California Transparency in Supply Chains Act of 2010

On January 1, 2012, the California Transparency in Supply Chains Act of 2010 (SB 657) went into effect in the State of California. Under the law, large manufacturers and retailers are required to disclose their efforts to eradicate slavery and human trafficking within their supply chains. The law’s underlying purpose is to educate consumers, so they can make informed decisions and purchase goods from companies that responsibly manage their supply chains.

American Freight® supports the fight against slavery and human trafficking. We prohibit human trafficking and slave labor in our operations and our company standards require compliance with applicable laws and regulations. Our Vendor Code of Conduct demonstrates our commitment to protecting the working rights and safety of the people who produce and supply products to our company. We are in the process of establishing contractual obligations requiring all vendors to be in compliance with our Vendor Code of Conduct.

Verification

Our Vendor Code of Conduct requires our vendors to refrain from the direct or indirect use of forced labor or any forms of human trafficking. Pursuant to our Vendor Code of Conduct, our vendors, not a third party, must verify/certify that their suppliers in their supply chains understand and comply with the requirements regardless of local business practices or social customs. We are still in the process of ensuring that all vendor contracts obligate them to follow our Vendor Code of Conduct.

Audit

Our Vendor Code of Conduct states that we may conduct reasonable audits on our vendors to ensure compliance. We do not use a third party company to conduct audits. We are still in the process of ensuring that all vendor contracts obligate them to follow our Vendor Code of Conduct. We have still not conducted any audits of vendors, but plan to do so in the future.

Certification

Our Vendor Code of Conduct requires our vendors to comply with all laws that may be applicable to doing business with our company, including, without limitation, the California Transparency in Supply Chains Act. Under our Vendor Code of Conduct, each vendor must supply certification as reasonably requested by our company to evidence such compliance. No vendors have provided us with a certification at this time, but we expect certifications in the near future.

Internal Accountability

We require all associates to follow the standards and principles set forth in the company Code of Ethics. We are in the process of obtaining agreement from all of our vendors to follow the standards and principles set forth in the Vendor Code of Conduct and all laws that may be applicable to doing business with our company. As with all alleged violations of policy, we investigate issues and take the appropriate action up to and including termination of associates and termination of agreements for vendors.

Training

We provide our managers and employees who have direct responsibility for supply chain management with knowledge and information regarding the California Transparency in Supply Chains Act.