Congo Child Labor Act of 2021.
The legislation is a proactive measure to align California's business practices with a commitment to human rights by ensuring transparency in supply chains involving cobalt. By compelling companies to disclose their sourcing practices, it seeks to hold them accountable for ensuring that their products do not contribute to child labor and human rights abuses. Furthermore, businesses that fail to comply with the disclosure requirements will become ineligible to bid on public contracts involving cobalt, thus impacting their operational capabilities significantly.
Assembly Bill 782, known as the Congo Child Labor Act of 2021, addresses significant concerns regarding child labor in cobalt mining, particularly in the Democratic Republic of Congo. The bill mandates that any retail seller or manufacturer operating in California with gross receipts over $10 million must not sell or make products containing 300 or more grams of cobalt unless they can certify, under penalty of perjury, that the cobalt is free from child labor practices. This certification is to be submitted via a Congo Child Labor Disclosure to the Franchise Tax Board, which will also create a public list of all relevant products and sellers.
Sentiment surrounding AB 782 has largely been supportive among child rights advocates and some segments of the business community who value ethical sourcing and transparency. However, there is notable opposition from some business groups concerned about the logistical and financial burdens imposed by the new compliance requirements. Critics argue that the obligations might disproportionately affect small manufacturers who may lack the resources to certify their supply chains adequately.
Notable points of contention include the implications of these requirements on local businesses and the management of compliance processes. Critics raise concerns that the legislation could inadvertently restrict competition by placing heavy burdens on companies that, unlike larger corporations, may find it challenging to establish comprehensive auditing and verification mechanisms for their supply chains. Additionally, the potential for penalties, including misdemeanors for false certifications, has raised concerns about the extensive legal implications for businesses operating under tight margins.