What is Modern Slavery Reporting?

What is Modern Slavery Reporting?

Modern slavery reporting is the regulatory and voluntary practice of disclosing the steps an organization takes to identify, prevent, and address forced labor, human trafficking, debt bondage, and other forms of exploitation within its operations and supply chains. The term encompasses compliance with laws such as the UK Modern Slavery Act (2015), the Australian Modern Slavery Act (2018), and California's Transparency in Supply Chains Act (2010), as well as voluntary disclosure through frameworks like the UN Guiding Principles Reporting Framework.

Why It Matters

The International Labour Organization estimates that 27.6 million people are trapped in forced labor globally, with 17.3 million in the private sector. Forced labor generates an estimated $236 billion in illegal profits annually. These are not historical figures—they represent current conditions across agriculture, manufacturing, construction, domestic work, and extractive industries in every region of the world.

Supply chains are the primary transmission mechanism. A 2023 analysis by the Walk Free Foundation found that G20 countries collectively import $468 billion worth of products at risk of being produced with forced labor. The industries most exposed include garments and textiles, electronics, agriculture (cocoa, palm oil, sugar, seafood), construction materials, and mining. Companies sourcing from these sectors face direct legal and reputational risk.

Legislative momentum is accelerating. The U.S. Uyghur Forced Labor Prevention Act (UFLPA), effective since 2022, creates a rebuttable presumption that goods produced wholly or in part in China's Xinjiang Uyghur Autonomous Region are made with forced labor, barring their importation unless companies can prove otherwise. The EU's proposed Forced Labour Regulation would ban products made with forced labor from the EU market entirely. Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act took effect in 2024.

Beyond compliance, modern slavery risk management is increasingly a condition of market access, public procurement eligibility, and investor confidence. Companies implicated in forced labor—even through distant supply chain connections—face import seizures, contract termination, shareholder activism, and lasting brand damage. U.S. Customs and Border Protection issued over 60 Withhold Release Orders between 2020 and 2025, detaining goods at the border pending forced labor investigations.

How It Works / Key Components

Modern slavery statements and reports typically describe the organization's structure and supply chains, policies on slavery and human trafficking, due diligence processes, risk assessment and management, performance indicators, and training. The quality and substance of these disclosures vary enormously—research by the Business & Human Rights Resource Centre consistently finds that most statements fail to meet even basic adequacy criteria.

Effective modern slavery programs go beyond statement publication. They begin with risk assessment—mapping supply chains to identify sectors, geographies, and supplier tiers with elevated forced labor risk. Tools like the Global Slavery Index, U.S. Department of Labor's List of Goods Produced by Child Labor or Forced Labor, and Verisk Maplecroft's risk indices inform this analysis.

Due diligence mechanisms include supplier codes of conduct, pre-qualification screening, on-site audits (announced and unannounced), worker interviews (conducted independently and in workers' native languages), grievance mechanisms accessible to workers throughout the supply chain, and remediation protocols for confirmed cases. Worker voice technologies—anonymous reporting apps and hotlines—are increasingly recognized as more effective than traditional auditing at detecting hidden exploitation.

Remediation is the most challenging and most important component. When forced labor is identified, responsible companies work to ensure that affected workers receive compensation, support, and protection from retaliation rather than simply terminating the supplier relationship, which can worsen outcomes for victims. The Dhaka Principles for Migration with Dignity and the ILO's Forced Labour Protocol provide frameworks for remediation.

Council Fire's Approach

Council Fire supports organizations in developing modern slavery due diligence programs that address regulatory requirements across multiple jurisdictions while building genuine protective capacity within supply chains. Our approach connects forced labor risk management to broader climate resilience and sustainable business strategies, recognizing that labor exploitation and environmental degradation frequently share root causes and geographic concentrations.

Frequently Asked Questions

What must a modern slavery statement include?

Under the UK Modern Slavery Act, statements must describe the steps taken to prevent slavery and human trafficking in the organization's business and supply chains, or state that no steps have been taken. Best practice includes covering organizational structure, policies, risk assessment, due diligence, training, and KPIs. The Australian Act is more prescriptive, requiring mandatory reporting criteria including a description of risks and actions taken.

How do companies detect forced labor in their supply chains?

Detection requires multiple methods—no single approach is sufficient. Social audits provide baseline visibility but frequently miss hidden exploitation. Worker voice mechanisms (confidential surveys, hotlines, mobile apps in local languages) are more effective at surfacing abuses. Data analytics can identify red flags such as excessive working hours, wage withholding patterns, and recruitment fee charges. Collaboration with NGOs, trade unions, and community organizations provides contextual intelligence that formal audit processes often lack.

What is the difference between modern slavery and labor exploitation?

Modern slavery encompasses the most severe forms of labor exploitation—forced labor, human trafficking, debt bondage, and servitude—where individuals are coerced, deceived, or otherwise unable to leave their situation freely. Broader labor exploitation includes practices like wage theft, excessive overtime, unsafe conditions, and restriction of workers' rights that may not meet the legal threshold of modern slavery but represent serious human rights violations requiring corporate attention and remediation.