Closed Rio trial violated Chinese law, scholar says

By Lucy Hornby

BEIJING, March 28 (Reuters) - China's decision to bar Australian diplomats from part of an Australian Rio Tinto executive's trial was in violation of Chinese law as well as consular agreements, a prominent legal scholar said on Sunday.

Verdicts and sentences are due on Monday in the trial of Australian citizen Stern Hu and three Chinese colleagues on charges of bribery and stealing commercial secrets.

Their detention and trial have been watched closely because of foreign investors' concerns about China's legal system and because of the insight it provides into the Chinese steel industry, as well as the global iron ore trade.

China's foreign ministry has said the court's decision to bar Australian diplomats from the portion of the trial dealing with charges of infringing commercial secrets was in line with Chinese law. Australia has protested against the decision.

U.S. diplomats were barred entirely from a similar trial involving a Chinese-born American citizen, Xue Feng, who was detained in late 2007 on state secrets charges for brokering the sale of an oil database to a U.S.-based consultancy.

Xue was tried in a closed court in July 2009, but no verdict has been announced yet.

'The consular problem in Rio Tinto and in Xue's case ... is the refusal of the PRC to allow consular attendance at trial despite plain language making no exceptions for closed trials in both the Australian and U.S. consular conventions,' Jerome Cohen, a professor at the New York University School of Law, told Reuters on Sunday.

Cohen said a document issued by the Foreign Ministry and Chinese judicial authorities on June 20, 1995, 'instructs the courts to allow foreign consular attendance at non-public trials, including criminal trials, whenever there is a provision for this in consular agreements, as there is in the Sino-Australian agreement'.

Few details of the commercial secrets proceedings have emerged from the Rio trial, which lasted for three days in Shanghai last week.

All four defendants pleaded guilty to accepting bribes, but contested the amounts alleged by prosecutors.

Leaked testimony alleged that the Rio employees accepted kickbacks, including from billionaire steel mogul Du Shuanghua, in return for allocations of cheaper term iron ore prices to steel mills desperate for raw materials.

The four were detained last year during sensitive annual iron ore price negotiations.

One defendant, Liu Caikui, also pleaded guilty to the commercial secrets charges.

The case seems to have had little impact on Rio's operations in China, which became its biggest customer last year, accounting for a quarter of its sales.

Days before the trial began, Rio Tinto signed a $2.9 billion deal with Chinese metals group Chinalco to develop an African iron ore mine.

(Editing by Paul Tait)

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