New California law combats human slavery
California law requires companies to make clear what they are doing to rid their foreign suppliers from the use forced labor or human trafficking.
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But this January also happens to be the month that a new law in California has come into effect, the first of its kind in the United States, and one that has the potential to do more than just raise awareness of human trafficking and actually make a real dent in the problem itself.
Human trafficking and forced labor are largely hidden problems, but they persist in just about every country in the world (including in the US) whether it's in cotton fields that feed our demand for clothing or in factories where our electronics are assembled. As consumers, we are all connected to human trafficking and slavery through the goods we use every day.
But a large hurdle in eradicating slavery is how disconnected those final products are from the conditions that produced them.
The supply chains that companies rely on to bring consumer goods to the market have become so fragmented that a grocery or apparel company has no idea – sometimes by design, sometimes inadvertently – that it is enabling the forced exploitation of workers. The retail clothing chain Gap was the target of activist campaigns and got a lot of bad press in the late 1990s for using exploitative child labor in factories that produced Gap clothing. But because stores like Gap outsource labor to factories and do not own them outright (and Gap was never the only one to take this route), they can shirk responsibility for what happens within those facilities.
A new rule in California seeks to put some of that responsibility back into the corporate offices of large businesses, so that it's no longer enough for a company to say it doesn't know the conditions in which its products are grown or manufactured. The California Transparency in Supply Chains Act, which was signed into law last year but only went into effect this month, requires companies to disclose, in a prominent place on their websites, what they are doing to combat forced labor and human trafficking in their supply chains.
The law applies to any manufacturing and retail company with $100 million or more in sales that does business in California; one estimate predicted the law would impact 3,200 global companies. To return to Gap as an example – in part because a report tailored to the California legislation, Effective Supply Chain Accountability, said Gap has exhibited several model practices in terms of cleaning up its supply chain – the company created a vendor code of conduct that meets core International Labor Organization standards, followed years later by a human rights policy, and has charted its level of influence over each stage of its supply chain.
Disclosing exactly those types of efforts is what is now required by the new law. A company must indicate the extent to which it audits suppliers for trafficking and slavery, verifies supply chains to evaluate and address risks of human trafficking and whether an independent third party is used for the verification process, maintains internal accountability standards, trains employees on this issue, and certifies that materials used in a product comply with human-trafficking laws in the countries where business is conducted.
There are still some fuzzy points: Certification, for example, has no standard definition. And there is no certifier for slavery-free, the way there is for organic or fair trade. But the law is in effect, companies have started publishing the information necessary to comply – and they have been advised not to make false or exaggerated claims that misrepresent what they're actually doing. There can be legal consequences.