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California Transparency in Supply Chains Act


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.  It is estimated that the reporting requirement will impact about 3,200 companies headquartered in California or doing business in the state.

Specifically, 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.  A company must disclose to what extent it: (1) engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery; (2) conducts audits of suppliers; (3) 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; (4) maintains accountability standards and procedures for employees or contractors that fail to meet company standards regarding slavery and human trafficking; and (5) provides employees and management  training on slavery and human trafficking. 

 

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