BHP Billiton

SPOTLIGHT

BHP Billiton

As the world's largest resources company group, with a market capitalisation of more than $US140 billion, BHP Billiton has over 100 operations in 25 nations across six continents. This year it continued a period of extraordinary expansion with the announcement of a record annual profit to July 2007 of $US13.42 billion, with plans for more than $US12 billion in new developments plus more lucrative sales strategies.

The profit surplus is being used to buy back shares to further concentrate power in the hands of the management group. BHP Billiton has also tabled a bid for mining giant Rio Tinto.

In the global supply chain, BHP Billiton is already the world's biggest supplier of metallurgical coal and manganese, among the top producers of energy coal, copper, lead, zinc, uranium and silver, and the third largest exporter of iron ore, nickel and cobalt.

While the company reports an increase in costs of 3.6 per cent over the year due to rises in contractor charges, fuel and consumables, it also clawed back some US$203 million in costs savings.

At a joint meeting of the International Metalworkers' Federation (IMF) and the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) in Brisbane, Australia in October, union representatives from around the world raised concerns that at least some of these savings may include unstated cuts to labour costs by the company's tough policies on wage bargaining, which could flow through to conditions to protect health, safety and the environment.
BHP Billiton's critical dependence on the exponential mineral demand from its main customer China, as well as from unpredictable Indian expansion, create long term concerns about the impact of future market instability on its 39,000 workers around the world, less than half of whom are unionised.

While BHP Billiton's corporate policy prevents donations to any political party, its surplus of investment funds outweighs most competitors for government contracts, and makes it a powerful influence on the rules for development projects.

While the company's approach to unions varies from particular sites and across nations, the conference heard that wherever it can, BHP Billiton seeks to undermine collective worker arrangements.

UNION ENGAGEMENT: A CHANGING HISTORY
The company's titanic status resulted from the controversial merger in 2001 of Billiton with Australia's mining and steel giant BHP. Since then, Australian unions which had for decades worked closely with BHP management have been excluded from top level negotiations, with new employees in many operations required to sign individual contracts which effectively surrender International Labour Organisation's rights to collective bargaining.

The IMF-ICEM conference heard that while the company's stated policies do not oppose unions in principle, BHP Billiton has divided employees by decentralising negotiations to local levels, fragmenting bargaining periods and avoiding responsibility through the contracting out of labour, management and joint ventures.

ANTI-UNION TACTICS
ICEM president and South Africa's National Union of Mineworkers leader Senzeni Zokwana told the conference that BHP Billiton's takeover of Anglo-Coal and other operations in his country had resulted in significant job cuts and a shift of permanent employees to informal arrangements, with the number of casual workers now double that of permanent employees - most on inferior employment conditions.

Many vulnerable employees were induced to enter casual contracts which "buy out" long term conditions such as family leave in exchange for short term payments which erode standards over time. Dividing unions between themselves through exclusive incentives and fragmented bargaining times were key tactics in the industrial relation strategy, Zokwana said.

OCCUPATIONAL HEALTH & SAFETY
BHP Billiton boasts a top priority for workers' safety, including a zero fatality target across its operations. However, the company's safety reports can exclude incidents where the operation is managed by contractors or minor joint venture partners. Delegates to the IMF-ICEM conference reported significant health concerns at operations in South Africa and South America.

In Australia - where three workers were killed at BHP Billiton's de-unionised Pilbara iron ore operations in 2004 - the Western Australian Government's Ritter inquiry linked the increased use of individual contracts with a reluctance to report safety concerns. But union leaders reported a subsequent failure of government mining inspectors to increase scrutiny.

Delegates to the IMF-ICEM conference remarked on the disparity between the low level of reporting of safety breaches in developing nations compared with the USA or Australia, possibly attributed to concerns about job security, or the fear of losing "safety bonuses".
"There is a vigorous campaign against any prosecution for breaches of the law. And in fact mining in Australia has fewer prosecutions than other industry in Australia, because of that campaign by mining companies," Julius Roe told the conference.

Abram Mathibela of the National Union of Metalworkers of South Africa (NUMSA) also reported the routine dismissal of workers suffering the chronic, debilitating condition of manganism - or manganese poisoning - so the company could avoid responsibility for their welfare.
Another tactic to reduce the company's negative safety reports is to discount incidents which were allegedly not work related, for example diseases of disputed origin or off-site incidents.

ENVIRONMENT AND INFORMATION CONTROL
BHP Billiton has a sophisticated public relations strategy to promote its environmental-friendly policies and to distance itself from any ecological damage of its operations, especially since its withdrawal in 2002 from the catastrophic poisoning of rivers in its former Ok Tedi copper mine in Papua New Guinea.

Legal opinion differs on the level of responsibility which BHP Billiton leaders have in actually complying with their stated environmental company policies, as opposed to their duties under corporate law. Only the future will reveal the extent of their integrity.

THE WAY FORWARD
The global unions' conference on BHP Billiton decided to implement a number of combined strategies and specific tactics to improve the workers' bargaining position across the company and its related entities.

Plans to encourage the group to apply best practice safety standards internationally and significantly improve environmental protections are well advanced.

IMF and ICEM are committed to close collaboration in engaging BHP Billiton on industrial relations globally. Through a new international information network and growing links with local communities, concerned organisations, suppliers and customers, unions can increase public scrutiny of the corporation's performance in complying with its ambition to be a responsible employer wherever it operates.

ONCE A WORLD LEADER
Australian Manufacturing Workers' Union (AMWU) national president Julius Roe reminded the conference that BHP's previous relations with unions resulted from a 21-month strike from 1919 to 1921 at the company's original mine at Broken Hill in New South Wales, which won a 30-hour week for underground workers and the establishment of a world-first workers' compensation scheme for injured employees in the Dust Diseases Board.

"The board was set up basically to prevent diseases of the lungs caused by dust, and these standards were decades ahead of what was established anywhere else in the world, and you can now see BHP Billiton almost 100 years later fighting all around the world to undermine those standards that were established at Broken Hill by the unions nearly a century ago," Roe said.

"In Mozambique, in Surinam, in many, many places where BHP has operations around the world, there aren't proper measures to protect health and safety and one of the key reasons for the 30-hour week underground was precisely to reduce workers' exposure to dust. Today in many BHP mines in Australia and in other countries workers are working seven days per week, 12 hours per day," Roe said.

BHP Billiton: the essential facts
Headquarters: Melbourne Australia, but with dual listing of BHP Billiton Ltd on the Australian Stock Exchange and of BHP Billiton Plc on the London Stock Exchange. BHP Billiton Plc also has a secondary listing on the Johannesburg Stock Exchange in South Africa. Major corporate centres in Johannesburg, and Houston, USA.

Employees: 39,000 direct employees, but more through joint venture partners and contractors.

Revenue: $US47.47 billion (year to June 2007)
Attributal Profit: $US13.42 billion
Underlying Earnings Before Interest and Tax: $US20.07 billion

Products: iron ore, thermal coal, metallurgical coal, bauxite, alumina, aluminium, manganese ore and alloy, petrol, gas, nickel, cobalt, copper, lead, zinc, uranium oxide, silver, diamonds.

Main Locations: Australia, South Africa, central and northwest Africa, Brazil, Mozambique, Peru, Chile, Columbia, China, Indonesia, Japan, Algeria, Mexico, USA and Canada.

Customers: energy suppliers, power generators, steel makers, construction, manufacturing, automotive and packaging, especially to China, Europe, Japan, and India.

BHP Billiton at a glance.
Five delegates to the IMF-ICEM BHP Billiton meeting were asked what issues BHP Billiton workers and their union face in their country and how can international union organisation improve conditions for workers.

Senzeni Zokwana
President ICEM and President of South African National Union of Mineworkers
"In South Africa now through our alliance with the ANC Government we have laws for the right to collective bargaining, the right to join a union, but we are facing global companies which disregard the law in relation to workers. We have also seen them increasingly introducing contractors and reducing the number of permanent workers, and that is difficult for our organising. A major challenge for us is to ensure the government is sympathetic to the union cause at all times because of course employers will try to do their best to win the government over. We must be ensuring housing, health and safety rules are complied with, including family housing to help fight AIDS, but employers will do their best to change the conditions.

"Internationally we can share our ideas and plans for organising, to see how we can provide incentives for workers to support their union, and keep the community on our side. If global companies can succeed against unions in one country, of course they will try to do it in other countries as well. Our motto is simple - we don't check the colour of a man's skin, we look at the policies that he is coming up with and we engage him on that basis."

Sergio Luiz Guerra
Secretary Administration and Finance, CNM-CUT, Brazil
"The main problem we are facing in Brazil is low wages, because we deserve more than what we are really getting. The second most important issue that affects workers from BHP Billiton is health problems because of the working environment. Many problems have to do with air pollution because of dust - it is pollution that leads to asthma and rhinitis, especially affecting the eyes.
"The Samarco (iron ore operation in Espirito Santo north of Rio De Janiero) where I work is half owned by BHP Billiton and the other half by CVRD (Brazil-based resources giant Companhia Vale do Rio Doce). So BHP Billiton mainly doesn't know about the problems we are having. Unions have to be joined together, we have to be strong by being together in order to confront all those problems that the workers have got. An International Framework Agreement would be positive because already some companies in Brazil have implemented this, and it would be useful for BHP Billiton to be included in a framework agreement."

Paul Howes
National Secretary Australian Workers' Union
"As one of the richest and most powerful companies in the world, BHP Billiton is still trying to drive down wages and conditions through a hostile approach to collective bargaining, particularly in its metalliferous and uranium mining operations in Western Australia and South Australia. This has led to serious concerns about its ability to meet its stated aims of corporate social responsibility, including in its health and safety practices and the protection of the environment.
"BHP Billiton's operations as a truly global corporation make it important for all its unions to have an ability to respond globally to represent workers no matter which country they come from. I also think it's important that the union global network build on its information sharing links to be able to mount truly international campaigns across the company's international borders, including the benchmarking of wages outcomes for employees from all areas of its operations."

Abram Mathibela
National Union of Metalworkers of South Africa
"A major question is the health and safety environment within the factories of BHP Billiton in South Africa. There's even been some footage on the TV about how some plants have exposed most of our members to quite horrible health and safety conditions whereby members in one part of this company have contracted this disease called manganism (manganese poisoning).
"What the company is doing is immediately they establish that a member or a worker has contracted that disease, immediately they avoid (dismiss) that member, and that member will have to die outside the company. They are using a lot of methods to try and disown or withdraw, or refuse to take responsibility for that particular case.
"Another major issue is job cuts and the contracting out of permanent workers onto informal arrangements.
"We think the support of other workers in the company from other nations can help us. Already our union has united many labour organisations in South Africa, but there are much more in other countries. It is important for people around the company's overseas operations to know what is happening in South Africa."

Ediles Francisco Marinas Vergaray
Secretary General of Sutracomosa, Peru
"The way they treat the workers in Peru is discriminatory for the people that are hired who live around the area where the site is. While the wages are good if you take into account the normal wages in Peru, those people that are hired locally don't have the same conditions as the people that are hired from other areas, so their conditions are poorer.
"This IMF-ICEM meeting has given us a clear perspective of what is happening and what we want to do is to educate people regarding unions. We want to get the workers to understand what the union can do for them. We want them to become members of our union - our union is growing slowly, but growing. We think with the help of other unions we will be able to achieve this. As a recognised union we have the support of the company, but only some of the officers of the company - we have 80 per cent support from the higher level directors of the company but lower officers of the company don't really support us that much, they don't want to take into account the labour movement."

To get full story with illustrations, please download the pdf file.