AustralianSuper has put Rio Tinto on notice for destroying a 46,000-year-old indigenous cultural site, but won’t pull out its money quite yet.
The fund’s chief investment officer Mark Delaney told reporters during a Bloomberg webinar that Rio Tinto’s decision to blow up the site was “the wrong thing to do”.
The fund has since raised the issue with the company’s leaders, he said.
But when asked if AustralianSuper intends to divest from the company, Mr Delaney said he “[doesn’t] think we’re at that position yet”.
“We’ve had two or three conversations with Rio Tinto about this issue, expressing our displeasure and the importance of the issue with senior managers and the board,” Mr Delaney said.
“We’re working the issue through with them.”
The New Daily asked AustralianSuper to provide more details related to its engagement with Rio Tinto, but the fund declined to expand on the issue.
Although Rio Tinto’s actions have been met with widespread condemnation, the company broke no laws.
The project even received ministerial consent from the Western Australian government.
Warning shot, but no divestment yet
Rio Tinto’s iron ore chief executive Chris Salisbury issued a formal apology to the heritage site’s traditional owners.
“Rio Tinto unreservedly apologises for what happened at Juukan Gorge,” he said.
“We have made it clear to the PKKP (Puutu Kunti Kurrama And Pinikura Aboriginal Corporation) that we are very sorry – it was never our intent to cause distress. Rio Tinto employees are hurting and I am personally distressed.”
Mr Salisbury added that the business is “committed” to learning from the incident with an eye to improving the way Rio Tinto does business.
And AustralianSuper’s Mr Delaney said the miner has so far been receptive to the issues raised by the fund.
AustralianSuper will also keep a close eye on how Rio Tinto – and other mining companies – treat other historic cultural sites going forward, Mr Delaney added.
“It’s a part of our day-to-day [environmental, social, governance (ESG)] work,” he said.
“It won’t always be perfect and things will get through the net as per this one, but we’ll be very keen to make sure that there aren’t issues like this reoccurring in Rio [Tinto] or other companies.”
The rock shelters destroyed by Rio Tinto were located in the Western Australian Pilbara region – the traditional lands of the Puutu Kunti Kurrama and Pinikura people – and showed signs of human occupation from 46,000 years ago.
“Losing these rock shelters is a devastating blow to the PKKP traditional owners,” Puutu Kunti Kurrama land committee chair John Ashburton said in a press release.
“Our people are deeply troubled and saddened by the destruction of these rock shelters and are grieving the loss of connection to our ancestors as well as our land.”
‘Devastating’ actions a risk for retirees
In addition to destroying an irreplaceable site of cultural and historical significance, Rio Tinto’s actions could also hurt Australians’ retirement savings.
“Beyond the devastating cultural impact, these issues go to a company’s licence to operate,” Australian Council of Superannuation Investors chief executive Louise Davidson told The New Daily.
“Social licence risk includes the impact that these issues will have on a company’s reputation and their ability to effectively engage with stakeholders important to their operations.”
This type of risk – considered a ‘social’ risk under funds’ ESG investment frameworks – can hurt super funds’ long-term returns, because the ill will of stakeholders makes it harder to conduct business.
“It is crucial for a company like Rio Tinto to maintain a strong, constructive working relationship with the Indigenous communities on whose land they work,” Ms Davidson said.
“Investors are continuing to have discussions with the company to understand where and why communication broke down with the Puutu Kunti Kurrama and Pinikura people and what steps need to be taken to ensure this can never happen again.”
The New Daily is owned by Industry Super Holdings