CSR Policy At BHP Billiton

CSR insurance At BHP BillitonAfter thorough deliberation of the research, the analysis indicates that BHP boasts of a good CSR report. However the activities that feature in this report atomic number 18 apocryphal CSR practices and there is a growing gap between BHPs rhetoric and the reality of its operations.The report also evaluates why these contr all oversial activities have not had a prodigious effect on BHPs corporate image. In particular, outlining BHPs physical exertion of its CSR Policy as a Public Relations (PR) tool to plow its reputation.Table of Contents admissionBHP Billiton was formed in 2001 through the merger of the BHP (a natural resource company) and Billiton (mining company). It now operates in 25 countries, employs approximately 41,000 people and has a market value of over 250 one thousand thousand (BHP Billiton, Our transaction n.d.).Milton Friedman describes CSR as a fundamentally subversive doctrine and states that there is one and only one genial res ponsibility of concern which is to friendly occasion its resources and engage in activities designed to amplify its profits so as long as it stays within the rules of the game, which is to say, engages in open and free aspiration without deception or fraud (Hamilton Fitzgerald 2005).While many leading companies argon genuinely moving in this direction, others are simply seeking a relatively short-term improved public perception of their operations.Increasingly CSR has become a major concern in the global mining economy because of the heightened awareness of unethical business behaviour. roughly recent examples of this include the devastating oil spill in 2010 by British Petroleum (BP) in the Gulf of Mexico (BP, Gulf of Mexico redress n.d.).Price Waterhouse Coopers identify a number of challenges BHP and many other natural resource companies face in todays surroundimproving safety and reducing the environmental impactimproving performance and operational effectivenessmanagin g riskcomplying with regulatory reporting requirements and get acrossing sustainability issues. (Price Waterhouse Coopers, n.d)BHP BillitonBHP responds to community expectations with a combination of policys including a code of conduct, sustainable growing policy and many others designed to set the standard of which it conducts its business. At the forefront of this approach stands BHPs CSR Policy.CSR PolicyBHP define its CSR Policy as a requirement to address risks, explicitly stating it has zero tolerance for the misconduct ofchild labour,forced or compulsory labour,treatment of employees,living wages,workplace health and safety,freedom of association,world hereditary pattern sites and cling toed areas,biofuels,corruption, bribery and extortion,compliance with laws,discrimination,indigenous rights andthe environment (BHP Billiton, Corporate amicable responsibility requirements n.d).Communication and AdvertisementBHP uses four communication channels on its website to publicise its CSR Policyreports, which reference CSR information for stakeholders,announcements, available on its home page which are designed to provide updates on their CSR performance and activities,multimedia, the website also offers effective use of multimedia to enhance their CSR information through relevant images, interviews and other media,feedback, BHP invites stakeholders to provide feedback via their website by submitting online questions (BHP Billiton, Our business n.d.).Uniqueness of CSR PolicyThe level of CSR differs from each company, however later on comparing BHP with Shell and British Petroleum, two of its natural resource competitors it is clear all three competitors are trying to get value from their CSR reporting by focusing on the environmental and social concerns of their stakeholders. This includes such things as political, economic, environmental, social, legal and cultural evetors.Drivers of CSR(Benn Dunphy 2007) argue that corporate social responsibility may i n fact be the consequence of profitability rather than the cause. So the question stands, is BHPs CSR Policy driven by true concern for society, or is it another way to increase corporate profit?BHP argue that its decision to report on Corporate Social Responsibility is based onconsideration of the key health, safety, environment, community and socio-economic risks of our businessconsideration of stakeholder feedback and commentary with regards to issues of secularitya desire to continually improve reporting standardsEvidence of Commitment to CSRBHP uses a number of methods to ensure it complies with its CSR Policy. This includes notwithstanding is not limited toconducting a progress assessment on its performance in relation to the UN Global Compact principle and the Global Reporting Initiative which are designed to align their operations.holding an annual Forum on Corporate Responsibility (FCR) that brings together representatives of senior management and key non-government organ isations and community opinion leaders to discuss and debate social and environmental matters relevant to BHP.Investing in community projects and recording its community contributions spend against the UN Millennium Development Goals (MDG), this presents a ordered framework for measuring tangible progress.The reporting methods noted above are publically available on BHPs website, this is proof that BHP acknowledges the challenges in the nature of its operations.AssuranceBHP licensed the URS in 2006 to provide an independent review of its Sustainability Report (URS Australia, n.d). The results indicated that BHPs Sustainability Report fairly represents the health and safety, environment, community and socio-economic impacts of its operations.Rhetoric or RealityBHP Billiton has argued in theory that it abides by its strong corporate responsibility however there is a growing gap between its rhetoric and the reality of its activities.The following cases are examples of challenges faced by BHPs operations when policy does not equate to practiceNatural Resource IndustryBHPs core business is to provide natural resources, an industry which has had increased social pressures to act responsibly. It quite a little be argued that BHPs CSR Policy was produced as a public relations tool to mitigate the negative impacts of its core business activities and also to maximize profits for its stakeholders. The real test here is does BHP act ethically when it has the opportunity to make a profit (Pratt Nikolova 2006). This was demonstrated most recently when BHP advised of its intentions to ply the Chinese energy market with an additional 10,500 tonnes of uranium annually. The Australian Conservation Foundation (ACF) warn that once the uranium enters China it will disappear from the safeguards radar, this could potentially lead to devastating outcomes such as nuclear proliferation. Clearly BHP has a greater CSR here but unfortunately the $80 million in tax revenue was more im portant than its public image or the health of the wider community.Economic InfluenceBHPs CSR Policy specifically prohibits the influence of government officials to support the company practices. Most recently in 2010 the Australian Federal Government proposed a super profit mining tax estimating to have made $100 billion in revenue between 2012-13 and 2020-21. However the government was subsequently influenced by three major mining companies including BHP, who explicitly opposed the tax proposal, threatening Australias investment capital of the United States (The mining company that cried poor 16 February 2011). As a result the Prime Minister slashed 30 per cent of the tax which means the Australian taxpayers will take a forecast revenue hit of $60 billion over a decade while BHP reports over $10 billion profit for the second half of 2010.Corruption, Bribery and ExtortionClarke (2007) argues that the debate concerning the true extent of the accountability and responsibility contin ues to the present day. BHP states thatAll contract related transactions and payments, including those in connection with gifts and hospitality and other expenditures, must be accurately recorded in reasonable detail in the books and records of any supplier who works on behalf of BHP Billiton (BHP Bilton, Corporate social responsibility requirements).However in April 2010 BHP was investigated by the United States Securities and Exchange Commission after Cambodias Minister for Water Resources told the countrys National Assembly that BHP Billiton had gainful US$2.5 million in unofficial payments, to the government, to secure a mining concession (An Alternative Annual Report 2010). BHP has not revealed what over payment was for but controversially the countries BHP operates in have poor records on corruptions and are desperately in need of foreign investment.Protection of the EnvironmentBHP states thatProtection of the Environment The supplier must operate in a manner that is protect ive of the environment and comply with all applicable environmental laws, regulations and standards, environmental permitting and re porting (BHP Bilton, Corporate social responsibility requirements).However in 1996 it was sued by Slater and Gordon for one of worlds most devastating environmental disasters when it discharged over one billion tonnes of tailings and waste material into the source of the Ok Tedi River in Papua New Guinea (PNG). This caused more than 3,000 square kilometres of deforestation, turned the tropical rain forests into savannahs, caused 95% decline in fish existence (An Alternative Annual Report 2010).Workplace Health and SafetyBHP states that it must ensurethe provision of safe and healthy working facilities and appropriate precautionary measures to protect employees from work-related hazards and anticipated dangers in the workplace (BHP Billiton, Corporate social responsibility requirements).However five of its workers in the Western Australia operations di ed in fatal injuries due to unsafe working practices from 2008-2010 (An Alternative Annual Report 2010).BHP also states that it must ensureworkers receive regular and recorded health and safety training (BHP Billiton, Corporate social responsibility requirements).However in its South African operations employees were not informed about the health and safety risks of handling a chemical piece called manganese which causes illnesses such as Parkinsons Disease (An Alternative Annual Report 2010).Effectiveness of BHPs CSR PolicyDespite its bad history BHP has usually maintained a good CSR reputation. In fact the Australian Centre for Corporate Social Responsibility went so far as to list BHP in the 2010/11 carrousel 20 Australian Listed Companies based on its advanced CSR capabilities (State of CSR in Australia Annual Review 2010/11).The real question here is has BHP earned its right to good CSR reputation?History of Public RelationsIt is a well-known fact that many companies spend a lot of money on Public Relations (PR) to manage their reputation.In the late 1990s BHP employed the Ecos Corp, an environmental PR company founded by former Greenpeace International Executive Director Paul Gilding to suspensor repair its reputation after the OK Tedi Mine disaster in PNG (Ecos 2007).The public relations was aimed at countering the bad publicity through campaigns including advertisements in business publications such as the Financial Review and Australian TV. BHP also offered legal support to the PNG Government for the development of new environmental laws. Unfortunately for BHP, this resulted in an even bigger public outcry, as the company was accused of interfering with its legislation in an effort to protect its own interests (Quester et al 2001).EvaluationThe evaluation of BHPs CSR Policy resides in the adequacy of its reporting standards.Clarke (2007) argues that in order for a company to receive creditability they must disclose their processes, procedures and assumptions in reporting.It can be argued that BHP has intentionally elect not to transparently report on the cases as mentioned in this report, for the simple fact that it leaves it open to more risk and public scrutiny. However this lack of credit effectively contradicts its stewardship and attests its reliability.Increased public awareness demands that CSR reporting will no longer be used as a public relations tool. This can be seen, as mentioned previously, through the introduction of the Australian Federal Government Mining Tax and other legislation such as the UK Bribery Act, both(prenominal) will inevitably have a significant impact on the way BHP conducts its business. Additionally important are organisations such as BHP Billiton Watch, which was formed to push-down store with the prominent concerns of communities and organisations across the world regarding BHPs activities (BHP Billiton Watch n.d).ConclusionIt is inevitable that organisations such as BHP, in controversial industries such as mining, are never tone ending to be holistically accepted. However, todays forward thinking generation recognise the impacts and challenges of CSR including safety, environmental, community and socio-economic issues.Stakeholders including shareholders demand greater accountability than simply financial returns. Therefore verification and transparency are key to BHPs success and the credibility of its CSR.BHP boasts of a strong reputation and has an opportunity and increased responsibility to enhance and contribute to a safe renewable environment and set an example for other companies alike.