CSR Policy At BHP Billiton

CSR Policy At BHP BillitonAfter thorough deliberation of the research, the summary indicates that BHP boasts of a good CSR report card. However the activities that feature in this report argon questionable CSR practices and there is a growing gap in the midst of BHPs rhetoric and the reality of its trading operations.The report as well as evaluates why these contr oversial activities have non had a significant effect on BHPs bodily image. In particular, outlining BHPs hire of its CSR Policy as a Public Relations (PR) tool to parcel out its constitution.Table of ContentsIntroductionBHP Billiton was formed in 2001 with the conjugation of the BHP (a internal resource company) and Billiton (digging company). It now operates in 25 countries, employs approximately 41,000 race and has a market value of over 250 million (BHP Billiton, Our business n.d.).Milton Friedman describes CSR as a fundamentally subversive doctrine and states that there is unity and exactly one well- disposed office of business which is to use its resources and engage in activities intentional to increase its meshworks so as long as it stays within the rules of the game, which is to say, engages in open and free competition without conjury or fraud (Hamilton Fitzgerald 2005).While umteen leading companies are very moving in this direction, others are simply seeking a relatively short-term improved earthly concern perception of their operations.Increasingly CSR has become a study concern in the global mining economy because of the heightened cognisance of unethical business behaviour. Most recent examples of this include the devastating crude oil spill in 2010 by British Petroleum (BP) in the disjunction of Mexico (BP, Gulf of Mexico Restoration n.d.).Price Waterhouse Coopers identify a number of challenges BHP and many other natural resource companies face in todays surroundings amend base hitty and reducing the environmental impactimproving performance and wor king(a) soundnessmanaging riskcomplying with regulatory inform requirements andaddressing sustainability issues. (Price Waterhouse Coopers, n.d)BHP BillitonBHP responds to alliance expectations with a combine of policys including a code of conduct, sustainable development 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 sterilize its CSR Policy as a requirement to address risks, explicitly stating it has nobody tolerance for the misconduct ofchild labour,forced or compulsory labour, discourse of employees,living wages,piece of work health and safety,freedom of association,world heritage sites and defend areas,biofuels,corruption, bribery and extortion,compliance with laws,discrimination,indigenous rights andthe environment (BHP Billiton, incarnate societal debt instrument requirements n.d).Communication and AdvertisementBHP uses four communication channels on its web site to spread abroad its CSR Policyreports, which reference CSR information for stakeholders,announcements, available on its home knave 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(prenominal) company, however after(prenominal) comparing BHP with Shell and British Petroleum, two of its natural resource competitors it is clear all three competitors are trying to corroborate value from their CSR coverage by focusing on the environmental and hearty concerns of their stakeholders. This includes such things as political, economic, environmental, social, legal and cultural factors.Drivers of CSR(Benn Dunphy 2007) argue that corporate social function may in fact be the consequence of favorableness rather than the cause. So the question stands, is BHPs CSR Policy driven by on-key concern for society, or is it another way to increase corporate profit?BHP argue that its decision to report on incorporate Social function is based on reflexion of the key health, safety, environment, community and socio-economic risks of our businessconsideration of stakeholder feedback and commentary with regards to issues of materialitya 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 but is not limited toconducting a progress assessment on its performance in relation to the UN Global Compact principle and the Global field of studying world-class 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 organisations and community opinion leaders to discuss and contestation 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 consistent framework for measuring tangible progress.The reporting methods noted above are manally available on BHPs website, this is verification that BHP acknowledges the challenges in the nature of its operations.AssuranceBHP commissioned the URS in 2006 to provide an free-living review of its Sustainability Report (URS Australia, n.d). The chairs indicated that BHPs Sustainability Report fairly represents the health and safety, environment, community and socio-economic impacts of its operations. palaver 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 manufacturingBHPs core business is to provide natural resources, an industry which has had increased social pressures to act responsibly. It can be argued that BHPs CSR Policy was produced as a globe traffic tool to mitigate the negative impacts of its core business activities and also to maximise 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 deep when BHP advised of its intentions to supply the Chinese energy market with an additional 10,500 tonnes of uracil 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 b ut unfortunately the $80 million in taxation was more important than its public image or the health of the wider community.Economic InfluenceBHPs CSR Policy specifically prohibits the influence of government officials to incite the company practices. Most recently in 2010 the Australian Federal Government proposed a super profit mining tax estimating to have made $100 billion in r veritable(a)ue 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 slap-up (The mining company that cried poor 16 February 2011). As a result the Prime Minister slashed 30 per cent of the tax which gist the Australian taxpayers will take a forecast revenue eruption 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 e xtent of the accountability and responsibility continues to the present day. BHP states thatAll proclamation related transactions and payments, including those in connection with gifts and hospitality and other expenditures, mustiness 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 paid US$2.5 million in unofficial payments, to the government, to secure a mining concession (An resource 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 Enviro nment The supplier must operate in a manner that is protective 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 fowl (PNG). This caused more than 3,000 square kilometres of deforestation, turned the tropical rain forests into savannahs, caused 95% slide down in fish population (An alternative Annual Report 2010). work Health and SafetyBHP states that it must ensurethe provision of safe and goodly 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).H owever five of its workers in the westward Australia operations died in fatal injuries due to unsafe working practices from 2008-2010 (An Alternative Annual Report 2010).BHP also states that it must ensureworkers receive secureness and recorded health and safety training (BHP Billiton, Corporate social responsibility requirements).However in its South African operations employees were not sure about the health and safety risks of handling a chemical instalment 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 retained a good CSR reputation. In fact the Australian Centre for Corporate Social Responsibility went so far as to list BHP in the 2010/11 Top 20 Australian Listed Companies based on its march on CSR capabilities (State of CSR in Australia Annual Review 2010/11).The real question here is has BHP earn its right to good CSR reputation?History of Pub lic RelationsIt is a well-known fact that many companies spend a lot of currency on Public Relations (PR) to manage their reputation.In the late nineties BHP employed the Ecos Corp, an environmental PR company founded by former Greenpeace internationalist Executive Director Paul Gilding to help 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 formula in an effort to protect its own interests (Quester et al 2001).EvaluationThe military rank of BHPs CSR Policy resides in the adequacy of its reporting standards.Clarke (2007) argues that in order for a company to re ceive creditability they must disclose their processes, procedures and assumptions in reporting.It can be argued that BHP has intentionally chosen 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 acknowledgement effectively contradicts its stewardship and attests its reliability.Increased public sentience gets 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 will inevitably have a significant impact on the way BHP conducts its business. to boot important are organisations such as BHP Billiton Watch, which was formed to deal with the fully grown concerns of communities and organisations across the world regarding BHPs activities (BHP Billiton Watch n.d).ConclusionIt is inevi table that organisations such as BHP, in controversial industries such as mining, are never expiry 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 enhancer 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.