MAC: Mines and Communities

The Weekend Essays: A critical moment for Rio Tinto

Published by MAC on 2020-06-05
Source: Reuters, ABC, Bloomberg

It's becoming clearer that Rio Tinto's destruction of a sacred 46,000 year old Aboriginal site will not easily disappear into the Australian political background [. The company is not just being forced to review its long-standing "engagement" practices of working with Indigenous peoples, but will possibly now go well beyond - driven by losses of investor respect, shareholder dissidence, likely basic misinformation spread within the company itself

And, not least of course, the reinvigoration and refocussing of Aboriginal outrage.


Traditional owners say Rio Tinto knew importance of caves razed for mine

Reuters -

5 June 2020

MELBOURNE - Rio Tinto Ltd knew the cultural and historical significance
of two caves in Western Australia years before it blew them up last
month as part of an iron ore mine expansion, traditional owners said on

However, Rio, which won state government approval to destroy the caves
in 2013, has said it believed it had consent from the traditional owners
of the caves, the Puutu Kunti Kurrama and Pinikura People (PKKP),
because they had not explicitly asked that the site not be mined.

The world’s biggest iron ore miner in late May destroyed the sacred
Aboriginal caves in the Juukan Gorge in the Pilbara that showed evidence
of continual habitation dating back 46,000 years.

“Our elders are deeply distressed about this,” Burchell Hayes, a
director of the PKKP Corporation said to the ABC.

“For years, we have made mention how significant those sites were to the
PKKP people. When we say that those sites are significant, we have an
expectation that miners, in this case, Rio Tinto ... they don’t go and
disturb that place,” he said.

Rio apologised and said it would urgently review its plans for other
sites in the area.

The caves, for which Rio Tinto funded at least four excavations,
revealed thousands of archaeological remnants subsequent to its 2013
approval to destroy the site, including a plaited belt of human hair,
found to be more than 4,000 years old, with genetic links to present day
traditional owners.

“We have obviously had some misunderstanding. We thought we had a shared
understanding of the future of the caves, that were going to be mined as
part of our normal mine sequence,” Rio Tinto’s chief of iron ore Chris
Salisbury told the ABC.

Rio had previously said it was sorry that “the recently expressed”
concerns of the PKKP not to mine the area had not arisen during many
years of engagements.

“There is concern about the Juukan Gorge destruction as well a serious
discontent about the way this crisis has been managed by Rio,” said
Brynn O’Brien, of activist investor the Australasian Centre for
Corporate Responsibility.

Australian legislation allows mining companies to apply for an exemption
to destroy Aboriginal sites.

Of the 463 applications in the past decade, none have been rejected,
Western Australia Environment Minister Stephen Dawson told parliament
last month. Applications can be appealed by mining companies but not by
traditional owners.

WA Government rules out further protections for Aboriginal heritage
sites at risk of demolition

Hannah Sinclair and Karen Michelmore

ABC (7.30)

4 June 2020

Key points:

* Last month Rio Tinto demolished rock shelters at Juukan Gorge
which had cultural and archaeological significance

* Rio Tinto says it will work with traditional owners to advocate
for better protection of heritage sites

* Clinton Walker wants the WA Aboriginl Heritage Act to be changed

Western Australia's Government has ruled out further protections for
Aboriginal heritage sites at risk of demolition following the
destruction of a 46,000-year-old site in the Pilbara.

WA Aboriginal Affairs Minister Ben Wyatt is currently reviewing the
Aboriginal Heritage Act, including the controversial Section 18, which
legalises the destruction of Aboriginal sites.

But he has rejected calls for a moratorium on any further work already
granted under the act.

"We won't be doing a moratorium because I think that would simply cease
activity, whether it be Main Roads activity, for example, that doesn't
have any contention, or even just local governments putting in work
around rivers and creeks," Mr Wyatt told 7.30.

"But what we do and what we always do is ensure that where it comes to
those areas that have more significant sites, we always encourage those
miners … and the traditional owners to have their own heritage
agreements and enter their own Indigenous land-use agreements that
usually have much stronger heritage processes."

It follows Rio Tinto's recent demolition of rock shelters at Juukan
Gorge in the Pilbara under a Section 18 approval.

Rio Tinto has vowed to advocate for changes to laws to better protect
ancient Aboriginal heritage after what it said was a "misunderstanding"
led to the destruction of the Pilbara site.

The company's chief executive of iron ore, Chris Salisbury, said he had
been "rocked personally" by the situation.

"I'd like to say very sorry to the Puuti Kunti Kurrama and Pinikura
People," he told 730.

"We've obviously had some misunderstanding. We thought we had a shared
understanding of the future of the caves, that they would in fact be
mined as part of our normal mining sequence."

He said the company was determined to learn lessons from the incident.

"Firstly, we'll work closely with traditional owners on the Juukan Gorge
area in terms of other sites and how we manage those, that's an urgent
matter," he said.

"The second thing is we've committed to a comprehensive review with
board oversight and there will be more announcements about that in the
next week.

"Lastly, we'll work with traditional owners, and through our review if
we identify issues that we believe should result in legislative change
to the West Australian Aboriginal Heritage Act, then we've committed we
will advocate with traditional owners for those changes."

'We can't let this happen again'

Both the office of the Federal Minister for Indigenous Australians and
the WA Aboriginal Affairs Department were warned by traditional owners
the Puutu Kunti Kurrama and Pinikura Aboriginal Corporation that the
work was imminent.

Federal Minister Ken Wyatt told 7.30 he would work with the State
Government and Prime Minister's Office "to ensure that we do not have a
repeat of the destruction of any Aboriginal site in this country".

But some are wary about such promises, particularly if the current
Section 18 approvals still stand.

Clinton Walker, a Ngarluma traditional owner from the Pilbara, said if
the Federal Government was serious, it would act immediately.

"If they are going to abolish that particular part of the act, they need
to not destroy any of those sites and leave them untouched," he told 7.30.

"Mr [Ken] Wyatt, I hope you are serious about what you are saying, I
hope you do what you say you are going to do about it.

"Unfortunately, I won't believe it until I see it happen because too
often, politicians make promises and they don't follow through with
those promises.

"If they can abolish Section 18 within the Aboriginal Heritage Act and
also strengthen that act so there aren't any loop holes to go around it,
that's when I will know that the Government is serious because this is
an atrocious loss of heritage belonging to Aboriginal people, as well as
Australians and the world. And we can't let this happen again."

There have been 463 applications to impact West Australian Aboriginal
heritage sites on mining leases under Section 18 in the past 10 years.
None has been rejected.

'This is our history'

The Pilbara region contains a rich collection of culturally significant
sites stretching back tens of thousands of years.

Mr Walker is still finding old sites, even today.

In fact, while filming with 7.30, he stumbled upon two carvings, one of
a dugong up to 5,000 years old and another of an emu eating a snake up
to 10,000 years old on a rock at Cowrie Bay near Karratha.

"This is our history," he said.

"When I see this, it says to me that my people have always been here,
that they've always had things available to them like food and water.
When I see that there, I feel pride about my own culture.

"When these companies destroy this sort of thing they are destroying our

He said he knew all too well the impact of the loss of such sites.

The Ngarluma people, like other groups, have been fighting to protect
their cultural history for generations, with countless sites destroyed
to make way for dams, railways and industrial plants in recent decades,
often without consultation.

One example of many, he said, was Harding Dam, built in the 1980s as
Karratha's main water supply in a sacred area full of cultural sites.

"It wasn't until construction of the dam [that] Aboriginal people were
aware of what was going on. It was too late for us to do anything about
it," Mr Walker said.

"All the sacred sites along here ended up under water.

"When you lose a site, they are gone forever. You can no longer use it,
you can no longer learn about it, you can no longer visit the site and
you can no longer practise the culture, the heritage of that area, and
share the culture with the neighbouring groups who have a connection to
that place too.

"It means it's lost to all future generations. It's irreplaceable."

'I thought they were serious about these things'

Mr Walker is angry about the loss of the Juukan Gorge rock shelters,
particularly as a former Rio Tinto employee who held the company in high
regard as he worked to improve its understanding of Aboriginal culture.

It has emerged the "high archaeological significance" of the site was
reported in a survey as early as 2013.

"I thought they were serious about these things but it's very
frustrating and saddening to know that they could allow something so
sacred, so ancient, so significant to not only Aboriginal people, the
traditional owners of the area, the PKKP people, but also to us as
neighbours," he said.

"We have all been here in that same period as them as neighbours. That
affects all of us, and I find that to be a spit in the face."


Blasts at Ancient Aboriginal Site Expose Widening ESG Frontline

By Sybilla Gross and David Stringer

Bloomberg Green

2nd June 2020

Explosions that damaged a 40,000-year-old Aboriginal heritage site at a Rio Tinto Group iron ore mine in Australia are focusing investor concern on the growing reputational risk companies face from social issues, widening the advocacy battlefront beyond climate change and governance.

The world’s No. 2 miner is being challenged by shareholders over its decision to carry out new blasting on May 24 for production at its Brockman 4 mine in Western Australia. While the explosions were authorized under a 2013 decision by the state government, the incident has sparked widespread controversy.

“It raises the question about, what is legal versus what is right? And that’s something that companies and also the investment community is under increasing pressure to consider,” said Danielle Welsh-Rose, ESG investment director for Asia-Pacific at Aberdeen Standard Investments, which holds Rio shares and manages about $645 billion in global assets.

“Investors are already more focused on human rights and social issues than they have been in the past, so there’s definitely scope for something like this to trigger an investor response,” she said.

They also are wielding increasing influence in markets. Norway’s $1 trillion wealth fund is doubling down in its responsible investment strategy, recently excluding Brazilian iron-ore giant Vale SA in line with its rules on environmental damage, and utility Eletrobras SA, citing the risk of human rights violations, including increased pressure on indigenous lands.

For more details on ESG investing, click here

Aberdeen has sought more information from Rio on the incident at Juukan Gorge in the Pilbara region. Two damaged rock-shelters at the site may have been occupied by humans as long as 46,000 years ago, according to the Australian Archaeological Association Inc.

Rio was reviewing its plans for the Juukan Gorge and will launch a comprehensive review of its broader heritage approach, iron ore CEO Chris Salisbury said Sunday, apologizing to the traditional landowners, the Puutu Kunti Kurrama and Pinikura Aboriginal Corporation. “We are sorry for the distress we have caused,” he said. The landowners, who recognized Rio had complied with its legal obligations, said May 25 that they were first advised on May 15 about the blasting.

The company said May 27 it also was sorry that the recently expressed concerns of the traditional owners had not arisen through the engagements that had taken place over many years under the agreement that governs its operations on their country. Rio had been informed on numerous occasions of the land’s importance and the community’s preference for keeping the shelters intact, the PKKPAC said in a statement May 30.

Debby Blakey, CEO of the Health Employees Superannuation Trust Australia, an industry pension fund that manages more than A$55 billion ($37 billion), has also written to the London-based producer seeking further explanation.

“If we show our dismay, and show the company, and expect a higher bar -- and quite honestly expect them to do what they say they’re going to do in terms of their reconciliation action plan themselves -- I think other companies will be more aware,” Blakey said. “Just because something is legal, doesn’t make it right.”

The firepower of socially conscious shareholders is growing. Almost $31 trillion was allocated to sustainable investing strategies in five key markets at the start of 2018, about a third higher than in 2016, according to a report by the Global Sustainable Investment Alliance. So-called impact funds, which seek to actively generate social and environmental outcomes alongside a financial return, hold about $500 billion globally, the Global Impact Investing Network said in a report last year.

It’s likely investor groups will use votes against company boards at annual meetings, or table resolutions calling for action -- familiar tactics used to articulate climate concerns -- to highlight social issues, Aberdeen’s Welsh-Rose said. “The reputation risk is something that is increasing now compared to how it was, I think because of that real collaborative investor action and increased sophistication of pressure groups, advocacy groups and investor groups.”

In Australia alone, investments in conservation, clean energy and other initiatives that are considered likely to have a positive impact on the environment or society will rise five-fold to A$100 billion in the next five years, according to the Responsible Investment Association Australasia.

“Social issues are just as important as the environmental, critical to protecting shareholder value,” according to Hesta’s Blakey, who said surveys of the pension fund’s members found they give about equal weight to the two issues.

While much recent ESG focus has been on climate and governance issues, that’s often been because there’s easier access to data in those areas, according to Aberdeen’s Welsh-Rose. “It’s a little bit more clear cut,” she said. “There’s a lot of work going on now to get companies to provide a lot more information and data on the social side.”

For Rio Tinto, there are specific questions to address on internal processes as a result of last month’s heritage site blasts, said Susheela Peres da Costa, head of advisory at Regnan, which advises institutional investors on ESG risks. A Rio spokesman pointed to the company’s plans announced Sunday to review and improve its handling of heritage issues.

“If this was a communication failure between the indigenous groups and Rio, it might raise questions about the stakeholder consultation process effectiveness,” she said. Alternatively, it could also be a matter of internal governance in communicating stakeholder risk properly. “It was a surprise to us, in particular because we think of Rio’s record on indigenous issues as relatively good.”


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