CALIFORNIA DISCLOSURE
Relevant Section of California Transparency in Supply Chains Act of 2010
(1) Every retail seller and manufacturer doing business in this state and having annual worldwide 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 direct supply chain for tangible goods offered for sale.
(c) 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:
(1) Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.
(2) Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.
(3) Requires direct suppliers to certify that 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.
(4) Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
(5) Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
In September of 2010, the state of California enacted legislation requiring all companies doing business in the state to disclose information on the actions being taken to address the risks of human trafficking and slavery in their global supply chains. Shown below are Carhartt's responses to the five required disclosures outlined in the legislation:
Verification – All factories producing goods for Carhartt are required to comply with the Company's Workplace Code of Conduct, which includes a specific prohibition of forced labor, which includes involuntary, prison or trafficked labor or labor otherwise obtained by force, fraud or coercion -- indentured, bonded or otherwise. These expectations extend to all Carhartt suppliers. Suppliers to Carhartt are expected to extend these standards to all of their suppliers and to initiate practices to assure that these standards are adopted throughout the global supply network supporting Carhartt. Verification takes place through a two-pillar approach that involves a combination of 3rd party certification audits (e.g. WRAP, BSCI, Better Work, etc.) and Onsite Verification Assessments from Carhartt’s Global Social Responsibility Team. More information on Carhartt’s two-pillar approach can be found in Carhartt’s Global Social Responsibility Supplier Manual.
Audit – Certification audits are conducted by reputable third-party assessment firms and are typically unannounced within a 15 to 30-day window. These audits evaluate present factory conditions as well as the policies, procedures and management systems that are necessary for ongoing compliance. Carhartt’s Onsite Verification Assessments are conducted by Carhartt’s Global Social Responsibility team (or contractors hired to act as representatives for Carhartt) and use a combination of announced and unannounced visits. These assessments are used to verify the information in the certification audits, assess the factory’s overall compliance to Carhartt’s requirements, and work directly with factories on any needed improvements.
Certification – Carhartt's Workplace Code of Conduct requires all suppliers to comply fully with all local laws, including those related to slavery and human trafficking. In the event local laws are not robust, Carhartt's Workplace Code of Conduct further prohibits suppliers from using "involuntary, prison or trafficked labor or labor otherwise obtained by force, fraud or coercion -- indentured, bonded or otherwise." Suppliers certify that they understand and comply with these expectations before starting Carhartt production and periodically thereafter.
Internal Accountability – Responsible labor conditions have been a core value at Carhartt since it was established in 1889. Internal accountability resides with the leadership of the core business functions responsible for the relevant commercial relationships - e.g., the Sourcing function for all relationships with cut and sew suppliers, Product Development with raw material suppliers, and the Licensing Department for all license agreements. All Carhartt suppliers and licensees must adhere to our Code of Conduct and maintain third-party certifications as outlined in the Global Social Responsibility Supplier Manual. If any supplier is found to be out of compliance with Carhartt's Code of Conduct, appropriate remedial actions are taken. While we prefer to work with suppliers to achieve improved conditions, violations involving human trafficking or slavery are classified as "zero tolerance" issues that must be immediately corrected with long-term corrective actions implemented (approved and monitored by Carhartt) or Carhartt would terminate the contractual relationship.
Training – With support from WRAP, Carhartt has conducted training on the Company's Workplace Code of Conduct - including provisions related to human trafficking and slavery. Individuals completing this training include supply chain leadership from the Vice President through the manager level in our Sourcing and Quality Assurance activities. Select individuals in our Customs activity also have completed the training. We are presently in the process of extending the training to others within our organization.
