What is a modern slavery statement?

What is a modern slavery statement?

A modern slavery statement is an annual report made under the Modern Slavery Act 2018 (Cth) about a business’ risks of modern slavery in their operations and supply chains and the actions they have taken to address those risks. 

The statement is submitted to the Australian Border Force and published on the Modern Slavery Statements Register. 

Who needs to have a modern slavery statement?

All Australian entities and any entity which carries on business in Australia that has an annual consolidated revenue of over $100 million must have an annually reported modern slavery statement. 

Other businesses may also voluntarily report, however, when they do so they are bound by the same obligations as entities which are required to report under the Act.

What is modern slavery?

Modern slavery refers to various forms of exploitation which undermine the victim’s freedom. It includes situations where a person exercises a right of ownership over another person as well as slavery-like practices such as servitude, forced or compulsory labour, deceptive recruiting for labour or services, forced marriage, debt bondage and sexual exploitation. It extends to the trafficking of persons for such exploitation. It also includes any work which by its nature is likely to harm the health, safety or morals of children. 

What must the statement address?

A modern slavery statement must address 7 mandatory criteria. 

No 1: Identify the reporting business

The business should provide their ABN/ACN as well as their name and address.

No 2: Describe your business

This part needs to detail the structure, operations and supply chains of your business. To do so, you should look at all aspects of the business including the organisational structure, where and how goods/services are sourced, the delivery of goods/services, employment and recruitment processes, financial investments, leasing of property, construction and its charitable activities.

The supply chain refers to all products and services which contribute to the business’ products and services including overseas sources and indirect suppliers.

No 3: Describe the risks of modern slavery in the operations and supply chains

After providing an overview of the business’ operations and supply chains, this criterion requires the identification of modern slavery risks which are caused, contribute to or directly linked with those aspects of the business. It should consider risks within the sector/industry, risks associated with services/products, geographic risks and any other risks within the business.

No 4: Describe the actions taken to assess and address modern slavery risks

The business is then required to detail the steps they are taking to address those risks, including due diligence and remediation processes. The company’s due diligence may focus in particular on aspects of the operation/supply chain which present a severe risk of harm to people. For example, a business may screen new suppliers, conduct modern slavery risk assessments of suppliers and provide training on modern slavery to employees. At a minimum, the business should have a modern slavery policy which is annually reviewed and improved upon. 

No 5: Describe how the business determines the effectiveness of their actions

In this part, the entity needs to detail the process by which it assesses the effectiveness of its actions. It does not need to state whether the actions have been effective. For example, these processes may include regular reviews of the modern slavery policy/action plan, regularly seeking feedback from key areas of the business, internal audits, measuring performance against KPIs and organising independent reviews. 

No 6: Describe the consultation process with any other entities owned or controlled by the business

This criterion is only relevant for businesses which own or control other entities. The consultation level will depend on the relationship between the entities and the level of risk posed by the owned/controlled entity. The process should sufficiently reveal and address the modern slavery risks of the owned/controlled entity. 

No 7: Include any other information considered relevant

The business can include any other information which they consider relevant for their modern slavery statement. The business may want to note other steps they are taking to reduce modern slavery and improve the lives of those who may be impacted by it, such as involvement in improving workers rights or fundraising for related causes like education and poverty. 

Takeaway

A modern slavery statement is an annual report which is mandatory for entities operating in Australia with a consolidated annual revenue of over $100 million. By requiring entities to thoroughly review their operations and supply chains, develop action plans and assess the effectiveness of their actions, the statement aims to continually improve how entities are addressing modern slavery. 

About Brigid Nelmes

Brigid NelmesBrigid is a legal intern at OpenLegal, working with our legal content team. She is currently completing her Bachelor of Laws and Bachelor of Arts (International Studies) at the University of Technology Sydney. Her interests are in digital/privacy and startup law.