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Jean-Sébastien Jacques, Rio Tinto’s CEO, will resign at the end of March after failing to contain the consequences of the destruction of an ancient Aboriginal site in Western Australia.
The company said two other top executives, Chris Salisbury, the iron ore chief, and corporate affairs leader Simone Niven, who had responsibility for indigenous affairs, will also leave Rio as the miner fights backlash from the investors against its decision to destroy the 46,000 year-old site.
Simon Thompson, president of Rio Tinto, said Jacques had agreed to resign as chief executive officer and a process was underway to identify a successor. He added that Jacques would remain in office until the appointment of a successor or would leave on March 31.
Rio has been struggling to contain the damage to its reputation after it destroyed two sacred Aboriginal shelters in May in Juukan Gorge in the Pilbara region of Western Australia to expand an iron ore mine. Its flagship iron ore operation, which generates more than 90 percent of the company’s profits, is based in the area.
“What happened in Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural importance never occurs again at a Rio Tinto operation. We are also determined to regain the trust of the Puutu Kunti Kurrama and Pinikura people and other traditional owners, ”said Mr. Thompson.
River razed the Juukan Gorge site in the Pilbara region of Western Australia to expand an iron ore mine © HANDOUT / PKKP Aboriginal Corporation / AFP via Getty Images
“We have heard concerns from our shareholders that the lack of individual accountability undermines the group’s ability to rebuild that trust and move forward to implement the changes identified in the board’s review,” he added.
Rio Tinto’s Sydney-listed shares fell 0.8 percent after the announcement. The broader S & P / ASX 200 fell 0.7 percent.
Salisbury will step down as director of iron ore with immediate effect and will leave Rio on December 31. Ivan Vella, managing director of railways, ports and basic services, will assume the position on an interim basis.
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Ms. Niven will be leaving the group at the end of the year and a new social performance role headed by Mark Davies, another Rio executive, will oversee the communities and heritage.
Rio received legal permission to demolish the site in 2013, but has come under fire for failing to change its plan more quickly when the archaeological significance of the rock shelters became apparent.
Some experts have compared the destruction of the site to the kind of cultural vandalism practiced by the Taliban.
Rio initially claimed that the incident was a “misunderstanding”, suggesting that the traditional owners did not realize the cultural significance of the site in time to prevent the explosions.
Mr. Jacques made his first public comments on the demolition two weeks after it happened. In an appearance before a parliamentary inquiry last month, Jacques said he was not aware of the importance of the caves before they were blown up.
The board’s initial response to the crisis was criticized by large Australian pension funds and some small UK investors.
After a review of the events that led to the explosions, the board deducted a total of £ 4 million from the bonuses of Jacques, Salisbury and Niven, but insisted that they were the right people to lead the company’s response to the incident. .
Accr, an investor advocacy group, said the resignations in Rio were an important moment for shareholder activism.
“Shareholder democracy and investor action are alive and well in Australia. Corporate captains may think twice about trying to mislead investors, not to mention a parliamentary investigation, in the future, “said James Fitzgerald, Accr’s legal counsel.
However, some investors were not satisfied.
Hesta, a pension fund that manages A $ 52 billion ($ 38 billion), said the board had not adequately demonstrated that it had adequate governance measures in place in relation to its deals with Aboriginal communities.
“While we welcome the actions taken by Rio today, changes in senior leadership should not distract from the need for an independent and transparent review of all current agreements between the company and the traditional owners,” said Debby. Blakey, CEO of Hesta.
Without an obvious internal successor, Rio will likely look outside the company for its next CEO, who will have to mend its relationship with indigenous Australia, as well as tackle big strategic issues like its dependence on iron ore.
Under Jacques’ leadership, Rio sold assets, returned huge amounts of cash to shareholders, and became the first major mining company to get off thermal coal, a polluting fossil fuel.
Yet analysts have said his greatest achievement was avoiding the big transformative deals that have hampered Rio in the past.
