The research finds that most companies complied with the minimum requirements of modern slavery reporting, with clear groups of leaders and laggards within the ASX200. Perhaps unsurprisingly, given this is the first year of reporting, the majority of statements appearing to follow a ‘race to the middle’ approach (seeking to satisfy the legal requirements of the MSA without disclosing more than key peers).

The research identifies areas where reporting can be improved and covers the practical steps businesses have taken to mitigate modern slavery risks in their operations and supply chains.
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Key findings:

• There are clear groups of leaders and laggards within the ASX200, with the majority of statements appearing to follow a ‘race to the middle’ approach (seeking to satisfy the legal requirements of the MSA without disclosing more than key peers). The average quality score for statements was 15.4 out of a maximum of 41 points, with only 31 statements scoring 20 points or more.
• While almost all statements addressed the key mandatory criteria for content under the MSA in some way (though to varying degrees of quality), a substantial number of ASX200 companies have struggled to comply with the more procedural criteria around identifying reporting entities and describing consultation with both reporting entities and other owned or controlled entities. In total, 33% of ASX200 companies’ statements appeared to be potentially non-compliant with one or more of the MSA’s requirements. In some cases, this potential non-compliance may reflect differing interpretations of the MSA’s requirements among legal services providers, including how these requirements interact with corporations law principles and apply to complex corporate structures.
• Almost all statements provided a basic level of information about modern slavery risks, such as modern slavery risk categories and higher risk countries. However, few ASX200 companies (5%) were able to clearly articulate how they may be involved in modern slavery risks using the ‘cause’, ‘contribute’, ‘directly linked’ continuum set out in the UN Guiding Principles on Business and Human Rights (UNGPs) or similar language. Most statements also focused on supply chain risks rather than modern slavery risks within the companies’ operations. Almost 65% of statements did not identify any general modern slavery risk areas/factors relating to companies’ operations. The variable quality of statements’ disclosures in this area (and more broadly) may be partly attributable to a low level of understanding of existing business and human rights frameworks such as the UNGPs within some companies (particularly smaller entities), as well as companies engaging external legal and professional services advisors with limited experience advising on business and human rights issues.
• The quality of reporting often focused on ‘paper over practice’ and was frequently undermined by insufficient detail around the implementation of key actions, such as polices, risk assessments or training. For example, less than half of statements identified how key policies are communicated or enforced, only 13% of statements that discussed training provided information about the training content and number of people trained, and only 33% explained the methodology used for supply chain risk assessments.
• Whilst statements show ASX200 companies are engaging with their Tier 1 suppliers through processes such as supplier questionnaires, few companies appeared to have considered how they can use and expand their existing leverage with suppliers and other business partners to address modern slavery risks, either alone or in partnership with others in their sector.
• Many ASX200 companies appear poorly prepared to respond to modern slavery incidents that may be identified in their operations or supply chains and are taking few steps to ensure that grievance mechanisms for vulnerable workers are trusted and accessible. Only 17% of statements identified actions taken by companies to ensure grievance mechanisms or other processes are trusted and accessible to stakeholders and that they are capable of receiving and responding to modern slavery complaints. • Efforts by ASX200 companies to assess the effectiveness of their actions to assess and address modern slavery risks are largely at a basic level and often focus on measuring quantitative outputs (such as number of workers trained) rather than practical outcomes (such as measurable increases in workers’ awareness of modern slavery after training). Only 32% of statements clearly explained how the companies assess effectiveness. Less than 5% of statements defined “effectiveness” or identified key components for an effective response.
• Few ASX200 companies are engaging with stakeholders to help inform their modern slavery risk management approach, such as civil society or vulnerable workers. For example, only 21% of statements referred to using feedback from external sources to assist with assessing effectiveness. Although 36% of statements identified broader instances of collaboration, this collaboration appeared to primarily be with other businesses rather than other stakeholders, such as unions or NGOs.

1 This research project assessed the 151 statements from ASX200 companies that were publicly available as at 1 June 2021.

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