CALIFORNIA ASSERTS ITS TRANSPARENCY IN SUPPLY CHAINS ACT

This week the California Department of Justice distributed letters to California manufacturers and retailers reminding them of the Transparency in Supply Chains Act which requires those it affects to disclose their efforts to remove human trafficking and modern slavery from their supply chains. Specifically the Transparency in Supply Chains Act applies to businesses operating in California with gross sales of $100 million or more. The letters accompany the California Transparency in Supply Chains Act Resource Guide issued this week by California Attorney General, Kamala Harris, which helps those same retailers and manufacturers determine whether the act applies to them or not. “The California letters generally request a report, within 30 days of the letter date, as to whether the receiving companies are complying with the Act, or, if they believe they are exempt, an explanation as to why.”

Those companies that do have to comply with the Act are expected to disclose on their websites their efforts to, for example, verify that their supply chains evaluate risks of human trafficking and slavery, and audit suppliers to determine their compliance with company standards for human trafficking and slavery. While these areonly two of the things these companies are required to disclose, the reality is that the compliance process is much more complex and thorough, which it should be. “The California law is likely a harbinger of things to come. Similar legislation has been proposed in New York, and other states are sure to follow.”

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