Rio Tinto pays $15m penalty over bribery failures
10 March 2023
Rio Tinto has paid the Securities and Exchange Commission (SEC) $15m to settle charges from the regulator over bribery failures.
In paying the civil penalty, the mining giant is consenting to the SEC order without admitting or denying findings that it violated provisions under the Securities Exchange Act of 1934.
These specifically relate to internal accounting controls and record-keeping requirements.
The SEC’s investigation found that a consultant working on behalf of Rio Tinto had attempted to bribe a government official in relation to mining rights in Guinea.
Rio Tinto was found to have hired a French investment banker as a consultant in July 2011 to help retain mining rights in the Simandou mountain region of the country.
The regulator found that the consultant, a close friend of a former senior Guinean government official, had attempted to make a bribe of US$822,000 to retain these rights.
This individual had begun working with Rio Tinto without a written agreement and was paid $10.5m for his services, a sum which was never verified in the company’s paperwork.
The mining rights were retained but ultimately the mine has not been developed by Rio Tinto.
The regulator issued the charges against the company after finding none of these payments to the consultant were accurately reflected in its records.
Furthermore, Rio Tinto 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,” said Charles Cain, chief of the SEC Division of Enforcement’s FCPA Unit.
“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 Tinto notified the authorities when it became “aware of the issue”, and though not confirming or denying the regulator’s allegations the company did carry out its own investigation into the matter.
“Since becoming aware, Rio Tinto has taken significant actions to enhance our compliance programme based on best practices,” said Dominic Barton, chairman of Riot Tinto.
“Under current leadership, we are taking action to build a culture guided by our values of care, courage and curiosity; 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.”
Last Updated: 10 March 2023