Shame on Rio Tinto for its preposterous excuse for blowing up an Aboriginal site

Rio Tinto mines iron ore in Pilbara, Australia. Photo / Getty Images

COMMENT

Picture the scene: "Sorry Stonehenge has been reduced to rubble. We thought it was just a load of silly rocks. Its cultural significance didn't become apparent until we looked it up on Wikipedia. Anyway, our bonuses have been docked so hopefully the pagans aren't too upset anymore and we can all move on from this unfortunate incident that really was nobody's fault."

If that sounds ridiculous, that's because it is. And yet, that is essentially the response provided by FTSE 100 mining giant Rio Tinto after it blew up two sacred Aboriginal caves at Juukan Gorge in the Pilbara region of Western Australia - despite being made aware of their archaeological importance years earlier.

Let's hope no one ever lets them near the Great Pyramids or Machu Picchu with a stick of dynamite.

One Unesco expert has likened the destruction of the 46,000-year-old site to the demolition of the ancient Semitic city of Palmyra in Syria by Isis. Rio Tinto's iron ore chief Chris Salisbury said it was all "a misunderstanding" but the company has still pledged "full accountability".

Unsurprisingly, Rio's idea of what accountability looks like is not shared by many of its largest shareholders, so appropriately this has turned into an explosive row.

Consequently top investors are demanding further penalties than the meagre ones so far handed out.

Response 'weak'

The board's response has been pathetically weak: a total of £4m ($7.8m) deducted from the bonuses of three top executives including boss Jean-Sebastien Jacques, or "JS" as he's affectionately known as among his mining buddies; Salisbury; and head of corporate affairs Simon Niven.

Still, there's nothing like putting a price on the destruction of the only inland site in Australia to show signs of continual human occupation through the last Ice Age. And to get access to a trifling 8m tonnes of iron ore as well, equivalent to roughly 2 per cent of total production from the region last year.

Chairman Simon Thompson needs to get a grip. Condemnation has reached fever pitch. Large shareholders have been queuing up to publicly express their outrage, and are unlikely to be appeased without further punishment at Thursday's annual meeting.

Embarrassing charade

The Church of England's pension board yesterday became the latest to condemn Rio's response. Although it didn't call for Jacques' head, reports claim some investors privately are, and several board members are pushing for more severe reprimands.

With two former Australian prime ministers also joining the chorus of disapproval, including Kevin Rudd who joked that Rio Tinto will soon be known as "Rio TNT", the whole affair has spiralled into an embarrassing corporate governance charade that could leave a serious stain on its reputation.

Yet, Thompson may feel his hands are somewhat tied by Rio's own internal report, which found that no single individual was responsible for the destruction at Juukan Gorge. Rio has also said that Jacques was not aware of the full significance of the site until after it was destroyed, as if that is some kind of reasonable defence, which of course it isn't. The point is he should have known.

So here's a fitting compromise: the board should push the button on Jacques' exit then order an inquiry to determine how significant he was to the company.

- Telegraph Group Ltd