Large firms face fines and criminal penalties under Australia's modern slavery reforms

Australia is set to strengthen its fight against modern slavery by introducing fines and potential criminal penalties for large companies that fail to prevent forced labour in their operations and supply chains, according to media reports.

The proposed reforms would apply to businesses with annual revenue exceeding A$100 million, marking the biggest overhaul of Australia's Modern Slavery Act since it was introduced in 2018. 

The move also comes as the United States steps up scrutiny of countries over forced labour practices.

Stronger legal obligations

The reforms would introduce a new duty requiring large businesses to take reasonable steps to prevent modern slavery across their operations and supply chains. Companies that fail to do so could face financial penalties or criminal prosecution.

Businesses that can prove they took reasonable preventive measures would have a legal defence against enforcement action.

Details such as the size of penalties and what qualifies as "reasonable steps" will be decided through consultation. The process will also consider deferred prosecution agreements and remedies for victims.

Attorney-General Michelle Rowland said: "Australians rightly expect that the products they buy are not made on the back of modern slavery, which is why the Albanese government is delivering a legislative framework with teeth."

Closing gaps in the existing law

Australia's Modern Slavery Act currently requires companies with annual consolidated revenue above A$100 million to disclose modern slavery risks in their operations and supply chains.

While the law improved transparency, it has faced criticism for lacking enforcement powers. A 2023 independent review found no clear evidence that it had delivered meaningful change for victims.

Since 2019, more than 17,000 modern slavery statements have been lodged by over 27,000 businesses.

International pressure grows

The reforms come as the US investigates around 60 countries, including Australia, over forced labour practices and proposes tariffs of up to 12.5% on imports from countries deemed to have weak safeguards.

Prime Minister Anthony Albanese has defended Australia's existing framework, calling it "robust, comprehensive and world-leading legislation addressing forced labour and modern slavery".

Aligning with global standards

The proposed changes would bring Australia closer to regulatory approaches adopted or planned in the European Union, Indonesia, South Korea and Thailand.

Modern slavery includes forced labour, slavery, debt bondage and forced marriage. Around 50 million people are estimated to be living in modern slavery globally, including more than 41,000 in Australia.