The BHP Billiton Guide to Business Conduct is founded on our Charter; it establishes a set of principles to assist employees in making decisions that are consistent with the Company’s corporate values and represent good business practice. Post merger, the roll-out of the Guide (published in eight languages) commenced in 2001. This case study outlines how effectively the Guide has been implemented at two sites – Worsley alumina refinery in Western Australia and Hillside aluminium smelter in South Africa. The information is based on an independent review carried out by the consulting firm Deloitte Touche Tohmatsu at the request of BHP Billiton Aluminium.
Our Charter requires a high standard of business conduct, honesty and integrity. Why is such behaviour important? The Company cares not only about delivering good results but also how those results are obtained, because:
- employees value companies where they are confident that they can trust the integrity of their colleagues and employer
- communities value companies who value them
- shareholders value companies that set and live up to high standards
- suppliers value customers who honour commitments
- customers value honesty and integrity.
Our HSEC Management Standards require all Company sites to implement the Guide to Business Conduct. It is the responsibility of site management to decide how best to implement the Guide at their operation. To assist them, extensive roll-out materials (including posters, power point presentations, case studies, wallet-sized cards and a Guide summary) have been developed at the Corporate level and are readily available. The materials most relevant to the site can be chosen and the presentation material can be adapted to cover the issues most relevant to the operation and region.
Free-call numbers for the Business Conduct helpline service are made available in all countries where the Company has major operations, including South Africa and Australia. Employees can call these numbers to seek help with dilemmas that they may face or issues that they may wish to raise. In all cases, confidentiality for ‘whistle-blowers’ will be maintained to the highest degree possible.
Claudia Kruse is a Senior Analyst, Governance and Socially Responsible Investment, with ISIS Asset Management. Claudia says, ‘As a global company, BHP Billiton faces a real challenge, not just in terms of delivering the message about whistle-blowing to over 50 000 staff (employees and contractors), but also to get it “culturally” right with such a diverse workforce. In order to assess how well the system works, it is important not only to monitor the frequency and nature of reports, but also to track the professional development of employees who have reported incidents over the long term. Guaranteeing adequate protection is essential in order for whistle-blowing to become an accepted and valued feature of corporate culture’.
(ISIS Asset Management is a UK-based institutional investment manager with approximately US$112 billion under management. ISIS believes that the management of social, environmental and ethical risks as well as good governance is key to long-term business success. Note: From October 2004, ISIS will be renamed F&C.)
BHP Billiton commits to ensuring that employees or contractors who raise genuine concerns will not be subject to retribution or disciplinary action.
To assess how effectively the Guide is being implemented at their sites, in November 2003 BHP Billiton Aluminium commissioned Deloitte Touche Tohmatsu (Deloitte) to undertake a review at Worsley and Hillside. The results of the audit provide a benchmark of good implementation practice. It is important to note that sites are not required or encouraged to initiate such external audits, as BHP Billiton has an audit system in place to test whether and how the Guide is being rolled out.
Worsley alumina refinery: background and key findings
Our Worsley alumina refinery is located in the south-west of Western Australia, near the town of Collie. Construction of the mine site (located at Boddington) and refinery began in 1980 and the first alumina was produced in 1984. A significant expansion of the operation was completed in 2000 and a project to further expand capacity received approval this year. Over 1100 people are employed at the mine site and refinery together with more than 300 contractors.
The Deloitte review found that before the BHP Billiton merger in June 2001, no written code of ethics existed at Worsley. When the Guide to Business Conduct was examined by the site, it reflected the broad ethical framework within which Worsley had been operating. The review found that the Guide is viewed positively, providing clarity, a detailed reference point and enhanced transparency.
There were several other key findings. Major existing and new contracts for both people and services include compliance with the Guide as a key condition. All employees have attended roll-out presentations and information about the Guide and its importance is included in induction procedures for new staff. The employee training program, which is also used for contractor training, includes presentations on the Guide and has been recorded in the business-wide system used for tracking training.
Further evidence of effective implementation of the Guide to Business Conduct, and the principles it espouses, is that ethical behaviour has been integrated into the core values in Worsley’s 2004 strategic plan.
Hillside aluminium smelter: background and key findings
Our Hillside aluminium smelter is located in Richards Bay, South Africa, about 150 kilometres north of Durban. The smelter came on stream in 1995. Plans to significantly expand capacity are well advanced. Approximately 1200 people are employed at Hillside, together with about 1000 contractors.
Hillside had in place a code of ethics that was replaced by the Guide to Business Conduct.
Deloitte found that Hillside demonstrated a well-organised process of roll-out of the Guide to Business Conduct, and that implementation has been supported by senior management. The Guide has been adopted at the highest level and has been included as part of the leadership agenda; the Chief Operating Officer met with the general manager, agreed a process for implementation and established a team to carry it out.
Conditions of employment at Hillside now include agreement to adhere to the content of the Guide. All employees have attended presentations to introduce the Guide, which included opportunities to discuss the content. Every employee has also had the opportunity to discuss the Guide with their line manager to confirm they understand the contents, including signing a declaration of understanding and compliance with the Guide, which is placed on their personnel file.
Hillside also has a declaration system regarding the giving and receiving of gifts (which must never be of sufficient value to influence a business decision); all gifts must be recorded and agreed by the line manager.
As a result of the Guide being introduced, several changes have been made to procurement policies and processes at Hillside. The Guide is enshrined in supplier terms and conditions. All suppliers are issued with the Guide and must endorse that they are in agreement with its policies and standards as a condition of entering into a contract or business agreement.
Review conclusions and recommendations
Deloitte found that both Worsley and Hillside demonstrated a well-organised process of roll-out of the Guide to Business Conduct, and that implementation has been supported by senior management. Neither site considered it necessary to offer rewards for compliance with the principles in the Guide. It was felt this would send the wrong message, as the Guide establishes principles for ‘doing business as usual’.
It was recommended that sites should ensure that awareness of the Guide is maintained over time; this may include regular self-certification regarding employees agreeing with and working to the principles of the Guide. Specialist ethics training should be considered for employees in ‘high-risk’ functions such as Finance, Human Resources, Marketing and the Commercial Department.
The Deloitte review concluded that the Guide to Business Conduct, rather than being considered a compliance document, should be seen as a living document and a starting point for making values-based decisions. This is very much the spirit with which the Guide was first established and accords with the desire for high ethical standards and excellence in business performance.
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