Under new reforms, Australian businesses could soon face criminal liability for failing to prevent modern slavery in their operations and supply chains, marking the biggest proposed overhaul of the Modern Slavery Act since its introduction in 2018.
Last week, the Federal Government announced plans to introduce the new criminal element for large businesses with annual turnovers exceeding $100 million, alongside civil penalties for organisations that fail to comply with existing reporting obligations.
Companies would have a defence if they can demonstrate they took reasonable steps to prevent modern slavery, ensuring those with adequate processes are afforded appropriate protections.
Complemented by practical guidance and education initiatives to help companies better identify, manage and remediate modern slavery risks, the reforms are intended to strengthen corporate accountability following widespread criticism that Australia’s current reporting regime lacks meaningful enforcement.
They also build on recommendations from the 2023 statutory review of the Modern Slavery Act, which found the legislation had succeeded in increasing awareness of modern slavery risks but required stronger measures to drive lasting change.
The announcement lands amid pressure from the United States, which recently proposed a 12.5 percent tariff on Australian exports as part of a broader push targeting countries it considers to have weak anti-slavery enforcement.
Australian Anti-Slavery Commissioner Chris Evans welcomed the Federal Government’s move, describing it as a significant step forward.
“This is a step towards a better and fairer approach to combating modern slavery,” he said.
“When Australia’s Modern Slavery Act was introduced, we were regarded as a global leader. Today, comparable jurisdictions are moving beyond transparency requirements and introducing stronger enforcement mechanisms, due diligence obligations and import controls.
“The introduction of criminal provisions sends the right signal to business that they should be treating modern slavery with the seriousness it deserves.”
Evans said he wants further reforms to build on the due diligence work businesses have already invested in, prioritise remedy for victims and push businesses past what he called “performative compliance”.
He also called for the new regime to encourage collaboration among businesses on shared risks, particularly in high-risk industries, with meaningful government engagement.
“A more robust response will also help position Australian businesses to remain competitive in key markets in the face of evolving regulatory and stakeholder expectations globally,” Evans added.
“Responsible and competitive markets depend on fair dealing. Profit should not be driven by a race to the bottom on wages and labour standards, nor by undercutting responsible Australian businesses.
“These reforms, if done well and fully enforced, are an opportunity for Australia to be a leader again.”
Attorney-General Michelle Rowland also welcomed the reforms, claiming that Australians increasingly expect businesses to do the right thing.
“Australians rightly expect that the products they buy are not made on the back of modern slavery, which is why the Albanese government is delivering a legislative framework with teeth,” she said.
“The proposed changes will introduce greater accountability, levelling the playing field for the majority of Australian businesses already doing the right thing.”
Rowland also said the Government would continue consulting with stakeholders on the design of the legislation to ensure it strengthened Australia’s response to modern slavery while supporting responsible businesses.
Outside of government, the proposed changes have been welcomed by international human rights group Walk Free, which said Australia was beginning to catch up with major trading partners that already impose stronger corporate due diligence obligations.
“Introducing criminal liability into the Modern Slavery Act confirms the government is serious about holding businesses to account for failing to prevent exploitation in their supply chains,” said Walk Free Founding Director Grace Forrest.
However, she cautioned that “if the bar for convictions is too high or deferred prosecutions are too easily permitted, too many survivors will be left without recourse.”
The Human Rights Law Centre also welcomed the proposed changes, with Associate Legal Director Freya Dinshaw saying they would place a clear obligation on companies to act on modern slavery risk in their supply chains rather than simply report on it.
“Robust laws are essential for safeguarding the freedom and dignity of workers who make the products we use every day,” she said.
“Today’s announcement represents a welcome and long-overdue step towards meaningfully strengthening Australia’s modern slavery laws and ensuring accountability for companies that turn a blind eye to exploitation and abuse.
“Most importantly, the proposed changes create a clear obligation on companies to take action to prevent modern slavery in their supply chains – this has the potential to drive real change to workers’ lives.
“We have yet to see the full details of the proposal, but are encouraged that the Albanese Government also plans to consult on appropriate remedies for victims of modern slavery. It is critical that any new offences are accompanied by direct pathways for workers to pursue justice.”
On the flip side, the Business Council of Australia (BCA) has questioned the reforms, saying they prioritise paperwork over fixing the problem and will add to the substantial red tape holding Australian businesses back.
“Modern slavery has no place in Australian business, and we take the responsibility seriously to stamp it out,” said BCA Chief Executive Bran Black.
“The BCA supports the current Act; however, the priority should be practical guidance and effective implementation of existing reporting requirements, not the imposition of vastly more red tape to Australia’s already staggering compliance burden.”
The Business Council has previously called for stronger regulator guidance, greater consistency in interpreting reporting criteria and more effective use of the data already being collected through modern slavery statements.
“Unfortunately, this announcement adds mountains of paperwork to an already paperwork-intensive system, forcing companies to focus on compliance with new and even more onerous requirements,” added Black.
“The Government has not consulted on these new penalties, and they add another layer onto Australia’s large and ever-growing pile of regulation, which already costs business $160 billion a year.
“The creation of this new criminal offence is contrary to the Government’s stated budget objective of reducing the regulatory burden faced by Australian companies.
“Undermining a robust system with a hastily conceived new offence doesn’t help end modern slavery. The priority should be implementing the existing framework properly, not creating a new offence that raises more questions than it answers.”
