Wednesday, March 13, 2013
BHP Billiton faces probe over Olympics hospitality
MELBOURNE (Reuters) - BHP Billiton Ltd, the world's largest miner, said it was cooperating with anti-corruption authorities following reports of a U.S.-Australian probe into its sponsorship of the 2008 Beijing Olympics.
Australia's Fairfax Media earlier reported that the U.S. Department of Justice and the Australian Federal Police (AFP) were investigating allegations that BHP provided inducements, hospitality and gifts to Chinese and other foreign officials.
The U.S. Justice Department told Fairfax, in response to a freedom of information request, it was conducting "law enforcement proceedings" involving BHP, which supplied the materials for gold, silver and bronze medals used in Beijing. The Department of Justice declined to comment after U.S. office hours on Tuesday.
The AFP confirmed it had been working with foreign counterparts and local regulators on Australian aspects of the U.S. investigation, without providing further details.
BHP said it had been cooperating with "relevant authorities" and believed it had complied with all applicable laws in regards to its Olympics sponsorship.
"BHP Billiton is fully committed to operating with integrity and the Group's policies specifically prohibit engaging in bribery in all its forms," BHP said.
BHP has been under investigation for possible corrupt practices in China and other countries including Cambodia since at least 2009.
Fairfax reported that between 2000 and 2008, BHP spent millions of dollars on a major Olympics sponsorship deal and hospitality package which according to a former China staffer involved more than 170 VIPs, including senior government officials and Chinese steel and mineral company CEOs.
Unlike most major consumer focused sponsors, BHP's involvement at the 2008 Beijing Olympics was targeted mostly at its close circle of Chinese buyers and employees.
"Most sponsorships focus on media buys and advertising. We've done almost none," Maria McCarthy, the head of BHP's Olympic sponsorship team, told Reuters in March 2008.
"Instead, we are focusing on community leveraging, stakeholder leveraging that involves governments and customers, and our staff," she said.
BHP was not one of the 12 sponsors in the International Olympic Committee's elite "TOP" programme - companies such as Coca Cola, Adidas, McDonalds and Johnson & Johnson who paid for the right to market themselves worldwide as partners.
The miner was instead a local sponsor, as it had been for the 2000 Games in Sydney, paying Beijing organisers an undisclosed amount of money and providing materials for the 6,000 or so medals required for the Olympics and Paralympics.
At the time, BHP was championing market pricing for iron ore from annual contracts, a move that drew an angry response from Chinese steel mills forced to pay much more for raw materials as demand soared.
(Reporting by Sonali Paul in Melbourne, Rob Taylor in Canberra and Nick Mulvenney in Sydney; Editing by John Mair and Richard Pullin)