NZ’s AI strategy: “light touch” regulation and opportunities for businesses

The AI Strategy confirms that New Zealand is taking a “light-touch” approach to AI regulation, which will provide reassurance to businesses looking to embrace the benefits of AI, while also reminding businesses of their governance responsibilities and the need to ensure compliance with existing legal frameworks.  

The AI Strategy (available here) follows recent guidance for the public sector, discussed in our previous article here. Alongside the AI Strategy, the Government has also issued a guidance note titled “Responsible AI Guidance for Businesses”. In this article, we explore the key takeaways for New Zealand businesses and next steps.

Summary of key takeaways 

The AI Strategy has been developed following a Cabinet decision in July 2024 committing to a strategic approach to AI (here). The Cabinet paper recognised that a clear strategic direction would “clear the path for AI to deliver better outcomes for people in New Zealand”.   

The new AI Strategy seeks to achieve this in various ways. In particular: 

•    Regulatory clarity and “light touch” legislation

The AI Strategy notes that uncertainty about how existing laws apply to AI may result in “a cautious approach to AI implementation until regulatory clarity improves”. As a result, the AI Strategy confirms that New Zealand is taking a “light touch” and “principles-based” approach to AI policy. It helpfully identifies that New Zealand has existing regulatory frameworks (e.g., privacy, consumer protection, human rights) which are largely principles-based and technology-neutral, and which can be updated if needed to enable AI innovation. This is a pragmatic and positive approach that we expect will provide reassurance to businesses exploring the adoption of AI, and will avoid some of the challenges created by detailed standalone legislation such as the EU’s AI Act (as discussed in our prior commentary here).  

•    Adoption focus 

The AI Strategy outlines New Zealand’s deliberate focus on AI adoption rather than development. That recognises the economic challenge and significant investment required for creating foundational AI. This approach is intended to “more rapidly realise productivity benefits across the economy without waiting for local AI development to mature”. 

•    Upskilling the workforce

The AI Strategy identifies that New Zealand faces a shortage of AI expertise across several sectors. The paper notes that New Zealand universities are helping to bridge the gap by building a “future-ready” workforce through specialised programmes, and notes the Government’s investment in tuition, STEM, and youth support to boost enrolment and career pathways.

In addition, the new “Responsible AI Guidance” offers a valuable framework to help businesses adopt AI responsibly and effectively. The Guidance encourages organisations to clearly define their purpose for using AI, prepare thorough stakeholder engagement and safe testing, and align AI objectives with internal policies. The Guidance also recommends building strong governance structures and ensuring compliance with existing regulations. The Guidance emphasises the importance of high-quality, unbiased data and cautions against using AI in areas where human judgment is essential. 

What does this mean for your business?

The AI Strategy will provide reassurance to businesses seeking to adopt AI systems, and the Responsible AI Guidance (here) offers a helpful consolidated roadmap. In practice, however, the application of the recommendations can be complex and businesses should start thinking early about the implications of the Government’s announcement and how they can respond to the new guidance.   

We summarise below what we see as the key takeaways and next steps: 

1. Clarify your AI purpose: Define what you want AI to achieve in your organisation and ensure the intended use is lawful and aligned with your business goals.

2. Prepare for adoption: This should include identifying current processes that are inefficient and could benefit from AI, engaging with stakeholders for input, and testing solutions in controlled environments like AI sandboxes.

3. Build internal capability: Set up dedicated teams to identify the business’s AI objectives and values, develop internal principles to guide the responsible and ethical use of AI, and develop consistent principles and terminology across the business.

4. Establish governance frameworks: Form a governance team to oversee risk, compliance, and regulatory alignment, and maintain transparent communication with stakeholders to build trust.

5. Ensure data quality and ethical use: Use clean, unbiased data to train AI systems, and avoid deploying AI in areas where human judgment is critical to protect individuals’ rights and wellbeing.

In addition, given the Government’s “light-touch” regulatory approach and preference for relying on existing legal frameworks, it will be critical for businesses to ensure they are familiar with how current laws will apply to the new technology. That should include in particular ensuring that: 

• data used in AI systems is collected and stored in accordance with the Privacy Act;

• any customer-facing systems such as chatbots, and related terms and conditions, are reviewed for compliance with the Fair Trading Act;

• AI systems do not engage in practices that restrict competition (e.g. algorithmic pricing collusion) under the Commerce Act;

• ensuring intellectual property is appropriately protected and that use of datasets and AI outputs does not result in infringement under the Copyright Act; and

• datasets are assessed for bias to minimise the risk of breach of the Human Rights Act.

Bell Gully’s team is actively assisting with AI governance, risk advisory and contracting projects across a broad range of sectors, and has extensive expertise in the responsible procurement and deployment of AI solutions. If your business is exploring AI adoption or looking to strengthen its governance approach, please get in touch with the listed contacts or your usual Bell Gully adviser. 

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.