Economy

Employees in Rio Tinto case appeal terms

By QIAN YANFENG (China Daily)
Updated: 2010-04-08 07:22

SHANGHAI - Three of the four employees of mining giant Rio Tinto who were jailed by a Shanghai court last month for taking bribes and stealing commercial secrets have decided to appeal their jail terms, their lawyers said Wednesday.

But Stern Hu, the Australian national who headed Rio's iron ore operations in China and was sentenced to 10 years behind bars, has yet to make a decision, his lawyer Jin Chunqing said.

During his meeting with Hu on Wednesday afternoon, Jin said Hu dismissed rumors that he owned several villas worth millions of yuan, as reported by media.

On March 29, Shanghai No. 1 Intermediate People's Court sentenced four Rio employees to jail terms ranging from seven to 14 years for taking bribes and stealing commercial secrets - a verdict the Australian government described as "very tough". The four were convicted of receiving more than 92 million yuan ($13 million) in bribes.

The court also said the four men - Hu, Wang Yong, Ge Minqiang and Liu Caikui - had, from 2003 to last year, used improper means to acquire commercial secrets from Chinese steel mills and the information was used to drive up the price that China paid for its iron ore imports. Last year alone, Chinese steelmakers paid an extra 1 billion yuan for iron ore imports, it said.

During the trial, only one of the four pled guilty to the charge of industrial espionage, although they all admitted to bribery charges.

After the verdict was annouced, Australian Prime Minister Kevin Rudd said there were "serious unanswered questions" about the conviction of Hu regarding the commercial secrets charge.

That part of the trial was held in closed court and no details have been made public.

The case had highlighted the growing tensions over the pricing of iron ore between China, the world's biggest consumer of the commodity, and the world's top three suppliers: Vale of Brazil, Australia's Rio Tinto and BHP Billiton.

China has been caught up in stagnant iron ore price negotiations with major suppliers, as it has sought to convince Rio Tinto and other suppliers to give its mills larger price cuts.

But the four were believed to have put Chinese steel companies in an unfavorable condition in the negotiations and led to the suspension of the talks last year.

Industry analysts have therefore suggested the fall of the four Rio employees reflected the Chinese government's determination to tighten control over the steel industry, as well as the release of confidential information in the sector.

Local media reports on Wednesday exposed a list of 20 domestic - mostly small and medium-sized - steel mills and steel-trading companies believed to have bribed Rio Tinto employees to secure the same low-cost, term iron ore contracts enjoyed by state-owned large steel mills.

They included Sinochem International Corporation, China National Building Materials & Equipment Import & Export Corporation, Rizhao Steel in Shandong province, the Tianjin Rongcheng Steel Group and many others.

Chinese firms involved in paying bribes in the case may also face legal repercussions if they caused severe damage to the country or gained huge improper profits from bribery, according to Qiu Baochang, a Beijing-based lawyer.

"But the punishment for bribers would be lighter than those who take the bribe, as the latter is believed to be in a stronger position and some of them may have demanded bribes from the former," he said.

Rizhao Steel chairman, Du Shuanghua, who had allegedly given $9 million to Wang Yong in bribes, has been barred from leaving Shandong province, according to a recent report from the Economic Observer.