June 15, 2011

To our stakeholders:

I am pleased to confirm that Gevaram Quality Envelopes Ltd reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely your,

Ariel Peled
Chief Executive Officer

We support and respect the protection of international human rights as drawn out in the Universal Declaration of Human Rights. A vibrant democracy (one of the few in the Middle East), the independent Israeli Judiciary system, the ethical principles of Judaism and Islam, the basic law "Human Dignity and Liberty", the basic law "Freedom of Occupation", the numerous labour laws which are strictly enforced, a high level of freedom of press - all these help to create a just society where prejudices based on religion, race or sex are addressed and corrected by education or by the force of law. Most important, this company is situated in and owned by a kibbutz - a form of collective settlement based on the principles of social equality, collective ownership, mutual aid and assistance.

We are a company with operations only in Israel. None of our activities infringe on human rights. We produce envelopes and paper folders: these cannot be used to repress human freedom and violate human rights. We do not have trade relations with companies (customers and suppliers) in countries which allegedly violate human rights. To enhance our social responsibility we have voluntarily adopted all the principles of the social accountability standard SA8000 which are based on the principles of international workplace norms contained in the ILO conventions, the UN's Universal Declaration of Human Rights and the Convention of the Rights of the Child. Among the issues covered are: child labour, forced labour, health and safety, freedom of association and the right to collective bargaining, discrimination, disciplinary practices, working hours, remuneration, and management systems.

We have a grievance mechanism in place for grievances. Depending on the nature of the grievance, the employee may turn to the Human Resources Manager or to the department head or even to the CEO if he is not satisfied with the solution offered.

We have put up a list of the workers' rights and benefits according to Israeli law on the notice board. This notice board also has the timing of the rest intervals for the three shifts and the minimum wage in effect by way of national law. A detailed explanation of sexual harassment in the workplace with the name of the appointed worker who is responsible to address these charges also put up on the notice board.

We support the UN's Women’s Empowerment Principles and our CEO has signed the CEO Statement of Support.

We comply with the strict SA8000 standards and undergo external social audits on a regular basis. The results of these audits are reviewed by the senior management and various recommendations are integrated into the existing policies and procedures.

No incidents of human rights violations have occurred in our company.

We comply with legal stipulations. In the area of overtime and social security payments, we pay more than what is legally stipulated.

All the principles in this section are protected by the law of the state of Israel.

In addition we have voluntarily adopted all the principles of the social accountability standard SA8000 which are based on the principles of international workplace norms contained in the ILO conventions, the UN's Universal Declaration of Human Rights and the Convention of the Rights of the Child. Among the issues covered are: child labour, forced labour, health and safety, freedom of association and the right to collective bargaining, discrimination, disciplinary practices, working hours, remuneration, and management systems.

The company is situated in and owned by a kibbutz - a form of collective settlement based on the principles of social equality, collective ownership, mutual aid and assistance. Some of the employees are kibbutz members; the rest are residents of the neighbouring towns. We do not believe in any kind of discrimination based on race, religion, gender, political opinion or social origin in our employment related policies.

We are committed to creating and maintaining a workplace that provides for employee health and safety and incorporate employee health and safety requirements in business strategies, plans, reviews and product offerings. We foster employee involvement and provide appropriate health and safety education to enhance the ability of employees to work safely and productively

The company has a Safety Officer who is responsible for implementation of all health and safety requirements according to the state law and the company policies. This includes inspection and monitoring of machines; fire fighting equipment; personal safety equipment; dangerous chemicals and their handling, storage and disposal; periodic hearing tests for the workers; conformity with the guidelines of the Ministry of Labour and the Ministry of the Environment; monitoring of noise levels, dust and pollutants in the factory.

We comply with legal stipulations regarding labour. In the area of overtime and social security payments, we pay more than what is legally stipulated. We organize transport for the workers to their homes throughout the day as the factory is situated in a rural setting.

We comply with the SA8000 standards. We hold this certificate from November 2005.

Our Human Resource Manager and the management regularly consult with our appointed law firm on all issues needing clarification and to ensure that we comply with all the legal stipulations.

We undergo external SA8000 social audits on a regular basis. The results of these audits are reviewed by the senior management and various recommendations are integrated into the existing policies and procedures.

The Safety Officer along with senior management review periodically the results of the measures implemented.

Employees undergo training in the fields of safety, quality control, first-aid, emergency evacuation, fire drills.

We also comply with the standards of ISO 9001 – quality management systems. This necessarily includes the involvement of the employees in the process, making them more efficient, trained and conscious of their contribution to the management process.

The company is situated in a rural settlement surrounded by a Nature Reserve. The importance of minimizing our environmental footprint and impact is reflected in the striving for greater environmental responsibility.
Integrate sustainability
Decrease the use of solvent-based printing inks
Increasing use of renewable energy source – solar energy
Maximize recycling of waste materials, and waste reduction
Treatment of hazardous substances
Water stewardship, pollution prevention
Allocation of responsibilities and accountability within the organization

The company is FSC Chain of Custody certified. FSC Chain of Custody Certification number is CU-COC-810471. Most of the white envelope paper we buy comes from a single local supplier. This supplier is not FSC certified; thus causing us to import FSC-certified white envelope paper from abroad for customers who ask for FSC-certified paper. Paper forms a high percentage of the raw materials used. The cost implications of the lack of local FSC-certified paper supplier are significant.
The company has had solar panels assembled on the roof which provide it with electricity.
We sell our waste paper to recycling plants.
We are gradually phasing out the use of solvent-based printing inks in favour of water-based inks.
We regularly monitor the work environment levels of noise, dust, and poisonous substances. Regular hearing tests are carried out on the workers.
All hazardous waste has to be transported to government-designated disposal sites.

The Factory Manager along with the Chief Executive Officer is responsible for environmental issues. The Safety Manager is responsible for compliance with the stringent requirements of the Ministry of Environment. We hold a "poisons permit" from the Ministry of Environment for the usage of hazardous substances after being inspected regarding their handling, storage, recycling, disposal and spill control.

We recycle all of our waste paper.
The solar panels assembled on the roof provide3.5% of the electricity consumed.
All aspects of dealing with hazardous materials have been learned and are under the supervision of the Safety Manager. No incidences have been recorded.
The company is FSC Chain of Custody certified from January 2009. Our dependence on the only local white envelope-paper manufacturer who is not FSC certified is holding back our progress in our aspiration to increase sustainable production. We have to import FSC-certified paper.
The monitoring of pollutants and dangerous substances has shown that we are within the ranges desired.
The use of water-based printing inks has increased at the expense of solvent-based inks.

Gevaram Quality Envelopes Limited is committed to work against corruption in all its forms, including bribery and extortion.
Gevaram Quality Envelopes Limited is committed to be in compliance with all relevant laws, including anti-corruption laws.
We require all directors, managers and employees to behave ethically and in conformity with the law and the guidelines. This is the cornerstone of our organization’s work and the relationships of its directors and employees with one another as well as with customers and partners.
Goals:
Strengthening anti-corruption behavior, including better risk management and compliance;
Encouraging and supporting employees in resisting corruption;
Providing management with a foundation for analysis of progress;
Planning and continuous improvement;
Motivating employees to be proud of the organization’s integrity and reputation;
Review and the strengthening internal controls to close any loopholes.

Financial and commercial transactions are fully computerized on a network and the working is transparent and least susceptible to fraud.
Most payments are directly credited to the bank accounts of parties/employees through electronic payment modes.
Cheques have to be signed by two authorized signatories out of a given list of signatories, depending on the sum involved.

We comply with the standards of ISO 9001. A clear management hierarchy and well-defined areas of authority and responsibility as entailed be ISO 9001 along with the defined chain of decision-making help to minimize the risk of corruption.
At present, we do not have an internal auditor but we do have a Finance Committee which meets periodically and has the authority to check any suspicion of corruption and unethical behavior.