Rio Tinto Case Study Analysis

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Rio Tinto Case Study
Prasad Naik
BUS 510-2

Background

Rio Tinto is a British-Australian mining company founded in 1873 with its Headquarters in London, England. It is a global company, which operates worldwide with a focus in Australia and Canada. Rio Tinto is considered to be the oldest and largest mining company in the world with over 68,000 employees. During its operation carried out over the years, Rio Tinto has acquired and merged a number of companies. In 2011, Rio Tinto was selected as the official gold and metals Provider Company for the London 2012 Olympic and Paralympic games. Dark Past

Notwithstanding the fact that Rio Tinto is a major and profitable company, it has some dark past about human rights and environmental violation. Issues ranging from carrying out illegal mining operation, employing “slave labor” and forcing them to work under brutal and unsafe conditions in 1980s,being sued by workers for health safety issues poor working conditions of workers and harming one of the richest areas of marine biodiversity on earth by dumping toxic cyanide from its Lihir gold mine operation. Due to this in 1981, Rio Tinto’s unhappy shareholder launched negative campaign called “People against Rio Tinto”. According to them Rio Tinto was involved in unethical practices like political bribes, environmental issues and poor treatment of indigenous peoples. Rio Tinto and Stake holders

Over the period of time Rio Tinto has been tainted with scandals. To gain the confidence of its stakeholders Rio Tinto should develop a communications strategy with them. Rio Tinto’s major stakeholders are its mineworkers, shareholders and investors, communities, civil society groups such as NGO and governments of states that Rio Tinto operates. Each of these stakeholders has their own concerns and expectations. Rio Tinto mineworkers are concerned about poor and hazardous working conditions and exploitation of their human rights. A community where Rio Tinto operates is concerned about health issues due to environmental pollution and destruction of local flora and fauna. NGO want Rio Tinto to stop its unethical operation such as use of slave labor, poor working condition, and exploitation of human right and destruction of the environment. Governments are concerned about legal framework and expect that business to abide their legal system. Developing a Communication Approach

Rio Tinto should develop an effective communication approach to tackle the allegation faced by them. Rio Tinto’s should convey its responsibility and integrity to stakeholders. Goals
Communications Strategy
To enhance the sustainable image of company
To show stakeholders what sustainable initiatives the company is taking using social media and Campaign. To refute the allegation of exploitation of human rights
Partnering with the NGO working for same cause and arranging a mass anti-human right campaign To provide more transparency
Publishing the financial statement and operating method and initiatives taken towards environmental protection ,in newspapers and website of company. Wining confidence of Shareholders
Providing them with triple bottom line i.e. environmental, social and economic annual report. Consequences of Allegation
Rio Tinto has to develop a communication strategy with its stakeholders, give answer to current negative campaigns of Operation Greenwash Gold and United Steelworkers Union (USW) or it will have to face financial as well as non financial consequences. Allegations may cause loss of the London Olympics’ contract and future potential contracts, which will affect the company’s revenues, thus net incomes. Further in many countries there are strict laws against human right violations this may cause them to loss license to carry out mining operation plus civil penalties. A bad reputation might cost Rio Tinto’s to lose customers and quality employees. Then for improving image they have to spend more money for advertising that...
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