CA SB657: Supply Chain Transparency Act
At STUDIO GHIBLI, we have always worked to ensure ethical working conditions throughout our supply chain. We make in-person factory visits and require independent, third-party audits to verify that the environment is as safe and healthy as it was presented to us. In accordance with the California Supply Chain Transparency Act, the following are the actions we take to ensure that human trafficking and slavery do not exist anywhere in our supply chain.
At a minimum, disclose to what extent, if any, that the retail seller or manufacturer engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.
- STUDIO GHIBLI requires all direct suppliers to go through annual compliance audits, as well as quarterly observation audits, which are performed by an accredited third-party auditing firm. These audits focus on assessing working and living conditions of the workers, verifying wages and ensuring workers are paid according to the hours worked, ensuring health and safety aspects in the working and living environments are properly maintained as well as making sure all documents and records are available, valid, and verified.
- STUDIO GHIBLI shares our Vendor Code of Conduct (VCOC) with all of our direct suppliers and requires this to be displayed in a central location at the factory. The VCOC has been translated into the major languages used along our supply chain (English, Spanish, Italian, Chinese Simplified, and Vietnamese).
- Prior to starting a business relationship with STUDIO GHIBLI, direct suppliers are required to complete vendor profiles providing information regarding social responsibility, including, but not limited to, standard hours worked per employee per week, minimum age of workers, disciplinary procedures, and preventative actions against forced or imprisoned labor. This document allows STUDIO GHIBLI to evaluate risk at the early stages of a new partnership.
At a minimum, disclose to what extent, if any, that the retail seller or manufacturer conducts audits of suppliers to evaluate supplier compliance with company standards for human trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.
- Full audits occur annually and is semi-announced (the factory is given a 10-day window where the audit could occur), conducted by an accredited third-party auditing firm. The audit focuses on labor, wages/hours, health and safety, management systems and environment. The auditors perform in-person interviews, both one-on-one and in groups in the local language in order to better understand the working conditions and feedback that workers may have about working at the facility. The auditor reviews payroll and attendance records in order to ensure that compensation both meets legal minimums and workers are paid for the correct hours & overtime.
- Additional quarterly unannounced observational audits are performed based solely on visual observation, focusing on labor and health and safety requirements. Observation audits provide good insight into daily and routine practices at the facility.
- CAPs (Corrective Action Plans) are required to address any non-compliance findings and allows STUDIO GHIBLI to work directly with the suppliers towards a solution to either correct, improve, or enhance systems and procedures within the facility.
- STUDIO GHIBLI conducts all annual audits using an expanded sampling, which provides a larger representation of the wages/hours data at each facility.
- Members of the STUDIO GHIBLI supply chain team have participated in multiple audits and worker interviews.
At a minimum, disclose to what extent, if any, that the retail seller or manufacturer requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.
- STUDIO GHIBLI’s VCOC is shared with all our direct suppliers. The VCOC highlights the accountability a factory has to comply according to local and international labor laws such as discrimination, child labor, forced labor, and disciplinary practices.
- We are introducing our VCOC to all materials suppliers along the supply chain to ensure awareness and compliance for all parties related to STUDIO GHIBLI.
4. Internal Accountability
At a minimum, disclose to what extent, if any, that the retail seller or manufacturer maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
- STUDIO GHIBLI’s core values—“the ethical choice is the right choice” and “everyone can and should make a difference”—are two values that our teams use to guide decisions, both in supply chain relationships as well as internal decision-making.
- While we are determined to work only with suppliers that have like-minded values, we can only effectively impact slavery and human trafficking with the support and cooperation of our suppliers.
- We have a zero-tolerance policy for any labor-related non-compliances found in the supply chain. As such, we will immediately terminate business relationships regardless of contract or potential revenue.
- CA SB657 compliance training was completed by all parties that interact with our supply chain. This training provided us with tools to mitigate risk within the supply chain and provide next steps if a team member discovers any non-compliance.
At a minimum, disclose to what extent, if any, that the retail seller or manufacturer provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
- The STUDIO GHIBLI Compliance team attends trainings and seminars to ensure internal awareness of various supply chain trends specifically in regards to labor and human rights issues. We partner with third-party entities to obtain information across our global supply chain.
STUDIO GHIBLI Product and Supply Chain teams are required to participate in the CA SB657 compliance training on forced labor and human trafficking violations, and steps to identify and report on high-risk areas across the supply chain. Such training has been conducted for existing team members and will be required for all new hires.