MAC: Mines and Communities

BHP Billiton faces US corruption probe

Published by MAC on 2013-08-21
Source: Mining.com, statement, Telegraph (2013-08-16)

BHP Billiton faces US corruption probe

Cecilia Jamasmie

Mining.com

16 August 2013

US authorities warned BHP Billiton they are looking into issues that could lead to the world's No.1 company having to face action over potential breaches of anti-corruption laws, related mainly to terminated projects and its sponsorship of the Beijing Olympics in 2008.

In a statement to the Australian stock exchange, BHP said Friday it is "fully committed to operating with integrity and the group's policies specifically prohibit engaging in unethical conduct."

However, the company has been under investigation for alleged corrupt practices in several countries as of late, including China, Australia, Cambodia and the Philippines.

In March this year, both the Australian Federal Police (AFP) and US authorities confirmed they were investigating claims against BHP of providing inducements, hospitality and gifts to Chinese and other foreign officials right around the time of the Beijing Olympics committee was accepting application for sponsorships.

BHP ended up being the official materials supplier for the gold, silver and bronze medals used in Beijing.

It also came to light that a parallel investigation was eyeing an aborted BHP mining deal allegedly involving corruption, which was overseen by Cambodian prime minister and strongman Hun Sen.

In 2010, BHP revealed it was conducting its own internal investigation in response to inquiries from US authorities. The probe, said the company at the time, had uncovered evidence "regarding possible violations of applicable anti-corruption laws involving interactions with government officials."

BHP is set to report its full-year results on August 20, the first under new CEO Andrew Mackenzie.


Update on Continuing Regulatory Investigations

BHP Billiton release

16 August 2013

As previously disclosed BHP Billiton received a request for information in August 2009 from the US Securities and Exchange Commission (SEC). As a result the Group commenced an internal investigation and disclosed to relevant authorities including the U.S. Department of Justice (DOJ) evidence that it uncovered regarding possible violations of applicable anti-corruption laws involving interactions with foreign government officials. As has been publicly reported, the Australian Federal Police has indicated that it has commenced an investigation. The Group is fully cooperating with the relevant authorities as it has since the US investigations commenced.

As a part of the US process, the SEC and DOJ have recently notified the Group of the issues they consider could form the basis of enforcement actions and discussions are continuing. The issues relate primarily to matters in connection with previously terminated exploration and development efforts, as well as hospitality provided as part of the Company's sponsorship of the 2008 Beijing Olympics.

In light of the continuing nature of the investigations it is not appropriate at this stage for BHP Billiton to comment further or to predict outcomes. BHP Billiton is fully committed to operating with integrity and the Group's policies specifically prohibit engaging in unethical conduct. BHP Billiton has what it considers to be a world class anti-corruption compliance program.


BHP Billiton faces US anti-corruption action over Beijing Olympics sponsorship

US authorities have warned BHP Billiton, the world's largest miner, it could face action over potential breaches of anti-corruption laws related to terminated exploration activities and its sponsorship of the Beijing Olympics.

Daily Telegraph

16 August 2013

BHP said on Friday that the US Securities and Exchange Commission and Department of Justice had notified the group "of the issues they consider could form the basis of enforcement actions and discussions are continuing".

The issues "relate primarily to matters in connection with previously terminated exploration and development efforts, as well as hospitality provided as part of the company's sponsorship of the 2008 Beijing Olympics", the miner said.

It said: "BHP Billiton is fully committed to operating with integrity and the group's policies specifically prohibit engaging in unethical conduct. BHP Billiton has what it considers to be a world class anti-corruption compliance programme."

The miner has been under investigation by the SEC for four years.

Reports earlier this year in Australia said that instead of using the Olympics affiliation to promote its products, BHP allegedly ran a "behind-the-scenes campaign to improve relations with its most important clients - those who run China's state-owned steel-making firms".

Chinalco, Baosteel and the China Iron and Steel Association were reportedly among those BHP wooed around the time of the Olympics, which came when the mining giant was being criticised in the media for high iron ore prices.

The Anglo-Australian miner said its own internal investigation launched several years ago found evidence regarding possible bribery of foreign government officials and the information was disclosed to relevant authorities, including the US Department of Justice.

Reuters reports that penalties for violations of the US Foreign Corrupt Practices Act can vary widely, depending on, among other factors, the extent and duration of the violations, the level of benefit the company received, and the level of cooperation from the target of the probe.

The SEC declined to comment and the Department of Justice was not immediately available for comment.

BHP reports full-year results on August 20, the first under new chief executive Andrew Mackenzie.

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