What Does the Australian Government’s Response to the Modern Slavery Act 2018 Review Mean for Business?

The Australian Government has officially released its response to the independent review of the Modern Slavery Act 2018, signaling a solid commitment to addressing modern slavery practices at both national and global levels. Following an in-depth review that examined the effectiveness of the legislation over the past four years, the government has pledged to implement several recommendations aimed at strengthening accountability, improving transparency, and enhancing the Act’s overall impact. 

Key Recommendations in the Review

The review process explored every aspect of the Modern Slavery Act, analysing its strengths and areas for improvement. Notably, the review recommended clearer compliance obligations for entities required to report under the Act and bolstered efforts to support victims of modern slavery. Recommendations also extended to increasing penalties for non-compliance and improving oversight of reported information. Key priorities included ensuring that small and medium-sized businesses are supported in understanding their responsibilities and adopting a targeted approach to help organisations meet expectations. 

The Government’s Response

The government has welcomed the review’s findings and outlined its plan to progressively implement the recommendations. Below are the highlights of its response:

1. Mandatory Reporting Standards. The government has committed to developing stronger and clearer mandatory reporting standards, including mandatory due diligence systems under consultation as part of strengthening the Act. This will require reporting entities to better detail their supply chain risks, actions undertaken to address these risks, and the effectiveness of those measures. The adjustment aims to ensure genuine and impactful efforts to combat modern slavery.
2. Enhanced Enforcement. A significant shift in enforcement mechanisms was announced. The proposed introduction of financial penalties for non-compliance is being explored and will undergo consultation with relevant stakeholders before finalisation. The potential for financial penalties being introduced signals the government is open to making reporting obligations enforceable in order to raise accountability across industries.
3. Protecting Vulnerable Workers. The government intends to expand support mechanisms for victims of modern slavery. Fostering collaboration with non-governmental organisations and service providers will provide affected individuals with immediate support and long-term recovery pathways.
4. Support for Small-to-Medium Enterprises (SMEs). Recognising the challenges faced by SMEs, the government is exploring tailored guidance and tools to assist smaller organisations in meeting compliance requirements. This includes accessible training, simplified templates, and awareness-raising initiatives to foster engagement and participation.
5. Strengthened Oversight Mechanisms. The review highlighted areas for augmented monitoring and governance. The Government has committed to improving the Modern Slavery Statement Register, ensuring data is accessible, comparable, and effectively analysed to identify trends and areas requiring attention.  The Government plans to introduce declarations to help businesses focus on high-risk areas by issuing high-risk declarations for specific regions, industries, or supply chains. In addition, the Government’s intention is to implement mandatory coversheets to improve reporting consistency. 

What Does This Mean for Australian Businesses?

Australian businesses—particularly large entities—will need to assess their current compliance strategies and prepare to meet enhanced obligations under the revised framework. With penalties now under consideration, compliance becomes not only an ethical imperative but also a legal and reputational priority. 

The Government’s commitment to introducing stronger enforcement measures, mandatory reporting criteria, and improved oversight mechanisms means that businesses will face heightened expectations to demonstrate meaningful action in addressing modern slavery risks. 

Key steps businesses should prioritise include:

• Reviewing supply chain management policies: Ensure current policies are robust, reflect due diligence processes, and align with emerging requirements such as identifying high-risk suppliers and regions. 

• Preparing more detailed and transparent reporting measures: Anticipate the introduction of enhanced mandatory reporting criteria, including clearer documentation of identified risks, remediation actions, and consultation with internal and external stakeholders. 

• Proactively identifying and remedying potential risks: Implement comprehensive systems to assess and address risks of modern slavery, including grievance mechanisms, monitoring tools, and collaborative solutions across supply chains. 

• Engaging with enhanced compliance tools and guidance: Take advantage of Government-provided templates, tailored guidance, and support for SMEs to streamline reporting processes and improve understanding of obligations. 

• Staying informed of high-risk declarations: Prepare to respond to forthcoming high-risk declarations that may identify specific industries, regions, or products where modern slavery risks are most prevalent. 

• For businesses at all stages of their corporate social responsibility journey, enhancing compliance now will mitigate risk, protect organisational reputation, and establish a solid foundation to adapt to the evolving regulatory environment. 

Small and medium-sized businesses should take advantage of upcoming government-provided tools to build their understanding of reporting requirements and avoid being caught unprepared. Improving corporate practices now will set the foundation to successfully adapt to the new compliance environment. 

No matter where your organisation is on the corporate social responsibility journey, whether its well-progressed or you’re unsure where to start, Intertek SAI Global can support you to develop and implement a sustainable, focused and compliant framework to mitigate modern slavery risk in your supply chain.