Independent review needed into financial risk management

Investors are unable to guarantee that financial risk is being appropriately managed unless there is an independent review of agreements between mining companies and Traditional Owners, HESTA believes. 

Following the Juukan Gorge scandal, the Joint Standing Committee on Northern Australia’s Interim Report recommended all mining companies that operated in Western Australia should conduct independent reviews of their agreements with Traditional Owners.  

They should also publicly commit to avoid using gag orders to prevent Traditional Owners from protecting their rights and raising heritage concerns. 

HESTA said it “strongly supported” the inquiry’s recommendation that companies with current Section 18 permissions halted all operations unless it could be established and verified that there was current, free, prior and informed consent obtained from Traditional Owners.  

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HESTA chief executive, Debby Blakey, said the findings highlighted that mining companies often lacked adequate oversight and effective governance frameworks. 

“The inescapable findings of the inquiry are that Aboriginal Heritage sites remain vulnerable to destruction. It would be unacceptable to investors that boards of mining companies are not actively and transparently seeking to understand their exposure to this risk,” Blakey said. 

“After all that has occurred at Rio, the boards of mining companies need to show investors that they have appropriate oversight and effective governance frameworks in place to ensure respectful, fair and ongoing engagement with Traditional Owners.”  

She said the recommendations that Rio should pay restitution and implement a moratorium on mining in the Juukan Gorge area highlighted the financial consequences of a company’s actions.