Apparel industry study
Most apparel companies fall short of disclosure requirements in California Transparency Act
8:08 a.m., April 12, 2012--One quarter of apparel makers are flouting a law requiring them to disclose their efforts to combat human trafficking, a University of Delaware study found.
Since Jan. 1, retailers and manufacturers with more than $100 million in sales worldwide that do business in California have been required to clearly post on their websites the steps they are taking to address human trafficking and slavery.
Lending risk and language
After studying 86 online disclosures of what apparel companies are doing to comply, Marsha Dickson, professor and chair of UD's Department of Fashion and Apparel Studies, found that apparel companies can still do more to improve their online information about these efforts.
“We could not find disclosures for one-quarter of the companies,” Dickson said. “Half of the statements were far from obvious -- requiring consumers to delve deeply into the companies’ websites through inconspicuous links, such as about us, investor relations or library.” The California Transparency in Supply Chains Act requires companies to feature a conspicuous and easily understood link to the required information on their homepages.
Another common shortcoming was whether companies require their direct suppliers to certify the materials used in the products are made in accordance to laws on human trafficking and slavery. “Most companies referenced their contractual purchase orders with direct suppliers,” Dickson said, “but those would infrequently extend to materials suppliers as those suppliers would contract only with the company assembling the end product.”
The offending companies should follow what some industry leaders are doing in this area, Dickson said.
Dickson highlighted The Jones Group, whose brands include Jones New York, Anne Klein, Rachel Roy and Nine West, as its disclosures not only addressed all elements of the required disclosure but also contained supporting evidence for each of its statements.
The Rev. David M. Schilling, director of human rights for the Interfaith Center on Corporate Responsibility, said the legislation provides companies the opportunity to be proactive and get educated about human trafficking and modern day slavery. “This act speeds up the process of companies going deeper down their supply chains to identify and eliminate any form of forced labor that exists. This is a moral and a business risk issue.”
Understanding some companies are still working toward compliance with the disclosure law, Dickson partnered with Doug Cahn, principal of The Cahn Group, LLC, to develop an online course in response to the requirement in the California Transparency in Supply Chains Act to report on training for supply chain managers.
“It can be complicated to define and identify human trafficking or slavery,” Cahn said. “Economic plight forces workers to accept less-than-ideal employment terms, so this course presents real-world scenarios to help participants identify both the obvious and more subtle indicators of trafficking or forced labor.“
More than 2,250 employees have completed the course to date representing nearly 80 companies in 34 countries and spanning numerous industries, including apparel, footwear, pharmaceutical, biotech, manufacturing, food processing, jewelry, retail, packaging, electronics and telecommunications.
For more information about the online training course offered by UD, contact SRS-Biz@udel.edu.