Business Conduct
There were 81 enquiries to the Business Conduct Helpline and fraud hotline systems in the year to 30 June 2006. This compares to 103 in the previous year. Of the total number of enquiries, 90 per cent 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 charts below.
Business Conduct Helpline and Fraud Hotline Enquiries by Category
2005/06
Business Conduct Helpline and Fraud Hotline Enquiries by Region
2005/06
The most common issues related to gifts, human resource, conflict of interest and harassment/pornography. In terms of geographic origin of business conduct enquiries, and 59 per cent of calls originated from Australia. A further 19 per cent of enquiries emanated from both southern Africa and Latin America and two and one per cent respectively from North America and Europe.
All business conduct cases and their treatment were reported (with appropriate management of confidential information) to the Global Ethics Panel.
All fraud-related cases were reported to Group Audit Services, which in turn reports to the Risk and Audit Committee of the Board. During the year a formal set of guidelines was used 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 Board has been involved in decision-making in regards to our approach to business conduct. In February 2005, the Board took a decision to extend the trial of the external independent helpline system that was put in place in October 2003 in southern Africa. The trial provided 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. Following a review of the service that indicated the service was not cost-effective, the Board took a decision in October 2005 to cease the external helpline and return to running one globally consistent in-house system.
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 practiced.
A key part of the assurance process for business conduct is an annual communication by the Chief Executive Officer to his direct reports to ensure that the Guide to Business Conduct has been rolled out and understood. This requirement 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 process, which has helped to quantify the extent to which employees and contractors are aware of the Guide to Business Conduct. Evidence also suggests that, following the acquisition of WMC in 2005, former WMC employees have adopted the Guide.This evidence consists of a number of calls to the Business Conduct Helpline from former WMC assets, indicating that they are aware of the helpline facility.
Communication of the Guide is facilitated with posters, a printed summary version of the Guide, electronic information and other communication tools. An addendum was produced in February 2006 to reflect the adoption of a new regional fraud hotline service and the Sustainable Development Policy.
Commission of Inquiry into the UN Oil-For-Food Program
On 10 November 2005 a Commission of Inquiry (Cole Inquiry’) was established by the Australian Government into possible breaches of Australian law by the three Australian companies (AWB Limited, Alkaloids of Australia Pty Limited and Rhine Ruhr Pty Ltd) mentioned in the Final Report of the Independent Inquiry Committee into the UN Oil-For-Food Programme (the Volcker Report). BHP Billiton was not named in the Volcker Report.
In the course of the Cole Inquiry, reference was made to a shipment of wheat to Iraq that had been financed by a BHP Billiton subsidiary (BHP Petroleum) in 1996. On 19 January 2006, BHP Billiton publicly said that it was concerned about those references and had begun an investigation to clarify the facts.
On 6 February 2006 the terms of reference of the Cole Inquiry were extended to include BHP Billiton.
BHP Billiton’s internal review is well advanced and has been supported by external advisory support as well as BHP Billiton’s internal audit team. The report from that review will include an assessment of compliance by BHP Billiton with the law and an assessment of compliance with BHP Billiton’s own business conduct requirements with a view to determining whether there has been a breach by any officer or employee of his or her duties to BHP Billiton. It will also include a report on any remedial actions that are identified as necessary in the course of that review.
Chief Executive Officer Chip Goodyear has made it clear from the beginning of this matter that BHP Billiton is deeply concerned at the issues raised in the Cole Inquiry and that he is committed to understanding all of the facts surrounding the issues and to reporting the conclusions from our review. Significant resources have been committed to the review.
Issues raised by our involvement in the Cole Inquiry were discussed at a meeting of the Forum for Corporate Responsibility in May 2006. In July 2006 the issues were again discussed in a meeting of the Global Ethics Panel at which external members of the Forum were present.
For our review to be thorough, we have to take account of any relevant information that may emerge from the Cole Inquiry and, therefore, will not be in a position to release the findings from the internal review until the Cole Inquiry process has been completed. At the time of writing, the Cole Inquiry is due to report by 29 September 2006.
