In the Matter of BHP Billiton Ltd. and BHP Billiton Plc (2015)
Case Details
- Case Name
- In the Matter of BHP Billiton Ltd. and BHP Billiton Plc (2015)
- Countries
- China, Burundi, Philippines, Congo, Dem. Rep., Guinea
- Foreign Official
- Various unnamed foreign officials and representatives of state-owned enterprises; Burundi Minister of Mines; Department of Environment and Resources of the Philippines; Governor of Katanga Province of the Democratic Republic of the Congo; Guinean Minister of Mines.
- Date of Conduct
-
2005 to 2008
- Nature of Business
- BHP Billiton Ltd., headquartered in Melbourne, Australia, and BHP Billiton PLC, headquartered in London, England, (collectively “BHP”) operate under a Dual Listed Company structure as a single economic entity run by a single board of directors. BHP is a global resources company that is among the world’s leading producers of major commodities, including iron ore, coal, oil and gas, copper, aluminum, manganese, uranium, nickel, and silver. BHP maintains American Depository Shares which have been registered with the SEC according to Section 12(b) of the Exchange Act and are listed on the New York Stock Exchange.
- Influence to be Obtained
- According to the SEC, on December 8, 2005 the Beijing Organizing Committee for the Games of the XXIX Olympiad announced BHP as an official sponsor of the 2008 Beijing Olympic Games. The SEC explained that, in exchange for providing the raw materials for the Olympic medals and financial support, BHP received priority access to event tickets and luxury accommodations during the Games. The SEC noted that to take full advantage of their priority status, BHP established the Olympic Sponsorship Steering Committee (“OSSC”) to which employees would submit Olympic Leverage Plans which identified key individuals whose attendance at the Games could further the business interests of BHP. According to the SEC, the overall objective of BHP was “to reinforce and develop relationships with key stakeholders” across Asia and Africa.
The SEC states that, in total, BHP invited 650 individuals to attend the Olympic Games in Beijing, 176 of which were government officials. According to the SEC, sixty officials, along with their spouses, attended the games under BHP sponsorships and were treated to event tickets, luxury hotels stays, and sightseeing trips while in Beijing—each hospitality package being valued at approximately $12,000–$16,000. The SEC’s order offered a series of examples of officials from Burundi, the Philippines, the Democratic Republic of the Congo, and Guinea with close relationships to BHP’s business interests who received invitations.
According to the SEC, BHP did not require the applications for invitations to undergo any form of legal or compliance review. Instead, the SEC claims that of the hundreds of applications submitted by BHP employees, only ten were reviewed by the OSSC and BHP’s Ethics Panel, which only served in an advisory capacity and noted that “accountability rest[ed] with business leaders.” Further, the SEC cited other flaws in BHP’s oversight including (i) numerous incomplete and inaccurate applications; (ii) a lack of general training on how to appropriately fill out the application forms and how business leaders should evaluate the applications; (iii) the failure of certain applications to update the company on any developments which could impact the appropriateness of a particular invitation; and (iv) the failure to set in place a mechanism that would allow BHP to detect whether an invitee was involved in other business dealings which could raise a conflict of interest.
- Enforcement
- On May 20, 2015, the SEC announced that it settled its charges against BHP through an administrative proceeding for BHP’s alleged violation of the FCPA’s books-and-records and internal controls provisions. According to the cease-and-desist order, BHP agreed to pay a civil penalty of $25 million.
- Amount of the Value
- Not Stated
- Amount of Business Related to Payment
- Not Stated
- Citizenship of Parent Entity
- Australia
- Total Sanction
- $ 25,000,000
- Reporting Requirements
- Yes (1 Years)
- Total Combined Monetary Sanction
- $ 25,000,000
Defendants
BHP Billiton Ltd.
- Citation
- In the Matter of BHP Billiton Ltd. & BHP Billiton Plc, Admin. Proc. File No. 3-16546 (May 20, 2015).
- Other Statutory Provision
- None
- Disposition
- Cease-and-Desist Order
- Defendant Jurisdictional Basis
- Issuer
- Defendant's Citizenship
- Australia
BHP Billiton Plc
- Citation
- In the Matter of BHP Billiton Ltd. & BHP Billiton Plc, Admin. Proc. File No. 3-16546 (May 20, 2015).
- Other Statutory Provision
- None
- Disposition
- Cease-and-Desist Order
- Defendant Jurisdictional Basis
- Issuer
- Defendant's Citizenship
- Australia
