All you need to know about New Zealand’s Modern Slavery Bill

What’s Happening?

On the 29^th of April, a new bill on modern slavery passed its first reading in New Zealand Parliament with bipartisan support. This marks the first time that a private members’ bill bypassed the standard ballot process by securing support from over 61 non-executive MPs.

The bill comes at a time when the regulatory landscape is tightening on all sides, and for good reason. According to the Global Slavery Index, approximately 8,000 people are living in modern slavery in New Zealand, while the country imported USD$4.7 billion of goods associated with child and forced labour in 2022, representing 10% of total imports.  

The new Modern Slavery Bill passed its first reading with an overwhelming 112 ayes and marks a significant step forward for New Zealand’s human rights and supply chain policy, which, in spite of its strong trading links with Australia, the UK and the EU, has yet to align with their progress on human rights due diligence legislation.  

Although this is New Zealand’s first bill of its kind, comparable to the UK’s 10-year-old Modern Slavery Act, it departs in a number of crucial ways from the precedents set by the UK and Australia, namely in terms of penalties for non-compliance and a focus on remediation as well as reporting.  

Given the fact that the UK currently has an estimated 122,000 people living in Modern Slavery (a number higher than New Zealand’s even correcting for difference in population size) and imports USD$26.1 billion of goods at risk of modern slavery annually, New Zealand’s Modern Slavery Bill may be the first in a slew of stricter legislative moves aiming at reducing harm rather than simply pointing it out.  

Well, what does it say?

The Modern Slavery Bill addresses the most severe forms of exploitation, including slavery, debt bondage, forced labour, human trafficking and child labour, recognising that New Zealand businesses and citizens may inadvertently support modern slavery through complex global supply chains.

Organisations with annual consolidated revenue exceeding NZ$100 million will fall into scope and be required to comply. This includes ‘New Zealand entities’, ‘Overseas companies’ and entities that control an entity that falls into either category. This covers some 500 companies operating in New Zealand - many of which are already reporting under Australian legislation - with some New Zealanders calling for the threshold to be lowered to NZ$ 50 million.  

Covered entities must publish annual modern slavery statements detailing:

• Their organisational structure and supply chain operations

• Identified risks of modern slavery in operations and supply chains

• Actions taken to assess, address, and mitigate these risks

• Effectiveness measures and due diligence processes

• Remediation efforts for identified instances of exploitation

What’s more, beyond what similar legislation in the UK and Australia have required, the Bill expects Modern Slavery Statements to contain the following:

• A description of any modern slavery incident that has occurred within the entity’s operations and supply chains  

• A description of any training provided to its employees and employees of their upstream suppliers in relation to recognising forced labour indicators  

• A disclosure of the number of complaints made to the entity regarding modern slavery, plus a description of the actions taken to follow up on complaints and address identified instances of modern slavery within its operations

It also introduces penalties for non-compliance. The bill makes it an offence for entities in scope not to comply and imposes a fine of up to NZ$ 200,000 should an entity fail to produce, submit and, crucially, publish a Modern Slavery Statement. Fines will also be imposed for any false or misleading information included in an entity’s statement, with directors of entities held personally liable should the offence happen with their consent or should they fail to take all reasonable steps to prevent such an offence.  

Although the Bill is primarily a reporting framework rather than a full mandatory human rights due diligence regime, it goes beyond simple disclosure requirements. Organisations will be required to report on modern slavery risks, actions taken to assess, address, mitigate and remediate those risks, and how they evaluate the effectiveness of those actions. This differs from broader frameworks such as the EU Corporate Sustainability Due Diligence Directive, which imposes more explicit obligations to identify, prevent, mitigate and address adverse human rights and environmental impacts.  

For now, the Bill is progressing through Parliament, with sponsors aiming for passage before the 7^th of November. This would bring the Act into effect in mid 2027 and the first reports due in 2028.  

Organisations would be well-advised to begin preparation now to ensure they have enough time to put adequate systems in place for compliance.  

How do I prepare?

As a starting point, organisations should do the following to begin preparations for compliance:

• Organisations should determine whether they will fall within the revenue threshold, considering consolidated group revenue, not just individual entity revenue. An initial, high-level review of their supply chain will also help with determining where the biggest risk may lie. It is advisable to keep an eye on high-risk geographies such as China and Russia but also conflict-affected geographies in Africa and the Middle East.  

• Use this to begin creating a comprehensive understanding of the organisation’s supply chain, including upstream suppliers and manufacturing processes. Learn how Diginex can provide you the data, technology, and expert-led support for end-to-end supply chain transparency.

• At this stage, the organisation should begin to engage suppliers to communicate new expectations and establish how much support they will need to reach compliance.  

• The Bill places significant emphasis on transparency around modern slavery risks and how organisations respond to them. While it does not impose the broader mandatory human rights due diligence obligations contemplated under frameworks such as the EU CSDDD, organisations will still need processes and information to identify relevant risks, report on actions taken, and respond to incidents and complaints.  Establishing clear risk assessment and reporting processes will therefore be an important part of preparing for compliance.  

• Additionally, these processes should have an executive-level owner to take responsibility for the development of policies and procedures relating to the organisation’s modern slavery compliance.  

• Finally, a plan should be established to train relevant staff on forced labour indicators.

The Bill does not simply represent a shift in New Zealand legislation. It reflects a broader shift in stakeholder and regulatory expectations towards greater transparency, accountability, and the prevention of harm. Over the coming years, organisations are likely to face increasing expectations to identify, assess, and address modern slavery risks within their operations and supply chains. Investing in robust due diligence systems can help organisations identify risks earlier, respond more effectively, and better manage the legal, financial, operational, and reputational liabilities associated with modern slavery.  

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