First Batch of Modern Slavery Statements Posted at Australia’s Online Register
It’s Beginning to Look A Lot Like Transparency
The holiday season is here, but it may not look or feel like prior holidays. Although some traditions, such as holiday office parties and New Year’s Eve celebrations, have been cancelled this year due to the ongoing global pandemic, a new annual tradition has begun.
Companies and other entities operating in the Australian market with annual consolidated revenue of $100 million or more and using a foreign financial year must file their annual modern slavery statements with the Australian Border Force (ABF) on or before December 31, 2020. As of December 14, 2020, over 100 statements had been submitted to the ABF and were posted at their online register. The roll out of the online register promises to usher in one of the goals of the Modern Slavery Act (MSA), to provide everyone with transparency into the modern slavery risks of reporting entities and their supply chains and, as noted in the Guidance for Reporting Entities, “drive a business ‘race to the top’ to improve workplace practices.”
Lessons Learned from First Batch of Statements
The first 100 plus statements posted at the ABF’s online register reflect a wide range of maturity levels in the modern slavery compliance programs of a wide range of reporting entities in various industries. It is clear that some reporting entities have had robust modern slavery programs in place for some time and have developed and use measurable metrics to document the effectiveness and continuous improvement of their programs over time. It is also clear that some reporting entities either missed the mark entirely or have a long way to go in build their programs to provide a broader response to their modern slavery risks and align more closely to the specific requirements under the law.
As a reminder, modern slavery statements must include the following information:
- Identify the reporting entity;
- Explain the structure, operations, and supply chains of the reporting entity;
- 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);
- Describe the actions taken by the reporting entity (and any entity that the reporting entity owns or controls) to assess and address those risks;
- Explain how the reporting entity assesses effectiveness of such actions;
- Describe the process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with; and
- Describe any other information the reporting entity considers relevant.
The ABF has encouraged reporting entities to also consider how the pandemic may increase the vulnerability of workers in their global operations and supply chains to modern slavery risks and to clearly explain in their modern slavery statements how the pandemic has impacted their capacity to assess and address modern slavery risks during their reporting periods.
Some companies did an excellent job in their statements explaining what they had done during their reporting periods to meet each of these requirements. More than a few, however, glossed over the more difficult requirements embedded in rows (3), (4), and (5) above.
For example, one company noted, in pertinent part, that it had only just begun to seek information from its suppliers so that it would be able to identify the modern slavery risks in its supply chain. Without that baseline information, the company was not able to assess and address those risks, if any, nor was it able to assess the effectiveness of its actions in assessing and addressing such risks because it had not taken any such actions.
Others took more insular approaches by relying on the addition of anti-slavery provisions in their supplier contracts or the implementation of internal policies and training programs. These companies never addressed any of the programs that they had put in place to assess and address the modern slavery risks in their operations and supply chains, such as the use of questionnaires, audits, or other forms of collaborative engagement. That gaping hole in their reports likely reflects a gaping hole in their modern slavery compliance programs. The Australian government has noted that supplier self-assessment questionnaires can assist reporting entities in learning more about their suppliers’ operations and their suppliers’ strengths and weaknesses in addressing modern slavery risks.
The ABF’s site includes a disclaimer that the publication of a company’s modern slavery statement in the online register does not mean that the company has complied with the requirements of the MSA. The ABF will publish all statements properly submitted to the online register, including compliant and non-compliant statements, to maximize transparency and ensure that reporting entities will be publicly accountable for their actions to address modern slavery risks.
If your company is subject to the December 31st reporting deadline or to the March 31st or remaining reporting deadlines in 2021, it is important to remember that your company’s statement must be approved by the principal governing body of your company and signed by a responsible member of your company before it is submitted to the ABF’s online register. Once your statement is submitted to the online register, it will be publicly accessible to your competitors, investors, business partners, and others.
The song, “It’s Beginning to Look a Lot Like Christmas,” was written by Meredith Wilson in 1951 and has been recorded by many artists, including Perry Como, Bing Crosby, and Michael Bublé. With apologies to Meredith Wilson and these talented singers, reporting entities that have not yet filed their annual modern slavery statement need to remember that:
It’s beginning to look a lot like modern slavery transparency Soon your reporting deadline will be here And the thing that will make you sing and your compliance program ring Is that your board of directors must review and approve, and Someone on that board must sign The report before it leaves your own front door.
You may want to take some time to review the modern slavery statements in the ABF’s online register to help you benchmark your MSA compliance program to those reporting entities that submitted more comprehensive statements. If you can describe your program on one page, you may need to better “deck the halls.”
Now is not the time for “auld lang syne.” Reporting entities need to do more than put words on paper; they need to have a robust and comprehensive modern slavery compliance program that provides them with the data they need to assess their risks and take action to address those risks - and to meet all of the reporting requirements under the MSA. The adoption of internal policies and training programs and the addition of anti-slavery provisions to supplier contracts are great first steps, but reporting entities need to do more and report on more. As in the song “Rudolph the Red Nosed Reindeer,” the last thing you want readers of your annual modern slavery statement to do is laugh and call you names!
“All [we] want for Christmas” is to make sure reporting entities have the tools (or toys!) they need to ensure they can effectively assess and address their modern slavery risks. “Frosty the Snowman” promises that he will be “back again some day.” Your MSA compliance requirements also do not end after your first statement is submitted to the online register. Reporting entities must maintain ongoing programs, submit modern slavery statements every year, and strive for continuous improvement in both their programs and statements over time. If you need help in meeting the requirements of the MSA, please check out CENTRL’s MSA360 page to learn more about our modern slavery compliance platform.