The Experts Respond: A CSR Q&A From the Supply Chain Summit Series

The Experts Respond: A CSR Q&A From the Supply Chain Summit Series

At the Supply Chain Summit Series event in San Diego in February, Michael Littenberg, Partner at Ropes & Gray LLP, spoke about legal requirements around a range of corporate social responsibility (CSR) legislation, as well as potential changes to existing and emerging regulations. In this blog, Sanket Mehta, CSR Analyst at Assent, and Jared Connors, Assent’s Subject Matter Expert, CSR, respond to questions received from session attendees.

Q: How do you manage suppliers who resist providing information because they say certain legislation (such as the UK Modern Slavery Act) is not directly applicable to their company?

SM: I would take the opportunity to further engage with these suppliers. If you’re using a template such as the Slavery & Trafficking Risk Template (STRT), the question set should be easy to use and fill out. If a supplier is unwilling to answer basic questions, that should raise a red flag.

To set yourself up for success when requesting data from your suppliers, I recommend positioning your requirements as part of a broader human rights movement, rather than the individual actions of your own company. Whether the supplier is in scope of laws such as the UK Modern Slavery Act is immaterial: as a supplier providing goods or services to a company in scope of one or more of these laws, their vulnerability to slavery and human trafficking matters can have an impact on your company and as a result, they fall within the scope of your due diligence efforts.

Q: Unions often charge fees for union members to work. Could this be seen as modern slavery issue or violation?

SM: Per the UK Modern Slavery, Act, modern slavery constitutes offenses of slavery, servitude, forced or compulsory labor, and human trafficking. According to the International Labour Organization’s definition, the work or service must be undertaken involuntarily. If the worker cannot withdraw his or her consent without fear of suffering a penalty, the work may be considered forced labor. Unions charging fees for members to work does not deny workers the right to stop working, in my opinion, and, as such, does not constitute forced or compulsory labor.

Q: Should U.S.-based companies that only buy from other U.S.-based companies be using a human trafficking and slavery risk template, such as the STRT?

SM: Yes, they do. The Global Slavery Index has shown that modern slavery in developed, high-income countries such as the United States is more prevalent than previously thought. This means due diligence is necessary, even if the supply chain is based entirely in the U.S. By using the STRT or a similartemplate, companies can map risks and carry out due diligence activities — a key component of an effective modern slavery program.

Q: How does a company’s annual income relate to its modern slavery requirements?

SM: Most modern slavery laws (e.g. the UK and Australian modern slavery acts, and the California Transparency in Supply Chains Act) have a set annual income threshold that determines when a company is considered in scope and required to publish statements about their modern slavery program online.

As such, the higher a company’s annual income, the more likely it is to come into scope of one or more regulations. How a company exercises due diligence will vary. A large company with expansive operations may need more formalized and extensive systems than smaller enterprises.

Q: What is the current status of the proposed repeal of Section 1502 of the Dodd-Frank Wall Street Reform Act?

JC: The Dodd-Frank Act is still here, and doesn’t show any signs of being repealed. The U.S. Department of State has actually taken a more active role in responsible mineral sourcing, with increased engagement in central Africa. Learn more about the U.S. Department of State’s views on the Dodd-Frank Act in Assent’s guide, Responsible Mineral Sourcing in 2019: With Contributions From the U.S. Department of State.

Q: Where does cobalt currently stand? What should we be doing about it?

JC: Formal global legislation does not include cobalt reporting. However, many companies have started including it in their existing responsible minerals programs. The Cobalt Industry Responsible Assessment Framework (CIRAF) and the Cobalt Reporting Template (CRT) are used to improve risk assessments in supply chains and enhance reporting capabilities. These tools, and others, will help companies include cobalt in their responsible mineral sourcing programs.


Assent’s Corporate Social Responsibility Suite includes solutions for human trafficking and slavery, conflict minerals and cobalt supply chain data management. To learn more about the Assent Compliance Platform, contact info@assentcompliance.com.

 

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