The Australian Government released a Consultation Paper in late August which seeks feedback on the proposed reforms to the Modern Slavery Act 2018 (Cth) (Act).

In our previous article (Beyond disclosure: financial penalties set to change the modern slavery landscape), we flagged the Australian Government’s intention to reform the modern slavery legislation. The opening of consultation provides businesses and other stakeholders an opportunity to consider the proposals and submit their feedback.

Interested parties are invited to provide feedback on the Consultation Paper, available here, by 25 September 2026.

The failure to prevent offence

The Australian Government has proposed a new failure to prevent modern slavery offence, which would apply to corporations with annual consolidated revenue over $100 million. This would align with the existing reporting threshold under the Act. The Consultation Paper explores the proposed offence in greater detail, but we note that a proposed ‘reasonable steps’ defence is presented. This is intended to incentivise proactive due diligence and risk management rather than impose liability where a corporation has taken appropriate measures to prevent modern slavery.

Penalties would align with offences of comparable seriousness, and examples of failing to prevent foreign bribery, industrial manslaughter, cartel conduct and money laundering have been referred to in the paper. Three options are proposed:

• a fixed maximum penalty (such as 100,000 penalty units);
• three times the value of the benefit obtained from the offending conduct; or
• if the value of the benefit cannot be determined, 10% of the corporation’s annual turnover during the relevant turnover period.

A 12 to 18 month delayed commencement is also proposed to allow time for compliance changes.

Alternative enforcement and civil penalties

The Government is also considering alternative mechanisms, including a Deferred Prosecution Agreement scheme allowing corporations to resolve matters through negotiated agreements involving governance improvements, remediation and cooperation.

Separately, the Government has confirmed it intends to introduce civil penalties for non-compliance with existing reporting obligations under the Act.

We will continue to monitor developments on this consultation and will share further updates as they become available.

This article was written by Laura Young, Partner and Kaitlyn Firnigl, Solicitor.