Mastercard Pressured by Activist Group To Hold Shareholder Vote On Creation of “Humans Right Committee” To Monitor Payments To “Hate Groups”

Mastercard Pressured by Activist Group To Hold Shareholder Vote On Creation of “Humans Right Committee” To Monitor Payments To “Hate Groups”

An activist group has succeeded in forcing Mastercard to hold a shareholder vote concerning a proposal which aims to monitor and restrict payments to far-right and white supremacist groups under the notion of protecting human rights.

The proposal was conceived by the US-based political group SumOfUs, a self-described “community of people from around the world committed to curbing the growing power of corporations” which aims to act as a “global consumer watchdog – running and winning campaigns to hold the biggest companies in the world accountable.” According to the Mastercard Notice of 2019 Annual Meeting of Stockholders and Proxy Statement filed with the SEC and provided to shareholders, the proposal will “request that the Board direct the Nominating and Corporate Governance Committee create a standing committee to oversee the Company’s responses to domestic and international developments in human rights that affect Mastercard’s business.”:

“Mastercard’s exposure to conflict in human rights risk is significant as our company operates in over 210 countries and territories, some of which have a significant risk of human rights violations. Companies can face risks related to human rights even when they only perform support functions. Internet infrastructure companies like web host GoDaddy, social media platform Facebook and payments firm PayPal have come under pressure for doing business with or providing a forum for neo-Nazis and other hate groups. Mastercard has received negative publicity for processing of payments to white supremacist groups. “Organizers Catch Credit Card Companies Profiting From White Supremacy: Online payment companies are complicit in authorizing transactions related to hate groups,” AlterNet, August 22, 2017 at https://www.alternet.org/news-amp-politics/color-change-activism; and “Color Of Change Is Attacking Hate Groups At The Source: Their Funding,” Fast Company, August 21, 2017 at https://www.fastcompany.com/40456061/color-of-change-is-attacking-hate-groups-at-the-source-their-funding. According to the website bloodmoney.org (accessed on December 18, 2018), Mastercard continues to process payments for organizations such as American Border Patrol, League of the South, Proud Boys and Stormfront. The United Nations Guiding Principles on Business and Human Rights (the “Guiding Principles”) approved by the UN Human Rights Council in 2011, note that “Business enterprises may be involved with adverse human rights impacts either through their own activities or as a result of their business relationships with other parties… For the purpose of these Guiding Principles a business enterprise’s ‘activities’ are understood to include both actions and omissions; and its ‘business relationships’ are understood to include relationships with business partners, entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services. See https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf, page 15

Speaking with Buzzfeed, Eoin Dubsky, a member of SumOfUs, justified the proposal by stating:

“Spreading hate involves spending money. Whether it’s paying for online advertising or organising violent rallies, white supremacist groups need financial services from companies like Mastercard.”

The proposal does not detail what the creation of a ‘human rights committee’ entails, nor does it specify who would lead the committee, as “None of Mastercard’s current Board Committees have been assigned responsibility for overseeing human rights issues.”

However, in response to this proposal, Mastercard’s Board of Directors provided a statement advising shareholders to vote against the initiative.

The Board unanimously recommends that stockholders vote AGAINST this proposal.

“Mastercard is committed to treating all people fairly and with dignity, and our interest in human rights extends to all areas in which our business is involved and where we have particular expertise. The Board does not believe that establishing a separate human rights committee is necessary to properly exercise its oversight of this important area. The NCG is responsible for considering issues significant to Mastercard related to corporate social responsibility and diversity initiatives, as well as other concerns raised by stockholders. The committee reviews legal, regulatory and public policy matters significant to Mastercard, and its charter gives the NCG the power to study or investigate any matter of interest or concern, including the retention of independent counsel or other expert advisors to facilitate its work at any time. Our existing framework reflects our unwavering commitment to social responsibility and human rights. Our 2018 Sustainability Report details our efforts in human rights as it relates to inclusive growth, an inspired workforce, and our ethical and responsible standards. Our Corporate Citizenship Report further describes the way we monitor our providers and vendors through a supplier code of conduct and supplier diversity program. In addition, we requireevery supplier we work with to abide by labor laws, operate in alignment with globally recognized human rights principles and avoid the use of forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise. While we expect each supplier to define its own human rights policy and approach, we require it to be consistent with both our supplier code of conduct and the U.N. Universal Declaration of Human Rights. The Proposal focuses on the use of our products by certain organizations. We operate our network on the principle that consumers should be able to make all lawful purchases, and our franchise rules ensure compliance with the laws pertaining to the acceptable use of our payment processing services by merchants, acquirers and issuers. We regularly monitor activities involving our products and services for any alleged illegal use. When we process payment transactions, we do not have visibility into goods that are purchased or the use of those goods. When we are made aware of illegal activity or rules violations, we work closely with law enforcement and acquirers to shut down those activities. Accordingly, because Mastercard has a committee with oversight over issues of corporate social responsibility and has disclosed its commitment to and oversight of human rights issues, the Board does not believe that establishing a separate human rights committee is necessary to properly exercise its oversight of this important area, nor does it add to Mastercard’s existing commitment to social responsibility and human rights. Therefore, our Board recommends that our stockholders vote AGAINST this joint proposal.”

This is only the latest instance of a payment processing platform facing pressure from Mastercard to deplatform individuals or organizations which activists believe to be dangerous or promoting hate. Previously, Mastercard pressured online subscription payment processor Patreon to drop current-UKIP parliamentary candidate Carl Benjamin, aka Sargon of Akkad, and Director of Jihad Watch, Robert Spencer, citing their language and “questionable content,” respectively, as justification for their removal.

Last year, The David Horowitz Freedom Center, a conservative foundation, had their ability to accept credit card donations through WorldPay revoked at the request of Mastercard, though this decision was quickly reversed after pressure from conservative media outlets.

What do you make of Mastercard holding a vote for this committee? What do you make of the Board’s recommendation to vote against the proposal?

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