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IN a recent interview with the Financial Times, Bill Gates dropped an interesting idea about how the US government might help businesses avoid becoming accessories to political repression in China. "I think something like the Foreign Corrupt Practices Act, has been a resounding success in terms of very clearly outlining what companies can't do," the Microsoft chairman said, referring to the law that bars US companies from paying bribes overseas.
When Congress held hearings on this issue late last month, Yahoo's lawyer more or less begged for legislative intervention. Of course, technology executives are trying to defer responsibility for their own decisions to co-operate with Chinese censorship. Yahoo, which provided evidence that helped imprison Shi Tao, a Chinese journalist, presents the most egregious example. But corporate leaders asking for government regulation is a rare enough spectacle to command attention.
Tech companies turn to Washington in genuine frustration. They plausibly argue that their continued presence in China is beneficial to the development of democracy there. Internet censorship is porous, freedom contagious. New economic sanctions against China would only retard the liberalisation we seek to accelerate. But even evil-resistant companies know that "voluntary" restraints mean little in this kind of competitive hothouse. If Google.cn declines to filter "freedom", its site will be blocked and Baidu will capture the market. Nor do businesses want to balance constantly the competing interests of shareholders, social responsibility and public relations. They rightly prefer to pursue the profit motive within clear rules.
China has provided one set of rules. The US government can provide another. As Mr Gates notes, there is an excellent precedent in the Foreign Corrupt Practices Act (FCPA), which was born in 1977 out of a similar sort of moral scandal. American companies were paying bribes to win contracts in the developing world, which was bad for the US's image abroad, antithetical to integrity and a problem of what we would now call transparency. The FCPA, which provides for fines of up to $2.0m (£1.2m) and prison terms for offending executives, is both a tool for honest businessmen who use it as an excuse to say no and a statement about American business values.
The human rights equivalent of this -- call it the Foreign Oppressive Practices Act -- could work in a similar manner to advance American values of liberty and democracy. Such a law would enjoin US companies from assisting in the violation of human rights in China and elsewhere. American companies would not be prevented from selling equipment and services in unfree countries, but rather stopped from tailoring their products to work as tools of tyranny.
Representative Chris Smith, a Republican congressman from New Jersey, recently introduced the discussion draft of a bill to "prohibit any United States businesses from co-operating with officials of internet-restricting countries in effecting the political censorship of online content". This is the right idea, sort of. The focus on internet freedom as opposed to human rights generally reflects a tendency to think of the web as an end rather than a means. Another, more practical, flaw is giving foreign nationals standing to sue in US courts as an enforcement mechanism. A more sensible approach would be for the state department, which already issues annual human rights reports by country, to provide opinions about whether specific transactions constitute co-operation in repression, and for the justice department to prosecute violators.
If some version of the Smith bill progresses in the House of Representatives, companies can be expected to raise other objections. One is that violations of human rights, unlike bribes, are hard to define. In fact, both issues move into a grey zone. Under the FCPA, so-called "grease" payments are deemed an acceptable way to motivate sclerotic clerks in their duties, as opposed to paying bribes to obtain business in the first place. Though slippery, this distinction recognises that US businesses operate in many countries that are not Switzerland. Likewise, any statute applying to internet companies should cut a wide berth for varying standards of hate speech and pornography, as well as allowing the sale of basic technology. Cisco routers can serve both good and evil.
A second objection is that such restrictions single out American companies. They do so intentionally because US tech companies, which are the envy of the world, have unique leverage. China does not want to forgo the economic advantages of their presence, even at the risk of undermining its political order. This is the dilemma of economic liberalisation as a whole, and we are in a position to make it more urgent. And where the US leads on this issue, others will follow. The FCPA influenced the adoption of a 1997 Organisation for Economic Co-operation and Development anti-bribery convention. As a result, advanced democracies no longer compete on the basis of their receptivity to corruption.
In fact, well-drawn restrictions could ease the predicament of US companies by, as Mr Gates says, making clear what they cannot do. An anti-repression law would give Yahoo a ready answer the next time Chinese officials demand evidence against cyber-dissidents. We must obey your laws, the American representatives would be able to respond. But we must obey our laws as well.
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The writer is editor of slate.com. Under syndication arrangement
with FE
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