California Transparency in Supply Chains Act and Conflict Mineral Disclosure
(December, 2015)

Jonathan Louis International, Ltd. (“Jonathan Louis” or “We”) believes strongly in corporate responsibility and acting in compliance with applicable state and federal laws.  In 2010, California passed the California Transparency in Supply Chains Act (SB 657) to help customers of large retailers and manufacturers identify whether those companies are making an effort to help eradicate slavery and human trafficking in their supply chains.

In 2010, Congress passed the Dodd-Frank Act, which directs the Commission to issue rules requiring certain companies to disclose their use of conflict minerals if those minerals are “necessary to the functionality or production of a product” manufactured by those companies.  Under the Act, those minerals include tantalum, tin, gold or tungsten.

Congress enacted Section 1502 of the Act because of concerns that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the DRC region and is contributing to an emergency humanitarian crisis. 

We seek to use only suppliers which we believe act in a responsible manner, including having no involvement with slavery, human trafficking, forced labor or child labor in violation of international standards or helping finance conflict in the DRC region.  Although price is an important criteria in selecting vendors, we evaluate our vendors on many other criteria, such as business history, financial stability, quality, timeliness of delivery, working conditions, and compliance with laws.

We take the ongoing and tragic global condition of slavery and human trafficking and the exploitation and trade of conflict materials very seriously.  In order to do our part to eliminate these human rights violations, we have implemented important practices in the management of our supply chain.  In the spirit of keeping our customers informed, and in compliance with the Transparency in Supply Chains Act, we would like to describe the compliance program we recently adopted:  

1. Verification Jonathan Louis attempts to annually evaluate and address potential risks of human trafficking and slavery and the exploitation and trade of conflict materials. Prior to engaging with a supplier, we inquire about their use of tantalum, tin, gold or tungsten sourced from the Democratic Republic of the Congo, Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia (the “listed countries”). We also use the US Department of Labor’s Bureau of International Labor Affairs “List of Goods Produced by Child Labor or Forced Labor” online database (link below) to determine whether the supplier may carry a heightened threat of inhumane labor practices.  We continue to monitor this database through the duration of our relationship with a supplier.  We have also developed a system of periodic audits and inspections of suppliers, conducted directly by trained Jonathan Louis personnel, to be performed even if the supplier’s country and industry have not been initially flagged as a risk. During these inspections, our personnel use an internally developed rubric and multi-part assessment to make note of any potential issues and any necessary follow-up.  We do not use a third party verifier.  Our personnel are currently unable to verify whether our suppliers use labor brokers.

2.  Audits  In an effort to detect any potential indications of human trafficking and slavery or use of tantalum, tin, gold or tungsten sourced from any of the listed countries in our supply chain, we audit approximately 20% of our suppliers each year.  We work diligently to negotiate this level of access into every business relationship in our system.  Our trained employees document any issues during their periodic, announced inspections of our suppliers.  Having this direct insight into supplier conditions allows us to react swiftly and aggressively to any problems we discover.  In order to make the most of limited resources and promote efficiency, auditing frequency generally correlates to the volume and significance of the supplier to our operation.

3. Certification As part of our agreements with suppliers, we request written certification that they comply with Section 1502 of the Dodd-Frank Act as well as the laws regarding slavery and human trafficking of the United States and of the country or countries in which they do business.  This certification also requires suppliers to attest to refraining from, among other things, employing forced labor, child labor, harassment, and discrimination or use of tantalum, tin, gold or tungsten sourced from the listed countries.  Failure to abide by human trafficking and slavery laws or to address concerns we identify may be cause for termination of the relationship with the supplier.

4. Internal Accountability Jonathan Louis developed internal accountability standards and procedures for employees and contractors failing to meet our company standards regarding slavery and trafficking.  If and when our company uncovers employee or contractor compliance problems, we provide written notice and a specified period of time to take corrective action.  Further, we have designated an officer within the company to monitor internal compliance.

5. Training To ensure that employees are aware of and can identify potential risks for slavery and human trafficking in the supply chain, from time to time Jonathan Louis will bring in outside advisors to conduct trainings on policies, practices and procedures designed to ensure that our supply chain is free of any type of coerced labor or use of tantalum, tin, gold or tungsten sourced from the listed countries, including how to spot warning signs of potential human rights violations.  Employees who ignore signs of child or forced labor are subject to disciplinary action up to and including termination of employment.  Training is required for every employee involved in supply chain management, audits of our suppliers and our highest officers.

6. Contact US.  If you become aware of or suspect that a supplier or other party with whom we do business violates slavery, human trafficking, Section 1502 of the Dodd-Frank Act or other laws, please contact us immediately at [supplychain@jonathanlouis.net].

Resources:
United States Department of Labor’s Bureau of International Labor Affairs “List of Goods Produced by Child Labor or Forced Labor”:
http://www.dol.gov/ilab/reports/child-labor/list-of-goods/ 
For more information about slavery and human trafficking, please explore the following resources:
U.S. Government “Trafficking in Persons Report”:
http://www.state.gov/j/tip/rls/tiprpt/index.htm
U.S. Department of Labor “Findings on the Worst Forms of Child Labor”:
http://www.dol.gov/ilab/reports/child-labor/findings/
International Labor Organization “Forced Labor, Human Trafficking and Slavery”
http://www.ilo.org/global/topics/forced-labour/lang--en/index.htm