Australian Stern Hu has been sentenced to 10 years’ jail by a Chinese court for stealing commercial secrets and receiving bribes.
Vivienne Bath at East Asia Forum has a measured yet still damning commentary on the process.
That China remains a country without the rule of law isn’t news. What’s news, and remains a puzzle to me, is why the Chinese have decided to parade it so publicly.
Update: A nice polite editorial at EAF calling for “engaging on these issues with China, from the starting point of respect for progress with Chinese law and on the basis of deep mutual interest in the large economic (and political) consequences of the commercial dimension of legal process.”
That may be the most productive course, but it’s not exactly satisfying…
Absolutely appalling. I feel very sorry for him and his family. Hu is paying a debt drawn not by him, but by huge multinationals and two governments.
And yet, this is what happens when you make a deal with the devil. If it makes people think twice about doing business with autocratic, human-rights-abusing China, so much the better.
Australian corporations must immediately embargo all exports to China.
Just joking.
Sorry to be off topic but the latest Newspoll is out and it’s the beginning of the end for straight talking Tone. I can’t wait to see how Shanners spins this one. He is the original kamikaze journalist of OZ politics. I haven’t been this excited since Funky Town (with apologies to Homer).
Rio Tinto has now sacked Stern Hu. They seem to get the joke.
Thank heavens that Rio Tinto has got rid of the rotten apple before he corrupted the rest of them.
Oh Katz. It is so sad. Yes Rio Tinto has adopted necessity – how loyal are they to the people ‘they once supported’ in RIO’s work. An organisation with all their influence could have extracted Stern Hu and his family much earlier and any time from their obvious fate.
They are the makings of a Shakespearian play, the Othellos of the business world. ke Peter Allen must be looking down in despair.
The Chinese, remarkable though they are, will turn on their Emporers – K Rudd must be watching, waiting. Undoubtedly, BHP made the right call – RIO was not in the national interest. How embarassing for Australian business to realise that the brown paper bags had invisable strings attached. Who’d have thought? Duh!
y’know… just to be a contrarian…
How many times have people criticized China for corruption? What happens if the guy was guilty? What if he actually did accept bribes? If I found out that some American guy colluded to deliver a contract at higher price so that he could fleece the Australian taxpayer, I’d want them to get 10 years too.
That’s the problem with these cases. You simply don’t know what really happened, and never will.
Pi, you’ll notice that I’ve linked to extensive criticism of the process by which he was found guilty.
I also think the sentence is manifestly excessive. Yes, corporate fraud should be severely punished, but this is way over the top.
It’s because they can, and since no-one can do anything about it, it shows who really is in charge. A bit like teaching a dog not to bite others. Obviously they got sick of not being able to buy all the Australian assets they wanted for being Chinese and not American (or some other “friendly” country).
Only by Australian standards. By Chinese standards, it’s not as bad as you think. If he was Chinese, he may well have been put to death. Chinese punishment is exceptionally harsh for almost all crime.
Can someone explain what the payers of the bribe got out of the deal? It’s gone over my head.
You’d have to say Hu was unlucky given 0.001% of corruption in China gets prosecuted. He should have bought himself some insurance by recycling some of his bribe to an official who could have
kept him safe.
Pi, there seems little doubt that he accepted bribes. But, that’s not the point. The problem is a secretive and non-transparent legal system. At trial’s end, we still don’t know what the evidence is and what exactly he did wrong. We still don’t know what constitutes an industrial secret.
I’ve just returned from a cross-cultural conference for European and Asian documentary makers and it was made abundantly clear to us that China still functions through bullying. This is another example of it.
“…why the Chinese have decided to parade it so publicly.”
As a warning .
“China still functions through bullying”.
And in other news, it has been revealed that the Pope is a Catholic.
The judge has concluded that Stern Hu sent emails that contained the “industrial espionage material” to Rio headquarters.
Yet.
1. Rio claims that these emails were never received by them.
2. Rio’s computer system in China was confiscated by the Chinese authorities last September.
So, how sound are the claims that Stern Hu sent emails?
Is there any evidence that these emails were received by Stern Hu’s superiors?
Will the Chinese authorities seek to contradict Rio’s assertions that the emails were never received?
Will Chinese forbearance on this matter affect contractual arrangements going forward? In other words, is Stern Hu the sacrificial lamb for a Rio’s most important market?
According to some reports (albeit in the News Ltd publications) Rio did receive the emails and emailed back asking for facts to be checked.
From where I sit, you can’t blame Rio for sacking the four men. They took large bribes in the course of their work. If that is not a sackable offence, what is? What’s more, Rio would have known the evidence of bribery was very strong yet they held off sacking them until they were found guilty.
Hu rolled the dice and lost. C’est la vie.
Some historical background which is relevant to the current Chinese justice system.
http://www.wsu.edu/~dee/CHPHIL/LEGALISM.HTM
Cultural differences, perhaps?
It’s clear as mud that Stern Hu is guilty of something. The trouble is, we can have no idea what it is, when he did it, whether he did it in concert with consenting adults or under duress and whether he should be punished for it or has already been punished sufficiently. Apart from that, it’s all perfectly transparent. It’s clear now as it always has been that due process cannot take place in China. Then again, as most have heard, the Japanese have a 98% conviction rate, so perhaps the Chinese don’t improve much on what happens in Japan.
The more interesting thing we learn from this sordid business is something most people say but is nice to see attested — asked to choose between doing business and looking after the human rights of their employees, CRA had no hesitation in offering their employees as road kill. I understand negotiations are in train to flog their carcasses as road base. Public private partnership — you can’t beat it.
Next time one of these large companies makes any pronouncement on anything touching their business interests, it will be useful to keep this in mind. These are people willing to throw all of working humanity under the proverbial bus if there is an extra dollar to be made from doing so.
Sam, the offence of bribery needs to be kept separate from the offence of industrial espionage.
If this is true, then someone in authority in Rio did see the information allegedly stolen. They thought it was important enough to be further verified. Did they not suspect that this information was obtained in a criminal manner? I suspect that this is the leverage that the Chinese authorities now have over Rio, to their future cost.
Due to the opacity of Chinese judicial proceedings now the world is unlikely to know of the state of mind of Rio high-ups with regard to this allegedly stolen information. And we don’t know whether and/or how this information has been used by Rio in their negotiations with their Chinese counterparties.
Instead, Stern Hu has been selected by the Chinese authorities, with or without the consent of Rio, to take the dive not only on the bribery charges, to which he pled guilty, but also to the espionage charges, to which he pled not guilty.
Two things have been proven by the Stern Hu case: the Chinese legal system has hardly changed in centuries; and capitalism works.
“the Chinese legal system has hardly changed in centuries”
This is a gross exaggeration. Do you think it’s no better than it was during the Cultural Revolution?
Sam,
operative word, “hardly”. Cf link @ 16.
The Cultural Revolution was temporary, Sam. I think there’ve been other times in China’s history where they’ve had mad, arbitrary emperors, so it’s all of a piece.
I feel sorry for Stern Hu and his family being cut adrift by Rio Tinto.
Interesting to see Rudd come out quite strongly criticising the process undertaken by the Chinese Government in relation to this case. The lack of transparency certainly casts a lot of doubt on just how much faith we can have in the process that lead to his conviction. If it was all above board, it certainly appears China has missed a golden opportunity to show to the world that it really is open for business and that its justice system is fair and legitimate.
Agree with billie @23 – it really does seem that Stern Hu has been hung out to dry on this one by Rio Tinto.
Stern Hu and his Rio colleagues have been the subject of a kangaroo court. The Rio sales team’s ‘trial’ was a travesty. They were first accused of giving bribes and spying, then the charges were reversed to accusations of accepting bribes. From whom? And why are the bribers not in court? The only thing that surprises me is the number of Australians who say thing like ‘no smoke without fire’ … not in the Chinese legal system. Stern Hu was no doubt made an offer he could not refuse. Confess to this, and receive leniency, otherwise you and your family will have an extremely unpleasant time.
The guys at the Australian Wheat Board must be thanking their lucky stars they were caught paying backhanders to Saddam and not the PRC. How many years would they have got for $300 million?
I suspect that the international community has been collecting evidence of the lack of transparency in the Chinese way of doing business for a long time. That the Chinese publicably say that they take conspiracy seriously is laughable – the brown paper bag has been a feature of daily life well before Queensland became a State. What they do take seriously is being found out.
The openly contemptuous Chinese approach to Copenhagen and other past international ventures and negotiations has been under scrutiny for a long time and will not be forgotten. Obama’s treatment at Copenhagen was notably infelicitous. One also suspects that ‘connections’ with Australian business and political leaders have been groomed for future use for many decades.
The international business community has probably being reviewing its Sino Strategy for a long time especially a safe way of extricating international business off China’s teats.
Swan et al did well to make Australia’s position plain earlier than later. It has been important Rudd and his team make it clear and publicably, that Australia’s interests must be protected, legally. One suspects that Sino interference in our domestic affairs has been on the nose for some time. There will be the usual, not on our watch style ticking off from the Chinese but they will know.
Unfortunately for Stern Hu and his associates, the Chinalco failure was a notable ‘wake up call’ for the Chinese. Their leadership came very close to the wind and will be doing a lot of thinking about the long term value of the Middle Kingdom ascending the throne of international business bully boy.
Their biggest problem is that associated need to embrace international law for business and human rights has been revolutionary for Chinese society (and a overdue reminder for outside investors from before Marco Polo, that greed is a two edged sword).
Poor bastards – even if they are guilty.
Of course they’re guilty, Razor. After all, they confessed.
I have to wonder what sort of deal they were offered to give the confession, though.
David – I wonder about the calculus on that one – plead guilty and get a lessor sentence or plead not guilty and spend years longer?
Razor, some bloke who was in court when they got sentenced said they didn’t look too happy. I reckon they got fucked over.
You are right on that one Razor. In a situation like that you would have been wise to plead guilty regardless of guilt or innocence. This was not a court but a planned conviction.