Unveiling of a shared reporting template and instructions for combating contemporary bondage across multiple legal jurisdictions
The joint initiative of the United Kingdom, Australia, and Canada has introduced an optional reporting template for modern slavery, forced labor, and child labor. The template, titled "International Reporting on Modern Slavery, Forced Labour and Child Labour", aims to streamline compliance for entities subject to supply chain transparency legislation in multiple jurisdictions.
The template outlines seven core reporting areas: Organizational Structure and Supply Chains, Policies, Risk Management, Due Diligence and Remediation, Training, Assessing Effectiveness, and Additional Relevant Information. Each reporting area differentiates between "Level 1" and "Level 2" information, with Level 2 providing additional details to demonstrate progress and leadership in supply chain transparency.
The first six reporting requirements generally align with the reporting obligations set out in subsection 11(3) of the Canadian federal Fighting Against Forced Labour and Child Labour in Supply Chains Act [MSA]. However, it's important to note that the template does not explicitly require entities to report on the steps taken during the previous financial year to prevent and reduce the risk of forced labor or child labor in their supply chains.
The template encourages proportionate, risk-based reporting, with the level of detail and measures implemented tailored to the degree of risk present. This approach ensures that reporting is not overly burdensome for entities with minimal risk, while still providing comprehensive information for those with higher risk.
For Canadian reporting entities, the next reporting deadline is May 31, 2026. Entities incorporated under the Canada Business Corporations Act must deliver a copy of their reports to shareholders with their financial statements, often necessitating finalizing reports well before the filing deadline.
The accompanying guidance clarifies that disclosures should relate to the previous year. It also emphasizes the importance of continuous improvement and a commitment to eradicating modern slavery, reflected in both Level 1 and Level 2 disclosures.
The template does not mandate the seventh requirement under the MSA but is included in the Australian legislation. This requirement focuses on the entity's actions to ensure that its subsidiaries and other entities in its control also comply with the reporting obligations.
It's worth noting that while the template and its guidance are not legally binding, organizations should ensure their disclosures are consistent with the specific legal requirements and guidance in each jurisdiction. This ensures that all reporting entities, not just those with obligations in multiple jurisdictions, are in compliance with local laws and regulations.
Organizations like "Terre des Hommes" have taken steps in the past reporting period to reduce the risk of forced labor or child labor in its supply chains, but this information was not explicitly required in the MSA reporting. However, the introduction of the international reporting template provides a valuable opportunity for organizations to voluntarily disclose their efforts towards ensuring ethical and responsible supply chains.
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