China charges Rio Tinto employees with bribery

The unfolding espionage crisis between Beijing and one of the world's largest miners took a new twist Wednesday as the Chinese government formally charged four Rio Tinto Ltd. employees with bribery and infringing trade secrets.

Investigators allege that the four, including Stern Hu, an Australian citizen who headed Rio Tinto's iron ore business in China, obtained commercial secrets about China's steel and iron industries through "improper means" and were involved in bribery.

But China stopped short of laying politically explosive espionage charges in a case that has strained ties with key trading partner Australia.

London- and Melbourne-based Rio Tinto has long denied the allegations. With news of the charges, the Australian government urged China to move swiftly on the case.

Rio Tinto has also demanded its employees have access to a lawyer.

"Rio Tinto will strongly support its employees in defending these allegations," Sam Walsh, chief executive of the company's iron ore business, said in a written statement. "From all the information available to us, we continue to believe that our employees have acted properly and ethically in their business dealings in China."

Walsh appealed for a "transparent legal process."

The four were arrested July 5, in the midst of a series of tense, multibillion-dollar negotiations with Chinese state-owned companies, including over the price Rio Tinto would charge for its iron ore. Australia is a key supplier of iron ore and other resources for China's fast-growing economy.

Also, the month before, Rio Tinto had rebuffed a $19.5-billion US investment from state-controlled Aluminum Corp. of China — though Chinalco, as it's known, has said the arrests are unrelated to the rejection of its offer. 

China's deputy commerce minister dismissed fears that any legal process will not be fair.

'We believe this will benefit China's attraction of foreign direct investment' —Chinese deputy commerce minister Fu Ziying

"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 Wednesday.

Fu said the case was an isolated incident that reflects 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.