BHP declines comment on 'tea money'

Thursday, April 22, 2010

22 Apr 2010

BHP Billiton Ltd is refusing to confirm corruption claims relating the company are connected to so-called "tea money" paid to officials in Cambodia.

Non-government group Global Witness last year highlighted allegations originally aired in a local Cambodian newspaper in 2007 that the company had paid the "tea money" a customary term for unofficial payments.

A BHP Billiton spokeswoman on Thursday said she was unable to add to comments already made by the company.

In its quarterly production report on Wednesday, BHP Billiton revealed it had uncovered potential corruption in company dealings with government officials.

The company did not disclose which country or countries the allegations related to, or whether any workers had been stood down or sacked in relation to the claims.

But Global Witness has said: "According to an article published in The Cambodia Daily on 24 May 2007, Cambodia's Minister for Water Resources, Lim Kean Hor, told the National Assembly that BHP Billiton had paid $US2.5 million to the government to secure a bauxite mining concession.

"In the same article, Lim Kean Hor is reported to have described this payment as tea money, a customary term for an unofficial payment in Cambodia," Global Witness said in its Country for Sale report.

The report went on to say that in accordance with the terms of a minerals exploration agreement BHP Billiton paid $US1 million to the Cambodian government in September 2006.

It said the money did not appear to be accounted for in government financial documents, raising questions about where the $US1 million had gone.

Global Witness wrote to BHP Billiton in 2008 about the allegations and the miner replied that it had paid $US2.5 million for a social development fund in Cambodia.

"We reject any assertion that the payment under the minerals exploration agreement is, or the amounts contributed to the social development projects fund are, tea money," the miner told Global Witness.

BHP Billiton on Wednesday said it was cooperating with relevant authorities and had disclosed evidence it uncovered regarding "possible violations of applicable anti-corruption laws".

The corruption investigation comes at a crucial time for BHP Billiton, as it is trying to convince regulators in Australia, Europe and Asia to sign-off on a controversial joint venture with Rio Tinto.

While refusing to name which country the corruption allegations relate to, BHP Billiton has volunteered that it does not relate to China.

Four Rio Tinto workers based in Shanghai were recently convicted of receiving bribes and jailed in China.

BHP shares were 1.47 per cent weaker at $42.10 at 1242 AEST, against a 1.17 per cent slide in the benchmark index.


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