Companies Duck Disclosure of Supply-Chain Slave Labor

SAN FRANCISCO (CN) – Building on prior rulings, the Ninth Circuit issued six opinions Tuesday holding that corporations have no duty to disclose the use of slave labor in their supply chains under California law.

The unpublished opinions follow a more in-depth, published decision from last month, which held that candy maker Mars Inc. did not have to tell consumers about “reprehensible” labor practices because “they are not physical defects that affect the central function of the chocolate products.”

Following that logic, a three-judge panel on Tuesday affirmed the dismissal of six lawsuits filed against Hershey, Nestle, Nestle Purina, Tri-Union Seafoods, Big Heart Pet Brands, and Mars Petcare.

In each case, the panel cited a 2006 California appeals court ruling, Daugherty v. Am. Honda Motor Co, which held a carmaker had no duty to disclose a product defect if the product did not fail during the warranty period.

Despite a growing list of defeats for consumers pushing to make companies disclose the use of forced labor, a Ninth Circuit judge indicated last month that a similar suit against Costco could go a different way. That’s because Costco displayed a code of conduct on its website that “prohibits human rights abuses” in its supply chain. Ninth Circuit Judge Mary Schroeder said she was not convinced the company could publicly announce it does not tolerate such conduct and still claim it has no obligation to enforce the policy.

Three lawsuits filed in 2015 against Hershey, Nestle and Mars claimed the companies failed to warn consumers that “the worst forms of child labor” were used to harvest cocoa beans in the Ivory Coast for their candy bars and chocolate products. Some child slaves are sold by their parents while others are victims of kidnapping and trafficking, according to international labor reports.

Hershey, Nestle, and attorneys representing plaintiffs in lawsuits against them did not immediately return emails and phone calls seeking comment Wednesday.

Lawsuits against pet food and seafood sellers allege their ingredients come from the waters of Southeast Asia, where victims of human trafficking are forced to board fishing boats and harvest prawns and shrimp used in pet food and packaged frozen seafood.

In 2015, The Associated Press published a Pulitzer prize-winning investigation on the widespread use of slave labor in Southeast Asia’s multibillion-dollar fishing industry.

The six unpublished opinions were issued by Circuit Judges A. Wallace Tashima, William Fletcher and Marsha Berzon.

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