Deep regret: Rio Tinto chairman Simon Thompson to exit after Juukan Gorge destruction
Rio Tinto chair Simon Thompson cites accountability for Juukan Gorge destruction as he announces he’ll quit as a director.
Rio Tinto chairman Simon Thompson has completed the top leadership rout at Rio Tinto by announcing he will not seek re-election as a director of the mining giant at its 2022 annual meeting, citing the need to take accountability for the destruction of 46,000 year old heritage sites in the Pilbara.
Fellow director Michael L’Estrange, who has also been under pressure after overseeing a review of Rio’s role in the disaster largely seen as a whitewash, will also step down from the board at this year’s AGM.
Rio’s decision to blast 46,000-year-old heritage sites at Juukan Gorge against the wishes of the Puutu Kunti Kurrama and Pinikura people, the site’s traditional owners, wrecked Rio’s international reputation and cost chief executive Jean-Sebastien Jacques, iron ore boss Chris Salisbury and corporate relations chief Simone Niven their jobs.
A Rio internal review into the decision to blast the gorge, run by Mr L’Estrange, cleared all three of any knowledge or involvement in the decision, blaming previous management, a breakdown in communication with the PKKP, failures of “linked-up decision-making”, and even its own internal software for blinding it to the need to protect the 46,000-year-old heritage site.
Both Mr L’Estrange and the Rio chairman have been under pressure to resign since the release of the report, which only recommended the loss of bonuses for Rio’s executive trio.
Rio’s attempts to mend its damaged relationship with traditional owners suffered a further setback last month, with Mr Thompson accused of reneging on pledges made after the destruction.
The decision of both to leave the company was welcomed by major investors and activist groups that helped ramp up pressure on the company in the wake of the release of the review last year, including AustralianSuper chief Ian Silk who called on Rio to ensure both men were replaced by Australian candidates.
“Following the recent appointment by Rio Tinto of chief executive Jakob Stausholm to the top role, it is appropriate and timely for Mr Thompson to assist with the transition before stepping down,” he said.
“However, as Mr Thompson has said, he is ‘ultimately accountable’ for the failings that led to the Juukan Gorge incident, and as a result his resignation is an appropriate acknowledgment of that governance failure.
“The resignations of Mr Thompson and Michael L’Estrange provide an opportunity to increase the Australian profile at board level.”
Australasian Centre for Corporate Responsibility general counsel James Fitzgerald said the decision of both men was needed if the company was to rebuild its shattered reputation and relationships.
“There is no realistic prospect of Rio Tinto rebuilding relationships, trust and reputation while those responsible for the degradation of its culture and social performance remain on the board,” he said.
“Other Rio Tinto directors who enabled the unhappy regime of the past few years, or who have made excuses for it, are encouraged to reflect on whether their continuing presence on the board is truly in the interest of the company and its shareholders.”
Rio said directors Sam Laidlaw and Simon McKeon would lead the search for a new chair.
Announcing his decision, Mr Thompson said he was ultimately responsible for the destruction of the important Aboriginal Australian heritage site.
“I am proud of Rio Tinto’s achievements in 2020, including our outstanding response to the COVID-19 pandemic, a second successive fatality-free year, significant progress with our climate change strategy, and strong shareholder returns,” he said.
“However, these successes were overshadowed by the destruction of the Juukan Gorge rock shelters at the Brockman four operations in Australia and, as chairman, I am ultimately accountable for the failings that led to this tragic event.”
Mr Thompson said the company has engaged with traditional owners to improve risk management and governance.
“We have taken decisive action to address the weaknesses identified in our risk management and governance, while also acknowledging the need to improve our work culture and to rebuild relationships.”
He said that following “significant surgery” in February, Mr L’Estrange had decided to reduce his workload and would not therefore be seeking re-election as a director at the forthcoming AGM.
“The entire board wishes Michael a full and speedy recovery and thanks him for his outstanding contribution. Rio Tinto will greatly miss his insights and wise counsel,” Mr Thompson said.
Mr L’Estrange, who will end six and a half years on the Rio board, said the mining giant would “continue to implement the critical changes aimed at ensuring that an occurrence such
as the destruction of the Juukan Gorge rock shelters never happens again”.
