Compliance headaches have gone global this week, from Nigeria to China.
First, Royal/Dutch Shell finally blinked and settled a civil lawsuit against the company about to start in New York. Relatives of Ken Saro-Wiwa, a Nigerian civil-rights activist hanged by authorities there in 1995, had sued Shell under the U.S. Alien Tort Claims Act for alleged complicity with the government in Saro-Wiwa’s death. Shell agreed to pay $15.5 million to Saro-Wiwa’s family and the survivors of eight other activists executed along with him.
Second, China has announced rather Orwellian plans to require all personal-computer makers that sell PCs the country to include special Web-blocking software with each unit. Ostensibly this is to block citizens’ access to pornography sites, but practically this system will allow Chinese authorities to “update” the list of blocked sites much like your central IT department sends out security patches to your desktop.
To my thinking, both of these events are near-misses for corporate compliance departments: mildly ominous developments that expand, yet again, the list of worries you need to keep in mind. The Alien Tort Claims Act, for example, has gone from a historical chestnut on the law books (it was passed in 1789 and hardly used for centuries) to something rather like a right to private action under the Foreign Corrupt Practices Act: anyone, living anywhere, can sue any company in U.S. courts for providing assistance to a government that does something the plaintiff claims is dangerous.
I recently conducted a podcast interview on the case with Jonathan Drimmer from the law firm Steptoe & Johnson, and man, this stuff seems hazy. How do you craft a code of conduct to insulate yourself from Alien Tort lawsuits? How do you enforce compliance?
The Chinese ruling could also be a ticking time bomb. You can’t wave off compliance with regulations from the world’s largest consumer market—especially one where various government agencies have very cozy relationships with each other, that Westerners often can’t quite perceive. Compliance with the rule itself should be simple enough; either install the blocking software onto the PC’s hard drive, or include a disk carrying the software with the PC’s packaging. That’s a hassle, but it’s not really hard to do.
But there’s something decidedly un-American about cooperating with another government’s censorship efforts. I could even foresee some crafty dissidents from Tibet or Taiwan suing U.S. companies for their cooperation under the Alien Tort Claims Act. And all for a rule that, I’m sure, clever Chinese hackers will be able to circumvent in less than an hour.
Welcome to the global village, folks.