BHP will remain a member of the Minerals Council of Australia – at least for now – but has reached a “preliminary view” that it intends to leave the World Coal Association, a move described by one observer as “a seismic shift”.
The world’s biggest miner also revealed it would consider its “future membership” of the US Chamber of Commerce, after identifying four “material differences” between itself and the group on climate and energy policies.
BHP’s review of its membership of industry associations that it said hold an active position on climate and energy policy was released on Tuesday, with BHP acknowledging it receives a “high level of benefit” from its membership of the MCA, the mining industry lobby group. But BHP has been concerned that the MCA’s position on climate and energy policy did not align with its own.
BHP also revealed publicly for the first time how much it contributes to the MCA, with the “Big Australian” paying a subscription fee of $1.86 million in 2016, equal to 17 per cent of the lobby group’s subscription revenue.
BHP said it had identified two material differences between itself and the MCA on climate and energy policy, signalling its ongoing membership of the MCA would depend on how the council responded to its concerns on these two points. The miner set a timeframe for the MCA to modify its advocacy or policy activity of no longer than a year.
“BHP will formally communicate the identified material differences to the board of the MCA, request that the MCA refrain from policy activity or advocacy in these areas, maintain a register of material differences, and will review its membership of the MCA if it has not refrained from such policy activity or advocacy within a reasonable period (being not more than 12 months),” BHP said.
BHP expressed concern over stances adopted by the MCA, saying that the MCA had “at times argued that energy policy should prioritise reliability and affordability over ‘other policy goals’. When discussing emissions reduction in the energy sector, the MCA has highlighted the costs associated with meeting Australia’s international commitments at the expense of addressing the importance of reducing emissions.”
BHP said it believed that “climate policy and energy policy are inextricably linked, and that energy reliability, energy affordability and emissions reduction should be considered on an integrated basis”.
It also expressed concern that the MCA had called for policy changes that were “technology specific and interventionist in relation to High Efficiency Low Emissions (HELE) coal”.
But BHP said its view was that “energy markets should be both fuel and technology neutral, and should not artificially favour one type of technology over another”.
BHP’s chief external affairs officer, Geoff Healy, said industry associations were important for developing policy and technical standards, sharing best practice and bringing together technical expertise and experience.
“This review makes clear the principles for our ongoing participation in industry bodies. While we won’t always agree with our industry associations, we will continue to call out material differences where they exist and we will take action where necessary,” Mr Healy said.
On its World Coal Association membership, the BHP report said that the WCA had “supported abandoning the proposed Australian Clean Energy Target”, and that there was a “narrower” benefit to BHP in being a member. BHP will make a final decision on this membership by the end of March 2018.
In response to the BHP report an MCA spokesman said: “BHP has been a valued member of the Minerals Council for many years, and we look forward to that relationship continuing in the future.”
Executive director of the Australasian Centre for Corporate Responsibility, Brynn O’Brien, said she welcomed BHP’s review of positions taken by the MCA, US Chamber of Commerce and the World Coal Association. The ACCR recently called on BHP to reconsider its membership of the MCA.
“BHP’s decision to cut ties with the world’s peak coal lobby, the World Coal Association is a seismic shift in the world of anti-climate lobbying,” she said.
“This is a message that even organisations like BHP, with large coal assets, do not value aggressive anti-climate lobbying,” she said.
“However, BHP’s equivocation in relation to membership of the MCA, in giving the MCA another 12 months to change its tune on coal, points to the highly-charged environment in which climate policy is made in Australia,” she said.
BHP acknowledged that industry associations were an “important forum for debate”, but added that having a range of members could make it difficult for a group to reach a consensus view on issues.
“We believe that in areas where no broad industry consensus exists, associations should generally refrain from advocacy in those areas, with individual members being best placed to outline their views independently,” BHP said.
BHP said it accepted the Intergovernmental Panel on Climate Change’s (IPCC) assessment of climate change science, which it said found that warming of the climate is unequivocal and that the influence of humans is clear.
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