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BHP releases Industry association review

BHP today published a report relating to its membership of industry associations which hold an active position on climate and energy policy.  The report, which BHP committed to produce on 18 September 2017, sets out:

  • 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 those industry associations.

Twenty-one industry associations were assessed as holding an active position on climate and energy policy, and were included within the scope of the review. The review focused on 10 climate and energy policies identified as being of key importance to BHP, with seven material differences in position identified across three associations:

  • The Minerals Council of Australia (MCA)
  • The United States Chamber of Commerce;
  • The World Coal Association (WCA).

The report sets out the principles which guide the Company’s membership of, and participation in, industry associations, and the methodology employed to identify material differences. It also describes considerations and possible courses of action for BHP where a material difference is identified. Considerations include the likely impact of the material difference on policy debate and the benefits BHP derives from the broader activities of the association, including in areas such as health, safety and environment.

Based on the review and consistent with the principles set out in the report, BHP will:

  • Remain a member of the MCA, given the high level of benefit BHP derives from membership. However, BHP will formally communicate the identified material differences to the board of the MCA, request that the MCA refrain from policy activity or advocacy in these areas, maintain a register of material differences, and will review its membership of the MCA if it has not refrained from such policy activity or advocacy within a reasonable period (being not more than 12 months).
  • Formally communicate the identified material differences to the board of the United States Chamber of Commerce, seek additional information about the nature of the differences that have been identified, and consider its future membership of the Chamber prior to making a final determination on or before 31 March 2018; and
  • Advise the WCA that BHP has reached a preliminary view to exit the WCA, in light of the identified difference and the narrower activities of benefit to BHP from membership. BHP will invite responses from the WCA before making a final determination as to future membership by 31 March 2018.

Chief External Affairs Officer, Geoff Healy, said while no industry association represents the views of any single member, they are important for sharing best practice, the development of technical standards and policy and to bring together technical expertise and experience.

“Active participation within industry associations is an opportunity for BHP to improve its own performance and to support industry as a whole in making a positive contribution.

“This review makes clear the principles for our ongoing participation in industry bodies. While we won’t always agree with our industry associations, we will continue to call out material differences where they exist and we will take action where necessary, as we have done today.

“Importantly, we will also continue to communicate our own views directly to investors, governments and civil society and we will redouble our efforts to engage, clearly and constructively, with our industry associations to positively influence the position they take on matters important to our Company.”

Mr Healy said publication of today’s report demonstrated BHP’s support for action on climate change and commitment to transparency.

The Industry Association Review is available here.