Why New Zealand needs a Modern Slavery Act
Do you know if you’re buying products made by slave labour?
Walk into St Lukes mall in Auckland and you’ll find Body Haven massage on the second floor. Last year, the company was found guilty of paying a masseuse the equivalent of 86¢ an hour. It was ordered to repay the worker $8000 and put on a “stand-down” list preventing it from hiring migrant labour for six months.
The sad truth is that it’s not an isolated instance of labour exploitation.
One of the most notorious cases hit headlines last year when Hastings-based Joseph Matamata was found guilty of 10 charges of people trafficking and 13 charges of dealing in slaves between 1994 and 2019. The victims were forced to work on orchards and do other jobs but never paid for their labour.
The court found Matamata enslaved people through violence and intimidation. He kept their passports and restricted their movements.
It’s among four trafficking prosecutions taken since 2009, involving a total of 51 victims.
“These numbers likely only reflect the tip of the iceberg,” according to Minister for Workplace Relations and Safety Michael Wood. In March, the minister released a five-year plan to combat modern slavery – the term coined to describe the rise of forced labour in today’s economy.
The plan comes with a $50 million budget and a pledge to look at new laws. Harsher penalties for offenders are also in the pipeline. But there’s pressure on the government to pick up the pace and introduce a Modern Slavery Act, following moves in other countries.
Global slave trade
More than 40 million people are estimated to be trapped in slavery, according to the Global Slavery Index 2018. Nearly two-thirds are in the Asia-Pacific region.
Mounting evidence of forced labour has led to renewed calls for companies to shoulder more responsibility for their supply chains and the people making their products.
In 2015, the UK introduced a Modern Slavery Act. It requires companies earning more than £36 million ($NZ70m) a year to report annually on the steps taken to ensure their products aren’t produced by slave labour.
Three years later, Australia passed its own Modern Slavery Act. The law means companies earning more than $A100 million ($NZ107m) must publish “modern slavery statements” setting out what they’re doing to address forced labour risks.
This law also applies to New Zealand companies that trade in Australia. To date, 23 New Zealand businesses – including Contact Energy and New Zealand Post – have published modern slavery statements.
Chapman Tripp partner Nicola Swan believes several hundred New Zealand businesses could be affected either being required to produce their own statements or to report on slave labour risks to Australian parent companies.
On this side of the Tasman, Trade Aid and World Vision are leading the charge for a Kiwi version of the law. The groups ran a petition calling on the government to introduce a Modern Slavery Act. Their call has won backing from 95 companies that signed a joint letter of support to the government.
World Vision New Zealand director Grant Bayldon believes a Modern Slavery Act would help force companies to clean up their practices. “There’s no disinfectant like sunlight,” he said.
Bayldon argues it would also “ensure that the companies already doing the work of monitoring their supply chains are not disadvantaged”.
A box-ticking exercise?
Christina Stringer, associate professor at Auckland University’s Centre for Research on Modern Slavery, agrees we need to catch up with Australia and the UK.
But it’s not just a matter of taking what’s in their laws and putting it on our statute books.
“Researchers have highlighted the [UK] act is not robust enough,” she said. With funding from the New Zealand Law Foundation and the Borrin Foundation, Stringer and colleagues are looking at what an effective Kiwi law should include.
In a recent paper, she investigated how textile, apparel and luxury good firms have responded to the UK Modern Slavery Act. “What we have found is that many [multinationals] are viewing the reporting requirements as a box-ticking exercise.”
Stringer is keen for any law here to cover small- and medium-sized businesses, as well as the big players. The majority of worker exploitation on our shores occurs among smaller traders that employ migrant labour, she said.
A 2019 report Stringer co-authored recounts interviews with 64 migrant workers who spoke of physical and verbal abuse, getting little or no pay, and threats of being reported to Immigration New Zealand if they complained.
No penalties: The lack of teeth in modern slavery laws has also been a point of criticism.
Latest UK figures show 17 percent of organisations required to publish a modern slavery statement had failed to do so. The UK government has announced plans to introduce fines for companies that don’t deliver but no date has been set for this change.
Bayldon agrees legislation here must include “consequences for companies [which] do not comply”.
Who’s checking? The other major issue is whether anyone is checking that companies’ statements tell the full story. Unless they’re independently reviewed, they may become little more than window-dressing.
In its November 2020 review of 120 modern slavery statements, the Australian Border Force said some noted “risk areas” but failed to describe the nature or extent of those risks.
Employers who flout employment and immigration laws can face up to seven years in prison and hefty financial penalties.
They may also face a "stand-down" period (up to 24 months) where they’re not able to support migrant worker visa applications.
Repeat offenders can be banned from hiring workers or acting as an employer for up to 10 years.
In April, there were 49 traders on the stand-down list. About a third were from the retail sector, with liquor stores featuring prominently. Companies in the horticulture and hospitality sectors also regularly appeared.
In response to an Official Information Act request, the Ministry of Business, Innovation and Employment confirmed in May that it was looking into 18 complaints involving workers in the agricultural sector not being paid minimum wage entitlements.
Liquor stores repay $250,000
In 2018, the former owners of two Hamilton Super Liquor stores were forced to repay more than $250,000 owed to employees in wages.
The six employees were paid between $8 and $11 an hour. Some worked 70 hour weeks. They weren’t provided with any sick leave, holiday pay or public holiday entitlements.
Last year, the owners of 10 other Super Liquor stores repaid four employees more than $21,000 in wages.
Berry farms busted
In April 2020, Matangi Berry Farm in Hamilton was fined $127,000 for exploiting workers. The employer was ordered to repay nearly $43,000 in wages to 207 workers.
Neighbouring business Olde Berry Farm NZ was fined $50,000 and ordered to pay $16,532 in wages to several employees. Olde Berry Farm managing director Andrew Peter Molloy was fined $10,000.
Labour Inspectorate regional manager Kevin Finnegan confirmed both businesses supplied to supermarkets.
Holiday park “nightmare”
In 2019, Rotorua holiday park Golden Springs was ordered to pay $230,000 to three employees in unpaid wages and compensation.
Director Shenshen Guan used social media to attract two migrants from China to work at the park. She took $45,000 from each of them as bonds. They arrived in New Zealand on visitor visas and began working unlawfully at the holiday park seven days a week for no pay.
One employee described working under Guan as "like a nightmare".
Guan and the company, Newzealand Fusion, were banned from hiring workers for 18 months and put on the stand-down list until July 2022.
In 2020, Newzealand Fusion was put into voluntary administration.
Fibre subbies breach standards
A 2018 Ministry of Business, Innovation and Employment investigation found 73 of 75 Chorus subcontractors in Auckland had breached minimum employment standards. Some staff were paid below minimum wage and didn’t receive holiday pay. The investigation also found some employers used extended trial or "volunteer" periods in which workers weren’t paid.
- The mounting toll of forced labour shows our laws aren’t doing enough to protect workers – or consumers who unknowingly buy products made by unpaid labour.
- Adopting a Modern Slavery Act would be a step forward. However, any act needs to avoid the shortcomings of laws in other countries.
- At a minimum, legislation should provide for independent checks of companies’ statements and meaningful penalties for those that don’t comply.