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Australian Prime Minister attacks China over Rio Tinto trial
March 30, 2010
8:15 am
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March 30, 2010

The Australian government has attacked China's handling of the Rio Tinto corruption trial, saying holding a large part of the proceedings in secret left 'serious unanswered questions.'

Kevin Rudd, the Australian Prime Minister, said he had "reservations" about China's decision to hold the industrial spying portion of the case behind closed doors. China, he said, had lost an opportunity to demonstrate transparency to the rest of the world.

Stern Hu, an Australian citizen, and three colleagues from the Anglo-Australian mining giant were convicted of bribery and commercial espoionage on Monday and sentenced to jail terms ranging from seven to 14 years for bribery.

Shortly afterwards, Rio Tinto announced that it had sacked the four executives, saying that it hoped the case would not affect its trade with the world’s largest steel producer.

However, Mr Rudd stressed that while the Australian government also condemned bribery, it remained concerned at the manner in which the espionage charge was handled.

"The trial on the second charge was held in secret with no media and no Australian officials present for it. This has left therefore serious unanswered questions about this conviction," Mr Rudd told reporters.

"In holding this part of the trial in secret, China I believe has missed an opportunity to demonstrate to the world at large transparency that would be consistent with its emerging global role."

He added: "Australia condemns bribery wherever it occurs. Australia also, however, has reservations about the manner in which the second charge contained within this court case has been handled."

Mr Hu, the head of Rio Tinto's Shanghai office, was sentenced to 12 years - seven years for bribery and five more on the industrial espionage charge. He is to serve 10 years in the relatively benign Qingpu prison, the only jail in Shanghai that holds foreign male prisoners. His colleagues Wang Yong, Ge Minqiang and Liu Caikui were given jail terms of 14, eight and seven years respectively.

The actions of the defendants "severely damaged the competitiveness of China's steel companies" and "isolated" China during last year's iron ore price talks, leading to their collapse, presiding judge Liu Xin told the court.

"They took advantage of their favourable position in the iron ore trade and teased out information by dangling the promise of profits," Mr Liusaid.

"The four have confessed criminal information that prosecutors did not know," he said.

While Mr Rudd expressed his concerns about the trial, he was at pains to stress that business relations with China should not be harmed.

"I believe the bilateral relationship will sustain these sorts of pressures," he said. "We've had disagreements with our friends in Beijing before, I'm sure we'll have disagreements again."

Foreign Minister Stephen Smith also protested Mr Hu's sentence as 'very harsh' and said: "What is unknown as a consequence of the lack of transparency is whether here we are simply dealing with information which would be normally and commercially available or whether we're dealing with something more broad than that," he said.

However he too insisted there would be no change to the relationship between Australia and China.

"We did go through some tensions and some difficulties last year, but whilst this has been a very sensitive, very important and very difficult consular case, I don't believe that what's occurred will have an adverse impact on our own relationship," he said.

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