American Licorice’s Disclosure in regard to the California Transparency in Supply Chains Act of 2010 (SB 657)

November 14, 2011

The California Transparency in Supply Chains Act of 2010 was approved by the Governor of California on September 30, of 2010. The act begins by declaring that slavery and human trafficking are crimes under state, federal, and international law and requires that retailers and manufacturers doing business in the state of California shall disclose efforts to eradicate slavery and human trafficking from its direct supply chain to tangible goods offered for sale. Please note that we are defining human trafficking based on the Palermo Protocol and slavery is defined based on the ILO Convention No. 29.

Following is American Licorice’s response to the California Transparency in Supply Chains Act of 2010 (SB 657):

1. American Licorice has conducted a risk assessment of its supply chain. All of our direct suppliers are located in the United States. Although human trafficking and slavery exist in the United States, the United States is not at significant risk for these activities, based on the Department of Labor’s List of Goods Produced by Child Labor or Forced Labor and is considered a tier one country (with the highest level of compliance in prohibiting severe forms of trafficking) based on the U.S. Department of State Trafficking in Persons Report of 2010. Because of low risk, we have not employed a third party for verification.

2. American Licorice has published standards prohibiting our suppliers from engaging in slavery and human trafficking. In addition, American Licorice terms and conditions on our purchase orders ask suppliers to represent and warrant that they do not and will not knowingly use any slave labor or engage in any human trafficking. Because of low risk in our supply chain, we do not currently audit our suppliers for compliance. However, we will consider more intense measures such as auditing or third party verification for any suppliers we determine that are of medium or high risk. If we suspect a supplier is involved in these activities, we will conduct an inquiry. If we find evidence of slavery and human trafficking at the supplier, we expect the supplier to take corrective action to resolve the issues within 90 days.

3. We ask our suppliers to sign a social compliance agreement stating that they do not engage in slavery or human trafficking. In addition to requiring that suppliers renounce and abstain from human trafficking and slavery, we also ask that our suppliers provide a safe and sanitary workplace, adopt non-discrimination practices, limit work hours in accordance with local laws, pay employees for work completed, provide a workplace free from harassment, employ individuals above the age of 14, and respect employees’ right to freedom of associates. We have recently revised our social compliance agreement to include questions on supplier awareness of country laws on human trafficking and slavery, in countries where they do business to this agreement.

4. Supply chain associates are required to make sure that all suppliers review and agree to our social compliance requirements. If the supplier has their own requirements, we ask that they provide a copy, and as long as the requirements are as comprehensive as our own, we will accept their policies in place of requiring acceptance of American Licorice social compliance requirements.

Each supply chain associate is required to attend training in regard to the issues surrounding slavery and human trafficking in the supply chain.

5. American Licorice provides training for associates that work with our supply chain as well as associates who work with contractors on the issues involved with slavery and human trafficking as well as identification of risk.

Full details of our social compliance requirements are available here.

You can read the terms and conditions of our purchase orders here.



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