Modern slavery legislation arrives: directors come into scope

For years, New Zealand has lagged behind comparable jurisdictions in addressing modern slavery through legislation. That wait is now over. 

On 10 February 2026, the Modern Slavery Bill was introduced, jointly sponsored by Greg Fleming MP (National) and Camilla Belich MP (Labour). This marks a watershed moment in how New Zealand businesses are expected to confront the worst forms of worker exploitation in their operations and supply chains.

This is a call to action with clear obligations and real penalties and consequences for those who choose to look the other way. 

A long road to this point

Back in March 2021, 85 leading New Zealand businesses wrote an open letter to the Government advocating for modern slavery legislation. They warned that complex global supply chains, a lack of transparency, and weak enforcement had allowed modern slavery to thrive and that the economic fallout from Covid-19 had only increased the risks for vulnerable workers.

Since then, cases such as the exploitation of workers at Gloriavale or the recent case of an Auckland-based Samoan chief who held two immigrants in slavery have brought the issue uncomfortably close to home. Directors who claimed ignorance of labour conditions in their supply chains found their moral authority questioned, even where legal defences might technically apply. As I wrote at the time in Boardroom magazine, ignorance is unlikely to be a sustainable strategy.

The countries we typically benchmark ourselves against, including the UK and Australia, have had similar legislation in place for years. New Zealand’s delay has been conspicuous. Now, with the Bill’s introduction, we have an opportunity not just to catch up but to set a standard informed by overseas experience and tailored to our own context.

What the Bill proposes

At its core, the Modern Slavery Bill establishes mandatory reporting obligations for entities with consolidated revenue of $100 million or more. This threshold is comparable to Australia’s, which will be good news for New Zealand companies already reporting under that regime.

Reporting entities must prepare annual modern slavery statements detailing their structure and supply chains, any incidents or risks of modern slavery, the due diligence steps taken to address them, complaints received, remediation measures, training provided and consultations undertaken. These statements must be published on the entity’s website and submitted to a public register.

However, directors should take notice. The Bill also goes materially further than its Australian counterpart in several respects. Most significantly, it introduces a comprehensive enforcement regime. Failure to comply with reporting obligations is an offence carrying fines of up to $200,000, with the High Court able to impose pecuniary penalties of up to $600,000. Knowingly providing false or misleading information in a modern slavery statement is also an offence.

Critically, the Bill includes personal liability provisions. If a reporting entity is convicted, a director or person involved in management may also be found guilty of the same offence if the conduct occurred with their authority, permission or consent, or if they knew, or reasonably should have known, that the offence was being committed and failed to take reasonable steps to prevent it.

Under the Bill, “modern slavery” includes slavery, servitude, forced or exploitative labour, debt bondage, people trafficking, sexual exploitation, coerced marriage, and the worst forms of child labour as defined by the International Labour Organization. This definition will be an important consideration through the select committee process as some will argue for it to be widened to incorporate other forms of exploitative practice, including breaches of employment standards.

The Bill also amends the Public Finance Act 1989 to exclude convicted entities from government procurement. That will be a powerful commercial incentive for compliance, particularly in the building and construction sector.

One of the most important differences from other regimes is the Bill’s focus on actual incidents of modern slavery, not merely the risk of it occurring. This means reporting entities will need to go beyond tick-box risk assessments and genuinely interrogate what is happening in their supply chains. This due diligence aspect is designed to support the reporting obligation and drive substantive action. 

Work with New Zealand organisations on modern slavery and exploitation shows that traditional assurance methods are often insufficient. Effective due diligence requires understanding the workers in your supply chain, their contractual arrangements and the specific exploitation risks they face. These can differ from sector to sector and manifest differently during different stages of the labour market cycle, both domestically and overseas.

Cross-party consensus: a model for good lawmaking

Perhaps as notable as the Bill’s content is the manner of its arrival. This is a Member’s Bill introduced under a relatively new Standing Order that allows legislation to bypass the usual ballot process when supported by 61 or more non-executive MPs. MPs from across the political spectrum– from National, Labour and beyond -- have put their names to this Bill, and this wide cross-party support speaks volumes.

In an era of increasing political fragmentation, achieving cross-party consensus on significant legislation is not easy. The incentive structure of electoral politics overwhelmingly favours competition over collaboration. When consensus does emerge, it tends to produce more durable and credible law.

This matters enormously for modern slavery legislation. The policy challenge is not one that can be resolved within a single electoral cycle. Supply chain transparency, enforcement capability, victim support and international cooperation all require sustained commitment across successive governments. 

What directors should do now

The Bill will be referred to a select committee for public consultation. Changes are likely as it moves through the parliamentary process and organisations will have the opportunity to submit on its provisions. Large entities with complex supply chains and international exposures should engage early and consider preparing a submission.

The Bill casts a wide net. “Entity” encompasses companies, body corporates, trusts, partnerships, associations, Crown entities, government departments, Offices of Parliament and local authorities, meaning the public and private sectors alike are captured if an entity meets the revenue threshold tests. The penalties regime extends to directors or other people involved in the management of reporting entities.

In the meantime, directors should not wait. Steps that can and should begin immediately include mapping supply chains, conducting risk assessments, developing modern slavery policies and supplier codes of conduct, reviewing procurement agreements and building awareness among boards and executive teams. 

For organisations already reporting under the Australian regime, the New Zealand Bill’s emphasis on actual incidents, not merely risk, means it may be timely to consider reviewing and future-proofing existing processes. 

The era of plausible deniability is ending. Modern slavery is insidious and usually hidden from view. It is also happening right here in New Zealand. This legislation requires directors to look, to report what they find, and then to act. 

The views expressed are those of the author and do not necessarily reflect the position of the Institute of Directors.

Sarah Baddeley is a Partner at MartinJenkins. She has previously advised government on modern slavery legislation and works with New Zealand companies to detect and prevent the exploitation of workers in their supply chains.