Are you able to set out your efforts to eradicate slavery and human trafficking from your supply chain? From 1st January you will need to be able to do that if you want to do business in California – that is when the California Transparency in Supply Chains Act of 2010 comes into force.
The bill was approved by governor Arnold Schwarzenegger in September last year, and covers all companies with worldwide sales of more than $100m and sales of $500,000+ in California. It specifically targets supply chains for tangible goods offered for sale. Provisions include:
* Verification of product supply chains to evaluate and address risks of human trafficking and slavery.
* Audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.
* Internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
* Training for employees on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
Already major US corporations like GE have statements on their web sites setting out their policy and action relating to this law.
While California has taken the lead with this legislation, it seems likely that other US states will follow.
David Schilling of the Interfaith Centre on Corporate Responsibility, says: “We believe that additional legislation, at both the state and federal levels, addressing these egregious human rights violations in company supply chains is inevitable.”
Much of the impact of this kind of legislation comes from the trickle-down effect. Companies that are affected directly then look to their suppliers to comply. So if you haven’t been asked the question yet, it’s probably only a matter of time.