The TakeAway: Pending California law seeks to end slavery and trafficking in business supply chains, part of a renewed broader trend of state-level action to address global sustainability and social justice issues.
When thinking about corporate reform toward sustainability and responsibility, we tend to concentrate on action at the federal or even global level—yet state and local governments play a profound role, too. Think of the selective purchasing laws passed by state and local governments in the 1980s barring contracts with companies doing business in South Africa, a strategy incorporated in the Massachusetts Burma Law in the 1990s (later overturned by the Supreme Court), and currently enacted by SweatFree Communities. Or consider the Regional Greenhouse Gas Initiative (RGGI) and the Western Climate Initiative (WCI) that fill the gap of federal inaction on climate by implementing regional carbon cap-and-trade policies. Borrowing from these playbooks, the California Senate and Assembly passed the California Transparency in Supply Chains Act of 2010 (SB 657) in July. Its goal: to eradicate slavery and human trafficking from business supply chains.
The proposed law now awaits Governor Arnold Schwarzenegger’s approval or veto by the end of September. It requires large retailers and manufacturers doing business in California to post on their websites what steps, if any, they’re taking to ensure their product supply chains don’t engage in slavery or trafficking. The proposed law applies to the 3,200-plus companies with gross receipts over $100 million that operate in the state. Among the specific disclosure requirements:
- Use outside verification firms to evaluate and address human trafficking and slavery risks in direct product supply chains;
- Conduct independent, unannounced audits of suppliers to ensure compliance with company standards on trafficking and slavery; and
- Monitor accountability for employees and contractors failing to meet company standards.
According to the bill’s author, California Senate President Pro Tem Darrell Steinberg (D-Sacramento), 12.3 million people work in some form of forced labor worldwide. Of those, an estimated 2.5 million have been forcibly sold into forced labor.
“If we can have dolphin-safe tuna, why can’t we have slavery-free goods?” asks actress Julia Ormond, founding president of the Alliance to Stop Slavery and End Trafficking (ASSET), one of a number of civil society organizations that support the Act, including the California Catholic Conference, California Consumer Federation, and Coalition to Abolish Slavery & Trafficking (CAST).
Christian Brothers Investment Services (CBIS), a socially responsible investing (SRI) firm for Catholic institutions, assembled 30-plus SRIs with over $40 billion in assets to sign a letter to Gov. Schwarzenegger urging him to enact the law.
“The requirements in SB 657 are very much in line with the recommendations of Professor John Ruggie, UN Special Representative for Business and Human Rights, which were adopted by the UN Human Rights Council in June 2008,” said Rev. David Schilling of the Interfaith Center on Corporate Responsibility (ICCR), of which many of the signatories are members.
Some businesses oppose the bill, claiming they don’t know what overseas vendors are doing, and gathering information will be difficult. The CBIS letter rebuts these claims, noting that “this type of information already is disclosed by many mainstream companies operating in California, including apparel companies, manufacturers, and retailers such as The Gap, Nike, Target, Wal-Mart, Disney, Levi’s, and Tiffany.” It then refers to assistance available from “a multitude of multi-stakeholder initiatives, including the Global Reporting Initiative and Forest Footprint Disclosure Project, as well as the Electronics Industry Citizenship Coalition and Responsible Cotton Network.”
“This country stands for freedom—we fought a Civil War to end slavery,” said Senator Steinberg. “Unfortunately, slavery is still right in front of us, and yet it is too often ignored. It’s too often ignored because we’re all busy people and we all go about our lives, and we often don’t think about who made what we buy,” he added. “[W]here supply chains … include slave labor and human trafficking—we must do something about it. This bill is a beginning.”
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We look forward to having companies ensure their supply chains are clean of slavery and trafficked persons, and we want to work with companies to get there. We host the Responsible Cotton Network website (which is a secure site for members). If you want to know more about us, please go to our new site, Responsible Sourcing Network http://www.sourcingnetwork.org
On September 30, 2010, The California Transparency in Supply Chains Act of 2010 (SB 657) was signed into law by Governor Arnold Schwarzenegger (see http://www.gov.ca.gov/press-release/16091/). Approximately 3,000 companies impacted by the law will be required to disclose starting January 1, 2012 the policies they have in place to ensure that their supply chains are free of slavery and trafficking, including the extent to which they use 3rd-party verification, conduct independent unannounced audits, and maintain internal accountability for employees and contractors that fail to meet company standards.
We applaud the bill’s author, California Senate President Pro Tem Darrell Steinberg, and also express appreciation to the Alliance to Stop Slavery and End Trafficking, for their work to protect human rights and encourage robust monitoring and reporting systems in global supply chains.
CBIS has worked for close to two decades with companies to develop effective monitoring and reporting systems in global supply chains. We welcome the opportunity to engage with companies in developing good practices that comply with this new law. To learn more, visit http://www.cbisonline.com/page.asp?id=1062
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