Landmark Rio deal to deliver billions to Aborigines

Michael Gordon

Reconciliation Australia board member Dr Tom Calma, Julia Gillard, Rio Tinto's Sam Walsh and Minister for Indigenous Affairs Jenny Macklin, during the presentation of the Rio Tinto Reconciliation Action Plan. Photo: Alex Ellinghausen

TRADITIONAL Aboriginal owners stand to receive more than $2 billion over 40 years under a watershed agreement with Rio Tinto that sets a new standard for negotiations between miners and indigenous Australia.

The deal also has the potential to tackle profound disadvantage in the Pilbara region of Western Australia.

Seven years in the making, the agreement will allow about 40 new iron ore mines to proceed in an area of 70,000 square kilometres, with the company signing up to bold targets to employ and engage as suppliers local indigenous communities, to protect significant sites and to back native title claims.

In terms of scale, breadth, duration and the inclusion of fixed obligations on both sides, the agreement is unprecedented, with Rio Tinto chief executive Sam Walsh declaring: ''It's good for the Aboriginal community. It's good for our business. It also happens to be the right thing to do.

''This is of a huge scale, and it's a huge opportunity for both the company and the Aboriginal groups. What we're doing here will help set a new standard across Australia.''

Indigenous groups described the agreement as the most comprehensive ever undertaken, delivering an income stream, education and job opportunities, access to supply contracts and a thorough set of mining exclusion zones to protect significant sites. In return, indigenous communities will commit to boosting school attendance and backing partnerships aimed at equipping people to fill jobs at Rio and in support businesses.

While the financial agreement with five native title groups is confidential, it is believed to include a fixed revenue share of iron ore sales that are predicted to increase from about 220 million tonnes a year to more than 400 million tonnes. Indigenous groups will devote a portion of the revenue to a ''future fund'' designed to ensure that coming generations share in the deal's benefits.

''One of the things that makes this historic is that past agreements were based only on 'best endeavours' [to improve outcomes for indigenous people],'' said Simon Hawkins, chief executive of the Yamatji Marlpa Aboriginal Corporation, which covers four of the five claim groups. ''This agreement is outcomes-focused, with requirements on traditional owners and Rio Tinto to meet commitments.''

The deal comes more than 15 years after then Rio Tinto chief Leon Davis advocated an end to an era of generally heavy-handed and exploitative treatment of traditional owners by mining companies.

It follows a study five years ago that found that 40 years of

substantial economic development in the Pilbara had delivered virtually no positive benefits for the region's indigenous population, with roughly the same number of Aboriginal people arrested in a year as were in mainstream employment.

Prepared for the Centre for Aboriginal Economic Policy Research, the report cited high unemployment, poor educational achievement and drug and alcohol abuse as contributing to high arrest rates and a general lack of capacity.

The deal commits Rio Tinto to have Aboriginal workers from the Pilbara comprise 14 per cent of its workforce, to support local indigenous business to a similar level and to provide its entire workforce with cultural awareness training. If it fails to meet the job target, Rio Tinto will be required to spend $200,000 a year for each of the groups on education scholarships.

''This is about people in the Pilbara being in charge of this transforming process in their lives,'' said Janina Gawler, Rio's chief negotiator in the agreement. ''The challenges ahead in the implementation are about building capacity and working with the groups to deliver on the vision that the traditional owners themselves have.

''They want to see benefits for their children's children and to ensure that their culture and heritage and law are maintained and are strong.''