Pearls and Irritations

One of the challenges of issue management is the perception by some critics that it might be more about looking good rather than doing good. That’s certainly the test facing Rio Tinto attempting to piece together its reputation, shattered by the high-explosive used to destroy 46,000-year-old aboriginal caves in Western Australia’s Juukan Gorge.

After initially arguing that it had legal authority to demolish the shelters to expand mining operations, Rio dumped its CEO, Public Affairs Director and iron-ore boss, and the Chairman recently announced his intention to stand down.

Now the company has announced plans to establish an Indigenous Advisory Group to strengthen ties with traditional owners and reassure investors that such an event won’t happen again.

Sadly, when big corporations announce some new initiative to demonstrate their social conscience, the public have every right to be cynical. Too often, such announcements turn out to be more about glossy public relations and very little to do with genuinely changing behaviour. And organisations risk thinking they have the issues “under control” just because they have set up these initiatives.

Think about energy giant BP which spent millions of pounds twenty years ago to enhance its environmental credentials with a new “sunburst” logo and the unlikely proposition that BP stands for Beyond Petroleum. Yet just months ago environmental lawyers in the UK launched legal action against another BP initiative, namely allegedly misleading advertising which asserts the company is “working to make energy cleaner” – despite the fact that 96% of BP’s capital expenditure is on oil and gas.

Or consider the huge effort by big tobacco to persuade us that their massive investment in e-cigarettes is a step towards a “smoke-free future” and the phasing out of traditional cigarettes. Yet they are still fighting the spread of Australian style “plain packaging”.

Little wonder big corporations rank so badly in terms of credibility. Indeed, the latest world-wide Edelman Trust Barometer reports only 48% of the public trust CEOs to do what is right, and 56% suspect business leaders of purposely trying to mislead people.

Into this disheartening scenario comes Rio Tinto, vowing to increase transparency in its approach to cultural heritage, including how traditional owners’ views will be sought and considered and how the company is working to advocate for sector-wide cultural heritage reform.

Critics have already questioned whether an advisory group of “five to eight members” can really “ensure a better understanding of Indigenous culture and issues . . . and provide a clear pathway to re-establish trust over time.”

However, it’s a step in the right direction. My friend Craig Badings at SenateSHJ believes while this may be Rio-specific for now, it will impact the entire mining industry in Australia and abroad. “This is one of those seminal moments in a sector’s life which fundamentally alters the way that a sector does business” he said. “Rio and others will make mistakes along the way, companies will stuff up, but the important thing is that the change has started, and it is not going to stop.”

While his optimism may or may not be warranted, this is a massive challenge. Back in 2016, following the Samsung Note 7 exploding battery debacle, Mark Sullivan wrote in Fast Company: “Profits come and go. But loss of credibility is a pain that lingers.” And more than 400 years earlier, in the seventeenth century, English Bishop Joseph Hall famously declared: “A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.”

Rio Tinto must know for sure that the world will be watching its efforts to Gorilla glue the crack in its broken reputation.