Large New Zealand entities to face new laws on modern slavery

2026-02-02 - 16:09

Comment: A proposed Modern Slavery bill will impose new requirements for certain New Zealand businesses to publish statements including a description of incidents and risks of modern slavery. This is less onerous than the due diligence duties initially canvassed in 2022, but nevertheless represents a significant regulatory burden for entities caught by the new regime. The bill will apply to all companies (and various other specified entities) operating in New Zealand with annual revenue over $100 million. Reporting entities will be required to carry out annual reporting on modern slavery risks within the entity’s supply chain and how they are being managed. Significantly, the bill will enable potential personal liability for directors and senior managers, as well as civil penalties and fines for breaches by the reporting entity. This is the first use of a new Standing Orders pathway that skips the usual random ballot process for member’s bills (the biscuit tin). The co-sponsors of the bill, National’s Greg Fleming and Labour’s Camilla Belich, will introduce the bill using Standing Order 288 which allows automatic introduction when at least 61 MPs (excluding ministers or under-secretaries) signal support. The Act Party is not supporting the bill (in part because of concerns that the new reporting framework will create significant compliance costs while doing little to address the actual problems of worker exploitation). Based on the sponsors’ announcement the key obligations under the bill focus on mandatory reporting aimed at transparency and accountability across supply chains. Entities in New Zealand with an annual revenue over $100 million will need to: identify modern slavery risks, by mapping supply chains disclose findings in annual modern slavery statements; and lodge those statements on a public register. The statement must be in a prescribed form, signed by an authorised person, and must cover various matters including the reporting entity’s identity, structure, operations and supply chains (including controlled entities), remedial actions undertaken, numbers of complaints and training undertaken for employees and suppliers. As noted above, the proposed disclosure model is less burdensome than the obligations initially considered by the previous Labour government in 2022, which had proposed mandatory due diligence obligations to actively search for and prevent modern slavery. The proposed bill instead focuses more simply on public transparency and accountability through disclosure. The proposed financial threshold for reporting entities (annual revenue of $100 million) is also significantly higher than the various tiered thresholds considered under the previous proposals. Richard Massey is a partner at Bell Gully. Photo: Supplied In terms of regulatory enforcement, entities that fail to report, or that make false or misleading statements, would face criminal fines up to $200,000 or civil penalties of up to $600,000. Significantly, the bill imposes personal liability for directors and any “person involved in the management” of a reporting entity if the entity commits a breach under that person’s authority, permission, or consent – or if they knew or could reasonably be expected to have known of the offence and failed to take all reasonable steps to stop it. This will likely be a point of focus in submissions and appears contrary to the trend of other recent reforms (e.g. changes to consumer credit and climate reporting frameworks) where personal liability provisions have been wound back. Timing and next steps The sponsors will introduce the bill on February 10, with a view to its enactment later this year (ahead of the November election). They have signalled there will be no transition period. Companies above the $100 million revenue threshold should therefore assume an accelerated commencement. In our view boards should assign clear governance ownership for modern slavery risk, approve reporting plans, and take early steps to ensure management is equipped to deliver the required disclosures. Businesses already reporting under Australian or UK regimes should consider how to use existing statements and methodologies prepared under those regimes, and how they can be adapted for the New Zealand context to minimise duplication. Procurement and risk teams should accelerate supply-chain mapping across suppliers, prioritising sectors and geographies with known exposure to modern slavery. Engagement in the consultation will also be crucial. We expect that many businesses above the proposed revenue threshold will wish to participate in the select committee process in due course, particularly on contentious aspects such as personal liability and the possible enforcement consequences.