PRESS RELEASE
The International shareholder campaign within Rio Tinto
22 May 2000
This Wednesday 24 May, the Annual General Meeting of Rio Tinto will be held
in Brisbane. This will bring to a head an international proxy contest waged
by trade unions in the UK, USA and Australia over the company's corporate
governance standards and employment practices.
It is expected that the union-sponsored resolutions will attract
significant support, especially in the light of support from the Australian
Shareholders Association and international independent shareholder advisory
services. The Rio Tinto shareholder campaign heralds a new phase in
increasing the accountability of major firms, and marks a new phase in
strategic action by trade unions and international co-operation amongst them.
8 March Launch; intensive investor effort since
The campaign was simultaneously launched in Sydney , London and Washington
DC on 8 March. Under the umbrella of the Coalition of Rio Tinto
Shareholders the chief sponsoring organisations were the CFMEU (Australia),
the ACTU , the British Trades Union Congress (TUC), the American Federation
of Labor-Congress of Industrial Organisations (AFL-CIO), and the
International Federation of Chemical, Energy, Mine and General Workers
Unions (ICEM). Combined, these organisations represent 41 million
workers. The proxy campaign is the first ever involving a global
coalition. And because Rio Tinto is a dual listed company in the UK and
Australia, it is the first campaign to involve seeking investor support in
two jurisdictions.
There has been intensive solicitation of investors in the USA, UK and
Australia over the last two months involving targeted mailings, a
special-purpose website and numerous direct consultations.
In Australia the investor liaison effort has been lead by Susan Ryan, AO.
Whilst the campaign has been underway Ms Ryan has been elected President of
the Australian institute Of Superannuation Trustees.
Exactly what's happening
On 24 May shareholders of Rio Tinto will have the opportunity to vote on
two resolutions that have been put forward by trade unions and which are
opposed by the board of directors.
The first is on good corporate governance. It calls for any Deputy
Chairman to be independent of the executive director team and therefore
able to better reflect shareholders' interests. Rio Tinto currently has
both an Executive Chairman and a Chief Executive. It is now proposing to
appoint the immediate- past Chief Executive as Deputy Chairman.
The resolution also calls for the board to disclose which of its directors
qualify as being genuinely independent and its criteria for doing so.
Currently the board does not identify its independent directors so
shareholders have no means of determining if there is a reasonable balance
between independent directors and the executive director team.
The second resolution calls for the company to commit to observing the core
minimum workplace rights standards of the UN's International Labour
Organisation. This has been moved in the interests of giving clarity to Rio
Tinto's employment policies by giving specific benchmarks against which
employment policy and practice can be measured. It is seen as especially
important for risk management in a company that operates in a large number
of countries and which has been the subject of human rights abuses in the
workplace.
The full text of the resolutions and their supporting statements can be
found at www.rio-tinto-shareholders.com
The Coalition will present its case from the floor of the Brisbane
meeting, whilst outside there will be a large but peaceful rally of union
members and supporters.
Major institutional investor support achieved
In Australia the resolution on good corporate governance has been
specifically endorsed by the Australian Shareholders Association and
Independent Shareholder Services, a leading advisory group to major
investors. There have been indications of support for one or both of the
resolutions from key institutional investors.
In the UK the resolutions have attracted the support of investors with over
65 billion pounds under management, including Top 20 shareholders such as
the Co-operative Insurance Society. The UK arm of the campaign concluded on
10 May with the London AGM. The final voting figures for both meetings
will be released by the company after 24 May.
Rio Tinto Board forced to move
The board of the company has been forced to lobby many institutional
investors to shore up a deteriorating support base. Many investors cannot
understand why the board has chosen to oppose adoption of improved
corporate governance, or why adherence to international minimum labour
standards presents a difficulty.
For the CFMEU, the ACTU and the international labour organisations with
which they have worked, the campaign has already been a success. Trade
unions have demonstrated that they can work with shareholders for the
mutual benefit of both in moving a big company towards improved board and
workplace practice.
Further Information :
Susan Ryan - 0411 013 268
Peter Colley - 0417 992 995
Paddy Gorman - 0418 116 426
--
Leftlink - Australia's Broad Left Mailing List
mailto:[EMAIL PROTECTED]
http://www.alexia.net.au/~www/mhutton/index.html
Sponsored by Melbourne's New International Bookshop
Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink
Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
