Table of Contents 2011 - Global Reporting Initiative · Table of Contents SUSTAINABILITY ry Self Declared n Third Party Checked GRI Checked C d C+ B B+ A A+ 2011 REPORT Our responsibility

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C+ B B+ A A+

2011 SUSTAINABILITY REPORT

Our responsibility is sustainability

Here partnership begins

Our responsibility is sustainability About This Report

REPORTING PERIOD This sustainability report is intended

only for the year 2011

DATE OF MOST RECENT PREVIOUS REPORT

The first issue of our report was published last year of 2010

REPORTING CYCLE Alliance One issue

sustainability report in an annual basis

CONTACT POINT Santi Jawtrakul

General Director [email protected]

Vincent Edward B. Dogomeo

Continuous Improvement/Sustainability Manager

[email protected]

Tel# : +84(0) 753 612 113 ext 111

Fax# : +84(0) 753 612 189

B1, B2, B5-B12 Giao Long Industrial Park,

An Phuoc Commune, Chau Thanh Dist.,

Ben Tre Province, Vietnam

ReportApplication Level

OU

TPU

T

G3 ProfileDisclosures

OU

TPU

TG3 ManagementApproach

DisclosuresO

UTP

UT

G3 PerformanceIndicator &

Sector Supplement

PerformanceIndicators

Report on:1.11.1 - 2.10

3.1 - 3.8, 3.10 - 3.12

Re

po

rt E

xte

rna

lly

Ass

ure

d

Not Required

Report on a minimun of 10 Performance Indicators, including at

least one from each of: Economic, Social and Environmental

Report on all criteria listed for Level C plus:1.2

3.9, 3.134.5 - 4.13, 4.16 - 4.17

Re

po

rt E

xte

rna

lly

Ass

ure

d

Management ApproachDisclosures for each Indicator Category

Report on a minimun of20 Performance Indicators, including at

least one from each of: Economic, Environmental, Human Rights, Labor,Society, Product Respon-

sibility

Same as required for Lavel B

Re

po

rt E

xte

rna

lly

Ass

ure

d

Management ApproachDisclosures for each Indicator Category

Report on each core G3 and Sector Supplement*

Indicator with due regard

to the Materiality Principle by either: a) reporting on the Indicator or b) explaining the reasons for

its omission

Stan

dar

dD

iscl

osu

res

C B AC+ B+ A+

*Sector supplement in final version

Back to Index

mailto:[email protected]

mailto:[email protected]

Page | 1


Organization's Name 10

Customers and Products 12

Operational Structure 12

Headquarters Location 12

Where We Operate 12

Nature of Ownership and Legal Form 12

Markets Served 12

Organization's Scale 13

Significant Changes in 2011 13

Awards Received In 2011 13

ORGANIZATIONAL PROFILE

10

STRATEGY AND ANALYSIS

7

Global Chief Operations Officer's Statement 8

Key impacts, Risks, and Opportunities 9

REPORT PARAMETERS

14

REPORT PROFILE

REPORT SCOPE AND BOUNDARY

Process for Defining Report 14

Boundary of the Report 15

Data Measurement Techniques 15

Effect and Reasons for Re-Statement 15

Significant Changes from Previous Reporting Periods 15

REPORT ASSURANCE 15

TABLE OF CONTENTS PROFILE DISCLOSURES

Page | 2


GOVERNANCE, COMMITMENTS AND

ENGAGEMENT

16

GOVERNANCE

Governance Structure 16

The Chair of the Highest Governance Body 16

Unitary Board Structure 17

Mechanisms for Shareholders and Employees to Provide Recommendations 17

Compensation Linkage 18

Process for the Highest Governance Body to Ensure Conflicts Of Interest 19

The Composition, Qualifications, and Expertise of the Members of

the Highest Governance Body and its Committees 19

Statements of Mission 19

The Highest Governance Body's Overseeing Procedures 19

Evaluating the Highest Performance Body’s Own Performance 19

COMMITMENTS TO EXTERNAL INITIATIVES

The Precautionary Approach & Principle Addressed by the Organization 20

Externally Developed Economic, Environmental and Social Charters, Principles 20

Memberships in Association and National/International Advocacy Organizations 20

STAKEHOLDER ENGAGEMENT

Organization’s Stakeholder Groups Engaged 21

Identification and Selection of Stakeholders 21

Approaches to stakeholder engagement 21

Stakeholders’ Key Topics and Concerns 22

TABLE OF CONTENTS PROFILE DISCLOSURES (cont.)

Page | 3


ECONOMIC

24

Disclosure(s) on Management Approach 25

EC1 Direct economic value 26

EC7 Procedures for local hiring and proportion of senior management 26


LA1 Workforce by employment type 29

LA2 Employee turnover 29

LA4 Employees covered by collective bargaining agreements 30

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and work-related fatalities 30

LA8 Education, training, counseling, prevention, and risk-control programs regarding serious diseases 33

LA10 Hours of training per employee 33

LA13 Composition of governance bodies 34

LA14 Ratio of salary of men to women 35

LABOR PRACTICES

27


EN1 Materials used 39

EN3 Direct energy consumption 39

EN4 Indirect energy consumption 40

EN8 Water withdrawal by source 41

EN16 Direct and indirect greenhouse gas emissions 41

EN21 Water discharge 42

EN22 Weight of waste 42

ENVIRONMENT

36

TABLE OF CONTENTS PERFORMANCE INDICATOR

Page | 4


Disclosure(s) on Management Approach 44 SO8 Fines and sanctions for non-compliance with laws and regulations 45

SOCIETY

43


PR9 Fines for non-compliance with laws and regulations concerning the provision and use of

products and services 51

PRODUCT

RESPONSIBILITY

50

Disclosure(s) on Management Approach 47 HR4 Incidents of discrimination and actions taken 48

HR5 Right to exercise freedom of association and collective bargaining 48

HR6 Risk for incidents of child labor 48

HR7 Risk for incidents of forced or compulsory labor 49

HUMAN RIGHTS

46

TABLE OF CONTENTS PERFORMANCE (cont.)

(cont.)INDICATOR

Page | 5


Alliance One’s Sustainability Team with Sustainability Uniform which is worn on Fridays Sustainability

Back to Index

Page | 6


Back to Index

At Alliance One, we have standardized wallpapers of all computers for our staffs.

This picture is one of three standard wallpapers designed by our General Director.

Page | 7


Profile Disclosure

STRATEGY AND ANALYSIS

Simon Gerry – Global Chief Operations Officer

“At Alliance One, our business success is driven with a philosophy that being

sustainable does not only believe in what sustainability principle provides

a significant impact to us. Furthermore, we always take a stance in

achieving success, there is consistently an integration of strategies

following to build a constant optimism of our mindset, which we can make

things with realizations and mitigate the adverse effect of the business

impact which we do each day.”

We will strive of

envisioning the platform of

our strategies, and we will

continuously aim with

idealism of undertaking a

positive result from our

objectives and

expectations for the future.

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Page | 8


Alliance One’s 2011 GRI Report

Global Chief Operations Officer’s Statement

The year of 2010 has meant a baseline

of our sustainability initiatives and

awareness towards transparency to

stakeholders. This has taken with a

perspective that our performance on

the selected indicators has reflected for

areas of what we accomplished and

what need to fulfill with its impact

upon the society, economy and

environment.

As one of the targets for 2011, this year

has marked the completion of our

expansion program which we

considered one of the achievements

when we completed the construction

of factory 3. The start of operation of

our new building facility has benefited

a growing opportunity within the area

where we operate the business. We

are able to expand our business

capacity and by this year, we set a

turnover target of 43 Million USD.

Gladly, this expectation at the end has

given us a way back of greater

attainment.

For us to measure the productiveness

of performance, we are keeping an eye

on production efficiency- a process tool

which needs updating and monitoring.

Our goal of achieving 60% efficiency is

quite in demand compared to the

actual performance of 56.4%. Even if

we are a bit far from our expectation,

but we will not limit ourselves of

reaching the target by acquiring new

system methodologies for

improvement and calibrating

manpower skills through continuous

trainings.

In a broader perspective, being

sustainable is what we have known as

most valuable. This does not only mean

saving light and water, but it is an

accompaniment of actions on how we

are going to sustain our business and

how we will become competitive for

five years and onwards.

We know the fact that cost of labor and

electricity in our vicinity will

incrementally increase. Realistically, we

have this projection that by next year,

electricity cost will increase to 5%. So,

the question lies on how we will

manage all of these. And this will give

us again a resiliency on how to sustain

for a long-term, putting sustainability

with the same concept.

At Alliance One the business strategy

is incorporated with a 5-year growth

plan which will serve as a stepping

vehicle. Each year, we can see how we

improve our performance in order to

reach our targets. This has been

influenced with a management

manpower restructuring by strongly

defining and calling the right

professional people. Through gradual

business stabilization, we shifted into

a wider model of business approach

which will provide directly to

increasing opportunities and

accomplishments.

Simon Gerry – Global Chief Operations Officer

Back to Index

Page | 9


Profile Disclosure

Key Impacts, Risks, and OpportunitiesBack in 2010, this year was a starting

point and an indicator of our overall

performance and progress. It marked

the way on how we have striven in

overcoming the challenges, taking

lead of the risks and sustaining and

improving the opportunities. These

risks are associated with an influence

of increasing salary, impacts on

government labor legislations,

banking systems, oil price and its

rising companies in the neighboring

location. In totality, we started to be

mindful of defining the sustainability

key impacts of our business. Impacts

where we are as a manufacturing

industry will focus on improving the

social, economic and environment in

which we operate every day.

In 2011, one of the most significant

opportunities which we have

accomplished is where we turned our

business around. In terms of delivery

performance, we could meet the

demanding targets and reduce the

unnecessary costs. These have

become a good foundation of the

management platform for today and

the coming years.

As we continue to focus on improving

imperatives, changes for the better

are needed in order to drive our

growth and maintain the expected

profitability. This statement was

being derived from the CEO when he

emphasized the significance of

striving for a remarkable operational

efficiency performance and its impact

to the environment.

At Alliance One, the objective of

being sustainable has contributed by

the stakeholders of whom we

engaged such as employees,

customers, community and

shareholders. With thorough

consciousness and diligence of

execution, these have become one of

our mechanisms to mitigate the

degree of risks. The awareness of

consumers on sustainability initiatives

is an integral part in order to mitigate

the impacts of risks.

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Page | 10



ORGANIZATIONAL PROFILE Organization at Glance

Alliance One Apparel Co. Ltd., is located

at Giao Long Industrial Park Ben Tre

Province, Vietnam with 80 km to the

South of Ho Chi Minh City. The company

occupies 100,000 square meters, and its

production started in October 2007. It is

100% foreign direct investors namely

Mr. Chaiyapong Vechamamontien, Mrs.

Suwanna Vechamamontien, Duang Dee

Dee Textile Company and Mr. Suchai

Kosriyakrakvong.

The company has been established and

based on investment certificate

55023000003 which was issued on

November 1, 2006 by the Board of

Management of Industrial Park of Ben

Tre Province. Its complete address is

zones B1, B2, B5 and B12 Giao Long

industrial Park, An Phuoc Commune,

Chau Thanh Dist., Ben Tre Province,

Vietnam.

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Page | 11


Profile Disclosure

ORGANIZATIONAL PROFILE (cont.) Development History

2006 2007 2009 2010 2011

Factory 1 (*)

18,027.48

18,027

Factory 1

737

12

2008

Factory 1

1,600

29

18,027 32,297

Factory 1

Factory 2 (**)

2,300

40

Factory 1

Factory 2

Factory 3 (*)

3,200

63

32,297 48,227

Factory 1

Factory 2

Factory 3

4,256

70

OCCUPIED AREA

FACTORY

TOTAL

WORKFORCE

TOTAL

SEWLING LINES

CUSTOMERS

* constructed

**constructed and operated

YEAR

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Page | 12



ORGANIZATIONAL PROFILE (cont.) Customers and Products

Alliance One Apparel Co. Ltd is

producing sportswear apparel, mainly

for adidas of 50% and 50% for Puma.

Our products are classified into pants,

jackets, shirts and shorts.

Operational Structure The full authority to manage the

operations of Alliance One is ruled by

the Board of Directors. In the structure

of organization, the Board of Directors is

consisting of the President, Chief

Operations Officer, and the Global Chief

Operations Officer. The role of the

Board of Directors is to ensure

effectively that communications are

properly channeled among

shareholders, and they are accustomed

on external decision making.

To the extent, under the Board of

Director is the Board of Management

whose responsibility is to ensure

internal affairs of the company. The

Board of Management is consisting of

General Director and the appointed

senior managers. They are responsible

for the review of internal company’s

performance on financial aspects,

human relations, production efficiency

and quality.

The Board of Directors and Board of

Management oftentimes conduct a

general review on performance in a

quarterly interval.

In October 2011, our Chief Executive

Officer has appointed the Operations

Director as the Global Chief Operations

Officer. The new responsibility is created

in response to the business expansions

not only in Vietnam but including other

regions.

Nature of Ownership and

Legal Form Alliance One is a limited and private

company, fully owned by foreign direct

investors.

Markets Served

Market Distribution

Market 2010 2011

Europe 50% 41.5%

United States 25% 19.6%

Asia 15% 21.3%

Latin Americas 4% 17.0%

Southern Africa 1% 0.6%

Clothing is one of the basic needs of

mankind. Clothing categorically

performance apparel is nowadays one

of the fastest growing sectors of the

global textile industry. This can be

attributed to the changes in the life-

style of majority of people today.

Alliance One products play an important

part to the customers we served.

Dominantly as one of the manufacturers

of sporting goods to adidas and puma

brands, our end products are distributed

to different destinations worldwide.

Headquarters Location Liberty Garment Co. LTD

137/47 Soi Phawana (41)

Ladphrao Road, Chandrakasem

Jatujak Bangkok 10900 Thailand

Phone: (662) 541-9309-16

Where We Operate Alliance One operates

only within Vietnam

The ownership percentage of

shareholders remains the same

from 2010

Shareholder Sharing in 2011 Chaiyapong Vechamamontien

48%

Suwanna Vechamamontien

35%

Duang Dee Dee Textile

25%

Suchai Kosriyakrakvong

2%

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Page | 13


Profile Disclosure

ORGANIZATIONAL PROFILE (cont.) Organization’s Scale

Employees and Equity

Total Employees

Liabilities and owner’s equity

(in USD)

2007 737 6,154,281

2008 1,600 11,273,704

2009 2,600 11,127,230

2010 3,200 21,579,648

2011 4,256 28,841,972

The net revenue has increased from

2008 to 2011 respectively compared to

2007 due to the start of full-year

operation and expansion. In 2009, the

company had constructed a new second

factory which started its operation

during April.

Liabilities have increased due to the

expanded capacity and used of short-

term & long-term loan investments.

Owner’s equity and shareholders

increased its capital. Total assets

increased due to investment in fix assets

for expanded capacity production and

sale value.

Significant Changes in 2011

Over the years, Alliance One’s business

growth has obtained significant changes

which are characterized in terms of size

and structure.

The company’s increasing figures in

production lines and numbers of

employees have been influenced from

the expansion of facilities.

Comparatively, during the year of 2010

and 2011, total operating cost has

increased to 59%. Such costs are

associated with the use of electricity,

water, fuel, personnel salaries and

wages, building and equipment

maintenance and procurement of raw

materials.

Awards Received in 2011

None

Net Revenues (in USD)

44

5,3

75

8,6

08

,29

4

12

,55

2,8

49 2

2,0

62

,80

8

39

,16

9,8

11

2007 2008 2009 2010 2011

Shipped Volume (in pieces)

10

6,4

32

1,8

01

,08

6

2,4

32

,24

3 3,8

02

,39

3

6,2

03

,75

0

2007 2008 2009 2010 2011

Workforce and Production Lines

Production

Lines Total

Employees

2007 12 737

2008 29 1,600

2009 49 2,600

2010 63 3,200

2011 70 4,256

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Page | 14



REPORT PARAMETERS Report Scope and Boundary PROCESS FOR DEFINING REPORT

The content of our sustainability report

is fully structured through GRI principles

of defining report content which

includes context, materiality,

inclusiveness and completeness. This

2011 report attempts to integrate the

information that our stakeholders find

significant.

Materiality Check

We applied a materiality principle to

manage and prioritize of what are those

issues of indicators in which we will act

and report on. This principle has

provided a specific guidance on the

selection of our business impacts. The

preparation for the list of aspects being

therefore identified at the management

meeting and stakeholders’ engagement

is considered as one of the important

key activities prior to the realization of

materiality test.

In this 2011 sustainability report, we aim

to report on at least 20 material

indicators that have been determined as

the most material. Within the minimum

requirement of this sustainability

reporting, these selected GRI indicators

should cover the minimum of at least

one from each category on Economic,

Social, Environmental, Human Rights,

labor, Society and Product

Responsibility.

Stakeholder Inclusiveness

This is one of which we consider a key

factor of defining our report content. In

this reporting process, our company’s

reporting team has been engaged with

communicating to the relevant

stakeholders whom we believe can

significantly affect the business process

may it be directly or indirectly.

In order to meet the demands on

stakeholders’ inclusiveness

requirements, we presented to them

our long-term business goals following

thereto the aspects and indicators. The

emphasis when it comes to the

importance of their contributions to the

selection processes was being

highlighted. Thus taken into

considerations of great interest, their

ideas can impact to our sustainability

initiatives.

Sustainability Context

The Sustainability Context Principle has

facilitated us on assessments of which

aspects we need to make consideration

and affecting influence to our company

and to the surrounding community. The

overall outcome is purposely structured

to show transparency to stakeholders

relevant on the following aspects such

as presenting the understanding of

company’s sustainability key topics,

including references to broader

sustainable conditions and goals,

showing the company’s performance in

a manner it communicates the

magnitude to the impacts that describe

a long-term strategy, risks and

opportunities, including supply-chain

issues.

Back to Index

Page | 15


Profile Disclosure

REPORT PARAMETERS (cont.) Completeness

In the identification of determining our

most material indicators, we therefore

applied the completeness principle in

order to ensure that topics are

discussed relevant to the aspects of on

Economic, Social, Environmental,

Human Rights, labor, Society and

Product Responsibility.

Following of such identification in

determining the material indicator, is an

assessment. We have reached for

consultations to our stakeholders and

have asked their opinions for the

important aspects that we can report

on. These have been governed of which

indicators wherein the most material to

report basing from essential priorities

that cover the entire supply chain,

reflecting performance of the entities

that are under control of or significant

influence on the company, and inclusion

on significant sustainability related

actions during reporting period.

BOUNDARY OF THE REPORT

The sustainability report is limited in

Alliance One, Vietnam. This report has

made an emphasis to disclose on

aspects and its corresponding selected

indicators. There is non-specific

limitation on the scope or boundary of

the report.

The basis for reporting on joint

ventures, subsidiaries, leased facilities,

outsourced operations and other entity

do not significantly affect comparability

from period to period.

DATA MEASUREMENT TECHNIQUES

Alliance One has measured data in a

manner that derived figures are

coherent with Global Reporting

Initiative’s preference whenever

possible. Moreover, our internal process

and other company systems have

provided as well to the data collection,

evaluation, assessment and

presentation such as:

- Enablon Application

- HRMS Data File

EFFECT AND REASONS FOR RE-

STATEMENT

Alliance One does not apply any

relevant explanation of the effect of any

re-statements of information provided

in earlier reports, and the reasons for

such a re-statement.

SIGNIFICANT CHANGES FROM

PREVIOUS REPORTING PERIOD

This report represents and highlights the

changes on the requirements from Level

C to Level B GRI Application level. See

additional information at front page.

Report Assurance GRI has not conducted any means of

assurance verification on the content of

this report. For such, we adhere to a

belief that all information written are in

accordance to the current expectations

of Alliance One including those data

relevant to management directions,

risks and opportunities.

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Page | 16



GOVERNANCE, COMMITMENTS, AND ENGAGEMENT

Governance Structure At Alliance One, governance is not only

delivering good results to our

shareholders, but it compasses to the

balance between economic, social and

environmental goals of our business. We

believe that good governance is an

integration of strategies in order to

encourage our employees to be efficient

and effective on their specific job

assignments.

Our Board of Directors and Board of

Management are responsible for setting

directions in the operation. The Board of

Directors governs the external affairs,

including the establishment and

development of corporate discipline.

Moreover, the Board of Management

consisting of Global Chief Operations

Office, General Director and Finance

Director are held responsible for the

daily operational activities.

In support to the internal affairs wherein

it prohibits endurance on the business

competitiveness, Alliance One has this

formation of interrelated sub-groups.

The initiation is to provide a clear

delegation of supporting duties. Among

these sub-groups are the Continuous

Improvement and Sustainability Team,

Trade Union relations, Occupational

Safety, First Aid, Fire Fighting and Sports

Affair Committee.

Alliance One aspires and commits for

the full-pledge involvement of

environmentally friendly or green

activities to ensure that all processes,

products, and manufacturing activities

are adequately address to the current

environmental concerns as to the

execution of maintaining profitability.

We combine our governance of

sustainability into the organization.

Employees across our operations need

to embrace the culture of sustainability

and create a change for the better. We

want each member of our organization

to generate new ideas and ways of

doing things in proactive manner, and

we want them to be the dominant

implementers for these changes.

The Chair of the Highest

Governance Body The highest governance body is led by

our President, Chief Executive Officer

and Global Chief Operations Officer. Our

President is a chairman of the board.

We have the Global Chief Operations

Officer who is engaged to the overall

operations and General Director who is

directly involved of the daily operational

activities, including the setting of

management strategies and corporate

policy.

The activities pertaining to everyday

management functions are supported

throughout by managers and heads of

the department. In consonance, the

foresaid core structure encompasses to

the business activities of Alliance One

with full commitments to sustainability.

The Trade Union is who as well

serves as one of the embodied

groups to connect primarily with

social concerns. The team is

consisting of employee

representatives from the

organization, and they act as an

independent unit. Their function

mandates to the voice of employees

and they communicate to the Board

of Management to any collective-

bargaining agreements. Basically, the

committee has a chairperson to rule

the representing members.

Back to Index

For any environmental related

program, the Sustainability Team is

structured to support the sustainable

Green Business Initiatives. The

managers within its senior level are

taking the functions of implementing

the program. On the highest

governance of sustainability, our

Global Chief Operation Officer and

General Director are the key drivers

ofenforcing the proper execution.

Page | 17


Profile Disclosure

GOVERNANCE, COMMITMENTS, AND ENGAGEMENT (cont.) Unitary Board Structure In 2011, Alliance One has 8 unitary

board members, five of whom were

independent executives: Chaiyapong,

Suwanna, Jimmy, David and Suchai. To

be considered as independent, the

board must determine that independent

executive has no direct involvement of

the operational activities.

Mechanisms for Stakeholders

and Employees to Provide

Recommendations Alliance One is a privately and limited

own company whose directives are

embodied with the highest governance

by the Board of Directors and the Board

of Management. In a quarterly basis,

both members will conduct an

operational performance review. The

review is not only limited to improving

productivity measures, but it integrates

the actions to take on impacts towards

sustainability.

As the Board of Management is directly

engaged to the internal management’s

decisions, employees have these

entitlements to communicate of

whatever agenda relevant to

improvements on social, economic and

environmental welfare. In such

representation, the Board of

Management governs all means of

communication on behalf of the Board

of Directors.

As we are a non-public company and

within our mechanisms, we have a

process where ideas and suggestions

can be offered and discussed from every

level of employees. We value our

employees, and we want them to work

in a manner of integrity and

professionalism. For them to raise any

concerns that pertain in achieving a

better working relationship to

management, we give them the

freedom to communicate through

suggestion box including those activities

to collaborate with trade union labor

relations.

Further to establishing strong relations

of which to express and connect with

our employees to the highest governing

bodies, our developed corporate

internal procedures collaborate for a

clear platform of direction.

Alliance One categorizes two divisions

when it comes to dealing with issues; we

have the open issue and the confidential

issue.

We define the open issues as any

suggestions and concerns that are to be

made known publicly to management

levels. Its intervention is in a form of an

open letter where this has to be placed

into suggestion boxes, or has to be

through open communications. The

suggestion boxes are located to the

areas where accessible to the workers

while open communication is held via

telephonic or open discussion approach.

The Continuous Improvement Team

is an organized body in the process of

searching improvements in factory-

wide. The coverage is aligned to

increasing productivity measures

with its aim to satisfy the

requirements of the customers in

achieving good quality, acceptable

cost and shorter delivery lead time.

Occupational Health and Safety

Team are organized by the company

in which its regulations are founded

under the local government. They

focused in sustaining the

implementation of occupational

health and safety programs by

protecting the health and welfare of

people who are engaged in

operational well-doing. We have as

well organized a group of individuals

wherein their main responsibility is

to support on First Aid and Fire

Fighting Programs. Above all, its

leading objective is to enhance and

strengthen the safety measures of

the facility.

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Page | 18



GOVERNANCE, COMMITMENTS, AND ENGAGEMENT (cont.)These in the following should specify the

person who raises the concerns and by

whom it will be made accountable for.

The raised issues can be addressed

directly either to the tribunal of Trade

Union Representatives, Human

Resource relations and to the Board of

Management.

On the other hand, confidential issues

are known to be addressed only through

suggestion boxes. The said recipients

from the approving bodies will take the

denouncements or unknown letters

with such confidentiality. In one hand,

both raised concerns and issues should

be investigated and deliberated by such

a resolution will be generated.

All of these related and agreed ideas

that were collected and affirmed by

committees of the trade union has to be

carried out by the representing

personnel of Human Resource. At its

next level, the Board of Management

comes up with legal decisions.

The Board of Directors takes into

agreement of whatever decision that is

acceptable and feasible.

For the feedback of decisions and

resolutions in a factory wide, employees

are informed through announcements

on bulletin posting or via the paging

system.

Aside from these internal mechanisms,

Alliance One engages with a wide range

of extending stakeholders on issues

affecting the company’s operation

wherein we put consideration and

involvement by participating programs

to industry-trade groups, local and

international levels to address emerging

issues to develop industry-wide

approaches to economic, environmental

and social challenges, and cooperate

with governments and other

stakeholders on common concerns.

These give us an opportunity to gain

more advantages on strengthening our

relationship and exposure to various

sustainability actions.

Compensation Linkage Compensation for the members of the

highest governance body and senior

managers vary from the different levels

of position. The compensation

proceeding is designed in a realization to

support and sustain the objective of

Alliance One as one of the most

profitable apparel manufacturers in

today’s business.

Alliance One composition of

shareholders whom majority belongs to

the highest governance body has

corresponding compensation attributed

to a certain amount of profit sharing

known as a dividend. Each of the

shareholders receives remuneration

according to their percent of share.

For other executives and senior

managers, compensation is based on

corporate policy. The Key Performance

Indicator (KPI) will serve as a tool to

drive members in achieving the goals

and expectations. The performance

evaluation is conducted in a yearly basis.

Higher compensation is paid when goals

are met.

We can reach the ultimate positive

outcomes towards greater

partnership by putting trust and

confidence to the people we serve.

We believe that employees are our

most essential asset.

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Without the right people that

we are putting into position, it is

hard for Alliance One to attain a

high level of success. And all

together, we will strive to

pursue continuously for

improvements.

As business partners, we align

our code of conduct and

principles to the entire

customers we are dealing with.

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Profile Disclosure

GOVERNANCE, COMMITMENTS, AND ENGAGEMENT (cont.)Processes for Ensure

Conflicts of Interest Alliance One’s Board of Directors and

the Board of Management are bound by

the corporate code of ethics which

specifically implies the avoidance for

conflict of interest. Each member

governing the highest body, including

employees must take an utmost

responsibility to ensure that

commitments are at its finest.

The Composition,

Qualifications, and

Expertise of The Highest

Governance Body

The Board of Directors has set its

standards for the qualifications of

members these include relevant career

experience, high integrity, strong values

and discipline and a commitment to

support the sustainable initiatives.

The Highest Governance

Body’s Overseeing

Procedures Alliance One has an established

Sustainability Team with cross-

functional members. The members are

spearheaded by the Global Chief

Operations Officer who is a member of

the Board of Directors and the General

Director who is a member of the Board

of Management. Under their supervision

we have the Sustainability Manager who

is responsible for managing other

members. These members are

representatives from Human Resource,

Compliance, Finance, Continuous

Improvement Team and Maintenance.

The responsibility of the team includes

making reviews and updates on policies

and performance in compliance with

applicable laws, provides updates

pertaining to the environment, health

and safety issues and reviews the

update of sustainable developments.

The Sustainability Team regularly and

directly reports to the Global Chief

Operation Officer and General Director

to discuss on matters relevant to

managing the sustainability key issues of

the company. In 2011, the team could

report to the representative of the

Board of Directors and the Board of

Management to provide updates on

sustainability projects in a monthly

basis.

Evaluating the highest

performance body’s own

performance, particularly

with respect to economic,

environmental, and social

performance The members of the Board of

Management conduct an annual review

on internal management’s performance.

In addition, the Board of Directors that,

in particular, represented by the

President and Chief Executive Officer

conduct an annual review and

assessment of the Board of

Management’s Performance.

“We always give

importance to

customers. Here we

serve them like partners.

With investment on

human assets, together

with continuous

improvement in human

and system, we can

advance with

customers”

Our mission does not only

emphasize partnership to

customers but it

encompasses across our

stakeholders. This statement

creates a manifestation that

partnership is also valuing

ourselves that Alliance One

can make a significant impact

on the business where we

stand.

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GOVERNANCE, COMMITMENTS, AND ENGAGEMENT (cont.)The Precautionary Approach

& Principle Addressed by the

Organization Alliance One’s approach to risk

management has become our cultural

principle. We are committed to taking

into priority of implementing

precautionary approaches or risk

preventions on working conditions,

environment and products hat help our

organization manage the occurrence of

uncertainty of risks. As a corporate

citizen, we are responsible in protecting

those areas that risks are inevitable.

As a manufacturer, we strongly unite to

our customers ensuring we are within

the reach of zero hazards and harmful

exposures. We have come with a strong

conviction that the Precautionary

Principle is our guiding compass to

manage and address the risk.

Externally Developed

Economic, Environmental

and Social Charters,

Principles Alliance One is an active participant to

some of the external initiatives which

strives to make a positive impact

towards sustainable growth. Our

principles and guidelines to creating

best practices and policy statements are

tailored by these reporting structures:

Fair Labor Association (FLA)

Custom Trade Partnership

Program Against Terrorism

Global Reporting Initiative GRI

3.1 2006 sustainability reporting

guidelines

Conservation of Environmental

Resources in Vietnam

(CONSERV)

GreenBiz Program, Vietnam

Chamber of Commerce and

Industry

Memberships in association

and National/International

Advocacy Organizations Alliance One participates in trade,

industry and professional organizations

that are local, national and global.

Participation helps us learn more

experience and understanding of the

industry-related requirements that will

influence the development of our

business.

adidas Global Apparel Strategic

Alliance (GASA)

Better Work Vietnam

Trade Union Confederation of

Ben Tre

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Profile Disclosure

GOVERNANCE, COMMITMENTS, AND ENGAGEMENT (cont.)Organization’s Stakeholder

Groups Engaged In the attempted identification for the

list of stakeholder groups that we

engaged, we classified these groups such

as:

Owner

Customers

Employees

Service Provider

Local Community

Government

Identification and Selection

of Stakeholders The identification and selection of

stakeholders with whom to engage and

talk into provides significance in

Alliance One. We refer these

stakeholders as individuals or groups

who have made an impact on the ability

of the company to perform.

The influence and conviction of

stakeholders’ representatives are

important since they are the key

elements in taking a proactive and

effective standpoint on issues that will

make our organization sustainable.

Prior to the identification of aspects, we

presented to the stakeholder’s

representatives the company long-term

goals. The presentation covers the

connectivity on material subjects

relevant to the reporting content. The

end process of selection has been

concluded during the consensus

meeting with stakeholders and

management.

Approaches to Stakeholder

Engagement We engage with our stakeholders

through consultations and surveys.

These approaches are vital for Alliance

One to seek for feedbacks and views for

continual management updates. We

communicate with local government

through consultation to address issues

on social and environmental. The

consultation is as well applicable when

we want to engage with local

community, service provider, customers

and employees. In some cases, we use

surveys to provide feedback for other

means of communication.

We have ongoing plans to establish more

programs for an effective engagement

with stakeholders. Among these plans

are:

Customers Feedback- a survey for

customers who interact with us on

various touch-point of our business

performance that will help the

company to identify specifically their

acceptable expectations.

Employee Suggestion-the objective

of this survey is to encourage

employees to communicate their

opinions and concerns in an

anonymous way, identify areas for

improvements maybe made,

provides feedback to management

on employee relations and facilitates

the company in achieving its goals.

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GOVERNANCE, COMMITMENTS, AND ENGAGEMENT (cont.)Stakeholders’ Key Topics

and Concerns We entrusted the feedback from our

stakeholders which provides

mechanisms to recognize those

concerns affecting the impacts of our

economic, social and environmental

aspects. In responding to the issues, we

engage in the open dialogue to

interested parties or individual to raise

their concerns and suggestions and we

are dedicated for any means of

constructive exchange of ideas. Our

contact information and direct

telephone line located in the

administrative division will serve as a

tool that everyone is permitted to have

access of an open communication.

We also acknowledged the feedback

from our customers during external

audit reviews, and we use these inputs

to give us a direction on implementing

improvement initiatives.

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Page | 23 Profile Disclosure

Our responsibility is

sustainability

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Page | 24


“Alliance One operates its business that

has an anticipation of building a long-term profitable growth. With a

sound realization of our expansion plan for the year of 2011, this has made the

company as one of the main contributors of expanding the economic progress

within the area where we operate.”

Veerasak Sakornarun – Finance Manager

THEECONOMIC

PERFORMANCE

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THEECONOMIC PERFORMANCE

Performance Indicators

Our Disclosure on

Management Approach

To strengthen our financial stability, we

integrate various business models that

will align the management’s

expectations, employees and customers’

interest in fulfilling the elevation of the

operational business development.

Because of the expanded business

facilities, we achieve the increase of

revenue and our ability to paying US$6.1

million for employees’ wages and

benefits- a 63% increase over the fiscal

year of 2010. This opportunity has

benefited the strides of business

influence to remain profitable.

We will aim to increase continuously the

percentage of our generated revenue at

the maximum projection. Such growth

will define the overall positive result of

our performance with an impact of

creating more opportunities in the

supply chain. We are responsive that

within the level of our capabilities, we

will strive to balance the smooth flow of

our process which will result in the

increase of productivity, enhance the

customers’ value creation, improve cash

flows and expand our global

marketability.

Alliance One is driven by the concept of

“What Else We Can Do”- shows

optimism to customers that we can do

business with full partnership and

commitment. We are not only limited to

improving the most significant

concentration of our internal

improvement initiatives on economic,

but as well it is extending towards an

impact of social and environmental

benefits to stakeholders.

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THEECONOMIC PERFORMANCE


EC1: Direct economic value

generated and distributed Economic Value in 2011 (in Million USD)

2010 2011

Total Revenue 22.06 39.17

[Expand business] Total Operating Cost 22.53 35.74

Employee Wages and Benefits 3.80 6.12

Payments to providers of funds

Dividends to all shareholders - -

Interest payments made to providers of loans (USD) 0.43 0.70 [Build new factory]

Payments to Government

Percentage of taxes from gross income 0 0 [Discount from Government ]

Community Investments

Voluntary donations 0.003 0.004 [Sports Day Events in Alliance One]

Infrastructure investments 18.06 25.73

EC7 Procedures for local hiring and proportion of senior manager hired from the local community at significant location of operations Alliance One is a company which

consists of diverse nationalities. We

make a significant stride to hire locals

to fill-in the staff or management-

level position, and to accomplish our

target of localizing workforce; for we

are positive that employed people in

our host country will strengthen and

enhance human capital.

Alliance One prohibits discrimination

in the hiring process based on race,

color, religion, disability, age, sex,

sexual orientation, national origin, or

veteran status.

The hiring process which the

management is applying provides

simplification as to regularity of

methods whereby it can easily seek

employees fulfill its workforce

demand.

Its current hiring process doesn't

apply the rule of granting preference

to local residents. As a result, the

percentage of local senior manager in

2010-2011 is zero percent. In 2012,

we will aim at promoting our current

local people with excellent skills and

work performance, and looking for

potential quantifiable people to

become senior managers.

TOP MANAGER

President

Chief Executive Officer

Global Chief Operations Officer

General Director

SENIOR MANAGER

Department Manager

MIDDLE MANAGER

Section Head

NORMAL WORKER

MANAGEMENTHIERACHY

AT ALLIANCE ONE

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THELABOUR PRACTICES

PERFORMANCE

“Alliance One is driven with a common belief that

employees are the foundation of achieving

the ultimate level of business success.”

Santi Jawtrakul – General Director

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THELABOUR PRACTICES

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Our Disclosure on

Management Approach

In line with our existence, we take into

such a significant value the integrity

and promotion of human rights,

bringing each employee with full

management’s engagement and

accessibility. With the best of our

interest, it is the policy of the company

that employees are protected from

any means of disrespect and

inappropriate behavior and any form

of unlawful discrimination.

As one of the biggest manufacturers in

the locality of Ben Tre, we exhibit a

strong partnership to employees in

developing and enhancing their skills

to become a forefront of creativity,

problem-solving and flexibility. For us

to strengthen of such development,

we are offering education and training

of fundamental concepts to every

employee in order to anticipate the

emerging key challenges which may

bring adverse impacts towards the

business.

To ensure that such long-term

projections are achieved, we have

dedicated teams from Human

Resource Department who are

responsible on periodic updates of

training programs’ fulfillment and

other activities to support the work

force retention.

Furthermore, Alliance One provides

health and safety rules for employees

to create an environment that is free

from any form of uncertainty.

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THELABOUR PRACTICES

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LA1: Total workforce by employment type, employment contract, and region, broken down by gender As Alliance One’s business operates in

Vietnam, the percentage of 98.87% of

the global workfoce is noticeably

dominated by local workers.

Furthermore, for the comparison of

the global workforce and local regions,

workers from Ben Tre where we are

located showed a dominated

workforce share of 87.9%.

Workforce by Global Region

2010 2011

Vietnam 98.67% 98.87%

England 0.03% 0.02%

Thailand 0.63% 0.54%

Philippines 0.57% 0.56%

Workforec By Region in Vietnam

2010 2011

Ben Tre 92.98% 87.90%

Tien Giang 3.77% 2.70%

Dong Thap 0.89% 0.80%

Others 2.36% 8.60%

From the start of our business

development which began in 2010, we

take into account the value of our

progress by creating and providing job

opportunities in the community. As we

continuously expand our operation,

more opportunities are increasingly

growing for workers with our

approximate projection to increase the

number of employees to 5,000.

Workforce by Gender

Workforce by Employment Contract

All Alliance One’s employees are full-

time contract employees

Workforce by Employment Type

2010 2011

Employees 1,924 4,226

Managed Workers 25 30

The increase of the total workforce in

2011 is due to the business expansion.

LA2: Total number of rate of

employee turnover by age group,

gender, and region Employee turnover is critical to any

business field as it involves

investments of company resources. As

a company, the turnover rate always

occurs apparently. We consider our

employees as one of the legitimate

customers with whom the nature of

our performance will reflect.

Employee turnover includes

organization’s financial implications

and effects directly on the impact of

achieving a targeted productivity.

Turnover Rate by Gender

5.9

%

3.0

%

2.5

%

0.7

%

2010 2011Woman Man

6.8

6%

2.9

9%

1.6

3%

0.6

8%

0.0

2%

0.0

1%

2010 2011

Turnover Rate by Age Group

50+ 30-50 < 30

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THELABOUR PRACTICES

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Keeping the turnover rate reduced is

essential part of sustaining a stable

business in nowadays’s recession. We

always find solutions of keeping our

employees satisfied with their jobs

which we believe it makes a

tremendous impact on the

organization’s workflow and

performance.

Some of our approaches that we

implement in 2011 to retain effectively

workers are:

Salary and Benefits Review

We take into significant value the

importance of keeping up on industry

standards and competitor’s salary and

benefits packages to retain employees.

As a result, we reassess salary on a

yearly basis to ensure that salary and

benefits packages we offer to our

employees are still on par with the

competition.

As Vietnam’s inflation rate is markably

increasing and forming a storm of

rising price, especially gasoline which

makes living conditons rougher and

difficult. To share and mitigate those

unexpected difficulties, we decided to

review the salary scheme which is

adjusted twice this year and came up

with an additional benefit package

namely ‘Gasoline Allowance’ added

directly to employees’ salary scheme.

Training Offer

We believe that employees who feel

knowledgeable and comfortable in

their work surroundings will often feel

more enjoyable and successful at their

jobs. So providing trainings relating to

work and offering opportunities for

learning that pertain to their daily

needs can motivate them to stay.

These training topics are not only

related to equipment and work

knowledge but as well to safety and

health care.

Our effort to make the trend of

employee’s turnover go down brings

us to reduce significantly the turnover

rate of women and the age group of 30

below who are the main workforce.

LA4: Percentage of employees covered by collective bargaining agreements In 2009, 77.8% of workers were

covered by collective-bargaining

agreements which are valid by the end

of the year 2012. We project that by

2013, 90% of our workers will

participate on the collective-bargaining

agreements.

LA7: Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender A safe and good working environment

measures and reflects Alliance One’s

management practices, particularly on

occupational health and safety. It

directly affects on our employees’

security and indirectly influences our

productivity. Conversely, maintaining a

non-accident working environment at

all levels across the organization is our

long-standing and primary aim to

move business toward being

sustainable and successful.

Salary Structure Basic Salary

Responsibility Allowance

Attendance Allowance

Gasoline Allowance

Incentive Bonus (Applicable

for sewing workers)

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THELABOUR PRACTICES

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Expense and lost days due to Injuries in 2011

Type of Injuries

Needles punch on

hand

Buttoning machines button on

finger

Hand cutters cut

hands

Sewing machine strike on

hand

Stumble and fall

Total

Lost Days

Number of Injury 2 1 5 1 1 10

Injury Percentage 20% 10% 50% 10% 10%

Total Lost Days 4 2 10.5 0 0 16.5

Expense Due to Injuries

*Payment for Day Off (in USD) 20.46 26.12 36.76 0 0 83.34

**Treatment Fee(in USD) 33.57 33.57 38.37 9.59 9.59 124.69

**Enterprise's Extra payment (in USD) 3.85 17.81 4.56 0 0 26.22

**Extra Allowance (in USD) 0 42.3 49.29 0 0 91.59

**Payment for Social Insurance (in USD)

0 290.99 263.86 0 0 554.85

Total Amount (in USD) 57.88 410.79 392.84 9.59 9.59 871.1

Injury Reduction

In 2011, we develop a clear and

workable safety program to provide a

safe working environment which is

free from any hazards and health risks

for all employees. We regularly offer

employees trainings on HSE (Health

and Safety Environment), which

provides information and instruction

on how to perform jobs safely and

without damaging health and other

training topics associated with

preventing work-related injuries and

diseases. Part of the safety program is

daily checking on the workplace to

make sure that safety policy and

standard are not violated; and

recording what findings are found

during the checking route, including:

ensure that work is done in a

manner of being safe and not

affecting employees’ health.

see to it that tools, equipment and

machinery are secure to operate

and are kept safe for production.

ensure that ways of storing,

transporting or working with

hazardous substances are safe

enough and do not risk employees’

health.

With such effective safety program, we

are relieved to report that we can bring

down the frequency of most injury

types in 2010 especially turn total cases

of Buttoning machines button on finger

down from 11 to 1. As a result, we can

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THELABOUR PRACTICES

PERFORMANCE


cut down on total expenses due to

work-related injury to 871.10 USD

comparing to those of 1,116.70 USD in

2010. Our target of reducing accident

and injury in 2012 is shown from the

table Injury Frequency Comparision.

Our target in 2012 is to drive the Injury

Rate to less than 0.1 accidents per 100

workers within a year.

Lost Days

The reduction on Injury Rate has

affected on the decrease of Lost Day

Rate in 2011. With 99% reduction rate,

we achieve the target set in 2010.

To be sustainable, we don’t satisfy

with the achieved target because the

one day lost due to injury is still

markable and affects production

efficiency. Most importantly, it

prevents our effort to build and

develop a safe working environment

with no accident. We challenge ourself

to target of no more than 0.005 of lost

day rate in 2012.

Absenteeism

In 2010, we were not able to aggregate

Absenteeism Rate (AR) due to the

Human Resource Data System. In

2011, we struggle to improve and

upgrade the system which currently

enables us to measure AR.

It reveals that 12,240 hours per

200,000 invested is lost due to

absences in 2011. Since lost days have

a significant impact on production

performance, it leads us to look and

work on AR reduction seriously. We

projected to bring down AR to no more

than 4% in 2012 or less than 800 hours

lost per 200,000.

Absenteeism Rate

2010 2011

2012’ Target

Overall N/I 6.12% < 4%

Per 200,000 hours

N/I 12,240 < 800

N/I: Non-Indentify

Occupational Diseases an Work-

Related Fatalities

There are no occupational diseases

and work-related fatalites found in

2011.

200,000

is derived from 50 working weeks @ 40 hours per 100 employee

Lost Day Rate

2010 2011 Reduction

Rate 2012's Target

2.24 0.03 99% <0.005

Reduction

Injury Frequency Comparison

Injury Type 2010 2011 Reduction Rate 2012’s Target

Needle punch on hand 7 2 71% 0

Buttoning machines button on finger 11 1 91% 0

Plastic container drop down on foot 1 0 100% 0

Fabric relaxing machine wrap on hand 1 0 100% 0

Hand cutter cut on hand 3 5 67% 1

Touch on grinder machine 1 0 100% 0

Sewing machine strike on hand 1 1 0% 0

Tumble and fall N/I 1

- 0

Total 25 10 60% 1

N/I: Non-Indentify Reduction Increase Maintain

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THELABOUR PRACTICES

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LA8: Education, training,

counseling, prevention, and risk-

control programs in place to assist

workforce members, their families,

or community members regarding

serious diseases

Health Aspect

Alliance One has a high concern in the

prevention of serious diseases which

contributes to the health and safety,

satisfaction and stability of the

workforce. In 2011, the coverage of

our health and medical services,

training and counseling is still aiming

for workforce members.

Periodic Health Assessment is

offered to all employeesto

screening and treating for a wide

range of common diseases.

“Marie Stop Training” is provided

to female workers to counsel about

knowledge on common woman-

related diseases and some health

concerns occurring during pregnant

period and maternity/paternity

time.

Information on HIV/AIDS and

occupational diseases is posted in

surrounding workplace to help

increase workers’ awareness.

In order to offer a more effective

health and medical service and

treatment, we initially conduct a study

and analysis of each disease that

workers commonly get during work.

The output of the study will help us

understand clearly on prevailing root

causes of each disease and improve

our working environment.

Safety Aspect

As a manufacturer and employer,

‘Safety First’ becomes our number-one

priority. This drives us to focus more

on Safety trainings which are always

included in annual training plan and

set in highly emphasized rank. Among

those Safety trainings, there are three

topics which are given priority:

Fire Fighting

Health and Safe Environment (HSE)

C-TPAT (Customs-Trade Partnership

Against Terrorism)

LA10: Average hours of training per

year per employee by gender, and

by employee category At Alliance One, we seek for

opportunities not only in investing and

establishing our infrastructure, process

and system improvements but also its

extent; we take significance on the

optimum utilization of human

resources that help employees achieve

the organizational goals by

undertaking training and education

activities.

The training opportunities include the

objectives to expand our employees’

intellectual capabilities by increasing

the job knowledge and skills at each

level. The approach of training is

Assistance Programs

Education/ Training

Counseling Prevention/ Risk Control

Treatment

Workers

Workers' Families

Community Members

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Average Training Hours/Employee in 2011

Employee Category

Total Hours

Top Manager 1.00

Senior Manager 3.63

Middle Manager 3.78

Normal Worker/Staff

3.33

Average in 2011 2.93

Target in 2012 2.00

Our training hours/employee in 2010 is

0.08

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THELABOUR PRACTICES

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covered by extensive programs

through practical, virtual classroom

setting and hands-on training.

LA13: Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity As an international establishment

whose organizational structure is

represented by Vietnamese, Thai,

British and Filipino nationals, we

acknowledged that the importance of

diversity is a success-factor for the

overall business impacts.

To retain a strong foundation of

workforce and to foster the

established strategy of the company,

we aim to develop our employees and

nurture our working environment with

full respect and integrity.

It is our responsibility to be

accountable for our employees’ values

and activity participation throughout

the business process regardless of

gender, age group and minority group

membership.

In full partnership with our key

customers, our principle is strongly

connected with them that we

recognize and respect cultural

differences, and we believe that

employees should be employed based

on their ability to do the job rather on

their personal characteristics or belief.

We defined the different management

levels into:

• Top management- refers as the first

level; only involves the President,

Chief Executive Officer, Global Chief

Operations Officer, and General

Director.

• Senior management- refers as the

second level. They are the managers

of operations and under top

management commands.

• Middle management- refers as the

third level; they are the section

heads.

• Normal workers- refer as the 4th

level; they are the people who

directly involve in the shop floor.

Composition of Workforce

Gender

Minority Groups

Age Groups

Women Men

Non-Minority Minority

< 30 30-50 +50

Top Manager

25.0% 75.0%

100.0% 0.0%

0.0% 75.0% 25.0%

Senior Manager

37.5% 62.5%

100.0% 0.0%

12.5% 62.5% 25.0%

Middle Manager

33.3% 66.7%

100.0% 0.0%

11.1% 94.4% 0.0%

Normal Worker/Staff

77.4% 22.6%

99.7% 0.3%

69.1% 30.3% 0.5%

Composition of Governance Body

GENDER

Woman 33.3%

Man 66.7%

MINORITY GROUPS

Non-minority 100%

Minority 0%

AGE GROUPS

< 30 10.0%

30-50 83.3%

>50 6.7%

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THELABOUR PRACTICES

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Basic Salary (in USD)

Top

Manager Senior

Manager Middle

Manager Staffs/

Employee

Men 1,250 750 500 125

Women 1,250 750 500 125

Salary Ratio 1 1 1 1

LA14: Ratio of basic salary and

remuneration of women to men by

employee category, by significant

locations of operation

Basic Salary

The ratio of basis salary of women to

men is 1.0 at all employee categories

in Alliance One. Since 77% of our

workforce is shared by women, the

creation of pay equity in salary,

compensation and remuneration not

only helps us respect and comply with

Labor and Employment Laws of

Vietnam where Alliance One operated,

but reflects that we are practicing the

fair treatment and no-discrimination in

business operation.

Remuneration

There are no discriminations on the

ground of gender when remuneration

is paid. Remuneration varies through

working positions (such as top

manager, senior manger, middle

manger and normal worker), jobs (such

as office worker, shop-floor worker,

etc.), the number of years of working

for the company and level of

knowledge.

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Page | 36

THEENVIRONMENT

PERFORMANCE

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Page | 37

“At Alliance One,

creating a well-balanced execution in

protecting our employees and the

environment is what we are committed in

responding to the so-called Environmental

Stewardship.”

Vincent Edward B. Dogomeo Continuous Improvement/Sustainability

Manager

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Page | 38


THEENVIRONMENT

PERFORMANCE


Our Disclosure on

Management Approach

As a steward of our business success,

we take this responsibility of

promoting awareness, imposing

discipline and building a higher

sensitivity in preventing the adverse

effect to our environmental

performance. Furthermore, we are

socially and environmentally

accountable by reporting the

measurements of our performance

ensuring that products and operations

meet applicable government and

customers’ standards.

In this sustainability disclosure cycle,

we report on the most significant

topics that are relevant to our

stakeholders, and we

identified these

key issues

such as

Energy, Water and Waste. Our long-

term goal has been institutionalized

towards “Environmental Targets of

25% Reduction by 2015”. The

expectation has given Alliance One a

direction to monitor and evaluate the

reporting data. The effect and

realization of these targets are

coordinated and thereby influenced by

employees and community.

Alliance One’s on-going programs are

substantiated by an organized body for

conducting a periodic review and

reporting statements for the overall

company. Under such a role to direct

and manage the environmental

performance, we have founded a

dedicated Sustainability Team which

includes 10 members from different

departments. They serve as a

committee to act on:

*Formulating factory-wide sustainable

strategies and implementing projects

*Collecting data, monitoring the key

performance indicators and progress

periodically

*Facilitating activities of the

conservation of energy and natural

resources

*Participating in various movements

on customers’ program for the update

of sustainability trends and targets

Despite the continuing challenges to

reaching expected targets, we believe

that our effort of executing the step-

by-step undertaking will help Alliance

One accomplish the environmental

imperatives.

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Page | 39


THEENVIRONMENT

PERFORMANCE


EN1: Materials used Due to apparel manufacturing nature,

we don’t use any kinds of raw natural

materials for process of producing

products.

Two major materials used in sewing

products are fabrics and threads which

we purchase from outside and

nominated suppliers.

Acetone is the main cleaning liquid

used to remove spots from products

during processes of decorating and

sewing.

Carton and poly-bag are two base

materials for packing purpose which

are ordered from outside suppliers.

The rise of consumption of materials

used in 2011 is due to the increase of

products produced as the result of the

business expansion in that year.

EN3: Direct energy

consumption by primary

energy source

In Alliance One, our direct energy

source comes from fuel distilled from

crude oil including gasoline and diesel

that are non-renewable. All of our

processes and machines don’t use

both gasoline and diesel for product

manufacturing. Our main energy

source is electricity we purchase from

the government’s electricity provider.

Gasoline is used for four transiting cars

only. Diesel is particularly used for

generator when we don’t have power

supply.

Although the cost of direct energy

contributes 0.1% of total operating

cost in 2011, we strive to look for any

opportunities to reduce the

consumption for the sake of being

sustainable in business.

For gasoline for cars, we come up

with the effective car schedule.

Total Direct Energy Consumption

2010 2011

Gasoline (Liter) 22,920.0 (0.006) 31,296.0 (0.005)

Diesel (Liter) 41,860.0 (0.011) 17,991.0 (0.003)

Total Energy (GJ) 2,302.0 (5.9 x 10

-4) 1,686.9 (2.7 x 10

-4)

(kWh) 639,442 (0.16) 468,576 (0.08)

Cost/pc (USD) 0.0067 0.0077

Numbers in parentheses are the direct energy consumption per piece of product produced

Back to Index Total Material Consumption Vs Material Consumption per product

2010 2011

Raw Materials None - None

Semi-Manufactured Goods

Fabric (Yards) 5,817,595 (1.53) 8,990,125 (1.45)

Threads (Cones) 350,198 (0.09) 614,748 (0.10)

Associated Process Materials

Acetone(Liters) 4,610 (1.2 x 10-3

) 5,910 (0.9 x 10-3

)

Materials for Packing Purpose

Carton (Boxes) - - 231,230 (0.04)

Poly-bag (Pcs) 3,844,965 (1.01) 6,072,789 (0.98)

Numbers in parentheses are the material consumption per piece of product produced

= 0.1 kWh

Total Direct Energy/Product (in kWh)

2010

2011

0.16

0.08

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Page | 40


THEENVIRONMENT

PERFORMANCE


The use of diesel is inevitable to us.

Reducing its consumption is our

difficult part for it implies on the

frequency of no power supply.

Due to the nature of our business, the

use of renewable-energy is still a

challenge to us. However, we are

trying to search for suitable and

relevant renewable energy sources to

reduce our non-renewable energy

consumption.

EN4: Indirect energy

consumption by primary

source

Indirect energy consumption indicates

the efforts to manage our

environmental impacts. Alliance One

uses indirect energy which comes from

electricity purchased from a

government provider to generate

power supply in our facilities. The

purchased electric energy is used to

activate the steam and boilers, run

machineries and operate the lighting

system.

We face a big challenge to keep the

electricity cost per product decreased

since our business starts the expansion

in 2011 and the electricity price in

Vietnam increases in the same period.

With the goal of 30% cost saving on a

year basis, we do our best in seeking

and trying many ideas and solutions on

saving electricity. Some of the highlight

solutions we are implementing in 2011

are:

Installing and using the

alternative switching system in sewing

section. The system divides the number

of lights used in a sewing line into

blocks which are controlled by separate

switches.

Increasing workers’ awareness of

energy saving

As the result, the total cost we spend

in 2011 for electricity makes up 0.56%

of total operating cost in comparison

to 0.71% in 2010. Especially, we are

able to lower the electricity

consumption per product produced

from 0.0024 GJ in 2010 down to

0.0019 GJ in 2011. It also results in

reducing cost per product from 0.05

USD to 0.03 USD while the total

products produced in 2011 are more

than 1.5 times in 2010.

Indirect Energy Consumption Vs Shipped

Volume

Total Indirect Energy Consumption

2010 2011

Electricity (kWh) 2,599,900.0 (0.67) 3,302,740.0 (0.53)

Total (GJ) 9,359.6 (2.4 x 10-3

) 11,889.9 (1.9 x 10-3

)

Cost/pc (USD) 0.05 0.03

Numbers in parentheses are the indirect energy consumption per piece of product produced

2010

2011

0.67

0.53

Total Indirect Energy/Product (in kWh)

= 0.1 kWh

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Page | 41


THEENVIRONMENT

PERFORMANCE


We are going to implement and search

for more energy-saving solutions in

2012, including:

The extension of the alternative

switching system to company-wide and

setting the system as a standard for

building or constructing new facilities.

Taking advantage of nature light.

Integration of energy saving

devices for sewing machines.

EN8: Total water withdrawal

by source

2010 2011

Total (m3) 163,966 102,465

Cost/pc (USD) 0.013 0.005

Alliance One water source is supplied

from the Government provider. Our

water consumption is mainly domestic,

being used for bathrooms, toilets,

canteen and watering plants.

Even though the total cost we pay for

purchased water contributes nearly

0.1% of the total operating cost in

2011, we are aware of that its

environmental impact is more

important than its financial impact

since our target is to keep our business

sustainable.

During 2011, we start some initiative

programs to save water. The

installation of new water faucets and

worker trainings are among the

effective activities we implement.

In 2012, we are going to put some

water saving projects in place as part

of continuous improvement and

sustainability, including:

The Collection and use of rain water

during rainy season.

Taking advantage of water from the

lake in the site.

Water Consumption Vs Shipped Volume

EN16: Total direct and indirect

greenhouse gas emissions by

weight Greenhouse gas (GHG) emissions are

key causes of climate change which

becomes nowadays’ critical problem to

everyone in the world. As Alliance One

is one of the biggest manufacturers in

the location where we operate, we

initiate to measure GHG emissions

generated by Alliance One during 2011

in order to get ourselves into working

out on how significantly our generation

of GHG gas emissions affects the

surrounding community and

contributes to the global climate

change.

GHG Emission/ Product (in tones)

Back to Index

Back to Index

2010 2011

1.7x10-2

Water Volume/product (in m3)

= 1.0 x 10-2 m3

4.2x10-2

Websites we use to convert

energy into GHG emission:

Direct energy to GHG emission

http://www.icbe.com/carbondata

base/volumeconverter.asp

Indirect energy to GHG emission:

http://www.epa.gov/cleanenergy/

energy-resources/calculator.html

http://www.icbe.com/carbondatabase/volumeconverter.asp

http://www.icbe.com/carbondatabase/volumeconverter.asp

http://www.epa.gov/cleanenergy/energy-resources/calculator.html

http://www.epa.gov/cleanenergy/energy-resources/calculator.html

Page | 42


THEENVIRONMENT

PERFORMANCE


Alliance One’s direct GHG emissions

come from the use of diesel for two

generators producing electricity when

there are problems with power supply.

Alliance One’s indirect emission is

resulted by consuming purchased

electricity whose sources are owned

and controlled by another

organization.

EN21: Total water discharge

by quality and destination It is regulated by Decree No.

88/2007/ND-CP dated on May 28th

2007 of the Vietnamese Government;

the volume of water discharged by

organizations in Industrial Zone is

calculated by 80% of water purchased

by organizations.

In 2011, Alliance One discharge 81,972

cubic meters of water which is

disposed through wastewater sewer

system in Giao Long Industrial Park

where Alliance One is located. The

discharged water is treated by water

treatment facilities in the Industrial

Park.

EN22: Total weight of waste by type and disposal method

Table of Waste by Type

No. Areas/ Process

Waste Classification U

nit

Discharged Volume

Waste Type

Disposal Method

Dis

po

sal

Fre

qu

en

cy

DISPOSAL HANDLING PROCEDURE

DISPOSAL ACTION

2010 2011 H

azar

do

us

No

n -

Haz

ard

ou

s

Reu

se

Rec

yclin

g

Dir

ect

Dis

char

ge

1 Cutting / Production

Excess fabrics Metric

ton 8.7 153.6

Daily

Separate excess rolled fabrics from cut fabrics & place in sacks.

Sell to outside service company who will collect excess fabrics.

2 Production/ Offices

Cardboard / Papers

Metric ton

1.17 48.1

Daily

Place in sacks & transfer to FTY waste storage area for selling.

Sell outside service company who will collect waste cartons /papers.

3 Maintenance Oil Liter 1,000 850

1 year

Place used oil in barrels with the used of hand gloves & transfer to FTY waste storage area.

Sell outside service company who will collect used oil.

4 Entire factory Water m3 10,931 81,972

Immediately after used

Liquid waste runs through FTY pipeline directly to industrial zone drainage system.

Direct discharge from FTY/IP zone to area river.

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Page | 43

THESOCIETY

PERFORMANCE

“At Alliance One, we believe that

our existence is dominated by a

strong influence within the society where we operate the

business.”


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Page | 44


THESOCIETY

PERFORMANCE


Our Disclosure on

Management Approach

At Alliance One, we believe that our

existence is dominated by a strong

influence within the society where we

operate the business. As a corporate

citizen, our long-term survival is

dependent on maintaining the

relationship of trust by partnering and

engaging on employees, communities,

customers and suppliers. We know

that our performance reflects the way

on how each significant stakeholder

interacts to us and by listening to

them, it will build Alliance One

strengthens a sustainable community

not just an organization.

To be inclined towards facing the

social trend and competitiveness,

Alliance One participates in various

external programs initiated by

government and customers. Such

initiatives are focused on building

strategies and implementing

improvement activities that will help

Alliance One, its surrounding

communities and other organizations

of addressing key challenges and

identifying opportunities in the

business growth.

We take such responsibility that all

employees are aware of the emerging

issues and its impacts. Each of us is

accountable for demonstrating an

intuitive understanding and synergy of

extending the influence having it

known as the key driver of value

creation. As a foundation, we will

accomplish the pledge of being a

responsible corporate citizen by

periodically updating and continuing

the implementation of training and

awareness programs across the

organization.

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Page | 45


THESOCIETY

PERFORMANCE


SO8: Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations Alliance does not have non-monetary

sanctions or significant fines for the

non-compliance or violations with laws

and regulations for the reporting

period of 2011.

As the company’s basic principle, we

fully comply and scrupulously follow the

stipulation of laws or regulations

governing the avoidance to any means

of occurrence for anti-trust, disputes

and irregularities or denial of

misconduct.

Alliance One is committed to not

entering into situations that will result

to conflict of interest with employees,

customers and other related parties.

Alliance One’s charity

activities in 2011

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Page | 46

THEHUMAN RIGHTS

PERFORMANCE

“As our company’s general principle, employees who

dwell in the business operations deserve respect, a freedom to exercise their rights

and interests with its common pursuit of

achieving the highest level of harmony.”


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Page | 47



Our Disclosure on

Management Approach We are committed of promoting an

organizational atmosphere that

preserves the inherence of our ethical

conduct in consonance with full

compliance of Alliance One policies.

To ensure that Human Rights are

respected and protected, it is our

responsibility to uphold a strong

connection with employees and

significant stakeholders on practices to

support the company’s sphere of

influence. Alliance One’s fundamentals

on the Business Conduct are fully

integrated and structured from the

Customers’ principles and values with

its aspirations to create a company

that is environmentally transparent

and flexible towards emerging adverse

issues.

In further aspects, we recognize and

highly regard the essential value of

labor and employment laws

incorporating the respect in its sanctity

on freedom of association, equal

employment opportunities, workplace

respect, health and safety, diversity

and customer relations. To foster the

adherence of all applicable values and

standards, we expect that each of our

suppliers and contractors of where we

engaged must embrace similar

standards and values.

Under the overall directions from the

Administrative and Human Resource

function, Alliance One periodically and

constantly seeks opportunities to

upgrade the level of employees’

welfare on human rights.

Alliance One’s Sports Event

in 2011

Page | 48


THEHUMAN RIGHTS

PERFORMANCE


HR4: Total number of

incidents of discrimination

and corrective actions taken Alliance One’s policy is to provide all

employees with an environment of

mutual respect that is free from any

form of harassment and discrimination.

As a corporate citizen, we reflect our

core values and good practices through

the guidance of our company policies

and local law requirements.

Alliance One takes an initiative to

apply disciplinary actions for employees

who violate the policy and who manifest

in any form of incidents of discrimination

and harassment. Prior to the imposition

of discipline, incidents are subjected to

further investigation through “Grievance

Procedure”.

Alliance One’s Human Resource in

coordination with the company’s Trade

Union dominates the responsibility in

creating and directing a clear regulation

for corrective actions to different levels

of management.

Alliance One has no substantiated

records for the incidence of illegal

discrimination in 2011.

HR5: Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights

Alliance One is a manufacturing

industry where employees are entitled

to exercise their right for freedom of

association and collective bargaining in

the organization of their own choice. We

ensure that employees are supported of

these rights for respecting individual’s

dignity and ambitions as well as the

respect and recognition of all

employment and labor laws.

We ensure our suppliers and

contractors with whom we do business

to embrace similar values and standards.

Our compliance system facilitates us to

ensure employees adhere to the

implementing laws.

Alliance One has not significantly

identified of any risks for the incidence

of discrimination.

HR6: Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor

At Alliance One, we prohibit the

unlawful practices of child exploitation

or any form that may cause to reflect the

occurrences for a significant risk for

incidence of child labor.

We are fully committed to the

compliance of child labor laws. Alliance

One has an integrated corporate policy

to ensure that children are protected to

perform their job without any

interference of their education, including

the adverse effect of health, safety and

overall development. We ensure our

suppliers and contractors with whom we

do business to embrace similar values

and standards.

Our compliance team takes into

responsibility for monitoring and taking

corrective actions for any cases when

issues of any risk are evident.

NO DISCRIMINATION

FAIR TREATMENT Alliance One ensures employees

are protected against physical abuse, harassment and threat

FREEDOM OF ASSOCIATION

Alliance One respect employees to join an organization or

association, Union or committee in accordance to labor laws

EMPLOYMENT OPPORTUNITY

Alliance One is committed to ensuring all decisions on employment’s benefits;

compensation and promotion are in accordance to the working

ability and experience of employee

Alliance One prohibits the discrimination based on race,

religion, sexual orientation, gender identity, marital status,

ethnicity and disability

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THEHUMAN RIGHTS

PERFORMANCE


Alliance One has not significantly

identified of any risks for the incidence

of child labor.

HR7: Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor

Alliance One recognizes and respects

all labor and employment laws, including

those respecting equal employment

opportunities, privacy and freedom of

association. We believe that employees

must be protected to any uncertainty for

incidents of forced or compulsory labor.

And we ensure our suppliers and

contractors with whom we do business

to embrace similar values and standards.

Only for other circumstances, we are

responsive to facing those challenges

that will manifest the occurrence of

related incidence at work, and we take

into full attention of implementing

precautionary measures to prevent and

eliminate any forms of forced or

compulsory labor.

Working hours: The management

does not require employees, except in

extraordinary circumstances to work

more than 60 hours per week including

overtime or as required by Vietnam Law.

Pregnant workers: Those who are

pregnant under seven months are

permitted to work in a regular working

hour. Pregnant workers equal or over

seven months are not permitted. They,

however, will be paid in normal

working hours.

Child labor: The

organization does not

employ children who

are less than 15 years of

age, or less than the age

for completing education

in the Socialist Republic of

Vietnam where such age is

higher than 15.

Alliance One has not

significantly identified of

any risk for the incidence of

forced or compulsory labor.

Alliance One’s Sports

Event in 2011

Lucky Draw with the

Award of One Motorbike

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Page | 50

THEPRODUCT

RESPONSIBILITY PERFORMANCE

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Page | 51


THEPRODUCT

RESPONSIBILITY

PERFORMANCE


Our Disclosure on

Management Approach Alliance One is governed by a

commitment that products we

manufactured are in compliance

with laws or regulations, may it be

local and international. In support to

the drive of sustainability, we assure

that materials and processes used in

manufacturing have no hazardous

components that may end up to

finished goods. We are actively

engaging with customers, suppliers

and other parties to upgrade

ourselves on specific standards and

requirements that for clear

understanding will lead us more

aware of the trend of restrictions.

From procurement of materials,

manufacturing within our processes

until delivery, we are bounded by

certain principles and parameters

ensuring that we conform to product

health and safety legislations.

We integrate the fundamental

guidelines to our training programs

concerning the update and provision

of laws and regulations on the use or

manufacturing products. Such

training activity is directed by the

Human Resource/ Compliance Team

with their role as well to monitor

periodically and follow-through the

progress and completeness.

PR9: Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services Alliance One does not have the significant

fine for non-compliance for failure to

comply with laws or regulations may it be

international and local concerning the

provision and use of products for the

reporting period of 2011.

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Page | 52 Alliance One’s 2011 GRI Report

Our responsibility is… sustainability

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Documents

Table of Contents 2011 - Global Reporting Initiative · Table of Contents SUSTAINABILITY ry Self Declared n Third Party Checked GRI Checked C d C+ B B+ A A+ 2011 REPORT Our responsibility