House bill to require disclosure of efforts to eliminate slave labor from supply chains

by Cydney Posner

Yesterday, Representatives Carolyn Maloney and Chris Smith introduced H.R. 3226, the ‘‘Business Supply Chain Transparency on Trafficking and Slavery Act of 2015.’’  The bill comes on the heels of articles about slavery and human trafficking like this one on the front page of the NYT, documenting the use of slave labor on fishing boats (“In interviews, those who fled recounted horrific violence: the sick cast overboard, the defiant beheaded, the insubordinate sealed for days below deck in a dark, fetid fishing hold”), and other similar pieces in the WSJ and AP, as well as the publication of the State Department’s 2015 Trafficking in Persons Report.  As noted in the press release, the State Department report emphasized the importance of setting “clear expectations for businesses on human rights issues” and the need for governments to “adopt policies that promote greater transparency and better reporting on anti-trafficking efforts in supply chains.”

The bill (which has not yet been published by the GPO), includes the following findings, among others:

“In 2014, the Department of Labor identified 136 goods from 74 countries around the world made by forced labor and child labor. The United States is the world’s largest importer, and in the 21st century, investors, consumers, and broader civil society increasingly demand information about the human rights impact of products in the United States market.”

The bill would require the SEC to adopt rules, applicable to public companies with over $100 million in global gross receipts, mandating disclosure of whether the company “has taken any measures during the year… to identify and address conditions of forced labor, slavery, human trafficking, and the worst forms of child labor” within the supply chain, along with a description of those measures. The disclosures would be made annually in the Form 10-K under the heading “Policies to Address Forced Labor, Slavery, Human Trafficking, and the Worst Forms of Child Labor.” Disclosures would include the text of policies adopted, a description of actions taken to identify and eliminate the risks of forced labor, slavery, human trafficking and child labor through a company’s supply chain (including an identification of risks) and efforts made to conduct supply chain audits. Information would also be required regarding any supplier attestations required, training conducted by the company, and implementation by the company of internal accountability standards, supply chain management and procurement systems, and reporting procedures through the supply chain for failures to meet company standards.

The press release indicates that the bill is intended to help consumers make informed purchasing decisions and create market competition to improve how businesses identify and address instances of slavery and human trafficking within supply chains. The bill would not, however, “dictate how companies do business.” According to Representative Maloney, the “legislation simply requires businesses to publicly disclose what actions they have voluntarily undertaken to remove labor abuses from their supply chains. It is a good first step we can take to improve reporting and transparency so that we can enforce existing laws against labor abuses and allow consumers to make more informed decisions.” According to Representative Smith, “The bottom line is there is no excuse for a company’s complicity or ignorance in the suffering endured by human trafficking victims hidden away in the supply chain. It is not enough for a company to say they are unaware of human trafficking in their product line; consumers and Congress want to know that companies are actively taking steps to ensure there are no connections between human trafficking victims and their business products and services.” Senator Richard Blumenthal is reportedly planning to introduce a companion bill in the Senate.

 

The same two sponsors introduced a similar bill in 2014, which went nowhere. This bill has been referred to the House Committee on Financial Services, and Govtrack.us gives the bill a 10% chance of getting out of committee.  However, the prominence of recent lengthy articles recounting the horrors of slave labor and trafficking may create a stronger impetus to move the bill forward.

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