In September 2017, BHP committed to publish:
- a list of the material differences between the positions BHP holds on climate and energy policy, and the advocacy positions on climate and energy policy taken by industry associations to which BHP belongs; and
- the outcomes of BHP’s current review of its membership of those industry associations.
BHP published its Industry Association Review (Review) on 19 December 2017. This Review focused on 21 industry associations assessed as holding an active position on climate and energy policy, and 10 climate and energy policies identified as being of key importance to BHP’s position strategy and/or policy advocacy(1). Based on a case-by-base assessment, the Review identified seven material differences on climate and energy policy across three industry associations: the Minerals Council of Australia (MCA); the US Chamber of Commerce (the Chamber); and the World Coal Association (WCA).
The Review then assessed the broader activities of these three associations in areas considered to be of relevance to BHP (namely: Health and Safety; Environment; Community; Workforce; and Economics). The Review concluded that BHP receives a high level of benefit from the broader activities of the MCA, a more moderate level of benefit from the broader activities of the Chamber, and a lower level of benefit from the broader activities of the WCA.
In light of the identified material differences and assessment of broader activities, BHP:
- Determined it would remain a member of the MCA, subject to a number of actions. These actions included requesting that the MCA refrain from policy activity or advocacy in relation to the identified material differences, and committing to review BHP’s membership of the MCA if the association had not refrained from such activity or advocacy within a reasonable period.
- Determined it would seek additional information from the Chamber prior to making a final determination as to future membership. BHP committed to making this determination on or before 31 March 2018.
- Reached a preliminary view that it would exit as a member of the WCA. Before reaching a final view, however, BHP invited a response from the WCA to the findings of the Review. BHP committed to making a final determination on or before 31 March 2018.
The purpose of this document is to confirm the determinations made as regards BHP’s membership of the Chamber and the WCA, and to provide an update in relation to the MCA.
US Chamber of Commerce
Following publication of the Review, BHP undertook a number of engagements with representatives of the Chamber, which enabled the Company to further assess the level of benefit provided by membership. Based on these interactions and the findings of the Review, BHP has determined it will remain a member of the Chamber.
BHP derives a range of benefits from the broader activities of the Chamber, particularly its advocacy on economic issues such as free trade and tax reform. In particular BHP notes the position the Chamber has taken on issues of policy significance including its commentary on the issue of steel and aluminium tariffs in the United States. It would be difficult for BHP to replicate this advocacy outside of its membership of the Chamber.
In accordance with Principle 9 of its Industry Association Principles(2), BHP will:
- request the Chamber to refrain from policy activity or advocacy in relation to the material differences identified by the Review, which remain; and
- keep its membership of the Chamber under review.
BHP will also seek to influence the direction of the Chamber’s climate and energy policy, in a manner consistent with BHP’s position, by actively participating in the Chamber’s Energy and Environment Committee, which BHP has been invited to join.
World Coal Association
Following publication of the Review, BHP undertook a number of engagements with representatives of the WCA. In light of the material difference identified by the Review and the narrower activities of benefit to BHP from membership, BHP has reached a final view that it will exit as a member of the WCA.
In doing so, BHP has appreciated the engagement of the WCA following publication of the review and acknowledges the contribution in a range of areas relating to the environment and community affairs. As BHP noted in its review, however, the broader benefits are narrow in scope.
BHP therefore believes that, on balance, it would be appropriate to discontinue membership of the WCA.
Minerals Council of Australia
On 14 March 2018, the MCA released an updated Energy and Climate Policy Position. BHP welcomes this revised policy position, which is aligned with BHP’s approach to climate and energy policy. In particular, from a policy perspective, the updated MCA position addresses the two areas identified as material differences by BHP, relating to the energy trilemma and technology neutrality.
In the Review, BHP identified a range of broader benefits provided by its membership of the MCA, relating to health and safety, environment, community, workforce and economics. BHP continues to assess the benefits of membership in these areas as high.
BHP will work with the MCA and its members in relation to reflecting the updated Energy and Climate Policy Position in the MCA’s public advocacy. In this regard, BHP is represented on the Board of the MCA, as well as on its Public Policy Committee and Energy and Climate Committee.
BHP’s Industry Association Principles
BHP’s Principles for participation in Industry Associations, described in the Review, guide the Company’s membership of, and participation in, industry associations that hold advocacy position on climate and energy policy. Consistent with these Principles, BHP will keep under regular review its alignment with the climate and energy policy positions taken by industry associations on matters of significance to the Company.
1) The Scope and Methodology section of the Review provides more detail on how these 21 industry associations and 10 climate and energy policies were chosen.
2) These are described on page 4 of the Review.