Canada Pension Plan Acknowledges Risk of ‘Dual Use’ Technology in China’ Tencent, but Maintains Investment
The Canada Pension Plan Investment Board (CPPIB) says it is monitoring China’s Tencent, in which the board has invested over $1 billion, for possible use of “dual use” technologies. Security experts have warned that Tencent’s social media app, WeChat, widely used in China and by diaspora, is under surveillance by the Chinese Communist Party.
Michel Leduc, senior managing director and global head of public affairs at CCPIB, told a House of Commons committee on May 8 that the Crown corporation still maintains investments in Tencent after being questioned about it by Liberate MP Jean Yip.
“We recognize that the organization has evolved and changed, and the issues associated with their operations. One example might be dual use technologies—they were built for a particular intention, and then over time, they may be used for intentions that were not contemplated at the time. So it is something that we’re seized with and monitoring very, very closely,” he said while testifying at the Commons Committee on Canada-People’s Republic of China Relationship (CACN).
Yip asked Leduc if the CPPIB knew “certain parts of the business may be engaged in surveillance,” how it came to the decision that “that is unacceptable and move on?”
Leduc said the board hasn’t reached “any conclusion” on the issue yet.
“It is an exposure that we have that we’re monitoring very closely,” he said.
The Epoch Times has inquired about CPPIB’s investments in Tencent since 2020, but the board has repeatedly not responded to media requests.
The House of Commons cyber security team warned MPs back in 2019 to avoid Tencent’s WeChat, according to a 2019 report by iPolitics. The security team reportedly noted at the time that information on the messaging app continues to be stored on servers located outside Canada even after it’s been deleted, and that the platform doesn’t provide end-to-end encryption.
The board owned around $1.2 billion in shares in Tencent as of March 2022, the latest date that the board has published data.
A 2020 study by the University of Toronto’s Citizen Lab said that communications on WeChat are “subject to pervasive content surveillance.”
“Documents and images transmitted entirely among non-China-registered accounts undergo content surveillance wherein these files are analyzed for content that is politically sensitive in China,” the study said.
CPPIB also has investment in Bytedance, another Chinese tech company whose TikTok video-sharing app was recently banned from government-issued devices by Ottawa and the provinces due to security concerns.
The Chief Information Officer of Canada has determined that TikTok “presents an unacceptable level of risk to privacy and security” according to a February statement from the Treasury Board of Canada Secretariat.
Forced Labour Concerns
The CACN meeting in part focused on national security and human rights concerns surrounding pension funds in Canada, an issue highlighted by a report from the UK-based NGO Hong Kong Watch. The NGO said in a report last year that Canadian pension funds are passively invested in at least 13 China-based companies where “there is credible evidence of involvement in Uyghur forced labour programs and construction of internment camps in Xinjiang.”
According to Hong Kong Watch, the exposure is due to those companies’ inclusion in certain indices. An updated version of the report, released last December, said CCPIB is still exposed to 7 forced labour camps and 6 repressive infrastructures.
Eduard van Gelderen, senior vice-president and chief investment officer for Public Sector Pension Investment Board, acknowledged that his fund invests in some of the indices named in the Hong Kong Watch report.
“In our passive investment approach, we do have exposure to the MSCI Asia index funds. So yes, there will be some names,” said Eduard van Gelderen, senior vice-president and chief investment officer for Public Sector Pension Investment Board.
Omid Ghoreishi and Peter Wilson contributed to this report
