Corporate behavior in China: where does the buck stop?

Veteran Chinese human rights activist Harry Wu, founder of the Laogai Research Foundation, has emailed me his response to my recent conversation with Cisco's representative. Wu's concluding paragraph:

We should now ask Cisco to make public the information about exactly how much business it has done with the PSB. Every Cisco shareholder has a right to know about this information. They should publicize their profits, the quantity and date of sales and business dealings, and contacts in China, as well as the specific types of software and technology that has been sold. After Cisco has truthfully revealed this information, Congress and the American people can decide whether or not Cisco has committed a violation of the law.

The full text of his letter can be read by clicking on the continuation link at the bottom of this post if you're reading this from the blog's main page. If you're coming directly to this post's permalink, then you can just scroll down and find the letter at the bottom of this post.

A number of people think Cisco is being singled out unfairly. As somebody named Travis wrote in my comments section: 

To single out Cisco is, with respect, rather shallow and shortsighted. The real criticism and pressure should be levied at G7 governments that go about beating their breasts and trumpeting the cause of human rights but quickly change the subject when it comes to one fifth of humanity. Cisco's products are barely even a detail in that context and, if serious about promoting Human Rights in China, we need to realize them as one of many remora fish picking up a few scraps left from odious foreign policy, not as an organization with any real power.

In a blog post titled Cheap Shot in a Good Cause, Dana Blankenhorn of Moore's Lore writes:

McKimmon's point now is that China Cisco is cooperating with the worst excesses of the China government, which is seeking to have both the world's best Internet technology and full control over what people do with it.

That is a good point, but I don't think you don't go after Cisco to make it.

You ask the U.S. government, is your policy to enable full cooperation with the Chinese tyranny? And if you don't like the answer you work to change it.

Public companies should not be expected to make or enforce American foreign policy, or trade policy. The buck stops with the government, and in a democracy it stops with us.

There is precedent for all this. IBM cooperated with Hitler, selling the punch card equipment that enabled the Holocaust. At some point it was up to the U.S. government to halt that cooperation, but the government never did. Is this IBM's fault entirely? No, I'm afraid it's not.

There's more on his blog, and please check it out... but please do not perpetuate his gross misspelling of my last name!

Blanketom (or however you spell it- I can't be bothered to check either) does make a good point despite his spelling problem. ;-) We as citizens need to set behavioral standards for the companies that trade in our name. Where should the line be drawn, if it can be drawn? I've heard some pretty strong arguments over the past few weeks that any attempts to draw such a line would do more harm than good. I still think we need a lot more public debate and scrutiny on this issue.  I'm not willing to just give up on it just because it's too difficult and can't be solved with quick and easy black-and-white solutions.

Some people still seem to be twisting my words and claiming I don't want to engage China economically. As I've said before, I have always believed strongly in economic engagement with China. But should we hold engagement to some basic and consistent ethical standards? I think we can and should.

Got some views? Don't be shy...

Letter from Chinese human rights activist Harry Wu:

Cisco lacks  the authority to declare itself innocent of violations in China

I’m pleased to hear that Cisco has publicly confirmed that it has done business with China’s Public Security Bureau (PSB), and also provides service and training to its customers (the inference being that it has provided service and training to the PSB.)

While Mr. Alberstein asserts that Cisco has not violated American law through its business dealings with the Chinese police, this is not up to Mr. Alberstein to decide. The U.S. Congress has the authority to decide if any violations have been committed. Cisco’s technology and equipment has without question made the job of Chinese police easier and more effective. Cisco has assisted Chinese security forces with their monitoring capabilities, and Mr. Alberstein lacks the authority to say that this does not constitute crime control.

Mr. Alberstein maintains that Cisco “sells networking equipment to law enforcement agencies around the world” and infers that its business activities in China are therefore identical to those in other countries. However, our issue is with China specifically, and there is a specific U.S. law that prohibits the export of crime control equipment to China. We should not believe the argument that Cisco’s sales of high-tech equipment to China are as innocuous as such sales to some other countries, and we must remember that there is a country-specific law in the Tiananmen Sanctions contained in Section 902(a)(4) of the Foreign Relations Authorization Act for FY 1990-1991 (Public Law 101-246)

We should now ask Cisco to make public the information about exactly how much business it has done with the PSB. Every Cisco shareholder has a right to know about this information. They should publicize their profits, the quantity and date of sales and business dealings, and contacts in China, as well as the specific types of software and technology that has been sold. After Cisco has truthfully revealed this information, Congress and the American people can decide whether or not Cisco has committed a violation of the law.

 

Sincerely,

 

Harry Wu

Executive Director
Laogai Research Foundation

Comments

[omih]

While I think Governments should step in and legislate in these instances I also think that to absolve companies of any guilt themselves is wrong.

You can't say businesses can do whatever they like (within current legal limits) until they are told to stop it.

Businesses should have codes of conducts and ethics. If they behave badly, albeit legally, then the media and subsequently consumers should hold them to account.

If this situation eventually ends up costing Cisco money because of consumer boycotts then they will change their future behaviour or at least think twice.

But just because a government hasn't acted to stop a company behaving badly that doesn't mean they are not in the wrong. It also doesn't mean that we, personally, shouldn't take our own action.

[Iain MacLaren]

Isabel Hilton has written an article "Made in China" in Granta magazine #89 "The Factory" which discusses some of the real difficulties with having codes of practice and the means whereby such can easily be circumvented. She discusses the efforts of those engaged in ensuring compliance and some of the methods whereby documents are falsified and compliance officers are lead astray. I wonder what your comments might be on this article. (Granta's ISBN is 090314175-2 and is a UK based magazine at www.granta.com

Iain

[Passerby]

I would like it if Mr. Harry Wu could have a full counting of the funding sources for his anti-China work.

[Passerby]

Comment on Iain Maclaren's comment.

China has many problems, but child labour is not one of them. If someone claims it is a problem area, I think he/she either is ignorant or has other motive.

[Joseph Wang]

I don't think that the issue of Cisco selling equipment to the Chinese Police is nearly as clear cut as this blogs make it out to be. The Chinese Police for the most part are police, and most of the things that they have to do involve the same sorts of police work that all police departments have to deal with.

As a hypothetical situation, suppose the Cisco equipment was being used to set up 911-like emergency centers or were used to set up traffic surveillance to reduce traffic accidents. I'd argue in that case, Cisco is doing a good thing.

Maybe this isn't the case, and what Cisco is selling is being used to torture political prisoners. They it would be a bad thing.

I don't know what the equipment is, or what it is being used for, but I do think its necessary to find out before making an ethical judgment on this.

[Iain MacLaren]

"passerby" states "China has many problems, but child labour is not one of them. If someone claims it is a problem area, I think he/she either is ignorant or has other motive. " in response to my raising of Isabel Hilton's article. Yet her article is not about child labour. Rather it explores the problems in reality of monitoring compliance with agreed codes of practice and the employment of compliance inspectors and how their work is subverted. It is a very detailed piece with a range of views expressed.

[Gilles]

Hello, I just read in the Independant (UK) that Yahoo! just helped track down a journalist on behalf of the Chinese government. I can't find any mention of this on the web. Would you have any news. I think this needs a e-spanking for Yahoo!; Cheers.