China Indicts Four Rio Tinto Employees

Rio Tinto reported on February 11 that it had been advised the People’s Procuratorate in China had transferred the case relating to the company’s four Shanghai employees, detained since July 5, 2009, to the Shanghai Number One Intermediate Court for trial. A trial date had not been set. The charges related to receiving bribes and stealing commercial secrets. Those indicted include Stern Hu, an Australian citizen who headed Rio Tinto’s Shanghai office and who is originally from China, and Chinese citizens Liu Caikui, Ge Minqiang and Wang Yong.

Sam Walsh, chief executive Rio Tinto Iron Ore, said, “We are very concerned about the nature of these charges; however, as this is part of an ongoing legal process, it is inappropriate to comment any further.” Rio Tinto continues to hope for a transparent and expeditious process for its employees, the company’s statement said, and senior managers from Rio Tinto continue to maintain regular contact with the families of the detained employees and to provide support to them.

About a week prior to the announcement of the indictments, Rio Tinto appointed Ian Bauert as its managing director for China. Bauert speaks fluent Mandarin and established the company’s first office in China more than 25 years ago. He will lead Rio Tinto’s team of 160 employees in Beijing, Shanghai and Guangzhou. His most recent role was managing director, sales and marketing, iron ore. He started his career at Rio Tinto more than 30 years ago and has held various positions including managing director, Dampier Salt; and managing director, new business, iron ore.

Rio Tinto CEO Tom Albanese said Bauert’s new role underlines the importance the company places on enhancing its relationship with China. “I am deeply committed to developing our relationship with China. Ian’s experience and leadership will provide strategic direction and help guide all aspects of our engagement with China, one of our most important partners.”

Regarding the four indicted Rio Tinto employees, China’s Xinhua news agency reported that a court statement said prosecutors had accused the four of “taking advantage of their position to seek profit for others, and asking for, or illegally accepting, huge amounts of money from Chinese steel enterprises.” The report said they had lured the heads of Chinese enterprises with promises, or through other illegal means, to obtain steel companies’ commercial secrets on multiple occasions, causing “extremely serious consequence” for the companies.

News reports elsewhere in the world, especially in Australia, emphasized the uncertainty that the case raises for companies doing business in China and the need for transparency in China’s handling of the case.

As featured in Womp 2010 Vol 02 - www.womp-int.com