Spying for profit: The dangers of economic intelligence

By Jane Duncan 18 March 2020

Unless the foundations of overbroad spying are tackled – including South Africa’s overbroad definitions of national security, economic security and economic intelligence – then abusive spying practices that serve dominant interests, rather than the public interest, are likely to continue. (Photo: Adobestock)

For all intents and purposes, protecting economic well-being has become about protecting the economic wellbeing of the rich. Economic intelligence in pursuance of a country’s national interests facilitates crony capitalism and legitimises spying for profit.

Jane Duncan

In September 2019, High Court judge Roland Sutherland found sections of South Africa’s main communication surveillance law, the Regulation of Interception of Communication and Provision of Communication-related Information Act (or Rica), unconstitutional. The Constitutional Court still has to decide whether or not to confirm the lower court’s decision. 

In terms of Rica, no one is permitted to intercept communications intentionally, except under strict conditions. These conditions include that a special judge issues an interception direction (or warrant), to the applicants (the law enforcement or intelligence agencies), permitting the interception. 

The applicants in the case, the amaBhungane Centre for Investigative Journalism, argued that the threshold allowing the Rica judge to issue directions for lawyers’ and journalists’ communications was too vague and speculative. Both professions require confidentiality to protect clients and sources. 

In terms of Rica, the judge can issue a direction if there are reasonable grounds to believe that a crime has been, is being or probably will be committed, and this applies too to members of these professions. 

In his judgement, Sutherland argued that while sections of Rica were unconstitutional, he was loath to prescribe a higher threshold for lawyers and journalists. Instead, he preferred to focus on tightening the conditions for, and restrictions on, these directions. These conditions included requiring that the applicants disclose to the judge all relevant facts about the people they wanted to spy on, including their professions. 

Whatever the Constitutional Court decides about these arguments, it is likely that the existing grounds for issuing of interception directions will survive intact. This is because they’ve received little attention in the brouhaha about Rica. Yet, some of these grounds are highly problematic.

One of the most problematic is that the judge can issue a direction if there are reasonable grounds to believe that “… the gathering of information concerning an actual threat to the public health or safety, national security or compelling national economic interests of the Republic [of South Africa] is necessary”. 

So in other words, this section allows the collection of intelligence that relates not only to threats facing South Africa, but its interests, too. Collecting intelligence about threats to South Africa is largely uncontroversial, although we can quibble about what is a threat and what isn’t. But mandating them to collect intelligence about South Africa’s interests is too broad and open to abuse. Who decides what South Africa’s interests are, and on what basis? 

Implicitly, Rica endorses an expanded mandate for the spy agencies to include economic intelligence. Spies collect this form of intelligence to provide policy or commercially-relevant economic information to assist policy-makers to make better decisions. 

Ostensibly, these decisions may help to defend the country’s economic sovereignty. Spies argue that not collecting such intelligence may jeopardise a country’s national security by making it vulnerable to losing its competitive edge, resulting in job losses, or having its technological secrets stolen. 

The spies argue further that in an increasingly competitive global economy, economic security is an important dimension of national security. Therefore, they need to support policy-makers to raise the national standard of living, defend the country’s competitiveness by maintaining competitive advantages and maintain a fair business environment. 

Spies use economic intelligence mainly for strategic purposes to forewarn policymakers about long-term trends. Electronic signals, including communication networks, provide the spies with easy sources of economic intelligence, especially outside their countries. Yet, as Edward Snowden’s leaks have shown, intelligence is one of the most unregulated forms of spying and consequently is wide open to abuse. 

Now, Rica’s recognition of economic intelligence is arguably not as broad as is the case in other countries. In the UK and New Zealand, for instance, the spy agencies there can collect economic intelligence that relates to the country’s “economic well-being”.

This formulation is much broader than what Rica allows for, which is unsurprising as the UK and New Zealand have embraced an expansive definition of national security to include economic security, or the security of its economic interests abroad. Rica, on the other hand, requires the spies to demonstrate that the intelligence they collect is both necessary and compelling. Nevertheless, the formulation in Rica remains vague.

The South African spy agencies could argue that their mandate to collect economic intelligence also comes from the White Paper on Intelligence. This policy document embraces an expansive human security definition of national security, which includes an economic dimension. 

According to the White Paper, the intelligence services should focus not just on the absence of war, but on creating the conditions for peace and stability more broadly, and this extends to focusing on economic security. 

South Africans are all too familiar with controversies about the uses and abuses of political intelligence, but we haven’t even started to have a public discussion about the dangers of economic intelligence. 

Economic intelligence mandates the over-collection of intelligence for very dodgy reasons that risk escalating rather than reducing global tensions. 

Economic intelligence has been used by countries to wage economic warfare internationally, where intelligence is used to advantage countries unfairly in trade negotiations. Inevitably, this overbroad mandate leads to spooks turning up in all the wrong places, like commercial companies, parastatals and major international meetings. 

At its worst, economic intelligence legitimises espionage, giving spy agencies the mandate to steal the economic secrets of other countries. It positions intelligence work as being inherently partisan. It becomes about the defence of the capitalist system, and anti-capitalist and eco-socialist critics become enemies of national security.  

It creates a petri-dish for corruption in spy agencies, where companies incentivise spy agencies to use state resources to their advantage, in return for a golden handshake or two. Public agencies can be put at the disposal of private actors. The secrecy that generally attaches to intelligence work can prevent the public from becoming aware of this pernicious form of state capture. 

Johan van Loggerenberg’s account of how economic intelligence was misused to advantage sections of the tobacco industry is a salutary lesson in how susceptible this form of intelligence is to corporate capture. 

As the old Cold War rivalries abated, many spy agencies found themselves with less work to do, so they have a vested interest in expanding their attention to other areas. As neoliberalism intensified from the 1970s onwards, globalised markets driven by finance capital became more important to determining relations between countries. 

Economic intelligence (often reduced to market intelligence), facilitated the worldwide spread of neoliberalism, as it helped the major superpowers to develop and defend their global competitiveness. 

French and Japanese intelligence agencies became specialists in economic intelligence. They perfected an offensive approach that moved well beyond simply defending their countries against espionage and theft of commercial secrets. For instance, the French planted moles in US companies. They used economic intelligence to destabilise competitors as an aid to economic nationalism.

A key proponent of economic intelligence, Christian Harbulot, argued that the offensive use of information is a key factor in ensuring a nation’s success. The Japanese set up a dedicated economic intelligence agency.

We know from the Edward Snowden revelations that the powerful Five Eyes spying alliance – consisting of the US, the UK, Canada, Australia and New Zealand – has used economic intelligence to spy on African leaders to establish their positions in trade negotiations. 

The British signals intelligence agency, Government Communication Headquarters (GCHQ), spied on South African officials to establish their negotiating positions at the G20 summit in 2009. GCHQ also spied on the employees of South African multinational mobile phone company MTN, especially roaming managers who travelled extensively to negotiate roaming agreements with other countries. 

Apart from South Africa, GCHQ has also spied on oil-producing countries such as Angola and Nigeria, as well as businesspeople in Nigeria, the Democratic Republic of Congo (DRC) and Angola.

British interest in these African countries is not coincidental. Much of the world’s reserves of Coltan – a metal essential to the information economy – as well as copper, are to be found in the DRC. The UK has also become reliant increasingly on oil imports from the Organisation of Petroleum Exporting Countries (OPEC) countries, including Angola and Nigeria. 

The South African and Nigerian surveillance also contradicted the assurance in the original Five Eyes agreement that Commonwealth countries would be protected from surveillance. At the end of the day, when its economic interests came into play, the UK was willing to violate its own agreement and treat these countries’ governments as any other foreign surveillance targets. 

The Australian government’s decision to be open about its role in the Five Eyes alliance was motivated partly by the need to respond to the growing international concern about economic intelligence gathering. It went out of its way to reassure Australians that its domestic spying activities were strictly limited and tightly supervised.

New Zealand investigative journalist Nicky Hager has been sceptical about the spy agencies’ economic intelligence mandate, and with good reason. He has argued that economic intelligence is of dubious value to the protection of national security.  

Hager has argued that the spy agencies use economic intelligence as a justification for intelligence budgets on a post-Cold-war era when traditional hostilities have declined. Yet, the privatisation and deregulation of more economies have made this form of intelligence even less useful. These structural shifts have made it impossible to take proper, legal decisions about which private companies to give this intelligence to.

New Zealand’s signals intelligence agency, Government Communications Security Board, even used the US mass surveillance programme X-keyscore (one of the surveillance programmes Snowden disclosed), to spy on contenders for the top job at the World Trade Organisation, to give the country’s minister of finance an unfair advantage in winning the job (he wasn’t successful). 

A former prime minister of New Zealand interviewed by Hager had to admit, “… there are insurmountable difficulties in trying to channel useful economic intelligence to private companies. How do you choose which rival companies to give intelligence to? Should you help a foreign-owned company operating in New Zealand or a New Zealand-owned company producing its products in China?”. 

Government ministers, especially ministers of finance also found economic intelligence to be of limited value to their decision-making. It would be interesting to know how South African finance ministers feel about the usefulness of this form of intelligence.

As activist academic Aziz Choudry has argued in his recent edited volume, Activists and the Surveillance State, spies have a long history internationally of disrupting and undermining political activists. They have maintained a sufficiently elastic definition of national security to justify spying on activist movements on the pretext of countering extremism, subversion and terrorism. 

The left and the environmental movement’s demands for higher wages and economic and environmental justice has made them natural targets of spy agency suspicion, ripe for infiltration and disruption. 

The incorporation of economic intelligence into national security mandates has facilitated the development of a surveillance-industrial complex, where intelligence work and dominant economic interests have become so intertwined that they have become mutually supportive.

For all intents and purposes, protecting economic well-being has become about protecting the economic well-being of the rich. Economic intelligence in pursuance of a country’s national interests facilitates crony capitalism and legitimises spying for profit. 

In view of the dangers involved in collecting economic intelligence, the Council of Europe’s, European Commission for Democracy Through Law (or the Venice Commission) has warned against overbroad economic intelligence mandates. It has argued that the collection of intelligence for “the economic well-being of the nation” may result in economic espionage. 

The Commission argued for a much narrower definition of economic intelligence. They argued that strategic surveillance is useful in at least three areas of economic activity: the prevention of the proliferation of weapons of mass destruction (and violation of export control conditions generally), circumvention of UN/ European Union sanctions and major money laundering. 

They argued further for “… A clear prohibition of economic espionage buttressed by strong oversight and the prohibition for the intelligence agencies to be tasked by the government departments or administrative agencies involved in promoting trade would be useful prevention mechanisms”.

South Africa could do well to incorporate these safeguards. The surveillance reforms to Rica that are being considered by the Constitutional Court at the moment are necessary and important

However, unless the foundations of overbroad spying are tackled – including our overbroad definitions of national security, economic security and economic intelligence – then abusive spying practices that serve dominant interests, rather than the public interest, are likely to continue. In fact, the abuses may get even worse as self-interested economic nationalism becomes the order of the day, globally and locally. DM

Jane Duncan is a professor and Head of Department of Journalism, Film and Television at the University of Johannesburg. She is the author of Stopping the Spies: Constructing and Resisting the Surveillance State in South Africa (Wits University Press, 2018).



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