Situation Analysis

Situation Analysis

Problem statement:

How should BHP find itsorientationof social responsibilityand in the whole society what kind of social responsibility should it take?

Frame of reference：

This problem should be analysis onsocial responsibility levels. What kind of responsibility should undertake by the Mineraland resources enterprisein the society, and what kind of responsibilityshould be taken by stakeholders.

Issues

Internal

BHP as a world's largest mineral enterprisehas 35,000 employees and distribute in 26 countries. In these 26 different countries, BHP needs to undertakedifferentsocial responsibility, but generally speaking there are 4 points.

1. The economic responsibility:Economic responsibilities include the responsibility to shareholders and creditors. Shareholder and creditor of the enterprise arean important class of stakeholders,whether the enterprise implement the social responsibility is related to enterprise's shareholders and creditors anticipated targets are realized.After BHP acquired the Tintaya Copper Mine, the Tintaya Copper Mine has a huge economic benefit, in 2005 won the 389 million revenues, net profit 196 million.

2. The responsibilityto the client: The customersare the enterprise' products recipients and users, are also the important enterprise stakeholders.Whether enterprise profit and value can be realized, it has a large extent to depend on the customer's choice.BHP as mineral enterprise, which needs to service customers safe, high quality, reasonable pricemineral products, and perfect mineralservice.Peru has the richestmineral resources in South America; the Tintaya Copper Mine has many clients, such as China and India are the largest customers.

3. The responsibility to the community: The responsibility to the communityshould be formulated higher than the standard the law and it belongs to a kind of the moral service.Mineral resources enterprise and its community have the close relation, it has an unshirkable responsibility in the local economic development, area developmentplanning, traffic, education, sanitation and public undertakings.BHP realized establish the good community relations, participate and help area economy society construction, protect the ecological environment.

4. The responsibility for social welfare and public utilities: mineral resources enterprise as a capable economic organization, should undertake the responsibility to return the society and participate in public welfare activities. In the Tintaya dialogue table, the community and the company signed an agreement in which the company committedto giving the community land equivalent to the amount of territory that was expropriated by the state and acquired by BHP Billiton, as well as an additional 25 to 50 per cent for land depending on the quality.

External

The pressure on BHP mainly comes from the local community and NGOs.The local community's main purpose is to through the protestand other ways to give BHP more pressure, so that they can get more land compensation benefits.At the same time, they also ask more job opportunities and to improve the living conditions.NGOs will help the local residents to strive for more interests, such as reducethe pollution and improve the ecological environment, change the unreasonable land negotiation and compensation system, increase job opportunities and establish tailing dam.

The Corporate Community Leadership Program (CCLP) is a programto help mineral enterprises to be broader.

The organization will help mineral enterprise to have a sense of duty, so thatto build a good relationship with the local community. Only in this way we can have broader industry opportunities.

SWOT analysis

BHP

Strength Opportunity

- BHP is the world's largest mineral enterprise

- The Tintaya Copper Mine has many clients, such as China and India

- Peru has the richest mineral resources in South America - By taking more responsibilities, BHP can make a better brand awareness

- More skilled workers by training local people

- Better relationship with governmentand NGOs

- Broaderindustry opportunities by CCLP

Weakness