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What is the California Transparency in Supply Chains Act?

The California Transparency in Supply Chains Act (SB 657) requires certain companies to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. This blog post will provide an overview of the Act, including its key requirements and implications for companies doing business in California.

The California Transparency in Supply Chains Act (SB 657) requires certain companies to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. This blog post will provide an overview of the Act, including its key requirements and implications for companies doing business in California.

The California Transparency in Supply Chains Act was passed by the state legislature in 2010 and took effect on January 1, 2012. The Act applies to all businesses that sell or lease tangible goods, wares, merchandise, food, or services in California. Businesses that meet any one of the following thresholds are subject to the law:

a. Have gross annual revenues exceeding $100 million;

b. Have been convicted of a violation of slavery or human trafficking laws within the past five years; or

c. Have a contract for the sale of goods, wares, merchandise, food, or services worth more than $100 million with any state agency or department.

The law requires covered companies to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains by posting a link on their homepage titled “California Supply Chain Transparency.” The link must lead to a page that contains a description of the company’s efforts to address slavery and human trafficking in its supply chain, including but not limited to:

a. Certification and verification procedures;

b. Audits of suppliers;

c. Training programs;

d. Accountability standards and procedures for employees and contractors;

e. The company’s responses to verified incidents of slavery or human trafficking in its supply chain.

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f. Whether the company maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and human trafficking.

Companies that fail to comply with the law may be subject to civil penalties of up to $2,500 per violation. In addition, any person who knowingly manufactures or sells goods, wares, merchandise, food, services, or materials that are city-manufactured pursuant to this division shall be guilty of an infraction punishable by a fine not exceeding five hundred dollars ($500). Misdemeanor penalties may also apply for subsequent violations.

The California Transparency in Supply Chains Act is a groundbreaking law that requires companies doing business in California to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. The act has far-reaching implications for companies doing business in the state, and failure to comply can result in significant penalties. For more information on how your company can comply with the Act, please contact us today.

Learn more about how EmpoweredESG can help your organization stay complaint with the California Transparency in Supply Chains Act.

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