Rio employees face trade secrets, bribery charges

[August 12, 2009]  SHANGHAI, China (AP) -- China has formally arrested four employees of the Anglo-Australian mining giant Rio Tinto Ltd. on charges of infringing trade secrets and bribery, in a case that has strained relations with Australia.

Xinhua News Agency said Wednesday that investigations showed the four employees, including Australian citizen Stern Hu, had obtained commercial secrets about China's steel and iron industries through "improper means" and were involved in bribery.

The report made no mention of the more serious charge of stealing state secrets, which Chinese media have been saying the four would be accused of since they were detained nearly six weeks ago.

Xinhua said Chinese prosecutors had found evidence of bribery and that some individuals in Chinese steel and iron companies were suspected of providing the Rio employees with commercial secrets. No specific details were given.

Amanda Buckley, Rio Tinto's spokeswoman in Melbourne, Australia, declined to comment, saying the company had not received official confirmation of the arrest and charges.

Chinese-born Hu, the manager of Rio Tinto's Chinese iron ore business, and three Chinese co-workers were detained July 5 as protracted talks on iron ore prices were under way with Chinese steel mills.

The few details of the case that are known have come from state-owned Chinese media, including accusations Hu paid bribes to Chinese officials for information on China's negotiating stance in iron ore price talks.

China's deputy commerce minister said the case was an isolated one.

"We believe Chinese judicial organs will make a fair ruling on the case based on the facts and in accordance with law. There is no question about that," Fu Ziying told a news conference.

Fu said the case showed the government's determination to create a competitive, open and fair market environment in China.

"This will not hurt China's efforts in terms of attracting foreign direct investment. On the contrary, we believe this will benefit China's attraction of foreign direct investment," Fu said. He added it should not affect relations with Australia.

Chinese media reports have said Hu's actions amounted to stealing state secrets, and executives of at least five major Chinese mills are being questioned. A Chinese diplomat said in July that China had told Australia it had "ample evidence" that Hu and his three co-workers stole state secrets.

Australia is a major supplier of iron ore and other minerals to resource-hungry China.

The case has raised tensions between Beijing and Canberra, where the government is concerned that the case is moving too slowly and that Hu may not receive a fair trial.

Australia's government was aware of media reports of the Rio workers' formal arrest and charges being laid, but had not yet received formal advice to that effect from Chinese authorities, the Department of Foreign Affairs said in a statement.

[Associated Press; By ELAINE KURTENBACH]

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