California Cases
The removal of the legal gap follows damning exposes in recent years by the Associated Press and the Guardian, though politicians had already been trying to close the loophole. Lawyers have also gone to court to take on slavery, citing the news reports and State Department data on forced labor.
Lawsuits filed in California accuse Hershey Co., Mars Inc. and Nestle SA of ignoring slave labor in their West Africa cocoa plantations. Nestle has said it has set up pilot monitoring programs on some Ivory Coast farms, with plans to extend them to all suppliers by the end of the year. Hershey and Mars have made similar statements, saying that while the lawsuits are without merit, they’re spending hundreds of millions of dollars to eradicate the practice from their supply chains.
The lawsuits were inspired in part by California’s supply- chain transparency law, the first of its kind, which in 2012 began requiring companies with more than $100 million in revenue to publicly disclose their efforts to fight slave labor.
Investor Scrutiny
In Washington, U.S. Representative Carolyn B. Maloney, a New York Democrat who has made supply-chain slavery one of her causes, wants to apply the California example nationwide and expand it. Her proposal would require companies to regularly tell the U.S. Securities and Exchange Commission what they’re doing to eradicate forced labor, creating a new avenue for investor scrutiny -- and litigation.
The California law has also inspired change in the U.K., where the Modern Slavery Act passed in 2015. The law applies to companies with global annual revenue of at least 36 million pounds ($52 million), half the revenue cutoff under California law. It also requires board members to sign off on the statements.
EU rules requiring supply-chain transparency in all member states take effect in 2017, while individual member nations including France are considering legislation of their own.
The U.S. bill is H.R. 644.