There is a growing need to proactively manage human rights risks in research collaborations, commercial relationships, and investments. Recent developments bear this out, including the November 2019 report of the National Security Commission on Artificial Intelligence, the placement of 28 Chinese entities—including Hikvision, Megvii, and iFLYTEK—on the U.S. Entity List, and the public scrutiny of relationships between foreign parties and U.S. (and UK) academic institutions, companies, and investors. In this briefing, MassPoint PLLC will cover select legal, policy, and risk aspects of the technology-human rights nexus.
Private companies that receive SWF and SOE investment, as well as the investors who arrange or co-invest with state-linked firms, should, when screening investments and assessing nonfinancial risk before and after the point of investment (and when additional investment is under consideration), the quality and risk inherent in the corporate structure and governance, as well as the business conduct controls of SWFs and SOEs, may affect them in the near- to longer term. In doing so, they should take a lesson from the PIF situation, post-Khashoggi.
Some Congress members are lobbying the Administration to impose human rights sanctions on Chinese officials and companies responsible for or complicit in abuses against China’s Uighur Muslim minority and other minorities. Two companies named, Dahua Technology and Hikvision, are very large, China-based global firms that produce surveillance products and systems. The bottom line is that the tech industry should take note of the development (even if no sanctions are imposed), as it foreshadows the legal and reputation risk issues they will, without doubt, face in connection with tech-enabled abuses, privacy encroachments, and other conduct by consumers of tech products and services.