BHP Billiton, a multinational company conducting its operations in a sum of 100 locations in around 25 countries. The company has its capital in Melbourne, Australia. Currently, the company is managed by Andrew Stewart Mackenzie as its CEO and Mike Henry as the president of operations, in Australia. The company has around eighty thousand three hundred and sixty-eight employees globally, thousands of them being in Australia. BHP is a huge financial hub which is aimed at ensuring profitability of its operations. For example, the company collected a huge revenue, around 30.91 billion Australian dollars in revenue in the last financial year, 2016 fiscal year. BHP Billiton is combination between two companies BHP and Billiton back in the early 21st century, 2001. The dual free industries founded in the early 19th century instituted BHP Billiton: Today, the firm is a leading producer in the mining industry. The company was an establishment of 13th August 1885, (BHP) Broken Hill Proprietary's history can be traced back to mining of zinc, silver, and lead in the Australian region. As such, BHP made discoveries within several factors of production namely diamonds, lead, zinc, copper and other different ornamental goods. Besides, recent research clearly suggests that BHP is amongst the best producer in value-added steel products. On the other hand, Billiton's was founded back in the year 1851, in the period tin was mined on the Indonesian Island. Additionally, Billiton has grown into a worldwide major producer of metal and a high-ranking producer of alumina, steaming coal, chrome and manganese ores and, alloys, titanium, and nickel raw materials. Moreover, Billiton was able to realize its economic growth towards the foundation of the copper related platforms. The newest Forbes magazine reviews the company at the top a hundred companies regarding the market value and amongst the top ten biggest companies in Australia.
Moreover, the business scene within the Australian is mostly dependently on the laws that govern the country. The authorities control the market either directly or indirectly since its day to day activities have an impact on the economy hence effect to a company as the BHP Billiton. Like any other country, the Australian government has the following impacts on the general economy hence on the individual companies. The government acts as a market catalyst .with the influence of the government in the formation of policies. Policies pertaining mining and the financial institutions mostly affect the social behavior of the business world especially both local corporations and multinational corporations as the BHP Billiton which at large operates in Australia. Such policies can control the actual prices of the commodities produced by a company such as the BHP Billiton in our case may be the cost of refined iron products in the market. Such policies from the government may ensure security and political stability hence attract more investment within the country's borders. In turn, promoting the local operating businesses.
The Australian government's s to the spending can at large have an effect on the businesses operating on the Australian soil. For instance, the government gets money from the taxes it levies to businesses, for example, the thirty percent tax corporation tax, when spending on the government is increased, so do the taxes. The high spending by the government leads to limited pools of the resource from the savings. Therefore leaving very little for the private investor like the BHP Billiton. Such spending by the government leads to a drop in private investments thereby shrinking production of goods and services. The ultimate effect on business will be cuts or losses of its staff members and finally a collapse of the business. The government policies can at large have an impact on the rates. For instance, when the government decides to increase the rates, there will be an increase in the cost of borrowing in the business world. Moreover, the higher rates have the ability to reduce the clients spending. On the other hand, the lower interest rates pull investment opportunities as the businesses increase their production hence lead to the profitability of businesses hence a flourished economy. Additionally, the government can influence the rates in a small instance when it decides to print more money in its reserves, hence the possibility of inflation which does not favor the business growth. Especially when the inflation is high, there is a huge possibility of corporations as BHP Billiton to fall.
The government also can lead to a collapse of BHP Billiton by policies that revolve around the nature of the company's operations, mining. For instance, the Australian government has a lot of policies that regard the processes of mining. The government has made the whole process so tedious and expensive to implement. For example, before mining takes place, one has to have the exploration licenses which is prone to renewal and also cancellation. The company also has to have a clearance from the respective ministry so as to allow them to go on with the exploration. Such time is taking, and expensive procedure may lead to a low production of a company hence promote losses. Moreover, the legal processes make it hard for the company to expand its operations.
With the increasing laws regarding mining regulations most of which are based on the school of thought pertaining international sustainable development, the companies that major in the mining sector such as the BHP Billiton are suffering. One of such is the Treaty on Biological Diversity (Biodiversity Treaty). The treaty is said to be amongst the greatest undertakings of the 1992 Earth Summit in Rio De Janeiro, Brazil. If properly looked into, the outcomes of the treaty might have destructive implications to the mining sector. The vital concept of the treaty is that the nations should take up the role in preserving its biodiversity and using its bio diverse resources in sustainable development only. The treaty is responsible for the formulation of most of the environmental laws that tend to restrict mining. Such treaties affect majorly the participants in the mining sector. For instance, it will limit the mining operations in some areas of which resources are properly accumulated in. In turn, BHP Billiton, a mining company will only have to operate in specific areas. Therefore implying that in the case of resources depletion, mining companies will run with fewer productions hence a possibility of incurring losses. In as much as the treaty is meant for the future good, the present might suffer.
Other than the biodiversity treaty there are other treaties, conventions, and agreements that have had an alarming impact on the growth of the BHP Billiton Company and other companies that major into the mining sector. In its 2012 annual report, the BHP Billiton lists the change of climate as amongst its biggest risk. The company clearly admits that the change in climate will automatically have an impact on its production patterns hence its financial performance in many of its operations. In as much as there is the fear of the climatic change, the company has tried over the previous years to get involved in matters that involve the preservation of the environment. However, most of the conventions that are taking place about the environment are majorly aimed to reduce the company's increased production in oil, coal, and gas. Of which the advocators of the environment point to as the supreme cause to the endangering of the planet. Moreover, when the production in the BHP Billiton Company is reduced, there is a very high possibility of the company to lose its bragging right as amongst the biggest mining companies in the world.
In as much as the laws and regulations pertaining the operations of businesses are healthy in the success of any business, the governments are supposed to ensure that the laws and regulations set are not harmful to the development of the businesses. In our case, the governments should help the mining corporations with the technological assistance in how to manage the industrial pollution that they might produce. To sum up, the BHP Billiton has proved with no doubts that the governmental laws and regulations and international laws can affect the operations of businesses within a certain jurisdiction.
Bakker, R. M., & Shepherd, D. A. (2017). Pull the plug or take the plunge: Multiple opportunities and the speed of venturing decisions in the Australian mining industry. Academy of Management Journal, 60(1), 130-155.
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