Modern slavery reporting requirements – Overview

What is modern slavery?

Modern slavery is a term used to describe situations where coercion, threats or deception are used to exploit victims and undermine or deprive them of their freedom.

Modern slavery does not include practices such as substandard working conditions or underpayments of workers. However, these may be considered ‘red flags’ when assessing the risks of modern slavery in a supply chain.

The construction sector is considered to be a high-risk sector for modern slavery. Sectors characterised by labour-intensive, temporary and irregular work can be at a higher risk of forced labour, especially when activities are performed through low skilled and low-wage jobs.

What is a Modern Slavery Statement (MSS)?

A Modern Slavery Statement (MSS) must identify the risks of modern slavery in a business’s supply chain and address seven mandatory criteria:

1. Identify the reporting entity

For example, clearly set out the name of your business on the front page of the MSS.

2. Describe the reporting entity’s structure, operations and supply chains

• Structure means the legal and organisational form of the entity
• Operations means the activities undertaken to pursue its business objectives and strategy
• Supply chains mean the products and services (including labour) that contribute to your products and services.

3. Describe the risks of modern slavery practices in the operations and supply chains of the reporting entity and any entities it owns or controls

Risk of modern slavery practices means the potential for your business to cause, contribute to or be directly linked to modern slavery through your operations and supply chain.

4. Describe the actions taken by the reporting entity and any entities it owns or controls to assess and address the risks of modern slavery in your supply chain, including due diligence and remediation processes

Due diligence means ongoing management processes to identify, prevent, mitigate and account for how your business addresses actual and potential modern slavery risks.

Remediation means that if you have caused or contributed to the adverse impacts of modern slavery you should try to ‘make good’ by restoring the victim to the position they would have been in had those adverse impacts not occurred.

5. Describe how the reporting entity assesses the effectiveness of the actions taken to assess and address the risks of modern slavery in your supply chain

While you are not required to determine if your actions to address modern slavery have been effective, you must explain what you are doing to check whether your actions to assess modern slavery risks are working such as monitoring specific steps you have taken.

6. Describe the process of consultation with any entities the reporting entity owns or controls.

This only applies if you own or control other businesses.

7. Any other relevant information

May not be applicable.

There is no set template for preparing a MSS. Businesses are encouraged to report and address the mandatory criteria in a way that best suits their operations.

The Act does not require you to report on specific cases or allegation in your entity’s statement or to certify that your entity’s operations and supply chains are ‘slavery free’.
An MSS must be approved by the board of directors, signed by a company director and submitted to the Australian Border Force for publication on an online publicly available central register.

What next for your business?

If your business is required to prepare an MSS, it is recommended that you begin now to ask the following questions about your business in order to understand your supply chain and help to write your MSS:

• Who are your direct suppliers and subcontractors? Do you know anything about, for example, where your suppliers get their products from, or who your subcontractors employ or contract?
• What are you procuring? Labour and materials? What materials specifically?
• Where are you getting your labour and materials from? Which suppliers and what locations?

For further information, view the ‘Guidance for Reporting entities’ published by the Department of Home Affairs.

Businesses in the UK have been required to provide MSS since 2015. The UK Business & Human Rights Resource Centre has a range of useful resources that may also assist.

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.