According to The Power Index, it was a “Power Move” when BHP Billiton CEO Marius Kloppers told the Creating Shared Value conference in Melbourne earlier this week that:

“We seek affirmation in our share price that what we do is right, but I think we’ve got to turn that around … We need affirmation from our communities that what we are doing is the right thing, we need affirmation from our employees in their turnover rates that they are proud of working for us. We want to create a more profound inter-linkage with communities, engage those communities more in supplying our businesses and make sure those communities benefit from our presence.”

Power move it may be, but what is really going on?  When the head of a major transnational corporation announces an epiphany on corporate social responsibility it is appropriate to be sceptical. The plain truth is that publicly listed companies are amoral entities that simply don’t engage in CSR except where there is a business case to do so.

BHP’s share price has never been “affirmation” that what the company was doing was “right” in any kind of moral sense, only that it was pursuing a profitable business model. And BHP does not “need” affirmation from host neighbourhoods, or its employees to feel “proud”; though both may be commercially advantageous to the extent to which they (for example) increase productivity or minimise transaction costs. Similarly, Kloppers may quite honestly “want” to shift the nature of BHP’s relationship with the communities where it operates, but this will only ever be for reasons of corporate strategy revolving around profit maximisation.

So what won’t BHP be doing? Well it seems unlikely, for example, that BHP is going to shut down the 139 (30% of the total) companies in the group that operate from tax havens — though presumably all that money that is not being paid over to “communities” in the form of tax revenue could buy a heck of a lot of affirmation.

A clue to the Klopper’s underlying motivations can be found in the nature of the event at which he was speaking, convened by the organisation Business for Millennium Development of which BHP is a “pro bono partner“. As I noted for Crikey back in February, the B4MD website pretty frankly acknowledges that business is only interested in poverty alleviation when it occurs as the consequence of commercial activity. And accordingly, the B4MD website sets out an extensive “business case” for why corporations should support global poverty alleviation, with reasons including supply chain efficiencies, new markets, staff recruitment and retention, risk management and public relations.

So with that in mind, what might BHP be up to here? One possible explanation is that the uttering of a few platitudes at a peak level conference is an easy way of scoring some cheap public relations mileage. In the era of Occupy it probably does not do any well-known transnational any harm to display a little public humility.

But perhaps there is something more specific going on. Perhaps Kloppers is seeking to reposition BHP following the company’s unsuccessful opposition to the carbon tax. Or maybe the company’s contentious Yeelirrie mine proposals are to be formally abandoned?  Or, who knows, is it possible that Kloppers is laying the ground work for a new approach to environmental protection, clean up and rehabilitation at the proposed new open-pit mine at Olympic Dam, which has been heavily criticised by the Australian Conservation Foundation and others? Let’s hope so.

But whether it is merely PR puffery, a change of direction at Olympic Dam, or something else altogether, the one constant is the singular motivation to maximise returns.

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW