Forget Arnotts. Forget Bundaberg Sugar. Forget Woodside.

The debate leading up to the big Rio Tinto shareholder votes in May will be the most complex, politically charged and serious that we’ve ever seen over foreign investment.

From what has been presented and argued so far, I’ll be voting my two Rio shares in favour unless a superior proposal emerges.

However, leaving aside the shareholder value questions, the Australian government should use this unique opportunity to secure the Rio Tinto head office Down Under.

There is something quite offensive about a London-based company selling huge chunks of publically owned assets — these are valuable resources embedded in the Australian landscape and extracted under government mandate — to the Chinese Government.

And this is all because the Rio board imperilled the company by deluging $60 billion in cash — again largely generated from selling Australian assets — on a Canadian aluminium outfit 18 months ago.

Those who say “leave it to the Rio shareholders” should remember that the company is presently only 14% Australian-owned. And once the two Chinalco directors are added, Australian-based board representation will be down to just two out of 17, or 12%.

The last time Rio Tinto asked for favours from a Labor Government was back in 1995-96, but most of the promises were then thrown out after John Howard became Prime Minister. Cynical Rio even hired Howard’s nephew Lyall to help handle government relations.

The Australian influence over Rio has been steadily downgraded such that now is an opportunity to finally cut the colonial umbilical cord by requiring it to relocate the HQ from London to Melbourne and appoint more Australian-based directors.

At least half the incumbents should be walking the plank anyway given the Alcan debacle.

If Rio abandoned its dual listed company structure and made the ASX its primary listing, Australian super funds would be forced to buy and local ownership would rise up towards 30%, even if Chinalco was the largest individual shareholder with 18%.

Such a move would negate the dreadfully small level of Australian ownership at major resource projects detailed in this disturbing list.

Whilst the Chinalco deal will further weaken direct Australian ownership, the response of BHP-Billiton chairman Don Argus has been both predictable and hypocritical.

Rather than sending former Labor national secretary Geoff Walsh to Canberra to lobby and distribute a report prepared by Blake Dawson, Argus should come out publically and state his case. Release the Blakes document, Don.

BHP Billiton is a conflicted competitor to Rio and should not be in the business of self-interested backroom lobbying on bogus national interest grounds. Instead, it should either make an alternative offer for 100% of any of the 14 projects that are being partially sold, or it should buy a blocking stake to try and vote the deal down.

Besides, the BHP board should be getting on with the job of replacing its 70-year-old chairman and showing some accountability for the $6 billion in nickel write-offs they’ve just swallowed.

Finally, there is the important question of Chinese influence pedalling and political donations.

China Inc gave more than $1 million to the Labor Party last year and it would be very easy for Chinalco’s lobbyists at Hawker Britton to promise Wayne Swan another $1 million-plus in donations from China if the deal is approved.

John Faulkner’s proposed ban on foreign donations should be enacted before Australia approves the biggest single offshore investment by the Chinese government.