Thursday, 27 January 2011

Backlash against transparency: the right to corporate privacy?

To what extent will a right-wing French MP sympathetic to big business and French government's ongoing manoeuvres to create a "corporate confidentiality" label endanger critical reporting on corporations and business transparency?

Last week, French right-wing MP Bernard Carayon in an interview for the website Rue89 boldly stated "I claim that the State and private companies should also benefit from physical persons' right to privacy. [...] Companies should be allowed to define for themselves which information remains secret [...]."

Carayon, who also chairs the French corporate-funded think-tank Prometheus Foundation, recently tabled a remarkable legislative proposal in the French Parliament that aims to enhance business secrecy to the point of seriously undermining the public's right to know about corporate practices. Riding on the controversy created by Wikileaks and a recent case of industrial espionage in France allegedly involving a couple of Renault high executives and a Chinese battery maker, Carayon wants to increase protection for "economic information" by introducing a three-year prison sentence and a 375.000€ fine for anyone found guilty of breaching “the confidentiality of information of an economic nature". The sentence would be doubled if the culprit has acted "with the intention of causing harm" or has "made a personal profit" by leaking the information.

The crucial point here is the definition of the "information of an economic nature ". The proposal is extremely vague, stating that this includes all "information that is not general knowledge freely accessible by the public and that has, directly or indirectly, an economic value for the company, and which has been protected with substantial secrecy measures by its legitimate owner, according to the law and common practices". In other words, the actual definition of "information of an economic nature" is any internal information a company wishes to consider secret.

Of course, Carayon claims that a company should not be allowed to use this law to hide fraudulent activities. But how to prove that certain companies' activities are illegal without access to the information? This new law would considerably increase big business' secrecy because it considers industrial espionage on an equal footing to information leaked to the press. A difference could have been made, but wasn't: there is little doubt the omission is intentional.

Carayon's Prometheus Foundation has built itself a name in recent years for representing, under a “do-tank” label, the political interests of some big names in French industry, notably in the armament and pharmaceutical sectors. Thalès, EADS, Safran, Dassault, Sanofi-Aventis... all sit on the Foundation's Board, but the banking and energy sector also contribute to its budget. The Prometheus Foundation has for instance set up an "NGO Transparency Barometer", which uses flawed criteria and methodology in a poorly disguised attempt to unfairly discredit critical NGOs. This new legislative proposal takes the Foundation into new, far more dangerous territories in its zealous defence of corporate interests.

But this shouldn't be seen as only coming from a right-wing MP backed by a few big companies: the move is bigger. Not only is the legislative proposal supported by 124 MPs, but the French government, through the Inter-ministerial Delegation on Economic Intelligence (a high-level informal body gathering officials from the Ministries of Defence, Interior, Research, Budget, Environment, Foreign Affairs and the Economy, and that now directly reports to the French Presidency), is also working with a number of big French business lobbies (Medef, AFEP, CDSE, CGPME, Chambers of Commerce...) to design new legislation intended to create a new legal label, “corporate confidentiality”, to protect corporate information that is not covered by existing intellectual property laws. According to the head of this body, Olivier Buquen, this will cover “all strategic information, which can be, depending on the company, a client's database, a business plan or the details of a partnership […] we wish to simplify legal procedures for companies, and to create penalties that are severe enough to act as a deterrent. Our text will foresee legal proceedings against whoever steals or leaks a company's key information.”

“Steals or leaks”: in this French official's words, targeting whistle-blowers is an objective no longer pursued with a convenient omission but with an affirmation. Both initiatives still need to pass a few hurdles (and will probably be merged in some way) before being discussed by France's Assemblée Nationale. Nevertheless, the ambition of business lobby groups to take advantage of anti-industrial espionage legislation to silence internal dissent and deter critical reporting is very clear... and could influence the situation all over Europe: a European Arrest Warrant could be used under the terms of this legislative proposal to arrest a French whistle-blower anywhere in the EU, and other countries might be tempted to follow France's appalling creativity.

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