Rio Tinto exec facing commercial secrets charges

[March 23, 2010]  SHANGHAI (AP) -- Four Rio Tinto employees were standing trial Tuesday in a closed Shanghai court session on politically sensitive charges of stealing commercial secrets after earlier pleading guilty to taking bribes.

Australian executive Stern Hu and three Chinese coworkers have been detained since last July in a case many thought linked to Beijing's anger over high prices it was paying 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.

Hu and his coworkers -- Liu Caikui, Ge Minqiang and Wang Yong -- pleaded guilty Monday to bribery charges heard in court sessions attended by Australia's consul-general, Tom Connor. Those hearings wrapped up Tuesday morning, Connor said.

Hu made no comment in court Tuesday, Connor said, providing no other new details.

Australia formally protested the court's decision to close sessions handling charges of industrial espionage, which began Tuesday afternoon.

No 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. China has not disclosed who is accused of offering the alleged bribes.

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 has just urged the court to handle the case in a quick and transparent way.

Rio Tinto's chief executive, Tom Albanese, was visiting Beijing as the trial began Monday. In comments to a high-level economic forum that was also attended by Chinese Premier Wen Jiabao, he stressed the company's desire to keep its China business on track.

The company 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.

"Only in the last year have we come upon some difficulties, which we are working hard to resolve," Albanese said. He said the case against Rio Tinto's employees was of "great concern."

Shanghai's No. 1 Intermediate People's Court was scheduled to hold three days of hearings on the Rio Tinto case. Almost all criminal cases that go to trial in China end in conviction but there can be long waits for verdicts and sentencing.

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. Lawyers and law experts have shied away from comment, saying the threat of retaliation for unauthorized

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.

China is often accused of using close political and business ties between the public and private sector to conduct industrial espionage on a grand scale. It likewise has sought 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.

The Rio Tinto case is seen by many working in China business 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.

[Associated Press; By ELAINE KURTENBACH]

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