Drafting Tips for Crafting a Good Modern Slavery Act Statement

Australian Border Force Identifies Six Good Practice Trends in First Tranche of Modern Slavery Statements

The Australian Border Force (ABF) has published the first tranche of modern slavery statements (statements) submitted under the Modern Slavery Act 2018 (MSA). As of January 11, 2021, 210 mandatory statements and 45 voluntary statements were posted in the ABF’s online register. The statements offer an interesting insight into the modern slavery compliance programs of companies in various industries. Although the ABF has not specifically called out any of these statements as being good or bad, the ABF has identified the following six good practice trends in this first tranche of statements:

1. Use Outline Provided Under MSA

Although the MSA did not provide a template statement form for reporting entities to use, the MSA requires statements to include each of the following:

• Identification of Reporting Entity: Statements must identify the reporting entity;
• Overview of Business: Statements must explain the reporting entity’s structure, operations, and supply chains;
• Identification of Modern Slavery Risks: Statements must describe the risks of modern slavery practices in the operations and supply chains of the reporting entity (and any entities that the reporting entity owns or controls);
• Description of Actions Taken to Assess and Address Modern Slavery Risks: Statements must describe the actions taken by the reporting entity (and any entity that the reporting entity owns or controls) to assess and address those identified modern slavery risks;
• Explanation of Review of Actions Taken to Assess and Address Modern Slavery Risks: Statements must explain how the reporting entity assesses the effectiveness of the actions it has taken to assess and address modern slavery risks;
• Description of Consultation Process with Other Entities: Statements must describe the process of consultation with any entities the reporting entity owns or controls or with whom the reporting entity is issuing a joint modern slavery statement; and
• Discussion of Other Relevant Information: Statements must describe any other information that the reporting entity considers to be relevant.

The ABF has suggested that reporting entities organize their statements based on these seven key topical areas, such as by using headings that align with each of these requirements or by providing illustrative tables that set out where each of these specific topics are addressed in the statement. For example, one company included a chart on page two of their 26 page statement that listed the seven key reporting requirements on one side of the chart, and on the other side of the chart, they identified the sections and page numbers within their statement where each of those specific requirements were addressed.

2. Address Impacts of COVID-19 Pandemic

The ABF expects reporting entities to address the impact that the ongoing COVID-19 pandemic has had to on the entity’s business operations and supply chains. The ABF has previously advised as follows:

The Australian Border Force (ABF) encourages entities to consider how the impacts of COVID-19 may increase the vulnerability of workers in their global operations and supply chains to modern slavery, including in Australia. Factory shutdowns, order cancellations, workforce reductions, and sudden changes to supply chain structures can disproportionately affect some workers and increase their exposure to modern slavery and other forms of exploitation. …

It is important that entities continue to take steps to assess and address modern slavery risks during the COVID-19 pandemic and that they report on these actions through their modern slavery statements. … The ABF encourages reporting entities affected by COVID‑19 to clearly explain in their modern slavery statements how COVID-19 has impacted their capacity to assess and address modern slavery risks during their reporting periods. …

The ABF encourages these entities to also include information in their modern slavery statements about relevant activities implemented or resumed between the end of their reporting periods and the deadline for submitting their statements.

The ABF has noted that good modern slavery statements will recognize where modern slavery risks have increased due to the pandemic and explain how the reporting entity has responded to those increased risks, both during their reporting period and afterwards. For example, one company even addressed how it managed modern slavery risks when sourcing personal protective equipment and sanitation supplies for its own employees.

3. Assess Effectiveness of Actions Taken

The ABF has indicated that good statements recognize the importance of evaluating the effectiveness of the actions taken by the reporting entity to combat modern slavery during each reporting period and include clear plans to track the effectiveness of the reporting entity’s responses. For example, one company noted in its statement that it would conduct biannual reviews and audits to assess the effectiveness of the actions it had taken to assess, address, and remediate the modern slavery risks in its workplaces and in the workplaces of its suppliers.

4. Call Out Collaboration for the Greater Good

The ABF has advised that good statements will include information about the reporting entity’s collaboration with other entities to address modern slavery, including governmental bodies, business peers, workers and their representatives, and civil society. For example, one company noted that it was a member of and collaborated with various industry and multi-stakeholder initiatives and identified these groups and initiatives by name.

5. Identify Plans for Future Action

The ABF has recognized that good statements will highlight the reporting entity’s commitment to continuous improvement of its modern slavery governance and compliance program and explain how the reporting entity will refine its response in future years. For example, a number of companies noted that they would increase both employee and supplier training in the future.

6. Use Case Studies

The ABF has noted that good statements will include case studies to provide practical examples of how the reporting entity is addressing modern slavery risks, including through supplier engagement or collaboration with civil society organizations. For example, one company provided a case study on how they had assessed and addressed modern slavery risks in their waste management supply chain.

Benjamin Franklin once commented that you should “either write something worth reading or do something worth writing.” Companies subject to the annual reporting requirements under the MSA must do both, they must do something worth writing about, i.e., implement and maintain a pro-active modern slavery compliance program, and then write something about their program worth reading, i.e., draft an annual statement that thoroughly describes their program and meets the specific reporting requirements under the MSA.

The first 250 plus statements posted at the online register reflect a range of modern slavery program maturities, from companies that have had robust programs in place for a number of years to those that are still at the starting gate. Some of the good statements included pictures, charts, and other graphics and others relied solely on words to convey the company’s message, but all of the good statements reflected the good programs behind those statements. Companies that have not yet prepared their first annual statement may want to review these recent drafting tips from the ABF and incorporate these tips into their final statement.