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Summary
- Rio Tinto’s CEO, Jean-Sebastien Jacques is facing calls to resign amid the ongoing parliamentary inquiry into the company’s decision to blast heritage sites in Australia
- In May 2020, the mining giant exploded two 46,000-year-old aboriginal rock shelters in the Hamersley Range of the Pilbara region in Western Australia.
- The company chose to blast the Juukan rock shelters to gain a larger volume of high-quality iron ore, and this led to the destruction of the site
A strong case of corporate governance and broader responsibilities that guide the functioning of companies involved in mining activities has emerged with the recent decision of Rio Tinto Plc (LON: RIO) blasting two 46,000-year-old aboriginal rock shelters. The company’s CEO, Jean-Sebastien Jacques is facing calls to resign amid the ongoing parliamentary inquiry into the company’s decision to blast a heritage site in Australia for accessing $135 million worth of iron ore. It is worth to be reminded that in May 2020, the mining giant exploded two rock-shelters in the Hamersley Range of the Pilbara region in Western Australia.
Parliamentary inquiry proceedings
Jacques, the CEO of Rio Tinto led the parliamentary inquiry into the matter on 7 August 2020 and explained how the miner had measured four alternatives (including the 46,000 old heritage rock shelter) available to expand its Brockman 4 iron ore mine in 2012-13. He mentioned that if the company went ahead with the remaining three, it could have saved the Juukan shelters. Jacques stated that the company instead chose to blast the Juukan rock shelters to gain a larger volume of high-quality iron ore, and this led to the destruction of the site. Presenting that the variation was for approximately 8 million tonnes of higher-grade iron ore, Rio Tinto’s chief executive highlighted that the worth of this amount of ore assessed at that time was about $135 million. It is reported that the company had shipped about 327.4 million tonnes of iron ore from the Pilbara region in 2019.
Informing that the Puutu Kunti Kurrama and Pinikura (PKKP) people, the land's traditional owners, were unaware that the company had other options available with it, which could have potentially protected the Juukan Gorge site, Jacques mentioned that besides keeping it hidden from the PKKP in 2012 and 2013, they were told about only one option. Warren Entsch, chair of the Joint Standing Committee on Northern Australia, stated that this hiding of facts was concerning and asked for a deeper inquiry into the matter at a later date.
Rio Tinto with legal approval to explode the site, however, believed PKKP’s were aware of permission until representatives for the PKKP Aboriginal Corporation came to the company at a time when it could not have safely stopped the blast. The PKKP objected to the reference made stating that it did not communicate earlier regarding its preference to preserve the ancient site.
The inquiry also questioned Jacques to respond to the claims that his predecessor, Sam Walsh, had made. According to reports, Walsh as company’s chief executive had ordered not to mine the Juucan Gorge. In his response, Jacques said that the law firm that had presented the series of events from 2003 to the date of the blast did not recover any such orders from the former CEO.
Rio Tinto chief executive under pressure to quit
There is a growing pressure for Jacques, the chief executive of the company to quit from his position after the incident of the mining major blew up 46,000-year-old Aboriginal rock shelters. The Juucan Gorge is depicted as one of the most significant finds in Australian archaeological history. And as Rio Tinto could not understand the cultural and heritage related importance of the 46,000-year old aboriginal site before undertaking the explosion activity, Jacques is facing calls to resign. Australian Members of Parliament (MPs) have condemned Jacques and other senior executives of Rio Tinto for their failure and inability to convincingly reply to several questions put to them during the enquiry.
The parliamentary committee heard that none of the mining company’s senior officials went carefully through the 2018 archaeological report that was specially made by the firm itself. This report stated that the site held the highest archaeological significance in Australia. In addition, Jacques’ himself confirmed that the PKKP people were unaware that the site was one of four options available for mining, instead presented as a single option, leading to site’s destruction. Asking for Jacques’ to put down his papers as CEO of Rio Tinto, the Australian Centre for Corporate Responsibility stressed that it seems Jacques has moved away from accountability.
Asking for Rio Tinto’s accountability, AustralianSuper, one of the biggest pension funds in Australia and also a Rio Tinto shareholder, felt that such actions should not have happened. Further adding that in case necessary steps are not taken for improvement, it may be forced to take measures to push for the required level of accountability at Rio Tinto’s next annual meeting.
A recap on the event
Rio Tinto Group, an Anglo-Australian multinational miner, considered to be the world's second-largest metals and mining corporation that produces iron ore, copper, diamonds, gold, borates, and titanium has faced a wave of criticism after it exploded the ancient site in Australia. The company had blown the culturally significant site against the will of the land's traditional owners, the PKKP people who had asserted repeatedly on their wish to preserve the site. The rock shelters were damaged due to the mining explosion carried out by Rio Tinto as part of its expansion plans of Brockman 4 iron ore mine.
The blast activity was deemed legal as the mining company possessed Western Australian government’s consent under the state’s Aboriginal Heritage Act in 2013, to destroy or damage the sites. However, as the development unfolded itself, it is said Rio Tinto could have other options to expand its iron ore mine to save the 46,000 year old heritage site in Juukan Gorge but selected to smash up the rock shelters only to access an increased amount of high-grade iron ore.
The turn of events has led to an inquiry by the Senate. Accepting that it missed several opportunities to reassess its plans on mining activities, the mining major told the Senate that it was aware of the fact that one of the shelters was of the highest archaeological significance in Australia, but did go ahead with the detonation. The company also noted that it was unsuccessful in achieving its own internal standards when it comes to the destruction of Juukan rock shelters. This admission of failure by Rio Tinto holds significance as former senior employees of the company have also made their submissions to the Senate and highlighted the same.
Jean-Sébastien Jacques, the chief executive of the global mining company, accepted that Tinto has damaged the site and apologised to the PKKP. In his reply to the inquiry on the damage of rock caves, supposedly sacred to the aboriginals, Jacques mentioned that in order to promote the current and future generations of Australians, the company is firm that such destructions are not repeated in future.
It is to be noted that Rio Tinto is carrying out its own independent board review into the entire matter which is due to be completed in October 2020. The stocks of Rio Tinto Plc traded at GBX 4,707.00, up by 0.80 per cent on 10 August 2020 GMT 8:21 AM GMT.
Conclusion
Rio had obtained ministerial consent to destroy or damage the sites from the Western Australian government under that state’s Aboriginal Heritage Act in 2013, though the entire incident brings to light the issues raised by the inquiry regarding greater legal protections for traditional owners and preserve sites of heritage importance.
