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BHP SHADOW REPORT: Shining a Light on Revenue Flows

BHP BILLITON WATCH: Recommendations

SHAREHOLDER ACTIVISM

ALTERNATIVE ANNUAL REPORTS

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ABOUT BHP BILLITON
This website examines a number of BHP Billiton’s operations around the world. The collection of case studies highlights the disparity between BHP Billiton’s ‘Sustainability Framework’ and the reality of its operations.

In the year 2009-2010 BHP Billiton has continued its involvement in many controversial mines, is advancing risky and unwanted projects and is making advances to acquire assets in known conflict zones.

In 2010 BHP Billiton has made steps to report on the revenues it pays to host Governments but has been selective in the information it reports on, excluding important information. BHP Billiton reported the revenues (royalties and taxes) paid to Governments for many of the countries it operates in, but is involved in projects in countries on which it has refused to report. It is the revenue flows that BHP Billiton does not reveal in its reports that raise suspicion, it is these figures the public want to know, it is these figures that would be an opportunity for BHP Billiton to show real leadership in the spirit of true transparency.

There are a number of exploration activities that BHP Billiton is involved with that do not feature in its annual report. It is these operations where there are transparency issues in negotiating with Indigenous Peoples, land disturbance and the brokering of deals with local, state and federal Governments and agencies. There must be accountability and reporting of activities, spending and negotiations at the exploration stage if BHP Billiton is to demonstrate transparency and corporate responsibility.

The BHP Billiton mines, exploration projects and assets that feature in this Alternative Annual Report are those where one or more of the following issues has been prevalent; human rights abuses, labour rights, relocation of communities, mistreatment of Indigenous Peoples, destruction of sacred sites, devastating impacts on food and water, climate change, use of paramilitaries, health concerns, irresponsible tailings disposal procedures and questionable corporate social  responsibility practices.

In 2007 the United Nations enshrined the rights of Indigenous Peoples to Free Prior and Informed Consent (FPIC) in the UN Declaration on the Rights of Indigenous people. In 2010 BHP Billiton still does not officially accept this principle. In 2011 the new OECD Guidelines for Multinational Enterprises will be released. Within these guidelines we can expect to see FPIC acknowledged. FPIC means that consent is given free of coercion or manipulation, before the commencement of any activities, and with full disclosure of information that is understandable and accessible to communities. If consent is not given, then proposed activities must not take place. To date, BHP Billiton has merely noted that there are “a wide diversity of views” on FPIC, and fails to rise to the challenge needed to genuinely implement it.

Exploration prior to mining includes land disturbance. It also includes negotiating access to land. BHP Billiton did not report on exploration in its 2010 Annual Report (BHP Billiton Sustainability Report 2010) despite the gravity of its environmental and social impacts. This stage of mining also includes negotiating or brokering land deals, a process referred to in the mining industry as gaining a “social licence to operate”. This is a process that can cause division in communities, making them vulnerable to manipulation by vested interests. Access to non-biased information becomes problematic, and these deals may misrepresent the true position of Indigenous and other affected communities.

There are many social impacts that arise alongside mining developments, including the influx of alcohol, drugs, prostitution, sexually transmitted diseases and conflict within communities over land ownership, gender roles, the relative power of women, royalties and compensation. There are many other social impacts that relate to the health of the environment (like access to food and clean water, and contamination of land and water), and access to traditional cultural sites as well as homelands, all of which can easily be affected by mining operations.

BHP Billiton may agree in theory on upholding human rights but in 2009-2010 there was no reporting on human rights risk assessments or ‘material risk’ identification, showing a lack of commitment in this area. While BHP Billiton has a policy on human rights, as explained within its Sustainability Framework, and is a signatory to a number of voluntary agreements on human rights, it is apparent from the following case studies that policy does not equate to practice.

Many of the countries that BHP Billiton operates in have poor records on corruption, poor human rights records and a high level of militarisation, and are willing to make serious compromises for desperately needed foreign investment. These are all factors that often create an environment that undermines the rights of communities when faced with a form of development they oppose.

BHP Billiton, the largest diversified resource company in the world, has a unique opportunity to embrace one of the most progressive principles in human rights: FPIC as acknowledged by the United Nations. BHP Billiton also has the opportunity to begin a transition out of dirty energy minerals (oil, uranium and coal). We call on BHP Billiton’s shareholders and board to consider the opportunities that exist in renewable technology and exercise the moral responsibility to lead the way on environment and social behaviour.