The proposed Australian Modern Slavery Act reforms could significantly change how large organisations identify, manage and address modern slavery risks across their operations and supply chains.
In July 2026, the Australian Government announced plans to introduce a new criminal “failure-to-prevent” modern slavery offence for companies with annual consolidated revenue of more than AUD 100 million. A defence would be available where a business can demonstrate that it took reasonable steps to prevent modern slavery. The Government also intends to introduce civil penalties for non-compliance with existing reporting requirements under the Modern Slavery Act. If enacted, the reforms would move Australia’s modern slavery framework beyond its current emphasis on transparency and reporting towards greater accountability for how businesses identify and manage modern slavery risk. For organisations within scope, the question may increasingly become not only whether they have reported on modern slavery, but whether they can demonstrate what they have done to identify, investigate and address risk.
What are the proposed Australian Modern Slavery Act reforms?
Australia’s Modern Slavery Act currently requires organisations with annual consolidated revenue of at least AUD 100 million to publish an annual Modern Slavery Statement addressing risks within their operations and supply chains and the actions taken to address them.
The proposed reforms would strengthen this framework through:
- A criminal failure to prevent modern slavery offence
- A reasonable steps defence for organisations
- Civil penalties for non-compliance with existing reporting requirements
- Stronger enforcement and greater scrutiny of the processes behind Modern Slavery Statements
The details have not yet been finalised. What constitutes “reasonable steps”, for example, will be shaped through consultation and the legislative process. That distinction is important for businesses considering how to respond now. The proposed reforms should not be treated as final legal requirements, but they do provide a clear indication of the direction in which Australia’s modern slavery framework is moving.
What could a failure to prevent modern slavery offence mean for businesses?
A failure to prevent offence would place greater emphasis on the systems and actions organisations have in place to manage modern slavery risk. Publishing a Modern Slavery Statement may form part of that process, but organisations could increasingly need evidence showing how potential risks were identified, how suppliers were prioritised for further investigation, what action followed when concerns arose and whether corrective measures were effective.
This becomes more challenging as supply chains grow. Modern slavery risk may not sit with an organisation’s largest or most visible suppliers. It can arise through subcontractors, labour hire providers, overseas manufacturers and other organisations further into the supply chain. For procurement, sustainability and compliance teams, this creates a practical challenge: how do you establish sufficient visibility across a large supplier population while focusing deeper due diligence where the risk is greatest?
Where Modern Slavery Risk Can Remain Hidden
Supplier policies, codes of conduct and questionnaires remain useful elements of modern slavery due diligence, but they do not always show what workers are experiencing in practice. Achilles’ own Ethical Business Programme data provides an indication of why worker-level insight matters.
Since the programme was launched in 2018, Achilles has conducted more than 10,000 worker interviews globally, providing participating organisations with insight into working conditions and potential human rights risks across their supply chains. The Achilles Ethical Business Impact Report 2025 found that 33% of workers surveyed reported receiving their employment arrangements informally. In UK construction, 32% of individuals surveyed said they had not received formal terms and conditions of employment. Worker awareness also remains an important issue. In 2021 and 2022, 80% of workers surveyed were unsure about the signs of modern slavery. By 2024, that figure had fallen to 52%, showing progress while also highlighting a continuing gap in awareness.
These figures are drawn from Achilles programme activity across international markets and should not be interpreted as estimates of modern slavery prevalence in Australia. What they demonstrate is that there can be a meaningful gap between formal supplier controls and the experience of people working within the supply chain. That gap matters when organisations are trying to establish whether their due diligence processes are working in practice.
What does effective modern slavery due diligence look like?
Effective modern slavery due diligence is not about applying the same level of scrutiny to every supplier. A risk-based approach helps organisations identify where potential human rights impacts are most likely or most severe, then focus deeper assessment and action where it is needed. The OECD Due Diligence Guidance for Responsible Business Conduct sets out six steps that businesses can use to identify and address adverse impacts across their operations, supply chains and business relationships.
- Step 1: Embed responsible business conduct into policies and management systems.
- Step 2: Identify and assess adverse impacts across operations, supply chains and business relationships.
- Step 3: Cease, prevent or mitigate adverse impacts.
- Step 4: Track implementation and monitor effectiveness.
- Step 5: Communicate how impacts are being addressed.
- Step 6: Provide for, or cooperate in, remediation where appropriate.
For businesses preparing for the proposed Australian Modern Slavery Act reforms, the OECD framework provides a useful way to assess whether existing processes move beyond risk identification to action, monitoring and remediation. The key is having enough supply chain visibility to understand where deeper due diligence is required and what action has been taken in response.
How Achilles Helps Australian Businesses Strengthen Modern Slavery Due Diligence
Achilles supports organisations across different levels of modern slavery and human rights due diligence, from identifying potential supplier risk to gathering independent evidence of employment practices.
Achilles Risk Screening provides external risk insight across large supplier populations without requiring every supplier to complete a questionnaire or onboarding process. This can help procurement and compliance teams identify where closer review may be needed.
Where deeper assurance is required, the Achilles Ethical Business Programme combines site surveys, confidential worker interviews and management system audits to provide insight into employment practices and potential human rights concerns. Ethical Sourcing Audits also consider workplace and accommodation conditions alongside policies, records and worker experiences.The programme supports corrective action and ongoing monitoring, helping organisations move from identifying potential risk to understanding what is happening and what action is required. Suppliers participating in the programme recorded an average 10% improvement in audit scores.
For businesses preparing for the proposed Australian Modern Slavery Act reforms, this layered approach can help strengthen supply chain visibility and provide clearer evidence of how modern slavery risks are being identified and addressed.
Preparing for greater accountability
The proposed reforms have not yet been enacted, and businesses will need to follow the consultation process and eventual legislation closely. There is, however, value in reviewing modern slavery due diligence before the final requirements are known.
Organisations can assess whether they have sufficient visibility across their supplier population, whether their risk methodology identifies where deeper assurance is needed, whether concerns lead to documented action and whether remediation is followed through. The direction of Australia’s proposed reforms suggests that evidence of action will become increasingly important alongside disclosure. For businesses with complex supply chains, combining supplier risk intelligence with independent audits, worker engagement and ongoing monitoring can provide a clearer understanding of modern slavery risk and stronger evidence of how those risks are being addressed.
Achilles helps organisations identify potential modern slavery and unethical employment practices across their supply chains and focus deeper assurance where it is most needed.
