China: 'Bribery is widespread' in Rio case

from China Daily

Executives from all 16 Chinese steel mills participating in iron ore price talks this year have been bribed by Rio Tinto employees, an industry insider claimed Tuesday, amid reports that the government is considering invalidating 20 iron ore import licenses to regulate the chaotic ore import business.

The startling claim comes amid a widening probe of alleged business espionage linked to the world's second-largest iron ore miner, Rio Tinto.

Executives from five leading domestic steel makers and officials from the industry association are reportedly under investigation following last week's detention of four employees of Rio Tinto's China operation, including an Australian.

"Rio Tinto got to know the key executives of the 16 steel mills, who have sensitive industry information, when the China Iron and Steel Association (CISA) brought them to the bargaining table," said a senior manager at a large steel company, who requested anonymity.

"And then Rio Tinto bribed them (to get access to industry data), which has become an unwritten industry practice," the source said.

"If companies didn't accept, they would have cut supplies and so the whole steel industry has been bribed."

His words come as the CISA is reportedly mulling over re-examining the iron ore import licensing system because some license holders are said to have abused their rights.

"It is very likely for CISA to cancel about 20 iron ore import licenses held by steel makers and trading companies, with a focus on trading companies," the 21st Century Business Herald reported, citing an anonymous source.

Another industry insider, who also requested to be unnamed, told China Daily: "There are about 1,200 steel mills in China. Most small- and medium-sized mills without import licenses have to buy ore from big ones with licenses.

"Therefore, some big mills don't care about the ore prices because they could transfer the increasing cost to small- and medium-sized ones. Meanwhile, those small- and medium-sized steel mills are forced to sign contracts with global miners privately."

And, Hu Kai, analyst with Umetal, a steel consulting firm, said: "Because of their own interest and intense competition among various steel makers in China, it's unlikely for them to present a united front when bargaining with overseas ore providers."

Related readings: Secrets of Chinese steel mills found in Rio's computers Australia: Rio case not to affect trade ties Detained Rio Tinto executive in good health: Australian FM Govt: Proof against Rio spies sticks FM: China to handle Rio spy case 'according to the law'

But Hu said such measures can't solve the root problems, because huge demand for iron ore in China determines that the price talks will continue and disorder will continue to exist.

"I suggest the country should first control the output of the iron and steel industry. Besides, China should also enhance exploration of domestic mines and increase investment in overseas mining resources," Hu said.

CISA started reducing iron ore import licenses in 2005. By the end of last September, the number of firms possessing licenses in China has been reduced from 500 in 2005 to 112 now, and trading firms from 250 to 40.

The Shanghai State Security Bureau earlier this month detained Stern Hu, an Australian citizen and Rio's chief iron ore salesman in Shanghai, and three of his Chinese colleagues. They are accused of stealing sensitive industry data critical to China's iron ore price talks.

Calling "Balls and Strikes"

As the New York Times highlighted this weekend, the image of the judge as umpire has become a dominant analogy in discussions of judicial restraint. Chief Justice John G. Roberts said in the opening remarks of his own confirmation hearings in 2005: ”Judges are like umpires. Umpires don’t make the rules; they apply them. The role of an umpire and a judge is critical. They make sure everybody plays by the rules. But it is a limited role.” Today, members of the Senate Judiciary committee frequently used this statement to frame their opinions about what role Judge Sonia Sotomayor might play on the Supreme Court (the rare venue in which sitting on the bench is a good thing).

An (incomplete) review of the senators’ written statements and oral testimony finds the phrase “balls and strikes” used 11 times, “umpire” or “umpires” used 16 times, and “playing field” used twice today. Sen. John Cornyn, R-Tex., perhaps appealing to his Big 12 base, went for a football simile instead. Once all of the written statements are submitted to the record and the transcripts are finalized, I’ll update with a complete word count. Excerpts of the senators’ sports infused language are below the jump:

Sen. Jeff Sessions, R-Ala.:

Such an approach to judging means that the umpire calling the game is not neutral, but instead feels empowered to favor one team over the other.

Sen. Dianne Feinstein, D-Calif.:

Also, it showed me that Supreme Court justices are much more than umpires calling balls and strikes and that the word activist often is used only to describe opinions of one side.

So I do not believe that Supreme Court justices are merely umpires calling balls and strikes. Rather I believe that they make the decisions of individuals who bring to the court their own experiences and philosophies.

Sen. Russ Feingold, D-Wis.:

It made these decisions by interpreting and applying open-ended language in our Constitution like ‘equal protection of the laws,’ ‘due process of law,’ ‘freedom of the press,’ ‘unreasonable searches and seizures,’ and ‘the right to bear arms.’ These momentous decisions were not simply the result of an umpire calling balls and strikes.

Sen. Charles Schumer, D-N.Y.:

Just short of four years ago, then-Judge Roberts sat where Judge Sotomayor is sitting. He told us that his jurisprudence would be characterized by “modesty and humility.” He illustrated this with a now well-known quote: “Judges are like umpires. Umpires don’t make the rules. They apply them.”

It made these decisions by interpreting and applying open-ended language in our Constitution like ‘equal protection of the laws,’ ‘due process of law,’ ‘freedom of the press,’ ‘unreasonable searches and seizures,’ and ‘the right to bear arms.’ These momentous decisions were not simply the result of an umpire calling balls and strikes.

But any objective review of Judge Sotomayor’s record on the Second Circuit leaves no doubt that she has simply called balls and strikes for 17 years far more closely than Chief Justice Roberts has during his four years on the Supreme Court.

Sen. John Cornyn, R-Tex.:

To borrow a football analogy, a lower court judge is like the quarterback who executes the plays - not the coach who calls the plays.

But a few of your opinions do raise questions - because they suggest the kinds of plays you’d call if you were promoted to the coaching staff.

Sen. Tom Coburn, R-Okla.:

We expect a judge to merely call balls and strikes? Maybe so, maybe not. But we certainly don’t expect them to sympathize with one party over the other, and that’s where empathy comes from.

Sen. Sheldon Whitehouse, D-R.I.:

I particularly reject the analogy of a judge to an “umpire” who merely calls “balls and strikes.” If judging were that mechanical, we would not need nine Supreme Court Justices. The task of an appellate judge, particularly on a court of final appeal, is often to define the strike zone, within a matrix of Constitutional principle, legislative intent, and statutory construction.

The “umpire” analogy is belied by Chief Justice Roberts, though he cast himself as an “umpire” during his confirmation hearings.

…the infamous Ledbetter decision, for instance; the Louisville and Seattle integration cases; the first limitation on Roe v. Wade that outright disregards the woman’s health and safety; and the DC Heller decision, discovering a constitutional right to own guns that the Court had not previously noticed in 220 years. Some “balls and strikes.”

The liberties in our Constitution have their boundaries defined, in the gray and overlapping areas, by informed judgment. None of this is “balls and strikes.”

Sen. Ted Kaufman, D-Dela.:

A judge, or a court, has to call the game the same way for all sides. Fundamental fairness requires that in the courtroom, everyone comes to the plate with the same count of no balls and no strikes.

One of the aspirations of the American judicial system is that it is a place where the powerless have a chance for justice on a level playing field with the powerful.

Sen. Al Franken, D-Minn.:

Second, I am concerned that Americans are facing new barriers to defending their individual rights. The Supreme Court is the last court in the land where an individual is promised a level playing field and can seek to right a wrong.