Friday, April 30, 2010

Implementing and Integrating China's Amended Secrets Law--Official Views and Objectives

I recently wrote to briefly describe China's move toward a new Secrets Law.  Larry Catá Backer, China's New Secrets Law, Law at the End of the Day, April 26, 2010.  I suggested the tension inherent in the new approach--pitting an older Cultural Revolutionist view of the integration of political and economic orders subsumed within a nationalist political understanding, with the disclosure and transparency requirement of globalized business culture.   I also suggested that the administrative malleability of the notion of secret--leaving its characterization to administrative officials to be decided post hoc providers a level of uncertainty that might impede global business.  I wondered whether the new law would put Chinese companies operating abroad in a difficult situation.  And I suggested the potential conflict between the possible thrust of the Secrets Law and global movement towards  corporate social responsibility and the incorporation of human rights elements into basic corporate behavior.  Yet, it is also clear that every state must protect its political secrets.  All states also must provide an institutional, mechanism for the protection against theft--whether of real, personal or intangible property.  The protection of rights to information is an especially important.  What is unclear is whether state and business secrets may be conflated as easily as the recent Chinese provide.  

Others have taken a different view:
Law experts also said the draft is effective in reducing the scope of State secrets, defining expiration dates for confidentiality of files and holding a person liable for any secret release.
"Items that laws or administrative ordinances stipulated to be open to the public, should be made open," according to a newly added stipulation in the latest amendment.
"It draws a clear line distinguishing what is a confidential secret and what is not," said Ma [Huaide, a law professor of China University of Political Science and Law], adding government transparency will be promoted accordingly.
Wang Huazhong and Wang Xing, Police to work with phone, Internet providers, China Daily, April 27, 2010.

What is clear is that "Telecom operators and Internet service providers must cooperate with public security and State security authorities on investigations of possible State secret leaks, according to a draft law. The law in effect furhter engages businesses in stabilizing national security, experts said." Id.  As the Wall Street Journal Reported: "At a news conference Thursday, Sun Zhenping, a senior official in the legislature's legislative-affairs commission, said Internet operators wouldn't be expected "to monitor every piece of information, but only to report the most obvious ones that are suspected of disclosing state secrets." He didn't elaborate." Skye Canaves, Bejing Revises Law on State Secrets, The Wall Street Journal, April 29, 2010.
Clearer still is the public focus of the Secrets Law Changes--the use of electronic communication to foster political unrest, especially in sensitive autonomous regions.
Officials have blamed phone text messages as a tool for criminals to instigate the deadly July 5 riot last year in Northwest China's Xinjiang Uygur autonomous region.

"We now have more media carrying information, rather than just the paper documents of the past. Without cooperation from network carriers and service providers, authorities alone could not collect evidence or sort out the cases," said Ma Huaide, a law professor of China University of Political Science and Law.

He also stressed that although operators are obliged to cooperate with investigations, "they cannot intercept or misuse information not in question".

Some insiders of telecom and Internet service providers on Monday expressed their concerns about possible abuses of power, while admitting the cooperation would be effective in tackling crime and fraud.

Wang Yuquan, a senior consultant from research firm Frost & Sullivan, believes that in the past telecom operators had not been given a clear legal obligation and therefore did not act as they should have. They have indirectly assisted the growth of crime, he said.

However, independent telecom expert Xiang Ligang said: "Operators should serve no more than providing an information-sharing platform or a channel. Identifying what is a State secret is complicated in practice. Parties other than police who mishandle information would easily breach users' privacy."
Wang Huazhong and Wang Xing, Police to work with phone, Internet providers, China Daily, April 27, 2010.  Iran, perhaps, provides an object lesson in the utility of electronic communication t level the playing field between the state apparatus and dissident forces in their ability to marshal forces.  "Forget CNN or any of the major American "news" networks. If you want to get the latest on the opposition protests in Iran, you should be reading blogs, watching YouTube or following Twitter updates from Tehran, minute-by-minute. " Ari Berman, Iran's Twitter Revolution, The Nation, Blogs, The Notion, June 15, 2009.  And the ability of foreign states to enhance that electronic communication power is also well known.  "The State Department asked social-networking site Twitter to delay scheduled maintenance earlier this week to avoid disrupting communications among tech-savvy Iranian citizens as they took to the streets to protest Friday's reelection of President Mahmoud Ahmadinejad. "  Evgeny Morozov, Iran Elections:  A Twitter Revolution?, The Washington Post, June 17, 2009.

Lastly, the revisions might represent an effort to centralize the control of the determination of what are state or commercial secrets.  "Flora Sapio, a lecturer on Chinese law at Istituto Universitario Orientale in Naples, Italy, said the state-secrets-law amendment also restricts the ability of lower-level authorities to classify information as state secrets, and therefore appears to be "an attempt to centralize control of state secrets." She said amendment is "an old piece of legislation is being brought up to date according to the needs of an authoritarian regime.""  Skye Canaves, Bejing Revises Law on State Secrets, The Wall Street Journal, April 29, 2010.  But the definition of both state and commercial secrets remain vague enough that virtually any piece of information may be determined ot be such--and to be so determined after the fact (that is after information has been disclosed.  Worse, people accused of violating the lawbmay not be able to defend against the charges to any effect.  ""Chinese prosecutors never publicly detailed what information the men—who were later fired by Rio Tinto—possessed. When they were sentenced, the judge said the secrets primarily involved how much Chinese steelmakers were willing to pay for iron ore, information executives at other companies considered routine market intelligence. James T. Areddy (Yajun Zhang contributing),  China Defines Commercial Secrets, Tells Firms to Protect Them, Wall Street Journal,  April 26, 2010.  
In any event, what is clear is that information in China belongs to the state.  Whether classified as commercial or state secret, information may be disclosed and used only to the extent permitted by the state.  And the state retains the right to characterize the information and the effects of its use without permission.  That is a very different framework from that developing elsewhere, where  the presumption is the inverse of that in China.  It is this foundational difference in view that will make translating business and political culture between China and its business partners more difficult in the coming years.  And it will pose the greatest problem for Chinese enterprises operating outside of China, that will be subject to its internal information culture as well as the obligation to conform to the information culture of host states.  For now, however, "the answer appears to be that obtaining almost any information from a Chinese enterprise poses some risk." John Garnaut, Chinese Define What is a Secret, Business Day, April 28, 2010.


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