BHP Billiton is an Anglo-Australian multinational company that was created through the merger of BHP and Billiton in the year 2001. The headquarters of BHP Billiton are at two places; Melbourne and London. This organisation is ASX listed company and it mainly deals in mining, petroleum, metals, iron ore, copper, natural gas, nickel and uranium (Bhp.com 2018). Revenue of BHP Billiton was US$ 38.286 billion in 2017 and number of employees work in the organisation are 65,000.
The purpose of the report is to highlight the CSR initiatives and ethics taken by BHP Billiton. The discussion of the report will be completely based on responses of BHP Billiton to stakeholders’ expectation on corporate social responsibilities and human rights.
Carroll’s Model of CSR
Carroll defined the CSR pyramid with simple framework that states why and how the organisations can meet the social responsibilities. Carroll’s pyramid has four distinct responsibilities. First, economic responsibility is about making profit from the business and it is the only way to exist in the business world. As stated by Carroll (2016), economic responsibility gives benefits and it is the only path to survive in the society for long run. Legal responsibility is to abide by the laws and regulation. Organisations must follow the legislation in which business environment they are currently working. The legal responsibilities of the organisations are to follow the laws regarding Competition Laws, Health and Safety of the employees and Employment laws. Ethical responsibilities of the organisations are to be ethical and follow the obligation to do what is right for the organisation. The organisations in the business environment must be just and fair to avoid the harm. According to Capaldi et al. (2015), the ethical responsibility of the businesses is to go beyond the requirements of the laws. Finally, philanthropic responsibility of the companies is to return the society and this responsibility is mainly discretionary; however, this responsibility is significance to improve the brand image of the organisations.
Wartick and Cochrane’s Typology
Wartick and Cochrane (1985) proposed the three-dimensional model of principles, policies and processes. This concept is the integration of the principles of CSR, the policies’ of social issues management and the process of action into the evolving system. In order to understand the social performance of the organisations; three views are significant, such as the basic definition of the responsibility of the organisations regarding society, the issues existent in social responsibilities and philosophy of responses. According to Grayson and Hodges (2017), in order to understand the corporate social performance; the management of the organisations need to understand the social issues to which these responsibilities are tied. Social issues can evolve under the social responsibilities and the businesses must address the social issues. Social involvement to solve the social issues are associated with five areas; matching the social need, seriousness of social need, interest of top executives, public relations, government pressure. As pointed out by Devin and Richards (2016), philosophy of the business in response to social responsibility can be defined as social responsiveness. Social responsiveness is about the organisations’ decisions regarding the social pressures.
BHP Billiton produces each year Sustainability Report Scope on the basis of emissions calculation. BHP Billiton is in the mining industry and the organisation has to look after the environment as this industry tends to harm the environment. BHP Billiton has been in the partnership with Conservation International since 2001 to support the efforts on biodiversity and conservation, both within operations and more broadly. As published in the book by Yakovleva (2017), BHP Billiton has implemented an integrated wellbeing and quality of life programme for the workers so that they can live in the best environment. BHP Billiton works in fossil fuel extraction and it is responsible for greenhouse gas emission. BHP Billiton is responsible for cumulative emission as in the year 2014 at 8,789 MtCo2e and it is represented almost 0.65% of global industrial emissions (Bhp.com 2018). BHP Billiton does voluntarily reporting to the GHG emissions and this organisation was criticised for the lobbying against the carbon pricing in Australia. In addition, BHP Billiton donates almost 1% of its pre-tax profits to community programme in order to improve the standard of living. In order to reduce the carbon footprint, BHP Billiton established and co-founder of Bush Blitz with Australian Government to help Australian Biological Resources Study. BHP Billiton takes the approach to environmental management on the basis of robust identification, control and assessment of material risk across all phases of the business (Frederick 2018). In case of the climate change, BHP Billiton focuses on decreasing the greenhouse gas emission and energy use at the operation process. Managing water is a complex task due to range of water-related risks and the possible impacts on water resources, communities and bio-diversities. BHP Billiton has Environmental Resilience Framework to build on existing conservation and REDD commitments by contributing to enduring environmental outcomes through water stewardship, biodiversity conservation and climate change.
BHP Billiton is committed to high ethical business practices and governance standards. BHP Billiton provides detail operational, community and environmental information for the local governmental stakeholders. This organisation has its committee to monitor the progress of environmental factors as it has different departments and agencies of regulatory information in Coal, Petroleum, Copper and Iron Ore. There are two types of sustainable reporting; web-based report and summary report published by the organisation following the Global Reporting Initiative (GRI).
BHP Billiton has taken the initiatives in line with the company charter and the culture of care, the organisation has undertaken the activities to enhance the mental and physical wellbeing of the people. BHP Billiton has worked hard over the past few years to simplify and roll out health and safety of the employees and communities to control across the assets. BHP Billiton is one of the members of UN Global Compact and this organisation is the supporter of Extractive Industries Transparency Initiative. BHP Billiton follows the Corporate Human Rights Benchmark as well. BHP Billiton is not only fosters the strong relationship local communities; however, this organisation tries to provide better society in international level. It has taken the initiatives to develop the opportunity provided by mineral resources and they continue to prosper in delivery of the demand. In order to deal with the climate change, BHP Billiton achieves the meaningful reduction in energy use to recognise the significance of playing societal responsibility (Tai and Chuang 2014). BHP Billiton has taken collaborative approach to improve the condition of the society and the stakeholders to ensure the sustainable future in all the activities.
BHP Billiton has some issues regarding not following of the CSR and the development of the society and environment. BHP Billiton faced the issue of a dam holding back waste water from the iron ore mine in Brazil. BHP Billiton took the improvement actions to ensure that it meets the highest ethical standards in all dealings. This is consistent with the charter values.
BHP Billiton is fully committed to working with integrity and it has been following the Code of Business Conduct specially prohibits the engaging in unethical behaviour. BHP Billiton works with integrity, safety and it demonstrates the commitment towards the shareholders and stakeholders through processes and actions. The organisation always looks out to learn and seek for the scope to develop (Linnenluecke et al. 2015).
BHP Billiton follows the philosophy of governance that goes beyond the compliance. The organisation believes in high-quality governance that supports the long-term value creation that can put good governance in good values. The structure of the corporate governance allows the interaction between the shareholder and the Board; the relationship between the Board and the CEO. The robust process helps to ensure the delegation flows through the Board and its committees towards the CEO, Operation Management Committee and the Executive Leadership Team. This communication process assists to ensure the alignment with shareholders and they have responsibility for day-to-day management. OMC has the responsibility for controlling, planning and directing of the activities (Kraakman and Hansmann 2017). BHP Billiton follows the Charter as part of the corporate governance framework and it embodies the corporate purpose.
BHP Billiton does not have the issue of dilemmas and contradictions in business that can lead to the dilemma for the managers as there can be conflict between societal outcomes and business performance. Social outcomes can be part of the protecting of the environment and protecting of the employees in BHP Billiton. In the year 2015, BHP Billiton hit almost $25m fine for the corruption allegation in corporate governance (Rupp et al. 2015).
BHP Billiton Foundation has been working to address some of the critical global sustainable development challenges that are facing the generation. The organisation works in partnership to find the new solutions and set new ethical standards for the future. BHP Billiton Foundation does the charity of making the education helpful to unlock the talent of the young people. BHP Billiton does the natural resource governance that raises the standards of governance and transparency to ensure the wealth created by the global resources. According to Schwartz (2017), BHP Billiton has resilient environments for the sustain peoples’ culture, food security and livelihood to combat the climate change and underpin the thriving society around the world. BHP Billiton shows the quality education through which the people can build the skill and knowledge to seize the opportunity towards improvements of lifestyle and enhance the communities and societies.
Conclusion
CSR has already become the major concern in global mining economy as the heightened awareness of unethical business. BHP Billiton has the CSR policy that prohibits the impact of government officials and BHP takes the measure for the protection of the environment, workplace health and safety and effectiveness of public relations. Therefore, BHP is in the controversial industry and BHP takes the measure for betterment of the community and environment through lowering the environmental impact. Stakeholders of the business demand the accountability to verify transparency.
Reference List
BHP Billiton. 2018. Environment and Corporate Social Responsibility. [Online] Available at https://www.bhp.com/environment [Accessed 17th Jun 2018]
Capaldi, N., Schmidpeter, R., Zu, L. and Fifka, M.S., 2015. Dictionary of corporate social responsibility CSR, sustainability, ethics and governance. Berlin: Springer.
Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), p.3.
Devin, B. and Richards, C., 2016. Food waste, power, and corporate social responsibility in the Australian food supply chain. Journal of Business Ethics, pp.1-12.
Frederick, W.C., 2018. Corporate Social Responsibility: From Founders to Millennials. In Corporate Social Responsibility(pp. 3-38). Berlin: Emerald Publishing Limited.
Gerde, V.W., Cochran, P.L. and Welcomer, S., 2017. Power and Social Behaviour: A structuration approach to stakeholder networks. In Unfolding Stakeholder Thinking 2 (pp. 83-105). Routledge.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Abingdon: Routledge.
Ioannou, I. and Serafeim, G., 2015. The impact of corporate social responsibility on investment recommendations: Analysts’ perceptions and shifting institutional logics. Strategic Management Journal, 36(7), pp.1053-1081.
Kraakman, R. and Hansmann, H., 2017. The end of history for corporate law. In Corporate Governance (pp. 49-78). Gower.
Linnenluecke, M.K., Birt, J. and Griffiths, A., 2015. The role of accounting in supporting adaptation to climate change. Accounting & Finance, 55(3), pp.607-625.
Rupp, D.E., Wright, P.M., Aryee, S. and Luo, Y., 2015. Organizational justice, behavioural ethics, and corporate social responsibility: Finally the three shall merge. Management and Organization Review, 11(1), pp.15-24.
Schwartz, M.S., 2017. Corporate social responsibility. Abingdon: Routledge.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Yakovleva, N., 2017. Corporate social responsibility in the mining industries. Abingdon: Routledge
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