A UN Code for the Multinationals

...Even its most ardent proponents recognize that a code of conduct for multinational corporations will not keep underpaid customs officials or overfed ministers from asking for baksheesh or la mordita...

...Indeed, multinational corporations are not known to be eager to display the cards the UN would like to see on the table-facts and figures that might reveal short-term capital movements, monopolistic tendencies and accounting techniques that artificially reduce taxable earnings or mask payments to local functionaries...

...Cummins' Chairman Miller agrees that it would have "an immediate self-policing effect on the managers of multinational corporations...

...and J. Irwin Miller, chairman of the Cummins Engine Company-was most interested in the developing nations, especially dislocations of the local economies that could result from multinational operations and the questions of control, taxation and compensation for nationalized properties...

...Finally, Javits doubts that the preparation of a code of conduct should be entrusted to the new Commission alone, contending that "careful standards of confidentiality would have to be devised" to bring about the desired results...

...In a little-noticed report issued last November by the Committee, corruption was said to be "a phenomenon invading the political and economic sectors in many parts of the world," permeating the social texture and presenting "a threat to democracy and public welfare...

...to Northrop aircraft company's hiring a former French Air Force Chief of Staff as a "consultant" and allegedly paying $450,000 in bribes to two Saudi Arabian generals...

...Home countries of international firms were called upon to enact strict statutes making bribes and political contributions offered by their citizens in foreign lands illegal...

...Exxon chairman J.K...

...These range from United Brands' $1.2 million payoff to a Honduran economic minister to secure a reduction in the banana export tax...

...And the effort has taken on new urgency in the light of more recent revelations about certain big business activities...

...But a clear set of "rules of the game" issued by an international organization like the UN, it is argued, might keep big business from making the payoff...

...As one UN spokesman observed, "Disclosure is a powerful weapon against corruption...

...to inflated "donations" by Gulf Oil and other corporations to political parties in South Korea, Bolivia, Canada, and Italy...

...The fledgling CTC thus has a significant ally, because the kind of information the SEC requires is essential if a country is to truly benefit from a firm's presence on its soil...

...They might be moved, however, to pass laws that will at least require that these gifts be made public-as Canada has...

...Since sound regulatory and contract-negotiation policies obviously cannot be maintained in the face of official dishonesty, the panel urged the introduction of vigorous anticorruption measures...

...All of these matters have now been turned over to a newly-created Commission on Transnational Corporations (CTC), a 48-nation UN body headed by Ravi Shankar Bhatt, director of the Indian Steel authority and other Indian industrial enterprises...

...There has been too much stress on the machinations of a few companies, he feels, and too little on the positive contributions of others...

...The bribery issue is expected to produce heated debate as well at the Congress on Crime Prevention and Treatment of Offenders, a world gathering of police officials scheduled to be held in Toronto in September...

...Under existing Federal laws, an American commits no crime when he bribes a foreign official...

...The panel-whose American members were Senator Jacob K. Javits (R.-N.Y...

...The CTC plans to maintain close contacts with the business world and its critics-corporation executives as well as trade unions, public interest groups and universities...

...At most, his company may have to square its accounts with the Securities and Exchange Commission and could face penalties for not disclosing those payments in corporate reports...

...Fortunately, disclosures may begin without having to await completion of the code...

...Its main function, as stated by the overseeing Economic and Social Council, will be to develop "a comprehensive information system on the activities of transnational corporations by gathering information made available by governments and other sources, and by analyzing and disseminating such information to all governments...

...He also deplores the absence of any reference to "vindictive nationalization, arbitrary and capricious rule making" and other discriminatory treatment by host governments...

...Senator Javits, though he supports the new UN apparatus, has raised some objections to the world organization's approach...

...The UN panel further suggested that the United States withhold investment insurance awards from firms when there is any evidence of questionable dealings, a precedent set in the ITT case...

...For in addition to the Commission, the UN has set up an Information and Research Center on Transnational Corporations...

...When the Economic and Social Council meets in Geneva next month, it will discuss the progress of the Commission on Transnational Corporations in general and the problem of international bribery in particular, with special emphasis on the corporate givers rather than the corrupt takers...

...But the special UN panel that proposed it last year, following lengthy study and hearings, saw the guidelines serving governments and businesses alike as "an instrument of moral persuasion, strengthened by the authority of international organizations and the support of public opinion...

...DEFINING CORPORATE ETHICS A UN Code for the Multinationals BY CHARLES GAULKIN United Nations Ever since the ITT-Chile episode, the United Nations has been working on developing a code of conduct that would apply to multinational corporations...

...Charles Gaulkin is a United Nations information officer specializing in international economics...

...At its opening meeting earlier this year, it decided to give highest priority to preparation of the code of conduct...

...Some host countries, while hoping to get access to these records, may still not wish to outlaw foreign contributions to their political parties...

...The task of fighting it at the national level has been difficult, the Committee added, because "international and transnational economic criminality" has reinforced this behavior on the part of politicians and administrators...

...Bolivia could stop paying the $50 million owed on nationalized Gulf properties if Dorsey doesn't change his mind...

...Eventually, they may also form the basis for a more formal document that would have the force of an international treaty...

...In effect, this may be what is in store for Gulf Oil, whose board chairman, Bob Dorsey, refused to appear in Bolivia on May 22 to answer charges that between 1966-69 his company issued bribes totaling over $350,000 to Bolivian officials, including the late President Rene Barrientos Ortuno...

...Another UN agency, the Committee for Crime Prevention and Control, has already called for restraints of "international economic crimes...

...One of the members of the the original UN panel, Sicco Mansholt of the Netherlands (former head of the Commission of the European Economic Community), believes expropriation without compensation would be a justifiable sanotion of violators of a code of conduct...

...Essentially a series of recommendations intended to go beyond the problems surfacing in the headlines, the code will lack any real enforcement clout...

...Host governments, it said, should clearly define permissible limits of activity by multinational affiliates, prohibit them from giving any direct "gratuities" to officeholders and prescribe sanctions against infringements of adopted rules...

...Jamieson will no longer be able to tell a stockholders' meeting, as he did so imperiously on May 15, that he will not reveal the amount Exxon donated in Canada because "I don't think we want to give that information...

...Still, it was mainly through SEC investigations that the latest wrongdoings came to light...