BHP Billiton’s CSR Activities
Discuss About The Sustainable Livelihood To Implement CSR.
With the ramified economic changes, corporate social disclosure of company has changed drastically with a view increase the transparency of the business. The BHP Billiton Company is Anglo-Australian multinational mining, metal and petroleum dual-listed public company which is having headquartered in Melbourne. The CSR activities of the company are highly effective which focuses on delivering the best results to stakeholders. The town of Bento Rodrigues has been hardest hit of BHP Billiton Company which resulted to death of 600 people (BHP Billiton, 2017)
The Corporate social responsibility is known with it’s vary name such as corporate sustainability, sustainable businesss, corporate conscience, corporate citizenship and responsible business. In many cases, harm to the environment and harm to vulnerable communities go hand-in hand while working with the organization (Blowfield, Karam & Jamali, 2017).
There are several corporate laws and regulations which need to be followed by company to deliver the best results for the society. . It is considered that BHP Billiton Company has followed comprehensive CSR strategy after happening of disaster of town of Bento Rodrigues. One of the major unique CSR strategic programs of the BHP Billiton Company was to establish nexus between the corporate social responsibilities and corporate governance (Blowfield, Karam & Jamali, 2017).
The CSR disclosure of BHP Billiton Company after 2016 has shown the essence of legitimacy theory which have been followed by company to increase the overall outcomes of efficiency. It is observed that due to the disaster of town of Bento Rodrigues, many government authority and corporate governance program have put allegation on the company that it failed to follow proper rules and regulations while operating its business in Brazil. However, Minas Gerais state environmental prosecutor declared the incident as mistake of BHP Billiton which emerged due to its failure to meet legal and ethical compliance. He alleged company for not complying with the CSR rules legal corporate governance with a view to save the costing (Blowfield, Karam & Jamali, 2017).
After seeing the disaster results and negative impact on the society, BHP Billiton has focused to increase the overall outcomes and efficiency of the company. It is observed that Corporate social responsibilities program of BHP Billiton has been prepared by making more focus on rendering the benefits to society and keeping its business more transparent for its stakeholder. Corporation have enormously determinate effects on the environment. Oil spills are some of the most conspicuous example which has found to have negative impact on the society. It is observed that in order to account for the important social and ecological considerations in doing business, BHP Billiton Company have adopted the concept of triple bottom line social, environmental and economic. After the incident of 2015, 2016, company changed its reporting frameworks and also installed eco- supporting supply chain to strengthen its CSR activities for the social benefits of society. It has made efforts to hire, foster and empowered a diverse workforce and in order to reduce the negative impact of its business on society, it has set up legal and ethical code of conducts. BHP Billiton Company has also started its green washing program to strengthen the positive eco-logical impact on the society. It has also increased the overall funding for its CSR activities by following the international corporate social responsibilities program (BHP Billiton, (2016). The current CSR program has increased return available to its shareholders to fret over its negative own impact. The laws and regulations must be followed in all jurisdictions in which company operates. Company has also issued its investment for supporting the families and people who got affected by the negative impact of its business (Blowfield, Karam & Jamali, 2017).
Legitimacy Theory Approach
There are several other CSR programs which have been adopted by BHP Billiton Company to mitigate the negative impact of its business. However, with a view to increase the overall outcomes of its CSR activities, BHP Billiton Company has followed legitimacy theory in its triple bottom line (Bair, & Palpacuer, 2015). The legitimacy theory is one of the most important theories which explain the phenomena of voluntary social and environmental disclosure in corporate communication. In context with the legitimacy theory, it is observed that all he international company working on the international level are required to follow the proper corporate disclosure program to strengthen the corporate disclosure program. BHP Billiton Company has increased the transparency of its corporate social program to disclose all of its reporting data to its stakeholders. In 2014, due to its incidents in Brazil, Company had to face high loss in term of monetary outcomes and brand image. The last incident was the negative outcomes which lower the brand value of BHP Billiton Company on international level. It is evaluated that due to the less effective CSR corporate governance program and less effective CSR activities, it had to face increment in its overall cost of production which eventually decrease the overall return on capital employed (Bair, & Palpacuer, 2015). After that, as per the legitimacy theory, BHP Billiton Company established harmonization in its reporting framework by complying with the IFRS rules and regulations. It was observed that the inclusion of the due diligence reporting, management representation letter and CSR activities program disclosure reporting framework was adopted by BHP Billiton Company to strengthen its reporting frameworks in the best interest of stakeholders and complying with the OECD guidelines. It was cleared stated in the OECD guidelines that all the multinational companies needs to establish the nexus between their CSR reporting program and United Nations Guiding Principles on Business and Human Rights to render the best benefits to society (Ross, 2017).
BHP Billiton Company clearly states in its annual report that all its value chain activities and work program has been mould in such a way which will eventually strengthen the protection of environment and complying with the applicable laws and regulations. As per the legitimacy theory and adoption of it international CSR program, BHP Billiton Company stated that the reporting framework of its corporate social program is based on the consideration of the key health, safety, environment, community and socio- economic risk of the business. The current CSR program of BHP Billiton Company has been designed after considering the last incidents and allegation imposed by the CSR authority.
As per the annual report of company, it has been contributing more than 5% of its overall average 5 year profit for its corporate social program to strengthen the benefits rendered to economic (Bair, & Palpacuer, 2015). BHP Billiton Company has been using number of methods to ensure its complies with its CSR policies which includes conducting the progress assessment program on its rendered performance in relation to UN global work program, global reporting initiatives and rendered benefits to society at large. It has also adopted investing community projects and recording of its community contribution spend against UN policies and rules (Bluszcz, & Kijewska, 2015).
Adoption of Triple Bottom Line Concept
As per the legitimacy theory, companies indulged in hazardous work process require more strengthen rules and regulations for its reporting disclosure. BHP Billiton Company indulged in oil, petroleum and mining program which requires utmost care. However, it has also installed eco-supportive system to improve its eco- management system to improve the overall performance throughout the time. It is observed that company needs to implement effective rules and regulations which will not only increase the disclosure requirement but also strengthen the corporate governance program of Company (White, 2017).
It is observed that if BHP Billiton Company perceives legitimacy theory then it could adopt number of strategies, course of corporate governance action to implement the corporate strategic program. These four strategies are given as below (Gamu, & Dauvergne, 2018).
The BHP Billiton Company may seek to educate and inform its relevant stakeholders about the materialistic and non-materialistic things (Bair, & Palpacuer, 2015).
IT may also seek to manipulate and mould perception by deflecting appeal to organizational authority.
It may also strengthen its corporate governance program to implement strategic program to strengthen the transparency of the work system and implemented disclosure code of work program (Mayes, McDonald, & Pini, 2014).
As per the report given by after investigation by the United States Securities and Exchange Commission after Cambodia’s Minister for Water Resources, it was analysed that $ 2.5 million payment was made by BHP Billiton company to government for the social development of the people who got hurt by its spill case in Brazil. Nonetheless, the new program and implemented corporate strategic program implemented by company shown that the eco-system and developed plan will result to increased supporting program by the company for the benefit of society at large (Carter, 2015). It is further observed that in order to implement the proper strategic program by the BHP Billiton Company for the benefit of the protection of environment, it followed proper strategic program of complying with the international environmental laws and regulations in the best interest of organization. In the CSR reporting framework, BHP Billiton Company ensure that it must follow proper provision of safe and secure health work program for its employees and clients at large. Appropriate precautionary measures for the work related hazardous work program will be undertaken for the benefit of the society. It has been observed that BHP Billiton company also undertaken worker related safety program for the benefit of society. The public relation of company was also boost by it with a view to increase its overall business outcomes. It has followed proper strategic program to increase the overall effectiveness of the work and reduced the negative impact of its businesss on the stakeholders (Narula, Magray, & Desore, 2017).
Reporting Framework and CSR Programs
Despite of its bad history and negative outcome of the Brazil oil spill case, BHP Billiton Company has maintained a good reputation of its CSR activities by implementing the strategic program. In addition to this, it has also included its name in the top 20 CSR following company which have shown the high amount of positive indicator for the effective business functioning (Albert, Werhane, & Rolph, 2014).
The public relation of the BHP Billiton Company is also based on the CSR reporting frameworks and harmonized financial reporting. It has been observed that company has complied with the all the domestic and international reporting frameworks to maintain transparency for its stakeholders. This reporting framework is followed to disclose every sing details and work process of company to its shareholders so that they could know the possible problems and issues which company has been facing (Visser, 2016). Therefore, it could be inferred that The CSR disclosure of BHP Billiton Company after 2016 has included the essence of legitimacy theory due to the disaster of town of Bento Rodrigues, government authority allegation on the company that it failed to follow proper rules and regulations. However, Minas Gerais state environmental prosecutor declared the incident as mistake of BHP Billiton which emerged due to its failure to meet legal and ethical compliance (Haufler, 2016).
Conclusion
With the ramified changes in economic conditions and negative businesss factors, CSR reporting compliance and BHP Billiton Company’s CSR contribution towards society has increased throughout the time. It has used 5% of its average five year profit for the benefit of its stakeholders. It has kept the business functioning of organization effective by keeping the standards CSR policies for the benefits of society and reducing the negative impact of its organizational functioning. The eco system implemented and effective complied program will eventually increase the overall outcomes of the business at large. Now in the end, it could be inferred that after the incident of BHP Billiton Company, the management invested good amount of its capital for the benefits of society and managing the business effectively for reducing the negative impact of its oil, petroleum and other business on its stakeholders.
References
Albert, P. J., Werhane, P., & Rolph, T. (2014). Introduction. In Global Poverty Alleviation: A Case Book (pp. 1-11). Springer, Dordrecht.
Bair, J., & Palpacuer, F. (2015). CSR beyond the corporation: contested governance in global value chains. Global Networks, 15(s1).
BHP Billiton, (2016), Annual Report, retrieved from https://www.google.co.in/search?q=BHP+Billition+annual+reprot&oq=BHP+Billition+annual+reprot&aqs=chrome..69i57j69i60j69i61j69i60j69i59.5450j0j7&sourceid=chrome&ie=UTF-8
BHP Billiton, (2017), Annual Report, retrieved from https://www.google.co.in/search?q=BHP+Billition+annual+reprot&oq=BHP+Billition+annual+reprot&aqs=chrome..69i57j69i60j69i61j69i60j69i59.5450j0j7&sourceid=chrome&ie=UTF-8
Blowfield, M., Karam, C., & Jamali, D. (2017). Introduction. Corporate social responsibility in developing countries: a development-oriented approach. In Development-Oriented Corporate Social Responsibility: Volume 2 (pp. 15-26). Routledge.
Bluszcz, A., & Kijewska, A. (2015). Challenges of sustainable development in the mining and metallurgy sector in Poland. Metalurgija, 54(2), 441-444.
Carter, R. A. (2015). Innovative CSR Concepts Break Down Economic Obstacles. Engineering and Mining Journal, 216(9), 44.
Gamu, J. K., & Dauvergne, P. (2018). The slow violence of corporate social responsibility: the case of mining in Peru. Third World Quarterly, 1-17.
Haufler, V. (2016). Corporations, Governance Network, and Conflict in Developing World. The New Power Politics: Networks and Transnational Security Governance, 225-245.
Mayes, R., McDonald, P., & Pini, B. (2014). ‘Our’community: corporate social responsibility, neoliberalisation, and mining industry community engagement in rural Australia. Environment and Planning A, 46(2), 398-413.
Narula, S.A., Magray, M.A. & Desore, A., (2017). A sustainable livelihood framework to implement CSR project in coal mining sector. Journal of Sustainable Mining, 16(3), pp.83-93.
Ross, D. (2017). Dynamics of corporate social responsibility in Australia’s mining sector: A critical sociological analysis. In The dynamics of corporate social responsibility (pp. 187-201). Springer, Cham.
Visser, W. (2016). 19. The future of CSR: towards transformative CSR, or CSR 2.0. Research Handbook on Corporate Social Responsibility in Context, 339.
White, S. (2017). Regulating for local content: limitations of legal and regulatory instruments in promoting small scale suppliers in extractive industries in developing economies. The Extractive Industries and Society, 4(2), 260-266.
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