Sad times for top dogs in state-owned mining companies the world over – the wine-and-dine gravy train has all but ground to a halt. The latest firm to feel to wrath of regulators is BHP Billiton, which has paid $25m (£16m) to settle US charges relating to hospitality worth tens of thousands of dollars lavished on foreign government officials at the 2008 Beijing Olympics.
The Anglo-Australian mega-miner, which supplied the metal for the medals at the quadrennial sporting pageant, invited 176 officials, including some ‘connected to pending contract negotiations or regulatory dealings such as the company’s efforts to obtain access rights,’ the Securities and Exchange Commision said.
The 60 guests who took up the offer (some with their spouses) were mainly from African and Asia and ‘enjoyed three- and four-day hospitality packages that included event tickets, luxury hotel accommodations, and sightseeing excursions valued at $12,000 to $16,000 per package.’
‘BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors,’ the SEC’s enforcement director Andrew Cerseney said.
The regulator did say BHP ‘neither admits nor denies the SEC’s findings,’ while the company itself said there were ‘no findings or corrupt intent.’ Rather the SEC concluded the FTSE 100 mining giant didn’t have strict enough controls on its hospitality programme and thus violated the Foreign Corrupt Practices Act.
It’ll have been a pretty sobering experience for BHP, which has set up an independent compliance arm where none existed before and has to report to the SEC for a year. And if they’ve learnt their lesson, their dealings with government figures the world over will be rather more sober too.