Ethical Partners calls for change post recent Rio Tinto incident

June 12, 2020
Market Thoughts & Insights

It is sadly now well documented that on the 24th May 2020,Rio Tinto blasted rock caves known as the Juukan Gorge rock shelters in the Pilbara region of Western Australia to allow for the expansion and development of its Brockman 4 asset. We understand these rock caves were regarded as being of cultural and historical significance to the First Peoples. Archaeological testing at the site had determined they were approximately 46,000 years old and the Puutu Kunti Kurrama and Pinikura peoples (PKKP) are reported to have a deeply spiritual and emotional connection to their ancestral past through this land.

When we assess the timeline of how this deeply regrettable event unfolded we do believe that whilst Rio Tinto has followed the letter of the law with respect to ensuring consent (granted in 2013) and providing some limited site access to the PKKP in recent times, it does not appear to have abided by the UN Guiding Principles. Whilst the process of obtaining a Section 18 notice and the broader process of consent from the Traditional Owners is an issue that we are not experts in, we are confident that RIO’s commitment to operate in a manner which is consistent with UN Guiding Principles and UN Declaration on the Rights of Indigenous Peoples(UNDRIP), was not abided by in this case.

Specifically, we have read that key issues became evident in 2014, one year after consent was granted. At that time it became clear that the significance of the Sacred Site following further investigation was much greater than initially understood when consent was struck. It was determined that the site was at least twice as old as previously believed, the locations more numerate and a range of artifacts needed to be protected. We strongly feel this should have been a catalyst for Rio Tinto to reconsider the mine plan and re-engage with the PKKP peoples.

We acknowledge that this is a complicated issue and we are continuing to educate ourselves, but in our view that does not mean investors should shy away from advocating for change at the corporate and regulatory level to mitigate the chances of the mistakes of this magnitude being repeated. We await the findings of the flagged review of this event, but initially it appears to us that the missteps that lead to this horrific event are born from a breakdown in communication: communication within Rio Tinto,communication between Rio Tinto and the regulatory/government bodies, and most significantly, communication between Rio Tinto and the Traditional Owners (the PKKP in this instance). As a result, our suggestions are built around creating catalysts for improved communication and transparency to facilitate a better understanding for all stakeholders of the issues and to help prevent events of this nature in the future.

Further to the broad recommendations outlined below we strongly encourage Rio Tinto to make public the findings from its announced review to show the accountability taken and also provide learnings to the broader industry. We note with some disappointment that Rio Tinto is yet to make any formal pubic statement to the London or Australian Stock Exchanges, rather choosing to provide a link on their corporate website. It has also become clear over recent days that this is not a risk isolated to Rio Tinto, with Fortescue, BHP and Woodside all reported to be planning future destructive expansions in the same manner.

To that end, we call on Rio Tinto and the mining sector for:

Increased disclosure via the publishing (by every ASX listed company) of a Register of sites and places of Aboriginal and Torres Strait Islander heritage that will be impacted by intended works and development*: These will be in the form of Section 18 notices in Western Australia, Section 90 of the National Parks and Wildlife Act 1974 (NSW) and other relevant legislation for each State and Territory of Australia: We feel this may allow all stakeholders to be better educated on what current approvals exist and to assist in fostering a broader discussion on their applicability. In our view this is a relatively simple process that could be enacted swiftly and we will be encouraging companies to do this.

For the full article and our other three suggestions please see attached.

*to the extent permissible by the First Peoples

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