International Law & Trade - Corporate Citizenship - Katrina Relief Part I BHP Billiton: An Australian Company Reaches Out To Help Americans

Saturday, October 1, 2005 - 01:00

The Editor Interviews John C. Fast, Chief Legal Counsel and Head of External Affairs, BHP Billiton.

Editor: Please describe BHP Billiton's business.

Fast: BHP Billiton is the world's largest diversified resources company with market capitalization as at August 19, 2005 of approximately U.S.$92 billion. We are distinguished from other resource companies by the quality of our assets, our deep inventory of growth projects, our customer-focused marketing, our diversification across countries, commodities and markets and our petroleum and gas business.

We have some 38,000 employees (and an equivalent number of contractors) working in more than 100 operations in 30 countries. Reflecting our aim to be a premier global company, we occupy industry leader or near industry leader positions in major commodity businesses, including aluminum, energy coal and metallurgical coal, copper, ferro-alloys, iron ore and titanium minerals, and have substantial interests in oil, gas, liquefied natural gas, nickel, diamonds and silver.

Editor: What characteristics of your company's business put it in a special position to be helpful when a disaster like Katrina strikes?

Fast: Due to the size and the nature of our Group, we can access a breadth of expertise in the areas of logistics either internally, or through our networks of contracting companies. We also have the capacity to mobilise a range of transportation options (land and/or air) and heavy lifting equipment, depending on the geographic proximity of the disaster to our operations.

Editor: Describe your company's efforts to attend to the immediate needs of the victims of Katrina.

Fast: On the morning of Monday, August 29, just after Katrina had made landfall and the storm was passing through Louisiana and Mississippi, the Group offered its logistics services to area relief agencies. These included helicopter services from Amelia, La., a base which was not too adversely affected by the storm. Later that week, we also offered our supply boat to take materials from staging areas to relief zones. The Group also allowed employees to take time off to support these efforts, whether it was helping co-workers or family members impacted by the storm, or volunteering with relief agencies supporting victims. This initiative is ongoing, and teams continue to muster and focus efforts for particular aspects of Katrina relief, e.g., volunteer work at collection centers, food banks, etc. Coinciding with the in-kind contributions of supply and logistics services, the Group contributed U.S.$500,000 to local relief agencies and announced to all staff that it will match employee contributions as well.

Editor: Tell us what your corporation plans to do to meet the longer-range needs of the victims.

Fast: In the Houston office, a Katrina Relief Committee was formed to capture specific needs of affected co-workers, to identify wider community needs, and provide targeted assistance in partnership with relief agencies and to specific shelters. This is really an off-shoot of the Group's community engagement practice, as outlined in BHP Billiton's Charter. As you may be aware, the situation in Houston has been very dynamic. On September 1, up to 25,000 evacuees were housed in the Astrodome, and the Group was readying staff to support various efforts to help them. But only a week later fewer than 2,500 remained and the outpouring of volunteers and material goods exceeded expectations, such that shelters advised to "hold onto your material donations." The Group's matching contribution campaign will last three months, and teams continue to work with agencies to identify areas in which its resources and those of its employees and contractors can have a significant impact. It might be worth noting here that the Group held a collection drive for the local food bank in June, ahead of the hurricane season, recognizing that this is an agency which supplies shelters when the need arises later in the year. This initiative will be an annual event to pro-actively support disaster relief efforts.

Editor: Are you a part of the team that decides what the company should do when a national or international disaster occurs?

Fast: The nature of the Group's response to significant disasters is determined by the Office of the Chief Executive, with input from the businesses closest to those disasters and from the Sustainable Development and Community Relations department, which manages our corporate community contribution. The intent is always to obtain an early but clear indication of the extent of any disaster and agree on an appropriate response. I am a member of the Office of the Chief Executive and am therefore involved in that decision-making process.

Editor: Describe when and how that team reacted as the significance of Katrina became evident?

Fast: We were advised by our Houston office of the initial impact almost immediately and were in regular close contact for some time as the situation continued to change. A decision was made to make a corporate contribution of US$500,000 two days after the event. In addition, the Group announced it would match personal donations to disaster appeals by employees from all our businesses, globally.

Editor: Did the company face internal corporate bureaucratic hurdles that slowed its response? If not, why not?

Fast: The decision-making processes in these instances are relatively streamlined and do not involve the formation of committees or other bureaucratic bodies. The three groups involved in decisions such as these are the management of the businesses impacted by the disaster, the Office of the Chief Executive and the Sustainable Development and Community Relations department. We recognise the importance of a timely response to disasters such as Katrina and the Asian Tsunami and deliberately keep the decision making processes simple. Contact is by email, phone or face-to-face, depending on where in the world the decision makers are located at the relevant time. When the Tsunami occurred (the day after Christmas Day), members of all three of these groups were variously on leave in different time zones around the world. The decision was made through a series of conversations by mobile phone and e-mail.

Editor: Does your company have a corporate plan in place to provide help when a national or international disaster strikes?

Fast: The local response is determined by the management team of the business involved. A significant incident such as the Asian Tsunami or Hurricane Katrina is escalated to the corporate level for a Group response.

Editor: How does your company justify expending significant resources for such community welfare activities?

Fast: The communities in which we operate are our most immediate concern because within those communities live our employees and their families and friends, our contractors and businesses partners and people from other organisations we work with, all of whom are integral to our own success as a Group. In addition, we believe it is our corporate social responsibility to make a contribution to disaster relief efforts. Our employees also expect (rightly so) that the Group they work for will support its communities in both good and tough times. One reported quote from an employee, made in response to our contribution to the Asian Tsunami relief efforts was that "It's important to know that our Company cares as much as we do."

Editor: How do such activities benefit your shareholders?

Fast: The BHP Billiton Charter states that we are not successful unless our four key stakeholder groups - employees, customers, communities and shareholders - think we are doing a good job. We take every effort to explain to shareholders that all these groups are important to us and we need to work collaboratively with all of them to ensure our business is sustainable in the longer term.

Editor: Some corporate governance experts rate social responsibility as one of the top corporate priorities and suggest that monitoring corporate planning and performance in this area is an important responsibility of board members. Do you agree?

Fast: Our approach to social responsibility is as fundamental to the long-term success of our Group as other aspects of corporate governance and it is integrated through all levels of the business. Our license to operate and grow depends directly on the responsible operation of all aspects of our business, which includes our ability to work effectively with, and deliver lasting value for the communities in which we operate. The reputation we build in this area has the capacity to deliver real competitive advantage for the Group. Conversely, being found wanting in this area will ultimately compromise our ability to attract and retain top talent, gain access to new land for exploration and project development and attract investors to the Group. Our Board of Directors is certainly aware of and supports the Group's activities in the social responsibility arena. However, our involvement is embedded in the Group's culture - it is not driven by or dependent on monitoring by the Board of Directors.

Editor: Yours is a global company. Do you apply the principles of social responsibility you mentioned worldwide?

Absolutely - we are a global Group operating in 25 countries. In this day and age, maintaining our reputation is dependent on our day-to-day performance within all the countries and cultures where we operate. A social issue in South America can impact a potential growth opportunity on the other side of the world. However, in a more positive light, a strong track record of being valued by our communities will contribute to us being considered as the 'company of choice' by governments, business partners and communities. It will also enable us to attract and retain a skilled and motivated workforce in an increasingly competitive market and will assist in our ability to attract capital to continue to grow our business.

Editor: Describe some of the things that your company has done to ameliorate the effects of disasters outside the United States. Take the Tsunami for example.

Fast: Our response to natural disasters very much depends on the proximity of our operations and how we can best assist. BHP Billiton only has small operations in Indonesia, none of which were directly impacted by or close to areas affected by the Asian Tsunami. In that instance, our response was more to provide financial resources to aid agencies so that they could help people rebuild their lives. We supported our employees' contributions by matching their personal and fundraising efforts. Their response was quite amazing. Activities varied from film screenings, to fairs and fundraisers at sporting matches to individual employees donating some of their personal leave. Overall, the total amount contributed by our employees was over US$400,000, and the Company matched that amount. Our overall contribution to the Tsunami disaster relief appeals was almost U.S.$1.5 million.

On the other hand, after the recent earthquake near Iquique in Chile, much of our efforts involved employees providing "hands-on" assistance and expertise to people to rebuild their homes, making heavy equipment available to re-open roads that had been destroyed and assisting to restore basic services to very small and remote communities.

Editor: Do you view your company as contributing to alleviating poverty worldwide by virtue of the employment of foreign workers and the multiplier effect that their wages have in creating jobs for those who supply their needs as consumers, citizens, etc? Would you provide an example?

Fast: From our engagement with NGOs, as well as with governments in developing countries where we operate, we understand that the best way to empower people to escape the poverty cycle is to provide education and training so they have the skills to be employed - either within our businesses or through other opportunities.

Our community activities in impoverished countries strongly focus on education and small business development. This is probably most evidenced in Mozambique, a country which emerged from a seventeen year civil war, had limited infrastructure, a poorly skilled workforce and widespread malaria prior to our entry into the country in 1998.

We now operate a world class aluminium smelter outside the capital city of Maputo which was built in record time with benchmark safety and environmental performance. The economic contribution of this business (7% GDP and 50% exports) has led to permanent job creation and measurable improvements in the quality of life for people in the region.