Frequently Asked Questions - MSA Legislation

Watch this space for updates as we continue to address key MSA legislation FAQs

What kinds of workplace practices are considered to be modern slavery?

Australia’s Modern Slavery Act defines “modern slavery” to include the following practices:

• Human trafficking;

• Slavery;

• Servitude;

• Forced labor;

• Debt bondage;

• Forced marriage;‎

• Deceptive recruiting for labor or services; and

• Worst forms of child labor

The “worst forms of child labor” includes situations where children are subjected to slavery or similar practices or engaged in hazardous work.‎

Modern slavery does not include practices like substandard working conditions or underpayment of workers, but these practices may be present in some modern slavery situations.

Does my company need to comply with Australia’s Modern Slavery Act?

The mandatory reporting and other requirements under Australia’s Modern Slavery Act apply to companies and other entities:

  1. Operating in the Australian market, including both domestic and international companies, at any time during the applicable twelve-month reporting period; and ‎
  2. With annual consolidated revenue of at least $100 million AUD over that same reporting period.

An entity that does not meet these threshold requirements may voluntarily elect to comply with the reporting requirements under the Modern Slavery Act.

What are the key components to developing a holistic Modern Slavery Act compliance program?

There are 5 broad components to building a complete MSA Compliance program:

  1. Establish an overall governance and oversight program with formal policies and procedures, training programs, whistleblower hotlines, etc. ‎
  2. Assess the risks in your internal operations. Identify key stakeholders and conduct a formal assessment of the risks in those operations and understand and remediate identified risk. ‎
  3. Assess the risks in your external supply chains. This may be the most time-consuming part of your compliance program because it involves conducting assessments on all your local, national, and global suppliers and assessing the risks in those suppliers and understanding and remediating identified risks.
  4. Prepare a formal report each year that addresses key aspects of your program and file the report in the public registry by the applicable deadline. ‎
  5. Put in place a strategic plan and program of ongoing improvements.

‎CENTRL offers a Step-by-Step Guide for MSA Compliance to help you meeting the requirements of Australia’s Modern Slavery Act. This guide is available to all subscribers.

How do I create an inventory of my company’s external suppliers?

In order to meet the disclosure requirements in your annual Modern Slavery Act report, it is important that you create a map of your suppliers by criticality and modern slavery risk. Inherent modern slavery risk is driven by several key factors, such as the country or countries in which each supplier is located, their employment practices (e.g., the use of migrant labor), and their specific business sector.
Once I have mapped my suppliers, how do I assess their modern slavery risks? What questions do I need to ask my suppliers as part of this assessment process?

The Modern Slavery Act does not prescribe specific questions that companies should ask their suppliers. However, there are six broad categories of questions that your company should ask its suppliers because the answers to these questions are critical in helping your company to understand the risks presented by its suppliers. These six categories focus on the following key areas:

  1. Status check on prior or current modern slavery issues; ‎
  2. Outline of geography and industry-based risk exposure; ‎
  3. Understanding of employment practices and conditions; ‎
  4. Standing up governance and audit programs; ‎
  5. Maintenance of grievance and redress mechanisms; and ‎
  6. Identification and remediation of modern slavery risk in their supply chains.

‎CENTRL offers an out-of-the box questionnaire to be completed by your suppliers to help you assess the modern slavery risks in you supply chains. You can also modify the questionnaire based on your specific needs.

How do I score the responses to a modern slavery questionnaire? How do I identify high risk versus low risk suppliers?

The Australia Modern Slavery Act does not require companies to certify that their operations and supply chains are slave-free. The scoring framework is, however, a very important element of your overall modern slavery risk assessment process. A practical way to organize your scoring framework is to divide your questions into three categories – trigger questions, high risk questions, and other questions – and assign different weights to each category. Trigger questions should essentially act as “circuit breakers” in that an unfavorable response to any one of these questions should immediately classify the supplier as high risk. For example, if the supplier reports that it is currently under investigation by the Australian government for the use of forced labor in its business operations, the supplier should be graded as a high-risk supplier. High risk questions should be assigned a higher weight than other questions. However, unfavorable responses to other questions can also prove to be problematic. Your risk rating process should recognize that multiple unfavorable responses to other questions can also result in a high-risk classification.

CENTRL offers a default scoring framework built into its questionnaires that is optimized to provide you with risk ratings that allow you to see deeper into the modern slavery risks at each of your suppliers.

I have several hundred suppliers that I will need to assess within the next few months. How can I complete this task in time without adding additional employees?

Australia’s Modern Slavery Act does not mandate the process that companies must use to assess and address modern slavery risks in their operations and supply chains. A manual process can be slow, cumbersome, and difficult to translate into actionable results and management reporting. Due to the annual reporting requirements, compliance using automated tools will help companies compile the information they need to act on and draft their annual modern slavery statements. With the right questionnaire design, scoring framework, and support platform, you can conduct your internal and external assessments in a matter of weeks. The goal of an automated platform is to rapidly and accurately classify your suppliers into risk categories and identify the key issues that need to be addressed. This allows you to have a single repository of information to help you draft your annual modern slavery statement and to embed continuous improvement year over year into your program and reporting.

CENTRL is committed to the vision of providing the automation and flexibility you need to conduct these assessments quickly, accurately, and at scale.

How many times do I need to require my suppliers to complete these modern slavery assessment questionnaires?

Companies are required to submit their modern slavery statement to the Australian government each year. Since each report should show your company’s improvements in assessing and responding to modern slavery risks, your company will need to conduct assessments each year so that you can accurately report on these annual results.
What are my company’s reporting requirements under Australia’s Modern Slavery Act?

Your company’s annual modern slavery statement must include the following information:

  1. Identify reporting entity; ‎
  2. Explain structure, operations, and supply chains of reporting entity; ‎
  3. Describe risks of modern slavery practices in operations and supply chains of reporting entity (and any entities that reporting entity owns or controls); ‎
  4. Describe actions taken by reporting entity (and any entity that reporting entity owns or controls) to assess and address those risks; ‎
  5. Explain how reporting entity assesses effectiveness of such actions; ‎
  6. Describe process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and ‎
  7. Describe any other information reporting entity considers relevant.

‎This statement must be approved by the company’s board of directors or other governing body and signed by a director of the company. This statement must be submitted online to the publicly accessible registry maintained by the Australian Border Force within 6 months of the close of your financial year. See

There is no template form for this purpose. As noted above, your company’s modern slavery statement must include all of the required information. This means your modern slavery compliance program must be built to ensure your company can comply with these reporting requirements. In other words, “build back” from these reporting requirements.

Some tips for drafting your company’s annual modern slavery statement are below:

  1. Reality-based: Avoid aspirational statements that are not supported by action.
  2. Honesty is the Best Policy: Be honest about your company’s situation and risks and what your company has done in the reporting year to improve your program.
  3. Remember that Your Statement is Not a Certification: Your company is not required to certify that its operations and supply chains are slave free.
Once I submit my company’s first modern slavery statement to the Australian government, what key elements do I need to put in place to ensure that my company maintains an ongoing compliance program?

The Australian government expects to see continuous improvement from all reporting entities. As such, compliance is not a “one and done” exercise. Your company will not be able to reuse its prior modern slavery statements in subsequent reporting years. Your company’s modern slavery statements improve in quality and demonstrate progress over time as your company increases its understanding of the unique and evolving modern slavery risks in its operations and supply chains. To meet this expectation of a “race to the top,” companies should embed a long-range view of compliance into their programs and strive for and document their continuous improvement from a good to better to best program.