Management Law: The BHP Billiton Plc Essay

Question:

Discuss about the Management Law for The BHP Billiton Plc.

Answer:

1. Analysis of Samarco Case from an Ethical Perspective

The BHP Billiton Plc is recognized as the leading company in the natural resources. The company was established in the year 2001 by merging with the BHP Ltd with its head quarter situated in Melbourne, Australia. The company is mainly segregated into seven sections including Base Metals, Stainless Steel Petroleum, Aluminium, Diamonds and Specialty Products, Carbon Steel Materials, Energy Coal, and Materials (BHP Billiton, 2012). Concerning the Samarco case that took place in Minas Gerais, Brazil, it is evident that the incident has been marked as one of the major environmental disaster across the globe. The Samarco case occurred due the burst of dam in which large population lost their lives. It was mainly caused due to the poor drainage system and errors in designs based on which it is stated that the company is entirely responsible for such occurrence. From the report presented by the police and the geotechnical engineering professor, it is evident that the incident was largely occurred due to malpractices of the company by neglecting the dam, which was on the verge of collapsing (Reuters, 2016).

Considering the scenario and the causes behind the disastrous events, it is identified that the company was unable to analyze the risk of collapse and failed to take appropriate decisions on time. In addition the company also lacks in demonstrating integrity and behave in a professional manner, which indicates the company’s exposure towards fraudulent activities (CNBC, 2016).

The Samarco case is considered as the cause of violating the ethical consideration in the business, which might be evaded with the support of the code of ethics. Apart from this, the company failed to seek the advice from the expertise and act in a diligent manner. The team members were also liable for the involving in decision-making and considered the matter seriously (ABC, 2016). Based on the situation outcome and the feedback of the company, it is identified that BHP Ltd. has significantly avoided several ethical consideration, which the company must follow to continue its business. In addition to this, this further proved disregard of the board management team along with the operation team, which has neglected the environmental issues and community development as the incident also include death of people (AEDT, 2015).

The company is deemed to promote the sustainability by showing their concern towards the public safety, thereby maintaining ecological balance. However, this incident has affected the life of people within those residential areas, which clearly depict the engagement or interests of the management towards the community and the environment (CPA Australia, 2011). Importance of Securing Ethical Values and Principles

The ethical values and principles would enable the company to demonstrate integrity, practise competence, exercise leadership and promote sustainability. Thus, securing of ethical values and principles will let the company to consider the health, safety and wellbeing of the society, which further enhance the company reputation in long run. Considering ethical value within business operations also helps to perform the work within the area of competence and successfully compete in the global market as well. In this context, it can be stated that the company would continue its business in lawful and ethical manner by upholding the reputation and valuing the profession along with effective decision making team, which also let to succeed in business as well promote betterment of the society.

2. Recommendations Based on the Ethical Framework

Considering the case and the operation of the company, it is evident that the Samarco case occurred due to the negligence of team members along with the board.

Based on the current situation of the company, it can therefore be suggested that BHP Ltd need to develop its entire process along with ethical consideration and proper maintenance of every implications by prioritizing the community development. To continuing the business successfully, the management must identify key drivers of the business operations and determine the changes required to improve the efficiency of organization. In the Samarco case, lack of proper team management, communication and ethical consideration have been evident by the company, which need to be eliminated prior to changing the business process or strategic priority (Brown University, 2016,). In this regard, the company is suggested to treat people with politeness thereby evacuating the discrimination will be taken as the most essential factor for managing the disastrous event such as Samarco case. In addition, the company also need to practise competently by making decision considering the suggestions of the team members and seeking their advice to perform efficiently by ensuring all the legal requirements as well (Engineer Australia, 2010).

Taking reference to the code of ethics, it can also be suggested that the exercise leadership promotes to consider ethical practice as well as involve in the public welfare, in which the engineers will be communicated about the activities to be performed and to handle the risks or uncertainties. With the support of sustainability development, the company can remain concerned towards the public and can rebuild the lost reputation due to the Samarco incident. This will also enable the company to integrate health, safety and environmental deliberation into the activities performed by the engineers. In this regard, it is essential to secure the ethical values and principles by considering appropriate framework, as it helps to implement appropriate decisions in the engineering practice as well as in business conduct (Clarke, 2010). Therefore, considering this factor the company will concentrate on the integrity, practice leadership, exercise leadership, and support sustainability to enhance the business profitability and support the community development in more effective manner (Motto & Schuck, 2012).

Apart from all the above recommendations, the management also need to seek advices form the regulatory entities to study the external challenges that might be raised in the process of business or production. The organization should also lessen the exposure to maintain the ethical regulations and to implement appropriate measure that will contribute towards the economic development. Concentrating on the economic development, the company will need to maintain loyalty and satisfaction amid the customers, which on the other hand will reduce the risks to negative exposure publicly. In this regard, the organization can focus on maintaining trust and transparency among the management team as well as other stakeholders, which will build a positive image that, can help to manage critical situation and control the amount of loss. Apart from this, while developing any kind of strategies or deploying new technologies in the business operation, the team members are required to seek legal advices from the experts (The Guardian, 2016).

3. Memorandum

To: Senior Vice-President

From: Manager

Date: 31st August 2016

Purpose: Outlining BC's rights and responsibilities

Based on certain issues experienced by the company, it is suggested to develop the rights and responsibilities of the company in accordance to the Australian law of contract to avoid negative occurrences in future. The Australian Law is legalized under the English Contract Law, which concentrates on statutory amendments regarding ethical principles of contracts (Consult Australia, 2012).

Better Car Ltd ("BC”) is an Australia company based in Melbourne, engaged in car manufacturing. The company is aware about the incident regarding the issue faced by Tom a customer due to the “Self-Drive” mode designed by the company. The company regrets about the distressing situation that the customer had to face because of the management fault. Hence, it is acceptable for the client to file a case against the company as the entire liability caused due to minor negligence of the engineer in checking the wiring.

The company has recently developed the design of the cars with the T2016 model by utilizing "Self-Drive” technology innovated by the company's engineers. However, to purchase the car, the purchasers will need to enter into a contract, which include the following clauses: "You must at all times keep your eyes on the road, your hands on the steering wheel and be prepared to take over the "Self-Drive” mode despite it being activated at any time”

"In the event of any claim for breach of contract, the manufacturer's liability for damages will not exceed $5,000”

The company’s employee reported that, the client being insisted for several times, denied to read and signed it casually.

Due to this incident, the earlier purchaser of the T2016 model have developed the feeling of insecurity as a result many of the customers demanded to refund for the purchase made.

Therefore, now it has become crucial to make certain amendments so that the company will not repeat the same mistake again and the clients do not have to suffer.

The company needs to focus on developing the measures concerning the safety of the customers. It will also become essential of the company to review these measures from time-time. As per the case of Baiada Poultry Pty Ltd Vs Queen 2012, the contractors were required to follow the safety measures with the work place and ensure that those safety measures are being updated accordingly (Smith, 2013; p. 210).

In addition to this, the company will also require to seek the expert advice, which will assist the company to take appropriate decision and anticipate the possibility of the risk. It can be cited through the case of Hamersely Iron Pty Ltd V Robertson, 1998, in which the party involves the expertise, which enabled them to analyse and develop the strategy to prevent the risk (Smith, 2013; p. 210).

The BC Ltd should maintain transparency with the customers regarding the terms and conditions and price of the goods and services offered. This will enable the company to build trust the customers.

Next, there should be a flow of communication among the customers and the retailers. The retailers will require informing and educating the customers regarding the goods and services being offered (Motto & Schuck, 2012). In addition, it is also essential of the BC Ltd. to involve the management team along with the stakeholders to make the decision making more effective. This way the company will also be also be able to maintain adequate transparency within its decision making process.

While entering into the contract with the customers, the company should be aware and responsible toward its roles as an offeror to the contract. As an offeror, the company is liable to disclose all relevant information to the customers (i.e. the offeree). The information should be delivered with transparency in order to avoid any confusion among the customers. It must be ensured that the customers make purchase decisions after being completely aware of the product quality and features. In absence of transparency required in the communication process, the company might face problems related to fraudulence, which will in turn affect the company’s brand image over the long run. Another responsibility of the company, when selling its products to the customers is disclosing the facts related to product manufacturing and sourcing ethically. This implies that the company must disclose true and authentic facts. Any associated risk found with the use of the product and the corresponding preventive measure should be communicated by the company to its customers. Moreover, respecting the rights of the customers to take decisions at their free will, the sellers appointed on behalf of the company should restrain from pressurising or forcing purchases. It might draw criticisms against the company in terms of unethical conduct and anti-competitive practices in the market. The company should use the proper channels of communication with the customers, which can comprise different means of advertisements and packaging.

References

ABC, 2016, Catastrophic failure, Stories, viewed 31 August 2016, <

AEDT, 2015, Samarco mine costs will make for more than one ‘difficult year’ at BHP, viewed 31 August 2016, <

BHP Billiton, 2012, ‘What we value’, Annual Report, pp. 1-296.

Brown University, 2016, A framework for making ethical decisions, Science and Technology, viewed 31 August 2016, <

Clarke, J., 2010, Overview of Australian contract law, Law, viewed 31 August 2016, <

CNBC, 2016, BHP's Samarco to pay at least $5b in Brazil dam spill deal: source, Metal and Mining viewed 31 August 2016, <

Consult Australia, 2012, ‘Australian contract law’, Traditional Contracting Reform Response To Consultation Paper, pp 1-29.

CPA Australia, 2011, ‘Efficient use of resources’, Improving Business Performance, pp. 1-30.

Engineer Australia, 2010, ‘Guidelines on professional conduct’, Our Code of Ethics, pp. 1-3.

Motto, M., & Schuck, R., 2012, ‘Australian contract law’, Consult Australia, pp. 1-29.

Resnik, D, B., 2016, What is ethics in research & why is it important?, Research , viewed 31 August 2016, <

Reuters, 2016, Probe Finds samarco disaster was caused by poor drainage and design, Fortune, viewed 31 August 2016, <

Smith, G. W., 2013, Contractor safety management, CRC Press, USA.

The Guardian, 2016, Brazil's mining tragedy: was it a preventable disaster? Business, viewed 31 August 2016, <

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