The Australian Institute of Company Directors (AICD) has opposed steps to mandate due diligence under the Modern Slavery Act, suggesting that a further consultation process is required.
The AICD joins the Australian Retail Council (ARC), which has argued that some of the proposed reforms could place unnecessary strain on businesses without delivering better outcomes for affected workers.
This follows the proposed recommendations put forward by Anti-Slavery Commissioner Chris Evans, which would require reporting entities, including the Australian Government, to demonstrate that they are taking reasonable steps to identify, prevent and address modern slavery in their operations and supply chains.
They would also give the Anti-Slavery Commissioner the power to declare that a product, service or industry carries a high risk of modern slavery, requiring Australian businesses to increase their due diligence on such goods.
In a recent submission to the Attorney General’s Consultation on the Modern Slavery Act 2018 (Cth), the AICD said that a considered, public consultation, accompanied by a detailed discussion paper, is critical to support robust policy deliberations.
“The AICD does not support a policy approach that continually seeks to layer new and complex obligations on organisations, when it is well known that combatting modern slavery requires tackling global human rights issues and global governmental cooperation,” it said in the submission.
“More broadly, the AICD has called for a more fundamental rethink of the reporting regime – away from broad-based reporting and towards a targeted, high-risk sector approach.
“Currently, the reporting threshold of $100 million of revenue captures around 3,000 entities, many of whom will have limited understanding of modern slavery risks. Government focus should be on helping organisations where modern slavery risks are greatest.”
In its own submission, ARC rejected the idea of compulsory due diligence, instead advocating for a voluntary, risk-based due diligence framework.
It argued that a flexible system would better reflect the complexities businesses face in detecting and mitigating modern slavery risks, particularly across global supply chains.
The group emphasised that reform should recognise meaningful action and encourage continuous improvement, rather than creating a “box-ticking” culture. It warned that excessive regulation could lead businesses to prioritise compliance over tangible outcomes for vulnerable workers.
Last week, the Chartered Accountants Australia and New Zealand (CA ANZ) also weighed in with a new submission, saying it supports strengthening the Modern Slavery Act but stresses that reforms must be practical, proportionate and supported by clear guidance.
“CA ANZ welcomes changes to make the Act more effective, but highlights that new obligations must be matched with clear expectations,” it said.
“This is especially important for entities new to modern slavery reporting, where requirements often demand significant judgement.
“The submission emphasises proportionality, ensuring obligations reflect an entity’s risk, size, resources and operating context – to keep compliance practical and meaningful.”
One of its key concerns, it said, is the potential burden on smaller reporting entities, particularly those that sit near the $100 million consolidated revenue threshold.
The UN Committee recently backed the proposed amendments, urging the Federal Government to take action and introduce mandatory due diligence.
In its Concluding Observations report, the Committee listed mandatory due diligence as one of its top three priority issues requiring a formal government response within 24 months.
“The Committee acknowledges the adoption of the Modern Slavery Act 2018 (Cth),” said the report.
“However, the Committee remains concerned that the State Party has not yet adopted a comprehensive national action plan on business and human rights, and that business entities are not subject to a mandatory human rights due diligence obligation covering their operations and supply chains, including those abroad.
“The Committee further notes that recommendations of the Statutory Review of the Modern Slavery Act 2018 (Cth) (McMillan Review) calling for the introduction of due diligence obligations and strengthened enforcement mechanisms have not yet been fully implemented.”
