Australian Commonwealth Coat of Arms

Transcript E&OE

10 July 2009

Press Conference

Subject: The detention of Rio Tinto Executive, Mr Stern Hu in China.

STEPHEN SMITH: Later this morning, Australian consular officials will conduct a consular visit on Mr Stern Hu, who as you know has been detained on suspicion of espionage and stealing state secrets.

The primary purpose of the consular visit will be to satisfy ourselves as to his welfare and well being. Once Australian officials have conducted that consular visit, officials will report to me and I will make that report available to his family and the employer. Once that process has been completed, I'll then make public remarks about the consular visit. That process may be completed by today, or may take until tomorrow.

In the meantime, can I indicate that Chinese officials in Canberra yesterday assured Australian officials that Mr Hu had been treated well and in accordance with appropriate procedures and in accordance with Chinese law.

As you know, Australia has a consular agreement with China and the consular visit, today, is taking place in accordance with that consular agreement, which was entered into with China in September 2000. Australian officials have also been seeking to elicit further information from Chinese authorities as to the basis and reasons for Mr Hu's detention.

I'd like to quote to you public statements made either by Chinese officials, or placed on official Chinese websites which give the Australian Government further information about these matters. But I do make the point, we are continuing to press Chinese authorities for further details about the reasons as to Mr Hu's detention.

Yesterday, the Ministry of Foreign Affairs spokesperson yesterday afternoon said, and I quote, "I would like to note the criminal detention of Mr Hu is a judicial case. Relevant Chinese departments took action against him according to law on the strength of conclusive evidence that he stole China's state secrets on behalf of overseas interests, thereby seriously damaging China's economic interests and economic security."

So there we see a reference to the stealing of state secrets damaging China's economic interests and economic security. Last night on an official Chinese Government website, a statement was posted - and I read in part from that statement.

"As understood from the Shanghai State Security Bureau, during China's iron ore negotiation with foreign miners in 2009, Stern Hu gathered and stole state secrets from China via illegal means, including bribing internal staff of Chinese steel companies."

"This has caused huge loss to China's national economic security and interests. The national security authority is conducting a criminal investigation on Stern Hu and the other three staff." I also draw your attention to article eight of the Chinese State Secrets Law, 1989, which says that "state secrets shall include the following" - and refers to secrets in national, economic, and social development.

So I make two points. Now, for the first time in a number of days, we see some underlying basis or reason for the detention. This has been received or gleaned from public statements or posting of official statements on websites and not yet directly from Chinese officials. Two things are clear. Firstly, Mr Hu is now at risk of being subject to Chinese legal, judicial and criminal procedures and secondly, the Chinese state and the Chinese authorities take a much broader view of what state secrets or national security might be than, for example, Australia or other nations might.

Mr Hu is currently in detention. No charges have yet been laid. He may, as I say, be subject to those charges. And as a consequence of that, one of the issues that will be raised with him by consular officials will be the question of legal representation.

Let me make a series of other points, but just also underline the point I've just made. That China has its own laws about state secrets. They are clearly broader than the view that Australia might take. Frankly, it's difficult for a nation like Australia to see a relationship between espionage or national security and what appear to be suggestions about commercial or economic negotiations.

Having said that, Mr Hu of course now as I say runs the risk of being subject to Chinese criminal legal and judicial processes.

The primary purpose and role of Australian Government officials' efforts in the last few days has been to seek to gain access to Mr Hu and to satisfy ourselves as to his welfare and well being and once we've reported on the consular visit to the employer and to the family, as I say, I'll make some public remarks about the outcome of the consular visit.

Before I take your questions on this matter, let me just make some remarks about some comments I've seen in Australia.

I've seen comments by the Leader of the Opposition, Mr Turnbull. Can I simply say that the Australian people will make their own judgment about what judgment, if any, Mr Turnbull has exercised on this matter.

I've also seen comments from the Shadow Spokesperson for Foreign Affairs this morning, suggesting that the Australian Government has done nothing for four days and that the first occasion we contacted the Acting Chinese Ambassador in Canberra was yesterday.

The Opposition's Spokesperson for Foreign Affairs knows that this is not factually correct. Australian officials were advised in Shanghai on Sunday evening of Mr Hu's detention, and from that moment contact was made by Australian officials in Shanghai and subsequently in Shanghai, Beijing and Canberra about Mr Hu's case. And those representations have been made daily since that time.

This is not an occasion where domestic political points should seek to be made or scored. And I simply make this point: that to date, the Chinese authorities have conducted themselves strictly in accordance with the consular agreement that Australia has with China.

That agreement, of course, was entered into with China in September 2000 at a time when the Howard Government was in office. And, from my recollection, both Mr Turnbull and Ms Bishop were Ministers in that Government.

Before I respond to your questions on Mr Hu, can I just make two remarks in other areas.

Firstly, I haven't had the opportunity to put on the public record how much the Australian Government welcomes the successful visit by President Obama to Russia, and how much we welcome the agreement between President Obama and President Medvedev to recommence or restart negotiations for the follow-on treaty to START, so far as reduction of the nuclear weapons stockpile is concerned.

Secondly, can I also place on the record the Australian Government's very warm welcome of a successful Indonesian election. It is too early in the process to congratulate the winner, or a winner. But we welcome very much that the third largest democracy has successfully conducted an election and we look forward to working very closely with the new Government of Indonesia in what is a most important relationship to us.

I'm happy to respond to your questions.

QUESTION: Mr Smith, the reference to overseas interests, is it clear whether the reference to overseas interests is the Australian Government, the company Rio, or some other group?

STEPHEN SMITH: As I say, I'm relying entirely upon that which we've gleaned from public comments by Chinese officials or what we've seen on official Chinese websites.

We continue to press Chinese authorities and Chinese officials for more detail as to the basis of Mr Hu's detention.

But, having read to you the Ministry of Foreign Affairs statement yesterday, extracts therefrom, having read to you extracts from the statement placed on the website, it is clear in our mind that these matters relate to commercial or economic matters. And, as I said, when I first announced the advice we had received from Chinese officials on Wednesday that Mr Hu had been detained on suspicion of espionage and stealing state secrets, this came very much as a surprise to us.

It now seems clear that the road or the line which Chinese authorities are going down relates directly to commercial matters.

It's very hard for the Australian Government to, frankly, see the connection between what might be daily commercial negotiations or matters and national security issues. But when you look and reflect upon the statements, as I have this morning, it's quite clear that they are proceeding on the basis of possible criminal charges, possible criminal investigation arising as a result of commercial or economic negotiations.

That's as much light as I can shed on it in advance of getting further detailed information from Chinese authorities.

Can I just make this point: currently Mr Hu is in detention. He has not yet been charged. So if he is to be charged we don't yet know the precise nature or basis of those charges, if any.

QUESTION: Mr Smith, what does it say about the Government's - the Australian Government's relationship with China, that you've had to rely on information from public websites and public comments to come to this press conference today? You're being kept in the dark on this issue.

STEPHEN SMITH: We have a very good relationship with China. We have a very strong economic relationship with China and that continues to grow.

This is a very serious consular matter. A senior Australian company executive working in Shanghai has been detained. And, from the moment of his detention, we have pressed Chinese officials for detailed information about his whereabouts, his welfare and the reasons for his detention.

The Chinese authorities have responded strictly in accordance with the consular agreement that Australia signed with China in the year 2000.

But irrespective, as I've said previously, of the timelines and timetables set out in that consular agreement, we have been pressing the Chinese authorities from the moment we were advised by the employer of Mr Hu's detention, for two things: access to him to enable us to satisfy ourselves as to his welfare and wellbeing; and, secondly, some detailed information as to the reasons for this detention.

To date we have gleaned that from public comments and public remarks, and we continue to press the Chinese authorities for detailed information surrounding the circumstances of his detention and the reason for his detention.

QUESTION: Does that agreement need to be reviewed? I mean, are you disappointed it's taken this long to get this information, and in fact - and it's come from a third party?

STEPHEN SMITH: I am - well, I don't regard the Chinese Ministry for Foreign Affairs or the Chinese Shanghai State Security Bureau as third parties.

QUESTION: Through websites.

STEPHEN SMITH: They are official Chinese sources. I would of course much preferred that this information was given to us much earlier through official diplomatic channels.

QUESTION: How concerned is the Government that Mr Hu seems to have been judged guilty without even being charged?

STEPHEN SMITH: China has its own legal and criminal system. Clearly, in a whole range of matters and circumstances, it differs from Australia's criminal and judicial system and the judicial and criminal systems of other countries.

But what Chinese officials have made clear through their public statements is that they are strongly asserting that Mr Hu will be treated in accordance with Chinese law. And that is why I say one of the issues from day one has been the risk, the prospect, the possibility that Mr Hu may well face charges in accordance with Chinese law and in accordance with Chinese criminal law.

And one of the issues that will be raised with him today will be the question of legal representation in case that prospect becomes real.

But China has its own system. China is a sovereign nation in its own right. And as I have said on many occasions in the past, whenever an Australian comes within the criminal or judicial or legal system of another country, there is a limit to what Australia can do.

But the Chinese official statements, both public and private, underline consistently that Mr Hu will be treated in accordance with Chinese law - that of course is a different system from our own.

QUESTION: Mr Turnbull said yesterday he should be either charged or set free. And that seems reasonable doesn't it?

STEPHEN SMITH: Under Chinese law - which is what we're dealing with, a person can be detained for some time without charge and only when he is charged is he or she eligible or able to get legal representation. That is the Chinese system. It differs markedly from our own, but that is the system that Australian nationals or any other national from another country falls within if they live or work in China.

QUESTION: What is the penalty if he's charged with espionage?

STEPHEN SMITH: I'm not going to speculate about penalties, because firstly he hasn't been charged, and secondly, I don't know what, if any, charges will be laid against him.

QUESTION: Well, they're suggesting it's espionage for one. What's that carry in China?

STEPHEN SMITH: He hasn't been charged, so I'm not proposing to speculate about what he may be...

QUESTION: No, but it's been - hasn't it been put out there and [indistinct]...

STEPHEN SMITH: He has not been charged - he's been detained on suspicion of espionage and stealing state secrets.

QUESTION: Of espionage. So what does that carry? What's the maximum penalty for that?

STEPHEN SMITH: I'm not proposing to speculate about any maximum penalty for any...

QUESTION: Is it on the website? Is that where you get your information from?

STEPHEN SMITH: If you want to research Chinese law that's entirely a matter for you.

QUESTION: I'm sure DFAT's done it though.Your department's done it.

STEPHEN SMITH: I'm not proposing to engage in any speculation on the basis...

QUESTION: But it's not speculation, you - he's been arrested on espionage and stealing state secrets. So DFAT, your officers would have told you what that - what the penalty was if in fact he gets charged with that and goes to trial.

STEPHEN SMITH: If and when he is charged with particular offences, I'm very happy to respond to questions of that nature. In the meantime, you can do your own research if you want to and I'm not your unpaid researcher.


QUESTION: Well, no I'm not suggesting you are, but I'm suggesting you have that information.

STEPHEN SMITH: And I'm not proposing to speculate about what penalties may arise when no charges have yet been laid.

QUESTION: What stage does it have to get before the Government calls in the Chinese Ambassador?

STEPHEN SMITH: The Acting Chinese Ambassador was contacted by Australian officials on Monday of this week and called in yesterday.

QUESTION: And what was the result of that?

STEPHEN SMITH: So the suggestion by the Shadow Minister for Foreign Affairs that somehow the Opposition had got there first is of course factually incorrect.

QUESTION: Is that one of those calling the Ambassador to read him the riot act?

STEPHEN SMITH: The Ambassador was called in yesterday, Thursday, in advance of the Chinese authorities advising late yesterday afternoon that consular access would be granted.

QUESTION: And was that to express the Government's displeasure?

STEPHEN SMITH: It was to underline very strongly the Australian Government's desire to have consular access to Mr Hu and that same message was and has been transmitted since Sunday in Shanghai, Beijing and Canberra.

QUESTION: Mr Smith, what's stopping you contacting directly your Chinese counterpart, or Mr Rudd contacting Hu Jintao?

STEPHEN SMITH: Because at this stage the responses we have made have been both sensible, measured and proportionate. If and when I see or feel the need to make contact with my counterpart, Foreign Minister Yang, I will.

But to date, the Chinese authorities have conducted themselves strictly in accordance with the consular agreement that we have had with China since the year 2000.

QUESTION: Should Australian businessmen in - or businesspeople in China feel nervous about the implications with this?

STEPHEN SMITH: I don't for myself see any wider implications. I have no evidence or information or knowledge which would suggest that there is cause for concern in the wider remit. What other companies or organisations or individual businesspeople do is a matter for them.

For the present, we are dealing with this matter as a very serious matter, where an Australian has been detained, and it is now quite clear on the basis of the public remarks made by official Chinese spokesperson that he is being detained on suspicion of stealing state secrets, it clearly relates to commercial or economic matters as I've quoted to you, and we continue to press the Chinese authorities for more and further information.

QUESTION: Is this the problem of doing business with a totalitarian state? That these sorts of issues are going to continue to emerge over the years and China's one of Australia's biggest trading partners?

STEPHEN SMITH: China is one of Australia's most important economic relationships, and we have a very productive and positive relationship with China.

But any person who goes to China or who does business in China has to understand that they are bound by Chinese law and Chinese procedures, and that's a matter for individual businesspeople or individual travellers to China to make judgements about.

QUESTION: The other people involved in this are Chinese nationals on Mr Hu's staff. Are they a matter for the Australian Government, or are they a matter for Rio?

STEPHEN SMITH: They're not Australian citizens, so as a consequence, we don't have the same standing, responsibilities, obligations or rights as we do so far as Mr Hu is concerned.

But because they are employees of Rio Tinto, we have been working very closely with the company, the employer. The employer is also making its own representations about all of its employees and we are working very closely with Rio Tinto, just as we are working very closely and giving consular assistance to Mr Hu's wife.

But we have both an obligation and rights so far as Mr Hu is concerned because he is an Australian citizen.

We don't have those same rights so far as Chinese nationals are concerned; but of course we are concerned because they are employees of, effectively, an Australian company and we're working closely with the company.

QUESTION: It's somewhat farcical, isn't it, that you have to get this information off - about his case off a website rather than just... especially if it's an espionage case?

STEPHEN SMITH: You may have been out of the room, but as I said earlier, I would of course preferred to have received this information directly from Chinese officials, and it's quite clear that what the Chinese authorities are focusing on is not espionage, but what they describe as state secrets.

I've read to you section eight of the Chinese State Secrets Act which has a much wider ambit than Australia would generally regard as national security matters.

QUESTION: Is it fair to say then, we shouldn't in Australia be thinking of this as a sort of skulduggery spy case; it's their interpretation of what spying is?

STEPHEN SMITH: I think it is now, crystal clear from the remarks made by Chinese officials, and from the statement posted on the official Chinese website that I have referred to you, and read to you earlier, that we are dealing here with the Chinese view of criminal offences relating to commercial matters.

I'll again quote from the statement issued by the Shanghai State Security Bureau: "As understood from the Shanghai State Security Bureau, during China's iron ore negotiation with foreign miners in 2009, Stern Hu gathered and stole state secrets from China, via illegal means, including bribing internal staff of Chinese steel companies. This has caused huge loss to China's national economic security, and interest. The National Security Authority is conducting a criminal investigation."

That clearly puts it in the commercial realm, and identifies the 2009 iron ore negotiations which, as I understand it, have not yet been formally completed. But those negotiations of course are a commercial matter between Australian companies and Chinese companies, and not something that the Australian Government has a role in.

QUESTION: What do you think of the Premier's comments that it could get out of control and undermine trade between the two countries?

STEPHEN SMITH: I've seen reports of the Premier's remarks, and I think the Premier has made very sensible, moderate and understated remarks, and at some stage I'll have a conversation with the Premier about these matters, but his public remarks have caused me no difficulty.

Of course, such a serious matter is a matter which goes very much to the relationship between Australia and China, so we are treating this as a very, very sensitive and difficult issue and that's why we're proceeding in the manner in which we have.

QUESTION: Would it make sense to have a meeting with him before he heads off to China in a week's time?

STEPHEN SMITH: Without in any way wishing to advertise the Premier's diary, those matters are in hand. Could I just also make this point? Of course my colleague, Simon Crean, who's travelling to China, I spoke to him last night, and when he arrives in China in the next couple of days, he will of course, as appropriate, raise precisely the same points that we've been raising with appropriate Chinese officials in the course of his meeting. His visit of course has been scheduled for some time, and its focus is the automotive industry, but as appropriate, he will raise these points as well.

QUESTION: Given everything that you've said this morning, would Australia want to have a free trade agreement with a country like China?

STEPHEN SMITH: We continue to very strongly believe that it is in Australia's national interest to have a positive and productive economic relationship with China, and that includes continuing free trade agreement negotiations with China, which are on foot.

QUESTION: Is there a risk though that, I mean things could be thrown off balance, just as has happened in the last few days?

STEPHEN SMITH: We continue to believe that a Free Trade Agreement with China would be in Australia's economic and national interest, and we continue to pursue that.

QUESTION: Just timing, Minister Smith, today, precisely Perth time, when will Consular Bishop be meeting with Mr Hu?

STEPHEN SMITH: This morning, some time this morning, that consular access visit will take place at the Ministry of State Security detention centre, and once I've received a report and relayed the report to the employer, Rio Tinto, and to the family, either directly, or via officials, much more likely via officials, then I will make some public remarks about the outcome of the consular visit.

As I say, that may be today, it may be tomorrow, but I'm not proposing to make any public comment in advance of the family, in particular Mr Hu's wife, and the company, having had a full briefing of the outcome of the visit.

QUESTION: Did Mr Barnett request the meeting with you, and what would be the value of you consulting him before he goes?

STEPHEN SMITH: They're matters that you should raise with the Premier, I'm very happy to have a conversation with the Premier, he's off to China, it certainly makes commonsense for me to see the Premier, I'll leave it to the Premier to advise you of his diary arrangements, it's for him to do that, not for me.

But given Western Australia's very important economic relationship with China, of course it makes sense for me to speak to the Premier, which I'm happy, very happy to do, and as I said earlier, I've seen reports of his public remarks, and they cause me no difficulty whatsoever, they are very sensible. I would have wished that others would have followed his lead.

QUESTION: Is there an economic implication here for Western Australia, given his arrest stemmed from this year's iron ore price negotiations, if those price negotiations haven't been resolved, I mean does this set the whole process back?

STEPHEN SMITH: The iron ore negotiations occur on a regular, invariably annual basis, they are commercial matters for the iron ore companies, and the companies to whom they supply in China, they are not matters that the Australian Government has a role in, or seeks to involve itself in, they are strictly commercial matters, which is why I've made the point, on a number of occasions this morning, that whilst he has been - Mr Hu has been detained on suspicion of espionage and state secrets, the Chinese authorities and Chinese law takes a much wider view of those matters than we would in Australia.

When we use the phrase espionage in Australia, we think in terms of national security. It's clear from the comments I've referred to, that they are dealing here with commercial matters, and it's those matters that we are continuing to press Chinese authorities for further information about.

QUESTION: Minister, I'm not sure whether it has been put to you previously, but can I put it to you, can you rule out Mr Hu being an agent of the Australian Government?

STEPHEN SMITH: As I've said on a number of occasions previously, both in respect of this matter and other matters, I never make public comments about intelligence matters. I follow in that respect the longstanding practice of Australian governments, that I don't respond to, or be drawn on those matters, but I have...

QUESTION: If he was not though, what would be the harm in saying that he was not?

STEPHEN SMITH: Because I follow the longstanding practice of successive Australian governments, which is a very sensible one, that I don't comment upon these matters.

And if you want me to, I'm very happy to draw your attention to my remarks earlier in the week, when I said that Mr Hu's detention on the basis of suspicion of espionage and stealing state secrets, came very

much as a surprise to the Australian Government, as it did to his employer, Rio Tinto.

QUESTION: You would know if he wasn't, wouldn't you?

STEPHEN SMITH: I don't comment, and I'm never drawn on matters relating to intelligence.

QUESTION: So is there a chance of another chat later today?

STEPHEN SMITH: It will entirely depend upon the timing and timetable related to the report I receive on the consular visit, and briefing the family and the employer. But I won't be making public comments about that matter in advance of the family and the employer being briefed.

Thanks very much everyone.


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