JURIST - Paper Chase: China court convicts Australia mining employees of stealing commercial secrets

[JURIST] A Chinese court on Monday convicted four employees of Australian mining company Rio Tinto [corporate website] of receiving bribes and stealing commercial secretes. Rio Tinto's Shanghai manager, Australian national Stern Hu, and three Chinese colleagues were sentenced to between seven and 14 years in prison for accepting around USD $13.5 million in bribes and using "improper means" to gain secret commercial information that gave the company an advantage when bargaining with China over the importation of steel. The court concluded that Chinese companies paid an additional 1.02 billion yuan (USD $150 million) [Xinhua report] for steel last year because of the actions the four men. Rio Tinto said they were unable to comment [press release] on the conviction for stealing commercial secrets because that portion of the trial was held in a closed court. The statement also condemned the actions of the men and indicated they would be fired, stating:

Receiving bribes is a clear violation of Chinese law and Rio Tinto's code of conduct, The Way We Work. We have been informed of the clear evidence presented in court that showed beyond doubt that the four convicted employees had accepted bribes. By doing this they engaged in deplorable behaviour that is totally at odds with our strong ethical culture. In accordance with our policies we will terminate their employment.

The company also denied any internal wrongdoing in relation to the charges. In its ruling, the court indicated that at least two Chinese officials would be charged with passing the commercial secrets [NYT report] to Rio Tinto.

Hu and the three other defendants were accused last July [JURIST report] of stealing "state secrets" during stalled iron ore price negotiations. One month before the men were detained, Chinese lawmakers considered [JURIST report] a revised version of the country's sweeping state secrets [JURIST news archive] law to address Internet leaks of classified data. In June 2007, Human Rights in China [advocacy website] said that the state secrets system in China gives the government virtually complete power to halt the free flow of information [JURIST report], "undermining healthy governance and rule of law." In November 2006, Hong Kong reporter Ching Cheong [advocacy website, in Chese] began a five-year prison term for passing state secrets to Taiwanese intelligence, after the Beijing Higher People's Court affirmed [JURIST reports] the sentence on appeal. He was released [press release, in Chinese] in 2008 after serving half of the sentence.