Manifest-Minerva's Thomas Bolger takes a look at key issues at upcoming AGMs, focusing this month on issues at BHP.
At BHP's annual general meeting (AGM) on 15 October, shareholders will vote on three resolutions filed by the Australasian Centre for Corporate Responsibility (ACCR). The resolutions concern the protection of cultural heritage sites in Australia, climate-related lobbying and an amendment to BHP's constitution.
The constitution resolution requests a new clause be inserted to allow shareholders to put forward advisory resolutions that do not bind the directors of the company. The filing of advisory ordinary resolutions is a common right in the UK and elsewhere; however, Australian legislation is more restrictive. Accordingly, while BHP shareholders can file such resolutions, BHP Ltd shareholders cannot. The resolution is classified as a special resolution and requires a 75% vote in favour to pass. The other two proposals are ordinary resolutions and are conditional on the constitution resolution being successful. As the resolution is subject to a high bar to pass, the ACCR may struggle to get sufficient support.
The cultural protection resolution has been drafted with the support of the First Nations Heritage Protection Alliance, a coalition of more than 25 Aboriginal and Torres Strait Islander organisations and leaders from across Australia. The resolution requests BHP to adopt a moratorium on undertaking activities that would disturb, destroy or desecrate cultural heritage sites and to lift gag orders that restrain Indigenous groups from publicly speaking out.
The proposal was filed after Rio Tinto detonated a 46,000-year-old site known as the Juukan George rock shelters in Western Australia's Pilbara to facilitate the expansion of its operations, and revelations that BHP has approval to destroy at least 40 significant Aboriginal sites in central Pilbara. Rio Tinto faced widespread global condemnation for the blast, which resulted in its chief executive, Jean-Sebastien Jacques, and two other senior executives stepping down. BHP was granted permission for the expansion of its South Flank iron-ore mining operations just three days after the detonation.
As a result of increased pressure and focus, BHP has established a heritage advisory council with Banjima native title holders to inform the South Flank operation and has said it will not disturb sites without further consultation. BHP is reviewing all permissions it has been granted to destroy heritage sites in the Pilbara and states it has found a way of to save more than ten sites. While the board agrees that legislative reform is required, it argues its policies, practice and agreements exceed the current legislative framework, and shareholders should vote against the resolution. Under section 18 of Western Australia's heritage laws, mining companies can apply to destroy sites, and traditional owners have no right of objection or reply.
The third proposal requests BHP to review the advocacy of its industry associations relating to economic stimulus measures in response to Covid-19 and to suspend membership of groups if they are found to be advocating for measures inconsistent with the Paris Climate Agreement. The ACCR are concerned that organisations may seek to make the most of the economic crisis brought on by the pandemic by lobbying for new fossil fuel developments and deregulation. At the 2019 AGM, ACCR put forward a similar proposal asking BHP to suspend membership of lobby groups accused of being at odds with the Paris Agreement.
On 14 August, BHP announced new climate policy standards, which provide greater clarity on how the company's policy positions should be reflected in association advocacy. The standards expect associations to advocate for Paris-aligned emission reduction targets. The board recommends shareholders vote against the proposal, arguing it does not consider the new standards or accurately take into account the benefits received from industry association during the pandemic.
Thomas Bolger is stewardship team leader at Manifest-Minerva
Manifest-Minerva's Thomas Bolger takes a look at key issues at upcoming AGMs, focusing this month on the rise of shareholder dissent.
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