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Failure of corporate governance.
BHP Rio Tinto knew about the briberies all along but declined to act on it. The monopoly adopted a deliberate policy of benevolent neglect towards briberies by its senior staff in China.|
As a regional monopoly and a global duopoly, BHP Rio Tinto can throw its weight around and ignore good corporate governance, this monopoly believed it can bribe its way through anything.
Now it is calling in the big names on its payroll to pore oil on troubled water for them.
Rio Tinto calls in Kissinger to mend fences
JOHN GARNAUT, KIRSTY NEEDHAM AND MAT MURPHY
March 31, 2010
MINING giant Rio Tinto has engaged the services of 86-year-old Henry Kissinger to help rebuild the company's bridge to China in the wake of the Stern Hu affair.
As fallout continues from the jailing of Hu and three other Rio Tinto executives in China, it has emerged that the company turned to the former US Secretary of State last year after the collapse of its US$19.5 billion investment deal with Chinalco and the arrests of the executives.
Mr Kissinger has been well known and respected in China since his 1971 meeting with premier Zhou Enlai paved the way for president Richard Nixon's historic meeting with Chairman Mao Zedong the next year.
Rio yesterday declined to comment on Mr Kissinger's role.
But The Age understands that Mr Kissinger has contributed to Rio restoring its relationship with China and continues to be on the company's books.
He is believed to have helped secure a meeting on Rio's behalf with Wang Qishan, a Politburo member who handles many of China's global financial affairs.
Mr Kissinger's role came to light as claims emerged that Rio was told months before the arrests of Hu and his three colleagues of potential ''dodgy dealings'' within its China operations but resisted internal calls for an investigation.
(Cestmoi: So BHP Rio knew about the briberies all along but did not act on it! BHP Rio Tinto let Mssrs. Hu, Wang, Ge and Liu continued bribing and accepting bribes but now washes its hands off the affair. What we have here is a failure of corporate governance. )
There was also more political fallout, with the Chinese government expressing ''serious concern'' over Australian criticism of the trial of Hu and his colleagues.
A day after criticism by Foreign Minister Stephen Smith, Prime Minister Kevin Rudd said he had reservations about the conviction and the secrecy. ''China, I believe, has missed an opportunity to demonstrate to the world at large transparency that would be consistent with its emerging global role,'' he said.
Hu, an Australian, was sentenced to 10 years' jail by a Shanghai court for receiving bribes and obtaining commercial secrets, but Australian officials were blocked from attending part of his trial. Mr Smith said the resulting uncertainty over what constitutes a commercial secret would have repercussions for the international business community's dealings with China.
Chinese foreign ministry spokesman Qin Gang hit back, saying: ''The Australian side should respect that result and stop making such irresponsible remarks.''
The opposition accused the government of moving too slowly and not protesting strongly enough when diplomats were told they would not have access to the full trial.
''Kevin Rudd has been exposed as having little or no influence with the Chinese leadership,'' said opposition foreign affairs spokeswoman Julie Bishop.
Mr Rudd said the government had made ''strong, high-level and frequent representations'' on Mr Hu's behalf.
Hu's lawyer, Shi Keqiang, told The Age he had not talked with his client since the verdict, but they would decide whether to appeal in coming days.
Greens senator Bob Brown called on the Australian Securities and Investments Commission to investigate what Rio knew about the use of commercial secrets, given the company ''received multibillion-dollar advantages from the activities of Hu and his fellow accused".
The Age has been told that a number of Rio employees in Singapore raised concerns with management about the activities of employees in China more than a year ago but the concerns were never formally investigated.
A well-placed source, speaking on condition of anonymity, said a rapid rise in the iron ore spot price led some to question whether bribes were being offered. ''Some of the guys in Singapore said 'let's have an investigation' but that investigation was quashed by senior company figures,'' the source said. Rio's internal complaints policy requires matters raised by employees to be addressed. A spokesman said the company would ''always investigate such claims in line with established formal processes''.
(Cestmoi: BHP Rio Tinto tell us this only now, after the excretia has hit the fan, that it adopted a policy of benevolent neglect towards briberies by its senior staff? What we have here is a failure of corporate governance. )
Rio has ordered an independent review into its processes but is unlikely to make the results public.
But the company could face investigation by regulators in Australia and overseas. ASIC said it was monitoring events to determine whether it would conduct a probe. The UK's Serious Fraud Office is also gathering information on Rio but is yet to commence an investigation.
(Cestmoi: Let us see whether Australia's ASIC and the UK's Serious Fraud Office can handle BHP Rio Tinto. What we have here is a failure of corporate governance. )
Timothy Devinney, professor of strategy at University of Technology in Sydney, who has 25 years' experience in Chinese trade, said an investigation into Australian companies operating in China could uncover a culture of misbehaviour.
''If you scratch below almost any company operating in China you would probably find things you don't want to know about,'' Professor Devinney said. ''You wouldn't want to go into this investigation unless you were prepared to pull the curtain aside.''
With RICHARD WILLINGHAM
http://www.theage.com.au/busines ... -20100330-rbht.html