Anti-human trafficking policy mandate moves out of committee

By CMTA Staff

Capitol Update, July 2, 2010

The Assembly Judiciary Committee passed, 7 to 2, SB 657 (Darrel Steinberg D-Sacramento) which mandates that manufacturers and retailers develop and disclose their company’s policy to eradicate slavery and human trafficking from their supply chains.

Although the bill is portrayed by the sponsors as a consumer protection measure, the statute sets forth a set of minimum standards that all companies must address.  If this bill is signed into law, companies will need to disclose at a minimum what they are doing and not doing in the following areas:

  1. Engaging in a third-party verification of product supply chains to evaluate and address risks of human trafficking and slavery;
  2. Conducting independent, unannounced audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains;
  3. Requiring suppliers to certify that raw 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. Maintaining internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking; and
  5. Providing company employees, including management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

In addition, the bill contains an exclusive remedy by the Attorney General for injunctive relief if a company fails to disclose their policies on their websites.

This type of mandate is unprecedented and may encourage future mandates that increase businesses liability.  California businesses are likely to be held responsible for the actions of suppliers whom they have no contractual relationship or influence over, depending on the depth of their supply chain.

California’s business community opposes slavery and the abusive treatment of workers. However, SB 657 puts businesses in the role of policing federal and state laws regarding slavery and human trafficking.  CMTA believes that businesses have already stepped up to address the myriad of challenges in this area and that ongoing international dialogues should continue on the role businesses should play.

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