franchise.co.nz – PUTTING PEOPLE IN BUSINESS
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With the recent fast-tracking of the Modern Slavery Bill, the introduction of a
modern slavery reporting regime for New Zealand has become much more
likely. The Bill outlines a regime similar in many respects to that already
in effect in Australia, although with significantly more penalties attached.
Franchisors and franchisees may well be asked by the businesses they
supply to demonstrate their commitment to anti-slavery practices.
Threshold and requirements
Despite indications in a 2024 Cabinet Paper that the revenue-tested reporting
threshold would be NZ$20m in revenue per year, the Bill sets a threshold
of NZ$100m, bringing New Zealand in line with Australia. The threshold
will apply to companies (including overseas companies operating in New
Zealand), sole traders, trusts, partnerships, societies, and central and local
government.
Reporting entities will be required to prepare a “modern slavery statement”
for every 12-month period they meet the reporting threshold. The statement
must contain, among other details, a description of any modern slavery
incident which has occurred, or of any known or anticipated risks of an
incident occurring within the operations or supply chain of the entity. Actions
taken by the entity to mitigate such risks must also be addressed, with the
annual statements published on the reporting entities’ websites, and
publicly registered.
Penalties for non-compliance
Unlike the Australian regime, New Zealand’s Bill would introduce civil and
criminal penalties for non-compliance. The Bill will make it an offence,
punishable by a fine of up to NZ$200,000, to fail to meet reporting obligations.
Directors may be found guilty of the same offence if they permit or knowingly
fail to prevent an entity’s offending. Entities in breach may also face a penalty
of up to NZ$600,000.
The Bill will amend the Public Finance Act 1989 to provide that the Crown
must not directly pay money to a reporting entity penalised under the Bill.
Additionally, a record of every conviction or penalty imposed will be entered
into the new register.
What’s next?
While the details of the Bill may change, we expect some version of a modern
slavery reporting regime to be in force before the election in November. As
such, now is the time to get familiar with the proposed law.
The NZ$100m reporting threshold means that the reporting requirements will
only apply to a select few entities. Despite this, we consider it best practice to
take steps to address modern slavery risks. Entities that will be subject to the
reporting requirements will require assurances that products and services are
not connected with slavery or exploitation.
Franchisors and franchisees that engage in business or trade with
reporting entities will therefore need to demonstrate their commitment to
anti-slavery practices.
There is also a heightened risk of damage to brand reputation by the
introduction of domestic
modern slavery laws.
The Wynn Williams team
will keep a close eye on
the progression of the Bill.
If you have any queries
about what the incoming
law will mean for your
business, or want to get
ahead of the changes,
please do not hesitate to
contact us.
Wynn Williams on the impacts of the new
Modern Slavery Bill
MODERN
SLAVERY
Franchise Management
Wynn Williams
www.wynnwilliams.co.nz
Contact
Katrina Hammon
09 300 2647
021 221 8847
katrina.hammon@
wynnwilliams.co.nz
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