Rio Tinto’s Kellie Parker charts miner’s way after insult and injury
“Our employees weren’t proud, they were ashamed to wear their uniforms in public, they didn’t want to talk about it at family barbecues, they didn’t want to say who they worked for, we had people who just wanted to leave,” said the 49-year-old.
People in Rio have always liked to think that what’s good for business should in most cases be good for Australia. Both thrive when the price of iron ore explodes.
The company and the country will come much closer to their decarbonization goals if a clean energy solution can be found for the Tomago smelter in New South Wales and the Boyne smelter in Queensland.
And few companies can offer greater economic autonomy to Indigenous Australians than Rio, which operates some of the world’s most lucrative businesses on remote lands typically covered by declarations of Indigenous title.
Yet Rio and Australia have fallen in love with each other over a decade of controversy that has marred the London-based company’s reputation in the country.
Bullying, sexual harassment and racism
Many Australians saw Rio Tinto as one of the powerful mining companies that undermined the Rudd government’s mining and carbon tax plans, and perceptions of tax avoidance deepened when a lengthy spat with the Australian tax authorities erupted. was made public in 2015.
Serious regulatory investigations into Rio’s conduct in African countries such as Guinea and Mozambique have generated a flood of bad headlines, as have Rio’s ties to controversial mines in Bougainville and Kakadu National Park.
The reputational demise has come to a head over the past two years as the company has been lambasted for destroying the valuable indigenous cultural heritage of Juukan Gorge in Washington state and fostering a corporate culture plagued by bullying, sexual harassment and racism.
The maelstrom prompted shareholders to evict former chairman Simon Thompson, chief executive Jean-Sébastien Jacques and several other senior executives.
The fact that a period of record profitability and dividends could not save Rio’s former leadership is an example of how qualitative factors such as reputation and sustainability have become more important to many investors than short-term quantitative data such as the size of the dividend.
In Australian dollar terms, the annual profit Rio announced in February was the largest ever by a publicly listed Australian company and the US$16.8 billion ($23.24 billion) in total dividends paid during of the year were by far the largest.
This year’s result will tend to decline due to lower iron ore prices, but it’s still on track to be one of Rio’s biggest. Despite the record profits, Parker says the company had stopped listening.
“How did it happen?” Parker asks. On reflection, she says that Rio had “started to focus internally on our business processes, our results, our safety, our production and our costs, there is no community there. There was no external feedback. »
Looking for outside voices
That view resonated with Commonwealth Bank CEO Matt Comyn as the couple reflected on cultural change at a recent superannuation conference. “We had become arrogant…we had become insular, we had stopped really looking for outside voices,” Comyn said.
Parker’s role was created after Juukan with her telling new CEO Jakob Stausholm that “no matter how much I can help, I want to help”.
“It was a recognition that Australia is so important to Rio Tinto, and we hadn’t given Australia enough attention,” Parker says of the role she took on in March 2021.
The role meant Parker was elevated to Rio Tinto’s 12-person executive committee (exco) for the first time; a recognition of two decades of eclectic work during which she had also spent time managing the ports of Rio and then its Australian aluminum division.
However, the position of “General Manager Australia” does not give Parker operational or financial control of Rio’s west coast iron ore mines, nor of its bauxite-aluminum business on the east coast; these pillars are led by Simon Trott of Perth and Ivan Vella of Montreal.
Parker, who now lives in Brisbane with her English husband, two children and a dog, is in charge of Rio’s relations with Australian governments, communities and First Nations people.
“My job is to ensure that there is always a voice within the exco and up to the board on Australian issues,” she says.
Parker is not the first executive tasked with managing the quality aspects of the company’s work in Australia, without having control of operational assets.
Former Cricket Australia chairman David Peever served as Rio’s ‘general manager’ for Australia between 2009 and 2014. He was succeeded by legal eagle Phil Edmands, who used his first speech in the role to lament workers’ demands for bereavement leave when their pets died.
The role ceased to operate in its traditional form in 2015 after Edmands’ 21-month stint, and over the next four years was incorporated into the portfolio of Rio exco members such as Andrew Harding, who now leads Aurizon, or Joanne Farrell, who is president of Safe Work Australia.
Opinion writers such as The Australian Financial Review Joe Aston argued that behind the impressive headline, Peever and Edmands were little more than Rio Australia’s top public relations executives.
Unlike Parker, neither Peever nor Edmands were members of the Rio exco. When asked if his role was largely public relations, Parker replied that it was more than a real authority to act.
“You actually have to listen carefully and then say ‘this means we have to operate in a different way.’
Rio reputation repair
“Then you need to execute that difference, which is why the Global Communities and Social Performance team reports to me and the Health and Safety team; so that we can really change the way we do function.
Meaningful change takes time, and Parker isn’t claiming that Rio’s reputation repair is nearly complete. But some early evidence of change is visible.
The recent $991 million settlement with the ATO is a sign that Rio is ready to end the fights dragging its name through the mud, even though some internally still believe they are correct in principle.
Parker says this year’s decision to publicly share a report by Elizabeth Broderick that detailed weaknesses in Rio’s workplace culture sparked a sharp increase in the number of employees filing complaints, with fewer complaints filed from anonymous way.
With respect to Indigenous relations, the company strengthened its cultural competency training and established a new advisory board, while committing to a “co-management” approach to give Indigenous title holders a role more powerful in mine planning.
“I’ve seen mine plans change dramatically through co-management,” she says.
But for every victory, there are many unresolved conflicts; Rio has yet to agree with indigenous groups in the Kimberley region how the closed Argyle diamond mine should be rehabilitated.
And as long as a reparations agreement with the traditional owners of the Juukan Gorge PKKP remains outstanding, Rio de Juukan’s recovery will be incomplete.
“We certainly can’t claim success,” Parker says.
Rio has changed its company values to “Care, Curiosity and Courage” from “Safety, Teamwork, Excellence, Respect and Integrity,” but Parker knows their actions will be what matters most.
“If we do things right with our community, if we do things right for our employees, it will be good for our shareholders,” she says.
“Actions certainly speak louder than words, and we’re on a long-term journey, that’s for sure,” she says.
“We will only know success when our partners talk about it.”