Mining giant Rio Tinto (RIO) was up 1% amid wider strength in the mining sector despite releasing a shocking report into its workplace culture which revealed racism, sexual harassment and assault and bullying.
The external review covering the last five years showed bullying and sexism were ‘systemic’ across the group with 28.2% of women and 6.7% of men experiencing sexual harassment at work and 21 women reporting actual or attempted rape or sexual assault.
The survey of its workforce also showed people working in a different country to their birth experienced high rates of racism with 39.8% of men and 31.8% of women who identify as Aboriginal or Torres Strait Islander in Australia experiencing racism.
Little wonder Rio chief executive Jakob Stausholm, who has only been in post for just over a year, described the findings as ‘deeply disturbing’, adding that he felt ‘shame and enormous regret’ at learning the extent of the problems.
REPORT ‘NOT A REASON FOR REDUCED CONFIDENCE’
The review was led by former Australian Sex Discrimination Commissioner Elizabeth Broderick who said: ‘This report is not a reason for reduced confidence in Rio Tinto. By proactively commissioning this study, one of the largest of its kind within the resources industry, it demonstrates a very clear commitment to increased transparency, accountability and action.’
Rio says it will adopt the 26 recommendations made by Broderick with a focus on three areas: creating safe, respectful and inclusive working environments; ensuring its camp and village facilities are safe and inclusive; and making whistleblowing 'as easy and safe as possible'.
The report does acknowledge a visible shift in attitudes and behaviour over the last 12 months.
AJ Bell investment director Russ Mould said: ‘The revelations about the workplace culture at Rio Tinto are genuinely jaw dropping - they tick about all the negative boxes you can find. Sexual assaults and harassment, racism and bullying.
‘In that context an increase in the share price in response looks a little odd, but perhaps it reflects market appreciation for Rio at least fronting up and taking the bull by the horns when it comes to fixing these deep-rooted problems.’
Mould added that the mining sector’s role in the energy transition is likely to put its working practices under greater spotlight. ‘Given Stausholm is relatively new to the job, he is likely to be given time by shareholders to try and sort things out,’ Mould said. ‘However, he will know he has very little margin for error.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Tom Sieber) and the editor (James Crux) own shares in AJ Bell.
