There is a dark side to corporate reporting mechanisms because they flood the market with information that isn’t necessarily useful.
Students from The Australian National University (ANU) College of Law have contributed to a landmark global report examining patterns of corporate reporting on the risks of modern slavery supply chains.
The report, “Beyond compliance in the hotel sector: A review of the UK Modern Slavery Act statements” is the first in a series of sector-specific studies involving ANU Law students. Their involvement is part of a collaborative research project led by Australian human rights organisation Walk Free (London), corporate environmental, social and governance data platform WikiRate (Berlin), the independent non-profit Business and Human Rights Resource Centre (BHRRC) (London), and the ANU College of Law.
Working in pairs during Semester 1 of 2019, 35 ANU Law students evaluated hotel-sector company statements to assess their compliance with the UK Modern Slavery Act 2015. Students peer-reviewed their evaluations using criteria jointly designed with BHRRC and WikiRate.
Three ANU students acknowledged in the report – Hayley Blyth, Carly-Ann Selby-James and Daniel Wei-En Kang – then undertook a “meta evaluation” of the data to identify patterns in corporate reporting including improvement over time, examples of best practice and systematic problems. The three earned law elective credit for this internship, jointly supervised by Walk Free’s London office and ANU College of Law Associate Dean (International), Associate Professor Jolyon Ford.
“There was an enormous amount of work that needed to be done to evaluate two things: firstly, the extent to which individual companies’ reports over time are becoming more detailed and useful to consumers who are supposed to act on these reports; and secondly, comparing companies’ reporting practices in terms of their quality and transparency,” said Dr Ford.
Associate Professor Jolyon Ford supervised more than 30 students for the research project. Photo: Tom Fearon/ANU
The report finds that just one in four hotel company statements meet the minimum requirements of the UK Modern Slavery Act, while two-thirds did not disclose any information on the risks workers may face in their direct operations and supply chains.
For ANU students, the project facilitated authentic, real-world learning about human rights risks in transnational supply chains.
“I approached Walk Free and raised that we had students interested in getting experience in mandatory reporting and disclosure compliance, as well as contributing towards solving a global problem,” said Dr Ford.
Australia followed the UK by adopting the Modern Slavery Act 2018 (Cth) to strengthen corporate reporting on the risks of forced labour and human trafficking in company operations and supply chains. However, Dr Ford noted that disclosure legislation alone isn’t a complete safeguard in our “data-saturated age”.
“The problem we face is that there are large volumes of information being reported, but it doesn’t necessarily help transparency efforts. In fact, there is a dark side to corporate reporting mechanisms because they flood the market with information that isn’t necessarily useful,” he said.
Following their research of hotels, ANU Law students are continuing to support Walk Free and WikiRate by turning their sights to another sector with far-reaching influence in the corporate world: finance.
“One way to really clamp down on the prevalence of modern slavery is through the finance sector. If banks or insurers put conditions on lending or insurance that require firms to address forced labour and human trafficking, that can really change corporate behaviour,” said Dr Ford.
The project will continue through 2020 with other sector-specific reports, with some students undertaking credit-bearing internships.