MAC/20: Mines and Communities

Investors barrack Rio Tinto bosses at their annual AGM

Published by MAC on 2003-04-18


Investors barrack Rio Tinto bosses at their annual AGM

The following reports on last week's annual general meeting of Rio Tinto come from the London Guardian and various Australian publications (April 18th & 19th). Although questions and statements about the company's operations in Indonesia, West Papua, Turkey, Bougainville, Jabiluka and elsewhere collectively dominated the meeting -as has been the case for the past two decades - these were barely mentioned in the press.

A brief report in the Daily Telegraph did, however, quote Robert Wilson's comment at the start of the meeting that, while he had "enormously enjoyed" his eight year reign as chair of the world's second biggest mining company, the job had "its plusses and minuses". He added: "I've never been quite sure on which side of the ledger to put these annual general meetings", reflecting the fact that Rio Tinto has suffered more shareholder and community criticism, and for a longer period of time, than any other public company.

Partizans, which coordinated much of the protest at last week's Rio Tinto AGM in London also celebrates its twenty-fifth anniversary this year, making it the longest-existing shareholder and community campaign group anywhere.


Investors barrack Rio Tinto bosses - Remarks about small shareholders return to haunt Sir Richard Sykes

Terry Macalister, The Guardian

Friday April 18, 2003

Rio Tinto was barracked by small shareholders and special interest groups at an annual meeting that marked a bad-tempered send-off for chairman Sir Robert Wilson.

A procession of speakers criticised the continued role of former GlaxoSmithKline boss Sir Richard Sykes as a Rio Tinto non-executive following his recent remarks that small shareholders should be barred from annual meetings.

The mining group was attacked over pension issues, alleged safety problems in Utah and for not making provisions for a number of legal cases being taken out against it. An exasperated Sir Robert eventually called for a vote to end the questions, saying: "I think we have had enough of that." One small investor, Robert O'Donaghue, described the board as "insatiable cormorants", querying why there was a pension deficit at the same time as increased payments for directors.

Robert Muriel, another investor, started the assault on Sir Richard, saying it was wrong for him to receive a 22% increase in his pay when he held small shareholders in such disdain.

"Sir Richard Sykes believes small shareholders should be excluded from AGMs but I have as much right as anyone to be here. You have got to wonder why he is there, though," said Mr Muriel.

Earlier this year Sir Richard said: "Why should one person with one share be able to have a cup of coffee and a sandwich and disrupt the company?"

Sir Robert, who retires in October, was unaware of what Sir Richard had said but insisted it was irrelevant to Rio Tinto's meeting, which was about company business.

After the meeting, Sir Richard said his remarks had been misunderstood. "My concerns were aimed at those special interest groups that buy one share in a company and then dominate the business of the meeting." Shareholders also criticised directors for being paid in sterling while investors received dividends in dollars. Sir Robert said it was highly regrettable but that directors were paid in pounds to reflect their place of residence.

Other critics questioned Rio Tinto's ethics. "The government must change company law to ensure the directors of irresponsible companies like Rio Tinto are made fully liable and accountable for their destructive impact overseas," said Friends of the Earth campaigner Ed Matthew.


Rio Tinto bosses duck shareholders

Melbourne Age, Australia

Friday 18 April 2003

Angry Rio Tinto shareholders blasted independent director Sir Richard Sykes for reportedly saying small shareholders should be excluded from company annual general meetings.

The attack on Sir Richard, the chairman of the Anglo-Australian mining company's remuneration committee, came at the company's annual general meeting in London.

At the meeting, shareholders also queried a 22 per cent pay rise to non-executive directors, the lack of contingency funding for potential lawsuits and the safety of projects in the United States and Papua New Guinea.

Rio Tinto chairman Sir Robert Wilson refused to allow shareholders to question Sir Richard directly at the meeting, saying his comments were not related to company business.

He also defended the rise in pay for non-executive directors from STG46,000-a-year to STG56,000 ($A119,050 to $A144,925) as necessary given increasing potential for board members to be sued in the post-Enron business environment.

"The burden and demands and potential liability has risen sharply and this company has had to address the question of whether fees need to be raised appropriately," he said.

"What you're seeing here you will see reflected in other companies in years to come."

Sir Robert repeated his promise not to go ahead with the Jabiluka uranium mine without the consent of the traditional owners, the Mirrar people, and said it would not be forgotten when he retires this October.

"This commitment doesn't disappear with my retirement," he said.

"The question of putting a clear commitment into legal form is, I understand, under discussion."

The board denied it was ignoring potential court cases involving environmental damage and human health problems caused by its past activities in places ranging from the north England city of Hull to Bougainville and Papua New Guinea.

"There are a number of court cases around at any one time but the opinion of the board is that they don't represent a significant risk," finance director Guy Elliott said.


Rio vows to seek approval

By Maria Hawthorne and AAP - Herald Sun Australia

19 April 2003

Global mining group Rio Tinto plc has confirmed it won't proceed with the Jabiluka uranium mine without the consent of the region's traditional land owners.

Rio Tinto chairman Sir Robert Wilson said his promise about Jabiluka to the Mirrar people would not be forgotten when he retired in October.

"This commitment doesn't disappear with my retirement," he told the annual meeting in London on Thursday which was regularly interrupted by rowdy shareholders angry at a 22 per cent rise in directors' fees.

At one point they blasted independent director Sir Richard Sykes who sought to have them banned from future annual meetings.

Sir Richard, who is chairman of Rio Tinto's remuneration committee, came under fire on several fronts.

The small shareholders:

- attacked the board and management for alleged lack of contingency funding to cover potential lawsuits, and;

- raised concerns about safety issues involving projects in the US and Papua New Guinea.

Sir Robert sought to restore calm by making the Jabiluka commitment.

"The question of putting a clear commitment into legal form is, I understand, under discussion," he said.

The Jabiluka mine is under development by Rio Tinto's 68 per cent subsidiary Energy Resources of Australia which also operates the nearby Ranger uranium mine.

The Rio Tinto board also denied it was ignoring potential court cases involving environmental damage and health problems caused by its past activities in areas ranging from the northern England city of Hull to Bougainville and PNG.

"There are a number of court cases around at any one time but the opinion of the board is that they don't represent a significant risk," finance director Guy Elliott said.

On the 22 per cent pay issue, Sir Robert defended the rise which will lift non-executive directors' fees from pound stg. 46,000 a year to pound stg. 56,000 ($A119,050 to $A144,925).

He said the increases were necessary given increasing potential for board members to be sued in the post-Enron business environment.

"The burden and demands and potential liability has risen sharply and this company has had to address the question of whether fees need to be raised appropriately," he said.


Rio Tinto confirms promise on Jabiluka

MSN Nine News, Australia - 18th April 2003

Global mining group Rio Tinto plc has confirmed it won't proceed with the Jabiluka uranium mine in Australia's Northern Territory without the consent of the region's traditional land owners.

Rio Tinto chairman Sir Robert Wilson his promise about Jabiluka to the Mirrar people would not be forgotten when he retires in October.

"This commitment doesn't disappear with my retirement," he told the company's annual shareholder meeting in London.

"The question of putting a clear commitment into legal form is, I understand, under discussion."

The Jabiluka mine is under development by Rio Tinto's 68 per cent subsidiary Energy Resources of Australia Ltd which also operates the nearby Ranger uranium mine.

The Rio Tinto board also denied it was ignoring potential court cases involving environmental damage and human health problems caused by its past activities in places ranging from the North England city of Hull to Bougainville and Papua New Guinea.

"There are a number of court cases around at any one time but the opinion of the board is that they don't represent a significant risk," finance director Guy Elliott said.

At the meeting, shareholders also queried a 22 per cent pay rise to non-executive directors.

Sir Robert defended the rise in pay for non-executive directors from STG46,000-a-year to STG56,000 ($A119,050 to $A144,925) as necessary given increasing potential for board members to be sued in the post-Enron business environment.

"The burden and demands and potential liability has risen sharply and this company has had to address the question of whether fees need to be raised appropriately," he said.

"What you're seeing here you will see reflected in other companies in years to come."

Sir Robert said the metals industry was likely to lead a global economic recovery but there was no indication when this would occur.

Strong demand out of China had pushed up iron ore prices during 2002, and was likely to drive any recovery, but a volatile foreign exchange market added further uncertainty to the near-term outlook.

"As far as the outlook is concerned, forecasts are obviously clouded by the uncertain economic and political consequences of the war in Iraq," Sir Robert said.

"Even leaving aside the war, it is difficult to see what might cause significant improvement in the main economies of the OECD (Organisation for Economic Cooperation and Development) in the near term."

Rio Tinto's key assets, such as copper, aluminium and coal, were "depressingly flat" in 2002, with iron ore and gold the only exceptions.

But despite these lacklustre markets, the company had delivered its second best earnings performance, Sir Robert said.

Rio Tinto reported a net profit of $US651 million in 2002 after $US879 million in writedowns.

This compared to a $US1.079 billion net profit in 2001 which included a $US583 million writedown.

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