Sunday, January 31, 2010

231) The Great Firewall of China - Business Law Advisor

The Great Firewall of China: How Lessons from the Apartheid Era Can Lift the Information Curtain
by Santiago Cueto
International Business Law Advisor
January 22, 2010

Corporate Codes of Conduct Played a Major Role in the Collapse of Apartheid in South Africa and Are a Viable Means to End Digital Censorship in China.

The remarks of U.S. Secretary of State Hillary Clinton yesterday that “we stand for a single Internet where all of humanity has equal access to knowledge and ideas” echoed the stern tone of Ronald Reagan twenty years ago when he challenged Soviet leader Mikhail Gorbachev: "Mr. Gorbachev, tear down this wall!"

Fast forward to 2010 where digital walls have replaced brick and mortar to divide repressed citizens of authoritarian regimes from the world’s free flowing current of information and ideas.

Corporate Codes of Conduct a Viable Means to Challenge Digital Censorship in China

Secretary Clinton’s remarks concerning the” information curtain” dividing the world, reminded me of the apartheid era where much greater injustice and unspeakable acts against humanity were challenged and ultimately overcome through the use of corporate codes of conduct.

These corporate codes of conduct, which came to be known as the Sullivan Principles, were pioneered by the African-American preacher Rev. Leon Sullivan, a zealous promoter of corporate social responsibility.

In 1977 Rev. Sullivan was a member of the board of General Motors. At the time, General Motors was one of the largest corporations in the United States. General Motors also happened to be the largest employer of blacks in South Africa, a country which was pursuing a harsh program of state-sanctioned racial segregation and discrimination targeted primarily at the country's indigenous black population

Corporate Codes of Conduct Originally Developed to Challenge Apartheid

Rev. Sullivan developed the codes to apply economic pressure on South Africa in protest of its system of apartheid. Before the end of South Africa's apartheid era, the principles were formally adopted by more than 125 U.S. corporations that had operations in South Africa. Of those companies that formally adopted the principles, at least 100 completely withdrew their existing operations from South Africa. The principles eventually gained wide adoption among United States-based corporations and played a significant role in the collapse of that regime.

In reflecting on the success of his anti-Apartheid efforts, Rev. Sullivan recalled:

Starting with the work place, I tightened the screws step by step and raised the bar step by step. Eventually I got to the point where I said that companies must practice corporate civil disobedience against the laws and I threatened South Africa and said in two years Mandela must be freed, apartheid must end, and blacks must vote or else I'll bring every American company I can out of South Africa.”

Given the success of the Sullivan principles in ending apartheid, we should look at applying the same principles to lift the information curtain in China.

Why Multinationals Should Adopt Corporate Codes of Conduct

Google, to its credit has pioneered this movement, albeit not under the auspices of any articulated corporate code of conduct as far as I know. Google's defiance of China's censorship mandate illustrates the power of corporate social responsibility initiatives to influence and reshape the repressive policies of authoritarian regimes.

While most major multinational companies consider a presence in China critical to their future success, Google has demonstrated that even the largest of corporations are willing to forgo short term gain in the interest of an ultimate triumph over censorship--similar to how corporations sacrificed profits to challenge apartheid in the 1970s and 1980s.

In Google's case this will come at a cost of an estimated $300 million a year in revenue. Although it will hardly make a dent in Google’s coffers, it’s a step forward in the right direction. Sure, China can thumb its nose at Google and Yahoo by pointing to Baidu and Alibaba.

But it risks the alienation of countless other multinationals who could conceivably adopt corporate codes of conduct and refuse to do business with China until the Great Firewall is torn down.

While the preferred course of action of companies concerned about censorship is to avoid repressive regimes altogether, it is likely that some companies will not choose that course. Those that do not should consider a corporate code of conduct so that they can turn their involvement in oppressive systems from a potential human rights liability to a neutral or maybe even positive act of engagement.

The challenge now will be to put these ideas practice by incorporating them into diplomacy and trade policy to apply meaningful pressure on companies to act responsibly through the adoption of corporate codes of conduct.

What do you think?

P.S. A little about my interest in this area: I’ve been an advocate for corporate codes of conduct for well over a decade and authored an extensive note on the topic for the Florida Journal of International Law to address industrial oil pollution in Latin America: Oil's Not Well In Latin America: Curing The Shortcomings Of The Current International Environmental Law Regime In Dealing With Industrial Oil Pollution In Latin America Through Codes Of Conduct.
Viewed as a cutting edge proposition, the article has since been cited by numerous textbooks and academic journals including West’s Environmental Law treatise, the New York University Journal of International Law and the Georgetown University Journal of International Environmental Law.

Links to blogs that reference this article

Cueto Law Group LLC
4000 Ponce de Leon Boulevard, Suite 470 |
Coral Gables, FL 33146
Tel (305) 777.0377
Fax (305) 777.0397

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