According to the SEC order, Rio Tinto in July 2011 “hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights in the Simandou mountain region in Guinea. The consultant began working on behalf of Rio Tinto without a written agreement defining the scope of his services or deliverables.”
“Eventually the mining rights were retained, and the consultant was paid $10.5 million for his services, which Rio Tinto never verified,” the SEC said. A Commission investigation found that the consultant, acting as Rio Tinto’s agent, “offered and attempted to make an improper payment of at least $822,000 to a Guinean government official in connection with the consultant’s efforts to help Rio Tinto retain its mining rights.”
“Furthermore, none of the payments to the consultant was accurately reflected in Rio Tinto’s books and records, and the company failed to have sufficient internal accounting controls in place to detect or prevent the misconduct,” the SEC added. “The mine has not been developed by Rio Tinto.”
Rio Tinto consented to the SEC’s order without admitting or denying findings that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934.
“We are glad to have resolved this matter related to events that occurred over a decade ago,” Rio Tinto Chairman Dominic Barton said in a prepared statement. “When Rio became aware of the issue, an internal investigation was immediately launched, and we proactively notified the appropriate authorities.”
“Since becoming aware, Rio Tinto has taken significant actions to enhance our compliance program based on best practices,” Barton added. “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.”
Charles Cain, Chief of the SEC Division of Enforcement’s FCPA Unit, said, “Even well-designed controls need committed managers to be effective. 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.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.