‘Test for the board’: UK pension fund heaps pressure on Rio Tinto boss over Juukan Gorge blasts

  • 9/9/2020
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The Church of England’s pension board, which manages more than £2.8bn ($AU5bn) in retirement savings, has poured pressure on the board of Rio Tinto to take action against its chief executive over the global miner’s decision to blow up culturally significant 46,000-year-old rock shelters in Australia. Speaking to the BBC on Wednesday, the pension board’s director of ethics and engagement, Adam Matthews, stopped short of calling for CEO Jean-Sébastien Jacques to be sacked but said investors felt a decision by the Rio board to cut the bonuses of executives in response to the scandal was not sufficient. “We’ve been part of dialogues with the chairman over the past months, and with other investors both in Australia and in the UK, and we’ve expressed the deep concern that we have around this and so it’s very much a test for the board of how serious their response is,” Matthews said when asked if Jacques should go. The Rio Tinto board is due to meet this week amid heavy criticism of its behaviour by investors, Australian Indigenous groups and political figures. A well-placed market source said some among Rio Tinto’s major investors now believed the company’s crisis could only be ended by Jaques’ departure and the only question remaining was how quickly it could get him out the door. Matthews said there was “disquiet” among Rio Tinto board members over the company’s decision in May to blow up the ancient rock shelters at Juukan Gorge, in Western Australia that were significant to the local Puutu Kunti Kurrama and Pinikura (PKKP) people and showed signs of continual human occupation through the last Ice Age. “They’ll be discussing it this week, but remember the company is under the spotlight on this,” he said. The church pension fund’s call comes on top of those by Australia’s largest superannuation fund, AustralianSuper, and the UK-based Local Authority Pension fund (LAPFF) which have heaped pressure on Rio Tinto’s board to sack Jacques. Rio Tinto has also been disparaged by two former Australian prime ministers. On Wednesday, the former Labor PM, Kevin Rudd, said Rio Tinto “will soon be known in Australia as Rio TNT”. “Rio Tintohas blown up its own reputation as anything approximating a responsible corporate citizen in Australia,” Rudd told the ABC. “The executives responsible for this decision should no longer be executives. For the company, I think their reputation now is mud.” Former Coalition prime minister Malcolm Turnbull told the ABC on Monday he had “no idea what went wrong in Rio Tinto, what went wrong with the WA government … to allow it to happen, it just staggers me”. Rio Tinto told an Australian parliamentary inquiry it decided to blow up the caves because doing so would allow it to access better quality iron ore than leaving the site undisturbed. As part of the parliamentary process, the company on Friday released a trove of documents showing that it hired lawyers in preparation to fight off possible attempts by the traditional owners to go to court and stop the blast – a move that was also condemned by investors. In August, following an internal review conducted by board member Michael L’Estrange, the company’s board stripped $5m from Jacques’ bonus and about $1m from the bonus of its head of iron ore, Chris Salisbury. However, the documents released by the company on Friday have raised questions among investors about the accuracy of the internal review’s findings. “This is still very much ongoing and so it’s concerning that there seems to be sort of different disclosure information at odds with the full report,” Matthews said. Jacques is meeting with traditional owners on whose lands Rio Tinto holds mining leases in Western Australia. He met with representatives from the Puutu Kunti Kurrama and Pinkura people on Tuesday and was scheduled to hold on-country meetings with other traditional owners later in the week. The future of the federal parliamentary inquiry is itself in doubt. The inquiry, chaired by government MP Warren Entsch, was preparing to travel to the Pilbara this week to meet traditional owners and view the destruction first, but those plans were abruptly called off on Monday. The WA state government has, according to Entsch, “changed the rules” of travel, “preventing” them from visiting. “I’m profoundly disappointed about this, as is the committee. We were really starting to gather some very interesting information,” Entsch told the ABC. “It’s impossible for us, in my view, to be able to do justice to this inquiry and have full transparency when we’re making decisions unless we’re going to be able to sit down face-to-face with those affected by it.” WA amended requirements for federal parliamentarians entering the state “to minimise the risk of Covid-19”, but WA Premier, Mark McGowan said the travel request had not been rejected. “The chair was advised if the committee still wished to pursue its travel, then application should be made to WA Police, who manage the exemption process,” a spokesman said. The spokesman said the restrictions are to “protect Aboriginal people living in those communities [in the Pilbara] who are more at risk of serious illness from the coronavirus than other Western Australians.” But Entsch said conducting hearings long distance was not an option because of language and cultural barriers. The WA government would not be drawn on Entsch’s request for a moratorium on s18 applications while the Inquiry is on hold. Under section 18 of the WA Aboriginal heritage act, traditional owners are unable to lodge objections or to prevent their sacred sites from being damaged. “The minister [Wyatt] expects any proponents to have properly consulted with relevant traditional owners,” the spokesman said. The WA Government has released a new draft legislation for public comment, in which s18 has been abolished, but it is unlikely to be introduced to parliament before the next state election in March. Director of the Cape York Institute, Noel Pearson who dealt with Rio Tinto in Queensland after the introduction of native title in the 1990s, said both the internal review and Rio Tinto’s lengthy response to parliamentary questions on notice were “inadequate” and “evasive”. “What Rio Tinto seems to not have accepted is that the starting place for the future has got to be the telling of the truth,” Pearson said.

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