On 16 July 2026, the Commonwealth government announced plans to strengthen Australia’s existing commonwealth modern slavery laws (Modern Slavery Act 2018 (Cth) (MS Act)) including introducing criminal penalties for failing to prevent modern slavery1 in their supply chains and civil penalties and associated enforcement powers to address non-compliances with the MS Act.
This proposal comes off the back of a 2023 statutory review of the MS Act,2 which proposed 30 recommendations to strengthen the framework and improve accountability, which the Commonwealth government responded to, agreeing to 13 recommendations and agreeing in principle to 12 of the recommendations,3 including:
- introducing civil penalties for non-compliance;
- potential amendment to the terms “operations” and “supply chains” in the MS Act;
- clarifying difficulties in joint reporting; and
- amending mandatory reporting criteria.
Interestingly criminal liability under the MS Act was not anticipated during the 2023 statutory review or in the Commonwealth government’s response.
The existing modern slavery statutory regime and look ahead
Under the existing MS Act, the Commonwealth and corporations within Australia or entities carrying on business within Australia with an annual consolidated revenue of at least $100 million are required to prepare and publish annual Modern Slavery Statements outlining the risks of modern slavery in their operations and global supply chains and the actions they are taking to address them.
Whilst the introduction of the MS Act marked an important first step in addressing modern slavery risks within Australian supply chains, the MS Act is often criticised as a “tick the box” exercise rather than driving real change, focusing on reporting and transparency rather than enforcement.
The proposed criminal penalties, together with the anticipated civil penalty regime and broader reforms, would move the MS Act beyond a reporting-focused framework towards a more enforceable compliance model.
What does modern slavery look like in the construction industry?
Modern slavery can range from child labour and human trafficking to poor working conditions. Some of the biggest modern slavery risks in the Australian construction industry often arise through:
- complex subcontracting chains;
- labour-hire arrangements;
- reliance on migrant and temporary workers;
- wage theft; and
- procurement of materials from high-risk countries.
In fact, recent commentary from the Australian Anti-Slavery Commissioner has specifically identified construction as a higher-risk sector, especially where opaque or unauthorised subcontracting arrangements are used.4
What businesses should start doing now
Whilst the timing of these Australian proposed reforms has not been confirmed (and are still subject to further Government consultation), it is a timely reminder to consider ways your business may be impacted by modern slavery reforms, plan for compliance, and drive meaningful outcomes within your supply chains. For many clients that means:
- moving beyond high-level policy statements by understanding your reporting obligations and preparing compliant Modern Slavery Statements;
- taking practical steps to identify and manage modern slavery risks across your operational and global supply chains;
- designing and implementing robust due diligence systems that align with the anticipated statutory requirements and global best practices; and
- implementing grievance and remediation frameworks or reviewing the effectiveness of existing remediation frameworks in anticipation of more detailed mandatory reporting on these mechanisms.
If you would like to know what these changes mean specifically for your business or would like assistance in preparing for the upcoming changes, please get in touch with our Construction and Infrastructure team.
[1] The Hon Michelle Rowland MP, ‘Albanese Government Combating Modern Slavery’ (Media Release, 16 July 2026).
[2] John McMillan, Report of the Statutory Review of the Modern Slavery Act 2018 (Cth) (Report, 25 May 2023).
[3] Attorney General’s Department (Cth), Australian Government Response to the Review of the Modern Slavery Act 2018 (Cth) (Government Response, 2 December 2024) 11-15.
[4] Australian Anti-Slavery Commissioner, ‘Getting the Balance Right: Proportionate Due Diligence to Address Modern Slavery Risks’ (Speech, 4 September 2025)