As a manufacturer for major retail brands, MAS is sensitive to its clients’ need for ethical and transparent sourcing in order to protect their brand reputations. MAS management was also encouraged to develop Go Beyond in order to turn its “sweatshop-free” reputation into a competitive advantage that differentiates it from other apparel manufacturers. This study thus also illustrates the business case for embedding human rights within a company’s management practices.

Company profile
Founded in 1986 and headquartered in Colombo, Sri Lanka, MAS Holdings operates 28 intimate and active apparel, fabric and accessories plants in five countries, employing over 45,000 people worldwide. MAS was initially formed as a joint venture to manufacture women’s dresses with MAST, a subsidiary of Limited Inc, which owns Victoria’s Secret. Since then, MAS has built more joint venture plants in partnership with MAST, Triumph, Brandix International (another large Sri Lankan apparel company), Sara Lee Courtaulds, Brandot International and Stretchline Global, a UK elastics company.

Today, the company manufactures bras, panties, briefs, sleepwear and athletic wear along with elastic, fabrics, lace, hooks and other accessories. MAS is the largest supplier for Victoria’s Secret and is also a major vendor for The Gap, Marks & Spencer, NIKE, Speedo and Reebok. In 2006, MAS’s revenues were US$693 million and it was the second largest apparel manufacturer in Sri Lanka. Average annual revenue has grown 20%–30% for the past several years.

MAS has won the American Apparel and Footwear Association’s Excellence in Social Responsibility Award for Women’s Issues, in addition to international safety and productivity awards.

The setting for the MAS Women Go Beyond
Labour rights and the status of women in Sri Lanka

The International Labour Organization has observed that sweatshop abuses are common in the apparel industry. This includes child labour, unpaid overtime work, unsafe facilities and denying workers the right to collective bargaining. These conditions have been attributed both to the separation of apparel branding from production, which is increasingly located abroad, and to the reliance on underage, female and/ or migrant workers.

The Sri Lankan government has worked to reduce the severity of these abuses. Child labour has been curbed and the minimum statutory age for employment in the apparel sector is 16. MAS voluntarily maintains a minimum age of 18. Sri Lankan employers are required to contribute 3% of salary to a trust fund that employees receive when they resign and 8% of salary to the Provident Fund, which employees receive as a lump sum upon retirement. After five years’ work, employees also receive a “gratuity” payment of a half-month’s salary for every completed year.

In Sri Lanka, 85% of the textile industry workforce is female and approximately 350,000 women work in factories. Sri Lankan women traditionally do not work outside of the home, but high unemployment in rural areas and displacement due to civil unrest have made many young women the family’s primary or sole  breadwinner.

A well-known stereotype is the “Juki Girl,” a woman in her late teens or early twenties who moves from her rural village to the free trade zone and works on a Juki sewing machine in a garment factory to send money home. Living in dormitories away from their families, Juki Girls do not necessarily have access to nutritious meals, reliable transportation or banking services to save their earnings. They are also vulnerable to sexual abuse.

Civil war in Sri Lanka
Ongoing civil conflict in Sri Lanka makes it a challenging environment for the operation of a multinational enterprise. A civil war between the separatist Liberation Tigers of Tamil Eelam and the Sri Lankan government began in 1983. About 64,000 people havebeen killed in the conflict and 800,000have been displaced. Both sides agreed to a ceasefire in 2002, but the conflict re-escalated in 2006 after the foreign minister, an ethnic Tamil, was assassinated. The war has devastated the Sri Lankan economy. Sri Lanka’s GDP per capita is $965 per year. However, compared to developing countries with a similar income level, Sri Lanka has a higher literacy rate, longer life expectancy and lower infant mortality.

The MAS Women Go Beyond programme
History of Corporate Social Responsibility (CSR) at MAS

When the Amaleans founded MAS, they wanted to avoid the sweatshop model of production. They installed air conditioning, free company canteens and ample bathroom facilities and built plants in rural villages, rather than in the free trade zones. MAS did not require workers to take pregnancy tests—a common practice in other businesses— and instead provided special attention and extra meals for pregnant women. While the company does not have formal unions, MAS workers elect representatives to Joint Consultative Committees that meet monthly with management to discuss workplace, customer and community issues.

Each plant created its own educational and social programmes open to all employees. One plant offered English classes, reproductive health workshops and leadership training. Another was known for its athletics programmes, employing and subsidizing the training of national, international and even Olympic level athletes. Maternity clinics, vaccinations and personal hygiene programmes were common. At one plant, the senior executives donated their own money each month for college scholarships for village children. After the tsunami, employees raised money and spent their weekends building homes for displaced people. All the plants held Parents Days, when workers’ families could visit, tour the plant and meet the managers.

In general, these programmes increased costs 3%–4%, but the higher productivity and lower downtime of employees who embraced the company culture compensated for this. A senior manager estimated that a 1% increase in efficiency or decrease in absenteeism added $200,000 to the bottom line. The 3% spent on CSR programmes generally increased efficiency by 5%, a $400,000 net gain in profit.

Developing Go Beyond
In 2003, MAS reformed its Corporate Branding and Strategic CSR Department. The Department proposed that MAS systematize its employee and community programmes and begin to brand itself as an ethical manufacturer. Before the Go Beyond programme, the variety and funding of classes and community participation were at each plant manager’s discretion. Go Beyond created a framework to standardize, improve and track the results of the employee programmes at each plant, with a particular focus on women’s issues.

MAS examined the best practices in each plant and developed a four point framework of Career Advancement, Work-Life Balance, Rewarding Excellence and Community Activation. As a standard, each plant site offered English and IT classes and financial management seminars. The Department also recommended creating a name, logo and image for the new programme that had to be translatable into different languages, simple and short, but meaningful—Go Beyond.

The Go Beyond programme emphasizes Global Compact Principle 1, that “within their sphere of influence, businesses should support and respect the protection of internationally proclaimed human rights.” The programme focuses special attention on the rights and treatment of women. In this regard, it also emphasizes Principle 5, the effective abolition of child labour, and Principle 6, the elimination of discrimination in respect of employment and occupation.

MAS launched the Women Go Beyond programme over a six-month period at 17 Sri Lankan apparel plants with high ratios of female employees. MAS created a new position to promote the programme to plant management and workers. The promotional materials included posters, stickers and newsletters in both English and Sinhala, presentations by noted guest speakers with singers and dancers, and even a short film. In 2004, each plant also selected a staff member to be a “Go Beyond Champion” who would supervise the programme implementation.

Outcomes: Internal effects
The reorganization of the plants’ employee programmes into the Go Beyond framework proceeded from June 2004 to May 2005. The implementation team launched an external Go Beyond website in October 2004. Based on the programme impact measurement framework that was developed in July 2004, the plants held 290 programmes in the four areas and reached the average worker 3.7 times in the first year.

At the end of 2004, a female employee was selected from each plant to be an “Empowered Woman of the Year.” For the winners, MAS held a gala awards ceremony with dancing troupes from each of the plants, a fashion show of MAS apparel and award presentations by leading Sri Lankan public figures and business people.

To benchmark the programme, MAS hired an external research company in May 2006 to survey 2000 managers, supervisors and workers about their awareness of the Go Beyond programme. 90–92% were generally aware of the programme and 63% of supervisors and 61% of workers knew specific programme goals. After two years, 40% of workers said that the programme was making a genuine difference but the remainder said they had not been affected directly yet. 70% of managers felt that the programmes clearly differentiated MAS from other companies in Sri Lanka, as well as those in China and India.

Over time, Go Beyond was rolled out to MAS plants in India and Vietnam. The Go Beyond Champion network now has 200 members who lead teams at each plant, which include finance managers, production managers and the Go Beyond Empowered Women of the Year award winners.

The implementation of the Go Beyond programme required programme design, technical and relationship building capabilities. The programme was based on MAS’s own best practices as measured against the apparel industry and more importantly, against international labour standards. The implementation also included frameworks for measuring results, benchmarking and subjecting the programme to external evaluation.

Outcomes: External effects
MAS invited local women’s activists and media representatives to participate in the selection process of its “Empowered Woman of the Year.” This exposed the programme to scrutiny from local media and NGOs. National newspapers in Sri Lanka wrote a series of articles featuring the Go Beyond winners. Afterwards, the Sri Lankan government sought MAS’s help to start a similar programme nationwide. Several MAS business partners donated funds to strengthen and enhance the Go Beyond effort.

These awards for businesswomen were the initial stage in developing strategic corporate social responsibility projects that MAS has co-branded with its customers. Based on the positive initial results for MAS, The Gap Inc. and Victoria’s Secret subsequently began their own initiatives recognizing women entrepreneurs in MAS plant communities. The Gap Inc. committed $150,000 for three years to fund The Gap Go Beyond programme in Sri Lanka and will expand the programme to other countries once it is operational.

The Gap Go Beyond programme has two phases. The first supports academic talent and provides sustainable development education. In communities where MAS business units are located, students in grades 10 to 13 are provided with a curriculum based on the Youth Xchange programme developed by UNEP and UNESCO. The programme also provides a grant for the best qualified female university entrant in the selected communities. Additionally, The Gap Go Beyond Schools Sustainability Awards annually reward and recognize the most effective sustainable development project.

In the second phase, the programme works with two organizations in Sri Lanka to develop a prototype for an eight- to ten-day certification programme for 20 to 25 women who have demonstrated entrepreneurial ability.

Another co-branded initiative is Unilever Go Beyond, which is a two-day programme called “Getting More out of Life” that is presented at the plants as part of the regular Go Beyond framework. It includes one day of health and hygiene education and one on personal grooming and confidence building. Unilever funded the salaries of the university lecturers, medical faculty and beauticians who teach the course, which concludes with an examination and a certificate of completion. Co-branded programmes are also in development with Victoria’s Secret and Marks & Spencer.

Ethical standards and the future
The Go Beyond programme created an opportunity for developing a MAS brand, a step not usually taken by contract manufacturers. MAS has begun talks with The Gap Inc. to put Go Beyond “ethically made” tags into its clothes, right next to The Gap branded labels. If the initiative is implemented, it will create a closer vendor-client relationship between MAS and The Gap, and also appeal to socially responsible consumers.

Noshua Watson is a doctoral student in management strategy at INSEAD, Fontainebleau, France. Prior to attending INSEAD, Ms. Watson was a reporter at Fortune magazine in New York. The complete version of this case study, including references and additional annexes, is available on the UN Global Compact website at www.unglobalcompact.org. This case is based on interviews and data collected for an INSEAD case study (MAS Holdings: Strategic Corporate Social Responsibility in the Apparel Industry, European Case Clearing House, 2006) and an article about MAS Holdings for World Business magazine (“The Ethical Bra,” October 2006). The INSEAD case study was prepared under the supervision of Jonathan Story, Professor of International Political Economy at INSEAD and Shell Fellow of Economic Transformation. In July 2005, an INSEAD research team visited MAS headquarters in Colombo, Sri Lanka, and MAS plants in Pannala, Horana and Hanwella, Sri Lanka, to interview managers and plant workers. The visit was funded by a grant from the INSEAD R&D Committee and ground transportation and clerical assistance in Sri Lanka were provided by MAS. Other interviews included representatives from the Colombo office of the International Labour Organization, Clinch (Sri Lanka), MAST/Limited Inc., Gap Inc. and JW Thompson Advertising (Colombo). Follow-up research included phone interviews and in-person meetings in Fontainebleau, France, in November 2005 and March, August and October 2006.

MAS Eco Go Beyond, a strategic CR initiative of MAS Holdings commenced in August 2006. ‘Mihikathage Daruwo’, a flagship initiative of this programme is a sustainable development education project aimed at introducing the concept and creating understanding of applicability to youth as tomorrow’s leaders. The first phase of this programme which was successfully concluded in October 2007 was conducted in 20 schools across 5 communities in which MAS business units operate, namely Horana, Agalawatte, Hanwella, Pannala and Kuliyapitiya.

Phase two of the project sees an additional 10 schools coming on board from the 3 communities of Avissawella, Thulhiriya and Kandy bringing the total to 30 schools this year.

The launch of phase two took place with a meeting at the Ministry of Education, Isurupaya for the principals and teachers of the participant schools. The meeting was held under the support of Mrs. Sandya Wijebandara, Additional Secretary to the Ministry of Education.

The event’s proceedings included a very insightful talk on sustainable development by the programme consultant who highlighted the timely need for this topic in education. Mrs. Sandya Wijebandara, reiterated the Ministry’s support and endorsement of the project.

March 2008

MAS Holdings announces the launch of the MAS Institute of Management and Technology (MIMT), located at the MAS Fabric Park, Thulhiriya.

MIMT is a public training institute with exceptional facilities and infrastructure, including a fully equipped auditorium seating 300 people, 17 training rooms with labs for English language, IT, textile processing and sewing machine mechanics and residential facilities for up to 250 people.

MIMT is being launched with a vision to enhance employment opportunities to the youth of this country and to uplift competencies in the industries in Sri Lanka. There will be a particular focus on the Textile, Apparel, IT and BPO sectors. MIMT will partner with leading training providers to offer a range of programmes. The flexibility of working with a network of partners will ensure that MIMT’s training will remain relevant to the changing needs of our country.

Partnering with Informatics, a premier IT training institute, MIMT will offer a suite of IT programmes ranging from diploma level to degree programmes along with qualifications in 3D graphics and JAVA. MIMT will also offer a suite of technical programmes to skill employees in the textile and apparel industry. A range of English language,  soft skill development and etiquette programmes will enhance the employability of people.

MIMT CEO, Chandan de Silva said:
“MIMT will offer customized programmes to address the skill shortages in the IT enabled, BPO, Textile and apparel industries. We want to develop well rounded candidates by focusing on core competencies and soft skill development.”

MIMT’s own job placement center will help students from MIMT find employment within the MAS Fabric Park and in other industries.

MIMT also offers Corporate training programs targeting workers, supervisors and executives. These could be residential or day programs. Companies can work with MIMT to create customized programs to include relevant technical training coupled with soft skill development and experiential learning.

MIMT’s partner, Borderlands, will bring experiential learning into the Institute, utilizing the rock, waterways and natural surroundings.

MAS is also announcing that it aspires to launch the MAS Business School later in the year. This will be for senior executives and will be centered around Leadership Excellence and Innovation.

MAS Holdings Chairman Deshamanya Mahesh Amalean said:
“My vision is to see Sri Lanka recognized as a destination for knowledge and innovation within the next five years. This is one step towards that goal.”

The ceremonial opening of MIMT took place on the 31st of January 2008 under the distinguished patronage of Professor Malik Ranasinghe, Vice Chancellor, University of Moratuwa.

About MAS:
MAS Holdings, an innovation focused company is one of the region’s largest suppliers of Intimate apparel and Activewear. Operating in five countries with over 45000 people, the company is a vertically integrated apparel solutions provider and the preferred sourcing partner for world-class brands such as; Victoria’s Secret, Nike, adidas, Reebok, Speedo and M&S.

January 2008

MAS Holdings felicitated their Empowered Women of the year for the 4th consecutive year on 16th December 2007 at the BMICH.  21 Empowered Women of MAS’s various business units were recognized for their personal and professional achievements.

The annual “Empowered Women of the Year” awards are a focus of the “Go Beyond” programme, through which employees excelling in all walks of life are recognized.  The programme aims to empower employees and impact communities by championing the cause of women’s empowerment in society.  The programme also focuses on ensuring employee’s career advancement and strengthening their work-life balance.

Chief Guest, Ms. Gowrie Ponniah, Member of the MAS Strategic CSR Advisory Programme Coordinator of the International Programme for the Elimination of Child Labour at the ILO stated in her Keynote address stated: “MAS’s plants are a valued member of the community that it is located in. Not only contributing to the rapid economic improvement of the area, but also a major supporter of  local educational, sports, environmental and religious  activities. Nationally, I am certain that the success of the Go Beyond programme spurred the Apparel Industry’s Garments without Guilt campaign aiming at creating new global markets for our products”.

Guests of Honours included, Country Director for Sri Lanka and India of Victoria’s Secret, Ms. Reena Cheriyan, Director for NIKE- India, Sri Lanka & Pakistan, Mr. Atul Ujagar, Ms. Rosy Senanayake & Ms. Chandini Rajaratnam, Vice President Executive Creative Director, JWT.

Speaking on behalf of Victoria’s Secret, Ms. Reena stated; “MAS had done a fantastic job with the CSR area which gave Victoria’s Secret a sense of pride and confidence about the future of the South Asian region, and the Go Beyond Awards is VS’ favourite Corporate Responsibility event which they look forward to every year.”

Addressing the large gathering, Mr. Atul Ujagar said “MAS is already amongst our [NIKE] top 5 vendors. It’s been our privilege and honour to partner with MAS and sponsor its annual Go Beyond Awards. We are sure this program will go a long way in extending our brands appreciation towards the worker community at large.”

Victoria’s Secret and NIKE, both strategic buyers for MAS, have shown their support towards the “Go Beyond” initiative through the sponsorship of the winners’ awards over the past 4 years and 2 years respectively, since it was launched at MAS.

The theme of the awards ceremony reflected MAS’ journey of 20 years and its credibility in its practices which focused on its predominantly female workforce leading to its strategic differentiator, MAS Women Go Beyond, which was launched in 2003.

The Women Go-Beyond initiatives at MAS have been globally recognized and rewarded. In 2005, the programme was awarded the American Apparel and Footwear Association Award for Excellence on women's issues.

In recognition of MAS’ Corporate Responsibility initiatives the UN Global Compact in July 2007, selected the Go-Beyond programme as a 'Case for inspiration'. MAS Holdings was one of the 22 companies that had been selected from a membership pool of 4400 organisations to be featured in the report.

This month, Market Movers, an International Finance Corporation (Member of the World Bank Group)/SustainAbility publication, featured MAS Holdings as one of 4 companies. Furthermore, the Go Beyond program has been used as the case study in the most recent publication of UN Global Compact / Human Rights Commission called “Embedding Human rights into Business Practice II”.

Established in 1987, MAS Holdings is one of the region’s largest suppliers of intimate and active wear. The company manufactures for world-class brands such as; Victoria’s Secret, Nike, adidas, Gap, Reebok, Speedo and M&S. MAS has achieved its goal of placing Sri Lanka on the world map as a preferred sourcing destination for ethical apparel sourcing.

January 2008