BHP’s Group Procurement Officer, Sundeep Singh, took to the IMARC stage this week to talk about the major miner’s experience in responsible sourcing, diversity and inclusion, and climate change.
He said taking responsibility in all of these areas was not only right, but good for shareholders and business, going on to provide several examples of how the company was displaying industry leadership in these spaces.
Among the initiatives mentioned by Singh at the International Mining and Resources Conference (IMARC), in Melbourne, was the company’s goal to be gender-balanced by 2025. Three years ago when the company made this pledge, women made up 17.6% of its workforce. Today, that number has climbed to 24.5%.
Data collected by BHP shows more inclusive and diverse teams outperform other teams on safety, productivity and culture. Highlighted in this is an up to 67% lower injury rate, 11% better adherence to schedule and 28% lower unplanned absence.
The company has gone further than this, working with other suppliers like ESS Compass, Blackwoods and Komatsu to make sure the machines it uses, the clothes employees wear, the food they eat and the camps they live in are more inclusive, he said.
“Another example is the work that we have done with Kal Tire, a tyre management and fitment organisation that supplies to our Spence operation in Chile. This job requires physical strength, which has been historically restricted to larger men,” he said.
BHP worked with Kal Tire to implement a program that trained women to complete the task and also implemented a zero weight arm. This saves people lifting a torqueing tool that can weigh around 20 kg by simply holding the tool in position when torqueing each bolt, according to Singh.
“The program eliminated the need for physical strength as a pre-requisite for the role, making it not only safer, faster but also more inclusive,” he said.
On the issue of climate change, Singh talked up the company’s progress, highlighting the company’s world-first tender earlier this year for LNG-powered vessels for its maritime transport operations as it works towards a goal of net-zero operational emissions by 2050.
Singh said BHP is working with its suppliers and customers to reduce emissions from the transportation, processing and use of its products.
“Ambitious emissions targets will only be achieved by a supply chain that allows us to collaborate with partners like Adelaide-based Voltra who last year helped to develop the world’s first electric UTE, ahead of Tesla,” he said.
“This is a welcome addition to a growing fleet of light electric vehicles that will “significantly reduce our category 1 emissions”, he said.
When it came to ethical sourcing, he said BHP is continually reviewing and assessing its supply chain, applying the framework established through its own Human Rights Centre of Excellence and Global Contract Management System.
“No-one wants to work with unethical suppliers,” he said. “Having high-risk partners is ultimately expensive for everyone and represents significant exposures. Human Rights violations are the furthest anyone could possibly be from shared value.”
Through the system, BHP knows 96% of its direct suppliers are concentrated in 10 countries, Singh said.
As well as researching ways to lift safety through reduced nitrous oxide fumes that result from blasting and driving productivity from improved fragmentation via differential energy blasts, this partnership represents a joint commitment to eradicate the use of palm oil in the explosive manufacturing process, according to Singh.
“And, as you may know, a recent and rapid increase in palm oil production, has resulted in an increase in deforestation – destroying habitats, displacing local communities and contributing to climate change,” he said.
“As a part of our agreement, Dyno Nobel will only use certified sustainable raw materials and products. If they use forestry-based products, including palm oil, they will give us information on the country and company of origin, and evidence that they are certified sustainable.”
If palm oil is included, Dyno Nobel will include a timeline and plan for its replacement with an alternative product, he added.
While Singh acknowledged that, in the past, BHP didn’t always get it right with its suppliers and “their experience has been varied”, he did say the company is now focused much more on seeking to establish a supplier relationship model based on sustainable mutual commercial value built on long lasting partnerships that unlock value for all of its businesses.
BHP’s supply chain spans 60 countries, 10,000 partners with an annual spend of $20 billion across its capital and operating expenses portfolio in its 2019 financial year. It sourced 215,000 different types of material and equipment for its Australian operations alone in that year.
