Live: How Bad Laws Get Made

The Haps

ACT’s Workplace Relations Minister Brooke van Velden has struck again, saving universities at least $1.5 billion with her health and safety reforms. How did she do it? She stopped Worksafe forcing laboratory upgrades worth that much. The changes would have made labs MORE dangerous. How was that possible? The people who work in the labs are nearly the only people in the country who know what their materials and equipment do. They’re also the most likely to get hurt by misusing them, so they already have good incentives. Worksafe telling them how to do their job was silly and expensive, but it took a common-sense Minister to fix the madness. As the saying goes, you save a billion here, a billion there, pretty soon you’re talking real money!

Live: How Bad Laws Get Made

At the other end of the spectrum, Labour and National have teamed up to give a live lesson in how bad laws get made with their Modern Slavery Bill. This week, Free Press shows the bill is all about virtue signalling and nothing to do with slavery, but it will push up costs and distract companies from their core business. It’s also great politics, if voters don’t think too much, because who’d question anything that’s against slavery?

The Modern Slavery Bill does not actually outlaw slavery. Slavery, people trafficking, sexual exploitation, blackmail, it’s all illegal in New Zealand. The Police and Labour Inspectorate can and do investigate, arrest and prosecute people for these crimes. This new Bill even refers to the Crimes Act, to point out what it’s against. Specifically, it’s against anyone in New Zealand buying anything if any part of it has been touched by modern slavery.

The Bill makes companies with over $100 million in revenue produce a report every year. Actual slavery, sexual exploitation, human trafficking, is already just straight out illegal because it’s a very serious crime regardless of whether you’re a company with more than $100 million in revenue. This legislation is virtue signalling, a Parliamentary demand for select people to write meaningless reports.

The Bill is being introduced while the Government is doing everything it can to reduce red tape, such as by getting rid of climate change reporting for most businesses.

The reports must include: “a description of any modern slavery incident that has occurred within the operations and supply chains of the reporting entity… and… any known or anticipated risks of modern slavery occurring within the operations and supply chains of the reporting entity… and… a description of the actions taken by the reporting entity… to assess, prevent, address, mitigate, and remediate modern slavery and risks of modern slavery… and… details of… the number of complaints made to the reporting entity in relation to modern slavery…”

In other words, if you sell something in New Zealand, you need to work out if every screw, every fibre, every rare earth metal in a battery or electronics component might have been produced by someone in conditions of modern slavery. Everything sold has a family tree of inputs stretching back generations and all over the earth.

As Leonard Read said, not a single person on the face of this earth knows how to make a pencil. Even something that simple is made by millions of people who never meet.

The tip of the pencil contains rubber milled from trees in one country (or made in a much more complicated synthetic process), mined and refined brass made from copper and zinc that holds the rubber on top of a piece of wood from another tree was milled using machinery that was also mined. By the time you get to the paint on the outside and the graphite on the inside, you get the picture. Of course all of these materials and the pencil itself move through their own chains of storage, manufacturing, and transport that spans across many countries.

Read picked the pencil to make his point because it’s such a simple thing. Most things are much more complicated and are touched by many more millions in many more countries before they get to a Kiwi consumer.

So what? People will say. That the world is complicated is no reason not to combat slavery. It can’t be THAT difficult to trace all the parts and the materials that went into them, after all, they managed to end up in one product…

The point of the pencil story is that no one person could know all the people involved, but to detect modern slavery you’d need to know more than that. If people are lowly enough to enslave their fellow man or woman then they won’t have much trouble lying. Even if some poor Kiwi company could work out every person involved in producing their products, they can’t keep them all honest.

The net result will be company directors demanding their CEO finds a consultancy who will write a convincing enough report every year. They’ll have to work out how to deal with complaints, and ‘anticipated risks.’ Because nobody can prove there’s no modern slavery in their supply chain, there’s no real standard, but: You can’t afford to be the worst, so it’s safest to pay the best. It’s a consultant’s dream.

The law also requires the Government appoint a new Human Rights Commissioner to prioritise Human Slavery. That’s a quarter-million dollar a year job if you’re interested. It requires the Ministry of Justice to publish all the reports businesses are writing, and perhaps prosecute any companies who don’t fill out a report. If they’re prosecuted they can be fined up to $800,000, and they can’t sell anything to the Government for five years.

So, the Bill is a massive virtue signal that adds costs and distracts business people’s attention with likely no benefit. But there’s something much worse about this law. It totally misses how people in desperate situations actually end up better off.

For the last 30 years, 138,000 people have escaped poverty, every single day. Most days, this has not been reported. It’s happened because of trade and investment. Capitalism has annihilated poverty, giving the poorest people on earth real prospects and choices, including the opportunity to say no to people who’d like to exploit them, because they have a better option.

This Modern Slavery Bill will be welcomed by the hand wringing media. But it won’t do anything for people truly suffering around the world. The people it will help the most will be bureaucrats and consultants who write reports about people they’ve never met.