BARRY FITZGERALD AND MATHEW MURPHY
Sydney Morning Herald
April 23, 2010
BHP BILLITON'S chief executive, Marius Kloppers, has sent an internal memo to all staff expressing ''great concern'' at the Cambodian ''tea money'' scandal and reminding all employees that working with integrity is ''critical to our success''.
In the message, obtained by BusinessDay, Mr Kloppers moves to reassure staff that the matter will be investigated forensically but that the probe was still at ''a relatively early stage''.
''You should be assured that we will thoroughly and fairly investigate these matters, as we would any other possible breach of law or the code, and take whatever action is appropriate at the conclusion,'' he said. ''While matters of this kind are of great concern, they remind us that we must work in a way that is consistent with our code and our charter values. Along with safety, nothing is more critical to our success than working with integrity.
''That means working in a way that upholds our values, which underpins everything we do. We also know that consistent and proper business conduct creates loyalty and trust,'' Mr Kloppers said.
The email was issued a day after BHP told the market that it has been under investigation by the US Securities and Exchange Commission since August. BHP said a subsequent internal investigation had uncovered evidence ''regarding possible violations of applicable anti-corruption laws involving interactions with government officials''.
BHP has so far refused to disclose where the bribery scandal transpired but BusinessDay believes it involves a $US1 million payment made by the company to the Cambodian government back in 2006 to secure bauxite leases.
The British advocacy group Global Witness raised queries about the payment in its Country for Sale report, published in February last year. Its own investigation found that Cambodia's non-tax revenue from mining concessions for 2006 was only $US443,866.
''This raises questions as to where BHP Billiton's $US1 million payment made in September 2006 has gone,'' the report says.
Concerns about facilitation payments, fraud and bribery have long been an issue for BHP and its far flung global operations.
A BusinessDay analysis of inquiries made to BHP's conduct and fraud hotline over the past five years shows the matter has been a continual headache for the global miner.
That is despite the company's Working with Integrity: Code of Business Conduct document being circulated to all staff and including guidelines on what to do if asked to make a facilitation payment.
BHP's official position, according to the document, is that it ''discourages the making of facilitation payments'' and advises staff to ''be cautious of agreeing to demands for facilitation payments''.
On average, about 7 per cent of all calls to BHP's conduct and fraud hotline each year are concerning facilitation payments, bribery or fraud.
That number spiked in 2005 when documents show about 14 per cent of calls to the hotline were about facilitation payments and bribery while a further 15 per cent related to fraud.
Curiously in 2006, at the time that the $1 million payment in question is said to have been handed to the Cambodian government, no breakdown is given for the number of calls relating to facilitation payments, bribes or fraud. They are subsumed into the ''other'' category.
In the message, obtained by BusinessDay, Mr Kloppers moves to reassure staff that the matter will be investigated forensically but that the probe was still at ''a relatively early stage''.
''You should be assured that we will thoroughly and fairly investigate these matters, as we would any other possible breach of law or the code, and take whatever action is appropriate at the conclusion,'' he said. ''While matters of this kind are of great concern, they remind us that we must work in a way that is consistent with our code and our charter values. Along with safety, nothing is more critical to our success than working with integrity.
''That means working in a way that upholds our values, which underpins everything we do. We also know that consistent and proper business conduct creates loyalty and trust,'' Mr Kloppers said.
The email was issued a day after BHP told the market that it has been under investigation by the US Securities and Exchange Commission since August. BHP said a subsequent internal investigation had uncovered evidence ''regarding possible violations of applicable anti-corruption laws involving interactions with government officials''.
BHP has so far refused to disclose where the bribery scandal transpired but BusinessDay believes it involves a $US1 million payment made by the company to the Cambodian government back in 2006 to secure bauxite leases.
The British advocacy group Global Witness raised queries about the payment in its Country for Sale report, published in February last year. Its own investigation found that Cambodia's non-tax revenue from mining concessions for 2006 was only $US443,866.
''This raises questions as to where BHP Billiton's $US1 million payment made in September 2006 has gone,'' the report says.
Concerns about facilitation payments, fraud and bribery have long been an issue for BHP and its far flung global operations.
A BusinessDay analysis of inquiries made to BHP's conduct and fraud hotline over the past five years shows the matter has been a continual headache for the global miner.
That is despite the company's Working with Integrity: Code of Business Conduct document being circulated to all staff and including guidelines on what to do if asked to make a facilitation payment.
BHP's official position, according to the document, is that it ''discourages the making of facilitation payments'' and advises staff to ''be cautious of agreeing to demands for facilitation payments''.
On average, about 7 per cent of all calls to BHP's conduct and fraud hotline each year are concerning facilitation payments, bribery or fraud.
That number spiked in 2005 when documents show about 14 per cent of calls to the hotline were about facilitation payments and bribery while a further 15 per cent related to fraud.
Curiously in 2006, at the time that the $1 million payment in question is said to have been handed to the Cambodian government, no breakdown is given for the number of calls relating to facilitation payments, bribes or fraud. They are subsumed into the ''other'' category.
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