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Oversight Institute
Category: Regulatory Frameworks

Modern Slavery Statement

Also known as: Slavery and Human Trafficking Statement
Simply put

A modern slavery statement is a public document in which an organisation describes the steps it has taken, if any, during a financial year to identify and address slavery and human trafficking in its operations and supply chains. It is a disclosure and reporting obligation under certain national laws, such as the Commonwealth Modern Slavery Act 2018 in Australia. The statement communicates an organisation's efforts to combat exploitation, but the level of detail and the actions described vary widely between reporting entities.

Formal definition

A modern slavery statement is a periodic (typically annual, aligned to an organisation's financial year) disclosure required of qualifying entities under applicable modern slavery legislation, setting out the steps the entity has taken, if any, to address the risk of modern slavery in its operations and supply chains. "Modern slavery" in this context generally encompasses slavery, servitude, forced or compulsory labour, and human trafficking. In the Australian regime, statements are submitted to and published on a government register (the Modern Slavery Statements Register) under the Commonwealth Modern Slavery Act 2018; requirements and reporting thresholds differ by jurisdiction and are not globally uniform. Practitioners should note that a statement is fundamentally a transparency and disclosure instrument rather than a certification of compliance or independent verification of conditions in the supply chain: the phrasing "if any" reflects that a statement can lawfully report that no steps were taken, and content is typically self-reported. A statement therefore does not by itself confirm the absence of modern slavery, does not extend visibility beyond an organisation's direct knowledge of its supply tiers, and should not be treated as equivalent to substantive due diligence, ongoing monitoring, or remediation.

Why it matters

For third-party and supply chain risk professionals, a modern slavery statement is one of the few externally visible signals of how a business partner treats human rights risk in its operations and supply chains. Because modern slavery is described as a complex and often hidden crime, statements offer a starting point for understanding whether a counterparty has identified the risk, taken steps to address it, or done neither. Under regimes such as the Commonwealth Modern Slavery Act 2018 in Australia, qualifying entities must publish these statements on a government register, creating a public record that procurement, compliance, and ESG teams can consult when assessing or onboarding suppliers.

Who it's relevant to

Procurement and Supplier Onboarding Teams
These teams can consult published statements, such as those on the Australian register, when screening and onboarding business partners. A statement helps gauge whether a supplier has identified modern slavery risk in its operations and supply chains, but because content is self-reported and may report that no steps were taken, it should be corroborated with further due diligence rather than treated as a pass condition.
ESG and Human Rights Compliance Functions
Compliance teams responsible for meeting disclosure obligations under applicable modern slavery legislation prepare and publish the organisation's own statement, describing the steps taken during the financial year. They also track that reporting thresholds and requirements differ by jurisdiction and are not globally uniform, so obligations for the organisation and its counterparties may vary by region.
Third-Party Risk Analysts
Analysts assessing counterparties should treat a statement as a transparency instrument, not a certification or independent verification. It reflects only the entity's direct knowledge of its supply tiers and does not confirm the absence of modern slavery, so it is best combined with monitoring and other evidence when scoring or tiering suppliers.
Auditors and Assurance Providers
Those reviewing an organisation's controls need to distinguish the existence of a published statement from substantive due diligence, ongoing monitoring, or remediation. Because statements are self-reported and vary widely in detail, assurance work should test the underlying steps described rather than relying on the disclosure alone.

Inside Modern Slavery Statement

Organizational structure and supply chain description
A statement typically describes the reporting entity's structure, its business operations, and the nature of its supply chains, though the depth of supply chain detail varies and often covers only direct (first-tier) suppliers rather than the full multi-tier network.
Policies and governance
An account of the policies in place relating to slavery and human trafficking, including codes of conduct, procurement policies, and governance arrangements. A policy's existence is an attestation of intent and does not by itself constitute independent verification of practice.
Due diligence processes
A description of due diligence undertaken to identify and address modern slavery risks. This may cover onboarding-stage screening, ongoing monitoring, or both; practitioners should note which parts of the relationship lifecycle are actually covered.
Risk assessment and management
The methods used to assess and manage modern slavery risk across operations and supply chains, ideally distinguishing inherent risk (before controls) from residual risk (after controls are applied).
Training and awareness
Details of training provided to staff, and in some cases to suppliers, to help identify and respond to indicators of forced labor and human trafficking.
Effectiveness measures
Where reported, indicators or key performance measures used to evaluate how effective the entity's actions have been. Such measures are frequently qualitative or self-reported and may not demonstrate outcomes with independent validation.

Common questions

Answers to the questions practitioners most commonly ask about Modern Slavery Statement.

Does publishing a modern slavery statement mean an organization is compliant with modern slavery laws and free of forced labor in its supply chain?
No. A modern slavery statement is typically a transparency and disclosure obligation, not a certification of compliance or an attestation that no forced labor exists. In many jurisdictions the legal requirement is to publish a statement describing the steps taken (or to state that no steps were taken), not to achieve a particular outcome. Publishing the statement satisfies a reporting duty; it does not verify conditions across the supply chain, and it does not eliminate the underlying risk. Independent verification of actual labor conditions is a separate exercise from producing the statement.
Is a modern slavery statement the same thing as broad ESG or supply chain due diligence?
Not exactly. A modern slavery statement addresses a specific scope: forced labor, human trafficking, and related exploitation within an organization's operations and supply chains. It does not by itself cover the wider range of environmental, governance, or other social risks that fall under general ESG programs, nor does it substitute for comprehensive supply chain risk management. In many programs it is one component of a broader due diligence effort rather than a replacement for it, and its scope is typically confined to the human rights concerns named in the relevant legislation.
How far into the supply chain should a modern slavery statement address risk?
Coverage depends on the applicable law and the organization's visibility. Statements commonly describe direct suppliers most fully, because visibility typically diminishes beyond the first tier. Where legislation encourages examination of deeper tiers, organizations often acknowledge the limits of their visibility rather than claiming full coverage. It is generally more credible to state what portion of the supply chain has been assessed and where visibility ends than to imply that lower tiers have been fully evaluated.
What content is typically expected in a modern slavery statement?
Expected content varies by jurisdiction, but statements often describe the organization's structure and supply chains, its policies relevant to modern slavery, its due diligence processes, the areas assessed as higher risk, the steps taken to address those risks, and any measures used to gauge effectiveness. Some regimes also specify approval and signatory requirements. Because expectations differ across regions and sectors, organizations should confirm the specific reporting criteria that apply to them rather than assuming a single global format.
How can an organization address the risk that a statement becomes stale or self-reported?
Statements are often produced on a periodic cycle and reflect a point in time, so they can become outdated as suppliers, sourcing regions, and risks change. Many programs treat the statement as an output of ongoing due diligence rather than a one-off document, updating it as conditions evolve. Where the underlying assessments rely on supplier self-reporting, that self-reported information typically lacks independent validation; some organizations supplement it with audits, worker-level checks, or third-party assessment to strengthen credibility, though such measures are not universal.
How does a modern slavery statement relate to the rest of a third-party risk management program?
In many programs the statement connects to onboarding and monitoring activities such as supplier screening, contractual clauses, questionnaires, and risk-tiering. The statement can document these processes, but producing it does not by itself perform ongoing monitoring; that function typically sits within the broader TPRM lifecycle. Treating the statement as the endpoint rather than as a disclosure of continuing due diligence is a common gap, since the reporting obligation and the operational risk management activities serve different purposes.

Common misconceptions

Publishing a Modern Slavery Statement means an organization has verified that its supply chain is free of modern slavery.
A statement is a disclosure of the steps taken (or not taken); it is an attestation of process and intent, not independent verification of conditions. Visibility often extends only to the first tier, leaving lower tiers where forced labor risk is frequently higher largely unassessed.
A Modern Slavery Statement covers the full breadth of an organization's supply chain and ESG risk.
Its scope is specific to modern slavery and human trafficking risk. It does not address broader information security, financial, operational, geopolitical, or other ESG risks, and it typically reflects direct third-party relationships more than the deeper Nth-party supply network.
The statement gives a current, ongoing picture of an organization's controls.
A statement is generally a periodic, point-in-time disclosure. The information can become stale between reporting cycles, and much of its content is self-reported without independent assurance.

Best practices

Distinguish clearly between policies that exist and controls that have been independently verified, and avoid presenting attestations as confirmation of on-the-ground conditions.
Separate inherent risk from residual risk when describing risk assessment, so readers understand risk levels both before and after controls are applied.
State the scope boundaries explicitly, including which supply chain tiers are covered and acknowledging where visibility beyond the first tier is limited.
Extend due diligence beyond onboarding into ongoing monitoring, and describe which parts of the supplier lifecycle the statement's processes actually cover.
Refresh the statement on a defined cycle and note the point-in-time nature of its disclosures to guard against stale information.
Where operating across multiple jurisdictions, account for differing regional and sectoral reporting expectations rather than assuming a single standard applies globally.
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