Superannuation giant HESTA urges scrutiny of Rio Tinto over Juukan Gorge

Superannuation heavyweight HESTA says it and other investors will ultimately pay the cost of Rio Tinto’s damaged licence to operate.

This handout photo taken on May 15, 2020 and released by the PKKP Aboriginal Corporation and received by AFP on May 27, 2020 shows Juukan Gorge in Western Australia -- one of the earliest known sites occupied by Aboriginals in Australia. Photo by Handout / PKKP Aboriginal Corporation / AFP

Superannuation heavyweight HESTA has urged the parliamentary committee investigating Rio Tinto’s destruction of the ancient Juukan Gorge caves in the Pilbara to scrutinise the mining giant’s conduct in its dealing with Indigenous groups.

HESTA, which manages $52bn of assets on behalf of 860,000 members, used its submission to the inquiry into the May detonation of the caves to argue that it and other investors would ultimately pay the cost of Rio Tinto’s damaged licence to operate.

“On occasions where companies make decisions and discover a gap between the letter of the law and community expectations, it is investors such as HESTA who bear the costs, which ultimately results in lower returns for our members,” the group said.

The Juukan Gorge saga meant Rio Tinto could experience future delays in permitting and a lack of trust from traditional owners, HESTA said, while board and management time would be spent responding to the fallout of the incident and rebuilding the company’s reputation in Indigenous relations.

HESTA holds $250m worth of Rio Tinto shares.

Rio Tinto detonated the caves, where artefacts dating back as far as 46,000 years had been recovered, back in May. The mining giant’s own submission to the inquiry, published on Tuesday, confirmed that it had three other viable mine plans for the area that would not have destroyed the caves and identified numerous points in time where the cultural significance of the cave should have been recognised.

Rio Tinto chief executive Jean-Sebastien Jacques will appear before the inquiry on Friday morning.

Jean-Sebastien Jacques, CEO of Rio Tinto. Picture: Getty Images)

HESTA noted that the actions taken at Juukan Gorge were legal and that the mining company had obtained ministerial consent for its plans under Western Australia’s Aboriginal Heritage Act back in 2013.

“We believe our investee companies should adopt and promote a culture which asks whether companies ‘should’ do something rather than whether they ‘can’ do something,” it said.

“We acknowledge that the law can sometimes lag community expectations and we expect companies to recognise this and make appropriate decisions to safeguard and enhance the value of the company over the long term.”

The group said there remained “a lack of transparency” over several aspects of Rio’s processes.

A submission lodged by the Australasian Centre for Corporate Responsibility NGO said Rio Tinto had shown an “egregious noncompliance” to its public commitments on relationships with Indigenous communities.

“Wilful non-application of disclosed commitments is a matter of concern for investors and society at large, and may raise questions of corporations and consumer law,” the group said.