Since our last update, further details have been released on the proposed modern slavery law for New Zealand. The proactive release of a Cabinet Paper outlines a gradual approach to combat modern slavery and confirms our previous predictions that some of New Zealand’s proposals are likely to be stricter than those overseas.

However, the future of the law is uncertain, with the new Government indicating that they have some doubts about taking this forward. The question then is, will we ever catch up to other countries’ regimes?

Key points of the Cabinet Paper

Reporting threshold
As expected, the revenue-tested reporting threshold will be $20 million in revenue per year and applies to companies, sole traders, charitable entities, central and local government, trusts and incorporated societies. Reporting entities will have to prepare an annual disclosure statement that identifies the modern slavery and worker exploitation in their operations and supply chains.

Public register
This disclosure statement will be publicly available on a register, with all statements using a similar format. Voluntary statements can also be made.

Penalties for non-compliance
An infringement fee of $10,000 will apply where entities have failed to meet their reporting obligations. A penalty of up to $200,000 will apply where entities provide false or misleading information.

Regulator
A regulator will be appointed to ensure the integrity and public trust in the register. They will also have powers to issue improvement notices and publicly announce the names of entities that have been convicted of an offence (for providing false or misleading information) or that have been issued with infringement notices.

What’s next?

We had expected modern slavery legislation to be introduced by mid-2024. However, the new Government has indicated they are “yet to make decisions” regarding the proposal.

Despite the lack of Government commitment, overseas companies often require assurances that products and services are free from slavery and exploitation.

This means that many New Zealand businesses must show their efforts to combat modern slavery when responding to tenders, trading with overseas entities in regulated markets or where expanding into a new market. This international pressure combined with the risk of brand reputation damage means that many businesses are pre-emptively taking steps.

Whether you’re trading with overseas companies that ask about your modern slavery policy, expanding into new markets or wanting to protect valuable brand reputation, preparing sooner rather than later is a sensible option.

The Wynn Williams team will be keeping a close eye on this area of law, so do not hesitate to get in contact if you would like to discuss developing relevant policies or discuss what proposed reporting obligations may mean for your business.