BHP Billiton: Ethics and Corporate Social Responsibility

This report explores the CSR strategies of BHP Billiton for developing a better image in the business environment along with attaining sustainable growth objectives. It covers key stakeholders, environment, human rights, governance, and philanthropy.

Running Head: Ethics and CSR
BHP billiton
Ethics and Corporate Social Responsibility

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Table of Contents
1. Introduction.........................................................................................................................................2
2. Corporate Social Responsibility...........................................................................................................2
Carroll’s Model of CSR.............................................................................................................................3
3. Key stakeholders..................................................................................................................................5
4. Environment........................................................................................................................................5
5. Human Rights......................................................................................................................................6
6. Governance.........................................................................................................................................6
7. Philanthropy........................................................................................................................................6
8. References...........................................................................................................................................8

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1. Introduction
BHP is a multinational metal, petroleum and mining company. It was formerly known as BHP Billiton
Limited and BHP Billiton Plc. It is an Anglo-Australian listed public company headquartered in
Melbourne, Victoria, Australia. The company was founded in 1985 and till 2017; company acquired the
leading position as the largest mining company in terms of market capitalisation. Along with this,
organization known as the third largest company in Australia in terms of revenues as their revenues
have been almost tripled in recent years. BHP Billiton was formed with the merger of Broken Hill
Proprietary Company Limited (BHP) and Anglo-Dutch Billiton plc in 2001. Every company irrelevance to
its nature, size and revenue requires adopting appropriate corporate social responsibility so that the
desired goals and objectives could be attained along with the sustainable growth in the competitive and
dynamic business environment. Apart from this, corporate social responsibilities are known as set of
strategies which falls under international private business self-regulation (BHP, 2018).
BHP’s corporate social responsibilities are effective enough in terms of developing and maintaining an
effective position and positive image amongst the target audience. The report will focus over the CSR
strategies of BHP Billiton for developing better image in the business environment along with attaining
sustainable growth objectives. Apart from this, the report will also focus over the key stakeholders of
the organization which will be affected by the organizational actions, strategies adopted by the
organization in relevance with the protecting the environment and initiative taken by the organization
along with collaborating with government and NGOs. Further, the report will focus over the strategies
adopted by BHP Billiton for securing the human rights. Various stakeholders are linked with the
operations of organization and in relevance with enhancing organizational image in the target market;
measures taken by the organization will be discussed in this report. Along with this, the report will also
focus over the appropriate strategies in relevance with the ethical management of people within
workplace. The last part of the report will discuss governance structure along with the company’s record
on philanthropy. These measures are majorly known for giving back to the society and these measures
help the organization to develop a positive image amongst the business environment.
2. Corporate Social Responsibility
Every company needs to understand their corporate social responsibilities and BHP Billiton has
described their corporate social responsibilities as fundamental subservice policy. Company states that
there is only one responsibility for every business which is utilisation of resources so that the
organizational activities could be performed in an appropriate manner along with gaining positive
results. BHP is a mining based company and CSR is increasing due to increasing awareness for the
unethical business behaviour. BHP’ response towards society and community is with a combination of
policies such as code of conduct, sustainable development policy and various other policies which are
designed as per the standards for performing the organizational operations (Schwartz, 2017).
BHP Billiton’ CSR policy covers following aspects:

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 Compulsory labour;
 Employees treatment;
 Wages and salaries of employees;
 Workplace health and safety;
 Freedom of association;
 Biofuels;
 Corruption and extortion;
 Discrimination; and
 Environmental aspects (Tai & Chuang, 2014).
BHP Billiton has adopted four communication channels for advertising and promoting its CSR policies on
its website:
 Reports are being used so that stakeholders could gain relevant information with regards to the
CSR information.
 BHP announces every update regarding the amendments in their CSR policies on their website’s
home page which are mainly designed for providing notification to the stakeholders.
 Multimedia sources are also being used so that CSR information could be shared amongst the
target audience, employees, customers as well as other stakeholders. Multimedia strategies
have various platforms through which attractive images and other techniques could be used for
enhancing the effectiveness of organizational effectiveness along with directing the media
techniques in an appropriate manner (Carroll, 2015).
 Apart from the above four strategies, feedback is also being used with the motive of taking
feedbacks from the stakeholders of the organization in relation with its strategies as well as to
analyse the areas for improvements. Feedback option is available over the website of BHP
Billiton where stakeholders could easily share their valuable feedback (Suliman, Al-Khatib &
Thomas, 2016).
Carroll’s Model of CSR
Carroll’s pyramid of CSR policies is segregated into four sections i.e. philanthropic, ethical, legal, and
economic. It is a pyramid of CSR and it is a simple framework mainly used by organizations for meeting
their social responsibilities. Main features of this pyramid are:
 CSR policies are built on the purpose of foundation of profit under which profit must come
first (Asrar-ul-Haq, Kuchinke & Iqbal, 2017).
 Further, these policies comply with the requirement of business in ensuring the compliance
of laws and regulations.
 The last part of the pyramid includes philanthropic options and before considering these
options, organization must consider its ethical duties.
Responsibilities displayed over the CSR pyramid includes following responsibilities:
Economic:

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 It is a responsibility of business for being profitable;
 Essential way to survive in the competitive and dynamic business environment along with
benefiting society in long run (Grayson & Hodges, 2017).
Legal:
 Responsibility for obeying regulation, rules and policies;
 Employment, Health and Safety and Competition are certain crucial rules and regulations which
are required to be followed.
Ethical:
 This aspect covers the responsibility to act morally and ethically;
 In relation with this responsibility, business is required to follow narrow requirements of the
laws and regulations;
 Treatment with suppliers, employees and stakeholders are certain crucial regulations under
ethical responsibility of BHP (Walker-Said & Kelly, 2015).
Philanthropic:
 This responsibility mainly includes elements for giving back to the society;
 This responsibility is bit optional but necessary in terms of establishing an effective and positive
image amongst the society;
 Charities, donations, etc. are certain important aspects of this responsibility.
Every company has different CSR policies and with the help of these policies, an organizational
effectiveness could easily be identified and analysed. However, BHP’s CSR mainly focus over social and
environmental concerns of their stakeholders. These majorly include political, environmental, economic,
legal and cultural factors. BHP’s CSR policy is mainly based on the various considerations such as health,
safety, community, environment, and various other socio-economic risks. Apart from this, stakeholder’s
feedback are considered as essential elements in relation with resolving the issues so that appropriate
measures could be adopted and implemented for improving organizational performance by improving
CSR policy (Mason & Simmons, 2014).
Wartick & Cochran (1985) have determined an evaluation model for analysing the effectiveness of
corporate social responsibility adopted by organizations. The primary rationale for this evaluation was
determining the corporate social performance of the firms in terms of ethical obligations and social
pressures. With the help of this, it was analysed that the policy includes the analysis of its performance
with regards to the UN Global Compact principle and the Global Reporting Initiative and these are
aligned with their operations. It has been analysed that corporate social responsibilities of BHP in an
annual meeting. In this annual meeting, Forum on Corporate Social Responsibility (FCR) brings
representatives of senior management and key members of non-governmental organizations and
community leaders together for providing their opinion in relevance with the corporate social
responsibilities of BHP. CSR activities of BHP are mainly developed for increasing the stakeholder’s

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interaction with the organization. Apart from this, other motive of CSR policy of BHP is to make effective
public relations and this has helped the organization to reduce the negative impacts over the core
business activities of organization along with enhancing the profitability of organization so that
appropriate and relevant benefits could be provided to the stakeholders (Ruggie, 2017).
3. Key stakeholders
Definition of stakeholders given by BHP Billiton Group is “key stakeholders for the organization are all
those people who are adversely or positively impacted by the operations, those people who have an
interest in the functionalities of organization as well as those people who have an influence from the
company’s operations (BHP, 2018). Prominent stakeholders identified for BHP Billiton Group are:
 CFMEU
 Isaac/Connors Catchment Landcare;
 Moranbah Traders Association;
 Emergency Long Term Accommodation Moranbah;
 Moranbah District & Support Services Assn Ltd;
 Dysart Community Support Group Inc.;
 Mackay Conservation Group;
 Mackay Whitsunday Regional Natural Resource Management;
 Mackay Regional Council for Social Development;
 Member for Charters Towers; and
 Member for Dawson
4. Environment
BHP Billiton’s CSR policy in relevance with environment is based on the robust identification, analysis
and control of material and other risks across the all areas of business i.e. from operation to closure,
exploration to development. Organization always focus over the engagement with stakeholders and
their perceptions in the decision making process. In order to protect environment, BHP Billiton has
adopted certain measures through which impact of their actions could easily be minimised (BHP, 2018).
Apart from this, organizational main motive is ensuring that suppliers operate in an appropriate manner
in relation with protecting environment along with complying with the laws and regulations of
environment. Environmental obligations for BHP Billiton include:
 Resources are not being extracted or explored within, adjacent to the boundaries of World
Heritage-listed properties.
 Boundaries attached or adjacent to the International Union for Conservation of Nature (IUCN)
are not explored for extraction of resources.
 Waste is not disposed into river or marine environment and not it is disposed into the land.

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5. Human Rights
In relation with strengthening the human rights, BHP has adopted appropriate measures for facilitating
effective management of people. BHP Billiton has adopted provision of safe and healthy working
facilities along with effective precautionary activities for protecting employees as well as their interest
within the organization. Organizational operations includes mining, extraction of natural resources, etc.,
thus, these safety measures includes work-related hazards. Advanced measures have been adopted by
the organization after five of the workers died in the Western Australia during performing organizational
operations due to unsafe working practices in 2008 to 2010.
In order to improvise the health and safety at workplace, organization provides regular training to its
employees and labour in relation with spreading awareness amongst them about reducing the health
and safety risk.
BHP’s code of conducts for the people working in organization are effective and it provides commitment
to work with integrity, respect and also provides appropriate guidance to the employees for enhancing
organizational performance. Apart from this, it has been observed that organization values its
employees’ value and take all measures through which employees’ needs could be fulfilled. This helps
organization to develop positive image amongst the employees (Cowen, Ferreri & Parker, 1987).
6. Governance
BHP Billiton is engaged in mining, extraction of petroleum, minerals, etc. and all these materials fall
under natural resources category. Natural resources are very scarce in nature and countries which have
appropriate value of natural resources have the potential to attract other countries and in relation with
maintaining the same amount of potential, it is the responsibility of organizations engaged in the
business of natural resources needs to execute their operations with good governance of natural
resources (BHP, 2018).
In relevance with the governing natural resources, organization has adopted Principles of Responsibility,
Openness, Accessibility and Fairness through which revenue transparency could easily be guided.
Company have also adopted various strategies along with developing intercalations with the
governments for building effective and ethical relationships which are constructive and open. Anti-
corruption compliance programs and various other laws such as compliance with competition laws have
also been adopted by the organization for enforcement against third parties in relation with developing
an anti-competitive manner towards the organization.
7. Philanthropy
Company execute appropriate functions to ensure that the society and communities are getting
appropriate benefit from the organizational operations. Initiatives such as supporting economic
development, investing in employment generation programs and providing training measures for the
society so that the people could be made self-sufficient to earn a respectable living standard.

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Organization also supports various programs through which government’s capacity could be increased
and local organizations could develop their transparent image. Creo Antofagasta Plan, Ideas Inc. and
World Class Supplier Program are certain programs and partnership with other organizations which
support society, and local organizations for increasing their capacity along with building capacity to
manage its international operations in an effective manner.
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8. References
Asrar-ul-Haq, M., Kuchinke, K.P. and Iqbal, A., 2017. The relationship between corporate social
responsibility, job satisfaction, and organizational commitment: Case of Pakistani higher
education. Journal of Cleaner Production, 142, pp.2352-2363.
BHP. (2018) Governance and transparency [Online]. Available from:
https://www.bhp.com/community/governance-and-transparency [Accessed 13th June 2018].
BHP. (2018) Our approach [Online]. Available from: https://www.bhp.com/community/our-
approach [Accessed 13th June 2018].
BHP. (2018) Stakeholders [Online]. Available from: https://www.bhp.com/-/media/bhp/regulatory-
information-media/coal/bhp-billiton-mitsubishi-alliance/caval-ridge/environmental-impact-
statement-eis-appendices/creisappe3stakeholders.pdf [Accessed 13th June 2018].
Carroll, A.B., 2015. Corporate social responsibility. Organizational dynamics, 44(2), pp.87-96.
Cowen, S.S., Ferreri, L.B. and Parker, L.D., 1987. The impact of corporate characteristics on social
responsibility disclosure: A typology and frequency-based analysis. Accounting, Organizations and
society, 12(2), pp.111-122.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate
social responsibility work for your business. Routledge.
Mason, C. and Simmons, J., 2014. Embedding corporate social responsibility in corporate
governance: A stakeholder systems approach. Journal of Business Ethics, 119(1), pp.77-86.
Ruggie, J.G., 2017. The theory and practice of learning networks: Corporate social responsibility and
the Global Compact. In Learning To Talk (pp. 32-42). Routledge.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Suliman, A.M., Al-Khatib, H.T. and Thomas, S.E., 2016. Corporate Social Responsibility. Corporate
Social Performance: Reflecting on the Past and Investing in the Future, p.15.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Walker-Said, C. and Kelly, J.D. eds., 2015. Corporate Social Responsibility?: Human Rights in the
New Global Economy. University of Chicago Press.
Wartick, S.L. and Cochran, P.L., 1985. The evolution of the corporate social performance
model. Academy of management review, 10(4), pp.758-769.