Published: March 22, 2010
By DAVID BARBOZA
SHANGHAI — Three employees of Rio Tinto, the British-Australian mining giant, agreed to plead guilty Monday to taking bribes while working for the company in China, stunning confessions on the opening day of their three-day trial here.
The employees, including Stern Hu, an Australian national, admitted to receiving several million dollars of bribes, according to their lawyers. A fourth employee is expected to do the same.
The proceedings were largely closed to the public, but an Australian consular official said that Mr. Hu — the focus of the case — had admitted in court Monday to receiving some of the $1 million in bribes prosecutors accused him of taking while at Rio Tinto.
Mr. Hu and the three Chinese employees were detained last July in a high profile corruption case that at the time rocked the global steel industry and even strained diplomatic relations between China and Australia.
After a nine-month-long detention, Mr. Hu and his three Rio Tinto colleagues are on trial this week at the Shanghai No. 1 Intermediate Court, accused of accepting more than $12 million in bribes and also stealing commercial secrets from Chinese state-owned companies.
Now, according to several lawyers involved in the case, all four Rio employees may eventually plead guilty to accepting bribes.
In a statement after the opening day of the trial Monday, Tom Connor said Mr. Hu made “some admissions” and acknowledged taking some of that money.
Zhang Peihong, a lawyer for another Rio Tinto employee standing trial, Wang Yong, said his client has agreed to plead guilty to accepting about $1 million in bribes — much less than the $10 million he is accused of taking.
A spokesman for Rio Tinto declined comment on Monday.
The guilty pleas, which are expected to be formally entered Tuesday, are a dramatic turnabout in the case. Australian had pressed China for months, demanding a fair and transparent legal process, hinting that the employees may have been framed. Prime Minister Kevin Rudd even warned in recent days that “the world will be watching” the trial.
And for much of the past year, Rio Tinto, one of the world’s biggest producers of iron ore, has strongly defended its workers, saying the company has no evidence they engaged in wrongdoing.
The four Rio Tinto employees were initially accused of espionage, which would have fallen under the country’s tough state secrets law, and of causing China “enormous economic losses.” But in August, the four employees were formally charged with lesser offenses: bribery and stealing commercial secrets.
Monday’s portion of the trial focused only on the bribery issue. On Tuesday or Wednesday, the focus will switch to stealing commercial secrets.
Many Western executives doing business in China worry that the four Rio Tinto employees — Wang Yong, Ge Minqiang, Liu Caikui and Stern Hu — may have been unfairly detained because of business disputes with government-owned companies; and that other foreign executives could be targeted.
The timing of the case seemed ominous. Shortly before the July detentions, China’s steel industry association had complained about the skyrocketing price of iron ore and criticized Rio Tinto and other foreign suppliers for a breakdown in iron ore contract talks.
The detentions also came just after Rio Tinto scrapped plans to accept a $19.5 billion investment from Chinalco, one of China’s biggest state-owned mining groups.
Beijing has insisted this is a criminal case and has pressed Australian officials and others to avoid “politicizing” the case.
Yet because Australia is one of the leading suppliers of iron ore to China — iron ore worth billions of dollars and intended for this country’s booming steel industry — the case has become a concern for the top leaders of both countries.
Legal experts say the July detentions and initial allegations that the four Rio Tinto employees were stealing state secrets also suggested the government may have been using the case to punish Rio Tinto.
Western executives were alarmed because in the days after the detentions were announced last July, a spokesman for the foreign ministry dubbed the group spies, and China’s state-owned media published articles saying it was actually the Rio Tinto employees who were bribing government officials to get access to sensitive documents.
Yet in the nine months since the four were detained, the authorities here have announced no other arrests of steel industry officials for bribing Rio Tinto employees or trading in government secrets.
Indeed, prosecutors here reduced the charges to bribery and stealing commercial trade secrets after Australian and even American officials said they were concerned about the case and what it would mean for foreign executives working here.
Since then Australian officials and Rio Tinto executives have been more cautious in their remarks about the case.
Last week, Rio Tinto said that it had formed a joint venture with Chinalco, the Chinese state-owned company, to develop a huge iron ore project in Africa. And on Monday, Rio Tinto’s chief executive, Tom Albanese, spoke at the China Development Forum in Beijing, and pledged to work with China to find mineral resources in China and overseas.
Chen Xiaoduan contributed research.
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