Australia rules out corruption probe after BHP revelation

Australia Thursday ruled out an inquiry into the foreign dealings of its giant mining companies after BHP Billiton unveiled alleged corruption, just weeks after four Rio Tinto staff were jailed in China.

Foreign Minister Stephen Smith said any breaches would face Australian justice, but he did not believe an inquiry was necessary despite this week’s revelation by BHP, the world’s biggest miner.

“I don’t thing that is a sensible or an appropriate response for the government to take,” he told Sky News.

“Australian law has extra-territorial effect, and an Australian or an Australian company which engages in the bribing of government officials overseas commits an offence against Australian law.”

“(But) I don’t believe that there’s anything that I’ve seen that would cause the Australian government to move to an inquiry of the nature you’ve suggested,” Smith added.

BHP on Wednesday said it had evidence of possible corruption involving “interaction” with government officials, and was cooperating with the US Securities and Exchange Commission and conducting an internal probe.

The company refused to disclose the location of the alleged breach, other than saying it did not take place in China, a key market where the Rio workers were jailed for bribery and industrial espionage last month.

Reports on Thursday said the revelation centred on a 2.5-million-US-dollar payment related to a bauxite exploration project in Cambodia.

The Australian newspaper said BHP has admitted paying the money to a community in Cambodia’s east but has denied a claim by one of the country’s ministers that it was “tea money”, or a bribe.

The company has said the money was put into a development fund investing in social welfare programmes, and that it paid one million US dollars to the government for bauxite exploration rights, according to the newspaper.

BHP declined to comment on the reports.

Rio Tinto immediately sacked its four employees after their conviction by a Shanghai court and condemned their behaviour as “deplorable.”

Mining has emerged as a key driver of Australia’s strong recovery from the downturn, as Asian countries like China display an insatiable demand for its commodities such as iron ore and coal.