Cablegate: Nomination for Corporate Excellence Award: Procter

VZCZCXRO1201
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #2539/01 1670912
ZNR UUUUU ZZH
O 160912Z JUN 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1558
INFO RUEHZS/ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 03 MANILA 002539

SIPDIS

SIPDIS

STATE FOR EAP/EP
STATE FOR EB/CBA NSMITH-NISSLEY
STATE ALSO PASS EXIM, OPIC AND USTR
TREASURY FOR OASIA

E.O. 12958: N/A
TAGS: BEXP EINV ELAB ETRD KSEP SENV RP
SUBJECT: NOMINATION FOR CORPORATE EXCELLENCE AWARD: PROCTER
& GAMBLE PHILIPPINES

REF: STATE 64726

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NOMINATION
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1. Post is pleased to nominate Procter & Gamble (P&G)
Philippines for the 2006 Award for Corporate Excellence
(ACE). P&G Philippines has energized its workers with a
spirit of social responsibility and philanthropy that makes
an excellent representation of American values and character
to the local business community. P&G traces its
manufacturing roots in the Philippines back to 1935 when its
Manila investment became the first P&G plant in Asia. Today
P&G Philippines, a market leader in consumer categories for
detergent, soaps, diapers, dishwashing liquid, and paper
products, boasts 1,000 direct employees with assets of $10
billion in the Philippines. The company is dedicated to
improving the quality of life for Filipinos through programs
to revitalize poor communities, donate educational
resources, promote healthier lifestyles and support the
local economy with job creation initiatives.

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GOOD CORPORATE CITIZENSHIP: Community, Education and Health
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2. Revitalizing Communities: P&G is working with the
charity organization "Providing Care" (Gawad Kalinga) to
construct housing and contribute educational resources for
impoverished Filipinos living in slums. In 2004, P&G
sponsored the construction of the first Procter & Gamble
village representing 48 new homes in an impoverished area of
metro Manila. As momentum and enthusiasm for the program
spread throughout the company, individual P&G employees
decided to contribute to the effort by giving up a day's
salary to fund more houses. P&G instituted a matching
program for such employee contributions. In 2005 P&G
donated funds to build another 70 homes. In addition, P&G
employees opted to give up their 2005 Christmas party at a
four-star hotel in favor of channeling the budget funds to
build even more homes for the poor. Over the past three
years P&G Philippines and its employees have contributed USD
170,000 to build 120 homes for needy families. Though the
alliance with P&G and "Providing Care" began in the
Philippines, the concept has spread throughout the P&G
corporate network. "Providing Care" now receives donations
from P&G employees around the world. P&G employees are also
encouraged to participate in the construction of the houses
and are excused from work to do so on pre-designated
occasions.

3. Supporting Education: P&G Philippines supports a Live,
Learn, and Thrive (LLT) program in each P&G village to
provide free pre-school services for children up to six
years old. P&G donates five centavos (about nine cents) of
every consumer purchase of Safeguard White to support the
ongoing operations of the LLT centers. P&G also supports
education for the 7-13 age groups by donating uniforms and
school supplies to students.

4. P&G Philippines also designed the Sagip-Isip program to
aid the Philippines' public school system, which lacks
resources. P&G Philippines partnered with the local
Microsoft Corporation to provide modern technological
equipment to schools. Participating schools collect P&G
product labels and exchange them for educational equipment
like computers, software, audio-video showcases, books, and
educational tapes. These resources greatly enhance the
learning environment in participating schools throughout the
Philippines.

5. Health Initiatives: P&G is a long-time advocate for the
promotion of good health and hygiene practices. In 2002
company employees volunteered their time to participate in a
"Two Steps to Good Health" campaign in which they traveled
to cities including Cebu, Bacolod, Iloilo, Cagayan de Oro,
and Davao to put on skits and hold training seminars for
elementary children and their parents on the importance of
hygiene and how it protects against disease.

6. In February 2006, the company organized and hosted the
2nd International Health and Hygiene Symposium. The two-day
seminar gathered 150 hygiene experts from around the world
to discuss cleanliness and hygiene measures that can be used
to fight disease.

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GROWTH AND DEVELOPMENT OF THE LOCAL ECONOMY
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7. Management of P&G Philippines is focused on job creation
as a means to stimulate the local economy and has identified
creative ways to bring jobs to the Philippines. P&G
Philippines has identified more than 7,000 new employment
opportunities for local workers through direct and indirect
hiring practices. The jobs include direct sales, marketing
and packaging positions as well as IT support and human
resource management positions through American business
process outsourcing providers with operations in the
Philippines. The company also moved its Shared Service
Center to the Philippines to centralize accounting work for
the P&G network in Asia. P&G Philippines successfully
lobbied to set up a Pampers diapers manufacturing facility
in the RP. Production of the diapers will bring revenue of
$7 million to the local economy. P&G has further invested
$30 million in its manufacturing plant in Laguna to make the
Philippines a major manufacturing and service hub for P&G in
Asia.

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EXEMPLARY EMPLOYMENT PRACTICES
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8. P&G Philippines offers a generous compensation package
to its employees including free P&G products, shuttle
service, meal allowances, rice subsidies, the opportunity to
apply for loans towards the purchase of a car or a house and
competitive wages based on a 15.5-month year. Note.
Philippine law requires employers to pay workers for an
extra "13th month" as a bonus. P&G's standard of an
additional 2.5 bonus months beyond its legal obligation is
quite generous. End note. The company places itself among
the top ten percent of employers in terms of salary levels.
Employees are also given stock in the company. Managers
point out that one of P&G's founders, William Cooper
Procter, noted "when employees become shareholders, their
interests and the interests of the company become
inseparable."

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ENVIRONMENTAL STEWARDSHIP
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9. P&G Philippines holds environmental stewardship as an
important responsibility. P&G was one of the first
companies in the RP to switch from using hard Alkyl Venzene
(AV) to soft AV in its soaps because the hard AV was not
biodegradable. P&G was an early adopter of the change,
which it implemented ahead of legislation which later
required companies to use non-toxic ingredients.

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COMPETITIVE AND INNOVATIVE ACTIVITIES
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10. P&G has reaped the benefits of an innovative marketing
strategy which is carefully tailored for Filipino consumers
by targeting low income households and offering single-use
("sachet") packets of product. The small quantity makes the
product affordable for consumers on a tight budget, who do
not have the disposable income to buy in bulk. The product
line also makes adjustments for local culture and
infrastructure. For example, P&G manufactures a bar soap
for pre-treating laundry in consideration of the tradition
of hand washing in which bar soap is rubbed onto clothing.
In addition, Tide detergent is tweaked for efficiency in the
country's hard water conditions.

11. P&G headquarters selected the Philippines as the new
manufacturing site for Pampers diapers in part because of a
new technology developed by the P&G Philippines branch. The
technology is being reviewed by the Department of Science
and Technology which may grant special status to the
innovative project.

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COMPLIANCE WITH U.S., INTERNATIONAL, AND LOCAL LAWS
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12. Values are at the core of the Procter and Gamble
Company. Integrity, honesty, respect for individuals, and
"doing what's right" guide the staff in their everyday
work. P&G Philippines has resisted the local practice of

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offering bribes as a means to move products through customs.
P&G managers revealed to Econoffs that they had once
dismissed an employee who had paid a bribe to expedite
customs clearances. The company has established a zero
tolerance policy for corruption and requires its employees
to respect a high standard of ethical conduct.

KENNEY

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