A coalition of global investors managing a collective $14 trillion has written to Australia’s biggest mining companies describing Rio Tinto’s destruction of Aboriginal rock shelters as a wake-up call and demanding assurances about their relationships with First Nations peoples.
In a letter circulated on Thursday, the investor group which included America’s Fidelity, the Church of England Pensions Board and several top local super funds said their long-term investments meant they needed to have confidence in how miners obtained and maintained their “social licence” with the traditional custodians of their land on which they operated.
The push comes after traditional owners were left devastated and investors shocked and outraged at Rio Tinto’s ill-fated decision to blast through two culturally significant 46,000-year-old rock shelters at Western Australia’s Juukan Gorge to enlarge an iron ore mine. Over several weeks, some of Australia’s largest superannuation funds applied pressure for greater accountability for the disaster that eventually forced the resignations of Rio’s chief executive Jean-Sebastian Jacques and two of his deputies last month.
“The events at Juukan Gorge have shown this is a significant risk for investors and have prompted us all to take a deeper look at how relationships between companies and First Nations and Indigenous peoples are formed and function,” said the letter, whose signatories also included HESTA, Cbus Super, the Australian Council of Superannuation Investors (ACSI), Aviva Invetors, Legal & General, AXA, and the California State Teachers’ Retirement System.
“We believe that investment risk exists where there is a mismatch between a company’s stated approach to relationships with First Nations and Indigenous communities and what happens in practice.”
The letter was mainly addressed to miners with operations in Australia, such as BHP, Glencore, Fortescue Metals Group, South32, Oz Minerals, Newmont, Anglo American, and Northern Star. Recipents also included foreign giants, such as Brazil’s Vale and US gold miner Barrick and Pan American Silver Corp.
Ever since traditional ownership rights were recognised in Australia, Indigenous groups have been entering into legally binding native-title agreements with mining companies, which provide valuable royalty streams in exchange for the impact to their cultural heritage and wealth derived from their land.
However, the Juukan Gorge disaster and subsequent federal parliamentary inquiry have shone a spotlight on a power imbalance underpinning negotiations between resources giants and Indigenous groups, including the use of “gag clauses” in land use agreements that prohibit traditional owners from publicly objecting to mining activity. Rio Tinto has also conceded multiple failures in its heritage-protection processes and engagements with traditional owners – the Puutu Kunti Kurrama and Pinikura (PKKP) people – in the lead-up to the blasting of the gorge.
“This issue has exposed material investment risk for investors,” ACSI chief executive Louise Davidson said.
“We want to understand how companies across the industry are managing these risks and working to ensure that a disaster like the Juukan Gorge never happens again.”
The investors said in the letter they were committed to working with the mining sector to support the development of processes and standards that would ensure disasters such as the destruction of the Juukan Gorge caves were never repeated. “To do so, we need to better understand your approach to management of cultural heritage and First Nations and Indigenous community relations,” it said.
The group said it intended to gather responses from the companies before “initiating a dialogue” involving input from community representatives and mining executives.
Debby Blakey, chief executive of $52 billion super fund HESTA, said the Rio Tinto disaster had been a “wake-up call” for miners – and investors making long-term decisions – about the importance of managing the risks associated with Indigenous heritage appropriately. “Not only so we can mitigate financial risk for our members’ investments, but also so we can ensure there are fair and sustainable outcomes for indigenous communities and companies,” Ms Blakey said.
Source: Thanks smh.com