California law turns up heat on forced labor conditions

By Noel Randewich ,Reuters

SAN FRANCISCO — A new California law will force retailers and manufacturers to disclose from 2012 how they guard against slavery and human trafficking throughout their supply chains, ratcheting up scrutiny over some of the largest U.S. corporations. From Jan. 1, about 3,200 major companies doing business or based in California, a list that includes Apple Inc. and Gap Inc., will be required to disclose steps they take, if any, to ensure their suppliers and partners do not use forced labor. Companies risk getting sued by the state attorney general if they flout that law. But experts say the real pressure will come from the court of public opinion: consumers who care about ethical working conditions and take an interest in how their favorite brands get made. Major U.S. consumer companies that have already come under fire include Apple. A group of suicides at supplier Foxconn, which makes the iconic iPhone, raised questions about working conditions at plants in southern China.

Apple declined to comment on the new legislation. The heightened scrutiny expected under the law, which applies to retailers and manufacturers in the state with over US$100 million in global sales, is already spurring companies to take a closer look at practices they follow, and in some cases improve them, lawyers say. “It’s a law that makes sure that companies who are aware of the issues, but could be managing them better, come to the realization that this is the moment where they better get a better handle on them,” said Jon Sohn, a lawyer at McKenna, Long and Aldridge in Washington, DC. “Anything that can harm your brand should be taken seriously.” Child labor and slavery, broadly defined as forced labor, run rampant not just in emerging markets like Asia and Latin America, but also within developed economies such as the United States. The U.S. Department of Labor says children and forced laborers produce 130 kinds of goods in 71 countries, numbers that have likely increased during the economic crisis. Over 12 million people are victims of forced labor, according to the International Labor Organization.