MAC/20: Mines and Communities

Are Rio Tinto shareholders going to give more than lip service towards righting their wrongs?

Published by MAC on 2021-03-19
Source: Consumers Advisory, The New Daily, NIT

The obscenity of holding Traditional Owners to archaic agreements with no meaningful review.

While the outrage that erupted from Rio Tinto’s wilful and deliberate destruction of Juukan Gorge has not yet diminished, the company has made a commercial decision to ‘modernise’ its agreements with Traditional Owners, but it is not prepared to engage in negotiations about paying increased compensation or royalties for the hundreds of millions of tonnes of high-grade iron ore it pulls from the ground annually.

Rio Tinto and its shareholders now have a decision to make. Are they going to give more than lip service towards righting their wrongs or are they going to keep stuffing their pockets to the detriment of the Traditional Owners whose land they currently operate on, with callous disregard for decency and respect?

Former chief executive Jean-Sébastien Jacques got a pay rise last year despite the destruction of the sacred 46,000-year-old Aboriginal site that forced him to stand down and plunged the mining group into crisis. Jacques’ total remuneration rose 20 per cent to £7.2m in the 12 months to the end of December, even though the blasting of the Juukan Gorge cost him performance bonuses. The miner announced chairman Simon Thompson and non-executive director Michael L’Estrange would step down ahead of next year’s annual shareholder meeting.

See also:

2020-09-21 Early Week Essay: Aboriginal spokesperson reiterates Juukan demands
2020-09-13 Rio Tinto CEO and senior executives depart from company over Juukan Gorge
2020-09-07 The Week's Essay: Rio Tinto approaches dire Juukan moment

Rio Tinto: The false dawn of Modernisation

NIT Editorial - https://nit.com.au/rio-tinto-the-false-dawn-of-modernisation/

11 March 2021

There is growing consternation and real concern amongst Pilbara Traditional Owners that Rio Tinto is not interested in substantively righting the wrongs of the past decades where it has been making massive profits for its shareholders while many of the Pilbara mob live in Third World conditions.

It was not that long ago that there were more Pilbara Aboriginal males in jail than there were Pilbara Aboriginal males in Year 12. There is something seriously and frighteningly wrong.

The outrage that erupted from Rio Tinto’s wilful and deliberate destruction of Juukan Gorge has not yet diminished, however Rio Tinto has obviously made a commercial decision that while it is prepared to ‘modernise’ its agreements with Traditional Owners it is not prepared to engage in negotiations with Traditional Owners about paying increased compensation or royalties for the hundreds of millions of tonnes of high-grade iron ore it pulls from the ground annually.

Take Wintawari Guruma Aboriginal Corporation for example. They have six Rio Tinto mines on Eastern Guruma Country. From these six mines Rio Tinto has made hundreds of billions of dollars in profit. Fortunately for Rio and unfortunately for Eastern Guruma Traditional Owners, Rio only pays royalties on three of those six mines. They refuse to pay royalties on the other three mines because they are not legally obliged to do so.

In other words, they will continue to mine the country, destroy Wintawari Guruma sites and seriously impact the Native Title rights granted by the Federal Court, while making billions of dollars in profit from the three mines.

Rio Tinto has been mining at Tom Price for some 55 years now without paying a single cent to Traditional Owners – simply because they choose not to.

It’s both perverse and amoral; a shocking reminder that Rio Tinto’s Board and management are more concerned about profits and dividends than the relationship they have with the Traditional Owners whose lands they are operating on and profiting off.

Where is the so-called ‘social licence’ which Rio trumpets about on a regular basis, but much less so of late given their appalling behaviour and contempt for Traditional Owners regarding Juukan Gorge.

As part of the existing agreements between Wintawari Guruma and Rio Tinto, there is a clause that calls for a review of the agreement. In 2015, Wintawari Guruma requested Rio Tinto sit down with them in good faith and review the agreement.

In the lead up to the meeting, Wintawari Guruma had observed that Rio were making massive profits and that they, as Traditional Owners, were getting very little in return. When the request was made to address the compensation clause and an increase in royalties it was flatly refused by Rio Tinto who said that under the agreement, they were not legally obliged to talk about royalties and that they would not do so under any circumstances.

This obviously caused a great deal of anger and frustration for the Traditional Owners, who said that when they signed the agreement, they believed they had the right on a periodic basis to renegotiate the agreement in relation to royalties payable.

Also significant is the fact that the original agreements were signed in a different era, some 20 years ago, when Rio’s mining footprint and impact on Country was significantly different to what it is today.

Back then Rio only operated three relatively small, contained mines on Eastern Guruma Country. The mines were nothing like the large-scale behemoths they are today. The Traditional Owners who signed the original agreements could never have contemplated the massive expansion of mining and the resulting destruction of their Country and culture.

To hold the current Traditional Owners to these archaic agreements with no prospect of meaningful review, ever, is an obscenity.

The lack of meaningful review of the original agreement raises the issue that the Traditional Owners did not give free, prior and informed consent when they signed off on the agreement because they did not understand that the review of the agreement was administrative and not substantive.

This means they had no powers to compel Rio Tinto to renegotiate anything. The Traditional Owners could surely not have known that they were giving away all of their rights for generations to come.

If they did not give free, prior and informed consent there is a possibility that some agreements between Traditional Owners and Rio Tinto may be null and void.

This issue of free, prior and informed consent has also been raised by PKKP and indeed by the National Indigenous Australians Agency (NIAA) who asked Simon Hawkins, the CEO of Yamatji Marlpa Aboriginal Corporation (YMAC) if YMAC could provide evidence that the Traditional Owners gave free, prior and informed consent when YMAC signed off on the agreement between multiple Traditional Owner groups and Rio Tinto.

Rio Tinto and its shareholders now have a decision to make. Are they going to give more than lip service towards righting their wrongs or are they going to do only what they are legally obliged to do and keep stuffing their pockets to the detriment of the Traditional Owners whose land they currently operate on, with callous disregard for decency and respect?


Rio Tinto chairman Simon Thompson to resign over the Juukan Gorge disaster

Sue Lannin

https://thenewdaily.com.au/news/indigenous-news/2021/03/03/rio-tinto-chairman-juukan-gorge-disaster/

3 March 2021

The chairman and a board director of Rio Tinto will resign over the Juukan Gorge caves destruction.

The big miner announced chairman Simon Thompson and non-executive director Michael L’Estrange, a former top public servant, would step down ahead of next year’s annual shareholder meeting.

Last year, Rio destroyed two 46,000-year-old caves in the Pilbara region against the wishes of the traditional owners, the Puutu Kunti Kurrama and Pinikura (PKKP).

Former chief executive Jean-Sebastian Jacques and two top executives were forced to resign last year over the scandal.

Investors had been calling for both Mr Thompson and Mr L’Estrange to step down.

The destruction of the sites last May were described as “wrong” at the time by Mr Thompson.

However, Mr Thompson said that as chairman he was ultimately accountable for the destruction of the sacred Aboriginal site.

The chief executive of the National Native Title Council, Jamie Lowe, said the resignations should have come sooner.

“We think the cultural shift within Rio Tinto needed to happen immediately, it’s too bad it’s taken some eight months,” Mr Lowe said.

Mr L’Estrange led a widely discredited internal review of the Juukan incident.

The failures of the internal review have led to the resignations announced on Wednesday, Mr Lowe told ABC News.

“I think they tried to cover it up with the internal review,” Mr Lowe said.

“Our advice to Rio since the outset is that they needed to open this up with some transparency.

“They ignored our advice from the outset. The result is what we see now with both of them having to step down from the board.”

Many investors were also unhappy that Rio appointed former chief financial officer Jakob Stausholm, an internal candidate, late last year to replace former boss Mr Jacques instead of an outsider.

The cave sites were among the oldest in Australia and showed evidence of continuous human habitation for 46,000 years.

A report in 2014 by archaeologist Michael Slack found one of the caves to be rare in Australia.

“The site was found to contain a cultural sequence spanning over 40,000 years, with a high frequency of flaked stone artefacts, rare abundance of faunal remains, unique stone tools, preserved human hair and with sediment containing a pollen record charting thousands of years of environmental changes,” Dr Slack wrote.


Former Rio Tinto chief got pay rise despite destruction of sacred site

https://consumersadvisory.com/2021/02/22/former-rio-tinto-chief-got-pay-rise-despite-destruction-of-sacred-site/

22 February 2021

Former Rio Tinto chief executive Jean-Sébastien Jacques got a pay rise last year despite the destruction of a sacred 46,000-year-old Aboriginal site that forced him to stand down and plunged the mining group into crisis.

Jacques’ total remuneration rose 20 per cent to £7.2m in the 12 months to the end of December, even though the blasting of the Juukan Gorge cost him performance bonuses.

The increase in his annual pay was driven by a surge in the value of unvested shares he holds in the Anglo-Australian company. Rio, the world’s biggest producer of iron ore, had a record-breaking year due to red hot Chinese demand for the steelmaking ingredient and last week announced the largest dividend in its history.

Rio’s annual report, published on Monday, also disclosed that two other executives who left the company on December 31 in the wake of the Juukan Gorge debacle — Simone Niven, head of corporate relations, and Chris Salisbury, head of iron ore — were awarded termination benefits worth $1m and $1.6m, respectively.

Simon Thompson, Rio’s chairman, said the strong 2020 financial performance was overshadowed by the destruction of the ancient rock caves. “We feel well short of our values as a company and breached the trust placed in us,” he said.

The increase in Jacques’ pay drew strong criticism, with the Australasian Centre for Corporate Responsibility arguing he should not be rewarded for presiding over the company’s destruction of the rock caves.

“The decision to destroy the Juukan Gorge caves was morally repugnant and financially stupid. It has already cost the company millions, and the true cost won’t be known for years to come,” said James Fitzgerald, ACCR strategy lead.

“The payout casts doubt over Rio Tinto’s various expressions of sorrow and regret. Here we have the chair and board rewarding Jacques for his ham-fisted destruction of priceless cultural heritage as well as shareholder value.”

Fitzgerald said Jacques should consider donating his pay to an Aboriginal charity.

Jakob Stausholm, previously Rio’s head of finance, was named chief executive in December. Jacques will formally leave the company on March 31.

The annual report also disclosed that Rio paid another former chief executive, Sam Walsh, A$17.6m ($13.9m) in deferred bonus payments last year. The payment had been frozen since 2017 due to a bribery investigation by regulators into payments made by Rio to a consultant working on the Simandou iron ore project in Guinea.

Rio said it made the payment following an independent dispute resolution process and because “no further material information” had emerged from the investigation by regulators.

The mining group made a previous payment of A$7.3m to Walsh in March 2020 related to his deferred bonus entitlements.

 

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