Three leading Rio Tinto (ASX: RIO) executives including CEO Jean-Sebastien Jacques (pictured) will leave the company after its Aboriginal site destruction in the Pilbara became too much to stomach for shareholders.
Public outcry has escalated following a review that effectively valued the now obliterated heritage Juukan rockshelters at $7 million in the form of exec pay cuts.
The miner announced this morning Jacques was stepping down by mutual agreement, but would stay in his role until 31 March 2021 or earlier if a successor is appointed before then.
In addition to his salary which is likely to be around $7.8 million after penalties have been applied, the outgoing Rio Tinto boss will be eligible to long term incentive plan (LTIP) performance rights in the coming years worth around $28 million at indicated prices.
Under the arrangements the outgoing Rio Tinto boss is entitled to long-term incentive plan performance rights that could be worth
Chris Salisbury will immediately step down as chief executive for iron ore and Simone Niven will step down as group executive for corporate relations. Both will depart the group entirely on 31 December 2020.
Salisbury will be replaced by currently managing director for rail, port and core services within Rio Tinto iron ore, Ivan Vella.
In its announcement Rio Tinto emphasised there was general recognition of the transparency of the Board Review and support for the changes recommended, but "significant stakeholders have expressed concerns about executive accountability for the failings identified".
"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," chairman Simon Thompson said.
"We are also determined to regain the trust of the Puutu Kunti Kurrama and Pinikura people and other Traditional Owners.
"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."
Thompson described Jacques' leadership during COVID-19 as "exemplary", and thanked him for his efforts since becoming chief executive in 2016.
"During that time, he has led the best safety performance in Rio Tinto's history, simplified the portfolio, divested the Group's coal assets, established a clear strategy to address climate change and generated exceptional shareholder returns," Thompson said.
"I would also like to thank Chris and Simone for the contribution both have made to the success of Rio Tinto over many years. I know that all three individuals, like the rest of the Board, deeply regret the destruction of the Juukan rockshelters."
The group has also appointed non-executive director Simon McKeon as senior independent director with immediate effect, with an aim to enhance board engagement in Australia.
"I am grateful to Simon for agreeing to assume the new Senior Independent Director role of Rio Tinto Limited. He is committed, as I am, to enhancing the Board's engagement in Australia and working with stakeholders to deliver the changes set out in the Board Review," Thompson said.
"Rio Tinto is a financially and operationally robust business with world-class assets, a clear strategy and outstanding people. We are determined to learn the lessons from Juukan and to re-establish our reputation as a leader in communities and heritage management."
The Australasian Centre for Corporate Responsibility (ACCR) has welcomed the departures as a good "first step", but asserts Rio Tinto has displayed a lack of cultural understanding.
The centre has also raised concerns about why long it took the company to address this destruction of heritage.
"There are in fact two disasters: The first involves the tragic destruction of Juukan Gorge in May; the second is the dishonest malaise of Rio Tinto's board and senior management in the months since," says ACCR legal counsel James Fitzgerald.
"The first cannot be undone. The damage is irreparable. We will need to hear from the PKKP people as to whether they are satisfied with any reparations Rio Tinto has offered.
"On the second: the behaviour of the Board and senior management is reminiscent of the arrogant ignorance that led to Rio Tinto's withdrawal from Bougainville in 1989."
He notes investors have "stepped up" and shown they will not not accept "corporate misinformation and the absolute disrespect to cultural sites that has become Rio's modus operandi".
"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," he says.
"This is just the first step on a long path towards restoring Rio Tinto's good practice and reputation in its relationships with Indigenous peoples.
"The company's conscientious but beleaguered Communities staff deserve to be supported and encouraged in their important work."
The Puutu Kunti Kurrama and Pinikura Aboriginal Corporation says the PKKP people have no comment to make about the changes to Rio Tinto's senior executive, but has reiterated its stance to prevent any kind of repeat in the future.
"We will continue to work with Rio Tinto in the aftermath of the Juukan Gorge disaster. Our focus continues to rest heavily on preserving Aboriginal heritage and advocating for wide-ranging changes to ensure a tragedy like this never happens again," the PKKP said.
"We cannot and will not allow this type of devastation to occur ever again."subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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