Tackling the Enablers of Oppression

Last Monday during a moving speech at the Holocaust Museum, President Obama announced an executive order allowing US officials to impose sanctions on foreign nationals using technology to carry out human rights abuses in Syria and Iran. A wonderful gesture which is totally and utterly arbitrary and probably unenforceable.

Let’s look at what the order does.  The intention is to prevent individuals and companies from enabling the Syrian and Iranian governments to use technology to jail, torture, and massacre their own people.  It states:

“Cognizant of the vital importance of providing technology that enables the Iranian and Syrian people to freely communicate with each other and the outside world, as well as the preservation, to the extent possible, of global telecommunications supply chains for essential products and services to enable the free flow of information, the measures in this order are designed primarily to address the need to prevent entities located in whole or in part in Iran and Syria from facilitating or committing serious human rights abuses.”

Already the US has announced new sanctions against the Syrian General Intelligence Directorate, the Syriatel phone company, the director of Syria’s general intelligence services, the Iranian Revolutionary Guard, the Iranian Ministry of Intelligence and Security, and Datak Telecom.

The best thing about this executive order is that it finally recognizes the role of the third party enablers in authoritarian governments’ human rights abuses:  the manufacturers of the special routers that facilitate internet censorship; the companies that set up nationwide surveillance networks; the individuals who provide information on the location of dissidents.  These entities need to be recognized for their role in facilitating atrocities, and this order does that.  The problem is that there are a lot of authoritarian governments out there using technology to oppress their people.  A lot of them.  And even a lot of not-so-authoritarian governments using technology against the interests of their populaces.  In fact, you’d be hard-pressed to find a country that doesn’t use technology in a restrictive way.  Where do you draw the line?

Let’s take China, for example.  China’s Golden Shield is probably the world’s formidable surveillance network, and this technology is routinely deployed to suppress dissent.  Every time there’s any kind of disturbance in Tibet, Xinjiang, or anywhere else in the country for that matter, “China uses the well-tested tactic of suspending communications,” according to the Reporters without Borders Enemies of the Internet 2012 report.  There is mounting evidence to suggest that American companies, such as Cisco Systems, helped build Golden Shield.  I won’t go into too many details here, but Loretta Chao and Don Clark wrote an excellent piece last summer in the Wall Street Journal detailing the role of Cisco, HP, and other companies in the “Peaceful Chongqing” surveillance project.  Ethan Gutmann has also written extensively about western companies peddling technological suppression to China in his 2004 book, Losing the New China.

The Chinese government says that the Golden Shield is used primarily for crime control, but opponents argue (quite rightly) that the system can and routinely does snare dissidents in its net.  Companies selling technology to China (and other authoritarian regimes) almost always excuse it with the claim that they are merely following the “local laws” of the country they’re doing business in.  That’s true.  But what happens when those laws are written by authoritarians?

The Arab Spring has made it a lot harder for western companies to use the excuse of “we’re just following the local laws” when they sell technology to oppressors.  The popular uprising has illustrated just how integral technology is to organizing dissent, and just how central it is to suppressing it.  It has taken years to dismantle the 1990s tech boom era belief that technology can only be democratizing.  And while China (and many others) are not using surveillance technology to hunt people down and kill them, they are, in many cases, using technology to severely restrict the human rights of their people. Obama’s executive order is a step in the right direction to recognize the role of third-party atrocity enablers, but ultimately technology companies will still sell to dictators who oppress their people, as long as there are profits to be made and their brand image remains untarnished by doing so.

Since this is a blog on corporate social responsibility after all, it’s important to underscore how companies need to answer this dilemma for themselves.  The Global Network Initiative is an interesting approach to the problem.  The GNI is a “multi-stakeholder group of companies, civil society organizations (including human rights and press freedom groups), investors and academics spent two years negotiating and creating a collaborative approach to protect and advance freedom of expression and privacy in the ICT sector, and have formed an Initiative to take this work forward.”  In other words, the companies and organizations participating in the GNI, which include Microsoft, Yahoo, and several investment firms, have drawn up a set of principles which will hopefully guide their actions in these kinds of sticky situations.  Of course it’s not binding, and far from perfect, but it does provide some “rules of the road” when a company is selling ICT products in a less-than-free setting, and can provide some quasi-legal cover for companies to make ethical decisions while boosting their brand image.  The GNI accountability standards require transparency in decision-making, as well as an independent review of the member company’s implementation of the organization’s principles.  For such an initiative to work, however, there needs to be more legislative attention paid to the rest of the world beyond Syria and Iran, and significantly more companies need to do the right thing and decide that voluntary participation in such an initiative benefits us all.

So why doesn’t Dunkin’ ditch the Styrofoam?

I love Dunkin’ Donuts  coffee.  It’s an affair that started in Beijing in 1999, in China’s first Dunkin’ shop (where I got a really cool keychain I carried with me until its untimely demise in a Hong Kong bar circa 2005).  I’m definitely not the only one who loves the stuff.  Dunkin’ Donuts serves over one billion cups of brewed coffee each year, or 2.7 million cups per day.   But every single time the cashier hands me that Styrofoam cup (and even more so when I throw it away after I’m done), it gives me pause. Drive-thru coffee has become a valued commodity in my role as mom to a toddler and baby, but I’m generally put off enough by the Styrofoam cups to choose Starbucks over Dunkin’, even though I think Dunkin’ coffee is superior in just about every respect.  (Local coffee shop coffee is definitely the best, but I’m talking drive-thru options only here.)

Is Styrofoam that bad?  In a word, yes. Styrofoam is the industrial trade name of polystyrene, a insulating foam.  It’s classified as a potential carcinogen by the EPA, and toxic chemicals leach out when it’s heated which can disrupt the reproductive system.  It’s also a petroleum-based product.  Although technically recyclable, most localities won’t accept it (and awareness about its recyclability is low), and it takes forever to break down in a landfill.  Cost-wise, switching to paper cups would pretty much be a wash for a chain the size of Dunkin’.

People do appear to care. A quick Google search reveals pages and pages of petitions and letter writing campaigns asking Dunkin’ to swap out Styrofoam for recycled paper cups. But the “quest for the cup” (as Dunkin’ calls it) is, in reality, pretty complicated.  (Sidebar: it reminds me of the disposable vs. cloth diaper debate – the choices are closer than they would initially appear.) Paper isn’t completely saintly – it weighs more, is tougher to transport, and isn’t always recyclable.  But, it isn’t made out of a fossil fuel, and it breaks down a lot faster in the landfill.  The greenest major chain coffee cup award probably goes to Starbucks, which started using cups with 10% post-consumer recycled waste in 2006, and has hosted three Cup Summits (not kidding), bringing together geeks and paper company wonks to address the challenge of waste in the cup supply chain.  A couple weeks ago, even McDonald’s announced they would be phasing out polystyrene foam cups for paper at 2000 locations.

Dunkin’s 2010 CSR report is surprisingly honest about the cup being the elephant in the room when it comes to the chain’s sustainability, but apparently they haven’t managed to find a paper cup that meets their heat retention standards.  When I called up Dunkin’s corporate office (feelin’ like a real blogger now) to ask why they’re clinging on to Styrofoam, their global PR director Michelle King responded:

 “We are looking for an alternative to our current expanded polystyrene (EPS) foam cups that has similar benefits to our guests such as it keeps coffee hot, protects consumer hands from beverage heat, works with a lid that prevents spills, provides an improvement in its environmental portfolio and meets our targets for franchisee profitability and unit economics, and we have tested several options.

 Meanwhile, we have reduced the weight of both our foam hot cup and our plastic cold cup in 2009, which reduced the amount of materials sent to landfills by 4.6 million pounds annually. Additionally, we are preparing to test an in-store foam cup recycling program and we offer a reusable mug program as an option for our franchisees.”

I buy that they’re trying, but I think the problem for Dunkin’ lies in perception.  I had to go digging to find out about their efforts to find a replacement, and until I did a bit of research, I didn’t realize that paper isn’t the silver bullet everyone probably thinks it is.  Ultimately what we can all hope for is a breakthrough that delivers a cup that is made of recycled material and completely recyclable.  Until then, I’ll be packing a few extra thermoses in my car.  Styrofoam is scary.

Chipotle’s Golden Wrapper

Chipotle’s ad aired during the Grammy Awards (not the Superbowl), obviously targeting the Willy-Nelson-Covers-Coldplay-appreciating demographic. 

I LOVED the ad and got a bit teary, but my husband wasn’t convinced.  I was a vegetarian for twenty years, and although I’ve fallen off the wagon, I’m pretty vigilant about where my meat comes from.  I always felt comfortable at Chipotle because of their sustainability policies, but my husband hadn’t ever heard of them, even though we’ve stood in line staring at the same signs at our local Chipotle.  He argued that he eats there because the burritos are delicious, and wondered why Chipotle would go down that route.  (If you’re wondering why we were spending so much time dissecting a TV ad, you obviously don’t have a brand strategist for a husband).  We had such different reactions to the ad that I wondered what my friends thought.  I did a quick Facebook poll, and the general consensus seemed to be that the music was cool and that it was a beautiful ad, but many were skeptical about the true extent of Chipotle’s sustainability policies. 

And that’s where it becomes a problem for Chipotle. When companies make family farms and sustainability a centerpiece of their branding, there’s a lot riding on it.  If it turns out they’re less saintly than their ad suggests, it could shatter that image and create a problem where none existed.  Welfare and sustainability are becoming increasingly important issues for consumers.  Just a few days ago, Bon Appetit, a major corporate catering company, announced that it will be tightening welfare standards in their supply chain.  Clearly, Chipotle is a leader in this growing trend.

 Chipotle has a pretty extensive explanation of their policies on their website.  They’re committed to “naturally-raised” meats, and this is what “naturally-raised” means to them: “naturally raised animals are raised in a humane way, fed a vegetarian diet, never given hormones, and allowed to display their natural tendencies.”  Unfortunately, we have to rely on Chipotle’s word, because there’s no federal standard for the word “natural” or minimum standards that farmers need to comply with to label the meat they sell as “natural,” other than that it must not be processed to the point of fundamentally altering its character.    One of the things not spelled out by the natural label, for example, is access to pasture.  Chipotle says they’re striving to source more pasture-raised product, but they don’t specify how much of their product is pasture-raised as of now.  I wonder how many Chipotle ad viewers thought that pasture-raised animals were a given? 

Fox-conned

After a scathing NYT expose and the firestorm it ignited among customers, Apple has begun external audits of its suppliers inside China.  I use the term “external” rather than “independent” since Apple has hired the Fair Labor Association, a non-profit representing a mixture of civil society organizations, universities, and “socially responsible corporations.”  Apple joined the FLA as a member company in January 2012 after the NYT story broke. According to a news release, “In addition to conducting independent assessments of participating companies’ supplier facilities, FLA works with civil society organizations, universities and companies to develop and improve social responsibility programs and provide training and capacity building at the facility and brand level.”

Apple came under scrutiny not because they’re the only ones using these suppliers (almost every major electronics brand does), but because they’re now the world’s most valuable company and their consumer image just doesn’t gel with workers’ rights violations in China.  This story actually surfaced a few years ago, but was blown into the mainstream by last month’s NYT series investigating the realities of Apple’s global supply chain.

Can there be meaningful audits by an industry-funded auditor?  And if the audits uncover problems, can they be fixed?  The FLA lists an impressive and growing list of 34 companies as member companies, all of which agree to sign a workplace code of conduct.  Their list includes H&M, which came under fire in the summer of last year, when hundreds of Cambodian workers apparently collapsed due to malnutrition in a factory making products for the Swedish chain. It looks like H&M joined the Fair Wage Network (affiliated with the FLA) in September of last year, after the story surfaced.   Just like Apple, H&M has a fairly clean consumer image, and even won a corporate sustainability award in 2010.

It’s not like Apple has been hiding any of the problems uncovered by the NYT article.  In fact, many of them are detailed in their own annual progress reports.  Apple has been voluntarily auditing their suppliers and producing their own reports since 2007, and they’ve conducted an impressive 288 audits of their suppliers as of the publication of the 2011 report.  In other words, Apple already does a lot more than their competitors to uncover rights violations in their supply chain.  And yet that was not enough to produce meaningful improvements in working conditions or push the rest of the industry to follow suit.  The point is – is noncompliance tolerable as long as a company goes through the motions of auditing?  How would Apple even begin to go about pressuring their suppliers to change? This is one area where companies have a lot more leverage than governments or NGOs.  In theory, they can take their business elsewhere if suppliers don’t clean up their act.  But can they do it alone?

One of Apple’s primary suppliers, Foxconn, is China’s biggest electronics manufacturer, employing over one million people.   It would be nearly impossible to make an iPad or a desktop computer or even a TV without Foxconn. It would most certainly be impossible to manufacture these products on the timeline the American consumer has come to expect without Foxconn. The folks at Foxconn know that they’re the only game in the world at this point.  So the question is, will American consumer pressure finally push Foxconn to reform its ways?  Like many things in the Chinese labor market, the description on paper does not match reality.  On paper, workers are protected by comprehensive national labor laws, housed in comfortable dormitories, provided access to therapists and counselors, and given job training and opportunities to advance within the company.  In reality, China’s labor laws are routinely flouted and rarely enforced, workers live eight to a room, and are regularly pulling overtime shifts and standing for over 10 hours a day.  When the story about a rash of worker suicides at Foxconn broke last year, the company responded by putting up nets to catch jumpers.  Not exactly the response Apple probably had in mind.  This time, however, Foxconn has pledged to raise worker pay significantly and cut down on overtime.  Perhaps the worldwide attention to this story finally tipped the scales in favor of the workers.

Multinationals hoping to take advantage of China’s inexpensive manufacturing conditions have to take responsibility for the working conditions in their suppliers’ factories.  Apple has clearly started down this road.  But it will take more than audits.  It will take action.  And it’s unclear exactly what kind of action can be taken when Apple (and every other electronics manufacturer) is held over a barrel by the realities of their supply chain.  Full disclosure: I am an Apple fanatic. I love my Macbook (four years old and still running like a dream – take that PC!), my iPhone, and my iPad.  I want Apple to be able to fix this.  Millions of people do.  This is one reason to be optimistic about the FLA audits.  Combined with steady pressure from consumers, Apple will hopefully be able to affect positive change that will pull up standards throughout the industry.