7 Years Without Reporting Penalties: Australia’s Modern Slavery Act is Changing

August 20, 2026

The term modern slavery is used to describe situations where coercion, threats or deception are used to exploit victims and undermine or deprive them of their freedom. While few businesses would knowingly deal with suppliers that use exploitative practices, all organisations share the collective responsibility to guarantee their goods and services are not products of modern slavery.

Since its introduction, Australia’s Modern Slavery Act has required businesses that meet the criteria (over $100 million annual consolidated revenue) to report their actions to assess and address modern slavery risks in their operations and supply chains through the publication of a Modern Slavery Statement.

In July 2026, Albanese Government announced proposed reforms to strengthen the Act, including new criminal offences for companies that fail to prevent modern slavery in their supply chains and civil penalties for non-compliance with reporting obligations. These reforms reinforce that modern slavery is a serious crime under Australian law and strengthen corporate accountability for addressing and preventing it.

Reforms under consideration

Since 2019, Australia’s approach to modern slavery has centred on transparency. However, the Act does not currently impose penalties for failing to comply with these reporting requirements. The proposed reforms would change this by introducing greater enforcement of existing obligations.

Companies required to report under the Act will face a new criminal offence if they fail to prevent modern slavery within their supply chains and operations. This puts the weight on how effectively a company manages its risks, rather than on the publication of a statement alone. Reporting entities will need to take reasonable steps to prevent modern slavery in order to avoid penalties – though what that means is still being worked out through consultation.

While the Government’s proposed changes represent a significant strengthening of Australia’s modern slavery framework, the reforms remain subject to consultation, and concerns have been raised by organisations such as Walk Free regarding how the proposed criminal offence would operate and be enforced. Particularly, the scope of the offence, the standard required to establish liability and the responsibilities placed on businesses will be important considerations. The final legislative framework and its subsequent implementation and enforcement will be the key to assessing the practical impact of the reforms.

Simultaneously, the Government intends to introduce civil penalties and enforcement powers for non-compliance with the existing reporting obligations. A deferred prosecution agreement scheme and remedies for victims are also under consideration. These reforms will be accompanied by practical guidance and education initiatives to assist companies to better identify, manage, and remediate modern slavery risks

Why now?

Governments worldwide are moving towards stronger due diligence obligations and enforcement. Domestically, the pressure has been building for the last three years. In 2023, there was an independent statutory review of the legislation conducted by John McMillan, that resulted in 30 recommendations, with 25 of them being initially accepted by the Government. Additionally, more than 100 investors, businesses, unions and civil society groups wrote to the Federal Government earlier this year, arguing Australia’s disclosure-only regime had fallen behind international peers.

What this means for your business

If your organisation already reports under the Act, this is a good moment to review your modern slavery framework and identify where the gaps are. Consider how well you understand the risks in your operations and supply chains, if you have genuine supplier engagement, whether your risk assessments and action plans are current and documented, amongst others.

For organisations below the $100 million threshold, modern slavery requirements may still be relevant as customers, investors and larger supply chain partners are increasingly expecting transparency from all suppliers. A voluntary statement showcases transparency in the supply chain, demonstrates commitment to responsible business practices, and builds stakeholders’ trust.

How can Cress help

At Cress, we help organisations build modern slavery and navigate these changes. This could include assessing modern slavery risk across operations and supply chains, developing or reviewing their Modern Slavery Policy and Statement, or building supplier due diligence processes. Get in touch with our team to find out how we can help you prepare.

Cress is the Hydroflux Group’s in-house sustainability consulting team, operating as a specialised division and driven by a simple but powerful goal: to help organisations across Australia, New Zealand and the Pacific region create a more sustainable future. As a young and agile team, we combine technical expertise with fresh, forward-thinking approaches to help clients navigate complex challenges across climate risk, emissions reduction, modern slavery, water stewardship, and ESG reporting, building on the Hydroflux legacy of engineering excellence while bringing a sustainability lens to the industries and communities shaping the future of our region.

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