In its final report into the incident, the Northern Australia committee accused the West Australian government of a lack of engagement, and called for a rewrite of the state's contentious draft heritage legislation.

Rio blew up the 46,000-year-old Juukan caves on Puutu Kunti Kurrama and Pinikura country in May 2020, devastating the traditional owners.

The mining giant had legal permission to destroy the caves under WA's outdated Aboriginal Heritage Act but has since conceded it breached the PKKP's trust.

In a report highly critical of both Rio and the WA government, the joint committee has recommended wide-ranging legislative change.

Federal laws should be urgently amended to hand responsibility for all Aboriginal and Torres Strait Islander cultural heritage matters to the minister for Indigenous Australians, rather than the environment minister.

Stronger overarching heritage legislation should be co-designed with Indigenous people, setting out minimum standards for all states and territories and potentially the right for traditional owners to veto the destruction of important sites.

It should be focused on protecting and celebrating heritage and should emphasise the principles of free, prior and informed consent.

"States have failed," the committee said on Monday.

"Time and time again, states have prioritised development over the protection of cultural heritage - including through the enactment of site-specific development legislation intended to further dispossess Aboriginal and Torres Strait Islander peoples."

West Australian Senator Dean Smith and Nationals MP George Christensen rejected the need for stronger Commonwealth oversight, which they said could be used as "deliberate weapons against the resources sector".

They instead suggested Rio Tinto should face further consequences for actions they labelled "disgraceful, negligent and wilful".

"There should be a judicial inquiry into the destruction of the site, investigating if conduct preceding or following the event warrants further action - including criminal charges," they said.

Chief executive Jakob Stausholm said Rio Tinto was "working to drive cultural change at every level of the business".

"We have been working hard to rebuild trust and meaningful relationships with the PKKP people and other traditional owners," he said.

The PKKP Aboriginal Corporation said a "great sense of sorrow and loss" remained for its people almost 18 months after the Juukan destruction.

"The response by Rio Tinto, other mining companies and government decision-makers to the events at Juukan Gorge will be a test case for First Nations people throughout Australia and internationally," it said.

The inquiry's final report follows more than a year of hearings involving dozens of traditional owner groups and other stakeholders.

MPs surveyed the relationships between mining companies and Indigenous groups, hearing repeated concerns about inequity and poor dealings between the two parties.

"The committee is dismayed to hear reports that some companies continue to endanger critical heritage sites," the report said.

"It calls upon those in the industry who are improving their processes, to hold their peers to account for these inappropriate actions."

Rio, which has since parted ways with its former chief executive and other senior figures, has repeatedly apologised for the Juukan destruction.

Along with other Pilbara miners, it is modernising heritage agreements and has pledged to stop enforcing gag clauses which silence traditional owners.

Federal Environment Minister Sussan Ley said there was a "collective view" among state, federal and territory leaders that heritage laws needed to be modernised.

"Most importantly, Indigenous Australians must be part of that process," she said.

WA Aboriginal Affairs Minister Stephen Dawson said the state's proposed new legislation was the result of extensive consultation and would only allow sites to be disturbed if traditional owners provided informed consent.

Australian Associated Press