The UK government has long had concerns over the human-rights record of the Chinese Government and about security issues relating to the use of surveillance equipment manufactured by companies closely associated with the Chinese Government. These concerns led, in November 2022, to instructions to government departments not to install further equipment from these manufacturers on sensitive sites and to give consideration to removing what they already had. However, no similar instruction applies to local government, and while the issue has been raised at the local level, no councils currently have plans to remove any existing cameras.
Concerns over human rights and security may have some impact on local government procurement decisions in future. At present, there is no obvious regulatory mechanism through which these concerns are likely to manifest, but there are a number of ways in which that could change and suppliers should pay particular attention to the forthcoming consultation on a new National Procurement Policy Statement.
Background
Following the publication of a report by the House of Commons Foreign Affairs Committee in July 2021 in which concerns were raised about Chinese security companies, one of the companies mentioned, Hikvision, entered into a long correspondence with the (then) UK Biometrics and Surveillance Camera Commissioner (BSSC), Fraser Sampson.
The correspondence detailed both the commissioner’s concerns and the responses from Hikvision. As well as this correspondence, the BSCC has published a variety of guidance and information relating to the procurement and deployment of CCTV in local authorities and police forces. Although from this documentation, Mr Sampson was clearly of the view that contracting authorities should not be procuring from companies such as Hikvision, it is not obvious what regulatory grounds there are for local authorities not to do so, a point that Hikvision continues to stress.
In November 2022, the Cabinet Office instructed central government departments to cease deployment on “sensitive sites” of equipment produced by companies “subject to the national intelligence law of the People’s Republic of China”. The government subsequently clarified that local government operations were not considered sensitive sites for this purpose.
There is currently a Surveillance Camera Code of Practice which local government must have regard to. The previous government was due to abolish the code of practice and the BSCC under the Data Protection and Digital Information Bill 2023, but the general election was called before this could be done.
The new government has indicated its intention to bring forward its own Digital Information and Smart Data Bill, but at the time of writing, the details of this bill are not known, including what the expected role of the BSSC will be, if any. No commissioner is currently appointed.
In the meantime, in October 2023, the UK Government passed the Procurement Bill, which was intended to increase transparency around central and local government procurement activity. Although a supplier can be excluded if they are held to pose an actual threat to national security, the previous government did not indicate that Hikvision or similar suppliers should be considered in that category.
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By GlobalDataRecently, the new Labour government announced that the current National Procurement Policy Statement, which accompanies the implementation of this legislation, would be withdrawn and a new statement issued. This means that the legislation will not now come into force until February 2025. It also means the new government may introduce new guidance that could relate to the security and human-rights concerns mentioned in this blog. Looking at the amendments proposed by Labour to the previous Government’s Procurement Act, many by Angela Rayner, now Deputy Prime Minister, we can get some sense of the new government’s priorities in this area. These include human rights, sanctions and money laundering, employment rights, national security, outsourcing, and tax transparency. However, any such guidance would need to be compatible with the legislation already passed. The government will be consulting on the proposed guidance in the autumn.
Implications for local government
A statement by Baroness Neville-Rolfe in the House of Lords on 9 April 2024 on behalf of the Cabinet Office stated that local authorities were under no obligation to remove surveillance equipment and should follow National Cyber Security Centre (NCSC) guidance. This guidance provides principles for organisations to follow but is not prescriptive.
GlobalData had the opportunity to ask a senior representative of the NCSC if there were any plans to extend the restrictions on companies such as Hikvision beyond their application to “sensitive sites” and was told that there were none.
While the previous biometric and surveillance camera commissioner had concerns over Hikvision’s involvement in the UK security market, unless Hikvision cameras and/or installations demonstrably fail to meet the requirement of the surveillance camera code of conduct, particularly principle seven, described above, there are at present no obvious regulatory disadvantages to their products. This situation could change if the new government appointed a new commissioner and/or made changes to the security camera code of conduct or introduced new guidance in the forthcoming National Procurement Policy Statement.
Local government responses
There have been a variety of public responses from (mainly smaller) local authorities to the concerns over the use of Chinese suppliers in the provision of CCTV equipment. Several district councils in Kent have indicated that they will not renew existing contracts involving Hikvision, but have no plans to remove their existing cameras. Also in Kent, Dover Council said that while it used Hikvision cameras it did not have a contract with the company itself. Elsewhere, Harborough District Council has indicated that it will “review” its use of Hikvision cameras.
A review of GlobalData Pubic Sector’s Opportunities Database indicates that no organisations have contracts directly with Hikvision or Dahua, meaning that the use of their technology, where it has occurred, will have been as a result of partner contracts. For example, Dudley Metropolitan Borough Council previously awarded a contract for CCTV Equipment and Support to DVS, which uses Hikvision cameras. Some other examples are given below.
According to a Freedom of Information request from the Scottish Greens, at least 20 Scottish Councils are currently using Chinese-owned CCTV technology with Hikvision being the supplier in at least seven of these. As far as we are aware, none have announced publicly that they intend to remove them.
Looking forward
The UK has committed to “progressive realism” with regard to foreign policy, which means trying to support the values of democracy and human rights while recognising that there are practical constraints on the actions any government can take.
The salience of this issue in future is likely to depend on the future conduct of the Chinese Government, public opinion, and the attitude of the UK Government towards regulation. The new government has indicated it is open to either tightening or loosening regulations depending on context and the perceived impact on its five “missions”. So far, there is no indication that the new government has changed its historical view of the Chinese Government’s foreign or domestic policy.
The government will be bringing forward a Cyber Security and Resilience Bill as part of its legislative programme, but there are no indications this will make any changes to the position of the type of security technology discussed in this blog.
For its part, Hikvision has made it clear that it sees no legal or regulatory obstacles to continuing to pursue the public sector market in the UK. Indeed, this would appear to be the case providing its products continue to comply with the surveillance camera code of practice. However, while there appear to be no immediate commercial opportunities in the local government market as a result of this issue, it should form part of any security systems supplier’s analysis of their own strengths, weaknesses, opportunities and threats.
There are a number of security suppliers who have used Hikvision and/or Dahua cameras on GlobalData Pubic Sector’s Information Centre who do supply to local government. These include Openview Security Solutions, which installed a Hikvision solution in Lancashire, and Tyco Fire and Integrated Solutions, which has historically defended Hikvision and Dahua over alleged security vulnerabilities.
Suppliers of security equipment would do well to review their supply chains and evaluate any associated risks and opportunities either on security or on environmental, social and governance (ESG) grounds, bearing in mind the considerations discussed in this blog.
Finally, it is possible that the new government’s forthcoming National Procurement Policy Statement could impact the regulatory environment on this issue, and we would advise any suppliers to engage with the government consultation which will be taking place in the autumn.
