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This paper revolves around Brazil mini disaster which occurred in the Fiscal year 2015 and how sit has impacted the environment as well as the organization. It explains as for how the corporate for social responsibility in their published report of sustainability have published. On the more, this paper defines the count on the aspect of being legitimacy theory and its impact on the status and goodwill of the organization.
Fact of the Case
Incident: – A dam in the town of Bento Rodrigues has fallen down which led to 600 persons homeless and eleven persons are killed and fifteen are not found and are still missing. On the more on statistical grounds, the dam is spread across four hundred and forty kilometres leaving a large public without water supply and damaging the health of general people and agricultural loss.
Cause: – As per the research the blamed is stated on the mining organizations BHP Billiton’s and Vale. It was floated that the failure on each and every count to fulfil their duties on account of due diligence as according to the OCED guidelines laid for multinationals enterprises. Moreover, it is clearly stated in reports that it, not an accident and the same was expressly declared by the prosecutor of Minas Gerais state environmental as in the report for the year 2013 expressed clearly that the tailings dam’s integrity was followed as per law and hence, it should disapprove the license or renewal of BHP Billiton (Ong, 2016). The suggestion was ignored leading to turn the situation into such a big disaster
Blame: – BHP Billiton was clearly blamed on account of throwing complete ignorance with respect to storage of the mining materials in the dam. No reason on account of increased production expenses, a reduction in commodity prices and pressure to attain approvals license.
As per the agreements BHP has to take all the obligations on account with environmental losses and any impact on human and their rights especially on account with supplies and any business relationships.
OECD guidelines for multinational enterprises
OECD guidelines are applicable across nations and Australian and Brazilian governments are a part of such guidelines as they have signed on following such rules. Primarily these guidelines state that if any Australian organization dealing in mining have their projects established across world border then it is the duty of such company to ensure the sight operations with utmost due diligence so that no loss and harm is suffered by anyone. Principles of OECD clearly states that corporate prime responsibilities are to perform activities for the good and betterment of universe and later the rest must follow.
Features include that corporate social responsibility is a crucial element which must not be ignored by the corporate and corporate officials. There should be the level of transparency occurring with the nature of transactions formulated in current as well as future scenarios. The Disclosure on each and every activity of the mining industry in the books of account in very crucial whether being related to the financial statement or non-financial analysis (Golob, & Bartlett, 2007). None the less, such guidelines which help in acting and reacting in a lawful manner with respect to any mis happening caused by such industry. Thus, acting as a preamble for the private organization to actively respond and behave in benefit and profit of social, the economic benefit of the environmental and it better good rather than aiming at their profits only.
Corporate Social Responsibility deals with various elements which deal with attaining sustainable growth of delivering best to the environment surrounding. It is a self-evaluation approach which the corporates maintain to understand their compliance in relation to monitoring lawful and ethical environment managed. Corporate social reporting deals with reporting on three elements which are the people, profit, and planet generally known as the 3Ps of the company. On the more, the report is based on the four pillars which being the legal front which deals with the understanding the legal aspect and ensuring that the working of the organization is done under lawful compliances (Golob, & Bartlett, 2007). The economic front explains that the company working does not hamper the economic growth of the industry and ensures that it takes necessary steps to improve the economy. Looking at the ethical front it maintains the parameters that the organization has wholly and solely running on an ethical ground and doing business with no intention of malice and unlawful stands, the feeling must not be based on the forgery. The philanthropic front is the final pillar which deals with the voluntary services provided to the society which is basically not even asked by the society. It acts as an additional help or an extra privileged provided by the organization to the society.
This concern is an ever-growing topic for the multinational organization and as the era is moving towards globalization and multinational platform the company must attain the level of legal functioning. In fact, the Australian government is ensuring that the company deals with the phenomenon of a progressive approach which primarily indulgences into the massive research and employing methodology as per current trends and ideas which ensure that the multinationals are working for the betterment of the economy. In fact, the government and the compliances team have sincerely worked towards the advancement of ensuring a desirable format in which the organization aims to report in their annual report the various social disclosures (Pellegrino, & Lodhia, 2010).
Especially, with respect to the mining industry and its manufacturing segments, Australian government maintains a strict pattern of reporting the same in the annual reports. Many Australian researchers have made a detailed study provided legitimate theory and framework to ensure that the strategies, as well as symbolic activities, are tested and hence disclosed appropriately in the reports.
Legitimacy Theory and Test: – It is a social unsaid agreement which defines the parameters of the society and the organization. It defines the magnitude level which the operations of the business must sustain in level with the social ideology of acceptance. It defines the methods, values and the desirable outcomes degrees which the environment can overlook on behalf of the company working (Pellegrino, & Lodhia, 2010). Mining industry requires a social license to operate, on the more such industry on a regular basis understand and monitor the ever-changing political and environmental. This industry must aim at providing more than desired information along with keeping transparency in actions as their prime level of importance. The aptitude towards reporting has also taken a step advancement as now the company aims to provide not only a report in a traditional format called the annual reports.
As per new laws and compliances, the Australian listed companies and especially the mining industry has to provide an annual sustainability and environmental information. This segment specially defines in detail about the occurrences of the transactions in a detail format hence providing an extra dimension to the scenario as a whole, basically because the companies especially the BHP Billiton and the Trio are scrutinised and annual basis on account of their effort to disclose the various schemes with reflection to the pollutants counts with respect to the environment (Pellegrino, & Lodhia, 2010). Along with necessary reporting done with respect to necessary changes and surrounding impacts.
BHP Billiton Reports
The sustainability reports published by the organisation keeping in mind for corporate social responsibility and the mini-disaster of the dam in Brazil for the fiscal year 2016 and fiscal year 2017 point the following elements the company has made a sincere effort to disclose all the events with respect to dam failures in detail format, the organisation as especially reported a six-page report on Samarco and its failures along with all the possible details related to the same. CEO of the company in its reports provides that the immediately take various initiatives to put life back in action. The advancement of the geotechnical and disaster team for relief. On the more, they have established a permanent presence with a team of 35 experts which are on recorded monitoring the situation to provide better relief to the general public (BHP, 2016).
The organization has ensured to maintain parameters on social economic actions like infrastructural building, building the education system and health care system of the groups by providing necessary aids and requirements on financial as well as the non-financial background. The company has taken serious actions on the environmental front as to rebuild the water quality, living standards, ensuring better on stronger standards of preservation and environmental safety. Samarco operations as on date are suspended for the fiscal year 2016 (BHP, 2016). The company is studying and seeking help by understanding Canadian dam association standards and rules and embodying them as the best in their standards, rules as well as regulations. Efforts are made to centralize all the mineral dam management by the minerals operating group.
Report for the year 2017 does not provide such strong backing on the Samarco as the details are provided on page twelve of the report on the more just providing a short insight and describing the efforts taken in the fiscal year 2016. It only focuses on the lesson learned for near future on account of risk management process in terms of framework and structural improvements as well as accountability in terms such disaster management (BHP, 2017).
BHP Billiton has ensured to pay off the government of Brazil a lump sum amount of $ 2.3 billion for the damages caused along in addition to the recovery program of US$ 500 million for the fiscal year 2016 and US$300 million each for fiscal year 2017 and 2018 (Ong, 2016). The same are not going to stop here as the budgeted expense on contribution for the fiscal year 2019 to 2021 aims to be US $ 200 to 400 million (Ong, 2016). The company in detail analysis has mentioned in detail the performance analysis which deals in providing as how the company treats its employee its health concerns, illness causes and various action taken for the betterment of the organization as a whole.
Findings and Conclusion
Comparing the sustainability reports for the fiscal year 2016 and 2017 and the legal terms maintained on the corporate legitimacy and the standards expressed on the corporate social reporting. On account of transparency and disclosures of activities, a company has failed or actually excluded to mention the real cause or the main reason for such failures. Moreover, in both the reports company have summarized such segments by simply stating that they have started the investigation. Agree to support such investigations and all on humanitarian grounds agree to help on compensation and contributions. The company has agreed and is making sincere efforts on paying off debts on account of financial losses as well as non-financial losses. But still does not takes the blame on the shoulder as nowhere the company in its reports mention the real cause of such big disaster of the falling off the tailing dam. Non the company mentions in detail the role of action taken as well as steps. Along with various process involved in storing the minerals in the dam. In fact, the company in his report has completely ignored the finding mentioned in the financial year 2013 in relation to the integrity of dam and renewal of license.
Henceforth, the above paper clearly expresses that the company has incidents may have eroded the legitimacy on account of the corporate theory and CSR reporting in the sustainability report.
BHP. (2016). Sustainability Report. BHP Billiton. Retrieved From
BHP. (2017). Sustainability Report. BHP Billiton. Retrieved From
Golob, U., & Bartlett, J. L. (2007). Communicating about corporate social responsibility: A comparative study of CSR reporting in Australia and Slovenia. Public Relations Review, 33(1), 1-9.
Pellegrino, C., & Lodhia, S. (2010). Disclosures by key bodies in the Australian mining industry on climate change: a test of legitimacy theory.
Ong, T. (2016, March 03). BHP Billiton-owned mining company agrees to pay $3.2bn to Brazil Government over 2015 dam collapse. ABC News Online. Retrieved From