Australia's former ambassador to China criticises Rio Tinto’s Chinese bribery scandal

Australia's former ambassador to China Geoff Raby has called Rio Tinto Ltd.’s Chinese bribery scandal a breach of "corporate governance," the first time he has commented on the issue nearly one year after stepping down from the diplomatic post, according to The Australian.

"I will always be a bit constrained in what I can say about that," Geoff Raby told The Australian. "I learned a lot, it was a very challenging period for a while. More than anything else, the lesson I took from that was one of corporate governance."

Rio Tinto, based in Melbourne and London, is one of China's top providers of iron ore and a key industry negotiator in commodity price talks with the government.

Australian Stern Hu and three Chinese colleagues, employees of Rio Tinto, pleaded guilty at the Shanghai No.1 Intermediate People's Court in 2010 to taking bribes during fractious annual negotiations over iron ore prices. It was then seen as a blow for Rio Tinto at a time when it was trying to restore good relations with China.

The case was largely reported by media, and the Chinese steel industry - where bribes, shortcuts and inducements were part of doing business - has been under scrutiny.

At the time of the crisis, Raby remained tight-lipped on the matter. According to The Australian, the then Rudd government tried to downplay the incident.

Since retiring from the Department of Foreign Affairs in August, Raby has remained in Beijing as a business consultant. Meanwhile, he serves on the boards of four listed companies, including Rio Tinto's major rival Fortescue Metals Group.

Clinton Dines, former president of China operations of BHP Billiton and Vale, another of Rio's competitors, said "it was clearly a governance issue. Either they did know, or maybe turned a blind eye. Alternatively they didn't know, so it was a failure of their management systems."