I. The Country Assessment Guidelines, which address large, external issues beyond the control of Levi Strauss & Co.'s individual business partners. These help us assess the opportunities and risks of doing business in a particular country.

II. The Business Partner Terms of Engagement, which deal with issues that are substantially controllable by individual business partners. These Terms of Engagement are an integral part of our business relationships. Our employees and our business partners understand that complying with our Terms of Engagement is no less important than meeting our quality standards or delivery times.

Country Assessment Guidelines

The numerous countries where Levi Strauss & Co. has existing or future business interests present a variety of cultural, political, social and economic circumstances.

The Country Assessment Guidelines help us assess any issue that might present concern in light of the ethical principles we have set for ourselves. The Guidelines assist us in making practical and principled business decisions as we balance the potential risks and opportunities associated with conducting business in specific countries. Specifically, we assess whether the:

• Health and Safety Conditions would meet the expectations we have for employees and their families or our company representatives;
  
  
• Human Rights Environment would allow us to conduct business activities in a manner that is consistent with our Global Sourcing and Operating Guidelines and other company policies;
  
  
• Legal System would provide the necessary support to adequately protect our trademarks, investments or other commercial interests, or to implement the Global Sourcing and Operating Guidelines and other company policies; and
  
  
• Political, Economic and Social Environment would protect the company's commercial interests and brand/corporate image. We will not conduct business in countries prohibited by U.S. laws.

Terms of Engagement

• Ethical Standards
  We will seek to identify and utilize business partners who aspire as individuals and in the conduct of all their businesses to a set of ethical standards not incompatible with our own.
  
  
• Legal Requirements
  We expect our business partners to be law abiding as individuals and to comply with legal requirements relevant to the conduct of all their businesses.
  
  
• Environmental Requirements
  We will only do business with partners who share our commitment to the environment and who conduct their business in a way that is consistent with Levi Strauss & Co.'s Environmental Philosophy and Guiding Principles.
  
  
• Community Involvement
  We will favor business partners who share our commitment to improving community conditions.
  
  
• Employment Standards
  We will only do business with partners who adhere to the following guidelines:
  Child Labor: Use of child labor is not permissible. Workers can be no less than 15 years of age and not younger than the compulsory age to be in school. We will not utilize partners who use child labor in any of their facilities. We support the development of legitimate workplace apprenticeship programs for the educational benefit of younger people.
  
  Prison Labor/Forced Labor: We will not utilize prison or forced labor in contracting relationships in the manufacture and finishing of our products. We will not utilize or purchase materials from a business partner utilizing prison or forced labor.
  
  Disciplinary Practices: We will not utilize business partners who use corporal punishment or other forms of mental or physical coercion.
  
  Working Hours: While permitting flexibility in scheduling, we will identify local legal limits on work hours and seek business partners who do not exceed them except for appropriately compensated overtime. While we favor partners who utilize less than sixty-hour workweeks, we will not use contractors who, on a regular basis, require in excess of a sixty-hour week. Employees should be allowed at least one day off in seven.
  
  Wages and Benefits: We will only do business with partners who provide wages and benefits that comply with any applicable law and match the prevailing local manufacturing or finishing industry practices.
  
  Freedom of Association: We respect workers' rights to form and join organizations of their choice and to bargain collectively. We expect our suppliers to respect the right to free association and the right to organize and bargain collectively without unlawful interference. Business partners should ensure that workers who make such decisions or participate in such organizations are not the object of discrimination or punitive disciplinary actions and that the representatives of such organizations have access to their members under conditions established either by local laws or mutual agreement between the employer and the worker organizations.
  
  Discrimination: While we recognize and respect cultural differences, we believe 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. We will favor business partners who share this value.
  
  Health & Safety: We will only utilize business partners who provide workers with a safe and healthy work environment. Business partners who provide residential facilities for their workers must provide safe and healthy facilities.