Tuesday, March 23, 2010

Rio Tinto and China Rules

Four employees of Rio Tinto, mining giant, stood trial in China on Monday, while the company's chief executive said in Beijing that Rio remained committed to working with the key Asian customer.

Australian national Stern Hu and three Chinese employees of Rio faced prosecutors in the court in Shanghai, all accused of taking bribes and violating commercial secrets.

Hu pleaded guilty to taking bribes worth some six million yuan ($879000) citing Tao Wuping, the lawyer for another defendant.

The case has highlighted the risks of doing business in a country with a huge market but close ties between the ruling Communist Party, police and courts.

"This issue is obviously of great concern to us," Albanese told a forum of officials and executives, referring to the case. He also said that they respectfully await the outcome of the Chinese legal process. He added "we remain committed to strengthening our relationship with China, not just because you are our biggest customer, but because we see long-term business advantages for both of us."

Foreign reporters were not allowed to attend the forum, and Rio emailed copies of Albanese's speech. A Chinese webcast of it did not include his comments on the trial.

The four employees from Rio's iron ore team, including Hu, were detained last summer at the height of fraught negotiations over 2009 ore prices, creating a furore over China's opaque state secrets laws.

Chinese media last summer accused the four of seeking information about Chinese mines and steel mills, which many firms consider legitimate market information.

Rio has said that its employees did nothing wrong.

Shanghai is likely to want the case over quickly, before its much ballyhooed 2010 World Expo opens in Shanghai in May.

China has excluded Australian diplomats from observing the part of the trial concerning commercial secrets, drawing protests from Canberra, which says they have the right to be present for the whole trial, scheduled to last three days.

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