In newspaper ads, the “Big Four” accounting firms call Hong Kong democracy protesters a threat to “the rule of law, society, and the economy.” But it’s not clear why.
WASHINGTON — Rights and watchdog groups are questioning both the logical and legal basis for a series of advertisements, published by the world’s four largest accountancy firms, expressing opposition to the recent pro-democracy demonstrations that took place in Hong Kong.
The firms include one, Deloitte, headquartered in the United States, as well as three European companies, PricewaterhouseCoopers, Ernst & Young (now known as EY) and KPMG. Of course, these are fully global entities, with collective revenues above $100 billion a year and together known simply as “the Big Four.”
Late last month, the Big Four took the extraordinary step of publishing a series of Cantonese-language newspaper advertisements expressing opposition to strengthening plans by pro-democracy advocates to hold a 10-day non-binding referendum around Hong Kong’s political future, accompanied by a public demonstration calling for governance changes in the island.
The advocates – known as Occupy Central with Love and Peace, founded by academics and lawyers – were not calling for violence. Rather, they were urging supporters to snarl downtown traffic, hoping for a landmark display of frustration with the island’s current governance system.
Many view that system as controlled by the Communist Party of China. Amidst a formal public-consultation process taking place over recent months, the protesters are calling for a plan to institute universal suffrage by the island’s next general elections, in 2017 (technically, Beijing has pledged to make this happen). Those calls have inflamed tensions in Hong Kong and parts of China — conditions that have evidently spooked the island’s influential business community.
“[W]e hereby announce that we are opposed to this movement, and are concerned that ‘occupy central’ would have negative and long-lasting impact on the rule of law, the society, and the economy of Hong Kong,” the advertisements stated, according to a media translation. “We hope that the disagreements could be resolved through negotiation and dialogue instead.”
The ads note that the Central district, where the demonstrations were planned, is the island’s hub of financial activities, home to domestic and multinational firms alike. The Big Four’s clients, the ads warned, had expressed significant concern regarding the potential impact of major public protest on the market.
“We are worried that multinational companies and investor[s] would consider moving their regional headquarters from Hong Kong, or indeed leave the city entirely,” the companies stated. “This would have a long-term impact on Hong Kong’s status as a global financial centre.”
While the ads have received little attention, rights observers say the actions are significant.
“It’s safe to say that these ads really stopped us in our tracks,” Sophie Richardson, the director of the China program at Human Rights Watch, told MintPress News.
“In our view, it’s quite unusual that these major accounting firms would take such a position publicly, especially in light of the fact that those people have been doing nothing but exercising their right to freedom of assembly as protected under international law.”
Hong Kong was a British colony for more than a century and a half, until China regained sovereignty over the area in 1997. Yet the island continues to retain amenities not shared in many other parts of China, as well as hybrid regulatory, legal and governance systems.
Certainly, Hong Kong’s proximity to China and strong legal safeguards have been lucrative. The island has been at or near the top of all of the world’s financial centers in recent years as a host to initial public offerings, bringing in more investment capital than the major stock markets in New York and London.
Safeguarding those business interests is an understandable priority, for both corporate firms and for the Hong Kong government. Similar advertisements were taken out in mid-June by the local chambers of commerce of five countries — Canada, Italy, India, Bahrain and Hong Kong itself — though these were not necessarily indicative of their home government’s views.
Yet rights advocates say the Big Four’s advertisements and very public advocacy on the issue was not only wrongheaded and dangerous, but undercut a central element of Hong Kong’s business success in the first place.
The advertisements were “an act done in bad faith and … capable of contributing to violations of the human rights of those looking to exercise their rights to freedom of expression and peaceful assembly as enshrined in international law,” Mabel Au, director of Amnesty International Hong Kong, a watchdog group, told MintPress.
“The accountancy firms must ensure that they do not contribute in any way to human rights violations or attacks on human rights defenders and peaceful protesters.”
Au notes that business considerations do not take precedence over human rights as enshrined in international law. Hong Kong is a party to the International Covenant on Civil and Political Rights, for instance, while the Big Four firms are bound by U.N. principles on the global rights obligations of multinational businesses, known as the Guiding Principles.
For instance, while restrictions on the right to peaceful assembly are permissible under international law, this is the case only if such restrictions are deemed necessary to protect legitimate public interests or the rights of others.
“Any restrictions must be proportionate. Amnesty International believes that this is not the case here,” Au said. “The accountancy firms would be wise to remember that the right to freedom of expression and the right to peaceful assembly go hand in hand with the rule of law in Hong Kong.”
Indeed, the companies’ expressed concern over the Occupy Central demonstration’s potential implications for Hong Kong’s rule of law strikes some as naïve or specious.
“If they’re concerned about the threat to the ability of Hong Kong to function in the transparent, law-oriented and meritocratic way it has in the past, then, frankly, a single public gathering that stops traffic for a day is reasonably low on the list of things to worry about,” Human Rights Watch’s Richardson said.
“These demonstrations are representative of fundamental concerns about the rule of law and who gets to make decisions about what happens in Hong Kong. These businesses have likely profited precisely because there is transparency and protections of freedoms of expression, as well as social organizations and political parties that can hold the state to account.”
It remains unclear where exactly the decision-making processes behind the advertisements began. The week after the Big Four ads ran in Hong Kong newspapers, for instance, employees of each of the companies took out their own local ads, expressing frustration and stating that the firms’ “statement doesn’t represent us.”
In subsequent days, some of the Big Four global headquarters appeared to backtrack somewhat, noting that the relevant decisions had been made by local subsidiaries rather than reflecting global policy.
When asked by MintPress for clarification on this point, Deloitte’s Hong Kong subsidiary declined to comment, while EY and KPMG did not respond. PricewaterhouseCoopers, or PwC, however, did appear to stand firm on the decision to publish the advertisements, while offering a more nuanced reading of the company’s position.
“PwC Hong Kong is fully supportive of the right of the people of Hong Kong to make their voices heard peacefully,” a company spokesperson told MintPress in an email.
“The advertisement … is not opposed to democratic debate and discussion, it simply expressed concern about the significant disruption that the ‘Occupy Central’ movement could bring for the businesses and people of Hong Kong.”
PwC says it encourages everyone interested in Hong Kong’s future to “voice their opinions without disrupting the lives of others.”
The events appear to have rattled Beijing authorities, though the Chinese official reaction is still up in the air. Just ahead of the planned referendum and following a series of growing public protests, the Chinese government issued a first-of-its-kind white paper reaffirming Beijing’s control over Hong Kong’s affairs. Media analysis has suggested the paper was a warning to advocates of greater democracy for the island.
Human Rights Watch’s Richardson says the Big Four’s advertisements have to be seen in the context of this growing political pressure. “That they took out the statement makes you wonder whether they were trying to signal to the Chinese authorities that they felt compelled to clarify which side they were on,” she said.
Clear bottom line
Meanwhile, the Occupy Central actions are being seen as remarkably successful, with the July 1 demonstration drawing more than 500,000 people, according to organizers.
Saying they are “very encouraged by the result,” backers also estimate that nearly 800,000 people, or around 10 percent of the island’s residents, voted in the referendum, according to a press release. Nearly 88 percent of total voters, the organizers report, “believed that if the government proposal does not meet international standards allowing genuine choices by electors,” it should be vetoed.
“[A]lthough Hong Kong people may have diverse views on the electoral reform proposals,” they continue, “they have a clear bottom line – other than one person, one vote, universal suffrage should allow people from different backgrounds to enter into the election thus providing truly meaningful choices for the voters.”
On Tuesday, the Hong Kong government sent a formal report on the public-consultation process to Beijing. But, Richardson says, they failed to include any reference to the demonstrations or referendum, while watering down the frustrations felt by significant segments of Hong Kong society.
Chinese authorities will now weigh the Hong Kong report and other political factors to come out with a decision on how they think governance reforms on the island should proceed. While there is no timeframe on when this ruling will come out, observers say it will likely take place in the next month.
Whether Occupy Central and other pro-democracy advocates could potentially get people back out into the streets at that time remains unclear.