Supply Chain Responsibility
On January 1, 2012, the California Transparency in Supply Chains Acts of 2010 (SB 657) (the “Act”) went into effect in the State of California. The Act seeks the elimination of forced labor, slavery and human trafficking from product supply chains and requires that companies disclose their efforts to ensure that their supply chains are free from forced labor, slavery or human trafficking.
In July 2011, Isola joined the Electronic Industry Citizenship Coalition (EICC) as an applicant member. As we work toward becoming a full member of the EICC, we have begun to review our supply chain, our supplier practices and our policies and procedures with respect to our suppliers. As a result of this review, we have begun to take actions to ensure that our direct supply chain is free from forced labor, slavery or human trafficking, including the following:
- Written Policies and Procedures: In connection with joining the EICC, Isola has adopted the EICC Code of Conduct and is working toward full implementation of it within our company. The EICC Code of Conduct contains internationally recognized labor and human rights standards which include, among other things, freely chosen employment, child labor avoidance, restrictions on working hours, and humane treatment of employees. Further, the EICC Code of Conduct requires that we operate our business in compliance with all applicable labor laws, rules and regulations, including but not limited to, all laws forbidding the solicitation, facilitation or any other use of slavery or human trafficking, as those terms are defined in the Act. Presently, Isola has purchasing agreements or purchase order terms and conditions in place with most of our direct suppliers. In 2012, we intend to review the terms and conditions of each of these agreements and revise them as necessary to include language requiring each of our suppliers to comply with international standards and applicable laws and regulations that prohibit forced labor, slavery or human trafficking.
- Supplier Certifications: In 2012, we will require all of our suppliers to certify their compliance with EICC Code of Conduct, including the provisions barring the use of forced labor, slavery or human trafficking.
- Third-Party Audits: Beginning in 2012, we will commence conducting targeted audits of suppliers to ensure they are in compliance with the EICC Code of Conduct, including compliance with all applicable labor laws, rules and regulations governing forced labor, slavery and human trafficking, as set forth in the Act. These audits will be announced to our suppliers in advance, and we expect that over a period of several years, we will audit all of our suppliers. We reserve the right to use a third party to conduct these audits.
- Accountability Standards: Isola has a zero tolerance policy for violations of the laws banning forced labor, slavery or human trafficking. Should we determine that one of our suppliers has violated any of these laws, we will take immediate action to remove the supplier from our approved vendor list. In addition, any Isola employee who fails to alert executive management of any prohibited activities concerning slavery and trafficking by Isola suppliers will be subject to discipline up to and including termination of employment.
- Employee Training: Starting in 2012, Isola will conduct training for all employees whose job functions include purchasing. This training will be designed to emphasize the standards set forth in the EICC Code of Conduct and the importance of ensuring that our suppliers comply with laws that prohibit forced labor, slavery or human trafficking and the requirement that our employees immediately advise executive management of any issues or concerns regarding noncompliance by our suppliers. Following the initial training, we will provide regular updates and refreshers as necessary.
Isola is committed to taking all necessary measures to eradicate slavery and human trafficking in our direct supply chain. We will continue to update our policies and procedures as needed to ensure that we have appropriate safeguards against any mistreatment of persons involved in our direct supply chain.