Rio Tinto in talks with SFO over bribery probe deal

Rio Tinto is in talks with the UK’s Serious Fraud Office about a possible deal under which the Anglo-Australian miner would avoid prosecution on bribery allegations.

The group is seeking a deferred prosecution agreement over a payment it made to a consultant working on a contentious iron ore deposit in Guinea, according to people with knowledge of the situation, who said there was no certainty a deal would be reached.

Under a DPA, the SFO charges a company with a criminal offence but proceedings are automatically suspended as long as the deal is approved by a judge. For negotiations to begin, the company has to agree a number of terms, including paying a fine and co-operating with future prosecutions of individuals.

Rio and the SFO declined to comment.

The SFO launched an investigation into “suspected corruption in the conduct of business in Guinea” by Rio in July 2017.

That followed Rio’s decision in November 2016 to alert the SFO, the US Department of Justice and the Australian Federal Police about a $10.5m payment it had made to François Polge de Combret, a former top French banker, for his work on the Simandou project in 2011.

Rio has never said why it reported the fee but emails from 2011 that were posted online showed senior Rio executives discussing the payment to Mr de Combret and his “closeness” to Guinea’s President Alpha Condé.

The company also sacked the executive in charge of the project at the time and its head of legal affairs, saying they had “failed to maintain the standards expected of them under our global code of conduct”.

Simandou is the world’s biggest untapped deposit of steelmaking ingredient iron ore and one of the richest prizes in the mining industry. 

Rio was stripped of the rights to the northern half of the deposit in 2008 when they were handed to BSGR, the family mining company of Israeli businessman Beny Steinmetz.

In 2011 Rio secured its claim to the remaining half of Simandou with a $700m payment to the then new government of Mr Condé — a deal which, the emails indicate, Mr de Combret helped facilitate.

Mr de Combret did not respond to a request for comment.

The SFO has signed eight DPAs since they were introduced in the UK in 2014 as an official way to settle costly corporate investigations. Companies that self-report to the SFO are more likely to be considered for a DPA or receive discounts on their fines if they can prove extensive co-operation with the SFO.

Such plea deals have been hailed as a pragmatic way of getting around the high threshold needed to criminally convict companies. But critics have pointed out that plea bargains have not resulted in the criminal convictions of top corporate leaders.

According to information published by the SFO after a freedom of information request, 66 individuals were interviewed under caution in relation to DPAs between 2014 and April 2020 and 11 charged, but none have been convicted.