Human Trafficking and Slavery

In September 2010 the State of California passed a law requiring companies doing business in California that have annual gross global receipts in excess of $100 million to disclose on their website company efforts to ensure their supply chains do not support human trafficking or slavery. This legislation was an amendment to the state's Revenue and Tax Code. While the California legislators stated that they were targeting the legislation towards large commercial retailers, the bill will have unintended consequences on the electronics industry. California's human trafficking legislation has the potential to impose costly burdens as the entire supply chain will be questioned and audited regarding their social responsibility practices.

Although the law only applies to retailers and manufacturers doing business in California with gross worldwide receipts in excess of $100 million, the provisions of the law will have significant implications for the entire supply chain. The law states the disclosure requirements for companies. Companies must disclose to what extent, if any, they are doing the following:

  • All information on a company's efforts, if any, to eradicate slavery and human trafficking must be on the company's webpage. The link to this information must be easy to understand and conspicuously located on the homepage.
  • Performs verification of product supply chains to evaluate and address risks of human trafficking and slavery, including disclosing whether the verification was conducted by a third party.
  • Conducts audits of suppliers to evaluate supplier compliance with company standards for human trafficking and slavery, including disclosing if the audit was not independent and unannounced.
  • Requires direct suppliers to certify that materials incorporated into the product comply with human trafficking and slavery laws of the country or countries in which they are doing business.
  • Maintains internal accountability standards and procedures for employees and contractors failing to meet company standards regarding human trafficking and slavery.
  • Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within supply chains.

IPC held a webinar that provided further details on the law and requirements for the electronics industry. This presentation is available to IPC members free of charge.

Industry

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