Stuffing the Holiday Stockings with Two Handy Supply Chain Disclosure Charts ... and One Top Five Mistakes List!
[Warning: The juxtaposition of joyous holiday festivities and forced labor is not intended to make light of human rights violations, but to assist companies in avoiding common mistakes in their anti-human trafficking disclosure statements.]
We have analyzed countless California Transparency in Supply Chains Act disclosure statements and consistently see five mistakes. (In fact, we have only rarely reviewed a prepared client disclosure that does not violate at least one of them). In this season of giving and being mindful about the suffering of others, we offer these five holiday mistakes so that companies and their leadership can avoid landing on Santa's naughty list:
- Forgetting to bring an assigned dish to the holiday gathering. Remember to publish required anti-human trafficking disclosure statement using a link on the homepage of the company's website (NOT on the sustainability page, "legal" page, etc.)
- Promising a pony. Do not overstate anti-trafficking efforts just because it "sounds better"—stick with what can be proven if a regulator, advocacy group, or reporter comes knocking.
- This sleigh will definitely fly. Do not make statements of fact ("we take a zero-tolerance approach," "we ensure that forced labor never taints our products," etc.) that create unnecessary legal risk/liability. Instead, opt for aspirational language that accurately portrays historical steps taken and is also forward looking ("we strive to ensure that our products are free from the taint of forced labor," "we try to only work with vendors that share our commitments," etc.)
- Foregoing key ingredients from a favorite holiday recipe. Unlike the UK Modern Slavery Act (which gives companies wide latitude with regard to what to include in the disclosure), the California Transparency in Supply Chains Act requires companies to answer the very specific questions outlined in the chart below. In short, it is crucial to include mandated information in disclosure statements; and, because the UK act is much broader, it is possible to modify California act disclosures to cover both the California and UK disclosure requirements.
- Off-the-shelf may be fine for certain gifts ... but not for disclosure statements. This point is in harmony with the four points made above. The basic message is to not fall prey to the temptation to simply copy and paste from a competitor's or an industry group-provided disclosure statement. One size definitely does not fit all.
Give Paul or Markus a jingle to discuss present (or contemplated) disclosures. We are always happy to help spread the seasonal compliance cheer! And as a holiday gift, we are including two disclosure charts to help guide your planning.
© 2020 Perkins Coie LLP
