Trial of four Rio Tinto employees opens in China

SHANGHAI (Reuters) - Four employees of mining giant Rio Tinto stood trial in China on Monday, in a case closely watched by foreign investors nervous about navigating a booming economy with often murky legal boundaries.

Australian Consulate General, Tom Connor (C) goes through a security check as he enters the Shanghai Number One Intermediate People's Court on the morning of Rio Tinto trail March 22, 2010. (REUTERS/Nir Elias)

Four police vans swept into the court in Shanghai, China's financial hub, while foreign reporters were excluded from the trial of Australian national Stern Hu and three Chinese employees of Rio, all accused of taking bribes and violating commercial secrets.

The case has highlighted the risks of doing business in a country with a huge market but close ties between the ruling Communist Party, police and courts. Shanghai is likely to want the case over quickly, before its much ballyhooed 2010 World Expo opens in Shanghai in May.

The four employees from Rio's iron ore team, including Hu, were detained last summer at the height of fraught negotiations over 2009 ore prices, creating a furore over China's opaque state secrets laws.

Chinese media last summer accused the four of seeking information about Chinese mines and steel mills, which many firms consider legitimate market information.
Rio has said that its employees did nothing wrong.

China has excluded Australian diplomats from observing the part of the trial concerning commercial secrets, drawing protest from Canberra, which says they have the right to be present for the whole trial, which is scheduled to last three days.

Before entering the court, Australia's Consul-General in Shanghai, Tom Connor, told a crush of reporters he would make a statement after the day's proceedings.

WARNING TO AUSTRALIA
 A Chinese researcher in a think-tank run by the nation's Ministry of Commerce said there was a strong case against the Rio employees and warned Australia to keep a distance.

"The Australian government and public need to calmly and rationally consider this question: should the government waste such a large amount of political and financial resources to pay the bill for certain companies' immature and even illegal ways?" the researcher, Mei Xinyu, wrote in the Chinese-language Shanghai Securities News.

"What Rio Tinto and Stern Hu did would be utterly taboo in any host country," wrote Mei.
The trial opened on the same day that, according to one Chinese news report, Internet giant Google may announce whether it will pull out of China over its complaints about censorship and hacking.

While the trial progresses in a brown and grey concrete building near an elevated highway in Shanghai, Rio's chief executive, Tom Albanese, is in Beijing to address a conference of government and business elites in China, his firm's largest market.

Mindful of the international attention paid to the Rio case, China has stuck strictly to its own legal deadlines for moving the case from police to the court system.

Defence lawyers interviewed on Friday did not yet know in which order the charges would be considered, or which days would be open. The verdict may not be immediately announced.

By Lucy Hornby, Reuters