Australia to criminalise corporate failure to prevent modern slavery in supply chains
Published on 07/16/2026 at 23:24 | Redaktion boerse-global.de
The Australian government has announced plans to introduce a new criminal offence for large companies that fail to prevent modern slavery within their global supply chains — a move that signals a significant hardening of corporate accountability standards and carries implications for UK businesses operating in the region.
Attorney-General Michelle Rowland outlined the proposed reforms on 16 July 2026, which aim to strengthen the existing 2018 Modern Slavery Act by introducing meaningful legal and financial consequences for non-compliance. For UK employers with Australian operations or supply chains, the changes represent a marked departure from the current transparency-based regime and could set a precedent for similar regulatory tightening elsewhere.
As corporate accountability standards tighten globally, UK employers must also ensure their own compliance obligations are watertight — especially under the Health & Safety at Work Act 1974. Falling short can expose businesses to serious penalties. A free toolkit provides 9 ready-to-use tools including risk assessments, compliance checklists, and a director liability guide. Download the free Health & Safety at Work Act 1974 Toolkit
New criminal and civil liabilities
Under the proposed legislation, companies with an annual revenue exceeding A$100 million could face criminal charges if they are found to have failed to prevent forced labour or other forms of modern slavery in their operations. The government intends to provide a legal defence for businesses that can demonstrate they took reasonable steps to identify and mitigate these risks.
Alongside criminal liability, the reforms introduce civil penalties and expanded enforcement powers. These measures follow an independent review which concluded that the 2018 Act had not yet triggered meaningful changes in corporate behaviour. While approximately 17,000 statements have been lodged by companies since 2019, critics noted a lack of effective "teeth" to ensure compliance.
Government data highlights the scale of the challenge. Roughly 4,000 companies currently report annually under existing transparency requirements. Last year, the Australian Federal Police conducted 280 investigations related to modern slavery, while estimates suggest that 41,000 people are living in modern slavery within Australia itself.
Pressure from international trade standards
The push for legislative reform follows significant trade pressure from the United States. Reports indicate that the US had recently threatened a 12.5% tariff on Australian exports, citing concerns over the volume of forced labour-linked imports entering the country.
Current assessments suggest that 21% of Australian imports carry a high risk of being linked to forced labour. Globally, approximately 50 million people are estimated to be in situations of modern slavery. Anti-Slavery Commissioner Chris Evans characterised the proposed reforms as overdue, arguing that the changes are necessary to align Australia with evolving international standards and to protect the domestic economy from punitive trade measures.
Stakeholder responses and consultation
The announcement has drawn a varied response from industry and advocacy groups. The Human Rights Law Centre and the Responsible Investment Association Australasia welcomed the move, viewing the introduction of penalties as a vital step toward corporate accountability. Grace Forrest of Walk Free also expressed support for the strengthened penalties while noting that the law's effectiveness will ultimately depend on its enforceability.
While the debate over corporate compliance continues, health and safety managers can take practical steps right now to protect their organisations. A free comprehensive toolkit includes risk assessments, director liability guides, and compliance checklists — all designed to help you meet your legal duties under the Health & Safety at Work Act 1974. Download the free Health & Safety at Work Act 1974 Toolkit
However, the Business Council of Australia raised concerns about the potential for increased "red tape" and the administrative burden of additional paperwork for large firms.
The government has indicated that it will conduct further consultations on the specific details of the legislation. These discussions are expected to cover the implementation of deferred prosecution agreements and potential remedies for victims of supply chain exploitation.
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