Holding Rio Tinto accountable
Actions by Rio Tinto leading to the destruction of Aboriginal heritage at Juukan Gorge were disgraceful, negligent and wilful - and the executive leadership of the company must be held to account.
More than a year has passed, yet Rio Tinto and its board have fundamentally been let off the hook for obliterating the 46,000-year-old site in WA’s Pilbara region.
At the time, the Australian Financial Review reported the destruction was “an egregious story of corporate blindness”.
The interim report of this committee described the loss of such a significant cultural, ethnographic, and archaeological feature as “the theft of a vital part” of the living culture of the traditional owners, the Puutu Kunti Kurrama and Pinikura (PKKP) people.
The PKKP characterised the event as “devastating for us”.
Rio has conceded it should never have happened and breached the trust placed in it by the PKKP over almost two decades.
Despite the outrage shown in Australia and beyond, no impactful financial penalty or regulatory sanction has been imposed on Rio to date.
Chairman Simon Thompson has admitted he was ultimately accountable yet has been allowed the extraordinary privilege of determining his own exit-strategy, choosing to remain in the role for another year.
Non-executive director Mr Michael L’Estrange has resigned.
He led an internal review that failed to adequately explain why management responsible for cultural heritage protection was unaware of the Gorge’s enormous significance.
Rio Tinto’s most recent annual report, however, revealed that Mr L’Estrange was paid 46 per cent on top of his annual fees for conducting the inquiry, totalling more than $280,000.
Former Chief Executive Jean-Sebastien Jacques stepped down from the role in January this year, but remained on Rio Tinto payroll until March, after receiving a 20 per cent pay rise and taking home $12.85 million for the year.
And while iron ore boss Chris Salisbury and London-based former corporate relations chief Simone Niven lost their jobs and have foregone bonuses, they will still receive eight months’ wages in lieu of notice, totalling $718,000 and £307,000 respectively.
Rio Tinto’s shareholders delivered a strong message at its 2021 AGM about the poor corporate culture that Juukan Gorge exposed to the world.
In one of the most significant shareholder protests in Australian corporate history, 60.8 per cent voted against the miner’s remuneration report.
The report estimated Jacques, Salisbury and Niven collectively left Rio Tinto, subject to vesting hurdles, with more than 765,000 shares worth tens of millions each.
In rejecting the report, The Australian Shareholders Association said it was an “unsettling fact that the former CEO has departed with a very large remuneration package whilst being held accountable for the Juukan Gorge disaster”.
The UK-based Local Authority Pension Fund Forum (LAPFF) was also critical, stating Rio Tinto’s leaders had failed over the course of the year to take adequate accountability.
Investors did secure a new policy strengthening the power of future boards to claw back pay and bonuses, as well as increasing the emphasis on environmental, governance and social performance in awarding bonuses.
But they failed to make Rio Tinto more Australian-orientated, with no clear answer why its headquarters would remain in London, rather than relocate to an Australian capital city.
“Without Australia, we wouldn't be where we are today. It’s where more than half our assets are based and for thousands of our employees, Australia is home.” – Rio Tinto, Our commitment to Australia.
Institutional investors appear to be softening, giving Rio the benefit of the doubt, with LAPFF suggesting it is now “heading in the right direction”.
Media coverage around the release of Rio Tinto’s Communities and Social Performance report last month included illuminating results from an anonymous survey of ten traditional owner groups in the Pilbara.
The West Australian and The Australian, among other publications, reported on 30 September that that while the groups generally approved of commitments made by the miner to enhance Indigenous engagement and protect cultural heritage, genuine action was required for change to occur.
One response noted that “the commitment is admirable … but the proof will be in the breadth of the modernisation”.
Another accused Rio Tinto of doing the “bare minimum required to recover its reputation” when it came to improving agreements.
On the Australian advisory group being established to help Rio Tinto better understand Indigenous issues, responses were mixed, with groups highlighting the need for the board to “engage directly with its traditional owner stakeholders” and adding “(it) is about establishing relationships”.
The head of the Australian Council of Superannuation Investors was also quoted at the time, welcoming Rio Tinto’s initial progress but noting this was only “an early signpost on a long road ahead”.
In Rio Tinto’s defence, it has taken decisive steps to strengthen internal processes, implement new heritage protocols, empower line managers, and modernise agreements with traditional owners.
It is recognised that Rio Tinto has moved on – and been allowed to move on – with business as usual, acknowledging that these were “sensitive and contentious issues”, but noting that it had “no choice” but to allow Jacques, Salisbury and Niven to depart in good standing and with the bulk of their entitlements.
There should be a judicial inquiry into the destruction of the site, investigating if conduct preceding or following the event warrants further action – including criminal charges.
It is worthwhile noting here that a Royal Commission is not the only form of judicial inquiry.
Many other methods have been established in recent years to investigate misconduct, corruption, or conduct review for the purposes of law reform, which engage retired judges or senior members of the legal profession.
The success and integrity of Australia’s mining industry is central to the prosperity of states such as Western Australia and Queensland and has substantial bearing on Australia’s wealth.
An inquiry ensures Rio Tinto’s executive leadership is held to proper account, while protecting the international reputation of Australia’s mining industry and every other industry stakeholder.
How best to protect Indigenous cultural heritage and the advancement of the resources sector.
Rio Tinto’s failures should not reflect upon the entire resources sector.
Much of the submissions and evidence presented to the committee stated outright opposition to the very existence of the resources sector, rather than improving the capacity of Indigenous people to protect their cultural heritage.
We cannot ignore that the resources sector is one of largest generators of employment and economic opportunity in our country – including for Indigenous Australians.
I reject the committee’s recommendations that seek to establish new, duplicate and unnecessary laws and regulations at a Federal level.
There is a great danger these proposed laws and regulations will be used as deliberate weapons against the resources sector, produce longer approval lead times, drive up project approval costs, provide further opportunity for activist activity, and ultimately undermine job opportunities and other economic benefits for Indigenous people.
As the current framework is widely accepted to provide sufficient protection, duplication of cultural heritage protection laws at a Federal level is not supported by peak industry bodies.
It also was not a recommendation following the 2013 Productivity Commission Inquiry into Mineral and Energy Resources Exploration in Australia.
However, the Commonwealth could play a unique and distinct role in setting standards and accreditation, assisting the States to develop and adopt best practice around transparency, information sharing, stakeholder engagement and regulatory improvement.
Instead of new laws and regulations, there is already an existing Federal process for the registration of significant cultural heritage sites that could be streamlined and enhanced to enable Indigenous people to list sites for protection.
The existing Federal process is the National Heritage List, which is a database of places of natural, historic and Indigenous significance to Australia.
Currently, people can nominate a place with outstanding value for inclusion on the List, then the Australian Heritage Council assesses that value against set criteria and makes recommendations to the Minister for the Environment about listing.
The final decision on listing is made by that Minister. This could perhaps be enhanced by involving the Minister for Indigenous Australians in decisions on listing Indigenous places of outstanding significance.
It should be noted that listed places are protected by Australian Government laws, as well as special agreements with State and Territory Governments and Indigenous and private owners.
Places on the List are protected under the Commonwealth’s Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), which requires that approval be obtained before any action takes place that could have a significant impact on the national heritage values of a listed place.
If Juukan Gorge were on this List, it is unlikely that the destruction of the site would ever have occurred.
Changes should ensure that greater access to the existing National Heritage List process, and appropriate communication about the process, is provided to Indigenous people.
Importantly, overwhelming and convincing evidence has been presented that proposes the end of so-called “gag clauses” in contracts and agreements between resources companies and Indigenous people.
Such clauses impede the free and timely disclosure of corporate and other behaviour that may be motivated to limit the protection of cultural heritage with irreparable consquences.
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Senator Smith
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Mr George Christensen MP
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