Privacy for you and me, and them

In late 2014 I started a small discussion group called Twilight Debates. Our first reading was a thought-provoking piece by Christos Tsolkas. Our last reading was more philosophical, which was appropriate, because the group has since morphed into a monthly philosophical meeting at the house of a friend and colleague. The focus of that discussion was on privacy.

My intention in this short post is to gather together my own thoughts on privacy, writing quickly as I look out on a wind-tossed sea at Sunrise Beach. This is intended to be a conversation piece rather than a fully formed scholarly article. My starting point is to speculate, from an Australian perspective, about a couple of privacy issues as they
relate to individuals and corporations.

Isaiah Berlin thought that freedom was a slippery concept: “Like happiness and goodness, like nature and reality, it is a term whose meaning is so porous that there is little interpretation that it seems able to resist” (Two concepts of liberty). The same could be said for privacy.

Nonetheless it is often helpful to find out the etymology and history of a term, and I think that is true in this case. Derived from Latin privus ‘single’ through Old French private, the word immediately conjures up associations such as privy, privates, private, as well as associated concepts such as seclusion, withdrawal from society, secrecy, hiding something from public view, and concealment, hiding information. For some it might also suggest autonomy.

Rousseau, in his Discourse on the doctrine of inequality, observed that “the real founder of civil society was the first man who, having enclosed a piece of ground, said that this is mine”. What is intriguing about this statement is the assumed connection between civil society and individual rights. It is my belief that when civil society is based on just, fair principles and the rule of law, then individual privacy–understood as autonomy, protection from arbitrary intrusion and interference–is respected. In a sense this fits the definition of classical liberalism.

Since March 2014 Australian Privacy Principles (APPs) have delineated the rights of individuals and the responsibility of corporations. These 10 principles cover (1) what personal information organisations can collect and share with third parties, (2) what their disclosure requirements are, (3 and 4) the requirement that data be accurate, up to
date, and secure, (5) the need for open policies which stipulate how those data are managed, (6) the general right of individuals to access their personal information, and have it amended if it is inaccurate, incomplete or out of date, (7) the stipulation that an organisation cannot also use an Australian Government identifier for an individual (e.g., a
Medicare number) as its own, (8) the provisions for anonymity, (9) how organisations should protect the personal information they transfer outside Australia, and (10) the requirement that higher standards be applied to the handling of sensitive information relating to ethnic, health, and racial background or a criminal record.

It is a moot point whether all these principles hold much water if protections against hacking, surveillance, fraud and government/corporate deception are weak. What can be done about these threats is another issue.

What measures are in place to protect the privacy of corporations, and what is meant by that term exactly?

Secret offshore tax shelters are one potent form of protection, first perfected by Switzerland in 1934 and since applied as a template and refined in countries such as Andorra, the Bahamas, Beirut, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Cook Islands, Hong Kong, the Isle of Man, Lichtenstein,
Mauritius, Monaco, Panama, St. Kitts and Nevis and Uruguay.

Individuals seeking to understand that web of intrigue, and governments trying to claw back lost tax revenue, are often reliant on leaked documents such as the Panama Papers: 11.5 milion documents now being studied by 375 journalists associated with the International Consortium of Investigative Journalism.

Gag orders are another. When Australia’s banknote printer was caught in a corruption scandal which implicated Saddam Hussein and a Malaysian arms dealer, and involved bribes to help sell Australia’s polymer banknote technology overseas, court orders were obtained to prevent further reporting of details about the charges against the company.

It is my contention that too much information is concealed about the failure of some wealthy individuals and some transnational corporations to abide by the national tax regime, which means that the burden of contributing to the upkeep of our roads, hospitals and schools falls disproportionately on wage earners. As Juan Carlos Varela reported in the New York Times on April 11, 2016 in relation to the Panama Papers:

The scope of the information is breathtaking: The files include information on more than 14,000 banks, law firms, corporate incorporators and other middlemen from more than 100 countries, which is just a small part of a worldwide industry that harbors trillions of dollars.

That some can rig the system to hide their wealth is not merely unjust; it also harms global development by siphoning off revenues that could be directed to education, health care and infrastructure.

The media has largely served up breathtaking revelations about individual politicians and celebrities who have used anonymously owned shell companies and offshore accounts to evade tax. Drip feeding the public with tabloid stories about individuals evading tax has been a way of deflecting attention away from the real story, which is how an alternative system of corporate tax avoidance has been stealthily developed. The advantage of the tabloid approach is that it serves up a few individual shock horror stories before the media then moves on to the next titillating thing. In-depth systemic analysis will take longer, thanks to corporate secrecy.

We need to understand the difference between corporate privacy, needed for legitimate, commercial-in-confidence reasons, and corporate secrecy which is simply aimed at using hidden Russian doll structures to hide dodgy practices, illicit funds transfers and illegal activities. In this TED talk Charmian Gooch has some illuminating insights to offer about the massive social costs of corporate secrecy.

It is my tentative conclusion that private autonomy warrants respect and protection, as does corporate privacy, whereas secret, illegal, tax-evading structures do not. Governments have a role to play here, but we do too, especially if we see ourselves as free, active, informed citizens, not just consumers of information and products.