Credit: AFP/Arne Dedert/dpa

Credit: AFP/Arne Dedert/dpa

What the Huawei espionage controversy means to the Philippines

25 March 2019

BY MARK MANANTAN, alumnus.

From the contested South China Sea to the bustling streets of Makati and Bonifacio Global City, Chinese influence in the Philippines has now become very evident. Not only did it recently snatch a low-lying sandbar called Thitu (Pag-asa) Island, but China’s people are dramatically acquiring foothold in the local employment industry at an unprecedented rate.

Majority of Chinese laborers are reportedly engaged in online gaming and the construction industry. Coming to their defense, the Duterte government said Chinese nationals were recruited for massive infrastructure projects under the “Build Build Build” program due to shortage in Filipino labor. A startling statement that drew criticisms, especially with an overwhelming 2.2 million unemployed and 5.5 million underemployed Filipinos.

The alarming influx of Chinese nationals prompted the Philippine Senate to launch an inquiry. Based on the investigation, approximately 400,000 illegal Chinese workers are currently in the Philippines. The Senate sought the deportation of these Chinese workers, majority of whom entered the country under temporary labor permits by skirting labor regulations. The Bureau of Immigration also noted that Chinese nationals topped the list of its arrested fugitives in 2018.

The issue gained further public attention after the news about Zhang Jiale, a female Chinese student, who threw taho (soy curd) to a Filipino police officer at the MRT went viral. As a social media obsessed nation, the news about the taho-throwing incident has brought to the fore the nagging question in Metropolitan Manila: Why are there so many Chinese?

But beyond the obvious and trending news about Chinese presence found in the streets and skyrise buildings of Metro Manila, another extension of Chinese influence, that is equally alarming yet more insidious in nature, is also unravelling in the very same corners of Bonifacio Global City: Huawei.

Why Huawei?

Several weeks ago, local data privacy advocates sounded the alarm to the Duterte government on the potential intrusion and surveillance of China to the Philippines by the Chinese telco giant—an indication that the global controversy surrounding Huawei from the West has finally reached the Philippines.

To put into context, Huawei is the winning contractor for the Safe Philippines project of eChina International Telecommunications Construction Corp. Huawei’s role in the initial rollout of the smart city project—where 12,000 state-of-the-art mass surveillance security cameras will be piloted in Clark, Pampanga and Bonifacio Global City, Taguig—received skepticism despite its visibly noble intent. A Senate resolution was filed to investigate the risks of Huawei being a potential backdoor for Chinese proxy intelligence gathering, which could undermine the country’s national security.

But the Duterte government does not seem to pay attention. The government has downplayed the issue and showed no concrete signs of suspending the P20-billion project.

Amid the global controversy surrounding Huawei and the government’s perceived inaction over the concerns raised, the question beckons: Is the national security threat posed by Huawei credible? And if yes, what are its implications to the country’s national security and sovereignty?

Huawei as spy agent?

It is no doubt that tech giants such as Facebook, Google, Apple and Samsung, among others, are also facing legal scrutiny on their potential abuse of consumer data privacy. Yet what makes the case of Huawei distinct is the company’s affinity with the Chinese Communist Party, an association that makes the telco giant susceptible to conduct espionage for political and military purposes, more than as commercial means.

The evidence to this claim is found in China’s 2017 National Intelligence Law, or NIL. Article 7 of the NIL explicitly mandates all citizens and corporations to support, cooperate and collaborate with Chinese national intelligence-gathering efforts and to maintain its secrecy.

Transgressing the strict provisions of NIL could be tantamount to a criminal offense. Furthermore, Chinese entities who shall comply by “acquiring” intellectual property from foreign companies are also incentivized and guaranteed safety and protection.

It is also no secret that Huawei’s rise to be at the forefront of 5G technology is credited to its links with the CCP. Based on a report published by the US Trade Representative Section 301 in March 2018, China’s military hacking unit known as the Third Department of China’s People’s Liberation Army or the 3PLA is actively pilfering commercial information to make Chinese companies even more competitive, while safeguarding their corporate intelligence.

Huawei, therefore, despite its firm stance on being a privately-owned digital technology company, it is required under NIL to show some state loyalty.

Worldwide threat or paranoia?

The growing suspicion against Huawei in the Philippines echoes a similar trend unfolding all over the world. Last year, Australia banned Huawei from bidding on its 5G network. Soon after, Japan followed suit while New Zealand, United Kingdom, Canada and Germany have expressed reservations with Huawei’s 5G technology and products.

The recent development to date is the indictment of Huawei’s chief finance officer and the company founder’s daughter, Meng Wanzhou, for violating US trade sanctions against Iran and pilfering “Tappy,” a smartphone testing technology owned by T-Mobile. In his official visit in the Philippines, US State Secretary Mike Pompeo also warned the Duterte government on the security ramifications of Huawei.

Despite all existing information pointing Huawei’s espionage activities, Duterte’s government keeps mum. Through his spokesperson, Duterte said he can veto any senate resolution which attempts to block the payment to the Chinese CCTV surveillance systems for the Safe Philippines project.

Huawei and the third PH telco

The unravelling of Huawei’s spying controversy could not have come at a perfect timing, especially when the Philippines is about to welcome Mislatel, the new telco player backed by China Telecom, another Chinese-state owned company. But even with security concerns of Chinese acquiring access to critical telecom infrastructure, the Duterte administration appears nonchalant about the potential threats and risks involved.

With his alleged personal ties to one of the major consortium partners, it is implausible for Duterte to block Huawei. Any efforts to do so could potentially hurt and derail the entry and credibility of Mislatel.

As Mislatel faces “delay” in acquiring its franchise from the Philippine Congress to operate, and while Huawei’s Safe Philippines project is still in pilot stage, it is incumbent upon the members of the public and private sector—academia, small to medium enterprises, media, civil society and non-government organizations—to adopt a forward-leaning approach toward the case of Chinese state-owned ICT companies entering the Philippine market.

Either through public debate or policy discourse, it is vital to further engage lawmakers in both Congress and Senate, as well as concerned government agencies, primarily the Department of Information and Communications Technology and the National Privacy Commission.

Such engagement must be reoriented to assess if the security risks outweigh the perceived benefits of Chinese ICT companies based on the existing provisions set forth in Republic Act 10175 or the Cybercrime Prevention Act of 2012 and related laws and policies vis-a-vis China’s NIL 2017.

The government as well as the general public must internalize that outcomes of these projects will have far-reaching implications to the Philippines’ thriving digital economy, cybersecurity, sovereignty and every Filipino’s freedom and privacy.

If we remain complicit or act nonchalantly on the issue, we ourselves can become culpable in the gradual erosion of our sovereignty and freedom as a nation—a prime lesson we still cannot fathom even after more than 300 hundred years of colonization.

Mark Manantan is a research fellow at the Center for Southeast Asian Studies in the Republic of China (Taiwan) and a research affiliate of Manila-based think tank Pathways to Progress. He is also an alumnus of the Master of International Relations (Advanced) at the Coral Bell School of Asia Pacific Affairs, ANU. Views expressed are entirely personal.

This article originally appeared in the Philippine Star

Updated:  22 March 2016/Responsible Officer:  Bell School Marketing Team/Page Contact:  CAP Web Team