Modern Slavery legislation is on its way, but not what we expected
The New Zealand government is ‘finally’ preparing legislation to address Modern Slavery and exploitation in New Zealand. This is expected within the next 6 months, 4 years after Australia.
The proposed legislation is not ground-breaking, but a critical starting point.
This legislation will require New Zealand organisations and businesses with over $20 million in revenue to be transparent about their operations and supply chains through a new public register. They will be required to report and outline the actions they are taking to address Modern Slavery and exploitation risks in their operations and supply chains. Their reports are to be included in a publicly-accessible digital disclosure register for modern slavery statements.
These organisations and businesses may face potential penalties of between NZ$10,000 to NZ$200,000 for non-compliance and false or misleading statements.
This is a step back from the original legislative proposal in 2022 which would have not excluded New Zealand businesses with less than $20 million in turnover. This is disappointing given we know through recent prosecutions that this is an area where Modern Slavery is present. The initial proposal would have required all organisations to take action, regardless of size, if they became aware of Modern Slavery or worker exploitation, but put a stronger obligation on large organisations to conduct more comprehensive (and ongoing) due diligence activity across its supply chain.
In the current version due diligence is no longer a requirement. Smaller companies are excluded because the government does not want to overburden them. While a legitimate concern, the reality is that a lot of worker exploitation involves small to medium sized enterprises, and size should not give you the right to take advantage of vulnerable people
In addition the government’s rationale for focusing on larger New Zealand organisations is that they have more leverage to address Modern Slavery and exploitation in their extended supply chains. While this is true, it should not preclude small to medium size businesses from trying. Ultimately ignorance should not be a valid defence against Modern Slavery.
Modern Slavery Reporting
There is a lot of work to be done worldwide
Modern slavery reporting has faced substantial criticism for its lack of effectiveness, as experts argue that it is not adequately "fit for purpose." The challenges include the complexity of supply chains, limited transparency, weak enforcement, and limited stakeholder engagement.
The Australian Human Rights Centre in a 2022 report Evaluating the early impact of Australia’s Modern Slavery Act found that 77 percent of reviewed Australian Modern Slavery statements failed to comply with the basic reporting requirements mandated by the legislation.
Addressing these issues and promoting greater cooperation are crucial steps to enhance the credibility and impact of Modern Slavery reporting in the ongoing fight against this reprehensible crime.
New Zealand companies, regardless of size, should be required to conduct due diligence of their suppliers on human rights and Modern Slavery risks. New Zealand companies need to actively engage and work with their suppliers to address potential issues in their operations.
In most cases, Modern Slavery and exploitation take place further down in supply chain tiers. Conducting thorough due diligence and engaging with suppliers is the best way to end or mitigate Modern Slavery risks and the approach many of our most important trading partners have adopted.
The legislation, while not going far enough in our opinion, will help, and as we mentioned in the opening is a critical starting point. However, as New Zealanders we need to return to our values.
He aha te mea nui o te ao? He tāngata, he tāngata he tāngata!