Well, here is confirmation that Hillary Clinton's State Department was briefed on Google's delivery of an ultimatum to China over censorship.

The text of the statement:

Statement on Google Operations in China

Hillary Rodham Clinton

Secretary of State Washington, DC

January 12, 2010

We have been briefed by Google on these allegations, which raise very serious concerns and questions. We look to the Chinese government for an explanation. The ability to operate with confidence in cyberspace is critical in a modern society and economy. I will be giving an address next week on the centrality of internet freedom in the 21st century, and we will have further comment on this matter as the facts become clear.

There is no indication as to whether they were briefed before the move or subsequently, but for reasons given in my earlier post I think the State Department knew perfectly well this move was coming. The allegations against China that the statement refers to are unlikely to be new to any degree, and certainly would have been known at the time of Clinton's meeting with Eric Schmidt and other CEOs last week.

Such meetings I am sure happen regularly with various industry heads. My point is simply that this move by Google has to be seen as a private firm coordinating its foreign policy with that of US national foreign policy. Not a new idea (think oil companies for starters) but interesting in an era of radical transparency, corporate responsibility and "Do no evil". It's also intriguing here because the move is not - as far as I can see - the kind of cynical, manipulative coordination between private and public foreign policies that we saw in advance of the Iraq war (or again, earlier oil interests), but a development that is at least hooked on a genuine issue of human rights (privacy, speech).

For those suggesting this is simply Google scuppering other tech companies in China because its own position is weak, I think it highly unlikely. If my main argument is correct, this move either arose out of or would have at least been mooted at the meeting of industry leaders with Clinton last week. They all face the same problems in China. Perhaps it was agreed that Google.cn would be sacrified as shot across China's bow precisely because it had the weakest commerical position of those present. If alternatively Microsoft had taken this position, what are you holding in reserve as a threat? Google.cn?

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In a timely follow up to my post yesterday on whether companies need a foreign policy, Google has effectively delivered an ultimatum to China.

The ultimatum essentially says "let us provide uncensored Google in China or we will shut Google.cn". Naturally, no one expects China to accede to Google's wishes.

The background an a good analysis are provided by Imagethief here.

Imagethief does not mention the meeting between Internet business leaders and Hillary Clinton last week, and I cannot help but feel that the timing of this announcement is linked to that meeting even if there are broader events leading up to this. Eric Schmidt is simply too close to the Obama administration to do this on the fly. Certainly to China it will look like it is, and if there is one thing that was acknowledged in that meeting it is that any stand US companies take in relation to human rights in China will be viewed by China as a proxy move by the US.

While Imagethief notes and the Wall Street Journal implies that Google's eventual withdrawal from China on human rights grounds makes it really difficult for Microsoft to remain, I would be very surprised if Microsoft, the State Department and others did not already know of the move before Google dropped today's bombshell.

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So what is the real story? Has the Great Recession dented ethical consumerism, or has the ethical consumer remained constant?

Consumers in the UK appear to be as ethical as ever, and the most ethical in Europe, according to a survey by IDG.

So how about this rival report by Mintel that says consumers are shying away from paying a premium for ethical or sustainable goods while they are under under the yoke of recession.

Can any readers resolve the apparent contradiction here?

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So after a week-long brouhaha Apple Inc has decided to permit the release of a new iPhone application called iSinglePayer.

The application enables users to see which US legislators have received political contributions from which limb of the anti-healthcare-reform lobby, and then to phone up the representative at the touch of a button. The application's data is supplied by the Center for Responsive Politics.

The link between industry money and political process has never been more transparent.

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Having spent a few years as a compliance professional in the financial sector, I was intrigued to read about the detail of the Pfizer settlement.

The drug company Pfizer, you'll recall, has just settled with the US Department of Justice for a total financial penalty of $2.3 billion - the largest ever. The allegations against Pfizer concerned illegal marketing of painkiller Bextra and several other drugs.

What did not come through in the original reports was that in one part of the settlement, the inspector general  of the US Department of Health and Human Services  (HHS) required Pfizer to change the reporting line of the company's compliance department from the General Counsel to the Chief Executive. 

In-house compliance professionals are often in a bit of a bind. They are supposed to advise the business on how it needs to conduct itself if it is to remain within the letter of the regulations. Their reporting line, however, is often to someone with a strong personal interest in the short-term financial success of the business development to which the advice relates. Although compliance departments inevitably attract the label of "business prevention", their reporting lines (and remuneration and retention prospects) in fact incentivise them to bend over backward to accommodate the concerns of their superior. So much for independence.

In Pfizer's case compliance reported to the general counsel. As Lewis Morris, general counsel for the inspector-general's office put it:

"The lawyers tell you whether you can do something, and compliance tells you whether you should ... We think upper management should hear both arguments."

If that is what the lawyers are there to do, then they will be rewarded on the basis of their overall contribution to business development. Compliance reporting into that setup risk ending up singing the same tune, or leaving.

I predict regulators will become more prescriptive about the precise reporting lines of compliance professionals. I am not sure, though, that instituting a reporting line to the chief executive is the most effective course though. Although the CEO has a group-wide interest and won't want the actions of a particular division to threaten the overall reputation of the group, the CEO is still guided by short-term financial incentives. A better solution might be a reporting line into the audit committee of the board, which should be majority comprised of independent non-executives.

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French cosmetics giant L'Oreal was found guilty yesterday of racial discrimination for seeking an all-white sales force to promote its shampoos.

The French appelate court held that L'Oreal had tried to stop black, Asian and Arab women from selling its Fructis shampoo in French supermarkets.

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The Japanese car manufacturer Nissan aims to mass produce electric cars by 2012 with an emphasis on affordability.

It will be releasing its first electric car in Japen later this summer, and in the USA in 2010. The target date for global mass production is 2012.

Nissan is Japan's third biggest car maker. Their EV prototype is discussed in more detail here.

The race is clearly on to produce fully electric cars for the mass market, with Tesla, Toyota and China's Dongfeng Motor Corp all pushing ahead with plans.

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It would appear that the food industry knows precisely how to undermine even the most self-aware person's impulse control, by manufacturing food that contains exactly the right combination of sugar, fat, and salt to hit a preset "bliss point" in our brains.  So says Dr. David A. Kessler, in his new book "The End of Overeating." The former head of the FDA spent years fighting the tobacco industry, accusing it of deliberately manipulating nicotine levels in cigarettes to make them more addictive.  Now Kessler has turned his attention to the food industry:

"In “The End of Overeating,” Dr. Kessler finds some similarities [to tobacco] in the food industry, which has combined and created foods in a way that taps into our brain circuitry and stimulates our desire for more.

When it comes to stimulating our brains, Dr. Kessler noted, individual ingredients aren’t particularly potent. But by combining fats, sugar and salt in innumerable ways, food makers have essentially tapped into the brain’s reward system, creating a feedback loop that stimulates our desire to eat and leaves us wanting more and more even when we’re full."

This explains a number of things for me, for instance, why so many processed foods contain sugar, even where you'd never expect to find it.  It also explains why it's so much easier not to buy the Doritos in the first place than it is to buy them, bring them home, and not pig out on them. 

I don't think there's any way to regulate this aspect of the food industry--how do you tell an industry they're not allowed to make their product as appealing as possible?  Tobacco is a little different; it has been demonstrated to have extreme health risks with zero benefits.  But food, well, even if the food in question is unmitigated crap, it's hard to seriously argue for some sort of food police who will determine which foods are nutritionally acceptable.  So it appears that the only way to counter the chemically-engineered assault of the food industry is through consumer education about salt, fat, sugar, and neurobiology.

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From kitchen utensils to reclining chairs, a Scripps Howard News Service investigation has identified thousands of contaminated consumer products.

The actual quantity of products affected is unknown due to what the news service terms "haphazard screening, an absence of oversight and substantial disincentives for businesses to report contamination".

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Arthur Frommer isn't happy with the press his latest book has been getting.  Reviews, though positive, seem to have left out the most important points.  "Ask Arthur Frommer: & Travel Better, Cheaper, Smarter," is, according to the author, a survey of his political and ethical views of what travel should be, as well as a practical guide to travel savvy.  So he's written an essay, an unabashed self-review, outlining what all the book reviewers have missed.

Here are Frommer's top 10, very good arguments:

(1) The urgent need for longer American vacations, guaranteed by law. We are the only prosperous country to lack such humane requirements, and the book pleads with the public to support congressional action to mandate at least - at least - three weeks per year of paid leave for every person.

(2) The right to travel, in peacetime, to wherever we wish. The book argues that travel is a First Amendment right, a learning activity; that the federal government has no more right to prohibit travel to a particular country than it has to stop us from attending a lecture or reading a book.

(3) The right of a travel writer to criticize travel establishments without being sued for libel. Several disquieting court actions in other countries are frightening examples of what could happen here.

(4) The immense expansion of Amtrak. To reduce our dependence on foreign oil, to improve our quality of life, we need a broad network of speedy trains. The recent allotments of economic-stimulus monies to high-speed rail is a start that must be duplicated by still more appropriations in the years to come.

(5) Greatly increased support for our National Parks, which are now suffering from inadequate financing in previous years. Fierce opposition to commercialization of the parks (Coca-Cola signs at the entrance to Yellowstone?).

(6) A limitation on the unnecessary operation of corporate jets, placing burdens on our already-overcrowded skies.

(7) An Airline Passengers' Bill of Rights, preventing airlines from stranding passengers on the tarmac for four hours and more.

(8) A start on assisting travel and tourism for the poor, including low-income-based reductions of the cost of Amtrak tickets and admission to public museums.

(9) An end to the mistreatment of foreign tourists to the United States, eliminating thoughtless and unnecessary barriers to incoming travel and discourteous treatment of such visitors by our customs officials.

(10) Correcting the failure by the Department of Transportation to devote adequate resources to dealing with deceptive advertising of travel (omission of key expenses and fees) by airlines, tour operators and others.

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