In The Matter Of Bhp Billiton Ltd. SEC File No.

Facts

D 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, D 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. D 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. D 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. D operates through different business divisions, called Customer Sector Groups (CSGs). These CSGs included Iron Ore, Aluminum, Petroleum, Base Metals, Diamonds and Specialty Products, Stainless Steel Materials, Manganese, Metallurgical Coal, and Energy Coal. Each CSG had its own president, who reported to a member of D. D also had a Minerals Exploration Group that assisted the CSGs with exploration activities. In December 2005, D became an official sponsor of the 2008 Beijing Olympic Games. D paid a sponsorship fee and supplied the raw materials used to make the Olympic medals. D 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 during the August 2008 Games. D 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 D’s CEO. D wanted to establish better relations with Communist China. Its goal was to use Olympic hospitality to motivate China-based stakeholders, including customers, suppliers, government, and media, to enhance business opportunities for D. D also invited guests from around the world, including foreign government officials and representatives of state-owned enterprises, to attend the 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. D 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 officials’ spouses or guests. D then prepared Olympic Leverage Plans that detail the business advantages sought to be obtained from each country D targeted. D business managers submitted lists of potential invitees and were instructed to rank them in order of importance. D invited 650 people to attend the Olympics, including 176 government officials, 98 of whom were representatives of state-owned enterprises that were D customers or suppliers. D 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 canceled before the Olympics began. D 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. D then required business managers to detail out any potential issues related to corruption or court possibly breach D’s Guide to Business Conduct. 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. The controls did not adequately address the antibribery risks associated with offering expensive travel and entertainment packages to government officials. D did not require independent legal or compliance reviews. D’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, “requests for travel and accompanying spouses will be approved by the Olympic Sponsorship Steering Committee and the Global Ethics Panel Sub-Committee.” The OSSC and the Ethics Panel subcommittee did not review the appropriateness of individual hospitality applications or airfare requests. Business managers had sole responsibility for reconciling the competing goals of inviting guests. 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.” 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, D 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. D 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. Almost all of the hospitality applications relating to government officials were approved and submitted in mid-2007. D 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. D invited a number of government officials who were directly involved with, or in a position to influence, pending negotiations, efforts by D to obtain access rights, or other pending matters.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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