Novalpina Capital buys spyware co. NSO Group & commits to helping it become more transparent

On the 14th of February 2019 it became public that US private equity fund Francisco Partners had sold the Israeli cyber intelligence company NSO Group to its Israeli co-founders. The founders and management team were supported in the acquisition by the private equity firm Novalpina Capital.

On the 15th of February, Novalpina Capital sent a letter to Citizen Lab, a Canadian interdisciplinary research laboratory, which to date published 11 reports detailing how NSO’s spyware was being used to spy on human rights defenders, among others. In the letter, the company said that the concerns that had been raised by Citizen Lab were one of the factors they examined prior to the deal, that they had conducted extensive due dilligence and that they were satisfied that NSO operated with integrity and caution. They said they were committed to helping NSO become more transparent about its business. In response, Citizen Lab asked that, as a first step, Novalpina Capital provided answers to several questions regarding their and NSO’s human rights due diligence and corporate social responsibility practices. On the 19th of February, a number of leading civil society organizations wrote to Novalpina Capital, asking it to respond to 9 specific points of concern. Novalpina Capital did not respond directly to the letter, but commented on it in an article.

The three letters and the article are available below. On 18th of June 2019, Novalpina Capital promised a “significant enhancement of respect for human rights” at NSO Group. In September 2019, NSO group developed a human rights policy, vowing to abide by UN Guiding Principles, but human rights watchdogs reacted with scepticism.

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13 September 2019

NSO group develops human rights policy, vowing to abide by UN Guiding Principles, but human rights watchdogs are sceptical

Author: Steven Scheer, Reuters

"Cyber firm NSO vows to tackle human rights misuse", 10 Sep 2019

NSO Group would abide by U.N. guidelines to prevent rights abuses...Human rights group Amnesty International...was sceptical that NSO’s new policies would make a difference. NSO's...cellphone hacking software, Pegasus, has been linked to political surveillance in Mexico, the United Arab Emirates and Saudi Arabia...NSO said it would from now on systematically apply U.N. identify risks that its technology could harm human rights, and then prevent or mitigate them... Danna Ingleton, deputy director of Amnesty Tech [said]:...“NSO is a company that has a history of saying one thing and doing another...The reason why they are doing this is to whitewash violations.” ... She said that NSO and the [whole] industry...needs more accountability and...more due diligence when selling to oppressive regimes so...defenders are not targeted. In May...WhatsApp said a security breach on its app showed signs of coming from a government using surveillance technology developed by a private company, and may have targeted human rights groups...WhatsApp [said] it had some reasons to believe the spyware had been developed by NSO. The firm... did not comment...but said it would investigate any “credible allegations of misuse”....Francisco Partners sold [NSO] seven months ago to NSO managers and...Novalpina Capital...

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19 June 2019

Novalpina Capital promises enhanced respect for human rights at NSO Group following allegations that its technology was used to spy on defenders

Author: Stephanie Kirchgaessner & Jon Swaine, The Guardian

"WhatsApp spyware: UK firm promises new 'respect for human rights' following allegations", 18 Jun 2019

A controversial Israeli cyber weapons company has agreed to establish new internal rules on ways it will protect human rights activists and journalists following multiple allegations that its technology was used to spy on dissidents and the media. Its majority owner, Novalpina Capital, a UK private equity firm, has promised a “significant enhancement of respect for human rights” at NSO Group, whose Pegasus software was recently alleged to have infected phones through a glitch in the WhatsApp messaging software. The announcement was made shortly after the Guardian revealed NSO Group’s ownership structure... In a...statement... [owner of Novalpina Stephen Peel] said: “Novalpina is committed to do whatever necessary to ensure NSO’s technology is used only for its intended lawful purpose” ... Novalpina...said [the] new governance framework will “be designed to reflect the need for particular attention to be paid to adverse human rights impacts on individuals at ‘heightened risk of vulnerability or marginalisation’”, including journalists and human rights defenders...  The initial response to NSO’s announcement from activists and researchers who closely monitor the company was sceptical. “You don’t do human rights by press release, and you don’t commit to openness by listing all the ways you reserve the right to not be open,” said John Scott-Railton, a senior researcher... at Citizen Lab... 

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Company response
27 February 2019

Novalpina Capital responded re: letter by Amnesty Int'l et al.

Novalpina statement re: NSO Group

A Novalpina Capital spokesperson said: “Novalpina Capital is committed to operating under the highest standards of corporate governance, acting with integrity and a respect for human rights at all times. We are a signatory to the UN Principles on Responsible Investing, and we also believe that NSO Group should be - and can be - operated in accordance with the UN Guiding Principles on Business and Human Rights.

“NSO Group is a world-class business whose technology plays a vital role in helping intelligence agencies and law enforcement investigate and protect the public from terrorism and crime. The due diligence process that we undertook on this transaction was very thorough and conducted over several months. It included a comprehensive assessment of NSO’s approach to vetting potential customers and its process for addressing questions of misuse.

“At the same time, we understand the concerns expressed by a number of NGOs that this technology has the potential to undermine human rights.

“Over the coming months, we will build upon the existing ethical conduct and governance framework for NSO Group to ensure that this is grounded in the United Nations Guiding Principles on Business and Human Rights and underpinned by a commitment to full transparency in line with those Principles.

“We intend to work closely with human rights activists and other civil society groups in designing that framework to ensure that the critical life-saving technology supplied by NSO Group to intelligence agencies and law enforcement is used responsibly and ethically.”

26 February 2019

Leading civil society organizations call on Novalpina Capital to address human rights concerns regarding NSO Group's products & services

Author: Amnesty International, R3D: Red en Defensa de los Derechos Digitales, Privacy International, Access Now, Human Rights Watch, Reporters Without Borders & Robert L. Bernstein Institute for Human Rights, NYU School of Law and Global Justice Clinic, NYU School of Law

"Open letter to Novalpina Capital, CC: NSO Group, Francisco Partners", 18 Feb 2019

We...release this open letter to Novalpina Capital regarding the recent announcementof the buyout of NSO Group from Francisco Partners. We call on Novalpina Capital to publicly address our serious concerns regarding accountability for NSO Group’s involvement in previously documented spyware abuses, Novalpina Capital’s current approach to addressing human rights impacts associated with NSO Group’s products and services, and the future trajectory of the company. Research has documented the use of NSO Group’s Pegasus spyware to target a wide swath of civil society, including at least 24 human rights defenders, journalists and parliamentarians in Mexico, an Amnesty International employeeOmar AbdulazizYahya AssiriGhanem Al-Masarir, award-winning human rights campaigner Ahmed Mansoor, and allegedly, the targeting of Jamal Khashoggi. These individuals and organizations appear to have been targeted solely as a result of their criticism of governments that utilized the spyware or because of their work bearing on human rights issues of political sensitivity to those governments. Thus, this targeting is in violation of internationally recognized human rights. [W]e call on Novalpina Capital to: Confirm an immediate end to the sale or further maintenance of NSO Group products and services to governments that have been accused of intentionally infringing human rights through communications surveillance...[Refers to Black Cube].

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26 February 2019

Novalpina Capital comments on letter regarding its buyout of NSO Group, sued for enabling surveillance of activists

Author: Alex Plough, Yifan Yu & Mariana Valle, Debtwire (UK)

"Israeli Spyware Firm NSO Group Confronts Controversial Past As It Seeks $500 Million Buyout Loan", 25 Feb 2019

...Israeli software company NSO Group [is] facing multiple lawsuits alleging that their products have been used to spy on innocent civilians...The spyware company, whose products include an app that allows users to remotely access targets’ cellphones, is confronting these issues as it seeks backers for a $500 million loan to finance a buyout... After the buyout was announced..human rights organization Amnesty International published an open letter to Novalpina Capital, NSO and Francsico Partners calling for Novalpina to publicly address these concerns. Contacted...for comment, Novalpina said it had thoroughly vetted NSO, was committed to transparency and human rights, and would work with activists and civil rights groups to build upon the company’s existing ethics and governance framework. Public perception...weighed on deal discussions in the past. In 2017, news that the company was in sale talks with Blackstone prompted protests in Mexico...The talks ultimately fell apart...NSO is being sued by the Saudi dissident,...a Qatari citizen and Mexican activists...Contacted...for comment,... NSO said: “We do not tolerate misuse of our products. If there is suspicion of misuse, we investigate it and take the appropriate actions, including suspending or terminating a contract.” [Refers to Verint Systems & Westbridge Technologies].

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19 February 2019

Citizen Lab publicly responds to Novalpina Capital's letter on purchase of NSO Group

Author: Ron Deibert, Citizen Lab (Canada)

"Open letter to Novalpina Capital on involvement in the purchase of NSO Group", 18 Feb 2019

I am writing in my capacity as Director of the Citizen Lab in response to your letter dated February 15, 2019 regarding Novalpina Capital’s involvement in the purchase of NSO Group... Since 2016, we have published a total of 11 reports regarding NSO Group’s spyware. These reports provide empirical evidence that NSO Group’s technology has been used abusively and illegally to spy on civil society, human rights defenders, and journalists, among other targets. We appreciate your commitment—as stated in your letter of February 15, 2019—to “helping NSO Group become more transparent about its business.”

As a first step, we ask that Novalpina Capital provide answers to the following questions regarding...human rights due diligence and corporate social responsibility practices

- What “extensive due diligence” processes were undertaken by Novalpina Capital prior to the purchase of NSO Group?

- What criteria were used to determine that Novalpina Capital believes NSO Group “operates with the highest degree of integrity and caution”?

- What “safeguards” are in place regarding the responsible and appropriate use of NSO Group products?...

As Citizen Lab recently noted...the fact that NSO Group provides technology to governments engaged in lawful surveillance efforts does not justify a carte blanche approach to human rights and business practices within the surveillance industry. [Refers to Francisco Partners and the Blackstone Group].

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19 February 2019

Novalpina Capital, new owner of NSO Group, writes to Citizen Lab & commits to helping NSO become more transparent

Author: Stephen Peel, Novalpina Capital (UK)

"[Letter from Novalpina Group to Citizen Lab]", 15 Feb 2019

I write to you in my capacity as one of the founding partners of Novalpina Capital, a European private equity business that innvests in mid-sized businesses. As you will have noted, ouor firm recently backed the management of NSO Group in an acquisition of their business. I would welcome the opportunity to meet you, to explain a little more about why we are comfortable owning the business and in particular the safeguards in place regarding the use of its products. Naturally, the concerns that have been raised by Citizen Lab historically were one of the factors we examined prior to proceeding with the deal. We have conducted extensive due dilligence over a period of months. We are satisfied that the business operates with the highest degree of integrity and caution and would welcome the opportunity to explain how we came to this conclusion. As the new owners of the business, we are committed to helping NSO become more transparent about its business - within the conines of the national security constraints inherent in the company's work. We are also keen to hear the views of organisations like yours and broader groups of intrest, to help guide the appropriate governance for technologies such as NSO's...

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