KLD Research signs on to a joint investor statement on freedom of expression and the Internet

In September 2005, KLD signed a joint investor statement on Freedom of Expression and the Internet. Reporters Without Borders (RSF), a French organization dedicated to the protection of free speech, Boston Common Asset Management and Domini Social Investments collaborated in writing the statement. The statement comes at a time when investors are increasingly concerned with the proliferation of certain communications technology within countries, most notably China, known to violate commonly held standards for human rights.

The use of technology, including Internet services, to monitor, censor and track the actions and communications of potential dissidents and activists presents not just an ethical problem for investors, but could have implications for the value of investments. Of particular concern is loss of reputation among customers, and possible regulatory action by governments.

KLD has followed this issue for some time. In July 2005 KLD participated in a round table discussion held at Boston Common, in conjunction with RSF and The Berkman Center for Internet and Society at Harvard Law School, on the use of technology to subvert freedom of expression. As documented by NGOs such as Human Rights Watch and Amnesty International, the Chinese government has used surveillance technology, human censors, and laws to try to maintain control over its citizens' use of the Internet. Amnesty reported in 2003 that the government had arrested dozens of people for allegedly "subverting state power" and "vilifying the Chinese Communist Party" through articles and essays they had posted on the Internet.

KLD gave its first human rights concern to an Internet company for complicity by a foreign government in September 2005. KLD gave the concern to Yahoo! Inc., in response to revelations by RSF that the company’s Yahoo! Holdings Ltd in Hong Kong had provided information to the Chinese government that led to the arrest and conviction of a Chinese journalist.

The Chinese government accused the journalist, Shi Tao, of sending the content of a Chinese government communication to reporters. This warned against critical reporting on the anniversary of the Tiananmen Square massacre to a Chinese-language website based in the U.S. Yahoo!'s Hong Kong division received and complied with a court order to provide information that helped the Chinese authorities identify and locate Shi.

Shortly after the story on Shi Tao broke, the Financial Times noted in an editorial that, according to RSF, Hong Kong law (which governs Yahoo's subsidiary) does not actually specify what is legally required of Internet service providers when Chinese government officials demand information. The editorial therefore questioned whether Yahoo was following law as opposed to custom.

In June 2005, RSF criticized a number of Internet companies, including Yahoo!, for cooperating with the Chinese government's campaign to censor the Internet by complying with filtering guidelines and blocking access to material frowned upon by the government.

In addition to the joint investor statement, Domini Social Investments and Boston Common Asset are working on filing a shareholder proposal on this issue. For more information on the joint statement or the shareholder proposal, please contact Adam Kanzer at Domini Social Investments or Dawn Wolfe at Boston Common Asset Management.