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. 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.
Frequently Asked Questions about this Article…
The Samarco disaster was a tragic collapse of a tailings dam in Brazil, which was part of a joint venture between BHP Billiton and Vale. It resulted in significant human and environmental damage.
Andrew Mackenzie responded by flying to Brazil to personally inspect the damage, apologizing profusely, arranging immediate assistance for those affected, and announcing an independent investigation into the tragedy.
BHP's response is considered effective because it was prompt, empathetic, and transparent. The CEO's personal involvement and the decision to conduct an independent investigation demonstrated accountability and responsibility.
BHP arranged for food, water, and other assistance to be provided to those affected by the disaster, showing a commitment to immediate relief efforts.
Social media platforms like Facebook and Twitter have increased the importance of managing corporate crises effectively, as they can quickly amplify public scrutiny and criticism.
Other companies can learn the importance of swift, empathetic, and transparent responses to crises, as demonstrated by BHP's handling of the Samarco disaster.
BHP canceled many of its Christmas parties as a gesture of respect and solidarity with those affected by the Samarco disaster, reflecting the seriousness of the situation.
An independent investigation helps ensure transparency and accountability, providing an unbiased assessment of the situation and helping to prevent future incidents.
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