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Déjà Vu: South Africa and China

We must put economic pressure on corporations that make money in China, where brutal human rights violations are habitual.
 
 
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As things change, everything stays the same. Remember apartheid South Africa? Remember the voluntary corporate code of conduct called the Sullivan Principles? Remember Reagan's "constructive engagement"?

In the early to mid-'80s, the Sullivan Principles and constructive engagement were a cover for "business as usual" in an effort to dispel criticism of the white minority government's brutal suppression of the majority of the South African population, financially underpinned by U.S. corporate investments, bank loans and trade.

Recently, there have been outcries by Republicans and Democrats alike in Congress about the U.S. technology companies being required by the Chinese government to spy on and violate the human rights of Chinese citizens. These companies make lots of money selling hardware, software and services to the totalitarian government, including its police and military. The suggested solution: another U.S. government task force to investigate, hinting that a new voluntary technology industry code of conduct might be in order. Déjà vu?

In the early 1970s, global corporations, including about 350 U.S.-based transnational companies, were pouring millions of dollars into racist, white-minority-ruled South Africa to earn lots of money. Why not? There was cheap, controlled and abundant black African labor, cheap natural resources, a western banking system, an industrial economy exporting products to Europe and the West and a police and military state elected in a whites-only "democracy" to keep the trains running on time.

In the People's Republic of China, we find a one-party dictatorship of the proletariat, welcoming global corporations into an enormous and expanding economy based upon cheap, controlled and abundant labor; cheap natural resources; an increasingly Western financial system; and an industrial economy with little or no environmental, health, safety, and labor protections. The country has an enormous trade surplus, thanks primarily to exports to the United States, and is one of the largest investors in our country's treasury market. Top it off with a military and police state, enhanced by the most sophisticated Western security technology money can buy.

Internet search engine companies such as Yahoo and Google were recently castigated by Congressional politicians for working for the Chinese government to censor the internet, spy on Chinese citizens, and turn over email records to Chinese security forces. Several years ago, it was discovered that Cisco Systems, Nortel, IBM, Sun Microsystems, Microsoft, and Oracle, among many others, were selling the government the technology to violate human rights, all to make money and have access to one of the largest national markets to make even more money. So what's changed? Not much.

Our wonderful Clinton and Bush administrations and Congressional Democrats and Republicans, taking corporate money hand over fist, and listening to thousands of corporate lobbyists in Washington, D.C., provided this terrorist government "most favored nation" (MFN) status, eventually making MFN permanent, welcomed it into the World Trade Organization (WTO), and lavished the Chinese economy with enough industry, technology, and capital to guarantee political, economic, and military impregnability.

In South Africa, you may remember, corporations came under increasing political pressure by the majority African population, while the world community, including many in the United States, supported the end of apartheid rule by exercising shareholder advocacy, divesting stock, and refusing to bank and do business with the South African government and corporations supplying capital and other strategic resources to help keep the white dictatorship in power. To counter this strategy, corporate management trotted out the Sullivan Principles, or a voluntary code of conduct in South Africa, for corporations operating there to legitimize their presence by advocating "equal pay for equal work," desegregating restrooms and cafeterias for workers, and verbally calling for political "change" in South Africa. Corporate management's Sullivan Principles, which were never opposed by the white minority government, were supplemented by President Reagan's "constructive engagement." The Reagan policy basically stated that the U.S. government should continue to operate in South Africa, publicly "deploring" apartheid, while continuing to economically strengthen it.

Of course, this was a convenient cover for corporations to continue "business as usual" and make money on the apartheid. It did, however, allow corporate management to publicly decry racial discrimination in South Africa and for politicians to jump on the meaningless bandwagon of humanitarian concern for the suppression of democratic rights, free speech, evil segregation, and … blah, blah, blah. In other words, corporations, politicians, and government officials in the United States all participated in the dialogue of "constructive engagement" to avoid destroying apartheid or, more importantly, disrupting ordinary business and reducing large corporate profit margins.

Naturally, the Sullivan Principles, an unenforceable corporate voluntary code, was propaganda, corporate "leaders" in South Africa and Ronald Reagan never intended to really challenge apartheid because that would threaten their lucrative business relationship with the white masters. Ten years after the Rev. Leon Sullivan announced his "principles," he denounced them as unworkable and supported mandatory economic sanctions. In the meantime, thousands of human beings were tortured and murdered in South Africa, and corporate managers pocketed lots of Krugerrands.

We've now held public hearings in Washington, D.C., on how the technology companies are supporting human rights violations, politicians have been able to sound off, and corporate spokespeople have said how they really believe in freedom of expression and how "awful" and "shameful" it is that the Chinese dictatorship requires their companies to comply with a "censorship brigade." Meanwhile, thousands of Chinese citizens demonstrate daily, and thousands die in prison or are tortured to death for their religious or political beliefs.

The Bush administration created a U.S. State Department Task Force to study the issue, and Republican legislation has been introduced to enact a Global Online Freedom Act which would create a code of conduct for internet companies. You can bet it will be a voluntary, unenforceable industry code established much like the Sullivan Principles to guarantee corporate "business as usual" in China.

What brought down the white minority government in South Africa was not words, but economic deeds. The apartheid government was stripped of its powerful economic, financial and strategic material support of Western corporations, due to those corporations and banks losing investments, deposits and sales to individuals, city and state governments, and institutions exercising economic democracy. Corporate morality is the morality of materialistic self-interest, or the morality of money, and that alone provides the life blood to the heart of the beast.

If Americans and other citizens want to impact corporate conduct in China, especially the conduct of those technology companies that sell their products and make their money from a totalitarian, terrorist government that uses that technology to violate the human rights of its citizens, meaningless words and voluntary codes are not enough. A terrorist does not weaken his resolve as he grows economically, politically and militarily stronger, more technologically efficient, and even more resourceful.

I plan on introducing shareholder resolutions to call on corporate management of technology companies to cease providing the Chinese police and military another weapon to violate the human rights of its country's citizens. Even if corporate management and the Securities and Exchange Commission (SEC), which is run by corporate Republicans, are unsuccessful in keeping these resolutions off the ballot, it still won't be enough to stop the speeding locomotive of corporate greed and Chinese government totalitarian rule.

Change in China will only come about when sovereign governments, pressured by their citizens, eliminate all business ties to China, end strategic investments and discontinue the export of capital and technology to this terrorist government. That means we must put economic pressure on corporations that make money, and lots of it, in China.

For American consumers, it also means refusing to buy cheaply produced Chinese goods (12 percent of China's exports to the United States go to Wal-Mart) that are inexpensive because of the exploitation of human and natural resources in China. These goods are cheap because human labor is cheap and human misery is not considered in the profit equation. The only morality the corporation understands and responds to is the morality of materialistic self-interest.

John Harrington is a founder of Working Assets, and the author of "Challenge to Power."