Culture Dictates Behaviour
Corporate Social Responsibility (CSR) is not – as some companies seem to think – a marketing fad, a necessary evil, or a “check the boxes” exercise. It is a way of doing business. A company is in fact, either a socially responsible entity, or it isn’t.
Funny things can happen where money is involved it seems. No country is immune from the virus called greed. More contagious than flying pigs, it can have a chronic effect on corporate culture. Culture in my experience of observation, dictates behaviour.
Our much-revered BHP and its corporate malfeasance over many years of active, deliberate dumping of heavy metal-laden tailings into the pristine rainforest rivers Ok Tedi and Fly, in Papua New Guinea is a case in point. A bit hard to hide that, resulting as it did in the displacement of 50,000 people downstream who were dependent upon the river, and the nearly 3,000 sq km of grey toxic sludge that replaced forest and food crops alike.
Only after legal action in Australia did BHP admit to environmental devastation on such a scale that the company’s hypocrisy became untenable and it simply gave its share of the mine (operated in partnership with Canadian Inmet Mining Corporation) to the Papua New Guinea Government. And walked away from any responsibility in cleaning it up. The mine remains open and continues to use the rivers for its waste disposal.
BHP lives on and spruiks a great CSR story on its website. No mention of its record at Ok Tedi though, as it doesn’t own it any more.
Not dissimilar is the behaviour of James Hardie. Once a respected conglomerate of building products companies with major operations in the United States and Australia that, when the cover-ups and lies became too obvious, and the financial burden of restitution became too much, made a transparent and pathetic attempt to flee the repercussions (and taxes) in Australia by setting up corporate headquarters in the Netherlands.
This was after it was proved through the courts to have known of the horrific human impact of exposure to asbestos. And, knowing of the scientifically verified cause and effect relationship between asbestos and Mesothelioma – a debilitating lung disease – it continued to mine it, and continued to conceal this information from its unprotected employees, sentencing them to a certain early and painful death. Why wouldn’t they? It was a profitable business.
Could there be more venal corporate behaviour than this?
Apparently yes, as demonstrated by successive management teams and board members of James Hardie itself time and again. At every step of the way it has fought the moral and legal obligation of compensation. It paid its actuarial consultants well to have them agree that $300 million allocated in a trust fund to compensate employees and their families established under legal penalty in 2001, ought to cover it.
The fallout is snowballing still, as the directors are said to have made false statements just last year to the market about the capacity of the fund to pay compensation into the future for the second and third wave of claims expected against it. GFC to the rescue and all that, they may well end up liquidating the trust and paying nothing further more.
But these actions on the part of James Hardie are not isolated. The company has demonstrated a culture of dishonesty for some time now, with an anti-trust lawsuit in Chile compounding the current civil action in Australia by the Australian Securities & Investment Commission (ASIC). The ASIC trial in the NSW Supreme Court this month found the company breached the Corporations Act by delivering misleading information to the ASX back in 2002. Damages are yet to be determined. There remains the threat of potential legal action for the same breach more recently.
The company continues to squander shareholders’ funds in fighting case after unwinnable case brought against it, all in the name of looking after shareholder interests. If they bothered to think about this for 30 seconds, they would surely see that what is right for employees, for the community and environment, is in fact good for shareholders.
There is an apparent lack of resources in the compliance and regulation of the mining industry worldwide. This is the problem we face. We do not have enough people or resources to watch over all mining activities, and sadly it appears, some mining (and forestry, and chemical and building products and…) companies will do whatever they can get away with, because it pays them to do so.
This may be so for any industry, anywhere, if the regulatory oversight is slim, the fines are inconsequential, and the media censored or ignorant of their activity. As BHP and James Hardie et al before them have proved, culture dictates behaviour.
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Category: CSR & Sustainability, Reputation Management
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