In a major setback to Brazil-United States relations, disclosures of NSA spying activities in Brazil led President Dilma Rousseff to postpone what would have been the first state visit by a Brazilian leader to Washington in two decades. The incident, derived from leaks by former U.S. intelligence contractor Edward Snowden, brought issues related to internet security and governance to the forefront of the policy debate in the South American nation.

In response, Brazil is now developing a government-run email service in an effort to protect its communications. Furthermore, an amendment has been put forth by Rousseff to an important 2009 bill, known as the internet’s “Marco Civil,” which establishes rights and duties of Brazilian individuals, government and businesses regarding internet use. The amendment, which is being considered "with urgency" and scheduled to be voted on this week by the Brazilian Congress, could force all data centers for internet services in Brazil to be located in-country, cutting Brazil off from cloud computing and big data applications.   

While applauding the Brazilian leader’s criticism of mass surveillance by governments of the global communications infrastructure, which was reinforced by leaders from other nations after new disclosures of NSA activities involving their countries, advocates of internet freedom and neutrality warn that data localization requirements would function as insurmountable barriers to the free flow of information online, hurting not only Brazil's technology sector, but services, manufacturing and R&D. Forty-seven business associations from eighteen countries sent a joint letter to President Rousseff expressing their concerns.

After asking for a “multilateral” approach to internet governance in a speech at the United Nations, in early October, Rousseff announced via Twitter that Brazil will convene an international summit of government, industry, civil society and academia on the topic in April 2014.

 On October 23rd, the Brazil Institute, in association with the Canada Institute, hosted a discussion with experts on the implications of the postponed state visit and the new internet regulatory framework proposed by Brasilia. The discussion was moderated by Paulo Sotero, Director of the Brazil Institute. Jamie Hedlund, advisor to the President for the Internet Corporation for Assigned Names and Numbers and Carlos Eduardo Lins da Silva, Editor of Politica Externa and Brazil Institute Global Fellow, both participated on sight. Kellie Meiman, Managing Director at McLarty Associates, Ronaldo Lemos, Lawyer and Visiting Scholar at the MIT Media Lab, Ricardo Sennes, Director and Partner of Prospectiva Consultoria Internacional and Wesley Wark,Visting Research Professor at the University of Ottowa, all participated via Google Hangout in the Wilson Center’s first ever use of this technology in a public panel discussion. 

Kellie Meiman started the conversation emphasizing that history and geopolitics played an important role in shaping the consequences of the NSA surveillance leaks. According to her, Brazil’s reaction has been very consistent and emblematic of a long held distrust with respect to Brazil-U.S. relations, and particularly in the areas of security and military issues. This indicates how much work is needed to improve Brazil-U.S. relations. Had there been a stronger relationship already, perhaps the reaction would have been more muted. In addition, Brazil and the U.S. have divergent geopolitical views, specifically on the issue of intervention and sovereignty. Whereas the U.S., post-World War Two, has been incredibly involved in international affairs, Brazil is non-interventionist, focusing on domestic issues first. This disconnect is very much present in Brazil-U.S. bilateral relations, yet it is rarely spoken of.  Meiman explained that the combination of a noninterventionist world view (geopolitics) and mistrust about Brazil-U.S. relations (history) exacerbated the situation. According to her, both governments should look forward and explore how to collaborate more in defense. She also believes the Mutual Legal Assistance Treaty (MLAP) must be reformed as it has not proven agile enough in the initial phase of effective use, particularly in cases involving fraud and money laundering of public funds by Brazilians. In addition, she called upon the private sector to show greater effort in getting the relationship back on track and emphasized that policy steps in reaction to the incident must be carefully designed, since there is a possibility that they might not get to the root of the problem and instead harm the economy and investment in Brazil.

Jamie Hedlund followed with an overview on ICANN’s involvement in Brazil and the April 2014 international summit that President Rousseff is scheduled to host in Rio de Janeiro. The reason the organization reached out to the Brazilian government is because it is a leader in the Multi Stakeholder model. Brazilian internet policy was developed by a steering committee of government representatives, members of civil society, members of the private sector and members of the technical community. Hedlund stated that whereas there are various entities focusing on the multi stakeholder model, IP addressing and technical standards for internet policy, there is a lack of established institutions that focus on pressing internet issues such as cyber security, privacy and spam. According to Hedlund, there are three groupings of countries in terms of views on internet policy. On the poles, there are those who believe strongly in the Multi Stakeholder approach, and those, who do not have the same freedom of expression interests, that want government-only organizational structures to develop internet policy. However, there are also many countries in the middle that are somewhat suspicious of the Multi Stakeholder model because they see it benefiting the U.S. and American companies, but are also weary of the other side. Brazil is a leader in the middle group, with an impressive internet infrastructure and great understanding of Multi Stakeholder governance. For this reason, ICANN reached out to Brazil in an effort to create space for these pressing internet governance issues to be discussed and dealt with.

Ricardo Sennes started off by providing the political and economic context in which recent developments have taken place. Since 2003, the beginning of Lula’s administration, Brazil has been undergoing a phase of activism in industrial policy. Brazil’s response to the NSA surveillance scandal in the IT sector undoubtedly has connection to other sectors, such as telecom, oil and gas, and the health industry. Public opinion in general in Brazil is in support of President Dilma’s Marco Civil Strategy. Sennes noted the importance of the 2014 Presidential elections. The race has already started, he noted, emphasizing that President Rousseff’s reaction to revelations of NSA spying was aimed at both the general public as to the demands of the Workers’ Party, which she joined only in 2001 and which sees her with some reservation.  Sennes recalled that the question of internet governance in Brazil is not new, making reference to the Lula governments’ proposal of UN regulation over the internet worldwide, which the private industry was critical of.  According to Sennes, the ITC sector in Brazil has successfully fulfilled the government’s demands in terms of innovation, investment, and national content. This shows that the ITC sector has a place of importance within the industrial policy debate taking place in Brazil over the past ten years. National and international companies have been working together in the IT sector in Brazil, viewed as a very important market. This environment positively impacted the Marco Civil law, which was shaped through an open and democratic dialogue. However, when the NSA scandal emerged, dialogue between the government and internet industry was broken. According to Sennes, Rousseff expanded this diplomatic problem across sectors to security, defense, trade, and internet.  The Brazilian government has proposed three changes. First, new internet governance policies to be adopted worldwide, focusing on multilateral platforms, much like the Internet Management Committee in Brazil. Second is a redesigning of the Brazilian government’s communications, and third is the request to nationalize data centers by locating them in Brazil. The latter is the most controversial proposal, and the business sector is very concerned about its consequences. It has been added as an amendment to the Marco Civil bill. Sennes concluded by noting that due to President Rousseff’s government’s perceived weakness in international affairs, she might use the internet governance debate provoked by the NSA disclosures as an opportunity to emerge as a strong international player.

Wesley Wark provided a portrayal of the Canadian reaction to the NSA scandal and the consequences it has for cyber security and global governance of the internet. Wark expressed that the Canadian reaction was one of genuine puzzlement, raising questions of political control over intelligence agencies, Canada’s relations with the U.S., its strongest intelligence partner, and questions about legality. He explained the role of the Communications Security Establishment Canada, the country’s most important intelligence agency, comparable to the NSA in the U.S., and the Five Eyes intelligence sharing partnership between the U.S., Canada, Britain, Australia, and New Zealand. According to Wark, Canada was spying on Brazil because of this larger intelligence alliance, which further raises the question about political control over intelligence gathering. He also emphasized the importance of distinguishing between economic intelligence gathering of information and industrial spying. Economic intelligence is conducted by most states from time to time, and is regarded as legitimate, since it is only to be used by governments. However, industrial spying can be conducted by many actors, and ultimately uses government intelligence agencies to clandestinely acquire intelligence information and then pass it along to private industries for their competitive advantage. Wark affirmed that there was no such exchange of information intended or achieved between the government and the private sector in Canada. According to him, the Brazilian case highlights the fact that this distinction is under constant threat. In terms of cyber security and internet governance, there is much that needs to be done.  Wark believes governments, the private sector, and individual citizens all have a role in making this change. Governments must work towards an international self-denying ordinance in which they will avoid using technology for the gains of the private sector. The private sector should take the lead to secure its own informational resources, and must conduct a debate on industrial espionage.  Lastly, individual citizens must pay better attention to their own cyber security and communications practices. Wark emphasized that all of these initiatives are needed if we want a free internet to help us perform as global citizens.

Ronaldo Lemos, one of the authors of the Marco Civil law, shared his perspective on the impact of the NSA scandal on internet governance policy in Brazil. Lemos explained that the Marco Civil bill has been changed in response to the surveillance incident, making it more “adequate” politically. The government has amended a provision that requires data centers being installed in Brazil in order to render services to Brazilians.  Lemos emphasized though, that this is difficult due to the near impossibility of establishing nationality online. Forced localization, he explained, also has implications for infrastructure. One of the main bottlenecks for data centers in Brazil is electricity. If data centers are placed in Brazil without proper avenues for it to be distributed, it will not work. In addition, there is a concern about a possible domino effect where, if the forced localization provision is passed, other countries might follow suit. Lemos explained that reciprocation is also plausible, in which case, Brazilian governments will be required to have data centers in countries where they offer services to citizens. Lemos strongly opposes the provision from being included in the Marco Civil bill. He said that there are indications that the debate on localization of data centers has continued inside the government and that Rousseff herself had second thoughts about the amendment she proposed.

Carlos Lins da Silva concluded the debate by sharing key concerns about the issue of internet governance in Brazil in light of the NSA surveillance leaks. Supporting what was said by Ricardo Sennes, Mr. Silva believes the internet governance issue is a good political opportunity for Rousseff to become a global personality, using it as a flagship of her time as President. Besides being an important international issue, Lins da Silva believes internet governance may be politically profitable for her domestically. Although she is a front runner for the October 2014 elections, her reelection is not guaranteed. She needs to garner support from younger generations, and engaging in internet policy governance may be a way of accomplishing that. Standing up to the American president and postponing the state visit to Washington scheduled for October 23 was seen positively by a large portion of Brazilian society as well as by those in her Workers’ Party, where she is not very popular. Mr. da Silva has expressed three main concerns about Brazil’s approach to internet governance. First, he worries that some people may want to create something that is uniquely and exclusively Brazilian, which is dangerous. This could resemble the 1980s, when President Sarney created a market reserve for informatics in Brazil. This initiative did have some positive outcomes, especially in the financial sector. It delayed however, Brazil’s entrance in the age of information more broadly, since personal computers available were extremely expensive and ineffective, and pushed the country into a long period of darkness on innovation. Second is the concern that Brazil might try to collaborate with China and Russia in this area, although he believes it will not actually happen. Lastly, Silva expressed concern that the NSA disclosures have undermined and may delay improvements urgently needed in Brazil-U.S. relations.

Compiled by Carolina Cardenas, Brazil Institute Intern

Edited by Paulo Sotero and Michael Darden

Photo courtesy of Blog do Planalto