20100330 China jails Rio Tinto staff for seven to 14 years

China jails Rio Tinto staff for seven to 14 years

SENTENCED AND FIRED: Rio Tinto sacked the four convicted staff members, saying the trial had clearly shown they engaged in ‘deplorable behavior’

REUTERS AND AFP, SHANGHAI AND SYDNEY
Tuesday, Mar 30, 2010, Page 1

A Chinese court jailed four Rio Tinto staff for seven to 14 years yesterday for taking bribes and stealing commercial secrets, a sentence Australia said was harsh.

The Shanghai Intermediate People’s Court sentenced China-born Stern Hu (胡士泰), who headed Rio Tinto’s iron ore operations in China, to 10 years in jail, with parts of a seven-year bribery term and a five-year secrets sentence running concurrently.

It handed down jail terms of 14 years to Wang Yong (王勇), eight years to Ge Minqiang (葛民強) and seven years to Liu Caikui (劉才魁), all Chinese nationals.

The four men, dressed casually in sports jackets, stood for the verdicts, which came nine months after they were first detained.

Rio Tinto immediately sacked the four and voiced hope the case wouldn’t affect its vital trade with China.

“In accordance with our policies we will terminate their employment,” said Sam Walsh, the company’s iron ore chief executive, in a statement, describing their behavior as “deplorable.”

Rio chief executive Tom Albanese said ethical behavior was “at the heart of everything we do” as he stressed the importance of the company’s relationship with China, the world’s biggest market for iron ore.

Internal investigation had shown that all wrongdoing was outside company systems, Rio said.

Canberra acknowledged there was convincing evidence of corruption, adding that ties with Beijing would not be hurt by the verdict in a trial that has been closely tied up with politics and diplomacy.

However, Australian Foreign Minister Stephen Smith said he still had “serious unanswered questions” about the most controversial part of the trial, covering the stealing of commercial secrets, which was held behind closed doors.

Smith said China had missed a chance to clarify its secretive and often confusing rules about what constitutes a secret.

“This was an opportunity for China to bring some clarity to the notion or question of commercial secrets,” he told a news conference in Canberra, referring to a decision to close the portion of the trial dealing with commercial secrets to Australian diplomats.

“As China emerges into the global economy, the international business community needs to understand with certainty what the rules are in China,” he said.

“On any measure, this is a very tough sentence. It is a tough sentence by Australian standards. As far as Chinese sentencing practice is concerned, it is within the ambit or within the range,” he said.

“I don’t believe the decision that has been made or has occurred will have any substantial or indeed any adverse implications for Australia’s bilateral relationship with China,” Smith said.

The court said the defendants helped obtain information from confidential strategy meetings of the China Iron and Steel Association, which represents the steel industry in price negotiations.