Investors shrugged off the news of a cleanout at the top of Rio Tinto Big over the destruction of one of the oldest sacred sites in Australia.
Rio surprised on Friday morning with news of the cleanout that saw CEO, Jean-Sébastien Jacques, and two other senior executives leaving over the decision to blow up a 46,000-year-old Aboriginal sacred site in the company’s iron ore tenements in WA’s Pilbara.
And Chris Salisbury, the head of Rio’s key iron ore business, and corporate affairs head, Simone Niven who had responsibility for indigenous affairs — are also leaving.
The CEO steps down by the end of March next year and the other two leave by the end of this year.
Rio shares though dipped 0.1% at midday to $100.35 as the wider market shed 1% in the wake of the slide on Wall Street on Thursday.
The departures follow Rio’s sluggishness in dealing with the fallout from the destructive blast that saw the company try to avoid sheeting home full responsibility to any senior executive. Rio denied knowing about the site’s importance until that denial was exposed as being wrong by evidence of earlier warnings going back half a decade.
Major shareholders – mostly Australian stepped up pressure on the Rio board for transparency and accountability and a Federal Parliamentary committee weighed in with public hearings at which Rio’s obfuscation was exposed.
Rio conducted an in house inquiry that didn’t resolve the issue, especially so far as the big shareholders were concerned.
The inquiry saw Mr. Jacques, Mr. Salisbury, and Ms. Niven – whose department oversees community relations – stripped of $7 million of their 2020 bonuses because the review found they had to bear some responsibility.
Rio chair Simon Thompson said at the time no one would be stood down over the matter because the board had decided they were the best people to lead the critical reforms to heritage processes that were required.
However, the tokenistic bonus cuts did not satisfy investors and Indigenous groups who told board members that docking the pay of well-paid executives fell well short of true accountability for the destruction of such a significant site.
It is the second time in a month that major shareholders have forced change on a leading Australian company.
Last month they forced AMP Chair, David Murray, to resign, taking with him board supporter in John Fraser, a former head of Federal Treasury. A major shareholder led the revolt that also saw the head of AMP capital demoted back to a previous position.
The Rio departures come after months of escalating pressure from Aboriginal groups, shareholders, and government leaders over Rio’s decision to blast the two culturally significant rock shelters in Western Australia’s Pilbara region which had evidence of continual human occupation tracing back at least 46,000 years.
The blast was legally sanctioned for the expansion of Rio’s Brockman 4 iron ore mine, but it went against the wishes of the land’s traditional owners, the Puutu Kunti Kurrama and Pinikura (PKKP) people.
Although Rio Tinto claimed it believed it had the PKKP’s consent until it was too late to stop the blast safely. Rio has since publicly apologised and has acknowledged multiple failures in its communication with the traditional owners that could have prevented the debacle.
But many of these problems were linked to a revamp of the handling of indigenous relations at the instigation of Mr. Jacques. This effectively downgraded relations when previously responsibility for them had rested with the CEO.