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Introduction
The year in review has seen continued growth in interest in the non-financial aspects of our performance, from traditional stakeholders and also from those in the investment community who have begun to assess more thoroughly the social and environmental aspects of our business.
Against this backdrop, it is clear that strong governance in both the financial and non-financial arena is a critical aspect of running a successful corporation. Our approach to corporate governance is outlined in our Annual Report and on our website at www.bhpbilliton.com/bb/investorCentre/annualReports.jsp
This section outlines our approach to HSEC governance.
Structure and responsibilities
At every level of the organisation, our line managers are responsible for HSEC matters. Although they are supported by functional personnel who provide specialist advice and support in managing all aspects of HSEC, ultimate responsibility rests with the general and senior management teams. Executive remuneration is also directly linked to the financial and non-financial performance of the Company. Non-financial performance indicators include health, safety, environment and community targets.
As shown in Figure 2, the Company's peak HSE governance body is the HSE Committee, which is a subcommittee of the Board. Current membership of the Committee comprises two executive Directors; a non-executive Director (who is Committee Chair); the Vice President HSE; and recognised international experts in the fields of health, safety and the environment. The non-executive Director member is proposed by the Chair of the BHP Billiton Board and approved by the Directors. Appendix A presents profiles of HSE Committee members. Additionally, each site is required to establish committees representing both worker and management interests in HSEC matters. Further details on the HSE Committee can be found on our website at www.bhpbilliton.com/bb/aboutUs/governance.jsp
Figure 2. HSEC Organisation Structure
HSEC standards across the Company are coordinated and monitored through the BHP Billiton Executive Committee, with HSEC issues included in the agenda for each meeting. This committee includes the heads of the CSGs, legal, marketing and human resources. The peak functional group is the HSEC Forum, comprising Corporate representatives and HSEC functional heads from each of the CSGs. The Forum is involved in setting direction for the HSEC function, identifying priority issues, monitoring HSEC performance and building consensus for the way forward. Development of HSEC practices and the response to issues of Company-wide significance are managed through specialist networks.
Our HSEC audit program is a critical component of the HSEC governance program, which has been specifically designed to ensure that our Charter, HSEC Policy and Management Standards are being effectively implemented across the Group.
Policy, Standards and Systems
The Company has combined health, safety, environment and community matters in one policy and one set of management standards. Wherever we operate, HSEC aspects are addressed in our decision-making processes, alongside other business considerations.
Knowing that much of our success as a global company depends on how effectively we work with our employees and the communities in which we operate, we see the HSEC Policy as being central to our future success. While our Policy broadly aligns with the United Nations Universal Declaration of Human Rights, it also requires that we meet and, where appropriate, exceed legal and other requirements. As such, the Policy recognises that where governments implement international conventions, such as those of the International Labour Organisation, we will comply. The Policy underpins our management systems worldwide and sets the foundation from which we operate. It is based on the principles contained in our Charter. This means that, while we strive to deliver strong financial returns to shareholders, we fully recognise and deliver on our wider responsibilities to our stakeholders - good HSEC is good business.
The HSEC Management Standards were revised during the year, resulting in a consolidated, yet more comprehensive, set of 15 standards. The Standards are well established, providing a strong basis for continual improvement in performance. The Standards, listed in Figure 3, were developed to ensure consistent interpretation and implementation of the HSEC Policy. They form the basis for the development and application of HSEC management systems at all levels of the Group.
Figure 3. HSEC Management Standards (titles and intent statements)
Standard 1. Leadership and Accountability
Intent: BHP Billiton Directors, managers, employees and contractors understand their accountabilities and demonstrate leadership and commitment to HSEC.
Standard 2. Legal Requirements and Document Control
Intent: Relevant legal, regulatory and other HSEC requirements are identified, accessible, understood and complied with and an effective HSEC document control system is in place.
Standard 3. Risk and Change Management
Intent: HSEC hazards are identified and associated risks assessed, classified, documented and managed. New or proposed changes to processes, products or services are assessed for potential HSEC risks and managed to ensure HSEC performance is maintained at an acceptable level.
Standard 4. Planning, Goals and Targets
Intent: HSEC is an integral part of business planning with goals and targets established to drive continuous improvement in performance. (This Standard also requires that closure, decommissioning, remediation and rehabilitation plans are costed, documented and reviewed.)
Standard 5. Awareness, Competence and Behaviour
Intent: Employees, contractors and visitors are aware of relevant HSEC hazards, risks and controls and are competent to conduct their activities and behave in a responsible manner.
Standard 6. Health and Hygiene
Intent: Employees and contractors are assessed for their fitness for work and protected from health hazards associated with their work. Community health issues associated with BHP Billiton operations are identified and effectively managed.
Standard 7. Communication, Consultation and Participation
Intent: Effective communication and consultation is maintained with stakeholders associated with BHP Billiton activities, and they are encouraged to participate in and commit to HSEC performance improvement initiatives.
Standard 8. Business Conduct, Human Rights and Indigenous Affairs
Intent: Activities and operations are conducted in an ethical manner that supports fundamental human rights, respects the traditional rights of indigenous peoples and values their cultural heritage.
Standard 9. Design, Construction and Commissioning
Intent: Management of HSEC risk is an integral part of all projects through design, approval, procurement, construction and commissioning.
Standard 10. Operations and Maintenance
Intent: All plant and equipment is operated, maintained, inspected and tested using systems and procedures that manage HSEC risks.
Standard 11. Suppliers, Contractors and Partners
Intent: The contracting of services; the purchase, hire or lease of equipment and materials; and activities with partners are carried out so as to minimise any adverse HSEC consequences and, where possible, to enhance community development opportunities.
Standard 12. Product Stewardship
Intent: The responsible production, transport, storage, use, recycling and disposal of BHP Billiton products and by-products is promoted to minimise their life-cycle HSEC impacts.
Standard 13. Incident Reporting and Investigation
Intent: Incidents are reported, investigated and analysed. Corrective and preventive actions are taken and lessons shared.
Standard 14. Crisis and Emergency Management
Intent: Procedures and resources are in place to effectively respond to crisis and emergency situations.
Standard 15. Monitoring, Audit and Review
Intent: HSEC performance and systems are monitored, audited and reviewed to identify trends, measure progress, assess compliance and drive continuous improvement.
The objectives of the Standards are to:
- support the implementation of the Charter and the HSEC Policy across the Group
- provide a risk-based HSEC management system framework, broadly consistent with international standards, such as ISO 14001, OHSAS 18001 and SA 8000
- set out the expectations of the Group for the progressive development and implementation of more specific HSEC management systems at all levels of the Group
- provide consistent auditable criteria against which HSEC management systems across the Group can be measured
- provide a basis from which to drive continuous improvement.
The scope of the Standards covers all operational aspects and activities that have the potential to affect, positively or negatively, the health and safety of people, the environment or the community. They cover the entire life cycle of our assets, from exploration through to construction, commissioning, operation, decommissioning, closure and rehabilitation.
Our occupational accident and disease reporting processes are designed to comply with the relevant laws in the regions where we operate. All sites are also required to have consultation and communication processes, comprising management and worker representation, to address HSEC issues.
Material safety data sheets (MSDSs) are available for all our products, identifying potential health, safety and environmental aspects associated with their use. Please contact the Company if you would like a copy of an MSDS for any of our products. Additionally, we are involved in a number of commodity association activities where we are progressively seeking improvements to the responsible use and life cycle impacts of our products.
All aspects of performance are incorporated in the Management Standards, including accountabilities; risk assessment and management; business planning; and target setting for improvement, communication, training and awareness, performance monitoring, auditing, and management review.
Supporting the risk basis of the Management Standards is our Enterprise-Wide Risk Management strategy, which is embedding risk management processes into all our critical business systems, allowing us to adopt a precautionary approach to business management. See Case Study No. 38 and www.bhpbilliton.com/bbContentRepository/AboutUs/Governance/EWRMPolicyStatement.pdf
The requirements of the Standards apply to all BHP Billiton sites and operations throughout the world. These include facilities that are owned or operated by us, development projects and major activities by contractors on our sites or under our management.
Where we have no operational responsibility but have an equity stake or significant BHP Billiton assets are involved, the Standards are made available to the operator so that comparable HSEC standards can be applied.
In addition, the Standards require operations to evaluate the social and environmental performance of our contractors and suppliers, including such issues as human rights records and previous environmental incidents.
Each of the 15 HSEC Management Standards includes a set of clear performance requirements. During any year, those sites not audited complete a self-assessment against the Standards and prepare performance improvement plans to progress to full compliance with the Standards. Conformance against the HSEC Management Standards is reported in the Audit and Self-Assessment section.
To ensure that our HSEC (including human rights) management requirements are embedded into significant investment decisions, we have established an investment process that covers a range of investment types and establishes the policy by which all investments are to be reviewed and authorised in BHP Billiton. The process also outlines key participants and includes the incorporation of independent peer reviews.
The Standards are reviewed at least every three years and, if required, revised and reissued.
The full HSEC Management Standards and performance requirements are available on our website at www.bhpbilliton.com/bbContentRepository/Policies/HSECManagementStandardsIssue2.pdf
Hierarchy of systems and documents
The BHP Billiton Charter, HSEC Policy and HSEC Management Standards are mandatory at all our sites and operations, under a hierarchical management system where systems and documents must meet and support the requirements of those of higher levels, as shown in Figure 4.
Figure 4. Hierarchy of Systems and Documents
During the year, we made further progress preparing and revising our detailed protocols and guidelines, based on knowledge and best practices from around the Group. All our operations are able to access leading thinking through these protocols and guidelines, accelerating their rate of improvement. The following new documents have been prepared:
- Fatal Risk Control Protocols
- Hearing Conservation Guidelines
- Health Surveillance Guidelines
- Health Exposure Assessment Guidelines
- Energy and Greenhouse Guideline
- Energy and Greenhouse Gas Management Plan Template
- Human Rights Self-Assessment Toolkit.
We are aiming for some of our management systems to be certified. For example, we have achieved our target for ISO 14001 certification of our environmental management systems at all of our major operating sites. Some of our sites are now working towards certification of their safety management systems to OHSAS 18001, while others are progressing certification of their social management systems against SA 8000. A number of our sites are also certified to the ISO 9000 standards for quality management.
Business conduct
The BHP Billiton Guide to Business Conduct applies to all our employees and contractors, regardless of their specific job or location.
The foundation of the BHP Billiton Guide to Business Conduct is the Charter. The Guide seeks to provide direction and advice on conducting business and interacting with governments, communities and business partners. Clear guidelines are provided on general workplace behaviour, including issues related to discrimination. It also states our policies, standards and guidelines on a wide range of ethical issues, including conflict of interest, financial inducements and bribery, insider trading and political contributions. Managers and supervisors are held accountable not only for their own actions, but also for the actions of their staff.
The Board approved several changes to the Guide to Business Conduct in 2003 to ensure that it would meet or exceed the requirements of the US Sarbanes-Oxley Legislation, as well as voluntary guidelines issued by stock exchanges in the US and Australia. These include making it clear that the Guide applies to non-executive Directors where it is applicable to their duties as BHP Billiton Directors. The Guide is available in seven languages in addition to English.
Resolution of business conduct issues is encouraged at the local level. If this is not possible, the issue can be raised with regional points of contact or helplines based in southern Africa (Johannesburg), Europe (London), Australasia (Melbourne) and South America (Tintaya, Peru). For issues related to fraud or bribery, the Fraud Hotline is contacted. The final level of management review is the Global Ethics Panel.
Internal performance requirements regarding business conduct have been established under our HSEC Management Standards. Distribution of the Guide to employees and contractors, as well as presentation and discussion of its principles, is monitored and reported through the Company's HSEC audit program.
The Guide to Business Conduct is available on our website at www.bhpbilliton.com/bb/peopleAndEmployment/globalBusinessConductGuide.jsp
Auditing
Our HSEC Management Standards include a requirement for an auditing process to check that our Charter, HSEC Policy and Standards are being applied and to verify performance. The audits are designed to address the degree of implementation of our HSEC management systems and their effectiveness in meeting the Group's needs and those of the business being audited. Recommendations for improvement are made as required.
The HSEC Audit Protocol is based on the HSEC Management Standards and systems and performance management principles. The audit program is a triennial peer review process, with audit teams drawn from the HSEC function, operations personnel and external sources. It provides an objective view of site activities and systems and assists site managers through the identification of gaps in HSEC management programs. These gaps are addressed through monitored Performance Improvement Programs. The process provides assurance to the Group and the Board that HSEC risks are being satisfactorily managed and identifies leading practices that can be shared across the Company.
The audit process is proving invaluable in accelerating the rate of improvement in all aspects of HSEC management through the identification and communication of leading practices.