China court hears secrets charges against Rio Tinto executive, 3 others; bribes case wraps up

By Elaine Kurtenbach, AP
Tuesday, March 23, 2010

Rio Tinto exec facing commercial secrets charges

SHANGHAI — The trial of four employees from Australian mining giant Rio Tinto was set to end Wednesday as a Shanghai court wrapped up closed sessions on industrial espionage charges.

The Rio Tinto case is seen by many working in China as a signal that the Communist-ruled government is subjecting foreign companies to increasingly close scrutiny, raising the risks of running afoul of secrecy rules that are themselves kept secret.

Defense lawyer Zhang Peihong said he expected the trial to finish as expected in the afternoon. The release of a verdict or sentencing could come much later.

Australian executive Stern Hu and three Chinese co-workers pleaded guilty to charges of taking bribes, though they disputed the amounts of money allegedly involved, lawyers said.

The four have been detained since last July in a case many thought was linked to Beijing’s anger over high prices it paid for iron ore — a key commodity in China’s booming economy. Rio Tinto, based in London and Melbourne, is one of the top suppliers of ore to China and a key industry negotiator in price talks with China’s state-owned steel mills.

Australia’s consul-general in Shanghai attended the court sessions on the bribery charges. His government formally protested the court’s decision to close sessions handling charges of industrial espionage, which began Tuesday afternoon.

Australian Foreign Minister Stephen Smith said he expected Hu’s trial to end Wednesday but a verdict could still be days away.

Smith declined to say whether he was surprised by Hu’s admissions on bribery charges or whether he thought they were made under duress.

“I’m not proposing to be drawn on a commentary on the trial until the trial processes have completed,” Smith told Australian Broadcasting Corp. radio in Canberra.

“We expect the trial processes in terms of the hearing to conclude today. The court’s made it clear that it expected a three-day hearing. Today is the last day of that scheduled hearing,” he said.

“Regrettably it also coincides with that part of the trial to which Australian officials don’t have access to and we regret that and we’ve made that point clear to Chinese officials,” he said.

Few details of the allegations against Hu and the others have been released. The four were formally arrested in August and have not been allowed any public comment.

Zhang and another lawyer, Tao Wuping, refused comment on the commercial secrets charges.

“It’s too sensitive, beyond my capacity,” said Zhang.

Earlier Chinese reports suggested the Rio Tinto employees may have been caught up in an effort to control information exchanged during the iron ore pricing talks, where Rio Tinto was acting as lead negotiator for the miners.

The admissions of bribe-taking were a blow for Rio Tinto at a time when it is striving to restore good relations with China. After initially staunchly defending its staff, the company recently urged the court to handle the case in a quick and transparent way.

Rio Tinto recently named a new top executive for China, and last week announced an agreement with China’s state-run aluminum giant Chinalco to develop an iron ore reserve in the West African country of Guinea.

Almost all criminal cases that go to trial in China end in conviction. The maximum penalty for commercial espionage is seven years in prison. The maximum penalty for taking large bribes is five years.

Court officials have refused comment on the Rio Tinto case and China’s state-controlled media has provided scant coverage.

Beijing considers steelmaking one of its key strategic industries. As the world’s largest maker of steel and consumer of the iron ore required to make it, China has sought to exert stronger influence over price negotiations with overseas suppliers like Rio Tinto.

The government seeks to control access to the wide range of information it considers secret or sensitive through aggressive use of its own sweeping but obscure secrecy laws.

Associated Press reporter Rod McGuirk in Canberra and Associated Press researcher Ji Chen in Shanghai contributed to this report.

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