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Google and China: When Should Business Leave on Human Rights Grounds?

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With Google's decision today to shut down its Chinese-based search engine, google.cn, the company has won considerable praise from organizations concerned about its human rights record. This approval stands in stark contrast to the condemnation the company received when first entering the country in 2006. The Financial Times cartoonist Ingram Pinn captured these contrasting perspectives perfectly, depicting Google as the speech-suppressing "Great Firewall of China" in 2006, then casting the company as the lone protestor stopping the tanks in their tracks in 2010.

Google's decision again raises a question of serious interest to business, the public, and governments: When is it right to cut ties and leave a country on human rights grounds?

Leaving often seems like the clear-cut ethical winner in this debate. There often is, however, a case for companies to stay, provided there is a commitment to making a positive impact on human rights. Leaving may look and feel great to those of us in the West, but exiting a market may not always have the desired impact.

Consider the case of the consumer electronics companies. They are increasingly under fire about whether the metals they source from the Democratic Republic of Congo (DRC)--tin, tantalum, and tungsten--may be helping fund the purchase of weapons that fuel violence and human rights abuses in one of the world's toughest conflict zones. There is a consensus that "conflict minerals" should be eliminated from the electronics industry, and the tempting next step is to cut out all minerals sourced from the DRC.

But that decision isn't as simple as it may seem: Because end buyers purchase from refiners that often combine ore from multiple sources, traceability remains a problem, and it might not even be practical to "leave" the country.

By contrast, what if companies were to leverage their purchasing power to drive positive change in the DRC? Perhaps there is a role for business to bring "development-oriented metals" to market by identifying specific mines where the benefits of mining are shared locally and production upholds human rights. As an alternative to leaving, companies could also explore diplomatic channels to encourage a sustainable trade in minerals in the DRC and the surrounding region.

GE is taking a related approach in China and Vietnam, where the issues are very different than those in the DRC. Among the company's top corporate responsibility priorities is "rule of law." GE's leadership believes that effective government in emerging markets is critical for both business success and human rights, and the company therefore works with government and civil society to establish transparent legal systems, encourage open law-drafting processes, and develop well-trained judges and lawyers. For example, GE attorneys teach classes at law schools in both countries, and the company's foundation also invests in rule-of-law initiatives by providing grants such as one in China to an organization focused on commercial law, intellectual property rights protection, and citizens' rights, and another in Vietnam to a program that aims to strengthen courts and enhance legal transparency.

One might conclude that the comparisons between countries don't work, because all situations are different. In fact, that is exactly the point: When it comes to determining whether a company's decision to enter or exit a market is good or bad for human rights, there's no one-size-fits-all rule, and the ethics of the decision will vary considerably with the context.

As such, "are you in or are you out" may be the wrong question. No company automatically advances human rights by leaving a country, and, likewise, no company automatically improves the situation by staying. In all but the worst cases, it's how business participates in challenging markets that is the ultimate test. Does the company have a clear understanding of how its products, services, and market presence will impact human rights? Has the company identified its most significant human rights risks, and does it understand how to mitigate them? Is it working with sympathetic government partners to advance human rights?

Let's also remember the opinions of the people these decisions are designed to support: the local population. Many companies left South Africa and Burma because democratically legitimized local movements called for mass divestments, which is not the case in China today.

We don't know yet whether Google's decision, which essentially takes them out of the search business in China, will increase freedom of expression, privacy, and security. Some argue that the company should distance itself from censorship by leaving; others argue that the company should stay with a search engine that filters less (and more transparently) than the local competition. Whatever one's opinion, the fact that an increasing number of companies are weighing these decisions demonstrates that human rights considerations are reaching senior leaders in business like never before.

The time has come for us to applaud those companies that seek to integrate human rights into their decision-making, to criticize those that don't -- and to be open to the fact that this could mean praising both companies that seek to make an impact by staying in difficult markets as well as those that decide to leave.

Aron Cramer is President and CEO of BSR, a global business network and consultancy focused on sustainability, and the coauthor of the forthcoming book Sustainable Excellence (Rodale 2010). Dunstan Allison Hope is BSR's Managing Director, ICT Practice, and the coauthor of the forthcoming book Big Business, Big Responsibilities (Palgrave Macmillan 2010).