In April and May, STR Responsible Sourcing held Multi-stakeholder Roundtables in Los Angeles and New York to discuss the implementation of The California Transparency in Supply Chains Act. During the open dialogue sessions, multiple topics of discussion came up. Here are some of the highlights:
- The need for clarification of the Act
- Enforcement of the Act
- Possibility of score cards issued by advocacy groups based on the disclosure information
Clarification of the Act
Several important questions came up with regards to the implementation of public disclosure:
- What exactly is compliance with the Act?
- How does the information have to be posted on the website in order for it to be conspicuous?
- Does the information have to be organized according to the exact five disclosure points listed in the Act?
- What are the definitions of “slavery”, “human trafficking”, “direct supply chain”, “verification”, “certification”, “contractor”, etc.?
- Will the Attorney General (AG) issue a best practice guide?
- Will the AG work with companies to achieve proper public disclosure, or will she make an example?
- Does the supply chain include licensees of your brand?
- “Tangible goods for sale” worldwide or only those sold in California?
The need for more guidance from the AG is apparent. According to recent information, the AG’s office is interested in brands taking a leadership position and sharing how they plan to disclose. Together with the AG, an exemplary disclosure can be developed by a brand and shared with others in order to facilitate compliance with the Act. As part of her outreach efforts, the AG is planning to hold a multi-stakeholder roundtable in the fall, if the budget permits. This roundtable will hopefully lead to guidance on how to disclose the required information.
Enforcement of the Act
According to the Act, the exclusive remedy is injunctive relief by the AG. The AG will be issued a list of all the retailers and manufacturers who should be abiding by the Act, so detection of those companies not complying with the Act should be easy.
The question came up whether non-governmental organizations (NGOs) would become monitors or even enforcers of the Act. This is not the intention of the Act, but one should certainly expect NGO reaction to disclosures.
Possibility of score cards issued by advocacy groups based on the disclosure information
It was not the intent of the Act to place monitoring activities in the hands of NGOs. However, score cards evaluating company activities in the supply chain already exist. See the Free2Work application introduced by the Not For Sale Campaign and the International Labor Rights Forum. And the information provided publicly by companies complying with the Act next year will no doubt provide valuable material for this score card and others.
It was brought up, that NGOs should convene to come up with a common, standardized vision of a score card. Perhaps the private sector initiative focused on human trafficking introduced in October 2010 – BCAT, the Business Coalition Against Human Trafficking – in conjunction with other NGOs could take up this idea.
Stay tuned for more highlights from our Roundtable discussions. For more information on how to respond to SB 657, please see STR Responsible Sourcing’s California Transparency in Supply Chains Act page.