How Much CSR Is Enough For BHPBilliton?

Thursday, 28 January, 2016

Business is business, don’t you know?

But however that may be, it’s still somewhat unedifying to witness the legal to-ing and fro-ing that’s now going on between BHP Billiton, Vale and the Brazilian government.

At issue is just who should contribute what to the compensation package that’s being put together for the people in and around Bento Rodrigues Brazil.

Bento Rodrigues was at the epicentre of the disaster that occurred when a mine tailings dam breached upstream at an iron ore mine owned by Samarco, itself a joint venture between Vale and BHP.

BHPBilliton’s publicity machine immediately swung into action following the disaster, and the company assured news-hungry evening audiences that it would make full and proper restitution.

For those that lost loved ones in the accident, that would have come as scant relief in any case.

But to watch the high level negotiations going on between the two companies and the government must be heart-rending. One wonders at the hourly rates of the lawyers involved.

There are compensations, though.

A generation or two ago, depending on their own internal corporate cultures, such giants of capitalism as BHPBilliton and Vale might well have tried to duck their responsibilities altogether.

The world is littered with old, unreclaimed minesites that are riddled with toxicity and uninhabitable.

Nowadays though, it’s harder to walk away from such situations and, at least in its public pronouncements, BHPBilliton isn’t even going to try.

“We have said we will do the right thing since the day of this tragic event”, said the company in an official statement.

What exactly the right thing is, or will be, remains moot.

The Brazilian government is reported to be after at least US$7 billion in total compensation. But who will pay is another question.

“We are not guarantors to Samarco”, said BHP in almost the same breath, although a Brazilian court ruled in December that BHP and Vale were jointly responsible for the environmental damage.

So far, around US$100 million has been allocated for spending through an emergency relief fund.

It would appear that the Brazilian government wants more and that BHP Billiton and Vale are in fact minded to give more.

But how close the two sides come together in negotiating the final sum will be crucial.

Times are tough in the mining sector and there’s not much spare money around.

On the other hand, being a straitened miner is better than being dead, and it’s also better than witnessing the pollution of the entire eco-system on which you depend for a living.

The lawyers will be getting fat arguing it out, that’s for sure.

As for the people of Bento Rodrigues and the wider Mariana district, they may have to wait some time before they even know whether they’re even getting full restitution.