Monday, 7 April 2014

Eroding privacy mars Indian elections, spooking foreign investment

Beginning April 7 and running until May 12, India will conduct elections to choose the 16th Lok Sabha, or the lower house of the country’s parliament. In what could well be the largest democratic event in history, one of the world’s most populous countries will decide on how best to propel its struggling economy as it faces tough economic and legislative obstacles.

Perhaps reflecting the deep internal divisions in India and a lack of any real effort to address its crippling corruption culture, the government recently enacted unsettling new laws controlling domestic surveillance. These new measures risk harming the Indian economy further by spooking foreign investment due to their broad targeting and high potential for mismanagement.

It is unclear whether the two main political parties - The Bharatiya Janata Party, or BJP, and the Indian National Congress - will be able to fix India’s growing problems sufficiently.

Both parties are extremely polarising with little in the way of agreement connecting their ideologies. The BJP’s candidate is controversial pro-business Hindu nationalist Narendra Modi. While the semi-socialist Congress is one of the world’s oldest political parties, currently in its fourth generation of Gandhi family leadership.

Mr Modi is placed by some leading analysts with a strong chance of victory despite his controversy. But even his charisma and dedication may not assuage India’s geographic and demographic realities even if he is victorious.

On top of the inherent divisions in the Indian nation, India’s economy is not performing anywhere near as strongly as it was during the last ten years. Some of the usual sticking points are front and centre during this election, as can be expected, but the big topic is economic trouble.

India was already slowing down considerably before the past few months exacerbated this trend. March 2014 was the first month in a while where the Indian stock market managed to catch its breath, but a dangerously fluctuating rupee still threatens to dip the economy even further into strife.

Foreign investment also dissipated over the past 12 months as worries about India’s economy spread outside its shores. India needs this type of direct investment to grow, which is what makes the rushed passing of new surveillance systems so curious.

Two massive surveillance programmes - Project NETRA (dealing with internet traffic) and the Content Monitoring System (targeting telecom) - are now running at full capacity, scooping vast quantities of data and communications from throughout the Subcontinent.

The CMS is an upgrade from the old Lawful Interception Systems which required India’s telecoms to use these systems on their premises for targeted surveillance of individuals. CMS goes significantly further this time.

With the new scheme, Indian authorities now have the capability to monitor tens of thousands of calls simultaneously. Each of the more than 70 telecom companies registered in India is required to monitor a minimum of 30 telephone calls concurrently and forward their data streams to each of the nine law enforcement, intelligence, and tax agencies.

Given India’s reputation for corruption and misallocation of authority, this new system is bound to be abused, with even greater social and political consequences than with previous iterations considering its increased power and breadth.

There is supposed to be an oversight protocol for CMS where all surveillance requests can be logged and assessed, but it is not clear who will be the gatekeepers. No judicial review system or legal framework currently exists to determine what would constitute a legitimate monitoring request. It simply appears that everyone can be targeted, at any time, for whatever arbitrary reason.

Project NETRA is a slightly different beast. It aims to close the gaps which any tech-savvy Indian enjoys using Skype or Google Hangouts for communications. The initialism stands for Network Traffic Analysis and will use around 1,000 nodes stored inside India’s ISPs to search for keywords among Indian internet traffic such as “terrorist”, “bomb”, etc. Even though intelligence agencies have for years known that terrorists do not use these words, the system has been given the green light.

What is most disturbing about these two systems is their catch-all operation. They are meant to monitor domestic Indian communications with an eye for security, but there is nothing stopping officials turning those eyes onto foreign business interests operating in the country.

India’s privacy and free speech laws were abysmally weak before the new surveillance was created, and it reflects a stunning naivete of the government if they assume the programmes will not be misused. The programme’s original motive is admirable - created to protect the country from threats of terrorism and militancy - but it does not fit well with India’s massive corruption problem.

In such a cultural environment, a dragnet surveillance programme will not encourage the foreign direct investment required to take India’s economy back up to cruising speed. Systems such as CMS and Project NETRA operating inside a country where 1,500 legislators are presently indicted on corruption charges and awaiting trial is enough to scare even the most risk-averse investor.

Unless India can enact tough anti-corruption laws and privacy regulation, all Indian nationals, and anybody who interacts with them electronically, is at risk of invasive surveillance. Business interests in the country should be careful to remember that all emails and phone calls to the Subcontinent could be ultimately captured, stored, analysed, and potentially sold to the highest bidder.

We all thought the American snooping programmes were bad, but at least the United States has institutions protecting citizens from government overreach. Indians enjoy none of these luxuries, and Western business interests should be wary.

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