209 – Who’s Watching the Watchdog? Is Supply Chain Transparency Working?

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Dr. Sandie Morgan and Dave Stachowiak are joined by Benjamin Thomas Greer. His role at the California Governor’s Office of Emergency Services is as a Subject Matter Expert in the field of human trafficking and child sexual exploitation; specifically instructing and developing human trafficking courses for law enforcing and emergency personnel. They discuss the complexities and challenges of the California Supply Chain Act and how consumers can be advocates for ending modern day slavery within supply chains.

Key Points

  • As the global economy extends, consumers are likely less aware of where the products they purhcase come from and how they’re assembled, but it’s more important than ever to remain thoughtful of the supply chain.
  • The California Supply Chain Transparency Act does not require a company to affirmatively investigate their supply chain, but it does require the businesses to post on their website home page what efforts, if any, that they do to ensure that forced labor or exploitation is not a part of their chain. 


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Dave [00:00:00] You’re listening to the Ending Human Trafficking Podcast. This is episode number 209, Who’s Watching the Watchdog? Is Supply Chain Transparency Working?

Production Credits [00:00:11] Produced by Innovate Learning, Maximizing Human Potential.

Dave [00:00:31] Welcome to the Ending Human Trafficking Podcast. My name is Dave Stachowiak.

Sandie [00:00:37] And my name is Sandie Morgan.

Dave [00:00:39] And this is the show where we empower you to study the issues, for you to be a voice, and make a difference in ending human trafficking. Sandie, I’m really interested in this conversation today as I am in virtually every conversation we have because we’re going to dive in on supply chain transparency. And this is something we’ve talked a lot about, and yet I don’t have a clear answer in my mind as to the question that we’re posing in this title, which is who’s watching the watchdog? This is a big question, right?

Sandie [00:01:09] It’s going to be a great interview.

Dave [00:01:11] I am glad to welcome to the show today, Benjamin Thomas Greer. He is in the role at the California Governor’s Office of Emergency Services as a subject matter expert in the field of human trafficking and child sexual exploitation. Specifically, he’s instructing and developing human trafficking courses for law enforcement and emergency personnel. Before joining Cal OES, he served as a special deputy attorney general with the California Department of Justice, office of the attorney general. There he led a team and a comprehensive report for the California attorney general entitled The State of Human Trafficking in California back in 2012. He has published numerous American law review and international journal articles and has presented and lectured in 10 different countries. Benjamin, so glad to welcome you to our show.

Benjamin [00:02:02] Thank you very much for having me.

Sandie [00:02:03] Well, I’m really excited to have you because I’ve been really impressed with how many articles you’ve researched and written and published, and I’ve especially been interested and followed your writing on supply chain transparency. And one of the articles that were really gripping was “Who’s watching the watchdog?” So, I thought we could have a conversation today about the efficacy of supply chain transparency. Are you up for that?

Benjamin [00:02:33] Absolutely, I’d love to.

Sandie [00:02:34] Okay. So, let’s just start with, would you explain why we support this idea of supply chain transparency? What does that mean to ending human trafficking?

Benjamin [00:02:49] Well, as we’ve seen in the last couple of decades, as the global economy extends and reaches into farther regions of the globe, consumers are probably less aware of where the products that they purchase come from and how they’re assembled. And that is individuals who want to exploit labor, the opportunity to coerce or force victims around the world in either the mining or manufacturing of raw minerals, manufacturing or assembly of products. And so, it’s really important for consumers if they want to be thoughtful and impactful consumers to understand the supply chain of the products that they’re purchasing.

Sandie [00:03:35] Okay. So, I was very excited when California passed the California Supply Chain Transparency Act. What does that actually do for us?

Benjamin [00:03:51] Well, first of all, California was the first government, either local, state or federal in the world to require such a disclosure. There are maybe some fundamental misunderstandings about what exactly what the California Supply Chain Transparency Act does. It does not require a company to affirmatively investigate their supply chain, but what it does do, is it requires the businesses to post on their home page what efforts, if any, that they do to ensure that forced labor or exploitation is not a part of their chain. So, a company would be in full compliance if they would literally post on their home page, we do nothing to investigate our supply chain. In my reading of the law, they would be in full compliance.

Sandie [00:04:41] That’s really disturbing. But with the focus on cause related marketing, corporate social responsibility. Are there some big companies that are actually going beyond the stated compliance requirements?

Benjamin [00:05:01] Absolutely. There are, you know, many companies have seen this as an opportunity to demonstrate to their consumer base and potentially new consumers that they are good corporate citizens, that they have meaningful oversight and procedures in place. And that was really kind of the design legislatively behind the California law is that it really wanted to provide the consumer with the information so that the consumer can influence corporate behavior through the use of their money and which products they wanted to support.

Sandie [00:05:38] OK, so this is basically a legislative initiative that encourages moral business behavior, right.?

Benjamin [00:05:50] Yes. By giving the consumer information and then the consumer can choose which corporate moral behavior they want to support.

Sandie [00:06:00] So, I’ve been the consumer and gone to a Webpage and not found anything that inspires me to be loyal to that brand. And I’ve called and usually all I get, and they are in compliance, is we have a zero-tolerance policy against slavery. Well, my next question is, so what do you do? And they don’t have an answer for that. And so that was part of the reason I was really interested in your article on opaque transparency. You’re very good with witty titles. Why California’s Supply Chain Transparency Act is unenforceable. Can you explain that for us?

Benjamin [00:06:48] Yeah. In one of the articles that I published there were a couple key kind of legal hurdles that were structured into the legislation that I wanted to analyze deeper. Specifically, three main areas. First of all, it requires a corporation to post on their home page what their policies are, if any. But the legislation did not give a definition of home page. It seems like a pretty basic and fundamental understanding, but as I kind of dug into the issue, I found no less than three different statutory definitions of home page and two different case law definitions of home page. So, even if I was a business who wanted to comply, the question still is unclear as to where do I put the information? Where do I post that link to the information? In case law, the deciding factor really seems to come down to what was the intent of the disclosure. If the intent of the disclosure was public safety, like a child car seat recall or the airbag recall in your cars, that disclosure must be posted on the very first page the consumer encounters. If information is based more on consumer awareness, like a social media’s privacy policy, then the courts addressed that as the first significant page that the consumer would encounter, so not necessarily the first page that loads. In my estimation, again, because the intent of the supply chain act was consumer awareness, I believe that it would be probably the first significant page that the consumer would encounter.

Sandie [00:08:41] Okay. So, when we think about why supply chain transparency is good, then your comment on the Internet aspect of monitoring this is very connected to one of the points in your article about how corporate globalization has increased the marketplace for slave-made goods. So, this globalization and when we think of the Internet, it’s really hard to conceptualize the scope of that. And so, then it’s hard to figure out how we can use the Internet to actually monitor slave-made products. So, can you kind of define how that context lends itself to this opaqueness that you mentioned?

Benjamin [00:09:36] So, obviously any tool can be used for good or for ill. And obviously, we see, especially when we’re talking about trafficking and exploitation, the Internet fits perfectly in this box, right?

Sandie [00:09:51] Right.

Benjamin [00:09:51] Law enforcement and legislators can use it as a tool to increase transparency. But we also know that traffickers exploit it in order to identify victims that they would like to exploit. One of the ways that the Internet, especially in the transparency realm, I believe has really helped is specifically in the UK. In the UK’s Modern-Day Slavery Act of 2015, I believe, they heavily borrowed the language from California on the supply chain issue.

Sandie [00:10:25] Oh, that’s cool.

Benjamin [00:10:27] In their legislation, they actually put a little more tooth in it than the California legislation. And a really robust system of collecting the names of the corporations that have posted their required information for consumers. And then they have a biannual or an annual report that’s published and disseminated via the Internet. So, consumers can go on and they can investigate corporations or the businesses of the products that they purchase.

Sandie [00:11:00] Well, you know, I can think back and remember big, news-worthy experiences where a brand, a well-known brand, was discovered to have slave made elements in their product. And they worked very quickly to change because it isn’t good for their business model to be seen as exploitative.

Benjamin [00:11:28] Absolutely. Looking back, even into the 80s and the 90s, we had shoe companies, or we had jewelry and diamond companies. There’s a number of different procedures that a lot of these companies have put in place voluntarily certifying that certain gems were not mined out of conflict zones or FIFA put a special mark on soccer balls to let consumers know that soccer balls have not been produced by child labor. So, there are lots of opportunities for corporations or businesses to demonstrate that they are doing right by their employees.

Sandie [00:12:07] Well, and this is a really important abstract element of how we do cost benefit analysis from the corporate perspective. But from the social justice perspective, when you just mentioned child labor, I want people to think about when a child is working instead of being in school. What is the ultimate cost-benefit ratio for, or actually the antithesis of that, for that country? Because they have children, they’re the future who aren’t getting an education. So, there’s a cost to this. That’s very hard to figure out with just your calculator on your phone.

Benjamin [00:12:53] Absolutely.

Sandie [00:12:55] OK, so then what is happening on the federal level as far as supply chain transparency?

Benjamin [00:13:03] Well, honestly, I believe some effort for supply chain transparency has been tried over the past 10 years, 15 years. To my knowledge, it’s always been met with some pretty good resistance. I mean, if you think about it from a business perspective, corporations have they spend millions of dollars to design a Web page in order to get consumer traffic to certain products that are maybe high margin products that they want to sell or very crafted Website. And so, to have the government, either state or federal government come in to start to mandate things that need to be on that Website, it really starts to disrupt whatever the mission that they had for that Website. So, from a business perspective, there’s been pushback. California, like I said earlier, was the first state to require this. It would not surprise me if in the coming years, a few more states require it. And then at some point there’s a tipping point. We reach a tipping point. And different states that each require five different issues to be posted on the home page. It really starts to kind of call out for maybe a national or a federal resolution to this issue.

Sandie [00:14:19] Well, I know that there was legislation proposed in Congress probably 10 years ago, but then it didn’t go anywhere. And we were all disappointed because it was right after California had passed this. So, I keep looking for that, and when I talk to congressional or Senate leaders, I always mention this would be a great next step to make this across the board.

Benjamin [00:14:44] I absolutely agree. Interestingly, I guess, I’ve seen the largest derivative effect in the California law, not necessarily here domestically, but internationally. Other countries that see value in these types of laws and disclosures, specifically like I mentioned, the UK, I believe Australia last year in their modern-day slavery act borrowed heavily off of the California structure and Norway is doing so right now. So, for me, one of the things that’s standing out is really that derivative effect that we’re seeing internationally on this issue.

Sandie [00:15:21] Well, we actually interviewed John MacArthur in episode number 195 about how in Australia they have implemented this as a policy in their procurement department for the entire dioceses of Sydney. And they’ve actually published a report, and I’ll put a link to that in the show notes for people. And anything that Ben mentions we’ll also put links in here. Yes, so those are good evidence of progress and people beginning to understand some of the laws of supply and demand impact on how consumers impact supply and demand. But you wrote another article that was the very first one that I actually read because I loved the title, “Who’s Watching the Watchdog?” And in that, you say, and this is a quote, “determined traffickers react remarkably well to consumer demand and under regulated economic sectors and easily adapt to legislative weaknesses.” I’ve had the sense that the traffickers have more flexibility and they can move quickly to adapt to market changes. And so, they have the advantage and not just in this area of labor trafficking, but also in sex trafficking. They adapt very quickly. Can you expand on your statement?

Benjamin [00:16:52] Yeah, I don’t even know if traffickers do it knowingly, but because they don’t have some of the parameters that either law enforcement or government has, process and procedure that always has kind of a time lag or delay. They see a change in the morning, they can react by the afternoon. And that is just not necessarily the way that government and especially legislation is designed. Legislation primarily is reactive, we wait for a bad event to occur and then we try to pass legislation to prevent that bad a bad act from reoccurring. Not necessarily proactive, and that’s a general statement, but the same with law enforcement, for the most part, it’s very much reactive. Where traffickers, they’re agile and dynamic enough that they can be proactive in their response or their activities.

Sandie [00:17:48] OK, so what are some ways where we can actually leverage the fact that the California Supply Chain Act does give us as consumers a pathway to be advocates for corporate change? Do you have some suggestions for us?

Benjamin [00:18:09] Yeah, I mean, I think truly supporting the companies that you morally agree with. And you support their activities, that will then start to create kind of its own gravity and it will demonstrate to other businesses that are maybe on the outside of that moral circle. They will want to compete for your consumer dollar. And so, from a business perspective, they may want to change their business practices to compete for your consumer dollars. So, I really think it’s important not just to say one thing as a consumer, but really try to the best of our ability to live by the notions and the morals that we expound.

Sandie [00:18:56] So, when you were working in the attorney general’s office, how much of the agenda was driven by the Supply Chain Transparency Act?

Benjamin [00:19:09] When I was at the AG’s office it really was. I was there at the time that the law was going into effect. So, there still really wasn’t a clear picture of what disclosure was going to look like, let alone what enforcement was going to look like. Don’t forget, in the language of the statute, the attorney general has the sole power of enforcement through injunctive relief.

Sandie [00:19:34] Tell us what that is? Injunctive relief?

Benjamin [00:19:37] Alright, here’s your 30 second law school.

Sandie [00:19:40] Well, that’s good I always wanted to go to law school.

Benjamin [00:19:44] There are two main types of injunctive relief, you have prohibitory or mandatory. Prohibitory obviously would be the court stopping you from doing something. Let’s say an example would be a protective order or a court order that you’re supposed to stay away from a location by a hundred or a thousand feet or whatever it may be. The other type of injunction would be mandatory, where the court is forcing you to do something. Those are usually disfavored by the court because it’s very onerous and resource-intensive for the court every day to make sure that you are doing what you’re supposed to be doing. Courts will rely on third parties to enforce the prohibitory injunction. If you are in a location that legally you’re not supposed to, the court is relying on someone to report that activity to the court. So, it’s kind of passive in that nature. So, if the attorney general were to try to enforce proper disclosure, if you had a company that was recalcitrant or was not giving proper disclosure because disclosure is linked to the Website, an injunction could be something along the lines of do not have your Website come to the state of California until you follow the law. I don’t know enough about the technology of whether that’s even possible. So, it may require the individual to take down their website in its entirety, which would be very damaging to the business. Especially since we’re talking about large manufacturers that do a hundred million dollars in annual gross receipts.

Sandie [00:21:31] That’s a really good important point to clarify. I often am asked how many companies do 100 million in California? And I have to point out that they don’t have to do 100 million in California. It’s anywhere, right?

Benjamin [00:21:48] Right. Correct. It’s in global receipts. Early estimates of the number of businesses that would fall under this act were somewhere around 3,000. I don’t know what the true heart number count is, but those were some of the early estimates.

Benjamin [00:22:07] And how many could date have you identified? In this article, it says 600 companies have a California supply chain title policy page.

Benjamin [00:22:20] Yeah. So, that article was published a number of years ago. The number is significantly larger than 600, it’s definitely in the thousands. Exactly what the number is, I don’t know. So, that’s another issue that goes into this whole kind of opaque transparency scheme. The state franchise tax board is required under the law to provide the attorney general with the list of companies that would fall under this requirement, but it’s legally unclear of whether that list can actually be published or whether it would be confidential tax information.

Sandie [00:22:57] So, if it were, then your description in this article about the name and shame public campaign becomes an anti-trafficking advocacy tool, right?

Benjamin [00:23:12] Absolutely.

Sandie [00:23:14] So, has anybody tested that here in California?

Benjamin [00:23:18] Not to my knowledge. I know there are some groups that obviously are out there with very much like that list of names to ensure that those corporations are doing so disclosing appropriately. But to my knowledge, there’s been no current legal action on that.

Sandie [00:23:36] Are there other tools that if I bundle these together, like, for instance, my students are always wanting to do more? So, one of the things that we do is a fair-trade fashion show to show how consumer choices actually can drive demand. And I know that when the Trafficking Victims Protection Act was reauthorized in 2008, the Department of Labor was mandated to report on child and forced labor every two years, and their most recent report came out. So, it seems logical that we could pull up that report and then if we had access to the California list and we could do some really serious advocacy with our own companies in California.

Benjamin [00:24:29] Absolutely. And there’s a number of apps applications out there, some that have been partially funded by the State Department to try to give information for consumers on products.

Sandie [00:24:41] Yeah, Toil and Sweat is the DOL app, that’s my favorite. But I want to know how do I get that list, Ben?

Benjamin [00:24:54] I don’t have a good answer for you, unfortunately.

Sandie [00:24:57] But now you’ve charged me up and I’m going to find out and I’m going to keep calling somebody from the FTB, you said?

Benjamin [00:25:07] Yeah, Franchise Tax Board

Sandie [00:25:08] Yeah. So, this is enlightening. And I’m sure I’ll find a student that’s really inspired by this discovery in this article too.

Benjamin [00:25:17] Because the whole goal is it’s not supposed to be that hard to figure out the companies that should be disclosing. That was the whole intent behind the law, is that it should not be this difficult for consumers to understand where the products they are purchasing originated and the corporate practices that went into the manufacturing is supposed to be a lot easier.

Sandie [00:25:41] And that was always my understanding, and so I’m really excited to dig a little deeper and learn from you. We’re kind of coming to the end of our 30 minutes for this. So, I want to give you a chance to say what you would like us to remember about supply chain transparency and how we can be the most effective advocates to partner with that opportunity that we have here in California.

Benjamin [00:26:12] Well, I think that the consumer has a lot of influence over how a business or a corporation will behave, and it’s incumbent upon each one of us to really kind of practice with our consumer dollars, what we preach to our friends and neighbors about where we place our values and how we construct our societal morals. And so regardless of the California Supply Chain Act, I think it’s really important for each one of us to really do our best to support the businesses that we fundamentally agree with.

Sandie [00:26:54] And just in case some of my listeners think, oh, I don’t live in California, this doesn’t apply to me. What you just said earlier is that a hundred-million-dollar marker is global trade volume. And so, these Websites are not just in California, they are everywhere. So, anybody can use this tool.

Benjamin [00:27:16] Absolutely.

Sandie [00:27:17] Well, I am really looking forward to having another conversation with you. Your research really helps me understand some of the complexities and challenges, which I’m sure will lead to opportunities for advocacy for maybe putting more teeth in it. I don’t know if you have any recommendations for what should happen next to make it more effective?

Benjamin [00:27:45] Well, I think some of the affirmative duties to investigate the supply chain and that’s kind of what the United Kingdom has done in their legislation, it’s starting to bear fruit in the UK. It is really starting to change corporations’ policy. So, that might be an area that I would like to maybe see a more aggressive approach legislatively.

Sandie [00:28:07] Alright. So, all those law students and human trafficking advocates out there, this is a project you can take on. And Ben, thank you so much for joining us today. This has been very inspiring for me. And I plan to follow up on several of the things that I’ve learned here today. Thank you.

Benjamin [00:28:28] Excellent, thank you so much.

Dave [00:28:29] Ben, Sandie, thank you. Sandie, what an insightful conversation. The work is never done, is it? There’s so much more for us to do and we’re inviting you to take the next step as well. If you are just starting your journey with us, I hope you’ll hop online and download a free copy of Sandie’s book, The Five Things You Must Know, A Quick Start Guide to Ending Human Trafficking. It is a great starting point for teaching you the five critical things that Sandie has identified that you should know as you join the fight against human trafficking. You can get access by going over to endinghumantrafficking.org. And it’s also a great place to learn more about the anti-human trafficking certificate program here at Vanguard University. And the other thing to know if you hop online is the next Ensure Justice conference. That’s coming up, Sandie! March 6th and 7th, 2020.

Sandie [00:29:27] Oh, my gosh. It’s going to be so fantastic because 2020 is the 20th anniversary of the passage of the Trafficking Victims Protection Act.

Dave [00:29:38] Ensurejustice.com is where to go for that. See you in two weeks, Sandie.

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