China's sweeping secrets laws leave Rio few options

By Lucy Hornby and Benjamin Kang Lim

BEIJING (Reuters) - The options for Australian miner Rio Tinto, or indeed anyone, to help four employees detained in a Chinese state secrets investigation are limited, lawyers say, as laws leave great latitude to investigators and prosecutors.

Under China's sweeping laws, the health and even the birthdays of the current leadership are considered state secrets.

Almost anything else can be classed as secret, especially economic data, as China moves from a system where everything once belonged to the state to the current free-for-all where everyone scrambles for any advantage they can get.

Stern Hu, an Australian citizen, and three Chinese colleagues were detained this month for stealing state secrets to aid Rio in price negotiations for iron ore, which is used in steelmaking. At least one Chinese steel executive is also detained and the probe has reached many of the largest mills.

The murkiness of state secret laws puts foreign investors potentially at risk when dealing with state-owned entities and potentially sensitive economic information.

Australia's Prime Minister Kevin Rudd said on Wednesday the world was watching the case and warned significant economic interests are at stake.

The case has also raised concerns about rights under China's legal system that are more commonly heard from human rights activists than from businessmen.

"This case makes as clear as any does that business people also have human rights," said Jerome Cohen, a professor at New York University School of Law. "They ignore at their peril what are perceived as purely human rights cases, since, as this case illustrates, they can be next."

CONSULAR VISITS

Chinese diplomatic protocol prevents Australian consular official from asking Hu about anything other than his physical welfare. After their first visit last Friday, Beijing is not required to allow another visit for one month.

During investigations, neither the defendant nor the lawyer have access to documents on which a case in based, and lawyers cannot challenge the "secret" designation, Cohen said.

Lawyers are often not allowed to see their clients until the state security apparatus has concluded the investigation and formally handed the suspect over for prosecution. That can take months, or even more than a year.

Defense lawyers in such cases themselves have a legal "obligation to guard secrets," said lawyer Guan Anping, who took on state secrets cases in the past.

Trials involving state secrets are held behind closed doors, and family members of defendants are barred.

The diplomatic fuss could benefit Hu in areas where Chinese authorities exercise discretion, for instance in allowing earlier access for his lawyer or increased privacy in consultations.