BILL ANALYSIS
Bill No: SB
1231
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SB 1231 Author: Corbett
As Introduced: February 19, 2010
Hearing Date: March 23, 2010
Consultant: Art Terzakis
SUBJECT
Public Contracts: sweatshop labor: slave and sweat free
code of conduct
DESCRIPTION
SB 1231 makes the following substantive and clarifying
changes to existing provisions of the Public Contract Code
(Section 6108) related to "sweatfree" procurement policy
and code of conduct:
1. Expands the scope of the Sweatfree Code of Conduct to
include abusive forms of labor performed by all persons,
not just child labor.
2. Requires contractor certification to include all raw
materials in the supply chain used to produce or
manufacture the goods produced.
3. Applies the state's Sweatfree Code of Conduct
provisions to public works projects if the contract for
building materials is in excess of $20,000 . Also,
prohibits a contractor from splitting a contract into
separate accounts to avoid the minimum threshold.
4. Extends the time frame (sanction) from one year to two
years that a contractor may be removed from the bidder's
list if he/she knew or should have known any products
were laundered or produced by abusive labor.
SB 1231 (Corbett) continued
Page 2
5. Renames the Sweatfree Code of Conduct to read the Slave
and Sweat Free Code of Conduct and makes other conforming
code maintenance changes.
6. Deletes the requirements that the appropriate agency,
in consultation with the Director of Industrial
Relations, employ an approach to implement the Slave and
Sweat Free Code of Conduct and that the Department
explore mechanisms to ensure that businesses that
contract with state agencies are in compliance with this
body of law.
7. Requires contractors whose manufacturing and assembly
locations are outside the United States to comply with
international laws or treaties binding on their
countries.
EXISTING LAW
Existing law generally provides the Department of General
Services (DGS) with the governing authority related to
state procurement activities, including acquisition of
materials, supplies and services.
Existing law requires every contract entered into by a
state agency for the procurement of equipment, materials,
supplies, apparel, garments, and accessories and the
laundering thereof, excluding public works contracts, to
require a contractor to certify that no equipment,
materials, supplies, apparel, garments, or accessories
provided under the contract are produced by sweatshop
labor, forced labor, convict labor, indentured labor under
penal sanction, abusive forms of child labor, or
exploitation of children in sweatshop labor. The law
provides for misdemeanor liability in the case of a knowing
false certification.
Existing law provides that if a contractor knew or should
have known the specified products furnished to the state
were laundered or produced by the specified types of
prohibited labor, the contractor may be removed from the
bidder's list for 360 days.
Existing law requires the Department of Industrial
Relations to establish a contractor responsibility program,
on or before February 1, 2004, including a Sweatfree Code
of Conduct.
SB 1231 (Corbett) continued
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Existing law also requires the appropriate procurement
agency, in consultation with the Director of Industrial
Relations, to employ an approach to implement the Sweatfree
Code of Conduct, as specified. Additionally, Existing law
requires the Department of Industrial Relations to explore
mechanisms to ensure that businesses that contract with
state agencies are in compliance with this section, as
prescribed.
BACKGROUND
Human Trafficking: Human trafficking is the modern-day
practice of slavery. It's one of the fastest growing
criminal industries in the world, consisting of the
subjugation, recruitment, harboring, and/or transportation
of people for the purpose of forced or coerced labor or
commercial sexual exploitation. Every year traffickers
generate billions of dollars by exploiting those seeking to
cross international borders in search of a better life as
well as those vulnerable within the United States,
including within the State of California.
Since passage of the Trafficking Victims Protection Act in
2000 and the United Nations Palermo Protocol, international
awareness of human trafficking has increased and new human
trafficking laws have been introduced in over half of the
countries around the world. The International Labor
Organization estimates that over 12 million people
worldwide are working in some form of forced labor on
bondage and that more than 200 million children are at
work, many in hazardous forms of labor.
Hilda Solis, the U.S. Secretary of Labor, recently stated
the "most vulnerable persons - including women, indigenous
groups, and migrants - are the most likely to fall into
these exploitive situations and the current global economic
crisis has only exacerbated their vulnerability."
In 2005, Congress passed the Trafficking Victims Protection
Reauthorization Act, directing the Secretary of Labor and
the Department of Labor's Bureau of International Labor
Affairs (ILAB) to compile "a list of goods that ILAB has
reason to believe were produced using forced labor or child
labor" in order to provide consumers and firms with this
sort of information.
SB 1231 (Corbett) continued
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Purpose of SB 1231: In December of 2009, the Senate
Judiciary and the Senate Labor and Industrial Relations
Committees held a joint informational hearing on the
subject of human trafficking and supply chains - the basis
for this measure arose from the discussions at that
hearing.
As noted above, existing law, the Sweatfree Code of
Conduct, Public Contract Code Section 6108, prohibits state
agencies from procuring goods and services from contractors
and subcontractors who use abusive forms of labor is
limited to child labor.
In summary, this measure would expand the scope of the
Sweatfree Code of Conduct to prohibit the abusive labor of
all persons, not just children. It is modified to include
slavery and sweatshop labor, and the procurement of all raw
materials used in the supply chain. SB 1231 would also
apply the state's "sweat free" procurement policies to
public works projects that cost over $20,000. Public works
projects have been exempted to date. The author has chosen
to include such materials and supplies because bricks,
glass and other such materials used in public works
projects appear on the U.S. Department of Labor's list of
tainted goods (goods produced through child labor).
The author's office emphasizes that businesses have
asserted in the past that it is too
burdensome and difficult to monitor supply chains.
However, the author's office contends that there are a
number of businesses which already monitor supply chains in
order to promote good labor practices with their
subcontractors.
Arguments in Opposition : Opponents concern with this
measure is limited to the inability of a public works
contractor to know where all of the materials or supplies
used in a construction project were produced and the
characteristics of the workforce used in their production.
Opponents point out that many construction materials,
supplies and equipment are produced overseas and pass
through multiple intermediary business entities (exporter,
importer, distributor, retailer) before they are acquired
by a contractor for use in a public works project. In
addition, public works contracts often involve multiple
SB 1231 (Corbett) continued
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specialty contractors, each of whom would have to certify
to the prime contractor that all the materials, supplies,
and equipment they brought to the project were not produced
by sweatshop labor. Opponents also argue that a public
works contractor is essentially at the end of a long supply
chain and in most cases has no contractual relationship
with the manufacturer of the components used in a
construction project and therefore lacks leverage to force
the manufacturer to meet labor standards.
Furthermore, opponents believe that SB 1231 would result in
new and expensive compliance burdens for small business,
create new opportunities for protesting and delaying
construction project awards and encourage more litigation
against contractors.
PRIOR/RELATED LEGISLATION
SB 657 (Steinberg) 2009-10 Session. Would, among other
things, beginning January 1, 2011, require retail sellers
and manufacturers doing business in the state to develop,
maintain, and implement policies related to their
compliance with federal and state trafficking from their
supply chain. (Pending in Assembly Judiciary Committee)
SB 1649 (Steinberg), 2007-08 Session. Substantively
similar to SB 657 (Steinberg) of 2009-10 Session. (Died in
Assembly Appropriations Committee)
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.
SB 578 (Alarcon) Chapter 711, Statutes of 2003. Enacted
non sweatshop labor guidelines to state procurement
policies to ensure that goods and services purchased by the
State of California are produced in workplaces that adhere
to minimum standards for protecting workers.
SB 1888 (Hayden) Chapter 891, Statutes of 2000. Extended
existing law that prohibited state agencies from procuring
SB 1231 (Corbett) continued
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foreign goods made by forced labor, convict labor, or
indentured labor to include goods made by abusive forms of
child labor or exploitation of children in sweatshop labor.
AB 2457 (Figueroa) Chapter 1149, Statutes of 1996.
Required every contract entered into by a state agency for
the procurement of equipment, materials or supplies to
specify that no foreign-made equipment, materials or
supplies furnished to the state may be produced by forced
labor, convict labor or indentured labor under penal
sanction (forced labor). Also, required contractors to
agree to comply with this provision, and imposed sanctions
on contractors who violate this provision, as specified.
SUPPORT: As of March 19, 2010:
Alliance to Stop Slavery and End Trafficking
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Teamsters Public Affairs Council
Engineers and Scientists of California, IFPTE Local 20
International Longshore and Warehouse Union
Professional and Technical Engineers, IFPTE Local 21
United Food and Commercial Workers Western States Council
UNITE-HERE
SB 1231 (Corbett) continued
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OPPOSE: As of March 19, 2010:
American Council of Engineering Companies
Associated General Contractors
California Association of Sheet Metal & Air Conditioning
Contractors
California Business Properties Association
California Chamber of Commerce
California Chapter of the American Fence Association
California Fence Contractors Association
California Independent Grocers Association
California Landscape Contractors Association
California Nevada Cement Association
Construction Employers Association
Engineering Contractors Association
Engineering and Utility Contractors Association
Flasher Barricade Association
Marin Builders Association
National Federation of Independent Business
Southern California Contractors Association
Western Electrical Contractors Association
FISCAL COMMITTEE: Senate Appropriations Committee
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