The wires last week were burning with far more than fireworks, as networking giant Cisco Systems Inc. and computer manufacturer HP suddenly found themselves scorched by reports that it was supplying surveillance cameras and other equipment to the city government of Chongqing, China.
If true, it would put the U.S. companies in possible violation of U.S. export laws, which forbid the sale of technology that might foster the abridgment of human rights.
The original report in the Wall Street Journal Tuesday named Cisco as one participant in Chongqing’s e-government program the Journal identified as “Peaceful Chongqing,” and described as “an ambitious new surveillance project in China–a citywide network of as many as 500,000 cameras that officials say will prevent crime but that human-rights advocates warn could target political dissent.”
That’s exactly the reason why equipment and software that can specifically be used for crime control is prohibited from being sold to Chinese public projects, a direct reaction to the Chinese crackdown of the 1989 Tienanmen Square uprisings. That word “specifically” is important–if a device has multiple uses, such as just the camera itself, then its sale is permitted. It’s all the control hardware and software that comes with a full surveillance package that’s prohibited.
The companies have taken two approaches to the Journal‘s story, with Cisco coming out fighting–categorically denying any involvement in a Chongqing crime-control project, clarifying that it is working with the Chongqing government, but on a broader e-government initiative and not for cameras.
“Cisco’s proposed participation in the Smart+Connected Communities project in Chongqing is based on standard, unmodified Cisco routing and switching equipment–the same equipment that is supplied to governments and private sector customers worldwide, in full compliance with US export regulations, which are based in part on human rights concerns, and does not include video surveillance hardware or software,” Cisco’s General Counsel Mark Chandler wrote Tuesday.
This is not Chandler’s first go-around on this issue. In June, he defended Cisco against allegations that Cisco had customized their equipment for the express purpose to track Chinese dissidents, at the request of Cisco’s Chinese clients.
“The lawsuits are inaccurate and entirely without foundation–and in fact they simply recycle the identical allegations that were raised by the Falun Gong religious group three years ago, which were extensively reported at the time and discussed at a Congressional hearing, including reference to the same Chinese government statements about their goals for technology,” Chandler wrote at the time. “We have never customized our equipment to help the Chinese government–or any government–censor content, track Internet use by individuals or intercept Internet communications.”
HP, however, has not denied involvement in a surveillance project. Rather, they have taken a more circumspect approach. HP executive Todd Bradley told the Journal that “we take them at their word as to the usage,” adding “it’s not my job to really understand what they’re going to use it for. Our job is to respond to the bid that they’ve made.”
In other words, human rights violations? What human rights violations?
The problem for HP, Cisco, and indeed, any company that does business with the Chinese government, is that they really don’t know what government technicians might be doing with their software and hardware after the sale is done. It is doubtful the Chinese government will openly advertise its true intentions, so at some point companies like HP may feel themselves shrugging and taking China at its word.
Even if U.S. companies follow the letter of the law, jailbreaking, cracking, and other forms of extreme modification would certainly put any customer in violation of the terms of agreement for that product. But when the customer is the Chinese government, how would such violations be enforced, even if discovered?
China presents that problem for any technology, not just Cisco’s. Sadly, there are probably whole server farms of Linux machines being used to track and suppress speech in China, a practice that most, if not all, Linux developers would find abhorrent.
But Cisco is in even more of jam, because networking infrastructure is exactly one of the areas in which China is desperately trying to catch up, which makes it too huge a market to ignore. In 2007, Cisco announced a $16 billion investment in the China market, so they are most definitely committed to getting into that market.
The question for most observers of Cisco and any other U.S. company working with China is how far companies are willing to go in order to keep Chinese business? Technology headlines are replete with companies that have chosen to comply with local Chinese laws rather than risk China go with a global competitor or a local company that treats patent and copyright infringement as a minor inconvenience. Or, as in the case of HP, they may decide to accept China’s explanation of the products’ use and leave any discrepancies to the diplomats and politicians.
China is a crucial issue for networking companies to resolve, and soon. With a population of 1.3 billion and one of the fastest-growing economies in the world, China’s infrastructure is exploding in growth–and networking and technology is part of that equation. Just this week, Alcatel-Lucent and China Telecom announced a partnership that will add 100 million homes to China’s broadband population, as one recent example.
The costs of sticking to ethics can be high. When Google stood up to China and stopped censoring search results in that country, it may have handed the country’s search business to competitors like Microsoft and Baidu.
But is that cost really higher than the loss of human rights?