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Rio Tinto Limited Shanghai Representative Office in Shanghai - Source: Reuters -
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Four employees of mining giant Rio Tinto, including Australian
national Stern Hu, will stand trial in China on Monday, charged
with receiving bribes and infringing commercial secrets.
Here is an explanation of the case and its implications.
What are the four accused of?
Stern Hu and three Chinese executives of the Anglo-Australian
miner, which does much business with China, were formally arrested
in July.
The three Chinese are Liu Caikui, Ge Minqiang and Wang
Yong.
They were arrested on suspicion of illegally obtaining commercial
secrets and bribery.
Initial Chinese media reports that they faced accusations of
stealing state secrets did not materialise.
Under the commercial secrets charge, courts can jail people for up
to three years, or up to seven years in "especially serious"
cases.
The bribery charge could draw jail terms of up to 20 years,
according to Zhang Peihong, a lawyer for one of the accused Chinese
nationals, Wang Yong.
Rio has said the four did nothing wrong.
What happens next?
The four men will face trial in Shanghai, China's coastal business
centre, where they were based.
The Shanghai First Intermediate People's Court will allow
Australian consular officials to observe the part of the trial
dealing with the bribery charges, but they will be excluded from
the part about infringing commercial secrets, the Australian
government said.
The Chinese Foreign Ministry has said Australia has no grounds for
claiming a consular agreement should give Australian officials
access to the full trial, calling the decision a matter of
"judicial sovereignty."
The trial will last for three days. In Chinese trials there is
sometimes a wait of days or weeks before a verdict is announced at
a separate hearing.
China's courts come under the heavy influence of the ruling
Communist Party and rarely reject prosecution arguments.
But the Australian government and Rio will be watching the trial
carefully.
Chinese trials are seldom open to foreign reporters, and the
Shanghai court has not arranged for any access.
If convicted, the men can appeal?
Chinese investigators may also take up additional cases against
steel executives accused of bribery and providing business secrets
in the Rio case.
At least two executives at Chinese steel companies were earlier
detained in connection with the Rio case, but it is unclear whether
they have also been formally charged.
What does the case mean for the steel industry?
Rio's China team managed details of term contracts for iron ore, a
necessary raw material for China's vast steel industry, as well as
tracking market information.
The Rio trial will add an element of uncertainty and wariness to
already contentious iron ore negotiations between China and the
three big miners: Rio, its fellow Australian miner BHP Billiton and
Brazil's Vale.
Last year China's crude steel output accounted for almost half the
world's total.
Steel output and iron ore imports both soared to record highs in
2009.
China and Rio had hard feelings even before the arrests, following
the collapse of a deal by Chinese state-owned aluminium firm
Chinalco to increase its stake in Rio.
Traditionally, Asian steel mills accept whatever deal is settled
first between any mill and any of the big three global ore
suppliers.
China's steel industry association refused to settle on that
price last year and sought to change the basis of talks for 2010
prices, which take effect April 1.
This year, the Chinese side has been led by Baosteel, which joined
the Chinese steel industry association and other major Chinese
steel mills in a plea to the government to step into the
talks.
What are the boarder implications of the case?
The detention of the four has stoked investors' worries about doing
business in China's murky legal environment.
The trial comes as Google's dispute with China over Internet
censorship and hacking complaints has also brought into focus
foreign business complaints about the country's ways. Google has
indicated it expects a conclusion soon in its dispute.
How will this impact China-Australia relations?
Australian Prime Minister Kevin Rudd earlier warned China it had
major economic interests at stake and the world was watching how it
handled the case.
Both governments appear to want to insulate broader ties from any
contention over the case, especially after the state secrets spying
accusation was dropped.
But China's decision to deny Australian officials access to part of
the trial could stoke tensions, putting domestic political pressure
on Rudd.
Much is at stake for both sides. China is Australia's biggest trade
partner. Australia exported $15 billion worth of iron ore to China
in 2008 - 41% of its iron ore imports in that period.
Despite the arrest of the executives, Australian firms, including
Rio, continue doing business and deals with China.
