In re BHP Billiton Ltd. and BHP

 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 74998 / May 20, 2015 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-16546 
 
 
In the Matter of 
 
BHP Billiton Ltd. and BHP 
Billiton Plc, 
 
Respondents. 
 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
  
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against BHP Billiton Ltd. and BHP Billiton Plc 
(collectively, “BHPB” or “Respondents”). 
II. 
 In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (the “Offers”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over them and the subject matter of these 
proceedings, which are admitted, Respondents consent to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 
Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below.  
III. 
 On the basis of this Order and Respondents’ Offers, the Commission finds
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 that: 
  
                                                
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  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding on any 
other person or entity in this or any other proceeding. 

 
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Summary 
1. This matter concerns BHPB’s failure to devise and maintain sufficient internal 
controls over a global hospitality program that the company hosted in connection with its 
sponsorship of the 2008 Beijing Summer Olympic Games.  BHPB invited approximately 176 
government officials and employees of state-owned enterprises (collectively, “government 
officials”) to attend the Olympics at BHPB’s expense.  The majority of these invitations were 
extended to government officials from countries in Africa and Asia that had well-known histories 
of corruption.  The three to four day hospitality packages included event tickets, luxury hotel 
accommodations, meals, other hospitality, and, in many instances, offers of business-class airfare 
for government officials and their guests.  BHPB informed its employees that “[o]ne of the core 
objectives [of the Olympic sponsorship] is to maximize the commercial investment made in the 
Games through assisting [BHPB] to strengthen relationships with key local and global 
stakeholders, e.g.: Government Ministers, Suppliers and Customers,” and that the hospitality 
program was “a primary vehicle to ensure this goal is achieved.”   
2. BHPB recognized that inviting government officials to the Olympics created a 
heightened risk of violating anti-corruption laws and the company’s own Guide to Business 
Conduct, but the internal controls it developed and relied upon in an effort to address this risk were 
insufficient.  As a result, BHPB invited government officials who were directly involved in, or in a 
position to influence, pending contract negotiations, efforts to obtain access rights, regulatory 
actions, or business dealings affecting BHPB in multiple countries.  In addition, BHPB’s books 
and records, namely certain internal forms that employees prepared in order to invite a government 
official to the Olympics, did not, in reasonable detail, accurately and fairly reflect BHPB’s pending 
negotiations or business dealings with the government official at the time of the invitation.   
3. As a result of this conduct, BHPB violated the internal controls and books and 
records provisions of the Foreign Corrupt Practices Act (“FCPA”). 
Respondent 
4. BHP Billiton (“BHPB”) is a combination of two companies: BHP Billiton Limited, 
which is headquartered in Melbourne, Australia, and BHP Billiton Plc, which is headquartered in 
London, England.  Since 2001, BHPB has operated under a Dual Listed Company structure, under 
which BHP Billiton Limited and BHP Billiton Plc operate as a single economic entity, run by a 
unified Board of Directors and management team.  BHP Billiton Limited American Depositary 
Shares (“ADSs”) and BHP Billiton Plc ADSs are registered with the Commission pursuant to 
Section 12(b) of the Exchange Act and listed on the New York Stock Exchange under the tickers 
“BHP” and “BBL” respectively.     
Background 
5.  BHPB is a global resources company that is among the world’s leading producers 
of major commodities, including iron ore, coal, oil and gas, copper, aluminum, manganese, 
uranium, nickel, and silver.  As of June 30, 2014, the end of its most recently completed fiscal 
year, BHPB had a market capitalization of approximately $190 billion, with over 140 locations, 
operations in 25 countries, and a workforce of more than 128,000 employees and contractors. 
6. During the relevant period, BHPB operated through different business divisions, 
called Customer Sector Groups (“CSGs”).  These CSGs included Iron Ore, Aluminium, Petroleum, 
Base Metals, Diamonds and Specialty Products, Stainless Steel Materials, Manganese, 

 
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Metallurgical Coal, and Energy Coal.  Each CSG had its own president, which reported to a 
member of BHPB’s Group Management Committee.
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  BHPB also had a Minerals Exploration 
Group (“MinEx”) that assisted the CSGs with exploration activities. 
7. Under BHPB’s operating model during the relevant period, each CSG President 
was responsible for ensuring their businesses’ compliance with the company’s Guide to Business 
Conduct.   Every CSG President also was required to certify annually that they had read and 
understood the Guide, confirmed that their direct reports had done the same, and discussed it with 
their direct reports.  BHPB had a centralized legal department.  In addition, it had an advisory body 
with internal and external membership called the Global Ethics Panel (“Ethics Panel”), which 
advised business leaders on compliance with the Guide to Business Conduct and other business 
ethics issues.  BHPB did not have an independent, centralized compliance group within its legal 
department, or otherwise. 
BHPB’s Hospitality Program for the 2008 Beijing Summer Olympic Games 
A. The Scope and Goals of BHPB’s Olympic Hospitality Program 
8. In December 2005, BHPB and the Beijing Organizing Committee announced their 
agreement for BHPB to become an official sponsor of the 2008 Beijing Olympic Games.  Under 
this agreement, BHPB paid a sponsorship fee and supplied the raw materials used to make the 
Olympic medals.  In exchange, BHPB received the rights to use the Olympic trademark and other 
intellectual property in public announcements and advertisements, as well as priority access to 
tickets, hospitality suites, and accommodations in Beijing during the August 2008 Games.   
9. BHPB established an Olympic Sponsorship Steering Committee (“OSSC”) to plan, 
oversee, and implement its sponsorship program, which involved multiple different branding, 
promotion, and relationship-building initiatives.  The chair of the OSSC, who also was the chair of 
the Ethics Panel, reported directly to BHPB’s CEO. 
10. One of BHPB’s objectives for the sponsorship was “to reinforce and develop 
relationships with key stakeholders” in China and in “product and investor markets, and regions 
where we have or would like to have operations.”  BHPB’s strategy for accomplishing its 
objectives included “[u]tiliz[ing] Olympic hospitality to motivate China-based stakeholders, 
including customers, suppliers, government and media, to enhance business opportunities for BHP 
Billiton in China” and “[u]tiliz[ing] Olympic hospitality to build relationships with stakeholders 
from product and investor markets, and regions where we have or would like to have operations.”  
11. One of the company’s sponsorship-related initiatives was a global hospitality 
program under which BHPB invited guests from around the world, including foreign government 
officials and representatives of state-owned enterprises, to attend the Beijing Olympics on three to 
four day hospitality packages.  The hospitality packages included luxury hotel accommodations, 
meals, event tickets, and sightseeing excursions, at a cost of approximately $12,000 to $16,000 per 
package.  In addition, BHPB executives approved the offer of round trip business class airfare to 
approximately 51 foreign government officials, as well as the airfares for 35 of these government 
                                                
2
  In 2012 and 2013, BHPB re-organized to consolidate the CSGs into five business units:  Petroleum and Potash; 
Copper; Iron Ore; Coal; and Aluminium, Manganese and Nickel. 

 
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officials’ spouses or guests.  Apart from BHPB’s desire to enhance business opportunities by 
strengthening relationships with its guests, these trips had no other business purpose. 
12. An internal e-mail to CSG presidents and other senior BHPB business managers 
emphasized the importance of the hospitality program to the success of BHPB’s sponsorship, 
stating, “[a]s you know we have made a commitment to support the Beijing Olympic Games in 
2008.  One of the core objectives is to maximise the commercial investment made in the Games 
through assisting [BHPB] to strengthen relationships with key local and global stakeholders, e.g.: 
Government Ministers, Suppliers and Customers.  The BHP Billiton Hospitality Program is a 
primary vehicle to ensure this goal is achieved.”  
13. In early 2007, BHPB employees prepared country-specific Olympic Leverage 
Plans, which summarized BHPB’s business and Olympic-related objectives.  In a number of 
instances, these plans discussed inviting key stakeholders, including government officials, to help 
BHPB develop relationships with a view to increasing or maintaining its business opportunities.  
For example, the Olympic Leverage Plan prepared for one country stated that BHPB’s business 
objectives in that country included “gaining access to regions that will provide growth for 
[BHPB’s] business” and “gaining port access.”  The plan further stated that the hospitality program 
would “provide useful relationship building opportunity for . . . stakeholders” and that the invitees 
would include the country’s Minister of Mines and Minister of Transport.  The Olympic Leverage 
Plan for another country, while not specifically addressing the hospitality program, stated that one 
of the goals for the sponsorship was “us[ing] Olympics program to strengthen and build the govt’s 
confidence and relationship with [BHPB], to help facilitate approvals for future projects.” 
14. After Olympic Leverage Plans were prepared for each country, BHPB business 
managers submitted lists of potential invitees and were instructed to rank them in order of 
importance, with “Category A” being those “most critical to the business.”  Internal BHPB 
presentations discussed the need to establish “the business benefit” of an Olympic invitation.  
15. Eventually, BHPB invited approximately 650 people to attend the Beijing 
Olympics, including 176 government officials, 98 of whom were representatives of state-owned 
enterprises that were BHPB customers or suppliers.  BHPB also invited the spouses of 102 of these 
government officials.  Most of the invited government officials were from countries in Africa and 
Asia where there was a known risk of corruption.  Sixty of these government officials ultimately 
attended, 24 of them with their spouses or guests.  A number of other invited government officials 
accepted their invitations, but then cancelled before the Olympics began.   
B. BHPB’s Insufficient Internal Controls over the Olympic Hospitality Program 
16. Early in its planning for the Olympics, BHPB identified the risk that inviting 
government officials to the Olympics could potentially violate anti-corruption laws and the 
company’s own Guide to Business Conduct.  The company relied on its existing operating model 
and an Olympic-specific internal approval process to address this risk.  However, these internal 
controls, and BHPB’s implementation of them, were insufficient. 
17. BHPB developed a hospitality application which business managers were required 
to complete for any individuals, including government officials, whom they wished to invite.  
These applications included the following questions: 
9.   What business obligation exists or is expected to develop 
between the proposed invitee and BHP Billiton? 

 
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10.  Is BHP Billiton negotiating or considering any contract, license 
agreement or seeking access rights with a third party where the 
proposed invitee is in a position to influence the outcome of that 
negotiation? 
11.  Do you believe that the offer of the proposed hospitality would 
be likely to create an impression that there is an improper 
connection between the provision of the hospitality and the business 
that is being negotiated, considered or conducted, or in any way 
might be perceived as breaching the Company’s Guide to Business 
Conduct?   
If yes, please provide details. 
12.  Are there other matters relating to the relationship between BHP Billiton 
and the proposed invitee that you believe should be considered in relation to the 
provision of hospitality having regard to BHP Billiton’s Guide to Business 
Conduct? 
18. BHPB required each such application to be filled out and signed by an employee 
with knowledge of the invitee’s relationship with the company, and approved in writing by the 
president of the relevant CSG or the BHPB country president.
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  A cover sheet that accompanied 
the blank forms included a short description of anti-bribery provisions in the Guide to Business 
Conduct and urged employees to re-read the section of the Guide concerning travel, entertainment, 
and gifts before completing the form.  However, the controls did not adequately address the anti-
bribery risks associated with offering expensive travel and entertainment packages to government 
officials. 
19. First, BHPB did not require independent legal or compliance review of hospitality 
applications by someone outside the CSG that was submitting the application, and did not clearly 
communicate to its employees the fact that the Ethics Panel was not reviewing and approving each 
invitation to a government official.  On the one hand, BHPB’s internal website stated that the 
hospitality applications were subject to “scrutiny by the Ethics Panel [steering committee],” and 
the hospitality applications themselves stated that, “[r]equests for travel and accompanying spouses 
will be approved by the Olympic Sponsorship Steering Committee and the Global Ethics Panel 
Sub-Committee.”  E-mails sent to some BHPB business managers by a member of the OSSC staff 
stated that the Ethics Panel had “approved” their applications.   
20. However, other than reviewing approximately 10 hospitality applications for 
government officials in mid-2007 in order to assess the invitation process, the OSSC and the Ethics 
Panel subcommittee did not review the appropriateness of individual hospitality applications or 
airfare requests.  The Ethics Panel’s charter stated that its role simply was to provide advice on 
ethical and compliance matters, and that “accountability rest[ed] with business leaders.”  Members 
of the Ethics Panel understood that, consistent with their charter, their role with respect to 
implementation of the hospitality program was purely advisory.  As a result, business managers 
had sole responsibility for reconciling the competing goals of inviting guests – including 
                                                
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  In countries where multiple CSGs operated, BHPB had employees designated as “country presidents” or “country 
managers” to coordinate the activities of the various business units. 

 
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government officials – who would “maximize [BHPB’s] commercial investment made in the 
Olympic Games” without violating anti-bribery laws. 
21. Second, some hospitality applications were not accurate or complete.  Many 
applications identified an employee of a state-owned enterprise as a “Customer,” but failed to 
identify the invitee as a “Representative of Government.”  In addition, a number of applications 
contained “No” responses to Question 10, even when BHPB had pending negotiations, efforts to 
obtain access rights, regulatory actions,  or other business dealings in which the government 
official was directly involved or in a position to influence.  Furthermore, in a number of instances, 
BHPB business people were provided with examples of language that had been used by other 
employees when responding to Questions 10 and 11 in order to explain why an invitation was 
appropriate, even when there was a “Yes” response to Questions 10-12.  As a result, many 
hospitality applications contained the exact same statements in response to Questions 10 and 11, 
rather than a description of the specific facts and circumstances relating to that government 
official.
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22. Third, while BHPB had an annual Guide to Business Conduct review and 
certification process, and generalized training, it did not provide its employees and executives with 
any specific training on how to fill out the hospitality forms or how to evaluate whether an 
invitation to a government official complied with the Guide.  During the relevant period, this 
portion of the Guide included a case example concerning a negotiation between BHPB and a 
Ministry for Planning in a particular country, in which the Minister indicated that it would help his 
consideration of the company’s application if the Minister and his wife could visit BHPB’s 
operations in Australia.  The example stated that “this kind of situation requires the utmost caution 
and you must consult senior management.  You must not offer to provide anything that could be 
reasonably regarded as an attempt to unduly influence the Minister’s decision.  This means that 
you must not pay for travel by the Minister’s wife.”  However, BHPB did not provide any 
guidance to its senior managers on how they should apply this portion of the Guide when 
determining whether to approve invitations and airfares for government officials’ spouses. 
23. Fourth, although the form asked whether any business was “expected to develop” 
with the invitee, BHPB did not institute a process for updating hospitality applications or 
reassessing the appropriateness of invitations to government officials if conditions changed.  
Almost all of the hospitality applications relating to government officials were approved and 
submitted in mid-2007.  However, BHPB did not require hospitality forms to be updated, or 
invitations to be reconsidered, in those situations when government officials subsequently became 
involved in negotiations, attempts by BHPB to obtain access rights, or other pending matters. 
24. Fifth, hospitality applications were submitted by individual CSGs, and generally 
only reflected negotiations between the government official and that CSG.  While lists of invitees 
were circulated among senior BHPB business managers, BHPB had no process in place to 
                                                
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  For example, a number of hospitality forms included the following response to Question 10: “Yes, the invitee is in 
a position to influence the outcome of the pending contract, however, this is an organization that we have been 
conducting business with for over five years.  Negotiations and contract outcomes are a regular occurrence but due 
to the lengthy relationship with BHP Billiton there is evidence [of] a long term commitment that would not 
necessarily be influenced by this gesture.  It is a way of rewarding the business that has previously been conducted 
with BHP Billiton.” 

 
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determine whether the invited government official also was involved in other CSGs’ negotiations, 
efforts to obtain access rights, or other business dealings. 
C. As a Result of its Insufficient Internal Controls, BHPB Invited Government Officials 
who were Directly Involved in, or in a Position to Influence, Pending Negotiations, 
Regulatory Actions, or Business Dealings with BHPB 
25. As a result of its failure to design and maintain sufficient internal controls over the 
Olympic global hospitality program, BHPB invited a number of government officials who were 
directly involved with, or in a position to influence, pending negotiations, efforts by BHPB to 
obtain access rights, or other pending matters. 
Republic of Burundi 
26. In mid-2007, BHPB’s MinEx group submitted a hospitality application form to 
invite the as-yet-unidentified Burundi Minister of Mines and spouse to the Olympics, with airfare 
included.  Because BHPB was not currently in negotiations with the Minister of Mines at the time, 
the hospitality application form contained a “No” response to Question 10.  However, BHPB had a 
joint venture (“JV”) in Burundi with an entity that was in danger of losing a nickel exploration 
permit unless it made a substantial near-term financial investment in the project or negotiated a 
renewal or amendment of the permit.  Under Burundi law, the Minister of Mines was responsible 
for reviewing an application to renew or amend a mining permit and presenting the application to 
the country’s Council of Ministers for final approval.   
27. In late 2007 and early 2008, BHPB began to negotiate directly with the newly-
appointed Minister of Mines to extend and modify the JV’s nickel exploration permit.  However, 
BHPB employees did not update the hospitality application or take steps to re-review the 
appropriateness of the invitation after these negotiations began.  As noted above, no such re-review 
was required by the internal controls that BHPB relied upon for the Olympic hospitality program.  
The Minister of Mines and his wife attended the Olympics as BHPB’s guests for four days. 
Republic of the Philippines 
28. In July 2007, BHPB became embroiled in a dispute with a local JV partner 
concerning a prospective nickel mining operation in the Philippines.  The JV partner sued BHPB in 
local court and filed requests with the country’s Secretary of Department of Environment and 
Resources (“DENR”), requesting reversion of the mining rights that the JV partner had assigned to 
the JV.   
29. In October 2007, a BHPB employee from the Stainless Steel Materials CSG 
submitted a hospitality application to invite the Secretary and his spouse to attend the Olympics, 
with airfare included.  The completed application contained a “Yes” response to Question 10, but 
only described a technical services agreement that BHPB was considering submitting to the DENR 
for the Secretary’s approval.  Question 10 of the hospitality form did not explicitly require, and the 
employee’s response did not provide, any information about the Secretary’s role in reviewing the 
JV partner’s reversion request or the fact that the President of the Philippines had designated the 
Secretary to mediate the dispute between BHPB and its JV partner.  The form included a “No” 
response to Question 11. 
30. The Secretary accepted BHPB’s invitation in December 2007.  In March 2008, he 
issued a decision denying the JV partner’s reversion request and continued during the ensuing 
months to mediate the parties’ dispute.  In late July, BHPB became concerned that the company’s 

 
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JV partner had learned about the Olympics invitation.  As a result, BHPB withdrew the invitation 
shortly before the Olympics began.   
Democratic Republic of the Congo 
31. In mid-2007, MinEx submitted a hospitality application form to invite the Governor 
of the Katanga Province in the Democratic Republic of the Congo (the “DRC”) and his spouse, 
with airfare included.  Following its June 2007 review of 10 invitations to government officials, the 
Ethics Panel subcommittee advised MinEx to provide more detail about whether the invitation 
involved Gecamines, a state-owned entity with which BHPB was attempting to negotiate a copper 
exploration deal.  In response, MinEx submitted a revised application that contained a “No” 
response to Question 10, stating, “[t]he issuing and management of mineral titles and negotiations 
with third parties in DRC have nothing to do with the Governor’s roles and responsibilities.  
Although [BHPB] are currently engaged in negotiations with State copper company, Gecamines, 
the Governor of Katanga will have no influence in these dealings.” 
32. Later in 2007, however, BHPB employees held several meetings with the 
Governor.  Internal summaries of these meetings noted that the Governor was “a close ally of [the 
DRC] President” and that having the Governor as BHPB’s ally “could be the key to unlock a 
successful entry in a deal with Gecamines.”  In spite of obtaining this information after making the 
initial decision to invite the Governor of Katanga and his wife to the Olympics, BHPB employees 
did not update the hospitality application form or take steps to re-review the appropriateness of the 
invitation.  No such re-review was required under the internal controls that BHPB relied upon for 
the Olympic hospitality program.  The Governor accepted the invitation, but then cancelled before 
the Olympics.   
Republic of Guinea 
33. In May 2007, MinEx submitted a hospitality application to invite the Guinea 
Minister of Mines and his spouse to the Olympics, with airfare included.  The application 
contained a “No” response to Question 10, and in response to Question 11 it stated, “No.  A sound 
professional relationship with the Guinea Ministry of Mines is key for the success of the [BHPB] 
exploration and mining business in this country.”  Following its June 2007 review of 10 invitations 
to government officials, the Ethics Panel subcommittee advised MinEx to provide additional 
information concerning this invitation.  The MinEx employee who had prepared the original form 
asked BHPB’s Guinea country president to respond to the request for information concerning any 
pending negotiations with the Minister.  The country president replied that “of course” there would 
be “further negotiations” regarding the upcoming renewal of a bauxite mining concession held by 
BHPB and the government’s intention to review all existing mining concessions, but that the 
response to Question 11 was “key in that regard.”   
34. This information was not passed along to the Ethics Panel subcommittee, however, 
and the form was not updated to accurately reflect the pending negotiations across all of the CSGs 
operating in Guinea.  Because they received no response to the Guinea country president’s email, 
MinEx officials mistakenly understood that the Ethics Panel had approved the invitation.  The 
Minister accepted the invitation on behalf of himself and his wife in January 2008, but cancelled 
shortly before the Olympics began. 
  

 
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Legal Standards and FCPA Violations 
35. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-
and-desist order upon any person who is violating, has violated, or is about to violate any 
provision of the Exchange Act or any rule or regulation thereunder, and upon any other person 
that is, was, or would be a cause of the violation, due to an act or omission the person knew or 
should have known would contribute to such violation. 
36. Under Section 13(b)(2)(A) of the Exchange Act, issuers are required to make and 
keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 
transactions and disposition of the assets of the issuer.  
37. Under Section 13(b)(2)(B) of the Exchange Act, issuers are required to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances that 
(i) transactions are executed in accordance with management’s general or specific authorization; 
(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in 
conformity with generally accepted accounting principles or any other criteria applicable to such 
statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in 
accordance with management’s general or specific authorization; and (iv) the recorded 
accountability for assets is compared with the existing assets at reasonable intervals and 
appropriate action is taken with respect to any differences. 
38. As a result of the conduct described above, BHPB violated Section 13(b)(2)(A) 
because its books and records, namely certain Olympic hospitality applications, did not, in 
reasonable detail, accurately and fairly reflect pending negotiations or business dealings between 
BHPB and government officials invited to the Olympics.  BHPB violated Section 13(b)(2)(B) 
because it did not devise and maintain internal accounting controls over the Olympic hospitality 
program that were sufficient to provide reasonable assurances that access to assets and 
transactions were in executed in accordance with management’s authorization.   
BHPB’s Cooperation and Remedial Efforts 
39. In response to the Commission’s investigation, BHPB retained outside counsel to 
assist it with conducting an extensive internal investigation into potential improper conduct in 
the jurisdictions that were the subject of the staff’s inquiry.  BHPB provided significant 
cooperation with the Commission’s investigation by voluntarily producing large volumes of 
business, financial, and accounting documents from around the world in response to the staff’s 
requests, and by voluntarily producing translations of key documents.  BHPB’s counsel 
conducted scores of interviews and provided the staff with regular reports on the findings of its 
internal investigation.   
40. BHPB also has undertaken significant remedial actions.  BHPB has created a 
compliance group within its legal department that is independent from the business units.  This 
compliance group is responsible for FCPA compliance, among other things, and reports directly 
to BHPB’s general counsel and Audit Committee.  In addition, it has reviewed its existing anti-
corruption compliance program and implemented other changes.  These include embedding 
independent anti-corruption managers into its businesses and further enhancing its policies and 
procedures concerning hospitality, gift giving, use of third party agents, business partners, and 
other high-risk compliance areas.  BHPB also has enhanced its financial and auditing controls, 
including policies to specifically address conducting business in high-risk markets.  BHPB has 

 
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conducted extensive employee training on anti-corruption issues and overhauled its processes for 
conducting internal investigations of potential violations of anti-corruption laws. 
IV. 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondents BHP Billiton Ltd.’s and BHP Billiton Plc’s Offers. 
 Accordingly, it is hereby ORDERED that: 
 A. Pursuant to Section 21C of the Exchange Act, Respondents cease and desist from 
committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act. 
 B. Respondents shall, within 10 days of the entry of this Order, pay a civil money 
penalty totaling $25,000,000 to the Securities and Exchange Commission for remission to the 
United States Treasury, subject to Exchange Act Section 21F(g)(3).  If timely payment is not 
made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment must be made in one 
of the following ways:   
(1)  Respondents may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request;  
(2)  Respondents may make direct payment from a bank account via Pay.gov through 
the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
(3)  Respondents may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission and 
hand-delivered or mailed to:  
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
Payments by check or money order must be accompanied by a cover letter identifying BHP 
Billiton Ltd. and BHP Billiton Plc as Respondents in these proceedings, and the file number of 
these proceedings.  A copy of the cover letter and check or money order must be sent to Antonia 
Chion, Associate Director, Division of Enforcement, Securities and Exchange Commission, 100 F 
St., NE, Washington, DC 20549.   
C.  During a one-year term as set forth below, Respondents shall report to the 
Commission staff on the operation of BHPB’s FCPA and anti-corruption compliance program.  
If Respondents discover credible evidence, not already reported to the Commission staff, that: 
(1) questionable or corrupt payments or questionable or corrupt transfers of property or interests 
may have been offered, promised, paid, or authorized by Respondents, or any entity or person 
while working directly for Respondents, to any government official; (2) that related false books 
and records have been maintained; or (3) that Respondents’ internal controls failed to detect and 
prevent such conduct, Respondents shall promptly report such conduct to the Commission staff.  
During this one-year period:  

 
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(1)  Respondents shall submit to the Commission staff a written report within 180 
calendar days of the entry of this Order on the operation of BHPB’s FCPA and 
anti-corruption compliance program (the “Initial Report”).  The Initial Report 
shall be transmitted to Alexander Koch, Assistant Director, Division of 
Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, 
DC 20549-5041.  Respondents may extend the time period for issuance of the 
Initial Report with prior written approval of the Commission staff. 
(2)  Respondents shall undertake one follow-up review, incorporating any comments 
provided by the Commission staff on the Initial Report, to further monitor and 
assess the operation of its FCPA and anti-corruption compliance program and 
whether Respondents’ policies and procedures are reasonably designed to detect 
and prevent violations of the FCPA and other applicable anti-corruption laws (the 
“Final Report”). 
(3) The Final Report shall be completed by no later than 180 days after the Initial 
Report, and shall be transmitted to Alexander Koch, Assistant Director, Division 
of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549-5041.  Respondents may extend the time period for 
issuance of the Final Report with prior written approval of the Commission staff. 
(4) The reports submitted by Respondents will likely include proprietary, financial, 
confidential, and competitive business information.  Public disclosure of the 
reports could discourage cooperation, impede pending or potential government 
investigations or undermine the objectives of the reporting requirement.  For these 
reasons, among others, the reports and the contents thereof are intended to remain 
and shall remain non-public, except (a) pursuant to court order, (b) as agreed by 
the parties in writing, (c) to the extent that the Commission staff determines in its 
sole discretion that disclosure would be in furtherance of the Commission’s 
discharge of its duties and responsibilities, or (d) is otherwise required by law. 
 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 
 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 74998 / May 20, 2015 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-16546 

 

 

In the Matter of 

 

BHP Billiton Ltd. and BHP 

Billiton Plc, 

 

Respondents. 

 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

  

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against BHP Billiton Ltd. and BHP Billiton Plc 

(collectively, “BHPB” or “Respondents”). 

II. 

 In anticipation of the institution of these proceedings, Respondents have submitted Offers 

of Settlement (the “Offers”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over them and the subject matter of these 

proceedings, which are admitted, Respondents consent to the entry of this Order Instituting Cease-

and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below.  

III. 

 On the basis of this Order and Respondents’ Offers, the Commission finds1 that: 

  

                                                
1  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding on any 

other person or entity in this or any other proceeding. 



 

 2 

Summary 

1. This matter concerns BHPB’s failure to devise and maintain sufficient internal 

controls over a global hospitality program that the company hosted in connection with its 

sponsorship of the 2008 Beijing Summer Olympic Games.  BHPB invited approximately 176 

government officials and employees of state-owned enterprises (collectively, “government 

officials”) to attend the Olympics at BHPB’s expense.  The majority of these invitations were 

extended to government officials from countries in Africa and Asia that had well-known histories 

of corruption.  The three to four day hospitality packages included event tickets, luxury hotel 

accommodations, meals, other hospitality, and, in many instances, offers of business-class airfare 

for government officials and their guests.  BHPB informed its employees that “[o]ne of the core 

objectives [of the Olympic sponsorship] is to maximize the commercial investment made in the 

Games through assisting [BHPB] to strengthen relationships with key local and global 

stakeholders, e.g.: Government Ministers, Suppliers and Customers,” and that the hospitality 

program was “a primary vehicle to ensure this goal is achieved.”   

2. BHPB recognized that inviting government officials to the Olympics created a 

heightened risk of violating anti-corruption laws and the company’s own Guide to Business 

Conduct, but the internal controls it developed and relied upon in an effort to address this risk were 

insufficient.  As a result, BHPB invited government officials who were directly involved in, or in a 

position to influence, pending contract negotiations, efforts to obtain access rights, regulatory 

actions, or business dealings affecting BHPB in multiple countries.  In addition, BHPB’s books 

and records, namely certain internal forms that employees prepared in order to invite a government 

official to the Olympics, did not, in reasonable detail, accurately and fairly reflect BHPB’s pending 

negotiations or business dealings with the government official at the time of the invitation.   

3. As a result of this conduct, BHPB violated the internal controls and books and 

records provisions of the Foreign Corrupt Practices Act (“FCPA”). 

Respondent 

4. BHP Billiton (“BHPB”) is a combination of two companies: BHP Billiton Limited, 

which is headquartered in Melbourne, Australia, and BHP Billiton Plc, which is headquartered in 

London, England.  Since 2001, BHPB has operated under a Dual Listed Company structure, under 

which BHP Billiton Limited and BHP Billiton Plc operate as a single economic entity, run by a 

unified Board of Directors and management team.  BHP Billiton Limited American Depositary 

Shares (“ADSs”) and BHP Billiton Plc ADSs are registered with the Commission pursuant to 

Section 12(b) of the Exchange Act and listed on the New York Stock Exchange under the tickers 

“BHP” and “BBL” respectively.     

Background 

5.  BHPB is a global resources company that is among the world’s leading producers 

of major commodities, including iron ore, coal, oil and gas, copper, aluminum, manganese, 

uranium, nickel, and silver.  As of June 30, 2014, the end of its most recently completed fiscal 

year, BHPB had a market capitalization of approximately $190 billion, with over 140 locations, 

operations in 25 countries, and a workforce of more than 128,000 employees and contractors. 

6. During the relevant period, BHPB operated through different business divisions, 

called Customer Sector Groups (“CSGs”).  These CSGs included Iron Ore, Aluminium, Petroleum, 

Base Metals, Diamonds and Specialty Products, Stainless Steel Materials, Manganese, 



 

 3 

Metallurgical Coal, and Energy Coal.  Each CSG had its own president, which reported to a 

member of BHPB’s Group Management Committee.2  BHPB also had a Minerals Exploration 

Group (“MinEx”) that assisted the CSGs with exploration activities. 

7. Under BHPB’s operating model during the relevant period, each CSG President 

was responsible for ensuring their businesses’ compliance with the company’s Guide to Business 

Conduct.   Every CSG President also was required to certify annually that they had read and 

understood the Guide, confirmed that their direct reports had done the same, and discussed it with 

their direct reports.  BHPB had a centralized legal department.  In addition, it had an advisory body 

with internal and external membership called the Global Ethics Panel (“Ethics Panel”), which 

advised business leaders on compliance with the Guide to Business Conduct and other business 

ethics issues.  BHPB did not have an independent, centralized compliance group within its legal 

department, or otherwise. 

BHPB’s Hospitality Program for the 2008 Beijing Summer Olympic Games 

A. The Scope and Goals of BHPB’s Olympic Hospitality Program 

8. In December 2005, BHPB and the Beijing Organizing Committee announced their 

agreement for BHPB to become an official sponsor of the 2008 Beijing Olympic Games.  Under 

this agreement, BHPB paid a sponsorship fee and supplied the raw materials used to make the 

Olympic medals.  In exchange, BHPB received the rights to use the Olympic trademark and other 

intellectual property in public announcements and advertisements, as well as priority access to 

tickets, hospitality suites, and accommodations in Beijing during the August 2008 Games.   

9. BHPB established an Olympic Sponsorship Steering Committee (“OSSC”) to plan, 

oversee, and implement its sponsorship program, which involved multiple different branding, 

promotion, and relationship-building initiatives.  The chair of the OSSC, who also was the chair of 

the Ethics Panel, reported directly to BHPB’s CEO. 

10. One of BHPB’s objectives for the sponsorship was “to reinforce and develop 

relationships with key stakeholders” in China and in “product and investor markets, and regions 

where we have or would like to have operations.”  BHPB’s strategy for accomplishing its 

objectives included “[u]tiliz[ing] Olympic hospitality to motivate China-based stakeholders, 

including customers, suppliers, government and media, to enhance business opportunities for BHP 

Billiton in China” and “[u]tiliz[ing] Olympic hospitality to build relationships with stakeholders 

from product and investor markets, and regions where we have or would like to have operations.”  

11. One of the company’s sponsorship-related initiatives was a global hospitality 

program under which BHPB invited guests from around the world, including foreign government 

officials and representatives of state-owned enterprises, to attend the Beijing Olympics on three to 

four day hospitality packages.  The hospitality packages included luxury hotel accommodations, 

meals, event tickets, and sightseeing excursions, at a cost of approximately $12,000 to $16,000 per 

package.  In addition, BHPB executives approved the offer of round trip business class airfare to 

approximately 51 foreign government officials, as well as the airfares for 35 of these government 

                                                
2  In 2012 and 2013, BHPB re-organized to consolidate the CSGs into five business units:  Petroleum and Potash; 

Copper; Iron Ore; Coal; and Aluminium, Manganese and Nickel. 



 

 4 

officials’ spouses or guests.  Apart from BHPB’s desire to enhance business opportunities by 

strengthening relationships with its guests, these trips had no other business purpose. 

12. An internal e-mail to CSG presidents and other senior BHPB business managers 

emphasized the importance of the hospitality program to the success of BHPB’s sponsorship, 

stating, “[a]s you know we have made a commitment to support the Beijing Olympic Games in 

2008.  One of the core objectives is to maximise the commercial investment made in the Games 

through assisting [BHPB] to strengthen relationships with key local and global stakeholders, e.g.: 

Government Ministers, Suppliers and Customers.  The BHP Billiton Hospitality Program is a 

primary vehicle to ensure this goal is achieved.”  

13. In early 2007, BHPB employees prepared country-specific Olympic Leverage 

Plans, which summarized BHPB’s business and Olympic-related objectives.  In a number of 

instances, these plans discussed inviting key stakeholders, including government officials, to help 

BHPB develop relationships with a view to increasing or maintaining its business opportunities.  

For example, the Olympic Leverage Plan prepared for one country stated that BHPB’s business 

objectives in that country included “gaining access to regions that will provide growth for 

[BHPB’s] business” and “gaining port access.”  The plan further stated that the hospitality program 

would “provide useful relationship building opportunity for . . . stakeholders” and that the invitees 

would include the country’s Minister of Mines and Minister of Transport.  The Olympic Leverage 

Plan for another country, while not specifically addressing the hospitality program, stated that one 

of the goals for the sponsorship was “us[ing] Olympics program to strengthen and build the govt’s 

confidence and relationship with [BHPB], to help facilitate approvals for future projects.” 

14. After Olympic Leverage Plans were prepared for each country, BHPB business 

managers submitted lists of potential invitees and were instructed to rank them in order of 

importance, with “Category A” being those “most critical to the business.”  Internal BHPB 

presentations discussed the need to establish “the business benefit” of an Olympic invitation.  

15. Eventually, BHPB invited approximately 650 people to attend the Beijing 

Olympics, including 176 government officials, 98 of whom were representatives of state-owned 

enterprises that were BHPB customers or suppliers.  BHPB also invited the spouses of 102 of these 

government officials.  Most of the invited government officials were from countries in Africa and 

Asia where there was a known risk of corruption.  Sixty of these government officials ultimately 

attended, 24 of them with their spouses or guests.  A number of other invited government officials 

accepted their invitations, but then cancelled before the Olympics began.   

B. BHPB’s Insufficient Internal Controls over the Olympic Hospitality Program 

16. Early in its planning for the Olympics, BHPB identified the risk that inviting 

government officials to the Olympics could potentially violate anti-corruption laws and the 

company’s own Guide to Business Conduct.  The company relied on its existing operating model 

and an Olympic-specific internal approval process to address this risk.  However, these internal 

controls, and BHPB’s implementation of them, were insufficient. 

17. BHPB developed a hospitality application which business managers were required 

to complete for any individuals, including government officials, whom they wished to invite.  

These applications included the following questions: 

9.   What business obligation exists or is expected to develop 

between the proposed invitee and BHP Billiton? 



 

 5 

10.  Is BHP Billiton negotiating or considering any contract, license 

agreement or seeking access rights with a third party where the 

proposed invitee is in a position to influence the outcome of that 

negotiation? 

11.  Do you believe that the offer of the proposed hospitality would 

be likely to create an impression that there is an improper 

connection between the provision of the hospitality and the business 

that is being negotiated, considered or conducted, or in any way 

might be perceived as breaching the Company’s Guide to Business 

Conduct?   

If yes, please provide details. 

12.  Are there other matters relating to the relationship between BHP Billiton 

and the proposed invitee that you believe should be considered in relation to the 

provision of hospitality having regard to BHP Billiton’s Guide to Business 

Conduct? 

18. BHPB required each such application to be filled out and signed by an employee 

with knowledge of the invitee’s relationship with the company, and approved in writing by the 

president of the relevant CSG or the BHPB country president.3  A cover sheet that accompanied 

the blank forms included a short description of anti-bribery provisions in the Guide to Business 

Conduct and urged employees to re-read the section of the Guide concerning travel, entertainment, 

and gifts before completing the form.  However, the controls did not adequately address the anti-

bribery risks associated with offering expensive travel and entertainment packages to government 

officials. 

19. First, BHPB did not require independent legal or compliance review of hospitality 

applications by someone outside the CSG that was submitting the application, and did not clearly 

communicate to its employees the fact that the Ethics Panel was not reviewing and approving each 

invitation to a government official.  On the one hand, BHPB’s internal website stated that the 

hospitality applications were subject to “scrutiny by the Ethics Panel [steering committee],” and 

the hospitality applications themselves stated that, “[r]equests for travel and accompanying spouses 

will be approved by the Olympic Sponsorship Steering Committee and the Global Ethics Panel 

Sub-Committee.”  E-mails sent to some BHPB business managers by a member of the OSSC staff 

stated that the Ethics Panel had “approved” their applications.   

20. However, other than reviewing approximately 10 hospitality applications for 

government officials in mid-2007 in order to assess the invitation process, the OSSC and the Ethics 

Panel subcommittee did not review the appropriateness of individual hospitality applications or 

airfare requests.  The Ethics Panel’s charter stated that its role simply was to provide advice on 

ethical and compliance matters, and that “accountability rest[ed] with business leaders.”  Members 

of the Ethics Panel understood that, consistent with their charter, their role with respect to 

implementation of the hospitality program was purely advisory.  As a result, business managers 

had sole responsibility for reconciling the competing goals of inviting guests – including 

                                                
3  In countries where multiple CSGs operated, BHPB had employees designated as “country presidents” or “country 

managers” to coordinate the activities of the various business units. 



 

 6 

government officials – who would “maximize [BHPB’s] commercial investment made in the 

Olympic Games” without violating anti-bribery laws. 

21. Second, some hospitality applications were not accurate or complete.  Many 

applications identified an employee of a state-owned enterprise as a “Customer,” but failed to 

identify the invitee as a “Representative of Government.”  In addition, a number of applications 

contained “No” responses to Question 10, even when BHPB had pending negotiations, efforts to 

obtain access rights, regulatory actions,  or other business dealings in which the government 

official was directly involved or in a position to influence.  Furthermore, in a number of instances, 

BHPB business people were provided with examples of language that had been used by other 

employees when responding to Questions 10 and 11 in order to explain why an invitation was 

appropriate, even when there was a “Yes” response to Questions 10-12.  As a result, many 

hospitality applications contained the exact same statements in response to Questions 10 and 11, 

rather than a description of the specific facts and circumstances relating to that government 

official.4 

22. Third, while BHPB had an annual Guide to Business Conduct review and 

certification process, and generalized training, it did not provide its employees and executives with 

any specific training on how to fill out the hospitality forms or how to evaluate whether an 

invitation to a government official complied with the Guide.  During the relevant period, this 

portion of the Guide included a case example concerning a negotiation between BHPB and a 

Ministry for Planning in a particular country, in which the Minister indicated that it would help his 

consideration of the company’s application if the Minister and his wife could visit BHPB’s 

operations in Australia.  The example stated that “this kind of situation requires the utmost caution 

and you must consult senior management.  You must not offer to provide anything that could be 

reasonably regarded as an attempt to unduly influence the Minister’s decision.  This means that 

you must not pay for travel by the Minister’s wife.”  However, BHPB did not provide any 

guidance to its senior managers on how they should apply this portion of the Guide when 

determining whether to approve invitations and airfares for government officials’ spouses. 

23. Fourth, although the form asked whether any business was “expected to develop” 

with the invitee, BHPB did not institute a process for updating hospitality applications or 

reassessing the appropriateness of invitations to government officials if conditions changed.  

Almost all of the hospitality applications relating to government officials were approved and 

submitted in mid-2007.  However, BHPB did not require hospitality forms to be updated, or 

invitations to be reconsidered, in those situations when government officials subsequently became 

involved in negotiations, attempts by BHPB to obtain access rights, or other pending matters. 

24. Fifth, hospitality applications were submitted by individual CSGs, and generally 

only reflected negotiations between the government official and that CSG.  While lists of invitees 

were circulated among senior BHPB business managers, BHPB had no process in place to 

                                                
4  For example, a number of hospitality forms included the following response to Question 10: “Yes, the invitee is in 

a position to influence the outcome of the pending contract, however, this is an organization that we have been 

conducting business with for over five years.  Negotiations and contract outcomes are a regular occurrence but due 

to the lengthy relationship with BHP Billiton there is evidence [of] a long term commitment that would not 

necessarily be influenced by this gesture.  It is a way of rewarding the business that has previously been conducted 

with BHP Billiton.” 



 

 7 

determine whether the invited government official also was involved in other CSGs’ negotiations, 

efforts to obtain access rights, or other business dealings. 

C. As a Result of its Insufficient Internal Controls, BHPB Invited Government Officials 

who were Directly Involved in, or in a Position to Influence, Pending Negotiations, 

Regulatory Actions, or Business Dealings with BHPB 

25. As a result of its failure to design and maintain sufficient internal controls over the 

Olympic global hospitality program, BHPB invited a number of government officials who were 

directly involved with, or in a position to influence, pending negotiations, efforts by BHPB to 

obtain access rights, or other pending matters. 

Republic of Burundi 

26. In mid-2007, BHPB’s MinEx group submitted a hospitality application form to 

invite the as-yet-unidentified Burundi Minister of Mines and spouse to the Olympics, with airfare 

included.  Because BHPB was not currently in negotiations with the Minister of Mines at the time, 

the hospitality application form contained a “No” response to Question 10.  However, BHPB had a 

joint venture (“JV”) in Burundi with an entity that was in danger of losing a nickel exploration 

permit unless it made a substantial near-term financial investment in the project or negotiated a 

renewal or amendment of the permit.  Under Burundi law, the Minister of Mines was responsible 

for reviewing an application to renew or amend a mining permit and presenting the application to 

the country’s Council of Ministers for final approval.   

27. In late 2007 and early 2008, BHPB began to negotiate directly with the newly-

appointed Minister of Mines to extend and modify the JV’s nickel exploration permit.  However, 

BHPB employees did not update the hospitality application or take steps to re-review the 

appropriateness of the invitation after these negotiations began.  As noted above, no such re-review 

was required by the internal controls that BHPB relied upon for the Olympic hospitality program.  

The Minister of Mines and his wife attended the Olympics as BHPB’s guests for four days. 

Republic of the Philippines 

28. In July 2007, BHPB became embroiled in a dispute with a local JV partner 

concerning a prospective nickel mining operation in the Philippines.  The JV partner sued BHPB in 

local court and filed requests with the country’s Secretary of Department of Environment and 

Resources (“DENR”), requesting reversion of the mining rights that the JV partner had assigned to 

the JV.   

29. In October 2007, a BHPB employee from the Stainless Steel Materials CSG 

submitted a hospitality application to invite the Secretary and his spouse to attend the Olympics, 

with airfare included.  The completed application contained a “Yes” response to Question 10, but 

only described a technical services agreement that BHPB was considering submitting to the DENR 

for the Secretary’s approval.  Question 10 of the hospitality form did not explicitly require, and the 

employee’s response did not provide, any information about the Secretary’s role in reviewing the 

JV partner’s reversion request or the fact that the President of the Philippines had designated the 

Secretary to mediate the dispute between BHPB and its JV partner.  The form included a “No” 

response to Question 11. 

30. The Secretary accepted BHPB’s invitation in December 2007.  In March 2008, he 

issued a decision denying the JV partner’s reversion request and continued during the ensuing 

months to mediate the parties’ dispute.  In late July, BHPB became concerned that the company’s 



 

 8 

JV partner had learned about the Olympics invitation.  As a result, BHPB withdrew the invitation 

shortly before the Olympics began.   

Democratic Republic of the Congo 

31. In mid-2007, MinEx submitted a hospitality application form to invite the Governor 

of the Katanga Province in the Democratic Republic of the Congo (the “DRC”) and his spouse, 

with airfare included.  Following its June 2007 review of 10 invitations to government officials, the 

Ethics Panel subcommittee advised MinEx to provide more detail about whether the invitation 

involved Gecamines, a state-owned entity with which BHPB was attempting to negotiate a copper 

exploration deal.  In response, MinEx submitted a revised application that contained a “No” 

response to Question 10, stating, “[t]he issuing and management of mineral titles and negotiations 

with third parties in DRC have nothing to do with the Governor’s roles and responsibilities.  

Although [BHPB] are currently engaged in negotiations with State copper company, Gecamines, 

the Governor of Katanga will have no influence in these dealings.” 

32. Later in 2007, however, BHPB employees held several meetings with the 

Governor.  Internal summaries of these meetings noted that the Governor was “a close ally of [the 

DRC] President” and that having the Governor as BHPB’s ally “could be the key to unlock a 

successful entry in a deal with Gecamines.”  In spite of obtaining this information after making the 

initial decision to invite the Governor of Katanga and his wife to the Olympics, BHPB employees 

did not update the hospitality application form or take steps to re-review the appropriateness of the 

invitation.  No such re-review was required under the internal controls that BHPB relied upon for 

the Olympic hospitality program.  The Governor accepted the invitation, but then cancelled before 

the Olympics.   

Republic of Guinea 

33. In May 2007, MinEx submitted a hospitality application to invite the Guinea 

Minister of Mines and his spouse to the Olympics, with airfare included.  The application 

contained a “No” response to Question 10, and in response to Question 11 it stated, “No.  A sound 

professional relationship with the Guinea Ministry of Mines is key for the success of the [BHPB] 

exploration and mining business in this country.”  Following its June 2007 review of 10 invitations 

to government officials, the Ethics Panel subcommittee advised MinEx to provide additional 

information concerning this invitation.  The MinEx employee who had prepared the original form 

asked BHPB’s Guinea country president to respond to the request for information concerning any 

pending negotiations with the Minister.  The country president replied that “of course” there would 

be “further negotiations” regarding the upcoming renewal of a bauxite mining concession held by 

BHPB and the government’s intention to review all existing mining concessions, but that the 

response to Question 11 was “key in that regard.”   

34. This information was not passed along to the Ethics Panel subcommittee, however, 

and the form was not updated to accurately reflect the pending negotiations across all of the CSGs 

operating in Guinea.  Because they received no response to the Guinea country president’s email, 

MinEx officials mistakenly understood that the Ethics Panel had approved the invitation.  The 

Minister accepted the invitation on behalf of himself and his wife in January 2008, but cancelled 

shortly before the Olympics began. 

  



 

 9 

Legal Standards and FCPA Violations 

35. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-

and-desist order upon any person who is violating, has violated, or is about to violate any 

provision of the Exchange Act or any rule or regulation thereunder, and upon any other person 

that is, was, or would be a cause of the violation, due to an act or omission the person knew or 

should have known would contribute to such violation. 

36. Under Section 13(b)(2)(A) of the Exchange Act, issuers are required to make and 

keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 

transactions and disposition of the assets of the issuer.  

37. Under Section 13(b)(2)(B) of the Exchange Act, issuers are required to devise and 

maintain a system of internal accounting controls sufficient to provide reasonable assurances that 

(i) transactions are executed in accordance with management’s general or specific authorization; 

(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in 

conformity with generally accepted accounting principles or any other criteria applicable to such 

statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in 

accordance with management’s general or specific authorization; and (iv) the recorded 

accountability for assets is compared with the existing assets at reasonable intervals and 

appropriate action is taken with respect to any differences. 

38. As a result of the conduct described above, BHPB violated Section 13(b)(2)(A) 

because its books and records, namely certain Olympic hospitality applications, did not, in 

reasonable detail, accurately and fairly reflect pending negotiations or business dealings between 

BHPB and government officials invited to the Olympics.  BHPB violated Section 13(b)(2)(B) 

because it did not devise and maintain internal accounting controls over the Olympic hospitality 

program that were sufficient to provide reasonable assurances that access to assets and 

transactions were in executed in accordance with management’s authorization.   

BHPB’s Cooperation and Remedial Efforts 

39. In response to the Commission’s investigation, BHPB retained outside counsel to 

assist it with conducting an extensive internal investigation into potential improper conduct in 

the jurisdictions that were the subject of the staff’s inquiry.  BHPB provided significant 

cooperation with the Commission’s investigation by voluntarily producing large volumes of 

business, financial, and accounting documents from around the world in response to the staff’s 

requests, and by voluntarily producing translations of key documents.  BHPB’s counsel 

conducted scores of interviews and provided the staff with regular reports on the findings of its 

internal investigation.   

40. BHPB also has undertaken significant remedial actions.  BHPB has created a 

compliance group within its legal department that is independent from the business units.  This 

compliance group is responsible for FCPA compliance, among other things, and reports directly 

to BHPB’s general counsel and Audit Committee.  In addition, it has reviewed its existing anti-

corruption compliance program and implemented other changes.  These include embedding 

independent anti-corruption managers into its businesses and further enhancing its policies and 

procedures concerning hospitality, gift giving, use of third party agents, business partners, and 

other high-risk compliance areas.  BHPB also has enhanced its financial and auditing controls, 

including policies to specifically address conducting business in high-risk markets.  BHPB has 



 

 10 

conducted extensive employee training on anti-corruption issues and overhauled its processes for 

conducting internal investigations of potential violations of anti-corruption laws. 

IV. 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondents BHP Billiton Ltd.’s and BHP Billiton Plc’s Offers. 

 Accordingly, it is hereby ORDERED that: 

 A. Pursuant to Section 21C of the Exchange Act, Respondents cease and desist from 

committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act. 

 B. Respondents shall, within 10 days of the entry of this Order, pay a civil money 

penalty totaling $25,000,000 to the Securities and Exchange Commission for remission to the 

United States Treasury, subject to Exchange Act Section 21F(g)(3).  If timely payment is not 

made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment must be made in one 

of the following ways:   

(1)  Respondents may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request;  

(2)  Respondents may make direct payment from a bank account via Pay.gov through 

the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

(3)  Respondents may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission and 

hand-delivered or mailed to:  

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

Payments by check or money order must be accompanied by a cover letter identifying BHP 

Billiton Ltd. and BHP Billiton Plc as Respondents in these proceedings, and the file number of 

these proceedings.  A copy of the cover letter and check or money order must be sent to Antonia 

Chion, Associate Director, Division of Enforcement, Securities and Exchange Commission, 100 F 

St., NE, Washington, DC 20549.   

C.  During a one-year term as set forth below, Respondents shall report to the 

Commission staff on the operation of BHPB’s FCPA and anti-corruption compliance program.  

If Respondents discover credible evidence, not already reported to the Commission staff, that: 

(1) questionable or corrupt payments or questionable or corrupt transfers of property or interests 

may have been offered, promised, paid, or authorized by Respondents, or any entity or person 

while working directly for Respondents, to any government official; (2) that related false books 

and records have been maintained; or (3) that Respondents’ internal controls failed to detect and 

prevent such conduct, Respondents shall promptly report such conduct to the Commission staff.  

During this one-year period:  



 

 11 

(1)  Respondents shall submit to the Commission staff a written report within 180 

calendar days of the entry of this Order on the operation of BHPB’s FCPA and 

anti-corruption compliance program (the “Initial Report”).  The Initial Report 

shall be transmitted to Alexander Koch, Assistant Director, Division of 

Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, 

DC 20549-5041.  Respondents may extend the time period for issuance of the 

Initial Report with prior written approval of the Commission staff. 

(2)  Respondents shall undertake one follow-up review, incorporating any comments 

provided by the Commission staff on the Initial Report, to further monitor and 

assess the operation of its FCPA and anti-corruption compliance program and 

whether Respondents’ policies and procedures are reasonably designed to detect 

and prevent violations of the FCPA and other applicable anti-corruption laws (the 

“Final Report”). 

(3) The Final Report shall be completed by no later than 180 days after the Initial 

Report, and shall be transmitted to Alexander Koch, Assistant Director, Division 

of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549-5041.  Respondents may extend the time period for 

issuance of the Final Report with prior written approval of the Commission staff. 

(4) The reports submitted by Respondents will likely include proprietary, financial, 

confidential, and competitive business information.  Public disclosure of the 

reports could discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement.  For these 

reasons, among others, the reports and the contents thereof are intended to remain 

and shall remain non-public, except (a) pursuant to court order, (b) as agreed by 

the parties in writing, (c) to the extent that the Commission staff determines in its 

sole discretion that disclosure would be in furtherance of the Commission’s 

discharge of its duties and responsibilities, or (d) is otherwise required by law. 

 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary