Developments in the Field the Juukan Gorge Incident: Key Lessons On

The Juukan Gorge Incident: Key Lessons on Free, Prior and Informed Consent

Anirudha NAGAR¶*

Keywords: cultural heritage, FPIC, Indigenous peoples, Juukan Gorge, Rio Tinto

I. INTRODUCTION On 24 May 2020, Rio Tinto detonated an area of the Juukan Gorge in the Pilbara in Western Australia as part of its iron ore mining operations, damaging two ancient rock shelters with profound cultural significance to the Puutu Kunti Kurrama and Pinikura (PKKP) People.1 The incident has brought international attention to the importance of Indigenous cultural heritage within environmental, social and governance (ESG) considerations. The blasts led to considerable scrutiny of Rio Tinto and criticism focused on a corporate culture found to have prioritized commercial gain over protecting cultural heritage and ensuring meaningful engagement with Traditional Owners.2 On 11 June 2020, the Australian Senate referred the incident to the Parliamentary Joint Standing Committee on Northern Australia to examine the immediate circumstances of the incident as well as the wider context around the destruction of Indigenous heritage in Australia, including the legislative regime that vested Rio Tinto with legal authorization for the blasts. The Committee released a damning interim report, Never Again, in December 2020.3 Under pressure from investors and the public, three senior Rio Tinto executives lost their jobs and two further resignations were recently announced.4

¶ Conflicts of interest: The author declares none. * Anirudha Nagar is a human rights lawyer and Communities Director at Accountability Counsel (San Francisco, USA), which amplifies the voices of communities to defend their environmental and human rights. The views expressed in this piece are the author’s own. 1 Parliament of the Commonwealth of Australia, Joint Standing Committee on Northern Australia, Never Again, Inquiry into the Destruction of 46,000 Year Old Caves at the Juukan Gorge in the Pilbara Region of Western Australia - Interim Report (December 2020) 1. 2 Ibid, 7. 3 Ibid. 4 ‘“I am ultimately accountable”: Rio Tinto Chairman to Stand Down after Cave Blast Disaster’, The Sydney Morning Herald (3 March 2021), https://www.smh.com.au/business/companies/i-am-ultimately-accountable-rio-tinto-chairman- to-stand-down-after-cave-blast-disaster-20210303-p577bv.html (accessed 1 April 2021).

Business and Human Rights Journal, 6 (2021), pp. 377–383 © The Author(s), 2021. Published by Cambridge University Press. doi:10.1017/bhj.2021.18 Downloaded from https://www.cambridge.org/core. IP address: 170.106.40.139, on 25 Sep 2021 at 16:54:05, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/bhj.2021.18 378 Business and Human Rights Journal Vol. 6:2

While Rio Tinto is facing direct financial and reputational consequences, there is now an expectation from the investment community that other companies will reform and ensure higher standards of protection for Indigenous cultural heritage. The Juukan Gorge incident is one of the clearest demonstrations of the need for mining companies to respect the principle of Free, Prior and Informed Consent (FPIC) in their processes, regardless of whether this is enshrined in domestic legislative provisions. FPIC is an international legal standard articulated in the United Nations Declaration on the Rights of Indigenous Peoples that applies to the process by which Indigenous communities are given the opportunity to approve or reject projects affecting them or their territories prior to the commencement of operations.5 Besides being a well-established international legal norm,6 FPIC is also in the best interests of all stakeholders, as projects lacking community consent are fraught with financial and reputational risks. This piece focuses on three broad lessons from the Juukan Gorge incident and calls for the principle of FPIC to be embedded throughout the project cycle: addressing power imbalances in company–community negotiations (section II), ensuring communities are engaged in project design (section III), and prioritizing meaningful accountability and corporate culture (section IV). Section V offers brief concluding thoughts.

II. ADDRESSING POWER IMBALANCES DURING NEGOTIATIONS What is striking about the Juukan Gorge incident is the disconnect between Rio Tinto’s words and actions. Rio Tinto’s blasting of the rock shelters was technically legal under domestic law, as it held a permit under section 18 of Western Australia’s Aboriginal Heritage Act 1972 to undertake mining. However, the company fell short of its public rhetoric of working in partnership with First Nations communities and stated commitments to international standards, including the United Nations Guiding Principles on Business and Human Rights (UNGPs).7 Under Rio Tinto’s Communities and Social Performance Standard, the company specifically commits to seeking the FPIC of affected Indigenous communities as defined in the International Finance Corporation’s Performance Standard 7 on Indigenous Peoples (IFC PS7).8 IFC PS7 requires companies to ensure a process of FPIC with regard to project design, implementation and expected outcomes in circumstances involving potentially adverse impacts. In a Board-led review published in August 2020, Rio Tinto stated its belief that it had obtained the PKKP’s FPIC through agreements negotiated with the PKKP to conduct

5 United Nations Declaration on the Rights of Indigenous Peoples, General Assembly Res. 61/295 (adopted on 13 September 2007), arts 11, 19, 28 and 29. 6 The consent requirement is also enshrined in the International Labour Organization Indigenous and Tribal Peoples Convention C169 (adopted on 27 June 1989, entered into force on 5 September 1991), arts 6 and 16. 7 Rio Tinto, ‘Our Approach to Respecting Human Rights’, https://www.riotinto.com/en/sustainability/human-rights (accessed 1 April 2021). 8 Rio Tinto, ‘Communities and Social Performance Standard’,5,https://www.riotinto.com/-/media/Content/ Documents/Sustainability/Corporate-policies/RT-Communities-social-performance-standard.pdf (accessed 1 April 2021).

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mining including on the land on which the Juukan rock shelters were located.9 This claim fails to take account of the deep power imbalances at play in those negotiations. Like many Indigenous communities facing land management decisions, the PKKP was significantly hampered by its weak bargaining position viz-à-viz a major mining company. The Native Title regime in Australia does not specifically incorporate the principle of FPIC. It provides groups with a right to negotiate and if, after six months, no agreement is reached, a party can ask the Native Title Tribunal to arbitrate. However, the Tribunal almost always rules that proposed developments can occur and there is no right to veto these decisions. In over twenty years, the Tribunal has only twice blocked a proposal because of impacts on communities.10 As a result of the Native Title system, land use agreements tend to be offered by mining companies on a take-it or leave-it basis. For communities, failure to accept terms can mean foregoing the associated royalties, training, employment, and compensation for land impacts.11 In addition to their weak bargaining position, Indigenous communities often struggle to access the support they need to protect their interests – from mapping their lands, navigating complex and technical company consultations and consent processes, and monitoring company activities – in large part because they cannot afford it. Meanwhile, mining companies have well-resourced access to legal teams and technical and subject matter experts. The PKKP’s weak bargaining position and inadequate legal and technical support had a direct bearing on its negotiations with Rio Tinto. After discussions began in 2003, agreements reached in March 2011 provided a framework for Rio Tinto to conduct iron ore mining operations on PKKP land. They identified 16 ‘Rights Reserved Areas’ encompassing sites of ‘especially high cultural significance’ on which it was agreed mining would not take place; however, the Juukan rock shelters were not included among them.12 The agreements contained confidentiality or gag clauses, preventing them from contesting company decisions, raising concerns, or asserting their rights to protect heritage sites under legislation without first obtaining the company’s consent.13 The Parliamentary Joint Standing Committee noted that members of the PKKP did not understand the terms of the agreement they signed and questioned whether their representatives made sufficient efforts to communicate the complex and lengthy agreements to the PKKP prior to signing. The Committee stated, ‘it is difficult to see how free, prior and informed consent can be achieved in such circumstances’.14 On the contrary, the Committee found ‘severe deficiencies in the company’s relationship practices with the PKKP’, including ‘failures to properly consult with the PKKP

9 Rio Tinto, ‘Board Review of Cultural Heritage Management’, https://www.riotinto.com/-/media/Content/ Documents/News/RT-Cultural-Heritage-Board-Review.pdf?rev=6021fd0fe15e4d44823320225261abdc (accessed 1 April 2021), 19. 10 John Southalan, ‘The FPIC Fixation: Indigenous – Mining Law, Internationally and Australia’ in International Mining and Oil & Gas Law, Development, and Investment (paper 22A in conference proceedings, Rocky Mountain Mineral Law Foundation, 2019) 14. 11 Parliament of the Commonwealth of Australia, Never Again, note 1, 6. 12 Rio Tinto, ‘Board Review’, note 9, 7. 13 Parliament of the Commonwealth of Australia, Never Again, note 1, 5. 14 Ibid, 12.

Traditional Owners, and a lack of transparency regarding information and decision making’.15 While negotiated agreements may have the potential to protect Indigenous cultural heritage, the Juukan Gorge incident demonstrates the need for companies to address underlying weaknesses in the bargaining position of Indigenous peoples.16 For their part, companies should ensure an ongoing process of review and engagement with Traditional Owners. Entering into early, fixed agreements, particularly if executed before there is an opportunity to undertake comprehensive heritage surveys, goes against these principles. Instead of imposing provisions that prevent communities from making complaints, companies should pro-actively strengthen local grievance mechanisms where concerns can be raised without fear and remove confidentiality provisions from agreements. In line with the UNGPs, grievance mechanisms must be legitimate, accessible, predictable, equitable and be based on dialogue and engagement.17 FPIC also requires that communities have access to the legal or technical support they need. The Australian Native Title Act established a system of government-funded organizations termed ‘native title representative bodies’ to provide legal and other assistance to help native title groups in negotiating with developers, but that funding has proven to be inadequate.18 There are a range of other innovative financing solutions that are the subject of recent research. These should be considered based on what is operationally feasible and allows for a community-centred approach.19

III. ENGAGING COMMUNITIES IN PROJECT DESIGN Significant scrutiny in the aftermath of the Juukan Gorge incident has focused on Rio Tinto’s decision to proceed with blasting despite its knowledge of the rock shelters’ cultural significance. As the Parliamentary Committee found, ‘Rio knew the value of what they were destroying but blew it up anyway. It pursued the option of destroying the shelters despite having options which would have preserved them’.20 This approach violated the central avoidance principle under cultural heritage protection standards. IFC PS7, which Rio Tinto committed to upholding, states:

16. Where a project may significantly impact on critical cultural heritage that is essential to the identity and/or cultural, ceremonial, or spiritual aspects of Indigenous Peoples lives, priority will be given to the avoidance of such impacts. Where significant project

15 Ibid, 7. 16 See Ciaran O’Faircheallaigh, ‘Negotiating Cultural Heritage? Aboriginal-Mining Company Agreements in Australia’ (2008) 39:1 Development and Change 25. 17 Human Rights Council, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’, A/HRC/17/31 (21 March 2011), Principle 31. 18 Parliament of the Commonwealth of Australia, Never Again, note 1, 18. 19 See Columbia Center on Sustainable Investment, ‘Innovative Financing Solutions for Community Support in the Context of Land Investments’ (March 2019), http://ccsi.columbia.edu/2019/03/22/innovative-financing-solutions-for- community-support-in-the-context-of-land-investments (accessed 1 April 2021). 20 Parliament of the Commonwealth of Australia, Never Again, note 1, vi.

impacts on critical cultural heritage are unavoidable, the client will obtain the FPIC of the Affected Communities of Indigenous Peoples.21

At the time of deciding on project design in 2013, Rio Tinto was aware of the ethnographic and archaeological significance of the Juukan Gorge sites through reports it received in 2008. Yet, out of four options developed for designing the mine, three of which avoided disturbing the rock shelters, it chose the fourth option in order to access higher volumes of high-grade iron ore. Rio Tinto received further information about the significance of the sites, including through excavation work in 2014 which uncovered around 7,000 artefacts, including a four-thousand-year-old human hair belt which linked the site directly to the ancestors of the Traditional Owners. A report, provided to Rio Tinto in December 2018, described one of the rock shelters as of ‘the highest archaeological significance in Australia’ containing ‘a cultural sequence spanning over 40,000 years’.22 Throughout this period, the principle of avoidance should have prompted an internal review of the planned destruction of the Juukan rock shelters and a consideration of alternative options. However, the Board-led review confirmed that the Juukan Gorge rock shelters were not even expressly referenced in any risk registers.23 It was only after the explosives had been laid days before the blast that top executives at Rio Tinto headquarters were properly appraised of the cultural significance of the site. When the PKKP formally raised their concerns with the destruction of Juukan Gorge in May 2020, Rio Tinto claimed it was too dangerous to remove the explosives as they were already loaded. To make matters worse, the three alternatives for the design of the mine that could have avoided the Juukan rock shelters were never shared with the PKKP.24 Needless to say, the provision of sufficient information, and in a form that is understandable and accessible to local communities, is a necessary condition for FPIC. What Juukan Gorge makes abundantly clear is that companies should seek to engage with Indigenous communities to explore different options for a project’s location and design. Best practice in this field instructs that communities and their advisors be provided with a full alternatives analysis, including an examination of technically and financially feasible project alternatives, and a documentation of the rationale for selecting a particular proposed course of action.25 This level of disclosure has the potential to improve the quality of decision-making at the project design stage.

21 International Finance Corporation, ‘Performance Standard 7 – Indigenous Peoples’ (1 January 2012), 5, https:// www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/ performance-standards/ps7 (accessed 1 April 2021). 22 Rio Tinto, ‘Board Review’, note 9, 14. 23 Ibid, 17. 24 Parliament of the Commonwealth of Australia, Never Again, note 1, vi. 25 International Finance Corporation, ‘Guidance Note 1: Assessment and Management of Environmental and Social Risks and Impacts’ (1 January 2012), 10, https://www.ifc.org/wps/wcm/connect/6df1de8f-2a00-4d11-a07c- c09b038f947b/GN1_English_2012.pdf?MOD=AJPERES&CVID=mRQjKE9 (accessed 1 April 2021).

IV. PRIORITIZING MEANINGFUL ACCOUNTABILITY AND CORPORATE CULTURE Unprecedented public and investor attention has focused on a perceived accountability shortfall following the blasts at Juukan Gorge. Major investors and superannuation funds publicly expressed dissatisfaction with the penalties proposed by Rio Tinto’s Remuneration Committee which recommended that incentive payments be withheld for the Chief Executive Officer, the Group Executive for Corporate Relations and the Chief Executive for Iron Ore.26 A Board meeting to discuss an escalation of the company’s response resulted in the resignation of these three senior executives who were found to bear some responsibility for the incident. Subsequently, two Board members have signalled their upcoming resignation. With respect to remedying the harm to communities, Rio Tinto was forced to undertake a significant reevaluation of its position. It has now proposed to rehabilitate the site, put a moratorium on further development pending consultations with the PKKP and waive confidentiality provisions in its agreements.27 The Parliamentary Committee has welcomed this and recommended that Rio Tinto negotiate a restitution package for the destruction of the Juukan rock shelters with the PKKP, remediate the site, and engage with the PKKP on a safe keeping place for artefacts and other material to be stored and displayed for the benefit of Traditional Owners.28 One of the most critical questions the Juukan Gorge incident raises is how a company could so fundamentally miscalculate risks, first with respect to the blasting of ancient rock shelters and then in relation to holding those responsible to account. What causes a corporate culture where such a monumental risk to both the company and the community went repeatedly unquestioned and where ‘the risk to social licence was not fully apparent … creating a “blind spot” for operational management’?29 Companies need to take pro-active steps to ensure risks are accurately assessed, particularly when commercial and community interests are in tension. Staff who are specialized in social and environmental compliance should not be marginalized. Instead, they should be given key positions so that commercial, operational, social and environmental expertise jointly contribute to decision-making. The basis on which performance and renumeration is assessed also warrants review so that the preservation of cultural heritage and protection of Indigenous rights are adequately incentivized. Respect for Indigenous cultural heritage is fundamental to forging a social license to operate in mining projects. Doing so requires conducting good faith and contextually appropriate consultations beforehand and, when mistakes are made, carefully calibrated action to address adverse impacts companies have caused or contributed to.

26 ‘Australian Super Says Rio Tinto Punishment Falls Short’, The Australian Financial Review (26 August 2020), https://www.afr.com/companies/mining/australiansuper-says-rio-tinto-punishment-falls-short-20200826-p55phz (accessed 1 April 2021). 27 Rio Tinto, ‘Ensuring this never happens again’, https://www.riotinto.com/news/inquiry-into-juukan-gorge (accessed 1 April 2021). 28 Parliament of the Commonwealth of Australia, Never Again, note 1, 17. 29 Rio Tinto, ‘Board Review’, note 9, 16.

V. CONCLUSION Although domestic legal standards in Australia currently do not protect the right of First Nations’ communities to FPIC, the Juukan Gorge incident highlights the crucial role investors and shareholders can play in ensuring companies are held accountable to public commitments and international legal standards. The incident should serve as a reminder for all mining companies to act consistently with the principle of FPIC even in the absence of specific domestic legislative requirements, especially during agreement negotiations, decisions around project design and when transgressions occur. Rigorous implementation of FPIC has the potential to transform corrosive corporate cultures and build strong relationships with Indigenous communities, laying the foundation for more robust risk management of sacred sites.