Silencing the noise: Asbestos liabilities, accounting and strategic bankruptcy

Abstract

The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. AbstractThe legacy of the global exploitation of asbestos provides an illustrative case to examine corporate strategy in response to the significant financial risk presented by the long-tail liability.The James Hardie group was the dominant asbestos manufacturing concern in Australia and, confronted with the uncertainties of burgeoning long-tail tort claims, embarked on a radical corporate reorganization. At the centre of the reorganization was the creation of a business unit of limited potential to separate asbestos long-tail liabilities from the profitable operations of the corporate group and locate the risk in an alternate legal arena. The strategic recognition of accounting assets and liabilities to construct a 'bottom line' and shift organizational boundaries is explored using Delaney's theory of strategic bankruptcy. This interdisciplinary and critical sociological lens highlights the power of organizations to exploit the malleability of accounting concepts to pursue their strategic goals.

Critical race theory, counter-accounting, and the emancipatory potential of counter-stories

“…, 2001; Gray, 1997, 2000, 2001); and Boiral (2013). Rodrigue (2014), Apostol (2015), Moerman and van der Laan (2015), and Rodrigue et al. (2015).…”

“…(2015), Gallhofer et al . (2015), Moerman and van der Laan (2015), Rodrigue et al . (2015), Thomson et al .…”

“…6. SeeCooper et al (2005),Gallhofer et al (2006),Dey et al (2010),Boiral (2013),,Apostol (2015),Contrafatto et al (2015),Gallhofer et al (2015),Moerman and van der Laan (2015),Rodrigue et al (2015),Thomson et al (2015),Denedo et al (2017Denedo et al ( , 2019,Laine and Vinnari (2017), Tregidga…”

Accounts and counter-accounts: accounting and accountability for asbestos-related liabilities

“…Nonetheless, each year an estimated 1.1 million tons of asbestos is used worldwide (Statista, 2021) suggesting that regulatory efforts have been suboptimal, and that the formulation, implementation and enforcement of rules and regulations needed to be improved (Wikeley, 1997;Bartrip, 1998;Twight, 1990;Moerman and van der Laan, 2007;Castleman, 2017). Researchers identify several instances which demonstrate failure of laws and accounting to provide an adequate picture of the adverse consequences associated with asbestos-related exposure (Moerman and van der Laan, 2007, 2011a, 2011b, 2015bO'Connell and Webb, 2006;Ukwatte et al, 2023). As a result, workers in asbestos mines, production factories and industry sectors such as construction, telecommunications and automobiles are victims of the negative externalities associated with asbestos production and consumption (Moerman and van der Laan, 2011b;Wikeley, 1997;Bartrip, 1998;Ukwatte et al, 2023).…”

“…Although the role of accountability mechanisms such as accounting cannot be underestimated, the complexity of asbestos-related liabilities and the companies' tendency to use strategies to avoid adverse publicity may attenuate the role of accounting in this regard. The extant literature provides various examples of how laws and accounting create space for strategic bankruptcy (Moerman and van der Laan, 2011a;O'Connell and Webb, 2006;Moerman et al, 2014), human rights abuses (Yamin, 2008), social isolation (Kozlowski et al, 2014), environmental hazards (Lee et al, 2008) and the long-term liabilities of asbestos companies going unrecognised (Moerman and van der Laan, 2011a, 2013b, 2015b. Moerman and Van der Laan (2011b), for instance, document a lack of accountability for human rights conditioned by the transfer of accountability for indigenous welfare from the state to the private sector coupled with an environment that fostered the dominance of authoritarian attitudes in the community.…”