Compliance Program for Anti-Human Trafficking Conflict Mineral & Ethical Sourcing Workshop 2015 info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 1
Today s Presenter James Calder Director - Compliance Programs Assent Compliance Over ten years as a senior expert on product stewardship, regulatory approvals/certifications, product safety, and ethical sourcing. info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 2
Main Legislative Drivers Federal Acquisition Regulation (Executive Order 13627) California Transparency in Supply Chains Act UK Modern Slavery Act 2015 info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 3
Federal Acquisition Regulation Human Trafficking Provisions Timeline 2006 2007 A contract clause prohibiting severe forms of HT, procurement of commercial sex acts and the use of forced labor has appeared in federal service contracts Contractors had to: i) notify employees about the policy; ii) establish an employee awareness program and iii) notify the Government of an alleged violation Expanded to cover all federal contracts and subcontracts, including those for supplies and commercial items 2009 Addition of language to make the adoption of a TiP awareness program a mitigating factor if a violation occurred info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 4
Federal Acquisitions Regulation (Executive Order 13627) Expanded list of types of conduct Prohibits the withholding of identity documentation Prohibits the use of misleading or fraudulent recruitment practices Prohibits the charging of recruitment fees Outlines contractors responsibilities to provide return transportation Outlines contractors responsibilities in providing employee housing that meets host country housing and safety standards info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 5
Federal Acquisitions Regulation (Executive Order 13627) Recruiters Must use trained recruiters abiding by local laws Contracts Contractors to provide employment contracts if they are separately required to do so by law or by contract - in writing, at least 5 days before relocation in a language understood by the employee and that contains details about, work description, Wages, prohibition on charging recruitment fees, work location(s), living accommodation and associated costs, time off, roundtrip transportation arrangements, grievance process and the content of applicable laws and regulations that prohibit trafficking in persons info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 6
Federal Acquisitions Regulation (Executive Order 13627) Changes in reporting requirements Contractors must report credible information to both the contracting officer and the agency Inspector General Contractors must cooperate with Government investigations of trafficking (this includes provision of information, access to facilities and staff, and responsibility to protect all employees suspected of being victims or witnesses to prohibited activities. info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 7
Federal Acquisitions Regulation (Executive Order 13627) Mandatory components of the compliance plan: (i) an awareness program; (ii) an employee reporting process; (iii) a recruiting and wage plan that addresses the restrictions on recruiting fees; (iv) a housing plan that ensures housing meets host country housing and safety standards; and (v) procedures to prevent trafficking activities by agents and subcontractors Compliance as a mitigating factor Compliance plan can only be considered as a mitigating factor for liability if: Was in place at time of violation Was implemented at time of violation Company took remedial actions, including reparation to victims Maybe a stupid question but can you explain the difference of in place at the time compared to implemented at time info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 8
UK Modern Slavery Act UK Modern Slavery Act This Act requires companies to produce a "slavery and human trafficking statement" each financial year, disclosing their efforts (or lack thereof) to ensure their supply chains are free from slavery and human trafficking. Required for all companies (private and public) doing business in the UK and having over 36 million (Global) Applies to good and services Must report the business structure, policy, due diligence processes, areas of risk, KPIs, training Went into effect last month info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 9
California Transparency in Supply Chain Act Since January 1, 2012, every retailer and manufacturer doing business in California with annual worldwide gross receipts exceeding $100 million must disclose on its website the extent to which it works to prevent AHT in the supply chain. Disclosure to include: Verification (Does it assess the Supply Chain?) Audit (Does it perform?) Certification (Do suppliers certify?) Internal Accountability (Internal Procedures?) Training (Does it train and how?) info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 10
CA TISA Statement We, ACME Corp, Do not verify our supply chain for human trafficking Perform no audits Do not require suppliers to certify they supply goods free of human trafficking Have no internal procedures to identify human trafficking Do not provide any education to our employees or supply chain on the risks of human trafficking info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 11
CA TISA Statement We, ACMECARE Corp, Have implemented a risk based assessment performed by a third party with human trafficking subject matter expertise. The assessment covers every known supplier and labor broker in ACMECARE s supply chain. This occurs on a yearly basis for the entire supply chain with increased frequency for every supplier and/or labor broker holding some level of risk Performs yearly unannounced third party audits within the entire supply chain. Selected auditors must demonstrate specific knowledge on the risks of human trafficking. Audits are always performed on high risk suppliers plus a random selection of 10% of our other supply chain Requires all direct suppliers to contractually certify they comply with the labor laws of the countries in which they do business. Local labor laws are identified by region for the suppliers knowledge and encouragement Through its Ethics Committee, has implemented internal procedures to monitor the efficacy and results of our anti-human trafficking program. The Ethics Committee provides recommendations to the Compliance Officer who reports to the Board for their commitment on the entire organization s anti-human trafficking program. info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 12
Three Regulations: Single Solution info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 13
Building a Program To be successful, an Anti-Human Trafficking program should cover the following categories: info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 14
STEP 1: Policy Creation The Policy is your company s framework detailing your approach to these regulations Objective: details the regulations impacting your company Policy Statement: demonstrates your position Roles & Responsibilities: defines employees roles Hotline: provides reporting mechanism Champion: must be adopted and accepted by senior leadership info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 15
STEP 2: Awareness Program Broadcasting your company s policy and requirements to address Anti-Human Trafficking Develop & Distribute Educational Materials: creates awareness for internal employees as well as suppliers to ensure they are monitoring activities Communicate Requirements: inform the supply chain of the requirements and actions that constitute a violation of your policy info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 16
STEP 3: Reporting Hotline A Reporting Hotline provides employees, suppliers and contractors a way to report issues, ask questions and provide assistance Address Confidentiality: Explain the measures taken to ensure any information provided is done so in confidence Provide Instructions: Reporting is only as good as the detail provided so its important instructions are given in order to demonstrate what s needed for a company to take action info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 17
STEP 4: Supply Chain Risk Assessment Assessing your vulnerability to human trafficking issues within your supply chain will help eliminate risk Create a Sourcing Map: certain geography locations pose a greater risk to the potential for Human Trafficking Identify Supplier/Contractor Practices: through the use of questionnaires and audits document the hiring practices of your supply chain Include your business operations info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 18
STEP 5: Mitigation Activities Exposure of any potential issues requires an action plan to change the practices of the supply chain or eliminate the source Questionnaire/Audit Review: evaluate supplier responses and work with them to eliminate hiring practices that create risk for Human Trafficking violations Share Requirements Annually: pass along your supplier code of conduct and educate suppliers on the need for ethical practices info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 19
STEP 6: Incident Management Create a process by which your organization can properly assess and resolve any instances of human trafficking Manage incidents reported through hotline, HR, or other avenues Assigns ownership (case management) to identify, analyze, and correct any exposure to human trafficking Reporting of incidents info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 20
STEP 7: Continuous Improvement Demonstrate your company s continued efforts to improve supply chain transparency, promote education and awareness on the topic and reduce supplier risk Year Over Year Improvement Opportunities: as the program gets started document ways in which your company can improve its processes and communication within the supply base Increased Audit Verifications: create a plan to add supply chain audits to your annual process KPIs: document your supplier risk and track your decrease in risk level as the program matures info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 21
STEP 8: Due Diligence The verification process by which a company ensures its program is robust, adopted by the supply chain, promotes transparency and meets the requirements of the relevant regulations Program Completeness understand the reporting requirements, define execution Transparency ensure your internal processes are auditable and expectations to your suppliers are understood and able to be followed Process Documentation how your company and supply chain will handle situations as they arise Has to include some validation/challenge to areas of risk Applies to all steps info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 22
Thank You! info@assentcompliance.com www.assentcompliance.com TEL: 1(866)964.6931 23