The Guardian May 31, 2000


Stunning shareholder support for union resolutions at Rio Tinto AGM

A press release issued by the CFMEU following the Rio Tinto AGM of 
shareholders held in Brisbane last week says that trade unions have won 
substantial shareholder support for their position within Rio Tinto in an 
unprecedented display of shareholder activism. In voting results released 
recently by mining giant Rio Tinto, it was disclosed that two union-backed 
resolutions won the support of around 20% of shareholders.

The first resolution, on improved corporate governance, attracted 20.3% 
(113.8 million) of shares voted. The second resolution, on company 
compliance with international human rights standards in the workplace, won 
the support of 17.3% (95.4 million) of shares voted. The vote for the 
second resolution is especially impressive as it is an issue beyond 
conventional shareholder concerns. It reflects increasing awareness of the 
human rights implications of company operations.

International campaign

The shareholder campaign was a cooperative effort of trade unions in 
Australia, Great Britain, the United States and South Africa, as well as 
other trade unions internationally. It was the first ever proxy vote 
campaign conducted on an international basis by trade unions.

"Union involvement in shareholder activism in Australia has come of age 
with this result" said CFMEU National Secretary John Maitland, who is also 
President of the International Federation of Chemical, Energy, Mine and 
General Workers Unions (ICEM). "The board unanimously opposed our 
resolutions, and disparaged our efforts. But they can't ignore this result.

"The issues raised by us were ones of genuine concern to shareholders. Rio 
Tinto's corporate governance practices aren't up to scratch and don't 
protect shareholders' interests as much as they should. And it is clearly 
the case that many investors saw no good reason why the company couldn't 
comply with international minimum human rights standards in the workplace."

John Maitland noted that, at the Brisbane AGM, Chairman Robert Wilson and 
Chief Executive Leigh Clifford both expressed a desire to achieve peace and 
reconciliation with trade unions in Rio Tinto's operations. Robert Wilson, 
spoke of "reconciliation" with the company's union employees.

"I look forward to those sentiments being made tangible in the near future 
in negotiations with the company", said John Maitland. "We are witnessing a 
new era of action by trade unions within the heartland of business."

CFMEU General President, Tony Maher, also welcomed the remarks by the two 
Rio Tinto chiefs and said he was "particularly pleased to hear the 
Chairman, Mr Wilson, admit to shareholders that the company had made 
mistakes in the past in employee relations. If Rio Tinto matches it's 
rhetoric at the AGM with action at it's operations, the time is now ripe 
for the unions and the company to go forward together in a mutually 
beneficial relationship", said Tony Maher.

ACTU Secretary Greg Combet said that "companies like Rio Tinto should 
recognise that working people and their families have become important and 
influential members of the investment community. That influence is 
beginning to be used internationally to send a message to companies like 
Rio Tinto that as investors in the company and as members of the global 
community, we expect them to adopt basic minimum labour standards."

The resolutions called on Rio Tinto to adopt United Nations ILO standards. 
ILO signatories commit themselves to basic principles such as the abolition 
of child labour, the implementation of equal pay, the recognition of trade 
unions and the right of employees to bargain collectively.

Disappointment

At the same time, the CFMEU expressed disappointment with the Board's 
rejection of a shareholders' resolution calling for improved corporate 
governance standards. This resolution was supported by a number of 
institutional investors. It was moved by the President of the Australian 
Institute of Superannuation Trustees, Ms Susan Ryan, and supported by the 
representative of the Australian Shareholders Association attending the 
AGM, Mr George Bissell.

Tony Maher said that the shareholder campaign would continue until Rio 
Tinto adopted the corporate governance standards expected of it.

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