20 Jul 2020

Australia slavery act could expose NZ companies' risks

8:49 am on 20 July 2020

New Australian legislation could force New Zealand companies to confront modern slavery in their ranks.

Woman hand holding on chain link fence for remember Human Rights Day concept.

Photo: 123RF

The Australian Modern Slavery Act requires companies with more than A$100 million ($NZ107m) in turnover to report any potential evidence or risks of worker exploitation within their organisation to the government.

The modern slavery statements force businesses to explain the entity's structure, operation and entire supply chain, and acknowledge working conditions that may contribute or are linked to modern slavery.

Modern slavery recognises the most serious forms of exploitation of workers, such as forced or bonded labour.

For example, if a business based in Australia sold products manufactured in a factory in Thailand, the business would have to review the working conditions of the factory and publicly disclose them.

A senior associate from law firm Chapman Tripp, Nicola Swan, said the policy could force around 500 New Zealand businesses to publicly disclose their risk to modern slavery practices within their organisation.

This includes companies that are registered in Australia with revenues that exceed A$100m or businesses that are part of a major Australian company's supply chain.

The first set of statements are due in late December.

Swan said when they become public they could shine a light on working conditions within New Zealand businesses.

"There's going to be increasing pressure coming down the supply chain and questions are going to be asked to make sure that none of the businesses feeding into them have got modern slavery in their own business.

"That's where I think we're going to see a lot more New Zealand companies being caught by having to answer these sorts of questions in a much more specific way then they might have."

Swan said New Zealand was not immune to cases of modern slavery.

In March, a Hastings-based Samoan chief was found guilty of 10 charges in human trafficking and 13 charges in dealing in slaves.

The Australian Modern Slavery Act carries no financial penalty for businesses which fail to comply with the legislation's requirements.

Swan said there were powers in the act which were designed to incentivise businesses to publish slavery statements.

"There are some very clever powers in the act whereby the minister can request information about why you haven't published a statement, and the minister then has the power to publish the name of the entity which hasn't complied with the legislation."

Swan expected the New Zealand government to follow the example set by Australia and institute its own modern slavery statement policy in the next few years.