Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Foreign Companies Doing Business In China Must Watch Rio Tinto Employees Prosecution

I have told many clients, the laws of China are different than the laws of their home jurisdiction (e.g., Canada). What may not get you into trouble in Canada, may get you into trouble in China. That being said, criminal laws have a significant overlap - what is bad behaviour is generally bad everywhere.

It is very important for foreign businesses that are active in China to closely watch China's prosecution of Mr Hu (an Australian representative of Rio Tinto) and three Chinese citizens, Ge Minqiang, Wang Yong and Liu Caikui (also employees of Rio Tinto). On or about February 10, 2010, Chinese prosecutors moved forward with their prosecution of Mr. Hu and three Rio Tinto colleagues by formally indicting them for “illegally accepting huge amounts of money" and obtaining commercial secrets at the expense of Chinese steel mills. The Xinhua report cited the Chinese procurators as saying: "The accused four, including Stern Hu, exploited their positions to seek gain for others, and numerous times either sought or illegally accepted huge amounts of money from a number of Chinese steel firms; and many times they used personal inducements and other improper means to obtain commercial secrets from Chinese steel firms, causing serious consequences for the steel firms concerned." These allegations still must be proved.

The news reports indicate that the case is likely to proceed within weeks to a trial that is closed to the public.

Since true facts are somewhat unknown. As a result, it is difficult to state that the Rio Tinto employees are caught up in an exceptional situation that has as much to do about politics and international commerce than the behaviour of people. it may very well be that culture or competitive business practices may have been a significant factor in the dispute.

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