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sumers about hazards posed by defective products.68 Individuals in
private ¬rms may also be permitted to disclose privately held con¬-
dential information if it would reveal a threat to health or safety.69
Although all of these disclosure rules have evolved in an ad hoc fash-
ion, they share a common logic: The veil that ordinarily surrounds
the private sector is lifted to protect a fundamental interest “ namely,
the right to personal security.70
Policymakers have imposed disclosure requirements on private
actors to protect other basic rights as well. In almost all OECD coun-
tries, a right of access to personal information held by nongovern-
mental organizations is recognized, as a way of protecting each cit-
izen™s right to privacy. In the United States, disclosure requirements
have been imposed on many private schools, out of an appreciation
of the critical importance of education to the development of human
capacities.71 Students and parents have a right to their own educa-
tional records, and under the Student Right To Know and Campus
Security Act, a right to information about a broad range of oper-
ational matters, including an institution™s fee policies, graduation
rates, accreditation, and policing practices.72
Individuals also have a right to economic security that may lead
to the establishment of disclosure requirements for the private sector.
Many jurisdictions require businesses to disclose information about
plans for plant closings or mass layoffs.73 Some jurisdictions cre-
ate a right of access to records pertaining to disciplinary hearings
undertaken by private ¬rms.74 The ability to obtain work and borrow
money is also protected by obligations imposed on businesses to dis-
close information they have collected about the character or health
of applicants for employment or credit.75
It is sometimes argued that access provisions such as these are
only speci¬c applications of a very narrow principle: that individ-
uals should have a right of access to personal information held by
public or private organizations, because individuals have a property
right in this information “ that is, they own it “ and consequently
should be entitled to control its use.76 However, this explanation does
not ¬t the realities. In many instances, disclosure laws compel the
release of information that is not “personal” at all. The information

165
Blacked Out


that is accessible under the United States™ Student Right To Know and
Campus Security Act, describing accreditation and graduation rates,
is not personal data. Similarly, much of the information that would be
disclosed under many of the “bills of rights” that have been proposed
for consumers of health services in the United States “ such as infor-
mation about internal procedures for making treatment decisions, the
handling of grievances, and physician quali¬cations and compensa-
tion “ is not personal information either. However, it is information
that relates directly to a fundamental citizen interest, either in good
health or education, and this is the factor that drives pressure for
disclosure.
The right of access to information is often presented by advocates
of transparency as being itself one of the basic human rights.77 This
is not a universally accepted point of view. Furthermore, it is dif-
ferent than the logic proposed here. The line of reasoning pursued
in the South African PAIA, and that implicitly drives policy in other
countries, regards access to information as a critical tool in protect-
ing those basic interests that are typically described as fundamental
human rights “ such as the interests in physical security and economic
security. The right to information is, therefore, a derivative right: It
arises as a natural consequence of our commitment to a range of
basic human rights. Although it is a corollary, it may nonetheless
be critically important as a tool for ensuring that basic interests are
protected.78
Take, for example, the question of access to information held by
the operator of a privately run prison “ perhaps the Diamondback
Correctional Facility in Watonga, OK, a CCA prison that in 2004 held
over 1,000 prisoners under a contract with the Arizona Department
of Corrections, and another 800 prisoners under a contract with the
Hawaii Department of Public Safety, but had no contract with the
State of Oklahoma itself.79
In principle, several different groups could make a legitimate
demand for information about the Diamondback facility. Advocates
for the prisoners had a right to information held by CCA about inter-
nal conditions in the prison, as well as information about disciplinary
procedures; these informational claims could be grounded in the
basic rights to security and fair treatment, which persist even for
prisoners. The citizens of Arizona and Hawaii also had a claim to
this information, and to information about work and educational

166
The Corporate Veil


opportunities provided by CCA, so they could exercise their right to
participate intelligently in political debate about the wisdom of their
states™ correctional policies. The 5,000 residents of Watonga, OK, had
a right to personal security that could be jeopardized by riots or
escapes at the prison, and that entitled them to information about
the potential risk, including data about the number and risk pro¬le
of inmates, the number and quali¬cations of staff, and emergency
response procedures.80 Other residents of Oklahoma also had a right
to information about internal conditions in the prison, so that they
could make an informed judgment about the wisdom of a state policy
that allowed the importation of prisoners from other jurisdictions.81
In short, there were many groups that could make a reasonable
claim to information held by CCA, so they could ensure that an array
of basic rights were adequately protected. Unfortunately, existing dis-
closure law did not follow this logic. The Diamondback prison was
not affected at all by Oklahoma™s disclosure law, as it was not tied
to the state corrections department by a contract. Although CCA had
an agreement with the state of Arizona, Arizona™s state disclosure
law does not recognize a right to information held by contractors.
By contrast, Hawaii™s disclosure law might recognize a right to con-
tractor information, but only if the documents could be shown to be
“government records” “ a phrase not yet de¬ned by Hawaiian courts.
Furthermore, a Hawaiian court would have to be persuaded that
the requested documents were Hawaiian government records; Okla-
homans could not use Hawaiian law to obtain information about
Arizonan prisoners in the nearby Diamondback prison.82 This was
the predicament created by reliance on the traditional approach to
information rights.
Of the claims that might be made against the Diamondback
prison, the demand for information needed to make an informed
assessment about the wisdom of prison contracting (or interstate
prison contracting) likely seems weakest. This is one of the paradoxes
of contemporary attitudes toward disclosure of information. Among
specialists who study human rights it is common to make a distinc-
tion between two “generations” of rights “ the ¬rst including basic
civil and political rights, and the second including economic, social,
and cultural rights.83 Older documents such as the American Bill of
Rights emphasize the ¬rst generation of rights, and many critics argue
that these rights are more important than second generation rights,

167
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which include matters of economic security.84 It could be argued,
however, that this view is reversed when we begin to contemplate the
question of imposing transparency obligations on nongovernmental
actors. We readily agree that it is necessary to impose disclosure obli-
gations on corporations to protect the economic interests of share-
holders, employees, and consumers; the proposition that disclosure
obligations might also be justi¬ed so that citizens are able to exercise
political rights “ for example, to allow informed decisions about the
wisdom of prison contracting “ seems more problematic.
There is, nevertheless, a strong argument in favor of recognizing a
right to information held by private organizations that is tied to fun-
damental political rights. Some tasks “ such as the counting of votes,
the education of children, or the handling of prisoners “ are clearly
central to civic life; furthermore, there is rarely consensus on the best
way of handling these tasks. Decisions about educational or correc-
tional policy “ including the decision to delegate to a private body “
may be made despite substantial disagreement and uncertainty about
the likely impact of those decisions. Communities need information
about the actual effect of their decisions in order to improve future
decisions and build consensus on community goals. Organizations
that perform those functions should not be permitted to maintain
informational monopolies that compromise the ability of communi-
ties to deliberate effectively about critical policies.85


The realities of reform
Principle is one thing, and practice is another. The South African PAIA
might articulate a sensible way of thinking about transparency in the
private sector, but the probability that any other nation will adopt
comparable legislation is negligible. The PAIA is the product of very
unusual circumstances “ the accession to power of a well-organized
popular resistance movement, dominated by a left-wing political phi-
losophy, strongly supported by a mass labor movement, and deter-
mined to undercut a white elite that controlled both politics and
commerce. These were the conditions that led to the adoption of a pro-
vision in the 1996 constitution that assured a right of access to infor-
mation in private hands; and even under these conditions, the new
African National Congress government soon began to reverse course,
at ¬rst proposing legislation that substantially restricted that right.

168
The Corporate Veil


We know that any attempt to introduce comparable legislation in
an established democracy would be doomed to failure. The essential
elements for such a change “ a broad suspicion of the private sec-
tor, a dominant popular movement, an opportunity for quick and
radical change in policy “ are not present. On the contrary, the
mere contemplation of such a policy would trigger a well-organized
and broad-based lobby by businesses and other organizations who
would be subject to the law. It would be regarded as an unwarranted
attack on the integrity of the private sector. Businesses would also
argue “ with some justi¬cation “ that a push to entrench a general
principle of access ignores the speci¬c mechanisms that have evolved
to encourage transparency in particular sectors, such as reporting
requirements imposed by securities exchanges for publicly traded
corporations, or imposed by tax authorities for charitable organiza-
tions. (A 1995 proposal to extend the Australian Freedom of Informa-
tion Act to the private sector was rebuffed for this reason.86 )
In the United States, the dif¬culties that would beset an attempt
to establish a general right to information are illustrated by the pro-
longed failure to establish a more limited right to personal informa-
tion held by private organizations. By the turn of the century, many
OECD countries had adopted privacy laws (also known as data protec-
tion laws) that control the use of personal information in the private
sector, and include a right to access personal information held by
nongovernmental organizations. The United States, by contrast, has
faced intense resistance from business leaders to the adoption of a
comprehensive privacy law. As a result, privacy advocates have been
compelled to ¬ght a series of smaller battles for legislation on the
handling of speci¬c types of personal data held in certain sectors “
such as credit, educational, or health information.87 Even in these
smaller battles, privacy advocates have faced ¬erce resistance from
industry lobbies.88
This is the future confronting transparency advocates. It is prac-
tically impossible to do to the private sector what most democracies
have in the past done to their public sectors “ that is, impose a general
statutory scheme providing for access to information. The fragmen-
tation of the public sector has had the effect of breaking up the old
coalition that could once be relied upon to push for stronger trans-
parency rules. It may be true that businesses often resist the disclosure
of information they have provided to government agencies; but it is

169
Blacked Out


also true that businesses are the dominant users of disclosure laws
in many countries.89 So long as government had an expansive role
in regulation and provision of services, businesses had an interest in
assuring their own ability to access government information quickly.
The commonality may not have been appreciated, but General Motors
and Ralph Nader had a shared interest in ensuring that the United
States government was bound by disclosure rules.
The transfer of public functions to nongovernmental organiza-
tions will break up this commonality of interest “ and put in its place
new con¬‚icts between citizens and the new private providers of pub-
lic services. If the principle articulated in the South African law is
to be carried forward in other countries, it will be done incremen-
tally, through a succession of battles to establish information rights
for speci¬c types of information or for speci¬c sets of organizations.
The work of mobilizing coalitions to establish information rights will
be dif¬cult. The general principle at stake “ access to information
to protect fundamental rights “ will often be obscured by the details
of substantive policy in a particular area. Furthermore these new
coalitions will often face well-organized and better-funded industry
resistance.




170
8
REMOTE CONTROL




The restructuring of public services over the past two decades
reminds us that power is ¬‚uid: It ¬‚ows easily from one place to
another. For the preceding thirty years, the main preoccupation of leg-
islators and nongovernmental organizations had been ¬nding ways of
maintaining control over growing national bureaucracies. A number
of devices “ including disclosure laws that allowed citizens to share
in the task of oversight “ were invented to provide a check on bureau-
cratic power. But just at the moment when these checks had been
established “ and in part, because these checks had been established “
the locus of power began to change. Authority ¬‚owed from public
bureaucracies to purportedly private actors, whose work began to
provoke, in some quarters, the same complaints about abuse and
opacity that had once been lodged against the bureaucracy itself.
This is not the only sense in which power has diffused away from
the traditional structures of governance. Increasingly, decisions over
a broad swath of national policies are in¬‚uenced by decisions taken
within supranational institutions “ new structures for the negotia-
tion and enforcement of multilateral agreements on matters once
resolved by national or subnational governments alone. Britain™s
“metric martyrs” “ storekeepers arrested for selling produce by impe-
rial weight rather than by the metric weight required by the European
Union “ were contending with the in¬‚uence of new supranational

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