Attorney General Kamala D. Harris Issues Guide for Companies to Comply with the California Transparency in Supply Chains Act
SACRAMENTO— Attorney General Kamala D. Harris today issued a resource guide to assist companies that do business in California with disclosing their efforts to prevent and root out human trafficking and slavery in their product supply chains, as required by law. The guide, The California Transparency in Supply Chains Act: A Resource Guide, provides businesses with recommendations to develop and refine their disclosures to consumers.
“Human trafficking profits from exploiting the most vulnerable in our society and often extends to factories, farms and construction sites,” Attorney General Harris said. “This guide will help companies disclose efforts to eradicate human trafficking from their supply chains and empower consumers to make informed purchasing decisions.”
The California Transparency in Supply Chains Act (D-Steinberg, 2010) (the Act) requires large retailers and manufacturers that do business in California to disclose on their websites their efforts to eradicate slavery and human trafficking from their direct supply chain for tangible goods offered for sale. The Act applies to companies doing business in California with annual worldwide gross receipts totaling over $100 million and that identify themselves as a retail seller or manufacturer on its California tax return.
The Resource Guide explains each of the Act’s requirements, and provides model disclosures inspired by actual company website disclosures. These model disclosures aim to help businesses develop their own effective disclosures—ones that not only comply with the Act, but also more fully educate the public about the integrity of their supply chains.
Specifically, the new guide will assist companies in addressing the Act’s five required disclosure categories:
1. Verification: Disclose to what extent, if any, that the retail seller or manufacturer engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery.
2. Audits: Disclose to what extent, if any, the retail seller or manufacturer conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.
3. Certification: Disclose to what extent, if any, the retail seller or manufacturer requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.
4. Internal Accountability: Disclose to what extent, if any, the retail seller or manufacturer maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
5. Training: Disclose to what extent, if any, that the retail seller or manufacturer provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
The Act does not impose any obligation on businesses to implement new measures. All disclosures must be made available on the company’s website and be accessible by a conspicuous link on the homepage. If a company subject to the law does not have a website, it must provide written disclosures within 30 days of receiving a request for the information.
In 2012, Attorney General Harris released a report, The State of Human Trafficking in California, which outlined the growing prevalence of human trafficking and emphasized that the crime is routinely “hidden in plain sight,” with victims often going unrecognized and consumers across the United States—including those in California—routinely make purchasing and business choices that “inadvertently promote the crime of trafficking.” Developing model disclosures will empower California consumers to join the fight against human trafficking, and enable companies to highlight their efforts to eradicate trafficking and slavery from their supply chains and improve the quality of the goods they bring to market.