Most Australian businesses with revenue above $100 million have been filing Modern Slavery Statements since 2019. The statements went in annually, got lodged on the register, and for a lot of organisations that was roughly where engagement with the issue ended. That approach will not hold up much longer.
The Australian Government is advancing reforms to the Modern Slavery Act 2018 that shift the legislation from a disclosure regime into an active due diligence obligation. For businesses currently treating their annual statement as the whole of their compliance effort, the gap between what they are doing and what will soon be required is going to be uncomfortable to close quickly.
What Is Actually Changing
The 2023 statutory review of the Modern Slavery Act produced 30 recommendations. The government agreed to 25 of them in full, in part, or in principle in its December 2024 response.
The key proposed changes are:
- Introducing penalties for non-compliance with statutory reporting requirements
- Lowering the reporting threshold from $100 million to $50 million in annual consolidated revenue
- Requiring entities to report on modern slavery incidents or risks as they occur
- Amending the Act to require entities to have an active due diligence system in place
The due diligence requirement is the one that changes the most. Right now, entities must report on what they have done to assess and address modern slavery risks. Under the proposed reform, they need to demonstrate they have a functioning system for doing that, not just describe their efforts. There is a real difference between describing what you did and showing that you have a process that runs whether or not someone is watching.
The New Criminal Offence
On 16 July 2026, the Australian Government announced its intention to introduce a new criminal offence for the failure to prevent modern slavery. The government’s consultation on this offence is working through its scope, application, and what defences will be available.
A failure to prevent offence puts the burden on the organisation. To avoid liability, a business needs to show it had adequate procedures in place to stop modern slavery occurring in its operations or supply chain. Not knowing about it is not a defence.
This follows the same model used in the UK for failure to prevent bribery and tax evasion. Businesses with UK operations will know how it works. For most Australian businesses, it sets a higher bar than anything in the current Act.
The government is also looking at whether a Deferred Prosecution Agreement scheme could sit alongside the new offence, and at how victims might access civil remedies.
Civil Penalties
The Government intends to introduce civil penalties and associated enforcement powers to address non-compliance with existing obligations under the Modern Slavery Act.
Previously, there were no real financial consequences for failing to lodge a Modern Slavery Statement or for lodging one that did not seriously address the mandatory criteria. That changes under the reform package. Civil penalties apply to existing obligations, not just the incoming ones, which means businesses carrying gaps in their current compliance are already sitting in a more exposed position than they were a year ago.
Who Gets Captured Under the New Threshold
The proposed drop in the reporting threshold from $100 million to $50 million in annual consolidated revenue is one of the changes with the widest practical reach.
At the current threshold, a significant number of entities are currently reporting through the Modern Slavery Register. Dropping to $50 million brings in a significant number of mid-sized businesses that have never had any obligation under the Act and, in many cases, have not thought about supply chain risk in any formal way.
If your business is between $50 million and $100 million in revenue, the time to build your due diligence system is before the amendment passes, not after. Building it under a live legal obligation with a tight timeframe is harder and more expensive than doing it on your own schedule now.
What a Functioning Due Diligence System Actually Covers
Supply chain mapping. You need to know who your suppliers are, where they operate, and which industries and geographies carry the highest exploitation risk. Tier one is the starting point. Tier two and beyond is where most organisations have the least visibility and the most risk.
Risk assessment. A documented process for identifying where exploitation is most likely and ranking that risk. Not every supplier sits at the same level of concern, and a credible system reflects that.
Remediation. When a risk or incident surfaces, there needs to be a clear process for what happens next. How do you engage with the supplier? What corrective action is expected? How do you track whether it was taken?
Board oversight. The Australian Anti-Slavery Commissioner, Mr Chris Evans, who commenced his five-year term on 2 December 2024, will play an active role in supporting implementation as reforms progress. Regulators will be looking for evidence that boards are genuinely overseeing the due diligence system, not just being briefed on it annually.
What To Do Now
The reforms are not law yet. But the consultation is well advanced and the direction is not in doubt.
Review your current Modern Slavery Statement against the mandatory reporting criteria. If it is mostly narrative with little evidence of active risk management, it will not meet the standard the incoming reforms require.
Start your supply chain review. Map your tier one suppliers and identify where the highest risk sits. Document the process. Doing this work now means you are not doing it under a compliance deadline.
Assign clear ownership. Modern slavery due diligence cannot sit only in procurement or a sustainability team. It needs a governance structure, a named owner, and reporting that reaches the board.
At Anitech, we help Australian businesses build the governance and risk management systems that sit behind obligations like this. That means moving organisations from annual disclosure to a functioning due diligence process with documented controls that hold up under scrutiny. If your business is approaching the $50 million threshold or already above $100 million and wants an honest assessment of where the gaps are, that conversation is worth having before the legislation passes. Visit anitechgroup.com
Recent Comments