BHP Billiton: Climate Change Leader or Laggard?

BHP Billiton: Climate Change Leader or Laggard?
Introduction
BHP Billiton, as a leading global resources company, has explicitly declared its commitment to operating sustainably. It is thus imperative for the company to seriously take into consideration the issue of environment and climate change and other relating issues. This essay therefore will first look at BHP’s environmental stand from a sustainable international business aspect and then some existing issues of the company’s current operations and managerial decisions.
BHP’s environmental stand from a sustainable international business perspective
BHP Billiton, as a large mining company, is voluntary submitting transparent reports on their environmental initiatives. In particular, the company is focused on creating long-term trust and support from external stakeholders and therefore, it also relies on investing in large-scale, long-life diversification policies. Currently, the company focuses on the analysis of water footprint and strives to provide tax payment regularly. Therefore, the readiness to approach climate change issue and its dedication and commitment is congruent with the current global perceptions. At the same time, the political context can become a significant obstacle to developing their climate-change oriented strategies. As such, although the company has a strong commitment to environmental concerns, it cannot ignore the fact that the Australian government issues the legislature rescinding their adherence to a carbon price. In response to these changes, the company decides “to give away 1 % of pre-tax profit to community programmes every year – in 2013 this came to $ 245,8 million supporting initiatives such community enterprise in Colombia” (Mehra, 2013). Nonetheless, the company does not reject introducing their climate change reporting and can continue meeting their own environmentally friendly initiatives. What is more important is that the company introduces new programs and project that contradict environmental reforms and provide a new vision on global concerns.
According to Olympic Dam initiatives, the BHP Billiton focuses on a set of development policies that detail the company’s adherence to reaching leading practices by imposing the minimum harm to their employees, as well as to the external stakeholders. It also highlights the environment and license terms under South Australian Acts and Regulations introduced to BHP Billiton and offers a reference to the system that ensue Olympic Dam conforms with appropriate duties and obligations (Environmental Management Framework 2009). As it can be seen from the above, the attention to environmental concerns is not ignored although it changed the direction. In this respect, the attention should be given to new opportunities for managing such issues as fossil fuels and carbon price.
Constant improvement and adherence to global environmental concerns is essential or managing new alternative technologies that would minimize the harmful effects of the mining industry. BHP Billiton seeks to research and promote leaching technology that would make the mine industry development more efficient (Russell 2012). Additionally, the company could not be considered to be an innocent and committed stakeholder that focuses purely on environmental protection. As such, Mayman (2007, n. p.) reports, “BHP Billiton’s profits have boomed 27% in the past year from burgeoning sales of iron ore, copper, aluminum, manganese and natural gas, and it owns the world’s biggest deposit of uranium, at its Olympic Dam mine in South Australia”. The company has also commercial agreements for selling uranium oxide with such developed economies as Sweden, France, Belgium, Japan, South Korea, Canada, Taiwan, and the US. In this respect, the concern with the environmental challenges and reporting is justified because the Australian government has also encouraged its uranium sales to Russia and India. Although the company admits the use of uranium, it is still ready to accept any requests and concerns from the external stakeholders concerning their environmental and ecological problems. As soon as BHP Billiton realizes the potential environmental gaps, it will be able to reach environmental sustainability.
Discussion on the statement “BHP's leaders are unaware of the consternation that their public policy engagement has caused among climate negotiators in Warsaw and activists on the ground”?
In the report on BHP Billiton, Mehra (2007, n. p.), explains, “It may well be that BHP’s leaders are unaware of the consternation that their public policy engagement has caused among climate negotiators in Warsaw and activists on the ground”. Hence, although the company regularly introduces an annual sustainability report, it still hides 1% of profits to community programs annually before paying taxes to the government. Therefore, this act could be perceived skeptically in the world community because of tax-avoidance. It also implies that BHP does not fully realize the consequences of adhering to the country’s political and economic interest instead of focusing on global climate change policies. What is more important is that “at a time when the global divestment movement is taking hold on campuses, with institutional investors, and in grassroots communities opposed to resource exploration and fossil fuel pollution, BHP’s size and visibility makes it more vulnerable than most” (Mehra 2007, n. p.). Hence, this problem has been considered during the UN meeting in Warsaw that worries about the policy of the Australian government that takes the course on economy rather than on corporate social responsibility in a globalized community. In the future, the company has many alternative pathways that can improve the situation. For instance, the company can join the group of environmental activist that introduce efficient climate change actions and make important contributions in promoting new reforms. At the same time, BHP can also withdraw its fossil fuel concern and make a shift toward a more sustainable development. The latter is the best option because of the diversified strategy pursued by the company. The holdings in copper could improve the company’s reputation and make the largest copper mine producer take the leading environmental positions in the world. The moral vision should become the underpinning for BHP’s manager if they seek the global recognition as the primary concern and objectives. What is more important is that climate leadership can become another beneficial concern.
In their report, Clark and Wilson (2013) agree that BHP Billiton must reduce their investment in mining industry; rather, they should respond to the risk posed by global warming. Indeed, climate change should be a motivation for the managers to stop anti-environmental policies. Additionally, the community is also dissatisfied with the policy, imposing pressure on coal producers and fossil fuel industry that creates threats to climate in addition to the already existing environmental problems.
Woodburn (2014) reports on the negative consequences for implementing BHP Billiton’s Coal Project that can have a diverse effect on the farming activity in Australia. In response to this issue, the farmers have actively engaged into preventing the project accomplished and signed an agreement with the company for the purpose of limiting the influence of coal industrial activities. Such an action is the major decision that would minimize the influence of environmental challenges. Hence, the company should take into consideration the requests on the part of the community and support greater protection of land. Such a position can make BHP’s manager become more aware of the ecological challenges. Removing the conflict between the coal producers and farmer is possible through developing new legislature and regulations preventing the development of new lands (Woodburn 2014). In response to the problem, BHP Billiton has conducted a thorough report on the mining procedures, as well as the consequences it will have for the Australian natural environment. Despite the complaints, they are still supportive of the project because their reports prove that the development of new territories will not have a negative impact on the natural landscape.
The above-presented case shows that BHP Billiton should be more accountable for their activities in case they want to contribute to their sustainability policy. However, it still seeks compromise on their activities to strike the balance between profitability and environmental responsibility for the welfare of the community (Coal n. d.). Additionally, Ker (2013) pays attention to BHP’s inadequate policy concerning shale mining which can pose threat to the welfare and health of the Australian population.
The strategic evaluation of the company’s mining policies and initiatives should comply with the responses from the community. They should realize that the priority should be given to the analysis of corporate social responsibility (Australian Government Department of the Environment 2014). What is more important is that the department could not fully justify the strategies introduced by managers despite their readiness to report on their environmental activities. The very essence of mining industry does allow the producers to adhere to the utmost environmental concerns. Instead, BHP’s managers continue their destructive policies. The Australian government has also introduced shocking conclusions in regards to the company’s activities, by approving their actions and encouraging their programs and projects. In general, the growing tendencies in integrating corporate social responsibility and environmental concerns can put the BHP’s reputation under the threat. The point is that, although BHP’s reporting system is well-established, it provides the community with shocking information on their mining projects and programs that do not comply with the international standards (Environment Australia n. d).
Reference List
Australian Government Department of the Environment 2014, Strategic Assessment of BHP Billton iron ore expansion for the Pilbara, viewed May 16, 2014, http://www.environment.gov.au/node/18597
Clark, P, and Wilson, J 2013, ‘Industry veteran with sustainability agenda stands for BHP board’, Mining, viewed May 16, 2014, http://www.ft.com/cms/s/0/ce57acf6-37fb-11e3-a493-00144feab7de.html#axzz31rwdUogs
Coal, I n. d., ‘Bulli Seam Operations Project: Environmental Management Strategy’, Environmental Management System, viewed May 16, 2014, http://www.bhpbilliton.com/home/aboutus/regulatory/Documents/Bulli%20Seam%20Operations/Bulli%20Seam%20Operations%20Project%20Environmental%20Management%20Strategy.pdf
Environment Australia n. d.. ‘Overview of Best Practice Environmental Management in Mining’, 1-43.
Environmental Management Framework 2009, ‘Olympic Dam Expansion Draft Environmental Impact Statement’, 707-718, viewed May 16, 2014, http://www.bhpbilliton.com/home/aboutus/regulatory/Documents/odxEisChapter24EnvironmentalManagementFramework.pdf
Ker, P 2013, ‘Cold brings comfort for BHP shale strategy’, The Sydney Morning Herald, viewed May 16, 2014, http://www.smh.com.au/business/cold-brings-comfort-for-bhp-shale-strategy-20130318-2gb6b.html
Mayman, J 2007, ‘BHP Billiton shareholders call for moral stand on lucrative trade’, The Guardian, viewed May 16, 2014, http://www.theguardian.com/business/2007/oct/01/nuclearindustry.nuclearpower
Mehra, M 2013, ‘BHP Billiton: Climate change leader or luggard?’, Guardian Sustainable Business, viewed May 16, 2014, http://www.theguardian.com/sustainable-business/blog/bhp-billiton-climate-change-leader-laggard
Russell, C 2012, ‘No full environmental impact study needed on BHP Billion’s rejigged Ollympic Dam expansion plan, says SA Premier Jay Weatherill’, The Advertiser, viewed May 16, 2014, http://www.adelaidenow.com.au/business/sa-business-journal/no-full-environmental-impact-study-needed-on-bhp-billitons-rejigged-olympic-dam-expansion-plan-says-sa-premier-jay-weatherill/story-e6fredel-1226516736376
Woodburn, J 2014, ‘Farmers to cooperate with BHP Billiton amid feud over Caroona Coal project on Liverpool Plains’, News, viewed May 16, 2014, http://www.abc.net.au/news/2014-02-23/ceasefire-in-liverpool-plains-coal-fight--hold-for-sunday/5277414