Rio Tinto Group (RIO) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Rio Tinto Communities and Social Performance Cultural Heritage Seminar. [Operator Instructions] I must advise you that this conference is being recorded today, Tuesday, the 22nd of March 2021. I would now like to hand the conference over to your speaker today, Menno Sanderse, Head of Investor Relations. Please go ahead, sir.

Thank you, Heidi, and good morning, everybody. Welcome to Rio Tinto's Communities and Social Performance Seminar with a focus on cultural heritage management. The seminar will combine a number of presentations, followed by a Q&A session. The presentations will be slightly longer than usual at just under an hour, but we will use that time very well and provide you a broad overview of our communities and social performance function, covering our policies and standards, case studies from Australia and Canada and the change to our government -- governance. You will hear from members of the Executive Committee, CSP practitioners and the chair of the Sustainability Committee of the Board. Before I hand over to Jakob Stausholm, Rio Tinto's CEO, please take a look at the cautionary statement on Slide 3. Having done that, Jakob, over to you.

Thank you, Menno. Good morning, and good evening from Perth. I would like to acknowledge the traditional owners of the land where I'm presenting from today, the Whadjuk Noongar people. I would also like to acknowledge and pay my respect to all traditional owners and indigenous peoples that host Rio Tinto operations around the world. When I joined Rio Tinto 2 years ago, one of the attributes that attracted me to the company was a long-standing track record and commitment to how it operated, way beyond the financial performance. While the topic of today's seminar is communities and social performance, I'd also like to touch on some of the other ESG performance and focus areas. Safety is a great example. In 2020, we achieved the second fatality-free year in our 148-year history. Nothing is more important than safety and well-being. And I'm always encouraged to see that safety is very much in the hearts and minds of our people across the business. Similarly, we need to bring other areas of ESG into greater focus. The destruction of Juukan Gorge should never have happened. This tragic event illustrates to me that while we have areas of excellence in ESG, there are areas where we must improve, and I'm committed to make those improvements. Over the last few weeks, I have had the privilege to meet many people who deeply care about Rio and who have provided me with feedback on how we can achieve this. This will not be easy, and it is the start of a long journey. Just last week, I visited Gove in the Northern Territory, and I was able to spend some time with the Gumatj and the Rirratjingu people. They allowed me to attend their event to launch their vision for the long-term future of the town of Nhulunbuy. I was impressed with their entrepreneurial spirit and their commitment to create future opportunities for their people and the broader region. We've taken decisive action to increase the focus on how we work with communities, particularly with indigenous people. We also play -- we also have a critical role to play in transitioning to a more sustainable economic model. Our approach to climate change is an important component. Last year, we set 20 -- clear 2030 CO2 emission targets and an ambition of being net 0 by 2050. Just last month, we set our first of 3 goals, working in close partnership with our customers. Aiming for impeccable ESG credentials also requires optimizing our rich cultural diversity, including increasing the number of women in leadership roles and developing indigenous leaders, as we will describe later. We recognize that diversity only works where we have an environment that is safe, inclusive and respectful. To that end, we are focusing on empowering people to have the confidence to speak freely. We have recently created an internal task force called Everyday Respect to address sexual harassment, bullying and racism, ensuring a better work environment. At our 2020 results presentation, I highlighted the need to build on our strengths. We will do this by focusing on 4 areas. First, and put it simply, Rio Tinto must be the best operator. Our operations performed well last year, especially with the additional challenges of COVID-19, but we can further sharpen the consistency of our performance. Secondly, as I said earlier, I firmly believe that the foundation for our business is achieving impeccable ESG credentials. Thirdly, we must excel in development, both organically and inorganically. We will only pursue opportunities that create value, and we will maintain an absolute commitment to capital discipline. Finally, we must step up our external engagement and become a more outward-looking company that fully participates in the societies where we operate. This is our social license to operate. It is judged by others and essential to our long-term success. We have reflected a great deal as a company and leadership team, listening, learning and responding by taking actions to improve the traditional owner partnership and cultural heritage aspects of our business. Today, Kellie and Brad will outline how we are doing this in Australia, modernizing and improving agreements, eliminating confidentiality clauses and, when traditional owners agree, being fully transparent. They will also describe how we are investing in our own indigenous leaders through the $50 million development fund, and we're looking at how we strengthen our approach to cultural heritage and engagement with indigenous people in every single country where we operate. One thing is clear: building meaningful and trusting relationships is vital, and that starts with traditional owners. We must focus on real engagement with our communities, understanding their felt experience and never forgetting that, ultimately, we're guests on their land. And as guests, we must respect our hosts and work with them to understand their priorities and concerns and minimize our impacts. We also must remember that our stay is temporary. We need to ensure we leave a positive legacy. This is essential to our business. We're committed to doing the right things and working with our host to rebuild trust. The process we make is now supported by stronger governance that improves the way we engage with all of our host communities, locally, nationally and globally. Our new Executive Committee started at the beginning of this month, a major transition with almost everyone new in job. We now have the future team in place to develop the pathway forward. This is an experienced, able and value-driven team. They know Rio Tinto very well and have a shared commitment to unleashing the company's full potential. Two of my ExCo members are here today, and I look forward to introducing more them to you throughout the year. With that, let me hand over to Kellie, who will talk more about our social license in Australia.

Thank you, Jakob. My name is Kellie Parker, and I'm the Chief Executive Australia for Rio Tinto. I officially started in this role at the beginning of March. Prior to my appointment, I was Managing Director of our aluminum operations in Australia and New Zealand. And before that, I was Managing Director in our Iron Ore Product group. I grew up in the Pilbara, and I've worked for Rio Tinto for 20 years, and I'm very honored to have this opportunity to help lead our company through a very difficult time in its history. I care deeply about our company, our people and the communities where we operate. Throughout my years in Rio Tinto, I've seen that when we place emphasis on fostering mutual respect with our partners, we can create lasting and genuine relationships, particularly with indigenous groups and our communities. My absolute objective is to harness this approach to help rebuild relationships and regain our standing in Australian society. Since starting my new role, I have met with a large number of stakeholders, including indigenous leaders, to listen to them and understand how we can improve. Some of their feedback has been confronting, but it's imperative that we listen, learn and then take action. We are determined to take this feedback on board to become better, a more caring company, a better partner and be more in tune with society's expectations. I have been very grateful to meet with a number of former CRA and Rio Tinto leaders, who have spent time sharing the mindset and culture that has helped Rio Tinto earn an industry-leading reputation for indigenous relations. As current leadership, we need to learn from this. In 1995, Rio Tinto broke with tradition and made a commitment to negotiate with traditional owners rather than litigate. The company had a vision to create mutual value by working in active partnerships with traditional owners. From that time onwards, we entered into more than 40 agreements globally with the majority of these relating to the Australian operations, in particular, in the Pilbara to underpin the significant growth in our iron ore business. In May last year, after 25 years of working to create respectful and genuine partnerships with traditional owners, we failed. We failed not only in the destruction of the rock shelters at Juukan Gorge, but we failed in our commitment of the Puutu Kunti Kurrama and Pinikura peoples in our commitment of our indigenous partners and to our employees and other stakeholders. We have learned a really hard lesson from the events of 2020, and we are determined to make a real change across our company. We must not forget that the strong reputation we used to have for making positive contribution to indigenous communities attracted many people to work for Rio Tinto over the years. And that is why many of our people felt immense hurt, disappointment and shame for what happened at Juukan Gorge. There has been a lot said about the damage that has been done to our reputation externally as a result of our actions, but what's perhaps not as widely recognized is the impact it had on our own people. So our task, however long it will take, will be to earn back trust from inside and outside the company. What gives me hope for the future is that there are so many people in our company who are determined to help us to do better and rebuild our lost reputation. As an outcome, the team has developed a program of work to improve our processes and rebuild trust. Here is a summary of the actions we are taking. Some of these are being led by me, others by my colleague, Simon Trott, Chief Executive of Iron Ore; and Mark Davies, Group Executive Safety, Technical and Projects and their teams. This is very much a collaborative effort. We are taking actions to address recommendations of the parliamentary inquiry and feedback we have received directly from traditional owners and indigenous leaders. In Iron Ore, the team is focused on rebuilding the relationship with the PKKP peoples. We know this will be a long process of re-earning trust. We are also modernizing and improving our agreements in the Pilbara over the coming years in partnership with traditional owners. We'll be making sure outdated causes are removed so traditional owners are empowered, and we want to ensure we're supporting the right social and economic outcomes for communities. There is also a strong focus on cultural change inside the company on training and empowering site leaders and our community relations practitioners and, of course, making sure our systems and governance are right, so processes are not only done properly, but also issues can be raised. The discussions with traditional owner groups to better understand and reflect their wishes are ongoing and will take time. But in the interim, we have increased engagement regarding current and proposed plans for mining; confirmed that traditional owners are not restricted from raising concerns about cultural heritage matters with anyone or from applying for statutory protection for any cultural heritage sites. We've introduced mechanisms in our approach to respond better to new information that may emerge about cultural heritage sites; and committed to realizing more impactful economic and social benefits. As CEO Australia, I will be focused on nationwide indigenous issues. We have a dedicated program to increase indigenous leadership and employment in our business. We are also stepping up the number and frequency of our external engagements to make sure we are truly listening to our stakeholders and getting their ongoing input as we progress these actions. At a group level, we're focused on building cultural capability and competency and strengthening our communities and social performance function. These actions are mostly focused on Australia this year as that is where we have the most work to do, although the lessons we have learned and improvements that we make here will also be implemented in other parts of our global business. We have heard the many calls for greater transparency in our agreements and commitments with traditional owners. We are committed to reporting, at least on an annual basis, on ongoing progress against our internal commitments and external obligations. We will also create an opportunity for traditional owners to provide their views on how successfully we are meeting the commitments within our agreements. It is important to note, this will be an opt-in basis at the discretion of the traditional owners. The ultimate format will be iterative, and we will seek their input and endorsement of this. And finally, one of our key actions is to help to redefine and advocate for improvements in cultural heritage management practices across the industry. Today, there are numerous channels for traditional owner engagement and governance within the Australian business, and these ultimately inform the Board and the Sustainability Committee. We need to ensure that information flows transparently and regularly through the organization from multiple sources and channels. We start at the grassroot levels with local engagement with traditional owners via CSP and asset teams. Strengthening the direct relationships on-site is a key priority. These local teams inform the asset and product group senior leaders, and our leaders will be trained to better identify and address CSP risks. In the Pilbara, we are currently completing the first phase of the new integrated heritage management process that has involved so far our review of more than 1,000 sites. These sites have been reviewed with input from traditional owners. Where there is any doubt about the potential impact, we have reclassified the relevant sites from cleared for mining back to protected as a precautionary measure, pending further consultation. We have an Australian steering committee comprised of our most senior leaders of our business who are based here. Indigenous and cultural heritage issues are tabled at this forum each month as well as at our Executive Committee. We are also establishing an indigenous advisory group. The Australian steering committee and Executive Committee provide bimonthly updates to the Board. The communities and social performance area of expertise and Rio Tinto Iron Ore also provide regular updates to the Sustainability Committee of the Board. We have consulted traditional owners and indigenous leaders on the concept of an indigenous advisory group. Following this engagement, we have now committed to establishing an indigenous advisory group to help us better manage issues that are important to indigenous Australia and our business. It's critical that we get this right, and we'll continue to engage with traditional owners and indigenous leaders in codesigning the operation of the indigenous advisory group. We hope to have our first meeting with this group later this year. It will be comprised of 5 to 8 members and will fulfill a coaching and mentoring role of our senior leaders across 4 pillars of talent, education and training; land and cultural heritage stewardship; economic development and wealth creation; and recognition, advocacy and industry leadership. Through this, we aim to enhance our corporate understanding of indigenous in culture and issues and guide the implementation of our indigenous strategy. Our Board will also have access to this group. This is a new concept to help bring outside views into the organization to advise us on priorities and issues for traditional owners. We are keen to improve the diversity and breadth of views that we're hearing when making decisions and foster an environment of constructive challenge. The ultimate goal, as I said at the beginning, is, over time, to regain our standing as an industry leader in indigenous relations. I'll now hand over to Brad Welsh, Head of Indigenous Affairs.

Thank you, Kellie. Good morning, good evening, everybody. My name is Brad Welsh, and I've recently taken on the role of Chief Adviser, Indigenous Affairs. I've spent more than a decade within Rio Tinto in various roles, including environment, communities operations and, most recently, General Manager of Operations in our Weipa business up in Cape York. I do hold degrees is in 3 different areas, including welfare focused in a major component being aboriginal community studies, law and a Masters of mining engineering with a focus on mine management. I was born in the community of Red Fern, and I grew up -- I'm from the Muruwari tribe, which is in Northwestern New South Wales. Prior to that, I spent a decade working in various governments, including the Prime Minister's office, the New South Wales Premier's Office, the Planning Minister's office and various senior positions in the New South Wales government. There are 3 key documents that guide our engagement with indigenous communities or host communities. Our recently developed engagement principles, which Mark will talk a little bit more about later on in the presentation; the way we work, which is our global standard of working; and a document called the Australian Indigenous Strategy, which is made up of 5 pillars designed to lift our organizational focus to address the issues and opportunities faced by Australian aboriginal communities in working with Rio Tinto. As outlined by Kellie, we'll be working closely with the indigenous advisory group to refresh the Australian indigenous strategy in 2021 and 2022. We've identified 6 areas that we need to significantly improve on our position for the company to work in genuine partnership with host communities. Kellie explained a number of these areas, so I'll focus on a few, including indigenous leadership, economic participation through agreement modernization and cultural competence. This is where our efforts are being directed. And while we don't underestimate how long it will take to build excellence across our company, we are encouraged by our internal team's willingness to engage and go on this journey. Our cultural competence journey is about more than being aware. It's helping our team understand not just the differences in culture, but also how we can bridge gap between -- bridge gaps between cultures for the benefit of both. We've spoken many times about the need to rebuild the relationship with PKKP. We know that this remains a critical piece of our rebuilding program. Our focus so far has been heavily on the initial remediation of the sites or what's known as the make safe works in Juukan Gorge prior to the 2021 wet season. We're also aware that there are 8 other traditional owner groups in the Pilbara, where we're looking to rebuild the relationships or partnerships, modernize our agreements, rebuild trust and support a shared future. You can see on the right-hand side 5 big questions traditional owner groups are asking about partnership with our business. While these areas are covered in the majority of agreements, we also know that a genuine partnership is a felt experience, and we have to demonstrate care and our discretionary efforts to these questions to show that we're serious about rebuilding the partnership. For example, in building a trusting relationship, some of the discretionary efforts required are around our indigenous leadership commitment and our cultural competency commitments. While these commitments are not required under any of our agreements or any regulation, we know that they're important to position our business to work more collaboratively with traditional owners and host communities. We've made significant commitments to modernize agreements in the Pilbara, including not enforcing confidentiality or other clauses that may restrict traditional owners speaking about their cultural heritage or seeking culture heritage protections. We also have to respect that Pilbara as being a diverse landscape of traditional owner groups. For example, some groups have quite a small membership base, meaning that the employment clauses and agreements might not become a priority in a modernized agreement. This means we need to work with each group to understand what's important to them in a partnership and ensure that any modernization is focused on those areas. We also know that agreements should never be set and forget. We need to build a culture around our agreements that allows future improvements, different priorities at different times and mechanisms that continue to bring the parties together in partnership. We know that our most successful agreements are structured in a way that continues to bring the parties together. For example, rather than trying to cover every possible scenario in the drafting of an agreement, we can build mechanisms that require consensus between the parties, given we have a shared future. However, we understand that this will be difficult to do with a deficit of trust. We have committed USD 50 million to attracting, retaining and growing indigenous professionals and leaders in our business. This commitment is designed to grow a generation of indigenous leaders in the corporate world. We know that no other company in the country has made a similar quantum of commitment, and we also know that indigenous communities are heavily challenged at attracting corporate skill sets into their organizations. We believe that investing in the next generation of indigenous leaders, including traditional owners from host communities, will not only grow a skill set needed for those communities, but also support our company to better navigate host communities going forward. We're very encouraged that we've been able to double the number of indigenous managers in our business since the announcement last year. However, we do acknowledge that this is a number of 7 up to 15. So we still have a mountain to climb. But we recognize that we have a long way to go to grow the next generation of indigenous leaders in the corporate sector. We've established the indigenous leadership team in the business and are learning more about this opportunity as we engage across the company -- the country. One of the key levers in this journey is partnering with external service providers. Given this area of investment is so new to the corporate sector, most employment programs are focused at the entry level. We believe this has the capability to capture the imagination of other corporates to make genuine commitments in this area as well. I'll now hand over to Mark. Thank you.

Thank you, Brad. Hello. I'm Mark Davies, Group Executive, Safety, Technical and Projects. I've worked for Rio Tinto for 25 years in a range of roles around the world. I joined the company as a mechanical engineer and have been fortunate to lead both operational and commercial teams. The destruction of Juukan rock shelters caused great personal distress and concern for many of our employees, for our communities and for our CSP professionals. One of the actions we are taking to ensure we never have an incident like this again is to strengthen our communities and social performance capabilities across the company and to embed and align our CSP teams more closely with operations. I'm pleased to be able to share an update on the establishment of our CSP area of expertise, which, along with our health, safety and environment areas of expertise, sit within my portfolio. Being excellent at CSP requires us to have good relationships. We need to understand each other's perspectives and objectives. We also need to have the right capabilities, processes and systems to ensure that we follow through on our commitments, just like we do in safety today. We already have extensive CSP capabilities within our business. We have more than 250 communities professionals supporting 60 sites in 35 countries. These professionals will be further supported by a team of regional and technical experts with a wide range of skill sets, including scientists, archeologists, economic development experts and human rights specialists. To ensure we have alignment and are delivering mutually beneficial outcomes, we need to have more joined-up decision-making within our business. It's critical that CSP considerations are part of operational decision-making and that is why we have moved our communities' teams from a centralized corporate relation structure to report directly into our product-driven asset teams. We have also established the central CSP area of expertise to support and complement our asset-based teams by building capabilities, providing support and delivering assurance. The CSP area of expertise is analogous to and has exactly the same reporting line as safety. This allows the escalation of risks and issues outside of mine management, just as we do for safety. All of our CSP leaders, from the product groups and the area of expertise, sit together on our newly formed CSP senior leadership team to set our global approach, drive the right priorities and ensure appropriate reporting. Ultimately, the work we do in CSP must lead to sustainable and tangible improvements in the social and economic outcomes of the communities that host us. This is the basis for constructive partnership. So as Brad mentioned, we have agreed a set of principles to guide all of our engagements and our improvement activities. Effectively, these principles are our north star, to ensure we're contributing constructive partnerships with our communities. So what do these principles of respect, partnership, outcomes, trust and accountability mean? Well, firstly, we respect the rights, interest and history of the communities where we operate. We engage directly with the communities impacted by our activities, and we deliver on our commitments. Respect is absolutely fundamental to our approach. Our partnerships are underpinned by direct engagement, by listening, decision-making and achieving outcomes together, and Alicia will provide an example of one of our partnerships at Gove shortly. Our expectation is that communities will have sustainable improvements in social and economic outcomes arising from our activities. This includes local employment and local procurement. We will measure and report our social impact. And as part of earning back trust, we will disclose, inform and explain the likely impacts of our projects and assets, and we will engage broadly with community leaders and members seeking their feedback. Social impacts and risks will be evaluated and documented with active controls and assurance in place, and we will have accountable leaders. CSP goals will be integrated into our corporate strategy and into our leaders' objectives and incentives. We are educating our workforce to make well-informed decisions, taking into account the broader context. There are 5 key areas that the CSP area of expertise will focus on in supporting better CSP performance across Rio and ultimately, better monitoring and management of CSP risks. The first is supporting capability building so that leaders can hold community engagement and partnerships as a key priority in running safe and sustainable operations and that they are able to identify and prioritize CSP risks. The second focus area for the CSP area of expertise is providing specialized regional and technical support to a deep subject matter expertise in the areas of indigenous people, heritage, agreements, economic development, resettlement, social impact analysis and social risk. The third is assurance, which effectively audits our performance to ensure that we do what we say. The next area is monitoring the external environment and engaging the stakeholders to ensure we respond to emerging trends in practical and appropriate ways. And finally, refining, updating, enhancing our management systems status and reporting to ensure that we understand and manage risk consistently and follow through on our commitments. We have a detailed work plan with our asset-based teams for 2021, and I'll share with you some of those key priorities now. I've already spoken about capability building, which will be a combination of training and recruiting external experts to complement our internal capability. I'm really pleased to advise that Melinda Buckland will join us in early April as Head of our CSP areas of expertise, where she will be responsible for driving our global CSP strategy and capability build. Melinda has more than 25 years experience in communities in the global mining industry. Skills and training is another focus area in 2021. And in the second half of this year, we will roll out a training program being developed now with the University of Queensland Center for Social Responsibility in Mining. The initial programs will build CSP capability and agreement-making and cultural heritage management through structured skills assessments, training, and on-the-ground experiences. In the area of assurance, this year, we have 25 business conformance audits to be conducted by independent CSP auditors on-site or remotely. These audits will provide an independent perspective on CSP risk management. We will also improve the effectiveness of audits by focusing on maturity rather than just compliance. And on the systems front, we will replace multiple systems with a single CSP incident management system to enable more consistent performance and reporting. We are also undertaking a refresh of our global CSP standard and will review our CSP risk and controls across all our functions and assets. By executing this immediate program of work, rebuilding and enhancing our CSP capability and engaging in alignment with our guiding principles, we will be better able to support line leaders to manage the complex CSP risk initiatives that they face. We really want to make respectful relationships with First Nations people and all of our communities central to our culture in the same way that safety is today. I'll now hand over to Megan. Thank you.

Thanks very much, Mark. And hello, I'm Megan Clark, and I chair Rio Tinto's Sustainability Committee. Today, I'm on the land of the peoples of the Kulin Nation. The Sustainability Committee on behalf of the Board has been charged with overseeing the implementation of the recommendations made in the parliamentary inquiry and also the Board review into the destruction of the rock shelters at Juukan Gorge. Today, I wanted to share with you the key aspects of that governance and oversight. As Mark has discussed, our operating model and governance structure for our communities and social performance has now been strengthened, and it mirrors our safety operating model. We've also strengthened the assurance model for communities and social performance, and our assurance model has 3 lines of defense. At the very base of this are our standards, policies and our guidance. And they are developed by -- and maintained by our area of expertise. But it's not enough to have the right standards. These standards must be applied consistently on the ground in our businesses. So the Sustainability Committee undertakes deep dives to ensure that the standards are being lived at our businesses and that we're building true partnerships with our traditional owners, First Nations and communities. The first level of assurance is at the operations. And as Kellie has described, there's 2 very important changes there: firstly, the integration of heritage considerations into mine planning and development studies; and secondly, that the prime responsibility for the relationship with traditional owners is with the asset general manager. The traditional owners have told us that they want direct dialogue with those who control the mine plan, the drills and the shovels. The second level of assurance will be overseen by their area of expertise, as Mark has described, that this level brings in experts from group risk function and across the business. The Sustainability Committee conducts deep dives into the effectiveness of the area of expertise on a regular basis. At this level, internal audit is also an important part of the assurance. And it reports its filings directly to the committee. Our third level of assurance brings in independent audits to ensure the effectiveness of our controls. This outside-in view is very important part of our assurance. Let me now cover how -- some of the ways that the Sustainability Committee will ensure that our changes are effective and that we have the right culture and behaviors on the ground and we're helping to build those communication channels that Kellie outlined. To ensure there's appropriate management and controls over our CSP risk, the Sustainability Committee at each of its meetings in 2021, and we've already commenced this in this year, will review the progress on the implementation of the recommendations of the parliamentary inquiry and our own Board review. We'll also receive updates from our Iron Ore business on the progress in improving heritage management. The committee has requested and will receive updates on our audit of our global CSP risk so that we take the lessons of Juukan and make sure that we are learning those lessons across all of our operations. The integrated heritage management process means that there's an immediate escalation of approvals relating to any site of high significance to the CEO level and, if necessary, to the Board. To date, no approvals have been escalated. And as you've heard, our Iron Ore team has reviewed over 1,000 heritage sites and all sites of high cultural significance, as a precaution have been allocated protective buffer zones. As well as reviewing these reports, the Sustainability Committee is using other channels to ensure that the measures we're undertaking are meeting the needs and expectations of the traditional owners. Part of that is regular site visits. I personally visited the Pilbara and Juukan Gorge with our Chair, Simon Thompson. It was a really emotional visit, listening to the traditional owners and listening to their stories. And I plan to visit the Pilbara 3 more times in 2021, again, to listen and check that we are meeting those expectations. As Chair of Sustainability, if invited, I will be an observer at the meetings of the indigenous advisory group that Kellie outlined. It's an important part of listening to that advice, which we do at the local level, in our local implementation committees, at the regional level in our regional implementation committees, and the advisory group will take a national perspective. It's very important that we go beyond the parliamentary inquiry and the Board review recommendations to learn the lessons of Juukan globally. The integrated heritage management plan is being implemented as appropriate globally, and the Sustainability Committee will oversee this implementation. The committee, as I mentioned, has already requested and now receives updates on an audit of our global CSP risks and relationships at its each meeting. And finally, we will, together with our traditional partners, traditional owner partners, will report on the progress of this reform. We'll do that on a 6-monthly basis in conjunction with our normal financial reporting, and we'll continue to engage in forums such as this to make sure that we are reporting on that progress. Let me now hand over to Alicia.

Hi, I'm Alicia Sherwood, General Manager for Communities and Social Performance, Pacific Operations for the aluminum product group. I've worked for Rio Tinto for 13 years in communities and social performance roles. Today, I will talk in detail about why agreement-making is so important and discuss a historic case study from the Gove operation located in the remote northeast Arnhem Land in the northern territory of Australia. Rio Tinto owns and operates the Gove operations, which is a bauxite mine and curtailed alumina refinery. Prior to our ownership in 2007, the mine had been at the center of a well-known grievance in Australian aboriginal land rights for decades. The Yolngu people are the traditional aboriginal land owners of Arnhem Land and have one of the oldest living cultures on earth stretching back to more than 40,000 years. After years of exploration activity and without reference to the traditional owners, a mining lease was granted by the government in 1962. The following year in 1963, the Yolngu clan leaders representing the traditional owners, responded with a petition on bark, which outlined their concerns about the mining lease granted over their land without consent. The Yirrkala bark petitions were sent to the Australian parliament in 1963. They were the first traditional documents prepared by indigenous Australians that were recognized by the Australian parliament. A select committee investigated the Yolngu's concerns and made a series of recommendations to the government, including formal recognition of Yolngu rights to hunting areas and access to and protection of sacred sites -- sacred and other sites. Despite the committee's recommendation, parliament did not recognize their rights, including the fundamental issue of terra nullius, nobody's land. In 1968, despite the concerns raised by the Yolngu, the Gove agreement was established, providing Nabalco, the previous owner, a 42-year lease with the right to renew to mine on aboriginal land. When their appeals to parliament failed, the Yolngu leaders turned to the Supreme Court in the Northern Territory. And in 1971, the court decided that the ordinance and mining leases were valid and that the Yolngu people were not able to establish their native title at common law in a decision known as the Gove land rights case. The Yolngu eventually received native title to their land in 1978 under the Aboriginal Land Rights Act 1976. However, the mining leases, which they objected to since 1963, were excluded from the provisions of the act. Because the mining leases were granted in Gove before 1976, the grievances of traditional owners were not addressed by the 2 previous mining companies, and they continued operating knowing consent was never provided. Rio Tinto acquired these Gove operations in 2007 as part of its acquisition of Alcan. We immediately commenced engagement with traditional owners. Rio Tinto set out to right the wrongs of the past and addressed the longest-running aboriginal mining dispute in Australian history through an agreement-making process. Despite Rio Tinto having the right to renew its leases for a further 42 years in 2011, we worked directly with the Gumatj, Rirratjingu and Galpu traditional owners to embark on a direct agreement because it was the right thing to do. The negotiations took place between 2008 and 2011, recognizing and respecting what the land meant to the Yolngu was core to these negotiations. In 2011, the Gove traditional owners agreement was signed in the presence of the then Australian Prime Minister, Julia Gillard. At the ceremony, Yolngu leaders told the Prime Minister that the matter is now resolved and that the agreement allows the Yolngu people to finally start healing and move on. I joined Rio Tinto in 2008 as part of a small project team to negotiate the historic agreement and have spent the last 10 years implementing it. Agreement implementation is not isolated to any single part of the business. Agreements will often include commitments around land use, environment, procurement and employment. Therefore, the responsibility is not only with the communities team. It sits with the broader company and requires understanding, prioritization and efforts of everyone. The Gove traditional owners agreement celebrates 10 years this May, and the partnership remains strong with many successes for all parties. The entrepreneurial spirit of the traditional owners and their desire to have self determination by building and maintaining sustainable businesses is a key success. For example, the Gulkula mining operations is the first aboriginal 100% owned and operated bauxite mine by the Gumatj clan, which commenced operation in 2017. Rio Tinto supported the traditional owners by sharing business practices, such as regulatory, health, safety and environmental advice. It should be noted that Gulkula mining is ASI-certified. Another success is the global diesel supply contract with the Rirratjingu clan. The agreement also addresses the importance of the protection of sacred sites and cultural heritage. We work in partnership with traditional owner groups to manage and protect these sites for future generations. The most recent partnership occurred last Monday, where Jakob, our CEO, was there in person to witness the traditional owners present their vision on the township, which is being developed for the operations post mining. This vision will assist post mining transition and ensure a positive legacy post Rio Tinto. I'd now like you to hear a few words first-hand from one of the owners of the Gulkula mining operation, which was a commitment under the agreement. [Presentation]

Before concluding, I'd like to move to another Pacific operations asset, Weipa, in far north Queensland, where we recently commenced a program focusing on improving leaders' capabilities through exposure to experiences in community with the 12 traditional owner groups we partner with. The program was built to gain respect for and knowledge of the local culture and develop cultural advocates in our leaders, designed to move participants from being culturally aware to cultural advocates and build a core of advocates across our operations. Cultural immersion is exposure to experiences, activities, individuals or groups whose culture differs from one's zone. The program will continue to be rolled out between Weipa and Gove in 2021 and beyond. Many thanks for listening, and I'd now like to hand over to Clayton.

Thank you, Alicia, and thank you, everyone, on the line today. It's a pleasure to be here to speak about our work with our indigenous communities. I'm Clayton Walker, and I'm the Chief Executive, Iron Ore Company of Canada. IOC is a leading producer of premium, high grade, low impurity iron ore concentrate and DR pellets, which aid in the decarbonizing of steel production. We have a mine and processing facilities in Labrador City in Newfoundland and Labrador and a terminal and port facilities in Sept-Iles, Québec, which are connected by a 418-kilometer railway. We've been operating for more than 60 years with a projected mine life more than 50 years into the future. In the 2 provinces we operate, there are 5 indigenous groups that have overlapping traditional or historical rights or interest claims. They are Innu Nation, the Innu Nation of Uashat Mak Mani-Utenam, the Innu Nation of Matimekush Lac-John, Naskapi Nation and the new NunatuKavut Community Council. As one might expect, our relationships with these communities are complex. In any relationship, there is a past, present and future you need to reconcile in order to come together to achieve common goals. While we don't have all the answers, we have found that reconciliation's achievable by following these 3 principles. First, we have committed to prioritizing these partnerships from the very top to the very bottom of the business. We have made it clear within the business the importance of having strong positive relationships with our indigenous communities. As an example, we have made it mandatory for all of our employees to complete cultural awareness training in order to access our sites. Second, we have started with first -- with listening first, seeking to understand concerns, points of view and aspirations. Over time, this understanding has allowed constructive dialogue to occur. Third, we have delivered substantive action in order to build trust. This is more than just words. It's tangible change on the ground. Impact and Benefit Agreements, or IBAs, which are encouraged by the Canadian government and common practice across Canada, have provided us a process and a framework for putting these principles into practice. But IBAs are just a framework. You need to continue working beyond that, building truly 2-way and mutual beneficial relationships, which make them sustainable. So how does this work in practice? Let me give you a few examples. Last December, we were able to sign a historic joint agreement with ITUM and MLJ communities in Québec. We had worked on these agreements for about 3 years. The relationship had not been positive historically, to put it mildly. We had -- and it had escalated over the years to the point where communications have broken down and disputes had ended up in the courts back in 2013. In 2018, both sides acknowledged the desire to reset the relationship, and we began the process of committing, listening and rebuilding trust. We had previously developed agreements with the Innu Nation and the NunatuKavut Community Council in 2014. So we were starting with a baseline of experience, and we are now in discussions with the Naskapi Nation about a potential fourth agreement with them. In every case, the IBAs reflect the particular circumstances of the communities and our shared goals around education, procurement, business development, cultural heritage and environmental stewardship, where connection to the land is such a vital part of the health of the communities. The second example where listening is critical is finding opportunities to work together with or without an IBA. Through consultation and discussions, the Naskapi Nation highlighted the acute need for reliable Internet access to their village near Schefferville, Québec. We worked with them to provide broadband to the community by extending the fiber that runs along our railroad. This has been a real game changer for the education and health services in the community and a critical lifeline as it turns out in the current pandemic. As a final example, I'd like to highlight -- what I would like to highlight is we are working on increasing indigenous participation in employment and procurement opportunities, building capacity and developing a common understanding of what is needed by the business and what the communities are able to deliver. For example, Pencal Supplies Limited is an Innu partnership, which has a 5-year contract with us providing busing, industrial cleaning and fuel delivery valued at over $33 million. The economic and social outcomes of these agreements are important, but they only happen if you're able to achieve reconciliation and build long-lasting trust. Thank you. And now, Jakob, back to you for some closing remarks.

Thank you, Clayton. Let me just say a few closing words before we take your questions. Today, you have seen firsthand that we have some new people in some new roles, and we are working hard to earn back the trust of the traditional owners in the Pilbara. We are taking decisive actions to modernize agreements and invest in future indigenous leaders. And as you've just heard, we have many fine achievements to be proud of in other parts of Australia and Canada. This is how we have operated for decades in partnership with indigenous people. Our social license is an essential part of doing business. The path towards a lower carbon world provides rich growth prospects for our industry, but I'm convinced that the societal expectations on how to mine will only increase. Our aim of having impeccable ESG credentials should not be seen as a cost or just the response to Juukan, but rather an opportunity to build long-term competitive advantage. We still have a lot of work ahead of us. But you have my commitment that we will drive towards consistently high ESG performance in all areas. Thank you, and we will now take your questions.

Thank you. Thank you, Jakob, and thank you, everybody, for your attention. And we are now proceeding to the Q&A session. This will take about 60 seconds or just over 60 seconds to give people the time to join us on the phone. As a reminder for those on the webcast, the phone number is on the invitation to the seminar. And Heidi, the operator, will shortly provide instructions on how to ask a question for those of you on those phone lines. So please stand by for a minute while Heidi, the operator, collects the questions. Great. Heidi, I think we are ready for questions.

[Operator Instructions] Your first question comes from the line of Stefan Hansen from Nikko Asset Management.

Just a question for Kellie or Brad. Just from what you've seen from the outcomes of the review of the West Australian Aboriginal Heritage Act, just wondering if you think the new positions and processes that Rio now has in place will meet the requirements of the updated act. And also then more broadly, just your views on how you think the updated laws are going to provide traditional owners with the protections they need, but while also allowing Rio to receive the approvals it needs to operate effectively.

Brad, why don't you start?

Thank you, Jakob. Thank you for the question. From what we've seen of the West Australian proposal laws, it focuses on a move away from what's known as Section 18 or permit-by-permit sort of approvals or impact-by-impact approvals and more towards what's known as cultural heritage management plans. So our business is well versed in doing culture heritage management plans in a jurisdiction like Queensland. We've done them in a place like Weipa for quite a long time. We do think that presents quite an opportunity for the company and traditional owners to work together on what's known as the cultural heritage landscape, which is broader than the impact footprint or the individual sort of approvals. I think that's a positive move, and we are looking forward to working collaboratively to understand what that culture and landscape would look like. There's a number of other commitments that we're quite supportive of, and we've been quite supportive of. That is a process for working through new information when it arises as well as the right of appeal for traditional owners. So obviously, we have to see the legislation when tabled, we do believe that our approach will be significantly higher than and usually is significantly higher than any regulatory approach and addressed heavily by discretionary efforts. So we know that our relationship is underpinned by trust, and the thing that drives trust is really discretionary effort with our partners. But thank you, good question.

No worries. Could I ask another one, please, for Jakob. You mentioned in your opening words, Rio's desire to lift traditional owner engagement, not only in Australia, but globally. Can you perhaps give us some thoughts on how the -- all these positive improvements that's been outlined today might be brought to help issues at resolution in the U.S.?

Yes, thank you. As you know, the situation is -- it's a very different situation we are faced with in the U.S. It's a different system. It's a different setup. But nonetheless, we are going through a long engagement process primarily going through the forest services in the U.S. It's -- one lesson learned I take out of Australia is the importance of direct engagements, and this is probably the one thing that we really do want to push harder, seeing how we can more directly engage with the First Nation groups in the U.S. and, in particular, the San Carlos tribe.

[Operator Instructions] Your next question comes from the line of Karina Madill from Mackenzie Investment.

I just have one quick question. You did mention that you know you failed on that aboriginal site blow up, but you did have a framework before, and these issues continue to happen. So I was just wondering what in your framework failed before. And what are you implementing now to kind of address those exact failures that you had in your framework from before?

Look, let me take that. And Brad, you are most welcome to add further. But we have extensively laid out the root causes of went wrong and it went terribly wrong with Juukan Gorge. And we are addressing that in the Board report issued last autumn. There was a number of procedural things that went wrong. But for me, over and above everything, what is really crucial for us is to have the right relationships with the traditional owners that, over and above procedural aspects, could have avoided what happened at Juukan, I have no doubt about that. And I hope you hear our commitment to real engagement and real relationship through everyone at management of Rio today. Brad, do you want to expand?

Yes. Thank you, Jakob. One thing I'd say about our company is we have always had pockets of excellence. We have had world-leading agreements in places like Weipa, where we expanded the footprint of the mine in the cultural heritage landscape. Alicia talked about the Gove agreement, where, through a discretionary effort, we formed an agreement rather than just what the extension of our leases. So our company has always had pockets of excellence. I think the recognition in Juukan was there is benefit to bringing indigenous voices into the most senior levels of the company through, whether it's an indigenous advisory group, whether it's indigenous leadership, whether it's general managers having the relationship at a local level. And we want to get far more consistent in our approach across the company by introducing our senior leaders to indigenous people, either locally or nationally or internationally. And we know that, that partnership and that relationship drives performance of our business as well as the implementation of our standards. So I think -- in summary, I think we've always had pockets of excellence, but this is really about building that capability for the company to respond at all levels in the business.

And just to finalize on that point, that is exactly what we are trying to do with Mark Davies building the CSP function across the group with what we're doing across Australia appointing Kellie Parker as CEO of Rio Tinto across Australia. So that's what we're implementing right now.

Okay. And also just kind of -- it might be the same answer, but in terms of your accountability practices, you touched on it a little bit in the presentation. But internally, with these new sort of Board changes, what's going to happen in terms of accountability and how that's going to shift in the future? Because a lot of promises are being made, but how are you going to make sure that you keep them?

Yes. Look, we certainly, as a new executive team, feel very accountable. And that's what the Board took out that this is happening. So I think we should ask Megan for an answer to that question.

Thanks, Karina. And certainly, we'll have reports regularly on the progress on the management implementing the recommendations that we've had from the parliamentary inquiry from the Board review. But it's important here that we have the culture shift as well on the ground. So we will be verifying that on the ground. I'll be visiting as Chair of the Sustainability Committee another 3 times this year at Pilbara and, as Brad outlined, checking directly with the traditional owners, are we meeting those expectations. So there's a number of things that sit over the top in a governance sense, all of our lines of defense, not just our standards, but how we'd work at the operations. How we're looking through the expert area of excellence to make sure that we have the right standards and that we're implementing those standards. How will we keep internal audit, just checking on that as well. And then it's not enough to look at yourself. We also -- as that's the third area of checking, we're bringing that external view to audit our areas and make sure we are doing exactly what we said we would do. But I would reiterate Jakob's comments and Brad's comment. What's important here is that we stitch up that relationship all the way through our organization, including the Board. It's one of the reasons that the Board of Rio Tinto have met with the PKKP Board. And so making sure that we also have the backup of those relationships so that we can -- we have those communication lines open at every level, at the local level, the regional level, the national level, and we do that across our global operations.

And I probably should add one last thing is we have made quite a significant change in our bonus structure. And now ESG is a significant part of it for all of us in management. That should hopefully also drive behavior.

Your next question comes from the line of Edward John from ACSI.

Thank you. Well, first, I'd like to begin by just acknowledging the engagement from the executive team and the Board with global investors on these critical issues and particularly the commitment to greater ongoing transparency as well as ongoing engagement with traditional owner groups in Australia and First Nation groups across the world. My question is whether you feel the lessons that have been learned in Western Australia and the Pilbara can actually be applied on projects globally, particularly resolution copper?

Yes. Thank you very much, and thanks for your acknowledgment. It's very felt in the organization, what we have been through and provides a unique platform for us to apply deep learning. I can assure you about that. Look, it's really tricky because there's definitely learnings from Australia that we need to think about how do we apply that best in resolution. But it's also very important that it is a very different setup in the U.S. than in Australia, and we cannot just say what we do in the Pilbara is exactly the same we should do in resolution. I got the question earlier on. And I do think, with the benefit of hindsight, I would really like to see how we can deeper, more directly engage with all the First Nation groups in the U.S. But I would like to remind you, we have gone through 7 years of engagement process. And in any case, it's a bit theoretical about the resolutions because there is no development plan yet. We are only at an early stage, and we need to work together with everyone to see how and whether we can develop the right development plan that there can be a broad consensus about moving forward. So views for and against is a bit theoretical at this point in time. But I can assure you, we will very, very deeply think about how we can apply learnings, all the learnings from Australia into a project like resolution. It's tricky, though. It is progressing right now, and it's simply not at the stage where the real key decisions are being made. It's the only event we have right now was the publishment of the environmental impact study and the land swap. Thank you.

Your next question comes from the line of Craig Campbell from Northcape Capital.

I've just got a couple of questions. Just going back to the initial incident at Juukan Gorge, that was initially reported in a local WA newspaper, and then it finally got to the mainstream media about a week later. But it took Rio just a few days short of a month to put a statement out regarding that. And I'm just wondering why it took so long for the company to say anything on it, even acknowledge that it had occurred. And then secondly, the fallout has been quite dramatic. There's been a lot of change going on and a lot of positive change as well. But with regard accountability, the Chairman is moving on, but will there be any changes to the Board following this? Because you look at what's happened, how it's been handled initially was quite poor, in my view. And from where I sit, I would like to see some further change made at the very top because you just can't believe that the Board didn't know the seriousness of this and really just failed to act. And beforehand, if everything had been working properly, the audit for sustainability should have started picking up these deficiencies, and it didn't. So there had to be some further accountability, in my opinion.

Jakob, do you want me to take that one?

Yes, please. If you don't mind, I just want to say one little thing up front because, Megan, I really appreciate your observation also on the first part of how we change things. But I want to just to note off the top of my head here, I was CFO at the time of the company when this happened. And obviously, I look back with deep regret at that time. I would say about accountability, just to give you a few dimensions because I hope we're all thinking with the same mindset of how can we intend to prosper from this point of view. We actually have had over the last few months 3 executives, including the Chief Executive, who has left the company. I have come in. I have reset -- I've set a new executive team in January, and we are having changes to the Board, and there's just a limit on how much changes you can deal with if you want to move the company forward as well. So at least from my perspective, living the changes every day, there is -- I think we actually have done significant changes. But Megan, why don't you answer the question?

Yes. Thanks, Jakob. And look, thanks, Craig, for asking both those -- both of those questions. In terms of the accountability, we have had very significant change with 3 of the executives taking accountability. And you've seen the recent announcement that the Chairman will stay to make sure that we have stability, but not stand at the AGM in the following year. So I can assure you that throughout the organization, myself personally as well, it's hard to even explain the level of hurt and shame that we feel, the shame that I personally feel because every single day, where the responsibility for people's safety, for their health, for the safety of all of our underground operations, there are open pits, et cetera, for our community relations, these responsibilities are very important. We -- as a Board member, all Board members are there at the discretion of the shareholders. So -- and we simply put ourselves forward for that. From my personal point of view, I'm absolutely dedicated to making sure that we make the transformation that is needed, not just in Rio Tinto, but actually throughout the mining industry to really make sure that we have true partnerships across the mining industry with traditional owners. You look back some 30 years, and there was a massive step in moving from litigation to partnership and a focus on shared value with our traditional owners. But this next transformation that we're undergoing and the industry will undergo, and I certainly will dedicate myself to that transformation, is one of our true partnership. As Brad and the team have outlined, it's about shared -- it's really about having that equal power, and it's about going beyond shared benefit to understand what our traditional owners and First Nations groups are trying to do and help them with that. It will be -- it will go beyond any requirement of the legislation as well. So I absolutely accept your comments on accountability. I do not shy away from it. But I'm also not naive that this is something that we will achieve quickly. All of my life in the mining industry since I first graduated, I've been committed to removing and eliminating fatalities in our industry. And I know from that, that it takes decades. It doesn't take years. So with the permission of the shareholders such as yourself and being invited by our traditional First Nations people have been welcome. I can just assure you that I'm extremely personally dedicated to make this change, whether I'm with Rio Tinto or outside and beyond my time with Rio Tinto.

Your next question comes from the line of Lou Capparelli from UniSuper.

This is probably also for Jakob and Megan. The question I really have is, you've announced a lot of changes and initiatives that are all very positive. But I'm just curious today what do you see as the biggest substantive change that's been implemented in your approach to heritage management that you see is going to be the critical factor in improving relations and outcomes with the traditional owners?

Megan, why don't you start? I have a couple of comments as well.

Yes. Thank you for the question. The 2 that really stand out for me, one, as Jakob has already mentioned, is the relationship. Because the one thing that still sits in my mind as I look at what happened and why it happened was -- where was it a quick phone call -- where all of those linkages that could have stopped this at any time. And it's a question that still sits there. And so I think having those relationships with the traditional owners, they are as important as the Prime Minister of the countries in which we operate, all the Presidents in those countries. And I ask myself the question, did we invest the same time in those relationships. And so that's a very important part of what we're trying to do right now. This should not just be business relationships but actually including friendships, where the communication channels are just open and those relationships are deep and trusting so that something like this could never happen again. The second for me is that this will fundamentally change the way we do mining as well because it requires a much more iterative interaction with the traditional owners of First Nations. First of all, listening, before you even do the mine plan, of what's significant and understanding their -- understanding the significant areas, the cultural significance, et cetera, I think we start that. And then as we work through the mine plan, sort of sharing that as we go and sort of getting that feedback from -- on the ground. I've seen that already start in the Pilbara, where you can see the traditional owners sharing their knowledge with the mining team and then changing the mine design and saying well, look, we've done this. How does that look? And then the traditional asset was great. But can you move the tailings dam just a little bit to the left so that this creek has a nice visual and the look and feel of that particular traditional -- of that particular cultural site is preserved? And the mining engineers go away and move it a little. And that sort of how iterative mining, I think, will change the way we do things. In a way, it replicates the change we've seen in software development, massive software programs that were developed behind closed doors and then pushed out on, in some cases, not to work. And now we see that kind of iterative part. So I think we will -- they're, to me, the big 2 changes that we'll see, this integration of cultural heritage with our mine planning and the strength of those relationships.

Yes. Thank you. Let me just say one thing on that front. It's along the same lines, but maybe just seeing from my chair, I do think actually my probably biggest leadership challenge is the following. We laid out very clearly today that you cannot have a central function who is responsible here. It's actually line management. And you also heard me saying earlier today that we mine on others' land, and it's way beyond procedural. It's about -- it has to be felt in the heart and the minds the same way as we have built safety culture over decades. And my leadership challenge is that this is not run by the first level, the ExCo team, nor the next level, the managing directors. You really have to be sure that the General Managers of each sites, and we got hundreds, more than 100 of those, that it's felt in the hearts and minds. So the one big thing is to make sure that we consistently get this as a value. And as you've also heard today, we have really, really some fantastic examples. We have best-in-class examples within Rio Tinto. For me, my responsibility, and I'm not ducking away from that, is to make sure that we get it consistently throughout. It's a leadership challenge. Thank you.

Yes. I just guess -- I mean, everything you're saying makes sense. It's just hard to square that. I would have thought or I think Megan's opening comment was that there needs to be good relationships with the traditional owners and even friendship. So it is disappointing that, that wasn't already just embedded in the way the mining operated historically, and it took this incident to sort of highlight that, that was a sort of missing component.

Look, it's a horrible event, and we would all love to have seen this never have happened. It should never have happened, but I can't change it. And it is absolutely crucial to rework this. It's not that we have found a lot of weaknesses elsewhere, but it's just very evident that when it comes to Juukan Gorge and with PKKP, that we just have to acknowledge that we have to work these things much harder. So I agree with your sentiment, but that's our challenge and opportunity.

Our next question comes from the line of Camille Simeon from Aberdeen Standard.

I'm interested in how you're applying this across the supply chain. So you've spoken to some of it in the presentation, and you're obviously doing a big program of work internally. There's a lot of positive changes that should come through as a result of that. But how are you going to apply that? Or how can you apply that across your supply chain to ensure that the partners that you're working with are at your level or increasingly moving along with you as well? Because that's, I guess, a key risk as well is that the supply chain is not where you want to be or where you're going and something happens there?

Yes, thank you. That's a very good point. I mean, when you say -- let me just clarify, when you say supply chain, you're saying about contractors and everyone and how we -- who we are using as contractors, et cetera? Is that correctly understood?

Yes, that's correct.

Excellent. So look, I think we're very cognizant about that, and we're doing everything we can. As mentioned earlier, I went through to our Gove operations last week. And just in that operation, I see that we spent more than $100 million a year of -- with local suppliers. It's absolutely key. And you had this wonderful example, by the way, from Gove. I think it's the first operation 100% run by indigenous groups doing their own mining, selling the bauxite to our operations. So you're absolutely right. This is not just a risk. It's a massive opportunity if you do that in the right way. Brad, do you want to elaborate a bit on this?

Yes. Thank you, Jakob. We are sharing with -- any of our sort of supply -- I guess there's probably a couple of points to make. We're sharing our approach with any of our suppliers. One thing I'd reiterate is we're not delegating the relationship with traditional owners. So we do want to make sure that, that relationship is direct. And I think the biggest opportunity is we're not talking about large groups of people. So if we think about the 9 groups in the Pilbara, we're talking about 3,500 members. We're not talking about sort of hundreds of thousands of people. Any investments we make in the Pilbara traditional owners and whether it's business development or capability uplift or leadership development in the corporate sector, those will pay off with all of our contractors because we're building the capability of the partners that we work with. And they'll be better able to match opportunity with capital. So I think the real opportunity is the investments directly and our partners into mutual objectives, allowing them and supporting them to build a sustainable approach with all people that they deal with, including mining and, obviously, no issue sharing through our contracting networks as the principle as well. Thank you.

We're coming up to the 10 minutes. So Heidi, maybe one last question, please.

Your final question comes from the line of [ David Whittaker ] from [ D Corp ].

Just a question around the escalation process. You mentioned there were 1,000 sites reviewed. And I think you said there was no cases of escalation. Is that correct?

Who should I ask here? Brad? I see also Simon Trott on the phone here. But Brad, why don't you take the question?

Yes. Thanks, Jakob. So more than 1,000 sites are -- including indirect sites have been assessed. And they've all been assessed and reviewed by the Iron Ore Chief Executive. So that, I guess, in some respect, have all been escalated. I think Megan's point was they haven't been escalated to the Board level due to being able to either be removed from the reserve or removed for further consideration. So we haven't gotten to the point where we've had to escalate all the way through to the most senior parts of the company, but the Rio Tinto Iron Ore CEO has had oversight of that review process and each one of those decisions.

Okay. And what could I -- just can I get an idea of what might cause an escalation to the Board?

Yes. It's usually a question of significance and the type of sites. So we've got about 13,000 sites across our iron ore position that we've recorded over the last 20 years. We -- you might find that a site has quite high significance from an archeological perspective as well as a living culture perspective, so the way the traditional owner group relates to that site. Where you've got, I guess, other sites that might be an artifact status, say. It's usually quite easy to collect those artifacts and disturb them or remove them to a safe location. So you're sort of looking at a couple of bookends. One of the other overlays that you see is this concept of intangible values. So that's a way that a site might look, feel, sound. What's the thing that makes the living culture sort of connect to the site, they're much harder to understand, and you have to understand them through the eyes of the traditional owners. So in a case like Juukan, if we were going to proceed with Juukan, you've got a site that's got a high level of preservation, proof of continual occupation and in an area that preservation in an arid sort of area is not a common thing. So a site like Juukan would have to go all the way through to the Board level because it's ranked quite highly from an archeological perspective as well as from the traditional owners in terms of this living culture or these intangible values. What we found is that the more significant site through our initial reviews, we've pulled them out of the process. We put them out of reserve and further worked with the traditional owner groups, especially while we're trying to build this partnership approach. And I think what we're looking forward to is unlocking the future of the Pilbara together because we do have mutual objectives in doing that. So it's probably the reason we haven't escalated through to the Board as yet.

Thank you, Brad, and thank you, speakers, and thank you, everybody, for listening. And I appreciate there are a couple of more questions, but please contact IR, and we will follow up with those. So thank you again, everybody, and see you at the next event. Bye.