STR RS Helps with California Transparency in Supply Chains Act Compliance

Specialized Technology Resources Responsible Sourcing has introduced a new program, “Act Now,” to help companies comply with the California Transparency in Supply Chains Act, which goes into effect January 1, 2012.

April 7, 2011

Specialized Technology Resources Responsible Sourcing (STR RS), a global provider of ethical sourcing consulting services, has introduced a new program, “Act Now,” to help companies comply with the California Transparency in Supply Chains Act, which goes into effect January 1, 2012. According to the Act, retail sellers and manufacturers with annual worldwide gross receipts over $100 million who do business in California must publicly disclose their efforts to eradicate slavery and human trafficking from their direct supply chains.

“A lot of companies are surprised that this new law applies to them.  California is the eighth largest economy in the world, so this legislation will affect over 3,000 national and international companies, regardless of where they are located,” said Rachelle Jackson, director of research & development for STR RS. “Companies will have to be prepared to disclose their efforts to eradicate slavery and human trafficking from their supply chains. This is a big job and companies that do business in California or sell to a buyer that the Act applies to need to begin preparing now.”

The “Act Now” program offers services to companies in the five areas mandated by the Act related to slavery and human trafficking. This includes:

  • Third Party Verification of Supply Chains – STR RS provides customized supply chain mapping and comprehensive risk services to identify existing risks related to human trafficking, slavery and other labor issues, such as child and migrant labor.
  • Independent and Unannounced Audits of Suppliers – With nearly 20 years of social auditing experience, STR RS can help companies ensure that suppliers comply with local and international laws on slavery and human trafficking, including assessments of supplier recruitment processes.
  • Supplier Certification of Legal Compliance – STR RS can help companies establish a certification mechanism for direct suppliers to ensure that components incorporated into a company’s product comply with country laws on slavery and human trafficking.
  • Internal Accountability Standards and Procedures for Employees and Contractors – To assess the robustness of internal policies and procedures related to human trafficking, STR RS conducts in-depth systems gap analysis and makes recommendations for compliance. STR RS also provides support in policy development.
  • Training on Human Trafficking and Slavery for Company Employees and Management With Direct Responsibility for Supply Chain Management – STR RS offers comprehensive training on the risk of forced labor and human trafficking in supply chains, which can be delivered in person or via the web in over 30 languages.

An estimated 12.3 million people are enslaved around the world today.  Human trafficking ranks second, after drug smuggling and tied with arms dealing, in organized crime activities.  There are anywhere between 600,000 and 800,000 victims trafficked through international borders every year, which does not include the millions trafficked domestically within their own countries.  As many as 18,000 men, women, and children are trafficked into the U.S. every year.

Although the Act does not require companies to engage in any efforts to eradicate slavery and human trafficking from their direct supply chain, it will certainly increase the pressure on companies to engage in such activities since advocacy groups, who are the major supporters of this Act, will likely be tracking public disclosures.

“Right now, California has not defined what penalties companies might face if they do not comply with the Act. However, it is clear that the consumer advocacy groups that pushed for this legislation will be watching closely and publicizing this information,” said Jackson. “Other states and the federal government are also looking at developing similar legislation.”

“The bottom line is that companies need to decide the scope and depth of their public disclosure.  They can either state publicly that they aren’t doing anything to address this issue or they can implement policies and systems to address this serious issue. The intent of the legislation is to encourage companies to act on a hidden issue that is now being put into the spotlight,” added Jackson.