Modern Slavery and Worker Exploitation Bill in the Works

This month, the Government announced that it planned to introduce legislation to address modern slavery and worker exploitation. The Bill would impose responsibilities on all New Zealand entities to identify risks of modern slavery and worker exploitation in their operations and supply chains, and to take action to address those risks. Breach of these responsibilities would attract financial penalties, which are likely to be significant. Consultation on the proposed framework is now open, so here we will outline its main features to help you have your say.

There is no internationally agreed definition of modern slavery, so the Government proposes that the Bill’s definition should include the legal concepts of forced labour, debt bondage, forced marriage, slavery and slavery like practices, and human trafficking. The Government also proposes that worker exploitation be defined to include non-minor breaches of New Zealand employment standards.

Companies, sole traders, partnerships, state sector organisations, local government, charitable entities, trusts, incorporated societies and Māori trusts and incorporations would be covered by the new responsibilities.

Small entities (defined as having annual revenues of below $20 million) would be required to take reasonable and proportionate action if they become aware of modern slavery in their international operations and supply chains, or if they become aware of modern slavery or worker exploitation in their domestic operations and supply chains. Such action could be reporting a case to the appropriate authority, working with the supplier to address the issue or changing suppliers.

Small entities would also need to undertake due diligence to prevent, mitigate and remedy modern slavery and worker exploitation by New Zealand subsidiaries or other companies under the contractual control of the entity. This means identifying the risks of slavery or exploitation across an entity’s operations and supply chains, taking steps to address those risks and evaluating the steps taken.

Medium entities (defined as having annual revenues above $20 million but below $50 million) would have the same obligations as small entities but also be required to publish a modern slavery statement disclosing their due diligence action.

Large entities (defined as having annual revenues above $50 million) would have the same obligations of small and medium entities but also be required to undertake due diligence across all their operations and supply chains, not just those of subsidiaries.

The Government proposes to introduce new offences for non-compliance with the regime, for which there would be significant financial penalties. The Government is also considering additional enforcement tools such as infringements, improvement notices and enforceable undertakings, “naming and shaming” for bad practice and publicising good practice.

Submissions on the proposed framework are open until 7 June 2022. If you would like assistance in preparing your submission, please contact us.