Tailings storage facilities risk management

BHP  uses the ‘three lines model’ of risk governance and management to define roles of different teams across the organisation in managing risk. This sets clear accountabilities for risk management and provides appropriate ‘checks and balances’ to support us in protecting and growing value. Our approach to TSF failure risk management at our operated assets is aligned with our standard approach to risk management, assurance and continuous improvement.

Under this model, the first line is provided by our frontline staff, operational management and people in functional roles – anyone who makes decisions, deploys resources or contributes to an outcome is responsible for identifying and managing the associated risks. Our first line operational personnel and management own the TSF failure risks and implement controls designed to reduce the likelihood and potential impacts of a failure. 
Our second line functions, primarily the Tailings Excellence team, Resource Centre of Excellence and the Risk team, are responsible for providing expertise, support, monitoring and challenge on risk-related matters, including by defining mandatory minimum performance requirements for the management of TSF failure risks. The second line supports the first line and is responsible for verifying risk management activities by conducting reviews and other assurance activities to help identify opportunities to improve understanding and management of TSF failure risks. 

The third line, our Internal Audit team, is responsible for providing independent and objective assurance over the control environment (governance, risk management and internal controls) to the Board and our Executive Leadership Team. This may include, for example, auditing the effectiveness of mandatory minimum performance requirements and their application to TSF failure risks. Additional assurance may also be provided by external providers, such as our external auditor.

The outcomes and actions resulting from the activities at each line are required to be documented, monitored, actioned and communicated on a regular basis to the relevant asset personnel, Executive Leadership Team members and the Board’s committees through operational and governance processes. Our approach to TSF failure risk management at operated assets is multi-dimensional encompassing both management of controls and governance. The key elements of this are: 

• maintenance of dam integrity
• operation, surveillance and maintenance
• emergency preparedness and response
• TSF governance and standards including Group-level oversight and assurance

Tailings storage facilities governance and standards

Effective governance of our TSFs also requires accountabilities to be clearly defined and appropriately qualified personnel appointed to key governance roles. 

There are three key first-line roles which we mandate across our operated assets:

• Dam Owner – the single point of accountability for maintaining effective governance and integrity of the TSF throughout its life cycle
• Responsible Tailings Facility Engineer – a suitably qualified BHP individual accountable for maintaining overall engineering stewardship of the TSF, including planning, operation, surveillance and maintenance
• Engineer of Record – an individual external to BHP who is a suitably qualified professional engineer retained by the Dam Owner for the purpose of maintaining TSF design, certifying TSF integrity and supporting the Dam Owner and the Responsible Tailings Facility Engineer on any other matters of a technical nature
  
   

In accordance with the GISTM, we have defined our Accountable Executive (AE) positions, who are direct reports of the BHP Chief Executive Officer and answerable to the BHP Board’s Sustainability Committee. The AE roles include an AE accountable for the Group-wide TSF governance framework, and AEs accountable for the safety of TSFs including avoiding or minimising the potential environmental and social impacts of a TSF failure, tailings management training and emergency preparedness and response. Frontline employees are the first line and manage the day-to-day operations and safety at site, while connected via regular communication to the relevant AE.

TSFs may also have Independent Tailings Review or Stewardship Boards to strengthen the control environment for TSF failure risks. BHP assesses the dam classification, risk, and operational circumstances in determining whether to empanel a Tailings Review or Stewardship Board. Not all TSFs will have a Tailings Review or Stewardship Board; they are in place, or are in the process of being established, for all our operated assets with ‘very high’ or ‘extreme’ consequence classified TSFs (in accordance the classifications Canadian Dam Association classifications). For TSFs where a Tailings Review or Stewardship Board is not required, independent, senior technical reviewers will act in this capacity.  

Additional information on our approach to TSF standards and Group-level oversight and assurance is detailed in our journey to date. 

For more information on our commitment to safe management of TSFs, emergency preparedness and response, recovery in the unlikely event of a failure, and transparency refer to our BHP TSF Policy Statement.