Modern Slavery Compliance: What Your Supply Chain Needs

Modern slavery compliance is a growing requirement for any business with a supply chain. Australia's Modern Slavery Act 2018 requires entities with annual consolidated revenue of AUD $100 million or more to report on modern slavery risks in their operations and supply chains. But the impact extends well beyond the companies that must report: their suppliers, co-packers and logistics partners are all part of the compliance picture.

This guide explains what the Modern Slavery Act requires, what your reporting obligations look like and how choosing ethical outsourcing partners reduces your compliance burden. For supply chain managers evaluating co-packing partners, understanding modern slavery compliance isn't just about legal risk. It's about building a supply chain that's resilient, transparent and aligned with the values your customers and stakeholders expect.

Australia's Modern Slavery Act 2018 requires reporting entities (those with annual consolidated revenue of AUD $100 million or more) to publish an annual Modern Slavery Statement. The statement must describe the entity's structure, operations and supply chains; the modern slavery risks present in those areas; the actions taken to address those risks; and how the entity assesses the effectiveness of its response.

The AUD $100 million threshold is under review, and the government has signaled it will likely be lowered to capture more businesses. The 2024 statutory review recommended reducing the threshold to AUD $50 million, which would roughly triple the number of reporting entities.

At the state level, the NSW Modern Slavery Act 2018 (currently partially in force) has a lower threshold of AUD $50 million and includes financial penalties for non-compliance, unlike the Commonwealth Act, which relies on a "comply or explain" model.

Even if your business falls below the reporting threshold, your customers may not. If you're a supplier to a reporting entity, expect them to ask about your modern slavery practices as part of their own due diligence.

Your Modern Slavery Statement must cover six mandatory criteria set out in Section 16 of the Commonwealth Act.

Structure, operations and supply chains: Describe what your business does, where it operates and who your key suppliers are. This includes co-packers, labor hire providers, logistics companies and raw material suppliers.

Risks of modern slavery: Identify where the risks sit. High-risk indicators include labor-intensive operations, complex subcontracting chains, workers from vulnerable populations, operations in countries with weak labor protections and industries with known exploitation patterns.

Actions taken: Describe what you've actually done to address those risks. This goes beyond policies on paper. Regulators and stakeholders want to see concrete actions like supplier audits, contractual requirements, worker voice mechanisms and remediation processes.

Effectiveness assessment: Explain how you measure whether your actions are working. This could include audit results, complaints data, worker surveys or key performance indicators tied to your modern slavery risk framework.

The statement must be approved by the principal governing body (board of directors) and signed by a responsible member. It's published on the Australian Government's online Modern Slavery Statements Register.

Building a modern slavery due diligence framework doesn't need to be overwhelming. Start with three practical steps that cover the foundations.

Map your supply chain: Identify every entity that provides labor or services in your operations. For packaging and fulfillment, this includes co-packers, labor hire agencies, cleaning contractors and transport providers. You can't assess risks you haven't identified.

Assess risk by category: Use a risk-based approach. Factors that increase modern slavery risk include high reliance on manual labor, use of subcontracted or agency workers, workers from migrant or refugee backgrounds and operations in sectors with known exploitation patterns (agriculture, cleaning, construction, packaging). The UN Guiding Principles on Business and Human Rights provide a recognized framework for risk assessment.

Implement controls: For each identified risk, put a control in place. This might include contractual clauses requiring suppliers to comply with modern slavery laws, periodic audits of high-risk suppliers, direct worker engagement (not just management interviews) and clear processes for reporting and remediating any issues discovered.

The key is proportionality. Your framework should match the scale and complexity of your supply chain.

Choosing supply chain partners with strong ethical employment practices is one of the most effective ways to reduce your modern slavery compliance burden.

CleverPak's workforce model is built around employing people from disadvantaged backgrounds, including refugees, people with disabilities and long-term unemployed individuals. Over 90% of our workforce comes from these communities. This isn't a CSR add-on. It's how we operate.

From a compliance perspective, this model means CleverPak directly employs and supervises our workforce rather than relying on layers of labor hire agencies and subcontractors. Direct employment gives us full visibility into pay rates, working conditions, hours worked and worker wellbeing. It eliminates the opacity that creates modern slavery risk in labor supply chains.

For our customers, this translates to lower compliance risk. When you report on your supply chain's modern slavery practices, you can point to a partner with documented ethical employment, verified pay compliance, trained supervisors and a workforce model specifically designed to create opportunity for vulnerable communities. That's a stronger compliance position than most outsourcing relationships can offer.

Modern slavery compliance intersects with a broader shift toward social procurement in Australia. Federal and state governments are increasingly weighting social outcomes in procurement decisions, and the private sector is following suit.

Social procurement means factoring in social benefits (employment of disadvantaged communities, environmental sustainability, Indigenous participation) when selecting suppliers. In Victoria, the Social Procurement Framework requires all government departments and agencies to apply social procurement criteria in their purchasing. Similar frameworks are expanding in NSW, Queensland and at the federal level.

For businesses evaluating co-packing partners, a supplier like CleverPak delivers both compliance and social impact. Our workforce model creates measurable employment outcomes for disadvantaged communities while meeting the quality and compliance standards your operations require.

This dual benefit matters because modern slavery compliance and social procurement are converging. The businesses that invest in ethical supply chain partners now will be better positioned as reporting requirements tighten, procurement frameworks expand and customers increasingly expect transparency about how their products are made and packed.