Ladies and gentlemen, my name is Ken McKenzie, and I'm your Chair. Thank you for joining us today. I recognize this is a far different situation than we're all used to, and I regret that we cannot be meeting face to face in Australia or London as we normally do. But at the same time, I'm grateful that we can still connect, albeit virtually, at this important time of the year. I'm joined virtually by all of your directors, who are located in The U.
K, Switzerland, U. S. And, of course, Australia. We also have our auditors from Ernst and Young. I would firstly like to acknowledge the Traditional Owners on the land on which this Annual General Meeting is being held, the Wurundjeri people of the Kulin Nation and pay my respects to their elders past, present and emerging.
There being a quorum present, I declare the meeting open and take the notice of meeting as read. I would now like to ask our Group General Counsel and Company Secretary, Caroline Cox, to outline the procedures for this virtual AGM. Caroline?
Thank you, Chair, and hello, everyone. My name is Caroline Cox, and I'm the Group General Counsel and Company Secretary of BHP. Today's meeting is being held virtually via the Lumi platform. This is the first time that BHP has conducted a virtual AGM, and for many of you, this may be your first virtual AGM as well. We have taken care to facilitate a positive experience for our shareholders.
We engaged with the Australian Shareholders Association, the UK Shareholders Association and ShareSOC and took on board their feedback for the conduct of this meeting. We have also had regard to ASIC's guidance on virtual AGMs. I will now run through the procedural aspects of today's meeting. We have published on our website a guide to using Lumi as well as answered a range of questions you may have. If you experience any technical issues, please refer to the help guide available on the Meetings page of our website.
In the unlikely event that we do experience any major technical issues, we will provide you with updates through our website and the exchanges. Voting today on all items will occur by poll consistent with our constitution. If you are eligible to vote as a shareholder of BHP Group Limited, a polling icon will appear. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options for, against or abstain.
There's no need to press submit or click the enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time that the Chair declares that voting is closed. All votes cast today will be added to the votes cast by BHP Group plc shareholders. The total sum of votes will represent the final voting result for each item of business, and these results will be filed with the exchanges. Tim Hewen from Computershare has been appointed returning officer for the meeting and will scrutineer the vote.
Turning now to the items of business. Items one to 22 in the notice of meeting are endorsed by your Board, and the Board recommends that you vote in favor of these items. Items twenty three and twenty five have been requisitioned by a group of shareholders in BHP Group Limited. Item 24 has been withdrawn. Item 23 is a special resolution seeking amendment to the constitution of BHP Group Limited.
Item 25 is an advisory resolution. Only if Item 23 is passed will Item 25 be valid. Items twenty three and twenty five are not endorsed by your Board, and the Board recommends that you vote against each of these items. Shareholders may make a comment or ask a question through the Lumi system. You do not need to wait until we get to the relevant item of business to do so, and I encourage you to submit your questions or comments now.
To comment or ask a question via Lumi, press on the speech bubble icon. This will open a new screen. At the bottom of that screen, there is a section for you to type your question. Once you've finished typing, please press the arrow symbol to send. We will ensure that there is a reasonable opportunity for shareholders as a whole to ask questions or make comments at this meeting.
Please refer to the help guides on our website if you are having any difficulty in asking a question or making a comment or have any other question. Thank you, Chair.
Thank you, Caroline. We will do our best to get to as many of your questions and comments as possible. To ensure that shareholders have a reasonable opportunity to be heard at today's meeting, we will, as a guide, ask you to limit your questions or comments to two. Questions should relate to the items of business under consideration at this AGM. I will now open the poll, and I will give you warning before I move to close the voting at the end of the meeting.
At the end of the meeting, the proxies for all items will be displayed on your screens. Engaging with shareholders is one of the most important parts of my role as Chairman. It's your feedback that truly sharpens our focus on what matters most. I've enjoyed these interactions over the last year, whether it be through retail forums or the meetings I've had with institutional investors all around the world. And I'm also pleased that we found new ways to connect despite the challenges of the year.
In fact, over the last three months, we've had an unprecedented amount of engagement with our shareholders. We've held two BHP Live events, a retail forum for U. K. Shareholders, two sustainability roundtable sessions, two indigenous heritage roundtables and a climate change briefing. This engagement has been invaluable.
Thank you. When I spoke to you at our twenty nineteen AGM, I said success is never assured, and we work in an uncertain world. Unfortunately, the past twelve months have demonstrated the extent of that uncertainty. Chile has been shaken by social unrest. And there's been significant commodity price volatility.
As I said, this is an uncertain world. But despite the global adversity, BHP performed solidly in the 2020 financial year. Earnings and cash flow were strong. Net debt was at the low end of our target range. Productivity was up.
Unit costs were down and we delivered US6.1 billion dollars in dividends to shareholders. We also appointed Mike Henry as Chief Executive Officer, replacing Andrew McKenzie, who retired as CEO on the 12/31/2019. Under Andrew's leadership, BHP became a simpler and more disciplined company. We thank him for his vision and hard work, which has changed the way we operate and engage with the world. Mike Henry is a leader of integrity with exceptional standards and an uncompromising commitment to safety.
He is a true professional with significant operational and commercial experience at BHP, and he has a deep passion for your company. And we'll hear from Mike shortly. This is a time of great opportunity for BHP because as great as the challenges the world is facing, we know the answer to many of them can be found in the very resources we produce. Our products are essential for global economic growth and the transition to a lower carbon world. We provide the materials that improve the lives of billions of people in developing nations and help engineers realize the dream of cleaner power, more efficient transportation, communications and battery storage.
This is what we do. This is BHP's guiding motivation and it's why we proudly commit to our purpose, to bring people and resources together to build a better world. We have the confidence to deliver on this purpose because of our strong foundations. When I first spoke to you as Chair in 2017, I detailed five priorities for the future of safety, portfolio, capital discipline, capability and culture and social value. And these priorities have not changed.
Safety is still our top priority. And I'm pleased that our total recordable injury frequency improved in 2020. And most importantly, we did not have any fatalities on our sites. We continue to sharpen our portfolio by focusing on future facing commodities and assets that will deliver the greatest long term value to shareholders. This is why we've strengthened our copper and nickel holdings and announced our intent to divest our interest in a number of coal assets whose value may be best realized outside of BHP.
We remain relentless on capital discipline and will continue to be guided by our capital allocation framework. This helps us to direct capital between investments, the balance sheet and cash returns to shareholders such as dividends. We also keep building on one of our core strengths, the capability and culture of the company and its people. And at Board level, this process continued over the year with a number of key appointments. Gary Goldberg has joined the Board, bringing with him more than thirty five years of global mining industry experience.
And following the work we did on our skills and experience matrix in 2018, we identified an opportunity to enhance the technology expertise on our Board. And as a result, in May, we announced the appointment of Dion Whiesler and Xiaoqin Cleaver. Dion has extensive global executive experience, including as the President and Chief Executive Officer of HP Inc. Xiaoqin has over twenty years of global experience in technology with a focus on software engineering, data and analytics, cybersecurity and digitalization. And I'm also delighted to welcome Christine O'Reilly to the Board this week.
Christine will bring deep financial and public policy expertise as well as valuable insights in large scale capital projects and transformational strategy. Finally, I'd also like to acknowledge Lindsay Maxted and Shruti Badira, both members of the Board for more than nine years. I thank Lindsay for his counsel and for his exceptional contribution to the Board and as Chair of the Risk and Audit Committee. Lindsay retired in September. And I also thank Shruti for her support to me as Senior Independent Director and her commitment to our shareholders.
And she's made an outstanding contribution to BHP and is retiring after this AGM. Thank you, Lindsay and Shruti. When we get the first four priorities right, safety, portfolio, capital discipline and capability and culture, we are a stronger, more focused and more efficient company. But none of that matters if we fail in our fifth priority, to generate real social value in the countries and communities where we operate. In 2020, we invested almost $150,000,000 in social value initiatives.
This includes the vital resources fund that we stood up to support regional Australian communities during the pandemic. We spent almost $2,000,000,000 on our local buying program, and we accelerated payments of $100,000,000 to small, local and indigenous businesses when they needed it most. We also boosted our indigenous workforce participation to 6.5% in Australia and 6.6% in Chile, exceeding our targets. And we paid USD 9,000,000,000 in taxes, royalties and other payments to governments around the world, an effective tax rate of over 42%. At our last AGM, I said that our relationships with traditional owners are among the most important that BHP has, and recent industry events only reinforce that view.
So I'd like to update you on our engagement with indigenous communities. In Australia, BHP has continued our work with Traditional Owners and more recently, the First Nations Heritage Protection Alliance to build our shared vision for the future. Together, we've developed principles around indigenous heritage in Australia, reaffirming our policy and commitment to free, prior and informed consent in agreement making and that regulatory regimes should respect and reflect this right. We've also set new aspirations for cultural heritage keeping places to even better advance traditional owners' values, culture and pride. Places where artifacts can be stored and visited and also places of knowledge, learning and celebration of the unique living cultures that they are connected to.
I want to acknowledge the Traditional Owners, indigenous leaders and aboriginal land councils that have engaged with us. I look forward to our continuing partnership to deliver the commitments we have made together and our shared objectives. BHP's approach to social value shows up locally through our support of the communities where we operate, but also globally where we are actively addressing some of the world's most complex challenges such as climate change. This is something that we have been addressing for decades. We are one of the first resource companies in the world to set targets for Scope one and two emissions.
And last year, we established a $400,000,000 program to invest in low emissions technologies. We recently made a number of announcements that demonstrate the next step in responding to this challenge because we know we have a responsibility to reduce emissions from our own operations and help communities and countries decarbonize their economies. We are acting on this responsibility. We have set out clear targets and goals based on thorough analysis and, most importantly, shared how we will deliver on these outcomes. There is no easy route to a net zero world.
But BHP is committed to the Paris Agreement and the United Nations Sustainable Development Goals because it's good for business and our stakeholders. In conclusion, let me come back to uncertainty. The world may be uncertain, but many things at BHP are not. We are certain in the strength, resilience and quality of our people who showed real purpose in 2020. We are certain that the resources we produce are essential.
They are fundamental to the way we live now and into the future. They are crucial to economic development and critical to the transition to a lower carbon world. And we are confident that our disciplined focus on our core priorities will allow BHP to sustainably create value for the long term. Thank you, and I'll now hand over to your CEO, Mike Henry.
Thank you, Ken, and welcome to everyone joining us online today. It's hard to believe that it's been almost a year since I was announced as BHP's Chief Executive. It's an honor to be entrusted by the Board and shareholders to lead this company. I've spent my whole career in the resources industry and have been with BHP for almost two decades. Our refreshed purpose statement developed last year to bring people and resources together to build a better world perfectly talks to why I'm here.
BHP is a company that is indeed steeped in history, but we're not constrained by it. As we've done for over a century now, we continue to evolve and lead for the times. We provide the resources that are essential to improving lives around the world. We support tens of thousands of direct jobs and many more through the business opportunities we create for others. Our operations provide the lifeblood for many regional communities, and young people are able to join us, grow their careers and build lives for themselves and their loved ones.
Our shareholders rely on the value we create and our consistent generation of strong cash returns. We do so supported by access to people, resources and capital, your investment in us. BHP must be a company that governments and communities trust and where great people want to work. We must be a company investors are confident in and find attractive because we generate strong value and returns in the right way. My commitment to you is to lead in a way that ensures all of these are so.
Our focus on social value will ensure that all stakeholders benefit from our existence and the communities trust in us. We will hire great people, invest in them and have a culture that supports exceptional performance. And we will protect and grow shareholder value over the short, medium and long term. This includes through the deliberateness we bring to how we shape our portfolio, to manage risk and maximize upside to the trends underway around us. Our strategy, portfolio relationships and team are strong, and this was evident in our results over the past year and in how we navigated the challenges that Ken spoke of.
In spite of these challenges, we achieved a safe year with zero fatalities in our operations and strong financial performance. This was possible because of the remarkable way in which people across BHP stepped up and because of the support we were afforded by our host communities, governments, business partners and traditional owners. We also sought to support those who rely on BHP. We shortened payment terms for small, local and indigenous suppliers. We provided new health and social funds in our host communities, and we created an additional 1,500 temporary jobs.
In addition, the BHP Foundation is funding vaccine and treatment research. Our strong performance has resulted in a number of our operations achieving record production or throughput, and we achieved lower unit costs across all of our major assets. We produced strong operational cash flow. And through our disciplined application of our capital allocation framework, we concurrently invested in growth, maintained a strong balance sheet with net debt at the bottom of our range and returned over USD 6,000,000,000 to shareholders for the third year in a row, which included an additional amount of US1.5 billion dollars over our minimum 50% payout ratio. We continue to stretch our performance and leadership on challenges the world is facing and that are important to BHP's long term value creation and to our shareholders.
We've demonstrated sector leadership in climate change action for over two decades. And as Ken mentioned, just last month, we announced our next series of commitments, including a 30% reduction in operational emissions in the next on path to becoming net zero by 2,050. We have recently made bold moves on renewable energy as well as on water stewardship, including a shift to 100% desalinated water and renewable power at our Escondida and Spence operations in Chile. We've grown female participation in our workforce by two percentage points in the past year to 26.5%, which is in the order of 50% higher than our peers. We continue to invest in indigenous employment and grew representation in our workforce over the year.
In Australia, the proportion of people who identify as indigenous in BHP is now around twice that of society overall. We are looking to double the proportion of people who have permanent employment with BHP. And we have also recently announced funding and support for 3,500 new apprenticeships and training opportunities in Australia over the next five years. As we look to the future, we remain confident the world will continue to need the commodities we produce. However, we also recognize that the world is dynamic and changing.
Global trends such as the electrification of transport, decarbonization of power, population growth and rising standards of living are expected to drive demand for copper, nickel and potash, future facing commodities, even as growth in demand for iron ore, metallurgical coal and oil and gas slows. And we are actively managing our portfolio to protect and grow value. This includes creating more options in future facing commodities for long term growth and tending to our current portfolio to maximize the value of our assets. Through our rigorous approach to capital allocation, we will create and secure more options through innovation, exploration, early stage entry and well timed acquisitions of attractive resources and assets. We've already made some progress here, adding copper and nickel options to our portfolio earlier in the year, and we are progressing towards a final investment decision on our potash project in Canada next year.
In terms of our existing portfolio, we recently announced steps to optimize our coal portfolio through focusing on high quality hard coking coal and divesting our other coal operations. And as part of our balanced approach to investing in petroleum, we recently grew our working interest in our Shenzi operation in the Gulf Of Mexico, but we also shared our intent to divest from more mature, later life assets, including our non operated interest in the Bass Strait joint venture. As we shape our portfolio for the future, it is incredibly important that we deliver exceptional safety, operational and financial performance. In the face of market uncertainty and slowing rates of growth in commodity demand, a greater proportion of value growth will come from an unrelenting focus on being great at what we do. We remain committed to the capital discipline we've demonstrated in recent years and will further build upon our technical and operational capability.
The revised shape of the executive leadership team will bring operational and technical excellence to the fore, along with our focus on our portfolio and social value. In the near term, we expect that the global economy will take some time to stabilize and recover from COVID-nineteen. Given the variable nature of the pace and structure of the recovery around the world and exacerbated by global trade tensions, the outlook for commodity markets remains uncertain. However, the strength and consistency of the economic recovery underway in China does provide a measure of confidence and optimism. BHP's performance in the past year illustrates the resilience of our portfolio, balance sheet, people and relationships.
We are very well positioned to weather uncertainty and to emerge from COVID-nineteen stronger, faster paced and more focused. So thank you. Thank you for the trust that you placed in our company. These are deeply uncertain times for the world and are likely to continue for some time. The way our people have stepped up to meet these challenges has been truly inspiring.
Their leadership in dynamism, with support from our valued relationships, has enabled us to deliver a year that was safer, lower cost and with strong returns. As the world rebuilds and aspires to a more sustainable future, BHP will continue to evolve and lead the industry in a way that grows value and returns for you, our shareholders, indeed, for all our stakeholders. Thank you again for your interest and continued support for our company. Back to you, Ken.
Thanks, Mike. And we'll now move to the items of business and questions. If you have a question or comment, please submit them now if you haven't already done so. And we will answer these questions at the appropriate time of the meeting. And we'll do our best to get through as many of your questions and comments as possible, but this does not mean that we will have an opportunity to respond to every question or comment that's submitted today.
We also received questions in advance of today's meeting, and Mike and I covered some of the key themes in our opening remarks, and we'll also answer some of these directly in a moment. Now all items of business today will be dealt with as joint electric actions with BHP Group plc shareholders. And as Caroline has already mentioned, Item 24 has been withdrawn. Items one through to six of today's business includes items routinely dealt with at BHP's Annual General Meetings, including the receipt of the financial statements, appointment and remuneration of the auditor and share capital authorizations. So I'll now take questions and comments on general matters and items one through six of the notice of meeting.
And all of these items are supported by your Board. If your question or comment relates to items seven to 25, including any broader questions relating to remuneration, the Board and Directors or BHP's membership of industry associations, I'll address it when we cover these items later in the meeting. So let's get started. Thanks, James.
Thank you, Chair. The first question we have is from Duncan Seddon from the Australian Shareholders Association. Duncan asks, the original Goldsworthy assets, including Goldsworthy Mines, Shea Gap and Yarri Mines, seem to have been idle or on care and maintenance for some years. Has BHP considered divesting these assets? Is there a budget or estimated cost for site rehabilitation of these mines?
Great. Thank you. Thank you, Mr. Seddon. Look, we enjoy our engagement with the Australian Shareholders Association, and we're pleased to have you join us here again today.
Mike, are you happy to answer these questions?
Sure, Ken. So thank you for the question. You're right. These assets have been idled for some years now. BHP reports closure and rehabilitation provisions as part of our financial statements.
And of course, those provisions are based upon management's best estimates of what that closure and rehabilitation is going to require at that point in time. Now you can find as part of our overall provision in the financial year 2020 annual reports the numbers that include cost of closure and rehabilitation for these assets. Now as it happens, right now, we are studying the long term commercial options for these assets, and divestment will be one of the things that we consider. There's part of these assets, though, where we've deemed them to be unlikely to ever be redeveloped. And for those assets, we do have a closure and rehabilitation effort underway, and that will continue.
Next
question, Chair, comes from Anthony Lawrence Jackson. Anthony asks, how is the company preparing for the potential competition that would come from the Simandou iron ore deposits in Guinea should they be developed?
Right. Well, thanks very much, Mr. Jackson. I mean the company has always said the steel market doesn't really need these tonnes. But we believe the likelihood that Sinandu coming online has increased.
And the reality is we look at that scenario in our strategic planning. So we know we must continue to focus on what we can control, and it's bringing down costs through further productivity, increasing our quality through our South Flank project, which will increase grade and lump in that product segment. But we're also pleased that we've got a diversified portfolio of options in copper and nickel and potash. Thanks, James.
Next question comes from Jared Covino. The question is in relation to Nickel West. He asks, can we comment on the seeming lack of progress and how we expect to get this operation back on track?
Great. Well, thanks, James. Thanks, Mr. Covino. I think this is another question for Mike, maybe just a little bit of background for our shareholders.
Nickel West is a fully integrated mine to market nickel business, and it is well positioned as part of a rapidly growing battery material supply chain. So it's one of the commodities that we see as very much future facing. Thanks, Mike.
Well, thank you for the question, Mr. Cavino. It's I'll start with saying that Nickel West is, I think, a really good news story. This is an asset that only a few years ago was looking at near term closure or divestment from BHP, where the team that's at Nickel West has done a wonderful job of turning that asset around. There's been a program of work underway over the course of the past year to replace some of the preexisting mines and moving into new mines that will support the asset over the long term.
And the life of the mine of the asset has been extended. There was also a major program of maintenance, so quadrennial shutdowns that occurred at both the refinery and the smelter last year. So that combination of mines transitioning and the big maintenance program that we had underway did create a bit of pressure on the last financial year, but the asset is now set up for the future. And as Ken mentioned, we see the future for nickel as a commodity being very bright, and we're well positioned in that industry. And we look to build upon Nickel West over time and potentially look to expand it in due course as well.
Next question, Chair, comes from Pamela Dorothy Hartgrenk. Pamela asks, why has BHP not set any goals or targets with respect to the Scope three emissions caused by the use of our petroleum products?
Great. Well, thanks for that question, Pamela. I mean, again, for the benefit of all of our shareholders, Scope three emissions are those emissions that are emitted outside of our own operations, which are typically Scope one and Scope two emissions. So they're outside of our own operations in our supply chain. So it's either by our customers or it's by our suppliers.
And we recognize the importance of taking action to support the reduction of emissions in our supply chain. There's no doubt. And we've set Scope three goals. We were one of the first in our sector, to do so. And our goals that we've established are to support the steel industry to develop technology and pathways capable of a 30% reduction in intensity by 2030 in, I guess, mentioned, integrated steelmaking.
And so we'll work on that over the next decade and probably the implementation of that will occur post 02/1930. We're also working with our maritime industry to support an emissions intensity reduction of 40% in BHP chartered shipping of our products. Now as I've mentioned, that's very much in the steel sector. And why the steel sector? Well, when we look at our Scope three emissions, that's where the majority of them are.
That's where we can have the most influence. That's where we can have the most impact. And so that's very much where we're going to be focusing. In the petroleum sector, we're a much smaller participant in a much larger market. So we're actually going to focus where we can make the biggest impact.
Thank you, Chair. I've got, five questions now on a related theme. So if you could bear with me, I'll read through all the five questions, and then you can address them at once. The first question comes from David Lawrence Crepp in relation to the North West Shelf. David asked, what is BHP's expected capital expenditure for the North West Shelf LNG project?
Why are we considering such large expenditure on a project that experts say would be stranded under a Paris aligned carbon budget? The next question comes from miss Christine Barbara Storey. Christine states, this week, a new carbon tracker report showed around half of BHP's projected oil and gas development CapEx over the next ten years would go to projects that do not fit within the IEA's sustainable development scenario carbon budget. Our Northwest Shelf and Scarborough projects are among the world's most expensive proposed projects that fall outside the SDS budget. Why is BHP pursuing high cost, high risk gas development that is incompatible with its stated commitment to the Paris Climate Goals?
The next question is from the ACCR. In November, BHP's Geraldine Slattery delivered a briefing which outlined BHP's plans to spend upwards of $8,000,000,000 on oil and gas projects over the next five years. As BHP has not set a target for Scope three emissions from its petroleum division, how can BHP's $400,000,000 climate investment program be taken seriously when it is spending 20 times as much on expanding oil and gas production. Next question comes from miss Kay Winogle. BHP's Scope one and two emissions reduction target would result in our 2,030 emissions being 4,700,000 tons of CO2 equivalent below those of 2,020.
Since making that commitment, BHP has commenced production at the Atlantis Phase three oil and gas project, which will ramp up to 30,000 barrels of oil equivalent per day of peak production. If consumed, this is estimated to release 6,000,000 tonnes of carbon dioxide equivalent per year, more than cancelling out the peak annual emissions abatement under our Scope one and two commitments. In fact, total annual emissions that would be enabled by BHP's in development oil and gas projects would dwarf the reduction in our operational emissions. Why is BHP undoing its emission reduction efforts by expanding its oil and gas production? Final question on this subject is from Linda Pickering.
Linda states, BP has committed, that is BP, has committed to reduce its oil and gas production by 40% over the next ten years. If BHP is as committed to climate action and mitigation of climate risk as it claims, why have we made no similar commitments to reduce fossil fuel production in line with the Paris climate goals?
Great. Well, thank you for those five questions. And you're right, they're very similar. It's I'll summarize it as why are we continuing to invest in our petroleum business. And I'll hand it over to Mike in a moment to just to talk to our views around that.
But let me sort of take a step back and talk high level about our portfolio, our participation and how we think about climate change in general. We accept, the science around climate change and we support, the Paris Agreement goals. And, you know, the challenge here is providing access to reliable and affordable, energy while reducing emissions. And the reality is that all current plausible scenarios, show that fossil fuels will be part of the global energy mix for decades. Yes, renewables are going to grow, but petroleum is going to be part of the energy mix for decades.
We spent a lot of time looking at this. We recently published, in our climate change, report, a scenario that we committed to running last year through our economic modeling and portfolio modeling, of a 1.5 degree scenario, which is again Paris aligned. And when we run that scenario, through our portfolio, which is similar to, you know, the work that the IPCC has done around a 1.5 degree scenario, we again find that petroleum is, in that energy mix. Coal definitely reduces dramatically, but oil and gas are still very much in the energy mix. So Mike, you might want to talk to how we're thinking about our petroleum investment.
Sure. Thanks, Ken. So as the Chairman mentioned, a 1.5 degree scenario is fundamentally good for BHP. It's good from a values perspective but also good from a value perspective. And hence, we're fully committed to it.
In the case of petroleum, probably a couple of things that I would draw out. So one, even in a decarbonizing world, because oil and gas are essential to human mobility, provision of other energy and to many of the industrial processes that support the way we live today, There is an expectation that oil and gas is going to be around for some time yet. Having said that, we've been very clear that we see oil as being an attractive place to invest for at least the next decade and likely beyond, but it is something that we're focused on for the short to medium term. And in doing that, we will be investing in areas where we believe that we have particular capabilities to bring to bear. We'll be seeking to grow shareholder value and returns through doing so, but we'll be adopting a balanced approach.
So we've also announced that we'll be divesting of assets that have less long life and which have less upside. So we'll be investing for the near term only in projects that will be able to secure returns over a period in which we believe the industry will remain attractive. Now there was a question there as well about our overall portfolio with reference to a peer company industry. I would like to add that we are already a diversified company. So we look at the totality of our portfolio.
Ken mentioned earlier that we have a number of commodities in the portfolio. We're taking action to reduce Scope one and Scope two emissions, so our operational emissions. And I should mention that in petroleum, we're at the very good end of the spectrum in terms of having low emissions intensity for the production in our oil and gas division. But we're also looking to support Scope three reductions globally, but doing so in a way that has tangible effect in terms of Scope three. And we'll be focusing on areas where we believe we can have particular impact because of our position in those industries or because of the technical know how that we're able to bring to bear in helping others in the value chain solve for their emissions.
Chair, the next question is from Stephen Darling. Stephen asked, why have we not expanded Olympic Dam to supply an end product instead of buying our copper back in the form of copper wire? This could be a flow on from the refinery to make Australian copper wire.
Thanks, mister Darling. I mean, today Olympic Dam is one of the largest underground mines in Australia, and it's been operating safely in an environmentally responsible way for thirty years. And by any definition, Olympic Dam is a world class resource, a producer of copper, gold, silver and uranium oxide. And Olympic Dam is very much a core asset in BHP's portfolio. Mike, could I ask you to comment?
Sure. So we our strategy is to focus on upstream activity. So in the case of copper, that means that we have a starting preference to be producing copper concentrate because we believe that the further upstream we are, the more aligned we are with BHP's particular capabilities. In the case of Olympic Dam, because of the uranium content in the ore, we do have to process all the way through to metal, so through smelting and then refining. But that's as far as we go.
So further downstream from that, for example, the production of copper wires you referenced, we see others being more capable of doing that. Of course, if there was somebody here domestically that was looking to purchase Olympic Dam copper in order to be able to do so, we'd be very happy to pursue that. But it's not an activity that we believe we have particular capabilities in and therefore wouldn't seek to do so.
Next question, Chair, comes from Lara Blacher. Lara asks, I think it's a statement from the LAPFF Chair, Doug McMurdo. I note the Chair's involvement in the withdrawal of the Cultural Heritage shareholder resolution that has been proposed for today's meeting, and I thank him for recognizing the strategic importance of community engagement by stepping into these discussions. I'll look forward to speaking with both the Chair and Traditional Owners to monitor how the resulting agreement is being put into practice. You have noted that BHP has changed its model on joint ventures to ensure that environmental, social and governance standards are better accounted for and protected in carrying out mining projects.
Could you clarify for me the difference in the prior and the current joint venture models and how the current model ensures adequate ESG impacts, for example, in relation to Resolution Copper?
Okay, great. Well, thanks for that question, Laura, on behalf of Mr. McMurdo. And I did enjoy catching up with both of you some short three weeks ago. Let me just highlight some of the key aspects of our current approach around non operated joint ventures.
We oversee our participation in non operated joint ventures with the support of a dedicated group of professional functions. These teams are in the areas of health, safety, environment and corporate affairs. And these professionals bring ESG items to the table through the nonoperated joint ventures board. This means we can influence the joint venture operator and other JV shareholders through the Board. So in short, there's a process and structure to support ESG matters being raised.
But I think it's really important to understand that we don't operate or control these non operated joint ventures. They have their own operating and management standards. But we do have a dedicated team of professionals that support them.
Chair, your next question is again from Duncan Seddon from the Australian Shareholders Association. Duncan states, notwithstanding the excellent descriptive at Page two fifty of the annual report, we are interested in the audit of operations at individual mines and exploration sites. We recognize that in conducting an audit of a company the size of BHP, at the extreme of a selection of sites to be ordered audited may have to be made. Is this the case? If a selection of sites has to be made, what is the procedure?
Is it a company decision, a joint decision, or the auditor's sole decision? What steps are taken to ensure the selection process is not contaminated? The auditor is steered to select particular operations for audit and not others. In the course of the audit, has the auditor identified any expenditure which could cause the company to be in breach of its commitments to good governance and compromise itself with regard to US, UK, and Australian anti bribery laws?
Great. Well, thanks for that question, mister Seddon. I think it's a question best directed, to our auditors. I did mention that they were here with us. They're here with us virtually, so I think this is going to be a good test of our technology.
Do we have our auditors on the line?
Good afternoon, Chairman. Thank you.
Can you hear me?
We can hear you. I hope I hope our shareholders can as well. Are you happy to answer that question on be that Mr. Seddon asked?
Yes, chairman. Good afternoon, Mr. Seddon and shareholders. I'll firstly provide some context to our audit report and respond to your questions, the first three of which I think, can be grouped up with the scope of the audit. To help to help understand the e one audit report, it is important to note that due to BHP's dualistic government structure, the audit reports are in respect of both Australia and The UK and are therefore different to audit reports you are familiar with Australian companies.
He's what audit report addresses the requirement of Australia and UK and is therefore more expansive than an Australian operations export report and includes detailed discussion on the matters of your questions. With respect to your first three questions on scoping, scoping is a key element of the audit. This is done entirely by and there is no involvement of the company. The scoping is determined in accordance with our risk assessment and consideration of qualitative and quantitative materiality factors. We consider the materiality for the group as a whole, then consider the relative contribution of individual locations or assets to determine the order procedures to be applied over each location or group function.
For example, coal and petroleum assets contribute on a relative basis less than other assets like iron ore, but is still subject to significant order procedures, including procedures addressing specific risks. Section four of our report discusses the audit scoping, including the criteria for determining our audit scope and the various scope categories applied to individual locations and functions. Section five of our report includes additional information over which assets were in the various scopes as defined in section four and allocated materiality for each location. You will note in section four, we include graphs that the audit coverage achieved as a percentage of profit before tax, total assets and revenue. And in section five, we list the scope applied to the joint action.
With respect to your last question regarding governance, this is an expansive topic, but I'll provide a succinct answer by referring to the annual report. Section two of BHP's annual report is titled Governance at BHP and provides significant information in this respect. As mentioned earlier, our opinion is over the financial statements as a whole and not in respect of an individual account balance disclosure or specific risk. Section 11 of our report outlines the auditors' responsibilities. From the audit perspective, I refer you to Section 12.1 of our report, which provides an explanation as to what extent the audit was considered capable of detecting irregularities.
This section discusses the audit approach to understanding the legal and regulatory frameworks that are applicable and how BHP complies with the various legal and regulatory frameworks, including bribery and corruption practices. Thank you, chairman.
Great. Thank you. That was Tim Wallace from from Ernst and Young.
Next question, Chair, comes from Natasha Michelle Lee, also in relation to the audit. The audit fees for the group increased from £6,800,000 to £11,200,000 in the last year, whereas the overall audit fees increased from £14,400,000 to $16,700,000 The increases in fees seem unjustified. Could you explain the reasons for these increases?
Well, thank you for that question, Ms. Lee. The Risk and Audit Committee of the Board reviews the auditors' fees annually, and we believe that they remain competitive. We develop a budget each year for the audit work, and the fee levels are benchmarked against what other companies pay. And BHP has a policy which restricts the type of nonaudit service that the auditor can provide to the group in order to preserve their independence.
Now in terms of your specific questions around the fees, you're right. In financial year 'twenty, we paid CAD16.7 million in fees, of which CAD16.3 million were related to assurance services. The increase in fees for the audit of the group's annual report, so if we break this down, in financial year 'twenty was CAD11.2 million. And again, versus financial year 'nineteen, it was GBP 6,800,000.0. So that's quite an increase, but it reflects how structures the audit.
And if you look in the annual report, you'll see that there is a largely offsetting decrease in the fees associated with the audit of subsidiaries, which has moved down from 5,100,000.0 to £1,300,000 So if you look at that overall, although the categories have moved, if you look at it overall, the increase in fees is from £14,500,000 last year to £16,700,000 this year. And this relates to certain additional assurance services like the assurance around our sustainability reporting. But as you know, we also did a transition from our old auditor to our new auditor, which is Ernst and Young, and there were some audit transition costs, but those won't be incurred on recurring basis.
The next question, Chair, is a jointly submitted question from Helen Haysam, Kirsten Polmere and Lauren Mill. The question is when is the company intending to provide benefits to shareholders by increasing the diversity of the Board of Directors and senior management, having a woman in charge increase profits?
Well, great. Well, thank you. Thank you for that question, and, it's an important point. We have an aspirational goal, to achieve gender balance across the company by 2025. And diversity in its broadest sense is good for business.
It drives better decisions, healthier culture and more efficient use of our talent. And we've seen this again and again and again in our business that our more diverse teams are safer and more productive. So the data really bears that out. So you're right. And our objective is to increase female representation in the company by 3% per annum, and we're making good progress against that aspirational Now in terms of why there are not more women on the Board, after Shruti Vedira steps down from the Board after the PLC AGM, we'll have four women on our Board.
That's 33%, and that's in line with The U. K. Best practice guideline. This continues to be a focus for our nominations and governance committee. We know that diversity makes us a better company.
But diversity isn't just about gender. It's also about skills and experience and nationality, and you can see that through the new directors that we've brought on board this year. And we need to work hard to foster diversity inclusion at all levels of the company. So our aspirational goal is to achieve gender balance across the company by 2025, and this includes a fixed target of maintaining Board diversity above 33%.
Next question, Chair, is from Derek Miller, also an Australian Shareholders Association member. He states that this is a comment but does invite you to respond, Chair. The five year BHP TSR performance is 6% per annum. The five year index TSR performance is 8%. The five year peer group TSR is 2%.
And based on this peer group, they all get a great bonus. Assume I assume that means, BHP management get a great bonus. This is a terrible performance for a company with first class world's best assets.
Well, thanks for that question, Mr. Miller. Well, it's not a question. Thanks for that comment. Look, I will respond.
I assume when you talk about the index, you mean the MCSI index, which we have in our TSR comparator. You're right. Over the five year period, we underperformed that index, but we've outperformed the ASX 200 and we've outperformed the FTSE one hundred and a number of mining peers and petroleum peers over the same period. And I think it's important that we acknowledge that we are in a cyclical industry. And versus that cyclical industry, we've performed well, but the MSCI is not necessarily a cyclical group of companies.
So we do have to look at the comparison across both of those sectors. TSR is also very dependent on the time period used for the analysis. For example, it excludes buybacks, which have been significant for BHP. I think we've made $15,000,000,000 of buybacks over the last ten years. And we're proud of the work that our management team is doing in managing the factors that we can control.
And over the past five years, the team's delivered a return on capital employed of 17%, has returned more than USD 35,000,000,000 to shareholders, has had a compound annual growth rate of 4% in production and has also achieved sector leading EBITDAs of over 50%. So look, we like the challenge, and we know that there's more work to be done.
I'll now take two questions, Chair, from Andrew Whitmore, both in relation to Samarco. First question is, what is the program of actions that have to be taken to create the conditions for a safe restart of Samarco's operations? Second question, what measures has the Renova Foundation taken to complete the reconstruction of the three communities near the Fundao Dam with utmost urgency? And what lessons has it learned from the failure to do this over a period of five years?
Great. Well, thanks for that question, Mr. Whitmore. Two questions. How are we progressing with the resettlement of the communities?
And then how are we progressing with the restart? I might ask Mike to handle the restart. But before that, I'll answer the question around the three communities. But as I do every year, I would like to give shareholders use this opportunity to give shareholders an update on what's happening at Samarco. I mean the Samarco Dam failure is a tragedy that must never be forgotten.
And BHP remains committed to doing the right thing and supporting the Renova Foundation with their mandate to redress the social and environmental impacts. Now BHP is focused on the two most significant Renova priority programs of compensating people and resettlement. But unfortunately, the COVID pandemic has impacted resettlement construction activity as well as So in relation to the pandemic, Samarco, Vale and BHP approved the release of BRL120 million to purchase vital resources for local communities such as respirators, ambulances and improvements to hospitals in the fight against COVID-nineteen. Now in terms of the overall progress, there are 42 programs of work that span social, environmental and community remediation. Now more than BRL 10,000,000,000 has been spent by Renova in compensation and remediation to date, and we're forecasting a further BRL 16,000,000,000 to be spent through calendar year 'twenty two.
So in U. S. Currency, this is around $4,800,000,000 of spend through to the end of calendar year 2022, of which BHP share is 50%. Now in terms of the resettlement, the program is ongoing and the most progress is being made in Bento Rodriguez, where houses and public buildings are under construction. The significant infrastructure works such as drainage and electricity are progressing well and are forecasted to be completed in 2020.
At Paracatu, the first houses infrastructure work are under construction and Angistera, the Renova Foundation continues to work with families on the resettlement plan. I do want to point out that people who lost houses that can't be rebuilt remain in paid rental accommodation during the construction of their new communities. Now one of the other key focus areas is compensation. Over 14,000 families are receiving financial assistance. This has gone to the people who have suffered the most direct impact to their economic or productive activity.
Around 270,000 people have received compensation for temporary loss of municipal water supplies, and compensation for all other damages is well underway. And as of September, over 10,000 families have received compensation. And recently, and we believe this is good news, there's a new scheme for compensating impacted people that was approved by the court. It's gained momentum, and we're hopeful that this will be a pathway to compensation being provided more quickly. And to date, we have 14 local commissions representing some 15 territories that have entered the scheme, and that covers 50% to 60% of the families that are registered.
And finally, the environmental remediation is going well. The stabilization of the riverbanks is complete. Water quality criteria for turbidity has been achieved twelve months in advance of the required deadline. And the River Doce is now the most monitored river in Brazil. There are 92 monitoring points along the river and in the coastal zone.
And this extensive monitoring confirms the strong recovery trends along the entire affected river pathway. Another really important point is a total of BRL 600,000,000 is being invested in sewage collection and treatment plants and waste disposal in 39 municipalities along the river. Now this will result in a vast improvement over the conditions that prevailed prior to the dam failure, where approximately 80% of raw sewage was discharged directly to the river. So I think this is a good improvement. So overall, this is good progress.
And although we recognize it's not going as quickly as we would like, we do remain fully committed to rehabilitating the environment, resettling impacted families and providing full and fair compensation. So I think, Mike, if you want to talk to the restart.
Sure, Ken. So we are supportive of Samarco restarting when it's safe to do so, when it's economically viable to do so and when the community is supportive of it. And the reason we're supportive is because we believe this is one of the best ways that we can mitigate the social impact arising from the dam failure. Of course, a restart would see direct employment in the operation itself, employment for all those who are supplying services and goods to Samarco, and it would also see the restart of tax payments to the Mariana municipality. So overall, we think that's the right direction to go.
Now there was a big milestone achieved in October, and that was the granting of the Corrective Operational License. But there's further work to be done. The filtration system has to be completed. That's currently planned for completion by the December. At that point, assuming that all of the other steps are in place to ensure that we can operate safely, the shareholders would take a final decision around restarting.
So we're on track, supportive, but it has to be done safely, and we have to have the filtration in place.
Great. Thanks, Mike.
Next question, Chair, comes from Lytigo Dion Nominees, Pty Ltd. BHP's 1.5 degree scenario analysis included some incredibly bold assumptions about the take up of as yet unviable carbon capture usage and storage technology, CCUS. Does the Board believe that such widespread use of CCUS is possible? Why was this model chosen over one in which fossil fuel use declines more rapidly, requiring less CCUS to meet a 1.5 degree outcome?
Great. Well, thank you. Thank you for that question. Look, CCS can be applied to a range of sectors. And in most scenario analysis, including the IPCC, it's critical to achieving a 1.5 degree outcome.
And it's particularly important in sectors where abatement is difficult, like industrial sectors and others, it's hard to reduce the emissions, and so you need to find a way to capture them. Now negative emissions technologies in general, including either biomass plus CCS or direct air capture plus CCS, are also important to offset emissions from sectors where it's expensive to decarbonize or quite frankly not possible to decarbonize, through, other means and other technology. So we have been focused on catalyzing deployment of CCS. You'd be familiar that we've set up a USD 400,000,000 fund in order to pursue technology in reducing emissions. And in our 1.5 degree scenario, CCS is limited in some sectors to reflect the barriers to adoption at large scale and at affordable cost.
But we still have about 10,000 facilities using CCS by 2050 in that 1.5 degree scenario.
Chair, I'll group two questions together now on a related theme. The first one is from, again, the ACCR. Last month, BHP committed to reducing its operational emissions by 30% by 2030 using a 2020 baseline. Given that its emissions are up 8% since 2017, this new 2030 target is more like a 24% reduction on 2017 emissions. Why did BHP use a 2020 baseline rather than a 2017 baseline?
Next question on this theme comes from Marion Clifton West. She well, the question is BHP's FY 2020 scenario analysis demonstrated that a 1.5% warming outcome presents by far the most positive impact on the value of the company's portfolio. So why aren't our emissions reduction targets aligned with that 1.5 degree scenario?
Okay. So thanks for those questions. I mean I think the first question is quite Why do we choose 2020? Because it's the year that we're in.
In setting targets, it is preferable to use the most recent data, which is available whenever possible. And quite frankly, that is the approach that is suggested by the SBTI, the Science Based Target Initiative. So quite simply, we've chosen the year that we're in to set the baseline, and so we've moved our target from off of that. So pretty straightforward answer there. In terms of the second question, James, could you repeat it for me?
Yes. BHP's FY twenty twenty scenario analysis demonstrated that a 1.5 degree warming outcome presents by far the most positive impact on the value of the company's portfolio. So why aren't our emissions reduction targets aligned with that 1.5 degree scenario?
Well, thanks for that question. I mean, first and foremost, we've set a net zero target by 02/1950, which is very much aligned with the 1.5 degree scenario. And we've also set a 30% reduction by 02/1930. And so we are putting real action around that. And when we haven't just sort of set a target without putting a plan together on how we're going to achieve that 30% reduction by 02/1930.
We actually have a plan to get there. And we'll be spending real money in order to get there. In our capital allocation framework, this objective of reducing emissions by 30% by 2030 will rank right alongside our maintenance capital, so the very top of our priority list. We're estimating that over that ten year period that we may have to deploy USD 2,000,000,000 to 4,000,000,000 in order to achieve that target. So we've established the target using the most recent year.
It's a 30% reduction. It's aligned with the Paris Accord. We have a net 02/1950 target. We have a plan to get there, and we're happy to be held accountable as we work our way towards those targets.
Next question, Chair, comes a jointly submitted question from Tinneko Mabunda and Asif Mohammad. Good day. We are the opinion that not enough emphasis has been placed on incorporating greenhouse gas emission targets into short and long term incentive performance conditions for carbon emissions. Is BHP considering integrating performance measures that track whether BHP has met Scope one, two and three emissions targets that are aligned to the Paris Agreement and other standards?
Great. Well, thank you. Thank you for that question. Last year, we committed to clarify and strengthen the link between our our climate goals and executive remuneration, and we believe we've achieved that. We recently announced that performance against climate measures will represent 10% of the outcome under the cash and deferred plan for all ELT members.
So the cash and deferred plan is the incentive program for, ELT members. Now this includes measures to reduce operational emissions as well as, emissions in our value chain. So Scope one, Scope two and Scope three as the question has asked. I think the other thing that's important here is that management are also shareholders. And like the previous question, the modeling that we've done on 1.5 degree scenario shows that, that's the most valuable outcome for our portfolio.
So as shareholders, management are also incentivized to drive towards that objective.
Chair, the next question comes from, again, Christine Barbara Storey. Christine states, BHP is a world leader. BHP has some power to determine the rate of transition to renew a renewable world. BHP should be able to lead for greater ambition on climate. Why is BHP not attempting to hasten the transition to renewables rather than continuing to invest in oil and gas just because of current expectations of level of gas and oil required?
Why is BHP not able to provide for customers' energy requirements by fast tracking renewables and assisting the customers to use more renewables rather than opening up new gas and oil fields? Trends can be set, not just followed.
Great. Well, thanks for that question. I think we've answered comprehensively the question around why we are continuing to participate in the petroleum sector in an earlier section. But this question is what are we doing to support renewables? And I think that's a very good question.
And iron ore, metallurgical coal and copper are all essential materials for building the physical infrastructure and the energy networks required to support renewables. And that's why we think we're an essential company in the transition to a lower carbon world. In a 1.5 degree scenario, we need almost twice as much steel in the next thirty years as we have in the last thirty years. And to keep pace with the development of renewables technologies like electric vehicles and solar power, then copper production would have to nearly double in the next thirty years over the previous thirty years, and nickel production would have to have a fourfold increase. So we're providing the commodities that the world needs in order to make the energy transition to renewables.
The next question is from, Robert and Muriel Brown. What investigation has been undertaken for the potential introduction of renewable hydrogen and ammonia as fuels in BHP's processes?
Great. Mike, are you happy to Sure. Talk to
I am. So where to start? We so first thing I would mention is that we've stood up a hydrogen consortium. So this is BHP coming together with a few others in industry to study potential application of hydrogen in our operations. Now there's some views out there that hydrogen will be able to replace diesel in mobile equipment on mine sites.
So these are things like trucks and so on for hauling ore on sites. Our view is that the more likely outcome there is going to be moving to electrification of our haul fleets rather than hydrogen, given our view on the economics currently. But that's something that we'll continue to study over time. We do have in the back end of this decade, where in order to achieve the 30% reduction in operational emissions that we've mentioned, that does include a component of being able to remove diesel from our haul fleet. Outside of that, though, we do see opportunities for using hydrogen in our operations.
So that's including, for example, using it for boilers, heat on in our operations. We have a proposal out there right now for a green hydrogen operation to be stood up to supply hydrogen into our Nickel West industrial processes. So this is something that we're studying quite deeply. We have some areas where we're likely to deploy green hydrogen into our operations. But in other areas, we'll move to electrification of certain processes, and that electrification will rely in part on renewable energy.
You would have perhaps seen the announcement we made last year of moving to 100% renewable energy in our Chilean mining operations and more recently, an announcement to move to 50% renewable electricity supply into our Queensland coal operations.
James.
Jay, the next question comes from Elizabeth Unless. It has come to investors' attention that a double standard appears to exist in how BHP has handled COVID-nineteen, with adequate responses in Australia and Canada versus its poor handling of the pandemic in Chile, Peru and Colombia. Workers at Spence Mine in Chile had to implement a twenty four hour work stoppage in March to force BHP to take adequate protection measures against COVID-nineteen. Trade unions in Peru, Chile and Colombia have of of COVID-nineteen the The and four suspected COVID COVID-nineteen nineteen deaths is there, three direct employees and one contractor.
BHP commits to upholding the UN guiding principles on business and human rights, indicating it endorses the principle of equally respecting human rights in all countries where it operates. How does BHP explain the disjuncture between its handling of the COVID-nineteen pandemic in industrialized versus lower income countries?
Thanks, Mike. So I will be absolutely clear. BHP has one standard for handling COVID globally. There is no double standard. We've had the same standard here in Australia and in Canada as we've had in our Chilean operations.
I think the reality is that there's been the pandemic itself has played out very differently in different jurisdictions. And that then has an impact on broader society, the prevalence of COVID in society, which then flows through to our operations. But there has been very substantial effort invested in all jurisdictions that BHP operates in to ensure that we have appropriate social distancing measures in place, that we have proper hygiene measures in place. We've invested in much more by way of transport to maintain social distancing. And we've reduced people on-site.
So using the Chilean example that you raised, we've reduced people on-site by 30 or 35% over the period in order to increase social distancing. And of course, that has economic consequences, but that was the right thing to do. We've also put in place further medical support. At one point in time, in Chile, they had the highest well, amongst at least amongst the highest rates of COVID globally. So against that backdrop, the efforts that we've undertaken have been able to protect the workforce more than otherwise would have been the case.
But we have a again, I'll just repeat, we have a single standard globally, and that standard is defined by the best medical expertise available to the company. And against that backdrop then, we do everything that needs to be done to ensure the well-being of the workforce.
Our next question, Chair, is from Richard Solly. He asked, before mining companies can operate in Ecuador, the Ecuadorian state has to consult with indigenous peoples and obtain their consent. Can you confirm that such previous consultation has taken place?
Okay. Well, thank you for that question, mister Sully. Might make a few general comments about the work that we're doing in Ecuador, and again and then ask Mike to talk specifically about the question being raised. But first of all, in Ecuador, we're talking about a greenfield exploration project. So we're undertaking low impact preliminary works to see if we can find targets worthy of further exploration.
So for example, we're taking water samples, we're taking soil samples, we're doing airborne geophysics. So our work in Ecuador, as with all of our exploration activities, is governed by our exploration management system, which enshrines our careful engagement with stakeholders and as well as environmental due diligence. So I want to assure everyone that we're very aware of the sensitivity around the issues that are being raised. And Mike, maybe you can comment specifically about the engagement.
Sure, Ken. So the deep engagement will be undertaken, of course. So within Ecuador, we know that there's some people who are opposed to mining. There's others who are very encouraging of mining. Where we're at currently with our exploration activity there is we are undertaking social mapping, we are engaging with a wide range of stakeholders and we are completing environmental due diligence.
And through these processes, we are able to recognize the sensitivities that exist and then take early proactive and appropriate management actions to deal with those sensitivities. As always, we will only proceed in accordance with our commitments to sound environmental and social practices and all regulatory requirements. Now specifically in Ecuador, are a signatory to the International Labor Organization Convention one hundred sixty nine, guaranteeing the rights of indigenous tribal peoples, which includes the right to prior consultations. And we'll be wholly compliant with that and compliant with our own commitments to indigenous upholding indigenous rights.
Our chair, the next question is directed to Mike. It's from Ms. Lynne Marie Irving. She asked, Mike, you mentioned the shift to high quality coal and letting go of lower quality coal. Does this mean shifting to metallurgical coal and exiting thermal coal?
Okay. Thank you for the question. And in short, yes. However, it goes one step further than that. Within metallurgical coal, there's the very high quality metallurgical coal, and then there's the less high quality metallurgical coal.
Our view is that in order for the steel industry to reduce its carbon footprint, it's going to need to increase the efficiency of its processes. That's going to require more of the very high quality hard coking coal. That's So the coal that we're going to keep in our portfolio. Thermal coal and the less high quality hard coking coal will be the subject of a divestment. And we've given ourselves two years to do that, but I have spoken publicly at our full year results about our intent to divest those assets.
James. Chair, the next question comes from SJ OP and Associates Proprietary Limited. My annual report arrived at four p. M. Today, only one hour before the Melbourne meeting time of five p.
M. A three fifty two page report is difficult to read online, and accordingly, one hour to review the annual report is not easy. Accordingly, can this be addressed in future years?
Well, thanks for that question. I mean, clearly, that's regrettable that you only received it today. I know we mailed it out on the usual date, which is the September 15, and I can only imagine that somehow COVID and the volume of mail that's moving through the system has somehow impacted the delivery date this year. So I apologize for that. I do remind shareholders that the report is available on the website, but I also appreciate that some shareholders prefer to get it as a hard copy.
Next question is from Mr. Simon Yu Tsong Chen. Is BHP investigating opportunities to expand the resource portfolio to rare earth commodities?
Mike, do you want to
Sure, Ken. In short, we always review commodities, but rare earths aren't something that BHP is looking at pursuing, in part because the markets for those commodities are too small. So when BHP assesses when we assess commodities, we look for large liquid markets. That's one criteria. Second of all, we have to be confident that BHP can secure an attractive position in those markets and that the cost curve is steep enough to allow us to invest your funds or your capital for great returns.
And we don't see the scale opportunity in rare earths as being significant enough for BHP.
Next question, Chair, is a similar question to one that you just addressed. So that answer may apply to this question, but I will read it in any case. The question is from Glen Maffain. Ever since before the pandemic, criticism has been leveled at BHP for its poor labor practices and its refusal to take responsibility at the global level for how its workers are treated across its operations. What is more, BHP remains the only major mining company that has not established a global dialogue with Industrial Global Union.
Now criticism is intensified over the company's inadequate handling of the pandemic in Latin America. As the largest mining company in the world by market capitalization and as a company that claims to operate with integrity and responsibility, will BHP undertake a meaningful dialogue with Industrial Global Union in order to ensure the highest labor standards are maintained through its operations and the challenges posed by the pandemic can be tackled through meaningful social dialogue?
So thanks for that question. I mean, we recognize and respect the right of our employees to freedom of association and to choose to be represented by, those who they wish to be represented by, you know, including trade unions. We have a well established framework for engagement with employees and their representatives. We engage with employees and their representatives, including industrial associations across our business, and we deal with those unions who represent our people on our sites.
Similar theme, Chair from NNEAF Proprietary Limited. Colombian Union's Syntra Carbon, affiliated to Industrial Global Union, is striking at Cerrejon since thirty one August following a breakdown in collective bargaining negotiations. The conflict is aggravated by the company's attempt to unilaterally introduce a shift system, which would reduce the number of jobs by 25% and place tremendous burdens on health, well-being and family lives. Cerrejon appears to want to force concessions on the collective agreement in order to cover the compensation costs associated with shedding jobs through the introduction of the death shift. BHP CEO, Mike Henry, has called on management and workers to work together to ensure operations remain safe and economically viable.
However, thirty days into the strike, Sarah Hong ignores calls from the Labor Ministry to return to the bargaining table to resolve the dispute and refuses to engage in discussions on the death shift. Will BHP call on Cerrejon to engage in good faith negotiations to resolve these two issues?
Okay. Again, thank you for the question. Maybe a bit of background for all of our shareholders around Cerre Haan. Cerre Haan, again, is a nonoperated joint venture operated by an independent company and management team. We have a 33% financial interest, along with Glencore and Anglo American who also have a 33% financial interest.
Cerrejon operates a large energy coal mine in La Guajira in the region of Colombia. It's important to note that Cerrejon has always been operating in a very complex environment and from both an environmental perspective as well as a socioeconomic perspective. So we seek to influence how Cerrejon operates, but ultimately, we're a minority shareholder, and we don't control Cerrejon or its operations. Cerrejon management is responsible for all aspects of managing the business. So detailed questions of this nature are really for them to answer.
But Cerrejon has confirmed that the new roster is widely used in Colombia and other parts of the world and will have controls in place prior to the implementation. And we, as shareholders, will monitor this through normal governance processes.
Chair, the next question is from Rachel Deans. Rachel states, the UN Special Rapporteur for Human Rights and the Environment, David Boyd, recently called for Cerrejon mine in Colombia to be closed because of its impact on the air and water quality in nearby communities. Rather than shirking BHP's responsibility for these major environmental issues by divesting this asset, wouldn't our company's reputation be better served by responsibly closing the mine and remediating the site?
Yes. Well, thank you. I mean, I we understand that Cerrejon has expressed concern at at some of the statements made by the United Nations Special Rapporteur, calling for the suspension of Cerrejon's operations in the area. But we also understand that members of the community have indicated they don't support, the same statement. So Sarah Hahn have confirmed their willingness to engage in open and constructive dialogue with the rapporteurs.
Sarah Hahn, as we understand it, will be sending a response to the concerns expressed, and we'll continue to engage with all interested parties to keep them informed of this process. And so we welcome this kind of dialogue.
Next question, is another one from Duncan Seiden from the Australian Shareholders Association. He asked, what is the impact of Rio Yukon Caves disaster on BHP's development of South Flank? Apparently, there are numerous caves along the whole range front there. Could you explain BHP's approach to preventing this problem?
Okay. Well, thanks again, mister Seddon, for the question. And as I emphasized at last year's AGMs, indigenous peoples are critical partners for our business and key stakeholders in BHP's operations globally. The Board and the company have a deep respect for indigenous peoples and their cultures and believe that strong partnerships with indigenous peoples are essential for BHP's business. And our overall approach is reflected in a number of the commitments that we've made in our indigenous peoples policy statement, our indigenous people strategy, our reconciliation action plan and the Uluru statement from the heart and our support of that.
BHP strongly supports the updating of Australia's cultural heritage laws in ways that give proper consideration and respect for traditional owners' views, and this is the FPIC or Free Prior and Informed Consent. And we've expressed this view in formal submissions to relevant governments inquiries that occurring right now within Australia. We've engaged and listened to Australian indigenous leaders at a local, state and national level, and we've clarified our commitment and approach to cultural heritage management and have taken on Board feedback from our traditional owners and that will strengthen our approach. So in terms of so that's our overall approach. In terms of the impact to South Flank from Yukon Gorge, I mean Yukon Gorge was a tragedy.
It was a loss of unique cultural heritage,
but
it was also a loss of trust. And it's had an impact across the industry as a whole. So we've listened to indigenous leaders from our operations at a state and national level. We've sought to clarify our commitment and approach to cultural heritage management. We've confirmed to traditional owners that, consistent with our normal processes, that will not act on existing Section 18 approvals without further consultation.
And we've set up a new body with our traditional owners at South Flank, the Banjima, where we've set up a heritage advisory council of senior elders that are going to work with us on that program. So but the short answer is, at this point, no change to the schedule at South Flank. Mike?
Thanks, Hinton. The only thing I would add is that, of course, all of this needs to start with internal culture and focus. So for myself and other senior leaders in BHP, we do spend time regularly with our Traditional Owner groups. That includes time on country, where we've been on country, learning about culture, hearing the stories of our traditional owners and also forming relationships over the around the Camp Fire. Last year, we had 28,000 people, so 85% of our workforce here in Australia who've been through training on Aboriginal and Torres Strait Islanders' history and culture.
And this was pre Juukan Gorge. This gets a lot of attention internally. We have robust processes in place. When new information comes to light in respect of the significance of a specific site, that's something where we have a commitment to ensure that, that information is taken into account and there's further engagement that occurs with the Traditional Owners about the path forward. And then as Ken said, we've recently formed together with Banjima elders or Banjima leaders a heritage advisory council, which will also have senior representation from BHP, specifically to oversee and inform the decisions taken at Southlake.
Next question, Chair, is another one from Richard Solly, this time in relation to Antamina in Peru. Could BHP confirm how many concessions for use of freshwater sources the company has in relation to the Antamina mine in Peru? What criteria are used to determine the use of rainwater and its consequences for local streams and aquifers?
Okay. Well, again, thank you for the question, Mr. Sully. I might just again give shareholders who aren't familiar with the asset a bit of an overview of Antamina, then I'll ask Mike to respond directly to the question around water. Antamina is, again, a nonoperated joint venture.
We own 33.75% of that asset. The other shareholders are Glencore, Teck and Mitsubishi. It's a Tier one asset. It commenced production in 02/2001, and it produces copper, zinc and silver.
Thanks, Ken. The so 100% of the freshwater used at Antamina comes from rainwater, and that rainwater is collected in the main water collection system. For the water that's used in the process plant, 99% or thereabouts of that water is made up of recycled water from the pumped in from the tailings ponds. Since 2013, Antamina has maintained only two water use licenses. One is for surface water and the other one is for groundwater.
We recognize from our participation in the shareholder committees at Antamina, so through our Board roles, that there's a strong focus there on continuous improvement that optimizes its use of water, and we're seeing a reduction or focus on reducing water use over time.
I'll group the two next two questions together, Chair, they're on a related theme. The first one comes from Lynne Marie Irving. She asks, you mentioned the implementation of a low emission energy generation plan. Do you consider gas a low emission energy source? The next question on this theme is from ACCR.
Earlier this month, in an interview with The Australian, Mike Henry said BHP supported the government's gas led recovery and welcomed anything that can be done to open up more supply in gas. Can the Chair confirm that BHP supports Australia's so called gas led recovery? How do taxpayer subsidies for the development of multiple new gas basins reconcile with BHP's support for the Paris Agreement?
Great. Well, thanks again for those questions. Under all current plausible scenarios, as I mentioned before, including the 1.5 degree scenario, fossil fuels will continue to be a significant part of the global energy mix. For example, fossil fuels play a role in all of the IPCC's 1.5 degree scenario. So this is not us, this is the IPCC scenarios.
And but the trends around each of those fossil fuels varies significantly. The share of primary energy from coal, for example, decreases the most. So it decreases by 90% to 100%. And the share of oil also declines, but the range is very broad between sort of 1090% depending on the pathway. And then to the specific question, again, is the IPCC's pathway to a 1.5 degree world, shows different scenarios that have both an increase and decrease in the share of natural gas.
So we all know where we need to get to. We need to get to zero emissions, and we need to get there quickly. And in our case, we've set a target of 02/1950, and we've set a target of 30% by 02/1930. The challenge for all of us is to find the pathway to get there. And that's why we've set up within our agenda Scope one, Scope two and Scope three emissions targets.
That's why we have put forward the $400,000,000 climate investment program. That's why we understand and have a pathway that gets us to the reduction target in 02/1930, and that's why we've linked all of the 10% all of those targets that we put together for climate change initiatives, we've linked those back to the incentive pay of our management team. But no one should doubt the intent of the company here. We the scenario analysis that we showed that we've done really shows that the more the world decarbonizes, the more valuable that BHP's portfolio becomes. And I think a really important point.
I'll let Mike speak to it speak I'm not familiar with, unfortunately, the quote that was in The Australian, but I'm sure I'm not sure if it's accurate, but Mike, you can probably comment to that.
Sure. So it was a broad statement about supporting the effort that the government has underway to help recovery of the economy. Part of that effort, of course, is opening up more gas to ensure that there's adequate gas supply to support reliable, affordable energy with a reducing emissions intensity relative to the current mix. Another part of the commitments or the effort that the government is investing is in CCS. And there were earlier questions, Ken, I think, to you around carbon capture
and
storage. The reality is that BHP is supportive of this totality of what's required both to enable recovery in the economy but also to ensure emissions reductions over time in line with the Paris Agreement. And you would have seen the recent commitment that we've made to purchase 50% of our electricity needs in Queensland from renewable energy, building upon an even more significant commitment that we made in Chile last year. So I think you have to look at the totality of what both what government is doing but also what BHP is both doing and then supporting.
Chair, the next question is from Mrs. Cheryl Brenner. Quite a lengthy submission, and some of the text has been lost as I believe it's exceeded the length limit on the system. But I'll read as much as I can, and you can respond. Asked in the UK shareholders forum on the September 23 year.
I asked this question, and the reply letter from our vice president of corporate affairs, though long, did not, it appears to me, answer this single very specific question. So I ask again: Chairman, what was the specific date on which, in respect of the first BHP person to become aware of a potential issue with data in connection with the Port HedlandTaplin Street dust pollution monitor. In respect of which awareness, the Western Australian State Government's environmental licensing body, the Department of Water and Environmental Regulation, has asserted that based on discussions, this was known to the Port Hedland Industries Council, Pty Ltd, and to our company as a member of this council for as long a period as dating back to April 2018. What was the date on which that first BHP person became aware of the potential issue?
Okay. Well, thank you, Ms. Brenner. I understand that you've raised these matters with Mike Henry directly and that a written response was provided earlier this week as you requested. But for the benefit of shareholders, perhaps I'll just ask Mike to quickly.
Sure, Ken. So to be honest, I don't know the exact date. But what I can say is that for some time, BHP was raising the issue that we believe that the Tappan Street Monitor might not be accurate. And that's because we were able to look at data from other sources. And so we were, I guess, advocating to the industry council that the veracity of the data coming off the Tappan Street monitor be checked.
I know that there were a number of times where a process was undertaken to audit the accuracy of that monitor. Assurances were provided to BHP that it was accurate. I think it was around the tail end of last calendar year, the beginning of this calendar year, we actually sourced another monitor and provided that to the council to set up alongside the Taplin Street monitor. And it was through that double check or the secondary check that finally, it was confirmed that the Taplin Street monitor was not performing as intended. So that was the point.
It would have been in possibly January or February of this calendar year that confirmation was received that wasn't accurate. And that was because of our persistence in asking for verification, reverification and ultimately providing a secondary monitor to really check whether or not it was performing as intended.
Another question from Mr. Cheryl Brenner on a on the same issue. Also incomplete, we've lost some of the questions due to the length of this one. I'll read it as best I can. Our company's iron ore material safety data sheet 2007 since replaced is understood to have included references to benign pneumoconiosis and termed siderosis, and I have been informed in writing by a company that the material safety data sheet was prepared at a time when the level of respirable crystalline silica present in BHP's product was not known.
So I asked, what is the period our company was supplying our company's product without knowing the level of respirable crystalline silica present in those products? Miss Brenna would also like to be sent a copy of the material safety data sheet so she can make her own assessments.
Ms.
Brenner, I think we'll have to come back to you on this one outside of the AGM because I don't know the exact period, but I assume that it was up until more recent times where it was confirmed that the levels were low or negligible. And hence, the safety data the material safety data sheet was updated, but perhaps we can come back to you formally on that outside of the AGM session.
Another question on Samarco Chair. This one from Mr. Morris Vincent Sheehan. And I think this may be the last question in general business. Given all the difficulties that you've experienced in Brazil, can you please advise what action you've taken to identify any problems in other areas of current and future operations?
Well, thank you for that question, Mr. Sheehan. I mean we've taken a number of important steps since Samarco in 2015. Dam safety reviews were completed following the guidelines recommended by the Canadian Dam Association, widely regarded as the most rigorous in the industry. They were completed for all active, inactive and closed, tailing storage facilities across our business.
The reviews identified that there were no significant deficiencies relating to the stability of our dams, but they did identify a number of opportunities for improvement around the design and the construction and operation of the dams. I think we identified 400 individual action items that were assigned to the business to implement, and 98% of those are now complete. And the 2% outstanding, it's just a function of the amount of time it takes to implement them. So we're still pushing forward to complete all 400, but 98% of those have been completed. We also established a tailings storage facility task force, and it's accountable for further enhancing our focus on tailings, including leading our ongoing participation in the setting of new international standards around this.
So there's a global tailings review that was co convened with the International Council of Minings and Metals. That's the ICMM. That's the peak body of the mining industry globally. So it was the ICMM. It was the United Nations Environmental Program and the Principles of Responsible Investing, or PRI, which is an NGO organization.
We've contributed to the development of that new global industry standard, and we fully support the transparency and independence of the review process. It's brought together a lot of stakeholders across a lot of disciplines to achieve this standard, and we're now very much focused on the implementation of it. I don't know, Mike, is there anything else you'd like to add?
I think that's it, Ken.
Chair, that was the last question for Items one through six.
Okay. Well, thanks, James. I think we'll move on then to Items seven to 10, which relate to remuneration. During the 2020 financial year, we implemented the remuneration policy that was approved at last year's AGMs. We believe this new policy is strongly aligned with company performance and shareholders' interests, and the implementation has gone smoothly.
Mike and Andrew, our CEOs during the year, achieved an outcome of 96% each, out of a target of 100% against the FY 2020 cash and deferred plan scorecard set at the start of the year. Now the vesting outcome for the twenty fifteen long term incentive plan awards was 48%, and this is the first vesting under the program since 2014. And BHP significantly outperformed the sector peer group. As we do every year, approval is being sought for share awards to the CEO. And this year, these awards are being made under the cash and deferred plan and long term incentive plan described in the remuneration policy that was approved at last year's AGMs.
And both awards are based on strict performance hurdles. The long term equity awards are subject to a holistic five year look back by the Board on performance. Item 10 relates to leaving entitlements of executive employees, and we seek shareholder approval for this item every three years. The entitlements for which shareholder approval is being sought this year is not materially different to those approved by shareholders in 2017. So maybe with introductory comments, James,
any questions? First question, again from Duncan Seddon. BHP proposes to reward executives for achieving carbon reduction targets. Can you explain what methods will be in place to prevent individual executives from gaming the system or prevent greenwashing in order to achieve a bonus?
Great. Well, thanks for that question, Mr. Seaton. I think it's important to note that these, reduction targets that we have set are absolute reductions. They're not intensity reductions.
So management is tasked to reduce the emissions absolutely. So any future growth, they'll have to just work that much harder. In order to decarbonize our operations, we need to reduce emissions from electricity. And quite frankly, we need to change the way that we operate. And what that typically means is we need to look for alternatives to diesel, which we use to power our fleets that move product around the operations.
So this is not as simple as installing energy saving devices or changing our maintenance practices. We need to partner with other resource industry companies, OEMs, other stakeholders to really incentivize the innovation to deliver these technical solutions that don't exist today. So the work's achievable, ambitious. And so very much having to reduce, emissions from, power generation, but also having to reduce emissions from, our mobile fleet.
Next question is from mister Robert Neil Simpson. He asks, is the board willing to allow shareholders a binding vote on the remuneration report? And if not, why not?
Great question. I mean shareholders in BHP already have a binding vote on remuneration policy every three years, and that's because we're dual listed. And in The U. K, a binding vote has been part of U. K.
Law since 2014. We last put our remuneration policy to shareholders at the twenty nineteen AGMs. Policy was approved with 93.5% support. And all of our director pay decisions, so whether it's an executive or a nonexecutive, must be made in accordance with that binding policy. And that also applies to the executive leadership team members as well.
Next question is from Mr. Robert Lorne. Given that many Board decisions have very long term consequences, such as opening a mine maybe fifty years, in duration, why are the so called long term incentives based on a much shorter time frame? The profitability of BHP is partly based on factors beyond the control of management, such as dam failures in Brazil. So why is the remuneration of top management based more on a fixed salary?
Right. So thanks for that question. I mean there's three components to executive remuneration. There's salary, there's the CDP, which is an incentive program, and then there's the long term incentive program. So I assume we're referring here to the third component, which is the long term incentive program.
And yes, the performance measure we use is relative shareholder returns over a five year period. Now this is longer than many other companies use. And the point you make that five years not being long enough in the context of a mine life, that's valid. But I think we also need to factor the fact that the tenure of an executive is also is not fifty years either. So it's difficult to get a perfect structure here.
So we think that five years is leading practice in terms of the vesting period. And I think it's from the outcomes that we're getting and the support for both our REM policy as well as our remuneration report, I believe that the majority of our shareholders believe our structure is working.
Next question jointly submitted from Tiniko Mabunda and Asif Mohammad. It's in relation to Ordinary Resolution 10, authority to approve leave entitlements. Leaving entitlements are incorporated in the remuneration policy to ensure departing employees and KMP are treated appropriately and in accordance with applicable laws. Why is this resolution applicable for three years and not one year if voted for? We recommend that the resolution only be viable from the year it has been approved by shareholders to the next Annual General Meeting, a one year time frame.
The resolution should be proposed again in BHP's next Annual General Meeting to ensure its alignment to any future changes to the remuneration policy.
Okay. Well, thank you for that question. Our leaving entitlements program is very similar to those that are used by other public companies. So it's very much a sort of stock standard, if you like, approach. We are it is up again for approval this year.
We do bring it for approval every three years, but it's not materially different to the program that was put up three years ago. So the program doesn't also vary that much. So to bring it forward to shareholders every year, I'm not sure that there's going to be a lot of value in that. But it's really the implementation and execution of that program that I think is the most important thing. And that's really what our Remco has responsibility for, to make sure that when we look at that, the conditions that we use in applying these programs and policies to people who are leaving the company, in particular, the application of the good leaver policy, I think it's the execution.
And we're very and that's reported through the remuneration report every year, which again is voted on every year. And we're happy, as a board to be held to account on the execution and implementation of that policy.
Chair, there are no further questions on items seven through 10.
Okay. Well, thanks, James. The next 12 items relate to the election and reelection of your directors. Eight of your directors are seeking reelection. Xiaochin Cleaver, Gary Goldberg, Christine O'Reilly and Dionne Weisler, our new directors, are each standing for election for the first time.
Now so that you can get to know our directors and our new directors a little a little better, I've asked each of them to say a few words.
Dear shareholders, hello, everyone. An unusual time in an unusual world. It's an honor and privilege for me to be considerate for the election to the board of BHP. I'm grateful to have this opportunity to introduce myself to you. Apart from a sound strategy, obsession of operational excellence, I'm particularly impressed by EHP's strong purpose, sense, and uncompromised commitment to health, safety, and environment, and a strong dedication in creating value to all stakeholders in every single decision taken.
I'm sure all of this will ensure a long term shareholder value and return. What do I bring to BHP? I've been spending more than twenty years in technology, specializing in software engineering, data analytics, cybersecurity, and digitalization. During my career with SAP, a world leader in enterprise software, I was in charge of the operations of technology and innovation, leading design and new applications globally, and managing engineering in China. Later on, I've been driving digital transformation in media industry, competing with technology giants and platform players.
I worked and studied in US, Germany, India, and China. Currently, I'm serving on the board of Capgemini, Infineon, and Amadeus. I believe my technology expertise, my international operation and change management experience, and my multicultural background could bring a unique perspective in execution of BHP's forward strategy and risk management. Together with the board, I believe I can meaningfully contribute to BHP's purpose of bringing people and resource together to build a better world. Thank you again for the opportunity to speak to you.
I'm looking forward.
Good evening, ladies and gentlemen, and thank you, Ken, for the opportunity to speak to shareholders. It's an honor to be asked to join BHP's Board of Directors. I'm a mining engineer by training, and I've spent my entire career in the mining sector working across a broad array of commodities and continents. It's an industry that means a lot to me personally and one that makes an important contribution to improving lives and creating value in communities and countries around the world. I bring more than thirty five years of global experience to this role, starting as a frontline supervisor and working my way up to a range of operational, strategic and executive leadership roles.
I spent thirty years at Rio Tinto and most recently served as Chief Executive Officer of Newmont. I've also been part of the collective drive to raise standards across the industry. This includes serving as the Co Chair for the Mining and Metals Industries of the World Economic Forum, as a Board Director and Treasurer for the International Council on Mining and Metals, as Vice Chair of the World Gold Council and as Chairman of the U. S. National Mining Association.
As mining industry leaders, our values are borne out in the work we do to keep people safe and to advance sustainability and to uphold global standards everywhere we operate. BHP plays an active role in creating and improving those standards within the resources sector. I believe this is fundamental to our ability to create significant long term value for all of our stakeholders, including you, our shareholders. BHP's commitment to safety, sustainability, social value and capital discipline, combined with its strategic focus on technical and operational excellence, make it a world leader. My own experience leading global mining companies and the lessons I've learned and relationships I've forged along the way give me the means to contribute to BHP's ongoing success.
I would be honored to receive your support for my election. Thank you.
Good evening, ladies and gentlemen. I'm both appreciative and proud to have the opportunity to join the board of such an iconic company, one that is important to Australia and a critical input to the world's economic recovery. I believe BHP is a company that can create long term shareholder value and contribute to the economic and social value of Australia and the world. My career includes over thirty years' experience in strategic, financial and operational positions in executive and nonexecutive roles across infrastructure, energy, medical research and the health insurance sectors. I'm currently a Non Executive Director of Stockland, Medibank Private and the Baker Heart and Diabetes Institute.
And I was previously a nonexecutive director of Transurban Group, CSL and Energy Australia. In my executive career, I served as Chief Executive Officer of Gasnet Australia Group and as Co Head of Unlisted Infrastructure Investments at Colonial First State Global Asset Management. If elected, I will bring all of my experience in large scale capital projects, finance, public policy and transformational strategy to the Board table as well as to the Risk and Audit and Remuneration Committees. It is an exciting time to join this great company and help guide its success over what will be a critical time for the world as we seek to bring positive momentum to the economic and health recovery of the world post COVID-nineteen. I thank you all for your consideration from my election to the board.
Good evening, everyone. When I was first approached about joining the BHP board, I saw a company that understands the opportunities to create a successful future for its shareholders and customers, as well as value for shareholders and society. My background is in the information technology sector, having held executive and operational roles across the globe, including North America, Europe, and the Asia Pacific region. I've lived and worked in these very different markets, China, which was a rich experience. I previously served as president and CEO of HP, a company that has transformed its business model to create opportunities as businesses and consumers demand more and more value from their investments in technology.
A core part of stakeholder demand has been based on the value a corporation delivers beyond just the financial. In my experience, communications and technology drive value growth for companies, and this will increasingly be the case in all sectors, including mining. I'm also a director of Thermo Fisher Scientific, a US $170,000,000,000 market cap company focused on servicing scientific advancement with customers in research, technology, environment, and medical research. And I recently joined the board of Intel Corporation, the 215 US billion dollar market cap company and the world's largest semiconductor chip manufacturer on a revenue basis. I believe mining is as essential to global advancement as technology and science.
I'm humbled by the opportunity to serve as a director of BHP and contribute my experience in operations and capital management as well as my perspective on current and emerging ESG issues. Thank you for your consideration and this opportunity.
Great. Well, hope you agree with us that those are some very strong additions to your Board. And James, happy to take any questions on items 11 to 22.
We have one question on those items, Chair. It's from Mr. Douglas Leslie. He states, chair mister chair Ken McKenzie is reported in the press as accepting an advisory role in the new investment bank, Barron Joey Capital. Can he be pleased can he please be asked at the AGM to explain how he can carry out this his BHP role to the full satisfaction of shareholders who see potential conflicts of interest and a major distraction in this other Baron Joey role?
If he cannot, he should be requested to vacate one or the other role.
Great. Well, thank you for your question, Mr. Leslie. I think it's appropriate that I let, Shruti Vadira, who's our senior independent director, answer the question. So again, we'll test our technology.
Shriti, are you there?
I am.
Please
Ken. Thank you, Mr. Leslie, for your question. I'm replying as the senior independent director on behalf of the rest of the directors as it is our responsibility to approve all external appointments by the chair, ensuring that he continues to have enough time to dedicate to the role of chair of BHP and that any conflicts of interest are manageable. Ken advised me and the rest of the Board of his potential role as a part time adviser with Baron Joey, and he sought formal approval from the Board in advance of accepting the role.
The nominations and governance committee and then the full board, without Ken being present and chaired by me for those sections of the meetings, considered and ultimately approved the chair taking this position on the basis of a number of conditions. These include that BHP remains the Chair's number one priority at all times that the position at Barron is part time advisory, not executive that Baron Joy will not advise BHP that the Chair himself will not advise on transactions or advise BHP competitors or our significant customers or suppliers. In addition, as we do for all directors, the board will continue to monitor potential conflicts on an ongoing basis and review them formally on an annual basis. So in summary, we have complete confidence that this appointment will not interfere with the chair's commitment and responsibility to BHP and its shareholders and that potential conflicts are being appropriately managed. And indeed, I would like to add that we remain clear that Ken is an outstanding chair.
Great. Well, thank you for that, Shruti. James, do we have any more questions on these items?
No further questions, Chair.
Okay. Well, then we'll move on. The last two items have been requisitioned by a group of shareholders in BHP Group Limited. As previously mentioned, Item 24 has been withdrawn and is therefore not for consideration at this meeting. Item 23 seeks an amendment to the constitution of BHP Group Limited to permit shareholders to express opinions or make requests about the management of the company by ordinary resolution at general meetings.
Item 25 recommends that BHP suspends its membership of industry associations where advocacy relating to COVID-nineteen economic stimulus measures is inconsistent with the goals of the Paris Agreement. Now as Caroline has mentioned, only if Item 23 is passed as a special resolution will Item 25 be deemed to be valid. Now the Board gave these resolutions very close consideration and ultimately concluded that we could not support them. The Board has therefore recommended a vote against both resolutions. The Board's reasoning is set out in full in the notice of meeting.
So thanks, James, and I'll take questions on Items twenty three and twenty five.
We have two questions on these items, Chair, and I'll read them together. The first one is submitted by ACCR. They ask last week, BHP suspended its membership of the Queensland Resources Council after the QRC launched an advertising campaign that urges the public to vote against a specific party at the Queensland state election on thirty one October. While ACCR welcomes the suspension, why didn't BHP suspend its membership of the New South Wales Minerals Council last year when it distributed highly partisan materials during the New South Wales state election. On what basis will BHP rejoin the QRC?
Second question on this theme is from Michael Kind and Alessandra Sciara on behalf of ShareAction. What steps has BHP taken to engage with industry associations that the company is part of and that are actively and aggressively working to stymie progress on climate change in Australia? And in cases where engagement has been fruitless, is the company considering exiting these associations? If not, how does it plan to escalate engagement with these associations?
Okay. Well, thank you for those questions. I think I'll start by just giving shareholders an overview of how we manage our industry associations and the governance processes around that. And I'm happy to talk to the QRC and New South Wales Minerals Council question. And then Mike, I might pass to you on the engagement and how that's managed with the industry associations.
Sure.
So look, first and foremost, we recently announced a number of changes in our approach to industry associations, and this was following extensive engagement with investors and other stakeholders. The reforms include providing greater clarity on the policy positions that should be reflected in association advocacy, so we ask them for that. We then monitor these advocacy plans in real time. And we're working with key associations in Australia to provide more transparency on their priorities and how, not just what, but how they go about doing their advocacy programs. Now this approach, as I mentioned, we did a lot of engagement with shareholders, this probably over a period of eight or ten months.
And as a result, Climate Action one hundred plus which is a group of large shareholders has welcomed this approach as have ACSI, the Association sorry, the Australian Council of Superannuation Investors. So I think a number of important improvements to our existing program, which was already robust with, we were doing annual industry association reviews, and we were publishing those. And so we had our policies. We were mapping the industry association's advocacy against that, and we were publishing the outcomes. And where we saw material misalignment, we were either working with those associations to close the gaps around that material alignment or, quite frankly, we were exiting.
And we have a strong track record of action around all of that. Now these new reforms that we've developed are expected to be fully implemented by the end of this year, and I'm sure Michael will talk to how we actually go about doing that. In terms of the QRC, I'm very familiar with that one because it's quite frankly current. We suspended our membership of the Queensland Resource Council recently, last week, as a matter of fact. And this follows a decision by the QRC to undertake advertising that targeted the overall standing of one political party, during the Queensland election.
Now we had expressed to the QRC on several occasions our opposition to the advertising approach and had formally requested that it be withdrawn. And unfortunately, this didn't occur. So we support communications campaigns that are focused on policies and policy issues of interest to the resources industry and also the people who rely on the industry. But we don't support communication campaigns that target the overall standing of one or more political parties. So it crossed over from policies to parties, and that's a red line for us.
So that's a fulsome description of what happened with the QRC. We do an industry association review every year. We identify gaps. We work on closing those gaps. Our new policy will do that in real time.
And in the particular case of the New South Wales, the materials that are the particular case that the ACCR is raising here, to be honest, I'm not familiar with it. Mike, you might want to comment if you're familiar with that. But maybe otherwise, please comment on the engagement.
Okay. So I might touch on both the New South Wales Minerals Council case of a year ago, Ken, and then I'll talk about engagement. So in the case of New South Wales Minerals Council, a few differences there. One is that BHP was not a participant on the Board of the New South Wales Minerals Council at the time. It was also part of a broader, more positive campaign.
Having said that, these are things that are constantly under review, and we've made a very clear statement with the suspension of our membership in the QRC as a result of the very of campaign that they were undertaking recently, which was on the campaigning on the party rather than the policies. Now if I talk then more broadly about engagement and how we're going to go about implementing the changes that we've established here, we have to have very clear standards. There then has to be monitoring of those standards, and that has to be backed up through the way that we engage with our industry associations. Now to that end, we've published our climate policy standards, which will then provide transparency externally as to the standards that we set that we then expect our industry associations to meet. Secondly, we've asked our associations here in Australia to develop an annual advocacy plan there's clarity within the association on which topics will be the subject of advocacy.
We've also asked for these associations to come together to get clarity around what will sit at the national level, so with a national association versus what will sit with state associations and what the apportionment of primary focus of advocacy will be between those groups. Against that backdrop then, as Ken said, we have real time monitoring. That will be undertaken by a team that we have internally that will be monitoring the positions taken, the advocacy undertaken, the statements made by our industry associations. And in real time, that will be monitored. And if there's something that we believe is misaligned with our expectations and the policies that we've set out, then there would be direct engagement, initially on the part of the representatives that we have in those bodies to understand what's happened and then to seek to resolve that, bring it back in alignment.
And if that's not the case, going back to one part of the question that was asked around whether we would withdraw, the answer is yes. If we didn't believe that an industry association was aligned or if we believe an industry association was materially misaligned and there wasn't a process in place to resolve that and achieve alignment, then we would need to withdraw.
James?
No further questions.
Okay. Well, thank you. Ladies and gentlemen, thank you for your questions. This now concludes the formal business of the meeting. We value your comments and ideas, and we'll continue to work for ongoing improvement on your behalf.
Now I'm going to close the poll five minutes after the conclusion of the meeting. So you if you have not yet voted, please take the opportunity to do so now. You can now see the proxies of each item of business on the screens. The results of the annual general meetings will be notified to the stock exchanges and published on our website following the conclusion of our BHP Group plc AGM tomorrow. Thank you very much for joining us.