BHP displays good crisis management

By now, the human and environmental tragedy arising from the collapse of a tailings dam owned by Samarco – a Brazilian iron-ore joint venture between BHP Billiton (ASX: BHP) and Vale (BOVESPA: VALE) – is well known.

By now, the human and environmental tragedy arising from the collapse of a tailings dam owned by Samarco – a Brazilian iron-ore joint venture between BHP Billiton (ASX: BHP) and Vale (BOVESPA: VALE) – is well known. I’ll wait for the proper investigations to be completed before assigning blame to any particular sins of commission or omission by Samarco.

Instead, I want to commend BHP and chief executive Andrew Mackenzie for their response to this disaster. On hearing the news, instead of relying on lawyers and public relations ‘experts’, Mackenzie quickly decided to fly to Brazil and personally inspect the damage. Rather than offering excuses, he has profusely apologised and quickly arranged food, water and other assistance for those affected. In tears at the company’s AGM, he even cancelled many of the company’s Christmas parties (which is probably going a bit far) as well as announcing an independent, external investigation into the tragedy.

In a world where business is a convenient whipping boy for politicians and journalists even at the best of times, the rise of social media such as Facebook (NASDAQ: FB) and Twitter (NASDAQ: TWTR) has made controlling the fallout from corporate disasters even more important.

So while the lives lost and environmental damage are distressing, in responding to the Samarco disaster in such a forceful but considered way, BHP and Andrew Mackenzie have made the best out of a very bad situation. As such, their response should act as a template for companies dealing with future disasters.

 

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