The company has been in talks with the community members, represented by the Human Rights Law Centre (HRLC), for several months.

The discussions were facilitated by the Australian OECD National Contact Point (AusNCP).

The talks were prompted by a September 2020 complaint to the AusNCP against Rio made by the HRLC, representing 156 villagers living near Panguna, alleging Rio is accountable for significant breaches of the OECD Guidelines for Multinational Enterprises relating to past and ongoing environmental and human rights impacts allegedly arising from the Panguna mine.

The complaint also alleges that, notwithstanding its divestment, Rio is accountable for remediating these ongoing impacts as it has an ongoing obligation to provide for or cooperate in remediation where it identifies it has caused or contributed to harm.

A joint committee of stakeholders will be formed to oversee a detailed independent assessment of the Panguna mine to identify and better understand actual and potential environmental and human rights impacts of the mine which ceased operating in 1989.

The Panguna Mine Legacy Impact Assessment Committee will be established by the Autonomous Bougainville Government (ABG) and the parties to the AusNCP process, Rio, the HRLC and the community members the HRLC represents.

The committee will be chaired by an independent facilitator and will include representatives from Papua New Guinea, ASX-listed Bougainville Copper and other landowners and community representatives.

"This is an important first step towards engaging with those impacted by the legacy of the Panguna mine," Rio Tinto CEO Jakob Stausholm said.

"It comes after months of constructive engagement with the HRLC and the community members they represent facilitated by the Australian National Contact Point, as well as engagement with other key stakeholders including the Autonomous Bougainville Government.

"Operations at Panguna ceased in 1989 and we've not had access to the mine since that time.

"Stakeholders have raised concerns about impacts to water, land and health and this process will provide all parties with a clearer understanding of these important matters, so that together we can consider the right way forward.

"We take this seriously and are committed to identifying and assessing any involvement we may have had in adverse impacts in line with our external human rights and environmental commitments and internal policies and standards."

Stausholm has been working to repair Rio's reputation since taking over as CEO in January.

The impact assessment will be mainly funded by Rio, and partially by Bougainville Copper, provided that broader stakeholders on the committee endorse the process and proposed methodology.

Rio and the other parties to the AusNCP process will discuss the recommendations from the impact assessment and the remaining commitments sought by the communities.

The Panguna mine closed in 1989 due to the start of the civil war.

Rio transferred its 53.83% majority shareholding in Bougainville Copper to the ABG and the PNG government in 2016 for no consideration, enabling ABG and PNG to hold an equal share in BCL of 36.4% each.