Crikey

In Chinese folklore, Buddhists gave Feng Shui practitioners cash-filled red envelopes to thank them for their assistance in warding off evil spirits. But for global mining behemoth Rio Tinto, it appears that the custom extends beyond Feng Shui into something close to cash for comment.

Caught up in the latest allegations surrounding detained executive Stern Hu, that he bribed Chinese steel officials for inside information, has been a tale of a more regularised practice — paying off Chinese journalists for their efforts in covering the company’s exploits.

In an extraordinary piece published in the Fairfax press on Monday, Sydney Morning Herald business correspondent John Garnaut claimed Rio Tinto-employed PR firms regularly distribute bulky cash envelopes to Chinese journalists. According to Garnaut, while this is hardly a rare occurrence in China, it certainly is among the global miners, who are usually hyper-paranoid over allegations of graft.

Garnaut told Crikey that his report was based on discussions with journalists who had been offered red envelopes, and a source who had been giving them out. He said they were arranged by a Beijing public relations firm.

Garnaut added that it was possible Rio Tinto wasn’t aware of the red envelopes distributed on its behalf.

Indeed, if Rio’s website is any indication, the world’s third biggest miner maintains a rigorous commitment to weeding out corruption. The dual-listed behemoth is a founding member of the Transparency International Business Principles for Countering Bribery.

In fact, Rio do more than just spruik the usual corporate cant over rigorous dealings. According to the website, the company are so enamoured by anti-corruption principles, they wrote the book themselves:

“In addition to internal policies and activities, Rio Tinto is active in promoting transparency and good corporate governance more widely. We were a member of the steering committee which developed and which continues to assist implementation of the Transparency International Business Principles for Countering Bribery (www.transparency.org).”

The rhetoric is unrelenting:

“Through the International Council for Mining and Metals we are also a company endorsing member of the Extractive Industries Transparency Initiative (EITI). Business units engage in the promotion and implementation of the EITI in those candidate countries in which the Group has operations…Rio Tinto also endorses the World Economic Forum’s Partnering Against Corruption Initiative.”

Rio also proudly meets the requirements of the OECD Convention on Combating Bribery, which is explicit when it comes to cash payments of the type Hu is accused of: “Attempt and conspiracy to bribe a foreign public official shall be criminal offences to the same extent as attempt and conspiracy to bribe a public official of that Party,” it says.

Further references to Rio’s squeaky clean image are can be found here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here and here.

When contacted by Crikey, Rio issued the following statement:

“Rio Tinto does not sanction cash for comment. Rio Tinto expects principal contractors, suppliers and others with whom we have a substantial involvement, to maintain high standards themselves. We inform them of Rio Tinto’s principles and policies and work with them where appropriate to support their adoption of policies consistent with their own. Rio Tinto is prepared to withdraw from business relationships if any partners do not live up to our values.”

A follow-up question on whether this meant Rio would now sack its Chinese PR reps was ignored.

Garnaut’s revelations are not without precedent. Beginning in the 1970s Chinese firms began offering the envelopes at news conferences and the like as a thank-you for favourable (or any) coverage. Of course, at that time, journalists were of course paid a pittance by the state. Western hacks usually knocked back the largesse but the growth of semi-independent publications like Shanghai Daily meant even more yuan for lucky locals.

But with most large corporations disowning such tactics, Rio appears, through its representatives or otherwise, to be desperately clinging to an earlier era when the cash ran free and the stories followed the script.