Modern Slavery Act Australia: A Business Compliance Guide for 2026
The Modern Slavery Act 2018 (Commonwealth) isn’t optional for large Australian organisations. If your annual revenue exceeds $100 million, you’re legally required to publish an annual Modern Slavery Statement assessing the risks of modern slavery in your operations and supply chains, and reporting the actions you’ve taken to address those risks. Non-compliance risks reputational damage, legal action, and investor scrutiny. Yet many Australian organisations still underestimate the Act’s scope and complexity.
This guide provides practical compliance guidance for the Modern Slavery Act, from understanding legislative requirements to implementing effective due diligence. For broader context on corporate responsibility and supply chain governance, see our guide to corporate social responsibility in Australia.
Understanding the Modern Slavery Act 2018
Legislative Overview
The Modern Slavery Act 2018 (Cth) is Commonwealth legislation administered by the Australian Border Force (ABF). It requires organisations with annual revenue of $100 million or more to prepare and lodge a Modern Slavery Statement with the ABF each financial year. The legislation applies to:
- Australian-based organisations with $100M+ revenue
- Overseas-based organisations operating in Australia with $100M+ revenue
- Entities meeting the threshold can’t rely on subsidiary status—they must report independently
What Counts as Modern Slavery
Modern slavery encompasses:
- Human trafficking: Movement of people through force, fraud, or coercion for exploitation
- Forced labour: Work obtained through coercion, violence, or psychological manipulation
- Debt bondage: People forced to work to repay inflated debts
- Servitude: Obligation to provide services under threat of penalty
- Child labour: Engagement of children in work that harms their wellbeing
- Forced marriage: Marriage entered into without free and full consent
- Organ trafficking: Removal of organs for transplantation
Modern Slavery vs. Poor Labour Practices
Modern slavery involves coercion, exploitation, and removal of freedom. Poor labour practices—low wages, long hours, unsafe conditions—aren’t necessarily modern slavery, though they can create conditions that enable it. Responsible organisations address both.
Who Must Comply?
The $100 Million Threshold
Any Australian or foreign organisation with annual revenue of $100 million or more must prepare and lodge a Modern Slavery Statement. Revenue includes:
- Global consolidated revenue (for multinational enterprises)
- Revenue from all business segments
- Revenue from all jurisdictions where you operate
If your revenue is close to the threshold, calculate carefully. Minor changes in exchange rates or business performance can trigger compliance obligations.
Small and Medium Enterprise (SME) Exceptions
Organisations with revenue below $100 million aren’t legally required to report under the Act. However, many Australian SMEs voluntarily prepare Modern Slavery Statements because:
- Customers increasingly require supply chain transparency
- Investors expect ESG reporting, including modern slavery risk management
- It’s good practice and differentiates responsible businesses
- Future regulatory changes may lower thresholds or expand requirements
Modern Slavery Act Compliance Requirements
Mandatory Content
Your Modern Slavery Statement must include:
1. Identify Your Organisation
Provide your organisation’s name, structure, operations, and supply chains. Describe your business activities and the sectors in which you operate.
2. Describe Your Operations and Supply Chains
Detail your global operations, manufacturing locations, supplier networks, and distribution chains. Modern slavery risks vary dramatically by geography and industry. A detailed operational description demonstrates risk awareness.
3. Assess Modern Slavery Risks
Identify where modern slavery is most likely in your operations and supply chains. Higher-risk areas typically include:
- Labour-intensive sectors (agriculture, construction, manufacturing, garments)
- Low-cost sourcing countries with weak labour protections
- Complex, multi-tier supply chains where visibility is poor
- Sectors with high migrant worker populations
- Situations involving casual or temporary labour
4. Describe Your Due Diligence Processes
Explain how you identify, assess, and respond to modern slavery risks. Due diligence should be:
- Risk-based: Focused on higher-risk areas of your supply chain
- Ongoing: Continuous, not one-off assessments
- Transparent: Clear about methodology and limitations
- Stakeholder-inclusive: Engaging workers, unions, NGOs, and communities
5. Describe Actions and Remediation
Outline specific actions you’ve taken to address modern slavery risks, such as:
- Supplier codes of conduct and audit programs
- Training for procurement and HR teams on modern slavery identification
- Grievance mechanisms for workers
- Remediation programs for victims of modern slavery
- Collaboration with industry peers, NGOs, and labour organisations
6. Reporting Outcomes
Report specific outcomes and metrics, such as:
- Number of suppliers audited for modern slavery compliance
- Incidences of modern slavery detected
- Remediation actions taken
- Training participation rates
- Grievances received and resolved
7. Governance and Board Accountability
Describe board-level oversight of modern slavery risk management and the processes used to approve your statement. Specify which executive or board committee holds accountability.
Statement Lodgement and Public Reporting
Modern Slavery Statements must be:
- Lodged with the Australian Border Force within 6 months of your financial year ending
- Published on your website in a prominent location
- Available for at least 3 years
- Signed by a responsible officer (director, company secretary, or equivalent)
The ABF maintains a public register of all Modern Slavery Statements. Your statement will be searchable and accessible to customers, investors, NGOs, and the public. This creates incentives for robust, credible reporting.
Building an Effective Modern Slavery Management Program
Step 1: Map Your Supply Chain
You can’t manage what you don’t understand. Create a comprehensive map of your global operations and supply chains:
- Primary suppliers (direct suppliers to your organisation)
- Secondary suppliers (suppliers to your suppliers)
- Geographic locations of sourcing and manufacturing
- Labour types and volumes in high-risk areas
This is an ongoing process. Supply chains change. You’ll continually discover new tiers and locations.
Step 2: Conduct Modern Slavery Risk Assessment
Identify where modern slavery is most likely based on:
- Industry risk profiles (some sectors are inherently higher-risk)
- Geographic risk (some countries have weak labour protections and enforcement)
- Supplier characteristics (size, scale, labour intensity, worker demographics)
- Product complexity (products requiring labour-intensive, multi-stage production are higher-risk)
Step 3: Develop Supplier Code of Conduct
Your code should address:
- Prohibition of forced labour and debt bondage
- Child labour prohibitions
- Fair wages and working hours
- Safe working conditions
- Freedom of association and collective bargaining
- Non-discrimination and anti-harassment policies
Make your code accessible and translated into supplier languages. Include auditing rights and consequences for violations.
Step 4: Implement Supplier Auditing
Conduct regular audits of high-risk suppliers, focusing on:
- Employment contracts and wage records
- Worker identification documents (checking for document retention, which could indicate control)
- Working hours and overtime compensation
- Workplace health and safety conditions
- Freedom of movement and worker testimonies
Include both announced and unannounced audits. Work with third-party auditors who have modern slavery expertise.
Step 5: Establish Worker Grievance Mechanisms
Workers must have safe, accessible channels to report concerns:
- Multiple reporting channels (phone, online, in-person, union representatives)
- Anonymous reporting options
- Protection from retaliation
- Clear investigation and resolution processes
- Regular communication of outcomes
Step 6: Build Capability and Training
Train your teams on modern slavery identification and response:
- Procurement teams: supplier assessment and auditing
- HR teams: recruitment and employment practices that prevent trafficking
- Operations teams: workplace observations and worker engagement
- Management: governance and oversight
Step 7: Develop Remediation Protocols
If you identify modern slavery, have clear protocols for:
- Immediate safety and wellbeing support for victims
- Coordination with law enforcement and NGOs
- Legal and medical support for victims
- Investigation and accountability
- Prevention of recurrence
Common Modern Slavery Risks by Sector
Agriculture and Food Production
High risk due to seasonal labour demand, migrant workers, cash payments, and limited regulatory oversight in some sourcing countries. Risks include forced labour in harvesting and processing.
Construction and Infrastructure
Labour-intensive with vulnerable migrant workforces. Risks include wage theft, unsafe conditions, document confiscation, and debt bondage.
Manufacturing and Garments
Complex multi-tier supply chains, price pressure, and low-wage sourcing countries create risks. Forced overtime, excessive hours, and unsafe conditions are common.
Mining and Extraction
Risks include forced labour in extractive activities, unsafe child labour, and exploitation of vulnerable communities in resource-rich but regulation-weak regions.
Technology and Electronics
Complex global supply chains with risks in rare earth mining, component manufacturing, and assembly in countries with weak labour protections.
Frequently Asked Questions
What happens if we don’t comply with the Modern Slavery Act?
The ABF can issue a notice requiring compliance. Non-compliance can result in public naming and shaming, reputational damage, customer and investor pressure, and potential legal action. There are currently no direct financial penalties under the Act, but regulatory changes could introduce fines.
How do we know if modern slavery exists in our supply chain?
Through systematic due diligence: supply chain mapping, risk assessment, supplier auditing, worker engagement, and grievance mechanisms. Many instances go undetected because they’re hidden, so robust monitoring is essential. Third-party auditors with modern slavery expertise can help identify risks and instances.
What’s the difference between modern slavery and poor labour practices?
Modern slavery involves coercion, threat, deception, or removal of freedom. Poor labour practices—low wages, long hours, unsafe conditions—aren’t necessarily modern slavery, though they create environments where slavery can occur. Responsible organisations address both.
How often should we audit suppliers for modern slavery?
At minimum annually for high-risk suppliers. Some organisations conduct audits every 2 years for moderate-risk suppliers and less frequently for low-risk suppliers. Mix announced and unannounced audits. Consider the outcomes of previous audits and changes in supplier operations.
Are we responsible for modern slavery in our suppliers’ suppliers?
Legally, your statement must address risks throughout your supply chain, including secondary and tertiary tiers. Practically, you can’t audit everyone. Focus your direct auditing on highest-risk tiers and work with first-tier suppliers to extend due diligence downstream.
Can we use our supply chain as a competitive advantage in modern slavery prevention?
Absolutely. Organisations with transparent, audited, slavery-free supply chains are increasingly preferred by customers and investors. This can be a genuine competitive differentiator and justify premium pricing with responsible customers.
Modern Slavery Act Compliance as Strategic Opportunity
The Modern Slavery Act is mandatory for large Australian organisations, but compliance shouldn’t be begrudged as a burden. Effective modern slavery risk management protects human rights, reduces operational and reputational risk, and strengthens supply chain resilience. Organisations that embed modern slavery prevention into their procurement and operational processes create competitive advantages and build genuine trust with stakeholders.
Your Modern Slavery Statement is a public document. Make it credible, transparent, and ambitious. Outline genuine risks, explain what you’re doing about them, and report real outcomes. Communities, customers, and investors are watching.
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