Temasek under Goodyear ? – Debunking the CEO’s glorious track record – Part I

7 Feb

Introduction


– One thing I am quite certain about is that he has very little to complain about… “when he leaves the country after nine years — five of them as BHP’s chief executive — he will be carting home a shareholding worth close to $60 million. His share rewards are in addition to his annual base salary and cash awards, which in the 2007 financial year were $2.03 million and $1.72 million respectively”

– from http://eatatjoeshome.blogspot.com/2007/10/blog-back.html

– “Friends of the Earth, Australia (FoE) is calling on BHP Billiton to address its massive, unsustainable water extraction for the Roxby Downs uranium mine in South Australia.   With today’s BHP Billiton’s Annual General Meeting in London coinciding with National Water Week in Australia, FoE nuclear campaigner Michaela Stubbs said: “The daily extraction of 35 million litres of Great Artesian Basin water for the Roxby has destroyed some of the precious Mound Springs and adversely impacted on others. Friends of the Earth has witnessed this destruction over several decades.”

BHP Billiton should also be forced to pay for the water it uses. It is unacceptable that the company pays nothing for its massive water take despite its record $17 billion profit in 2006-07.” In January 2007, Prime Minister Howard wrote to state premiers seeking agreement “to establish proper entitlements, metering, pricing and reporting arrangements for water extracted from the Great Artesian Basin.” Mr. Howard also said that “everybody’s got to make a contribution” when it comes to the problem of unsustainable water extraction from the GAB. But he later defended BHP Billiton’s ‘right’ to free, unsustainable water extraction.

FoE nuclear campaigner Dr. Jim Green said: “The Prime Minister ought to insist that the BHP Billiton operate under the same Great Artesian Basin management plan that is imposed on other users.”

– from Friends of The Earth

Note: You can find out more about BHP Billition’s news, especially pertaining to workers’ rights and environmental violations by combining it with a UK Net Monitor Google Search.

As former CEO of Temasek, Ho Ching is to be replaced by former CEO of BHP Billiton, Chip Goodyear, mainstream media (MSM) is quick to praise this transition as a wise move.

TODAY online wrote an endearing article, ‘Hello, my name is Chip’ portraying the incoming man as a no nonsense, sporty, fit, non-drinking and successful cosmopolitan business leader who helped a then faltering BHP grow into the black.

The tradition whereby a GLC (Government Linked Corporation) has always been headed by locals is surely in need of convincing to concerned Singaporeans  who might view a foreigner, given this task, with suspicion. After all, GLC is a multi-national corporation which is not only funded by local savings, heavily entrenched in the local economy, but also the region. More than reputation is at stake here.

While the question of whether Goodyear would turn the fortunes of Temasek around, given the multiple blunders made by the former CEO, Ho Ching, is a hot topic, and certainly worth pondering or analysing, it is the reputation of BHP Billiton and its human rights and environmental rights records, under Goodyear, that bears questioning.

BHP Billiton – Its controversial merger history from the Workers’ Perspective


According to a commentary and history on BHP Billiton by Workers Online, BHP Billition, which is a merger of BHP (also affectionately known as ‘The Big Australian’) and Billiton (a UK company with Dutch and South African background) in 2001 created an international controversy that was opposed by minority shareholders and workers alike.

The protest is understandable given many of the workers are shareholders and they did not have a choice in this matter. They also questioned the high price that BHP paid for the merger while executives are given higher pay after the move. Billiton CEO and Chairman Brian Gilbertson received $17.75 million while BHP CEO Paul Anderson was ‘poised to get a $3.2 million golden handshake on his departure next year, topped off with $13.6 million worth of free shares and options to buy more at bargain prices’.

Six unions representing BHP workers, held a press conference protesting against the move – the Association of Professional Engineers, Scientists and Managers Australia, the Australian Manufacturing Workers’ Union, the Australian Workers’ Union, The Communications Electoral and Plumbing Union of Australia, the Construction Forestry, Mining and Energy Union and the Maritime Union of Australia.  An estimated 5000 workers turned up outside the shareholder meeting in Melbourne to demonstrate against the decision.

While Goodyear was not the CEO when the merger occurred, one needs to bear in mind that he was already the Chief Financial Officer of BHP in 1999. According to TODAY, he was one of the major architects behind the merger in 2001.

The AWB – BHP Billiton scandal

 

After the first Gulf War, the UN imposed a sanction on Iraq, hoping to punish the dictator, Saddam Hussein and crippled his ability to acquire weapons of mass destruction. An Oil- For Food program was subsequently created to allow ordinary Iraqis access to food or medicine though it would generate more scandals involving BHP Billiton.

Apparently, the Australian Wheat Board (AWB) had, prior to the war, ‘funneled $A290 million (U.S. $208,887,000) worth of bribes into Saddam Hussein’s coffers’. The uncovering of this scandal caused the managing director to resign while top ministers in Australia were accused of using ‘ taxpayer money to subsidize an outlaw industry hosted by a brutal regime’. A Volcker inquiry found the company ‘had paid kickbacks to Saddam via inflated transport prices paid to a Jordanian front company, Alia Transportation, from 1996 to 2003. The monopoly was the biggest single supplier of food under the Oil-for-Food program. It sold 12 million tons of wheat valued at $A2.6 billion (U.S. $1.88 bn) on the UN’s watch’.

This set off opposition disputes within the government, so much so, that the Howard government decided to form its own inquiry headed by former appeal court judge, Terrence Cole.

This is where things began to unravel and BHP’s prominent role in this scandal became sinister:

‘… According to memos admitted as evidence to the Cole inquiry, Former AWB managing director Andrew Lindberg and other AWB executives met the Iraqi minister for Trade in 2002, when it was agreed that AWB would inflate transport prices to repay $A 8 million owed to Iraq by Tigris Petroleum, a partner of Australian resources megalith BHP Billiton.

An $A 82 billion company led by American Charles “Chip” Goodyear (from the Goodyear lumber family, rather than the Goodyear tire clan,) BHP digs or drills for just about everything on every continent on the planet except Antarctica. Coal, gold, diamonds, iron, oil, gas – if it’s in the ground, BHP gets it out. The company employs 36,000 people in 25 countries. Last year it reported an $A11 billion profit, the largest in Australian corporate history.

In 1996, BHP arranged with the AWB to send a 20,000-ton shipment of wheat worth $A5 million to Iraq on credit in hope it would open the way to develop Iraq’s 3-billion-barrel Halfaya oil field once UN sanctions were lifted…’

While BHP would not be able to gain access to Iraqi fields due to failed negotiations, it did manage to give this business to Tigris with a ‘back door option to acquire 25 percent of Tigris’ operations if it wished’.

The company also ‘passed Tigris the debt owed to it by Iraq — the debt established by the $A5 million AWB shipment. Interest had by then blown the debt out to $A8 million, 25 percent of which was payable to BHP because of its back-door clause with Tigris’.

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