21 May 2015
In settlement negotiations with the US Securities and Exchange Commission, BHP Billiton agreed to pay a fine $25 million for violations of the Foreign Corrupt Practices Act. A US Department of Justice official said that BHP neither admitted nor denied wrongdoing while closing a related criminal probe without taking any action.
The world’s largest mining company had invited some 176 government officials including state owned companies to the 2008 Olympics Games in Beijing. The event was sponsored by BHP. The invitees were from the Philippines and the African nations of Burundi, Guinea and the Democratic Republic of the Congo. BHP had or was going to acquire mining interest in these countries.
The Olympic hospitality package included return business-class airfares, tickets to Olympic events, site seeing excursions, luxury accommodations and meals. This package was estimated to cost $ 16,000. Finally 60 officials agreed to take the hospitality package to attend the Games.
SEC claimed that BHP did not monitor the invitation process or train the employees to ensure that the invitation process was not tainted with bribery. Andrew Ceresney, director of the SEC enforcement division noted that BHP Billiton knew that inviting government officials to the Olympics would have a heightened risk of violating anti-corruption laws. But yet the company failed to make adequate internal controls to ensure that the invitations were free from corruption.
Australian Federal Police confirmed that it was investigating BHP for possible violations of laws relating to corruption. It is not clear whether the investigations relate to the Olympics hospitality program or other similar incidents of benefits given to foreign government officials.
Andrew Mackenzie, CEO of BHP said the BHP was co-operating with the US and Australian authorities in the ongoing investigations. He said that the company has learned from this experience and has become better and stronger. The company now has a better compliance program. It has put in place a Risk and Audit Committee of the BHP Board. Approval of this committee is necessary for entertainment of any foreign government officials.
The regulators around the world – the US, Britain, the European Union – are coming hard on bribes given to foreign government oficials.

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