Modern Slavery Act 2018 reforms: what's proposed and what suppliers will be asked for.
Updated: Oct 17
Australia plans to change the Modern Slavery Act 2018 from a reporting law into a duty to prevent. Under the government's proposal, companies with annual revenue over $100 million would have to take reasonable steps to identify, prevent and address modern slavery in their supply chains, or face a criminal offence. No bill has been introduced yet. Much of the evidence those companies need will have to come from their suppliers.
What does the Modern Slavery Act 2018 require today?
The Act came into force on 1 January 2019. It requires entities with consolidated revenue of at least $100 million to publish an annual modern slavery statement describing the risks in their operations and supply chains and the actions they have taken. It does not require them to address those risks, and there are no penalties for a poor statement.
A statutory review recommended lowering the threshold to $50 million. In its December 2024 response, the government kept the threshold at $100 million, to be reconsidered at the next review.
What changes has the government proposed?
On 16 July 2026, the Attorney-General announced three main changes:
A duty to prevent. Large companies would need to take reasonable steps to identify, prevent and address modern slavery in their supply chains.
A new criminal offence. A company that fails to prevent modern slavery could be charged. Showing it took reasonable steps would be a defence.
Civil penalties for reporting. Companies that breach the existing reporting rules could face civil penalties. Fine sizes will be set after consultation and are expected to be proportionate to company size.
A public consultation ran from 21 August to 25 September 2026. It asked about the offence's scope and defence, a possible deferred prosecution agreement scheme, and civil remedies for victims.
Where are the reforms at now?
As at 16 October 2026, the consultation has closed and no draft legislation has been released. The Attorney-General's office says the government intends to introduce the "strongest ever laws" to combat modern slavery. The Greens have pledged support, which would give the government the numbers to pass a bill in the Senate.
The debate is still live. On 15 October 2026, Australian Anti-Slavery Commissioner Chris Evans released a paper, Impact through action: A framework for modern slavery reform. He welcomed the government’s commitment but warned that the proposed failure to prevent offence alone is unlikely to achieve its goals. “Criminal prosecutions are challenging and resource-intensive, and will reach only a small number of cases,” he said. He proposed a four-part framework:
A due diligence or “reasonable steps” obligation for all reporting entities under the Act, including the Australian Government.
A criminal offence that complements this obligation and targets the most serious conduct.
A civil right of action so victims can seek compensation in the courts.
Annual reporting criteria aligned with the due diligence obligation.
The Commissioner’s office estimates Australia imports about US$17.4 billion of goods a year at risk of being made with forced labour. It says feedback shows broad support across stakeholder groups, including business, for a due diligence obligation, and that Australian companies selling overseas can expect much greater scrutiny of forced labour risks. The Business Council of Australia and the Minerals Council of Australia have raised concerns about the criminal offence.
Why are modern slavery statements under pressure?
Research led by Associate Professor Nga Pham at Monash Business School reviewed 39 ASX 100 companies against a 40-question disclosure framework built on OECD, ILO and UN standards. On average, companies addressed about 14 of the 40 questions, or 36 per cent. They described policies and governance well but said little about outcomes.
That gap is what the reforms target: less describing, more showing what was done.
Who will the reforms affect?
The duty and the offence would apply directly to companies over the $100 million threshold. In practice, the effect will reach much further. To show reasonable steps across a supply chain, a large company has to collect evidence from the businesses that supply it.
Government buyers already ask for this:
NSW government tenders. Since 1 July 2026, NSW agencies must use heightened modern slavery due diligence clauses for procurements rated high risk, with no minimum contract value (Procurement Board Direction PBD-2025-05).
Commonwealth contracts. Model clauses for procurements over $200,000 require suppliers to take steps on modern slavery risk and pass the same obligations to their subcontractors.
Overseas rules add to the pressure. From 14 December 2027, the EU Forced Labour Regulation bans products made with forced labour from the EU market, whatever the size of the supplier. Since July 2026, Australian goods have faced a 12.5 per cent US tariff that the US links to forced labour enforcement.
What will suppliers be asked for?
Every buyer's questionnaire is different, but the requests usually cover the same ground:
A modern slavery policy, with an owner and a review date.
A risk assessment of your own suppliers by country, industry and labour type.
Contract clauses that pass obligations down your supply chain.
Staff training on the warning signs.
A way for people to raise concerns, and a process for putting things right.
Records showing these things are in use, not just written down.
How can you prepare now?
Start with the evidence you already have. Most organisations have parts of it scattered across policies, contracts and HR records. Pull it together, fill the gaps, and keep it current, so the next questionnaire takes hours rather than weeks.
ESG Verified gives organisations a structured, evidence-based way to do this. You upload your policies and records against a set list of requirements, and the result is a certificate with a public verification page you can share with any buyer, rather than answering each questionnaire from scratch. See how certification works for organisations, compare the certification levels, or browse our FAQ.
Frequently asked questions
Does the Modern Slavery Act 2018 apply to my business?
The reporting requirement applies to entities with consolidated revenue of at least $100 million. Smaller businesses are not directly covered, but they are often asked for modern slavery evidence by larger customers and government buyers.
What is the proposed "failure to prevent" offence?
It is a proposed criminal offence for companies over $100 million in revenue that fail to prevent modern slavery in their supply chains. Showing that reasonable steps were taken would be a defence. It is not yet law.
When will the new modern slavery laws start?
No start date has been announced. Consultation closed on 25 September 2026, and draft legislation has not yet been released.
Will the reporting threshold drop to $50 million?
Not for now. The government kept the $100 million threshold in its December 2024 response and said it would reconsider it at the next review.
Does certification mean my business meets the reasonable steps defence?
No. The defence will depend on the final law and on each company's own actions. Certification helps you organise and share the evidence buyers are asking for.
This article is general information, not legal advice.
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