Rio Tinto Indigenous Employment Program in Australia - Case Study Example

Rio Tinto Indigenous Employment Program Name Course Tutor Date Introduction Rio Tinto is an international mining company that has its headquarters in the United Kingdom. The company is a combination of Rio Tinto PLC and Rio Tinto limited. The two entities form a group that combines productivity with a responsible approach to business. Furthermore, the group aims towards satisfying a sustainable development model which encompasses working with host communities as closely as possible. They do these by respecting the cultural values and ideals of the host communities and maintaining a symbiotic relationship with these communities. This paper presents a case study of Rio Tinto indigenous employment program in Australia. It aims at examining the relationship of Rio Tinto group and the Aboriginal and Torres Strait Islander indigenous population. Stakeholders The stakeholders involved in this program are the community leaders of the Aboriginal and Torres Strait Islander people, the company’s management and the indigenous people themselves. Werther and Chandler (2010) explain that a stakeholder is an individual or a group of people that posses interest in the actions of an organization. The leaders of the two communities are involved in consultations with Rio Tinto officials to lay down the ground work for the corporation between the company and the indigenous population. The leaders represent their communities in consultations with the company. They are in charge of picking the type of relationship they want to pick with Rio Tinto group by presenting their needs and requirements that are to be meet by the company before they enter into partnership. They, as traditional land owners, are signatories on agreements between the community and the company. An example of such an agreement was the Argyle participation agreement of 2005. The agreement outlined the community’s and the company’s vision for the development of the region to the benefit of both the community and the mining company. The indigenous people form a core stakeholder group in this relationship. As the company benefits from exploiting the mineral reserves on their land, the indigenous population benefit by getting employment opportunities, education provision, business development and provision of training programs for students in engineering,administration and human resource courses. The management of the company is involved with: decision making concerning the agreements made with the indigenous population, meeting with community leaders and putting in place programs that will mutually benefit the company as well as the indigenous communities 1,2,3 Impacts on the company’ strategic objectives Even though Rio Tinto is a global company with branches in the United Kingdom, North America, South Africa, Asia and Europe, its business base in Australia make up a third of its assets. Therefore, the company’s operations in Australia are significant part to the growth and development of the whole Rio Tinto group of companies. As mining is a capital intensive undertaking and is a long term investment, viable strategies and policies need to be developed to cope with the running of the company in remote regions. The main strategic objective of Rio Tinto is maximizing the long term benefits of the companies’ shareholders which include the location, extraction and processing of mineral resources in the whole world. This core strategy incorporates operations in a manner that is ethical and also socially responsible. The company aims to uphold a good reputation that would make it an attractive business organization. Rio Tinto has six strategic pillars that impact on its operations. They include health and safety, operational and financial delivery, growth and innovation, people, communities and environment and finally customers and markets4,5 The employment and educational opportunities offered by the company address the company’s core objective of developing and maintaining a highly competent workforce in addition to having good public relation with the surrounding community. The company recognizes the importance of people to the organization, and having a hand in the education and training of its indigenous workforce helps Rio Tinto to have a highly motivated staff. The provision of education training and employment opportunities provided by Rio Tinto also upholds the company’s objective of having a positive relationship with both the communities around its mines and the environment. The objective sets to promote sustainable development by providing economic success and social well being of the people in the surrounding community. Provision of employment and education opportunities to the indigenous population also promotes the corporate social responsibility function of the company. This enables the company to maintain and enhance its reputation as a socially responsible company hence improved chances of customer preference. Rang (2011) argues that a well planned corporate social responsibility can improve an organization’s competitive and economic performance6 .Contreras (2004) supports this view by stating that a company’s engagement with the local community as a corporate social responsibility creates a good corporate reflection and insures the survival of the organization7 HR functions contributions The human resource department is one of the most important departments in the organization. They play a critical role in the execution of the employment program for the indigenous communities. The human resource department, which is in charge of vetting applicants for various positions, chooses individuals with the best requirements for the position in question. They are involved in the crafting of agreements with Aboriginal and Torres Islander people involving the percentage of workers they will educate, train and employ from the surrounding community. The Human resource section is in charge of establishing targets for employment opportunities offered to indigenous groups based on the demographics of the local populations. For the success of the employment program and the overall success of the company, the human resource department makes sure the organizations operations are reflective and focused on the retention and maintenance of skilled and trained indigenous employees. Strandberg (2010) argues that professionals in the human resource department are important in the implementation of an organization’s corporate social responsibility objectives. She argues that these professionals are in possession of the tools and expertise to leverage employee performance, commitment and engagement to the benefit of the organization. She points out that all employees prefer working institutions whose values align with their own. The human resource department is therefore tasked with finding those individuals who will complement their on growth with the growth of the company.8 In the 1990s the number of indigenous workers working for Rio Tinto was less than 0.5 percent of the total workforce in Australia. Harvey (2002) writes of the antipathy that existed between Rio Tinto group of companies and its detractors. The company did not want to face the opposition that its predecessor (CRA limited) had faced in the implementation of its mining operations on indigenous lands in Australia. To avoid opposition from the indigenous population, Rio Tinto promoted a range of human resource (HR) enticements that included recruitment and career promotions for indigenous people based on wide-ranging competencies rather than specialized proficiency9. As of 2010, the percentage of indigenous Australian workers in Rio Tinto was up to 7 percent of its total workforce. The increase in the number of aboriginal and Torres Strait Islander in the company’s workforce have coincided with improved relationships with these local communities hence better productivity due to the stable working conditions and relationships. All this achievements are attributed to the role played by human resource in implementations of the employment program for indigenous groups. Clinton Walker, a liaison officer and indigenous mentor at Pilbara Iron, explains that he spends time with those employees of indigenous origin to give them advice on the development of their workplace careers as well as their personal lives. Activities such as this, set up by Rio Tinto contribute towards a successful program as the development of commitment in these workers. Such practices increase the productivity of workers hence the company benefits from optimal employee performance. The training services and programs offered by Rio Tinto also offers indigenous personnel a chance to envision a long term successful future with the company hence the success of the employment program and the success of the company. Challenges facing the program However, the process is not as smooth as it might appear on paper. Despite the commitment of Rio Tinto towards indigenous employment, there is a shortage of skilled labor especially in the mining sector. The shortage of skilled personnel leads to the importation of labor to fill the positions needed. This approach does not favor capacity building and development of sustainable skills for the indigenous population. Statistics from the 2001 census showed that only 5 % of Aboriginal adults had post secondary education qualifications in East Kimberley. The organization admits that there is a scarcity in the number of indigenous people with available employability skills. This lack of education in indigenous people posses a great challenge to the implementation of the indigenous employment program by Rio Tinto. A large number of indigenous employees recruited by Rio Tinto require substantial literacy training so as to comprehend the requirements for the organization. This includes the occupational health and safety standards that require year ten literacy levels to comprehend. The lack of child care services and facilities hinder the employment of women in Rio Tinto. They can therefore not be employed if suitable child care arrangements are not available. This limits the engagement of women in mainstream employment. Another challenge faced by Rio Tinto in the implementation of the employment program to indigenous communities is the limited amount of coordination that is available between the agencies that are involved with the indigenous population. In provision of readiness training to potential employment targets, the company also provides family support in terms of social and health care. This brings it into interaction with other agencies that offer these services. However, there is a lack of proper coordination for the provision of these services. Even though there is an availability of semi skilled positions for indigenous people, there lacks a coordinated effort in their support and training. The TAFE sector which is responsible for provision of training services and facilities to this areas is either rigid in its operations or provides irrelevant training. Some locations where Rio Tinto has located its mines are thought to be too remote and that funding in such areas is uneconomic. The TAFE system also disregards the climatic changes of the regions. When training is carried out during the dry seasons, the program is disrupted by recreation leave taken by the trainees10. Conclusion Rio Tinto group of companies has a made commitment to build a long lasting relationship with the Aboriginal and Torres Strait Islander indigenous groups to promote sustainable growth and development. The relationship between the company and indigenous people is based on mutual respect and commitment to the set goals and strategies that are mutually beneficial. Seven percent of Rio Tinto’s workforce is of indigenous origin while it is also involved in the education and health development of indigenous people. Some of the challenges faced by the company include lack of skilled personnel among the indigenous population, poor training services offered by government agencies, disjointed coordination among care givers and a lack of child care services. References Trebeck, Katherine. Corporate responsibility and social sustainability: Is there any connection? In Power, Culture, Economy: Indigenous Australians and Mining, Canberra: ANU E Press, 2009 ‘Rio Tinto’. Rio Tinto Indigenous Employment in Australia. 2009. http://www.riotinto.com/documents/ReportsPublications/Rio_Tinto_Indigenous_Booklet.pdf. ‘Rio Tinto’. Core objectives and strategy. Melbourne: Rio Tinto PLC and Rio Tinto Limited .2008. Rang, Timo. The Strategic Importance of Corporate Social Responsibility: Competitive Advantage or Contemporary Trend? Munich: GRIN Verlag, 2011. Contreras, Manuel. Corporate Social Responsibility in the Promotion of Social Development: Experiences from Latin America and Asia. Washington: IDB, 2004. Werther, William and Chandler, David. Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. New York: Sage, 2010. Strandberg, Coro. The role of human resource management in corporate social responsibility. Burnaby: strandberg consulting, 2009. Harvey, B. New Competencies in Mining — Rio Tinto’s Experience. Melbourne: CMMI Congress, 2002. Altsia. Submission to the House of Representatives standing committee on aboriginal and Torres Strait Islander affairs: inquiry into indigenous employment, 2005. ‘Rio Tinto’. Social investment: working with Australian communities. Melbourne: Rio Tinto PLC and Rio Tinto Limited, 2008. Read More