We probably won't be much appreciated for invoking the Titanic deckchair analogy in comparing it with Rio Tinto's board behaviour, as it confronted shareholders at this week's annual general meeting (AGM) held on 11th April 2018.

Nonetheless, the serried rank of drab, indifferently-suited executives (with only two mute women in tow) did seem to fear some calamity might be ahead.

It was an impending disaster whose exact dimensions or outcome they couldn't fully anticipate, although it was briefly flagged up by chairman Simon Thompson as the meeting opened.

In essence, Rio Tinto, along with two former top executives, has been indicted by the US Securities and Exchange Commission (SEC) for wilfully, knowingly, and fraudulently, concealing the loss of a massive amount of money when it sold a coal company in Mozambique at a fraction of what was paid to acquire it.

Not just that - Australia's Securities and Investment Commission (ASIC) also weighed in with similar charges at the beginning of March this year.

While Thompson didn't acknowledge this particular event he said the company would defend itself vigorously against the SEC accusations of fraud – adding nothing more. This clipped, formally-couched , announcement must have left a number of shareholders (including ourselves) wondering whether more of substance would be offered later in the meeting.

But the majority seemed far less perturbed. (Heaven forbid that the world's second most powerful, highly capitalised and diversified mining company, serviced by PWC - one of the world's four leading financial accountancy firms - could fail to have guarded against battering by such a gargantuan iceberg potentially straight ahead! ).

Swell delivery

True to form, scarcely a bubble of discontent was heard during the first forty or so minutes of the meeting .

However, the swell certainly mounted over the following hour, and by the time the meeting was brought to an end, several board member (notably the pedestrian Thompson and J-S Jacques, his more articulate CEO) had been doused in some unwelcome spray.

Allegations of governance imprudence and tardiness in following up on previous undertakings given to shareholders are par for the course at such events.

The company received a hit over excessive board member pay. (In passing, we might point out that, if Rio Tinto board members are to be penalised for fatalities among workers at its operations, they should surely also suffer major financial impacts when local people are killed by military forces at various mine sites – see below).

Mr Thompson was also tasked with failing to implement adequate de-carbonisation of the company's energy sector.

Fire in the belly

The meeting really only ignited when Pius Ginting, a renowned Indonesian ecologist and social activist, stood up to summarise the findings of a recent field trip he'd made to Papua (“West Papua”, as the Indonesian government insists on calling it in part) to examine egregious aspects of the Grasberg mine's tailings dumping into rivers, creeks, and the coastal region.

Andrew Hickman of the London Mining Network, then rose in Pius Ginting's support, demanding Rio Tinto acknowledge a key role in bulwarking its corporate partner, Freeport, in complicity with military attacks on Papuan citizens. This included arbitrary killings, removal of villagers from their land, along with uncontrolled waste disposal that resulted in its own quotient of death and destruction.

Simon Thompson abruptly dismissed these accusations, confessing he “didn't know their detail”. He justified this complete lack of corporate due diligence by arguing that Rio Tinto's status was merely its junior partnership in a “metal stripping” arrangement with Freeport that would continue until 2021.

“Fact stripping” would be a much more apt way to describe his essay at “economy with the truth”, as yet a third shareholder jumped up to challenge the chair.

He pointed out that Rio Tinto had sealed an agreement with Freeport in 1996/7 that virtually bailed out the then-indebted US enterprise, making Rio jointly responsible for a succession of savage reprisals against local people (including imprisonment and torture in company facilities).

Added to which was its gross failure to ensure that potentially toxic tailings were prevented from cascading into the riverine environment at a rate of 200,000 tonnes per day. This abject failure – along with neglecting multiple human rights abuses – was why the Norwegian state Pension Fund Global, had thrown Rio Tinto out of its portfolio in 2008.

More was to follow

A challenging question focussed on the Panguna mine in Bougainville. that Rio had recently sold, demanding it fully pay for rehabilitation of the abandoned mine site. It also asked that the company compensate citizens for the deprivations and abuse of human rights they suffered during the long war resulting from attempts by the Papua New Guinea government to retain control of the island, centering on Rio Tinto's complicity in attacks in the Panguna area.

One of the most important further shareholder interventions sought a thorough examination of the role played by former CEO, Tom Albanese, in the company gaining control of its world-class Oyu Tolgoi copper-gold mine in Mongolia.

Once again, the distinctly shady machinations of a man now being indicted by the SEC and ASIC (see above) were put under the spotlight.

Amnesty report

In 2015, Rio Tinto had been accused by Amnesty International (no less) of concealing its involvement in Burmese human atrocities and a breach of sanctions applied against the country's military government, when it invested in Ivanhoe Mining, which controlled the Monywa copper mine to the south of the beleaguered state.

The move was intended as a sort of “trojan horse” to secure ownership of Oyu Tolgoi, while purportedly guaranteeing Ivanhoe's prior withdrawal from Burma.

But, during these negotiations – all under Mr. Albanese's watch - Rio Tinto secured 30% ownership of Ivanhoe, while local people were being brutally “resettled” from the Monywa area, amid growing international condemnation of the regime.

We ourselves, in 2015, had asked then-Rio Tinto chair, Jan du Plessis to divulge in detail the process by which its former CEO engineered the whole dodgy takeover.

Mr du Plessis admitted then that we had “reached the limit of our [the chair's] knowledge in the matter”, while then-CEO, Sam Walsh, said he had “no knowledge” of the agreement signed between Albanese and Ivanhoe.

And now, at the 2018 AGM, Simon Thompson, seemingly at sea, could only undertake to look into the matter further – three years later on.

What further evidence was needed to convince any dutiful and conscientious shareholder that, Messrs Thompson and Jacques are deeply out of their depth in terms of maintaining due corporate governance?

These two men are also culpably inclined towards misrepresenting and glossing over, vital errors of omission and commission, both past and present, relating to its policy document the “Way We [supposedly] Work”.

Not giving up

As the AGM wound down to a conclusion, a lot of those in the shareholder-investor belt may have become wearied and a little confused by the “dissident shareholder” attacks previously made on the company's ethical reputation.

They might also have felt somewhat cheated of the welcome benefits (afforded by their enhanced dividend payments) that normally would have allowed them to exit from the QE II conference centre, confident that Rio Tinto is well-armoured to face the challenges ahead.

Such confidence is neither warranted, nor deserved.

Time will tell, no doubt - the deck chairs may not need to be unfolded just yet and a rush to the lifeboats could be averted.

But those who dare critique the company - like Pius Ginting - will continue testifying to the company's actual performance, from their own fully informed perspective .

For as long as it's necessary.

(London Mining Network has published a report on the AGM here: http://londonminingnetwork.org/2018/04/the-dog-ate-my-homework-another-year-at-rio-tinto/, with a separate commentary here: http://londonminingnetwork.org/2018/04/death-and-destruction-caused-by-mining-in-west-papua-but-rio-tinto-denies-responsibility/)

[London Calling is published by Nostromo Research. Views expressed in this column are those of the author, and do not necessarily represent those of any other party. The column may be reproduced under a Creative Commons licence]