The California Transparency in Supply Chains Act (the “Act”) requires certain businesses to provide disclosures concerning their efforts to eradicate human trafficking and slavery from their direct supply chain for tangible goods offered for sale. The disclosures are intended to provide consumers the ability to make more informed choices about the products and services they buy and companies they support. This is Blue Apron’s (the “Company,” “we,” “us” or “our”) California Transparency in Supply Chains Act Human Trafficking and Slavery Disclosure (this “Disclosure”).
We believe that societies, economies and businesses thrive when human rights are respected and protected. In fact, respect for human rights is fundamental to our mission of making incredible home cooking accessible to everyone, our vision of building a better food system and our commitment to ethical business conduct.
Our current global footprint is limited, as the majority of our food supply chain is comprised of food suppliers located in the United States. Nevertheless, regardless of geographic location, we strive to source from suppliers that share our expectations as they relate to human trafficking and slavery as further described herein (the “Supply Chain Standards”) and we are in the process of implementing a responsible sourcing program that, among other things, is designed to avoid complicity in human rights violations related to our supply chains.
VERIFICATION
Verification Protocols. We take steps to help us evaluate and address risks of human trafficking and slavery in our food supply chain. More specifically:
- Initial Expectation-Setting and Request for Feedback. Because we work within a diverse value chain of suppliers, we recognize that each entity in our supply chain has its own independent duty, and we expect them, to comply with applicable laws, rules and regulations. We also expect our direct and active food suppliers (“Suppliers”) to enter into our suite of supply agreements which includes, without limitation, a Supplier Code of Conduct (the “Supplier Code of Conduct”) and Standard Terms and Conditions (the “Terms and Conditions”) that set forth our Supply Chain Standards as further discussed below. Our first step in the verification process, therefore, is to set clear expectations for our Suppliers through the onboarding documentation they are expected to review, acknowledge and execute. It is our expectation that the standards we set forth in our suite of supply agreements provide a sound starting point in the process of assessing the risk of human trafficking and slavery in our food supply chain.
- Initial Supplier Due Diligence Screening. As part of the process of onboarding new Suppliers, we include inquiries specifically designed to identify and assess human trafficking and slavery risks.
- Retained Compliance Advisors. In support of our verification process, we have engaged our outside legal advisor’s dedicated Supply Chain Compliance and Corporate Social Responsibility Practice to serve as our outside compliance advisor (“Compliance Advisor”). Our Compliance Advisor assists us in our efforts to develop and implement our herein-described protocols, and counsels us on an as-needed basis on compliance-related issues related to identifying, assessing, and managing the risk of human trafficking and slavery in our supply chains.
- Ongoing Compliance with our Supplier Code of Conduct and Terms and Conditions. We may periodically send our Suppliers targeted communications (i) reminding them of their ongoing obligation to comply with our Supplier Code of Conduct and Terms and Conditions, including those terms dealing with human trafficking and slavery, and (ii) instructing them to immediately notify us if and when they have reason to believe they are in violation of our clearly-articulated requirements and expectations. We may also at any time require our Suppliers to independently acknowledge or certify to their obligations to comply with the standards set forth in our Supplier Code of Conduct.
Monitoring/Frequency. We reserve the right at all times to require our Suppliers to certify to their compliance with the obligations set forth in our Supplier Code of Conduct and Terms and Conditions, including those terms related to human trafficking and slavery. We are working towards an ongoing certification program for our Suppliers that will supplement the representations they are currently expected to make at the time of onboarding.
Independent Third Party Auditors. We have an onboarding and audit program for our Suppliers that includes, without limitation, review of detailed food safety compliance records and documentation and announced on-site audits of their facilities. These audits are performed by our internal food safety teams as well independent third party auditors. Our third-party auditors are trained on and utilize our standards and audit processes and provide detailed feedback and reports on the results of the audits. As we build out the Supply Chain Audit Program, as defined and further described below, we are exploring whether we can effectively expand these existing audits by our internal and third party auditors to evaluate Supplier compliance with our Supply Chain Standards.
Labor Brokers. We do not use labor brokers.
SUPPLIER AUDITS
While “verification” is designed to identify, assess, and manage supply chain risks, “auditing” refers to activities a company takes to evaluate ongoing supplier compliance with existing company standards for human trafficking and slavery in its supply chain(s). From the outset of our Supplier relationships, we are very clear that we only want to work with Suppliers who share our compliance commitment, have the ability to consistently meet our standards and are committed to values of conduct that are compatible with ours. Our Supplier Code of Conduct states that “[i]t is the Company’s intent to select and retain Suppliers who share and embrace the letter and spirit of the Company’s commitment to integrity.”
- Audit Rights. Our Supplier Code of Conduct informs all Suppliers that we reserve “the right to audit, or designate a third Person to audit Supplier and [its] Facilities.” Under the terms of our Supplier Code of Conduct, we have the right to audit any applicable production facility (“Facility”) or any of our Supplier’s suppliers, carriers, contractors, or other Representatives (as defined below). Our Supplier Code of Conduct further provides that “[t]he audit will be unrestricted, and may occur with or without advance notice. Supplier will require that the applicable Facility’s management provide access to the Facilities and all books and records which will allow for a comprehensive Supplier Code of Conduct audit to be conducted, including an opportunity for confidential and private interviews with Facility employees selected by the Company or its auditor. No retaliation is permitted to be taken against any employee or auditor.”
- Audit Methodology. As our use of foreign Suppliers increases and the geographic footprint of our food supply chain grows, we have begun the process of designing and implementing a risk-based Supplier audit program (“Supply Chain Audit Program”). This program will be used to audit certain Suppliers to ensure that their labor practices comply with our Supply Chain Standards. These audits may include on-site inspections, document review, interviews with management and workers or any combination of the foregoing.
- Access to Records. Our Supplier Code of Conduct requires Suppliers to maintain and make available on-site at their Facilities “the documentation that may be needed to verify compliance with this Code of Conduct and with the applicable Laws of the jurisdiction(s) where the Products are Produced. All such documentation is to be made available upon request of the Company or its auditor.” Similarly, our Terms and Conditions require Suppliers to “maintain records of any audits conducted at the Facilities and of any corrective actions taken in response to such audits. . .”
Our Additional Actions to Encourage Supplier Compliance and Accountability.
- Anonymous Reporting. As our Supplier Code of Conduct states, “Supplier and its Representatives are encouraged to report to the Company unlawful, inappropriate or questionable activity or behavior in relation to, or suspected violations of, this Code of Conduct by sending a letter or email to the Company. All such reports will be treated as confidential, and any individual reporter may remain anonymous, where permitted by applicable Law.”
- Remediation. In accordance with our Terms and Conditions, Suppliers must also provide us with updates regarding any remediation efforts required as a result of deficiencies identified during inspections or audits. Our Supplier Code of Conduct, moreover, advises that, “[i]f Supplier’s business relationship with the Company has been terminated or suspended in connection with the foregoing, the Company may consider resuming business with Supplier or such Facility only after an audit satisfactory to the Company has been completed. A plan for sustainable improvement may be required. In the event that a corrective action plan is required by the Company, such action plan will be conducted on a timeline specified by the Company. The Company will review and approve the action plan and set a target re-audit date.”
- Non-Retaliation. Our Supplier Code of Conduct instructs that “[n]o retaliation is permitted to be taken against any employee or auditor” and any “[r]etaliation or reprisal against any individual who in good faith reports any such unlawful, inappropriate or questionable activity or behavior or suspected violation may result in the immediate termination of Supplier’s relationship with the Company.”
SUPPLIER CERTIFICATION
We require our Suppliers to comply with our anti-trafficking and anti-slavery standards. Our Suppliers represent in writing, through executing our supplier agreements, that they and their representatives (which include, without limitation, our Supplier’s affiliates and its and their respective suppliers, officers, directors, employees, carriers, contractors, representatives and agents (collectively, “Representatives”)) are in compliance with our Supply Chain Standards. We reserve the right at all times to require a separate certification from our Suppliers to further confirm their compliance with the Supply Chain Standards.
- Materials Free of Trafficked and Slave Labor. Our Terms and Conditions require our Suppliers to ensure that they and their Representatives comply with “all applicable Laws dealing with human rights . . . .” We require our Suppliers to, among other things, represent in writing that “[a]ll materials incorporated into the products are produced without the use or involvement of any forced labor, child labor or human trafficking.” Suppliers must also take steps to prohibit “the use of any forced labor or child labor in its labor force, business or supply chain.” Our Suppliers must maintain audit records and permit unrestricted facility inspections, as described above. This requirement remains in place throughout our relationship with our Suppliers and we require that our Suppliers ensure that their supply chain(s) also comport with our standards.
- Compliance with Applicable Laws. Our Terms and Conditions require our Suppliers to ensure that they and their Representatives comply with “all applicable Laws dealing with human rights,” and that they prohibit “the use of any forced labor or child labor in its labor force, business or supply chain.” In addition, our Supplier Code of Conduct requires Suppliers to confirm that they and their Representatives “comply with all applicable Laws regulating labor and employment, including . . . [l]aws that prohibit forced or bonded labor and indentured servitude.”
- Supply Chains Free of Trafficked and Slave Labor. Our Supplier Code of Conduct requires that, starting at the beginning of our relationship with Suppliers, all Suppliers review the Supplier Code of Conduct, and represent in writing that they understand and will abide by the Supplier Code of Conduct’s requirements as they relate to, among other issues, human trafficking and slavery. The Supplier Code of Conduct, for example, requires Suppliers to represent that they will not “use any slave labor, forced or bonded labor or indentured servitude, or permit human trafficking, in [their] supply chain."
As noted above, we may also periodically send communications to our Suppliers reminding them of their ongoing obligation to comply with our Supplier Code of Conduct and Terms and Conditions, including those terms dealing with human trafficking and slavery, and instructing them to immediately notify us if and when they have reason to believe they may be in violation of these expectations and requirements.
INTERNAL ACCOUNTABILITY
- Internal Accountability Standards & Compliance Monitoring. Our internal accountability standards and expectations for employees, officers and directors are set forth in our internal Blue Apron Code of Conduct (“Blue Apron Code of Conduct”). The Blue Apron Code of Conduct outlines our belief that “trafficked, slave, debt-bonded, indentured, child and other forms of forced labor are unacceptable” and sets forth our broader commitment to conducting business “in accordance with the highest ethical standards and in compliance with all applicable governmental laws, rules and regulations.”
- Preventative and Corrective Action. We encourage any employee, officer or director subject to the Blue Apron Code of Conduct to seek guidance if they have any questions or concerns. We also reserve the right to request a written certification of compliance from any or all applicable individuals. The Blue Apron Code of Conduct requires that individuals report to their immediate supervisor or any member of the Company’s senior management team any violations of such code, the law or any other Blue Apron policy or procedure. We will investigate all reports promptly and thoroughly and expect all individuals to fully and candidly cooperate with such investigations. Non-compliance can result in corrective action up to and including termination of employment, depending on the frequency and severity of identified infractions. We may also exercise our right to notify the appropriate authorities of potential violations of applicable laws, rules or regulations.
- Hotline Reporting. We maintain an ethics line reporting structure at 1-844-TELL-BLUE (1-844-835-5258). Questions or concerns can also be sent to tellblue@getintouch.com or via the website at www.intouchwebsite.com/tellblue. While the hotline is intended primarily for our employees, the contact information is generally available to anyone who wishes to report ethical or compliance related matters. Our ethics line allows all who report to remain anonymous. We are committed to investigating and promptly responding to concerns, and we enforce a strict anti-retaliation policy for good faith reporting.
TRAINING
Our Supply Chain team undergoes quarterly training programs that outline and discuss the standards set forth in our Supplier Code of Conduct and our Terms and Conditions. Our Supply Chain team also works in close partnership with our Legal, Regulatory Affairs, Quality Assurance and Food Safety teams to ensure that Suppliers are adhering to our standards both at onboarding and on a going-forward basis. As our foreign sourcing increases, we will develop additional training programs focused on our Supply Chain Standards and further educate our teams on how to identify, manage and mitigate any such supply chain risks.
CONCLUSION
This Disclosure articulates the efforts we have taken, and are planning on taking, with respect to our suppliers to ensure that our expectations around human trafficking and slavery are met. The majority of our food supply chain is comprised of food suppliers located in the United States. As our food supply chain expands to include more suppliers based outside of the United States, we will take steps to ensure their compliance with our expectations, including through verification, certification, and on-site audits. Similarly, as our wine and marketplace businesses continues to grow and evolve, we will expand our existing efforts, where relevant, to ensure that our wine and marketplace suppliers also understand and comply with such expectations. For example, suppliers within our wine supply chain are also expected to comply with the same Supply Chain Standards applicable to our food Suppliers and it is our goal to also introduce such standards to our marketplace vendors in the near future.
Given the nature of our business model, our supply chains are complex and constantly evolving. Despite the complexities, we are committed to conducting business in an ethical manner and we strive to work with suppliers that share the same values and commitments. We will continue to monitor and assess our evolving supply chains and evaluate new programs and initiatives that may support our and our suppliers’ commitment to supply chains free of human trafficking and slavery.