The State of California’s Transparency in Supply Chains Act Disclosure
The Company, both in its Supplier Long Term Agreements and Purchase Orders, requires direct suppliers to warrant that the performance of any work for the Company, including any materials provided by or incorporated into suppliers’ work for the Company, is in strict compliance with all laws, rules, regulations, ordinances, proclamations, demands, directives or other legal requirements that govern the current or future manufacture, sale or delivery of the components contemplated by the supply documents. Commencing in 2014, in both its Supplier Long Term Agreements and Purchase Orders, the Company expanded its compliance by including legal terms or conditions to specify that a supplier’s violation of any applicable laws relating to basic working conditions and human rights, including laws regarding slavery and human trafficking, is a material breach of the supply documents giving the Company the right to cancel and exercise any other legal rights available to the Company until the supplier furnishes Company with a certificate of compliance relating to such laws and regulations. The Company does not, however, on a regular basis, either: (i) engage in verification of product supply chains to evaluate and address risks of human trafficking and slavery or (ii) audit suppliers to evaluate suppliers’ representation of compliance with applicable laws concerning trafficking and slavery in supply chains. Commencing in 2015, the Company requires its senior leadership responsible for supply chain management to participate in annual continuing education for mitigating risks of human trafficking and slavery within the supply chains of products.
The Company also participates in a government-sponsored program that protect against illegal activities in the supply chain, including human trafficking and other forms of terrorism. Since 2007, the Company has been a validated, tier-2 member of the Customs-Trade Partnership Against Terrorism (C-TPAT) supply chain security program. C-TPAT is a voluntary public-private sector partnership program that mandates the implementation and maintenance of specific minimum security measures in the supply chain. For example, the container security aspect of the program provides for high-level scrutiny during the sealing, inspection, storage and receipt of shipment containers. The Company engages third party brokers and transporters who are also members of C-TPAT. As a part of this program, the Company performs regular on-site inspections of its domestic and international facilities and training to its employees to confirm compliance with C-TPAT.