The California Attorney General has released a new resource guide that aims to help companies comply with the California Transparency in Supply Chains Act.
Enacted in 2010, the Act requires large retailers and manufacturers doing business in California to disclose on their websites their efforts to stop human trafficking and slavery within their supply chains. The law applies to companies with annual worldwide gross receipts totaling more than $100 million and that identify themselves on a California tax return as a retail seller or manufacturer.
The Resource Guide explains the Act’s requirements, what should be included in website disclosures, and how the information should be formatted. Example statements are provided for each of the five mandatory disclosure categories
- internal accountability
There are also examples of how NOT to write a proper disclosure, such as this:
As a part of our extensive vetting process, we require each vendor to adhere to our Code of Conduct. Additionally, our unannounced, third-party audits provide current data on sourcing factories’ working conditions, including our company’s standards for trafficking and slavery in supply chains, compliance with local and international labor laws, and management policies. The audits are conducted quarterly. Further, we provide company employees and management who have direct responsibility for supply chain management training on human trafficking and slavery.
Most companies would see nothing wrong with using the above disclosure on their website. Yet, according to the Resource Guide, this disclosure is insufficient for a number of reasons. For instance, only two of the five mandatory categories are covered; there is nothing about the company’s verification, certification, or internal accountability practices. Also, although training is mentioned, there is no explanation as to the extent of their training activities.
Learn how to avoid these types of mistakes with The California Transparency in Supply Chains Act: A Resource Guide. It’s worth a read even if the law doesn’t apply to your business. There is increasing demand among many consumers (not just those in California) for this type of information. According to the Resource Guide, “a recent survey of western consumers revealed that people would be willing to pay extra for products they could identify as being made under good working conditions.”
The California Transparency in Supply Chains Act: A Resource Guide
By Michelle Kelley