Investors urge miners to change their ways after damning Rio Tinto workplace report

A sign adorns the building where mining company Rio Tinto has its office in Perth, Western Australia, November 19, 2015. REUTERS/David Gray/File Photo

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  • Top Rio investors concerned about abuse report
  • Industry calls on other miners to follow suit
  • Toxic culture makes it harder to attract female workers
  • Miners have been trying to change ‘boys club’ culture for years

Feb 2 (Reuters) – British-Australian miner Rio Tinto’s (RIO.AX) (RIO.L) confessions of sexual assault, racism and bullying in an internal report have sparked calls from investors for the whole sector is cleaning up.

An 85-page report released by Rio on Tuesday that highlighted a culture where harmful behavior is often normalized and bullying is rampant has shed light on the wider industry, which has long been accused of condoning inappropriate behavior. .

The Health Employees Superannuation Trust Australia pension fund said it was writing to mining companies asking how they were dealing with similar potential issues. The fund said it would “seek to engage with senior management and boards on how they oversee corporate culture” to ensure high standards.

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The miners, struggling to attract female workers, even as they grapple with a labor shortage, have been trying for several years to change a “boys club” culture. The world’s largest miner BHP Group (BHP.AX) has an “ambitious and ambitious goal” to achieve gender balance globally by 2025.

Investors and industry players gave Rio Tinto credit for releasing the damning findings of an external review, but said others in the industry, and beyond, must also act. .

“It shouldn’t be left to Rio Tinto. It’s an industry problem. It’s a societal problem. It’s not good for them to solve the problem on their end and it continues elsewhere,” said Greg Busson, Western Australia’s secretary of state for the Mining and Energy Union. , noted.

Rio Tinto launched the review in March last year, shortly after CEO Jakob Stausholm took over as head of the company following a backlash following the company’s destruction of the shelters under Juukan Gorge rock, 46,000 years old, to expand an iron ore mine.

Activist investor group Market Forces said Juukan Gorge exposed a culture of arrogance and other deep-rooted issues at Rio Tinto that surfaced through this report.

“The findings of this report demonstrate the need for increased and rigorous investor scrutiny of Rio Tinto and its governance practices,” said Will Van De Pol, head of asset management campaign at Market Forces.

“Clearly there is a need for cultural upliftment at Rio Tinto and this is yet another moment that needs to catalyze further change, and that would be something we would be really keen to see seep into Rio. Tinto.”

TOXIC CULTURE

Tuesday’s report, which took nearly a year to complete by an outside firm and involved comments from nearly a quarter of Rio’s 45,000 employees, provides a detailed disclosure of toxic workplace practices. .

A female worker described being asked to perform oral sex on a male colleague. When the request was flagged, a supervisor said he was sure the man was joking and that Rio would “make sure you’re not alone with him.”

Another worker said derogatory slurs from people of color are common and accepted as normal workplace jokes.

An employee said she wouldn’t recommend Rio to her friends as a place to work, a scathing accusation from a company that has publicly stated for years that it aims to promote gender diversity. Women make up 19% of Rio’s workforce.

“Other companies should take this as a signal that the human element cannot be ignored,” said Katie Mehnert of Ally Energy, a networking group linking workers to companies in the renewable energy sector.

“You may have the best assets on the planet, but if your culture is trashy, who will want to work for you?”

Rio CEO Stausholm, who commissioned the report, pledged to push for change.

“As CEO, I own the culture,” Stausholm told Reuters. “Now I know what I know, and I clearly have an obligation to answer it.”

Advocacy groups for women in mining and other extractive industries have cautiously greeted the report, which tacitly acknowledges what many in the mining industry have been whispering for years.

“We hope this example set by Rio Tinto will foster dialogue and inspire other mining companies to follow suit,” said Barbara Dischinger, director of International Women in Mining, a non-profit organization that promotes equality. gender in the mining industry.

BHP said it was committed to an inclusive and diverse workplace where people were respected. Fortescue Metals Group (FMG.AX) CEO Elizabeth Gaines said the miner had a “zero tolerance approach” to harassment and bullying and that all complaints were taken seriously.

Miners often work long hours in harsh environments for weeks on end, living side by side in small camps with little privacy.

A Reuters reporter in 2018 saw miners, gathered for an industry convention, pull down their pants to sing karaoke in their underwear.

The perception of mining as hostile to women and people of color has only exacerbated the industry’s talent problem, with enrollment in mining engineering programs plunging in the United States, Canada and Australia.

Employees in the Rio report described immense stress and anxiety trying to avoid sexual harassers, impairing their concentration and productivity at work.

“It is clear that there are significant challenges ahead both at the corporate level and across the sector,” said Louise Davidson, CEO of the Australian Council of Superannuation Investors, which represents 37 owners of superannuation investors. assets and institutional investors who collectively own an average of 10% of each ASX200 company.

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Reporting by Ernest Scheyder, Praveen Menon and Byron Kaye, with additional reporting by Melanie Burton; edited by Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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