Anti-slavery rules proposed for NZ companies with $20m+ revenue

Modern slavery is an issue wherever you live, and often New Zealanders have no idea that they’re accidentally contributing to it. On average, we spend $34 a week on products linked to modern slavery.

In a bid to begin tackling the issue, Deputy Prime Minister Carmel Sepuloni has announced proposed rules that, if passed, would compel organisations with more than $20 million annual revenue to document exploitation risks in their operations and supply chains.

This has been quite a while coming – in New Zealand, our legislation hasn’t quite caught up in tackling modern slavery, falling behind countries like Australia and the UK who already have specific anti-slavery laws in place.

A consultation was launched by the New Zealand Government in 2022 on modern slavery legislation, attracting 5,614 submissions. Guidance has also been sought from the Modern Slavery Leadership Advisory Group, led by ex-Air New Zealand CEO, Rob Fyfe, leading to this announcement.

We’re here to explain what these proposals could look like in practice, when you might expect them to come into play, and what businesses of any size can do to address modern slavery.

What is modern slavery?

Modern slavery refers to a number of exploitative practices that violate an individual’s human rights. These practices can include; human trafficking, slavery, servitude, forced labour, debt bondage, forced marriage and the worst forms of child labour.

There are people suffering under modern slavery in every country and sector. Industries that are considered ‘high risk’ include industrial cleaning, meat works, hospitality, construction, manufacturing, agriculture and fishing.

The Global Slavery Index estimated that on any given day in 2021, 8,000 people in New Zealand were living in conditions of modern slavery. In New Zealand, businesses may also be knowingly or unknowingly participating in modern slavery through their global supply chains.

Consumers could also be contributing to global poverty, by purchasing goods that have been produced by workers living under modern slavery practices.

An estimated 50 million people are trapped in modern slavery conditions worldwide. 17.3 million of the world’s modern slaves are exploited in private supply chains. More than 3 million victims of modern slavery are children.

Modern slavery refers to serious exploitation and does not include poor working conditions or underpayment of employees. While these practices are still illegal and carry legal consequences for the perpetrator, they are not generally classified as modern slavery.

What would be required by this potential new legislation?

The proposed rules are still to be precisely named. However, they currently outline the creation of a public register that all organisations with over $20 million in revenue would need to be listed on. On the register, they would have to detail the potential exploitation risks in their operations and supply chains.

This register would be visible to the public, so consumers can see for themselves what the companies are doing in terms of tackling modern slavery. Ideally, it would also encourage transparency and awareness around the issue, and bring in reputational risks to those companies who are continuing to facilitate or benefit from modern slavery.

While drafting the legislation is expected to take six months, it’s estimated that it could take three years for this proposed system to become operational. Even though we’re in an election year with potential change of leadership on the horizon, it’s notable that these proposals by the current administration already have cross-party backing. With that in mind, we can expect to see these proposals become law in due course.

How can smaller businesses address modern slavery risks?

These proposals will only require larger businesses to report their modern slavery accountability, so smaller businesses won’t be required by law to submit any kind of reporting around modern slavery. However, that doesn’t mean smaller businesses shouldn’t examine their own operations.

Modern slavery in all of its forms is illegal in New Zealand, and anyone knowingly exploiting workers under modern slavery practices can be prosecuted. Despite this, there are concerns that unlawful activity is being missed, especially in international supply chains. If you’re concerned about unknowingly supporting modern slavery through your supply chain, there are things that you can do to help spot red flags and make ethical decisions.

1. Be informed about modern slavery

One of the scariest things about modern slavery is how easily it can go undetected. There are thousands of people subjected to modern slavery conditions every day in New Zealand, working and living in our communities unbeknownst to us.

We’re also using products every day that have been manufactured by those under modern slavery conditions.

Slavery is a concept that feels quite separated from our everyday life. It’s hard for most people to think about it in the context of the 21st century. Yet, as the United Nations reminds us, ‘slavery is not merely a historical relic’.

In fact, in recent years, modern slavery has been on the rise. 10 million more people were in modern slavery in 2021 compared to 2016 global estimates. Now is an important time to learn more about how we can identify and fight modern slavery and share our knowledge with our friends, colleagues and the wider community.

2. Examine your supply chain

Small to medium-sized businesses (SMBs) can have limited resources to run a complete audit of their supply chain. However, we still believe that it’s worth examining your supply chain as best you can.

Do your suppliers have a human rights policy or a policy around modern slavery? Can you open a discussion with your vendors around modern slavery compliance? This is your opportunity to shine a spotlight on their operations to better understand how your products and services are being manufactured.

If your suppliers or vendors are not transparent about their operations, it may be worth exploring new options where they do have these policies in place.

3. Consider implementing a modern slavery or human rights policy

Just because you’re a small or medium-sized business doesn’t mean you can’t implement your own framework around modern slavery or human rights. Within your policy, explore why respecting human rights is important to your business and detail any measures that you have put in place to reduce the risk of modern slavery.

As with any policy, make sure that any measures are properly implemented within your business before you share your policy, and always consider seeking legal counsel when creating the policy. Employee management software can make it super easy to share the policy around too.

Ending modern slavery

Thank you for learning more about modern slavery. The more that we all – large businesses, SMBs and consumers – know about this important issue, the better we can tackle it on a local and international scale. Remember, all changes – no matter how big or small – can make a difference.

Beyond modern slavery, if you’re interested in learning more about compliance for your business, download our free Essential Guide to HR Compliance.

Disclaimer: The information in this article is current as at 28 July 2023, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.