Short-term: support populations most effected by
trafficking trafficking
Long-term: change societal norms and create
sustainable options that increase dignified work and
address root causes of trafficking.
“Its impossible to get
dressed, drive to work, talk
on the phone, or eat a
meal without touching
products tainted by forced
labour.(1)”
(1) US State Department, Trafficking in Persons Report,
2010
US Department of
Labour lists over 120
different goods
produced using child or
forced labour globally in
the agriculture,
manufacturing, and
quarried industries.
SB 657:
CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT
SB 657 Highlights(2):
• Effects “retail sellers” and “manufacturers”
• Company must be doing business in California and have $100 million or
more in annual worldwide gross receipts
• Mandates effected companies disclose what they are doing to address
trafficking in their supply chain.
• Disclosure must be “conspicuous” and “easily understood”
• Law only requires disclosure. It does not necessitate action or policy be
company.
(2) Senate Bill 657 accessed: http://leginfo.ca.gov/pub/09-10/bill/sen/sb_06510700/sb_657_bill_20100930_chaptered.html
WHAT COMPANIES ARE EFFECTED?
An estimated 3500-4500 businesses are subject to the Act, based on the following
interpretation of the legal requirements(3):
• The company is organized or commercially domiciled in California;
• Sales of the company in California exceed the lesser of $500,000 or 25% of
total sales;
• Real property and tangible personal property of the company in California
exceed the lesser of $50,000 or 25% of the taxpayer’s total real property and
tangible property; or
• The amount paid by the company in California for compensation exceeds the
lesser of $50,000 or 25% of total compensation paid.
(3) K&L Gates, California Transparency in Supply Chains Act – First 90 Days
FIVE AREAS THE LAW COVERS
Companies must disclose whether they…
• Engage in verification of product supply chains to evaluate and address
risks of human trafficking and slavery.
• Conduct audits of suppliers to evaluate supplier compliance with
company standards
• Require direct suppliers to certify that they are compliant with relevant
labour laws
• Maintain internal accountability standards
• Training on human trafficking and slavery provided to management
VERIFICATION:
Required:
• Discloses information on the verification of product supply chains
• The use of a third party to verify product supply chains
Recommended:
• conducts a tracing project to identify locations of unknown producers
• publishes a public list of suppliers, including country, name and
addresses
• States how many suppliers the brand has traced
> > “Traced” defined as knowledge of suppliers name and locations
AUDIT
Required:
• Discloses information on monitoring
• Identifies if monitoring is independent, third party, and unannounced
Recommended:
• Disclose auditing information, including suppliers monitored and frequency
• Discloses statistics on unannounced visits or off-site worker interviews
conducted
• The company discloses information on the use of labor brokers
• The company shares broad monitoring results publically
CERTIFICATION
Required:
• Whether materials incorporated into company products are certified (in
compliance with country laws in which they are doing business) by direct
suppliers
Recommended:
• Disclose direct suppliers' relationships at inputs or raw materials suppliers
• Use of a third party certification system that certifies suppliers down to the
raw materials level
INTERNAL ACCOUNTABILITY
Required:
• Information on internal accountability standards and procedures
Recommended:
• Code of Conduct that addresses labor standards
• Includes standards (Ex. Vendor Code of Conduct) in supplier contracts
• Preferred supplier program (to promote suppliers that demonstrate better and
improved labor conditions)
• Functioning grievance mechanism that includes investigation and efforts to
address grievance.
TRAINING
Required:
• Whether employees and management are trained on human trafficking and
risk mitigation in supply chains
Recommended:
• The company discloses information on financial support towards training.
SB 657 & BEYOND
Status of SB 657
• Does not mandate companies do anything. The first step is transparency.
• 70-80% of companies are believed to not to be complaint with SB 657.
• Similar legislation has been introduced in the UK and the US at the federal
level.
Beyond
• SB 657 creates an opportunity to engage in a broader sourcing
conversations with companies.
• Labor issues now on the agenda of many companies, previously unengaged
in them.
• SB 657 is only the first of potentially other similar legislative efforts.