New Zealand's Modern Slavery Bill advances

At a glance

• New Zealand's Modern Slavery Bill (Bill) has progressed following the Education and Workforce Select Committee's (Committee) recommendation that it be passed, subject to a range of proposed amendments.
• The proposed regime remains primarily focused on transparency and reporting, with mandatory due diligence obligations not recommended at this stage.
• The Committee has proposed several measures to reduce compliance complexity, including group reporting, recognition of equivalent Australian statements, and a six-month reporting deadline after financial year end.
• A new enforcement framework is proposed, including remediation notices, public identification of persistent non-compliance, and penalties of up to NZD600,000 for false or misleading statements.
• Several significant policy issues, including mandatory due diligence, an Independent Anti-Slavery Commissioner, and the treatment of overseas businesses, have been deferred for consideration during future statutory reviews.

New Zealand's proposed modern slavery regime has taken a significant step forward. On 31 August 2026, the Committee reported back on the Bill and recommended, by majority, that it be passed. The Committee proposed a range of amendments aimed at making the regime more practical and administratively workable while retaining its core objective of increasing transparency around modern slavery risks in business operations and supply chains.

The Committee's recommendations broadly preserve the structure of the Bill as introduced. The Bill remains primarily a transparency and reporting regime with mandatory due diligence not being recommended at this time. Reporting entities would continue to be required to disclose:

• Modern slavery incidents that have occurred.
• Known or anticipated modern slavery risks.
• Due diligence actions taken to assess, prevent, address, mitigate and remediate those risks.
• Complaints received, actions to investigate and remediation measures taken;
• How the entity assesses the effectiveness of its actions and actions taken to continually improve.
• The training and consultation carried out.

Key proposed changes by the Committee:

• Applying the NZD100 million revenue threshold only where an entity exceeds that threshold in each of its previous two accounting periods. This is a departure from the single-year test currently used in Australia and the UK.
• Reducing compliance complexity by allowing statements to be lodged within six months of an entity's financial year end, providing a longer transition period, enabling group reporting arrangements, recognising equivalent Australian statements, and removing duplicate publication requirements.
• Introducing a graduated compliance framework with information-gathering powers, remediation notices, and a public 'name and shame' mechanism for persistent non-compliance. A new revised offence and penalty regime, modelled on New Zealand's climate-related disclosure laws, would introduce penalties of up to NZD600,000 for false or misleading statements, with director and senior manager liability narrowed to focus on material breaches. Public sector and local government bodies are recommended to be exempt from these penalties. The Committee further recommends removing the provisions that would have prevented the Crown from contracting with entities found in breach of the regime.

The Committee expressly acknowledged that, due to the statutory 31 August 2026 reporting deadline, it prioritised establishing a workable reporting regime and was unable to reach conclusions on several significant policy issues. These include the establishment of an Independent Anti-Slavery Commissioner, mandatory due diligence obligations, potential expansion of the reporting threshold, and how the regime should apply to overseas businesses selling into New Zealand without a physical presence in the country. 

A statutory review is proposed to occur three years after commencement with a second review five years after that review is completed. These reviews should assess the effectiveness of the regime, support for victims, potential legislative and policy reforms, the case for an Independent Anti-Slavery Commissioner, liability settings, and whether more extensive reforms should be introduced in the future.

Alignment with Australia

The Bill was originally designed to align closely with Australia's existing Modern Slavery Act 2018 (Cth), reflecting the significant number of businesses operating on both sides of the Tasman. However, since the Bill was introduced, Australia has announced proposals that would fundamentally shift its federal framework away from a reporting-only model and towards one focused on prevention, accountability and enforcement.

Most notably, the Australian government has proposed a criminal 'failure to prevent' modern slavery offence for large entities, together with civil penalties for non-compliance with reporting obligations. If implemented, Australia would move beyond disclosure and require businesses to demonstrate that they have taken reasonable steps to prevent modern slavery risks in their operations and supply chains.

As a result, New Zealand and Australia may soon find themselves pursuing similar policy objectives through different regulatory mechanisms. New Zealand's proposed legislation places greater emphasis on reporting obligations backed by enforcement measures, while Australia's proposed reforms increasingly focus on the adequacy of a company's preventative systems and controls.

For New Zealand businesses, the practical message is largely the same. Expectations around supply chain transparency, human rights due diligence and responsible business conduct continue to increase globally. Whether driven by New Zealand's proposed legislation, Australian reforms, customer expectations or international standards, businesses should be assessing now whether their governance, supplier management and risk assessment processes are capable of identifying and responding to modern slavery risks in practice.