Modern Slavery Act 2018 (Cth)

The Modern Slavery Act 2018 (Cth) requires certain entities based in Australia, or operating in Australia, to report annually on the risks of modern slavery in their operations and supply chains and on the actions they have taken to address those risks. It also creates a public Modern Slavery Statements Register and now includes the Australian Anti-Slavery Commissioner as part of the statutory framework.

This is a transparency and reporting regime. The Act does not say that every business must guarantee there is no modern slavery risk anywhere in its operations or supply chain. Instead, it requires reporting entities to publicly explain their structure, operations, supply chains, risk areas, due diligence and remediation steps, and how they assess whether those steps are effective.

The Act also has broad geographic reach. It extends to acts, omissions, matters and things outside Australia. For businesses with offshore manufacturing, imported goods, overseas labour arrangements, international logistics or foreign subsidiaries, that matters because the reporting task is not limited to what happens inside Australia.

The starting point is section 5, which defines a reporting entity. For a reporting period, a reporting entity includes an entity with consolidated revenue of at least $100 million if, at any time in that reporting period, the entity is an Australian entity or carries on business in Australia.

The Act's definition of Australian entity is broad. It includes a resident company, a resident trust estate, a resident corporate limited partnership, and any other partnership or other entity, whether incorporated or unincorporated, if it is formed or incorporated in Australia or its central management or control is in Australia.

The Act also expressly covers the Commonwealth. It separately covers a corporate Commonwealth entity or Commonwealth company with consolidated revenue of at least $100 million for the reporting period. In addition, an entity that is otherwise below the threshold can choose to volunteer to comply.

Foreign businesses are not automatically outside the regime. A foreign entity can be a reporting entity if it carries on business in Australia at any time in the reporting period and meets the consolidated revenue threshold. Section 5 ties the meaning of carrying on business in Australia to the Corporations Act approach, so the analysis is not limited to Australian incorporated entities.

The revenue test is based on consolidated revenue, not just the turnover of one standalone company. If an entity controls another entity or entities, the total revenue of the entity and all controlled entities is worked out as a group under the accounting standards. That means group structure, control relationships and reporting periods need to be checked carefully before deciding that an entity is below the threshold.

The Act defines modern slavery by reference to serious forms of exploitation. It includes conduct that would constitute offences under Divisions 270 or 271 of the Criminal Code, trafficking in persons as defined in the relevant international protocol, and the worst forms of child labour as defined in ILO Convention No. 182.

For businesses, the practical point is that the concept is broader than direct slavery in the narrow historical sense. It can include forced labour, servitude, debt bondage, trafficking and severe child labour exploitation. Risk can arise in manufacturing, agriculture, cleaning, construction, hospitality, logistics, labour hire, raw material extraction, uniforms, electronics, imported goods and outsourced services.

The Act is concerned with risks in both operations and supply chains, and also with entities owned or controlled by the reporting entity. So the review should not stop at your direct Australian workforce. It should also consider subsidiaries, contractors, suppliers and sourcing channels, including overseas arrangements.

A reporting obligation arises for each reporting period where the entity falls within the reporting entity definition and is not already covered for that period by a joint statement or, for relevant Commonwealth bodies, a Commonwealth statement.

Under section 13, a single reporting entity must give the Minister a modern slavery statement for the entity unless a joint statement under section 14 or a Commonwealth statement under section 15 already covers it. Under section 14, one entity other than the Commonwealth may give a joint statement covering one or more reporting entities for the same reporting period.

Entities below the threshold can also opt in. Section 6 allows an Australian entity or an entity carrying on business in Australia to volunteer to comply by written notice to the Minister before the end of the reporting period. A voluntary election can apply to one period or later periods as well, unless revoked before the relevant period starts.

Because the Act works by reporting period, businesses should not assume that last year's position automatically answers this year's question. Revenue, control, group structure and Australian business activities can change from one period to the next.

Section 16 sets out the mandatory criteria for a modern slavery statement. For each reporting entity covered by the statement, the statement must identify the reporting entity, describe its structure, operations and supply chains, describe the risks of modern slavery practices in its operations and supply chains and in any entities it owns or controls, and describe the actions taken to assess and address those risks, including due diligence and remediation processes.

The statement must also describe how the reporting entity assesses the effectiveness of those actions, describe the process of consultation with owned or controlled entities and, for joint statements, with the entity giving the statement, and include any other information the entity considers relevant.

Approval and sign-off are not optional formalities. For a single entity statement, the statement must be approved by the principal governing body and signed by a responsible member. The Act gives examples of a principal governing body, such as a company's board of directors or a superannuation fund's board of trustees. A responsible member is an authorised individual member of that governing body, or another person falling within the Act's definition for the entity type.

The statement must be prepared in the approved form and given to the Minister within 6 months after the end of the reporting period, in the approved manner. The Act notes that electronic signing is permitted through the Electronic Transactions Act framework.

Section 14 allows a joint modern slavery statement covering one or more reporting entities. This can be useful for corporate groups, but the Act still imposes specific process requirements. The statement must comply with the mandatory criteria, be prepared in the approved form, and be prepared in consultation with each reporting entity covered by it.

Approval for a joint statement can be more complex than for a single entity statement. The statement must be approved by the principal governing body of each reporting entity covered, or by a higher entity that is in a position, directly or indirectly, to influence or control each reporting entity covered, whether or not that higher entity is itself covered by the statement. If neither of those options is practicable, the Act allows approval by at least one reporting entity covered, but the statement must then explain why the usual approval pathways were not practicable.

The signatory requirements also depend on which approval pathway is used. Businesses using a group statement should make sure the governance pathway, consultation process and signatory position are clearly documented before lodgement. Group reporting can simplify publication, but it does not remove the need to address each reporting entity covered by the statement.

The Act requires statements to be kept on the Modern Slavery Statements Register, which is publicly accessible online free of charge. This means statements are not just filed with government. They are public documents that can be read by customers, investors, workers, unions, civil society groups, competitors and the media.

If the Minister is reasonably satisfied that an entity has failed to comply with a requirement under the statement provisions, section 16A allows the Minister to request a written explanation, remedial action, or both. The request must specify a period of at least 28 days. If the entity fails to comply with that request, the Act allows publication of information about the failure, including the identity of the entity.

The current Act text does not set out direct financial penalties for failing to lodge a statement or for lodging a deficient statement. That does not mean non-compliance is low risk. Public exposure, procurement consequences, investor scrutiny and customer pressure can be significant, especially where a business has made broad public claims that are not supported by records or actual practice.

For many businesses, the hardest part of compliance is not the final statement. It is the quality of the records behind it. If a statement says the business has assessed risk, consulted with controlled entities, trained staff, reviewed suppliers or implemented remediation processes, the business should be able to show what was actually done.

Useful records often include supplier lists, sourcing information, procurement questionnaires, internal risk assessments, board or governing body approval records, consultation notes with subsidiaries or controlled entities, training materials, policy documents and copies of lodged statements. These records also matter for businesses below the threshold, because customers and tender panels often ask for practical evidence rather than broad assurances.

Businesses should also be careful with public claims. If marketing material, tender responses, supplier codes or website statements say the business has strong modern slavery controls, those statements should match the business's actual systems and records. The Act is a reporting law, but unsupported claims can still create broader legal and commercial risk.

Many SMEs are not reporting entities under the Act. Even so, they are often affected in practice because larger customers need information from their suppliers to prepare their own statements. A small importer, manufacturer, labour hire provider, franchise supplier or service contractor may be asked to complete questionnaires, provide supplier lists, explain sourcing locations, confirm labour standards, or accept contract clauses dealing with modern slavery risk.

If your business is below the threshold, the most practical approach is to be ready with accurate information rather than overstated assurances. Keep a clear list of key suppliers, know where your goods or services come from, identify any higher-risk sourcing areas, and make sure any statements you give to customers or in tenders can be backed up by records.

Businesses should also review procurement and supply contracts for information rights, audit rights, compliance warranties and termination clauses linked to modern slavery concerns. Even where the Act does not directly require a statement from your business, commercial counterparties may still expect a workable risk process and credible answers.

The Act now includes Part 3A, which establishes the Australian Anti-Slavery Commissioner. The Act sets out the Commissioner's functions and powers, requires the Commissioner to have regard to international obligations, and deals with staffing, consultants, strategic planning, annual reporting and independence.

For businesses, the practical significance is that the statutory framework is no longer limited to annual statements and the public register. There is now a dedicated office under the Act with ongoing functions connected to Australia's broader response to modern slavery. Businesses should keep an eye on current guidance, strategic priorities and public materials connected with that office when reviewing their compliance approach.

The Act received Royal Assent on 10 December 2018. Sections 3 to 10 and Parts 2 to 4 commenced on 1 January 2019. The current compilation on the Federal Register of Legislation is compilation number 2, dated 7 November 2024, and includes amendments up to Act No. 42 of 2024.

Businesses should check the current version of the Act, any rules made under the Act, and whether there are later amendments or commencement changes affecting reporting, the Commissioner, or any future enforcement settings before relying on this page for a live compliance decision.