Guide to the California Transparency in Supply Chains Act – SB 657

The California Transparency in Supply Chains Act, which was signed into law in October 2010 and went into effect in January 2012, requires certain companies to report on their specific actions to eradicate slavery and human trafficking in their supply chains.

Aimed at mid-size and large retailers and manufacturing companies with worldwide annual revenues of $100 million or more, the law’s chief goal is to ensure companies provide consumers with information that enables them to understand which ones manage their supply chains responsibly.

The law requires a company to disclose on its website its initiatives to eradicate slavery and human trafficking from its direct supply chain for the goods offered for sale.

 

HumanTrafficking

California Transparency in Supply Chains Act Requirements

A company must disclose to what extent it:

  • Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery;
  • Conducts audits of suppliers;
  • Requires direct supplies to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the countries in which they are doing business;
  • Maintains accountability standards and procedures for employees or contractors that fail to meet company standards regarding slavery and human trafficking; and
  • Provides employees and management  training on slavery and human trafficking.

You can read about the full requirement here.

 

SB657

California Transparency in Supply Chains Act Frequently Asked Questions

 

Q1. I am not a U.S. person or company. Business is conducted very differently in my country. Why am I required to comply with the anti-human trafficking and slavery requirements?

U.S. companies are subject to strict laws and rules in the United States and other countries. They could be held responsible if their business partners do not comply with all relevant requirements. These regulations are increasingly addressing the global impact of U.S. companies supply chains. As a member of a U.S. companies supply chain, you are expected to adhere to high standards of legal and ethical conduct at all times.

 

Q2. What should I do if I am uncertain whether an activity would violate the requirements?

You should contact the senior employee with whom you work at your customer as promptly as possible.

 

Q3. How can I learn more about your CA SB657 compliance requirements and my responsibilities?

The Fair Labor Association seeks to combine the efforts of business, civil society organizations, and colleges and universities to promote and protect workers’ rights and to improve working conditions globally through adherence to international standards. Find out more here.

 

Q4. What is Modern day Human Trafficking and Slavery?

The recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.
A victim need not be physically transported from one location to another in order for the crime to fall within these definitions.

 

Q5. Who is looking for violations in their supply chains and how?

A growing number of companies are integrating “corporate social responsibility” into their business models and embracing the responsibility to protect human rights, promote economic and social development, and look after the environment. Many have learned through experience that ethical practices contribute to sustainable profits and economic advantage, and benefit both investors and employees.

Globalization has led to increasingly complex supply chains. While challenging, supply chain monitoring enables companies to manage risk while protecting both their reputation and workers. Supply chain traceability is becoming a business necessity and initiatives like California’s Transparency in Supply Chains Act mean companies can no longer afford not to incorporate anti-trafficking measures into their corporate policies.

Companies do not have to reinvent the wheel in order to become good corporate citizens. Advocates have collaborated on a number of initiatives offering a wealth of proposals and ideas to help companies begin to implement policies to reduce the likelihood of modern slavery in their corporate supply chains.

For example, Verite, a U.S.-based NGO, developed a fair hiring toolkit that provides brands, suppliers, governments, investors, NGOs, and auditors with guidance to support the responsible recruitment and hiring of migrant workers in global supply chains. End Human Trafficking Now and UN.GIFT (the UN Global Initiative to Fight Human Trafficking) partnered with Microsoft to create an e-learning tool for business leaders, managers, and employees to identify the risks of human trafficking in their supply chains and point to actions they can take to address this risk. Generated by business, government, and civil society, the Luxor Implementation Guidelines facilitate integration of anti-trafficking values into corporate policies, while the multi-stakeholder driven Dhaka Principles outline measures for businesses to support migration with dignity.

Members of the socially responsible investment community – the Interfaith Center on Corporate Responsibility, Christian Brothers Investment Services, and Calvert Investments – cooperated on a guide to effective supply chain accountability to assist investors with implementation of the California Transparency in Supply Chains Act.

 

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