Rio Tinto exec salaries cut by $7m after Aboriginal site destruction review

24 August 2020, Written by Business News Australia

Rio Tinto exec salaries cut by $7m after Aboriginal site destruction review

Rio Tinto (ASX: RIO) chief executive officer Jean-Sebastien Jacques (pictured) will have his pay docked by around 38 per cent following a review of the practices and systems that led to the destruction of the heritage Juukan rockshelters in the Pilbara in May.

Jacques' payments will go down by $4.93 million, while Rio's chief executive for iron ore Chris Salisbury' payment will be cut by the same percentage, or just over $1.1 million.

Group executive for corporate relations Simon Niven will see her salary cut by around a quarter, or $958,282. 

The rockshelters known as Juukan 1 and Juukan 2 were destroyed on 24 May on land of the Puutu Kunti Kurrama and Pinikura (PKKP) people, as part of Rio Tinto's development of the Brockman 4 mine in Western Australia. 

The event followed a decade of consultation in which Indigenous owners were not informed of the fact there were options available whereby the caves need not have been desecrated. 

The caves held evidence of human occupation over 46,000 years ago, revealed in archeological digs that took place after the mining giant was granted authorisation to excavate, destruct or damage the sites in 2013. The tenements fall within a Native Title claim awarded in 2015.

Despite the public backlash against the company's actions, the market's response was quite the opposite with RIO shares having risen by close to 9 per cent since the caves were destroyed.

At $100.37 each, RIO shares are $7 shy of their 10-year high achieved in January.

Rio Tinto's review concluded while it had obtained legal authority to impact the Juukan rockshelters, it fell short of the standards and internal guidance that Rio Tinto sets for itself, over and above its legal obligations. 

The miner concluded the event was the result of a series of decisions, actions and omissions over an extended period of time, underpinned by flaws in systems, data sharing, engagement within the company and with the PKKP, and poor decision-making.

"While the review provides a clear framework for change, it is important to emphasise that this is the start of a process, not the end," says Rio Tinto chairman Simon Thompson.

"We will implement important new measures and governance to ensure we do not repeat what happened at Juukan Gorge and we will continue our work to rebuild trust with the Puutu Kunti Kurrama and Pinikura people."

Thompson says the company fully recognises traditional owners must be treated as equal partners which includes regular, open and respectful dialogue.

"We look forward to continuing our engagement with the PKKP on a joint initiative to learn the lessons from Juukan and to strengthen our partnership," he says.

"It is clear that no single individual or error was responsible for the destruction of the Juukan rockshelters, but there were numerous missed opportunities over almost a decade and the company failed to uphold one of Rio Tinto's core values respect for local communities and for their heritage.

"We are determined to learn, improve and rebuild trust across various internal and external partners. I look forward to working with J-S, Chris and Simone to drive change and improvements in order to re-establish Rio Tinto's credentials and strengthen heritage management across the business."

Penalties not enough, claim corporate responsibility advocates

The Australasian Centre for Corporate Responsibility (ACCR) has described the financial penalties as "completely off the mark" compared to the damage caused by Rio Tinto.

"Rio Tinto's board review is highly disappointing. It amounts to little more than a public relations exercise that still attempts to blame the PKKP; previous Rio Tinto administrations; and anyone else, rather than the company's current senior management," says ACCR strategy lead James Fitzgerald.

"This is an appalling indictment of how Rio Tinto truly values cultural heritage. Investors who have condemned this destruction must continue to hold Rio to account.

"Tens of thousands of years of cultural significance get blown up and all that goes to show for it is A$7 million of lost remuneration."

Fitzgerald describes the penalty as "pocket change" for these highly paid executives.

"Irreplaceable cultural heritage has been lost and the only consequence for any of the senior leadership at Rio is the loss of a bonus - not even their job," he says.

"These minimal proposed financial penalties misunderstand the nature of the damage, which is permanent and irreparable. Short term financial considerations were at the core of this disaster and cannot be the solution.

"Rio's board could have acted decisively. This soft touch, public relations-oriented review calls into question the suitability of every board member, especially the Chair Simon Thompson and the head of the review Michael L'Estrange."

Fitzgerald called for Jacques and Niven to leave the company.

"The fact remains that there were numerous opportunities for Rio Tinto to avoid this disaster over the past four years, and all of those opportunities were missed because nobody in senior positions gave Indigenous community relations the priority it deserves," he says.

"It is remarkable to see Rio Tinto prepared to throw its own reputation, and the reputation of so many past executives, under a bus to save its current CEO and head of External Relations.

"The statement (at para 50) that Rio believed it had Free, Prior, Informed Consent to destroy Juukan Gorge on the basis of agreements made in 2006 and 2011 not only demonstrates a lack of understanding of the concept of Free, Prior, Informed Consent: it is contradicted by Rio executives' own evidence before the parliamentary committee on 7 August, where they conceded that FPIC is an ongoing obligation."

Following the blasts, Puutu Kunti Kurrama Land Committee chair John Ashburton said Juukan was one of the earliest, if not the earliest, sites in the upland Pilbara and is part of a rich landscape of places in the area that have not been studied in depth.

"There are less than a handful of known Aboriginal sites in Australia that are as old as this one and we know from archaeological studies that it is one of the earliest occupied locations not only on the western Hamersley Plateau, but also in the Pilbara and nationally," Ashburton said.

He explained the PKKP were frustrated by a rigid regulatory system that does not consider important new information, such as the archaeological finds in the Juukan Gorge, once a Section 18 notice - which allows for destruction - is granted.

"We recognise that Rio Tinto has complied with its legal obligations, but we are gravely concerned at the inflexibility of the regulatory system which does not recognise the importance of such significant archaeological discoveries within the Juukan Gorge once the Minister has given consent," he said.

The Puutu Kunti Kurrama and Pinikura Aboriginal Corporation, after requesting future access to the site, was first advised on May 15 of Rio Tinto's activities to blast the gorge in close proximity to the rock shelters; and that explosive charges had already been laid.

PKKPAC attempted to negotiate with the mining company to stop the blast, or at least limit damage to the rock shelters.

"Our people are deeply troubled and saddened by the destruction of these rock shelters and are grieving the loss of connection to our ancestors as well as our land," Ashburton said.

"Losing these rock shelters is a devastating blow to the PKKP Traditional Owners."

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