Thursday, August 5, 2010

RIM's Privacy Challenge, Should Investors Weigh In?

Is Canada's darling, Research in Motion (RIM) about to face the same fate as internet giants Google and Yahoo regarding the right to privacy? The maker of Blackberry is facing mounting criticism from authoritarian governments about limitations on government access to private information on Blackberry servers.

The information is used by some governments to monitor the movement of human rights defenders and political opponents. Some say government access to this information is an infringement on human rights and the right to privacy.

Google and Yahoo have faced significant pressure from shareholders over the past few years regarding the right to privacy.
The issue came to a head after human rights defenders were jailed in China after technology companies provided the government with internet tools to track and sensor the activists.

Is it RIM's turn for the spotlight?

In 2005 responsible investors with combined assets of $22 billion launched a joint investor statement on the issue of internet privacy and human rights. The statement calls for internet technology companies to respect freedom of expression and to ensure their technology is not used by governments to curtail human rights.

Shareholders have filed numerous shareholder proposals over the past few years with US technology companies. Shareholders have been asking companies to adopt policies and procedures to ensure they protect basic human rights in the delivery of internet services. Google has now bowed to the pressure, criticizing China publicly regarding censorship. Human rights advocates are asking other technology companies to follow suit and stand up for human rights on the internet.

RIM and other technology companies frequently make concessions to foreign governments in exchange for access to growing markets in developing countries. To some degree this is a necessary part of doing business.

However, the question for RIM shareholders is, what are appropriate privacy concessions for RIM to make, and at what point do such concessions violate human rights?

Is RIM in your investment portfolio? Support human rights, become a shareholder advocate.