The topic of the first article which has been examined to understand the concept of corporate accountability is: Corporate accountability in the Samarco chemical sludge disaster.
This article sets out the real world case of one of the worst disasters occurred in Brazilian country, which have affected the country to a huge extent. The Samarco chemical sludge disaster took place in 2015. The two iron ore dams of an extractive country Samarco burst out in one of the small towns of the country. The disaster had severely affected the lives of the citizens of the country. This article explains the disaster as the disruption of a society’s normal functioning. The article further discusses the importance of legal initiatives to improve the business’s performance towards dealing with the social and environmental issues. Since, 1980s, various voluntary standards have been introduced for the companies to enhance and improve their corporate social responsibilities. The article emphasises on the accountability of multinational and other large sized companies towards the safeguarding of environment so as to avoid the disasters which arises due to natural disasters as well as man-made disasters. Also, OCED’s guidelines were introduced in the context of human rights protections, environmental protection, labour standards etc. These guidelines also provide sound opportunity to impose pressure on the national environmental regulators to seek company’s accountability towards sustainable practices. The article is prepared suggests that if OCED guidelines are followed by the companies, then the negative impact of their operations could be reduced to a good extent (Da Costa, 2017).
The topic of the second article that has been examined for the purpose of understanding the concept of corporate governance and environmental reporting is: Corporate governance and environmental reporting: an Australian study
The main purpose of examining this article is to understand the relationship between the entity’s environmental reporting and the attributes of corporate governance. The article suggests that there is a strong positive relation between the extent of company’s environmental reporting practices and the proportion of company’s total independent as well female directors. The article also provides that it is quite important for the companies to focus on their individual impacts on the overall nature and environment. It is also important for the companies to report about their business practices that supports their corporate social responsibilities, to the wide group of their stakeholders such as employees, customers, regulators, communities and the shareholders. The article defines the environmental reporting as the provision of information related to company’s social, economic and environmental practices. The article sets out in Australia, reporting on social and environmental matters is voluntary. However, reporting on such matters have various benefits for the company such as it creates its sound public image in the market and also it avoids various legal interventions from the governmental regulators (Kathy, Tilt & Lester, 2012).
The topic of the third article that has been examined for the purpose of understanding the concept of environmental reporting is: Environmental disclosures in the annual report.
This article focuses on the concept of legitimacy theory which is based on the belief that in order to operate smoothly and successfully, companies must act in the best interest of the society by performing all its functions in the socially accepted manner. It is generally believed that the companies have the key aim of generating satisfactory returns for their shareholders. However, this article suggests that large companies have to satisfy a large number of stakeholders in order to survive efficiently. Further, this article explains that the companies are social creations and hence their existence majorly depends on how willing is the society is to allow them to operate successfully. Therefore, corporate reporting is the way by which company can communicate with its stakeholders about its social and environmental performances so as to keep them satisfied and informed (O’Donovan, 2002).
The topic of the fourth article that has been examined for the purpose of understanding the concept of Corporate Social Responsibilities: Alternative Perspectives About the Need to Legislate.
This is the research article prepared to review the submissions of Australian government in 2005-06 for the inquiry into Corporate Social Responsibility of the company. The article suggests that the regulations related to Corporate Social Responsibilities as well as accountabilities must be determined on the basis of market forces of the country. The results of the research indicate that the business communities in any country favours the anti-regulation approach of the country under which the companies must be given the flexibility for the determination of their individual social responsibilities. However, the active participation of business corporations in the CSR activities is an essential thing for the country to take moves and initiatives towards its sustainable development and to address the issues related to social or environmental problems faced by the people of that nation (Deegan, & Shelly, 2014).
BHP Billion Limited is Australian company which is listed on the Australian Stock Exchange. The company is based at Melbourne, Australian and is in existence since 1851. It is engaged in the business of discovering, acquiring, developing and marketing of natural resources across the world. BHP Billiton operates through its four main segments. These segments are: Petroleum, Copper, Coal and the iron core (Bloomberg, 2017). It is indulged in the activities like potash development; mining, smelting and refinement of nickel. Also, it deals in provision of financial services and other services like trading, marketing, administrative and other support services. As BHP Billiton is dealing in the processing of natural resources, it has to perform its business operations considering its total impact on the natural environment. Due to its very nature, the company has to duly comply with the requirements of sustainability reporting. A sustainability report is a comprehensive report prepared and published by a business organisation to provide the information about its economic, environmental and social performance, to its stakeholders. To prepare a sustainability report, a company has to comply with Global Reporting Initiative Guidelines.
Sustainability reporting of BHP Billiton:
From the sustainability report of BHP Billiton, it has been observed that sustainability is the central part of who the company is and what the company does. The directors of the company have stated in BHP’s sustainability report that they are firmly determined to bring a positive difference to the environment in which it operates its business. The company is voluntarily disclosing its sustainability performance to its stakeholders and it holds itself accountable for this commitment (BHP Billiton, 2017).
The health and safety is company’s top priority. The company gives huge importance to its sustainability responsibilities and hence it operates in the environment responsible manner. It also possesses huge values and principles towards safeguarding and respecting the human rights. The company aims at the development of the local communities to which it belong and the overall economic development of the country. The company has its own approach to fulfil its responsibilities towards the society, environment and economy as a whole. In pursuit of its sustainability requirements, the company has designed its formal statements named as Our Charter and Our Requirement Standards. The said documents set out the minimum performance requirements to be achieved compulsorily. The standards of the company in consistence with the principles and compulsory requirements of International Council of Mining and Metals’ Sustainable Development Framework, the United Nations’ (UN) Global Compact, the UN Declaration of Human Rights and the Voluntary Principles on Security and Human Rights (BHP Billiton, 2017).
The sustainability report of the company is in line with the International Council on Mining and Metals’ Sustainable Development Framework. BHP Group prepares this report by following the global reporting initiatives guidelines. As the company is one of the signatory members of United Nations’ Global Compact (UNGC), its sustainability report as its UNGC communication in relation to progress of implementation of various principles. This report also supports the development objectives of the company at the wider level.
The company has voluntarily invested around one of its pre-tax profits, amounting to us $ 2.3 billion to the community program since year 2001. Also, it has made social investments for $ 80.1 million towards community development programs and its foundations. Further it had introduced an e-learning module in 2017 to emphasise on the mental health of its employees. It has set new target for 2018 to reduce to 50% (in comparison with 2017), the number of employees exposed to silica and coal dust. However, there is an increase in the occupational illness of the employees working with the company by 18% in 2017 as compared to 2016 and that of contractors increased by 23%.
BHP Billiton’s sustainability report for 2017covers its assets which have been possessed by it during the financial period starting from 1st July, 2016 to 30th June, 2017. These assets include those assets which are under exploration, the projects that are under development or execution processes as well as the sites and operations which are closed. The non-operating joint ventures of BHP Billiton are not included in its Sustainability report. However, certain key issues in relation to such joint venture.
The company had targeted certain standards to be achieved during the financial years 2013- 2017 and the results of its performance have been included in the current year’s sustainability report. In terms of safety, health, community, climate change and environment, BHP Billiton has achieved all the targets except a target in relation zero work related fatalities (safety standard) because it had to face one fatality at its Escondida asset in FY2017.
From the sustainability report of BHP Billiton it has also been observed that the contractors who are working with the company’s assets are required to duly comply with company’s health, safety, environment as well as community standards. The company believes that the strong standards in the areas of governance are must for the creation of enduring value and for the maintenance of its social licence which is mandatory for its operations.
The sustainability committee of BHP Billiton is entrusted with the function of overseeing the HSEC standards as well as human right and other legal and regulatory matters. The company seeks guidance from the external expert parties and forums for the sustainability issues for its decision making process. Further, the risk management strategies of the company are designed in such a way that all the significant risks are assessed by considering the potential impact of its operations on the health, safety, environment as well as its communities. Also, the financial and legal impact of its operations related to the natural resources is kept in mind by the board of the company at the time of formulation of risk management strategies (BHP Billiton, 2017).
BHP Billiton’s Internal Audit Department is responsible for the continuous evaluation of design as well as effectiveness of company’s sustainability processes in each year.
Conclusion:
After examining the sustainability report of BHP Billiton for the year 2017 and various other articles in respect of company’s responsibility towards the sustainable development of the country, it can be concluded that in the modern world, sustainable business practices of the corporate entities plays vital role in the protection of environment and its constituents. After reviewing the sustainability report of a large international natural resources company BHP Billiton, it can be said that company is effectively undertaking its sustainability practices tin order to meet the protection of its health, safety, environmental and social standards and also it is voluntarily disclosing all the results of its sustainability performances. The companies which are involved in the significant business operations that have material impact on the environment must at-least consider their sustainability responsibilities while formulating their strategies and policies towards the growth and survival in the market where there is intense competition.
References:
BHP Billiton, 2017. Annual Report. Retrieved from: https://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpsustainabilityreport2017.pdf
Bloomberg, 2017. Overview of company’s profile. Retrieved from: https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=256654
Da Costa, K. (2017). Corporate accountability in the Samarco chemical sludge disaster. Disaster Prevention and Management, 26(5), 540-552.
Deegan, C., & Shelly, M. (2014). Corporate social responsibilities: Alternative perspectives about the need to legislate. Journal of Business Ethics, 121(4), 499-526.
Kathy Rao, K., Tilt, C. A., & Lester, L. H. (2012). Corporate governance and environmental reporting: an Australian study. Corporate Governance: The international journal of business in society, 12(2), 143-163.
O’Donovan, G. (2002). Environmental disclosures in the annual report: Extending the applicability and predictive power of legitimacy theory. Accounting, Auditing & Accountability Journal, 15(3), 344-371.
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