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Australia calls Rio execs' sentencing very tough

Reuters | Mon, 29 Mar 2010 10:58

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[] -- Australia's Foreign Minister Stephen Smith said on Monday the sentences in the China-Rio bribery/commercial espionage trial were "very tough", but added there was evidence apart from confessions that bribery occured.

Smith was critical of China for hearing the commercial secrets charges in closed court, saying it would leave foreign firms uncertain about business rules in China.

A Chinese court convicted four employees of global miner Rio Tinto of taking bribes and stealing commercial secrets, including Australian citizen Stern Hu, with sentences ranging between 7 and 14 years in prison.

"On any measure this is a very tough sentence. It is a tough sentence by Australian standards. As far as Chinese sentencing practice is concerned, it is within the ambit or within the range," Smith told a news conference in Canberra.

"According to Australian officials there was evidence indeed, if not substantial evidence, that bribery acts had occured."

The case initially strained relations between Australia and its largest trading partner China in 2009, but Smith said the verdict and sentences would now not damage ties.

"I don't believe the decision that has been made or has occurred will have any substantial or indeed any adverse implications for Australia's bilateral relationship with China," he said.

But Smith said serious questions had been left unanswered.

"China has missed a substantial opportunity. This was an opportunity for China to bring some clarity to the notion or question of commercial secrets. That of course required transparency," Smith said.

"The Chinese authorities...determined this part of the trial be closed. That leaves serious unanswered questions," he said.

"Openess and transparency would assist not just Australia but the international business community in understanding and dealing with this matter. As China emerges into the global economy, the international business community needs to understand with certainty what the rules are in China."

China is Australia's biggest export market, with two-way trade worth $53 billion in 2008. Major Australian exports included iron ore, wool, copper ore and and manganese.

Resource-hungry Chinese firms have been behind several tie-ups with Australia firms.

In January, Australia approved China's biggest-listed gold miner Zijin Mining Group's $498 million bid for Australia's Indophil Resources NL.

But several Chinese bids for Australian firms have failed, most notably a $19.5 billion investment by metals firm Chinalco in Rio that fell apart when Rio sought an alternative rights issue and joint venture with fellow mining giant BHP.

China became Rio Tinto's biggest single customer last year, making up a quarter of the group's sales.

In a sign of ongoing business, China's National Offshore Oil Corp (CNOOC) and BG Group last week signed Australia's biggest gas supply deal, paving the way for BG's $7.35 billion coal-seam gas project.

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