October 2nd, 2009

Intel to Ireland: Vote Yes to Europe or else?

Posted by James Farrar @ 7:04 pm

Categories: Uncategorized

Tags: Ireland, Intel Corp., Microsoft, Dell, Corporate Citizenship, Corporate Social Responsibility, Sustainability, Lisbon Treaty, James Farrar

Irishness is not primarily a question of birth or blood or language; it is the condition of being involved in the Irish situation, and usually of being mauled by it.

Still, Intel has waded manfully into the thicket of Irish politics and nailed its colours firmly to its corporate social responsibility mast in backing the ‘Yes’ campaign in today’s national referendum on the EU Lisbon treaty. There is a lot at stake in today’s vote both for the people of Ireland and Intel and not least because it is the single biggest employer in the country. Together with Microsoft and Dell, Intel contributes a whopping 20% of Ireland’s GDP. So is what is good for Intel also good for Ireland?

This will be Ireland’s second go around on the Lisbon treaty with a ‘no’ vote recorded only last year. Intel fears yet another ‘no’ vote would isolate its European operations based in Ireland from an open market in an increasingly bound and unified Europe. Intel’s Ireland boss Jim O’Hara makes no bones about it:

Why did Intel come to Ireland? It came to Ireland because of its low corporation tax, its educated workforce, its competitive cost structures and the fact that, as part of the EU, it was a gateway into Europe. Intel made those choices in full belief that investment in Ireland was an investment in Europe.

Such words resonate powerfully in Ireland especially in the context of Dell’s decision earlier this year to move its European operations centre out of Ireland to a lower cost base in Poland at the cost of 2400 jobs.

As it goes I think Intel is on the right side of the argument but as a US multinational operating in Ireland, its political campaigning is not universally welcomed. One letter to the Irish Times summed up the concerns of the ‘no’ campaign:

It is disconcerting that companies such as Ryanair and Intel can spend vast sums of money in support of the Lisbon Treaty referendum with no questions asked. Why is it that companies like these are not subject to the Standards in Public Offices Commission rules? It’s questionable as to why these companies are getting involved and the Irish people are entitled to know what is behind their newly discovered philanthropy.

Both companies were recently the subject of EU Commission investigations and Intel was recently fined €1.06 billion by the European Commission (currently being appealed by Intel) for breaches of competition and consumer law. Intel was found guilty of “harming millions of European consumers” though its anti-competitive practices.

Intel has made an important contribution to the Irish economy and it is disappointing that it has chosen to pour a vast sum of money into the campaign in favour of Lisbon thereby radically distorting the debate.

My take: while I think Intel is on the right side of the issue I can’t help but feel a bit uneasy about the precedent set here. With the genie out of the bottle,  in future Intel may find it increasingly difficult to draw boundaries of the role it should and should not play in the political life of the many countries that host its operational interests.