At BHP, our purpose is to bring people and resources together to build a better world. As a part of this, we must ensure the integrity of tailings storage facilities (TSFs) across our operations and legacy assets to protect our people, the environment and communities in which we operate(1). Our aspiration is to eliminate the risk of catastrophic TSF failure at our operations and legacy assets and we are working with others and sharing our progress in an effort to make this a reality.
TSFs are dynamic structures that could comprise of multiple dams (or cells) that have contiguous, structurally similar interconnected walls but are operated under the same tailings disposal regime. Maintaining the integrity of these TSFs requires consideration of a range of factors, including appropriate engineering design, quality construction, ongoing operating discipline and effective governance processes and transparency.
Nothing is more important than the safety of our people and communities. Immediately following the tragic failure of the Fundão dam at Samarco in 2015, the BHP Board and senior management initiated a Dam Risk Review to assess the management of significant TSFs. This review covered both active and inactive facilities across our operated and non-operated assets. The review was in addition to existing review processes already being undertaken by our operated assets. The review, conducted by a combination of external tailings experts and BHP personnel, assessed dam design, construction, operations, emergency response and governance to determine the current level of risk and the adequacy and effectiveness of controls.
The scope of this review included:
- significant TSFs across all our operated assets and non-operated assets
- any proposed significant tailings or water dams as part of our major capital projects
- consideration of health, safety, environmental, community and financial impacts associated with the failure of a tailings dam, including the potential physical impacts of climate change on our TSFs
Improvement actions were assigned to address facility-specific findings. Our Internal Audit and Advisory team subsequently followed up to assess the quality and completeness of the improvement actions. These actions resulted in enhancements across our assets, such as buttressing of dam walls and installation of additional instrumentation to monitor dam integrity. Following such findings, we have undertaken and continue to undertake dam safety reviews, which provide external assurance statements on dam integrity.
Improvement actions were also identified to address common findings and lessons learned across the Group so that our approach to dam risk management could be further improved. As part of this, a central technical team was set up to enhance governance, oversight and assurance.
Prior to the tragic collapse of the Brumadinho dam at Vale’s iron ore operation in Brazil in January 2019, we already had a significant focus on looking at how we could deliver a step-change reduction in TSF failure risk. Together with our peers across the resource sector, the Brumadinho event further strengthened our resolve to collaborate to reduce those risks by sharing and implementing best practice.
In CY2019, we introduced our mandatory minimum performance requirements for TSFs that govern how we manage TSF failure risks across BHP which outlines applicable processes, including business planning, risk assessments and management of change. This standard, along with our mandatory minimum performance requirement on risk management and related matters, require us to take a risk-based approach and set out key considerations in relation to the management of TSF risks, such as when working with our communities and external stakeholders and building our emergency management plans.
In FY2019, we introduced the Priority Group Risk Review process, an additional second line led review of the Group’s most significant risks (such as TSF failure) to provide greater oversight and assurance of, and identify any opportunities to improve, the management of these risks. Key risk indicators (KRIs) have been set by management to help monitor performance against our risk appetite, including KRIs that monitor data relating to dam integrity and design, overtopping/flood management and emergency response planning. More information on our Risk Framework, which applies to all risks to which BHP is exposed (including those associated with TSFs), is available in our Annual Report.
As well as applying a comprehensive tailings governance plan for our operated assets, we have established a Tailings Taskforce team reporting to the Executive Leadership Team and the Board’s Sustainability Committee. The Tailings Taskforce is accountable for developing, accelerating and embedding our short-, medium- and long-term strategies in relation to the management of TSFs, including the continued improvement and assurance of our operated TSFs, progressing the development of technology to improve tailings management storage, and engaging in the setting of and implementation of new tailings management standards. We are committed to sustaining these strategies, continuing to review our approach to tailings management and continuing to consider and support any industry guidance, standards and regulation that would improve the management of TSF failure risk as they emerge.
1. Legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase