Profits at any cost?

HP, IBM, Dell, Microsoft, Cisco and Sun have all had their ethics called into question in separate reports from Amnesty and CAFOD

It's not been a great week for IT companies. While the whole financial landscape may be looking more fecund, the moral topography of some companies is appearing distinctly barren.

The week began with a damning report from the Catholic Agency for Overseas Development (CAFOD) highlighting sweatshop conditions in the factories that produce components for several leading PC manufacturers, including IBM, Dell and HP. The agency claimed to have uncovered "dire working conditions" at production sites in Mexico, Thailand and China. The wider implications of the report have already been touched on but basically CAFOD claims that these "appallingly low" conditions are a direct result of extreme pressures within the IT industry to cut costs.

While unsafe working practices and human-rights abuses are wholly unacceptable, previous cases such as Nike's mean that manufacturers treating factory staff in developing countries poorly is sadly neither new nor particularly shocking. But a report issued yesterday by human-rights campaign group Amnesty indicates that moral bankruptcy in the IT industry is not limited to the relatively low-margin, commoditised PC market. It seems some of the industries biggest software or "solution" providers could have also been driven onto equally shaky moral ground by financial pressure.

In the report, China: Controls tighten as Internet activism grows, Amnesty claims there has been a dramatic rise in the number of people detained or sentenced for expressing their opinions online or for downloading information from the Internet. Up to and including January 2004, 54 people had been detained or imprisoned for "Internet activism" in China -- a 60 per cent increase on November 2002 figures, according to Amnesty.

And where does China get the technology to monitor and restrict access to the Internet? From Microsoft, Sun, Cisco and Nortel, among others, claims Amnesty. According to the report: "Amnesty International remains concerned that in the pursuit of new and lucrative markets, foreign corporations may be indirectly contributing to human-rights violations or at, the very least, failing to give consideration to the human-rights implications of their investments."

This is not the first time that Amnesty has made this type of allegation. Following the organisation's first report on the issue, State Control of the Internet in China, several companies dismissed the allegations with the defence that they merely make the tools and are not responsible for their use: "If the government of China wants to monitor the Internet, that's their business. We are basically politically neutral," said a Cisco spokesperson. Microsoft said that it was "focused on delivering the best technology to people throughout the world", but that it "cannot control the way it may ultimately be used".

Amnesty quite rightly pointed out that this kind of response really isn't good enough; not just from the obvious moral perspective of a company disavowing all responsibility for the products it makes, but also from a legal standpoint. Amnesty cites the UN Human Rights Norms for Business, adopted in 2003, which states:  "Trans-national corporations and other business enterprises shall refrain from any activity that supports, solicits, or encourages states or any other entities to abuse human rights. They shall further seek to ensure that the goods and services they provide will not be used to abuse human rights."

The "it's not our problem" defence is especially galling in Microsoft's case, given that chairman Bill Gates is keen to be seen as a philanthropist through good works done via the Bill & Melinda Gates Foundation. The speech that Gates made at the World Economic Forum in Davos last week shows that he wants to be seen as a responsible business leader who contributes to the United Nations Development Program (UNDP): "The overall programme that Microsoft has to address the gaps - the digital divide - we call 'Unlimited Potential'. And that is by letting people have the very best software, letting them have access to all the information on the Internet, making sure that computer literacy and job skill training is there, that their potential will be realised and that they can participate in the information economy."

If Amnesty's assertions that Microsoft sold China tools to help it regulate the Internet (the software giant doesn't appear to be denying this) are accurate, then there seems to be a certain amount of hypocrisy in Gates' position that he is keen to provide "access to all the information on the Internet" to developing countries. Afghanistan, Mozambique and Egypt get "Unlimited Potential", and a share in around $1bn (£0.55bn) worth of aid as part of the UNDP and Microsoft programme, while when it comes to China, the software provider is helpless and "cannot control the way [it's software] may ultimately be used".

This apparent hypocrisy is frustrating, but focusing on one country or even one company is probably unfair. The US and UK governments are not guilt-free when it comes to controlling, or at least heavily monitoring, Internet information -- it's just that they do it a lot more subtly. Equally, as the CAFOD report identified, Microsoft is not the only IT company that has had its ethical stance questioned.

Ethics and morals have not traditionally played a large part in business -- particularly ethics and morals in relation to the third world. But when Gates and his ilk begin making speeches on the international stage about freedom and the digital divide, the wall constructed between business and morals begins to look increasingly shaky. Things are made worse by the financial squeeze that has dogged the IT industry for the past three years, which has lead to companies looking at new markets that may have a questionable approach to human rights.

No matter how shaky that wall gets, it is only consumer pressure that will make ethics a business issue. It seemed that only when the perceived threat of viruses hurt Microsoft's sales did the company begin to take the issue seriously. And it will only be when consumers begin to boycott products because of a company's ethical stance that firms consider taking action.

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