppliers must meet all local and national regulations. In addition,[the company] expect them to meet all the relevant Marks and Spencer standards relating tothe environment.

Next affirms in its code that supplier must comply with national laws andinternational standards that aim to protect the environment.

The Nike code asserts that the contractors should have written environmental policiesand standards, and should implement a system to minimize negative impacts on theenvironment.

The Levis code affirms that the company will only do business with partners whoshare its commitment to the environment and who conduct their business in a way that isconsistent with LS&CO.s Environmental Philosophy and Guiding Principles.

The code of Inditex affirms that External manufacturers, suppliers and theirsubcontractors shall be duly committed at all times to protect the environment and shallcomply, at least, with the standards and requirements of the applicable Local and InternationalLaws and Regulations.

12. Implementation

FC Code :The enterprise adopts management and organisation systems that are efficient,

transparent and adapted to its size and activity.

The systems allow a rigorous follow-up of human resource management and prove

compliance of the enterprises practices to the regulation.

In accordance to buyers practices, the monitoring system of the FC code is based onaudits. When the label was established in 2003, a first group of enterprises was accompaniedthrough a support programme and certified by an external audit company. In the followingyears, new applicants were audited after the completion of the FC support programme. TheFC support system consists of a preliminary audit, followed by a plan of corrective actions

aimed at achieving social compliance. The enterprise is accompanied by a support cabinet thatassists it in the implementation of an action plan over a period of six months, covering issuesof health and safety, minimum working age, wages, working hours, discrimination, freedom


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of association, forced labour and environment. After this period, the enterprise is auditedagain. The FC label is issued on the base of the results and conclusions drawn on the finalaudit. Verification audits, aimed at confirming or withdrawing the label of already FC-certified enterprises, have been launched in April 2008 and are currently ongoing.

The ETI Principles of Implementation cover areas related to monitoring andverification, transparency and disclosure. More in detail, the first principle concernscommitment by companies to endorse the base code and its implementation process, byappointing a senior manager for implementation activities, and by integrating the code and itsimplementation process into their core business. Secondly, the ETI Principles ofImplementation address the issues of monitoring, independent verification and reporting.Then, in the section on awareness raising and training it is stated that the relevant personnelshould be provided with appropriate training and guidelines. A continuous improvementapproach is at the base of corrective actions. The ETI also underlines in its last pointmanagement procedures, pricing and incentives, stating that negotiations with suppliers shalltake into account the costs of compliance.

Each of the buyers codes has specific provisions concerning the publication of thecode on the factory floor and its translation in a local language understood by the employees.

Inditex specifies that suppliers shall establish a management system that implementsthe code, and shall appoint a senior member of management to be responsible for itsimplementation and enforcement.

Concerning the monitoring system of the codes of labour practice, buyers carry outregular audits in their suppliers factories to ensure compliance with their codes. Thefrequency of such audits varies according to the buyer as well as to the level of compliance ofthe supplying factory. Audits may be managed internally by the buyer, or they may beoutsourced and carried out externally by an auditing cabinet. Audits may be announced or

unannounced. Nike explicitly mentions in its code that audits are unannounced.In the codes of M&S and Levis it is explicitly stated that the company will support

necessary improvements in their suppliers factories, requiring corrective action plans in theevent of non compliance of certain points. However, should the corrective action prove notsuccessful, they would cancel contracts and terminate the business relationship.

The Inditex code explicitly mentions the issue of transparency in its chapter on ethicalcommitment, which outlines measures for the prevention of corruption, bribe and extortion.

II. Summary and Conclusions

The table below provides a snapshot view of the sections above, summarising thedetailed provisions of each code.


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FibreCitoyenne

Nike Levi's Inditex Next M&S ETI Base Code

Child Labour

Legal workingage in Morocco

- 15 years of

age

Not youngerthan 16 years of

age

No less than 15years old

16, exceptionalcases 14

see ETI BaseCode

see ETI BaseCode

Children andyoung persons

under 18 shall notbe employed at

night or inhazardousconditions.

Forced LaborForbids any

form of forcedlabour

Prohibition onforced labor,

whether prison,indentured,bonded orotherwise

Forbids prisonor forced laborin contractingrelationships

Does not allowany form offorced or

involuntarylabour

see ETI BaseCode

see ETI BaseCode

There is noforced, bonded orinvoluntary prison

labor.

Discrimination

Excludes alldiscrimination

practices

based oncriteria other

thanprofessionalcompetence.

Nodiscriminationbased on race,creed, gender,

marital ormaternity status,

religious orpolitical beliefs,age or sexualorientation.

Respectscultural

differences,believes that

workers shouldbe employed

on the basis oftheir ability to

do the job,rather than onthe basis of

personalcharacteristics

or beliefs.

Forbids any typeof discriminatorypractice basedon race, caste,

creed,nationality,

religion, age,

physical ormental disability,gender, maritalstatus, sexual

orientationand/or union

membership orpolitical

affiliation.

see ETI BaseCode

see ETI BaseCode

There is nodiscrimination in

hiring,compensation,

access to training,promotion,

termination or

retirement basedon race, caste,national origin,religion, age,

disability, gender,marital status,

sexual orientation,union

membership orpolitical affiliation.

Health & Safety

Employeeswork under

conditions thatguaranteehygiene and

safety.

Written safetyand health

policies andstandards,

implementation

of a system toreduce work-related injury

and illness, andpromote the

general healthof employees

Will only utilizebusiness

partners who

provide workerswith a safe andhealthy workenvironment.

Provision of asafe and healthy

workplace totheir employees,

ensuringminimum

conditions oflight, ventilation,hygiene, fireprevention,

safety measures,and access to adrinking water

supply.

see ETI BaseCode see ETI BaseCode

Working

conditions aresafe and hygienic.

Remunerationand socialbenefits

Fairremuneration,and at leastequal to the

legal minimum

wage.

Minimum wageor prevailing

industrystandard,whichever

higher

Wages andbenefits thatcomply with

any applicablelaw and matchthe prevailing

localmanufacturing

or finishingindustry

practices.

At least the legalminimum wage

or collectivebargain

agreement,whichever is

higher. Wagesshould be

enough to meetat least the basicneeds of workersand their families

see ETI BaseCode

see ETI BaseCode

The higher ofnational legalstandards or

industrybenchmark

standards andshould always beenough to meet

basic needs andto provide somediscretionary

income.

Working hours

Working hoursrespect local

regulation, witha limit of 60

hours per week

No more than60 hrs per/week

No more than60hrs per/week

No more than 48hours per week

see ETI BaseCode

see ETI BaseCode

Working hourscomply with

national laws andbenchmark

industrystandards,

whichever affordsgreater protection.

Freedom of

Association

Freedom ofassociation is

respected

Respect therights of allemployees,including the

right to freeassociation andcollectivebargaining

Right to freeassociation and

the right to

organize andbargaincollectively

Right ofassociation,

union

membership andcollectivebargaining

see ETI Base

Code

see ETI Base

Code

Freedom ofassociation and

the right to

collectivebargaining arerespected.


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DisciplinaryMeasures andHarassment

Disciplinarymeasures are

gradual,according to

regulation, andthe level of

sanction isadapted to the

misconduct

Prohibitsdeductions from

pay as adisciplinary

measure; rightto a workplace

free of

harassment,abuse orcorporal

punishment.

Will not utilizebusiness

partners whouse corporal orother forms of

mental or

physicalcoercion.

Forbids physicalpunishment,

sexual or racialharassment,

verbal or powerabuse or anyother form of

harassment or

intimidation; anydeductions from

wages fordisciplinarypurposes

see ETI BaseCode

see ETI BaseCode

Deductions fromwages as adisciplinary

measure shall notbe permitted. No

harsh or

inhumanetreatment is

allowed.

RegularEmployment

Theemployment

will beformalised by acontract or at

least by a workcard ; forbids touse repeatedly

temporarycontracts that

keeps

employees in aprecarious

employmentsituation

Not impair therights of workers

by usingsubcontracting,homeworking,training and

apprenticeshipcontracts or any

other likeformula which

preventspromotion of

regularemployment

see ETI BaseCode

see ETI BaseCode

Regularemployment is

provided.

Subcontracting

Employees ofservice

providersbenefit from

lawful workingconditions

No use of anyform of

homework

Nosubcontracting

without the priorwritten

authorisation ofInditex.

Subcontractorsmust be

approved inadvance by

NEXT. It is thesuppliers

responsibility toensure

subcontractors'conformity tothe standards

Subcontractingis not allowed.

Environment

Environment

protectionthrough

organised andrational waste

disposal,reutilisation

and recycling,respect of

basic safetyrules.

Writtenenvironmentalpolicies andstandards;

implementationof a system to

minimizenegative

impacts on theenvironment

Business to beconducted

consistentlywith LS&CO.sEnvironmentalPhilosophy and

GuidingPrinciples

The ExternalManufacturersand Workshopsare obliged to

comply with theprovisions of the

legislation inforce on

environmentalmatters.

Suppliers mustcomply withnational laws

andinternational

standards thataim to protect

the environment

Suppliers mustmeet all the

relevant M&Sstandards

relating to theenvironment.

Implementation

Managementand

organisation

systems thatprove

compliance ofpractices toregulation

Independentverification and

inspections.

Regularevaluation of

suppliers'compliance,corrective

action plans,termination ofcontract if no

action is taken.

Nosubcontracting;managementsystems to

implement andmaintain

programmes toset in train the

code;independent

verification andmonitoring; no

corruption, bribeor extortion.

See ETIPrinciples of

Implementation

Regularevaluation of

suppliers'compliance,corrective

action plans,termination ofcontract if no

action is taken.

ETI Principles ofImplementation:(1) commitment;(2) monitoring,

independentverification and

reporting; (3)awareness raisingand training; (4)

corrective actions;(5) management

procedures,pricing andincentives


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As summarised in the table above, the analysis of the provisions of the FC code incomparison to the buyers codes and the ETI base code highlights that there is no significantdifference regarding the issues covered and the language used. The FC code is synthetic andstraightforward, and strongly anchored on the Moroccan Labour Code.

A potential area of improvement concerns transparency of the FC verificationmechanism based on independent audits. The detailed audit sheets used in the monitoringprocedures could be published on the AMITH website, which hosts all the detailedinformation concerning the FC. Such publication would allow more in-depth comparisonsbetween specific provisions of the FC code and of buyers codes.


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2. Field Study

I. Methodology

The methodology was largely influenced by the time frame and the available budget.

The sample for the field study was selected among the enterprises members of the AMITH inthe textile and clothing sector. Fifteen factories were approached and twelve accepted to bepart of the sample. The sample selection was made according to two criteria:

1) regional distribution, as the sample needed to be representative of the geographicaldistribution of the sector,

2) level of engagement in the FC (already certified, ongoing certification process, notinvolved with FC)

The Moroccan textile and clothing sector traditionally originated in Fs, before turningto the export market and expanding to Casablanca, Rabat and Tangier. These four areas arecharacterised by a high level of garment production for the export market and of employment

in the textile and clothing sector. The area of Grand Casablanca alone employs more than halfof registered workers in the Moroccan textile and clothing sector. In order to correctlyrepresent the geographical distribution of the sector, the sample enterprises were selected inthe regions of Casablanca-Berrechid, Rabat-Temara, Fs and Tangier, as exemplified by thechart below.

Casablanca-

Berrechid; 4

Rabat-Temara;

3

Fs; 2

Tanger; 3

The selection of the sample has also taken into account the different level ofengagement in the FC. Understanding the reasoning of managers and directors to engage inthe FC was a key element for assessing its potential for mainstreaming. The sample isconstituted of five enterprises that are already FC-certified, six that are in the progress ofbeing audited for certification (or have been already audited) and one that is subjected only tointernational buyers codes.

The field study was carried out during April-May 2008.

The main objective of the field study was to understand and analyse the opinions andperspectives of management and workers in factories supplying for international buyersconcerning the FC certification.

The methodology is based on semi-structured interviews with the management and ongroup interviews, also called focus group discussions, with workers. The choice of


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methodology is explained by the envisaged type of study. Priority was given to experiencesand opinions of the participants, underlining the complexity, detail and depth of the data.Traditional surveys based on standardised questionnaires on a large scale do not allow thistype of analysis and were excluded. For this reason, a qualitative study was preferred.

The choice of this methodology provided a wide variety of opportunities for

discussion and open dialogue among the research participants. The opinions, understanding,interpretation and beliefs of interviewees were crucial to understand the object of study.Similarly, focus group discussions were chosen to obtain the viewpoints of workers, becausethey encourage open communication on sensitive issues.

II. Outcomes

The aim of the field work was to collect information and perspectives from themanagement and the workers in a selected group of enterprises in order to assess the impactand the potentiality that the FC has in the garment industry in Morocco.

In order to understand what are the main driving forces that bring managers to engagein social compliance activities, the first area of investigation was their motivation to join theFC certification process.

Secondly, the interviews with the management have explored the main advantages anddisadvantages deriving from the involvement with the FC. Given that the sample chosen iscomposed of enterprises at different stages of the certification, these sections provideimportant insights on the benefits and challenges brought about by the FC.

Following up the comparison between the FC and selected buyers codes of conduct,the interviews also focused on the management experience with other codes and with theirrelated implementation system.

Managers have been asked to express their thoughts concerning their expectations for

the future of the industry and the relationship between competitiveness and social compliance.They have also been asked to express opinions on the potential of the FC.

Finally, managers had the opportunity to provide recommendations for theadvancement, promotion and possible improvement of the current FC.

Focus group discussions with a small sample of workers in each factory have beencarried out. These discussions aimed at understanding workers perspective concerning theengagement in social compliance, and in particular the related changes brought at factorylevel.

The outcomes of the interviews and focus group discussions are presented in thefollowing sections.

1. Management Interviews

a. Motivation

The first area of investigation concerned the motivation that brings or has alreadybrought enterprises to social compliance and in particular to the FC certification. Managerswere asked what was the main driving force behind their decision to engage in the FC

certification process. The interviews show two main factors as sources of motivation, oneexternal and one internal to the enterprise.


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External factorOne very strong motivational factor is strictly business-related and rotates around the

clients. Being FC-certified is seen as a competitive advantage by managers, who see throughit the opportunity to acquire a larger number of clients, to diversify their client base byattracting more prestigious brand names and to expand their exports towards unexplored,

more demanding markets. Managers believe that having the FC label reassures their clientsbecause it guarantees a minimum standard of compliance with international and local labourlaws. Some managers see it as an obligatory move to continue to work with large orders in asustained way.

In some cases, clients (namely Inditex, due to its bilateral agreement with AMITH ofJuly 2007) have directly demanded suppliers to engage in the FC certification. This isparticularly valid for those enterprises that have recently joined the support programme forthe FC certification.

Furthermore, due to their clients frequent audits, four enterprises were ready to beaudited for the FC certification without the need of the support programme. In these casesmanagers have voluntarily joined the FC, considering it a bonus feature for the enterprise.

One manager stated that he had the objective of actively sensitising and encouraging otherenterprises to engage in the programme by setting an example.

b. Advantages of the FC

Internal factorAlongside the external factors, eight managers have stated that they have engaged in

the FC certification because of reasons that are independent from external pressures they mayreceive. These reasons refer to the concept of citizenship and civic responsibility, not onlyat the enterprise level but in the larger context of the Moroccan society. Managers state thattheir engagement in social compliance was a personal, voluntary choice driven by theawareness of human and labour rights. They underline that being socially compliant is not amatter of discussion but a necessary factor in order to be good citizens and advance the

Moroccan society as a whole. This group of interviewees agree that, while it might not havebeen their first motivation to start the certification process, this awareness has becomeincreasingly important in their efforts towards the FC certification. All managers recognisethe benefits deriving from good social climate and stability at the factory level. Such situationis based on good relationships and communication with workers and their representatives, aswell as by the workers awareness of their rights and their importance in the factory. Workersand human resources in general have been stressed to be the crucial capital of the enterprise,and therefore investment in the improvement of their situation can only lead to benefits forthe factory as a whole.

Furthermore, it has been suggested that the FC support programme could serve as anadditional motivational factor for enterprises that may join the certification process in thefuture. Six managers stated that they recommended to other enterprises to become FC-certified because of the benefits that they have drawn from the support programme. Inparticular, they recognise the support cabinets to be very helpful not only in terms of socialcompliance issues, but also for human resource management, restructuring and reorganisationof the factory.

All the managers interviewed agree that being involved in the FC has been a verypositive experience. The overall judgement on the FC certification, as well as on the support

programme guided by the cabinet, largely depends on the characteristics of the enterprise. Anumber of enterprises selected were part of the original group of firms that was selected forthe FC certification at its launch in 2003. For most of these enterprises, the FC represented an


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extra certification on top of their already established efforts in the field of social compliance.Managers state that they had already made most of the investment before they were FC-certified, because of the initiatives carried out bilaterally with their clients (in particular withUS and UK clients). In these cases, the managers felt they were already in compliance andthey did not take advantage of the support programme with the cabinet.

The experience of the six enterprises that have only recently joined the FC or are in theprocess of being certified seems to differ from the one of the first group. Indeed, thesemanagers recognise a very impressive change on their factory floors thanks to theinvolvement in the FC and especially thanks to the consultancy of the cabinets carrying outthe support programme.

The main advantages recognised by the management can be grouped in the followingpoints:

Business opportunitiesManagers underline the advantages deriving from the FC in terms of business

opportunities. The managers of the five firms that are already FC-certified recognise that theirenterprises have become more reliable, and therefore that clients are keener on entrustingthem with larger or more complicated orders. They have been able to expand their client basetowards more demanding, prestigious clients that value social compliance efforts. Fourmanagers have started or are planning to venture in different export markets such as the US orthe UK. They also suggest that they do not have to struggle to approach clients to have moreorders, but that instead they are actively pursued by clients.

For the six enterprises that are in the process of being certified, advantages areexpected in terms of larger orders, higher number of clients, and the opportunity to work withspecific clients that have fully engaged in the FC by declaring that they will only work withFC-certified suppliers (i.e. Inditex).

Reorganisation and management systemThe managers of firms that have recently joined the FC support programme are very

impressed by the changes in terms of reorganisation of production and, more generally, aboutthe significant changes taking place on the factory floor.

The FC certification and its support programme have been instrumental for generalupgrading of the firms and a complete restructuring of production. Many managers credit thesupport cabinet as a very useful helping actor in order to improve their management system,to rationalise their production and to sustain their learning process. Managers recognise theyhave changed their working methods to be more efficient and more productive, in order tocounterbalance the investment they made for social compliance.

In particular, the most observable improvements have been recorded in security andhygiene issues. Managers state that, even though they thought they had a good level ofsecurity in the factory, many changes had to be made in order to comply with the FC code,and now they recognise that they needed improvements. Other managers commend theprogress in terms of keeping track of workers dossiers, legal documentation and medicalfiles.

All the managers interviewed agree on the improvements that the FC brought in termsof social climate within the factory. The relationship between management and workers has

improved greatly with the introduction of the FC and thanks to the support cabinets, whichinitiated communication groups and health and safety committees in companies which had noworkers representatives. Managers describe how the FC has advanced communication with

Social climate within the factory


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their workers, how it has improved clarity and simplified their relationship with workersrepresentatives. They underline that the FC support programme has shed light on theMoroccan legislation and has raised awareness on workers rights and benefits. Managersrecognise that workers are more motivated in their jobs, and therefore more productive,because they know their rights and feel secure and respected. They also emphasise that the

most important issue in their relationship with their workers is not necessarily a materialmatter, like paying a higher wage, but rather showing them respect and listen to their needsand concerns. This improved attitude assures stability in the workforce and a reducedturnover.

c. Disadvantages

Standardisation of codes of labour practiceManagers also point out the relevance of the FC as a label that certifies social

compliance in the Moroccan textile and clothing industries. They commend the creation ofone unified standard consolidating all codes of labour practice and setting a singleimplementation system. For the time being, managers recognise that the FC facilitates thebuyers audits.

Furthermore, managers highlight the importance of the FC initiative in changing theimage of Moroccan firms abroad, as well as its beneficial effect within the country in terms ofimproved knowledge of the Moroccan labour code.

The interviews gave managers the opportunity to express their concerns about thedisadvantages deriving from the FC. Those interviewees that have been involved in the FC orin buyers compliance systems for a longer time see hardly any inconvenience connected tosocial compliance, because they have observed that disadvantages in the short term turn into

advantages in the medium and long term. The managers of the six enterprises that are goingthrough the FC certification at present expressed a number of concerns connected to socialcompliance.

The most frequently mentioned disadvantages are explained in the following sections:

CostsThe most commonly reported disadvantage is connected to the costs associated to

social compliance, and in particular to the FC certification. The attitude towards this issuelargely depends on how far the firm was from compliance, and therefore, on how high therequired investment was. In the majority of the visited enterprises, the investment has beenvery substantial both in physical terms, such as health and safety requirements (canteen,additional toilets, well equipped first aid room with nurse and doctors contract), and in termsof wage and social security, i.e. paying all employees the minimum wage and registering thetotality of the labour force to the national social security system (CNSS). In average, the costof compliance in terms of minimum wage and CNSS for a medium enterprise of around 300employees can amount between 100,000 and 150,000 dirhams (c. 15,000 to 20,000 US$). Thehighest expense is registration to the CNSS and the penalties for delays in payments, whichcan reach millions of dirhams. Indeed, the specific issue of CNSS registration has emerged asone of the most pressing concerns. Several factories, especially in the area of Tangier, havelamented the very high charges they face with the registration of the totality of their workers

to the CNSS: the status quo before their involvement in the FC was to register around 60% ofthe workers. Hence, compliance with the FC requires a very significant investment, especiallyfor larger firms.


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While being aware of the high cost of compliance, several managers point out that thecosts are justified when looking at the long term, when costs become a productive investmentand they are balanced by the enhanced organisation of the factory, the improved stability onthe factory floor and the stronger motivation of the workforce.

As will be deepened further on in the section concerning expectations for the future,

managers complain that the costs they underwent in order to be compliant are not met by acorrespondent increase in the prices they are offered by their clients. This is an issue thatcreates anxiety, especially for those enterprises that were farther from compliance andsustained significant costs in a short span of time.

Time frameManagers have raised the issue of the time frame of the FC certification and its related

support programme. They underline that they, as well as their workers, need longer time inorder to be able to assimilate the information provided by the support programme. Managersin particular need more time in order to implement changes and reorganisation on the factoryfloor. Since many of the adjustments required involve not only physical investment but a

change in mentality, they underline that implementation is rather slow. That is why theywould have preferred a longer time frame.

d. Relationship with clients

Adherence to realitySome of the managers interviewed point out that some of the requirements of the FC

are not realistic. One of these issues is the respect of the legal working hours and overtime.Interviews show that in order to fulfil clients orders on a very short notice, enterprises are notable to follow the legal requirements concerning working hours and overtime, because if theydid, they would not be able to deliver the products and they would lose their supplyingcontracts. Managers also stressed that even when workers are urged not to do excessiveovertime, they want to work more in order to have a higher income.

Freedom of association has also been mentioned when discussing the adherence toreality of the FC code. Two managers have manifested uneasiness and apprehensionconcerning unions, due to negative experiences of other factories in the garment sector.

Managers have also underlined their difficulty in providing a full-time doctor on thefactory floor, although they have also acknowledged that there is a certain degree of flexibilityduring the audits concerning this point.

The interviews covered also aspects of the relationship between the Moroccanenterprises and their clients, especially focusing on their codes of labour practice and theirauditing systems.

Managers state that the FC and the clients codes are the same. There are only veryfew details that differ in the detailed audit sheets. One manager pointed out that his US clientsare increasingly concerned with environmental standards.

Concerning social audits, the experience is diverse. Some enterprises are audited veryregularly (between every 6 months to every year) from Spanish, American and Englishclients. Other enterprises were not audited very frequently and lamented the lack ofappropriate follow-up to the audits, which did not allow them to address the possibleproblems. Other enterprises have pointed out that they are not appropriately informed

beforehand about the clients expectations on certain details, and that they only find out abouttheir deficiencies when the audit takes place. This hinders them to adjust and addresspotentially problematic areas before the audits.


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Concerning the general relationship with the clients, there are also differentexperiences. Some managers praise their level of communication with the clients,highlighting that there is no imposition of orders or delivery times, and that they are alwaysable to negotiate and discuss time frame and capacity of the orders. Other managers state thatthey are unable to discuss the capacity and the prices offered for the orders, a situation which

puts them in a more difficult position.Several managers also mentioned the issue of dealing with intermediaries. In certain

instances, the presence of such intermediaries is problematic, because it hinders direct controlof the client on its supplying base. Some managers observe that this situation leads tounauthorised subcontracting to non-compliant factories that offer a lower production costs,therefore causing detrimental effects on the orders directed to their own enterprise. Anotherissue connected with the presence of intermediaries is the lack of liability of the client in theevent of unpaid orders.

e. Expectations for the future

concerning competitiveness and its relationship with social compliance

In general, managers do not see any conflict between social compliance andcompetitiveness; on the other side, as outlined below, they see a positive gain deriving fromcompliance and FC certification. Nevertheless, managers recognise that their margins arelower and lower, and that although the Moroccan textile and clothing industries produce amiddle-high range of products, they still suffer increasing pressure from internationalcompetition. Such competition comes from Asia, as well as from other countries in theMENA region, such as Egypt, characterised by lower production costs.

Looking more in detail at the impact of FC certification, the interviews carried outshow that the expectations on this issue differ according to the type of enterprise, i.e. between

the enterprises that are already certified and those that are in the process of certification. Thesection below summarises the expectations of the interviewees.

Priority to FC enterprisesThe first issue emerging from the interviews is the priority to be given by clients to

FC-certified enterprises. Most of the managers have mentioned this issue, underlining theirhopes of being prioritised. They rely on the agreement signed by Inditex in July 2007, whichstates that the company will only work with FC enterprises, and they hope other internationalclients will adopt the same strategy. Managers highlight the importance of the role played bythe AMITH in negotiating and securing such commitment from the clients. Some managersare doubtful that clients will actually work exclusively with FC firms: they think there is notsufficient capacity to respond to the clients orders, and they suggest that clients,notwithstanding their willingness and involvement in social compliance, will still resort tonon compliant suppliers at the peak of the season.

Managers of enterprises that are not FC-labelled yet are also very aware of the issue ofpriority/exclusivity. They state that, should it become compulsory for firms to be FC-certifiedin order to be able to work with certain clients (especially Inditex), they would apply andobtain the certification without further ado, even at the cost of dismissing a considerableportion of their workforce in order to be able to register every worker to the CNSS.

As a result of the FC certification, managers expect to have regular orders from theirclients, involving larger quantities. Since the competitive advantage of Moroccan enterprisesinvolves also their ability to deal with very small quantities, managers sometimes find

Larger, regular orders


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themselves accepting orders for very small replenishment orders, consisting of just a fewpieces of a certain size. This arrangement hinders the managements possibilities to invest intechnology, materials and even further improvements on the factory floor. Several managersbelieve this expectation will be realised, since certain clients are already repeatedly askingthem to increase their productive capacity.

More clientsThe vast majority of managers see the FC certification as an opportunity to attract

more clients. They believe that the certification attracts big retailers and brand-namecompanies that are especially concerned with the social compliance of their supplying base.The FC also provides an opportunity to diversify the client base. In particular, some managersplan to reach out to Spanish buyers such as Inditex, which has been very vocal about theirparticipation in the FC initiative; as well as to renowned demanding markets such as the UKand USA.

Higher prices

Several managers expect, or rather hope, that clients will reward their investment insocial compliance by increasing their prices. They underline how social compliance is ashared responsibility, and their efforts and subsequent costs should be compensated by anincrease in the prices they are offered. However, most managers do not rely on this to happenrecognising that most clients are not willing to make this step.

Competitiveness gainAs already shown in the section of the present report describing the advantages of the

FC, managers are very confident about the positive effect that social compliance, and inparticular FC certification and support programme, has on competitiveness. The impact on theenterprises performance is related to the improved social climate, which in turn is based on

enhanced workers representation and involvement in decision-making. This has a dramaticeffect on the sense of belonging to the enterprise, and as a consequence on its performanceand reactivity to market demands.

Managers underline that the FC certification is the first step of a sustained effort interms of social compliance and that it should constitute a path of continuous improvements.

PrestigeThe FC label is expected to give prestige to the certified enterprises and to promote the

image of Moroccan firms abroad, reassuring clients in their investment. Managers expect theAMITH to widely publicise the label in order to be able to reap the expected benefitsdescribed above.

Concerns surround the issue of CNSS registration. Some managers suggest the need

for negotiation of a special regime for the textile and clothing industries; others suggest tolower the CNSS rate or to lower the penalty fees for delayed payments, as they believe thesemeasures would create a win-win situation both for the enterprise, which would be able to

Concerns and outstanding issuesThe main concern is that clients will not exclusively work with FC enterprises, but that

they will continue to supply from non-certified, and possibly non-compliant, factories. This isa very widely felt risk among the interviewees, because they realise that competition withthese uncertified firms would be unfair and would compromise their survival on the market.

Another related concern is subcontracting: two of the managers interviewed in Tangierpoint out that it would be possible to be FC-certified while at the same time engage inunauthorised subcontracting to smaller, non-compliant factories.


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register the totality of its workers, and for the CNSS, which would not lose income. Othersencourage the negotiation of fiscal incentives for FC enterprises.

f. Recommendations for the promotion and improvement of FC

In general, managers praise the FC code and do not see any significant change to bemade in the FC terms of reference, because it is based on the Moroccan labour code. Onemanager proposed the inclusion of more technical details concerning quality assurance andmanagement as a possible evolution of the code concerns

In the sections below, there are a number of recommendations for the promotion andpossible improvement of the FC as a label and certification system.

Awareness and promotionThere is widespread consensus on the fact that the FC is still not widely recognised by

clients at the international level. Most clients still continue their own audits and are not fully

aware of the potential of the FC label. Managers suggest that the AMITH should engage in aseries of awareness-raising activities, involving media and communication (newspapers andtelevision). A suggestion is to have an open day to promote and disseminate informationabout the FC. This open day could also be instrumental in attracting new clients from UK,France, Germany and Italy. These efforts to promote and explain the FC are necessary also tofurther involve workers and make sure they realise that they are the main target of theimprovements brought about by the FC. Awareness would also stimulate a change inmentality and habits on their part.

Opinions concerning the level of tolerance during the certification process differamong the interviewees. A number of managers, especially in the areas of Casablanca andRabat, believe that certain issues are not negotiable, and non compliance with them shouldresult in failing to be FC-certified. Such issues are CNSS registration, payment of theminimum wage, issuance of wage slips, use of time cards to track the hours worked, annual,sick and maternity leave. Instead, other issues, such as working hours, overtime and thepresence of a full-time doctor in the factory, could be regarded with a larger degree offlexibility. Another suggestion is to create a scorecard for every audit chapter, and decideabout the certification on the base of a certain score, with some disqualifying points (e.g. child

labour). Other managers have a different opinion, arguing for example that flexibility andtolerance should depend also on the specific characteristics of each factory (e.g. their size).Others, especially in Tangier, argue that the CNSS payments should be object of a new

CredibilityManagers are well aware of the fact that the FC label must be credible, in order to reap

the benefits deriving from its reputation.In order to ensure credibility, there should be stricter controls and audits on the FC-

certified firms: managers recognise that an effort has been made in this direction, with therecent second round of audits to confirm the label. The re-auditing should take place moreoften. Some managers suggest every 6 months, some others every year; others suggest thefrequency depends on possible problems found on the factory floor. Some managersencourage unannounced audits to make sure there is no possibility to fake the situation; othersrecommend a 24-48 hours notice to ensure the presence of the pertaining officer in thefactory.

Managers stress that, in order to be credible, the FC should be enforced even in remoteand difficult areas, such as Guercif, where implementation of the labour code is particularlychallenging.


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negotiation with the government. Others believe that efforts should be appreciated, and thatcertification should be given also to those factories that can comply at 80 or 90% (e.g.factories that register 80-90% of their employees to the CNSS).

Increased transparency in the certification process should also be achieved, in order toreassure potential applicants about the credibility of the label. For example, the selection of

the auditing firm should be done with a higher degree of transparency.

2.

MainstreamingConnected to both the issue of promotion and awareness, and the issue of credibility,

is the scope of involvement in the FC. Managers feel that there is a need to have more andmore enterprises involved in the certification, until ultimately reaching a total coverageamong Moroccan enterprises. Such effort should be firstly encouraged by the AMITH, bypromoting the advantages deriving from the certification; however, all relevant stakeholdersshould be involved. The FC label should be equally supported by the government and byunions.

In order to create further incentives to stimulate participation in the FC, the AMITH

should also coordinate the FC label with other aspects of the Moroccan economy, such as thefinancial/credit system, the fiscal system and the customs certification.

It has been suggested that the FC should be compulsory in the textile and clothingsector, and that it should be imposed by clients, to counteract the lack of enforcement of thelabour code.

Small focus group discussions, with three to four members each, have been carried outin the visited factories. Members were chosen randomly on the factory floor, among workers

operating at sewing machines, cutting machines, serigraphy, finishing, controlling andpackaging. Both senior workers (with 15+ years experience in the factory) and recently hiredworkers were interviewed.

These interviews had the objective of hearing workers reactions to the changesbrought about by the FC and of understanding which priority areas still need to be addressed.

Workers interviews

a. Changes before and after FC

The overall outcome of workers interviews is that they are generally content withtheir working conditions, they are aware of their rights and they feel respected and well-treated by the management. Often they underline that they are glad to work in factories thathave a good reputation, and that they would easily change job if they had violations in theirrights.

Although very often workers are not aware of the name FC, they usually recognisesignificant improvements as a result of the certification and its support programme. The mostnoticeable area of improvement is related to tangible issues, such as access to the canteen,clean toilets separated between women and men, clean and safe environment, improvedventilation system that reduces the heat in the factory.

Workers underline that the FC has brought better clients, and a steady, continuousworkflow: in former times there were frequent lay-offs and more temporary work. Othersnotice that overtime is reduced and there are more regular working hours. They also praise

new working methods and the general reorganisation of production.In terms of social security and wages, most of the workers interviewed were alreadypaid the minimum wage before the introduction of the FC. However, in certain occasions they


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underline that they used to be paid a fixed wage, no matter the hours worked, whereasnowadays they are paid on hourly basis. In terms of registration to CNSS, all workersinterviewed were registered. Some of them notice an improvement due to the FC because theregistration to the CNSS takes place when they are hired by the enterprise, whereas beforethere used to be a 6-month probation period which was not covered by the CNSS.

b. Outstanding issues

It must be noted that there were no unionised workers among those interviewed, andalthough not explicitly asked, it seems unlikely that there were unions present in any of thevisited factories. This finding is consistent with the weak rates of unionisation across thegarment industry in Morocco.

Also, not all of the interviewed workers were satisfied with their situation. Especiallyamong packaging and finishing units, workers are often working long hours and feel theyhave a lower status on the factory floor when compared to machine workers. In onecircumstance, workers were not paid the minimum wage and were instructed by their

supervisor about what to say in order to pass the certification audit. They also complainedabout long working hours and heavy loads to carry.

The most significant concerns that workers highlight is their relationship with themanagement, and especially with their direct supervisors. Whilst certain groups of workershave direct access to the head of the enterprise and they feel that they are listened to, many ofthem can only talk to their direct supervisor, who is often not interested or not helpful inlistening to their concerns. It appears clear that respect and understanding from themanagement is very high in workers priorities, and that is potentially where efforts should beconcentrated in the future.


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3. Recommendations

This section aims at identifying focus areas from the analysis and field study and atproviding recommendations for the improvement and long-term sustainability of the FC.

Certain provisions of the FC and buyers codes are more controversial and problematicthan others. While there is unanimity on the prohibition of child labour and forced labour andthere is widespread recognition of the importance of health and safety regulations, theanalysis carried out in section 1 and 2 highlighted a number of focus areas, whoseimplementation still remain challenging.

Minimum wage: the payment of minimum wage (SMIG) constitutes a significantinvestment for enterprises that have an ongoing certification process. Despite the importantefforts being made in order to pay the SMIG to every worker, it has been noted that certain

categories of workers (i.e. in finishing and packaging) are sometimes not considered part ofthe actual workforce and are not paid the minimum wage.

Registration to social security (CNSS): together with the payment of the SMIG, thefees deriving from the registration to the social security system (CNSS) represent the highestcosts for social compliance. Due to the former practice of registering around 60% of theworkforce, the area of Tangier is particularly problematic when it comes to registration to theCNSS of the totality of workers.

Working hours and overtime: interviews in Section 2 show that the provisionsconcerning working hours and overtime are problematic and are often deemed unrealistic bymanagers. Being pressured by short delivery schedules, managers affirm that they have to

resort to overtime, during high season on a regular basis, to be able to respond to clientsorders.Freedom of association: while not explicitly investigated in the interviews, freedom

of association emerges as a difficult subject. Whilst managers affirm to have a good degree ofcommunication with workers delegates in their enterprises, social dialogue with organisedunions was not observed in the course of the field study. Union presence was not detected inany of the visited factories, and there were no unionised workers among those whoparticipated to the group discussions. In two circumstances managers explicitly mentionedtheir preoccupation with the eventuality of having unionised workers in their factory.

Subcontracting: the issue of unauthorised subcontracting to non-compliant factorieshas also emerged as one of the concerns for the future. Managers that are engaged in the FC

fear that they will face unfair competition from enterprises that subcontract most of theirproduction in order to be able to themselves officially comply with code provisions. Such ascenario would be detrimental to the initiative as a whole.

Focus areas

Section 1 has shown that the FC code and the buyers codes, including the ETI basecode, are very similar in their content and phrasing. This result has been confirmed by theinterviews with the managers, who have stated that there is hardly any difference between theFC code and the buyers codes. It can be affirmed that, while there could minor changes to bemade to the FC code, significant revisions or redrafts are unnecessary at the moment, as the

code is well aligned with the Moroccan Labour Code as well as with those of internationalbuyers.

Recommendations


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Implementation and monitoring systemIt was shown that the credibility of the FC label and its certification mechanism does

not only depend on the content of its code. Indeed, it largely depends on its implementationand monitoring mechanisms. As outlined in the conclusions of Section 1, increasedtransparency with regards to the FC auditing practices and improvement of its support

documentation system would be desirable.Differences between the FC and buyers practices concerning implementation and

monitoring emerged from the interviews with the management. The enterprises visited in thecourse of the field study are usually audited by their clients every 6 or 12 months, whereasthey had one FC audit in the occasion of their certification, followed by a second round ofverification audits in May 2008. This means that, in the case of the first group of enterprisescertified in 2005, there has been a gap of almost 3 years between audits. In order to ensurecredibility, managers suggested to continue the efforts made in the past few months aimed atmore frequent audits. The goal would be to carry out FC audits with the same frequency asthe buyers (every 6-12 months). Furthermore, it was found that the credibility of the FC isstrongly connected to its rigorous implementation. Due to the highly diversified industrial

texture in Morocco, certain geographical areas are traditionally identified with poor workingconditions and lax enforcement of the labour law. Managers recommended a thoroughimplementation of the same standards across all regions, without being more tolerant ormaking concessions to any particular area.

Communication

Communication regarding the FC should be improved and information disseminated toa higher degree, in order to ensure its promotion as well as up-to-date information for theinvolved stakeholders. The AMITH website, which has been used as a platform for thepromotion of the FC, could be expanded to include more detailed information, especiallyconcerning the monitoring and implementation system used in the FC framework.

Stakeholder support and buyers engagement

Sustainable improvements in the long term require the support and engagement fromall stakeholders, including the Moroccan government and unions, focusing on effectiveimplementation of the Fibre Citoyenne.

A condition for sustainability is also closely linked to the international buyerscommitment to develop socially responsible purchasing practices and to value the effortstowards social compliance, for instance by prioritising FC-certified enterprises. Buyerssupport and engagement constitute a significant motivational push for Moroccan enterprisesand are crucial to ensure long term sustainability of social compliance efforts in the sector.

social com(2)

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