Modern Slavery: Rising Expectations And Steady Reform Across Australia, APAC And Beyond

Modern slavery remains a critical issue for boards and executives. The past year has seen increased scrutiny from investors, regulators and civil society, with several high-profile supply chain incidents reinforcing the reputational and commercial risks of inaction. For large corporates, modern slavery is no longer just a compliance exercise but a strategic imperative that can impact market access, investor trust and brand image.

Across the Asia-Pacific, expectations on businesses to identify and address modern slavery risks (and human rights risks more generally) are also steadily rising. Governments are refining policy frameworks, regulators are strengthening coordination and guidance, and major buyers are asking for clearer evidence that supply-chain risks are being minimised. The focus on modern slavery is part of a broader global trend toward comprehensive human rights due diligence (HRDD), where companies are expected to embed respect for human rights across all operations and supply chains. However, the tempo is not uniform. Different jurisdictions are moving at different speeds. But the overall direction is clear: more structured HRDD, clearer reporting, and a sharper focus on remediation outcomes.

Australian Developments: Consultation and Clarity

The Australian Government is currently undertaking a public consultation process to seek input on possible reform of the Modern Slavery Act. This consultation was borne out of the Act's first statutory review in 2023, which highlighted the positive impact of the Act in raising awareness, but also called for clearer, more effective requirements. The public consultation, which closed on 1 September 2025, requested feedback on a suite of proposed changes to the Act, including expanded mandatory reporting criteria, improved joint reporting procedures, voluntary disclosure options, notification requirements, civil penalties for non-compliance and enhanced compliance powers for the regulator.

Another key development has been the appointment of the inaugural Australian Anti-Slavery Commissioner in late 2024, providing dedicated leadership for efforts to enhance business engagement, best-practice guidance, and cross-government coordination to address issues of modern slavery. Since taking office, the Commissioner has actively engaged with stakeholders through industry roundtables, published guidance on risk-based HRDD, and initiated collaborative projects with civil society to improve worker grievance mechanisms. These actions signal a strong commitment to driving practical improvements across sectors.

The Commissioner has also publicly called for higher-quality modern slavery statements that move beyond generic policy language. There is now a clear expectation that reporting entities demonstrate not just activity but impact, showing how risks are identified, prioritised and addressed, and how remediation delivers real outcomes for affected workers. We expect that the Commissioner's office will continue playing a key role in supporting businesses and government in their efforts to detect and eradicate modern slavery.

APAC Perspectives: perse Pathways but a Common Direction

The Asia-Pacific region presents a perse landscape of regulatory and policy approaches to modern slavery. Some jurisdictions are advancing new laws and national action plans, while others are taking incremental steps through policy guidance and voluntary frameworks. For businesses with multi-jurisdictional supply chains, this persity creates both challenges and opportunities.

A significant, increasing trend driving legislative change across the region is the use of trade policy as a lever for human rights enforcement, largely spearheaded by the United States. In the context of trade negotiations, the US is compelling key exporting nations like Malaysia and Indonesia to commit to, or implement, forced labour import bans on goods produced by forced labour as a condition for favourable market access and to avoid sanctions like Withhold Release Orders (WROs), which are a specific enforcement tool used by the US Customs and Border Protection to detain goods at US ports of entry if there is a "reasonable suspicion" of forced labour in their production.

Malaysia is developing its next National Action Plan on Forced Labour (2026–2030) to accelerate progress toward eliminating forced labour by 2030. This renewed focus is a direct response to international scrutiny, especially the US pressure that has led to WROs being issued against products and commodities manufactured or produced in Malaysia. The draft plan builds on the current Plan (2021-2025) and introduces renewed commitments to prevention, stronger governance of labour migration and recruitment, improved enforcement and compliance systems, and expanded protection and remedy for victims, including migrant workers. For businesses sourcing from Malaysia's manufacturing and agribusiness sectors—where risks such as recruitment fees and passport retention are well documented—these priorities will likely translate into stricter expectations for supplier oversight, closer scrutiny of recruitment practices, and a stronger obligation to provide grievance mechanisms that workers can access and trust.

Indonesia's National Strategy on Business and Human Rights, introduced in 2023 to run until 2026, sets out government expectations for Indonesian companies to assess and address human rights risks in their operations and supply chains. This domestic initiative aligns with the external demand for higher labour standards, as Indonesia has also signaled its intent to adopt a prohibition on the importation of goods produced by forced labour to facilitate its ongoing trade negotiations with the US. While the Strategy is not a binding law for foreign companies, the clear convergence of this national policy with these global trends signals rising standards, especially as Indonesia pursues OECD membership. Businesses with Indonesian suppliers should monitor these developments and be ready for further regulatory changes.

Thailand is also taking steps to strengthen its policy frameworks and enforcement mechanisms, with the government drafting a mandatory human rights and environmental due diligence law that would require businesses operating in the country to identify, prevent and address human rights and environmental risks across their operations and supply chains, aligning with international frameworks and supporting Thailand's OECD membership ambition. The Thai Government is still considering whether implementation will be phased or apply immediately, how to support businesses to comply with the requirements, and appropriate penalties and incentives (including potential tax and procurement benefits) to drive compliance.

Ultimately, these regional developments will result in a complex web of expectations and requirements, making it essential for businesses to carefully review their supply chains and identify where it may be necessary to adapt to local requirements.

Global Measures Affecting APAC Trade: EU Forced Labour Regulation

Beyond APAC, the EU's Forced Labour Regulation (Regulation (EU) 2024/3015) (EUFLR) will prohibit the placing and making available on the EU market, and the export from the EU, of products made with forced labour. The EUFLR entered into force in December 2024 and is set to apply from late 2027. Its scope is broad—applying to all products and company sizes—with investigations led by national authorities or the European Commission depending on where the forced labour occurs. APAC companies trading into the EU should prepare for potential product seizures, corrective action plans, and remediation requirements which may be imposed under the EUFLR.

What businesses should do in 2026 and beyond:

1Risk-based assessments

Risk-based and proportionate approaches remain key. Focus efforts on the parts of your supply chain where the risk of modern slavery is highest, rather than spreading efforts uniformly across lower-risk areas. This means looking more closely at suppliers in countries or industries known for labour exploitation (such as garments, palm oil, construction and mining), or at business partners where you have less visibility or control. Use available data, feedback from workers, and local expertise to identify these higher-risk areas and allocate resources accordingly.

" Businesses should ask: "Are we focusing our attention and resources where it matters most, and do we have a clear process for identifying and managing our biggest risks?"

2Remediation focused on workers

When modern slavery risks or incidents are identified, it is important to have a straightforward process for addressing them. This means making it easy for workers to raise concerns—such as through anonymous reporting channels—and ensuring those concerns are investigated quickly and fairly. Businesses should follow up on reported issues, communicate outcomes transparently, and make sure workers are not penalised for speaking up. To the extent possible and legally permissible, businesses should also coordinate with other entities sourcing from the same supplier, to ensure that workers only have to report incidents once.

" Businesses should ask: "How do we know our remediation process is working, and are we tracking whether problems are actually resolved?"

3Governance and accountability

Modern slavery risk management works best when there is oversight from the board and senior management. Boards should ensure there is clarity on roles, decision-making authority, and how concerns are escalated within the organisation. Regular training and scenario planning can help staff to know how to respond quickly and effectively if issues arise.

" Businesses should ask: "Do we have clear governance structures and escalation pathways, and is senior leadership actively engaged in overseeing modern slavery risk management?"

4Clear and consistent disclosure

When preparing your modern slavery statement or any public communication, make sure your claims are accurate and supported by evidence, such as policies, audit results or remediation records. Avoid overstating achievements or making promises you cannot substantiate. Consistency is important: ensure your messaging is aligned across annual reports, websites and other channels.

" Businesses should ask: "If a regulator or stakeholder challenges our disclosures, can we provide documentation to back up what we have said?"

5Align HRDD with AML/sanctions controls

Forced labour and human trafficking generate illicit proceeds and, in many jurisdictions (including Australia), are predicate offences to money laundering. HRDD should be integrated with financial‑crime risk assessment so that e.g. payments to high‑risk suppliers or recruiters, unusual or excessive recruitment fees, and opaque trade/logistics flows, automatically trigger enhanced due diligence, escalation, and—where appropriate—suspicious matter reporting (SMR).

" Businesses should ask: "Do our HRDD risk signals automatically trigger AML/sanctions controls and, where appropriate, SMRs, managed in a way that avoids tipping‑off the customer/supplier/recruiter?"

6Managing investigations and legal privilege

When investigating modern slavery issues, it is important to be clear about the purpose of the investigation from the outset. If legal advice is required, keep that part of the process separate from operational fact-finding or internal reviews for any other purpose. This helps protect confidential and privileged legal communications while still allowing your business to learn from incidents and improve processes.

" Businesses should ask: "Are we clear on the purpose and scope of each investigation, and do we have processes to protect legal privilege while still learning from incidents?"

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.