Rio Tinto CEO quits after backlash over Aboriginal site destruction

Jean-Sébastien Jacques, the chief executive of Rio Tinto, will step down by the end of March after failing to contain the fallout from the destruction of an ancient Aboriginal site in Western Australia, the miner said on Friday.

Two other senior executives — Chris Salisbury, the head of iron ore, and corporate affairs leader Simone Niven, who had responsibility for indigenous affairs — will also leave Rio, as the miner tries to contain an investor backlash against its decision to destroy the 46,000-year-old site.

Simon Thompson, Rio Tinto chairman, said Mr Jacques had agreed to stand down as chief executive by mutual agreement and a process to identify a successor was under way. The French-born executive would remain in his role until the appointment of a successor or leave by March 31, he added.

“What happened at Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural significance 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.

“We have listened to our stakeholders’ concerns that a lack of individual accountability undermines the group’s ability to rebuild that trust and to move forward to implement the changes identified in the board review,” he added.

Rio razed the 46,000-year-old Juukan Gorge site in the Pilbara region of Western Australia to expand an iron ore mine © HANDOUT/PKKP Aboriginal Corporation/AFP via Getty Images

Mr Salisbury will step down as head of iron ore with immediate effect and leave Rio by December 31. Ivan Vella, managing director of rail, port and core services, will take over on an interim basis.

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Ms Niven will leave the group by the end of the year and a new social performance function headed by Mark Davies, another Rio executive, will oversee communities and heritage.

Rio has been scrambling to contain the damage after it destroyed two sacred Aboriginal shelters in May at 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 per cent of the company’s earnings, is based in the area. 

Rio received legal permission to demolish the site in 2013 but has been fiercely criticised for not changing its plan when the archaeological importance of the rock shelters became clear.

Some experts have likened the destruction of the site to the type of cultural vandalism practised by the Taliban.

Rio initially claimed that the incident was a “misunderstanding”, suggesting it was not made aware of the cultural significance of the site by the traditional landowners in time to prevent the blasts.

Mr Jacques only made his first public comments on the demolition two weeks after it happened. At an appearance before a parliamentary inquiry last month, Mr Jacques claimed that he was not aware of the importance of the caves prior to them being blown up.

The board’s initial response to the crisis hit Rio’s reputation as a leader in indigenous affairs and was slammed by big Australian pension funds and some small UK investors.

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After a review of the events leading up the blasts, the board deducted a total of £4m from the bonuses of Mr Jacques, Mr Salisbury and Ms Niven but insisted they were the right people to lead to the company’s response to the incident. 

Accr, an investor advocacy group, said the resignations at Rio were an important moment for shareholder activism. They demonstrate that investors will not accept corporate misinformation and disrespect of cultural sites, it said.

“Shareholder democracy and investor action is alive and well in Australia. Corporate captains may think twice before attempting to mislead investors, not to mention a parliamentary inquiry, in future,” said James Fitzgerald, Accr’s legal counsel.

In an attempt to enhance Rio’s board engagement in Australia, Simon McKeon, a non-executive director, has been appointed to a newly created position of senior independent director.

With no obvious internal successor Rio will probably look outside the company for its next chief executive, who will have to mend its relationship with indigenous Australia as well as address big strategic issues such as its reliance on iron ore. 

Under Mr Jacques, Rio sold assets, returned huge amounts of cash to shareholders and became the first big mining company to exit thermal coal, a polluting fossil fuel.

However, analysts have said his biggest achievement was avoiding the big, transformational deals that have hobbled Rio in the past.


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