Communication Audit of BHP

Understanding CSR

Corporate Social Responsibility or CSR are policies adopted into the business models of organizations to perform activities that are beyond the firm’s revenue interests (Navi, 2012). These activities are usually social activities that invest in the greater good of the community. With the rising threat to the environment several organizations today have adopted activities to protect the environment as well (Clapp, 2014). CSR can also be defined as the way company uses its resources to produce overall positive impact to the society or a commitment by the organization to contribute for the economic development to improve the quality of life of its workforce and the society at large (Carroll, 2015).

CSR can also be termed as corporate citizenship that needs investment which may not have a financial gain. However, CSR improves the public image, brand of the company and increases the positive attitude of its customers and shareholders. Companies have been known to negatively impact both local communities and environment for their own gain (Brief, 2016). Amazon rainforests have been for logging and mining effecting the balance of the environment and the hundreds of communities living in this area (Okpara, 2013). Oil spill, water pollution due to chemical contamination, or taking over low livelihood areas to build hotels and buildings are some other examples. All these have indeed impacted the international reputation of companies (Preuss, 2013).

CSR is one way of making up the negative effects. Instead of vacating the communities, organizations today are trying incorporate these communities into the CSR policy, by providing education, building medical centers, providing sanitation and so on. Corporate Social Responsibility in several companies is seen as a burden or a distraction. These companies usually believe that their sole responsibility is to generate revenue (Schneider, 2012). However, what they fail to recognize is that increase in brand loyalty which in turn would increase the profits of an organization (O'Shea, 2013). CSR not only comprises the need of the organization to be socially responsible, but also incorporates the need to be ethical, loyal and trustworthy in their day to day operations.

CSR at BHP Billiton Ltd.

BHP Billiton Ltd, headquartered at Melbourne, Australia is a multination mining, metal and petroleum company. The company is the world’s largest mining company and generated revenue close to 61 billion USD in 2015. The organization has understood the importance of CSR of their organization and hence has pledged to help the community in several ways.

Analyzing CSR claims in BHP’s vision and strategy document

Several companies embed their CSR policies in to the values and mission of their organization. This hence, can be used to help every customer understand that the company is indeed socially responsible as these are the first things a customer would go through when choosing a vendor. Below are the list of CSR activities picked from the various documents of BHP.

From the Charter

The charter of BHP Billiton lists Sustainability, Integrity, Respect, Performance, Simplicity and Accountability as its key values which are also some of the important aspects of CSR (Billiton, 2016). All the above aspects defined how the company would like to function. The embedded concepts of CSR can be related as

Sustainability – To ensure that the resources are responsibly used ensuring the company’s existence in future and the ecological balance. For Example: their The Valdivian Coastal Reserve is the first carbon project in Chile to receive the verification of Climate, Community and Biodiversity (CCB).

Integrity – Being united with strong moral values, that is to be ethical in its functioning

Respect – Investing in relations including employees that are mutually beneficial.

Accountability – Being responsible for what they do

From their Introduction

The company’s introduction states that they believe in operating their assets safely and identify resources that are to be sustained for future leaders of BHP. This is a social responsibility to use the natural resources responsibly not just for the sake of the environment but also to ensure that there are enough resources left for the company to continue functioning

It also states that the company is committed to the health and safety of its employees, the environment and the communities BHP operates in. This is the key point in relation to CSR where the company defines its self as socially committed to their workforce, to the community they operating and the environment which is directly affected by the business.

The HSEC Framework

The Governance of the company has a sustainability committee that reviews and accesses the adequacy of their HSEC Framework (Health, safety, environment and community framework). This committee assists the board in all HSEC related issues including processes, resources, structures and performance standards used for the identification, management and reporting of HSEC risks and the investigation of any HSEC incidents (Billiton, 2016). This system also reports the effectiveness of the current system and makes suggestions whenever necessary. HSEC is also responsible to review the impacts of business decisions on the health and safety of its employees, the community and environment and provide necessary assistance. As a part of HSEC the company has released several documents related several activities to ensure that all HSCE functions are carried out in the company.

Aviation – Since, several employees are airlifted they have a defined set of safety expectations, technical requirements and critical controls for managing aviation risks. To contract all aviation needs prior approval from Flight Safety Foundation for Basic Aviation Risk standard clearance is required. The mandatory run for any aircraft is to have a dual controls system with two qualified pilots.

Community – BHP is committed to maintain amicable relations with the community, region and countries they operate in by helping them develop socially and economically. They also work towards reducing any activities that may impact human and social rights. The same is done through identify host communities every five years, analyzing the quality of life there and reviewing their social commitment to understand gaps and opportunities if any. They also believe in preserving the cultural heritage of the community they operate in

Human Rights – The Company is committed to follow the United Nations Universal Declaration of Human Right.

Environment – Given their line of business BHP takes major responsibility to maintain a sustainable environment since the growth of the organization is dependent on obtaining and maintaining natural resources. Since they also produce and consume fossil fuels, they take responsibility to reduce their emissions. The company has strict rules against exploring near world heritage sites and within boundaries of International Union for Conservation of Nature

Health – To prevent occupational illness of its workforce, BHP monitors the health of its employees, and manages all work related injuries by supporting the employees to avoid long-term effects.

From BHP’s code of business

In their code of conduct BHP lays out several rules to ensure the various CSR commitments. These policies are in relation to Employee health and safety, alcohol, drug and tobacco abuse, equality amongst employees, respecting human rights, working with governments whenever necessary, commitment against corruption, working for the environment, engaging with communities etc. (Billiton, 2016)..

Overall, being the largest mining company in the world, it is only relevant that the company has made strict policies and rules regarding various entities such as their employees, communities and the environment.

CSR Discrepancies and suggestion

The BHP’s CSR indeed covers a lot of activities that are involved in BHP. There new page is indeed a resemblance to what they have achieved for the society. However, the company has been a part of some major incidents that also have caused significant damage.

The first instance is of course the most recent incident of the tailing dam containing mining waste that collapsed into the towns and villages in the Gualaxo River Valley in Brazil. It has been reported that even the emergency alert system did not work. Though BHP was only a partner in this venture, the company’s CSR ties it to be responsible for the event. The Brazil team is said to be working on helping the 600 effected families recover. However, there is little progress on the same. Also, a similar issue has occurred in the 1984 when the tailings dam construction was obstructed due to landslides and hence the waste was discharged in to the river Ok Tedi increasing pollution levels in the villages nearby. This hence, is more of a repeat than a disaster. These events usual occur when the company collaborates with other companies. The simple reason for the error is that BHP is not completely responsible for the operations. It is necessary to understand that despite the fact that BHP does not have complete control of the project, they need to take care of the safety issues as they are a committed company. Events as such can highly effect the reputation and no amount of CSR can gain the trust of the villagers who were endangered.

The company is one of the largest fuel producer and hence understands the significance of responsible usage of fuel and the need to reduce the greenhouse gases. However, not all the subsidiaries of BHP have this facility. Also, the company should take up the responsibility of innovating alternative fuels as a serious task and encourage innovations in this sector.

Several companies have issues with higher wages however decisions leading to a workers strike damage the reputation of the company. Employee welfare is one of the key aspects of BHP’s CSR. However, BHP Billiton's Spence mine in northern Chile have gone on a 24 hour work strike on May 13 2016, and at Cerro Colorado copper mine on Jan 11 2016. These are just two reports, however, there are several other instances when workers of BHP have gone on strike due to labour negotiations. It is suggested the BHP takes its employee’s demands more seriously. Although the company has a string for the community policy it is necessary to provide workers with adequate wages given the inflation rate around the world.

BHP has also faced issues in regard to human rights when at several instances they have imposed their mining projects in areas where the communities where against the practise. The best example for this is the nickel mining project in Philippine island of Mindanao. Communication is the key in such cases. People living in a land for a long time have a relation with Mother Earth and letting go of these ties can be extremely difficult. Hence, it is the responsibility pf the mining company to explain to the sources how the project would benefit them and provide them with suitable compensation.

Conclusion

The quote “Greater the power, greater the responsibility” stands true in every walk of life. Being a multinational company with a billion dollar revenue and business all around the world would also mean greater responsibility towards the society. BHP Billiton has done significantly well in the corporate social responsibility sector. They have embedded their commitment to the society in almost all the aspects of the company’s strategies. To ensure the world knows that they takes their activities seriously they have released several internal policy documents that informed how BHP handles the policies related to CSR. They have considered several aspects of the company and made sure that every single person in the company follows these set of rules. However, it is common for a set back or two to line up in the incline of growth. Overcoming these by adjusting the existing polices to accommodate the setbacks will help the company grow. It is also necessary for a company to communicate what they believe in the most efficient way and make sure no discrepancies in the same exist.

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