New rules proposed for stamping out slavery will apply to all New Zealand companies earning more than $20 million in revenue.
Deputy Prime Minister Carmel Sepuloni announced the rules today alongside former Air New Zealand chief executive Rob Fyfe.
Under the proposals, organisations including churches, trusts and incorporated societies with more than $20m annual revenue will have to report and outline actions taken to address exploitation risks in their operations and supply chains.
“We’re taking action to address modern slavery and eliminate exploitation in our supply chains,” said Sepuloni, who is also Workplace Relations and Safety Minister.
The rules, though still to be hammered out precisely, are likely to have wide support among MPs. The National Party this afternoon reiterated it backed anti-slavery legislation.
Sepuloni said it would probably take three years for the new system to become operational, and once implemented, members of the public would be able to view a register outlining how well organisations were performing.
Fyfe is chair of the Modern Slavery Leadership Advisory Group.
He said after leaving Air NZ, he joined Icebreaker, where he and colleagues looked at implementing new ethical frameworks.
“We knew a lot less about the people in our supply chains than we did about the animals in our farms.”
Fyfe said he toured Bangladesh, China and the United States to inspect suppliers, and saw a range of conditions from the horrific to the exemplary.
He said it was useful for business leaders to understand how ethical operations and supply chain behaviour could boost a company’s reputation and value.
He said Icebreaker achieved a good understanding about its supply chains without having to spend a fortune doing so.
Instead, he said staff changed their ways of thinking, to take into account issues around modern slavery.
Asked about online marketplace customers who wanted to check the background of their products, he said it was still too difficult at times for consumers to verify the origins and ethical processes involved in making and shipping some goods.
But he said more rigorous checking by large companies of supply chains and producers would have a flow-on effect, as would increasing use of anti-slavery rules internationally.
“I admire businesses who are taking the lead in addressing modern slavery and not waiting for legislative change,” Fyfe said.
“But we must create a level playing field and ensure that as business leaders, our quest for cost competitiveness does not come at the cost of enabling modern slavery practices within our operations and supply chains.”
Fyfe said the proposed rules were good for Kiwi business and New Zealand’s global trading reputation.
“More and more, we are seeing consumers demanding transparency on the products they buy.”
As the Herald reported in June, a perceived lack of action on modern slavery had frustrated campaigners including migrant worker advocates.
Migrant Workers Association president Anu Kaloti today said the announcement was a good first step, but concerns remained.
Kaloti said she’d encountered more migrant worker abuse cases in the past year than in the preceding decade.
“People have been made to pay anything from $20,000 to $50,000 for securing a job and visa.”
Some of those people later found themselves in substandard housing, with jobs different from those promised, and severely underpaid, Kaloti said.
Three years ago, Hawke’s Bay horticultural labour contractor Joseph Matamata was jailed for people trafficking and slavery.
Kaloti wanted to know how other countries could be assured New Zealand’s supply chains were slavery-free and ethical.
“We support legislation to deal with modern slavery,” National Party workplace relations and safety spokesman Paul Goldsmith said today.
“We’re just impatient to see a bill,” he told the Herald. “It should have been a higher priority.”
Asked if the rules would have sufficient enforcement tools to punish non-compliance, he said: “The most important enforcement mechanisms are reputation and brand.”
Goldsmith believed big companies would respond very quickly to safeguard reputations.
Goldsmith said the Labour Government had been preoccupied with Fair Pay Agreements, which he believed were flawed, instead of tackling modern slavery.
“Now just before an election they fling out a press release,” he said of today’s announcement.
Former Workplace Relations and Safety Minister Michael Wood in April last year said he was working with advisers including Fyfe on the initiative.
Wood, who resigned last month as a minister over a shareholding scandal, was present at today’s event where Sepuloni and another speaker thanked him for his work tackling modern slavery.
Equal Employment Opportunities Commissioner Saunoamaali’i Karanina today welcomed the proposed new disclosure legislation.
“A public register requiring organisations earning over $20 million in revenue to report their actions in addressing exploitation risks in their operations and supply chains is definitely a good first step towards fostering a culture of transparency and responsibility.
“We are hopeful this will also empower Kiwis to make more ethical choices,” she added.
Sumeo said she hoped proposed legislation would advance human rights and tackle worker exploitation and modern slavery here and abroad.
Big Four accounting firm EY a year ago called for New Zealand to examine accountability legislation requiring transparency in supply chains or operations.
At the same time, dozens of other companies called for similar action.
The legislation still has to be drafted, which is expected to take six months, until after the next election.
John Weekes is online business editor. He has covered politics, crime, courts and consumer affairs. He rejoined the Herald in 2020, previously working at Stuff and News Regional, Australia.