Businesses abiding by proposed new laws to stamp out modern slavery in Australian supply chains will have a commercial edge over others, the Turnbull government claims.
Draft laws were introduced to parliament on Thursday as Australia bids to become a world leader in fighting slavery.
Businesses will have to say what they're doing to stop modern slavery in their supply chains.
The regime is expected to cover businesses with turnovers of at least $100 million, impacting about 3000 companies operating in Australia.
Assistant Home Affairs Minister Alex Hawke says as many as 4000 Australians are victims of modern slavery, found in mines, factories, brothels, construction sites and farms around the world.
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"Their exploitation involves serious crimes and grave human rights abuses and taints the goods and services that we use every day," Mr Hawke said.
Businesses which report will be in a race to the top to compete for market funding and consumer support while those who don't take action will tarnish their reputations and be penalised by the market, he said.
The Turnbull government has vowed to lead by example by considering possible modern slavery risks in procurement processes, publishing a regular statement.
But Australian Council of Trade Unions secretary Sally McManus is concerned companies that don't report what they've done to deal with slavery will not face penalties.
"This sends the message that they can get away with not taking this issue seriously," she said.
Ms McManus wants an independent commissioner to oversee and monitor the reporting, with companies which fail to report or submit false claims excluded from government procurement contracts.
"The ACTU calls on the government to enact a strong and effective Modern Slavery Act to eradicate this global scourge."
Around the world 40 million people are believed to be victims of modern slavery.
Studies have shown the main problems within Australia are sex trafficking, arranged marriages, and unscrupulous employers and labour agencies recruiting men and women from Asia and Pacific islands for agriculture, construction, hospitality, and domestic service.
Advocacy groups have come out in support of the legislation but want to ensure it encompasses all types of modern slavery.
Save The Children says orphanage trafficking and tourism must be recognised as a form of modern slavery.
Oxfam wants an independent commissioner to co-ordinate government action, educate companies and advocate on the issue.
They've also called for penalties for companies who fail to report or provide misleading information.
