Modern Slavery Bill

Implications for business

The introduction into Parliament of the Modern Slavery Bill has brought awareness of how modern slavery has manifested itself into New Zealand businesses. Modern slavery can rear its ugly head in a range of ways from forced labour in supply chains, exploitation (or coercion) of workers and various forms of trafficking.

The Bill has also made history as it is the first time a bill has been introduced through Standing Order 288. This allows a Private Member’s Bill to bypass the random ballot (or ‘biscuit tin’) process if it is supported by two-thirds of nonexecutive MPs.

This Bill was co-sponsored by Labour MP Camilla Belich and National MP Greg Fleming. This bi-partisan effort shows the importance of the Bill not only to our parliamentarians, but also to New Zealand society.

What is modern slavery?

Modern slavery is often seen as a global matter and, for many New Zealanders, it probably feels like an issue away from our shores. Unfortunately, this is far from the truth. World Vision currently estimates that the average Kiwi spends around $77 a week on goods linked to various forms of modern slavery.¹ Walk Free’s 2023 Global Slavery Index estimated that in 2021, there were 8,000 individuals on any given day, living in modern slavery in New Zealand.²

In a high-profile case in the modern history of slavery in New Zealand, Joseph Matamata was convicted of 13 charges of slavery and 10 charges of human trafficking involving labourers working in orchards. After bringing the labourers to New Zealand with promises of a better life, Matamata retained their income, restricted communication and movement, and used threats of violence to ensure the labourers stayed in their jobs.³

The Bill

The Bill is both broad and extensive in defining modern slavery. It is defined as:

• Crimes already understood in the Crimes Act 1961:
  • Dealing in slaves, as well as debt-bondage or serfdom
  • Dealing in people under 18 for sexual exploitation, removal of body parts, or engagement in forced labour
  • People 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 as defined by Article 3 of the United Nations Protocol
• Forced or exploitative labour
• Servitude, and
• Sexual exploitation.⁴

Outside of the definition of modern slavery, the Bill requires the Minister to report annually on modern slavery matters, to publish guidance and to direct the Chief Human Rights Commissioner to designate modern slavery as a ‘priority area’ if necessary. The Bill will lead to the creation of a Modern Slavery Statement Register to be publicly accessible. All this will be overseen by the proposed independent Anti-Slavery Commissioner.

What does this mean for business?

The Bill currently states that ‘reporting entities’ are required to:

• Prepare and publish annual modern slavery statements that describe their structure and supply chains
• Identify modern slavery risks (both real and potential)
• Outline what steps the entity is taking to deal with the identified risks, and
• Lodge these statements on the Modern Slavery Statement Register.

A ‘reporting entity’ in the Bill is defined as a business with a consolidated annual revenue that exceeds $100 million. These entities not only refer to New Zealand entities, but also any overseas company carrying on business in New Zealand. These entities can be both public and private organisations, with government agencies also being captured under this regime.

How this affects New Zealand businesses

If your business is considered a reporting entity under the Bill, non-compliance with the regime could carry a strong penalty. Offences will be committed if entities fail to comply with their reporting obligations, or if they knowingly make false or misleading statements in their reports. These offences could amount to reporting entities being liable on conviction to a fine of up to $200,000.

From a civil point of view, the maximum pecuniary penalty for a contravening reporting entity is $600,000.

This also imposes personal liability for directors and individuals involved in management. If an offence occurs with the permission, knowledge or presumed knowledge of these individuals, they will be found guilty. This is particularly important if the director or management should have known it was occurring but failed to take reasonable steps to prevent it from happening.

The final important note for businesses is that if they are found to be non-compliant, both the name of the business and the individuals responsible will be published on the Register for three years.

Preparing for the Bill to become law

Many affected by the reporting obligations of this Bill may already be familiar with its obligations, considering there are similar laws in other jurisdictions. However, potential ways to prepare for the implementation of the modern slavery legislation in New Zealand could be in the form of preparing policies and governance, reviewing supply and procurement contracts (and being particularly diligent about who your suppliers are), and potentially establishing internal whistleblowing procedures.

Other steps could involve identifying risk factors that may facilitate the exploitation of workers, and developing management plans to mitigate them. The Ministry of Foreign Affairs and Trade has a range of specific resources all targeted towards combatting modern slavery.⁵

A positive development

This Bill is widely seen as a positive development in New Zealand law. While there may be concerns on the extent of obligations imposed on entities, the benefits to victims undoubtedly outweigh the costs.If you are concerned that this proposed legislation may affect the way you do business, please don’t hesitate to contact us.

¹ worldvision.org.nz/about/media/parliamentary-rule-modern-slavery-act-for-nz

² walkfree.org/global-slavery-index/country-studies/new-zealand

³ Joseph Auga Matamata v R [2020] NZHC 1829.

⁴ legislation.govt.nz/bill/members/2026/242/en/latest/#LMS1569519

⁵ mfat.govt.nz/en/trade/nz-trade-policy/combatting-modern-slavery 

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