Question: 1 The culture of giving and receiving payments is ingrained

1. The culture of giving and receiving payments is ingrained in China. On the other hand accepting and paying bribes is a violation of Rio Tinto’s code of conduct. When does a payment stop being a gift and turn into a bribe?
2. The smaller Chinese steel companies bribed the Rio Tinto executives because of Rio Tinto’s policy of only dealing with large state-run steel companies. Can a business policy, such as giving priority to only one set of firms, be unethical? Is Rio Tinto ethically responsible for the bribes that were given to its employees because of its policy?
3. Why were these bribes prosecuted?
4. What lessons should be taken from these convictions:
a. For foreign governments?
b. For corporations trading in and with China?
c. For individual employees?
d. For possible investors in China?
5. Should Rio Tinto have been charged?

Bribery charges often involve a company making illegal payments to government officials in order to land lucrative contracts. For example, in April 2010 German auto manufacturer Daimler AG made a $185 million settlement with the Securities and Exchange Commission because it had violated American anti-bribery laws. The car company, that is now DaimlerChrysler Corp., had made at least 200 payments in over 22 countries over a ten-year period totaling $56 million in bribes to foreign officials in order to earn $1.9 billion in sales and $91.4 million in illegal net income. Sometimes, however, bribery can be between two or more companies, as was the case in 2010 with Rio Tinto, the Anglo-Australian mineral company, and several Chinese steel companies.

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  • CreatedOctober 28, 2014
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