The Copyright (Infringing File Sharing) Amendment Bill has today been passed, despite strong opposition from the Green Party and independent MPs, and an internet campaign against the bill.
The law will come into effect on September 1 and repeals Section 92A of the Copyright Act.
The legislation seeks to tackle illegal file sharing, including unauthorised movie and music downloads, with illegal file sharers receiving warnings for their first two infringements. A third infringement will see the owner of the copyrighted material able to seek a court order to suspend the offender's internet account.
Commerce Minister Simon Power looked forward to the Government's new online copyright regime coming into effect.
"Online copyright infringement has been damaging for the creative industry, which has experienced significant declines in revenue as file sharing has become more prevalent. This legislation will discourage illegal file sharing and provide more effective measures to help our creative industries enforce their copyright."
Mr Power said the legislation also extends the jurisdiction of the Copyright Tribunal so it provides an "efficient, low-cost" process to hear illegal file-sharing claims.
The tribunal will also be able to award penalties of up to $15,000 based on damages sustained by the copyright owner.
The notice regime will not apply to cellular mobile networks until October 2013.
Opponents said the law meant internet users could be disconnected without sufficient proof of any offence.
An amendment proposed by the Greens' Gareth Hughes sought to remove the clause that allows for suspension of internet accounts as a penalty, however this was voted down by the same 111 to 11 margin.
Only the Green Party and independent MPs Chris Carter and Hone Harawira voted against the bill.
Opponents to the bill also warned it might unfairly punish businesses or families when the downloading was done without their knowledge by an employee or family member or by someone hacking into their connection.
Twitter and Facebook users have again banded together to protest the legislation, "blacking out" their avatars by changing the images into black squares and tweeting using the hashtag #blackout.
"This is not what democracy is about," wrote Lydia Nobbs.
"This is legislation for foreign corporate interests to the detriment of NZ citizens. And we're not being given a chance to object," said Steffen Rusten.
A Facebook group called Opposing The Copyright (Infringing File Sharing) Amendment Bill has also been set up and has more than 1,800 members as of this morning.
The protests are similar to those following the Section 92A of the Copyright Act, which required internet service providers (ISPs) to disconnect users who repeatedly downloaded pirated material such as films or songs, prompting the Government to rethink it.
Late last year Parliament's Commerce select committee came up with a replacement which went some way toward addressing concerns.