Smart & Final's Disclosures re: California Transparency in Supply Chains Act of 2010

The California Transparency in Supply Chains Act of 2010 (hereinafter the "Act") requires certain companies manufacturing or selling products in the State of California to disclose their efforts (if any) to eradicate forced labor and human trafficking from their direct supply chains for goods they offer for sale.

Smart & Final Inc. and its subsidiary companies ("Smart & Final") fully support the purpose and goals of the Act and oppose the use of slavery or human trafficking in the manufacture and distribution of our products. Although our policies are currently under development, we are continually exploring effective methods to ensure compliance with the Act and eliminate the presence of slavery or human trafficking in our supply chain.

We have adopted a company policy condemning the use of slavery and human trafficking. We are developing this policy to include effective processes that identify, prevent and mitigate the impact of forced labor in our supply chain.

  • We maintain open lines of communication with our suppliers, managers, employees, investors, customers, and other stakeholders on a regular basis. Our policy against slavery and human trafficking, as well as measures we are taking to ensure monitoring of risks associated with the same, will be an important part of this communication. We are also considering how to properly provide training on our policy to our employees and managers, which we intend to include in our regular staff meetings.
  • We are evaluating our supplier agreements as well as the terms and conditions found in our standard purchase agreements to determine ways to ensure our suppliers are complying with our policy against slavery and human trafficking. For example, we intend to contact our suppliers to request that they provide certification that the products provided by them, and the materials incorporated into those products, are manufactured in compliance with our company's policy and the slavery and human trafficking laws in the countries in which the suppliers do business. We are also exploring the possibility of requiring direct suppliers to be responsible for monitoring the compliance of their own suppliers.
  • We plan to conduct a risk assessment of each of our direct suppliers, based on a variety of factors such as geographic location, the type of product provided, the amount of manual labor required for production, and any other publicly-available information regarding the supplier's reputation and operations. Any supplier identified internally as "high-risk" will be subject to further review by the company. We hope this review will initiate a dialogue between our company and the supplier, such that a proper plan may be developed for monitoring and correcting any possible deficiencies in the supplier's processes.
  • Although we do not currently conduct audits of our suppliers, we are considering the role of internal audits and self-reporting by suppliers as a method of compliance, as well as any mechanisms that the company can implement to monitor compliance with our policy. Independent auditors are not currently used but will be considered if the circumstances require. Any time we evaluate new suppliers for our corporate brand labels we conduct an on-site audit of their facilities. We are considering adding compliance with the Act to these on-site audits.