Paul Scarr (Queensland, Liberal Party) Share this | Hansard source

I rise to speak in relation to a very important issue—namely, the revelation today that Rio Tinto, a dual-listed company with head offices in both London and Australia, listed on both the London Stock Exchange and the Australian Stock Exchange, has made an extraordinary donation of $2 million to the 'yes' campaign, in terms of the proposed constitutional referendum which will provide for an enshrined voice to both parliament and the executive government. I was alerted to this in an article by Paige Taylor in the Australian today entitled 'Indigenous voice to parliament yes campaigners told to stick to positive message'. There's a reference in a paragraph in that article to:

Yes23 has tens of millions of dollars in donations from the approximately 500 corporations and philanthropic organisations that support an Indigenous voice in the Constitution.

On Friday, Rio Tinto announced it would contribute $2m.

I actually then went to Rio Tinto's website to verify whether or not that was correct, and, sure enough, their position with respect to the Voice includes the following statement:

We are donating A$2 million in support of the "Yes23" campaign.

Such an extraordinarily large donation by a multinational company in relation to a referendum dealing with Australia's Constitution and how its system of government will be established or may be changed for all time warrants serious consideration and careful analysis.

Prior to formulating my thoughts in relation to this, I went back and read perhaps one of the more serious speeches or articles of thought in relation to the social responsibility of business. That was Milton Friedman's quite seminal article entitled 'A Friedman doctrine: the social responsibility of business is to increase its profits'. It was written by Milton Friedman, the Nobel laureate, and published in the New York Times on 13 September 1970. In that article, he made a point with respect to the obligations of companies, which, after all, were established to take advantage of limited liability and are nothing more than an investment vehicle for the shareholders who invest in them. He wrote: 'In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the not-for-profit institution, and his primary responsibility is to them.' He goes on:

Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily—to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income …

But, as Milton Friedman says, that's up to the executive.

So we have this extraordinary situation where Rio Tinto is making a donation of $2 million. First, I want to look at Rio Tinto's own policies and see whether or not that donation actually complies with their own published policies. In relation to political engagement and participation in industry associations, they write:

We do not favour any political party, group or individual, or involve ourselves in party political matters. We prohibit the use of funds to support political candidates or parties.

In their code of conduct, entitled 'The Way We Work' and published in February 2023, they write on page 20:

Did the board of Rio Tinto actually consider whether or not it was appropriate to make a $2 million donation in relation to a proposed change to Australia's Constitution which is the subject of vigorous debate, where good and reasonable people are on both sides of the debate and which is clearly occurring largely on party political lines, where the Labor Party and the Greens have adopted a position, the federal Liberal Party and the National Party have adopted a contrary position and most of the minor parties in Australia have adopted their own position? How is this referendum, referring to Rio Tinto's own statement, not a matter which relates to a country's political process and political matters? How did the board of Rio Tinto come to that conclusion? It is astounding that Rio Tinto would decide to make a donation in the context of a referendum which is being hotly contested, which is deeply political and which concerns the future structure of Australia's Constitution. This is a matter for Australians. It is not a matter for multinational corporations.

When one looks at Rio Tinto's latest annual report, from 2022, who are their three largest shareholders? One is BlackRock Inc., an entity which is headquartered in the UK. One is Shining Prospect PTE LTD, which is the holding company of Chinalco's shareholding in Rio Tinto. Chinalco is a Chinese state owned enterprise. They are the largest shareholder of Rio Tinto, with 14.02 per cent. One is another entity referred to as the Capital Group Companies Inc., which clearly, again, is not an Australian entity. So there you have the top three shareholders, constituting approximately 26 per cent—all foreign owned corporations and the largest of them a state owned enterprise. How is it appropriate that such a multinational is engaging in such a partisan way with respect to the debate over Australia's Constitution? It's totally inappropriate. What universe were the board of directors of Rio Tinto in when they made this decision? If the managers of Rio Tinto wanted to make their own contributions and donations from their own money, that's one thing, but to do it with shareholders' money is entirely another.

If one looks at their remuneration report, the chief executive officer has a package which is worth 4.8 million pounds a year. If the CEO wanted to make his own donation, he could have, as could every employee. In fact, when one looks at the different shareholders in Rio Tinto in terms of their Australian shareholding base, there are 178,997 shareholders in Rio Tinto Limited with fewer than 5,000 shares. If one was conservative and said one assumes that they are Australian shareholders—and there'll be a mix—to the extent they're shareholders with a shareholding in the Australian entity and one assumes that, say, 40 per cent would vote no on the constitutional referendum that's coming up, that means approximately 70,000 shareholders have effectively had their investment in Rio Tinto mobilised to enter into a partisan political debate. It's completely unacceptable.

What universe were the board of directors of Rio Tinto Limited in when they made this consideration? Did they consult their own policy? Did they do any due diligence in relation to how divisive this debate has become and how partisan it is? How did they consider that appropriate? Would they do it in any other country in which they invest? I was absolutely gobsmacked when I saw that donation of $2 million. Their three largest shareholders are foreign entities—the largest is a state owned enterprise—and they consider it appropriate to donate $2 million to one side of a campaign in a very divisive constitutional referendum debate, which is hyperpolitical and hyperpartisan. I think this donation by Rio Tinto will be the subject of further, very deep analysis.