Industry groups have been blasting the Albanese Government’s plan to expand non-compliance penalties against businesses that fail to adhere to the Modern Slavery Act.
This comes a week after Attorney-General Michelle Rowland confirmed the Labour Government is preparing to introduce new anti-slavery laws as well as measures to equip companies to better identify and address risks in their global supply chains.
The Government will strengthen Australia’s modern slavery laws with a new criminal offence where companies with an annual consolidated revenue over $100 million fail to prevent modern slavery in their supply chains.
However, there will be a defence available if a company can demonstrate that they took reasonable steps to prevent modern slavery.
According to the Government, this will ensure companies which have adequate processes and steps in place are afforded appropriate protections.
Upcoming consultations are set to inform the details of the proposed offence and enforcement options to further ensure the reforms are practical, effective and fit for purpose, including consideration of a deferred prosecution agreement scheme and remedies for victims.
The overhaul also includes plans to introduce civil penalties and associated enforcement powers to address non-compliance with existing obligations under the Modern Slavery Act.
Australia's Modern Slavery Act 2018 requires large entities to report on modern slavery risks, make public statements, and address exploitation in supply chains.
But while industries agree modern slavery needs to be addressed and stamped out, some have come out lashing the increased penalties.
The Business Council of Australia (BCA) argued adding criminal penalties prioritises paperwork over fixing the problem and will significantly add to the already substantial red tape burden faced by business.
Chief executive Bran Black said the BCA has long supported the objectives of Australia’s modern slavery framework, and businesses continue to invest in the systems needed to identify and address exploitation in supply chains, at home and overseas.
But, he added the priority should be practical guidance and effective implementation of existing reporting requirements, “not the imposition of vastly more red tape to Australia’s already staggering compliance burden.”
The Business Council has previously called for stronger regulator guidance, greater consistency in interpreting reporting criteria, and more effective use of the data already being collected through modern slavery statements.
Closer alignment with comparable international regimes on terminology, due diligence expectations and disclosure requirements would also reduce duplication and keep resources focused on addressing modern slavery risk, the BCA declared.
“Unfortunately, this announcement adds mountains of paperwork to an already paperwork-intensive system, forcing companies to focus on compliance with new and even more onerous requirements,” Black said.
“The Government has not consulted on these new penalties and they add another layer onto Australia’s large and ever-growing pile of regulation, which already costs businesses $160 billion a year.
“Undermining a robust system with a hastily conceived new offence doesn’t help end modern slavery. The priority should be implementing the existing framework properly, not creating a new offence that raises more questions than it answers.”
Case studies of identified modern slavery issues have been shared in various Modern Slavery statements across fashion, with other industries likely identifying their own.
Australian fashion company Country Road Group confirmed that it discovered a supplier was secretly using an unapproved informal workshop to manufacture its products.
The issue, disclosed in the group's FY25 Modern Slavery Statement, was uncovered during a routine factory visit by a Country Road Group team member, with the unapproved facility found to have hazardous operating conditions including childcare facilities positioned too close to dangerous equipment.
Production was relocated to an alternative site assessed by the group's ethical sourcing team through third-party audits before manufacturing resumed. The statement notes that remediation of the original facility was determined not to be feasible.
In another instance, Australian bootmaker R.M.Williams confirmed in its FY25 Modern Slavery Statement that it had exited a relationship with a supplier in the last financial year.
According to the report, R.M.Williams had a supplier who had declined to participate in the brand’s transparency efforts. After multiple discussions to find a path forward with them, the pair had reached an impasse, with the bootmaker deciding to cut ties with the supplier.
According to the Global Slavery Index, an estimated 50 million people are living in modern slavery. Modern slavery – which includes slavery, forced labour and debt bondage – is a crime under Australian law, including where it happens outside Australia.
Attorney-General Michelle Rowland said Australians rightly expect that the products they buy are not made on the back of modern slavery. She said this is why the Albanese Government is delivering a legislative framework with teeth.
“The proposed changes will introduce greater accountability, leveling the playing field for the majority of Australian businesses already doing the right thing,” Rowland said.
“We will continue to work closely with stakeholders to inform the design of the proposed legislative changes, ensuring we strengthen efforts to combat modern slavery while continuing to support Australian businesses.”