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Modern slavery reporting requirements Mandatory Criteria 3
Seven mandatory criteria for an MSS
There are seven mandatory criteria for an MSS. The information below relates to Criteria 3, which requires an MSS to identify and describe the risks of modern slavery practices in the operations and supply chains of your business and any businesses you own or control.
A ‘risk’ that your business may be involved in modern slavery can fall into one or more of the following categories:
- A risk that you may cause modern slavery practices means the risk that your business operations may directly result in modern slavery practices – e.g. your entity may own and operate a factory that uses exploited labour
- A risk that you may contribute to modern slavery practices means the risk that your business’s operations and/or actions in its supply chains may contribute to modern slavery. This includes acts or failures to act that may promote or incentivise modern slavery – e.g. your business may have explicitly requested a construction company to source the most economical labour for a project and knowingly ignored the fact that workers were being exploited
- A risk that you may be directly linked to modern slavery practices means the risk that your business’s operations, products or services may be connected to modern slavery through the activities of another entity you have a business relationship with, even if you do not have a contractual relationship – e.g. your kitchen and bathroom company may sell vanities. These vanities may have been manufactured by another business that uses forced labour.
How do I identify and describe risks of modern slavery practices in the operations and supply chains of my business?
There is no minimum requirement in relation to how many levels in your supply chain you must examine. You need to consider all modern slavery risks that may be present in your Australian or international operations and supply chains. The following two steps provide a starting point:
Step 1: Examine your supply chain to identify:
- the general sectors and industries your business is involved in
- the types of products and services in your supply chain
- the countries and other businesses that are involved in your business.
Step 2: Check which of the sectors, types of products and services, countries and business that you have identified may involve high modern slavery risks. The following are some modern slavery risk indicators relevant to the construction industry to help evaluate your risks:
| Type of Risk | Indicators |
Sector and Industry Risk The construction industry is considered at a high risk of modern slavery. |
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Product and Services Risks Certain products and services may have high slavery risks because of the way they are produced, provided or used. For example, bricks and rubber are recognised as high-risk products globally. |
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Geographic Risks Some counties may have higher risks of modern slavery – for example, common sources of raw materials used in construction products such as timber, zinc, gravel, bricks and rubber are sourced from countries with higher risks of modern slavery such as Africa, China and India. |
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Business Risks Some entities may have particular modern slavery risks because they have poor governance structures, a record of treating workers poorly or a track record of human rights violations. |
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For further information, view the ‘Guidance for Reporting entities’ published by the Department of Home Affairs.
This information is part of a series on modern slavery reporting requirements aimed at assisting members understand the requirements. See the related documents contained in the ‘What to read next’ section for more information.
To find out more, contact HIA's Contracts and Compliance team
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