Even though modern slavery is outlawed in most countries, it is still a prevalent crime due to its hidden nature. Many products are discovered to be produced using forced labour and child labour in every country. Among them are everyday items, such as garments, fruits, vegetables, electronic devices, and toys, to name a few. There have been significant efforts by governments and civil societies to tackle the issues, especially in regard to requests for corporate engagement on this topic. Business relevance to modern slavery can be through their supply chain and even their operation. Until recently, businesses have not considered modern slavery as their broad agenda item, although this is changing. Several new legislative initiatives have been enacted to hold businesses responsible for their action, and the Australian Modern Slavery Act is one of the latest legislations. It is essential to understand how businesses, especially leading companies in human rights, respond to modern slavery from the operations and supply chain perspective under the Act’s requirements.
The aim of the study is to examine how leading companies respond to modern slavery under the provisions of the Australian Modern Slavery Act. This study explores what drives companies to respond to modern slavery, what their responses are, and how companies report the responses under the requirements of the legislation. Secondary data based on the modern slavery statements of three companies with high rankings in the human rights benchmark from the extractives sector are investigated under the lens of institutional theory and thematic analysis. Through this study, it is revealed that companies are having a homogenous approach towards preventing modern slavery in response to drivers identified by institutionalism: coercive pressure from the regulatory trends of legislations, investors, unions, and NGOs, normative pressure from international protocols, subject experts, and mimetic pressure from multi-stakeholder initiatives. These drivers influence companies to make changes to their structure and governance, and most importantly. Firms are found to establish or change their practices through the implementation of the risk assessment, remediation, monitoring, and review activities to ensure the effectiveness of the whole procedure. These are the initial steps businesses have taken to respond to a challenging yet necessary issue of modern slavery in their operations and supply chain while satisfying the Australian MSA’s disclosure requirements.