BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 657
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          Date of Hearing:  June 29, 2010

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mike Feuer, Chair
                   SB 657 (Steinberg) - As Amended:  June 23, 2010

           SENATE VOTE :  24-13
           
          SUBJECT  :  THE CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT OF  
          2010:  NEW INFORMATION TO AID CONSUMER PURCHASING DECISIONS

           KEY ISSUE  :  SHOULD CONSUMERS BE EMPOWERED WITH EASILY ACCESSIBLE  
          INFORMATION ABOUT THE EFFORTS, IF ANY, THAT THE STATE'S LARGEST  
          BUSINESSES (LESS THAN 5% OF ALL BUSINESSES IN CALIFORNIA) ARE  
          VOLUNTARILY UNDERTAKING TO ELIMINATE SLAVERY AND TRAFFICKING IN  
          THEIR PRODUCT SUPPLY CHAINS?

           FISCAL EFFECT  :  As currently in print this bill is keyed  
          non-fiscal.

                                      SYNOPSIS

          This consumer empowerment measure bill, entitled the California  
          Transparency in Supply Chains Act of 2010, is part of a  
          continuing effort by the author to fight the continuing  
          international tragedy of slavery and human trafficking.  This  
          measure seeks to provide consumers with unprecedented new and  
          easily accessible information provided by the state's largest  
          retailers and manufacturers about these businesses' efforts to  
          eradicate slavery and human trafficking that could inadvertently  
          be in their product supply chains.  Specifically, the bill  
          requires a relatively small number of the state's retail sellers  
          and manufacturers with the largest economic "fire power" to  
          disclose to consumers whatever efforts they have undertaken,  
          including none, to eradicate slavery and human trafficking from  
          their supply chains.  This disclosure shall be posted on the  
          specified business' web site, and shall be made available in  
          writing upon request to assist consumers in their purchasing  
          decisions.

          In October 2007, the California Department of Justice released a  
          report entitled "Human Trafficking in California" which  
          contained a comprehensive list of recommendations to combat  
          human trafficking.  The report stated, "California bears a moral  
          responsibility to exert leadership, through government and  








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          business purchasing practices, to implement and monitor codes of  
          conduct assuring fair and human labor practices throughout their  
          supply chain."  This bill takes up this critical clarion call  
          for action by seeking to harness the substantial economic  
          leverage of California consumers to encourage the business  
          community to deter forced labor in their supply chains.  

          The bill is supported by a broad coalition of human rights, law  
          enforcement and employee rights organizations.  It is opposed by  
          a coalition of business trade organizations that includes the  
          California Chamber of Commerce, California Grocers Association,  
          California Manufacturers and Technology Association, California  
          Retailers Association, and TechAmerica.  Opponents argue that  
          the measure would "require companies to develop policies with  
          regard to its [sic] entire supply chain ? [these] policies would  
          need to address specific issues such as third-party verification  
          of product supply chain, independent unannounced audits and  
          certification of raw materials."  

          However the analysis notes that this is actually not the case.   
          To the contrary, the bill merely requires the specified large  
          business entities to make available to consumers information  
          about whatever these business'  voluntary  efforts are, including  
          none, to eradicate slavery and human trafficking that could  
          inadvertently be in their product supply chains, i.e, the bill  
          does not in fact require the specified large businesses to do  
          anything other than make available the facts about what if  
          anything they are doing to deter human trafficking and slavery  
          in their product supply chains.  The bill leaves it to consumers  
          to decide whether and how, if at all, they wish to use such  
          information in their purchasing decisions.   
           
          SUMMARY  :  Seeks to provide consumers with new and easily  
          accessible information made available by specified large  
          retailers and manufacturers about these businesses' voluntary  
          efforts, whatever they may be, to try to eradicate slavery and  
          human trafficking that could inadvertently be in their product  
          supply chains.  Specifically,  this bill  :  

          1)Makes various legislative findings, including that (a) slavery  
            and human trafficking are crimes that are often hidden from  
            view and are difficult to uncover and track; (b) consumers and  
            businesses are inadvertently promoting and sanctioning these  
            crimes through the purchase of goods and products that have  
            been tainted in the supply chain; (c) absent publicly  








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            available disclosures, consumers are at a disadvantage in  
            being able to distinguish companies on the merits of their  
            efforts to supply products free from the taint of slavery and  
            trafficking; and; (d) it is the policy of this state to ensure  
            large retailers and manufacturers provide consumers with  
            information regarding their efforts to eradicate slavery and  
            human trafficking from their supply chains, to educate  
            consumers on how to purchase goods produced by companies that  
            responsibly manage their supply chains, and, thereby, to  
            improve the lives of victims of slavery and human trafficking.

          2)Requires, after a one year "phase in" period, beginning  
            January 1, 2012 every retail seller and manufacturer doing  
            business in this state and having annual gross receipts that  
            exceed one hundred million dollars ($100,000,000) to disclose  
            its voluntary efforts, including none, to eradicate slavery  
            and human trafficking from its supply chain.  

          3)Requires this consumer disclosure to be posted on the retail  
            seller's or manufacturer's web site, and for it also to be  
            available in writing upon request by a consumer.  In the event  
            the retail seller or manufacturer does not have a web site,  
            consumers must be provided the written disclosure within 30  
            days that the business receives the consumer request.

          4)Requires the disclosure, at a minimum, to disclose to what  
            extent, including none, that the retail seller or manufacturer  
            does each of the following:  (a) engages in third-party  
            verification of product supply chains to evaluate and address  
            risks of human trafficking and slavery; (b) conducts  
            independent, unannounced audits of suppliers to evaluate  
            supplier compliance with company standards for trafficking and  
            slavery in supply chains; (c) requires suppliers to certify  
            that raw 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; (d)  
            maintains internal accountability standards and procedures for  
            employees or contractors failing to meet company standards  
            regarding slavery and trafficking; and (d) provides company  
            employees and management training on human trafficking and  
            slavery, particularly with respect to mitigating risks within  
            the supply chains of products.

          5)Provides that the exclusive remedy for a violation of this  
            measure shall be an action brought by the Attorney General for  








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            injunctive relief, and that nothing in the bill shall limit  
            remedies available for a violation of any other state or  
            federal law.

          6)Provides that the bill's provisions shall not take effect  
            until January 1, 2012, to provide the designated retail  
            sellers and manufacturers substantial time to comply with the  
            bill's disclosure requirements.

           EXISTING LAW  :

          1)Establishes, under federal law, the crimes of kidnapping in  
            interstate or foreign commerce, peonage, slavery and  
            trafficking in persons, and provides for criminal and civil  
            penalties.  (18 U.S.C. Secs. 1201, 1581-1595.)

          2)Provides, under the Victims of Trafficking and Violence  
            Protection Act of 2000, the crime of human trafficking, and  
            delineates various federal actions to combat trafficking,  
            punish perpetrators, and provide services to victims of  
            trafficking.  (22 U.S.C. Sec. 7100 et seq.)

          3)Makes human trafficking a crime under California law.  (Penal  
            Code Section 236.1.)

          4)Allows, under the California Trafficking Victims Protection  
            Act, a victim of human trafficking to bring a civil action for  
            actual damages, compensatory damages, punitive damages,  
            injunctive relief, or any other appropriate relief.  (Civil  
            Code Section 52.5.)

           COMMENTS  :  This important consumer empowerment bill is part of a  
          continuing effort by the author to fight the continuing  
          international tragedy of slavery and human trafficking.  Through  
          this measure the author seeks to harness the immense economic  
          power of the purchasing decisions of California consumers to  
          help tackle this complex and challenging problem.  The bill  
          simply seeks to ensure interested California consumers have  
          reasonable access to basic information to aid their purchasing  
          decisions.  It does so by requiring designated major retailers  
          and manufacturers to disclose their efforts to eradicate slavery  
          and human trafficking that could inadvertently be in their  
          product supply chains.  The disclosure must be conspicuously  
          posted on a large retailer's or manufacturer's web site, and  
          also be made available in writing upon request.  








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          In support of the measure, the author states:

               The purpose of this bill is simple:  to help consumers  
               better distinguish companies based on the merits of  
               efforts to manufacture and supply products that are  
               free from the taint of slavery and trafficking.  With  
               better information, consumers will be more equipped to  
               help eradicate trafficking and slavery from product  
               supply chains through their purchasing decisions.

           Backdrop on the Scourge of Human Trafficking  :  As shocking as it  
          is to note in the 21st century, human trafficking involves the  
          modern-day recruitment, transportation, or sale of people for  
          forced labor.  Through violence, threats, and coercion, these  
          victims are forced to work in, among other things, the sex  
          trade, domestic labor, factories, hotels, and agriculture.   
          According to the January 2005 U.S. Department of State's Human  
          Smuggling and Trafficking Center report, "Fact Sheet:  
          Distinctions Between Human Smuggling and Human Trafficking,"  
          there are an estimated 600,000-800,000 men, women, and children  
          trafficked across international borders each year.  Of these,  
          approximately 80% are women and girls, and perhaps most  
          disturbing of all, up to 50% of the victims of human trafficking  
          are children.

          Human trafficking and forced labor have become alarmingly  
          prevalent with the rise of globalization.  It is estimated that  
          nearly 12.3 million people - equal to nearly one-third of  
          California's total population - are working in some form of  
          forced labor worldwide.  Trafficked individuals are moved from  
          one location to another, typically by coercion, deception, or  
          fraud, and find themselves subject to exploitation.  Those who  
          ultimately arrive in forced labor conditions have not offered  
          themselves up for work voluntarily and are forced to work under  
          menace of penalty and injury.  

          The U.S. Department of State issued a comprehensive report on  
          human trafficking earlier this year which crystallized the  
          impact of human trafficking and slavery in consumers' everyday  
          lives, and diagnosed strategies to combat the problem.  The  
          report states:

               "With the majority of modern slaves in agriculture and  
               mining around the world - and forced labor prevalent in  








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               cotton, chocolate, steel, rubber, tin, tungsten, coltan,  
               sugar, and seafood - it is impossible to get dressed, drive  
               to work, talk on the phone, or eat a meal without touching  
               products tainted by forced labor? Even reputable companies  
               can profit from abuse when they do not protect their supply  
               chain - whether at the level of raw materials, parts, or  
               final products - from modern slavery.

               Consumer spending and corporate investment in business are  
               leverage points that can turn around a system that has for  
               too long allowed traffickers and economies to operate with  
               impunity. There is an increasing push for consumer  
               transparency, certification, and more rigorous regulation?  
               Research suggests companies investing in fair labor  
               practices and labeling their products accordingly improve  
               conditions on the ground and drive up the demand for, and  
               price of, their products."

          The following table provides estimates of the national and  
          statewide distribution of known cases of forced labor across  
          various forms of exploitation:


           ----------------------------------------------------------- 
          |   Profile of Trafficking Cases by Type of Exploitation,   |
          |                     Using Percentages                     |
           ----------------------------------------------------------- 
          |-----------------------+----------------+------------------|
          |                       |      U.S.      |       CA.        |
          |-----------------------+----------------+------------------|
          |     Prostitution      |      46.4      |       47.4       |
          |-----------------------+----------------+------------------|
          |  Domestic Servitude   |      27.2      |       33.3       |
          |-----------------------+----------------+------------------|
          |      Agriculture      |      10.4      |       1.8        |
          |-----------------------+----------------+------------------|
          |      Sweat Shop       |      4.8       |       5.3        |
          |-----------------------+----------------+------------------|
          |Sexual Exploitation of |                |                  |
          |       Children        |      3.1       |       1.8        |
          |-----------------------+----------------+------------------|
          |   Mail Order Bride    |       .8       |       5.3        |
          |-----------------------+----------------+------------------|
          |         Other         |      6.9       |5.3               |
           ----------------------------------------------------------- 








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          California regrettably has been reported to be one of the top  
          four destination states for trafficking victims in the United  
          States.  Over 500 victims from 18 countries were identified in  
          California between 1998 and 2003.  

          The following table contains estimates of the statewide  
          distribution of victims across various forms of exploitation as  
          well as the share of victims by gender and age group according  
          to the Human Rights Center at UC Berkeley and the California  
          Alliance to Combat Trafficking and Slavery Task Force:


           ----------------------------------------------------------------- 
          |Trafficking Victims by Type of Exploitation in California, Using |
          |                           Percentages                           |
           ----------------------------------------------------------------- 
          |----------------+----------------+----------------+----------------|
          |     Source     |      UCB       |     CACTST     |     Median     |
          |----------------+----------------+----------------+----------------|
          |Sex Trafficking |      44.6      |       46       |      45.3      |
          |----------------+----------------+----------------+----------------|
          |    Domestic    |      16.8      |       31       |      23.9      |
          |   Servitude    |                |                |                |
          |----------------+----------------+----------------+----------------|
          |  Agriculture   |       .4       |       9        |      4.7       |
          |----------------+----------------+----------------+----------------|
          |   Sweat Shop   |      25.8      |       5        |      15.4      |
          |----------------+----------------+----------------+----------------|
          |     Other      |      12.5      |       9        |      21.5      |
          |----------------+----------------+----------------+----------------|
          |     Women      |       74       |                |                |
          |----------------+----------------+----------------+----------------|
          |    Children    |       16       |                |                |
          |----------------+----------------+----------------+----------------|
          |      Men       |       10       |                |                |
           ------------------------------------------------------------------- 
            
          Trafficking victims in California reportedly tend to be  
          concentrated in three "industries":  prostitution, sweat shops,  
          and domestic service.  A 2005 analysis of over 500 victims found  
          that victims in these three sectors accounted for over 80% of  
          victims identified between 1998 and 2003.  Many more are  
          believed to go unnoticed.









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           California's Past Efforts to Combat Human Trafficking and  
          Slavery - the State's "ACTS" Task Force  :  In 2005, the  
          Legislature enacted the California Trafficking Victims  
          Protection Act (AB 22 (Lieber), Ch. 240, Statutes of 2005).   
          This act established civil and criminal penalties for human  
          trafficking and allowed for forfeiture of assets derived from  
          human trafficking.  The measure, along with SB 180 (Kuehl, Ch.  
          239, Statutes of 2005) also established the California Alliance  
          to Combat Trafficking and Slavery (California ACTS) Task Force.   
          The Task Force was charged with conducting a thorough review of  
          California's response to human trafficking and to report its  
          findings to the Governor, Attorney General, and the Legislature.  
           

          In October 2007, the California Department of Justice released  
          the final report produced by the California ACTS Task Force  
          entitled "Human Trafficking in California," which contained a  
          comprehensive list of findings and recommendations to combat  
          human trafficking.  The report stated, "California bears a moral  
          responsibility to exert leadership, through government and  
          business purchasing practices, to implement and monitor codes of  
          conduct assuring fair and human labor practices throughout their  
          supply chain."  Indeed, California has had stringent procurement  
          policies in place since 2000 which prohibit state agencies from  
          purchasing goods or services produced by or with the benefit of  
          exploitative forms of labor.  The statute was amended in 2003 to  
          establish a "sweat-free" procurement policy and code of conduct  
          that ensures apparel, garments, and corresponding materials  
          purchased by the state are produced in workplaces free of  
          sweatshop conditions.  In amending the state's procurement  
          policies, the Legislature recognized a public interest in  
          avoiding subsidies to bidders and contractors whose workplaces  
          represent sweatshop conditions, including violation of  
          recognized standards of wages, workplace health and safety,  
          child labor, nondiscrimination and nonharassment, and the rights  
          of workers to assemble and choose to bargain collectively.

          This measure now before the Committee seeks to encourage large  
          businesses to voluntarily take reasonable steps, knowing how  
          important such efforts may be to some consumers, through the use  
          of these large businesses' substantial economic leverage to  
          deter forced labor from being used in their supply chains.

           "A Natural Place To Redouble Our Efforts  ":  As the author has  
          noted, California, with its large manufacturing and  








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          service-sector industries, global and economic strength, and  
          large presence of human trafficking, is a natural place for  
          especially strong anti-slavery efforts.  Available data clearly  
          shows that California is a significant economic presence in  
          today's increasingly global marketplace.  It is home to the  
          world's top 10 largest economies with the state's GDP exceeding  
          that of many developed countries of the world.  With more than  
          twice the GDP of nearly all other states, California accounts  
          for $1.8 trillion of the nation's total economic activity.

          California consumers and businesses occupy a particularly  
          central place among these statistics as they are significant  
          contributors to the sheer volume and nature of the state's  
          economy.  California's wholesale trade sales in 2002 were more  
          than $655 billion, retail sales totaled $359 billion, and  
          accommodation and food services totaled more than $55 billion.   
          According to RAND statistics, California imported nearly $200  
          billion in merchandise from abroad in the first three quarters  
          of 2009 alone-nearly 18 percent of all imports into the United  
          States.

          These numbers demonstrate the magnitude of California's consumer  
          base and indicate the significant role California's economy  
          plays in serving as a market for products, whether produced by  
          exploitative labor practices or not.  California consumers and  
          businesses appear to be uniquely positioned to drive human  
          rights violations out of the supply chains of products sold  
          within California borders by virtue of their ability to  
          translate the values pronounced by the U.S. Department of Labor  
          into demonstrable impact by virtue of their choice and simple  
          purchasing power.  

           The Measure's Small Business Exemption  :  In consideration of the  
          reduced ability of the state's smaller manufacturers and  
          retailers to influence human trafficking, the author prudently  
          has included an exemption in the bill for a retail seller or  
          manufacturer having less than $100,000,000 in annual sales.   
          While this exemption naturally does not alleviate small  
          businesses from actually complying with federal and state law on  
          human trafficking, it appropriately recognizes that they may not  
          have the same type of ability or resources to exert economic  
          influence on their suppliers as do the state's largest  
          businesses.

          Indeed, according to materials developed by the state's  








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          Franchise Tax Board (FTB) and provided by the author to the  
          Committee, based on total annual sales, this bill's disclosure  
          requirements will impact well less than 5% (only 3.2%) of  
          businesses operating within California's borders. Astonishingly  
          however, this 3.2% of the state's retail sellers and  
          manufacturers will "capture" an overwhelming majority of the  
          economic activity in California.  Again astonishingly, according  
          to the FTB, these relatively few but giant major retailers and  
          manufacturers account for over 87% of the total receipts for  
          total income and cost of goods sold in California.  Since these  
          businesses have such a disproportionate economic influence, this  
          bill appears to appropriately target only the state's largest  
          retailers and manufacturers in an effort to effect the most  
          significant impact on efforts to fight human trafficking and  
          slavery.
           
          The Business Case for Human Rights  :  In addition to the ethical  
          obligation to combat trafficking and slavery, commentators have  
          noted there are also business benefits from efforts to combat  
          human rights violations.  The emergence of the internet and  
          global 24-hour news coverage has revolutionized the environment  
          within which companies do business.  Firms are obliged to  
          conduct their operations under constant public scrutiny and to  
          face degrees of consumer transparency that did not exist even a  
          generation ago.  While this new business climate entails greater  
          commercial perils in cases where companies are found to be on  
          the wrong side of the law or of consumer expectations, it also  
          offers previously unforeseen opportunities for those that are  
          prepared to take the initiative and prove themselves champions  
          of good practice on human rights, environmental protections, and  
          other social concerns.  The International Business Leaders Forum  
          has identified eight areas in which businesses will benefit by  
          acting on human rights:  1) safeguard reputation and brand  
          image; 2) gain competitive advantage; improve recruitment,  
          retention and staff loyalty; 3) foster greater productivity; 4)  
          secure and maintain a license to operate; 5) reduce cost  
          burdens; 6) ensure active stakeholder engagement; 7) meet  
          investor expectations; and 8) improve access to finance.  

          Indeed, according to the report issued by the California ACTS  
          Task Force noted above, some industries and business owners in  
          the state have taken the lead to adopt codes of conduct that set  
          out minimum labor standards for their suppliers and  
          sub-contractors, thereby voluntarily harnessing their  
          substantial economic leverage to influence labor and human  








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          rights practices within their supply chains, which they contend  
          is appealing to consumers and good for business.  
           
          Injunctive Relief the Exclusive Remedy Provided in the Measure  :   
          This bill provides that the exclusive remedy for a violation of  
          its consumer information provisions is an action brought by the  
          Attorney General for injunctive relief only.
            
           ARGUMENTS IN SUPPORT  :  Reflective of the many letters of support  
          for the bill, co-sponsor Consumer Federation of California  
          writes that "California's consumers should be entitled to  
          purchase products without fear of inadvertently supporting human  
          trafficking around the world. This bill will help ensure that  
          consumers receive critical information regarding the efforts of  
          businesses to eradicate human trafficking so that they can make  
          the most informed purchasing decisions possible."
           
          Other proponents of the bill, including the Alliance to End  
          Slavery and Trafficking (ATEST), Not For Sale, Free the Slaves,  
          and the Polaris Project, state that the bill is a crucial step  
          in reducing the demand for slave-made products by providing a  
          tool for consumers, including businesses, to be better informed  
          as to how products are made.  By instituting a mechanism for  
          concerned consumers to be able to compare company efforts on  
          forced labor and human trafficking in their "supply chains,"  
          people can, these organizations contend, make more informed  
          decisions to spend their hard-earned dollars with the more  
          responsible company.  The proponents argue that the questions  
          asked by this bill are simple, and include whether or not a  
          company has their suppliers self-certify compliance with state  
          and federal laws regarding slavery, whether they encourage  
          employees and management to be trained on slavery and  
          trafficking, and whether they conduct unannounced audits of  
          suppliers.  They state that these basic questions will help  
          provide transparency as to the company's anti-slavery practices  
          so that consumers can decide for themselves with whom they want  
          to do business.  They contend that this transparency will also  
          benefit companies that are struggling to do the right thing  
          while competing against companies that are unfairly and  
          illegally using slave labor. 
           
          ARGUMENTS IN OPPOSITION :  In a joint letter, the California  
          Chamber of Commerce, California Grocers Association, California  
          Manufacturers and Technology Association,
          California Retailers Association, and TechAmerica write in  








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          opposition to the bill, making two principal contentions: 

               "SB 657 would require companies to develop  
               policies with regard to [sic] its entire supply  
               chain, which can include entities far outside  
               the borders of California or the United States.   
               The policies would need to address specific  
               issues such as third-party verification of  
               product supply chain, independent unannounced  
               audits and certification of raw materials."  

          However it should be noted that the measure does not in  
          fact require companies to develop any policies at all.   
          Instead the bill solely requires, as noted above, that  
          beginning one year after the bill's enactment, only those  
          relatively few giant retail sellers and manufacturers doing  
          business in this state which have annual gross receipts  
          exceeding $100,000,000 (less than 5% of the state's  
          businesses) need disclose their efforts, whatever they may  
          be including if there are none, to eradicate slavery and  
          human trafficking from its supply chain.

               "Private businesses should not be used as the  
               enforcement arm for federal and state laws  
               regarding slavery and human trafficking.  That  
               responsibility falls with the federal and state  
               government entities themselves."  

          However it should be noted that the measure does not, as  
          noted above, require the relative narrow number of  
          designated large companies to do anything other than post  
          specified information on their web sites and also make such  
          information available to interested consumers.  The bill  
          does not in any way require these private businesses to act  
          as an enforcement arm of government; indeed, the bill  
          acknowledges that these businesses are still completely  
          free to do anything they want about their efforts to fight  
          human trafficking and slavery, they simply need to note  
          this information on their websites and make such  
          information available to interested consumers.  

               "[T]he practical effect [of this legislation]  
               will be to hold certain companies up for ridicule  
               and condemnation for "failing" to address issues  
               they are powerless to address."








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          However it should be noted that the measure does not require the  
          relative narrow number of designated large companies to do  
          anything other than post specified information on their web  
          sites and also make such information available to interested  
          consumers.  If the information the business provides is found by  
          some consumers to reflect inadequate attention to this issue,  
          then that is a business choice as to whether that is a wise  
          course of action.  

          As to whether businesses here in California are completely  
          "powerless to address" the presence of human trafficking and  
          slavery in their product supply chains, as the business trade  
          groups contend, there is ample evidence, as noted above, that to  
          the contrary, some respected California businesses, according to  
          the report issued by the California ACTS Task Force noted above,  
          have already taken the lead to adopt their own codes of conduct  
          that set out minimum labor standards for their suppliers and  
          sub-contractors, voluntarily using their substantial economic  
          power to influence labor and human rights practices within their  
          supply chains.  
           
          Suggested Clarifying Amendments  :  In order to maximize clarity  
          in the bill that the measure does not require the specified  
          large business entities to do anything regarding human  
          trafficking and slavery within their product supply chains,  
          other than disclose what if anything they are doing, including  
          nothing,  the Committee may wish to explore with the author  the  
          possible merits of the following minor clarifications to the  
          section 3 of the bill:

            SEC. 3. Section 1714.43 is added to the Civil Code, to read:
                  1714.43.    (a)  Every retail seller and manufacturer  
            doing business in this state and having annual gross receipts  
            that exceed one hundred million dollars ($100,000,000) shall  
            disclose  , as set forth in subdivision (c),  its efforts to  
            eradicate slavery and human trafficking from its supply chain  ,  
            including the absence of any such efforts  .  For purposes of  
            this section, "doing business in this state" shall have the  
            same meaning as set forth in Section 23101 of the Revenue and  
            Taxation Code.
                   (b)  The disclosure described in subdivision (a) shall  
          be posted on the retail seller's or manufacturer's Internet Web  
          site  with a conspicuous and easily understood link to the  
          required information placed on the business' homepage,  and shall  








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          be made available in writing upon request by a consumer.  In the  
          event the retail seller or manufacturer does not have an  
          Internet Web site, consumers shall be provided the written  
          disclosure within 30 days of receiving a written request for the  
          disclosure from a consumer.
            (c)  (1)  The disclosure described in subdivision (a) shall, at  
            a minimum, disclose to what extent,  if any, that  the retail  
            seller or manufacturer does each of the following:
            (A) Engages in third-party verification of product supply  
            chains to evaluate and address risks of human trafficking and  
            slavery.
            (B) Conducts independent, unannounced audits of suppliers to  
            evaluate supplier compliance with company standards for  
            trafficking and slavery in supply chains.
            (C) Requires suppliers to certify that raw 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.
            (D) Maintains internal accountability standards and procedures  
            for employees or contractors failing to meet company standards  
            regarding slavery and trafficking.
           (2) The disclosure described in subdivision (a) shall include  
          the absence or lack of any efforts by the retail seller or  
          manufacturer as to each of the actions specified in paragraph  
          (1). 
          
           Pending and Prior Pertinent Legislation  :  There is substantial  
          and long precedent for the Legislature to successfully enact  
          consumer information requirements that include requirements for  
          posting information on internet web sites.  For example, just  
          this session there are at least two measures that require such  
          internet web posting.  SB 1268 (Simitian) seeks to require local  
          transportation agencies that use electronic toll collection  
          system to post a privacy policy on their Internet Web site.  And  
          SB 1269 (Oropeza) seeks to require the Department of Agriculture  
          and the Dept of Public Health to post on their Internet Web  
          sites information about the immunity from liability for groups  
          that donate food to charitable organizations.  Last year, AB 483  
          (Buchanan, Chap. 241, Stats. 2009) required the Worker  
          Compensation Insurance Rating Board to establish an Internet Web  
          site that posted workers compensation insurance information.   
          Indeed, this Committee successfully enacted legislation in 2004  
          (Judiciary Committee, Chap.356, Stats. 2004) that requires the  
          State Bar to conspicuously publicize on its internet website  
          that its members have the right to limit the sale or disclosure  








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          of member information not
          reasonably related to regulatory purposes.
           
           Regarding prior pertinent legislation pertaining to legislative  
          efforts to combat human trafficking and slavery, there is also a  
          long history of such legislative efforts.  SB 1649 (Steinberg)  
          of the 2007-2008 legislative session sought to require retail  
          sellers and manufacturers doing business in the state to  
          develop, maintain, and implement specified policies related to  
          their compliance with federal and state law regarding the  
          eradication of  slavery and human trafficking from its supply  
          chain.  It was held in the Assembly Appropriations Committee.   
          And SB 180 (Kuehl, Chapter 239, Statutes of 2005) established  
          the California Alliance to Combat Trafficking and Slavery  
          (California ACTS) Task Force.  AB 22 (Lieber, Chapter 240,  
          Statutes of 2005) established civil and criminal penalties for  
          human trafficking and allowed for forfeiture of assets derived  
          from human trafficking.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Alliance to Stop Slavery and End Trafficking (co-sponsor)
          Coalition to Abolish Slavery & Trafficking (co-sponsor)
          Consumer Federation of California (co-sponsor)
          Alliance to End Slavery and Trafficking 
          California Catholic Conference
            California Commission on the Status of Women
          California Labor Federation, AFL-CIO
          California School Employees Association
          California Teamsters Public Affairs Council
          Free the Slaves
          Los Angeles District Attorney's Office
          Not For Sale
          Planned Parenthood Affiliates of California
          Polaris Project

           Opposition 
           
          California Chamber of Commerce
          California Grocers Association
          California Manufacturers and Technology Association
          California Retailers Association
          Corona Chamber of Commerce








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          TechAmerica


           Analysis Prepared by  :  Drew Liebert / JUD. / (916) 319-2334