Australia’s biggest super fund, the $180bn AustralianSuper, has dismissed as inadequate Rio Tinto’s decision to strip bonuses from executives over the destruction of 46,000-year-old caves at Juukan Gorge in the Pilbara.
Ian Silk, the chief executive of AustralianSuper, said a report into the debacle by Rio Tinto’s board “highlights profound systemic, operational and governance failings”.
“AustralianSuper has met with the chair of Rio Tinto and expressed our view that the proposed penalties fall significantly short of appropriate accountability for those responsible,” Silk said.
“We have asked the board to reconsider its response and are continuing to engage with the company on the matter.”
Silk did not say what additional action AustralianSuper wanted.
It is believed the fund, which owns about $1.3bn in Rio Tinto shares, is yet to receive a response to its demands from the company.
Rio Tinto destroyed two rock shelters in Juukan Gorge in the Pilbara region of Western Australia on 24 May, despite having received five separate reports on the significance of the sites since 2013.
On Monday, Rio Tinto said it would strip about $5m in bonuses from chief executive Jean-Sébastien Jacques and about $1m in bonuses from iron ore boss Chris Salisbury after the company “failed to meet some of its own internal standards and procedures in relation to the responsible management and protection of cultural heritage”.
The internal review has received criticism from industry and shareholder groups.
The Australian Centre for Corporate Responsibility said the review was “highly disappointing” and “little more than a public relations exercise.”
“Tens of thousands of years of cultural significance get blown up and all that goes to show for it is $7m of lost remuneration,” ACCR’s James Fitzgerald said.
Fitzgerald said that was “pocket change for these highly paid executives” and that Jacques and Niven should lose their jobs.
The Australian Council of Superannuation Investors said the review “does not deliver any meaningful accountability”.
“Remuneration appears to be the only sanction applied to executives,” the council’s chief executive, Louise Davidson, said. “This raises the question – does the company feel that £4m [about $7m] is the right price for the destruction of cultural heritage?”
The $52bn super fund Hesta said investors are concerned risks aren’t being appropriately managed after the destruction of the Juukan Gorge.
Hesta says it has outlined its investor expectations in a letter to 14 Australian mining and energy companies.
“We are committed to engaging with companies to understand how they are managing these issues, and we will consider using our voting rights where we identify the need for improved practices and disclosure,” the Hesta CEO, Debby Blakey, said.
Blakey said investors were dismayed at the destruction of culturally significant sites at Juukan Gorge by Rio Tinto.
