American statesman: Henry Kissinger. Credit:Reuters "There are three companies all trying to get their iron ore into China," said the source close to Dr Kissinger's consultancy. "They are each trying to get a better relationship than others with the Chinese government. That's basically it." It is understood that Dr Kissinger conveyed Rio Tinto's post-Stern Hu commitments to the-then vice-premier, Wang Qishan. The arrest of the Australian iron ore executive and his three Chinese colleagues attracted front-page coverage across the world as executives contemplated a more assertive turn in China's dealings with the West. It also precipitated a crisis in Australia-China relations with the Australian government believing Hu was a pawn in a Chinese government play to increase leverage in the multi-billion dollar iron ore trade.

The Rudd government's efforts to lobby forcefully but without publicity appeared to deliver early dividends when the "stealing state secrets" charges were downgraded to "commercial" secrets and the bribery charges inverted from paying bribes to receiving them. But Canberra's strategy of public silence has had little to show for it since the point of trial, when family members and diplomats were evicted from nearly half of the "open court" proceedings. Observers were shocked by the severity of Hu's 10-year prison sentence, handed down f–ive years ago on Sunday. The sentence was commuted from seven years for bribery and five years for industrial espionage. One of his colleagues, Wang Yong, received 14 years. Since then, five yeas of consistent but unpublicised advocacy by each prime minister and foreign minister has failed to result in any hint of leniency. Fairfax Media understands that Hu is frustrated and devastated that he did not receive parole after the half way point of his 10-year sentence, which passed on July 5 last year.

Chinese authorities had been indicating at the time that his parole requests had been "under consideration" and that continues to be the case. Hu's disappointment also stems from endeavouring to do everything right in the eyes of authorities including engaging state-friendly lawyers, confessing to most allegations and behaving impeccably in jail. His difficulties have been compounded by watching other prominent Australian prisoners gain freedom or return home under a prisoner-swap agreement. One Australian source claimed Chinese authorities were "playing political games". Rio Tinto, meanwhile, has heeded the advice that Dr Kissinger delivered from late 2009.

Chief executive Sam Walsh, who was a friend of Stern Hu's and also his direct boss as head of the iron ore division, initially stood by his jailed executives. But immediately after their convictions on March 29, 2010, he sacked them by press release, slamming their "deplorable conduct". Fairfax Media understands Rio Tinto has not made representations in China on behalf of its former executives, although sources say the company remains concerned and has been liaising closely with Australian diplomats. Jerome Cohen, a leading authority on Chinese law at New York University, said the company's decision to "wash its hands" of Stern Hu, on Dr Kissinger's advice, was made possible by the credible bribery convictions. "Once it was discovered that he had not been faithful to his employer, Rio had the happy chance to look the other way, as Henry expensively advised," said Professor Cohen.

"I wonder what Henry Kissinger would have advised if Hu had not been corrupt, personally." The "stealing secrets" dimensions of the case, however, which account for half of Hu's 10 year sentence, raise ongoing ethical problems. Australian diplomats showed that the alleged secrets related to publicly-available steel industry information, according to cables published by WikiLeaks from around the time. They were also shut out of relevant proceedings so that evidence to support the industrial espionage convictions has never been exposed to any scrutiny. Rio has claimed that this lack of visibility means it has nothing to discuss. Whatever the substance of those secrets, however, they were stolen on the company's behalf.

Judge Liu Xin said Stern Hu, Wang Yong, Ge Mingqiang and Liu Caikui had all received sensitive price negotiation data "so that the Rio Tinto company which they served could work out corresponding countermeasures" and "gain more sales profits in the iron ore trade with China". The judge detailed how the employees were responding to specific head office demands. At the time, senior Rio executives were so concerned about being detained themselves that they avoided entering China. Rio Tinto has never officially confirmed that it received advice from Dr Kissinger, whose corporate dealings are notoriously opaque, but several senior sources confirm that it was delivered with great impact. "Details of the contract are confidential, if there is such a contract," said one source familiar with its content, confirming that it was worth about US$5 million.

Dr Kissinger did not respond to questions sent to his consultancy. Dr Kissinger advised Rio to build "trust" with its dominant customer, the Chinese Communist Party, by avoiding criticism and showing unwavering commitment to the relationship. Rio Tinto has since stood out among its peers for praising Chinese government achievements, procuring Chinese-made equipment and sponsoring party events. Last week, Rio Tinto sponsored and Mr Walsh attended one of the party's top public relations events, the China Development Forum, featuring a speech by Henry Kissinger. Rio Tinto claims its strategy for recovering from the Stern Hu affair has paid off because it has not suffered further damage, relative to competitors, and it has secured a joint-exploration agreement with a Chinese firm.

It is understood that Hu, meanwhile, is hoping to receive parole or a prison transfer so that he can return to Australia with his wife and now-adult children well before his full prison term is due to end on July 5, 2019.