The bosses of BHP have faced shareholders just weeks after sacking hundreds of workers and soon after two mine site deaths.
The mining giant held its annual general meeting in Sydney on Thursday after a four-year-high dividend was confirmed in August. The first shareholder question from the floor was whether the two deaths led to pay cuts for BHP executives.
Australian Shareholders Association spokesman Nathan Hood also asked how BHP could get to zero fatalities at joint-venture projects when BHP does not have full control of the sites.
“How can BHP target zero fatalities in joint ventures where it doesn’t have full control? And what specific actions arise from these two, including docking of executive pay?” Mr Hood said.
Chairman Ross McEwan said BHP was the operator of both the joint-venture mines where two people died.
“So the fact that we have other shareholders involved, we actually operate these so that we take absolute responsibility for these operations. And one of the tragedies happened to a contractor.
“Anyone who comes on to site for us is effectively seen as one of our people … We are having to look at how we operate with contractors, though.
“We’ve got very stringent (contractor) arrangements, but we’re doing a review to make sure that they fit with absolutely everything we’d expect from an employee of our business, so some work to be done there.”
A worker died at a Chilean mine in September, and a worker died at a Queensland mine in July.
The chairman explained BHP’s chief executive was at the Queensland mine and the Chilean mine within two days of each death. The internal review reports on fatal incidents go through BHP’s sustainability committee and then up to the board.
“When we do a review, we don’t allow the leader of the business that it’s involved to actually do the review. We bring in another senior executive to actually head up the review,” Mr McEwan said.
The chairman’s answer did not address the question of worker deaths affecting executive pay packets.
The second question from the floor included a query on what BHP did for the families of the two dead workers.
BHP asking ‘hard questions’ about worker deaths
New chief executive Brandon Craig said deaths were traumatic for colleagues as well as families, and BHP appointed a liaison to communicate with the families.
“ … everything from psychological support all the way through to making sure that there’s no accidental or adverse effects to the family financially,” he said.
“People pass away, then obviously the authorities get involved. You can have things like bank accounts being frozen accidentally. You can have all of these unintended impacts happening.
“So we make sure we have a team that monitors that too, to make sure those types of adverse things never happen.”
Opening the meeting, Mr McEwan highlighted the two recent deaths.
“In the last few months, two of our colleagues have lost their lives on site. One at BMA’s (BHP Mitsubishi Alliance) Peak Downs mine in Queensland, and one at Escondida in Chile,” Mr McEwan said.
“These are tragedies. They are tragedies for their family and friends, their workmates, and for their wider communities.
“We are asking hard questions of ourselves and of the business. We owe that to the people
affected and to every person who comes to work across our operations each day.”
Mining had made “tremendous progress on safety over many decades”, Mr McEwan said, but “terrible events like this remind us that our work is not done”.
Belief mining can be ‘fatality free’
Fronting his first annual general meeting as chief executive, Mr Craig said “I believe mining can be fatality free”.
“Both losses are unacceptable. As leaders, these moments stay with us. They remind us that behind every job, every roster and every shift is a person who expects to return home safely to the people who matter most,” he said.
“At BHP, we have made progress in improving safety over many years, but progress alone is not the measure.
“The only acceptable number is zero. I believe mining can be fatality free, and I want BHP to help prove that.”
Earlier this month, BHP announced 300 job cuts in the Pilbara. Iron ore prices are down 14 per cent over the past year and have lost 6 per cent in the past month.
The job cuts followed a series of strikes in August on the back of seven months of pay negotiations. The strikes cost about $120m in revenue.
In mid-August, BHP’s board signed off on a four-year-high dividend.
Profits for the year rose 9 per cent (to $US9.8bn). Alongside the fattened dividend, BHP had the budget to lift capital expenditure and exploration spend by 5 per cent to $US10.3bn.
At Thursday’s meeting, one shareholder lauded the miner’s “great” research and development schemes.
Shareholders got a $US0.99 ($A1.39 at the time) final dividend last month, bringing total dividends for the year to $US1.72 a share, up 57 per cent on last year, totalling $US8.7bn in returns for the year ($A12.24bn in August).
More to come