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In the wake of the recent negative publicity deluge, including a
segment on a national newsmagazine show, alleging labor violations
including the use of child labor, safety violations and unfair pay
practices, Apple released a third-party report detailing problems and proposed
solutions at one of its largest suppliers. This follows the January
1, 2012 effective date of the landmark
California Supply Chain Transparency Act (the Act).
As noted in Perkins Coie's March 12, 2012
Update, the Act imposes various explicit supply chain-related
disclosure requirements on certain retailers and manufacturers
having annual global receipts in excess of $100 million. The
California Franchise Tax Board estimates that some 3,200
multinational companies fall under the California Act's broad
reach.
Apple's report, combined with its prior disclosures on child
labor and other labor issues, underscores the importance not only
of (1) proactively managing supply chain labor practices but also
of (2) responding promptly, decisively and publicly to supply chain
transparency problems when they arise.
Depending on the organization, a sound supply chain due
diligence program tailored to avoid potentially devastating
legal/consumer/shareholder consequences might include:
A comprehensive Risk Profile
Review of existing supply chain policies, due diligence
materials, annual certifications and trainings
Remote and/or onsite audits of compliance with existing
policies
Implementation of remediation and/or verification plans to
correct deficiencies
Who Can Help?
Contact counsel for advice on the broad range of sophisticated
compliance issues implicated by the growing focus on supply chain
due diligence. You can find additional information on our website
under
Investigations & White Collar Defense.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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