We must regain the public’s trust, says Orica chair Broomhead

Orica chairman Malcolm Broomhead has called for business in Australia to regain the trust of communities.

Orica managing director Alberto Calderon. Picture: Colin Murty

Orica chairman Malcolm Broomhead has called for business in Australia to regain the trust of communities in an impassioned speech at the explosives company’s annual general meeting yesterday.

Mr Broomhead, who is also a director of BHP Billiton, said community’s trust in business had been rocked by the GFC and had weakened even further since.

“At no time has the lack of faith in big institutions — both government and commercial — been more starkly obvious,” Mr Broomhead said, pointing to the Brexit vote in Britain and Donald Trump’s recent triumph in the US presidential election.

He said it was up to industry to press its case about the mutual benefits of capitalism, highlighting the alleviation of poverty in China in the past 20 years after its shift to a capitalist, free enterprise economy.

“In both Brexit and the new US president-elect, the view of many in the communities who voted for both was that the core of the capitalist system — both business and democratic government institutions — had let them down, and so the desire is to retreat away from our current globalised business and government institutions to an undefined, simpler world,” he said. “In this context, it is important for business to get better at explaining our contribution and ensuring people understand that our standard of living relies on the contributions of industry. In the absence of business taking a credible and genuine leadership position in this, the vacuum will be and is being filled by others.”

Later, Orica chief executive Alberto Calderon said he was not yet ready to declare that the resources sector was through the worst of the cycle, despite a sharp uptick in Orica shares in recent months as investors bet on a looming improvement in the explosives company’s earnings.

Mr Calderon said he expected the business would continue to face “operational headwinds” in 2017 despite signs of stability among its mining customers.

“While the market is challenging now and in the short to medium term, there seems to be some stabilisation. While I’m not prepared to call the bottom of the cycle, it does feel like the mining world has reached an inflection point,” Mr Calderon said. “However, we remain cautious and conservative. We are confident that we are focusing on the right things for both the down time and the up cycle when it comes.”

Orica shares closed 10c higher yesterday at $16.87.