BHP makes 30-day payment terms standard for local suppliers

BMA operations. Image: BHP.

BHP has changed its procurement policies, extending preferred payment terms of 30 days to all Australian businesses in local areas.

The change means that more than 600 local businesses in Queensland and 300 local businesses in New South Wales will receive preferential payment terms from December 1, according to the company.

BHP Billiton Mitsubishi Alliance (BMA) and NSW Energy Coal will introduce the new terms. BMA asset president James Palmer said the decision was made following a period of engagement with suppliers, host communities, the Resource Industry Network and the federal government.

“We’ve heard concerns about the impact of our standard global payment terms on local businesses, and recognise there is more we can do to support our local communities,” Palmer said.

“We will extend our preferential terms further than the existing small and local businesses already captured.”

BHP’s suppliers in a local area like Mackay, regardless of size, will all be placed on 30-day payment terms following the change, helping more than 340 businesses.

It will also extend the 30-day payment terms to businesses in the Rockhampton region for the first time. The company has rezoned the region as local as part of a review of its procurement practices.

In NSW, BHP’s suppliers with a primary operating presence in Newcastle, Maitland, Muswellbrook, Singleton, Denman and Scone will also be placed on 30-day payment terms, regardless of size.

BHP vice president supply Sundeep Singh said the change would be a huge win for Central Queensland and NSW.

“As well as being a major employer in regional communities, we are also a major contributor to local economies – through the jobs we provide, and the goods and services we purchase,” Singh said.

Businesses will be automatically moved to 30-day terms on December 1 and won’t need to apply for the new payment terms, BHP advised.

The company will also host a workshop for local suppliers in Mackay during December to assist them with the transition to the updated procurement system.

Source: BHP.