On 16 July 2026, the Federal Government announced plans to introduce a new criminal offence for organisations that fail to prevent modern slavery in their operations and supply chains. For larger organisations, the proposed reform reframes modern slavery compliance as a prevention obligation: not just identifying and reporting risks, but being able to show the practical steps taken to reduce them.
This approach mirrors Australia’s recent “failure to prevent” bribery and corruption legislation, which focuses not only on misconduct itself, but on whether an organisation had appropriate systems, controls and procedures in place to prevent it. In practical terms, the question is likely to become whether the organisation can point to effective prevention measures, not merely a published statement.
The details of the offence, including the scope of the “reasonable steps” defence, are expected to be developed through consultation.
Moving Beyond Reporting
Submitting an annual Modern Slavery Statement may no longer be enough. Organisations should expect greater scrutiny of:
- Supply chain risk assessments
- Supplier due diligence
- Risk monitoring and remediation
- Governance and board oversight
- Workforce education and awareness
- Record keeping and evidence of action taken
The ability to evidence these activities may become critical in showing that the organisation had a credible prevention framework in place.
Training Every Employee to Recognise the Warning Signs
Many modern slavery risks are identified because employees notice something unusual and know how to escalate concerns. A comprehensive modern slavery training program should help employees recognise indicators such as:
- Debt bondage and excessive recruitment fees
- Withholding of passports or identity documents
- Excessive overtime or unsafe working conditions
- Signs of coercion, intimidation or worker exploitation
- Suspicious labour hire or subcontracting arrangements
Employees also need to understand their responsibilities, reporting channels and the organisation’s approach to supplier due diligence. For many organisations, this will require role-based training that reflects the different responsibilities of procurement, HR, legal, compliance, leadership and frontline teams. That training can be delivered through an existing learning management system or through a purpose-built platform such as Salt Compliance LMS.
Training is most useful when it is supported by records showing who completed it, when it was completed, and whether participants understood the key risks and reporting obligations.
Building a Defensible Training Record
A defensible training program should do more than deliver awareness content. It should create reliable evidence that training was assigned to the right people, completed on time, understood by participants and refreshed as risks evolve.
For example, organisations can use a learning management system such as Salt Compliance LMS to deliver role-based training, track completion and maintain records that support governance, assurance and audit requirements.
Importantly, Salt Compliance LMS creates an audit trail of:
- Training completion with modular assignment based on job role requirements
- Policy acknowledgements
- Assessment results
- Refresher training participation and adaptive learning pathways
These records help demonstrate that employees were trained to recognise and report modern slavery risks and understood their obligations.
Fair Supply: Demonstrating Due Diligence
Effective supplier due diligence often requires more than questionnaires. Platforms such as Fair Supply can help organisations identify and monitor modern slavery risks across complex supply chains.
Fair Supply can help organisations:
- Identify high-risk suppliers, industries and geographies
- Assess exposure to modern slavery risks
- Prioritise remediation activities
- Maintain evidence of ongoing risk monitoring
This creates a documented record of proactive risk management that can support an organisation’s broader compliance framework.
What organisations should do now
As Australia moves towards a “failure to prevent” model, organisations should consider whether they can demonstrate both effective supply chain due diligence and workforce awareness.
A practical first step is to conduct a gap analysis of existing modern slavery risk assessments and due diligence processes against the organisation’s current supplier base, operating model and risk profile. Organisations should also engage early with independent advisers to review the adequacy of their prevention framework, test whether controls are operating effectively and identify remediation priorities before regulatory expectations become more settled.
Immediate actions
- Review existing modern slavery risk assessments against current supply chain, supplier and geography exposure.
- Confirm supplier due diligence processes are documented, risk-based and capable of being evidenced.
- Map training requirements by role, including procurement, HR, legal, compliance, leadership and frontline teams.
- Strengthen board reporting, escalation pathways and record keeping to support a “reasonable steps” position.
Elements of a defensible framework
A strong compliance framework combines:
- Staff training – with reporting across policy management and training completions
- Fair Supply for risk identification and monitoring
- Robust governance and board reporting processes
Together, these measures help organisations move from compliance statements to evidence-based prevention: documented risk assessment, targeted training, supplier due diligence, escalation pathways and board-level oversight.
Authors
Julian Fenwick – CEO, GRC Solutions
Julian is the Founder and Managing Director of GRC Solutions and the creator of the Salt® compliance learning platform. A recognised leader in compliance, RegTech and organisational governance, Julian regularly speaks at industry conferences across Australia and Asia on innovation, compliance culture and emerging regulatory challenges.
Louise Matthews – Senior Risk & Compliance Legal Consultant, GRC Solutions
Louise is a highly experienced legal, compliance and regulatory affairs specialist with more than two decades of experience in the Australian financial services sector. Her career has included senior advisory and leadership roles with organisations including Aware Super, Hostplus, PwC and KPMG. Louise advises organisations on governance, risk management and regulatory compliance and regularly delivers practical compliance education and thought leadership programs.