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Riot police stand guard after pushing back protesters demonstrating against the new security law during the anniversary of the Hong Kong handover from Britain
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Nothing to say.
COST-BENEFIT ANALYSIS

Multinational companies are calling out injustice everywhere—except in China

Marc Bain
By Marc Bain

Fashion reporter

The past few months have seen a wave of companies speaking out on social issues and injustice. They’ve flocked to social media to condemn racism in solidarity with the protests against police killings of Black Americans. They’ve pledged to halt advertising on Facebook through July to rebuke the social media giant for its role in enabling hate speech online. Some have pressured the NFL’s Washington Redskins to change its name, which they call disrespectful to indigenous Americans.

But there’s an escalating human rights crisis where companies have remained silent. Despite China’s recent move to assert its authority over Hong Kong, along with the substantial evidence that China has pressed much of its Uighur ethnic minority into detention camps where they’re subject to forced labor, companies have generally not criticized China publicly. The situation shows the limits of what businesses will risk in the name of values.

“They are inconsistent,” said Surya Deva, associate professor of law at City University of Hong Kong and a member of the UN Working Group on Business and Human Rights. “This unprincipled approach, in my view, is problematic.”

Deva described it as a cost-benefit analysis. Unlike taking a stand against racism or hate speech, criticizing the actions of China’s government carries a large financial risk. Last year, for instance, after Daryl Morey, general manager of the NBA’s Houston Rockets, tweeted his support of the pro-democracy protesters in Hong Kong, China responded with measures such as suspending broadcasts of NBA games on state television. It has cost the league “hundreds of millions” and Chinese state television doesn’t plan to air games once play resumes. Many multinationals similarly have substantial business interests in China that would be in jeopardy.

William Nee, the business and human rights strategy advisor and analyst at Amnesty International, said he wasn’t surprised that companies standing behind the Black Lives Matter movement were not vocal about rights abuses in China. “Clearly, these companies know that Beijing will retaliate fiercely against any criticism of their policies, and there is not a big domestic audience in China who will reward them for their progressive stance either,” he said.

Nee also pointed out that, under international standards, companies are generally not required to take a public stand on such issues unless they have caused, contributed to, or been directly linked to human rights violations. There’s also the question of whether companies should take public positions on issues occurring in foreign countries. Many of the companies denouncing racism in the US and boycotting US-based Facebook are also based in the US, so it arguably makes sense that they would be more vocal about injustices at home.

But that doesn’t mean they are disconnected from what’s happening in China. A report earlier this year by the Australian Strategic Policy Institute, a think-tank founded by Australia’s government, found connections between dozens of international companies, including multinational giants such as Nike and Apple, and Chinese suppliers that used forced Uighur labor. On July 1, the US issued an advisory telling businesses to be aware of the risks of forced labor in their supply chains if they use facilities located in or linked to Xinjiang, the Western region where most of China’s Uighur population resides.

Experts also say the new national security law in Hong Kong, which gives Beijing authority to investigate and arrest suspects for an array of vaguely defined “political” crimes, has set the stage for rights abuses, putting companies operating in Hong Kong in a tricky position. “The national security law would also undermine the ability of businesses operating in Hong Kong to discharge their responsibility to respect human rights in line with the UN Guiding Principles on Business and Human Rights,” a panel of UN experts warned in a recent statement.

Those principles (pdf), adopted by the UN human rights council in 2011, state that businesses must avoid causing or contributing to rights violations, and must seek to prevent or mitigate issues “directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.” The principles are not legally binding, but Deva says practically all companies and industry associations accept them. Companies are also not excused by saying they are just complying with the laws of a country. The OECD has a similar set of standards (pdf) for businesses.

Some tech companies including Facebook, Google, and Twitter have paused processing requests for user data from Hong Kong’s law enforcement agencies over concerns about the law, though because they’re generally blocked in China they don’t have a large financial stake in doing so.

Other multinational firms might not be so directly entangled in thorny human rights issues, but their silence has still drawn notice. Patrick Collison, CEO of Stripe, an online payment processing firm, tweeted recently that US businesses should be clearer about their opposition to the actions of China’s government. He was referring to a report from the Associated Press on China using methods such as abortion and sterilization to reduce the Uighur population in the country.

While companies may feel like they have to play by China’s rules or suffer the consequences, Deva says companies do have leverage, particularly if they act collectively. They may not be able to force major reforms, but they can push for incremental changes, such as negotiating with local authorities to get concessions for Uighur workers. They could also fund research by centers at Chinese universities to push for more free access to information.

“In short, companies should act collectively and explore innovative ways to promote human rights without crossing ‘hard red lines,’ he said. If that fails, the UN Guiding Principles are clear, he noted: “If you try to use your leverage and it doesn’t change anything, you may have to use your last option, that is to withdraw or disengage from the market.”

Few companies seem likely to take so bold a stance anytime soon.

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