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AB-782 Congo Child Labor Act of 2021. (2021-2022)

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Date Published: 03/26/2021 04:00 AM
AB782:v98#DOCUMENT

Amended  IN  Assembly  March 25, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 782


Introduced by Assembly Member Cooper

February 16, 2021


An act to add Chapter 25 (commencing with Section 22757) to Division 8 of the Business and Professions Code, to add Chapter 5.5 (commencing with Section 16644) to Part 2 of Division 4 of Title 2 of the Government Code, to add Chapter 2.10 (commencing with Section 2700) to Part 1 of Division 2 of the Public Contracts Contract Code, and to add Section 19547.7 to the Revenue and Taxation Code, relating to child labor.


LEGISLATIVE COUNSEL'S DIGEST


AB 782, as amended, Cooper. Congo Child Labor Act of 2021.
Existing federal law, the Trafficking Victims Protection Reauthorization Act of 2005, requires the U.S. Secretary of Labor, acting through the Bureau of International Labor Affairs, to monitor and combat forced labor and child labor by, among other things, developing and making available to the public a list of goods from countries that the bureau has reason to believe are produced by forced labor or child labor in violation of international standards.
Existing state law, the California Transparency in Supply Chains Act of 2010, requires retail sellers and manufacturers doing business in the state and having annual worldwide gross receipts that exceed $100,000,000 to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale, as specified.
Existing law governs the bidding and awarding of public contracts by various state agencies. Existing law imposes requirements on contractors awarded various public contracts, including, among others, certifying that no equipment, materials, supplies, apparel, garments, or accessories provided under specified contracts are produced by sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor.
This bill would enact the Congo Child Labor Act of 2021, and would require a retail seller or manufacturer doing business in this state with gross receipts of $10 million or more per year shall not sell or make a product containing 300 or more grams of cobalt unless it has certified, under penalty of perjury, that the cobalt was not mined or refined using child labor by filing a Congo Child Labor Disclosure with the Franchise Tax Board. The bill would require the disclosure to include, among other things, the extent to which the retailer or manufacturer contracts with an independent third party to audit or verify that their supply chains are free of child labor. The bill would specify that a person who certifies under penalty of perjury as true any material matter that the person knows to be false is guilty of a misdemeanor. By creating a new crime and expanding the crime of perjury, this bill would impose a state-mandated local program. The bill would make the exclusive remedy for selling or making a product containing 300 or more grams of cobalt without the required certification to be an action brought by the Attorney General for injunctive relief. The bill would require the board to develop or contract to develop a list of products sold in California that contain 300 grams or more of cobalt and persons who sell or manufacture those products. The bill would require the board to publish the list on its internet website and to provide the list free of charge to any public entity and to the Legislature, upon request.
This bill would prohibit a person that has not filed the disclosure from bidding on or submitting a proposal for a new or renewed contract with a public entity for goods or products that contain more than 300 grams of cobalt and are worth more than $1,000,000. The bill would require a public entity to require a person bidding for or renewing a contract for goods or products containing more than 300 grams of cobalt to submit proof that they have timely filed the disclosure.
This bill would prohibit state funds from being used to purchase, lease, or otherwise acquire, or for grants to third parties that would be used to purchase, lease, or otherwise acquire, products containing cobalt in an amount of 300 grams or more and appearing on the list developed by the Franchise Tax Board unless the retail seller or manufacturer has filed a valid disclosure.
This bill would make related findings and declarations, including that the bill addresses an issue of statewide concern.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 This act shall be known and may be cited as the Congo Child Labor Act of 2021.

SEC. 2.

 The People of the State of California hereby find and declare as follows:
(a) On October 30, 2018, the Enough Project released a report documenting the links between cobalt mining, corruption, and human rights abuses in the Democratic Republic of Congo (“Congo”).
(b) The Congo produced more than two-thirds of the world’s cobalt in 2018.
(c) Current estimates project that increasing demand for cobalt for use in batteries will drive demand higher than production around the year 2030.
(d) On November 15, 2017, Amnesty International released a report detailing that most major electronics and electric vehicle companies had taken minimal to no action to address human rights abuses occurring in mines from which the cobalt in their supply chain is sourced.
(e) The vast majority of cobalt miners in the Congo, approximately 150,000, are employed by artisanal or small-scale mining (“ASM”).
(f) In 2018, children comprised approximately thirteen percent of the ASM cobalt workforce.
(g) Child ASM workers regularly must pay bribes to the local government members that are tasked to ensure that no children work at the mines.
(h) The Congo’s presidential security force, known as the Republican Guard, is known to violently and forcefully silence protests or claims for higher prices by miners in ASM.
(i) The serious and urgent nature of the threats to human rights posed by the cobalt industry in the Congo demands that states, local governments, educational institutions, and private institutions work together to quell the flow of capital to the organizations in the Congo that commit, or fail to take sufficient action to prevent, those human rights violations.
(j) It is the responsibility of this state and local governments to decide how, where, and by whom its financial resources should be invested. It is the prerogative of state and local governments to not award contracts or grants to companies or individuals who support the Congo’s cobalt industry as it currently exists.
(k) In order to effectively respond to the policies of the Congo’s cobalt trade in a uniform fashion, placing companies and individuals on the list of those who deal in the Congo’s cobalt trade must be accomplished on a statewide basis, and, therefore, the subject is a matter of statewide concern rather than a municipal affair.

SEC. 3.

 Chapter 25 (commencing with Section 22757) is added to Division 8 of the Business and Professions Code, to read:
CHAPTER  25. Congo Child Labor Disclosure

22757.
 As used in this chapter, the following definitions apply:
(a) “Board” means the Franchise Tax Board.
(b) (1) “Child labor” means work that is harmful to the health, well-being, safety, or morality of a person under 18 years of age.
(2) “Child labor” includes, but is not limited to, both of the following:
(A) The use of children in armed conflict, sex trafficking, and drug trafficking, or in activities used to fund armed conflict, sex trafficking, or drug trafficking operations.
(B) Depriving children of the opportunity to attend school in a meaningful manner by requiring them to engage in any of the work described in this subdivision.
(c) “Doing business” shall have the same meaning as set forth in Section 23101 of the Revenue and Taxation Code.
(d) “Gross receipts” shall have the same meaning as set forth in Section 25120 of the Revenue and Taxation Code.
(e) “Manufacturer” means a business entity with manufacturing as its principal business activity code, as reported on the entity’s tax return filed under Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code.
(f) “Person” means any of the following:
(1) A natural person, corporation, company, limited liability company, business association, partnership, society, or trust.
(2) Any successor, subunit, parent company, or subsidiary of, or company under common ownership or control with, any entity described in paragraph (1).
(g) “Retail seller” means a business entity with retail trade as its principal business activity code, as reported on the entity’s tax return filed under Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code.

22757.1.
 (a) A retail seller or manufacturer doing business in this state with gross receipts of ten million dollars ($10,000,000) or more per year shall not sell or make a product containing 300 or more grams of cobalt unless it has certified, under penalty of perjury, that the cobalt was not mined or refined using child labor by filing a Congo Child Labor Disclosure with the board that shall, at a minimum:
(1) Contain a statement that to the best of the retail seller’s or manufacturer’s knowledge, the product does not contain cobalt mined or processed using child labor.
(2) Disclose to what extent, if any, the retail seller or manufacturer does each of the following:
(A) Engages in verification of product supply chains to evaluate and address risks of child labor. The disclosure shall specify whether or not the verification was conducted by an independent third party.
(B) Conducts audits of suppliers to evaluate supplier compliance with company standards for child labor in supply chains. The disclosure shall specify whether or not the audits were independent and unannounced.
(C) Requires direct suppliers to certify that materials incorporated into their products comply with the laws regarding child labor of the country or countries in which the suppliers are doing business.
(D) Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding child labor.
(E) Provides training on child labor to company employees and management who have direct responsibility for supply chain management. The disclosure shall specify whether or not the training includes mitigation of risks within the supply chains of products.
(F) Contracts with an independent third party to audit or verify that their supply chains are free of child labor.
(b) A person who certifies under penalty of perjury as true any material matter pursuant to this section that the person knows to be false shall be guilty of a misdemeanor.
(c) The exclusive remedy for selling or making a product containing 300 or more grams of cobalt in violation of subdivision (a) shall be an action brought by the Attorney General for injunctive relief.
(d) Nothing in this section shall limit remedies available for a violation of any other state or federal law.

22757.2.
 The board shall develop or contract to develop a list of products sold in California that contain 300 grams or more of cobalt and persons who sell or manufacture those products. The board shall publish the list on its internet website.

SEC. 4.

 Chapter 5.5 (commencing with Section 16644) is added to Part 2 of Division 4 of Title 2 of the Government Code, to read:
CHAPTER  5.5. Prohibition on Use of State Funds Cobalt Products without Congo Child Labor Disclosure

16644.
 State funds shall not be used to purchase, lease, or otherwise acquire, or for grants to third parties that would be used to purchase, lease, or otherwise acquire, products containing cobalt in an amount of 300 grams or more and appearing on the list developed by the Franchise Tax Board pursuant to Section 22757.2 of the Business and Professions Code unless the retail seller or manufacturer has filed a valid Congo Child Labor Disclosure pursuant to Section 22757.1 of the Business and Professions Code.

SEC. 5.

 Chapter 2.10 (commencing with Section 2700) is added to Part 1 of Division 2 of the Public Contract Code, to read:
CHAPTER  2.10. Congo Child Labor Disclosure

2700.
 (a) For purposes of this section, “person” means any of the following:
(1) A natural person, corporation, company, limited liability company, business association, partnership, society, or trust.
(2) Any successor, subunit, parent company, or subsidiary of, or company under common ownership or control with, any entity described in paragraph (1).
(b) A person that has not filed a Congo Child Labor Disclosure pursuant to Section 22757.1 of the Business and Professions Code shall be ineligible to, and shall not, bid on or submit a proposal for a new or renewed contract with a public entity for goods or products that contain more than 300 grams of cobalt and are worth more than one million dollars ($1,000,000).
(c) A public entity shall require that a person bidding for or renewing a contract for goods or products containing more than 300 grams of cobalt submit proof that they have timely filed a Congo Child Labor Disclosure pursuant to Section 22757.1 of the Business and Professions Code.

SEC. 6.

 Section 19547.7 is added to the Revenue and Taxation Code, to read:

19547.7.
 The Franchise Tax board shall provide the list developed pursuant to Section 22757.2 of the Business and Professions Code free of charge to any public entity and to the Legislature, upon request.

SEC. 7.

 This act shall be broadly construed to accomplish its purpose.

SEC. 8.

 If any one or more provisions, sections, subdivisions, sentences, clauses, phrases, or words of this act or the application thereof to any person or circumstance is found to be invalid, illegal, unenforceable, or unconstitutional, the same is hereby declared to be severable and the balance of this act shall remain effective and functional notwithstanding such invalidity, illegality, unenforceability, or unconstitutionality.

SEC. 9.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.