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The Modern Slavery Bill - here’s what you need to know
National MP Greg Fleming and Labour MP Camilla Belich have announced that they are jointly sponsoring the introduction of a long‑awaited Modern Slavery Bill (the Bill). After a long period of de-prioritisation, the Bill was introduced on 10 February and is expected to become law before the November general election.
The Bill will require large entities operating in New Zealand to report on how they identify, address, mitigate and remediate incidents of modern slavery within their operations and supply chains. Because the Act Party declined to support the Bill, it was introduced as a Members’ Bill rather than a government Bill. However, its bipartisan support meant it could be introduced under Standing Order 288, rather than having to be drawn from the ‘biscuit tin’. This is the first time Standing Order 288 has been invoked.
What is “Modern Slavery”?
Modern slavery is severe exploitation that a person cannot leave due to threats, violence or deception. The Bill defines modern slavery broadly and includes conduct such as:
- offences under sections 98, 98AA, 98D, or 207A of the Crimes Act 1961 (dealing in slaves, sexual exploitation, trafficking, and coerced marriage or civil union);
- the worst forms of child labour under Article 3 of the International Labour Organisation Convention No. 182;
- trafficking in persons, as defined in Article 3 of the United Nations Protocol; and
- debt-bondage or serfdom, forced or exploitative labour, servitude, sexual exploitation, and slavery.
Modern slavery is a global issue, and New Zealand is not immune. Several high-profile New Zealand cases have involved serious exploitation that would fall within the Bill’s definition.
Walk Free’s 2023 Global Slavery Index estimated that on any given day in 2021, there were 8,000 people in New Zealand living in conditions of modern slavery, [1] and police reported 31 ongoing investigations into modern slavery last year.[2]
In March 2022, Joseph Matamata was convicted of 13 charges of slavery and 10 charges of human trafficking for offending committed between 1994 and 2019. When announcing the Bill, MP Greg Fleming said “Had the framework that we’re introducing in this legislation... been in place, that case would have been identified and dealt with years earlier and saved hundreds of victims.”
Key features of the Bill
If passed in its current form, the Bill would create a statutory reporting regime aimed at preventing modern slavery. This regime would require all reporting entities (defined below) to publish an annual modern slavery statement outlining:
- information on the reporting entity’s structure, activities, and supply chains;
- reports of modern slavery incidents, including risk assessments for up and down the supply chains;
- steps taken to mitigate modern slavery risks (such as due diligence and remediation processes);
- evaluations on current modern slavery policies and processes; and
- information on training activities for employees to identify modern slavery risks.
These statements would then be lodged on a public register, highlighting the Bill’s focus on transparency and reputational accountability. The Bill follows the proposals of its earlier versions and aligns with Australia’s framework, focusing on disclosure obligations rather than direct obligations on businesses to undertake due diligence of their supply chains.
The Bill also proposes the following:
- requiring the Minister to produce an annual report about referrals, investigations and prosecutions in relation to modern slavery incidents; and
- regular reviews of legislation and government policy in place to support victims of modern slavery; and
- the establishment of an independent Anti-Slavery Commissioner.
What will this mean for New Zealand businesses and directors?
Entities operating in New Zealand with consolidated annual revenue over NZ$100m will be deemed reporting entities. This includes listed companies, SOEs, and both public and private sector entities.
The severity of penalties for noncompliance sets New Zealand apart from Australia’s framework. Under the current Bill, a reporting entity will commit an offence if it:
- fails to comply with required reporting obligations; or
- knowingly makes false or misleading statements in its report.
Entities that commit an offence may be criminally liable for a fine of up to $200,000. In addition, the High Court can, upon request, order an entity that is not a government agency to pay a financial penalty to the Crown. The maximum amount for this civil penalty is $600,000.
Further, the Bill imposes personal liability for directors and senior managers. If an entity is convicted of an offence, a director or person involved in the management of the reporting entity is guilty of the same offence if it is found that:
- the offence took place with their authority, permission, or consent; or
- they knew, or could reasonably be expected to have known, that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
Names of non-compliant entities and responsible officers are to be published on the register for three years.
Our Thoughts
The Bill’s enactment is expected to occur before the election on 7 November, providing for no transition period, as the Bill is planned to come into force six months after receiving Royal Assent. Qualifying businesses should therefore assume an accelerated commencement is likely and begin preparation as soon as possible. Practical steps include:
- boards to consider drafting and implementing clear governance for modern slavery risk and developing the delivery of necessary disclosures.
- procurement and risk teams to review supply chains across the business, identifying higher-risk geographies or labour practices.
- businesses to review existing policies, supplier codes of conduct and contractual protections.
- businesses to establish processes for internal reporting, training and escalation concerns.
- where businesses operate in other jurisdictions with similar modern slavery regimes (e.g. Australia), they should look to adapt and leverage existing compliance frameworks to streamline implementation.
This Bill is a positive development for New Zealand, which has been out of step with other countries’ modern slavery legislation. It will also be welcomed by New Zealand’s trading partners, providing reassurances about supply chain processes.
Next steps
If you have any queries on the Bill, please get in contact.
Special thanks to Meg Vogel for her assistance in writing this article.
