Check against delivery

Privacy – a Human Right at Risk

Georg F. Krayer, Chairman of the Swiss Bankers Association

Ladies and Gentlemen,

Whatever is not public, is private. This, as you know, is a fundamental truth that is impressed upon us at a very early age. Not only that, but it can also be viewed as the philosophical bedrock of those Western values we hold most dear – values for which our ancestors had to fight long and hard. But today you get impression that the exact opposite is true: that everything private is public. In fact, there is almost nothing left to which the public does not have access. How else can we explain the fact that people of all ages demonstrate and talk about the most intimate details of their private lives on television? Or the way in which genetic data obtained from people found to be innocent are nevertheless stored in forensic databases? Or the way in which the press „exposes” in giant headlines what Switzerland’s ambassadors get up to before and after midnight? Are these merely occasional excesses, or has the frontier between public and private become so blurred that the discretion used in the distinction between the public and private zone does not exist any longer, with the result that we are all now at risk of becoming a plaything of the public at large – anywhere and anytime?

Sadly, I feel bound to conclude that privacy is indeed seriously at risk. Which obviously raises a number of questions – such as who or what is the driving force behind this development? And what can – and indeed must – be done to reverse this trend? These are just some of the questions I would like to explore with you in the coming minutes. And for once, I will be addressing them not so much as a banker, concerned that client data entrusted to his safekeeping might end up in the hands of nosy officials, but rather first and foremost as a private individual, seriously worried that George Orwell’s nightmare 1984 scenario has become all too real.

For me, privacy means an area the limits of which I can define myself without being obliged to accept intrusions from outside. The right to privacy is an inalienable human right on a par with the right to life and the freedom of speech. In Switzerland, as elsewhere in Europe, the protection of privacy is enshrined in the constitution and governed by specific legislation. Article 8 of the European Convention on the Protection of Human Rights also upholds the inalienability of the right to privacy and thus the privacy of personal data. What this means in practice is that the person who initially provides information is entitled to decide whether or not it can be circulated. It is up to the state, therefore, to lay down the rules and ensure that they are observed. The inflationary proliferation of jobs for data protection officers over the past decade is just one visible manifestation of this interpretation of the law.

Every single limitation of privacy should really be regarded as a restriction of individual freedom and integrity. Yet the reality, I’m afraid, is very different. I never cease to be amazed at how many people are unaware of just how many freedoms they have already willingly and unthinkingly surrendered. The use of private data becomes problematic as soon as they are intentionally or inadvertently used for a purpose other than that for which they were originally collected.

Procedures for monitoring and collecting information are a fact of life these days and should have long since triggered alarm bells. Consider for a moment some of the most recent examples of this steady erosion of our privacy:

In other words, whether we are aware of it or not, we are already being monitored around the clock, 24 hours a day. So it was not without justification that one of America’s most prominent data protection activists, Richard Smith, once described this decade as the decade of „Tracking and Monitoring”.

This erosion of privacy appears to be inexorable and therefore the question of personal data protection is of the utmost importance. Yet the press, the academic world and officialdom have all been strangely quiet on this subject. If anything, the tragic events of September 11, 2001 and the ensuing war on terror have dealt another blow to privacy. How ironic that it should be in the Land of the Free, one of the world’s oldest democracies, that privacy is now acutely at risk of being sacrificed on the altar of „Security of Society”. A new Ministry of Homeland Security is being set up and there seems to be no limit to the funds now available for bolstering the secret services and federal law enforcement agencies. But history shows us that no sooner have such secret services been given a fresh injection of funds than they begin overstepping the limits of their original mandate.

Please do not misunderstand me. No one would dispute that we must do everything in our power to combat terrorism. Indeed, the measures Switzerland was swift to adopt and implement after September 11 have rightly been accorded considerable international acclaim. Yet even here, the question of what constitutes a proportionate response must be addressed.

Of course freedom itself is relative, too, and one man’s freedom can be another man’s threat. Those who advocate tighter controls and comprehensive surveillance, however, should remember that such measures often produce the exact opposite of what was intended. By casting doubt on the democratic principles the West has fought so vigorously to defend, they play straight into the hands of the terrorists they are supposed to be targeting. Benjamin Franklin was well aware of the dangers posed by any excessive curtailment of individual freedoms when he wrote: „They that give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”

Yet today, dragnets and computer profiling are once again becoming accepted practice, just as the term „Fishing Expedition” is no longer an exclusive prerogative of anglers, having also come to mean across-the-board – or what is officially known as „dissuasive” – surveillance and data collection. In other words, we are all potential suspects and the much-vaunted transparent citizen threatens to be a nightmare about to come true. Hence my plea: the fight against terrorism and crime should always be approached with sound judgment, a clear sense of purpose and a sense of proportion.

But when and to what extent should the state be allowed to invade our personal privacy? I would argue that first there must be an indisputable public interest in such a step. Second, it must be up to the public authorities to prove that such a public interest exists and third, the principle of proportionality must be upheld. Viewed in this light, the German government’s plans to store all the client data from all of Germany’s banks with one central authority – naturally on the pretext of combating terrorism – must be regarded as extremely problematic from a legal point of view, to say the least. After all, such a step would neither be in the public interest, nor would it constitute a proportionate response.

Before defining the extent to which the private sphere can be circumscribed in the public interest, we must examine the division of roles between state and citizen. The Swiss interpretation of these roles is based largely on the thinking of philosophers such as Jean-Jacques Rousseau and Thomas Jefferson, both of whom regarded the people, and not the state, as the only legitimate source of power. The underlying assumption is that the state should be at the service of its citizens and not the other way round. The sanctity of privacy is therefore both a fundamental principle in its own right and a natural corollary of freedom.

Naturally in any democratic society certain rights and duties may conflict, which is why most democratic societies have established a clear hierarchy of freedom over security, for example, or privacy over convenience. Yet this should not blind us to the fact that there are also certain universal values and rights whose validity is not dependent on their social, cultural or historical context – one of which is undoubtedly the right to privacy.

As you have doubtless gathered by now, what I am most concerned about is the a priori protection and integrity of privacy. Data protection and privacy are often cited as the fundamental rights that are at stake in this debate, although I believe that the protection of financial privacy is no less vital. Speaking in my capacity as a banker, therefore, I would like to say a few words about the personal financial privacy of respectable clients  – a legitimate principle that is deeply cherished in Switzerland. Payments into and out of bank accounts and portfolios indeed quite precisely reflect the private lives and business activities of our clients. This category of data is not the business of the public authorities; moreover, if unprotected, it could become an easy target for abuse by unauthorized persons. This is why bank customer confidentiality must be preserved as a non-negotiable principle. However, over time its extent is determined by legal developments.  As examples I would mention legislation and rules concerning so-called politically-exposed persons, the bribing of foreign officials and insider trading. To preclude abuses in these areas, Switzerland and Swiss banks have developed a system of checks and balances that is unrivalled throughout the world. I cannot stress enough that funds of criminal origin are not in any way covered by the protection of privacy with respect to financial affairs in Switzerland.

When it comes to protecting the financial privacy of innocent account-holders, however, we should be careful not to think only in the short term. For the real issue here is not tax evasion, no matter how much that may dominate the headlines. The real issues are actually much more fundamental: How much control do we want the state to have? How important is privacy to us? Do we wish to remain in control of how our personal data are used? Here in Switzerland, our confidential handling of data, whether for private individuals or for organizations, hinges on our promise not to use or circulate such information without the express consent of the individual or institution that provided it. Ensuring that this remains the case in future is something well worth fighting for. I, for one, am convinced that the Swiss tenet of individual responsibility is incompatible with both the aims and practice of universal surveillance and the automatic pooling of information.

Of course the protection of our clients’ privacy presupposes integrity and responsibility on the part of bankers as well. After all, we the bankers are responsible for accepting, rejecting, cultivating and terminating a banking relationship with a client. By accepting the Due Diligence Agreement, however, Switzerland’s banks have also committed themselves to acting in accordance with ethical principles, which is why bankers must take a stand the moment any problems arise and adopt whatever countermeasures are necessary before being forced to cave in to official pressure. Which brings me to my last point, and one that is especially close to my heart – namely the individual’s responsibility to society at large. This is where the public interest and the individual’s interest in privacy can be said to intersect and where norms, customs and accepted practice should guide us in everything we do and – more to the point – refrain from doing. Ironically, it is precisely this sense of our individual responsibility to society at large, a sense of responsibility that is indispensable to our peaceful coexistence, which has suffered most as a result of the excesses of the 1990s. Unbridled greed, egotism and a callous disregard for others have increasingly come to take the place of moderation, consideration and the common good. Yet if each and every one of us were to renew our heartfelt commitment to these traditional values, we would soon deprive the privacy debate of much of its incendiary potential.
Ladies and Gentlemen, thank you very much.