Sharks Circle China's Alibaba.com
For the past seven years, Patric Douglas has run a San Francisco company that gives people a very unusual vacation experience. His customers go out on a boat, get into cages, are submerged beneath the surface of the ocean, and watch as sharks swim by. It's called shark diving, and while hanging out underwater with a great white may not be your idea of fun, Douglas, 36, has found enough thrill-seekers that his company, Mega Outdoor Adventures, takes about 500 people a year to the waters off the coast of Baja California to see all sorts of sharks, including great whites, tiger sharks, and whale sharks. "There are some really funky diving opportunities," explains Douglas, who now has four vessels operating full-time.
Thanks to his shark-diving business, Douglas has also become an unlikely leader of a campaign targeting one of China's top e-commerce companies. Alibaba.com, a business-to-business marketplace that is 40% owned by U.S. Internet giant Yahoo! (YHOO), provides small and midsized companies in China the chance to find buyers and sellers overseas. And, among the thousands of products displayed on Alibaba's site, are numerous types of shark fins, prized by many Chinese as the vital ingredient in shark fin soup, a delicacy often found on the menus at high-end banquets in Hong Kong, Shanghai, and other Chinese cities.
Harvesting shark fins can be a brutal practice—with sharks often tossed back into the ocean to sink to the bottom and die—and Douglas and other activists say that shark populations worldwide are plummeting as a result of the growing demand for fins. "Something evil is going on here," he says. The shark fin trade "is decimating the oceans."
On Congress' Radar
That has turned Douglas and other divers into activists. Since starting last year, they have sent petitions with thousands of signatures to Alibaba demanding that Founder, Chairman, and Chief Executive Officer Jack Ma crack down on the shark fin merchants using its site. Alibaba, which has more than 180 companies engaged in buying or selling shark fins, is "the New York Stock Exchange of shark fins," says Douglas. Adds Wolfgang Leander, a 66-year-old diver and director of shark preservation at the Ocean Realm Society, a lobbying group based in Florida's New Smyrna Beach, "They are offering the shark fin traders a very convenient platform to do business."
For Yahoo, the campaign against Alibaba (widely rumored to be readying an initial public offering for later this year) by the world's shark activists is the latest in a string of China-related public relations challenges. Last year, at a congressional hearing on the role played by U.S. companies in censoring the Internet in China, Representative Tom Lantos (D-Calif.) condemned Yahoo and others for their "abhorrent" willingness to cooperate with the Chinese government. In May, Shi Tao, a journalist currently imprisoned in China—thanks in part to Yahoo's cooperation with local police—sued the company in the U.S.
The headaches haven't just been about free-speech issues. A Chinese court in April ruled against Yahoo China (owned by Alibaba) in a lawsuit brought by IFPI, the International Federation of the Phonographic Industry, alleging that the company facilitated digital music piracy. Alibaba is appealing. The likely Alibaba IPO should provide some welcome good news from China for new Yahoo CEO Jerry Yang, who was instrumental in negotiating the acquisition of the Alibaba stake in 2005. Probably the last thing Yang wants for Yahoo is another black mark against China.
Standing Behind Its Policies
Alibaba denies any wrongdoing regarding shark fins.
"We respect our members' rights to make their own decisions on issues of cultural tradition," Alibaba spokeswoman Christina Splinder said in an e-mail to BusinessWeek. The company has a policy prohibiting Web site users from listing products taken from animals protected by local or international law such as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), she says. (Sharks are not on the CITES protected list.)
"We had an open dialogue with activists," she adds. "We took their suggestions and opinions on board and reviewed our policies…. We decided that our current policy is the appropriate policy at this time." Trade in officially recognized endangered species "is strictly forbidden on Alibaba," says Splinder. "Our editing team will promptly remove listings if we become aware that listings are not CITES compliant."
Activists contend that Alibaba should use a higher standard than the CITES list and argue that some of the shark fin merchants using the company's site are violating laws prohibiting overfishing of sharks. "A vast proportion of this trade is actually done illegally," says Brian Darvell, a professor of dental material science at the University of Hong Kong who was active in a grassroots movement in 2005 that successfully pressured Disney (DIS) to drop shark fin soup from the menu at Hong Kong Disneyland's hotels.
Quality Also an Issue
While the Hong Kong government says local buyers and sellers only deal in legitimately obtained fins, Darvell says that argument "is simply inconceivable. The volume is so great. We know that fishing occurs in areas that are supposed to be protected."
Alibaba's critics have an unlikely ally in Hong Kong's top shark fin traders group. Setting aside issues of right and wrong, Charlie Lim, general secretary of the Shark Fin and Marine Products Assn. in the city, says that cyberspace is a risky venue for shark fin merchants anyway. "To buy shark's fin, you really need to look at the fins and check the quality," he says. "I presume only small or new companies would turn to the Internet. There might be a greater chance to be duped if everything is done online."
The activist community, having made no progress with Alibaba, pledges to continue lobbying. But they're aware that they face a tough fight getting people to care about saving creatures that are hardly beloved by most people. "Sharks aren't cuddly and cute," says Duncan Carson, a Madrid-based activist behind the Web site stopsharkfinning.net. "So people aren't inclined to take notice."