PS2: Labor and Working Conditions
The HR Department is headed by a qualified HR Director with more than 24 years of experience. The HR Director has the support of two staff in charge of recruitment, training and payrolls. As of July 2021, Stein had a labor force of 285 employees (48% women); the proportion of women to men at the managerial level is 45%. The annual rate of staff turnover has ranged from 10 to 14% in the last three years thereby demonstrating that staff retention is high.
Human Resources Policies and Procedures
The company’s labor policies are documented in the Conduct Manual (Manual de Normas de Conducta) and address such aspects such as work hours, job categories and salaries, paid leave, child labor, employee conduct and policies on non-discrimination, harassment, and sexual harassment. The policies are in line with the requirements of Performance Standard 2.
Working Conditions and Terms of Employment
Terms of employment are documented in individual contracts for workers which include the type of contract, workhours, compensation and benefits. Employees work 48 hours per week, have one day of rest and two weeks of paid leave per year. As of July 2021, 87% of Stein’s workforce had open ended contracts and 13% had fixed-term contracts. Fixed-term contracts are only used to cover short term production needs. Both open-ended and temporary workers are hired directly by Stein. The most recent inspection by the Ministry of Labor undertaken in August 2019 identified no infraction relative to national requirements.
Workers’ Organizations
The company has not signed any Collective Bargaining Agreement. However, in alignment with the country regulations, Stein does not discourage workers from joining unions or prevent workers from forming organizations. In Costa Rica, workers can also create associations called ‘Asociacion Solidaristas’ to support the wellbeing of its members and improve communication between workers and management. The Asociacion Solidaristas cannot negotiate collective bargaining agreements. For more than 30 years, Stein has had an Asociacion Solidarista called ASOELS, which provides services to workers such as savings accounts. As of July 2021, 73% of the workers in Stein were members of ASOELS.
Non-discrimination, Equal Opportunities
Stein has documented policies for non-discrimination, harassment and sexual harassment which are explained at the time of recruitment. The policies include definitions of what constitute harassment and sexual harassment, how to present a complaint, how to investigate allegations, and the commitment to ensure confidentiality and protect the complainant against retaliation. The scope of the sexual harassment policies extends to employees, contractors, suppliers and visitors.
Labor Grievance Mechanism
As described above, Stein has policies for the prevention of non-discrimination, harassment and sexual harassment. Policies state that complaints should be presented directly to Human Resources. Stein also has a Code of Ethics (Politica de Cumplimiento Corporativo) which addresses aspects such as corruption, fraud and conflict of interest. According to the policy, breaches to the Code of Ethics should be reported to the Compliance Committee. Stein has recently retained an external consulting firm for the implementation of an ethics and compliance program and a confidential whistleblower channel (the channel is not yet operative). However, the company does not have a formal grievance mechanism nor records of grievances. Thus, as required in ESAP#4, Stein will develop and implement a grievance mechanism to allow employees and contractors to raise workplace concerns in line with the requirements of Performance Standard 2 paragraph 20, including the possibility of confidential and anonymous complaints to be raised and addressed. On-site contractors, such as security guards, cleaning, catering, etc. will also have access to the grievance mechanism.
Retrenchment
In 2018, Stein sold its branded generics portfolio to Eurofarma. Consequently, the company had to terminate the contract of 155 employees most of whom (63 percent) were transferred to Eurofarma. All employees received any outstanding back pay, benefits and severance payment mandated by law in timely manner. As required in ESAP#5, Stein will adopt a retrenchment policy to be applied in the event of any collective dismissals, including in the event of sales, mergers, or acquisitions, consistent with the requirements of IFC Performance Standard 2.
Occupational Health and Safety
Key OHS risks in the pharmaceutical industry are linked to workers’ exposure to chemicals (solvents, API) in laboratories and production process, interactions with machines (e.g., blister machines), noise, ergonomics (repetitive motion in manual packaging), and use of flammable and combustible materials. Key OHS risks in warehouses and distribution centers are linked to the interaction with forklifts.
Stein has completed hazard identification and risk assessment (HIRA) matrices per area in the manufacturing plant and has clearly documented procedures for the control of OHS risks such as safe handling of chemicals, use and maintenance of PPE, handling of forklifts, dangerous work permit, and accident investigation. Good housekeeping practices were observed during the virtual visit in all areas of the company (e.g., production facilities, laboratories, warehouse, storage of flammables, temporary storage of hazardous wastes). In addition, the company has recently implemented a behavior safety program.
Nevertheless, the lost time injury rate is above the benchmark values for the sector (US Department of Labor Statistics 2019). The most frequent and severe lost time injuries occurred during the cleaning and maintenance of packaging machines as the machine guards can be bypassed. Therefore, as required in ESAP#6, Stein will undertake a machine safety risk assessment for all production and packaging machines based on internationally recognized standards such as ISO 12100 and ISO 13849-1, or ANSI RIA 15.06 2012. Thereafter and based on the findings of the assessment, the company will agree with IFC on a time-based corrective action plan. In addition, as required in ESAP#7, Stein will develop and implement a lockout/tagout procedure, including step-by-step instructions for locking or tagging out all forms of hazardous energy sources (e.g., electric, hydraulic) before conducting service or maintenance activities in production, packaging, and auxiliary equipment.
More than 300 reagents and 90 API’s are used in the laboratory and production process respectively, some of which are carcinogenic. Control measures in Stein include dust collection equipment in areas at risk (i.e., dispensing, compounding, granulation), laminar flow hoods in the quality control laboratory, and the use of personal protective equipment (i.e., half-face mask with cartridges for acid gases or dust as required, gloves, safety glasses, etc.). However, no monitoring is in place to ensure these measures are effective. According to the occupational health surveillance procedure, a series of tests should be performed annually on workers exposed to dangerous chemicals and noise, such as tests on liver, kidney and thyroid function, and audiometry. Furthermore, pre-employment and annual medical exams currently include only preventive medicine (e.g., diabetes, hypertension) and ergonomics. Therefore, as required by ESAP#8, Stein will retain the services of an independent industrial hygienist and laboratory to conduct an Industrial Hygiene (IH) Risk Assessment for workers exposed to hazardous chemicals and noise; (ii) develop and implement an IH Exposure Monitoring Program; and (iii) develop and implement an Occupational Health Surveillance Program for workers (including on-site contractors) exposed to hazardous chemicals at dangerous concentrations and noise above safe levels in accordance with the company’s procedure and workplace exposure limits and practices recommended by NIOSH, ACGIH or other similar internationally recognized organizations.
Stein has a documented procedure to control on-site access of visitors and contractors. The EHS Supervisor must approve a work permit before contractors engage in dangerous work (e.g., works at height, hot work, etc.).
Workers engaged by Third Parties
Stein outsources those activities that are not part of its core business such as cleaning, catering, medical services, transportation, maintenance of auxiliary equipment, and physical security. Contractual provisions with contractors include the requirement to comply with labor laws, including the on-time payment of wages, and the right to request evidence of monthly payments to social security. These on-site contractors receive EHS training at induction and are provided with the necessary PPE (e.g., respiratory protection for cleaning personnel).
Management of the COVID-19 pandemic
Stein has implemented protocols and controls to prevent and manage the spread of the SARS-CoV-2 virus among the workforce. The plan includes daily disinfection of workplaces, social distancing, home-based work option for administrative employees, consistent use of PPE, and awareness raising campaigns. Stein has not undergone any retrenchment because of COVID-19.
