Accounting for modern slavery: an analysis of Australian listed company disclosures

Abstract

Purpose Given the impending introduction of legislation requiring large Australian listed companies to make supply chain disclosures about modern slavery, the paper aims to reveal current voluntary practice. The purpose of this paper is to provide a benchmark for assessing the current engagement of large companies with modern slavery in Australia. Design/methodology/approach Institutional theory provides the foundation for assessing current voluntary practice in relation to modern slavery disclosures by large Australian listed companies. Content analysis is used to identify quantity and quality of modern slavery disclosures of the top 100 companies listed on the Australian Stock Exchange. The contents of annual and standalone reports available on websites, as well as other online disclosures, are examined using terms associated with modern slavery identified from the literature. Findings Evidence gathered about modern slavery disclosures by ASX 100 companies shows information in annual and standalone reports reveal far less than other disclosures on company websites. Overall, the volume and quality of disclosures are low and, where made, narrative. A wide range of themes on modern slavery are disclosed with bribery and corruption and human rights issues dominant. Although currently in line with institutional theory, as there appear to be mimetic processes encouraging disclosure, results support the idea that legislation is needed to encourage further engagement. Research limitations/implications The paper provides a baseline of understanding about the volume and quality of modern slavery disclosures as a foundation for future research into the practices of Australian companies prior to the signalled introduction of legislation mandating reporting. It also identifies potential lines of research. The sample only examines large Australian listed companies which restricts generalisation from the results. Originality/value This is the first academic research paper to examine quantity and quality of modern slavery disclosures of large Australian companies. Results add support for the introduction of legislation by government.

How managers use culture and controls to impose a ‘996’ work regime in China that constitutes modern slavery

“…This represents worker exploitation, which is a characteristic of modern slavery (Parker and Chung, 2018). In addition, reports surface from time to time of factory suicides and physical abuse of workers by managers and supervisors, which is also consistent with a form of modern slavery (Stevenson and Cole, 2018;Christ et al, 2019;Landman and Silverman, 2019;Mende, 2019;Pinheiro et al, 2019;Voss et al, 2019;Flynn and Walker, 2020). This paper examines 'how' power/distance and uncertainty avoidance aspects of Chinese culture affect control mechanisms used by managers to control worker behaviour in a way that results in working conditions that are a form of modern slavery.…”

“…The interviews discussed above highlight working conditions that are consistent with modern slavery (Stevenson and Cole, 2018;Christ et al, 2019;Landman and Silverman, 2019;Mende, 2019;Pinheiro et al, 2019;Voss et al, 2019;Flynn and Walker, 2020): workers are expected to work long hours without overtime pay, they can be unfairly dismissed, and they must give gifts to their managers in order to keep their jobs. In some cases, managers impose fines and physically punish workers they are displeased with.…”

“…This paper builds on the London-based research of Nazarian et al (2017) to examine the effects of two dimensions of culture on the organisational culture and management controls of Chinese organisations. The issue of culture is important because increasingly globalised corporates are operating in culturally diverse countries (Parker and Chung, 2018;Christ et al, 2019;Landman and Silverman, 2019).…”

“…Piketty (2013) finds that the returns to capital continuously grow at the expense of labour coststhereby creating a labour surplus. However, Flynn and Walker (2020) argue from their research of company reports that large companies are increasingly pro-active in their desire to reduce modern slavery, while, on the other hand, Christ et al (2019) find little evidence of such pro-activity. This paper provides cases to show how, from within a Confucian culture of obedience and unenforced legal rights, unrestricted global capitalism, operating within the Chinese economy, is able to subject many workers to a form of modern slavery (Ward and Lowe, 2017;Landman and Silverman, 2019;McLaren et al, 2019).…”

Human rights reporting under increasing institutional pressure

“…Empirical studies on human rights reporting are scarce. Scant research shows that human rights disclosures are overall low for samples of the top 50 Australian financial service companies for the year 2009/2010 (Islam 2011), the largest 201 GRI-reporters in the world (Cubilla-Montilla et al 2019), and the top 100 Australian listed companies in the context of 'modern slavery' disclosures (Christ et al 2019). However, for a sample of multinational garment retail companies, it is shown that disclosure of specific human rights standards has increased significantly over time as a result of the development of standards by the ILO, stressing the importance of the role of International Governmental Organizations (Islam and McPhail 2011).…”