Large companies with annual revenue over A$100 million could soon pay fines and face criminal charges for failing to prevent modern slavery, under a new federal government crackdown.
These reforms come just six weeks after to impose trade tariffs of on 60 countries – including Australia – over their alleged inaction on forced and slave labour.
The good news? These proposed reforms will finally put Australia back at the forefront of global efforts to tackle modern slavery. That’s crucial, as it can affect everything from the we buy today, to worker exploitation in big sectors in Australia such as and .
Here’s what will change, what’s still set to be decided in consultation, and what it could mean on tariffs.
Why more action is needed
covers a range of exploitative practices, including:
- , where a person is effectively owned by another
- , where someone works under the threat of punishment
- , including child marriages
- and , where someone is forced to work to pay off a debt.
These practices are all under Australian and international law.
An estimated 50 million people around the world are enslaved today.
Australia is estimated to have trapped in modern slavery, from working as forced labourers to other forms of modern slavery, including child marriages.
What’s Australia done before now?
In 2018, the Coalition government established the . This requires companies with more than $100 million in annual consolidated revenue to report every year on the risks of modern slavery in their operations and supply chains.
This law was widely hailed as a crucial first step, with the it would prompt a business-led “race to the top” on fighting modern slavery. This has not happened.
Even when it was first introduced, a range of experts such as pointed out that the lack of penalties if companies didn’t comply with the law would weaken compliance.
Since 2019, 17,000 modern slavery statements from more than 27,000 businesses have been lodged on Australia’s .
Yet in the eight years of its operation, the Modern Slavery Act has done little more than raise awareness – and force companies to do more paperwork. As a 2023 found:
there is no hard evidence that the Modern Slavery Act in its early years has yet caused meaningful change for people living in conditions of modern slavery.
How US threats changed the game
For months, Jamieson Greer – President Donald Trump’s main trade advisor – has been conducting probes of 60 countries over their handling of goods made with forced labour.
In early June, the White House proposed new tariffs of up to 12.5% on those countries, .
That came after US courts blocked Trump’s sweeping international tariffs announced over the past year. The US has US$81 billion (more than A$115 billion) in tariffs.
Last month, a new tariff on exports to the US was “unjustified”, saying Australia has “robust, comprehensive and world-leading legislation addressing forced labour and modern slavery”.
A new criminal offence and fines
Announcing Australia’s new legal crackdown, Attorney-General :
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.
These have the potential to be groundbreaking reforms.
However, if a company can demonstrate it took reasonable steps to prevent modern slavery, this will be a defence against a fine or criminal action.
Key details – including the size of any fines and what will count as “reasonable steps” – will be worked out after upcoming consultations. Those consultations will also consider a deferred prosecution agreement scheme and remedies for victims.
This new duty to prevent modern slavery will be comparable to existing Australian legal obligations on companies to prevent and .
Levelling the global playing field
It’s too soon to say how these changes might affect US plans for a new 12.5% tariff on Australian imports.
Last month, the some economies – including the European Union and Indonesia – may face lower 10% tariffs. That’s because they were seen to have taken stronger action against slavery.
These proposed reforms would mean Australia was more closely aligned with the and in Indonesia, South Korea and Thailand.
Large Australian companies doing the right thing will benefit from a more level global playing field.
Businesses operating across borders will face increasingly consistent expectations, rather than allowing those with weaker obligations to undercut businesses that invest in responsible supply chains.
These reforms are a welcome step toward addressing the persistent and severe exploitation that continues to affect Australian supply chains.
, Professor of Law and Justice and Director of the Australian Human Rights Institute,
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