Fishy business – BHP Mining in PNG

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We are living in a globalised day and age where large profits driven companies are becoming more influential. Far gone are the days when people were graciously helping each other. Companies are not focusing enough on the ethics and good business practices but rather have turned their attention to the big bucks. Large international companies will continually raise the bar further and further away from business ethics and moral standards to gain competitive advantage.

Some might say as long as they do not breach any laws then they must be acting ethically. This is far from the case as there are business practices and decisions that are not covered by law to ensure all parties are fairly treated. These practices and decisions are those hat require personal judgement, common sense, moral thought and fairness. OK Tedi, a mining consortium in the mid 80s consisting of Inmet Mining Corporation, BHP Minerals Holdings and The State of Papua New Guinea (PNG state represented a group of land owners in the mining region and the state itself) – was a well publicised example of what happens when ethics do not play an important role in managerial planning and decision making.

The internal effects from the mining debacle which saw the Fly River polluted with waste from the excavation, was a class action against the group. With up to 40,000 residents living in villages along the Ok Tedi and Fly River affected from poorly planned waste management systems, the courts in Melbourne 1995 found the consortium guilty and had to compensate them. In 1996 further benefits were negotiated to ensure commitments to fining ways to reduces mine waste from entering the river system.

Environmental effects were clearly evident in the fragile agriculture and ecosystem of the river area. Copper waste not recovered in the minding operation resulting in copper concentration 30 times natural levels in the rivers downstream. The suspended sediment rose 4-5 times than what they higher than pre-mined conditions were blamed for the reduction of fish caught – down 70-90% in most Middle to Upper Fly River as schools of fish migrate themselves to cleaner waters.

With poor business management which lacked thorough consideration of negative externalities in the planning of the mining venture, the repercussions are very clear. Not only had the companies involved lost a great deal of money from compensating the victims, but they have more importantly lost their reputation – an asset that no amount of money can replace. Increasing environmental awareness of especially shareholders of a company has seen to a healthier business environment. The repercussion of lack of ethics will eventually cost the firm more in litigation, reputation, and loss of business.

Ethical business may seem to those in the industry as an oxymoron. Is it possible for businesses to be ethical? Yes. It comes down to all individuals in an organisation reinforcing ethics, morals, and good business processes and operations. This will ensure the longevity of a profitable company. But this is only the ugly side of business in the global economy today. business ethics and standards. come about through industry standards and common sense With every thing a companie does there will be repercussions down the road. There are those few who do abide by the law and carry out their business principles with their head held high.

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