from Disclosure to Due Diligence: Australia’s Modern Slavery Regime Signals a Shift to Action

Australia’s modern slavery framework is showing clear signs of moving from a disclosure‑only model toward more active risk management expectations. The January 2026 position paper from the Australian Anti‑Slavery Commissioner indicates that companies may soon be expected to identify, assess, and address modern slavery risks, not merely report on them. [1] Ultimately, the aim is to embed risk-based due diligence and high-risk declarations into the Modern Slavery Act 2018 (Cth).

[1]OAASC - Recommendations to strengthen Australia’s modern slavery laws - Initial Position Paper.

1.   OAASC – Recommendations to Strengthen Australia’s Modern Slavery Laws

The two primary recommendations forming the basis of the proposed reforms are:

a)    The introduction of a mandatory, risk‑based modern slavery due diligence obligation for reporting entities; and

b)   A mechanism enabling the Commissioner to declare that a product, service, or industry carries a high risk of modern slavery, requiring entities to consider such declarations in their due diligence and reporting obligations.

These proposals represent a significant evolution in regulatory expectations, particularly for sectors with complex, globalised and labour‑intensive operations such as aviation and logistics.

The position paper is focused on these two reforms. The 2025-2028 Strategic Plan for OAASC foreshadowed deeper reforms including regulatory measures to prevent the importation of goods made with forced labour.

1.1 Mandatory Risk-Based Due Diligence

Under this proposal companies will be required to actively manage and report on not only the steps taken, but also the effectiveness of their actions shifting the regime from passive disclosure to proactive risk management. A few examples from the position paper of how the due diligence obligation may operate in practice include:

-    Conducting modern slavery risk assessments;

-    Auditing higher-risk suppliers both in Australia and overseas; and

-  Supplier screening and proactive due diligence during procurement,
including considering purchasing practices.

1.2 High Risk Declaration

Under the proposal, the Commissioner may publicly identify high‑risk industries, regions, products, or services. Importantly, the declaration mechanism would apply to risks wherever they arise around the world and should not be restricted to specific jurisdictions. Organisations operating in or sourcing from these areas will face heightened scrutiny and more intensive due‑diligence obligations.

1.3  Penalty Framework

The position paper notes that future reforms may introduce civil penalties for non‑compliance, inadequate reporting, or false statements. While no penalty regime has been adopted, the possibility signals increasing regulatory seriousness and potential future accountability for boards, procurement leaders and executives.

2.    Strengthening Governance Ahead of Reform

Even though these proposals remain preliminary in nature, with the Government still considering whether, and in what manner, they will be adopted, the Commissioner’s position paper sends a clear signal: passive reporting will no longer be enough. Aviation and logistics operators and companies should begin strengthening their governance, supplier oversight, and risk‑management frameworks now to stay ahead of reform and protect operational resilience. Early preparation will ease future compliance burdens and demonstrate leadership in responsible supply‑chain management.

Contacts 

Adam Martin
+ 61 3 9119 2585
adam.martin@nortonwhite.com

Warren Ter
+ 61 3 9119 2557
warren.ter@nortonwhite.com