Anglo-Australian mining giant Rio Tinto has appointed a new CEO in the wake of the outcry over the destruction of the 46,000-year-old Juukan Gorge caves in the Pilbara region of WA in May this year.
The new appointee is the company’s former Chief Financial Officer, Jakob Stausholm, who joined the company in 2018.
Rio Tinto’s announcement has surprised many observers, as there was an expectation that an outsider would be chosen to replace outgoing CEO Jean-Sebastien Jacques.
Three top company executives resigned
The latter resigned, along with two deputies, in the wake of enormous criticism from Indigenous Australians, shareholders, the Federal government and the wider local and international community.
News agency Reuters said the choice of an internal candidate was a surprise as most bankers and investors had expected the company to choose an outsider in order to start with a clean slate.
It quoted Doug McMurdo, chair of Britain’s Local Authority Pension Fund Forum, which is a shareholder, as saying: “This decision appears to be further evidence of poor corporate governance and suggests a lack of any credible succession planning. It further raises questions about Rio Tinto’s corporate culture over the last few years.”
New CEO recognises need to restore trust
In a statement released by the company, Stausholm said he recognised the challenge ahead of him, acknowledging “the difficult times we have faced during 2020”.
“I am also acutely aware of the need to restore trust with Traditional Owners and our other stakeholders, which I view as a key priority for the company,” he added.
Recently an inquiry panel from the Joint Standing Committee of Northern Australia found that Rio Tinto should pay reparations to Indigenous Australians. It described the destruction of the caves as “inexcusable”. But CNN reported that the panel has not specified a specific amount.
‘What happened at Juukan Gorge was wrong’
Rio Tinto has apologised for the incident and its chairman, Simon Thompson, has admitted that “what happened at Juukan was wrong”.
In a statement made during the hearings, Northern Australia Committee Chair and MP, Warren Entsch, said corporate Australia could no longer ignore the link between its social licence to operate and responsible engagement with Indigenous Australia.
“Rio Tinto has paid a high price in reputation for its failure at Juukan Gorge,” Entsch stated. “Other resource companies need to take note: governments, investors and the community will no longer tolerate such tragedies.”