Corporate Social Responsibility in Extractive Industries

This assignment delves into the crucial topic of Corporate Social Responsibility (CSR) within the context of extractive industries. It requires students to analyze various aspects of CSR implementation in these sectors, considering experiences from developing countries, sustainability indicators used by mining companies, and potential issues like greenwashing. The analysis should also touch upon the link between corporate disclosure, legitimacy, and climate change accounting within the industry.

Running head: CORPORATE COMMUNICATIONS
CORPORATE COMMUNICATIONS
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Executive Summary
The report deals with an Australian mining company BHP Billiton Limited and its Corporate
Social Responsibilities. It looks into the overview of CSR how it helps in building the image of a
company and why the organizations should refrain from greenwashing. It also reflects on how
the company should let the stakeholders know of the exact CSR activities that it does. The report
also contains how BHP can use few other CSR activities to promote themselves.

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Table of Contents
Introduction..........................................................................................................................3
Integrating CSR and Issues Management............................................................................3
Issue Management...........................................................................................................4
CSR within the organization................................................................................................5
Role of CSR Issue Management..........................................................................................7
Communicating to stake holders.........................................................................................8
The overall communication...............................................................................................11
Conclusion.........................................................................................................................12
References:........................................................................................................................13

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Introduction
BHP Billiton is a multinational Anglo-Australian metals, mining and petroleum listed
public organization which has its headquarters in Melbourne and is the chosen company for the
report. It was founded in the year 1885 and in 2015 it became the world’s biggest mining
organization considering market values (Ore, 2014). BHP Billiton was formed in the year 2001
merging two companies namely the Australian Broken Hill Proprietary Company Limited (BHP)
and the Anglo–Dutch Billiton plc. Bilton is on the list of 90 organizations which market and
extract fossil fuel and is responsible for two thirds of the worlds greenhouse gas. It is the 19th
biggest polluter in the world. This essay looks into how the company plans its Corporate Social
`Responsibility and executes it so as to minimize the damage done to the environment. It also
shows how the media plays an important role in promoting the CSR activities of the
organization.
Integrating CSR and Issues Management
Corporate Social Responsibility is a type of self-regulation for corporate which have been
incorporated in a business model. These are a company’s initiatives which help them asses and
shoulder responsibilities for the organization’s social and environmental well being. These
efforts generally go beyond what environmental groups and protection regulators try to do
(Crane, Matten & Spence, 2013). CSR involves spending money without any financial benefit to
the company in the short term . It instead is used to promote positive environmental and social
changes.

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Huge companies especially the ones in heavy industry can have adverse effects on the
environment. Spilling of oil in seas and oceans are the most common examples but industries
such as mining, agriculture, chemical making can lead to irreparable damage to the environment.
Sometimes these can lead to climate change also. While some of the everyday necessities like
electricity and transportation are due to these industries there many others who have just grabbed
a lot of money from the environment’s decay (Yakovleva, 2017).
On many occasions harm to men and environment happen simultaneously. There were
groups in the Amazon rainforest who have been completely wiped off for gold mining, oil and
gas drilling and to generate hydroelectric power.
In light of these cases companies have now started to embrace a culture which balances
the need for profit with a commitment to maintaining and preserving nature. In short the funds
which inflict damage to environment and society also allows the companies to have positive
changes on the environment. These companies can also use their power to pressure governments
and other organizations to use resources ethically (Savitz, 2013).
Many organizations today are therefore using the tagline of ‘triple bottom line: social,
economic and environmental- or simply ‘people, planet and profit” to focus on the importance of
preserving the environment (Gimenez, Sierra & Rodon, 2012).
Issue Management
In a project’s life cycle there are always unwanted and unexpected problems which pop
up from time to time. When these things crop up the company has to deal with those otherwise
they can damage the project’s outcome. Most of the issues faced in a project are more or less
unexpected and ideally there should be team to address it as soon as possible so that the

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deadlines and objectives can be met (Cho & Kim, 2012). Problems such as shortage of staff,
suppliers, materials and technical failures can all have an adverse impact on the project if they
remain unresolved. Then again issues and risks are not quite the same thing. Issues cannot be
predicted, like for example finding a replacement for a staff who has left the company is an
identifiable risk (Wu, Chen & Olson, 2014). On the other hand however, a staff is involved in an
accident and is hospitalized for a month that becomes an issue.
In recent times supply chains are quite the central focus in Corporate Social
Responsibilities. As part of it the company might take in a lot of people to diversify and
empower its workforce. They might also pay generous amounts for maternity and paternity
leaves or accidental leaves. These however, cannot change the fact that the raw materials for
these industries are purchased from places which use child labour.
For example, the diamond industry has received a lot of flak from injustices in its supply
chain. ‘Conflict Diamonds’ are usually plucked from places ravaged by war where groups
usually fund their campaigns through excavating these precious stones often using child labour
from areas such as Angola, Zimbabwe and Ivory Coast.
CSR within the organization
BHP states its CSR Policy as a requirement for addressing risks (Hilson, 2012). It also
states that it has zero tolerance for the use of child labour, forced or compulsory labour,
mistreatment of employees, living wages, workplace health and safety, freedom of association,
world heritage sites and protected areas, biofuels, corruption, bribery and extortion, compliance
with laws, discrimination, indigenous rights and the environment. BHP also voluntarily gives
away one percent of its profit in programs for communities. It has made 241.7 million of

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community donations which includes a 100 million dollar contribution towards BHP Billiton
charity.
CSR does a lot of things for the company and therefore organizations nowadays want to
spend on these activities so that they can get some mileage out of it. First of all it improves
public image of the organization. They can do it by supporting non-profits by giving steady
partnerships, monetary donations, volunteerism, in-kind donations of services and products. By
means of publicity and general awareness organizations increase their chances of becoming
favourable in the eyes of the buyers.
CSR also increases media coverage of a company which in turn helps in highlighting the
work that the company is doing. Media usually pick up the good things that a company does and
highlights them in their space. However, even negative community impacts are highlighted by
the media which in turn affects the company adversely.
CSR also helps in boosting employee engagement. When organizations try and improve
their communities through corporate giving programs they are likely to retain and attract
workers. These activities also help retain and attract investors. When a company invests in a
CSR activity it shows the investors that it is not just bent on making money.
The Communication activities which should be adhered to by the company is that they
should always remember that negative reports spread faster than positive ones which is risk
while communicating CSR. However, many believe that companies who do not exaggerate or
hide their activities have nothing to fear. Firstly, there is nothing to be afraid of the media
(Zyglidopoulos et al., 2012). There are managers who believe that media is always out to get
them and are only interested in bad news. However, that is not the case. Most managers say that

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the media report their stories correctly. Also big issues need to be tackled head on. The company
should respond to its stake holders and see what they are asking for. Communicating to them
what they are interested in will help in eradicating ‘greenwashing’(Nyilasy, Gangadharbatla &
Paladino, 2014).
The organization should also never represent itself as a picture-perfect one. Stakeholders
can get very skeptical if everything looks rosy from the top. Corporate communications should
therefore present CSR activities integrating them into the organization’s business and not show
them as the company’s sole purpose.
Communicating CSR should not only be the job of the corporate communications branch
but also of the whole organization. While the communication department can only tell the story
of the CSR to the world, the rest of the company must make the world believe in the message.
There are always CSR issues which a company needs to manage . First is child labour. It
is clearly stated in the company’s website that children below the age of 15 cannot work in the
organization. Therefore they need to see that it is not violated through out all the plants that they
have. Also, there should not be any forced or compulsory labour which violates the essential
freedom of an individual.
Role of CSR Issue Management
BHP Billiton can face CSR issues in terms of customer or community conviction.
Moreover, the customers and community are less likely to believe on the good benefits of CSR
issues, if it is not associated with instant affect. The CSR issue related to customer and
community conviction can actually hamper the reputation the brand in the market. On the other
hand, in CSR practice, BHP Billiton is more likely to share all kinds of information among the

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stakeholders, whether it is positive or negative. In such situation, the reputation of the
organization is vulnerable to breakthrough, if any negative information about the business in
communicated among the stakeholders. Therefore, the organization should immediately manage
the CSR issues related to leak out of negative information. Furthermore, BHP Billiton often fails
in meeting the expected CSR needs of the customers, community and other stakeholders. The
reputation of the organization can also be hampered, when the CSR programs cannot meet the
actual expectation of the stakeholders.
The organization can effectively manage the media and internet for managing the CSR
issues. Moreover, role of CSR issues management is to protect the reputation of the organization
in the market. Moreover, the organization can know about the trends and wants of their
stakeholders towards knowing their CSR expectation. In this way, the organization will be better
able to meet the CSR needs of the stakeholders. On the other hand, strong media relation will
less spread the negative information of the organization, which can protect the image and
reputation of the customers. In this way, strong media relation in CSR issue management will
help the organization in making sustainable image and reputation in the market.
Communicating to stake holders
A very key issue in communicating CSR initiatives to stake holders is to make these
initiatives sound as they matter. This should be highlighted in such a way so as to see that its not
just another part of the company. However, in highlighting these events, that is if they are done
very aggressively companies face the risk of getting opposite of the desired result. This is known
as a boomerang response. Given the common mass’s distrust in major organizations it is not
unreal for a company to think that the stakeholders will perceive those attempts to highlight CSR

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as ‘greenwashing’.Greenwashing in its truest sense refers to using environment to highlight that
a company’s products and policies are eco-friendly. In the broader sense greenwashing describes
PR which usually aims at giving false impression that an organization is whole heartedly
interested and doing CSR (Walker & Wan, 2012). There are also concerns about companies
which are genuinely focused in CSR can be taken cynically by the stakeholders. This is because
stakeholders do not get to witness the CSR in front and have to rely on the company’s own
reporting. A key issue for managers, is to minimize stakeholders fear and communicate CSR
without being accused of greenwashing (Vries et al., 2015).
Therefore communication to stake holders should be very clear and loud. The extent of
the CSR activities which are highlighted should be put to the stakeholders in a way that they look
believable. Suppose if a company is sponsoring the education of 600 underprivileged kids in
Africa it should not resort to stating that it is helping children all over. Another example can be
the company spends on biotoilets in remote areas, then it should obviously state exactly the
number of toilets it has created so far in those places. The company should also be careful about
highlighting itself in front of those stake holders (Costa & Menichini, 2013). The organization
should not adhere to window dressing showing itself to be something it is not. The company
should always clearly mention, its history, its funding, and the state in which it is now.
A company with good corporate social responsibilities has these attributes:
Understanding of key environmental and social issues which are of prime concern to the stake
holders. Accepting the necessity of communicating CSR without bragging. Understanding how
CSR adds a lot of value to the goodwill of the company. Also there are a few essential ways to
communicating CSR: Cutting out the PR fluff and keeping it accurate and factual. To ensure

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message sent to the stake holders are consistent. Using data to state what the company has
achieved. Explaining how action in the company can be of value to the organization.
BHP Billiton has also adopted a corporate governance framework that is designed to
ensure:
Timely and accurate information regarding BHP Billiton, including its financial situation,
performance, ownership.
Strategies, activities and governance is provided equally to all shareholders and market
participants.
Channels for disseminating information are adopted which are fair, timely and cost-efficient; and
It does not communicate material price, or value, sensitive information to any external party
prior to that information
Being disclosed to all shareholders and market participants in compliance with its continuous
disclosure obligations.
There is always the most necessary need of bridging the portrayal gap. Communications
with positive outcomes that tend to put a gloss over the negatives or contain incorrect data can
create mistrust and damage the reputation of the company (Tai & Chuang, 2014). It is therefore
very necessary to check those issues and address them so that the facts are represented faithfully.
If it does not happen the media can expose these and result in portrayal gap where there is a
difference in how an organization portrays itself and how it is seen externally.
Communications with stakeholders is another very important factors these days as
businesses need them to work in a global environment. Effective communication is therefore an

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essential part of not only developing a strategy which can be responsive to environmental and
social risks and opportunities and delivering on that strategy. It also influences the
organisation’s culture.
Many activities in which organizations engage in, such as employees working for social
good and equal opportunities initiatives, are an important part of that transformation, changing
the way employees think and behave both at work and home. They also change broader
perceptions about the company.
The overall communication
The overall communication at BHP Bilton is doing well in passing on the information to
the key stakeholders of the company. The CSR team too has carefully addressed the fact that it
needs to highlight the fact on how the company is giving back to the environment in a way that
the depletion seems less.
The company can however, have a management team in place that only looks into the
CSR commitments of the company. The company can take the initiative also of planting more
trees or have ‘green zones’. Green zones are usually huge acres of land where a company takes
the initiative of planting trees (Sung & Hwang, 2013). Usually heavy industries which take a toll
on the environment tend to use this strategy so as that they can give back the environment what
they are depleting (Pellegrino & Lodhia, 2012). There are already a few such zones in Australia
and BHP can look to further add to those. They can start off by creating a nursery of plants and
slowly grow. The nursery should have all types of plants from where people can buy too.
Hoardings supporting the same cause can be put across the country so as to highlight this CSR
activity with the tag line of ‘What we take, we give double.’

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The second initiative can be an eco-friendly fuel that can help cars and buses run without
much pollution (Panwar, Kothari & Tyagi, 2012). Since the company is into mining and making
petroleum based products they can used their scientists to have a look into this idea. They can
start of by making it in the labs and then promoting or testing it in villages that necessarily do not
have much access to petrol or diesel. Once they are successful they can bring it to the cities and
promote it. In the cities they will be able to sell it too as a better alternative to petrol and diesel
and highlight the fact how it cuts down the air pollution levels.
Conclusion
It can be clearly seen that a company which is into mining and heavy industries has a
very transparent identity at the corporate levels. The researches, data and surveys which have
been collected from 2014 shows that the company has clear goals and visions regarding the CSR
activities in the future. It is in the Forbes list of top companies which goes to show that the
company stands firm on its ground and enjoys quite a good reputation among its stakeholders.

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