Candace Hodder, CLEAN project associate, recently attended a meeting of SoCal Ladies in CSR, an organization that brings women together to network and share expertise on important issues related to corporate social responsibility. This meeting focused on human trafficking, a labor compliance issue for the business community. Human trafficking is one of the most profitable criminal enterprises in the world generating $32 billion annually.
Beginning January 1, 2012 the California Transparency in Supply Chains Act will require California businesses with annual gross receipts exceeding $100 million dollars to disclose specific actions they’ve taken to eradicate slavery and human trafficking from their direct supply chains for tangible goods. Companies will be required to publish these actions, or lack thereof, on their corporate websites.
At first, this issue may seem one step removed from CLEAN’s core work, which focuses more heavily on environmental sustainability. But, in fact, this legislation relates directly to a trend CLEAN has been monitoring carefully for some time now – supply chain transparency.
The SoCal Ladies in CSR speakers, Kim Bick, Independent Counsel with Irell and Manella, and Denise Webster, Trading Law with Fresh & Easy, provided legal and retailer perspectives (respectively) on how this legislation will compel companies to engage directly with their suppliers to gather information on their recruitment practices. To preserve their reputation, proactive companies will also use this opportunity to preferentially select suppliers who show initiative in developing and implementing anti-trafficking and slavery policies.
For some companies, reaching out to direct suppliers to understand their policies to prevent human trafficking may be simply an extension of dialogue they have already been having on CSR-related issues. For others, this may be the first step taken to discuss responsibility with their suppliers. For all companies, this new legislation underscores the need to map their supply chains and communicate actively with their direct and indirect suppliers. It also provides strong indication that pressure is mounting for companies to be held accountable for the supply chains behind the products they create.