Water | BHP

In this section we'll cover:

Water stewardship: a shared responsibility

Access to safe, clean water is a basic human right, central to livelihoods and essential to maintaining healthy ecosystems. BHP’s vision is for a water secure world by 2030. This would be a world where water resources are conserved and resilient so they can continue to support healthy ecosystems, maintain cultural and spiritual values and sustain economic growth; where the human right to safe and accessible water and the traditional rights of Indigenous peoples are realised and upheld; and where water governance is effective and beneficial, ensuring communities and ecosystems thrive for future generations.

Water is integral to what we do and vital to the sustainability of BHP. We cannot operate without it. We interact with water in a number of ways, including:

extracting it for activities including ore processing, cooling, dust suppression, ecosystem irrigation and processing mine tailings
managing it to access ore through dewatering (extraction of water from below the water table to allow access to ore), as part of the oil recovery process and at our legacy assets (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase)
providing drinking water and sanitation facilities
discharging it back to the receiving environment
interacting with marine water resources through our offshore Petroleum business and port facilities
utilising marine water for desalination

For a more detailed example of how we use water in our operated assets, refer to our Olympic Dam Case Study.

We have a responsibility to effectively manage our water interactions and minimise impacts on water resources. We also recognise the importance of working with others to enable more effective water governance and stewardship across the communities, regions and countries where we operate.

Effective water stewardship must begin within our operated assets. From there, we can more credibly collaborate with others toward solutions to shared water challenges.

Responsible water management will ultimately make BHP more resilient in the long term and positively contribute to an enduring environment and social value.

On this webpage, we disclose how we manage our water interactions and water-related risks – through all our water interactions, from extraction to use and discharge. The term ‘water-related risk’ refers to risks where water is either part of the risk event description, or as a cause, impact or treatment for other risks. Water-related risks are captured in different areas of the Group Risk Architecture in categories that best reflect the criticality of managing water elements at our operated assets. BHP’s Risk Framework (including our Group Risk Architecture) is described in the BHP Annual Report and this webpage provides specific information in relation to water-related risks. In the BHP Annual Report, we also share our performance and how we are tracking against targets.

We produced our inaugural Water Report in FY2018 to highlight our efforts to improve stewardship of water resources and reflect water’s importance to society and to BHP. For more information, refer to our Water Report 2018.

Our focus on disclosure of our water activities remains strong, but we have chosen to integrate our water reporting within the disclosure of the broader aspects of our sustainability (e.g. health, safety, climate change).

Our water disclosures here and in the BHP Annual Report, have been prepared predominately pursuant to the International Council on Mining and Metals (ICMM) ‘A Practical Guide to Consistent Water Reporting’ minimum disclosure standard which is an international accounting framework to allow for comparable water data across the mining and minerals sector.

Our water disclosures also take into account other disclosure frameworks. BHP is a signatory to the United Nations (UN) Global Compact’s CEO Water Mandate (CEO Water Mandate), and our disclosures here and in our Annual Report serve as BHP’s Communication of Progress against the core elements of the CEO Water Mandate. Our reporting is also consistent with the Global Reporting Initiative (GRI), for more information on how this section meets the GRI standard, refer to our 2020 Sustainability Reporting Navigator.

We have reported our water withdrawals and discharges and had water-specific public targets in place for more than 15 years. While water stewardship is not new for us, we can do more.

BHP’s approach to water stewardship is visually represented in the figure below. Each element of our approach is discussed on this webpage.

BHP approach to water stewardship diagram In FY2019, we developed our Water Stewardship Position Statement that expresses BHP’s commitment to and advocacy for water stewardship. Implementation of the Position Statement commenced in FY2020. It outlines our vision for a water secure world by 2030. The Position Statement was developed following broad internal and external engagement and is aligned to the UN Sustainable Development Goals and other initiatives such as the CEO Water Mandate and the ICMM Water Position Statement. Our Position Statement describes the challenges facing fresh and marine waters across the globe and reinforces that it is everyone’s responsibility to take action together. Our approach to realising this vision includes taking action to improve water management within BHP and catalyse actions to strengthen water governance beyond our operated assets.

Our Water Stewardship Strategy was adopted in FY2017 to improve our management of water, increase transparency and contribute to the resolution of shared water challenges. The strategy pillars are outlined in the table below.

The five pillars of our water stewardship strategy

Risk	Technology	Value	Disclosure	Collective action
Embed processes and systems to effectively manage water-related risks and realise opportunities at a catchment level in the short and long-term.	Leverage technology solutions that drive a step-change reduction in water-related risks, realise opportunities and deliver multiple benefits.	Effectively value water in investment and operational decisions through integration into strategy, planning and evaluation frameworks.	Transparently disclose water-related risks, management and performance at an operated asset level.	Collaborate with stakeholders to improve regional water policy and catchment governance and address shared water challenges within our communities and across our value chain.
Risk management is one of BHP’s most central management processes. Fully integrating water-related risk management into our business processes and decision-making will be critical. A key step is to further understand and manage risks over which we have direct influence. These include operational, ‘within the fence’ risks, such as water infrastructure, as well as ‘beyond the fence’ risks, such as water access, that can affect communities, the environment and others that rely on shared water resources.	The investigation and application of new technologies, such as improved groundwater modelling techniques, alternative water treatment methods and real-time monitoring of water levels, flows and quality, can progressively improve our future water management practices. They will help us understand our water-related challenges, inform our management of water-related risks and realise opportunities.	We expect that embedding water-related issues more fully into our strategy, planning and evaluation processes will strengthen our investment and operational decisions. We are investigating how best to value water through direct price signals and indirect signals that consider environmental and social dimensions of extracting, using and discharging water.	Transparency builds understanding and accountability for our water performance. Comparable disclosure of water data, risks and performance by all key users is fundamental to effective water resource governance and sustainability.	Effective water stewardship requires collaboration with all stakeholders. We intend to advocate for effective water policy and catchment governance in collaboration with our host communities, government, industry peers and others. This includes support for fair and viable ways to access, share and conserve this precious shared resource. We will develop a policy statement on water stewardship to enable our approach to advocacy to be globally consistent but regionally applicable.

Risk

Technology

Value

Disclosure

Collective action

Embed processes and systems to effectively manage water-related risks and realise opportunities at a catchment level in the short and long-term.

Leverage technology solutions that drive a step-change reduction in water-related risks, realise opportunities and deliver multiple benefits.

Effectively value water in investment and operational decisions through integration into strategy, planning and evaluation frameworks.

Transparently disclose water-related risks, management and performance at an operated asset level.

Collaborate with stakeholders to improve regional water policy and catchment governance and address shared water challenges within our communities and across our value chain.

Risk management is one of BHP’s most central management processes. Fully integrating water-related risk management into our business processes and decision-making will be critical. A key step is to further understand and manage risks over which we have direct influence. These include operational, ‘within the fence’ risks, such as water infrastructure, as well as ‘beyond the fence’ risks, such as water access, that can affect communities, the environment and others that rely on shared water resources.

The investigation and application of new technologies, such as improved groundwater modelling techniques, alternative water treatment methods and real-time monitoring of water levels, flows and quality, can progressively improve our future water management practices. They will help us understand our water-related challenges, inform our management of water-related risks and realise opportunities.

We expect that embedding water-related issues more fully into our strategy, planning and evaluation processes will strengthen our investment and operational decisions. We are investigating how best to value water through direct price signals and indirect signals that consider environmental and social dimensions of extracting, using and discharging water.

Transparency builds understanding and accountability for our water performance. Comparable disclosure of water data, risks and performance by all key users is fundamental to effective water resource governance and sustainability.

Effective water stewardship requires collaboration with all stakeholders. We intend to advocate for effective water policy and catchment governance in collaboration with our host communities, government, industry peers and others. This includes support for fair and viable ways to access, share and conserve this precious shared resource. We will develop a policy statement on water stewardship to enable our approach to advocacy to be globally consistent but regionally applicable.

Our Water Stewardship Strategy is complemented by our public target and longer-term goal, established in FY2017.

Setting clear and transparent targets on critical metrics helps us focus our efforts, monitor progress and hold ourselves accountable. We have included water-specific public targets for more than 15 years. These have evolved from targets that were set from the top down based on intensity metrics (water used per tonne of product), to risk-based targets, to absolute volume reduction targets. Our water targets are now set through a bottom-up assessment of operated asset-level information and take into account the context, risks and opportunities of the relevant asset.

Through this experience, we have recognised that global-level intensity targets are challenging to define. Intensity targets are only appropriate at the individual operated asset level due to the regional nature of water resources and water-related risks as well as the individual variations in ore grade and production processes. We encourage our operated assets to identify intensity targets to improve performance above their contributions to our Group-wide target and longer-term goal outlined below.

Our five-year water target and longer-term goal

In FY2017, we announced a new five-year Group-wide water target of reducing FY2022 fresh water withdrawal by 15 per cent from FY2017 levels across our operated assets. For the purposes of this target:

‘Withdrawal’ is defined as water withdrawn and intended for use (in accordance with ‘A Practical Guide to Consistent Water Reporting’, ICMM (2017)) and ‘fresh water’ is defined as waters other than seawater, wastewater from third parties and hypersaline ground water. Freshwater withdrawal also excludes entrained water that would not be available for other uses. These exclusions have been made to align with the target’s intent to reduce the use of freshwater sources subject to competition from other users or the environment.
The FY2017 baseline data has been adjusted to account for the materiality of the worker strike affecting water withdrawals at Escondida in FY2017 and improvements to water balance methodologies at Western Australia Iron Ore (WAIO) and Queensland Coal in FY2019, which included alignment of water balances to ICMM guidance. Discontinued operations (Onshore US-operated assets) and non-operated joint ventures have been excluded.

The target was developed taking into account each of our operated assets’ circumstances, the potential to reduce fresh water use and the operated asset’s potential level of contribution to a BHP water target. The target focuses on the use of fresh water because it is usually the most critical water resource for the communities in which we operate and the environment, and is limited globally. Fresh water has greater direct use by society as it provides drinking water and water for amenities and recreation and it is important in enabling terrestrial environment to sustain ecosystem functionality. Therefore, elimination or reduction of risk and stress to fresh water resources has benefits to all. The majority of our operated assets are in terrestrial environments and therefore we can have greater influence towards and directly conserve the fresh water resource. Protection of the marine environment is also important and our Water Stewardship Position Statement acknowledges the importance of protecting this resource as well as fresh water. Performance against our target is one of the sustainability related measures in management scorecards across BHP.

Our longer-term goal is to collaborate to enable integrated water resource management in all catchments where we operate by FY2030. It is aligned to the United Nations Sustainable Development Goal 6 that seeks to ‘ensure availability and sustainable management of water and sanitation for all’. Beyond our operated assets, we will work with others on a shared approach to effective water governance. Our priorities will be around transparency, collaboration, and knowledge and innovation.

Our Water Stewardship Position Statement commits BHP to set public, context-based, operated asset-level targets that seek to improve our water management and support shared approaches to address water challenges within the regions in which we operate. These targets are intended to more closely align performance to key regional challenges and priorities. These targets are in development and will commence in FY2022.

Progress against our Water Stewardship Strategy, target and goal is reported in the water section in section 1.7.6 Environment of the BHP Annual Report.

BHP’s portfolio of long-life operated assets means that we must think about the long term, plan in terms of decades and consider the needs and circumstances of future generations. We need to consider both our operated assets’ needs and the potential for regional changes to water resources due to climate change, pollution, population growth and changing expectations.

The shared nature of water resources means we also need to think ‘beyond the fence’ – that includes the interactions within water catchment areas or basins – when managing risk. As part of our Risk Framework, our operated assets and functions are required to identify, assess, treat, monitor and control the potential water-related risks from their activities and make strategic business decisions in line with our Risk Appetite Statement. Our Water Stewardship Strategy has been progressing a range of improvements in relation to water-related risk management to further identify and assess operated asset water-related risks, including catchment-level risks. In FY2020, we completed risk assessments for the catchments and basins where we operate to develop a more comprehensive understanding of the water-related risks in our operational regions.

BHP and water sensitivity

The management of water-related risks needs to reflect the different physical environments, hydrological systems and socio-political and regulatory contexts in which we work. BHP must take into account the interactions that we, and external parties, have with water resources within catchments, shared marine regions and groundwater systems.

To better understand and manage the water-related risks for BHP at a portfolio level, we have assessed the water sensitivity of the locations in which we operate. The World Resources Institute’s (WRI) Aqueduct global water risk mapping tool is a widely used approach for assessing baseline water stress. We use the Aqueduct analyses within one of our factors (‘Competition for water resources’) in BHP’s water sensitivity assessment table below, while recognising that, in isolation, it has limitations for BHP due to its current exclusion of groundwater resources and the limited detail of data sets for some of our operating regions.

We define water sensitivity as the degree (high, moderate or low) to which a region is sensitive to a range of water-influencing factors that are identified below. This assessment is primarily qualitative.

The factors we assess are:

Climate: Different climatic conditions influence the availability of water and the way water interacts with the physical environment. We operate in a range of climate zones, including arid; hot desert; warm temperate; humid; and cool as noted in the table below.

BHP water source interactions: The water resources we extract from and discharge to vary across each operated asset and influence the exposure we have to particular water resources (i.e. surface, ground or marine water resources).

Competition for water resources: Most of our operated assets share water resources with other parties, including communities, agriculture, other industries and the natural environment. As a result, we consider factors such as stakeholder concerns and expectations, cumulative impacts and the extent to which a resource is shared with communities and the natural environment. We apply baseline water stress (using WRI categories) to inform the sensitivity of the water resource to competition by evaluating the total withdrawal with the total water resource available. A higher ratio indicates more potential for competition and thus the risk of higher stress.

Sustainability of water resource: Water resources are sustainable when their quantity and quality continue to support environmental and social requirements and values, for example maintaining vegetation populations or community water supplies. Understanding water resource sustainability and the tolerance to climatic and other changes is essential to effectively manage the potential impacts from BHP to water resources, the environment and communities. It also allows us to understand the potential impacts to our operated assets from both environmental variations (e.g. in climate) and from activities of other parties that use or interact with the water resource.

Regulation: The regions in which we operate have reasonably mature regulatory systems for water extraction, use and discharge, although their approach and requirements vary by operated asset and jurisdiction. Typically, we are granted a licence to extract a prescribed quantity of water for a defined period and to discharge water at certain quantity limits and quality standards. Monitoring and reporting requirements apply to support compliance with these conditions. In addition to local regulation, we apply a range of internal standards. Please refer to Water Governance for a detailed overview of these. There are a few instances where water use and discharge may not be regulated via licences or permits. Our internal standards require that, in these instances, BHP follows relevant local guidance e.g. Australian and New Zealand Environment and Conservation Council (ANZECC) Water Quality Guidelines or the International Convention for the Prevention of Pollution from Ships.

For a summary of our water sensitivity assessments for each operated asset and the catchment or marine region in which they are located, refer to the table below. We estimate that 75 per cent of our operated assets are in areas of moderate-to-high water sensitivity.

Our Escondida and Pampa Norte operations in Chile rate as having high overall water sensitivity due to their extremely dry and remote locations, coupled with historic use and interactions with the limited groundwater resources and an increasing interaction with seawater resources in these regions, which are highly significant to both the environment and local communities, including Indigenous peoples and coastal communities. The water sensitivity at Queensland, New South Wales Energy Coal and Olympic Dam, in South Australia, is elevated due to the level of focus by stakeholders and regulators in relation to water interactions within the regions of these operated assets; for example, our Olympic Dam operation manages its extraction from the Great Artesian Basin (GAB) closely because the GAB supports important springs and is a resource shared with Indigenous peoples, communities and other industries.

The following table summarises our water sensitivity assessment and the degree (high, moderate or low) to which an operated asset is sensitive to a range of water-influencing factors. This assessment is primarily qualitative.

How we assess water sensitivity at BHP

(L = Low influence on water sensitivity; M = Medium influence on water sensitivity; H = High influence on water sensitivity; n/a = Not applicable)

⁽¹⁾In accordance with Köppen-Geiger climate classification terminology.
⁽²⁾ Derived from the World Resources Institute’s Aqueduct global water risk mapping tool and the associated descriptors for baseline water stress: Low (<10%); Low to medium (10–20%); Medium to high (20–40%); High (40–80%); Extremely high (>80%); Arid and low water use; and no data. Gassert, F., M. Luck, M. Landis, P. Reig, and T. Shiao. 2014. Aqueduct Global Maps 2.1: Constructing Decision-Relevant Global Water Risk Indicators. Working Paper. Washington, DC: World Resources Institute. Available online at wri.org/publication/aqueduct-global-maps-21-indicators.
⁽³⁾ BMA = BHP Mitsubishi Alliance BMC = BHP Mitsui Alliance. Further description of all operated and non-operated assets can be found in Section 1.9 of the BHP Annual Report.

Water sensitivity across BHP operated assets

BHP Sustainability Water Assessment chart

None of our operated assets is under an ‘extremely high’ (>80%) baseline water stress as classified by the World Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct.

Our water-related risks are influenced by the water sensitivity in the regions where we operate. BHP’s Risk Framework informs the identification and management of water-related risks and further information is contained in the detailed table below. For more information on risk management, refer to the Risk Management section of the BHP Annual Report.

Water-related risks have the potential to impact:

the health and safety of our employees, contractors and community members
communities, including social and economic viability, as well as spiritual and cultural values
environmental resources, including water, land and biodiversity
legal rights and regulatory compliance
reputation, investment attractiveness or social value proposition
production, growth and development (including exploration)
financial performance

The significant water-related risks across our operated assets are summarised in the table below. We have classified the significance of BHP’s water-related risks as follows:

Tier 1: Water-related risks that may have significant consequences, in the absence of controls (shown in the table below as “1”).
Tier 2: Water-related risks that are still important, but may have lower consequences, in the absence of controls (shown in the table below as “2”)
n/a – Water-related risk that is not applicable at that operated asset.

This assessment does not take into account the effectiveness of controls to manage these water-related risks, and therefore this table should be read as a hypothetical representation of the potential impact of the risk in the absence of controls.

The water sensitivity table and the risk ratings table are reviewed each year at the operated asset level.

Asset-level BHP risk ranking for water-related risk

Risk area	Escondida	Nickel West	North American legacy assets	NSW Energy Coal	Olympic Dam	Pampa Norte	Petroleum	Queensland Coal (BMA)	Queensland Coal (BMC)	Western Australia Iron Ore (WAIO)
Catchment level	1	1	1	1	1	1	n/a⁽¹⁾	1	1	1
Climate change	2	2	2	2	2	2	2	2	2	2
Closure⁽²⁾	2	2	1	2	2	2	1	2	2	1⁽³⁾
Compliance	1	1	1	1	1	1	1	1	1	1
Dewatering⁽⁴⁾	1	2	n/a	2	2	1	n/a	2	2	1
Extreme weather	1	2	2	1	2	1	1	1	1	1
Marine	1	1	2	2	n/a	n/a	1	1	1	2
Tailings	1	1	1	1	1	n/a	n/a	1	1	1
Water access sanitation and hygiene	1	1	1	2	1	1	1	1	2	1
Water infrastructure	1	1	2	2	1	1	2	1	1	2
Water quality	1	1	1	2	1	2	2	1	1	2
Water security	1	2	n/a	1	1	1	n/a	1	1	2

⁽¹⁾Catchment’ risk for Petroleum has been incorporated in the marine risk area as there are no significant onshore Petroleum facilities.
⁽²⁾This rating does not include water-related risks associated with current operated assets that may emerge at closure.
⁽³⁾ For closure, the WAIO asset assessment includes the Beenup and Newcastle legacy assets that are currently managed by WAIO. Legacy assets refers to those BHP operated assets, or part thereof, located in the Americas that are in the closure phase.
⁽⁴⁾The removal or drainage of water from rock, soil or tailings.

The following table provides further details on BHP’s significant water-related risks, potential impacts and their management.

Risk area	Scope	Potential impacts	Management
Catchment	Risk associated with the physical, environmental, socio-political, water resource and regulatory settings of our operated assets, the activities of other water users, present and past impacts from our operated assets and cumulative and indirect impacts to shared water resources. BHP acknowledges and seeks to include the cultural and spiritual values associated with water resources, especially to Indigenous communities, in consideration of this risk.	Potential impacts to the community from BHP’s access to and use of water resources within the catchment include reduced water supply to communities, aesthetic impacts to recreational use for water or contamination of water sources with potential reduction in availability for community water use. Ineffective catchment governance and regulation can make them more complex to manage. The impacts to the environment may include changes to natural groundwater levels, changes to stream flows, water quality issues in ground, surface or marine environments, and reduced pressure in groundwater aquifers that, in turn, may affect the biodiversity, habitats and species that rely on the water sources. Environmental impacts can contribute to community conflict and reputational impacts. They can also alter the spiritual value of water/water features to Indigenous groups and affect the value of the water resource for future generations. Unsustainable use of the water resource may affect production and a lack of understanding of the water resource may fail to provide transparency to the operated assets on the long-term water management limitations and opportunities. Impacts to the water resource may have longer-term financial implications and threaten our business model, including our ability to expand or develop new resources and inhibit the delivery of our social value proposition. The cumulative impacts resulting from multiple users of the water resource within a catchment may exacerbate the community, environmental and business impacts discussed above.	We seek to manage potential impacts to the water resource, including the environmental, community and business impacts, through: ongoing and regular stakeholder engagement to ensure effective collaboration compliance with water allocation permits targets for reduced fresh water use participation in catchment-level reviews and regulator assessments to understand and improve technical knowledge, challenges and interactions at a catchment level ongoing monitoring and measurement of water (quality, quantity) understanding baseline and reference characteristics of water resource and movements water recovery or source substitution integration of water management practices into operated asset business planning identification and where feasible implementation of opportunities for reduced water use where practical, ongoing monitoring of flora and fauna and other indicators of environmental health human rights impact assessments More information on how BHP engages with communities is available at the Community section of our website. BHP undertakes ongoing assessment of baseline conditions at a catchment level and the potential direct, indirect and cumulative impacts of our operated assets on the baseline condition. Climate change science must be factored into this assessment. For more information, see Our Requirements for Environment and Climate Change standard. Our Water Stewardship Strategy includes a collective action and a disclosure pillar, both of which focus on water governance and collaborating with host communities, government, industry peers and other stakeholders. While BHP does not have the ability to directly manage all catchment risks, we need to maintain a focus on management of our contribution to the risk and commit to participate in collective approaches to ongoing catchment governance.
Climate change	Climate-related risks are discussed in the risk factors section of the BHP Annual Report. Climate-related risks capture both the potential direct and indirect impacts of climate change on water-related risks. From a water-related risk perspective, climate change can be considered as a potential amplifier of existing risks as it may significantly increase the likelihood and/or severity of other water-related risks or could result in new risks. Potential direct water-related impacts resulting from climate change may include changes in precipitation patterns, rising sea levels, increased storm intensities, higher temperatures and increased frequency and/or severity of natural disasters (such as floods or droughts). Indirect potential impacts of these changes may include coastal erosion, storm tide inundation, and increased production of toxic microorganisms and, over the longer term, reduced rainfall can create water security issues while increasing the need to manage excess water for others. Assessments of the potential impact of future climate change policy and regulatory, legal, technological, market and societal changes on water-related risks are uncertain given the wide scope of influencing factors and the countries in which we do business.	Climate change may affect near- and long-term BHP performance and may increase competition for, and the regulation of, limited resources, such as water, which are critical to the continuity of our business. This could affect the productivity of and costs associated with our operated assets. Potential impacts to the natural environment and communities could be exacerbated, which could result in increased impacts to water resources and greater scrutiny from stakeholders. This could delay, limit or prevent future development and affect the productivity of and costs associated with our operated assets. We could also face rapid change to international reporting standards, increased regulation and increased action from governments and expectations of companies to counter climate change, which may increase our costs and affect BHP and our stakeholders. We could also face increasing climate-related water litigation.	Controls for climate-related water risks can be similar to those for the dewatering, water security and extreme weather risk areas. BHP has a Climate Change Position Statement and the Our Requirements for Environment and Climate Change standard, which outlines our approach to climate change management and sets minimum mandatory requirements for our operated assets. This includes requirements such as regional analyses of climate science to improve our understanding of the potential climate vulnerabilities of our operated assets and communities where we operate, and to inform resilience planning at an operated asset level. Our operated assets are required to build climate resilience into their activities, for example, by designing facilities to withstand sea level rise or changing climate patterns, or factoring forecast increases in extreme weather events into operated asset plans. We also require new investments to assess and manage risks associated with the forecast physical impacts of climate change. For more detail, see the BHP Climate Change Report 2020.
Closure	Risk associated with water management and post closure obligations for operated assets that are closing, have closed, or are under ‘care and maintenance’, which can have water quality (within the BHP footprint and beyond) or water accumulation issues.	Ineffectively managed water-related closure risks may adversely affect the environment (for example, contaminants in surface and groundwater, changes to landforms), communities, public safety and our costs associated with managing water now and over the long-term.	Effective closure planning is an important control across BHP’s operated assets. Closure plans are required to consider issues such as pit void lake formations, acidic and metalliferous drainage and saline water accumulation, and potential impacts to both surface and groundwater. For legacy assets, (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase), controls may also be similar to those for the dewatering, extreme weather and water quality risk areas. For more information on our approach to closure, refer to the closure website. For more information on the financial provisions relating to closure liabilities, refer to the BHP Annual Report.
Compliance	Risk associated with changes in the regulatory settings, including the nature and extent of regulation related to water allocation, permits, tariffs and reporting obligations. Our operated assets function in mature regulatory environments for water and regulation compliance requires constant vigilance.	Non-compliances could result in lower-order infringements through to financial penalties, enforcement orders or proceedings, social activism or increased cost to BHP. Environmental impacts may cause regulatory breaches or legal liability.	Water regulatory requirements must be continually monitored and, where required, our compliance improved. Ongoing engagement with regulators helps to understand their priorities, how regulatory requirements apply to our operated assets and at a catchment level, and address any existing non-compliances regarding surface water and groundwater.
Dewatering	Risk associated with management of dewatering activities and surplus mine groundwater and surface water (such as levels, volumes and pressures). Many of BHP’s ore bodies are below the natural groundwater level and to access the ore we need to pump water. Dewatering is an important activity that supports mine production, by enabling access to ore located below the water table or enabling access to ore by supporting pit stability.	Dewatering can potentially impact geotechnical stability and safety, water supply, excess water management, the environment, communities and production.	Management controls for dewatering include: mine planning maintaining an operational and predictive water balance defining dewatering and depressurisation targets monitoring and reviewing performance metrics environmental impact assessments managing excess/surplus water (such as the re-injection of excess water to local aquifers, where possible) ongoing hydrology assessments to inform planning
Extreme weather	Extreme weather can cause drought, snow or flood events and may arise from acute (event-driven, including increased severity of extreme weather events) or chronic (longer-term changes) to climate cycles.	Extreme weather events may contribute to production, environmental, community and reputational impacts. For example, ineffective management during drought conditions may constrain production due to limitations on water availability. Ineffective management of excess water also has the potential to affect geotechnical stability and safety, prevent site access, cause injuries due to flooding and affect the environment, communities and production.	Forecasting and monitoring of extreme weather events is important in assisting timely and appropriate management. Other preventative controls include design criteria for surface water infrastructure (including extreme weather events analysis) and building integrity within the infrastructure. Mitigating controls include emergency preparedness, communications systems and adequately trained staff. For example, operated assets test the effectiveness of emergency preparedness for extreme weather events by undertaking emergency drills that include external agencies, such as regional fire and police as well as internal BHP resources.
Marine	Risk associated with the alteration in marine water quality (sea or coastal areas), water or seabed levels or biophysical changes to marine environments. Marine ecosystems are susceptible to impacts resulting from changes to the physical (e.g. temperature and pH) and chemical (metal, hydrocarbon concentrations) parameters of the water body. This risk can arise from significant or catastrophic loss of containment of hydrocarbons within Petroleum operated assets, discharges from desalination facilities or from port facilities located in proximity to communities and/or key marine areas.	Due to regional differences in marine ecosystems and potential cumulative impacts, the type and extent of the impacts to the marine environment for each of our operated assets may be different and could include increased costs for mitigation, offsets or financial compensatory actions or obligations. Potential impacts include water quality impacts due to loss of hydrocarbon or chemical containment. Impacts to water quality have the potential to affect both the environment and communities. Brine discharges at desalination facilities may result in the alteration of marine ecosystems. Loss of containment or other major incidents may affect BHP’s licence to operate and or production.	Controls for hydrocarbon containment include: pressure relief systems engineering design specifications operational procedures (e.g. job risk assessments, management of change, equipment performance standards, inspections and audits) passive protection bunding oil plume modelling to inform potential impacts, and controls to minimise impacts continuous monitoring during operations Mitigating controls include: communication and emergency drills preparedness plans and emergency systems. To minimise impacts associated with smaller discharges in marine environments, treatment, sediment, erosion and other collection and/or treatment systems are utilised. Controls for desalination and port facilities include: ongoing maintenance of critical equipment monitoring and technical studies stakeholder engagement.
Tailings	Risk associated with the water infrastructure design, operation and reliability of tailings storage facilities could pose catastrophic failure, seepage and inefficient water management.	Impacts arising from the ineffective management of tailings facilities can range from interrupted production to catastrophic incidents with multiple injuries and fatalities, widespread environmental damage and extensive community disruption, with flow-on financial and reputational impacts.	Following the Fundão tailings dam failure, BHP has sought to enhance our tailings management, governance and risk assessment processes, and contribute to raising industry-wide standards. BHP has formed an internal Tailings Taskforce. For more information, refer to the Tailings Storage Facilities website.
Water access, sanitation and hygiene (WASH)	Risk associated with providing access to safe and reliable drinking water (potable water) and appropriate sanitation and hygiene facilities. The remote nature of many of our operated assets means BHP is often the supplier of water to our workforce for drinking and sanitation, and the manager of effluent. This role sometimes extends to neighbouring communities.	Ineffective WASH practices may result in illness and potential fatalities, which could disrupt our operated assets, impact communities and the environment, have financial and reputational impacts and inhibit the delivery of our social value proposition. Our operated assets also have the potential to affect the cultural and spiritual values associated with water resources, including potential human rights breaches.	Understanding the baseline quality of the water we receive, the performance of our treatment plants and monitoring the water produced are our WASH priorities. We have global drinking water standards that operated assets are required to meet (see Water Performance FY2020 section). Other controls include appropriate infrastructure, qualified operators, sampling and exception reports and responses, maintenance strategies, emergency response and business continuity planning. Human rights impact assessments (HRIAs) are a control that assesses both direct impacts to the workforce and communities, as well as potential impacts to other human rights, such as Indigenous, spiritual and cultural rights. All operated assets are required to undertake and review HRIAs regularly. For more information on human rights at BHP, refer to our Human Rights website.
Water infrastructure	Risk associated with the capacity and reliability of water supply infrastructure. Sufficient and well-maintained water infrastructure is central to security of supply and other water-related risks.	Insufficient or poorly maintained water infrastructure can result in the inability of water infrastructure to supply the required quantity or quality of water necessary for our operated assets. This can result in losses in production and impacts to the long-term viability of our operated assets.	Controls include: design and construction that meet internal and external standards inspections and maintenance of infrastructure operating within set parameters monitoring and response Regular maintenance of water infrastructure, such as treatment plants, pipelines and tanks, is critical to ensure that water is adequate for our operated assets, both in quantity and quality.
Water quality	Risk associated with changes in the chemical attribute of water, which may occur from runoff or seepage (from exposed ground, pit slopes, waste rock), infiltration from water, tailings and process facilities, infrastructure, and increases in salinity due to long-term storage of water.	Changes to the quality of water that runs through or under an operated asset can affect the surrounding groundwater resources and streams. This can affect other water users and the environment. Changes in water quality can also constrain production or result in water accumulation over time (due to discharge restrictions), which makes management during extreme rainfall events more challenging. This risk can persist for years after mining activity has ceased.	Management of water quality risks requires an understanding of what contributes to changes in water quality, how this may affect sensitive receptors within the environment and/or communities, and the appropriate management measures required. Controls include: avoiding contact with substances that may affect water quality appropriate design, construction and monitoring of facilities to prevent and detect contamination and minimising any impacts through treatment and monitoring of water quality outcomes, so that the effectiveness of controls is understood and can be reviewed as appropriate
Water security	Risk associated with current and future balance between water supply and demand for all relevant users and related to the ecosystem function. A continuous and sustainable water supply is critical to our operated assets. Location and climate impact water availability and supply. For example, availability has been a risk at NSW Energy Coal in the Hunter region of eastern Australia due to extended periods of below-average rainfall.	The inability to secure water access can constrain production, affect the environment, create community concerns about water availability and have regulatory, legal and financial implications.	An adequate understanding of technical aspects of the water resource, hydrological conditions and/or long-term changes in water availability and management is critical to ensure ongoing supply. In addition, understanding demand through water balances, predictive modelling and monitoring, is central to effective water security. Many of the controls in place for the management of catchment risk are applied for management of water security risks. Please refer to controls listed above for the Catchment risk area of this table. We seek to use lower-quality water where feasible and recover and recycle water to reduce fresh water requirements.

Risk area

Scope

Potential impacts

Management

Catchment

Risk associated with the physical, environmental, socio-political, water resource and regulatory settings of our operated assets, the activities of other water users, present and past impacts from our operated assets and cumulative and indirect impacts to shared water resources.

BHP acknowledges and seeks to include the cultural and spiritual values associated with water resources, especially to Indigenous communities, in consideration of this risk.

Potential impacts to the community from BHP’s access to and use of water resources within the catchment include reduced water supply to communities, aesthetic impacts to recreational use for water or contamination of water sources with potential reduction in availability for community water use. Ineffective catchment governance and regulation can make them more complex to manage.

The impacts to the environment may include changes to natural groundwater levels, changes to stream flows, water quality issues in ground, surface or marine environments, and reduced pressure in groundwater aquifers that, in turn, may affect the biodiversity, habitats and species that rely on the water sources.

Environmental impacts can contribute to community conflict and reputational impacts. They can also alter the spiritual value of water/water features to Indigenous groups and affect the value of the water resource for future generations.

Unsustainable use of the water resource may affect production and a lack of understanding of the water resource may fail to provide transparency to the operated assets on the long-term water management limitations and opportunities. Impacts to the water resource may have longer-term financial implications and threaten our business model, including our ability to expand or develop new resources and inhibit the delivery of our social value proposition.

The cumulative impacts resulting from multiple users of the water resource within a catchment may exacerbate the community, environmental and business impacts discussed above.

We seek to manage potential impacts to the water resource, including the environmental, community and business impacts, through:

ongoing and regular stakeholder engagement to ensure effective collaboration
compliance with water allocation permits
targets for reduced fresh water use
participation in catchment-level reviews and regulator assessments to understand and improve technical knowledge, challenges and interactions at a catchment level
ongoing monitoring and measurement of water (quality, quantity)
understanding baseline and reference characteristics of water resource and movements
water recovery or source substitution
integration of water management practices into operated asset business planning
identification and where feasible implementation of opportunities for reduced water use
where practical, ongoing monitoring of flora and fauna and other indicators of environmental health
human rights impact assessments

More information on how BHP engages with communities is available at the Community section of our website.

BHP undertakes ongoing assessment of baseline conditions at a catchment level and the potential direct, indirect and cumulative impacts of our operated assets on the baseline condition. Climate change science must be factored into this assessment. For more information, see Our Requirements for Environment and Climate Change standard.

Our Water Stewardship Strategy includes a collective action and a disclosure pillar, both of which focus on water governance and collaborating with host communities, government, industry peers and other stakeholders.

While BHP does not have the ability to directly manage all catchment risks, we need to maintain a focus on management of our contribution to the risk and commit to participate in collective approaches to ongoing catchment governance.

Climate change

Climate-related risks are discussed in the risk factors section of the BHP Annual Report. Climate-related risks capture both the potential direct and indirect impacts of climate change on water-related risks. From a water-related risk perspective, climate change can be considered as a potential amplifier of existing risks as it may significantly increase the likelihood and/or severity of other water-related risks or could result in new risks.

Potential direct water-related impacts resulting from climate change may include changes in precipitation patterns, rising sea levels, increased storm intensities, higher temperatures and increased frequency and/or severity of natural disasters (such as floods or droughts).

Indirect potential impacts of these changes may include coastal erosion, storm tide inundation, and increased production of toxic microorganisms and, over the longer term, reduced rainfall can create water security issues while increasing the need to manage excess water for others.

Assessments of the potential impact of future climate change policy and regulatory, legal, technological, market and societal changes on water-related risks are uncertain given the wide scope of influencing factors and the countries in which we do business.

Climate change may affect near- and long-term BHP performance and may increase competition for, and the regulation of, limited resources, such as water, which are critical to the continuity of our business. This could affect the productivity of and costs associated with our operated assets.

Potential impacts to the natural environment and communities could be exacerbated, which could result in increased impacts to water resources and greater scrutiny from stakeholders. This could delay, limit or prevent future development and affect the productivity of and costs associated with our operated assets.

We could also face rapid change to international reporting standards, increased regulation and increased action from governments and expectations of companies to counter climate change, which may increase our costs and affect BHP and our stakeholders. We could also face increasing climate-related water litigation.

Controls for climate-related water risks can be similar to those for the dewatering, water security and extreme weather risk areas.

BHP has a Climate Change Position Statement and the Our Requirements for Environment and Climate Change standard, which outlines our approach to climate change management and sets minimum mandatory requirements for our operated assets. This includes requirements such as regional analyses of climate science to improve our understanding of the potential climate vulnerabilities of our operated assets and communities where we operate, and to inform resilience planning at an operated asset level.

Our operated assets are required to build climate resilience into their activities, for example, by designing facilities to withstand sea level rise or changing climate patterns, or factoring forecast increases in extreme weather events into operated asset plans. We also require new investments to assess and manage risks associated with the forecast physical impacts of climate change. For more detail, see the BHP Climate Change Report 2020.

Closure

Risk associated with water management and post closure obligations for operated assets that are closing, have closed, or are under ‘care and maintenance’, which can have water quality (within the BHP footprint and beyond) or water accumulation issues.

Ineffectively managed water-related closure risks may adversely affect the environment (for example, contaminants in surface and groundwater, changes to landforms), communities, public safety and our costs associated with managing water now and over the long-term.

Effective closure planning is an important control across BHP’s operated assets. Closure plans are required to consider issues such as pit void lake formations, acidic and metalliferous drainage and saline water accumulation, and potential impacts to both surface and groundwater. For legacy assets, (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase), controls may also be similar to those for the dewatering, extreme weather and water quality risk areas.

For more information on our approach to closure, refer to the closure website.

For more information on the financial provisions relating to closure liabilities, refer to the BHP Annual Report.

Compliance

Risk associated with changes in the regulatory settings, including the nature and extent of regulation related to water allocation, permits, tariffs and reporting obligations.

Our operated assets function in mature regulatory environments for water and regulation compliance requires constant vigilance.

Non-compliances could result in lower-order infringements through to financial penalties, enforcement orders or proceedings, social activism or increased cost to BHP.

Environmental impacts may cause regulatory breaches or legal liability.

Water regulatory requirements must be continually monitored and, where required, our compliance improved.

Ongoing engagement with regulators helps to understand their priorities, how regulatory requirements apply to our operated assets and at a catchment level, and address any existing non-compliances regarding surface water and groundwater.

Dewatering

Risk associated with management of dewatering activities and surplus mine groundwater and surface water (such as levels, volumes and pressures).

Many of BHP’s ore bodies are below the natural groundwater level and to access the ore we need to pump water. Dewatering is an important activity that supports mine production, by enabling access to ore located below the water table or enabling access to ore by supporting pit stability.

Dewatering can potentially impact geotechnical stability and safety, water supply, excess water management, the environment, communities and production.

Management controls for dewatering include:

mine planning
maintaining an operational and predictive water balance
defining dewatering and depressurisation targets
monitoring and reviewing performance metrics
environmental impact assessments
managing excess/surplus water (such as the re-injection of excess water to local aquifers, where possible)
ongoing hydrology assessments to inform planning

Extreme weather

Extreme weather can cause drought, snow or flood events and may arise from acute (event-driven, including increased severity of extreme weather events) or chronic (longer-term changes) to climate cycles.

Extreme weather events may contribute to production, environmental, community and reputational impacts. For example, ineffective management during drought conditions may constrain production due to limitations on water availability. Ineffective management of excess water also has the potential to affect geotechnical stability and safety, prevent site access, cause injuries due to flooding and affect the environment, communities and production.

Forecasting and monitoring of extreme weather events is important in assisting timely and appropriate management. Other preventative controls include design criteria for surface water infrastructure (including extreme weather events analysis) and building integrity within the infrastructure. Mitigating controls include emergency preparedness, communications systems and adequately trained staff. For example, operated assets test the effectiveness of emergency preparedness for extreme weather events by undertaking emergency drills that include external agencies, such as regional fire and police as well as internal BHP resources.

Marine

Risk associated with the alteration in marine water quality (sea or coastal areas), water or seabed levels or biophysical changes to marine environments.

Marine ecosystems are susceptible to impacts resulting from changes to the physical (e.g. temperature and pH) and chemical (metal, hydrocarbon concentrations) parameters of the water body.

This risk can arise from significant or catastrophic loss of containment of hydrocarbons within Petroleum operated assets, discharges from desalination facilities or from port facilities located in proximity to communities and/or key marine areas.

Due to regional differences in marine ecosystems and potential cumulative impacts, the type and extent of the impacts to the marine environment for each of our operated assets may be different and could include increased costs for mitigation, offsets or financial compensatory actions or obligations.

Potential impacts include water quality impacts due to loss of hydrocarbon or chemical containment. Impacts to water quality have the potential to affect both the environment and communities.

Brine discharges at desalination facilities may result in the alteration of marine ecosystems.

Loss of containment or other major incidents may affect BHP’s licence to operate and or production.

Controls for hydrocarbon containment include:

pressure relief systems
engineering design specifications
operational procedures (e.g. job risk assessments, management of change, equipment performance standards, inspections and audits)
passive protection
bunding
oil plume modelling to inform potential impacts, and controls to minimise impacts
continuous monitoring during operations

Mitigating controls include:

communication and emergency drills
preparedness plans and emergency systems.

To minimise impacts associated with smaller discharges in marine environments, treatment, sediment, erosion and other collection and/or treatment systems are utilised.

Controls for desalination and port facilities include:

ongoing maintenance of critical equipment
monitoring and technical studies
stakeholder engagement.

Tailings

Risk associated with the water infrastructure design, operation and reliability of tailings storage facilities could pose catastrophic failure, seepage and inefficient water management.

Impacts arising from the ineffective management of tailings facilities can range from interrupted production to catastrophic incidents with multiple injuries and fatalities, widespread environmental damage and extensive community disruption, with flow-on financial and reputational impacts.

Following the Fundão tailings dam failure, BHP has sought to enhance our tailings management, governance and risk assessment processes, and contribute to raising industry-wide standards. BHP has formed an internal Tailings Taskforce. For more information, refer to the Tailings Storage Facilities website.

Water access, sanitation and hygiene (WASH)

Risk associated with providing access to safe and reliable drinking water (potable water) and appropriate sanitation and hygiene facilities.

The remote nature of many of our operated assets means BHP is often the supplier of water to our workforce for drinking and sanitation, and the manager of effluent. This role sometimes extends to neighbouring communities.

Ineffective WASH practices may result in illness and potential fatalities, which could disrupt our operated assets, impact communities and the environment, have financial and reputational impacts and inhibit the delivery of our social value proposition. Our operated assets also have the potential to affect the cultural and spiritual values associated with water resources, including potential human rights breaches.

Understanding the baseline quality of the water we receive, the performance of our treatment plants and monitoring the water produced are our WASH priorities.

We have global drinking water standards that operated assets are required to meet (see Water Performance FY2020 section). Other controls include appropriate infrastructure, qualified operators, sampling and exception reports and responses, maintenance strategies, emergency response and business continuity planning.

Human rights impact assessments (HRIAs) are a control that assesses both direct impacts to the workforce and communities, as well as potential impacts to other human rights, such as Indigenous, spiritual and cultural rights. All operated assets are required to undertake and review HRIAs regularly. For more information on human rights at BHP, refer to our Human Rights website.

Water infrastructure

Risk associated with the capacity and reliability of water supply infrastructure. Sufficient and well-maintained water infrastructure is central to security of supply and other water-related risks.

Insufficient or poorly maintained water infrastructure can result in the inability of water infrastructure to supply the required quantity or quality of water necessary for our operated assets. This can result in losses in production and impacts to the long-term viability of our operated assets.

Controls include:

design and construction that meet internal and external standards
inspections and maintenance of infrastructure
operating within set parameters
monitoring and response

Regular maintenance of water infrastructure, such as treatment plants, pipelines and tanks, is critical to ensure that water is adequate for our operated assets, both in quantity and quality.

Water quality

Risk associated with changes in the chemical attribute of water, which may occur from runoff or seepage (from exposed ground, pit slopes, waste rock), infiltration from water, tailings and process facilities, infrastructure, and increases in salinity due to long-term storage of water.

Changes to the quality of water that runs through or under an operated asset can affect the surrounding groundwater resources and streams. This can affect other water users and the environment. Changes in water quality can also constrain production or result in water accumulation over time (due to discharge restrictions), which makes management during extreme rainfall events more challenging. This risk can persist for years after mining activity has ceased.

Management of water quality risks requires an understanding of what contributes to changes in water quality, how this may affect sensitive receptors within the environment and/or communities, and the appropriate management measures required. Controls include:

avoiding contact with substances that may affect water quality
appropriate design, construction and monitoring of facilities to prevent and detect contamination
and minimising any impacts through treatment and monitoring of water quality outcomes, so that the effectiveness of controls is understood and can be reviewed as appropriate

Water security

Risk associated with current and future balance between water supply and demand for all relevant users and related to the ecosystem function. A continuous and sustainable water supply is critical to our operated assets.

Location and climate impact water availability and supply. For example, availability has been a risk at NSW Energy Coal in the Hunter region of eastern Australia due to extended periods of below-average rainfall.

The inability to secure water access can constrain production, affect the environment, create community concerns about water availability and have regulatory, legal and financial implications.

An adequate understanding of technical aspects of the water resource, hydrological conditions and/or long-term changes in water availability and management is critical to ensure ongoing supply. In addition, understanding demand through water balances, predictive modelling and monitoring, is central to effective water security.

Many of the controls in place for the management of catchment risk are applied for management of water security risks. Please refer to controls listed above for the Catchment risk area of this table.

We seek to use lower-quality water where feasible and recover and recycle water to reduce fresh water requirements.

Catchment risk

Catchment-level risks are classified as Tier 1 across all of our mining operated assets as the nature of these operated assets coupled with their physical context has the potential to significantly impact water resources and related environmental and/or social values. This may arise because of direct impacts either from BHP’s operated assets or from the cumulative impacts from our activities combined with those of others within a region.

For example, Western Australia Iron Ore (WAIO) in the Pilbara region of Western Australia is located alongside other mining companies’ facilities. The cumulative effect of combined activities has the potential to impact groundwater that support local ecosystems and have important spiritual and cultural significance for Indigenous communities.

To better understand potential impacts, WAIO conducted a strategic environmental assessment that took a regional approach. A key element of the assessment was to understand the potential cumulative impacts and management strategies associated with surface water and groundwater. An analysis was also undertaken to identify key, water-dependent environmental features within the upper Fortescue River catchment.
This innovative approach allowed WAIO to develop proactive, outcome-based management actions to cumulative-impact risks. These actions now inform short and long-term operational planning to avoid and minimise impacts to water-dependent environments.

Case Studies

Dewatering risk

Please refer to our ‘Managing excess water in the Pilbara’ case study for an example of how BHP manages dewatering risks.

Managing excess water in the Pilbara

Extreme weather risk

Extreme weather risks are managed at the operated asset-level. These risks have been identified as Tier 1 at WAIO (cyclones), Escondida (extreme precipitation events), Pampa Norte (extreme precipitation events), Queensland Coal and New South Wales Energy Coal (variable rainfall including extreme rainfall and cyclones and periods of drought) and Petroleum (cyclones).

The climate at Queensland Coal is characterised by wet season rainfall, which includes tropical cyclone events that produce most of the annual rainfall and a dry season during which little rainfall occurs.

Mine-affected water (MAW) is one of the key water-related risks for Queensland Coal. MAW is rainfall runoff from active mining areas and other water that has been used in the mining process. MAW is typically stored in mine pits and dams. Over time, this water may become more saline due to evaporation or it may have increased suspended solids due to wash-down or erosion from surrounding mining activity. MAW is used for dust suppression and coal washing. Too little MAW may limit production and excess water may obstruct access and limit production in operational pits.

Water management activities aim for the balance between too much and too little water on each site. This allows sufficient storage for runoff from rainfall events, while not affecting production and not allowing unauthorised site discharge of MAW. Discharge of MAW needs to be managed in accordance with licence conditions, which in some cases may require managementof MAW prior to discharge. Appropriate management will minimise out-of-season flow in ephemeral creeks and rivers, which has the potential (if not controlled) to increase sediment and salt loads.

Due to a series of extreme rainfall events, excess water management is central to Queensland Coal’s operating strategy. Some BMA sites hold excess water after the 2011 and 2013 floods and tropical cyclone Debbie in 2017. One way of managing this is to move MAW from sites with water excess to sites that have too little water. A further control is to avoid the accumulation of additional water from excess rainfall events. BHP undertakes detailed studies on an ongoing basis that assess the benefit and cost of various options to manage excess water.

Ongoing modelling, ongoing modelling and simulations are used to inform appropriate flood risk mitigation activities, which include construction of flood levees and preparation of emergency evacuation plans.

Climate change has the potential to heighten these extreme weather risks and introduce new ones.

Water access, sanitation and hygiene risk

Water access, sanitation and hygiene is a Tier 1 risk at all operated assets where drinking water and sanitation facilities are provided for the workforce and/or communities.

The remote nature of many of our operated assets means that BHP is often the supplier of water for the purposes of drinking and sanitation, and the manager of effluent with respect to our workforce. In some instances, this role extends beyond our operated assets to our neighbouring communities.

In such circumstances, we are committed to providing access to safe and reliable drinking water (potable water) and appropriate sanitation and hygiene facilities.

For example, WAIO provides drinking water to the community of Newman, five operational mining areas and one closed mine, and supplements supply to our operations at port and rail. Therefore, management of this water is critical to our activities and surrounding communities. To manage this risk, WAIO adopted a management system approach based on ISO 9001, which integrates World Health Organisation (WHO) and the Australian Drinking Water Guidelines requirements, as well as a number of additional standards to enable a holistic approach to drinking water safety and infrastructure management.

Our operated assets also have the potential to affect the cultural and spiritual values associated with water resources. Where relevant, BHP engages with local and Indigenous communities to understand and seek to minimise effects to the cultural and spiritual value.

Water quality risk

Please refer to our Island Cooper case study for an example of how BHP manages water quality risks.

Island Cooper case study

Closure risk

Please refer to our Beenup Titanium Minerals Project Closure case study for an example of how BHP manages water risks in relation to closure.

Closure and water management at Beenup

Water-related risks can indirectly affect operations via our value chain, from supply to operated assets to customers. For example, floods in one part of the world may affect supplies of a critical input or item of equipment necessary to sustain our operated assets. Additionally, tightening regulation around water discharges in a particular country or region may constrain our customers’ manufacturing operations. This may have flow on effects to our ability to sell certain commodities.

BHP has potential exposure to water-related risks across its value chain and climate change may increase our future exposure. Customers and suppliers may be exposed to areas of high to extremely high water stress. Many are also located in areas with a higher likelihood of flooding. We need to understand these factors and respond to the challenges, working with our customers and suppliers.

BHP undertook an evaluation of our value chain in FY2018 to identify customers and suppliers with potential water-related risks. This highlighted a concentration of suppliers and customers in China that may be exposed to water-related risks. Commencing in FY2019, we began a more detailed evaluation, informed by the BHP risk assessment framework, of value chain water-related risks in this region. During FY2020, this evaluation identified suppliers in China operating within areas of water stress and potential partners for water collective action projects. This will further our understanding of opportunities to work with suppliers and customers to better manage water-related risks within our value chain.

For information on BHP’s interests in companies and joint ventures that we do not operate and how we engage with them, refer to the Non-operated joint ventures information in the BHP Annual Report.

Water stewardship is as vital for our Minerals NOJVs and Petroleum non-operated assets as it is for our operated assets.

Petroleum non-operated joint ventures

For our current petroleum non-operated assets, processes are in place to identify and manage water-related risks pursuant to the respective joint operating agreements. An example is in Bass Strait, offshore Victoria, Australia, where the operator is monitoring a number of water-related risks. These include risks associated with per-fluoroalkyl and poly-fluoroalkyl substances, non-aqueous phase contamination and oil-in-water metering.

Minerals non-operated joint ventures

We engage with our NOJVs to seek to enhance governance process and influence operator companies to adopt international standards and to better understand their management of water-related risks.

We have worked with Antamina and its shareholders to secure Antamina's commitment to align with ICMM Mining Principles. In addition, Cerrejón is implementing a water management approach focused on efficient use of water and a basins-based approach. It is also increasing stakeholder engagement to better understand the needs and concerns of local communities. For more information, refer to www.cerrejon.com.

For information regarding the Samarco NOJV, refer to our Samarco section.

BHP recognises that our positive environmental performance (including water stewardship) contributes to social value.

Effective water-related risk management can contribute to long-term business, social and environmental benefits, such as:

increased productivity
improved community benefits and resilience
improved water disclosure and governance
becoming a partner-of-choice to governments and communities in new and existing jurisdictions
access to resources by obtaining and retaining rights to operate and expand our current operated asset base
reduced liabilities and long-term legacy issues
increased long-term business resilience

An example of an opportunity from effective risk management is how WAIO manages dewatering. Dewatering at WAIO produces more water than is required for mining activities. This surplus water is a valuable resource and WAIO’s preference is to implement a controlled return of this water to aquifers through a managed aquifer recharge process. This approach has a number of benefits. It preserves the water resource for future use by BHP or other parties, minimises our environmental footprint and places less impact on the cultural heritage values of the surrounding landscape, which is an important consideration for Traditional Owners.

BHP’s Water Stewardship Strategy seeks to leverage technology solutions to significantly reduce water-related impacts and deliver benefits beyond our operated assets.

We have developed a roadmap of potential water technologies. This roadmap identifies emerging and long-term challenges and strategic opportunities to resolve these through technology and innovation. The roadmap was developed by overlaying operated asset-level water risk with the Water Stewardship vision and objectives to leverage technology solutions that drive a step-change reduction in water risk and realise value creation opportunities. Some examples of technologies and initiatives that are included in the roadmap include:

Olympic Dam tailings decant water treatment for reuse and to partially offset Great Artesian Basin supply
Escondida tailings dam water recovery/treatment for reuse
Queensland Coal mine-affected water treatment for reuse or discharge

Please refer to our Technology Case study for more information.

For further information on water-related opportunities for creating social value, refer to the Social value webpage.

We have a range of core business processes, requirements and guidance materials that apply to our management of water at Group and operated asset levels. These include:

our corporate planning, scenario, strategy and investment evaluation processes
standards such as Our Requirements and other Group-wide standards, including those on risk management, environment and climate change, closure, human rights, community and stakeholder engagement
target setting
water accounting
audit and assurance
technical water management standards.

The Our Requirements for Environment and Climate Change standard requires that our operated assets establish baseline water conditions, identify the water dependent receptors, water uses and stressors and predict changes to these conditions, including the potential impacts of climate change, for the ‘life of asset’.

Our operated assets are also required to determine their contribution to the current and future cumulative impacts and define thresholds and controls (e.g. environmental effects monitoring) to manage any catchment scale impacts; develop and review water forecasts over the life of asset; undertake a water resource situational analysis; and develop operated asset specific context based water targets. A situational analysis is an analysis of the water resources and catchments that the operated asset interacts with, including assessment of:

the sustainability of the volume and quality of the water resources, and any related environmental, social or cultural values, taking into account interactions of all parties and climate change forecasts
the state of water infrastructure, water access, sanitation and hygiene of local communities
the environmental health of the water catchments that feed the water resources taking into account the extent of vegetation, run off, and any conservation of the area
external water governance arrangements and their effectiveness.

BHP has developed technical standards that set minimum standards for water management across its operated assets. These standards include the requirements for all operated assets, including legacy assets (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase), to implement measures to minimise impacts to water resources and impacts to water-dependent ecosystems, communities and cultural values. The standards require development of the following in order to achieve this:

plans that incorporate initiatives that substitute, reuse and reduce our reliance on and impacts to fresh water
water balance that considers all primary water inflows, uses, treatment, storage, losses, diversions and discharges
plans for management of excess water (storm water, dewater and runoff) to ensure that a minimum tolerable level of impact to the receiving environment is achieved
documentation of potential and known sources of groundwater and surface water contamination across the exploration, project, operating and closed sites
a risk based management program where there is potential for groundwater or surface water contamination or water quality impacts. The program shall characterise the type, distribution and fate of contamination and establish water quality performance criteria in operational management activities (e.g. for excess water release or treatment).

BHP has established cross-functional teams to implement our approach to water stewardship at Group and regional levels. These teams include representatives from Planning; Engineering; Strategy; Health, Safety & Environment; Community; Corporate Affairs; Operations; Risk; and Legal.

More detail on the Group-level processes and requirements and how they apply to water-related risks is set out below.

Existing process	Application to water
Planning BHP has a corporate planning process (CAP) in place to implement long-term Group strategy. The CAP process guides the development of plans, targets and budgets to deploy capital and resources.	The planning process delivers an understanding of our projected production levels and water requirements over decades. Risks and opportunities are identified and assessed against social, environmental and economic considerations. For example, for some operated assets, access to ore is dependent on effective water management, therefore water is integral to short-term and five-year plans as well as production targets and effective environmental management.
Strategy BHP assesses how divergent policy, technology, market and societal outcomes could impact our current portfolio. We undertake ongoing monitoring of the macro environment to re-assess the resiliency of our portfolio because we recognise the world would respond in a number of different ways.	We undertake ongoing assessment of changes to legislation that identifies water as a national security interest; changes in valuation and cost of water; water-related legal or regulatory action against companies; changes in ocean health; and the nature and extent of water stress as water availability and populations change.
Investment evaluation BHP has a capital allocation framework that is designed to maximise shareholder value.	While our current investment evaluation process includes a qualitative assessment of sustainability risks and opportunities, we recognise there is room for greater understanding of water in future assessments. Our Water Stewardship Strategy includes an assessment of the adequacy of the current process (see Progress against Water Stewardship Strategy in Section 6.6.5 of the BHP Annual Report).
Tailings Dam safety reviews are mandatory as part of BHP global standards. The reviews are based on the Canadian Dam Association recommendations and include an evaluation of hydrogeological conditions that may influence dam stability.	For more information on tailings dam management, refer to the Tailings section of the BHP Annual Report.
Our Requirements standards BHP has a number of Our Requirements standards that outline Group-wide mandatory minimum performance requirements. They are supported by technical standard and guidance documents.	The Our Requirements for Environment and Climate Change standard and the Water Management Standard are key documents that set mandatory minimum performance standards for water management and outline both Group-wide and operational level requirements.
Risk management At BHP, management of risk is central to creating long-term value. Our mandatory minimum performance requirements for risk management outline BHP’s risk process that include steps for risk identification, analysis, treatment, monitoring and review, including specific requirement for material risk. Risks are subject to internal and, in some cases, external evaluation of effectiveness of controls.	Water-related risks are required to be identified, assessed and managed in line with the broader risk process as outlined in our water-related risk content on this webpage and in the BHP Annual Report. The understanding of water-related risk is increasing over time as discussed in our water performance summary in the Annual Report and our water-related risk content on this webpage.
Environmental management The Our Requirements for Environment and Climate Change standard takes a risk based approach to managing water-related risks.	All our operated assets must understand baseline conditions at a catchment level and the potential direct, indirect and cumulative impacts of their operations on these conditions. Climate change science must also be factored into this assessment.
Closure The Our Requirements for Closure standard requires closure considerations to be built into management and decision-making throughout the lifecycle of our operated assets to minimise longer-term risk and liabilities and identify and harness opportunities.	Each operated asset is required to develop a Closure Management Plan that covers the life of asset to minimise closure-related risk, including those that are water related, and include long-term monitoring to verify the effectiveness of controls and maintain performance standards.
Human rights We aim to identify and manage human rights risk in BHP activities and processes via human rights impact assessment and integration with our risk management system.	Our Water Stewardship Position Statement recognises water access and sanitation as basic human rights. We require our operated assets to assess direct impacts on people, the interrelationship with other human rights, such as Indigenous, spiritual and culture rights, and any specific implications for vulnerable and or marginalised groups. The right to water and sanitation entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic use and the provision of sanitation facilities that offer privacy and dignity. Our operated assets are required to identify and document potential human rights risk by undertaking human rights impact assessments. For further information, see our Human rights webpage.
Community and stakeholder engagement Understanding the needs and concerns of communities and other stakeholders is fundamental to water stewardship. The long-term nature of our operated assets means it is critical we make effective and genuine connection with people that can be sustained over time.	Refer to the Community section of the BHP Annual Report and the Community webpage for information on community and stakeholder engagement practices.
Climate change adaptation planning Our long-life operated assets require a robust, risk-based approach to adapting to the potential physical impacts of climate change. Effective analysis of regional climate science is critical to inform our resilience planning at an operated asset level and improve our understanding of the climate vulnerabilities our operated assets may face.	We have set minimum requirements in our Our Requirements for Environment and Climate Change standard that our operated assets need to address to understand and plan for climate mitigation and adaptation. Many of these relate to water security and water scarcity.
Audit and assurance Our Internal Audit and Advisory (IAA) team evaluates the design and effectiveness of our processes and management of material risk, including water-related risks. These results are considered in the development of plans to address improvements where required.	IAA periodically undertakes a review of material water-related risk and performance data to improve our understanding and consistency of approach to water management. External third party assurance providers routinely evaluate our water data and processes to ensure we accurately represent our commitments and action. Refer to the assurance statement in the BHP Annual Report.

Existing process

Application to water

Planning

BHP has a corporate planning process (CAP) in place to implement long-term Group strategy. The CAP process guides the development of plans, targets and budgets to deploy capital and resources.

The planning process delivers an understanding of our projected production levels and water requirements over decades. Risks and opportunities are identified and assessed against social, environmental and economic considerations. For example, for some operated assets, access to ore is dependent on effective water management, therefore water is integral to short-term and five-year plans as well as production targets and effective environmental management.

Strategy

BHP assesses how divergent policy, technology, market and societal outcomes could impact our current portfolio. We undertake ongoing monitoring of the macro environment to re-assess the resiliency of our portfolio because we recognise the world would respond in a number of different ways.

We undertake ongoing assessment of changes to legislation that identifies water as a national security interest; changes in valuation and cost of water; water-related legal or regulatory action against companies; changes in ocean health; and the nature and extent of water stress as water availability and populations change.

Investment evaluation

BHP has a capital allocation framework that is designed to maximise shareholder value.

While our current investment evaluation process includes a qualitative assessment of sustainability risks and opportunities, we recognise there is room for greater understanding of water in future assessments. Our Water Stewardship Strategy includes an assessment of the adequacy of the current process (see Progress against Water Stewardship Strategy in Section 6.6.5 of the BHP Annual Report).

Tailings

Dam safety reviews are mandatory as part of BHP global standards. The reviews are based on the Canadian Dam Association recommendations and include an evaluation of hydrogeological conditions that may influence dam stability.

For more information on tailings dam management, refer to the Tailings section of the BHP Annual Report.

Our Requirements standards

BHP has a number of Our Requirements standards that outline Group-wide mandatory minimum performance requirements. They are supported by technical standard and guidance documents.

The Our Requirements for Environment and Climate Change standard and the Water Management Standard are key documents that set mandatory minimum performance standards for water management and outline both Group-wide and operational level requirements.

Risk management

At BHP, management of risk is central to creating long-term value. Our mandatory minimum performance requirements for risk management outline BHP’s risk process that include steps for risk identification, analysis, treatment, monitoring and review, including specific requirement for material risk. Risks are subject to internal and, in some cases, external evaluation of effectiveness of controls.

Water-related risks are required to be identified, assessed and managed in line with the broader risk process as outlined in our water-related risk content on this webpage and in the BHP Annual Report. The understanding of water-related risk is increasing over time as discussed in our water performance summary in the Annual Report and our water-related risk content on this webpage.

Environmental management

The Our Requirements for Environment and Climate Change standard takes a risk based approach to managing water-related risks.

All our operated assets must understand baseline conditions at a catchment level and the potential direct, indirect and cumulative impacts of their operations on these conditions. Climate change science must also be factored into this assessment.

Closure

The Our Requirements for Closure standard requires closure considerations to be built into management and decision-making throughout the lifecycle of our operated assets to minimise longer-term risk and liabilities and identify and harness opportunities.

Each operated asset is required to develop a Closure Management Plan that covers the life of asset to minimise closure-related risk, including those that are water related, and include long-term monitoring to verify the effectiveness of controls and maintain performance standards.

Human rights

We aim to identify and manage human rights risk in BHP activities and processes via human rights impact assessment and integration with our risk management system.

Our Water Stewardship Position Statement recognises water access and sanitation as basic human rights. We require our operated assets to assess direct impacts on people, the interrelationship with other human rights, such as Indigenous, spiritual and culture rights, and any specific implications for vulnerable and or marginalised groups. The right to water and sanitation entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic use and the provision of sanitation facilities that offer privacy and dignity. Our operated assets are required to identify and document potential human rights risk by undertaking human rights impact assessments. For further information, see our Human rights webpage.

Community and stakeholder engagement

Understanding the needs and concerns of communities and other stakeholders is fundamental to water stewardship. The long-term nature of our operated assets means it is critical we make effective and genuine connection with people that can be sustained over time.

Refer to the Community section of the BHP Annual Report and the Community webpage for information on community and stakeholder engagement practices.

Climate change adaptation planning

Our long-life operated assets require a robust, risk-based approach to adapting to the potential physical impacts of climate change. Effective analysis of regional climate science is critical to inform our resilience planning at an operated asset level and improve our understanding of the climate vulnerabilities our operated assets may face.

We have set minimum requirements in our Our Requirements for Environment and Climate Change standard that our operated assets need to address to understand and plan for climate mitigation and adaptation. Many of these relate to water security and water scarcity.

Audit and assurance

Our Internal Audit and Advisory (IAA) team evaluates the design and effectiveness of our processes and management of material risk, including water-related risks. These results are considered in the development of plans to address improvements where required.

IAA periodically undertakes a review of material water-related risk and performance data to improve our understanding and consistency of approach to water management.

External third party assurance providers routinely evaluate our water data and processes to ensure we accurately represent our commitments and action. Refer to the assurance statement in the BHP Annual Report.

Water accounting

We have publicly reported our water withdrawals and discharges for more than 15 years, since the establishment of the Minerals Council of Australia’s Water Accounting Framework (WAF) Input-Output Model.

We transitioned our reporting in FY2019 to align with the ICMM ‘A Practical Guide to Consistent Water Reporting’ (ICMM Guidelines), an international accounting framework to allow for comparable water data across the mining and metals industry. Although the ICMM Guidelines are in general alignment with the WAF and the basic reporting requirements of the Global Reporting Initiative, alignment to the ICMM Guidelines has resulted in some changes to the way we now report water data. A key change relates to the terminology we use. We now describe our water inputs as water withdrawals and what we previously referred to as water outputs is now referred to as water consumption or water discharges.

Our reporting metrics are in line with the ICMM guidance, such that we report:

our water withdrawals (water intended for use by an operated asset) by source, by quality and by operated asset
water consumption (water used by the operated asset) via the type of consumption (e.g. evaporated, entrained)
water discharge (water returned to the environment ) by destination, operated asset and quality
water diversions (water actively managed by an operated asset but not used for any operational purposes) by quantity
water recycled/reused (water that is used more than once at the operated asset) by quantity and efficiency.

During FY2020, BHP continued to improve the robustness of its water data in line with the ICMM Guidelines. Please refer to section 6.8 of the BHP Annual Report for a glossary of terms currently used by BHP for water reporting.

BHP has continued to group water quality into three categories in line with the WAF, as this provides more granularity. Type 1 and Type 2 equate to high-quality water, while Type 3 equates to low-quality water under the ICMM Guidelines.

Please refer to the Water information in section 6.6 of the BHP Annual Report.

During FY2020, we continued to progress our Water Stewardship Strategy. Significant milestones included the further implementation of the global technical standards, assessment of water-related catchment and marine region risks and alignment of water-related risk to the BHP Risk Framework.

In FY2021, we will continue to engage broadly as we seek to establish additional collaborations to move towards our vision of water security for all.

We plan to ramp up the development of our context-based, operated asset-level water targets. The nature of these targets will vary across our operated assets, as we consider both the nature of our interactions with water and the shared water challenges within each region. The water resource situation analysis is expected to be completed in FY2021, which will involve collaboration with interested parties within the regions to address our shared water challenges.

We anticipate releasing an initial set of context-based, operated asset-level water targets by the end of FY2022.