China - Rio: If China follows its own legal rulebook, Rio Tinto should soon have a clearer idea of what it is up against. The People’s Republic’s Criminal Procedure Law allows the People's Procuratorate no more than 37 days to approve and explain the arrests of four of the miner’s executives. The employees were detained 38 days ago by the Shanghai State Security Bureau, apparently in connection with allegations of stealing state secrets.
As yet, Rio has received no formal notification of its employees’ purported offences. There have been suggestions in several Chinese publications that Rio has paid bribes to get information about the likely demand for iron ore or that even trying to find out state-controlled steelmakers’ plans amounts to theft of state secrets. The company denies any sort of malfeasance.
China has so far just about followed its rules by allowing Australian consular officials to make two visits to one of the detainees – Stern Hu, an Australian national. Yet the four executives have not been given access to legal counsel, something which is not guaranteed under Chinese regulations. This week's deadline gives the Chinese government an opportunity to show some good legal faith. Foreign companies are already concerned that these arrests will set an ominous precedent.
Delay would only add to the fear, although, as Jerome Cohen of the US Council for Foreign Relations points out, it would probably be more a sign of bureaucratic infighting inside China than part of a coherent strategy for scaring away investors.
The executives could conceivably be released without charges being pressed. That would bring the saga to a quick and happy end for Rio. But it seems unlikely and if that doesn’t happen, there will be more time to worry, as the prosecutors can change the exact charges in the 4-5 months before a trial. Still, if the authorities keep to this part of the timetable, the international community would gain some assurance that China isn’t making up the rules as it goes along.
