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US Investment Funds to Monitor Internet Controls in Repressive Regimes

A group of 25 investment funds and research foundations is calling on Internet-related businesses to monitor their operations in repressive regimes.

The investment managers are part of a campaign spearheaded by media watchdog Reporters Without Borders to make sure multinational high technology firms are not helping authoritarian regimes censor speech and spy on their own populations.

Such concerns have been heightened since allegations surfaced that Internet provider Yahoo may have given the Chinese government information that led to the arrest Shi Tao. In April, Shi Tao was sentenced to 10 years in prison for posting on a US-based Internet website information that China says is a state secret.

Reporters Without Borders had little success in its initial effort to enlist corporate endorsement of a statement publicly affirming commitment to freedom of expression. So the group decided to go to where the power was, the financial markets. The group began contacting investment fund managers. Julien Pain heads the group's Internet Freedom Desk.

"What we want is to raise the issue. We want them to discuss at least this issue and to engage in some thinking about it. I hope now other investment fund companies and analysts will join us," he says. "Of course it is easy for us to approach socially responsible funds. But I think even mainstream funds should take action."

The first investment fund to sign on was Boston Common Asset Management, a firm known for its focus on socially responsible investments. Dawn Wolfe, the firm's research director, says socially responsible investments serve shareholders best in the long-term. She admits that some companies are attracted to the allure of short-term profits.

"What that is doing is that while you are gaining a short-term business opportunity to build the infrastructure, for example in terms of Cisco, to build IT (information technology) structure and networking capabilities for the Chinese government, you are also aiding a culture of self-censorship in that country that is ultimately reducing what the long-term business opportunity would be. There are 87 million Internet users in China today. That represents less that seven percent of the total population of that country of potential users," Mr. Wolfe says.

Reporters Without Borders says past experience shows that US companies have been able to negotiate with repressive regimes, including China. The investment managers say they believe shareholders can pressure for such change. The 25 firms and foundations which have signed the statement represent $21 billion in assets.