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38. HSEC considerations are integral to our Enterprise-Wide Risk Management strategy
The effective management of risk is seen as being central to the continued growth and success of the Company. To this end, risk management processes are being embedded into all our critical business systems and processes through implementation of an Enterprise-Wide Risk Management (EWRM) strategy. When critical decisions are being made, managers are required to look beyond the obvious risks and recognise all sources of uncertainty, including issues related to health, safety, environment and community.
The embedding of risk management processes is taking place at all levels of the organisation, so that risks associated with changes or investments can be systematically identified and managed in a comprehensive and integrated way.
Particularly, EWRM requires managers to understand the risks associated with the activities under their control and to manage them accordingly; and this acts to stimulate and reinforce accountability. The context of all our risk management activity is always the achievement of our business plan and strategic objectives. Because there is a continuous focus on the events and issues that might affect how and when those strategic objectives are achieved, we are building resilience into our business at all levels.
To steer the implementation, an advanced EWRM framework has been developed, comprising policy, standards and guidelines that set exacting standards for management. The HSEC Risk Management Guidelines are consistent with this framework.
Each asset and business has gone through an objective process of risk assessment and has evaluated its current risk management approach and systems against a standard. The risk assessments have highlighted where further control action is required, and this is now being taken. Where gaps in the system of risk management were identified, a risk management plan has been prepared and is being implemented.
Corporate governance requirements are satisfied by the assessment of progress in risk management plans and in improvements in risk control, which is reported to business-level risk management and audit committees that in turn all report to the Risk Management & Audit Committee of the Board.
To coordinate all risk management activities, risk management ‘champions’ have been appointed at each operational location or function. They work as a Community of Practice, sharing information about initiatives and best practice.
A central element of the EWRM strategy is leveraging risk management information. The Company-adopted system assigns risks, controls and actions to accountable managers and enables management to track and report progress on all risk control activity. This system is also being used to ‘roll-up’ risk issues so that the Company can see all its major residual risks, along with opportunities for greater value creation through strategic risk management. The system is being used specifically to roll-up HSEC risks to obtain such a Company-wide perspective.
The ultimate aim of the Company's EWRM strategy is to embed risk management in all we do so that it truly becomes everyone's responsibility - as part of the BHP Billiton way.
