Is Rio Tinto really the model business it claims to be?

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Image credit: www.riotinto.com. Photographer: Christian Sprogoe PhotographyDate: 27 July 2009

Industriall has recently released a special report examining the bad business behavior of mining giant Rio Tinto.

Image courtesy of http://www.riotinto.com. Photographer: Christian Sprogoe Photography  Date: 27 July 2009
Image courtesy of http://www.riotinto.com. Photographer: Christian Sprogoe Photography
Date: 27 July 2009

The CFMEU reports that the company’s recent actions have been placed under great public scrutiny following the string of unpopular and highly public disputes with trade unions, communities, regulatory authorities and breaking indigenous people’s rights, all under the veil of “good corporate practices”.

2008 has brought along the biggest financial crisis the world had ever seen. And while the vast majority of businesses came out of it licking their wounds, the mining industry was one of the very few that emerged stronger than before, with an unprecedented commodity boom and hefty balance sheets.

However, the financial well being of the mining companies did not translate into financial well being for their workers, even though it is the hardest and the most unsafe industry in the world.

Hiding behind the global code of conduct and claiming to abide by good corporate practice, the company has thus far managed to preserve the image of ethical business, ranking as the leader in the mining sector.

However, Swiss-based REPRISK, a firm specializing in assessing the possible environmental, social, governance and reputational risks of companies, listed Rio Tinto as the sixth most controversial mining company of 2011, according to the special report by Industriall.

The company has had its share of controversies, including the one that has seen it being accepted as provider of the medals for the 2012 Olympic medals. Prior to that, Rio Tinto went through an audit and certification process, making it the first to be certified as a responsible mining company by the Responsible Jewelry Council (RJC).

The thing is, this organization of companies lists Rio Tinto as one of their founding members, which was later used as a stick to beat the London Olympics organizers with.

The long list of controversies includes the company’s already established practice to avoid negotiations with mine workers’ unions and preference to finding solutions with the workers themselves, the accusations of unethical conduct on part of Rio Tinto in Mongolia, the company’s habit of flexing their financial muscle in order to drag out disputes with individual trade unions in collective bargaining negotiations, the use of outsourcing as part of the strategy to reduce operational costs and escape from its responsibilities as an employer in Madagascar and many other controversies that are yet to be proved right or wrong.