California Transparency in Supply Chains Act

Transparency in Supply Chains ActIn 2010, the State of California adopted the Transparency in Supply Chains Act, which requires certain retailers and manufacturers to post a disclosure statement on their web sites detailing whether, and to what extent, they investigate or monitor slavery or human trafficking in their direct product supply chains.  Automated Packaging Systems, Inc., and each of its subsidiaries (collectively “APS”), expect suppliers in its direct product supply chains to comply with applicable laws, will investigate claims brought to its attention regarding the use of slavery or human trafficking by its suppliers and will take appropriate action to discontinue use of a supplier that uses such labor.  APS management is not aware of any claims regarding the use of slavery or human trafficking by any member of APS’s direct product supply chains in the history of the Company.

In accordance with the Act, APS’s disclosures are as follows:

1. Verification.  APS is committed to fair labor practices within its direct product supply chains.  We expect all suppliers and employees to abide by the provisions of our Business Ethics Policy, which is posted on our website.  At present we do not, nor do we employ a third party, to audit or evaluate the risk of human trafficking and slavery. 

2. Auditing.  APS currently does not conduct on-site audits of suppliers related to trafficking and slavery in supply chains, but is evaluating whether to expand its existing auditing program to incorporate inquiries regarding trafficking and slavery standards. 

3. Certification.  APS requires all suppliers to comply with applicable government regulations, as well as with APS’s policies and procedures.  At present, APS does not require direct product suppliers to certify that material incorporated into our products complies with the laws regarding slavery and human trafficking of the countries in which they are doing business.

4. Accountability.  APS’s Business Ethics Policy, which makes clear that all transactions are expected to be in compliance with all applicable laws, rules and regulations, requires honest and fair business dealings by all APS employees.  However, the current Business Ethics Policy does not deal specifically with the issues of slavery and human trafficking.

5. Training.  APS currently does not conduct specific training for employees or suppliers regarding slavery and human trafficking.

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