Yahoo!’s Human Rights Turnaround

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Just like any other global company, Yahoo! must ensure that its local country sites . . . operate within the laws, regulations and customs of the country in which they are based.

– Yahoo! Spokesperson, September 2005


Human rights trump doing business.  . . .  Internet companies must learn when not to hide behind the notion that we are corporations so it is our number one obligation just to do business. It isn’t our number one obligation. Our number one obligation is to be good world citizens.

– Carol Bartz, Yahoo! CEO, Yahoo! Business & Human Rights Summit, May 2009

What a difference media attention, a lawsuit, Congressional hearings, and ousting the CEO makes. Like earlier corporate responsibility poster children under intense pressure from stakeholders (see Nike), Yahoo is transforming itself from a laggard to a leader.

Seven years ago, Yahoo’s local affiliate signed the “Public Pledge on Self-Discipline for the Chinese Internet Industry,” agreeing to censor politically objectionable content on its web sites. Yahoo! China subsequently complied with requests from Chinese law enforcement officials for personally-identifiable user information, leading to the arrests of Internet writers and dissidents, including Shi Tao, a Chinese journalist sentenced to a 10-year prison sentence for “sharing state secrets,” i.e., e-mailing a government notice directing news organizations not to cover the 15th anniversary of the Tiananmen Square crackdown.

Yahoo’s failure to anticipate the human rights impact of cooperating with Chinese government internet censorship and surveillance generated widespread criticism of the company, and focused international attention on the potential complicity of internet companies in government threats to freedom of expression and privacy worldwide. Facing proposed legislation, Yahoo!, Google and Microsoft executives were called to Washington to explain their corporate human rights policies in China.

In November 2007, Congressional critics lambasted Yahoo for its handling of the Shi Tao case, and accused Yahoo’s general counsel of providing false information when he testified that Yahoo had no knowledge of the facts surrounding the Shi Tao case when the company provided his personal information to the Chinese authorities. In fact, Yahoo understood that the government request involved “state secrets,” but made no effort to resist the request. In a stunning instance of hearing theatrics, Chairman of the House Committee on Foreign Affairs, Rep. Tom Lantos, tongue-lashed Yahoo founder and CEO Jerry Yang, urging him to “face the family of the Chinese journalist who, as a result of Yahoo’s actions, has been tossed into a Chinese prison.” Yang stood in the hearing room, turned and bowed in apology to Shi Tao’s mother.

That apology marked the beginning of Yahoo’s human rights turnaround.

A week later, Yahoo agreed to settle a lawsuit Shi Tao had brought under the Alien Tort Statute seeking civil damages for Yahoo’s alleged complicity with the Chinese government in his imprisonment and torture.

In 2008, Yahoo launched a Business and Human Rights program that acknowledges corporate human rights obligations; adopts corporate human rights best practices, such as referencing international standards, engaging stakeholders and conducting human rights impact assessments; and has led to changes to Yahoo’s business practices. As it expands its market in Vietnam, for example, Yahoo is housing user information on servers outside the country so it can resist government requests for information.

Notably, Yahoo has assumed a leadership role in the Global Network Initiative (GNI), a voluntary multi-stakeholder program launched in October 2008. The GNI sets standards and guidelines for internet companies seeking to respect and protect the freedom of expression and privacy of their users. GNI participants Yahoo, Google and Microsoft commit to protect these individual rights when confronted with government action inconsistent with internationally recognized laws and standards, such as the Universal Declaration of Human Rights. The GNI principles also call for companies to implement these principles through Board engagement, human rights impact assessments, and agreements with business partners.

The GNI breaks new ground among voluntary corporate human rights initiatives by 1) providing specific guidance for resisting and narrowly interpreting government requests or demands that violate these rights, and 2) committing its participants to promote government reforms to strengthen human rights protections.  Consistent with John Ruggie’s protect, respect and remedy framework, the GNI leverages collective corporate action to promote government human rights protection while helping companies to avoid complicity with government human rights violations. If implemented in good faith, these features of the GNI could have the greatest impact on freedom of expression and privacy for internet users worldwide.

The month after GNI launched, Yahoo founder and CEO Jerry Yang resigned, one year after his public apology. The perception among stakeholders that Yahoo had become a corporate follower in its intensely competitive industry, contributed to Yang’s ouster. On human rights issues, new Yahoo CEO Carol Bartz appears to be positioning her company to demonstrate leadership.