Modern Slavery: An Australian Perspective

Modern slavery isn’t just something that happens overseas or in extreme circumstances. It can appear in everyday supply chains - from raw materials to packaging and logistics - and often hides behind complex tiers of subcontractors.

If you run a business in Australia, you may be legally required to report on modern slavery risks. Even if you’re not a “reporting entity”, your customers, investors and the public increasingly expect transparency about how you operate and source products and services.

In this guide, we’ll unpack what modern slavery means in Australia, who has reporting obligations, and practical steps you can take to identify, prevent and respond to risks - in plain English and with a business-friendly lens.

What Is Modern Slavery In Australia?

Under the Modern Slavery Act 2018 (Cth), “modern slavery” covers serious exploitation such as human trafficking, forced labour, debt bondage, forced marriage, deceptive recruitment, servitude and the worst forms of child labour.

It’s not limited to extreme scenarios. For example, a supplier may confiscate workers’ passports, engage labour hire intermediaries that charge unlawful recruitment fees, or impose excessive overtime under threats - these can all amount to modern slavery risks.

Crucially, risks may exist both in your own operations (for instance, through labour hire) and in your supply chains, including second- and third-tier suppliers (e.g. raw materials, packaging, outsourced manufacturing, freight and cleaning services).

Australia’s regime focuses on transparency. Rather than mandating a single way to fix the problem, it requires certain organisations to assess and report on risks and the actions they’re taking. This pushes better practices through markets and procurement.

Who Must Report And What Goes In A Modern Slavery Statement?

The Commonwealth regime applies to “reporting entities” - generally, Australian entities (and certain foreign entities carrying on business in Australia) with at least $100 million consolidated annual revenue for the reporting period.

If you meet the threshold, you must prepare an annual modern slavery statement and submit it to the Australian Government’s Online Register for Modern Slavery Statements. The statement is approved by your principal governing body (for companies, the board) and signed by a responsible member. It’s due within six months after the end of your financial year.

Your statement must cover the mandatory criteria, including:

• Your structure, operations and supply chains.
• The modern slavery risks in your operations and supply chains.
• The actions you’re taking to assess and address those risks, including due diligence and remediation processes.
• How you assess the effectiveness of your actions.
• How you consult with any controlled entities.
• Any other relevant information (e.g. governance, training, engagement and future plans).

Many businesses form a cross-functional working group (legal, procurement, HR, sustainability/ESG, operations) to collect data, run risk assessments and draft the statement. If you operate group entities, you’ll also need to manage consultation and data consistency across the group.

Note: Australia has also introduced state-based initiatives (particularly in government procurement). If you work with public sector customers, you may face additional supplier requirements through contracts and tender processes.

Practical Steps To Identify And Address Modern Slavery Risks

Whether you report under the Act or not, the following steps help you manage risk, meet stakeholder expectations and build a stronger, more resilient business.

1) Map Your Operations And Supply Chains

Start by documenting your structure, operating locations, business model and key supply chains. Go beyond first-tier suppliers where possible - note high-level dependencies (e.g. raw materials, packaging, logistics, cleaning and security services) and locations, as risk profiles often increase deeper in the chain.

2) Conduct A Risk Assessment

Use a risk framework to identify hotspots. Consider factors such as geography, industry/sector risk, product risk (e.g. raw materials like cocoa, cotton, mica, seafood), labour profiles (migrant and temporary workers) and known red flags (labour hire, multi-layer subcontracting, cash payments, excessive overtime).

Prioritise higher-risk areas where you have leverage to act (e.g. critical suppliers, higher spend, longer relationships or contractual control).

3) Engage Suppliers Early And Set Expectations

Communicate your standards and what modern slavery compliance means in practice. Ask targeted questions during onboarding and renewals, and collect relevant information proportionate to risk (e.g. country of origin, labour hire arrangements, audit history, remediation approach).

Where relationships are strategic or higher risk, build improvement plans together rather than relying only on “pass/fail” questionnaires.

4) Strengthen Your Contracts

Contracts are one of the most effective tools you control. Incorporate clauses that require suppliers to identify and address modern slavery risks, cooperate with reasonable audits, notify you of incidents and implement remediation where needed.

When drafting or renewing a Supply Agreement or Manufacturing Agreement, include obligations around ethical sourcing, sub-supplier management, record-keeping and incident reporting. For more general supplier arrangements, ensure your Terms of Trade align with your policy, right of termination and remediation commitments.

Be clear and realistic about what you’ll require and how compliance will be measured - then follow through. Overly broad clauses without practical follow-up may not deliver meaningful risk reduction.

5) Build Internal Policies, Training And Reporting Channels

Equip your team to spot issues and respond. This often includes a modern slavery policy, procurement standards, buyer training and a confidential reporting mechanism.

Implementing a Whistleblower Policy supports safe, protected reporting by workers and suppliers. If you collect personal information through grievance processes, make sure your Privacy Policy explains how reports are handled and stored.

6) Respond And Remediate

If you identify harm, the priority is to stop it and support remediation for affected workers. In practice, this might include working with the supplier on corrective actions, shifting to alternative suppliers where necessary, and reporting significant incidents through your governance channels.

Document your decisions and outcomes. This transparency will help when you assess effectiveness and prepare your statement (if you’re a reporting entity).

7) Measure Effectiveness And Improve

Choose indicators that make sense for your business (e.g. percentage of mapped suppliers, risk assessments completed, corrective actions closed out, worker engagement sessions held). Revisit your risk assessment annually and adjust controls as your operations and supply chains evolve.

What About Small And Medium Businesses That Don’t Meet The Threshold?

Even if you don’t hit the $100m revenue threshold, modern slavery is still relevant. Larger customers increasingly pass requirements down their supply chains. Tenders, frameworks and supplier codes of conduct now commonly ask SMEs to describe their risks and controls.

There’s also reputational and legal risk around public claims. If you promote “ethical sourcing” or “slavery-free” goods without a reasonable basis, you risk misleading conduct under the Australian Consumer Law. Keep your statements accurate and proportionate to your evidence - this is closely related to obligations under section 18 of the ACL (misleading or deceptive conduct).

From an employment perspective, manage the basics well: use the right Employment Contract, ensure workers are paid correctly, and watch for red flags like wage theft, sham contracting, unsafe work or coercion. Issues in your direct operations can be both a legal and a modern slavery risk.

Finally, build a right-sized program. A simple risk map, key supplier clauses, basic training for buyers, and a confidential reporting channel can go a long way - and will help you answer customer questionnaires confidently when they arrive.

Embedding Governance And Transparency

Good governance underpins a credible approach. At a minimum, your leadership should approve your modern slavery approach, oversee the statement (if you’re a reporting entity) and receive regular updates on progress, incidents and remediation.

Think about who owns each part of the program - procurement (supplier engagement and contracts), legal (governance, statements, disputes), HR (training, whistleblowing), operations (implementation and incident response), and sustainability/ESG (reporting and improvement).

Your governance documents can reinforce accountability. For example, board-approved policies, supplier standards and procurement procedures set expectations for teams and suppliers. Where relevant, ensure your commercial terms - such as a Supply Agreement or Manufacturing Agreement - reflect those standards so your legal rights align with your public commitments.

Transparency matters, too. If you publish a statement or make public claims, keep the content balanced and evidence-based. Avoid blanket language that suggests every part of your supply chain is verified or risk-free. If in doubt, pare back the claim or add context about your process and limitations.

Common Pitfalls To Avoid

• Assuming low risk because you buy from Australia or “reputable brands”. Modern slavery risk can exist domestically (e.g. cleaning, security, labour hire) and in higher-risk tiers of a global brand’s supply chain.
• Box‑ticking questionnaires without engagement. Questionnaires are useful, but risk reduction comes from relationships, capacity building and follow‑through.
• Copy‑paste statements. Your statement should reflect your actual operations, risks and actions - regulators and stakeholders can spot boilerplate language.
• Overreliance on audits. Audits can miss hidden coercion or document fraud. Combine audits with worker voice mechanisms and unannounced spot checks where feasible.
• Ignoring remediation. Cutting a supplier without a plan can sometimes worsen harm. Where possible, support remediation that protects affected workers.
• Overstating claims. Be careful with “ethical” and “slavery‑free” messaging. Keep it accurate, proportionate and consistent with the ACL (including section 18 and section 29 prohibitions on false or misleading representations).

Which Contracts And Policies Support Your Modern Slavery Program?

Clear, tailored documentation helps you communicate expectations, enforce standards and respond quickly to issues. Depending on your business, consider the following:

• Supply Agreement: Sets out supplier obligations, including ethical sourcing standards, subcontractor controls, audit rights, notification duties and termination rights for serious breaches.
• Manufacturing Agreement: Aligns product specifications with labour standards and gives you levers to address labour non‑compliance in production facilities.
• Terms of Trade: Embeds your sourcing expectations into day‑to‑day purchasing, useful where bespoke agreements aren’t practical.
• Whistleblower Policy: Provides safe, protected channels for reporting concerns from workers and stakeholders, with clear investigation processes.
• Privacy Policy: Explains how you collect, use and store personal information gathered through due diligence and grievance processes.
• Employment Contract: Confirms lawful pay and conditions, hours, leave and conduct, and helps prevent exploitation within your own operations.

These documents work best when supported by training, proportionate due diligence, and practical escalation and remediation pathways. As your program matures, you can refine the detail and expand coverage to higher‑risk categories and geographies.

How To Get Started (And Keep Momentum)

If you’re just starting out, keep it simple and build over time:

1. Assign ownership. Nominate a lead and establish an internal working group.
2. Map your operations and suppliers at a high level. Flag obvious hotspots.
3. Update your supplier templates and onboarding questions in line with your risk profile (start with major renewals and new suppliers).
4. Roll out basic awareness training for buyers and managers.
5. Introduce a confidential reporting mechanism supported by a Whistleblower Policy.
6. Define how you’ll measure effectiveness this year (e.g. mapping coverage, number of high‑risk suppliers engaged, issues remediated).
7. For reporting entities: plan your statement timeline, data collection and board approvals early.

If your arrangements are complex, it can be helpful to get targeted advice on governance, contracts and reporting so your legal position lines up with your practical approach. Keep your program proportionate: focus where you have leverage and the potential to reduce harm meaningfully.

Key Takeaways

• Modern slavery risks can exist in both your operations and supply chains; Australia’s regime requires large entities to assess and report on those risks annually.
• If you meet the $100m threshold, your statement must address mandatory criteria and be lodged within six months after year end, with board approval.
• Practical controls include mapping supply chains, risk assessments, supplier engagement, stronger contracts, training, confidential reporting and remediation.
• SMEs still face expectations via customer procurement and the ACL - keep any “ethical” claims accurate and supported by evidence.
• Contracts and policies matter: consider a Supply Agreement or Manufacturing Agreement with modern slavery clauses, plus a Whistleblower Policy, Privacy Policy and solid Employment Contracts.
• Start small but deliberate, measure effectiveness and improve each year so your legal obligations and market expectations are consistently met.

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