Australia’s critical infrastructure is under increasing threat and cyber-attacks are only part of the problem. Inadequate workforce screening and unchecked third-party relationships create security gaps that leave businesses vulnerable to insider threats, supply chain failures, and compliance breaches.
“Over the last three years, we have seen several cyber-attacks in Australia that have targeted the Federal Parliamentary Network; malicious actors have taken advantage of the pressures COVID-19 has put on the health sector by launching cyber-attacks on health organisations and medical research facilities; and key supply chain businesses transporting groceries and medical supplies have also been targeted,” the Parliament of Australia stipulated in the Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022. (Parliament of Australia, 2022)
The Security of Critical Infrastructure (SOCI) Act was designed to mitigate these risks, requiring organisations to implement strict personnel vetting and supply chain security measures. However, many businesses still fail to conduct adequate background checks, exposing themselves to regulatory penalties, financial losses, and reputational damage.
Which Businesses Need to Comply With the Soci Act?
The Security of Critical Infrastructure (SOCI) Act 2018 applies to businesses operating in industries deemed essential to Australia’s national security and economic stability.
These include:
- Energy, utilities, and water supply
- Telecommunications and data storage
- Healthcare and medical supply chains
- Transport and logistics
- Banking and financial services
- Education and research institutions
- Defence contractors and supply chains
Organisations managing Systems of National Significance (SoNS), those deemed particularly vital to national security, are subject to even stricter compliance measures (CISC, 2024).
The Soci Act Requires Workforce and Supply Chain Risk Management
Compliance with the SOCI Act extends beyond cybersecurity protections. Organisations must implement robust risk management strategies to prevent security breaches caused by employees, contractors, and third-party vendors.
Key obligations include:
- Workforce background checks: Ensuring employees and contractors do not pose security risks before they gain access to critical infrastructure (Department of Home Affairs, 2024).
- Mandatory incident reporting: Security breaches linked to personnel or third-party failures must be reported to the Australian Cyber Security Centre (ACSC) within 12 to 72 hours (CISC, 2024).
- Ongoing workforce compliance: Organisations must continuously screen employees, suppliers, and vendors to prevent insider threats (PwC, 2024).
- Supply chain risk assessments: Businesses must verify third-party security credentials and vet suppliers for potential vulnerabilities (CISC, 2024).
Failing to implement rigorous screening processes can lead to regulatory non-compliance, security breaches, and potential national security risks.
Delaying Compliance Leads to Reputational Damage and Security Breaches
Workforce and third-party screening are not one-time exercises. They require ongoing vigilance. Businesses must act whenever a new employee or contractor is hired, ensuring they are properly vetted for criminal history, security clearances, and credentials, before being granted access to sensitive systems (CISC, 2024).
If a security incident occurs, such as a data breach or unauthorised access involving an employee, contractor, or supplier, businesses must investigate the situation and report it immediately to regulatory authorities (ACSC, 2024).
As cybersecurity regulations evolve, organisations must stay ahead of legislative changes—such as the 2024 cyber security reforms, which impose stricter workforce compliance obligations, particularly for businesses managing critical infrastructure assets (Herbert Smith Freehills, 2024).
“We know government has to lead the way on cyber, but we also know we can’t do it alone, which is why these new laws have been consulted extensively with business,” said the Minister for Cyber Security, Tony Burke (Department of Home Affairs, 2024).
Delaying action increases exposure to insider threats, supply chain failures, and severe regulatory penalties, putting both business operations and national security at risk.
The Growing Threat of Unscreened Personnel and Third-Party Security Failures
While cybersecurity incidents dominate headlines, human risk remains one of the biggest security vulnerabilities. Inadequate workforce screening and unchecked supply chains leave businesses open to fraud, data leaks, and malicious insider activity.
In one of Australia’s largest security failures, an unvetted contractor was linked to unauthorised access to sensitive defence data, leading to a review of third-party security protocols (PwC, 2024). Without proper background checks, businesses cannot guarantee that their employees, vendors, and subcontractors are trustworthy.
Key vulnerabilities include:
- Insider threats: Employees with undisclosed criminal histories or financial vulnerabilities can be targeted by threat actors.
- Unverified contractors: Suppliers without proper security clearance can introduce vulnerabilities through third-party system access.
- Supply chain gaps: Poor vetting of offshore vendors leaves businesses exposed to data breaches and compliance failures.
Ignoring Soci Act Compliance Could Cost Your Business
Failure to comply with SOCI Act workforce and supply chain security requirements can result in serious financial, operational, and reputational consequences. Businesses that do not implement proper personnel and third-party security checks risk enforcement actions, including civil penalties, regulatory scrutiny, and potential intervention from the Cyber and Infrastructure Security Centre (CISC) (CISC, 2024).
While specific financial penalties depend on the nature of the breach, organisations failing to meet compliance obligations may face substantial fines and escalating enforcement measures under the Act.
Operationally, a compromised employee or third-party vendor can introduce data leaks, system failures, and regulatory investigations, disrupting business continuity and exposing organisations to further compliance failures (ASD, 2024).
Strengthen Your Workforce and Third-Party Compliance
For businesses operating in critical industries, workforce security is a mandatory compliance requirement that directly impacts national security and organisational resilience. As cyber threats, insider risks, and supply chain vulnerabilities continue to rise, businesses must ensure their workforce and third-party relationships are fully vetted.
De-risk your workforce and third-party relationships with industry-leading screening and background checks. Contact our team to find out how CVCheck can help your business meet SOCI Act compliance requirements.
References:
- Australian Cyber Security Centre (ACSC). (2024). Cyber security incident reporting obligations under the SOCI Act. https://www.cisc.gov.au/resources-subsite/Documents/cyber-security-incident-reporting.pdf
- Australian Government. Cyber and Infrastructure Security Centre (CISC). (2024). SOCI Act compliance requirements and regulatory obligations. https://www.cisc.gov.au/how-we-support-industry/regulatory-obligations
- Australian Signals Directorate (ASD). (2024). Cyber threat report: Critical infrastructure security risks in Australia.https://www.asd.gov.au/news-events-speeches/news/2024-11-20-australian-signals-directorate-releases-annual-cyber-threat-report-2023-24
- Cyber and Infrastructure Security Centre (CISC). (2024). Regulatory obligations under the SOCI Act. https://www.cisc.gov.au/how-we-support-industry/regulatory-obligations
- Department of Home Affairs. (2024). Risk management and personnel security under the SOCI Act. https://www.homeaffairs.gov.au/news-media/archive/article?itemId=1237
- Herbert Smith Freehills. (2024). Australia’s 2024 cyber security reforms and implications for critical infrastructure. https://www.herbertsmithfreehills.com/insights/2024-12/australias-2024-cyber-security-reforms
- Parliament of Australia. (2022). Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022. https://www.homeaffairs.gov.au/reports-and-publications/submissions-and-discussion-papers/slacip-bill-2022
- PwC Australia. (2024). The long road to uplift: Learnings from applying the SOCI regime. https://www.pwc.com.au/cyber-security-digital-trust/critical-infrastructure/learnings-from-applying-the-soci-regime.html
