Support builds for 'forensic' probe into Rio Tinto's land agreements
by Nick ToscanoIncensed Rio Tinto shareholders and Indigenous leaders are demanding an independent review into all of the miner's agreements with traditional landowners across its Australian operations after the destruction of ancient rock shelters triggered an executive purge.
The miner's board on Friday bowed to intense investor pressure and removed chief executive Jean-Sebastien Jacques and two deputies, iron ore boss Chris Salisbury and head of corporate affairs Simone Niven, for the blasting of the 46,000-year-old Juukan Gorge heritage site.
The chief executive of $52 billion super fund HESTA, Debby Blakey, said she welcomed the removal of the three executives. But she said an independent review was still necessary and has been seeking support from other major global investors for it. "The board has yet to adequately demonstrate to investors that they have appropriate governance and oversight arrangements in place to manage this risk," Ms Blakey said.
The 11th largest pension fund in the world, the California State Teachers' Retirement System, said it would publicly support the independent review.
Jamie Lowe, of the National Native Title Council, which represents 70 traditional owner groups and native title bodies also said he supported HESTA's proposal. "It took a catastrophe for people to start looking at this, it took something this dramatic," he said. "But to press the reset button, there needs to be a forensic review of their systems, of the culture within their workplace and the values within their workplace."
The Juukan Gorge disaster has also renewed long-held concerns about Rio Tinto’s leadership becoming overly London-centric, despite the company's Pilbara iron ore operations accounting for more than 90 per cent of its global profits.
Last week the board elevated one Australian representative, former lawyer Simon McKeon, to become Rio's senior independent director. The Age and The Sydney Morning Herald have been told that another Australian on the board, Megan Clark, could also play a more prominent role in the company's "healing process". Ms Clark is a former head of the CSIRO and a former vice president with Rio's mining rival, BHP.
In the immediate fallout from the destruction of the significant Aboriginal site in May, Rio Tinto's board launched a two-month review of how the blast proceeded without consent of the traditional owners. While determining no single cause or error were to blame, its findings pointed to a "series of decisions, actions and omissions" over an extended period of time, underpinned by failings in the company's processes of data-sharing and engagement with the traditional owners – the Puutu Kunti Kurrama and Pinikura people (PKKP).
The review's final recommendation – to limit penalties to about $7 million in bonus cuts for Mr Jacques, Mr Salisbury and Ms Niven – was widely denounced as inadequate by some of the company's biggest investors in Australia and the United Kingdom, and fuelled the pressure that ultimately forced the board to dismiss all three executives on Friday.
One of Rio Tinto's largest shareholders, Aberdeen Standard Investments, said it expected oversight and accountability for cultural heritage management to be elevated to the highest levels within Rio Tinto.
"We expect a level of transparency that will afford investors the confidence that cultural heritage is being managed appropriately, so that stakeholders can be confident that similar oversights do not recur," Aberdeen investment manager Camille Simeon said.