Rio Tinto chiefs lose millions in bonuses over destruction of Juukan Gorge
Rio Tinto chief executive Jean-Sébastien Jacques has lost almost $5m in bonuses and the head of Rio Tinto’s Australian iron ore group will lose more than $1m over the destruction of a 46,000-year-old Aboriginal heritage site at Juukan Gorge, after an internal review found “systemic failures in the cultural heritage management system”.
The mining company destroyed two rock shelters in Juukan Gorge in the Pilbara region of Western Australia on 24 May, despite having received five separate reports on the significance of the sites, both archeologically and to the local Puutu Kunti Kurrama and Pinikura (PKKP) people, since 2013.
An internal report, released on Monday, found that Rio Tinto “failed to meet some of its own internal standards and procedures in relation to the responsible management and protection of cultural heritage”, and also failed its own aspirations in working with Indigenous groups.
It said that as a result of the report’s findings, the board had voted to support a decision to withhold the bonuses of three senior executives, and that other managers, not at executive level, might also lose their bonuses. The board’s non-executive directors also agreed to donate 10% of their 2020 director fees to the Clontarf Foundation, a non-Aboriginal organisation that supports Aboriginal education and employment.
Penalties labelled ‘pocket change’ for executives
Jacques was due to receive an annual bonus of $3.1m (£1.7) and a long-term performance bonus of $1.8m (£1m) in 2021. The chief executive of Rio Tinto Iron ore, Chris Salisbury, was expected to receive a bonus of $1.1m this year, and the global group executive of corporate relations, Simone Niven, was expected to receive $959,702 (£525,000).
“In making these decisions, the remuneration committee considered the shortfalls identified in the board review, which revealed systemic failures in the cultural heritage management system operating at Brockman 4 over an extended period of time,” the report said.
It said that the three executives had failed through “acts of omission, rather than commission”.
The Australian Centre for Corporate Responsibility’s James Fitzgerald said the review was “highly disappointing” and “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”.
“Tens of thousands of years of cultural significance get blown up and all that goes to show for it is $7m of lost remuneration,” Fitzgerald said.
He said that was “pocket change for these highly paid executives” and that Jacques and Niven should lose their jobs.
The Australian Council of Superannuation Investors said the review “does not deliver any meaningful accountability” and an “independent and transparent review would have given investors greater confidence that [the] accountability applied was appropriate and proportionate”.
“Remuneration appears to be the only sanction applied to executives,” the council’s chief executive, Louise Davidson, said. “This raises the question – does the company feel that £4 million (about $7m) is the right price for the destruction of cultural heritage?”
Company focused on approval not protection
The report found that the company was more focused on gaining approval to conduct mining activities than it was on managing and protecting Aboriginal heritage, and that once approval was granted under Western Australia’s decades-old Aboriginal heritage laws to destroy the rock shelters they disappeared from mine planning maps, because a “buffer zone” was no longer required.
“Without this information, the risk to social licence was not fully apparent from the perspective of mine operations, creating a ‘blind spot’ for operational management,” the report found. “With changes in personnel over the years, knowledge and awareness of the location and significance of the Juukan rockshelters among operating and senior management were lost.”
The report found that the failures in the heritage information management system was a “fatal flaw” and was “symptomatic of a work culture that was more focused on ensuring that necessary approvals and consents were in place for ground disturbance of culturally significant sites, rather than also managing changing cultural heritage issues that could arise on sites where authorisation and consents for ground disturbance had previously been obtained.”
But it does not name any individuals who were responsible for changing the plan, and stresses that Jacques himself was not aware of the full significance of the site until after it was destroyed. It says the heritage team was under-resourced and “siloed”, but does not explain why local mining managers – who work out of an administration building decorated with a latex mould of the wall of Juukan 2, and were personally told of the significance the site held to the PKKP – did not raise the issue.
Multiple missed opportunities to review plans
Rio Tinto received permission under section 18 of the state’s Aboriginal Heritage Act to destroy two rock shelters, dubbed Juukan 1 and Juukan 2, in December 2013. Two years earlier, it signed a partnership agreement with the PKKP over the management of the Brockman 4 iron ore mine on PKKP land.
In 2012, when Rio Tinto was finalising the design of its mine pit, its heritage team requested that a buffer zone be placed around Juukan Gorge. The company developed four options for the mine pit, and chose the one which directly impacted on Juukan Gorge. The PKKP were not made aware, until a parliamentary inquiry which began last month, that there was ever an option for the mine which did not involve destroying the site.
The report found that Rio Tinto could have better communicated with the PKKP when finalising the pit design and applying for s.18 approval in 2012 and 2013.
It said it also could have reviewed its plans when it received an ethnographic report in 2013 that said the Juukan Gorge and Purlykuti creek area, including the rock shelters, were of “of high significance to Puutu Kunti Kurrama, in the old days and still today”; and in August 2014 when it received a preliminary report from archeologist Dr Michael Slack, who conducted a salvage dig, that Juukan 2 was “one of the most archeologically significant sites in Australia”.
It said Rio Tinto should also have reviewed its plans in December 2018, when it received a final report from Slack which stated that Juukan 2 had been occupied continually for 46,000 years – almost twice as long as previously estimated – and said it “has the amazing potential to radically change our understanding of the earliest human behaviour in Australia”.
The company received another ethnographic report in March of 2020, which reiterated that the site was of “high significance to the PKKP”, and found the rock shelters were a “connected complex rather than a number of isolated cultural heritage sites”.
Around the same time, the heritage worker for the PKKP reiterated the significance of the site to the local mine manager, and the PKKP had requested permission to visit “while we still can”.
“These changing realities in the period from 2018 should have prompted a review within Rio Tinto of the implications of the new ethnographic and archaeological reports for the Brockman 4 mine development plans, and especially their timing and sequencing,” the report found. “Such a review should have been initiated even in the absence of a formal request by the PKKP .
“These steps were not taken and important opportunities for pausing and re-considering options were missed until the PKKP formally raised their concerns in May 2020, by which time, as described in our submission to
the Inquiry, it was no longer safe and practicable to protect the sites.”
It said those steps were not taken because of “shortfalls in linked-up decision-making within the Rio Tinto organisation, and standards of governance and accountability, which call into question aspects of the work culture and priorities at Brockman 4”.
Rio Tinto will establish a new social performance role, which will oversee “key group-level risks” including cultural heritage risks. It will also require that regular audits of cultural heritage be conducted and reported to board level.
“There needs to be a clear recognition across the Rio Tinto organisation that, in circumstances in which appropriate authority has been given to disturb a cultural heritage site and related mitigation and salvage operations have been completed, ongoing review of that site’s heritage status continues to be required, and will need to be elevated in decision making as required,” the report said. “This is critical in situations in which material new knowledge about the site is acquired.”
The parliamentary inquiry into the destruction of the sites is ongoing. Hearings will be held on PKKP country in WA next month.