Published in The Australian (Sydney), 26 May 2026
During the first reading of New Zealand’s Modern Slavery Bill last month, one member of parliament warned it would create perverse incentives to look the other way. Another raised the compliance cost from his experience on an Australian board. A third acknowledged that the bill was drafted without departmental support.
In the end, though, all three voted for it. The bill passed 112 to eleven.
The problem the bill addresses is real. Modern slavery exists in global supply chains, in seasonal agriculture and fishing.
Privately, business leaders within the bill’s scope are concerned. The legislation is modelled on a regime the largest Australian and British firms have run for years with no measurable effect on the people it was supposed to help. Instead, it has created compliance costs: annual statements and supply-chain audits.
Business leaders know the legislation will become an expensive tick-box exercise and a feast for consultants. They also know they cannot say so publicly, because questioning the bill is heard as dismissing the problem.
Submissions close this week. If passed, the legislation will require New Zealand companies with more than NZ$100 million in consolidated revenue to publish annual statements on modern slavery in their supply chains, backed by penalties of up to NZ$600,000.
Directors face personal liability, not for exploitation but for failures to report, if they knew or could be deemed reasonably to have known an offence was being committed. Accurate reporting requires knowledge of conditions several tiers deep in supply chains that no director can realistically access.
The model is borrowed from the Australian Modern Slavery Act 2018 and its British equivalent. Australian readers will recognise the regime. They may be less familiar with the conclusions of their own government’s review of it.
In 2023, John McMillan, a former Commonwealth Ombudsman, reviewed the Australian Act, surveying nearly 500 reporting entities. Three years in, he found no hard evidence the Act had made any difference to the people it was supposed to protect.
Participants called it a tick-box exercise, and McMillan recommended thirty changes. The Australian government responded in late 2024 by accepting most on paper, then pushing penalties and due-diligence duties into further consultation.
The United Kingdom’s independent review in 2019 found the same: boilerplate statements disclosing nothing of substance. Not one study in the years since has found that either regime has reduced the incidence of modern slavery.
Germany went further in 2021, requiring companies to identify and remediate human rights risks in their supply chains. When the European Union extended similar duties continent-wide, Germany led the push to narrow the scope and has since wound back its own Act, cutting the companies covered by roughly two-thirds.
Against this record of failure, New Zealand’s parliament voted to adopt the same model.
It penalises the firms that look hardest at their supply chains, because discovery leads to exposure on a public register and exclusion from government contracts.
Meanwhile, a company that never looks, finds nothing, reports nothing and faces no consequences. In theory, directors who ‘could reasonably be expected to have known’ of exploitation are personally liable whether or not they investigated. In practice, no enforcement agency can prove what a director should have known about conditions at a fourth-tier supplier offshore. A documented but superficial process becomes its own defence. The bill rewards ignorance and punishes diligence.
The only member who said plainly that the question was whether the bill would “meaningfully make a difference or simply make us feel like we have done something” was from the party that voted no. The lead sponsor’s response was to tell New Zealand that parties opposing the bill were revealing who they really are.
If the bill proceeds, and it almost certainly will, the select committee should fix three things at a minimum.
The bill should define “supply chain” with statutory precision. As drafted, it imposes criminal penalties for conduct that extends through a company’s suppliers, their suppliers, and their suppliers’ suppliers, without ever specifying how far the obligation reaches.
It should narrow director liability. As drafted, the bill makes directors personally liable for what they ‘could reasonably be expected to have known’ about conduct deep in a supply chain – a standard impossible to satisfy when the conduct sits several tiers offshore.
The European Union’s directive, by contrast, requires proof of an actual negligent or intentional failure by the company and a causal link to the harm. New Zealand should adopt the narrower test. And it should build in mutual recognition with the Australian Act, so that companies reporting across the Tasman face one regime rather than two.
None of this would make it effective, but at least it would make it less destructive.
Still, there is something curious about the bill’s approach. Twelve years ago, New Zealand demonstrated it knows how to confront slavery directly.
Foreign charter fishing vessels operating in New Zealand waters had for decades employed crews who went unpaid, had their documents confiscated and were physically abused. University of Auckland researchers documented the exploitation.
When parliament finally acted in 2014, it did not ask companies to write annual statements. It required the vessels to be reflagged to New Zealand registration, bringing their crews under New Zealand employment law. Conditions improved. That went after the people responsible. The Modern Slavery Bill imposes generalised compliance on the firms least likely to be the problem.
New Zealand already has criminal law, employment standards and enforcement agencies to address exploitation. What it lacks is adequate funding for them. Enforcement of existing law is less photogenic than new legislation, but more effective.
The Labour Inspectorate employs roughly 81 inspectors nationally, of whom two work full-time on seasonal worker compliance.
The estimated annual cost of the compliance regime ranges from $9 million to $18 million. For a fraction of that, the inspectorate could double its capacity where exploitation actually occurs. Instead, the money will pay for corporate statements filed on a government register that no victim of modern slavery will ever read. The beneficiaries will be the consultants who help companies fill them in.
But that argument is almost impossible to make in public, because the bill is called the Modern Slavery Bill. The name does the work that the evidence cannot.
