Over a third of ASX companies receive a fail for modern slavery statements

By Jon Bragg

December 22 2021
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Only six Australian companies received an A grade from Monash University for their modern slavery statements.

Over a third of ASX companies receive a fail for modern slavery statements

Thirty-six per cent of modern slavery statements submitted by ASX 300 companies have been given a fail grade by the Monash Centre for Financial Studies (MCFS).

Ninety-seven out of the 239 companies assessed were given an E or an F for modern slavery disclosure quality compared to just six companies that received an A grade.

“This is alarming as we are not confident that these companies fully understand their exposure to modern slavery risks in their operations and supply chains,” said Monash lead researcher Dr Nga Pham.

Nanosonics, Invocare, Fisher & Paykel Healthcare, WestGold Resources and IDP Education were among those companies singled out for having poor disclosure scores.

Bega Cheese, Woolworths, Fortescue Metals, Wesfarmers, Westpac and Ansell were the only companies to receive an A rating, while 12 companies received a B, 75 received a C, and 59 received a D.

MCFS expanded on its previous evaluation of ASX 100 companies and identified a “clear divide” between the modern slavery statements of Australia’s biggest companies and those towards the bottom of the ASX 300 that were typically given a lower rating.

“This may in part, if not largely, reflect the fact that superior resourcing of larger companies makes them more able to afford sophisticated processes to deal with their modern slavery risks,” MCFS said in its assessment.

Modern slavery includes serious exploitation such as servitude, human trafficking, forced labour, debt bondage and child labour and currently impacts 40.3 million victims globally with $354 billion at-risk products imported into G20 countries.

Dr Pham said that the aims of the Modern Slavery Act did not currently align with the actual efforts of companies to reduce modern slavery.

“While a handful of the nation’s biggest companies revealed exemplary efforts to address modern slavery in their inaugural statements, many others barely complied with the basic requirements of the law,” he said.

The Modern Slavery Act commenced operation in January 2019 and requires companies to report on the risks of modern slavery in their operations and supply chains.

Investment consultancy firm JANA recently found that super funds were also falling short in their efforts to reduce modern slavery.

A number of key recommendations for companies, investors and regulators were issued by Monash, including strengthening due diligence and remediation processes and ensuring company boards understand their obligations on modern slavery and human rights.

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