Pressure Mounts For Rio Board After Australian Cave Blast Review
Australian superannuation fund Hesta has become the latest investor to voice dissatisfaction over the findings of Rio Tinto's board-led review into how the iron ore miner legally detonated historically significant Aboriginal rockshelters.
The comments come as Rio Tinto is expected to update investors within 24 hours on further steps that may bring more sanctions for executives, a separate Australian-based investor group told Reuters on condition of anonymity, on Thursday.
Rio's board is to meet on Thursday, the BBC has said.
After an internal review of its legal destruction of the sacred sites in Western Australia for a mine expansion, Rio said it would cut the short-term bonuses of some senior officials, including chief executive Jean-Sébastien Jacques.
"Accountability for the destruction at Juukan Gorge should rest at the highest levels of Rio," Hesta said in a statement that urged an independent review of all the pacts Rio Tinto has negotiated with traditional owners.
"As an investor, we have lost confidence that the company can do this on their own."
Rio declined to comment.
Rio shares were up 1.4% ahead of Thursday's events. Since the controversy broke in late May, they have gained nearly a tenth, underperforming a rise of 24% in prices of iron ore.
Investors say Rio's missteps have fuelled concern about the firm's culture and the ability of staff to flag concerns to managers, as well as whether the board review fell short of community standards.
An Australian petition to sack Jacques by activist group GetUp! has attracted 28,639 signatures.
"There seems to be some consensus building around the industry funds," said a source at an Australian asset manager who sought anonymity as the topic was sensitive.
"It's safe to say (Rio) are going to battle to avoid any structural change with management and with the board."
Pressure is also mounting from investors in Britain.
"While cutting short-term bonuses of senior executivesis a symbolic step toward attributing accountability for the tragedy, there is clearly a deeper, systemic governance issue that needs to be addressed more fully and urgently," the Local Authority Pension Fund Forum (LAPFF) said.
The Forum groups 81 public sector pension funds with assets of more than 300 billion sterling ($390 billion).
"To this end, LAPFF expects the Rio Tinto board to hold the appropriate parties accountable for Rio Tinto’s failings," it said in a statement.
Jacques met the Puutu Kunti Kurrama and Pinikura (PKKP) people this week after a two-week quarantine, having flown from Sydney.
In a statement, the PKKP said the grouping held meetings with senior executives "to share our feelings" and seek a way forward to repair and grow the relationship.
The findings of an Australian parliamentary review into the blast have been delayed to Dec. 9 because of coronavirus curbs, the panel said on Thursday.
(Reuters)
