Rio Tinto's chief executive Jean-Sebastien Jacques will lose a total of $AU4.9 million in bonuses after the destruction of the 46,000-year-old culturally significant Juukan Gorge rock shelters in Western Australia.
A review by Rio Tinto's board over the loss of the ancient rock shelters has concluded it was the result of flaws in systems, data sharing, engagement with Indigenous people and poor decision-making.
Rio Tinto detonated explosives in May near the culturally significant rock shelters, destroying them in the process.
The cave sites were among the oldest in Australia with evidence of continuous human habitation going back 46,000 years.
The destruction was legal under the section 18 exemption to WA's Aboriginal Heritage Act, which is currently being reformed.
It gave Rio Tinto access to an extra eight-million tonnes of high-grade iron ore, estimated at the time to be worth $AU135m at the time.
But the company's own review found while it had obtained legal authority for the blasts, it fell short of the standards and internal guidance Rio Tinto set for itself, over and above its legal obligations.
It found the company failed to properly engage with the Puutu Kunti Kurrama people.
Chief executive's incentive plan slashed
Jacques and two other senior executives will lose their annual performance bonuses as a result of the board's findings.
As well as not receiving a performance-related bonus, the board decided Jacques' long-term incentive plan award, due to vest in the first half of 2021, would be reduced by $AU1.83m.
The total losses for the chief executive alone total $AU4.9m.
The board review found there was "no single root cause or error that directly resulted in the destruction of the rockshelters".
"It was the result of a series of decisions, actions and omissions over an extended period of time, underpinned by flaws in systems, data sharing, engagement within the company and with the PKKP, and poor decision-making," it said.
Earlier this month, Rio Tinto admitted it did not tell traditional owners there were four options for blasting at Juukan Gorge, three of which did not involve the destruction of highly significant ancient rock shelters.
In a statement today, Rio Tinto chairman Simon Thompson said the review provided a clear framework for change.
"We will implement important new measures and governance to ensure we do not repeat what happened at Juukan Gorge and we will continue our work to rebuild trust with the Puutu Kunti Kurrama and Pinikura people," he said.
"We fully recognise traditional owners must be treated as equal partners which includes regular, open and respectful dialogue. We look forward to continuing our engagement with the PKKP on a joint initiative to learn the lessons from Juukan and to strengthen our partnership."
Rio Tinto targets improvements
The review outlined several areas where Rio Tinto could "improve, strengthen or amend practices, work culture and governance".
It said it would work on "strengthening communities and heritage systems, processes and teams within operations to ensure that heritage issues are accorded equivalent priority alongside safety and operational performance".
"This includes improved processes for escalating heritage issues to more senior decision-making levels and the need for a greater prioritisation of partnerships and relationships with Traditional Owners and First Nations people from senior operational leaders and teams," the review said.
It pledged to strengthen Rio's audit capability "through the introduction of more effective internal audits to ensure conformance with Rio Tinto and independent International Heritage Standards and Guidelines".
It also said it would strengthen board oversight and assurance to enhance governance and overall accountability.
Thompson said no single individual or error was responsible for the destruction of the Juukan rock shelters.
"But there were numerous missed opportunities over almost a decade and the company failed to uphold one of Rio Tinto's core values - respect for local communities and for their heritage," he said.
"We are determined to learn, improve and rebuild trust across various internal and external partners.
"I look forward to working with [Jean-Sebastien], Chris and Simone to drive change and improvements in order to re-establish Rio Tinto's credentials and strengthen heritage management across the business."
Executives unaware of area's significance
Executives from the company told a federal parliamentary inquiry investigating Rio Tinto's destruction of the rock shelters that senior executives were only made aware of its significant issues more than a week after tonnes of explosives were already laid in the area comprising the Brockman 4 mine and were unable to be removed.
The inquiry heard senior executives only became aware of the issue on 21 May, and were not aware of the area's high cultural significance until then.
This was despite a number of archaeological reports funded by the company since 2013.
The hearing was told "the point of no return" for the blasting was 13 May when hundreds of charges were laid at the site.
In a statement at the time, PKKP spokesperson Burchell Hayes said Rio Tinto's submission to the inquiry had "only served to deepen the anguish" of the traditional owners.
"We are deeply hurt and traumatised by the desecration of a site which is incredibly significant to us and to future generations," Mr Hayes said.
"Rio Tinto's submission to the parliamentary inquiry has deepened our hurt as we understand the true extent of the dysfunctional process which led to this desecration and has belittled our heritage.
"The information tabled to date leads us to question the foundations of our relationship with Rio Tinto. In particular, we regret the lack of value being attached to the land we had entrusted to them, beyond short-term financial gains."