CSR in Iran? My Way or the Huawei (Router Mfg)

There's an interesting article in the WSJ on the recent pullback of Chinese router manufacturer Huawei from doing business with Iran. Given the perceived willingness of Chinese firms to go where Western MNCs dare not roam due to limitations on investing in certain bogey nations alike (yes) Iran, Myanmar and North Korea, this occurrence is eye-opening at the very least. That is, are even Chinese corporations (with government ties, no less) subject to international pressure regarding Iran's alleged nuclear programme, human rights abuses and so forth?

Chinese telecommunications- equipment maker Huawei Technologies Co. said it will scale back its business in Iran, where the company provides services to government-controlled telecom operators, following reports that Iranian police were using mobile-network technology to track down and arrest dissidents.

Shenzhen-based Huawei will "voluntarily restrict its business development there by no longer seeking new customers and limiting its business activities with existing customers," according to a statement Friday on the company's website. It said the company was making the move due to the "increasingly complex situation in Iran." Company spokesmen declined to elaborate.

The action follows a front-page Wall Street Journal article in October that documented how Huawei's business grew in Iran following a pullback by Western companies after the government's bloody crackdown on its citizens two years ago. Iranian human-rights groups outside Iran say there are dozens of documented cases in which dissidents were traced and arrested through the government's ability to track the location of their cellphones—technology for which Huawei has provided support.

Activists hailed the company's decision, noting it was the first time a major Chinese company had decided to scale back its business in Iran. Until now, Iran has viewed its partnership with Chinese companies as a solid alternative to Western contracts.

"This is a significant milestone," said Mark Wallace, president of United Against Nuclear Iran and a former U.S. ambassador to the United Nations. "For the first time a major Chinese business is pulling back from Iran in the face of mounting international scorn for Iran's brutal regime." The New York-based group had been pressuring Huawei to leave Iran and had been communicating privately with the company for several weeks.

A spokesman for the U.S. State Department said it welcomed Huawei's announcement, adding that the U.S. "calls on all firms to exercise vigilance when doing business with Iran and ensure that any business does not contribute to the Government of Iran's ability to repress its own people."

That's all very well and good, but did the bleeding hearts brigade really persuade Huawei to curtail its activities selling routers to Iran that could help their government identify particularly vocal denizens--or is something else? Well, the article goes on to strongly suggest the latter possibility:

Executives at Huawei's highest levels have been discussing for months whether to scale back in Iran, according to people familiar with the matter. Those discussions gained in intensity in recent weeks, particularly after the Journal article, several people said...

Some Huawei executives in Shenzhen see operations in Iran as jeopardizing expansion opportunities in the U.S. and Europe, where the Chinese company has faced skepticism over its compliance procedures and dealings with countries that have pariah regimes. That was a driving factor behind the decision to dial back operations in Iran, a person familiar with the matter said. The Chinese company has held talks with consultants, lawyers and lobbyists from the U.S. on the issue.

Huawei is probably dialling back operations after finding out that Iran is not as lucrative an opportunity as once thought--or is already an exhausted one. As Jessie J sang, the Chinese don't need so much Iranian (money, money) at this point in time. There's also the matter of Huawei trying to establish a better reputation for itself independent of PRC state policy to consider and all of that protectionist "security"-related BS. Insofar as Huawei perceives US and European markets as being larger opportunities than doing business with Iran, well, let the human rights activists think they're having their "way."

I for one don't buy this story--though I have no qualms about using Huawei's routers instead of Cisco's and saving money in the process.