Aboriginal people dance at Sydney harbor, Australia, Nov. 11, 2020. (Photo by Zhu Hongye/Xinhua)

New Western Australian legislation to better protect Aboriginal heritage fell short of international standards, an investor body said on Thursday, after the proposed changes came under fire from Indigenous groups.

The resource-rich state on Wednesday unveiled a long-awaited bill aimed at protecting Indigenous heritage, but drew a backlash from Aboriginal groups because a government minister will keep the final say over development decisions.

Indigenous heritage protection has become a hot-button issue since miner Rio Tinto legally destroyed culturally significant rock shelters for an iron ore mine 18 months ago, sparking public outrage.

Australian pension fund HESTA and the Australian Council of Superannuation Investors (ACSI) said that opposition to the bill by traditional owners to the regulation was a cause for concern.

The rock shelters that Rio destroyed at Juukan Gorge showed evidence of human habitation stretching back into the last Ice Age.

"The material financial risks and uncertainty that can arise from poor company engagement with First Nations Peoples and lack of protection of cultural heritage are a concern for investors," ACSI CEO Louise Davidson said.

It was important that the new law gave increased assurance that risks to heritage sites will be adequately managed and mitigated, she said.

An Australian inquiry into the incident recommended a new national legal framework and for Aboriginal people to be the top decision makers on heritage issues.

Reuters