Modern Slavery Laws: Compliance Guide For Australian Businesses

Modern slavery isn’t just a problem overseas. It can exist in global supply chains that reach into Australia - from raw materials to finished goods and the services you rely on every day.

If you’re growing a company, scaling your team or bidding for larger contracts, understanding your obligations under Australia’s modern slavery laws is essential. The good news? With the right approach, compliance is manageable and can even strengthen your brand and supplier relationships.

In this guide, we’ll break down who needs to report under the Modern Slavery Act, what to include in a modern slavery statement, how to prepare one confidently, and the practical contracts and policies that support real-world compliance.

What Are Modern Slavery Laws In Australia?

The Modern Slavery Act 2018 (Cth) is Australia’s framework for identifying and addressing serious human rights risks such as forced labour, debt bondage, human trafficking and the worst forms of child labour.

Under the Act, certain entities must prepare an annual modern slavery statement that explains the risks in their operations and supply chains, and the actions they’ve taken to assess and address those risks.

Even if you’re not legally required to report, expectations are rising. Larger customers, investors, government buyers and your own team increasingly expect transparency and ethical sourcing. Many smaller businesses take proactive steps now so they can qualify for bigger tenders and become a preferred supplier.

Who Has To Report Under The Modern Slavery Act?

You must prepare and lodge a modern slavery statement if you are:

• An Australian entity, or a foreign entity carrying on business in Australia; and
• An entity with annual consolidated revenue of at least A$100 million (measured at the entity level).

That second point is important. It’s the entity’s consolidated revenue (including any entities it controls) that is assessed against the A$100 million threshold. It isn’t enough that a wider corporate group collectively exceeds A$100 million - the reporting obligation attaches to each entity that meets the threshold based on its own consolidated revenue.

“Entity” is defined broadly and includes companies, partnerships, trusts, superannuation funds and other bodies corporate or unincorporate. If you’re close to the threshold, it’s worth getting advice on how revenue is calculated and which entity should submit a statement.

What About Smaller Businesses?

Plenty of businesses under A$100 million still feel the impact. Many larger buyers and government agencies now build modern slavery expectations into procurement. You may be asked to answer supplier questionnaires, agree to specific contract clauses or even publish a voluntary statement to align with their standards.

Taking early steps - such as updating supplier contracts and having a simple policy and process - can make you a more competitive and trustworthy supplier. For example, you might tighten your Supply Agreement to include ethical sourcing obligations, audit rights and clear remedies if issues arise.

What To Include In A Modern Slavery Statement

If you’re a reporting entity, your modern slavery statement must be lodged within six months of the end of your reporting period (usually your financial year) and must address the mandatory content requirements in the Act. In practice, expectations for detail and transparency are increasing each year.

• Structure, operations and supply chains: Outline your entity (and any entities it controls), where you operate, and how your supply chains work - including upstream tiers and overseas suppliers where relevant.
• Risks of modern slavery: Identify risk areas in your operations and supply chains. Risk can arise due to industry, geography, labour practices, raw materials, subcontracting and the use of vulnerable workers (such as migrants).
• Actions taken: Explain the steps you’ve taken to assess and manage risk - for example, due diligence processes, supplier onboarding checks, contract updates, audits, worker voice mechanisms, staff training and escalation pathways.
• Effectiveness: Describe how you assess whether your actions are working. This may include KPIs, supplier scorecards, incident tracking, audit results and continuous improvement activities.
• Consultation: If your statement covers multiple entities, set out how you consulted with those entities in preparing the statement.
• Other relevant information: Include plans for the next reporting period, stakeholder engagement, remediation processes and any challenges or lessons learned.

Approval and signing are also mandatory. Your principal governing body (for example, the board of directors) must approve the statement, and a responsible member of the entity must sign it before you submit it to the government’s public register.

Because every statement is published on the Australian Modern Slavery Register, think of it as both a compliance document and a public commitment to ethical business. Stakeholders - including customers, investors and the media - can and do review these statements.

How To Prepare And Lodge Your Statement

A clear plan makes the process far less daunting. Here’s a practical, step-by-step approach you can adapt to your business.

1) Map Your Operations And Supply Chains

Start with a simple map. Identify your core operations, controlled entities and each level of the supply chain for your critical products and services. Be realistic about where visibility drops off and note where subcontracting or labour-hire is used.

If contracts are your main control point, it may be a good time to refresh your Terms of Trade or Goods and Services Agreement so you can require supplier disclosures and cooperation with audits.

2) Assess Your Risk Areas

Some sectors and countries carry higher inherent risk due to low wages, informal labour or weak enforcement. Materials such as cotton, cocoa, fish, construction inputs and electronics components are often cited as higher risk.

Consider how procurement practices (e.g. short lead times, price pressure) and multi-tier subcontracting can exacerbate risk. Document this risk assessment so you can show how it informed your actions.

3) Strengthen Your Controls

Decide what’s proportionate for your size and risk profile. Common actions include supplier onboarding questionnaires, due diligence checks, tailored contractual obligations, audit rights, and escalation and remediation pathways.

Training is powerful. Short, practical training for your procurement team and managers helps them spot red flags early. Building expectations into your workplace policies also ensures your internal standards are consistent.

4) Update Key Contracts And Policies

Contracts are your first line of defence. Review your major supplier and labour-hire contracts to include modern slavery clauses that cover compliance with applicable laws, audit and access rights, incident reporting, corrective action plans and termination rights for serious breaches.

Support this with internal policies. At a minimum, many businesses implement a simple supplier code or modern slavery policy, a reporting/escalation procedure, and a protected reporting mechanism such as a Whistleblower Policy.

5) Establish Incident And Remediation Processes

If you identify potential modern slavery indicators, your response should be victim-centred and proportionate. In practice, that may involve engaging the supplier on corrective actions, working with reputable third parties to verify improvements and, if needed, responsibly exiting a relationship after reasonable attempts to remediate.

Internally, make sure staff know how to escalate concerns, and keep records of decisions and outcomes in case your approach is ever scrutinised.

6) Measure Effectiveness

Choose simple metrics you can maintain year to year. Examples include the percentage of high-risk suppliers assessed, completion rates for training, audit findings closed on time, and supplier non-conformances.

Where you find gaps, be transparent about what you’ll improve next year. Continuous improvement is viewed positively by stakeholders reviewing your statement.

7) Draft, Approve And Submit

Draft your statement against the statutory criteria and include enough context for readers outside your business to understand your approach. Build in enough lead time for internal reviews.

Your principal governing body must approve the statement, and a responsible member must sign it. After approval, submit to the public register within six months of your reporting period end.

Practical Tip: Respect Privacy And Data

If your due diligence involves collecting personal information about employees or suppliers, ensure you handle that data lawfully and transparently. Having a clear, accessible Privacy Policy supports this and sets expectations about how you collect, use and store personal information.

What Happens If You Don’t Comply?

At present, compliance is primarily enforced through transparency. The government can call out entities that do not comply (“name and shame”), and your statement - or lack of one - is visible to customers, investors and media on the public register. Many large buyers also make compliance a contractual requirement, so non-compliance risks lost tenders or terminated agreements.

Reform is on the agenda. A statutory review has recommended changes such as civil penalties for non-compliance, stronger reporting requirements, and potentially a due diligence obligation and a lower reporting threshold. These proposals are being considered, so it’s sensible to lift your practices now to align with likely future expectations.

Bottom line: meeting the current legal standard is essential, but demonstrating genuine progress and transparency is what protects your reputation and commercial opportunities.

Documents And Policies That Support Compliance

Modern slavery compliance is stronger when your contracts and policies do the heavy lifting day to day. Depending on your size and risk profile, consider putting these in place:

• Supply Agreement: Tailored supplier terms that require compliance with modern slavery laws, mandate disclosures, allow audits, and set out remedies for breaches. A robust Supply Agreement is a practical control point.
• Terms of Trade or Customer Terms: Clear baseline terms that align your commercial expectations with your ethical commitments where relevant. You can embed expectations in your standard Terms of Trade or service terms.
• Non-Disclosure Agreement (NDA): Protects confidential information shared during supplier onboarding, audits and remediation discussions. An NDA encourages openness while managing risk.
• Workplace Policies And Training: Simple guidance for staff on procurement practices, red flags and escalation. Centralise through a Staff Handbook and targeted modules for key roles.
• Whistleblower Policy: A protected, confidential reporting pathway for employees and suppliers. A clear Whistleblower Policy supports early detection and remediation.
• Employment Contracts: Make sure internal labour practices meet Australian standards on wages, hours and conditions. Well-drafted Employment Contracts complement your ethical sourcing commitments.
• Privacy Policy: If you collect personal information in your due diligence or grievance processes, a transparent Privacy Policy helps you meet Australian privacy requirements.

You may not need every document above, but most growing businesses will need several. The key is tailoring them to your sector, risk profile and supply chain so they’re practical to implement and enforce.

Key Takeaways

• The Modern Slavery Act requires reporting entities (those with entity-level consolidated revenue of A$100 million or more) to lodge an annual statement that is published on a public register.
• Your statement must cover structure and supply chains, risk areas, actions taken, how you measure effectiveness and how you consulted with controlled entities - and it must be approved by your principal governing body and signed by a responsible member.
• Even if you’re under the threshold, larger customers and government buyers often expect suppliers to meet modern slavery standards through questionnaires, contract clauses and voluntary reporting.
• Build a practical program: map your supply chains, assess risk, update contracts, train staff, create escalation and remediation pathways, and track KPIs year on year.
• Use contracts and policies - such as a tailored Supply Agreement, Whistleblower Policy and Privacy Policy - to embed modern slavery controls into day-to-day operations.
• Reforms are being considered (including potential penalties and stronger obligations), so lifting your practices now will keep you ahead of evolving expectations.

If you would like a consultation on modern slavery compliance for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.