The U.S. Justice Department and Australian Federal Police are scrutinizing BHP Billiton's Olympic sponsorship and hospitality to determine whether Chinese government officials or executives at state-owned companies received inducements that could have resulted in BHP obtaining a business advantage, The Australian Financial Review newspaper reported Wednesday.
The Anglo-Australian company said it is co-operating with the investigations.
"We believe our Olympic activities complied with all applicable law," the world's biggest miner said in a statement.
"BHP Billiton is fully committed to operating with integrity and the group's policies specifically prohibit engaging in bribery in all its forms," it said.
Between 2000 and 2008, the company spent millions of dollars on its Olympics sponsorship and hospitality. BHP Billiton was classified as an official games sponsor and provided the metals to make the 6,000 gold, silver and bronze medals won at the Beijing Olympics and Paralympics. China's huge industrial demand for raw materials has made the country BHP Billiton's biggest market.
The U.S. Justice Department told the newspaper in response to a freedom of information request that its criminal division was conducting "law enforcement proceedings" involving BHP Billiton.
Australian Federal Police confirmed its involvement in "Australian aspects of the U.S. investigation."
"Foreign bribery investigations are inherently complex due to their cross border nature and often involve co-ordination between law enforcement and regulatory agencies," federal police said in a statement. It declined to elaborate on the BHP Billiton investigation.
The newspaper said the company and several staff or consultants may face criminal charges or civil sanctions.
The relevant laws are the U.S. Foreign Corrupt Practices Act — which carries penalties of 5 years prison and fines up to $2 million — as well as Australian corporate and criminal laws, it said.
Foreign bribery laws prohibit any benefit being given to a public official in order to obtain a business advantage.
The newspaper reported that Australia federal police reviewed U.S. files and discovered "suspicious transactions that had been recorded as legitimate business payments" by BHP Billiton.
It said much of the investigation will turn on how law enforcement authorities view officials from China's state-owned steel and aluminum companies in relation to foreign bribery laws.
If these Chinese officials are classed as serving government officials, then the company's provision of hotel rooms, meals and entertainment could be deemed illegal inducements.