Monday, July 20, 2009

Australian government criticizes China over Hu information

Australian Foreign Minister, Stephen Smith, yesterday publicly revealed he’d asked China’s Vice FM, He Yafei, for more information about the arrest of Rio Tinto’s Shanghai-based iron trade negotiator, Stern Hu, a joint Australian and Chinese national. He said he expected to have got the details from Chinese officials much earlier. “I was frankly disappointed that I didn’t get those through the usual channels,” he added.

After Hu and three other Rio Tinto executives, all unnamed Chinese citizens, were detained on July 5 by the Shanghai state security authority, a foreign ministry spokesman, Qin Gang, said Hu “is suspected of stealing Chinese state secrets for foreign countries and was detained on criminal charges."

Rio Tinto' spokesman, Nick Cobban, said the company was “surprised” by the authorities’ action and is “not aware of any evidence that would support such an investigation.”

Australian Prime Minister Kevin Rudd raised the issue of international procedure on July 15. "I also remind our Chinese friends that China too has significant economic interests at stake in its relationship with Australia and with its other commercial partners around the world," he said. This was echoed by US Commerce Secretary Gary Locke. "We need to have transparency, we need to have assurances and confidence that people working for these multinational companies ... will be treated fairly," he told CNN.

"We resolutely oppose anyone deliberately whipping up this case or trying to interfere in China's judicial independence," ministry spokesman Qin Gang responded. "This is not in Australia's interest."

Smith now believes that the Chinese are "focusing on a criminal or judicial investigation relat-ing to the 2009 iron-ore negotiations. They are not interested in what we would regard as espionage or national security matters.”

The Age newspaper of Melbourne reported that the secret police arrests followed bitter negotiations over iron ore sale contracts and also Chinese anger over Rio Tinto's decision earlier this year to abandon a $US19.5 billion merger with its state-owned Chinalco.

Vice-president of Chinalco, Lu Youqing, denied his company had any connection with the arrests but added, "Rio Tinto has no business credibility as a company. It is not unlikely that a few staff are suspected of breaching law."

After Rio Tinto subsequently agreed with rival BHP Billiton to set up a joint venture to run the iron ore resources of both companies in Western Australia, China's Ministry of Commerce also advised Chinese media that if the revenue of the JV reached "a certain amount," China's anti-monopoly law would apply.

Ironically, Rio Tinto is represented on the advisory board of the China Mining Congress and Expo (Oct 20-22, Beijing hosted by the Ministry of Land and Resources, and the Tianjin Municipal Government) by Ms Song Xiuli, external affairs manager at the company’s Beijing Representative Office. She is currently described by the congress website as the “Acting Chief Representative, Rio Tinto, China. “

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