When American Corporations Deliver US Foreign Policy ...
By Michael Likosk and Michael Shtender-Auerbach
The San Francisco Chronicle
Friday 02 November 2007
The headlines that Yahoo had handed over Chinese journalist and democratic activist Shi Tao's e-mails and IP address to China's secret police dominated the news last year. This sent a panic through an industry usually praised for its social responsibility and unaccustomed to external scrutiny. Congress called in the general counsels of four of our leading high tech firms - Cisco, Google, Microsoft and Yahoo - to account for their collaboration with the Chinese government. In the course of events, it became clear that the problem in the high-tech sector was not isolated but endemic.
Since this hearing, human rights activists have uncovered three additional cases whereby Yahoo's policy of sharing personal records of its users with Chinese authorities has led to arrest, alleged torture and lengthy prison terms. When our high-tech firms engage in such behavior abroad, they undermine a basic tenet of our foreign policy. What then is the appropriate response?
The U.S. foreign policy of "peaceful evolution" encourages the democratization of authoritarian regimes not through isolationist policies, but instead through constructive commercial engagement; that is, the promotion of free market capitalism abroad. However, some American companies promote and reinforce authoritarian capitalism and suppress democratic movements. The question is: How endemic is corporate-facilitated authoritarianism?
In places such as China, one worries that legitimate reform and resistance will be squelched with the help of U.S. corporations. Commercial engagement may at times produce the very authoritarianism that our high-tech firms make a claim to eradicating by virtue of their technologies. Sophisticated commercial actors and governments realize this.
On Nov. 6, the House Committee on Foreign Affairs will question Yahoo's senior executives on the veracity of testimony given by the company's general counsel during the 2006 hearing in relation to the Tao case. This offers Congress a unique opportunity to change the status quo for American high-tech companies cooperating with authoritarian regimes.
This hearing comes just two weeks after the same committee passed the Global Online Freedom Act, legislation aimed at promoting Internet freedoms and protecting U.S. firms from governments attempting to coerce them into participating in authoritarianism. It, in part, places constraints on U.S. firms, and then backs those constraints with possible civil and criminal sanctions.
Yahoo's director of global public affairs, Tracy Schmaler, maintains that Yahoo's legal counsel provided "truthful" testimony in 2006 and that Yahoo is working "to develop a global code of conduct for operating in countries around the world, including China." Corporate codes are important for advancing peaceful evolution and are part of the mandate of the Global Online Freedom Act. However, we must be wary of private solutions in which the regulator and the regulated are one and the same.
Microsoft founder Bill Gates has tied wider corporate accountability in his industry to the need for new legislation, modeled perhaps on the Foreign Corrupt Practices Act. Congress must assess the nature and extent of the social risks engendered by high tech corporate collaborations abroad. Are we genuinely concerned with the wider social harm of some transnational commerce? If so, what public or private institutions - domestic, foreign or international, or combination thereof, are the appropriate ones to assess and mitigate transnational high technology social risk?
Whether de facto or de jure, our companies are our foreign policy organs. American hi-tech companies - Yahoo, Google, Microsoft, Cisco - may not fly an American flag, but Chinese citizens, and others, may see it otherwise. The decision by Congress to summon the legal counsel of our blue chip high-tech firms into a congressional committee room last year was an important step in addressing this issue.
The continued congressional inquiry into Yahoo's testimony is further indication that our government values accountability and takes peaceful evolution seriously. While Lantos attempts to get at the truth of Yahoo's actions, Congress should consider legislative action, such as the one proposed by Gates, as an appropriate means for mitigating our collective social risks.
Michael Likosky is a visiting professor at the University of Wisconsin Law School and author of "Law, Infrastructure and Human Rights," (Cambridge University Press). Michael Shtender-Auerbach is managing director and founder of Social Risks, LLC, of which Likosky is also a principal.
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