Modern slavery reform: what’s changing and how to prepare

Australia’s modern slavery laws are moving from transparency to accountability. In July 2026, the Federal Government announced a proposed criminal offence for large organisations that fail to prevent modern slavery in their supply chains. It also proposed civil penalties for not meeting existing reporting obligations.

For many organisations, this changes the question from “What do we report?” to “What can we show we have done?” The good news is that the steps that will matter most are practical and achievable. They also build on work many organisations have already started.

What’s changing

Since 2019, the Modern Slavery Act 2018 (Cth) has required entities with annual consolidated revenue of at least $100 million to publish an annual modern slavery statement. Until now, there has been no penalty for failing to do so. The proposed reforms have two parts:

A “failure to prevent” criminal offence. An organisation with revenue over $100 million could be criminally liable if modern slavery occurs in its supply chain. A defence would be available if it can show it took “reasonable steps” to prevent modern slavery.

Civil penalties for reporting non-compliance. These would apply to organisations that fail to meet existing reporting obligations, including providing false or misleading information in a statement.

The penalty is still being designed. The Government’s August 2026 consultation paper floated several options:

• a fixed maximum of 100,000 penalty units (around $36.4 million at current rates)

• three times the benefit gained

• 10% of annual turnover where the benefit cannot be determined

These are comparable to penalties for failing to prevent foreign bribery.

Consultation closed on 25 September 2026. Legislation has not yet been introduced, so the detail may still change, including what counts as “reasonable steps”.

Who it affects

The offence is proposed to apply to the same organisations that already report under the Act. In practice, its reach will be wider. Large organisations will look to their suppliers and contractors to help demonstrate reasonable steps. Smaller businesses can therefore expect more supplier questionnaires, new contract clauses and requests for evidence.

Sectors such as infrastructure, the built environment, energy and resources, and products and manufacturing have long, complex supply chains. Areas commonly identified as higher risk include:

• Solar panels and other renewable energy components

• Construction materials such as bricks, stone, timber and steel

• Personal protective equipment and uniforms

• Services such as cleaning, security and labour hire

• What “reasonable steps” could look like

The Federal Government has not yet defined reasonable steps, and they are likely to be assessed case by case.

A practical starting point is the NSW Anti-slavery Commissioner’s Guidance on Reasonable Steps, published in December 2023. It was written for NSW public sector organisations, but its framework is useful for any organisation.

The guidance sets out seven steps across the risk management cycle: Commit, Plan, Source, Manage, Remedy, Report and Improve. It scales the level of due diligence to two things: the risk of what is being bought, and the capability of the buyer. It also includes model tender and contract clauses.

The comparable foreign bribery defence points to a similar pattern: proportionate, documented processes that are actually used. For modern slavery, that is likely to include:

1. Understanding where risk sits across operations and supply chains

2. Clear policies and governance, with accountability at board and executive level

3. Supplier due diligence, contract requirements and ongoing engagement

4. Training for the people who make procurement and workforce decisions

5. A process to respond to and remediate issues when they are found

6. Regular review of whether these actions are working

Some organisations have treated their annual statement as a reporting exercise. For them, the gap may be less about intent and more about evidence.

Where Perspektiv fits

We help organisations turn modern slavery obligations into practical action that holds up to scrutiny. We work alongside your legal counsel, who remain a key reviewer and approver of deliverables with legal effect. We do not provide legal advice.

We can support you at each stage:

Understanding risk

We map operations and supply chains, identify higher-risk categories and suppliers, and help you prioritise where to act first.

Building your framework

We map operations and supply chains, identify higher-risk categories and suppliers, and help you prioritise where to act first.

Working with suppliers

We develop questionnaires, assess responses and support corrective action plans.

Training your teams

We deliver practical training for procurement, project and site teams.

Reporting

We gather the evidence, draft your modern slavery statement and check it against the reporting criteria.

Response and review

We help you design processes for responding to issues and measure whether your actions are working.

Modern slavery reform: getting ready now

There is no need to wait for the legislation to start. Three practical steps will put most organisations in a stronger position:

Review your current approach. Compare your last statement and supporting processes against what reasonable steps are likely to require, and identify gaps in evidence.

Focus on your highest-risk areas. Prioritise the suppliers and categories where risk is greatest, rather than trying to cover everything at once.

Bring the right people together. Involve procurement, legal, HR and project teams early so policy, contracts and practice line up.

If you would like to talk through where your organisation stands, get in touch today.