Wrap Text
Resolutions under s249N of the Corporations Act
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
Date 19 September 2017
Location Melbourne, Australia
Release Number 30/17
Resolutions under section 249N of the Corporations Act for consideration at
the AGM
In accordance with ASX Listing Rule 3.17A, the wording of two proposed resolutions
that have been requisitioned under section 249N of the Corporations Act for
consideration at the Annual General Meeting of BHP Billiton Limited, to be held in
Melbourne on 16 November 2017 (Limited AGM), is set out in Attachment A.
Consistent with the BHP Dual Listed Company framework and the Articles of
Association of BHP Billiton Plc, the proposed resolutions will also be considered at
the Annual General Meeting of BHP Billiton Plc (Plc AGM) which will be held in
London on 19 October 2017.
The proposed resolutions have been requisitioned by shareholders of BHP Billiton
Limited representing approximately 0.0075% of the shares on issue in BHP Billiton
Limited (and approximately 0.0045% of the shares on issue in the combined BHP
Group). Attachment B is a copy of the accompanying statement from the
requisitioners that will be distributed to shareholders in accordance with section 249P
of the Corporations Act.
Resolution 1 (as set out in Attachment A) will be proposed as a special resolution.
Resolution 2 (as set out in Attachment A) will be proposed as an ordinary resolution.
However, Resolution 2 will be a valid resolution only if Resolution 1 is approved by
the required majority – that is, the validity of Resolution 2 is conditional on Resolution
1 being passed.
For the reasons set out below, the Board does not endorse Resolution 1. While the
Board is supportive of some elements of Resolution 2, the Board has formed the view
that, in its entirety, Resolution 2 is not in the interests of BHP shareholders as a
whole.
1
Accordingly, the Board is recommending that shareholders vote against both of the
resolutions.
The Board considers that the proposal to insert a new rule into the Constitution of
BHP Billiton Limited in the form set out in Resolution 1 gives rise to a number of
difficulties and uncertainties in practice, including undermining the authority and
accountability of the Directors.
Under the Constitution of BHP Billiton Limited, the power to manage BHP’s business
is vested in the Directors. It is important that the Directors be able to exercise this
power as they see fit and be solely accountable for doing so.
The proposed amendment to permit resolutions which are advisory would create
uncertainty and confusion, whereas the division of responsibility for decision-making
as between the Board and shareholders needs to be clear.
In relation to the position under UK law which is mentioned in the statement by the
requisitioners, legal advice obtained by BHP indicates that the ability to propose an
advisory resolution by ordinary resolution under section 338 of the UK Companies
Act 2006 has not been clearly established by UK case law.
In any event, shareholders already have various mechanisms available to them to
express views and opinions.
Shareholders are able, and already have the right, to ask questions about or make
comments on the management of BHP at any time, including at the AGMs. Further,
if shareholders disapprove of actions taken by the Directors, shareholders can refuse
to re-elect them or remove them from office by ordinary resolution.
In addition, there is regular and extensive engagement between BHP (at Chairman,
non-executive director and management level) and BHP’s institutional shareholders
around the world. Over the past four years, a significant part of this engagement has
related to climate change. Publication by BHP of its 'Climate Change: Portfolio
Analysis' in 2015 was a direct consequence of the constructive engagement the
Company had with investors on the matter of scenario planning for a 2°C world.
Paragraph 1 of Resolution 2 requests a review of BHP’s direct and indirect public
policy advocacy on energy policy and climate change from 2012 to the present day.
It requests that the review describe the immediate and likely long term impacts of
continued energy and climate policy uncertainty in Australia on BHP’s economic
interests. Paragraph 2 requests the publication of a report on that review. Paragraph
3 requests that BHP terminate its membership of an industry body where there is ‘a
pattern of manifest inconsistency’ between BHP’s positions on material public policy
issues considered in the review and those of industry bodies of which BHP is a
member.
As noted on the BHP website http://www.bhp.com/our-approach/operating-with-
integrity/industry-associations-bhps-approach, BHP keeps under review its alignment
with, and membership of, industry associations. The current review of industry
associations of which BHP is a member will be completed by 31 December 2017,
and BHP will make public the outcomes of that review.
BHP has always sought to make its position on significant public issues clear.
However, BHP will further its efforts to ensure that material differences with industry
associations on key issues are clearly understood. To that end, BHP will publish, by
31 December 2017, a list of the material differences between the positions we hold
on climate and energy policy, and the advocacy positions on climate and energy
policy taken by industry associations to which BHP belongs.
BHP has already published two reports describing its approach to the potential
impacts on BHP of both an orderly and a more rapid response to climate change.
This includes consideration of short, medium and long term policy responses in
Australia and other relevant jurisdictions around the world.
The Board considers that the action BHP is already taking (that is, undertaking the
review of industry associations and publishing the information described above,
together with BHP’s consistent public position on climate change and energy policy
as outlined below) obviates the need for Resolution 2.
BHP has set out its position on climate change and energy very clearly, including in
its submission to the Independent Review into the Future Security of the National
Electricity Market (Finkel Review), in which BHP expressed the following views on
energy reform:
* energy security, energy affordability and emissions reduction should be
considered on an integrated basis;
* technology neutrality should sit at the core of good policy because it provides
industry with the necessary flexibility to achieve objectives at the lowest
possible cost; and
* open and transparent energy markets are the best way to promote Australia’s
economic interests.
There is a wide range of views across industry, civil society, governments and other
stakeholders on how best to address climate change and energy policy. BHP’s
position is clear. BHP accepts the science, and believes that the world must limit
climate change and provide access to energy. BHP is committed to action to reduce
its emissions, build resilience to climate impacts and accelerate deployment of low
emissions technologies.
Further information on BHP can be found at: bhp.com
ATTACHMENT A
Resolution 1
Special resolution to amend our company’s constitution
To insert into our company’s constitution the following new clause 46:
Member resolutions at general meeting
The shareholders in general meeting may by ordinary resolution express an opinion,
ask for information, or make a request, about the way in which a power of the
company partially or exclusively vested in the directors has been or should be
exercised. However, such a resolution must relate to an issue of material relevance
to the company or the company's business as identified by the company, and cannot
either advocate action which would violate any law or relate to any personal claim or
grievance. Such a resolution is advisory only and does not bind the directors or the
company.
Resolution 2
Ordinary resolution on public policy advocacy on climate change and
energy
Shareholders request that:
1. the Board commission a comprehensive review of our company’s positions,
oversight and processes related to direct and indirect public policy advocacy
on energy and climate change, covering the period 2012 to the present day.
This would include an analysis of our company’s political advocacy and
lobbying activities, including indirect activities through membership of or
representation in industry bodies.
We request this review:
a. describe all payments by our company for direct or indirect lobbying
relating to climate and energy policy, in each case including the amount
of the payment and the recipient;
b. assess whether advocacy positions taken by industry bodies of which
our company is a member or at which our company is formally
represented, on specific Australian climate and energy legislation and
policy proposals, including:
(i) carbon pricing,
(ii) the recommendations of the Final Report of the
Independent Review into the Future Security of the National
Electricity Market (Finkel Review), including in relation to a
clean energy target (CET) as described in that Review,
(iii) the promotion of coal fired power generation and provision
of government subsidies therefore,
have been, and continue to be, consistent with our company's positions
on those proposals, the company's stated position on Australia's Paris
Agreement commitments, and our company's economic interests;
c. describe the immediate and likely long term impacts of continued
energy and climate policy uncertainty in Australia on our company's
economic interests; and
d. detail proposed actions to be taken as a result of the review.
2. the Board prepare (at reasonable cost and omitting confidential information) a
report describing the completed review, to be made available to shareholders
on the company website within four months of the AGM at which this proposal
is discussed.
3. where a pattern of manifest inconsistency is demonstrated over the period
2012 to the present day, between our company's positions on material policy
issues considered in the review and those of industry bodies to which it has
paid a membership fee, shareholders request that membership of such
industry bodies is terminated.
ATTACHMENT B
The notice of requisitioned resolutions included the following supporting statements
by the requisitioners. By publishing the statements, BHP does not make any
representations as to their truth or accuracy and disclaims any liability for their
contents.
Supporting statement to resolution 1 (special resolution)
Shareholder resolutions are a healthy part of corporate democracy in many
jurisdictions other than Australia. For example, in the UK shareholders can consider
resolutions seeking to explicitly direct the conduct of the Board. In the UK, the US,
New Zealand and Canada shareholders can consider resolutions seeking to advise
their Board as to how it should act. As a matter of practice, typically, unless the board
permits it, Australian shareholders can follow the example of none of their UK, US,
New Zealand or Canadian cousins in this respect.
Permitting the raising of advisory resolutions by ordinary resolution at a company's
AGM is global best practice, and our fellow shareholders in BHP Billiton Plc already
enjoy this right. (1)
A Board of Directors is a steward for shareholders and accountability for the
discharge of that stewardship is essential to long-term corporate prosperity.
In rare situations the appropriate course of action for shareholders dissatisfied with
the conduct of Board members is to seek to remove them. But in many situations
such a personality-focused approach is unproductive and unwarranted. In those
situations a better course of action is to formally and publicly allow shareholders the
opportunity at shareholder meetings such as the AGM to alert Board members that
they seek more information or favour a particular approach to corporate policy.
The Constitution of our company is not conducive to the right of shareholders to
place ordinary resolutions on the agenda of a shareholder meeting. In our view, this
is contrary to the long-term interests of our company, our company’s Board, and all
shareholders in our company.
Passage of this resolution – to amend our company’s Constitution– will simply put our
company in a similar position in regard to shareholder resolutions as any listed
company in the UK, US, Canada or New Zealand, and extend to us a right already
enjoyed by our BHP Billiton Plc counterparts.
The Australasian Centre for Corporate Responsibility urges shareholders to vote for
this proposal.
Supporting statement to resolution 2 (ordinary resolution)
As a shareholder, The Australasian Centre for Corporate Responsibility (ACCR)
favours policies and practices that protect and enhance the value of our investments.
Many investors are deeply concerned about existing and future effects of climate
change on society, business and our economy.
Investor concern about climate lobbying is growing. The Principles for Responsible
Investment (PRI) "Investor Expectations on Corporate Climate Lobbying," endorsed
by investors responsible for more than US$4 trillion in assets under management,
calls on companies to ensure that their public policy advocacy – whether direct or
indirect (e.g. through industry bodies) - supports efforts to mitigate and adapt to
climate change. (2)
The last decade or longer of Australian climate and energy policy has been
characterised by short-lived policy subject to relentless scrutiny and adversarial
campaigning by industry bodies, or no policy at all. Accordingly, we urge companies
in the mining and energy sector to review their relationships with industry bodies that
take obstructive or misleading public policy positions on climate change.
In particular, we question the long-term attractiveness to shareholders of our
company's public policy advocacy through the Minerals Council of Australia (MCA).
The inconsistencies between our company's policies and the MCA's lobbying
positions are clear.(3) In June 2017, the MCA sought to undermine adoption of the
Finkel Review's recommendations on energy policy by the federal government.(4)
These activities diminished the federal government's ability to resolve a national
policy issue of material relevance to our company and the stability of its
operations.(5)
In March 2017, the MCA criticised Renewable Energy Targets and Feed-in-Tariffs.(6)
The MCA has lobbied for government policy and financing support for the
construction of new coal-fired power generation,(7) although any new coal-fired
power generation would be inconsistent with Australia meeting its Paris Agreement
commitments, unless its emissions are fully captured with carbon capture and
storage (CCS).(8) The MCA has advocated for HELE coal,(9) which has much higher
emissions than CCS.
In the lead-up to the 2016 federal election, the MCA spent almost $2.5m promoting
coal-fired power generation.(10) The organisation has, in 2017, called for government
support to encourage financing of new coal- fired power generation.(11)
The MCA is vocal about their successful advocacy leading to the abolition of
Australia's short-lived carbon price, in their own words, "The MCA was at the
forefront of the debates over the carbon and mining taxes; and their abolition
(expected after July 2014) will be in no small part due to the council's determined
advocacy on both issues.”(12)
This demonstrates a pattern of vociferous and influential lobbying which has
obstructed progress on climate-related legislation and public policy.
This pattern stands in contrast to our company's public commitments, including its
commitment to leadership, on climate change.(13) BHP has long supported the
introduction of a carbon pricing regime in Australia. We commend the Board for
accepting the company's "responsibility to take action by... working with others,
including academia, industry and governments, to enhance the global response to
climate change.”(14)
The MCA's activities undermine the possibility of achieving what our company has
stated an "effective policy framework" should include: "a complementary set of
measures including a price on carbon, support for low-emissions technologies,
energy efficiency and measures to build resilience.”(15) Over time, these activities
have the potential to undermine shareholder value, given our company's exposure to
climate-related risk and energy instability. A case in point is our company's
operations at Olympic Dam, about which our company's CEO commented in
addressing our company's half year results in February 2017: "we would not look at a
major expansion of Olympic Dam unless we can be confident that we have a reliable
and affordable source of power within South Australia. We sincerely hope that the
government of South Australia and some of the reviews that are underway at the
moment that we are contributing to, some of which go to the federal level, actually
address some of the great difficulties we have had to face. These have cost us $100
million in this period…(16) (emphasis added)
Shareholders have a legitimate expectation of a level of policy consistency through
direct and indirect lobbying channels. The climate and energy policy advocacy of the
MCA is fundamentally at odds with our company's long term financial and strategic
interests; it is unable to be reconciled with our company's public support for
bipartisan long-term energy policy and recognition of the implications of a <2C future
scenario.
Our company also stands to suffer reputational damage by maintaining memberships
of organisations which hold policy and advocacy positions out of step with community
expectations.
Our company's continued membership of the MCA and representation on its Board
should be reviewed in light of the MCA's positions, with a view to exiting
arrangements inconsistent with our company's policy positions and interests. Further,
our company's indirect lobbying positions through other industry bodies, including the
US Chamber of Commerce, which campaigned for the Trump Administration's
withdrawal from the Paris Agreement, (17) and the World Coal Association, which
has in September 2017 campaigned for the rejection of a Clean Energy target (CET)
in Australia, (18) should be reviewed.
The Australasian Centre for Corporate Responsibility urges shareholders to vote for
this proposal.
(1) The threshold for the exercise of this right by shareholders in publicly listed companies in the UK
are 5% of the total voting rights or 100 shareholders (338 of the UK Companies Act 2006, see
https://www.legislation.gov.uk/ukpga/2006/46/section/338).
(2) See https://www.unpri.org/download_report/8535
(3) See http://www.afr.com/business/tensions-at-mca-over-finkel-strategy-20170806-gxq7xn
(4) See http://www.smh.com.au/federal-politics/political-news/minerals-council-steps-up-coal-lobbying-
as-agl-calls-for-end-to-political-gridlock-20170619-gwu60q.html
(5) See http://www.theaustralian.com.au/business/mining-energy/bhp-billiton-warns-for-crisis-in-power-
market/news-
story/2fd327cdc5258667701754788883bcb9?nk=041e2389e6c763abf862fa2e41cb8ddb-1504081073
(6) See http://www.minerals.org.au/news/electricity_subsidies_in_australia_-_the facts
(7) See http://www.afr.com/business/energy/dont-buy-the-minerals-council-costings-of-coal-power-
20170705-gx5enx
(8) See http://www.climateinstitute.org.au/verve/_resources/TCI_A-Switch-In-Time_Final.pdf
(9) See http://www.afr.com/news/politics/hele-coal-cheaper-than-previously-thought-says-mca-
20170702-gx2vzc
(10) See http://www.smh.com.au/federal-politics/political-news/mining-industry-tipped-millions-into-
preelection-clean-coal-campaign-20170216-guf3x7.html
(11) See http://www.afr.com/news/politics/whitehaven-coal-says-agl-makes-a-stack-of-profit-from-coal-
20170622-gww6o5
(12) MCA 2013 Annual report, see
http://www.minerals.org.au/news/2013_annual_report_minerals_council_of_australia
(13) http://www.bhp.com/environment/climate-change; We signed the CEO Statement on Business,
Climate Change and the Paris Negotiations calling for a positive outcome at COP21. We are a
signatory to the UNFCCC Paris Pledge. We are represented at the Financial Stability Board's
Taskforce on Climate-related Financial Disclosures (TCFD).
(14) http://www.bhp.com/environment/climate-change
(15)
http://www.bhp.com/-/media/bhp/documents/investors/reports/2015/bhpbillitonclimatechangeportfolioa
nalysis2015.pdf?la=en page 7
(16) See http://www.bhp.com/-/media/documents/media/reports-
and-presentations/2017/170221_interimresultsinvestorandanalystbriefingtranscript_verified_2.pdf?la=
en_at page 7.
(17) See https://www.bloomberg.com/news/articles/2017-06-09/paris-pullout-pits-chamber-against-
some-of-its-biggest-members
(18) See
http://webcache.googleusercontent.com/search?q=cache:ewkLoKV6ZC8J:www.afr.com/news/politics/
malcolm-turnbull-is-right-to-abandon-a-clean-energy-target-world-coal-boss-20170912-
gyfmtp+&cd=1&hl=en&ct=clnk&gl=au&client=firefox-b
Sponsor: UBS South Africa (Pty) Limited
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BHP Billiton Plc Registration number 3196209
BHP Billiton Limited ABN 49 004 028 077 LEI 549300C116EOWV835768
LEI WZE1WSENV6JSZFK0JC28 Registered in England and Wales
Registered in Australia Registered Office: Nova South, 160 Victoria Street
Registered Office: Level 18, 171 Collins Street London SW1E 5LB United Kingdom
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