Modern Slavery Policy: How To Build A Compliant Policy In Australia

If you run a small business or startup in Australia, you’ve probably noticed more customers, investors and supply chain partners asking questions about ethical sourcing and human rights. Even if you’re not legally required to report under the Modern Slavery Act 2018 (Cth) (the Act), you may still be asked for a “modern slavery policy” as part of a tender, a supplier onboarding pack, or a due diligence request.

That’s where a clear, practical modern slavery policy in Australia can make a real difference. It helps you show you take modern slavery risks seriously, sets expectations for your team and suppliers, and gives you a framework for how to respond if something goes wrong.

In this guide, we’ll walk you through what a modern slavery policy should cover, how to tailor it to your business size, and how to turn it from a “tick-the-box document” into something your business can actually use.

What Is A Modern Slavery Policy In Australia?

A modern slavery policy is a written document that explains how your business:

• understands modern slavery risks;
• expects staff and suppliers to behave;
• checks (and keeps checking) for risks in its operations and supply chain; and
• responds if it suspects modern slavery is happening.

In Australia, “modern slavery” is a broad concept. It can include conduct like forced labour, human trafficking, debt bondage, servitude and forced marriage. The key idea is that a person’s freedom is controlled or restricted so they can be exploited.

A modern slavery policy isn’t the same thing as a Modern Slavery Statement under the Act, but they work well together. Your policy is the internal “rules and approach” document. A statement is generally the public-facing report describing what you’ve done (usually required only for larger entities).

For SMEs, a policy is often the starting point. It becomes a foundation for other business documents too, like supplier onboarding terms, staff training, and procurement processes.

Do SMEs And Startups Need A Modern Slavery Policy?

Many SMEs and startups are not required to produce a Modern Slavery Statement, because the Act generally applies to entities with an annual consolidated revenue of at least $100 million.

But in practice, you may still “need” a modern slavery policy because:

• You supply bigger organisations: they may ask for your policy as part of their own compliance and due diligence.
• You want access to government or corporate tenders: some tender documents ask for evidence of ethical sourcing and labour standards (and a policy is a common way to show this).
• You have an overseas supply chain: importing goods, using overseas manufacturers, or relying on labour-hire providers can raise risk.
• Investors and board advisors expect governance: a policy shows your business is thinking ahead about risk management.
• Your customers care: strong ethical practices are now part of brand trust for many industries.

Even if you’re early-stage, having a modern slavery policy can help you build a consistent culture as you grow. It’s much easier to “bake in” good practices from day one than to retrofit them after a big client asks for them in a hurry.

What Should A Modern Slavery Policy Include?

There’s no single mandatory template for a modern slavery policy in Australia. The best policies are clear, practical, and tailored to how your business actually operates.

That said, most strong policies include the following building blocks.

1. Purpose And Commitment

Start with a plain-English statement of commitment. This is where you explain what modern slavery is and why your business is committed to preventing it.

Keep it short. A good policy is easy for your team to read and apply.

2. Scope (Who And What It Covers)

Be specific about who must follow the policy and what parts of your business it covers. For example:

• employees (full-time, part-time and casual)
• contractors and consultants
• labour hire workers
• suppliers and subcontractors
• overseas manufacturers
• logistics providers

If you operate online, you might also cover digital supply chain risks (for example, content moderation labour or outsourced customer service), depending on your model.

3. Roles And Responsibilities

This is where SMEs can keep things practical. You don’t need a huge compliance team, but you do need clarity.

• Directors/founders: approve the policy and make sure resources are available to implement it.
• Operations/procurement: conduct supplier checks and maintain onboarding records.
• People and culture: ensure staff understand expectations and know how to report concerns.
• All workers: follow the policy and report red flags.

If your governance documents are still evolving, it’s a good time to check your overall structure and core company documents (for example, a Company Constitution can help clarify decision-making and oversight processes as you scale).

4. Risk Areas For Modern Slavery (Tailored To Your Supply Chain)

This is often the part that makes a policy feel “real” rather than generic. Your policy should describe the key areas where your business is most likely to face modern slavery risk.

For SMEs and startups, common risk areas include:

• Manufacturing and sourcing: apparel, electronics, promotional merchandise, packaging, and anything produced in high-risk regions.
• Cleaning, security and labour hire: subcontracting chains can make oversight harder.
• Construction and trades: multiple subcontractors, tight margins, and fast turnaround can drive risky labour practices.
• Hospitality and retail operations: vulnerable worker cohorts and complex rostering practices.
• Logistics and warehousing: high reliance on contractors and third parties.

You don’t need to list every possible risk under the sun. Focus on what’s relevant to your business model today, and note that you’ll review as you grow.

5. Supplier Standards And Due Diligence

This section explains how you select and manage suppliers. Common approaches include:

• asking suppliers to confirm they comply with workplace laws and human rights standards;
• requiring suppliers to notify you if they become aware of modern slavery in their operations;
• risk-based supplier questionnaires (more detailed for higher-risk suppliers);
• contract terms requiring ethical conduct and audit cooperation (where appropriate and feasible for your business).

For many SMEs, the practical “upgrade” is to make sure your supplier relationships are documented properly. If you’re engaging third parties to deliver key services, a tailored Supply Agreement can be a helpful way to set expectations on compliance, reporting and termination rights if serious issues arise.

6. Reporting Concerns (Speak-Up And Complaints Handling)

Your policy should give people a safe and simple way to raise concerns. This can include:

• who to contact internally (for example, a founder, manager, or nominated compliance contact);
• how to report confidentially (where possible);
• how you will manage reports to reduce the risk of retaliation; and
• how reports will be investigated and escalated.

The goal is to make it easy for staff to speak up early, before risks turn into serious harm (and serious legal and reputational consequences).

7. Response Plan (What You’ll Do If You Identify A Risk)

It’s not enough to say “we don’t tolerate modern slavery.” Your policy should explain what happens if you suspect it.

A practical response plan might include:

• pausing orders or onboarding for a supplier while you assess the risk;
• requesting information or corrective action from the supplier;
• working with experts or relevant organisations where appropriate;
• terminating the supplier relationship for serious or unresolved issues; and
• supporting affected individuals where possible and safe to do so.

This is also where your general contract risk settings matter. Many businesses use limitations of liability and termination clauses across supplier and customer contracts, but these need to be aligned with how you intend to respond to serious compliance issues. (It can help to understand the limitation of liability clauses you may already be using, so your legal position matches your operational approach.)

8. Training And Awareness

For SMEs, training doesn’t have to be a huge program. It can be a simple, repeatable process, such as:

• a short onboarding module for new staff;
• a checklist for procurement decisions;
• a 15-minute annual refresher during a team meeting; and
• extra training for anyone dealing with high-risk suppliers or labour hire.

Your policy should state who gets trained, how often, and what the training covers.

9. Review And Continuous Improvement

Modern slavery risk management is not “set and forget”. Your policy should confirm that you will:

• review it regularly (for example, annually or after major supply chain changes);
• update it when you expand into new regions, products or suppliers; and
• track improvements over time.

This is particularly important for startups that may scale quickly and change suppliers, manufacturers, and fulfilment partners as they grow.

How To Build A Modern Slavery Policy That Fits Your SME (Step-By-Step)

If you’re starting from scratch, it’s easy to feel like you need a “big corporate” policy. You don’t. You need a policy that reflects your actual operations, while still meeting the expectations of partners who may be assessing your governance maturity.

Step 1: Map Your Operations And Supply Chain

Write down what you sell, where it’s produced, and which third parties you rely on. For many SMEs, a simple table is enough, covering:

• suppliers (including second-tier suppliers if you know them)
• manufacturing locations
• logistics providers
• labour hire or subcontractors
• key software or service providers (if relevant)

You can’t manage risk you haven’t identified.

Step 2: Identify Your High-Risk Areas

Risk is usually influenced by factors like:

• country risk (some regions have higher prevalence of forced labour)
• industry risk (for example, textiles and electronics)
• business model risk (tight margins, urgent deadlines, heavy subcontracting)
• workforce vulnerability (migrant labour, temporary visas, language barriers)

Your policy should show you’ve thought about these risks in a way that makes sense for your business.

Step 3: Choose Your Due Diligence Approach (Keep It Realistic)

SMEs don’t always have leverage to “audit” suppliers. That’s okay. Your policy can set a risk-based approach such as:

• Low-risk suppliers: basic declarations and onboarding checks.
• Medium-risk suppliers: more detailed questionnaires and periodic reviews.
• High-risk suppliers: contractual rights to request evidence, remedial action plans, or third-party verification where feasible.

What matters is that you have a process, you follow it, and you can show evidence of it if asked.

Step 4: Align Your Policy With Your Contracts And Policies

A modern slavery policy often works best when it’s supported by your broader legal framework. Depending on your business, that might include:

• supplier contracts and purchase terms
• staff codes of conduct
• procurement policies
• complaints handling processes

If you have staff (or you’re planning to hire), it can help to ensure your workforce documents are consistent. For example, an Employment Contract and internal workplace policies can support expectations around ethical conduct, reporting issues, and compliance.

Step 5: Decide How You’ll Publish And Use The Policy

Many SMEs publish a modern slavery policy on their website (often in the footer) and use it in supplier onboarding. Others keep it as an internal document and share it when requested.

Whichever approach you choose, make sure the policy is:

• approved at the right level (founder/director approval is common)
• accessible to staff
• easy to find when a customer or partner requests it

Common Mistakes SMEs Make With Modern Slavery Policies

A modern slavery policy can be a real asset, but only if it’s done thoughtfully. Here are a few common pitfalls we see for small businesses.

Using A Generic Template That Doesn’t Match Your Business

If your policy says you conduct “supplier audits across all tiers” but you’ve never done that (and realistically can’t), it can create risk. Overpromising can come back to bite you, especially if a partner relies on your policy in their own risk assessment.

A better approach is to describe what you actually do now, and what you plan to implement as you grow.

Forgetting About Labour Hire And Contractors

Modern slavery risk isn’t only overseas. In Australia, risks can also arise where there are complex subcontracting arrangements, vulnerable worker cohorts, or poor oversight.

If you use contractors, subcontractors, or labour hire, make sure your policy and your contracts cover expectations clearly. For example, if you regularly engage contractors, a tailored agreement (like a contractor or subcontractor arrangement) should reflect compliance obligations and reporting expectations.

No Reporting Channel Or “What Happens Next”

A policy that doesn’t explain how someone can raise concerns (and what you’ll do if they do) won’t help much in the real world.

Even in a small team, having a clear reporting pathway helps you respond quickly and consistently.

Not Reviewing The Policy As You Scale

Startups change fast: new suppliers, new markets, new products, and new hiring needs. If your policy hasn’t been reviewed in a few years, it may no longer reflect your business.

A simple annual review can keep your policy aligned with your operations.

How A Modern Slavery Policy Fits Into Your Wider Compliance (Privacy, Consumer Law, And Governance)

It’s easy to think of modern slavery compliance as “its own thing”, but it usually overlaps with other parts of running a compliant business.

Privacy And Reporting Information

If your reporting channel collects personal information (for example, names, contact details, incident reports), you should think about privacy. Many businesses will need a Privacy Policy if they collect personal information through their website or online forms.

This doesn’t mean your modern slavery policy needs to become a privacy document. It just means you should make sure your reporting process is handled carefully.

Consumer Trust And Brand Reputation

If you make claims like “ethically sourced” or “no forced labour” in your marketing, you need to be confident you can substantiate those claims. In Australia, advertising and product claims are regulated under the Australian Consumer Law (ACL).

Even where your intentions are good, vague or unverified ethical claims can cause issues. It’s worth making sure your customer-facing wording aligns with your actual supplier due diligence. (This is part of broader consumer compliance, including avoiding misleading or deceptive conduct, and being clear about what you can genuinely promise.)

Contracts And Risk Allocation

Your policy sets expectations, but your contracts give you enforceable rights. If you want the ability to terminate a supplier relationship due to serious ethical breaches, that needs to be reflected in your supplier documentation.

For customer-facing terms, the same principle applies: good legal documents can help you set clear expectations and avoid disputes. If you operate online, your Website Terms And Conditions can also support transparency around how you do business.

Key Takeaways

• A strong modern slavery policy in Australia helps SMEs and startups show customers, investors and supply chain partners that they take human rights risks seriously.
• Even if you’re not required to submit a Modern Slavery Statement under the Modern Slavery Act, you may still be asked for a modern slavery policy in tenders, onboarding and due diligence processes.
• A practical policy should cover scope, responsibilities, risk areas, supplier due diligence, reporting pathways, response plans, training, and regular review.
• The best modern slavery policies reflect what your business actually does today, with a clear plan for how you’ll improve as you scale.
• Your policy should align with your wider legal setup, including supplier contracts, employment arrangements, privacy processes, and governance documents.

If you’d like a consultation on putting a modern slavery policy in place for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.