BHP Says It’s Cooperating in Probe After Bribery Report

BHP Billiton Ltd., the largest mining company, said it’s helping an inquiry into possible breaches of anti-corruption laws after the Age newspaper reported bribery claims linked to the Beijing Olympics.

“We believe our Olympics activities complied with all applicable law,” Melbourne-based BHP said today in an e-mailed statement, referring to its sponsorship of the 2008 games held in China. “As previously disclosed, BHP Billiton has been cooperating with the relevant authorities in an investigation into possible violations of anti-corruption laws.”

BHP is the subject of a joint U.S.-Australian bribery probe into its dealings with foreign officials including Chinese dignitaries under a multimillion-dollar hospitality and sponsorship program at the 2008 Olympics, the Age reported. The company said it’s continuing an internal inquiry that stems from a 2009 probe by the U.S. Securities and Exchange Commission.

“No company, that I am aware of, has ever fought a prosecution in the U.S.” in an anti-corruption case, Mini vandePol, a partner at Baker & McKenzie in Melbourne, said today in a phone interview. It’s likely BHP will end up agreeing to settle with U.S. prosecutors, she said.

BHP slid 1.6 percent to 2,100.50 pence by 1 p.m. in London. It earlier rose 0.7 percent to close at A$35.91 in Sydney.

‘Careful Scrutiny’

China, the biggest purchaser of metals, is BHP’s largest customer, accounting for $22 billion in sales in fiscal 2012. A deal in Western Australia is being examined, the Age reported. The U.S. Department of Justice was conducting “law enforcement proceedings” involving BHP, the newspaper said. Michael Passman, a department spokesman, declined to comment.

“High value sponsorship arrangements of this kind are typically subject to very careful scrutiny with detailed protocols being developed to ensure that only appropriate guests are invited,” Andrew Legg, an Eversheds LLP partner in London, said today by e-mail. “From both a U.S. and U.K. perspective, particular care is required when approaching individuals who are considered to be foreign public officials. In China, this is a real concern as officers of state-owned enterprises are generally considered to fall into this category.”

The Australian Federal Police has been involved and is coordinating with foreign counterparts and local regulators, a spokesman for the force said in an e-mailed statement.

Inherently Complex

“The AFP has received a referral that relates to the Australian aspects of the U.S. investigation,” the spokesman said. “Foreign bribery investigations are inherently complex due to their cross-border nature.”

The initial requests from the SEC formed part of an investigation into terminated mineral exploration projects, BHP said in 2010. The projects concerned were in Cambodia and the Philippines, the Sydney Morning Herald said at the time.

BHP also said at the time that it had “disclosed to relevant authorities evidence that it has uncovered regarding possible violations of applicable anti-corruption laws involving interactions with government officials.”

The involvement of the Justice Department, coming after the company first admitted possible breaches of anti-corruption laws to the SEC and the U.K. Serious Fraud Office, follows standard procedure in such investigations, Baker & McKenzie’s vandePol said. “We were all waiting for it last year,” she said.

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