New Criminal Charges for Modern Slavery Breaches
What Businesses Need to Do Now

Overview

The Albanese government has announced major reforms that would expose large Australian companies to criminal prosecution if they fail to prevent forced labour in their global supply chains. This marks a significant strengthening of Australia’s modern slavery regime, which has long been criticised for relying too heavily on voluntary reporting and lacking meaningful enforcement.

Key Legislative Change

Companies with annual consolidated revenue above $100 million would face a new criminal offence for failing to prevent modern slavery in their operations or supply chains. Businesses could defend themselves only by demonstrating they took reasonable steps to identify and prevent forced labour, slavery or debt bondage. Civil penalties will also be introduced for non-compliance with existing obligations under the Modern Slavery Act, replacing the current largely voluntary framework.

This highlights the importance of Axion's platforms, RiskAlerts has identified this risk, SupplierSync was updated to accomadate the new governement requirements which ensures all of Axion's clients are within governement compliance.
Bob Anderson, Director . BRM Services

Drivers Behind the Reform

International Scrutiny
The United States recently criticised Australia for insufficient action on forced-labour imports and threatened additional tariffs on affected goods.
Regulatory Gaps
An independent review found the 2018 Modern Slavery Act had “not yet caused meaningful change” for victims and recommended mandatory due diligence.
Scale of Exposure
Modelling suggests more than one in five imported goods may be linked to supply chains where coercion or debt bondage is known to occur.
Businesses would have a defence if they could demonstrate they had taken reasonable steps to identify and prevent forced labour, slavery or debt bondage in their operations and supply chains.
Report from SMH Modern slavery reforms: Large Australian companies face criminal prosecution for supply chain failures

Key Risks

• Criminal investigations and prosecution for serious modern slavery offences.
• Significant financial penalties and legal costs.
• Supply chain disruption if suppliers are found to be using forced or exploited labour.
• Loss of government contracts or major customers.
• Reputational damage and negative media attention.
• ESG and governance failures identified by investors, insurers and regulators.

Immediate Action Items

1. Develop Modern Slavery Compliance Manual – Policies, procedures, supplier due diligence requirements, risk assessment frameworks, reporting processes, and staff responsibilities to help an organisation identify, prevent, mitigate, and report modern slavery risks within its operations and supply chains.
2. Review your Modern Slavery Risk Assessment.
3. Identify high-risk suppliers, countries, industries, and labour providers.
4. Update supplier onboarding and due diligence procedures.
5. Obtain written Modern Slavery declarations from suppliers.
6. Include contractual clauses requiring compliance with modern slavery legislation.
7. Implement supplier audit and monitoring programs.
8. Train procurement and supply chain staff to recognise warning signs.
9. Establish confidential whistleblower and grievance reporting channels.
10. Maintain documented evidence of all reasonable steps taken.
11. Regularly report modern slavery risks to senior management and the Board.

High-Risk Suppliers for Modern Slavery Due Diligence

Australian Government – Common High-Risk Industries (Modern Slavery)
Consolidated from Attorney-General’s Department guidance, Home Affairs, ABF resources, and the Modern Slavery Act Review.

1. Labour-Intensive & Vulnerable Workforce Sectors (Consistently in ABF guidance and Modern Slavery Act Review)

• Labour-hire and recruitment
• Horticulture and agriculture
• Meat processing
• Cleaning services
• Security services
• Hospitality and accommodation
• Construction subcontracting
• Seasonal, migrant, and temporary-worker sectors

2. High-Risk Imported Goods & Global Supply Chains (Referenced in Modern Slavery Act Review and Home Affairs guidance)

• Apparel, textiles, and footwear
• Electronics and components
• Solar panels and batteries
• Timber and forestry products
• Seafood
• Cocoa, coffee, sugar
• Stone, bricks, and construction materials
• Toys and low-cost consumer goods
• Mining and critical minerals (offshore extraction)

3. High-Risk Service Supply Chains (Highlighted in ABF business guidance)

• Transport, freight, and logistics
• Warehousing and distribution
• Waste management and recycling
• Facilities management
• Call centres and outsourced business services

4. High-Risk Country Exposure
Australia does not publish its own country list, but government guidance refers to:

• U.S. Department of Labor’s List of Goods Produced by Child or Forced Labour
• Global Slavery Index country-risk data
• ILO forced-labour indicators

Recommended Frequency: Review supplier modern slavery compliance annually, with additional reviews whenever engaging new high-risk suppliers or expanding into higher-risk jurisdictions.