NGOs Testing BHP Billiton and Investors’ Metal
As discussions about the failed Bill C300 are subsiding, BHP Billiton's sustainability report is being mocked and NGOs lodged complaints about the company’s Mozal aluminum smelter with the JSE SRI Index and IFC’s independent recourse mechanism.
BHP Billiton is one of the
So being subject to mock reports and embarrassed by NGO complaints about emission bypass at BHP Billiton’s
Concerns being raised about Mozal by a number of
While many different parties may now focus on reviewing emerging air quality assessment data being generated by SGS or scrutinize studies and models that justified the bypass option, a couple of other questions also deserve some attention: were the severe corrosion problems that impacted the structural integrity of the FTCs not detected through BHP Billiton’s elaborate environmental management systems described in its sustainability report, monitoring by government agency’s and/or lenders’ independent engineer? Or - if detected – were repairs delayed or perhaps too superficial to avoid structural damage that eventually forced the hands of the regulator and the company?
Looking at public information available on
The section entitled ‘Report on Significant Events and Issues’ provides for interesting reading:
" 2.1.1 Disruption of emissions or effluent treatment
In September 2001, corrosion was noted on the cooling tower of the Fume Treatment Centre of the Bake Furnace. As a result the cooling tower had to be repaired and during that time the FTC was run on by-pass during which time there was no scrubbing of fluoride emissions. A full incident report is provided in Appendix 3. Given that the incident was deemed a level 2 incident1 – using the BHP Billiton, consequence severity ranking – the incident was not reported beyond Mozal."
However, it was reported to the Lenders in MOZAL's 2002 AMR. Appendix 3 of the AMR provides further details along with a number of instructive pictures. Apparently, Mozal had to replace an eleven meter section of the tower at that time. This required a bypass lasted 62 days and, looking back, may now be seen as a signal of things to come.
What do you think should be the response of the JSE SRI Index or that of project lenders like IFC? Do you expect that this issue will impact BHP Billiton’s management systems, assurance processes and 2011 Sustainability Report?