A coalition of 80 institutional investors sent a
letter to Congress last week in support of the Business
Transparency on Trafficking and Slavery Act (HR 2759).
As discussed previously, the proposed legislation would require
companies to disclose efforts to identify and address the risks of
human trafficking, forced labor, slavery, and the worst forms of
child labor in their supply chains.
Modeled after the
California Transparency in Supply Chains Act, which went into
effect on January 1, 2012, the proposed federal legislation, unlike
the California statute, is not limited to retailers and
manufacturers. If enacted, the legislation would be applicable to
any publicly-traded or private company currently required to submit
annual reports to the Securities and Exchange Commission
("SEC"), as long as the company meets an established
annual gross receipts threshold. Companies would be required to
include the required disclosures in their annual reports to the
In a letter sent to Speaker of the House John Boehner and House
Majority Leader Eric Cantor, members of the Interfaith Center on
Corporate Responsibility and U.S. SIF: The Forum for Sustainable
and Responsible Investment called for HR 2759 to be placed at
the top of the legislative agenda in order to move "this
important legislation forward in an expeditious manner."
In urging Congressional leaders to prioritize the bill, the
investors stated that the proposed legislation
"reflects the realities of the marketplace, which
increasingly requires that companies be sensitive to social and
ethical issues, including human rights, in their operations and
global supply chains, and create human rights policies, as well as
due diligence processes to evaluate, monitor, and strengthen these
Notably, the investors' statement also argued that the U.N
Human Rights Council's unanimous endorsement of the
Guiding Principles on Business and Human Rights in June 2011
established "a global norm for the 'corporate
responsibility to respect' human rights and underscores the
importance of public reporting by companies."
When it was introduced in August 2011, HR 2759 was referred to
the House Committee on Financial Services and currently sits with
the Subcommittee on Capital Markets and Government Sponsored
Enterprises. Given the contentious climate on Capitol Hill, and the
upcoming presidential election, it is unlikely that the bill will
move in 2012, but its introduction is reflective of shifting
expectations regarding the responsibilities of companies to
identify and account for the adverse human rights impacts of their
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In Ambac v. Countrywide, plaintiff Ambac Assurance Corporation, a monoline insurer, guaranteed payments on certain residential mortgage-backed securities issued by defendant Countrywide Home Loans Inc.
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