Socio-Economic Performance
Please refer to the following sections for details on our community performance during this reporting period.
Employee relations
Employee relations are the responsibility of local and business unit management. Each business is required to:
- put in place employment arrangements that deliver outcomes consistent with the BHP Billiton Charter, HSEC Policy and Guide to Business Conduct
- build open and productive relationships with employees and provide processes to assist in equitably addressing workplace issues
- ensure that employees have the opportunity to develop skills that allow them to contribute to business success and be recognised and rewarded for those results
- support fundamental human rights and freedom of association and ensure legal requirements governing employment are fully met.
Employee relations arrangements at individual workplaces are required to respect local legislative requirements and other local standards and circumstances. During the year, 23 operations reported conducting employee surveys to better understand employees’ needs and concerns.
Further details on our approach to employment and our policies with regard to equality, recruitment, remuneration, performance management and employee development can be found in our Employment Principles (see www.bhpbilliton.com/bb/peopleAndEmployment/employmentPrinciples.jsp).
Our Guide to Business Conduct also outlines our policies with regard to equality in employment.
The following sections detail our performance in this area over the reporting period.
- Employee profile
- Freedom of association
- Diversity
- Child and forced labour
- Indigenous employment and training
- Work/life balance
- Remuneration
Employee profile
During the year, the average number of permanent employees across the Company (including our owned and operated facilities as well as our share of unincorporated joint ventures) was 35 070, compared to 34 800 reported in the previous period. A breakdown of employee numbers by region is presented in the graph below.
Regional geographic breakdown of total number of employees 2003/04
Approximately 5 per cent of employees were engaged on a part-time or casual basis.
The average turnover rate of employees who were engaged at operated sites and corporate offices was 6 per cent.
A total of around 38 000 contractors were engaged at operated sites compared with 32 000 in the previous reporting period.
A breakdown of employment by Customer Sector Group is presented below.
Employment by CSG (Average) in 2003/04
Freedom of association
We fully recognise 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 individually regulated employment arrangements, but this does not affect the rights of those employees to choose to belong to trade unions. Prospective employees are made aware of employment arrangements prior to joining the Company.
The Company’s policy is to consult with employees on major organisational changes and ensure processes are in place at all locations to address any issues.
In line with our Policy, wherever we operate we will ’meet and, where appropriate, exceed applicable legal and other requirements‘ and work within the values of our Charter. Hence we will ’continue the drive towards a high performance organisation in which every individual accepts responsibility and is rewarded for results‘ in order to create value for all our stakeholders.
The graph below presents a breakdown of the reported percentage of employees at operated sites and offices in each region who are covered by collective bargaining agreements.
Reported percentage of employees covered by collective bargaining agreements by region 2003/04
Over the reporting period, we have received some criticism from unions that our approach to collective bargaining is not consistent with our commitment to the UN Global Compact’s Principle 3 that, ‘Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining’. With regards to these comments, we make the following clarifications:
- The Company’s policies and practices are consistent with this principle. Over 60 per cent of our workforce globally is covered by collective agreements, clearly illustrating effective recognition of collective bargaining.
- All our employees have the right to elect whether or not to join trade unions.
- We have consulted on a number of occasions with the United Nations on our position with regard to collective bargaining and the Compact requirements. We received support from the Compact Office on all occasions, including:
- initially prior to signing
- upon reconfirmation of our commitment with the appointment of Chip Goodyear as CEO in June 2003
- in December 2003 as a result of concerns raised by the Australian Council of Trade Unions
- With regard to our Western Australian Iron Ore operations, individual contracts were offered to employees in 1999 in order to ensure the business remained internationally competitive. This was already the standard approach to employment in the minerals industry in Western Australia. The process has been as follows:
- Current employees were provided with the option of staying on collective arrangements or moving to Australian Workplace Agreements. At the end of the three-year term of the contract, individuals have the option of staying on the contract or moving to a collective arrangement. A majority of employees chose to move to Australian Workplace Agreements.
- New employees are offered individual contracts and are advised that this is our method of employment in this business unit. At the end of three years, they also have the option of staying on this type of contract or moving to a collective arrangement.
It should also be noted that, under Australian law, a requirement when offering Australian Workplace Agreements is to ensure that no individual suffers any net disadvantage compared to the relevant collective agreement. Over the period since 1999, all employees have received increased remuneration, which has been supported by excellent productivity achievements.
Diversity
The Company is committed to developing a diverse workforce and to providing a work environment in which everyone is treated fairly and with respect and has the opportunity to contribute to business success and realise their potential. In real terms, this means harnessing the unique skills, experience and perspectives that each individual brings and recognising that these differences are important to our success.
Employment with the Company is offered and provided on the basis of merit. All employees and applicants for employment are treated and evaluated according to their job-related skills, qualifications, abilities and aptitudes only. Employment decisions based on attributes other than a person’s qualification to perform a job are prohibited, e.g., race, colour, gender, religion, personal associations, national origin, age, disability, political beliefs, HIV status, marital status, pregnancy, sexual orientation or family responsibilities. Harassment in any form is unacceptable.
Approximately 7 per cent of our Company’s management are women. In the year ending 30 June 2004, about 9 per cent of full-time employees at operated sites and offices were women. There were significant regional differences, with women representing about 33 per cent, 18 per cent and 12 per cent of full-time employees in Europe, North America and Australia respectively. While there are no female members of the Board currently, the Company Secretary is a woman, as is the recently appointed President of Gas and Power.
The Company has identified some specific sites and countries where diversity issues are particularly sensitive. Examples of ongoing policies or programs undertaken to address employment diversity issues include Employment equity in South Africa, which ultimately aims to achieve representation at all levels in our businesses consistent with the demographic profile of South Africa, and targeted indigenous employment programs in the Pilbara region of Australia (Iron Ore), the Northwest Territories in Canada (EKATI), and New Mexico in the United States (New Mexico Coal). Further detail on our indigenous employment strategies is provided in Indigenous employment and training.
Employment equity in South Africa
To address historical issues of South Africa, which resulted in the majority of South Africans being excluded from participating in the mainstream economy, BHP Billiton South Africa adopted an empowerment strategy of change. This empowerment strategy covers transformation at the levels of ownership, management, sustainable socio-economic development, procurement and employment equity. The Employment Equity Policy is aimed at redressing previous disadvantages, disempowerment and employment imbalances through accelerated development, training and education programs.
We have set targets to increase representation of those people who are included in what are classified as ‘designated groups’ by the South African Employment Equity Act. Designated groups include African, coloured, Indian and disabled males and females and white females. Our target is to have 40 per cent representation of designated groups in positions ranging from Chief Operating Officer down to middle management level.
Current designated group representation across our South African management levels is as follows:
- 43 per cent representation at top management level
- 18 per cent representation at senior management level
- 32 per cent representation at middle management level.
For details of other work we are undertaking to address historical inequalities in South Africa, refer to our case study: Black Economic Empowerment Supply Unit established to promote BEE supply initiatives in the southern African region.
Indigenous employment and training
Indigenous employment is an important issue. Various initiatives have been introduced and reported in previous years, which have been supplemented at some operations by new programs aimed at further consolidating and increasing indigenous employment levels.
In Australia, BHP Billiton Iron Ore’s employment and training program continues to progress well. Direct indigenous employment has grown to nearly 6 per cent, with the target being 12 per cent by 2010. New initiatives over the last 12 months include:
- extension in the town of Newman of the high school educational partnership with education authorities, indigenous students and their families and the Graham (Polly) Farmer Foundation. (This program has been working successfully for three years at Port Hedland, and it was considered important that indigenous students at Newman were also provided with an opportunity to benefit from it.)
- participation in the Local Employment Strategy Group, comprising community groups, government agencies and local industry leaders, to establish partnerships with outside organisations to develop and support recruitment pools and training opportunities for indigenous candidates.
In addition, a group of senior Iron Ore people and Pilbara indigenous leaders visited the EKATI operation to share experiences and bring back ideas to further improve the programs at our Pilbara Iron Ore operations. Arising out of the visit were the following initiatives:
- Four indigenous employment liaison officers, two at Port Hedland and two at Newman, have been appointed to actively assist with the continuing development of existing programs and provide greater support to potential indigenous job and trainee applicants, current indigenous employees and trainees, and Company people working with them.
- The Company has committed to give indigenous people first priority for employment for entry-level positions. In Port Hedland, significant progress has been made to define and identify these entry-level positions.
- The mining operations around Newman are currently undergoing a significant growth phase, and the focus has been on maximising indigenous employment. The current target for these new positions is to achieve 30 per cent indigenous employment.
Indirect (contractor) indigenous employment at BHP Billiton Iron Ore’s operations has also been a focus for furthering indigenous employment, and all new major contracts have provisions setting minimum required percentages of indigenous employees. For example, the mining contract for Area C, which was let in 2003, had a minimum requirement of 6 per cent with a 1 per cent per annum increase. Currently their requirements have been exceeded, with 9 per cent indigenous employees.
For further details on BHP Billiton Iron Ore initiatives, refer to our case study: BHP Billiton Iron Ore initiatives provide educational and employment opportunities for our indigenous stakeholders in the Pilbara.
At Groote Eylandt Mining Company (GEMCO) in the Northern Territory, Australia, 42 full-time employees of the company’s direct workforce of 201 are of indigenous descent, a total of 21 per cent. This number includes 24 full-time participants in GEMCO’s Aboriginal employment strategy, which combines employment and training with activities undertaken by GEMCO’s Rehabilitation and Mine Services department.
Our EKATI operation in Canada and our New Mexico operation in the USA undertake a range of indigenous employment and training programs. The EKATI operation currently has 30 per cent Northern Aboriginal people employed directly and indirectly and has almost reached its target of 31 per cent. The New Mexico operation has 64 per cent Native American employees, including 87 per cent at the Navajo Mine.
Child and forced labour
In line with our Policy commitment to the UN Universal Declaration of Human Rights, we exclude the use of child labour and prohibit the use of forced labour at our operations. All sites are required to report the age of their youngest worker and the corresponding minimum working age in their jurisdiction. Over the reporting period, the youngest employees were 16 years of age, working as apprentices/administrative trainees in our Australian operations.
Work/life balance
Particular challenges arise from the global nature of our operations, which span all major time zones. Several options are available to assist employees in balancing the competing demands of their work and personal lives. By implementing policies and practices that help employees to balance these demands, we aim to achieve the goals of:
- increased productivity
- improved employee morale
- enhanced corporate image and positive public relations
- heightened employee commitment to work and to the organisation
- increased ability to attract and recruit the best employees
- achievement of workforce diversity objectives
- improved health and safety record due to fewer work-related incidents/accidents
- reductions in tardiness and absenteeism
- decreased turnover and, as a result, increased return on training and development investments.
At a regional level in Australia, we have been working on a number of initiatives to promote an improved work/life balance for our employees. These have included:
- guidelines for flexible work options
- elder care information kit
- employee assistance program.
Remuneration
When developing and reviewing remuneration and rewards policies and practices, we recognise the need to ensure that:
- our total remuneration practices are aligned with the market conditions in the industries, countries and regions in which we operate
- our practices comply with any relevant law and the Company’s standards of business conduct
- distinguishable differences in remuneration are aligned to the relative performance of the business, assets and individuals
- our employees see the link between the results they produce and the level of reward they achieve.
All Company employees earned greater than the stipulated minimum wage in the countries in which they worked.
Business conduct
There were 80 substantive enquiries to the business conduct helpline and fraud hotline systems in the year to 30 June 2004. Of the 80 enquiries, 25 were on the same specific issue. In order to ensure that the scope of enquires would be representative, the 25 enquiries on the same topic are treated as one enquiry. A breakdown of the enquiries is presented in the graph below. The most common issues related to conflict of interest, fraud, employment-related matters (such as disciplinary action, termination or hiring) and outside activities. All cases and the responses were reported (with appropriate management of confidential information) to the Global Ethics Panel. The management of several cases involved one or more members of the panel in the resolution process.
Business conduct and fraud hotline categories of calls 2003/04 
Following on from a report covering activities related to business conduct that was presented to the BHP Billiton Board in August 2003, and in light of international developments regarding corporate governance, there was a request by the Risk Management and Audit Committee of the Board for an assessment of an external and independent ethics helpline system. A 12-month trial of an external helpline system was established in October in South Africa. It was later extended to include Mozambique. The system provides staff with an external freecall phone number to call as an alternative to our internal business conduct helpline and fraud hotline. The external service provider reports any calls requiring follow-up immediately to our business conduct representative for action. In the first nine months of the trial, there were six calls requiring follow-up. After the trial has run its 12-month course, a decision will be made on whether to continue with the service in South Africa and Mozambique, to widen the service to other countries or to cease offering the service and revert to our internal system.
Internal performance requirements for business conduct are fully integrated in the HSEC Management Standards. Questions regarding business conduct are included in the HSEC audit and self-assessment, which has helped to quantify the extent to which employees and contractors have been aware of the Guide to Business Conduct. In addition, an effort has been made to assess the effectiveness of the roll-out in offices. This has indicated a substantive level of roll-out activity in our offices around the world. The Guide has been rolled out to all sites and functions. An effort was made over the course of the year to improve the communication of the Guide with posters, a printed summary version of the Guide, electronic information and other communication tools.
It is recognised that there is a continuous need to reinforce and refresh business conduct principles. This is supported by a strong commitment from the most senior management levels of the Company to ensure the principles of the Guide are understood and practised. This commitment is evidenced in part by an address by the Company CEO, Chip Goodyear, on the topic of ethics (including our approach to business conduct) to the third International Society of Business, Economics and Ethics World Congress in July 2004. The Company was a sponsor of the World Congress, lending support for debate on topics such as corporate ethics and governance. During the year, the Company also contributed to a report on whistle-blowing and corporate ethics systems written by ISIS Asset Management (a UK-based institutional investor), TRACE (an international non-profit business association active in the field of ethics) and the International Business Leaders Forum (a non-government organisation promoting socially responsible business practices).
Economic contributions
The economic contribution we make to society is much more than the financial profits we derive. More specifically, our contribution includes the value that flows from the broader contributions of our operations, such as payments to our employees and suppliers and disbursements to governments, including taxes and royalties.
Refer to the following sections for further details on:
Our economic footprint
The data in this section deal with the economic affairs of the BHP Billiton Group and cover both operated assets and our share of unincorporated joint ventures. Details on the financial definitions and additional performance information are available in the financial Annual Reports (see www.bhpbilliton.com/bb/aboutUs/annualReports.jsp). In our capacity as a member of the International Council on Mining and Metals and a signatory to the Global Compact, and with our primary listings on the Australian and London stock exchanges, we are keenly aware of the various voluntary codes covering practices in sustainable development and governance more generally.
In formulating the governance principles that guide our operations, the Company’s Directors have taken into account the various regulatory requirements, together with standards of best practice. Where governance principles vary across jurisdictions, the Directors have resolved to adopt those principles that they consider to be the better of the prevailing standards.
Refer to the graphs below for the Company’s diversification by operating assets and by market (turnover) across geographic regions and a breakdown of earnings by Customer Sector Group.
Diversification by market (turnover) At 30 June 2004 
CSG earnings before interest and tax (EBIT) excluding exceptional items 30 June 2004 
Diversification by geographic region (net operating assets) At 30 June 2004 
Globally, in 2003/04 the Company spent in the order of US$14 billion sustaining its businesses. The breakdown of this amount by category is presented below and shows expenditure by region to help to quantify the regional economic contributions of the Group.
Total allocated expenditure by category 2003/04 (US$ million) 
Expenditure by region (US$ million) 2003/04
| Income Tax Resource Rent Tax and Royalties |
Employee Payments, Goods and Services2 | Community Contributions3 | Shareholder Dividends4 | Regional Totals | |
|---|---|---|---|---|---|
| Africa | 59 | 2 129 | 12 | 178 | 2 378 |
| Australia and Asia | 1 354 | 5 529 | 15 | 964 | 7 861 |
| Europe | 167 | 627 | 1 | 473 | 1 268 |
| North America | 199 | 1 134 | 5 | 2 | 1 339 |
| South America | 381 | 843 | 14 | <1 | 1 238 |
| Total | 2 160 | 10 261 | 47 | 1 617 | 14 085 |
- The data in this table have been rounded. Unless otherwise stated the data cover operated assets and the Group’s share of unincorporated joint ventures.
- Goods and Services data only cover operated assets. Due to the way that we currently document the sourcing of all imported materials and services, we have not been able to allocate all expenditure on goods and services. Additional unallocated expenditure on goods and services totalled US$155 million globally. (Note: these data have not been audited.)
- Data cover both operated assets and our share of joint ventures.
- Shareholder dividends are based on the location of shareholders as per the share register of members dated 30 June 2004 and total dividends payable in FY04.
We also continue our support for the Extractive Industries Transparency Initiative regarding disclosure of payments of taxes and royalties. We will work with our host governments that participate in this process to ensure public reporting of these payments. In the interim, we have presented these data on a regional basis in the chart above.
Suppliers
Participating effectively in local economies is a key means of contributing to sustainable business creation and economic development. To this end, as outlined in our HSEC Management Standard 11, we seek to ensure that ‘consideration is given to creating business opportunities for local suppliers and contractors’. We have progressed a number of initiatives on this front and have detailed three in the case studies below:
- EKATI agreements aim to provide sustainable employment, training and business opportunities for indigenous communities
- Black Economic Empowerment Supply Unit established to promote BEE supply initiatives in the southern African region
- Mozal assists growth and development of local suppliers through collaboration and capacity-building programs.
The diagram below provides an indication of the distribution of our supply spend at a local, national or international level by our businesses.
Distribution of supply spend
Feedback
Site Map
Privacy Policy
Terms & Conditions