Modern slavery may be back on the Parliamentary agenda, after previous attempts to regulate this area stalled. A proposed regime to combat modern slavery was deprioritised in 2023, following the change of government,¹ but may now be revived through a Members’ Bill of National MP Greg Fleming.² If passed, Fleming’s Bill will introduce new reporting requirements for businesses operating in New Zealand³ and those businesses relying on unethical supply chains will be subjected to the court of public opinion. It goes without saying that an association to modern slavery practices would cause massive reputational damage.

Construction firms in New Zealand may take a particular interest in Fleming’s Bill, following recent amendments to the Building Act, which encourage the adoption of overseas building products.⁴ Many contractors will now be weighing up the benefits of importing previously unfamiliar materials into the New Zealand market and, for some, this will mean establishing new trading relationships with previously unknown suppliers. Due diligence will be key, if such contractors wish to minimise the risk of serious reputational harm down the road and regulatory action.

The proposed regime

The concept of ‘modern slavery’ has become increasingly well understood in the past decade, with several nations now having long-established regimes to combat modern slavery practices.⁵  Nonetheless, many businesses may still be surprised to hear the term ‘slavery’ in association with 21st century supply chains. The concept of modern slavery encapsulates a range of unethical practices still being used globally; these include physical coercion, forced labour, restriction of movement and debt bondage (in the context of workplaces). Such practices are unfortunately common in low-skilled manufacturing and subcontracted service sectors.

The newly proposed regime is reasonably consistent with that floated under the previous Labour government. Mirroring equivalent legislation in Australia, the Bill would require private and public entities above a certain revenue threshold to file and publish an annual statement outlining how the business is identifying and addressing risks of modern slavery within their operations and supply chains. Notably, the proposed revenue threshold is NZD $50 million – less than half the reporting threshold in Australia.⁶

Each modern slavery statement would be published on a publicly searchable register and an independent anti-slavery commissioner would be established to ensure businesses comply with the reporting requirements. Failure to comply with the regime would constitute an offence by the entity, attracting liability up to $200,000. Directors of a non-complying entity could be found liable for the same, or for a term of imprisonment not exceeding 1 year.⁷

Implications for an evolving construction market

The government has recently undertaken a project of concerted deregulation in New Zealand’s construction sector.⁸ Pertinently, this has included amendments to the Building Act which enable New Zealand to recognise overseas certifications of building products.⁹ It is expected that over 12,000 new building products will be made available to the New Zealand market,¹⁰ actively encouraging New Zealand builders to look overseas for competitive supply chains.

While these changes may have a positive effect, increasing competition in the industry, they also sit in tension with the proposed reporting regime. Contractors will be eyeing up new trading relationships with overseas suppliers, while these reporting requirements are yet to be realised and may not be well understood in the market. There is a real risk that poorly advised contractors bind themselves too readily to agreements with overseas suppliers, only discovering the ethical and reputational implications of engaging with those suppliers after the fact. If the proposed reporting regime does eventuate, businesses will be required to report on their supply chains whether they are ethical or not, and regardless of whether they have contractual or other rights to extract the information they need or want to inform their modern slavery reporting.

Contractors should also note that the consequences of non-compliance may go beyond pecuniary liability. Entities found liable for repeated offences under the regime could be excluded from taking up public contracts for a period of up to 3 years.¹¹ This would be a particularly chilling prospect for any contractor eyeing up a Public-Private Partnership or any other form of contract for public infrastructure.

How should contractors prepare?

Many contractors will already have experience in this area. Large developers are often now inserting bespoke terms into construction contracts, requiring contractors to comply with their internal policies for modern slavery reporting. For those less familiar with modern slavery regimes, there are a few important steps that should be taken to minimise future risk:

• Know what to look for: Contractors should be getting familiar with the types of conduct that these regimes seek to combat. A thorough due diligence process should be undertaken when considering any new overseas supplier, so as to identify any serious ethical concerns.
• Check your existing contracts: It is important to thoroughly vet existing suppliers as well, especially when renegotiating supply agreements. It would be unwise to assume that existing arrangements pass muster if they have not been previously considered through this lens.
• Secure a right to audit: Supply agreements should contain provisions enabling the contractor to audit the supplier and demand any relevant information they will need to report on what they are doing to combat modern slavery, in accordance with the regime.
• Build in protections: In the event that serious ethical concerns are uncovered, the contract should provide for the contractor to have a right to terminate. Contractors will also need to consider having an alternative supplier lined up as a business continuity measure, in the case where termination is necessary to protect the contractor’s reputation: otherwise, the contractual right to terminate won’t be usable in practice.

If a contractor’s supply agreements are properly drafted, and appropriate vetting is carried out, they will be well placed to interface with the proposed regime. If such steps are not taken, they will be inviting considerable risk. A good reputation is hard won and can be easily damaged.

1. Catherine McGregor (6 August 2024) The quiet demise of the Modern Slavery Act
2. Laura Scampion and Gemma Livingston (12 February 2025) The Modern Slavery Bill Set to Reshape New Zealand
3. Combatting Trafficking in Persons and Modern Day Forms of Slavery Bill (Modern Slavery Bill).
4. Ministry of Business Innovation & Employment (20 September 2024) Overseas Building Products Bill Introduced
5. See, for example, Modern Slavery Act 2018 (AU).
6. Modern Slavery Bill, Pts 1 and 2.
7. Modern Slavery Bill, ss 11 and 12, and Pt 3.
8. Take, for example, the recent announcement that certain builders will soon be able to self-certify their work.
9. Building (Overseas Building Products, Standards, and Certification Schemes) Amendment Act 2025.
10. Ministry of Business, Innovation and Employment (3 April 2025) Using overseas building products set to be easier
11. Modern Slavery Bill, s 14.