Critical Evaluation Of CSR Disclosures In Sustainability Reports Of BHP Billiton

Background on the Samarco dam disaster and its impact

Discuss about the CSR and Sustainability for Journal of Cleaner Production.

According to the Age article, the BHP Billiton dam disaster that took placein  5 November 2015, when an iron ore tailings dam in Mariana in Brazil, witnessed a calamitous failure, that resulted in  flood and devastated the village of Bento Rodrigues and killed minimum 17 people. In the history of Brazil this has been the worst environmental disaster where around 60 million metre cube of iron waste flowed into the Doce River, causing toxic brown mudflows to pollute the river and beaches near the mouth when they reached the Atlantic Ocean This caused and humanitarian crisis where hundreds of people were moved and cities suffered from water shortages (Ceulemans, Molderez & Van Liedekerke, 2015)). The owner of the Bento Rodrigues dam, Samarco, was subject to extensive trial and government authorisations. In 2016, charges of these circumstances were filed against the companies like Vale and BHP Billiton, who were in a joint. Controversy over the investigation grew after exposure of a 2013 report indicating structural issues in the dam.

The Corporate social responsibility or sustainability is an international organisational policy or a strategy adopted by an organisation, that time has passed as various international laws have been developed and various business have used their authority to push it beyond individual or even industry-wide initiatives.

The discussion deals with the Critical evaluation of the CSR disclosures in sustainability reports of BHP Billiton after the incident in the year 2016 and 2017. Moreover the focus of the report is on the theory of legitimacy that highlights the limit to which corporate social and environmental disclosures are influenced by the boundaries established by the society in order to be appreciated and avoid being penalized by the community in which the company operates.

As mentioned in the sustainability report about the Samarco which is a joint venture owned by the BHP Billiton in Brazil and Vale each of them having a 50 per cent shareholding (Chelli, Durocher & Richard, 2014). The Samarco operates with iron ore mining, processing and concentration. The sustainability report vividly describes the incident that took place on 5 November 2015, the Fundão dam which is one of Samarco’s two primary tailings dams – failed. This led to a significant volume of mine tailings being released that resulted, the communities to get flooded and even loss of life. Unfortunately, 19 people died – five community members and 14 people who were working on the dam at the time of the failure. Notwithstanding the effects on the groups and related framework downstream of the dam, the tailings spill made broad harm the indigenous habitat along the Rio Doce. Roughly 700 individuals were rendered penniless after the Samarco dam incident. Bridges were broken, streets were harmed and 100 kilometres of fencing was affected. More than 2,000 hectares of riparian vegetation and rural land was affected, with a huge number of huge amounts of tailings material stored in the riverbed and along stream banks. Sea-going fauna were influenced by the arrival of the tailings material into the stream framework (El Bizri, et al.,2016)). BHP Billiton is profoundly sorry to learn who have been affected by this catastrophe, specifically to the families and companions of individuals who passed on and in addition the individuals who have lost their homes or jobs and face an unverifiable future in the close term (Dowbor, 2016).

BHP Billiton’s response to the disaster and support to affected communities

As an immediate reaction of the Samarco dam incident, BHP Billiton Brazil stretched out its help to Samarco in the reaction exertion. The main concern was for the welfare of the Samarco workforce and the influenced groups. Samarco helped with giving brief settlement, water and nourishment help for influenced groups. BHP Billiton Brazil and Vale together dispatched geotechnical, calamity alleviation and compassionate reaction specialists, alongside senior wellbeing and security officials, natural researchers and various other care staff, to help the victims. Activities at the mine were promptly suspended. Moreover, individuals from the BHP Billiton Forum on Corporate Responsibility, which is comprised of nine exceptionally regarded common society pioneers, went by the Mariana region in January 2016 to comprehend the effects of the dam disappointment and Samarco’s reaction. BHP Billiton has now settled a changeless nearness in Belo Horizonte to keep on supporting Samarco’s remediation and reaction work over the more extended term. A group of around 35 specialized specialists and senior administration is currently drawn in full time in the continuous reaction exertion (Junior, Best, & Cotter, 2014). BHP Billiton Chief Commercial Officer Dean Dalla Valle accepted everyday obligation at an Executive Leadership Team level for BHP Billiton’s reaction to the dam disappointment and has been situated in Brazil since February 2016.

The sustainability report states that Sustainability is at the heart of everything the company does. They put health and safety first, they are environmentally responsible, they respect human rights and they support host communities

(Nishitani, 2016) As a partner in the communities in which they operate, they share stewardship of the environment, support local cultures and help drive economic development. Many of the operations last for decades, and the maintenance of a social licence to operate them is essential.

The report is focused on agreeing to the laws and controls of the wards in which they work and expect to surpass lawful and administrative prerequisites where those are less stringent than our own (Burritt, & Christ, 2018).). The Charter depicts the compulsory least execution prerequisites and give the establishment to create and actualize administration frameworks for their benefits (Luger, Mammen, & Haleblian, 2015)). The benchmarks are expected with the standards, position articulations and compulsory prerequisites of the 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. Contractual workers working at our advantages are required to conform to our wellbeing, security, condition and group (HSEC) gauges and necessities (Miranda & Marques 2016).

Sustainability policy and compliance with laws and regulations

In terms of administration of manageability, the BHP Billiton has elevated expectations of administration and regulates the manageability approach sustainably. The Board’s Sustainability Committee helps with administration and observing (Choett, al.,2015)). The Sustainability Committee likewise directs HSEC and other human rights matters, including the ampleness of the frameworks set up to recognize and oversee HSEC-related dangers, legitimate and administrative consistence and general HSEC and human rights execution. Individuals from the Sustainability Committee are Non-official Directors, every one of whom is fittingly gifted in HSEC and related issues as controlled by the Board (Santos, et al., 2017).

For the 2015 dam incident the responsibility regarding help influenced groups has stayed undisturbed since the dam incident. The company kept on working intimately with the partners to guarantee the best results for all included (Meira, et al.,2016). Their underlying need was to help Samarco in directing the philanthropic reaction and guarantee the wellbeing of the general population and nature. BHP has overcomed from that crisis stage to a more key, organized method for attempting to add to the advancement of medium and longer-term arrangements. Fundação Renova Fundação Renova is actualizing projects to re-establish the nature and modify the groups, as set out in the Framework Agreement with the applicable Brazilian specialists marked in March 2016. Fundação Renova is a non-profit, private establishment, named after the Portuguese word for ‘recharge’. It was built up by Samarco, BHP Billiton Brasil and Vale, and wound up operational on 2 August 2016. Fundação Renova’s staff of 400 individuals is bolstered by around 2,500 temporary workers and few BHP representatives approved to the association who give authority natural, social, legitimate, administration and correspondence counsel. Fundação Renova’s financial plan for CY2017 was R$1.94 billion (roughly US$590 million). To address the decent variety, scale and multifaceted nature of the projects, Fundação Renova works together and draws in comprehensively with influenced groups, logical and scholarly establishments, controllers and common society (Luger, Mammen,& Haleblian 2015). A free logical specialized and warning board, to be overseen by the International Union for Conservation of Nature (IUCN), will give master counsel to Fundação Renova. The board is to be guided by the standards of autonomy, straightforwardness, responsibility and commitment, and its reports and suggestions will be openly accessible. Led by Yolanda Kakabadse, right now President of WWF International, the board means to hold its first gathering before the finish of CY2017.

Around 8,000 budgetary help cards have been conveyed to individuals whose jobs were affected.. Around 400,000 individuals are relied upon to be qualified for remuneration for interference to water supplies along the Rio Doce. As at 22 July 2017, more than 186,000 cases have been acknowledged for instalment, with more than 82,000 paid. More than 14,000 families have enlisted for remuneration for different harms, for example, property misfortune or business impacts. Fundação Renova is moving and modifying the groups of Bento Rodrigues, Paracatu and Gesteira, in discussion with the influenced group individuals (Llena, & Talalweh, 2015)). The people group individuals recognized their new areas through a participatory procedure, which deduced in a vote directed by a free review organization. Urban arranging and plan of houses has initiated for Bento Rodrigues and Paracatu; be that as it may, issues with the offer of the land chose by Gesteira inhabitants has postponed their procedure and Fundação Renova is currently exploring options for the occupants’ thought(Morgan, Gomes, & Perez-Aleman, 2016). 

Conclusion

The theory of legitimacy states the limit to which corporate environmental and social disclosures are impacted by the limitations established by the society in order to be appreciated and avoid being penalized by the community in which the company operates. From the above discussion it is clear that in order to gain back the trust of the community the company of BHP Billiton through their performance has overcome the crisis effectively and has tried its level best to bear the loss. Billiton’s Brazil mine disaster in 2015 that lead to a great loss was overcome by the company with its operation as stated in the sustainability report of the years 2016 and 2017.

References

Burritt, R. L., & Christ, K. L. (2018). Water risk in mining: Analysis of the Samarco dam failure. Journal of Cleaner Production, 178, 196-205.

Ceulemans, K., Molderez, I., & Van Liedekerke, L. (2015). Sustainability reporting in higher education: a comprehensive review of the recent literature and paths for further research. Journal of Cleaner Production, 106, 127-143.

Chelli, M., Durocher, S., & Richard, J. (2014). France’s new economic regulations: insights from institutional legitimacy theory. Accounting, Auditing & Accountability Journal, 27(2), 283-316.

Cho, C. H., Laine, M., Roberts, R. W., & Rodrigue, M. (2015). Organized hypocrisy, organizational façades, and sustainability reporting. Accounting, Organizations and Society, 40, 78-94.

Dowbor, L. (2016). 13 Financing sustainability. Brazil in the Anthropocene: Conflicts Between Predatory Development and Environmental Policies, 269.

El Bizri, H. R., Macedo, J. C. B., Paglia, A. P., & Morcatty, T. Q. (2016). Mining undermining Brazil’s environment. Science, 353(6296), 228-228.

Garcia, L. C., Ribeiro, D. B., Oliveira Roque, F., Ochoa?Quintero, J. M., & Laurance, W. F. (2017). Brazil’s worst mining disaster: corporations must be compelled to pay the actual environmental costs. Ecological applications, 27(1), 5-9.

Junior, R. M., Best, P. J., & Cotter, J. (2014). Sustainability reporting and assurance: A historical analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), 1-11.