New Zealand's Copyright (Infringing File Sharing) Amendment Bill has unanimously passed its first reading in parliament.

The graduated response system was described by commerce minister Simon Power as "a fair and balanced process to deal with online copyright infringements." Rights holders will be able to request Internet service providers to send out notices to alleged infringers, who will receive three warnings.

The bill would extend the jurisdiction of the Copyright Tribunal, which would deal with complaints and award damages up to $15,000 New Zealand ($10,700). Rights holders can seek a court order to have the offender's Internet account suspended for up to six months.

New Zealand's government first proposed legislation to tackle illegal file-sharing in 2008, but there were protests over the controversial section 92A. The legislation stalled after the music industry and Internet Service Providers failed to agree on a code of practice in the required time frame.

As a result, the Bill was revised and the changes were unveiled in December 2009. It does not go as far as the original three-strikes system - Power says account suspension will only happen in the most serious cases - but there are concerns about the costs involved for rights holders and the complicated structure of the disputes procedure.

The bill has been referred to the Commerce Select Committee, which will report back to parliament in six months.