Legal News

On ?Leniency? and ?Severity? and the Rio Tinto Trial

By Ashby Jones

In the U.S., the news is mostly all-health-care-all-the-time on Monday. But there’s some big courtroom news coming out of China.

The trial of four Rio Tinto executives in Shanghai opened with a surprise on Monday when the men, including Australian national Stern Hu, admitted taking money in response to bribery charges.

It was a strange and, yes, surprising turn of events. The mining giant had previously said there is no evidence that its employees did anything wrong. But on the first day of the three-day trial in the Shanghai No. 1 Intermediate People’s Court, Hu, head of the Anglo-Australian mining giant’s China sales team, conceded he accepted money from steel makers on two occasions, apparently to ensure the mills were allocated iron ore. Click here for the WSJ story; here for Bloomberg’s take; here for the NYT story; here for the FT story.

However, Hu disputed allegations that the two bribes totaled about $935,000, according to people in the courtroom, who offered few other details.

So what to make of the admission?

According to the Journal story, it wasn’t immediately clear whether the admissions amounted to, or foreshadowed, guilty pleas on the bribery charges.

On Monday, Rio Tinto chief executive Tom Albanese referred to the case only briefly, saying “I can only say we respectfully await the outcome of the Chinese legal process. Today, I want to look to the future.”

A Rio Tinto spokesman declined to comment beyond Albanese’s remarks.

For our money, the most fascinating wrinkle to the story has to do with pleading guilty in China. Legal analysts note that during sentencing, Chinese courts look favorably on admissions of guilt during sentencing, a credo that WSJ reporter James Areddy says is summed up in the phrase “leniency for those who confess; severity for those who resist.”

“It does definitely make sense for an accused to plead guilty, and not just sometimes,” said Flora Sapio, a lecturer on Chinese law at Istituto Universitario Orientale in Naples, Italy. She added that “the penalties for bribery are graded by the amounts you give and receive.”

Still, pleading guilty certainly doesn’t seem like a foolproof strategy. Areddy writes that while “not-guilty pleas are increasingly rare and almost never succeed . . . conceding guilt can be risky, because China’s often opaque legal system offers little scope for defending attorneys and prosecutors to negotiate a deal with a plea bargain.”

Full post as published by Law Blog - WSJ.com on March 22, 2010 (boomark / email).