Rio Tinto to Pay $15 Million to Settle FCPA Charges
Australian mining giant Rio Tinto will pay a $15 million civil penalty to the Securities and Exchange Commission to settle claims the company violated the Foreign Corrupt Practices Act by bribing a Guinean government official to retain mining rights in the country.
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In 2011, Rio Tinto hired a "close friend of a former senior Guinean government official" as a consultant to aid the firm in retaining its mining rights in Guinea's Simandou region -- an area rich with iron-ore deposits -- by paying a $822,506 bribe to a senior Guinean government official. The consultant was paid $10.5 million by Rio Tinto "without a written agreement defining the scope of his services or deliverables" and "certain red flags" that the consultant was also providing advice to the Guinean official, SEC said in a March 6 order.
"None of the payments to the Consultant were accurately reflected in Rio Tinto’s books and records," SEC said, "and it failed to have sufficient internal accounting controls in place to detect or prevent the misconduct." The company's "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," said Charles Cain, chief of the SEC's FCPA Unit
Rio Tinto began an internal investigation "immediately" after it learned of the "issue," Chairman Dominic Barton said, adding that the company took "significant actions to enhance" its compliance program. "We are glad to have resolved this matter related to events that occurred over a decade ago on appropriate and reasonable terms," Barton said.