There is yet another area of concern and probe that is fast catching up the Corporate Social Responsibility; in fact, it is overtaking CSR. This is clear from California Transparency in Supply Chain Act, as will be operative from 1 January 2012. This Act when in force would add another dimension to the accountability of large retailers and manufacturers trading with the US state of California. This will require large retailers and manufacturers doing business in the US state to disclose their efforts to eradicate slavery and human trafficking from their product supply chains. Companies impacted by the legislation will include apparel and footwear retailers and manufacturers with annual worldwide gross receipts of more than US$100m - who must make the required disclosures on the home page of their corporate websites.

An estimated 3,200 companies worldwide will be affected by the new law, which must address five areas: third-party supply chain verification, independent and unannounced supplier audits, supplier certification of legal compliance, internal accountability standards, and staff training on forced labour and human trafficking. "The California law will have a wide reach," trade expert Brenda Jacobs, an attorney at Sidley Austin LLP, told.

Why Supply Chain Transparency Act?

Textile and apparel trade union leaders and struggling workers - especially poor migrants - in key exporting nations were among last year's victims of killings, beatings, arrests and dismissals, a global survey said recently.

"Around the world, workers trying to claim basic rights to decent work in many countries are being met with sackings, violence and in extreme cases murder by governments, employers and businesses," said Sharan Burrows, General Secretary of the International Trade Union Confederation (ITUC). The largest number of killings of apparel unionists (6), and breaches of their core labour rights, took place in Bangladesh, said the ITUC's annual survey of violations of trade union rights in the world. It also highlights that protests at garment factories in Bangladesh over minimum wage demands were widespread throughout the year, and were met with police brutality, with hundreds injured in the clashes. Stephen Benedict, ITUC Director of Human and Trade Union Rights, said the group has recently written to authorities in Bangladesh expressing its growing concerns over continued abuses of apparel workers and demonstrators.

Similarly the survey, carried out in 143 countries, documents that in Pakistan, Mustansar Randhawa, the founder of the Labour Quami Movement for loom workers, was shot dead in his office. And in Cambodia, Ath Thorn, President of the country's apparel union CCAWDU, received death threats last August before nationwide strikes were held. Moreover, hundreds of textile migrant workers from South Asia, with vast majority of women, were stripped of their passports and subjected to conditions amounting to slavery in an apparel plant in Jordan, with two reportedly "overworked to death." 90 trade unionists were murdered worldwide in 2012, including 49 in Colombia. In addition, 75 received death threats, at least 2,500 were arrested and 5,000 sacked because of union activities, said the ITUC.

In yet another case, garment, footwear and cotton producers continue to be among the worst offenders when it comes to the use of forced and child labour, according to three new reports just published by the US Labor Department. The findings feature in the 'List of Goods Produced by Child or Forced Labor' which the government agency was required to produce under the Trafficking Victims Protection Reauthorization Act of 2005.


The department looked at a total of 128 goods from 70 countries, and found that 16 countries produced cotton with child or forced labour. These include Argentina, Azerbaijan, Benin, Brazil, Burkina Faso, China, Egypt, Kazakhstan, Kyrgyz Republic, Pakistan, Paraguay, Tajikistan, Turkey, Turkmenistan, Uzbekistan and Zambia. It also singled out India and Nepal for using forced and child labour in the production of embroidered textiles, and Bangladesh, China and North Korea for textiles. Six countries (Argentina, China, India, Jordan, Malaysia and Thailand) were claimed guilty of violations in garments, and five (Bangladesh, Brazil, China, India and Indonesia) in footwear. We hope these reports will assist governments around the world in taking effective next steps to eliminate the exploitation of children, explains US Secretary of Labor, Hilda Solis. 


The two other reports released recently were the Worst Forms of Child Labor report that provides information on the efforts of certain US trade beneficiary countries to eliminate the worst forms of child labour. And the List of Products Produced by Forced or Indentured Child Labor under Executive Order 13126 of 1999. But officials also warn the latest data relates to the period immediately preceding the global economic crisis and could now be higher than the figures suggest.


Since individuals who become entrapped in child labour and forced labour are typically the poorest and most vulnerable members of society, it is likely that their numbers have increased during the crisis and in countries where the recovery has been weak.


But then, what is the way out?


California Transparency in Supply Chain Act


The State of California in the US advertises itself as the tenth largest economy in the world - so as well as the 3,200 retailers and manufacturers who will be required to post or link the disclosure, the reach into the consumer goods supply chain will be very significant.  "That is because retailers will be seeking from their suppliers further and specific assurances with respect to slavery and human trafficking, including certifications, as well as the right to verify those assurances and certifications so that they can truthfully state that yes, they take each of the steps about which disclosure is required," Jacobs explains. As a result, the new law has a cascading effect that goes far beyond California, to the global supply chain.


"This is not just about writing a statement for a website; it is also about re-writing contracts between buyers and vendors to impose greater responsibilities on the supply chain and possibly more unannounced inspections, including perhaps more work for third party inspectors," Jacobs adds.



 

Five points of disclosure


The California Transparency in Supply Chains Act requires each covered company to disclose, at a minimum, whether and to what extent it does five things:

  • Engages in verification of product supply chains to evaluate and address the risks of slavery and human trafficking - and if so, whether any verification is conducted by a third party; 
  • Conducts audits of suppliers to evaluate their compliance with the company's standards regarding slavery and human trafficking - and if so, whether those audits are independent and unannounced;
  • Requires direct suppliers to certify that the materials incorporated into the product comply with the laws regarding slavery and human trafficking in the country or countries in which they do business;
  • Maintains internal accountability standards and procedures for employees or contractors or suppliers that fail to meet company standards with respect to slavery and human trafficking; and
  • Provides training on slavery and human trafficking for employees and management who have direct responsibility for supply chain management, and training on mitigating the risks within the supply chain.

While many companies will already doing this, the new law puts them under even greater pressure to document it. And given the length and depth of the apparel supply chain, companies who are subject to the California law should already be working on what the statements or links on their websites will say - and ensuring that agreements with suppliers are consistent with those planned statements. 


Jacobs notes that the only "punishment" for failing to post a statement online is an injunction by the California attorney general compelling a company to make the disclosure. "But the public relations consequences are what is really at issue here," she adds. "No company wants to post or link a disclosure that says it is not addressing the possibility of slavery and human trafficking in its supply chain. "Nor does any company want to publicly say it is doing something if that statement can be contradicted."  It's also fair to assume that NGOs will be closely monitoring websites/links and publicising the fact that some companies disclose what steps they are not taking or that they are not using third party validators.


With this, a good beginning has been made to stop or at least reduce brutality inflicted on the less fortunate workers in textile and garment industry, who have been subjected to all kinds of injustice and repression forcing the workers to live at sub-human level in a world that prides itself of all conceivable noble and even honest practices.


Originally Published in The Stitch Times, October-2011