AustralianSuper seeks tougher penalties for Rio Tinto cave blast
Australia's largest superannuation fund has met with Rio Tinto to seek tougher penalties for the blasting of the ancient Juukan Gorge rock shelters, saying the bonus cuts announced earlier this week fall significantly short of appropriate accountability.
Ian Silk, chief executive of the $180 billion superannuation giant AustralianSuper, said the fund had met with Rio Tinto chairman Simon Thompson to express its view the proposed penalties were inadequate punishment for destruction of the two 46,000-year-old rock shelters considered to be among the most significant cultural heritage sites in Australia.
AustralianSuper chief Ian Silk wants tougher penalties over destruction of Juukan Gorge.Credit:James Alcock
Mr Silk said he had requested tougher penalties than the reduction of a combined $7 million in bonuses for chief executive Jean-Sebastien Jacques, iron ore boss Chris Salisbury and corporate affairs boss Simone Niven.
"The proposed penalties fall significantly short of appropriate accountability for those responsible," he said.
"We have asked the board to reconsider its response, and are continuing to engage with the company on the matter."
After a two-month review into the destruction that left the site's traditional owners devastated, Rio Tinto on Monday said the investigation had found systemic flaws but "no single root cause or error" and had concluded that the three executives' failures were of "omission rather than commission" as they had not been aware of the rock shelters' cultural value prior to detonation.
Mr Jacques would be stripped of 2020 bonus payments worth about $4.8 million, while Ms Niven and Mr Salisbury would lose about $1 million each. In 2019, Mr Jacques received a salary of £5.79 million ($10.5 million).
The announcement raised immediate concerns from activist groups and institutional investors that the proposed consequences failed to deliver on meaningful accountability.
"The report highlights profound systemic, operational and governance failings," Mr Silk said.
The $52 billion superannuation fund HESTA, which also invests in Rio, noted the findings that the blasting of the gorge, although legally sanctioned, had fallen "well short" of the miner's own standards but had failed to specify who was ultimately responsible for adhering to those standards and for ongoing oversight of heritage management.
"The report fails to assuage investor concerns about the gap in Rio Tinto's public commitment to lead on heritage protection, and its actions," HESTA chief executive Debby Blakey said.
Australian Council of Superannuation Investors chief executive Louise Davidson called on Rio's board to explain why greater accountability was not being applied in light of the disaster. "Remuneration appears to be the only sanction applied to executives," Ms Davidson said. "This raises the question – does the company feel that £4 million is the right price for the destruction of cultural heritage?"
Other major investors, including UK's Local Authority Pension Fund Forum, have welcomed Rio's release of the internal review and bonus cuts for the three executives as a "proper and appropriate first step".
Rio Tinto has acknowledged "you cannot put a monetary value" on the loss of the Juukan site ."But these are significant penalties," Mr Thompson said of the pay cuts on Monday. "I think they reflect both the seriousness of the incident and the damage that has been done to Rio Tinto's reputation."
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