By Andrew Hammond
One of the success stories of the pandemic has been the fast speed of vaccine development, yet this has not stopped some of the firms developing them, including AstraZeneca, becoming "political footballs" during the last 15 months.
Despite the AstraZeneca vaccine's proven efficacy, and the fact that it is being distributed not-for-profit, allowing its potential roll-out at low cost across much of the developing world (it has been used in around 130 countries and territories so far compared to less than 90 for its nearest rival), the jab has been questioned by many politicians, especially in continental Europe.
Most recently, the Australian government issued updated guidance last week to recommend only those aged over 60 get the shot due to the risk of a rare blood-clotting syndrome. This despite the fact that many millions of people younger than 60 have been given the AstraZeneca jab in other countries.
It is Europe, however, where the AstraZeneca vaccine has faced the most problems. Not only have leading politicians such as Emmanuel Macron questioned its efficacy, despite any obvious medical or scientific qualification to do so, the firm has also been taken to court by the EU over supply contracts.
Last week, the EU lost its most recent legal battle in Brussels to force AstraZeneca to supply 120 million doses of the vaccine by the end of June. It went to court in May after the company delayed shipment of the vital vaccines, having originally committed to supply 300 million doses by the same date.
However, the EU demand was not upheld by the judge in Brussels. Yet, a deadline did impose on AstraZeneca a requirement to supply doses to the EU over the summer or face hefty fines.
The pharmaceutical industry is not the first to face the wrath of governments during the pandemic. Last year, French digital minister Cedric O took leading technology players to task over coronavirus digital contact tracing systems, becoming the first major government minister to publicly call for Google and Apple to weaken privacy protections.
What these developments underscore is the apparently growing potential for businesses, across a growing range of sectors, to become intertwined in international political issues in sometimes thorny political, human rights, technological and/or legal issues.
This contact tracing system issue is by no means the first time that technology firms have stepped into political controversy. For instance, Google in 2013 unintentionally sparked a diplomatic row following its then-decision to change the name on its "Palestinian territories" homepage to "Palestine." The move, which Palestinian President Mahmoud Abbas reportedly called a "victory for Palestine and a step toward its liberation," provoked immediate complaint to the firm from Israel.
So while this is not a wholly new phenomenon by any means, it nonetheless appears to be increasing in incidence and salience. Partly, this is driven by globalization and also the growth of key industries including the "borderless" technology sector.
However, technology firms are not alone in experiencing issues from working with diverse political authorities across the world. Indeed, internationally-focused companies in many other industries, ranging from energy and extractives, to banking and fast-moving consumer goods, have long been confronted with challenges too.
Take the example of Hong Kong and Shanghai Banking Corporation (HSBC) which some U.K. Members of Parliament (MPs) on the House of Commons Foreign Affairs Committee accused of enabling China's recent crackdown in Hong Kong. HSBC has historic links to Hong Kong, where pro-democracy campaigners have taken to the streets and faced accusations of acting in a political manner and being too close to the Chinese authorities after it emerged that the bank had frozen accounts belonging to pro-democracy politician Ted Hui and members of his family.
In navigating such situations, various international codes of conduct, including the U.N. Guiding Principles on Business and Human Rights already exist and reinforce the corporate social responsibility practices of individual firms. However, some of the most enlightened companies have recognized the need for a more decisive shift toward what has been termed corporate foreign policy.
Corporate foreign policy aligns a firm's external affairs activity, including media relations, risk management, corporate social responsibility, government affairs, and operational planning, in a clear strategic framework. Recognizing the need for an unusual mix of core competences ― for instance in advanced diplomacy ― in some of these corporate functions, capability ― including tools, training and infrastructure ― can be enhanced where any gaps exist.
The relentless march of globalization, with the interconnections this brings, means that few international companies will escape these pressures completely. And, at the same time, owing to the proliferation of media, and the influence of NGOs and related stakeholders, the actions of firms are increasingly under the microscope.
For those companies which are perceived to misstep, the fallout can be increasingly damaging, both for the financial bottom-line and reputational. Yet, for others which are pro-active and invest in their capability, the prizes are potentially ever more significant.
Andrew Hammond (andrewkorea@outlook.com) is an associate at LSE IDEAS at the London School of Economics.
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Despite the AstraZeneca vaccine's proven efficacy, and the fact that it is being distributed not-for-profit, allowing its potential roll-out at low cost across much of the developing world (it has been used in around 130 countries and territories so far compared to less than 90 for its nearest rival), the jab has been questioned by many politicians, especially in continental Europe.
Most recently, the Australian government issued updated guidance last week to recommend only those aged over 60 get the shot due to the risk of a rare blood-clotting syndrome. This despite the fact that many millions of people younger than 60 have been given the AstraZeneca jab in other countries.
It is Europe, however, where the AstraZeneca vaccine has faced the most problems. Not only have leading politicians such as Emmanuel Macron questioned its efficacy, despite any obvious medical or scientific qualification to do so, the firm has also been taken to court by the EU over supply contracts.
Last week, the EU lost its most recent legal battle in Brussels to force AstraZeneca to supply 120 million doses of the vaccine by the end of June. It went to court in May after the company delayed shipment of the vital vaccines, having originally committed to supply 300 million doses by the same date.
However, the EU demand was not upheld by the judge in Brussels. Yet, a deadline did impose on AstraZeneca a requirement to supply doses to the EU over the summer or face hefty fines.
The pharmaceutical industry is not the first to face the wrath of governments during the pandemic. Last year, French digital minister Cedric O took leading technology players to task over coronavirus digital contact tracing systems, becoming the first major government minister to publicly call for Google and Apple to weaken privacy protections.
What these developments underscore is the apparently growing potential for businesses, across a growing range of sectors, to become intertwined in international political issues in sometimes thorny political, human rights, technological and/or legal issues.
This contact tracing system issue is by no means the first time that technology firms have stepped into political controversy. For instance, Google in 2013 unintentionally sparked a diplomatic row following its then-decision to change the name on its "Palestinian territories" homepage to "Palestine." The move, which Palestinian President Mahmoud Abbas reportedly called a "victory for Palestine and a step toward its liberation," provoked immediate complaint to the firm from Israel.
So while this is not a wholly new phenomenon by any means, it nonetheless appears to be increasing in incidence and salience. Partly, this is driven by globalization and also the growth of key industries including the "borderless" technology sector.
However, technology firms are not alone in experiencing issues from working with diverse political authorities across the world. Indeed, internationally-focused companies in many other industries, ranging from energy and extractives, to banking and fast-moving consumer goods, have long been confronted with challenges too.
Take the example of Hong Kong and Shanghai Banking Corporation (HSBC) which some U.K. Members of Parliament (MPs) on the House of Commons Foreign Affairs Committee accused of enabling China's recent crackdown in Hong Kong. HSBC has historic links to Hong Kong, where pro-democracy campaigners have taken to the streets and faced accusations of acting in a political manner and being too close to the Chinese authorities after it emerged that the bank had frozen accounts belonging to pro-democracy politician Ted Hui and members of his family.
In navigating such situations, various international codes of conduct, including the U.N. Guiding Principles on Business and Human Rights already exist and reinforce the corporate social responsibility practices of individual firms. However, some of the most enlightened companies have recognized the need for a more decisive shift toward what has been termed corporate foreign policy.
Corporate foreign policy aligns a firm's external affairs activity, including media relations, risk management, corporate social responsibility, government affairs, and operational planning, in a clear strategic framework. Recognizing the need for an unusual mix of core competences ― for instance in advanced diplomacy ― in some of these corporate functions, capability ― including tools, training and infrastructure ― can be enhanced where any gaps exist.
The relentless march of globalization, with the interconnections this brings, means that few international companies will escape these pressures completely. And, at the same time, owing to the proliferation of media, and the influence of NGOs and related stakeholders, the actions of firms are increasingly under the microscope.
For those companies which are perceived to misstep, the fallout can be increasingly damaging, both for the financial bottom-line and reputational. Yet, for others which are pro-active and invest in their capability, the prizes are potentially ever more significant.
Andrew Hammond (andrewkorea@outlook.com) is an associate at LSE IDEAS at the London School of Economics.
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