Perverse Precedent: The Trial of Stern Hu, State Secrets, Closed Trials, and the External Price of China's Worry About Internal Order

As the Stern Hu trial proceeds to its inevitable and murky conclusion--tied as it is to the negotiations over control of Australian extractive industries and the perceived necessity to use the trial to cement China's place among the community of nations above that of Australia, the media has recently circulated reports of mechanics of the trial:

China has refused a request from the Federal Government to give Australian officials access to the entire court proceedings during the trial of Rio Tinto executive Stern Hu. Mr Hu and three Chinese colleagues will go on trial in Shanghai next Monday over allegations of receiving bribes and inducing Chinese steel company executives to leak commercially sensitive information. The part of the trial dealing with commercial secrets will be closed to consular staff and other observers. The Federal Government had asked for its officials to be allowed to monitor the entire case, but the request has been declined.

China Refuses to Open Hu Trial, ABC News,  March 19, 2010.  The internal dynamics of Chinese political culture drives this result in part.  The State Secrets Law itself makes open trials difficult.  In the absence of a deeper experience with judicial management of sensitive cases in the public eye, an experience that has come hard to the West, it would have been odd had the issues underlying the breach of the State Secrets Law, as currently understood and applied, surface, even indirectly, in open trial.  Of course, that suggests both the need to reform the State Secrets  and its commercial adjuncts (the State Secrets complex) to conform to the realities of China's global engagement. China risks much by treating its State Secrets Law complex like some vestige out of the Cultural Revolution period.  Indeed, Chinese ideological maturity suggests a need to change the culture of the State Secrets Law complex.  But that is an issue for another essay.  The days of Stalinist paranoia about the provision and dissemination of routine financial information are quickly passing in China.  That paranoia was grounded in part, on the fusion of economics and politics, and the subordination, effectively of politics within economics.  That theoretical foundation was institutionalized in the State Secrets complex. The equation of breaches of financial information relating to industry with information that compromises fundamental aspects of state operation are long past.  And beyond paranoia, the State Secrets complex provided a legal cover for arbitrary and indirect disciplining of non-political activity to the greater glory of state policy. That has been acutely apparent in the Stern Hu drama--much as it is tied to Chinese efforts to strong arm  its way into a greater control of Australian natural resources.  On the other hand, such measures appear effective--the spectacle of the Rio Tinto grandee pandering to his Chinese hosts during the climax of the Chinese orchestration of its public and symbolic efforts to invert its relations with the West did not go unnoticed. Devon Maylie, UPDATE: Rio Tinto CEO To Speak At Beijing Conference March 22, Fox Business,  March 17, 2010 ("The chief executive officer of Rio Tinto PLC . . .  is scheduled to speak at a China Development Forum in Beijing next week just as the much-anticipated trial of four Rio employees begins in Shanghai. . . . Rio CEO Tom Albanese will speak on the same day at the Beijing-based forum on a panel with other company chief executives including from Danone Group . . .  and Ford Motor Co. . . . in a session titled "Strengthening Global Cooperation for a Mutually Beneficial Future." Id.)       

Equally important, however, are historical sensitivities that the Chinese continue to both suffer from and, when it suits them, exploit publicly.  The most important of these involve unequal treaty and sovereign relations that marked Chinese relationships with European and American States for a century before the end of the Communist Revolution in 1949.  Sovereignty has become, again, a code word for non-interference that is meant to be a conversation ending phrase, grounded in the certainly of Western guilt for the past and calculated to play well with a well managed internal campaign of hyper patriotism and fear of the foreigner.   But here, I think. Don Clarke has the right answer when considering the issue in a recent excellent post:

Finally, it's worth looking at what the Chinese government has to say about this. Regrettably, it has offered no serious, reasoned defense. On March 18th, Ministry of Foreign Affairs spokesman Qin Gang addressed some of these questions in a way that should forever put to rest accusations that Chinese government bureaucrats don't have a sense of humor. When asked about the closing of the trial, he insisted it was being handled in accordance with the Australian-Chinese agreement on consular relations and added this bizarre observation: "China has from ancient times stressed silence in the courtroom because the courtroom is a dignified place; one can't make a lot of noise before the trial has begun, one can't interfere with the independent handling of the case by China's relevant departments" (中国自古讲究开庭肃静，因为法庭是一个庄严的地方，不能在还没开庭的时候就冒出各种杂音，不能干扰中国有关部门依法独立办案). What this has to do with excluding Australian diplomats from the trial is not clear. Perhaps it is the Aussies' reputation for loving a good party. Are they afraid the diplomats will try to interrupt the trial with a barbecue?
When asked again about the matter, he responded, "Please don't mix up the relationship between a country's sovereignty, particularly its judicial sovereignty, and the Chinese-Australian Agreement on Consular Relations. The Chinese-Australian Agreement on Consular Relations must be premised on respect for China's sovereignty and judicial sovereignty" (请你不要混淆一个国家的主权，特别是司法主权和《中澳领事协定》的关系。《中澳领事协定》应以尊重中国的主权和司法主权为前提). Um... I hate to be the one to break the bad news, but the right to do exactly as you please is precisely what you give up when you enter into an international treaty. It is your sovereignty that makes your promise meaningful. Does the Ministry of Foreign Affairs really back Mr. Qin's interpretation of what it means to sign a treaty - that any obligation can be waved off by saying the magic word "sovereignty"? Does China expect those with whom it signs treaties to treat their obligations similarly? This would certainly be a new direction in Chinese foreign policy.

Donald C. Clarke,  The Closing of the Stern Hu Trial:  A Legal Analysis,  Chinese Law Prof Blog, March 21, 2010.


Of course, the most interesting ramifications of this conduct has little to do with the niceties of Chinese State Secrets or Commercial Secrets laws, as the Chinese choose to apply them internally.  Nor does it much have to do with the niceties of treaty law and the treatment of diplomats.  Instead, the Stern Hu trail can be understood, in a couple of senses.  First, it serves as a reminder of the ways in which Chinese sovereign investing will produce different conduct and conduct norms from that expected of other states within the informal rules of economic globalization.  Using state policy and the projection of economic power through corporations, the Chinese state will be tempted to use law as an instrument of economic activity.  As a consequence, Chinese corporations might be more tempted to use Chinese law as another means of deriving advantage in their sometimes intense interactions with competitors, targets and markets outside of China.  At the same time, Chinese corporations, to the extent they serve state policy, could be understood as public entities, extensions of the state, and thus instruments of policy--like law.  On the one hand the result is an extension of public law into private activity and on the other the extension of private activity to state governance.  Either way, the West is hardly prepared for this very different manner of aggressively pursuing state-private objectives.

Second, the Stern Hu trial might serve as a public notice that Chine reserves to itself the freedom to flaunt international law like that other great power, the United States.  It is not for nothing that China chose the trial of a foreigner (or at least of a foreign passport holder--the Chinese  may have a different conception of the status of overseas Chinese) to make a point about its global status and its power to deal with the representatives of secondary powers as it wants.  In this, the United States has served as a role model of sorts.  Its long and protected litigation about its obligations under the Vienna Convention with respect to notification of foreign consul when foreigners are arrested by state authorities for criminal activity provides a nice template for the Chinese.  Though the details are different, and the stakes are higher in the Chinese case, the American pattern serves as a model nonetheless.  The United States effectively thumbed its nose at the International Court of Justice's judgment in Avena, suggesting that its international obligations could not trump its sovereign rights.  See, Case Concerning Avena and Other Mexican Nationals (Mexico v. U.S.), 2004 I.C.J. 1 (March 31); Medellín v. Dretke, 544 U.S. 660125 S.Ct. 2088 (2005); Ex parte José Ernesto MEDELLÍN, Court of Criminal Appeals of Texas, 223 S.W.3d 315, 2006 WL 3302639 (Tex.Crim.App., Nov. 15, 2006); MEDELLÍN, Petitioner, v. TEXAS, 128 S.Ct. 1346 (2008). For a useful background paper see Margaret E. McGuinness, Medellín, Norm Portals, and the Horizontal Integration of International Human Rights, 82 Notre Dame L. Rev. 755 (2006); William J. Aceves, Consular Notification and the Death Penalty: The ICJ's Judgment in Avena, ASIL Insights, 2004. It is not hard to see how the Chinese could not have read these broadly to suggest its own conduct--especially as it seeks to acquire acknowledgment of its status as a superpower.

Of course, there are down sides to this course of conduct.  China will increasingly be unable to play both sides of the aisle--complaining about injustices to it as a developing state while seeking global acknowledgment of its super power status.   While that sort of double play worked effectively during the Copenhagen Climate Conference, it is unlikely to be effective for much longer.  More importantly, China will find that its super power status will cause it the same sorts of difficulties that other such powers have experienced in the past as they sought to exploit their weaker neighbors while explaining that this was all for their own good in the service of some higher set of ideologically driven goals.  China is beginning to experience this to some extent in China, though it ability to buy its way out of difficulties there will continue unimpeded for a little while longer.  But super power status will make it a target to tempting to ignore for the growing and powerful set of non state actors seeking to require all states ot harmonize their activities--especially for example with respect to human rights.  Projections of economic power abroad--even driven by sovereign design and aided by sovereign power--will have little effect in the face of transnational systems of regulation of private entities that are the preferred vehicle for such interventions.  The OECD's corporate governance frameworks, the U.N.'s forthcoming Protect-Respect-Remedy framework and international consumer and investor markets will tend to discipline Chinese behavior like it appears to be doing to the economic expressions of other powers.  But that is a lesson for the future.  for the moment, Stern Hu reminds us that reorganizations of global political alignments can be a messy and painful affair--especially for individuals on whose bodies these changes are expressed.