Modern slavery is not a distant problem. It does not exist only in developing nations or behind closed factory doors on the other side of the world. It operates in global supply chains that touch everyday Australian products — the clothes on store shelves, the electronics in offices, the fresh produce in supermarkets, and the cleaning services that maintain corporate buildings overnight.
For Australian businesses, understanding modern slavery is no longer a matter of corporate goodwill. It is a legal obligation — and increasingly, a commercial and reputational one.
What Modern Slavery Actually Means
The term "modern slavery" covers a range of serious exploitation: forced labour, debt bondage, human trafficking, child labour, forced marriage, and servitude. What unites these practices is the removal of a person's freedom through coercion, deception, or abuse of power.
Unlike the chattel slavery of previous centuries, modern slavery often hides in plain sight. Workers in garment factories in Southeast Asia may be paying off recruitment fees that trap them in jobs they cannot leave. Agricultural labourers in countries with weak labour protections may be living in employer-controlled accommodation with wages withheld for "housing costs." Domestic workers overseas may have had their passports confiscated.
According to the International Labour Organization and Walk Free Foundation's joint research, tens of millions of people globally are estimated to be living in conditions of modern slavery at any given time. It is the second most profitable form of organised crime worldwide.
The uncomfortable truth is that many Australian businesses are commercially connected to this exploitation — not through malice, but through the layered complexity of global supply chains and the difficulty of seeing what happens several tiers down from an immediate supplier.
Australia's Modern Slavery Act: The Legal Framework
Australia enacted the Modern Slavery Act 2018 at the federal level, with the requirement taking effect from 1 January 2019 for eligible entities. New South Wales introduced its own Modern Slavery Act in 2018 as well, though enforcement details have evolved since then.
The federal Act applies to any entity — Australian or foreign — that is based or operating in Australia with an annual consolidated revenue of at least $100 million. These entities are required to submit an annual modern slavery statement to the Australian Border Force's online reporting portal.
The statement must address seven mandatory criteria. These cover the entity's structure, operations, and supply chains; the risks of modern slavery in those operations and supply chains; the actions taken to assess and address those risks; how the entity assesses the effectiveness of its actions; the consultation process with entities it owns or controls; and any other relevant information.
Critically, the statement must be approved by the principal governing body — usually the board — and signed off by a responsible member such as a director. This is not a middle-management exercise. It sits at governance level by design.
Who Does This Affect Beyond the $100 Million Threshold?
This is the question many smaller Australian businesses ask — and the honest answer is: effectively, all of them.
If a smaller business supplies goods or services to a large reporting entity, that reporting entity will be examining its supply chain for risk. Increasingly, procurement teams at major corporations are including modern slavery risk assessments as part of supplier due diligence. Smaller suppliers who cannot demonstrate they've thought about modern slavery risks may find themselves losing contracts.
Beyond that, Australian consumer sentiment is shifting. Businesses that can credibly say they've investigated and addressed modern slavery risks in their supply chains have a genuine market advantage. Those who can't are increasingly exposed.
Globally, the direction is consistent. The United Kingdom's Modern Slavery Act, the EU's Corporate Sustainability Due Diligence Directive, and similar frameworks in Canada and Germany all point toward the same trajectory — mandatory transparency about labour conditions is becoming the global standard of responsible business.
Where Modern Slavery Risk Hides in Supply Chains
A mid-sized Melbourne-based clothing retailer once assumed their modern slavery exposure was minimal because they sourced from a factory in Vietnam that had passed an audit two years prior. During a deeper supply chain review — prompted by their largest customer asking for a modern slavery statement — they discovered that the fabric used in their garments was sourced from a sub-supplier in a region with well-documented forced labour concerns. The direct factory had clean paperwork. Two tiers down, the picture was very different.
This is a common story. Risk assessment needs to look beyond tier-one suppliers.
High-risk sectors and sourcing regions for Australian businesses typically include garment manufacturing in parts of South and Southeast Asia, electronics components from regions with documented labour abuse concerns, agricultural labour in countries with weak enforcement of worker protections, cleaning and facilities management services using labour-hire arrangements, and construction labour in fast-growing markets with migrant worker populations.
The risk isn't always offshore either. Migrant agricultural workers in some parts of regional Australia, and workers in certain domestic cleaning and care services, have been subject to exploitation that meets the legal definition of modern slavery.
What a Modern Slavery Statement Actually Requires
Many businesses produce their first modern slavery statement without fully understanding what a strong one looks like. Submitting something is a legal requirement, but regulators and procurement teams are increasingly distinguishing between statements that reflect genuine engagement and those that contain only broad platitudes.
A credible statement demonstrates that the business has actually mapped its supply chain, identified where the risk concentration sits, and taken concrete steps — not just expressed concern.
Supply Chain Mapping
This means understanding who the business buys from, where those suppliers source from, and where in that chain the human rights risks are elevated. Many businesses are surprised by how little they actually know about tiers two and three of their supply chain. Mapping doesn't have to be perfect in year one, but it needs to begin somewhere and develop over time.
Risk Assessment
Risk assessment involves evaluating which parts of the supply chain, and which geographies or product categories, carry the greatest exposure. Businesses should be drawing on both internal knowledge and external resources — country risk ratings, sector-specific risk data, and supplier questionnaires are common tools.
Concrete Actions
This is where many statements fall short. Generic statements about "commitment to human rights" or "zero tolerance for modern slavery" without accompanying actions are increasingly seen as hollow. Concrete actions include supplier audits, training for procurement staff, updates to supplier codes of conduct, grievance mechanisms for workers, and remediation steps when issues are found.
Effectiveness Review
The Act requires businesses to describe how they assess the effectiveness of their actions. This is genuinely difficult and many businesses are still developing their approach, but even a considered description of what metrics or indicators the business uses demonstrates serious engagement.
The Governance Reality: Why Boards Need to Own This
Modern slavery compliance isn't something that can be delegated entirely to a sustainability team or a legal officer. The Act requires board-level sign-off for a reason — because supply chain ethics ultimately reflects an organisation's values, and values are set from the top.
Directors who sign off on a modern slavery statement without having genuinely engaged with the assessment risk both personal and organisational exposure if serious labour abuses are later found in the supply chain and the statement is shown to be superficial.
Boards that take modern slavery seriously tend to embed it within existing risk governance frameworks rather than treating it as a standalone compliance exercise. It sits alongside environmental risk, reputational risk, and supplier financial risk as a material consideration in strategic procurement decisions.
Recent Developments Australian Businesses Must Know
The Australian government conducted a statutory review of the Modern Slavery Act 2018, and the findings — released in recent years — pointed toward strengthening the framework. Key developments include discussions about lowering the reporting threshold, introducing financial penalties for non-compliance (currently absent from the federal Act), and strengthening the guidance on what a sufficient statement looks like.
In the 2025-2026 legislative environment, organisations should expect continued tightening of requirements rather than loosening. The direction both domestically and globally is towards mandated due diligence — moving beyond reporting what you've done to requiring businesses to actually prevent harm.
The European Union's Corporate Sustainability Due Diligence Directive is worth watching even for businesses that don't operate in Europe. For large Australian exporters or businesses in global supply chains that include European entities, the EU framework may effectively extend into their operations through contractual requirements.
Practical Steps Every Australian Business Should Take Now
Whether or not a business meets the $100 million threshold, the following actions represent good practice and reduce risk:
Start by understanding your own supply chain. Many businesses don't have a complete picture of who they buy from and what those suppliers' supplier relationships look like. Even a partial map is better than no map, and it can be developed incrementally.
Review your supplier contracts and codes of conduct. Do they include modern slavery prohibitions? Can you terminate a contract if serious labour abuses are found? Are suppliers required to disclose their own supplier relationships?
Train your procurement team. The people making purchasing decisions are often the first line of defence. If they're not asking the right questions — about labour costs, worker accommodation, recruitment fees, and worker grievance mechanisms — risk will go undetected. Structured training makes a measurable difference.
The Modern Slavery Act Compliance course from the Australian Compliance Institute provides structured, intermediate-level training specifically designed for Australian businesses navigating these obligations. It covers the legislative framework, supply chain risk identification, what a compliant statement looks like, and how to implement practical due diligence processes that go beyond box-ticking. For businesses that need their teams to genuinely understand these obligations — not just sign off on a policy — this is the training to start with.
When Modern Slavery Is Found: Remediation Obligations
A critical and often misunderstood aspect of modern slavery compliance is what happens when issues are discovered. Many businesses are afraid that finding problems in their supply chain creates liability, so they prefer not to look too hard. This is fundamentally the wrong approach.
Regulators — and increasingly, courts and investors — will look more favourably on a business that found an issue, disclosed it, and took remediation steps, than on one that has no risk identification process at all and therefore claims a clean record.
Remediation can take many forms: working with a supplier to improve conditions rather than immediately terminating the relationship (which may simply harm the workers further), supporting workers who have been exploited to access compensation or repatriation, and strengthening audit and monitoring processes so the same issue cannot recur.
The guidance from organisations like the Responsible Business Alliance and the UN Guiding Principles on Business and Human Rights is clear — the goal is not perfect supply chains but continuous, good-faith improvement.
Modern Slavery and Brand Trust in 2026
Consumer expectations have shifted considerably. Younger Australian consumers in particular — the millennial and Gen Z cohorts now representing a significant share of purchasing power — actively make decisions based on ethical sourcing and labour practices. Businesses that can credibly tell a transparent, improving story about their modern slavery risk management have a genuine competitive advantage.
Institutional investors are asking similar questions. ESG assessment frameworks, which evaluate environmental, social, and governance performance, increasingly include modern slavery and human rights due diligence as material factors. A weak or absent modern slavery statement can affect a company's ESG rating, which in turn affects access to certain categories of capital.
This is not about reputation management in the traditional PR sense. It's about demonstrating that a business understands the full footprint of its commercial activity and takes responsibility for it seriously.
Building a Culture of Supply Chain Ethics
The businesses that do this well don't just complete a compliance exercise once a year. They build it into the operating rhythm of the organisation.
Procurement teams discuss modern slavery risk as part of new supplier onboarding. Category managers receive regular training updates as sourcing regions or product categories change. The board receives an annual briefing on supply chain risk that includes modern slavery alongside financial and operational risk. Supplier relationships include honest conversations about what has been found and what needs to improve.
This kind of culture doesn't happen automatically, and it doesn't happen cheaply. But it is genuinely achievable, and it is what separates organisations that are genuinely managing risk from those that are simply managing their public statements.
The Australian Compliance Institute's full course library includes training resources that support organisations in building exactly this kind of embedded compliance culture — starting with the Modern Slavery Act Compliance course and extending into related areas like environmental and sustainability compliance, WHS, and privacy.
Final Thought: Compliance Is the Floor, Not the Ceiling
The Modern Slavery Act sets minimum obligations. Meeting them is necessary but not sufficient for a business that genuinely wants to operate with integrity in 2026 and beyond.
The most important step is simply starting — mapping what you know, being honest about what you don't, asking harder questions of your suppliers, and investing in the training that gives your people the tools to act on what they find.
Modern slavery compliance done well is one of the clearest expressions of what kind of business an organisation actually is.
Frequently Asked Questions (FAQs)
Q1: Does the Australian Modern Slavery Act apply to my business if our revenue is under $100 million?
The mandatory reporting requirement under the federal Modern Slavery Act 2018 applies to entities with annual consolidated revenue of $100 million or more. However, smaller businesses are strongly encouraged to voluntarily report and are increasingly expected to demonstrate modern slavery awareness by larger clients and procurement teams who include supply chain ethics in their due diligence processes.
Q2: What are the penalties for not submitting a modern slavery statement in Australia?
The current federal Modern Slavery Act 2018 does not impose financial penalties for non-compliance. However, the federal government has signalled that strengthening penalties is under active consideration as part of the Act's ongoing review. Reputational consequences, loss of government contracts, and exclusion from major supply chains represent real commercial risks even without formal fines.
Q3: What must be included in an Australian modern slavery statement?
A compliant statement must address seven mandatory criteria: the entity's structure, operations, and supply chains; modern slavery risks in those operations and supply chains; actions taken to assess and address those risks; effectiveness assessment of those actions; consultation with owned or controlled entities; board approval; and any other relevant information the entity chooses to include.
Q4: How often does a modern slavery statement need to be submitted in Australia?
Reporting entities must submit a modern slavery statement annually, covering each 12-month reporting period. Statements are submitted through the Australian Border Force's modern slavery register, which is publicly accessible.
Q5: What is the difference between Australia's Modern Slavery Act and the UK's?
Both Acts require large businesses to report annually on modern slavery risks and actions. The UK Act, which applies to businesses with a turnover of £36 million or more, has been in place since 2015. Australia's federal Act applies to businesses with $100 million or more in annual consolidated revenue. The UK Act also does not currently impose financial penalties, though there are ongoing reform discussions in both countries about strengthening enforcement.
Q6: Can a business be held liable if modern slavery is found in its supply chain?
Under Australian law, a business is not automatically liable for modern slavery practices by its suppliers. However, failure to conduct adequate due diligence, combined with a misleading modern slavery statement, can create significant legal and reputational exposure. Investors, media, and NGOs increasingly scrutinise the gap between what companies claim and what conditions actually exist in their supply chains.
Q7: Where can employees and managers complete structured training on Modern Slavery Act compliance in Australia?
The Modern Slavery Act Compliance course offered by the Australian Compliance Institute is specifically designed for Australian businesses and covers the legal framework, supply chain risk identification, and practical due diligence implementation. It is CPD-accredited and suitable for intermediate-level learners in compliance, procurement, legal, and management roles.
Q8: Is modern slavery only a risk in overseas supply chains?
No. While significant risks exist in international supply chains — particularly in regions with weak labour law enforcement — modern slavery risks also exist within Australia itself. Documented cases involving migrant agricultural workers, domestic cleaning services, and certain care sector arrangements confirm that Australian-based operations are not automatically low-risk. Domestic due diligence matters too.
