Australia’s Modern Slavery Act (Cth) passed in December 2018 requiring all organisations with an annual turnover of A$100 million to publish an annual statement assessing and addressing modern slavery risks in their operations and supply chains. For organisations operating on the Australian financial year, the first statement is due 31 March, 2021.
With little time left and an estimated 76% of statements still outstanding, many entities will miss this first reporting deadline. However, there is still time to get it right, even for organisations only recently aware of this requirement.
While not quite as rushed, many other smaller organisations are working out a response to modern slavery, even though they fall below the Act’s revenue threshold. One way is through voluntary submissions which are often done to mitigate risk, increase supply chain transparency, get ahead of consumer demands, or simply to contribute to the identification and eradication of slavery.
Another common response by small-to-medium sized organisations is to conduct an assessment, enact targeted changes, and prepare a counter-slavery policy in response to inquiries from larger companies. In this way modern slavery compliance is being cascaded across supply chains in the form of questionnaires, contract requirements, and requests for slavery statements and policies.
Reporting to date
Our Ndevr Human Rights team at analysed the most recent data provided through the Government’s Modern Slavery Online Register and as of 28 Jan 2021 only some 24% of the expected 3000 reporting entities have submitted a Slavery Statement.
Based on these numbers and our qualitative market assessment, we understand that many entities remain simply unaware of their reporting obligations.
While the Act does not carry financial penalties for non-compliance, it does include a “name and shame” clause, and the media and NGOs may highlight who has not complied which will create a material risk for those organisations.
Ndevr Environmental has also learned that as many as 33% of submitted statements are being sent back by Border Force for revisions. Nearly all of those returned were caused by a failure to meet the Act’s reporting criteria, specifically around correctly signing-off the statement and showing it went through the correct consultation process - both easily avoidable issues.
Watch our webinar on supply chain resilience with James Bartle from Outland Denim, Justin Cudmore from Marque Lawyers, and Samantha Jones from Little Yellow Bird.
The deadline is nearing, don’t panic - but do report.
Standards and expectations are likely far lower for this first reporting period than the next, so it is best to get into the system now, even with a rushed statement.
The News and Resources section and the guidelines materials on the Border Force website are your first and best places to start. There is a wealth of information including step-by-step instructions on how to comply with the Modern Slavery Act and advice about good practice.
To avoid some of the simple pitfalls referenced above and to make sure you get over the line in time, here is a list of practical suggestions below.
What to avoid
Avoid the urge to pad out your first statement with activities completed after that first financial year. It may be tempting to do a quick supply chain assessment now, adjust the dates, and write that into your first statement. But – inadvertently perhaps – you may be setting yourself up for a tougher year-two statement when the stakes will be higher.
Avoid setting targets that sound good, but which don’t match your organisation’s capacity and ambition, err on the side of a streamlined but honest first statement.
Avoid copying and using statement structures from other reporting jurisdictions such as the United Kingdom. The Australian version asks for more information and is very specific about what should be included.
Don’t miss the deadline. Even without a financial penalty, it will be noted by border force, human rights NGOs, media and possibly consumers.
What to do
Clearly describe your corporate group and the entities therein – Border Force won’t know who is included in your statement unless you make it clear who is covered.
Be sure your entire board is briefed on this issue and what is included in the Statement and be sure that the Statement’s sign-off comes from the right level and is clearly named.
Include clear KPI’s and targets, especially quantifiable ones. Even put them in as dot points or infographics.
Address the impact of COVID on your counter-slavery effort and reporting and be specific with how the pandemic may have disrupted (or not) your activities, capacity, and supply chain.
Try to weave in specific examples and case studies for what you describe in your statement. This makes it grounded in your operations and business structure.
We understand for many organisations this is a complex process that can require more expertise and time than you have available. With the first reporting deadline fast approaching, if you need assistance, our team at Ndevr Human Rights specialises in supporting companies to comply with the Act. We are here to help.
Case Study: Intrepid Travel
We supported Intrepid Travel to develop its Human Rights Response framework aligned to the Modern Slavery Act 2018 (Cth). We undertook a Readiness Assessment of Intrepid’s existing policies, structures and practices, conducted a supply chain risk assessment, and produced guiding report and implementation roadmap for their global response, reflecting their commitment to use business as a force for good.
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Principal Consultant, Human Rights at Ndevr
Cover image courtesy of Outland Denim. Other images credited to: Australian Border Force, Unsplash & Intrepid Travel.