Special Projects > Ethical Investing
from the December 19, 2005 edition
GREG BAKER/AP
Internet companies are eager to crack markets like China. But when their software is used to silence dissent, is it ethical?
By G. Jeffrey MacDonald | Correspondent of The Christian Science Monitor
When Chinese authorities crack down on Internet use by dissidents, or the Burmese government prevents its people from access to e-mail, they have something in common with more than 20 other nations: They rely on technology, usually from corporations in the United States, to help them police the Web.
Without products from Cisco Systems, Secure Computing, and other US firms, regimes from Uzbekistan to Saudi Arabia would apparently be unable to manage what their citizens find or write when they surf the Internet. Reports of that reality are now inspiring investors to push for corporate human rights policies that support an open Internet, even if that means saying no to demands from certain governments.
Twenty-seven institutions - mostly American-based mutual funds - with more than $21 billion in assets under management signed a statement last month urging Internet businesses to adopt codes to uphold freedom of expression and to make public what each is doing "to ensure that its products and services are not being used to commit human rights violations."
"The universal declaration of human rights laid down in 1948 the basic freedoms that all people should enjoy, including freedom of opinion [and] freedom of expression," says Dawn Wolfe, social research and advocacy analyst for Boston Common Asset Management, the money management firm that launched the Joint Investor Statement on Freedom of Expression and the Internet.
Placating investors, pleasing China
"Those are widely accepted values and human rights that all people should enjoy. So I don't think - and I don't think our clients believe - that any corporation should be allowed to be actively or passively in violation of those rights."
But so far, responses from targeted firms have left activist investors dissatisfied. They also reveal an industry walking a fine line between placating American and European constituencies on one hand and doing what seems necessary to penetrate emerging markets on the other.
"We are mindful that governments wherever we do business around the world impose restrictions on access to information, and of course, we are obliged by law to follow them," Google tells the Monitor in an e-mail. "At the same time, we are also committed to doing what is best for our users. As a relatively new entrant to the Chinese market, we are in the process of learning as much as possible about how best to achieve these important goals."
High-profile incidents have helped launch freedom of expression to a spot high on the agenda of ethically minded investors.
Yahoo, for instance, has admitted to sharing user information for journalist Shi Tao with Chinese authorities earlier this year in a move that landed him a 10-year jail term. In doing so, the firm "complied with local Chinese law," according to Yahoo spokeswoman Mary Osako.
Paris-based Reporters Without Borders has led denunciations of Yahoo's move. Besides rallying investors to call for revised company policies, the group is also pressing for legislation to make it a crime for US companies to help "repressive" regimes in their monitoring and law-enforcement practices.
Other makers of search engines, such as Google and Microsoft, have also come under fire for blocking search results when Web surfers in China type in words such as "democracy" or "human rights." But these companies counter that they simply don't want to furnish links that lead nowhere as a result of what's known as "the Great Firewall of China," which blocks access to sites political and pornographic alike.
Legal, yes. But ethical?
Microsoft search tool MSN "will continue to make updates to the list of words not usable in parts of MSN Spaces [in China and elsewhere] to help ensure we continue to comply with local laws, norms, and industry practices," writes MSN Group product manager Brooke Richardson in an e-mail to the Monitor.
But critics of such policies say local statutes shouldn't be a company's sole consideration. "When a government asks you to censor your portal, do you do it because that's local law, or does another standard apply?" asks Adam Kanzer, legal counsel to Domini Social Investments. "A lot of companies feel, 'We have to have a presence in China and have to play by their rules,' but I think that's a little naive.... China needs them as much as they need China." That dynamic, he says, allows room for firms to negotiate terms that could potentially usher in new freedoms for Chinese citizens.
What's more, Mr. Kanzer says, companies furnishing firewall tools must recognize that ethical responsibilities shift when the client is a government, not a private business. When companies such as Cisco Systems or Secure Computing equip governments to keep their citizenries off certain websites - especially dissident political ones - he says, "it becomes a human rights violation."
"I want companies to be sensitive to that distinction," he adds.
Not participating in censorship
While China's Cisco-based system may be the world's most sophisticated Internet filter, other countries also make parts of the Internet impenetrable with help from American technology. Tunisia, for instance, turns to SmartFilter from Secure Computing to keep its people from viewing the websites of political opposition groups, human rights groups, and providers of privacy-enhancing technology. Saudi Arabia uses the same product to keep its people from accessing websites that discuss religious conversion, a crime punishable by death in the Kingdom. Secure Computing in San Jose, Calif., did not respond to calls seeking comment.
For its part, Cisco says it "does not in any way participate in the censorship of information by governments." Countries that limit access to websites use the same Cisco products "that libraries and corporate network administrators use to block sites in accordance with policies that they establish," Cisco tells the Monitor in a written statement. "Cisco sells identical products worldwide [rather than customize them for particular uses]. Cisco cannot determine what sovereign nations regulate and don't regulate in their own countries."
Still, concerns persist. Reporters Without Borders suspects Cisco of customizing technologies for use in Chinese police surveillance and possibly training Chinese authorities in how to use Cisco equipment "to spy" on citizens. The group points, for instance, to a Cisco brochure in Chinese showing connections between computer users and police. Boston Common Asset Management is "in dialogue" with Cisco, Ms. Wolfe says, in order to "get to the bottom of the allegations" because "we don't know to what extent it's true."
Finding a universally acceptable Internet-access policy is far from simple. Even developed Western nations routinely restrict what surfers turn up. The US, for instance, restricts access to known copyrighted material. France and Germany block access to neo-Nazi websites.
Even so, some investors are making the case that maximizing Internet access for all is not only an ethical position, but also one that's good for business. Despite potential for short-term profits, in the long run, restrictions to Internet access "present significant barriers to growth for Internet sector businesses," the Joint Statement warns.
For Internet businesses, however, a looming question remains: How much short-term business is worth sacrificing in order to champion an open Internet and human rights to self-expression in the long term? It's a question sure to be answered in locations across the globe, one thorny dilemma at a time.
"There is a competitive disadvantage to being based in a country like ours, where we have the civil liberties that we have," says John Palfrey, executive director of the Berkman Center for Internet & Society at Harvard Law School. American investors, he says, expect the companies whose stock they own to "at least not participate in a regime or make money off a regime that is sacrificing the liberties of someone else."
http://csmonitor.com/2005/1219/p14s03-lire.html