South African environmental reporting : a test of the legitimacy theory.
Date
2014-03-03
Authors
Loate, Boitumelo
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Abstract
This study examines the corporate environmental disclosures of South African mining
organisations from 2009 to 2011 to establish the level and type of these environmental
disclosures. An examination is made of mining organisations’ media articles to establish
whether their environmental disclosures can be explained by the concept of an implicit social
contract. Legitimacy theory posits that an organisation needs to be aware of all their
stakeholders’ needs and needs to portray themselves as acting in line with stakeholder values
and norms to ensure their continued success.
Although environmental reporting has been on the strategic agenda of several organisations
disclosures in South Africa, only a minority of research papers have explored how an
environmental crisis may impact upon the provision of such disclosures. This paper will help
fill this void by performing an examination of management communication strategies,
organisational actions and the change in the level of environmental disclosures contained in
the mining organisations’ annual report as a result of the acid mine drainage incident that
occurred in late 2009.
Media articles during and after the mining organisations’ legitimacy had been challenged
were examined using Suchman’s (1995) three types of legitimacy: pragmatic, cognitive and
moral to identify the type of legitimacy used in the context of a developing country.
Regarding the annual report disclosures and media articles’ communication strategies, results
were found to be consistent with the legitimacy theory. They indicate that South African
mining organisations use mostly the repair strategy in attempting to change the perceptions of
the public after an environmental crisis. The strategies utilised by the mining industry in the
media disclosures are expected of an organisation in crisis. The mining industry used,
primarily, repair strategies in interacting with its relevant stakeholders. The study’s finding
that maintenance strategies were the least of the three types of legitimacies is consistent with
an industry in crisis.
Even though the mining industry primarily used the repair legitimisation tactic, the range of
legitimacy techniques has proved to be a finding worth discussing. The mining industry did
not completely avoid the event i.e. use disclaimer strategies. Overall, the mining
organisations reacted to the heighted institutional pressures by increasing their environmental
disclosures and disclosed environmental information that conformed to stakeholders’ values
and persuaded society to view acid mine drainage as less problematic than it was reported to
be.
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Keywords
Social contract, Environmental disclosures, Organisational legitimacy