Corporate Governance and Sustainability Campaigns of BHP

Contents INTRODUCTION 1 Integrating CSR and Issue management 1 CSR and its associated theories 1 Issue management and its associated theories 2 Role of CSR within BHP 3 Role of CSR issue management for BHP 4 Consistency of company CSR communication message 5 Communication at BHP 6 CONCLUSION 7 REFERENCES 8 INTRODUCTION In the modern day business, corporate social responsibility has become one of the most important aspect. This is one of the most important aspects of corporate social responsibility (CSR) as it helps in improving the image of

COMMUNICATION

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EXECUTIVE SUMMARY
This report revolves around the BHP sustainability and corporate governance campaigns.
This also includes their CSR and issue management and how they are important in the
modern day firms. This report also highlights the issues that BHP is facing and the way in
which they have managed this with their operations. It also underlines the theories regarding
CSR and issue management. It also depicts the role of the CSR and Issue management at
BHP. In the last section of the report consistency in their corporate messaging has been listed
as well as the impact it has on the stakeholders. It also evaluates the communication at BHP.

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Contents
INTRODUCTION.................................................................................................................................1
Integrating CSR and Issue management................................................................................................1
CSR and its associated theories.........................................................................................................1
Issue management and its associated theories....................................................................................2
Role of CSR within BHP.......................................................................................................................3
Role of CSR issue management for BHP..............................................................................................4
Consistency of company corporate communication message...............................................................5
Communication at BHP.........................................................................................................................6
CONCLUSION.....................................................................................................................................7
REFERENCES......................................................................................................................................8
INTRODUCTION
In the modern day business, corporate social responsibility has become one of the most
important aspect. It has become an opportunity for the firm to partner with customers,
employees, government, communities, and stakeholders, shareholders to pursue and give
unmatchable outcomes (Fernando & Lawrence, 2014). It gives positive difference for the
individuals, society and the community. It not only helps in improving the image of the firm
but also ensures long term sustainability of the company. BHP (Broken Hill Proprietary
Company) is a one of the biggest mining and resource firm. It is having approximate global
revenue of US$38 Billion. It is headquartered in Australia and was established back in the
year 1885. It is having 60000 workers as well as contractors worldwide. This report
showcases the Issue management and CSR that is practiced in BHP. It also provides
information regarding the theories integrating issue management as well as CSR. It also
illustrates the role of CSR and Issue management in BHP. Consistency regarding company’s
corporate communication message has been discussed.

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Integrating CSR and Issue management
CSR and its associated theories
It is probably difficult to give exact definition of the CSR. But the general understanding of
CSR is that it is the act of the organisation that emphasize on both responsibility to interact
ethically with the surrounding as well as responsibility to make money. It is also sometimes
known as the responsibility of the organisation to share its profits with players that are
somehow affected by the business of the firm (Rodríguez Bolívar, Garde Sánchez & López
Hernández, 2015). Effective CSR is described as a firm proactively showing respect for the
interest of the community. In this, organisation tends to expand their focus beyond what is
called financial profit and consider the broader impact of firm on community.
There are several theories that surround CSR. First is the CSR itself; Using this theory
organisation interacts with bigger world as well as surrounding community. This theory
revolves around four obligations. They are economic, legal, ethical and philanthropic
responsibility. Second is “The Triple Bottom Line”. This is the theory that believes in
forming CSR dictating corporate leaders to tabulate bottom-line results not only in the
economic ways but also in the ways a firm affects in social realm as well as w.r.t the
environment (Louche & Idowu, 2017). This theory revolves around three aspects namely
economic, social and environmental. Third and most important theory is stakeholder theory
which was given by Edward Freeman. This theory states that those whose lives are affected
by the organisation has a right as well as obligation to participate in directing it.
Issue management and its associated theories
Issue management is an organisational communications process by which a firm finds the key
issues and hence prepare possible appropriate responses to these issues in advance (Epstein &
Buhovac, 2014). This is very essential in the modern day business environment where the
number of issues surrounding the company is large in numbers. This is done by the
organisation to limit the damage that an issue can make since all the preparations are done
before hand. There are three stage processes for IM that begins with finding latent and
emerging issues, secondly finding the impact of the issues and finally reacting to the issue.
For early detection of the issues an effective stakeholder research needs to be carried out.
This can help to potentially transform issue into an opportunity. It is understood to be long-
term process and often have influence formation to minimise the potential negative impact of
issues. It can be amplified using the normal suite of promotional marketing tools involving

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direct marketing, corporate advertising as well as public relations activities. The issue which
was not taken care at the early stage become a crisis. Crisis management is a part of issue
management.
CSR issue management is a critical term to modern day firms and have to be checked with a
proper attention (Bartlett & Devin, 2011). In order to make CSR issue management a firm
like BHP Billiton must understand stakeholders of firm with the help of timely research.
Checking the concerns, issues and needs is common to both IM and CSR. All these issues
need to be handled by the management before it becomes a headache for the company. Most
of the time it may results in failure in term of corporate reputation if issues related to CSR are
not taken care. On the other hand if it is executed in a well manner then it may enhance
corporate reputation.
Role of CSR within BHP
BHP has a big name in the market and is one of the biggest companies that are publicly listed
in the whole world (Kolk & Lenfant, 2010). With such a large name carrying at their back,
their responsibility towards the society has increased considerably. Understanding their
position in the market, they have put CSR in their spotlight. They have made a very
descriptive CSR plan as well as have developed extensive program for managing issues
related to the stakeholders. Various core CSR principles have been featured in BHP’s CSR
plan. It describes BHP’s value and purpose. Their stated value included respect, integrity,
sustainability and accountability in the form of putting safety and health at first priority. It
also included being environmentally responsible and supporting the community that are
affected by their business. Their other main feature of CSR is that, it has developed a Forum
on Corporate Responsibility apart from their Executive leadership teams which included
leaders from various environment, community and non-governmental organisations. This
forum was designed for challenging their thinking as well as providing BHP with multiple
CSR perspective. They produce their annual sustainability report.
This company has a name in the market in terms of communication they are using. A very
sound internal communication helps them in smoothening of the work process while the
corporate communication that they have adopted facilitated them in their CSR activities
(Mària & Devuyst, 2011). They have provided a platform where every stakeholder can raise
their ideas as well as suggest the problems they are facing. It is the role of the communication

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within BHP that it has been able to provide high quality services to their clients. In this
process they have designed and produced a range of banners that depicts culture,
conversation cards as well as culture case studies. All these have helped them in
communicating their values, code of business conduct and internal work culture to their
clients (Schutte, 2010). This platform also supported communities to talk with the
management so as to be the part of their business process and ensuring each other benefits.
They have made a framework where concerns related to each of their stakeholders have been
addressed. This also gets possible due to the communication mechanism they use. Their CSR
activities had a greater impact on their brand name. This can be understood by the fact that
this company has mines in the off-site places which is not so well developed. With their CSR
activities they have made their name in that area also. The most important thing that CSR
does is that it changes the perception of the consumers about the firm and hence helping in
increase of brand loyalty (Perrott, 2015).
Role of CSR issue management for BHP
There are various issues that are arising in the operations of the BHP. It is also present in
their CSR management (Cornish, 2013). Since there are large numbers of stakeholders
attached with the firm hence managing such issues becomes more important. They have also
made sure that they have an effective risk management system. This helped in making edge
in the market as they were capable of finding the issue in their CSR activities before hand and
hence making edge in the market. Their sustainability report addresses the issues that their
stakeholders are facing and hence they make plans for eliminating (B.H.P., 2017). It is due to
this reason that they have made edge in the market. This has helped them in narrating the
mind-set of the people. They have also accumulated all the issues in their community by
taking use of their media campaigns. The major thing about BHP is that they have gathered
all their stakeholders at common platform. This has helped them in identifying issues as well
as finding a better solution which directly or indirectly assists them in making a better
sustainability program.
Apart from this it is to be also made sure that there are various sections which their CSR
report has addressed. In this the role of their BHP foundation and Media is higher. Their
media includes ‘Think big’, other news report and releases. Their campaign of think big is a
landing page dedicated to BHP’s most recent corporate identity. It is a rebranding campaign

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which involved advertisements through TV and hence reinforcing their sustainability values
(Schmitt & Raisch, 2013).
It has also tasked with ensuring that appropriate links among HSEC and executive
remuneration performance. With their marketing and media management they have been able
to find out the issues they are facing and hence eliminating it (Garcia, Ribeiro, Oliveira
Roque, Ochoa‐Quintero & Laurance, 2017). This has helped them in making sure that they
have better image in the minds of the stakeholders. The appropriate images of the
stakeholders have helped them in gaining popularity in the mining region. It is due to this
rebranding campaign that they have been able to make their mark in the industry. Their
concerns towards the community development have helped them in gaining popularity in the
mining region.
Consistency of company corporate communication message
BHP’s messaging related to CSR issues as discussed is well-honed as would be expected
from any firm. Since it is to be understood that resources and the size of BHP has helped
them in gaining CSR objectives. In the last few years when the new CSR issues have
emerged they have been failing in achieving their CSR objectives (Hogan & Lodhia, 2011).
In the past few years they have faced challenges in their CSR campaigns. Their consistency
can be reviewed by following points:
 Overseas profits and royalty disputes: BHP has been in disputes with ATO and it is in
court for more than 11 years. This is due to the reason that BHP has a dual listing on
Australian as well as London stock exchange. Apart from this it also uses Singapore
as its global marketing hub. Apart from this both ATO and BHP disagrees on the
amount of tax that is payable with the ATO. Australian Tax Office tells that BHP is
routing profits through the lower taxed Singaporean entity approx. 0%. Queensland
government also had a fight with the firm on the same terms.
 Environmental Protection and employee safety: They have a long history towards
working for environment and the community. For example in 1994, the tailing dam at
the Ok Tedi river in PNG spilled mining waste into the nearby river which effected
more than 50000 individuals. BHP withdrew from the mine in 2002 after paying
millions of dollars to clean the environment and started a development fund. Apart
from this in Samarco mine in Brazil, 19 people died due to its collapse (The guardian,

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2015). BHP people were charged for the murder. In response to this BHP supported
the victims financially with the help of US$250 million for compensation and
remediation programs (Lannin, 2017). Apart from this in Queensland an employee
was killed while doing maintenance work.
 Fly-in-Fly-out and employing local community: There were examples which quoted
that they supported another town’s employees. The politician calls BHP as the “Worst
Corporate Citizen”. Another bad headline for BHP Corporate communication was
when the Australian financial review published a headline that stated “BHP
humiliated In Queensland coal ballot”. This article suggested that BHP is amateur in
negotiating skills as only 2% of their total workers voted for accepting a new BHP
employment agreement.
Communication at BHP
On the larger note it can be evaluated that BHP has given proper care to the communication
they follow in the firm. Public relations website, activities, corporate reports, videos and
advertisements of BHP is used by the firm for illustrating a high skilled and well-resourced
corporate communication team. In relation to their mining activities, they do not use
marketing campaigns and still it gives them maximum benefits (Pellegrino & Lodhia, 2012).
In BHP’s case they dress the windows in a very well manner. On the other hand some
researchers believe that their own employees believe that they have no intention of providing
communities with benefits that are long ranging. Stakeholders feels that cited firm has poor
reputation of balancing environmental, economic and social interests. At various platforms of
communication they have professionally portrayed CSR still the gaps exist in issue
management processes. Stakeholders see BHP on the back foot instead of being proactively
in control of major agenda items. Not all bad exist in its communication as they have done
well to address the issues through the help of representation that they give to each of their
stakeholders in the decision making (Floris, Grant & Cutcher, 2013).
RECOMMENDATION
BHP must focus on their communication especially related with improving communication
with communities regarding employment opportunities. It includes stakeholders and workers
in government, unions, the media, community leaders and suppliers. The communication
requirement requires being much more than a promotional exercise as showed in Think Big

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campaign. It must focus on long-term consultation and plan sharing. This activity requires
being a long-term IM agenda item and must address all the concerns the concerns related to
stakeholders. They must jointly work with Queensland Resources Council and mineral
council of Australia so as to bring sustainability in their work process.
Apart from this, different green marketing or green washing campaigns can help them in
making a positive impact on the minds of their important stakeholders. They have noticed the
fact that different stakeholders have different messages required for believing in them.
Different stakeholders concerns as well as the steps that they have taken have been
highlighted. While supporting community they must give proper care of the culture that is
present in the community. They should make changes in their rules and regulations in order
to make sure that they have support of the Australian Government in their operations. Their
program for sustainability development along with the values that they believe in is conveyed
to them by different mediums to their stakeholders.
Along with this, company must also focus on the safety of their employees and community.
Deaths at mine sites have a significant negative impact on their families and workforce.
Structural failures like tailing dams must be avoided by providing best of infrastructure. They
have made safety their priority as it is evident from their annual report. Safety must at the
highest priority in the IM agenda.
CONCLUSION
From the above report it can be concluded that CSR and Issue management has been the first
priority of BHP’s management. BHP’s communication team has designed their collateral to
position the firm in the most positive light possible. Their efforts towards corporate
messaging have been unique and strategy based. Apart from this they have not been able to
perform well in the aspect of triple bottom line. Despite of the efforts put by the different
communication platforms of BHP it has been seen that their stakeholders do not have believe
on them. The government and employees both considers its CSR program to be the worst.
Their IM has somehow improved reputation of the firm. There are many communication
flaws present in the company which they need to address.

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presentations/2017/170927_bhpsustainabilityroundtable.pdf
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Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in
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Fernando, S., & Lawrence, S. (2014). A theoretical framework for CSR practices: integrating
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Accounting Research, 10(1), 149-178.

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Garcia, L. C., Ribeiro, D. B., Oliveira Roque, F., Ochoa‐Quintero, J. M., & Laurance, W. F.
(2017). Brazil's worst mining disaster: corporations must be compelled to pay the
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