“Although the law does not require companies to take specific actions other than the disclosures, companies affected by the law should see this as an opportunity to actually take steps to make their supply chains free of slave labor or human trafficking…”
We’re watching with interest law firm coverage of The California Transparency in Supply Chains Act of 2010, which goes into effect at the end of the year and aims to bring accountability to businesses in California regarding the awful practice of human trafficking and slavery. Here’s the scoop:
– New California Law Requires Disclosures Regarding Human Trafficking and Slavery (Davis Wright Tremaine LLP):
“A new California law called The California Transparency in Supply Chains Act of 2010 will go into effect Jan. 1, 2012. This law affects any retailers and manufacturers ‘doing business’ in California with annual global gross receipts of $100 million. The law requires companies to disclose on their website their policies and efforts to combat the use of slave labor or trafficked humans in their supply chains…” Read on»
If a company meets requirements, it “must post a conspicuous and easily understood link on its website to disclosure statement that sets forth to what extent, if any that retail seller or manufacturer:
- Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery;
- Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains;
- Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business;
- Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking; and
- Provides company employees and managers, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks with the supply chains of products…” Read on»
– Compliance Deadline Looms For New Transparency in Supply Chains Act (Sheppard Mullin):
“An estimated 3,200 companies, or approximately 3.2 percent of the companies doing business in California … are subject to the Act.
A company could comply with the Act by simply disclosing that it has no policy regarding, and does not monitor, labor conditions involved in the production of its products or the materials incorporated in its products. This response, however, may have a negative public relations consequence with cost far greater then implementing a policy and internal controls…”” Read on»
“Note that the Act’s disclosure requirement does not take effect until January 1, 2012. The Act provides that the exclusive remedy for a violation is a suit for injunctive relief brought by the California Attorney General. In order to provide the Attorney General with the information needed to enforce the Act, the Franchise Tax Board is required to provide a list of retail sellers and manufacturers subject to the Act. The list is to be based on tax returns for taxable years beginning on or after January 1, 2011…” Read on»
See full text copy of The California Transparency in Supply Chains Act of 2010 (SB 657).