Companies Denounce North Carolina’s LGBT Discrimination Law While Operating in Countries Where Gays Are Executed

(Corrections appended; updated to include comments.)

Over one hundred corporations signed a letter denouncing North Carolina’s House Bill 2 (HB2), the so-called “Bathroom Bill” that prohibits localities from creating certain additional protections against discrimination, overturning Charlotte’s new law expanding LGBT anti-discrimination protections to include public accommodations. The media has been infatuated with the scenario that transgendered people would have to use the public bathroom of their biological sex. (It also invalidated any locality’s raising the minimum wage beyond the $7.25/hour set by the state.) The legislature even convened a special session just to pass the bill, in order to keep Charlotte’s law from ever coming into effect.

There are still substantive protections for LGBT people in the state. HB2 backers noted that localities can still pass additional anti-discrimination laws that apply to private businesses, and transgender individuals who have undergone a sex change and legally changed the gender on their birth certificate can use the restroom of their de jure gender.

Nonetheless, the notion of thwarting an attempt to increase protections for LGBT people, and feeling the need to do so with such urgency, cast North Carolina’s state government in a highly negative light, and corporations expressed outrage.

“Discrimination is wrong, and we believe it has no place in North Carolina or anywhere in our country,” read the HB2 denunciation letter. “As companies that pride ourselves on being inclusive and welcoming to all, we strongly urge you and the leadership of North Carolina’s legislature to repeal this law in the upcoming legislative session.”

While it is commendable that so many corporations are taking a stand for LGBT rights, nevertheless today’s global economy creates a glaring conundrum. Because a multinational corporation denouncing curbing of freedom in America will almost invariably operate in countries with far less freedom than any state in the union. A major portion of the world offers few protections for gays, and in many countries homosexual sex is illegal.

That is not to say that any corporation or individual has an obligation to divest from a country or state that is impinging on human rights. Some argue that economic sanctions are deleterious, as those most likely to be affected are the most vulnerable in a society, including those persecuted. Boycotting, say, Iran will probably deal a greater blow to a working class Iranian in a factory job than to the decisionmakers.

Economic sanctions can also deprive people of vital goods such as food and medicine. Some estimate that economic sanctions on Saddam Hussein-era Iraq were responsible for the deaths of over a million people (and others think that is a load of bunk).

Nonetheless, economic sanctions and local boycotts remain a popular form of expressing objection to the policies of a given country, state, or corporation.

Signatories might also defend their stances by arguing that North Carolina is different because the state is fighting progress of protections for LGBT people, as opposed to countries with a poor record for LGBT rights that nonetheless remain the same or have even improved relative to the past.

On the other hand, one could argue that threatening boycotts of North Carolina while operating in dictatorships reeks of hypocrisy. It is easy for a company to add its name to a high profile letter denouncing a North Carolina law, along with a vague threat of divestment, but hard to resist the temptation of operating in countries where few civil liberties, labor laws, and environmental protections can combine for huge profit margins while drawing little interest from American media.

(Arguably it is also hypocritical that some corporations denouncing HB2 nevertheless donated to the politicians who pushed it through.)

Regardless, we can find insight in seeing which companies have threatened boycotts over HB2 while readily operating in other parts of the world where gays have far less freedom.

Because so many countries offer few protections for LGBT people, Thought Front chose to identify which signatories have operations where homosexuality is not only a crime, but a capital offense.

According to the 2015 State-Sponsored Homophobia survey by the International Lesbian, Gay, Bisexual, Trans and Intersex Association (ILGA), execution for homosexuality is implemented by government actors in eight countries: Saudi Arabia, Mauritania, Sudan, Iran, Yemen, Iraq, parts of Nigeria, and parts of Somalia. ILGA determined that execution is hypothetically possible in Afghanistan, Pakistan, and Qatar, but that there is no evidence that it is likely to occur.

Excluding trade organizations, there were 120 corporations that were signatories to the letter denouncing HB2. Out of them, Thought Front identified 23 that operate in some form in countries where gays are executed. (The number would be over 30 if we were to include the three countries where ILGA says it is possible.)

Dow Chemical, which was not a signatory but nevertheless denounced HB2, also operates in one of the above countries. As does Deutsche Bank, which cancelled plans to add 250 jobs at its location in Cary, North Carolina. Unilever also denounced HB2 independently, yet operates in two of the above countries.

Letter signatory Coca-Cola has operations in all the above countries, unsurprising given its presence on almost every square inch of human civilization. In general, Coca-Cola supplies local companies with syrup that they then bottle and distribute. Coca-Cola and other American beverage brands often obtain special permission to operate in countries with economic sanctions in place, such as Sudan, on humanitarian grounds. Presumably the argument is that denying Coca-Cola products is tantamount to depriving people of food, including clean water.

The Coca-Cola Company did not respond to a request for comment.

Of course, given today’s supply chain, perhaps every signatory is within a few degrees of separation from one of these countries. In particular, any that produces physical goods likely are on some shelves somewhere in each country. (As reported by Thought Front, Pringles are even available in ISIS territory.) They will use vendors that might source from these countries, or even subcontract with vendors who do so. And foreign oil from the above countries can easily find its way into the engines powering different trips along the supply chain.

Saudi Arabia

Among countries where homosexuality is punishable by death, Saudi Arabia was the most common for the HB2 denunciation signatories to have a footprint. Understandable, as the country’s vast oil wealth easily fuels demand for goods and produces capital for investment.

But while rich in oil, Saudi Arabia has no codified legal system: the country adheres solely to interpretation of Shariah law. Currently there is debate as to whether Shariah dictates that sodomy is supposed to be punished by execution or by mere flogging. As of now, the punishment for sodomy by a married man is death by stoning; unmarried, 100 lashes and banishment for one year. If a non-Muslim engages in sodomy with a Muslim, the penalty is death by stoning. Penalties for women engaged in homosexuality are not entirely clear. All sex outside of marriage is a crime, but again punishment is not clear.

Within the country are offices for HB2 denunciation signatories Bank of AmericaCisco, medical technology company BD, storage networking company Brocade, cloud computing company EMC, IBM, Intel, and Accenture. Signatory Northrop Grumman has an entire subsidiary for Saudi Arabia, as does Microsoft. Unilever has a production facility there. Dow Chemical has an R&D center, two offices, and five joint ventures with Saudi companies. Software company CA Technologies has four partners in Saudi Arabia. GE also operates there.

A Microsoft spokesperson responded to an inquiry from Thought Front but has yet to comment.

Other signatories to the HB2 denunciation have retail locations in Saudi Arabia. Apple has two stores, one of which is larger than its New York flagship store. Signatory PVH, which owns brands including Tommy Hilfiger and Calvin Klein, has at least 21 stores in Saudi Arabia. Starbucks has 37 locations. Uber is available in Riyadh.

Deutsche Bank, which halted plans for an expansion in North Carolina, nevertheless has an office in Saudi Arabia. This month marks then ten-year anniversary of the bank having a presence in the country. Deutsche Bank even boasts that it offers Islamic financial products that comply with Shariah Law.

Deutsche Bank spokesperson Troy Gravitt declined to comment.

Hyatt has 3 hotels in Saudi Arabia; Hilton, 8; Marriott, 7; InterContinental, 7; Starwood, a whopping 19. And rentals are available through Airbnb.

Bank of America, Cisco, BD, Brocade, EMC, IBM, Intel, Accenture, Northrop Grunman, Dow Chemical, CA Technologies, GE, Apple, PVH, Starbucks, Uber, Hilton, Marriott, Starwood Hotels & Resorts, Airbnb, and Unilever did not respond to requests for comment.

A spokesperson for Hyatt responded,

At Hyatt, we celebrate a world that’s as diverse as our people and our guests, and we fundamentally oppose legislation that enables discrimination. That’s why Hyatt President and CEO Mark Hoplamazian was one of many executives who signed a letter to North Carolina Governor McCrory to ask that its laws protect all residents and guests from discrimination.
While we do not necessarily agree with views expressed in all places of the world, they do not prohibit Hyatt from continuing policies of inclusion and care for all. We are committed to ensuring our colleagues and guests feel safe, comfortable and cared for at Hyatt hotels. It’s this approach to embracing diversity and supporting inclusion that has led Hyatt to attract a remarkable workforce of very talented people who, because of their differences, help us connect with each other as human beings in a powerful way. It’s what makes staying at a Hyatt hotel different and gives our company a competitive edge.

InterContinental Hotels Group spokesperson Jean Tan said,

Thank you for your email. We recognise the importance and benefit of ensuring we fully represents the communities in which we operate and the guests who stay in our hotels. However, as a global company with international operations, IHG is committed to complying with the laws and regulations of all the countries and jurisdictions in which we operate. While we are mindful of the sensitive and complex social situation in KSA [Kingdom of Saudi Arabia], it is not our prerogative to comment on domestic politics.

 

Coca-Cola brand beverages are bottled in Riyadh by the Coca-Cola Bottling Company of Saudi Arabia (CCBCSA), a subsidiary of the Olayan Group.

CCBCSA spokesperson George Varghese declined to comment, saying it would not be appropriate to discuss the policies of the independently owned and operated Coca-Cola Company.

Iraq

Although Iraq has no national law making homosexuality a capital offense, nevertheless ILGA concluded the country warranted inclusion because executions are handed out so frequently by local Shariah courts, militias, and police.

GE has a substantial presence in Iraq, where they have three offices. According to its website, GE technology is used in 60% of the country’s electricity generation, and is responsible for 40% of the country’s oil production. GE boasts of having had a presence in Iraq for over four decades, which even includes the Saddam Hussein era, when GE participated in the Oil for Food Program and was caught bribing Iraqi officials to obtain contracts.

Microsoft also has a subsidiary in Iraq. An e-mail to the Iraqi press contact listed on Microsoft’s website bounced back as undeliverable.

Starwood has one hotel in Iraq and plans to open three more; and Airbnb has rental listings.

The ubiquitous Coca-Cola is bottled in Iraq by the Turkey-based Coca-Cola İçecek, which did not respond to a request for comment.

Iran

Iran’s penal code goes into exhaustive detail over punishment for same sex relations. Between two men, the punishment is death; two women, 100 lashings each, and death for the fourth offense. It is also illegal for two unrelated people of the same gender to be unnecessarily naked together in private. Evidence to prove sodomy includes testimony by at least four “righteous men” (and not women). However, punishment may be commuted if the accused repents before trial, akin to a plea bargain.

Unilever operates in Iran through a subsidiary called Unilever Iran Private Joint Stock Company. According to a 2010 SEC disclosure, Unilever has one office in Tehran, a production facility in the city of Qazvin, and 45 salespeople throughout the country.

Coca-Cola beverages are bottled in Iran by Khoshgovar Co. An e-mail to Khoshgovar seeking comment bounced back as undeliverable.

Sudan

In Sudan, the penalty for sodomy is 100 lashes and five year’s imprisonment. Punishment for a three-time offender is either life imprisonment or death.

Coca-Cola is the only HB2 signatory that has a presence in the country beyond merely having its products distributed. In Sudan, the bottler is DAL Foods Industries, Ltd. DAL did not respond to a request for comment.

Mauritania

The punishment in Mauritania for male-male sodomy is death by stoning; female-female, imprisonment.

And despite objection to HB2, Starwood is nevertheless planning to open a hotel in the Mauritanian capital of Nouakchott by 2017. Coca-Cola is bottled in Mauritania by Société des Boissons de Mauritanie (SOBOMA), which is a subsidiary of Equatorial Coca-Cola Bottling Company (ECCBC). The company did not respond to a request for comment.

Airbnb rentals are also available.

Yemen

Male-male sexual relations is punishable in Yemen by death by stoning. For women, it is 3-7 years in prison.

In Yemen, Coca-Cola beverages are bottled by Sana’a Beverages & Industrial Co. (SBI), which is owned by Shahir Abdulhaq, an influential Yemeni businessman with close ties to the president. Tragically, in December a Yemeni production facility was destroyed by Saudi-led bombing, although thankfully at the time it was closed for maintenance.

SBI did not respond to a request for comment.

Additionally, Airbnb has rentals in Yemen.

Nigeria

Homosexuality is illegal in all of Nigeria, but is only a capital offense in twelve northern states that implement Shariah law.

Although a number of HB2 denunciation signatories operate in Nigeria, such as GE, Thought Front identified only Coca-Cola as having a presence specifically in northern states. Nigeria’s bottler of Coke products, Nigerian Bottling Company Ltd. (NBC), has bottling plants in the states of Kano and Borno, where homosexuality is a capital offense.

NBC did not respond to a request for comment.

Somalia

In Somalia, where rule of law is shaky, ILGA reports that executions of gays occur in the southern part of the country, although other reports say gays may face execution anywhere, including semi-autonomous Somaliland.

“Warlords have made Somalia a death chamber for gays and lesbians,” said a Somali journalist.

Thought Front could not identify any HB2 denunciation signatories who operate specifically in the southern areas, although Coca-Cola is bottled in the capital of Mogadishu by the United Bottling Company (UBC), which is financed by about 400 individual Somali investors. In Somaliland, Coca-Cola beverages are bottled by Somaliland Beverage Industries (SBi) at a facility in Hargeisa.

UBC did not respond to a request for comment. An e-mail seeking comment from SBi bounced back as undeliverable.

Another HB2 denunciation signatory, Miramax, although not operating in any of the above countries, nonetheless last month was sold to BeIN Media Group, which is based in Qatar. Although Qatar ended its prohibition of sodomy in 2004, nevertheless the state operates Shariah courts that could hypothetically order executions. Gays also face heavy harassment and have no legal protections.

“We did this as Miramax,” said a Miramax spokesperson to the news website Deadline. “There has been an ownership change, but we are continuing to operate as an independent studio. This is Miramax signing this letter.”

It does bears noting that BeIN owner Nasser Al-Khelaifi, who is also a Qatari government minister, recently suspended a player on a French soccer team he owns for using the word “faggot.”


 

Are these corporations hypocritical for threatening divestment over North Carolina’s thwarting of a modest increase in LGBT protections, while operating in countries where homosexuality is a capital offense? That is debatable. And whether divestments from those countries would affect policymaking is more debatable still.

But what is not debatable is that corporate responsibility while competing in a global economy is a delicate dance.

Corrections: A previous version of this article stated that Yahoo had an office in Saudi Arabia. Reportedly they do not, despite listing it as a location in their Careers page.

A previous version also strongly implied that Dow Chemical and Unilever were signatories to the HB2 denunciation letter. In fact they denounced the bill independently, but were both signatories to a similar letter denouncing a discrimination bill in Missouri.

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