BHP Billton CEO admits OK Tedi was 'not ethical'

The following statement from Chip Goodyear, CEO of BHPBilliton re-iterates the company's "confession" some years ago that the Ok Tedi mine in Papua New Guinea should not have been constructed. What happened as the company offloaded its responsibility to the PNG government for the consequences of the mining, and fought to deny proper further compensation payouts to victims of its operations, is a scandal in itself. But now Goodyear seems to have diluted BHPBillton's post-Ok Tedi promise that it would abandon riverine tailings disposal. And it's now claiming moral leadership; of the industry - through its "charter" - even while stating that companies with bad track records (of which BHPBilliton is a prime example) won't get contracts in future.

What is also alarming about Goodyear's statement is the promise it carries to apply this new charter to India - Orissa in particular - for future iron ore and bauxite projects, Orissa being the one major mineral-rich state in the country whose pro-mining government wasn't removed in the recent nationwide elections.

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OK Tedi was 'not ethical'

Post Courier, PNG

15th July 2004

MELBOURNE: BHP Billiton Ltd's chief executive Chip Goodyear said yesterday the controversial Ok Tedi mine in Papua New Guinea would not have been developed under the company charter the group worked by today.

Speaking at a global business ethics conference in Melbourne, Mr Goodyear said companies with poor track records in relation to health, safety, environmental responsibility and sustainable development would have difficulty getting licences to operate in the future. BHP Billiton's charter adopted during the merger between BHP Ltd and Billiton Plc in 2001, stated that the company must earn the trust of employees, customers, suppliers, communities and shareholders.

"Companies with a poor track record in these areas will find it harder to gain regulatory approvals and community support for new developments in the future," Mr Goodyear said.

Included in the charter was a document in which BHP Billiton said it would no longer proceed with development in which tailings from the milling process were dumped into rivers.

"I think it is important to note . . . mines can be developed that way but unfortunately that (Ok Tedi) was not one," he said. BHP Billiton's 52 per cent equity stake in the mine was folded into a holding company, with future profits going to fund short-term and long-term sustainable development projects across PNG.

Mr Goodyear told the conference while the group's charter had been used to exit Ok Tedi in a positive way, the mine was not a development of which BHP Billiton was proud.

The group now maintained the same ethical project investment standards in developing nations as for countries such as the United States, the United Kingdom and Australia, he said.

"If we don't believe we can achieve these standards, then we will forgo the opportunity," he said. Mr Goodyear said corporate responsibility was becoming more important as future top tier resources assets were more likely than not to be discovered in "more challenging" parts of the world."

It was an issue the group was dealing with as it attempted to develop "potentially interesting" iron ore and alumina deposits discovered in the Indian state of Orissa.