Modern Slavery Bill to be introduced to Parliament

A Modern Slavery and Worker Exploitation Bill will be introduced to Parliament in February with support from both major parties.

It was able to ‘skip the biscuit tin’, the usual random ballot process for determining which Member’s Bills will proceed to introduction, as it can rely on the votes of more than 61 non-executive MPs – i.e., not Ministers or Parliamentary under-secretaries.

If passed, this legislation will require larger businesses to identify, address, and report on risks of modern slavery and worker exploitation within their operations and supply chains - both in New Zealand and overseas.

What would this mean for your business?

If passed without amendments, the Bill would require businesses (publicly listed and private) with annual revenue exceeding $100 million to publish mandatory modern slavery reporting.
Organisations will be expected to disclose both actual incidents and anticipated risks of modern slavery, including forced labour and exploitation, within their operations and supply chains.
While the Bill does not contain mandatory due diligence requirements, entities will be required to include a description of actions taken in response to risks identified, including due diligence and remediation processes. This creates a higher expectation that businesses will have due diligence and remediation processes in place, which would be a big step up for many NZ businesses.
Failure to comply with these reporting obligations could result in fines of up to $200,000 and pecuniary penalties of up to $600,000.

Next steps

The Bill will have its first reading on Parliament’s next sitting day, 10 February before proceeding to Select Committee. The extent to which progress can be made in election year in the context of a very full legislative agenda remains to be seen – but with support from both Labour and National, we can expect the legislation to endure as a priority beyond the election.

Passage would bring New Zealand into alignment with the UK (which passed equivalent legislation in 2015) and Australia (where reporting has been required since 2018). New Zealand will also have the advantage of their experience – with recent reviews in both jurisdictions, and with the Australian Anti-Slavery Commissioner raising concerns last year about the state of Australian reporting.

For businesses expected to be in scope of the regime, it is timely to consider whether to engage on the progress of the legislation, including on the scope of expected reporting. Our expert team has extensive experience in modern slavery law, compliance and risk mitigation having advised in relation to UK and Australian regimes for over ten years. If you would like advice on how this bill may impact your organisation, or assistance in preparing for these changes, or support submitting on the Bill, please get in touch.

Chapman Tripp will continue to monitor the development of the legislation and provide updates as it progresses.