Rio board to consider further executive sanctions over Aboriginal cave blasts

Rio Tinto is set to discuss further executive sanctions over the destruction of two 46,000-year-old Aboriginal shelters in Western Australia.

The company’s board plans to meet this week for talks on the matter, according to people with knowledge of the situation.

The Anglo-Australian group last month cut £4m from the bonuses of chief executive Jean-Sébastien Jacques, head of iron ore Chris Salisbury and head of corporate relations Simone Niven following an internal review of the rock cave blasts in May.

The board-led investigation concluded that no single individual or error was responsible for the blowing up of the caves in the Juukan Gorge to expand an iron ore mine. However, its report said Rio had missed numerous chances to prevent the demolition of the site. A 2018 report commissioned by the company showed the caves were of the “highest archeological significance in Australia”.

A number of shareholders, mainly in Australia but some in the UK, have said the financial penalties were inadequate and have called for a tougher response from the company and its chairman Simon Thompson.

“The cut to the senior executives’ pay was a good first step; further steps must be considered and appropriate and proportionate action taken,” said Doug McMurdo, chair of the Local Authority Pension Fund Forum.

Rio’s board is said to be divided over how to respond to the crisis.

At the weekend a report in the Mail on Sunday claimed two non-executive directors — former Centrica boss Sam Laidlaw and former Royal Dutch Shell finance director Simon Henry — had called for stronger disciplinary action against those involved in the blasts.

After the review was made public just over two weeks ago Mr Thompson, who was appointed chairman in 2018, claimed the board had no intention of removing Mr Jacques or any other executives.

“The key question is, who are the best people to lead the changes that have been identified in the board report? And the board has concluded that JS, Chris and Simone really are the right people,” Mr Thompson told the Financial Times at the time. 

Analysts say there is no obvious internal successor to Mr Jacques, who since taking the reins in 2016 has turned Rio into a money-printing machine, winning plaudits from many UK and US shareholders.

Mr Jacques has also cut costs, overseen a sweeping corporate restructuring and led the company to quit thermal coal before its rivals. On top of that he has avoided big deals, which have hobbled Rio in the past.

Mr Jacques recently travelled to Western Australia to try and arrange meetings with indigenous groups including the traditional owners of Juukan Gorge, the Puutu Kunti Kurrama and Pinikura people. 

Because of the state’s tough coronavirus regulations, he was forced to spend two weeks under quarantine in a Perth hotel room, according to people with knowledge of his situation. 

Rio secured approval from Western Australia’s state government to destroy the caves in 2013 as part of the expansion of its Brockman 4 mine.

However it, “missed opportunities” to alter its expansion plans following archaeological digs in 2014 and 2018.

Mr Jacques told a parliamentary inquiry into the blast that he was not aware of the cultural significance of the rock shelters until they were blown up on May 24. He also admitted he had not read the 2018 archaeological report.