Thursday, September 16, 2010

BHP chief executive 'selling out' Australia and the facts

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BHP Chief Executive Marius Kloppers has come out in support of a carbon tax. He thinks Australia should take the initiative because he thinks its inevitable. Really?
This is a very suspicious thing for him to say. It stands out in stark opposition to the interests of BHP shareholders....or does it. The only reason that would not be the case would be:
1. If there was some strategic benefit in BHP paying tax before Australia's international competitors. This is unlikely because it would result in a stronger AUD and a higher tax obligation by BHP.
2. If BHP is supporting the carbon tax in a 'secret deal'. It strikes me as rather coincidental that Kloppers would be supporting a carbon tax just after his company (BHP) and Rio Rinto won a huge tax concession over the Resource Rent Tax.

There is however the possibility that Kloppers is an idiot, or more specifically a 'liberal idiot', and that cannot be ruled out. There is no reason to think that bureaucratic enterprises like BHP are well-managed by critical thinkers. It would not surprise me if they accept the climate science of academics from the majority at face value, when they should be critically engaged in assessing it. Science is not a popularity contest. I have seen no evidence to suggest that critical arguments are being given the attention they deserve. Its all about having the 'popular' or political numbers.

It does not concern me that Rio Tinto is not supporting a carbon tax, because they would not have been privy to any 'possible deal'. The integrity of the BHP CEO is in question. We might ask if there is any strategic advantage for BHP in taking over a fertiliser enterprise like Potash Corp. There might be some more significant strategic game play here than I think. I can't see such a link though....so might be reading too much into it. Maybe its just another bulk commodities business it can dominate.
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Author
Andrew Sheldon
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