The verdict in the trial of four Rio Tinto employees in Shanghai is due on Monday.
The men, including Stern Hu, the 47-year-old former head of Rio’s iron ore trading in Shanghai, face 5 to 15 years in prison for bribery and a further 4 to 7 years for stealing commercial secrets.
Since the men have confessed to receiving bribes from steelmakers desperate for a steady supply of Rio’s iron ore, it seems likely that they will do some significant jail time.
Meanwhile, however, comes the news that Daimler, the luxury car maker, has been charged by the US Justice department with bribing officials in China, as well as Russia, Turkey, Egypt, Nigeria, Iraq and 16 other countries. Daimler is said to be ready to pay $185 million to settle the charges.
Under US law, any company with a base in the US can be charged with the bribery it commits in other countries. Siemens agreed in December to pay $1.3 billion to end corruption probes in the United States and Germany.
Which raises two interesting questions. The first – if the Rio Tinto employees are found guilty, will the US Justice department pursue Rio in the US?
The second is: if China is now keen on prosecuting foreign executives for bribery (Stern Hu is a naturalised Australian citizen), then will China now go after Daimler?
My guess is no. After all, Daimler bribed government officials for deals (although it appears to have paid in cash, rather than in cars, given that most Chinese officials seem to prefer Audis to Mercedes Benz’s). The charges against the Rio employees appear to have come from bribes they allegedly received from private steel firms. Indeed, the case seems to revolve around the fact that by favouring private firms, they caused government-owned steelmakers to lose out.
This sort of double-standard, however, is one reason why few people have faith in the Chinese court system, and why the trial against Rio continues to look highly political. If the government really wants to show us that it is keen on prosecuting executives for bribery, it is going to have to get its hands a bit dirtier.
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