Is he likely to need to send his ATPL and logbooks off for the issue of an SEP?
No. He can do the paperwork online now, after completing the required training and Test, with the assistance of an ATO/RTF (Flying School)
Will he need to trade in his JAA licence for an EASA one?
Yes.
Here's an interesting thing, though.
When EASA Part FCL was introduced, your colleague's ATPL became, by default, an EASA ATPL and, so long as it is still valid, (ie. not past it's 5 year 'Use By Date') it embodies, amongst other things, the privileges of a LAPL.
This means that an alternative to adding an SEP Class Rating, with the expense of a Test, and Licence re-issue, is for your colleague to complete the rolling recency requirements of a LAPL with an ATO/RTF, and he can then continue to exercise LAPL privileges unsupervised, so long as he maintains LAPL recency.
Just a thought.
MJ
Ps. I think the Kiwis will take exception to being referred to as a 'third world' nation!