Business Conduct
There were 103 substantive enquiries to the Business Conduct Helpline and fraud hotline systems in the year to 30 June 2005. This represents a 29 per cent increase from the previous year when 80 enquires were recorded. This increase in the number of enquiries may be attributed to a greater awareness of the business conduct system and processes. Of the total number of enquiries, 82 were to the Business Conduct Helpline or email address. A breakdown of the categories of enquiries and the geographic origin of enquiries are presented in the chart below.
Business Conduct and Fraud Hotline Categories of Enquiries
2004/05
The most common issues related to fraud, facilitation payments and bribery, gifts and travel, conflict of interest, employment-related issues and use of company resources. In terms of geographic origin of business conduct enquiries, about 60 per cent of calls originated from Australia, where the system is managed and where the Global Ethics Panel is primarily based. A further 17 per cent of enquiries emanated from southern Africa and 10 per cent each from North and South America.
All business conduct cases and their treatment were reported (with appropriate management of confidential information) to the Global Ethics Panel. The management of several cases involved one or more members of the Global Ethics Panel during the resolution process.
All fraud-related cases were reported to Group Audit Services, which in turn reports to the Risk Management and Audit Committee of the Board. During the year a formal set of guidelines was established for business conduct investigations.These include principles that every investigation should be independent, confidential and , thorough and that the results and follow-up action should be reported to the Global Ethics Panel.
The annual Business Conduct report was delivered to the Board in November 2004. The Board has taken a decision to extend the trial of the external independent helpline system that was put in place in October 2003 in southern Africa. This trial was initiated in light of international developments regarding corporate governance and independent whistle-blowing systems. The trial provides staff with an external free-call phone number to call as an alternative to the internal BHP Billiton Business Conduct Helpline or the fraud hotline. The external service provider reports any calls requiring follow-up immediately to the BHP Billiton Business Conduct representative for action. In the year to 30 June 2005 there were five enquires sourced from this service requiring follow-up (included in the total number of enquiries shown above).
We recognise that there is a continuous need to reinforce and refresh business conduct principles. This is supported by a strong commitment from the most senior management levels of the Company to ensure the principles of the Guide to Business Conduct are understood and practised.
A key part of the assurance process for business conduct is an annual email request by the Chief Executive Officer to his direct reports to ensure that the Guide to Business Conduct is rolled out and understood. This request is then cascaded through the Company. Internal performance requirements for business conduct are fully integrated in the HSEC Management Standards under Standard 8. Questions regarding business conduct are included in the HSEC audit and self assessment, which has helped to quantify the extent to which employees and contractors are aware of the Guide to Business Conduct. In addition, an assessment of the roll-out is made at offices. This has indicated a substantive level of roll-out activity in BHP Billiton offices around the world.
Communication of the Guide is facilitated with posters, a printed summary version of the Guide, electronic information and other communication tools. In addition to the rollout and assurance activities identified above, the Chief Executive Officer highlighted the priority of this document to all employees of former WMC assets and they were provided with a copy of the Guide to Business Conduct in June 2005.
The Global Ethics Panel commissioned an in-house benchmarking analysis in 2005 to examine peer company corporate ethics systems, to ensure that BHP Billiton has leading practices in this area. In reviewing this analysis, we have decided to continue with the same structure and management of the sytem; however, effort will be made to use existing resources more effectively; for example, communication tools, such as eLearning, will be explored.
For an example of policy in action, refer to our case study, Business conduct and the supply relationship.
