California Transparency in Supply Chains Act: Big Food Manufacturers Beware
A new law in California – the California Transparency in Supply Chains Act – became effective on January 1, 2012 and it imposes new obligations on large food processors (and other manufacturers), even those who aren’t located in California. The Act requires any manufacturer that does business in California (including, perhaps, simply selling its products there) and has annual global sales of more than $100 million dollars to disclose its efforts to eradicate slavery and human trafficking from the company’s direct supply chain. The Act is likely to cover many large non-California food manufacturers, even if their activities or operations in California are relatively minor. If applicable to your company, you must disclose via your company website whether, and to what extent, you do each of the following:
- Verify product supply chains to evaluate and address risks of human trafficking and slavery;
- Conduct audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains;
- Require direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business;
- Maintain internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking; and
- Provide training on human trafficking and slavery to employees who have direct responsibility for supply chain management, particularly with respect to mitigating risks within the supply chain.
If you’re concerned about whether this new law applies to your food business, and what your specific obligations are, we urge you to contact legal counsel for assistance.