Fallout from Rio Tinto’s blasting of a 46,000-year-old sacred site in Western Australia has spread across the Pilbara mining industry, as shareholders call for companies to make public their dealings with traditional owners and demand an immediate halt to any operations that could damage existing sites.
One of Australia’s biggest superannuation funds wants a public inquiry into all agreements Rio Tinto has made with Aboriginal traditional owners in the iron ore-rich Pilbara, saying: “A change in the ranks of Rio’s senior leadership won’t mitigate this risk for investors.”
Hesta, which manages $52bn on behalf of more than 870,000 Australians, has written to the Rio Tinto board before its meeting, due to go ahead on Thursday in London. Rio’s chief executive, Jean-Sébastien Jaques, has been widely tipped to be removed from his post over the matter.
Hesta warned that reputational risks from the actions of mining companies could impact their value.
“Mining companies that fail to negotiate fairly and in good faith with traditional owners expose the company to reputational and legal risk,” Hesta’s statement said.
“These risks increase the longer these agreements are in place. Without an independent review, we cannot adequately assess these risks and understand how they may impact value. We have lost confidence that the company can do this on their own.”
The super fund wants a review of all current agreements Rio has negotiated with traditional owners in light of revelations that they contain gag orders preventing traditional owners from speaking about their concerns for sacred and significant sites.
Hesta said it had sought advice from the economist and lawyer Prof Allan Fels as an appropriate expert to consider the matter.
Fels told Guardian Australia: “There are potential unconscionable conduct issues, both at the legal and ethical level. They need to be investigated independently.”
He said this included the use of confidentiality clauses. “Someone needs to look behind the confidentiality elements,” he said.
An investigation by Guardian Australia found that more than 100 ancient Aboriginal sites in Western Australia could still be destroyed by mining companies, which have obtained legal permission to do so.
The Australasian Centre for Corporate Responsibility (ACCR) wants Fortescue Metals Group to halt mining activities that would disturb, destroy or desecrate cultural heritage sites in Australia until relevant laws are strengthened, and to lift any confidentiality provisions on Aboriginal traditional owners so they can speak freely and publicly about cultural heritage or other concerns on their land.
“As investors, we believe it’s necessary that this shareholder resolution receives strong support – or is proactively adopted by FMG’s board – because there is far too much at stake to allow any further destruction of Indigenous cultural sites, as [the federal MP Warren] Entsch has also made clear,” said the ACCR’s Brynn O’Brien.
“In engagement with us, FMG has been clear that it is happy for business to continue as usual. Shareholders, in the wake of Juukan Gorge, know that business as usual is absolutely unacceptable.
“FMG has a dubious history of engagement with Pilbara native title holders, specifically the Yindjibarndi people. Comments as recently as last year, coming from the chairman saying ‘that is not a community I’m going to empower with tens of millions of your cash’ demonstrate that the company and board have a long way to go in understanding and valuing the intricacies of cultural heritage and the agency of traditional owners.”
The ACCR has also sought similar assurances from BHP.
FMG said it does not have heritage “gag order” clauses in its agreements with traditional owners and does not support a moratorium on mining activity.
“The moratorium, proposed by people unfamiliar with the West Australian mining industry, is not supported by Fortescue as it would disempower local Aboriginal people in the Pilbara and limit the positive contribution the mining industry is making to the state and national economies, at a time when it is needed most,” chief executive Elizabeth Gaines said.
Hesta said only a broader review of current practices and agreements with traditional owners “will provide certainty to investors that these risks are properly managed by Australia’s mining industry with fair outcomes for all”.
“The larger, systemic issue of how the company and the mining sector negotiates agreements with Traditional Owners needs to be urgently addressed,” it said.
Hesta joins several major institutional investors who have criticised Rio Tinto about its conduct surrounding the destruction of Juukan gorge.
In May the company blew up a 46,000-year-old significant site against the wishes of traditional owners to access higher grade iron ore. The act triggered international condemnation and prompted a federal parliamentary inquiry.
The inquiry, which has had to postpone a planned visit to Western Australia because of difficulties associated with interstate travel and the state government’s recent changes to quarantine restrictions, is continuing.
The inquiry chair, Warren Entsch, said there would be a series of remote access public hearings but members still wanted to visit WA as soon as possible.
“It is vital to see the destruction first hand and share the experience and the consequences of this policy failure with the traditional owners,” Entsch said. “It is vital that we hear directly from those most affected, the traditional owners of this country, and that can only be done in a meaningful way on country.”
Entsch repeated his call for a moratorium on all mining activity which could cause irreversible damage to heritage sites.
“No government and no company wants another Juukan Gorge on its conscience,” the LNP MP said. “If nothing else, the ongoing damage to Rio Tinto’s reputation should give pause for thought for all concerned.”
