What Is Modern Slavery Risk

Modern slavery risk is the risk that modern slavery practices are occurring in an organisation’s operations or supply chains. The part that matters is whose risk it is. Under the Commonwealth Modern Slavery Act 2018 the subject is harm to people, not commercial or reputational exposure for the entity, and reading it the other way round produces a statement about brand risk instead of exploitation.

Mandatory reporting criterion three asks a reporting entity to describe the risks of modern slavery practices in its operations and supply chains, and in those of any entity it owns or controls. Criterion four then asks what was done to assess and address them. Risk is the thing you are asked to find and explain honestly, not something you are expected to have eliminated before you report.

Three misreadings cause most of the trouble:

• Treating it as certification. The Attorney-General’s Department is explicit that entities do not need to certify their supply chains are slavery free.
• Writing it into a contract and stopping there. AGD’s position is that it is not sufficient to outsource compliance through contracts or to rely on statements from suppliers.
• Looking for a template. There is none, deliberately, because risk differs by industry and entity and the Act intends each one to think through its own.

A credible risk profile reads as an account of where harm is most likely and least visible, and what you did about it. That sits closer to human rights practice than to a compliance checklist, though it draws on the same governance and risk disciplines and the same risk management systems. The Attorney-General’s Department publishes its guidance material, including risk indicators and supplementary guidance on each reporting criterion, on the Modern Slavery Statements Register. Obligations and thresholds change over time, so treat this as general information rather than legal advice.

Sentrient’s modern slavery course sits within the wider compliance training courses library.