Category Archives: News

Why we should all care about what the Dutch development bank just did

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This month, the Dutch Development Bank went public with its commitment to “explicitly and systematically address human rights” across its investment process. The announcement accompanies a detailed plan already underway to conduct human rights “due diligence.” It also comes alongside the implementation of human rights respectful procedures undertaken by the entire Dutch banking sector.

Last year (and the year before, and the year before, and the decade before…we wrote about the collision course between human rights and international banking. Most multinational companies need loans and investment to expand globally, so adding human rights strings to their financing options creates good leverage. Additionally, development banks actually seek out investment and loan opportunities in complex contexts, and we think they should know what they’re getting into before they enter these risky transactions.

Development banks were created to reduce poverty in low-income countries. Increasingly, they recognize that poverty-reduction is a complex aim, and that equitable development can be hard to achieve. The World Bank has put power and wealth imbalances at the core of its current mission, and many banks have followed.

But the human rights policy of the Dutch Development Bank (FMO) is a game changer in international development finance, and we should all be watching.

Why? First, FMO is prioritizing human welfare using data, real-time evaluation and risk assessment to guarantee it. Second, it faces pressure to be a true leader in rights-respectful finance, as the whole Dutch private banking sector is expected to follow suit. Third, it gives them a policy position to stand up against the international banks that, as partners, would pressure them to overlook human rights risks in the name of profit.

On the third point, one Dutch bank has learned firsthand that human rights risks could also create financial risks. Dutch bank ABN-AMRO published its first human rights report in 2016, eight years after getting burned by a transaction with Goldman that turned out badly both for human rights and business. The “Abacus deal” with Goldman exacerbated the global financial crisis (specifically hitting Dutch and German pensioners, not to mention the mortgage holders left homeless), and cost ABN $840 million.

ABN’s flagship human rights report acknowledges the bank’s need for new personnel with a human rights focus. Banks are accustomed to working within financial reporting frameworks and benchmarked standards and have historically bypassed direct engagement with affected rightsholders. Yet at a minimum they will need to learn to vet the quality of engagement processes implemented by clients.

FMO’s new human rights policy has the potential to show them how.

 

Full disclosure: NomoGaia assisted FMO in developing its policy and intends to provide ongoing support as needed.

What do Sprint and Facebook have to do with Philando Castile’s shooting?

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This month, as a court acquitted Minnesota police officer Jeronimo Yanez in the death of Philando Castile, additional details of the shooting and ensuing investigation emerged.

Gizmodo and the Minnesota Star Tribune reported that more subpoenas and search warrants were issued on Castile’s girlfriend, Diamond Reynolds, than on Yanez. The Minnesota agency tasked with investigating his death sought seven warrants on Castile and Reynolds. Gag orders accompanied the subpoenas to third parties holding the couple’s data, requiring that Facebook, Apple, Sprint and others not tell Reynolds her data was under review.

Sprint and Apple complied. Facebook didn’t.

Law enforcement has sought data from telecommunications companies since Alexander Graham Bell invented the telephone. Phone companies have complied with subpoenas and warrants, sometimes offering up data without requiring an official request at all. What is notable is that, while Sprint and Apple have followed a long-standing tradition of relying on law enforcement (or courts) to determine whether customers’ privacy needs protection, Facebook, taking on a proactive role, has not.

Times are changing in telecommunications. Data requests from telecoms companies have increased as the data they hold has become more detailed. Between January and June 2016 (its most recent data), Sprint received 125,000 data requests from US law enforcement. In the same period, Facebook received 24,000 and Apple received 6,000.

Collaboration between law enforcement and social media or communications companies has come under increasing scrutiny, as these firms can provide, essentially, surveillance, on millions of people. Revelations from the Snowden leaks that the government makes sweeping data requests of companies have heightened concern. A product AT&T sells to law enforcement agencies makes use of the company’s years of backlogged GPS, telephone and text data. AT&T’s product, called Hemisphere, was supposed to be used only for apprehending drug traffickers. It has been used far more broadly. Eight states are even using it to track Medicaid fraud.

In essence, taxpayers and customers are paying AT&T to spy on them. Sprint has not said whether it runs a comparable program to Hemispheres, but it has certainly profited from working with government.  Sprint provides paid services to the Department of Homeland Security Secretariat, the United States Citizenship and Immigration Services (USCIS) department, TSA, immigration and customs (ICE) and Customs and Border Protection (CBP) – and that’s just within the DHS. Right now, it may be more committed to retaining its ties to government than to protecting the rights of its customers.

Reynolds said she felt treated “like a criminal, like it was my fault” after the shooting. Officers handcuffed her in a potential breach of her freedom from arbitrary arrest. But businesses also had a responsibility to respect her human right to privacy. Sprint and Apple held to old standards. If the tech media outcry is any indication, those old standards fail modern tests of corporate ethics.

What Facebook did, in contrast, is rather noble. In a series of email correspondences, Facebook lawyer Gavin Corn bucked the gag order, writing “Facebook then intends to provide notice to the users (including the deceased user’s next of kin and legal representative(s)) and to allow the users a minimum of 10 days to submit any objections they may have to the Court over the basis for, or scope of, these warrants.” In essence, Facebook championed Reynolds and Castile, investing company resources in their privacy rights.

This isn’t unheard of — Apple fought a government search warrant on the telephone of a San Bernadino shooter. It joins Yahoo, Facebook, Google and Microsoft in updating its policies “to expand routine notification of users about government data seizures, unless specifically gagged by a judge or other legal authority.” But Facebook’s only interest in rejecting the gag order was in securing Reynolds’ and Castile’s rights. That Facebook is safeguarding human rights is not an unmitigated good. Its commitment to transparency for Reynolds could provide guidance to its human rights team about how Facebook could make its own human rights approach less opaque. Regardless, in this case Facebook’s corporate ethics merit real praise.

United’s Human Rights Problem is the Same as Nestle’s and Nike’s: Supply Chain

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The United Airlines passenger removal fiasco is a microcosm of global supply chain problems.

(Full Disclosure: Our Executive Director, and the author of this post, is married to a United pilot)

By now cell phone videos of a United Airlines passenger being dragged from an airplane have crisscrossed the globe. His great wrong was refusing to give up his purchased seat to a crew member. The event has been characterized as a signal that corporations prioritize money over humanity, that police brutality is persistent and that United doesn’t care about its customers.

It’s actually a case study in how supply chains are set up to fail human rights.

United Has a Systemic Human Rights Problem in its Supply Chain

Supply chain abuses can be more harrowing than the victimization of one person, although they rarely hit so close to home. The past year has been rife with examples. Nestle sourced its seafood from enslaved Asian fishermen. FIFA turned a blind eye to the trafficking and deaths of construction crews building World Cup stadiums in Qatar. Children were found mining cobalt for batteries in Apple, Samsung and other companies’ electronics products. Resisting corporate will is particularly deadly in South America – over 50% of attacks on human rights defenders between 2015 and 2016 were committed in just 6 Latin American countries. Standing up for human rights is deadly in the Philippines, too. In 2015 Benilda Santos was shot dead for opposing the construction of a beverage plant in her neighborhood.

Nestle, FIFA, Apple and Samsung have strong policies for protecting consumers and employees. Training regimens focus on the importance of positive workplace culture. United has the same. It even has a human rights policy.

But all these entities have contracts with subsidiaries that carry out essential functions for name brands. The suppliers benefit from contracts with big companies, and those companies get to claim ownership of the products generated by suppliers.

Whole Foods, for example, stamps pineapples with a “Whole Foods” label, but those fruits are actually grown by Dole. In the same way, United stamped that Louisville-bound flight with its logo, although it was operated by a regional carrier called Republic Airlines.

How Regional Carriers are like Sweatshops

United holds Republic to its social standards in vague terms, but it only pays Republic to fulfill contractually agreed flights. A canceled flight is a canceled paycheck for Republic. Likewise, Nike pays its Asian suppliers to make a designated number of sports items by a designated deadline, not to promote women’s empowerment and labor rights. If the supplier misses the deadline, it loses the income.

Much has been written about the shortcomings of contracts for upholding rights-respectful principles, and about the limitations of supply chain audits. Part of what went so wrong in United’s response to the incident was its failure to see that the situation never should have arisen. Republic’s crew should not be reassigned on such short notice that the plane they needed to catch was already fully boarded by the time they reached the gate. If Republic cannot turn a profit without being so short-staffed and time-pressed (which, based on its current $0.20 stock price, it can’t), then its contracts need to be worth more.

Republic’s pilots fought for a living wage and won in 2015. But American, Delta and United didn’t step up to support the costs, even as a nation-wide pilot shortage looms. Without building out the pipeline in regional carriers, the majors will run out of pilots in a matter of years. But in the meantime, Republic alone foots the bill for paying pilots fair wages while watching its revenues and share price plummet.

The Many Victims of United’s Failed Supply Chain Relationships

The clearest victim of United’s failed supply chain relationship with regional carriers (and with aviation security forces) is Dr. Dao, who was still hospitalized as of Tuesday. But there are other victims, too.

The crew reassigned to fly a plane out of Louisville the next day probably got short-changed. They probably thought they were headed home when, upon landing in O’Hare, they learned that they would actually be headed to Louisville to fly another trip the next morning. The crew working the flight likely received insufficient training in client interactions or insufficient sleep to complete the interpersonal part of their jobs. United has worked hard to improve customer service among its direct employees over the past 18 months, but that work has not extended to regional contractors. United employees now face a chilly reception as they walk through airports across the US, considered complicit in the attack on a passenger that, to their mind, wasn’t on their flight and wasn’t mistreated by their colleagues.

Republic’s contract with United is at odds with United’s human rights policy, which claims that United “is not complicit in human rights abuses.” United’s policy that personnel may not touch passengers created a scenario where a force with a weak record for de-escalation training handles passenger removal, even in cases where the passenger has committed no offenses. Chicago Aviation Security violated Dr. Dao’s Security of Person on United’s contractor’s behalf. That’s complicity.

United’s position that Chicago aviation police, not United, committed the abuse doesn’t pass muster. Exxon Mobil is fighting a 16-year lawsuit for the crimes of Indonesian military personnel committed while protecting Exxon’s assets in that country. Name brands own the actions of their subsidiaries and contractors.

How to Fix It

  1. Create more flexibility for the supplier: Republic shouldn’t be penalized for the weather, which is what happens when thunderstorms make it impossible for crew to fly their scheduled Louisville leg (necessitating emergency reassignment of some other crew).
  2. Extend training to suppliers in customer engagement, de-escalation, and problem solving to reduce the need to involve aviation security.
  3. Evaluate security relationships and polices for calling in external security forces. Chicago isn’t the only city where police training has been found to lack focus on community policing and de-escalating tensions. United and its subsidiaries fly to Mexico, the Dominican Republic, Nigeria and Turkey – all countries where security personnel have a track record of committing abuses. United might need a new policy on calling in security.

The PR campaign United will soon launch, and the management strategy review consultants will soon bill, won’t change the way subsidiaries do business unless United makes it a priority to protect its outsourced workers and its outsourced clients.

 

Companies are Helping the US Government Keep Travelers Out: Is it Rights-Respectful?

Facial recognition technology, such as used in SENTRI lanes, is provided by at least 3 contractors contacted by NomoGaia

Yesterday the second iteration of President Trump’s “Travel Ban” Executive Order was slated to come into force. The evening prior, a federal judge halted its implementation, citing its “purpose to disfavor a particular religion.” The nationwide ruling, issued by a second federal judge, does not block the full order—it only applies to the section that banned travel from six Muslim-majority countries.

There are reasons to believe that, even without the “Travel Ban” in effect, bureaus within the Department of Homeland Security (DHS) are restricting entry to non-citizens (and some citizens), sometimes on religious grounds. This, says the United Nations High Commissioner, violates human rights.

Travel Restrictions Are Ongoing

Numerous Muslims and middle-easterners have been detained and denied entry to the US. Mohammed Ali’s son has been detained twice on flights since the first Travel Ban was issued. He says he was questioned about his religion while in detention. The Nigerian government has reported that several of its citizens were denied entry to the US, despite having valid multiple-entry visas. Northern Nigeria is majority-Muslim, although the country is not among the half-dozen blocked by the Travel Ban. Data bolsters anecdotes about dozens of Muslim Canadians being detained and turned back at the border (as well as an Egyptian-Canadian band traveling to the US for the South by Southwest Music festival).  

Statistics from Canada show that the US is turning away visitors from many nations at a 6% higher rate than in 2016, despite travel across the border having dropped.

Silence from DHS Contractors

Implementing enhanced screening and background checks requires DHS bureaus to use an array of technologies, tools and services. These are provided by private sector contractors. The DHS dispenses billions of dollars each year in private contracts.

NomoGaia reached out to 57 of the largest private contractors to DHS between February 6 and March 16, requesting information on how these companies had ensured that their goods and services were not at risk of being used to violate human rights. Of those 57, none described any processes in place for conducting “human rights due diligence.” Only nine replied at all:

  • UPS, which provides transportation and logistics to DHS, asked to be excluded from the study
  • BAE (a defense and security company), Nestle (which supplies water to DHS) and Sprint (a telecommunications and IT company) said they would get back to us but did not
  • Microsoft (an IT, data-collection and technology) pointed us to public documents regarding their opposition to the ban for its impacts on employees but not to documents addressing potential human rights implications of their government contract work
  • PAE (a surveillance and security firm), CACI (an IT and intelligence company that also provides interrogation services) and Northrop Grumman (a technology and intelligence company) declined to comment as a matter of “policy”
  • Battelle didn’t actually reply to our emails but invited us to fill in a survey about the effectiveness of their client communications. Coincidentally, the survey benchmarked Battelle against several other government contractors NomoGaia had contacted during research. There was no opportunity to seek further feedback at the end of the survey.

These non-responses are important from a human rights standpoint. As companies that help the US government implement its policies, they need to evaluate human rights risks. Their failure to respond brings the credibility of their policies into question, as well as their concern for racial and ethnic equality.

A Very Brief History of Corporate Complicity in State-Sponsored Human Rights Abuse

Historically, such business links have been damning for companies. General Motors was the single largest employer of black South Africans during the Apartheid era before pulling out of the country in 1986 under pressure from human rights groups. As recently as 2012, GM was making payments to South African claimants who accused the company of complicity in the human rights abuses of the Apartheid regime.

IBM, one of the largest contractors to DHS (and one that did not reply to NomoGaia’s information requests) has also faced lawsuits and reputational backlash for its activities in Apartheid South Africa. Its Apartheid suit was dropped in 2016 after the Supreme Court questioned whether non-citizens could press charges for human rights violations that occurred off of US soil. Those dismissal grounds would not necessarily be applicable for companies working with a US department on US soil.

Other human rights lawsuits against IBM, for its role in the Holocaust, have generated ongoing criticisms. The company provided software to the Nazi regime which was used to identify Jews for slaughter (the numbers tattooed on victims were generated by IBM technology).

IBM’s services to the Nazi regime initially provided a census function, identifying relevant populations and targeting them for deportation. These services are not unlike services provided to DHS for identifying deportation targets.

Corporate Standards Not Being Implemented

This is notable, because IBM’s human rights policy requires it to conduct “due diligence” of its operations to ensure that it does not violate human rights. Its policy reads as follows: “Underpinning our corporate responsibility standards and practices is our dedication to respect human rights. IBM’s stance on human rights is informed by international standards, including the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the UN Universal Declaration of Human Rights.” The UN Guiding Principles explicitly require IBM to “know and show” how its operations affect human rights.

Out of the 57 contractors contacted, 44 of the contractors had policies in place requiring the company to operate with respect for fundamental human rights. Of those, 16 required the company to conduct assessments of its business operations to ensure that its activities did not cause, contribute to or benefit from human rights violations. (All the contractors, human rights policies, and communications with NomoGaia are available on this Google Doc.)

That none are willing (or able) to describe how they are carrying out these assessments is problematic. UPS posited that “given the lack of any correlation between providing transportation and logistics services and ‘assisting in the implementation of the Travel Ban’” it should be removed from this study. However, Ford Motors faced decades of lawsuits for providing South Africa’s Apartheid government with vehicles, expressly for the purpose of transportation and logistics.

It is possible that our notes went unobserved by the right people, but NomoGaia is not alone in non-responses by companies to the Travel Ban. The New Yorker contacted the 10 largest contractors (all on NomoGaia’s list) in January. “Lockheed Martin and Boeing, the biggest government contractors, both declined to comment. Spokespeople for Raytheon, McKesson, and United Technologies also declined to comment. General Dynamics, Northrop Grumman, L-3 Communications, and the Bechtel Group didn’t respond to my e-mails. Only BAE Systems, the tenth-largest contractor, had a comment, and it addressed only a question on how the executive order might impact BAE employees. “I don’t think we’d experience any impact,” a spokesman wrote. “As a defense contractor supporting many military and security agencies most of our employees are citizens and actually many of them hold security clearances.”

BAE systems provided NomoGaia this reply: “I have passed this query to our US Head Office and asked them to respond directly.” No further response was forthcoming.

What Would a Duly Diligent Company Do?

Companies are a major part of government operations in the 21st century. 70% of the world’s largest “economies” are companies (including DHS Prime Contractors HP, SAIC, Verizon, AT&T, Microsoft, Nestle). Anti-poverty activists have argued that companies use this wealth to sway policy decisions in smaller economies. There is a risk, however, that companies refuse to use their leverage to sway policy decisions in larger economies

Microsoft may offer an exception to this rule in the case of the Travel Ban. Although the company would not provide information on whether it had evaluated the risk of being complicit in rights abuses linked to the Travel Ban, it threw its substantial weight behind the State of Washington’s lawsuit against the original ban.

There are political sensitivities around voicing dissent against government policies. President Trump has used formal communications to censure companies that speak out against his proposals, and contractors are naturally reluctant to jeopardize their relationships with the White House, particularly when the US Government is their primary client. Yet, with regard to the Travel Ban, the courts have, to date, been consistently on the side of human rights. Now would be an ideal time for companies to be evaluating their government contracts for human rights risks and using their shared leverage to ensure that they help government agencies uphold human rights.

We’re watching the wrong companies responding to the Muslim Travel Ban EO

UBER faced major blowback for the Muslim Ban. It's not one of the companies we should be watching.

All the press about companies and the “Muslim Ban” have missed a deeper story. Corporations involved in implementing the ban have been almost entirely silent about it.

That’s why NomoGaia has reached out to 59 of the largest. Our list includes telecom companies, hotel companies, IT intelligence gathering companies and others that take billions of dollars in contracts from the Department of Homeland Security (DHS) every year to implement DHS programs.

Business and the Muslim Travel Ban

Corporate leaders have been notably visible in the debate over President Trump’s Executive Order restricting travel to the US from seven majority-Muslim nations. UBER lost 200,000 subscriptions in less than a week, after its CEO was perceived to be supportive of the President’s action.

Facing public pressure, he has since withdrawn from an advisory panel, donated $3 million to a legal fund to support immigrants and refugees affected by the ban, and signed Uber on to a legal brief opposing the ban.

That legal brief has been signed by 97 companies, noting that “immigrants or their children founded more than 200 of the companies on the Fortune 500 list.”

The brief does not note that some of those companies, including Boeing and AT&T, are also major contractors to the Department of Homeland Security, which is the department predominantly tasked with implementing the ban.

Is Doing Business with DHS a Violation of Human Rights?

That puts Boeing and AT&T, and the thousands of other companies contracted by DHS to run its operations, in a tricky position. They are beneficiaries of DHS largesse, they carry out or facilitate much of DHS’s work, but they have human rights policies that obligate them not to violate rights.

There is no legitimate argument that the travel ban respects human rights. The High Commissioner on Human Rights and a large collection of Special Rapporteurs on human rights have made the case directly. The law suits against the Travel Ban Executive Order also hinge on questions of discrimination, injustice and freedom of religion.

What Companies are Actually Doing to Avoid Complicity in Human Rights Abuses from the Travel Ban

NomoGaia has reached out to over 50 of the Department of Homeland Security’s largest contractors, asking them to weigh in on their responsibilities in the face of the ban.

We will publish our results next month. In the meantime, a preliminary review of public statements reveals something notable: of the thousands of companies doing business with the Department of Homeland Security, only Microsoft and HP have spoken out directly in opposition to the Travel Ban. Yet HP did not join the 97-company Amicus Brief opposing the ban. Neither did major DHS contractors IBM, AT&T, Boeing or Verizon.

Microsoft alone has put its words into action, signing on to directly support the Washington Attorney General’s law suit against the Executive Order.