Rio Tinto has agreed to pay a $US15 million ($A21.5 million) penalty to settle a long-running dispute over alleged bribery relating to the Simandou iron ore project in Africa.
Rio Tinto has agreed to pay a $US15 million ($A21.5 million) penalty to settle a long-running dispute over alleged bribery relating to the Simandou iron ore project in Africa.
The dispute has dogged Rio and some of its former executives for the past decade.
It stems from payments made in 2011 to a consultant working on the proposed Simandou project, in the Republic of Guinea.
The U.S. Securities and Exchange Commission found that, in July 2011, Rio hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights at Simandou.
The consultant began working on behalf of Rio Tinto without a written agreement defining the scope of his services or deliverables, the SEC said in a statement.
The consultant was paid $10.5 million for his services, which Rio never verified.
The SEC’s investigation uncovered that the consultant, acting as Rio Tinto’s agent, offered and attempted to make an improper payment of at least $US822,000 to a Guinean government official.
Furthermore, none of the payments to the consultant was accurately reflected in Rio Tinto’s books and records, and the company failed to have sufficient internal accounting controls in place to detect or prevent the misconduct.
"Even well-designed controls need committed managers to be effective," the chief of the SEC’s division of enforcement said Charles E. Cain said.
"Here, deficient controls were no match for managers determined to hire a consultant whose only ostensible qualification was a personal relationship with a senior government official."
Rio said today its payment would resolve the investigation by the SEC.
The big miner said that, without admitting to or denying the SEC’s findings, it has agreed to pay a civil penalty for violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act.
“We are glad to have resolved this matter related to events that occurred over a decade ago on appropriate and reasonable terms,” chairman Dominic Barton said.
“When Rio became aware of the issue, an internal investigation was immediately launched, and we proactively notified the appropriate authorities.
“Since becoming aware, Rio Tinto has taken significant actions to enhance our compliance programme based on best practices.”
Mr Barton said Rio wanted an environment where every team member feels comfortable to speak up if something is not right.
“We remain committed to conducting business to the highest standards of integrity, and ensuring that our projects benefit communities, host governments, shareholders, and customers,” he said.
Simandou contains one of the world’s largest deposits of iron ore and is seen as a potential game changer for the global iron ore trade.
However, disputes between investors in the two adjoining mining projects and the need to spend billions of dollars on shared infrastructure to get the ore on to ships has stalled progress.
