Creating value is a concept that is central to our Charter and therefore our business at BHP Billiton. Value in the purely financial sense is not our only measure of success. As our Charter states, we also have an ‘overriding commitment to health, safety, environmental responsibility and sustainable development’. Thus to be truly successful we need to deliver value across all our business facets.

Efforts made to pursue Zero Harm in our organisation have been extensive and in many instances successful; however, we are deeply saddened to report that 17 fatalities occurred at our controlled operations and activities. The impact of these incidents on our people, their families and friends is deep and profound, and we offer our sincere condolences to all impacted by these tragic events. We are determined to eliminate fatalities from all our operations, and we will not be satisfied until this is achieved. These incidents have increased our resolve and reinforced our dedication to the work and challenges before us.

During the year, we made further progress in preparing and revising our HSEC protocols and guidelines, the content of which supports our detailed HSEC Management Standards and most importantly our aspiration to achieve Zero Harm. Through these protocols and guidelines, and supported by our HSEC audit process, all our operations can access leading thinking and practices.

The implementation of our Fatal Risk Control Protocols, introduced in April 2003, continued across the organisation. An additional Protocol is to be implemented early in the new financial year. This covers lifting activities with cranes and was developed following further analysis of the fatal risks. It is planned that full compliance with the requirements of the Protocols will be achieved throughout the Group by 30 June 2005. The implementation of the Protocols has resulted in some benefits already and there are documented instances of people surviving accidents due to the insistence on minimum standards for light vehicles. Another positive sign is that during the year our Classified Injury Frequency Rate reduced, resulting in an overall reduction of 26 per cent against the baseline.

To help us better understand and manage HSEC risks that are critical to our business, risk registers are in place and being maintained at all sites and at Customer Sector Group and Corporate levels of the Company, in line with our HSEC target. Work was also undertaken to better align HSEC risk assessment processes with our Enterprise-Wide Risk Management processes to improve the efficiency of assessments.

Employee health and associated occupational illness remain key focus areas. The control of employee exposures to and a reduction of occupational illnesses are the thrust of our Company health targets. Baseline health surveys were completed at 98 per cent of required sites, incorporating the establishment of occupational hygiene monitoring and health surveillance programs. While we have seen an increase in measured occupational exposure to noise during the year, this is largely an outcome of better systems being implemented for determining and monitoring employee exposures. It should be noted that the measure of occupational exposure does not take into account the wearing of personal protective equipment to mitigate against any potential exposures. We also introduced Company-wide exposure standards during the reporting period, many of which are more stringent than those required by local legislation. The targets will be revised during the coming year to further focus on reductions in employee exposure. Recognising the importance of the health of the communities in which we operate, we are also now supporting the Medicines for Malaria Venture, which has been established through the World Health Organisation with the aim of developing affordable anti-malarial drugs for people in the disease-endemic countries.

While environmental performance across the Company generally continued to be sound, regrettably two significant environmental incidents (i.e., incidents rated 3 or above on the BHP Billiton Consequence Severity Table) were reported. These related to acid water seepage that resulted in the release of poor-quality water outside the containment system at our now closed Selbaie base metals mine in Canada. An action plan has been put in place to fully contain subsequent seepage.

In line with our target, all required sites have retained ISO 14001 certification for environmental management systems. Energy conservation plans and greenhouse gas management programs are in place at all required sites. Water management plans and land management plans are in place at 98 per cent of required sites, and waste minimisation programs are in place at 97 per cent of required sites. Life cycle assessments have been completed for all our major minerals products.

In addition, during the reporting period, we developed a Company-wide Closure Standard. The Standard has been designed to provide a clear, systematic and consistent set of requirements to ensure that closure plans achieve Company standards, that cost estimates reflect risks and opportunities, and that plans are regularly reviewed. The principles set out in the Closure Standard will be an integral part of our investment and governance processes.

Because we operate in a diverse range of countries and cultures around the world, working effectively with these different communities is a task that requires time, resources and expertise. We are increasingly aware that we must build our people’s capacity within the Company so that they have the skills to build strong relationships with the different community groups with which they interact. To this end, community relations plans are in place at 98 per cent of required sites. Also, for the third consecutive year, we participated in Oxfam Community Aid Abroad’s Corporate Community Leadership Program (CCLP) in Orissa, India. We have a growing number of CCLP graduates who can directly influence the Company’s practices and improve our community performance. Our community contributions of 1.3 per cent of our pre-tax profit, based on a rolling three-year average, once again exceeded the target of 1 per cent. Many of these contributions support programs that focus on delivering sustained benefits in areas such as community welfare, education and health. No transgressions of the principles embodied within the United Nations Universal Declaration of Human Rights were identified within the Group during the year.

Some of our improvements in HSEC performance have been realised through the application of the Operating Excellence business improvement methodology. Many of these applications have not only demonstrated HSEC gains but have also delivered sustainable business outcomes. For example, our Yabulu nickel refinery in Australia has identified and prioritised projects that offer potential environmental and economic benefits. Under their Yabulu Optimisation Initiative, three projects, specifically aimed at energy and water re-use with the added benefit of increased cobalt recovery, have been commissioned.

During the year, we have been active in the International Council on Mining and Metals (ICMM) work program. The ICMM was established in 2001 as a global leadership body on sustainable development. The focus has been on establishing a minerals sector supplement to the Global Reporting Initiative’s Sustainability Reporting Guidelines. The process has been one of multi-stakeholder engagement, with the sector supplement expected to be finalised in the coming year.

We have again included within our Full HSEC Report a progress assessment against the principles contained in the United Nations Global Compact. While fully recognising the right of our employees to freely associate and join trade unions, we have a number of locations where we have a mix of collective and individual arrangements. Prospective employees are made aware of employment arrangements prior to joining the Company. At all times, our businesses comply with local employment law requirements and treat employees in accordance with the values expressed in our Charter.

Over the year, we received recognition for our performance in a number of areas. We received an award recognising Business Excellence for Innovation from the Global Business Coalition on HIV/AIDS, the pre-eminent organisation leading the business fight against the AIDS pandemic. Our work in Australia with indigenous, environmental, health and cultural organisations was recognised with a Special Award in the Australian Prime Minister’s 2003 Awards for Excellence in Community Business Partnerships. At the Australasian Reporting Awards we received the Best Occupational Health and Safety Award, and the Association of Certified Chartered Accountants (Australia and New Zealand) awarded us for Best Environment Report. Other notable events included being judged Sector Leader in the UK Business in the Environment Index and maintaining our inclusion in the Dow Jones Sustainability Index and the FTSE4Good Index.

Our internal HSEC Awards program has again been highly successful in recognising outstanding HSEC performance and innovation. The program, which attracted an increased number of applications from across the Company, provides a strong indicator of the extent to which individuals within our operations are contributing to our sustainability aspirations.

This Full HSEC Report was prepared in accordance with the Global Reporting Initiative (GRI) 2002 Sustainability Reporting Guidelines. It should be recognised that, due to the size and complexity of our business, judgements have had to be made regarding the extent of the information that can be presented in relation to each GRI indicator. A GRI navigator is available in the Full HSEC Report website to assist in accessing specific information.

One of our great strengths is our diversity and the commitment of our people to continuously look for ways to improve all aspects of our business. Looking ahead, we aim to continue improving our HSEC performance, working together for a sustainable future for the benefit of our shareholders and other stakeholders.

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