To require nationals of the United States that employ more than 20 persons in a foreign country to implement a Corporate Code of Conduct with respect to the employment of those persons, and for other purposes.

August 2, 2001

Ms. MCKINNEY (for herself, Mr. STARK, Mr. EVANS, Ms. KAPTUR, Mr. FILNER, Mr. MCGOVERN, Mr. SANDERS, Mr. HILLIARD, Mr. PHELPS, Mr. KUCINICH, Mr. CONYERS, Mr. DEFAZIO, Mr. HINCHEY, Ms. WOOLSEY, Mr. THOMPSON of Mississippi, Ms. CARSON of Indiana, Ms. LEE, Mr. ABERCROMBIE, Mr. JACKSON of Illinois, Mr. CUMMINGS, Mr. WATT of North Carolina, Ms. SOLIS, Mr. DAVIS of Illinois, Mr. BROWN of Ohio, and Ms. BROWN of Florida) introduced the following bill; which was referred to the Committee on International Relations, and in addition to the Committees on Government Reform, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To require nationals of the United States that employ more than 20 persons in a foreign country to implement a Corporate Code of Conduct with respect to the employment of those persons, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Corporate Code of Conduct Act'.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) On January 31, 1999, at the World Economic Forum, United Nations Secretary General Kofi Annan challenged world business leaders, in their individual corporate practices and by supporting appropriate public policies, to `embrace and enact' the Global Compact, an agreement that asks corporations to protect human rights, labor rights, and the environment.

(2)(A) On November 16, 1999, the Program on International Policy Attitudes (PIPA) issued a report that contained the results of a poll of 1,826 randomly selected adults, weighted to be demographically representative, conducted from October 21-29, 1999, relating to international agreements on environmental and labor standards.

(B) In the poll, 93 percent of the respondents stated that `countries that are part of international trade agreements should be required to maintain minimum standards for working conditions', 77 percent of the respondents believed (of which, 48 percent strongly believed) that there should be more international agreements on environmental standards, and 88 percent of the respondents agreed (of which, 67 percent strongly agreed) that `American companies that operate in other countries should be expected to abide by [United States] environmental standards.'.

(3) The European Parliament has passed a European Code of Conduct calling for European businesses to abide by European Union laws in operations outside of Europe.

(4) The protests in 2000 against the World Trade Organization (WTO) in Seattle, Washington, and the World Bank and International Monetary Fund (IMF) in Washington, D.C., demonstrate a growing constituency against the unregulated expansion of globalization.

(5) Unfortunately, too many United States businesses with operations abroad are notorious for their blatant disregard for the well being of the citizens of their host nations who are employees of the businesses.

(6) Many United States businesses recklessly pollute the local environment of foreign countries, pose serious health risks to local citizens, and threaten the cultural heritage of local citizens.

(7) 70 percent of workers in United States production factories abroad are women. Many of these women face mandatory pregnancy testing on a monthly basis and are forced to take birth control provided by their employer.

(8) Public confidence has declined substantially in the capacity and effectiveness of government at all levels to counteract unfair economic competition and to command greater corporate responsibility inside and outside of the marketplace.

(9) At the same time, public concern is growing regarding the increasing concentration of unaccountable corporate power and the declining corporate responsibility across national borders.

(10) Yet every year the United States Government provides a wide array of taxpayer-financed services and financial subsidies as well as special tax breaks as assistance to United States-based multinational corporations, especially to enable such corporations to invest overseas, to create jobs in foreign countries, and to expand their access to foreign markets.

SEC. 3. RESPONSIBLE BUSINESS PRACTICES OF UNITED STATES NATIONALS IN FOREIGN COUNTRIES.

(a) REQUIREMENT- A national of the United States that employs more than 20 persons in a foreign country, either directly or through subsidiaries, subcontractors, affiliates, joint ventures, partners, or licensees (including

any security forces of the national), shall take the necessary steps to implement the Corporate Code of Conduct described in subsection (b) with respect to the employment of those persons.

(b) CORPORATE CODE OF CONDUCT- The Corporate Code of Conduct described in this subsection is as follows:

(1) Provide a safe and healthy workplace.

(2)(A) Ensure fair employment, including the prohibition of the use of child and forced labor, the prohibition of discrimination based upon race, gender, national origin, or religious beliefs, respect for freedom of association and the right to organize independently and bargain collectively, and the payment of a living wage to all workers, including, at a minimum, a living wage that would meet the basic needs of an average-size family and provide some discretionary income for an average-size family.

(B) Prohibit mandatory overtime work by employees under the age of 18.

(C) Prohibit the practice of pregnancy testing of employees, including the forced usage of birth control, and further prohibit the dismissal or discrimination of employees based on pregnancy.

(D) Prohibit retaliation against any employee who conveys information, either internally, publicly,

or to government regulators in the country involved or the United States, relating to a violation or alleged violation of any provision of this subsection.

(3) Promote good governance and good business practices, including prohibiting illicit payments, ensuring fair competition, and revocation of corporate charters when corporations fail to serve the public good and general welfare.

(4)(A) Maintain, through leadership at all levels, a corporate culture that respects free expression consistent with legitimate business concerns, does not condone political coercion in the workplace, encourages good corporate citizenship and makes a positive contribution to the communities in which the national of the United States operates, and promotes ethical conduct that is recognized, valued, and exemplified by all employees.

(B) In addition, comply with internationally recognized worker rights and core labor standards.

(5) Uphold responsible environmental protection and environmental practices, including compliance with internationally recognized environmental standards and with all Federal environmental laws for similar operations that would be applicable to the national of the United States if the operations of the national were located in the United States.

(6) Comply with minimum international human rights standards.

(7)(A) Require, under terms of contract, partners, suppliers, and subcontractors of the national of the United States (including any security forces of the national) to adopt and adhere to the principles described in paragraphs (1) through (6).

(B) In addition, require full public disclosure of information relating to location and address, corporate name, applicable financial agreements, worker rights practices and labor standards, working conditions, environmental performance, and applicable investments of partners, suppliers, subsidiaries, contractors, and subcontractors of the national of the United States (including any security forces of the national).

(8) Implement and monitor compliance with the principles described in paragraphs (1) through (7) through a self-financing program internal to the business that is designed to prevent and detect conduct that is not in compliance with such principles by any employee of the national of the United States, or any employee of the partner, supplier, or subcontractor of the national, and that includes--

(A) standards for ethical conduct of such employees which refer to the principles;

(B) procedures for assignment of appropriately qualified personnel at the management level to monitor and enforce compliance with the principles;

(C) procedures for reporting violations of the principles by such employees;

(D) procedures for disciplinary action in response to violations of the principles;

(E) procedures designed to ensure that, in cases in which a violation of the principles has been detected, reasonable steps are taken to correct the violation and prevent similar violations from occurring;

(F) procedures for providing educational and employment-related counseling to any employee in violation of the principles; and

(G) communication of all standards and procedures with respect to the principles to every employee--

(i) by requiring the employee to participate in a training program; or

(ii) by disseminating information in writing in the appropriate local language that explains the standards and procedures.

(c) DEFINITIONS- In this section:

(1) BASIC NEEDS OF AN AVERAGE-SIZE FAMILY- The term `basic needs of an average-size family'--

(A) means nutritious food, clothing, health care, education, potable water, child care, transportation, housing, and energy; and

(B) shall be determined by wage studies that measure the purchasing power necessary to provide for the needs described in subparagraph (A).

(2) INTERNATIONALLY RECOGNIZED ENVIRONMENTAL STANDARDS- The term `internationally recognized environmental standards' includes standards relating to--

(A) mitigation of global climate change;

(B) reduction in the consumption and production of ozone-depleting substances;

(C) reduction in ship pollution of the oceans from such sources as oil, noxious bulk liquids, hazardous freight, sewage, and garbage;

(D) the ban on international ocean dumping of high-level radioactive waste, chemical warfare agents, and hazardous substances;

(E) government control of the transboundary movement of hazardous waste materials and their disposal for the purpose of reducing global pollution due to such materials;

(F) preservation of endangered species;

(G) conservation of biological diversity;

(H) promotion of biodiversity; and

(I) preparation of oil-spill contingency plans.

(3) MINIMUM INTERNATIONAL HUMAN RIGHTS STANDARDS- The term `minimum international human rights standards' means standards contained in the following United Nations instruments relating to international human rights: the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, the Convention on the Prevention and Punishment of the Crime of Genocide, the Slavery Convention, the Supplementary Convention on the Abolition of Slavery, the Slave Trade and Institutions and Practices Similar

to Slavery, and the International Convention on the Elimination of All Forms of Racial Discrimination.

(4) INTERNATIONALLY RECOGNIZED WORKER RIGHTS AND CORE LABOR STANDARDS- The term `internationally recognized worker rights and core labor standards' means standards contained in the following International Labor Organization (ILO) conventions:

(A) Freedom of Association and Protection of the Right to Organize Convention (No. 87).

(B) Right to Organize and Collective Bargaining Convention (No. 98).

(C) Forced Labour Convention (No. 29).

(D) Abolition of Forced Labour Convention (No. 105).

(E) Discrimination (Employment and Occupation) Convention (No. 111).

(F) Equal Remuneration Convention (No. 100).

(G) Minimum Age Convention (No. 138).

(H) Occupational Safety and Health (No. 155).

(I) Convention on the Worst Forms of Child Labor (No. 182).

(5) NATIONAL OF THE UNITED STATES- The term `national of the United States' means--

(A) a citizen of the United States or an alien lawfully admitted for permanent residence in the United States; or

(B) a corporation, partnership, or other business association that is organized under the laws of the United States.

(6) UNITED STATES- The term `United States' means the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.

SEC. 4. PREFERENCE IN AWARD OF CONTRACTS AND PROVISION OF CERTAIN FOREIGN TRADE AND INVESTMENT ASSISTANCE.

(a) PREFERENCE IN AWARD OF CONTRACTS-

(1) IN GENERAL- In entering into contracts with entities described in subsection (c) to procure goods or services, the head of an executive agency shall give a preference to contracting with entities that have adopted and are enforcing the Corporate Code of Conduct described in section 3(b).

(2) STANDARDS- The Federal Acquisition Regulations shall include standards with respect to the preference required by this subsection.

(b) PREFERENCE IN PROVIDING CERTAIN FOREIGN TRADE AND INVESTMENT ASSISTANCE-

(1) DEPARTMENT OF COMMERCE-

(A) IN GENERAL- In providing entities described in subsection (c) that are also United States exporters with introduction to contacts in foreign countries pursuant to section 2301(b)(4) of the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(4)), and in coordinating trade missions with entities described in subsection (c), the Secretary of Commerce shall give preference to entities that have adopted the Corporate Code of Conduct set forth in section 3(b).

(B) REGULATIONS- The Secretary of Commerce shall promulgate regulations containing standards with respect to the preference required by this paragraph.

(2) OVERSEAS PRIVATE INVESTMENT CORPORATION-

(A) IN GENERAL- In providing financing and issuing investment insurance, reinsurance, and guaranties to entities described in subsection (c) pursuant to title IV of chapter 2 of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2191 et seq.), the Overseas Private Investment Corporation shall give preference to entities that have adopted the Corporate Code of Conduct set forth in section 3(b).

(B) REGULATIONS- The Board of Directors of the Overseas Private Investment Corporations shall promulgate regulations containing standards with respect to the preference required by this paragraph.

(3) TRADE AND DEVELOPMENT AGENCY-

(A) IN GENERAL- In providing assistance to entities described in subsection (c) under section 661 of the Foreign Assistance Act of 1961 (22 U.S.C. 2421(b)), the Trade and Development Agency shall give preference to entities that have adopted the Corporate Code of Conduct set forth in section 3(b).

(B) REGULATIONS- The Director of the Trade and Development Agency shall promulgate regulations containing standards with respect to the preference required by this paragraph.

(4) EXPORT-IMPORT BANK OF THE UNITED STATES-

(A) IN GENERAL- In providing guarantees, insurance, and credit, and in participating in extensions of credit, for entities described in subsection (c), the Export-Import Bank of the United States shall give preference to entities that have adopted the Corporate Code of Conduct set forth in section 3(b).

(B) REGULATIONS- The Board of Directors of the Export-Import Bank shall promulgate regulations containing standards with respect to the preference required by this paragraph.

(c) ENTITIES DESCRIBED- The entities described in this subsection are nationals of the United States that employ more than 20 persons in a foreign country, either directly or through subsidiaries, subcontractors, affiliates, joint ventures, partners, or licensees (including any security forces of the national).

SEC. 5. INVESTIGATIONS OF COMPLIANCE WITH CORPORATE CODE OF CONDUCT.

(a) DEFINITION- In this section, the term `appropriate Federal official' means the Secretary of Commerce,

the Secretary of Labor, the Secretary of State, or the Administrator of the Environmental Protection Agency.

(b) PETITIONS-

(1) IN GENERAL- Any person may at any time file a petition with the appropriate Federal official requesting that action be taken under section 6 and setting forth the allegations in support of the request. A petition alleging the failure of an entity to comply with the Corporate Code of Conduct adopted by the entity pursuant to section 3 may seek--

(A) the termination of a contract awarded or of assistance provided to an entity that received a preference under section 4 in the award of a contract or in the provision of assistance;

(B) the withdrawal, suspension, or limitation of the eligibility of an entity for a preference under section 6; or

(C) action under both subparagraphs (A) and (B).

(2) REVIEW; DETERMINATION TO INITIATE INVESTIGATION- The appropriate Federal official shall review the allegations in any petition filed under paragraph (1) and, not later than 45 days after the date on which the petition is received, shall initiate an investigation unless the petition is dismissed under paragraph (3).

(3) DETERMINATION NOT TO INITIATE INVESTIGATION-

(A) IN GENERAL- The appropriate Federal official may determine not to initiate an investigation with respect to a petition filed under paragraph (1) only upon issuing a finding that the petition is frivolous. This finding shall be made without regard to whether similar allegations were made in a previously reviewed petition and shall focus exclusively on whether the facts alleged in a petition, if true, would fail to establish a prima facie case for noncompliance with the Corporate Code of Conduct set forth in section 3. Only if the facts alleged in a petition, if true, fail to make out a prima facie case, or if a petition contains only conclusory allegations with no allegation of supporting facts, shall a petition be dismissed as frivolous.

(B) NOTIFICATION- If the appropriate Federal official finds a petition to be frivolous, such official shall issue a written decision indicating the specific reasons therefor and shall publish notice of the determination, together with a summary of such reasons, in the Federal Register. A copy of the decision shall be sent to the petitioner and shall be made available for public review.

(4) SPECIAL COMMITTEES- The Secretary of Commerce, the Secretary of Labor, the Secretary of State, and the Administrator of the Environmental Protection Agency may establish one or more special committees to review petitions filed under paragraph (1) that are under investigation and make written recommendations with respect to each petition. The written recommendations shall be available to the public. The members of the special committees may be drawn from other agencies within the executive branch, and each member shall have the necessary expertise relevant to the issues raised in any petitions to be considered.

(5) INVESTIGATIONS-

(A) IN GENERAL- In initiating an investigation of a petition under this subsection, the appropriate Federal official shall publish a summary of the petition in the Federal Register, along with a request for any person to submit information relevant to the petition. Following such publication, such official shall conduct an independent investigation and gather information from all available resources. As part of the review process, the appropriate Federal official shall, as soon as practicable, and in no event later than 90 days after the date on which the petition is filed, provide opportunity for the presentation of information concerning the issues involved, including a public hearing at which all interested parties may participate.

(B) PETITIONS ALLEGING NONCOMPLIANCE- With respect to any petition alleging noncompliance, the appropriate Federal official shall determine whether such violations have occurred or are occurring. Such official in the preceding sentence shall provide written recommendations regarding the disposition of the allegations that shall be entered in the record of the investigation. The appropriate Federal official, or any member of any special committee established under paragraph (4), may also seek advice from experts in the fields of human rights, worker rights, environmental protection, and equal opportunity employment. The advice may be in writing or taken as oral testimony at

a public hearing and shall be entered in the record of the investigation.

(6) DECISIONS- After completion of the investigation, and in no event later than 270 days after the date on which the petition was filed, the appropriate Federal official shall issue a decision whether to grant the relief requested in the petition. The decision shall be in writing and clearly reference the issues presented, the factual findings regarding the allegations, and the standard applied in determining whether the facts as found required action under section 6. A copy of the decision shall be provided to the petitioner, the entity involved in the petition, and any other party that submitted information relevant to the petition, and shall be made available for public review. A summary of the decision shall be published in the Federal Register.

(c) INITIATION OF INVESTIGATION BY MEANS OTHER THAN PETITION- If the appropriate Federal official determines that an investigation should be initiated with respect to any matter in order to determine whether the matter requires action under section 6, such official shall publish such determination in the Federal Register and shall initiate such investigation using the procedures of

paragraphs (5) and (6) of subsection (b), to the extent appropriate.

(d) PROMULGATION OF REGULATIONS- The Secretary of Commerce shall promulgate regulations to implement this section. The regulations may include--

(1) procedures for the creation of special committees under subsection (b)(4);

(2) coordinating investigations with other agencies;

(3) consolidating multiple petitions concerning the same contract or entity; and

(4) holding hearings on similar petitions at the same time in order to efficiently gather information.

(e) JUDICIAL REVIEW OF DETERMINATIONS- Any final decision dismissing or denying a petition requesting action under section 6, or any final decision that results in an action against an entity under section 6, may be appealed by the petitioner or the entity to the appropriate United States Court of Appeals for review. The decision shall be reviewed as a final agency action.

SEC. 6. TERMINATION OF CONTRACTS OR ASSISTANCE AND WITHDRAWAL, SUSPENSION, OR LIMITATION OF PREFERENCE.

(a) TERMINATION OF CONTRACT OR ASSISTANCE- Based upon a determination from an investigation initiated under section 5 and notwithstanding any other provision of law, the Secretary of Commerce, the Secretary of Labor, the Secretary of State, or the Administrator of the Environmental Protection Agency shall terminate a contract entered into by the executive agency involved with an entity described in section 4(c) for the procurement of goods or services by the agency, and the appropriate Federal official or entity described in paragraph (1), (2), (3), or (4) of section 4(b) shall terminate foreign trade and investment assistance from the United States Government (as described in section 4(b)) provided to an entity described in section 4(c), if the entity or contractor or other recipient of the assistance is not in compliance with the Corporate Code of Conduct described in section 3(b).

(b) WITHDRAWAL, SUSPENSION, OR LIMITATION OF PREFERENCE- The designation of an entity as eligible to receive a preference under section 4 shall be withdrawn, suspended, or limited if the entity is no longer in complete compliance with the Corporate Code of Conduct described in section 3(b).

SEC. 7. REPORTING REQUIREMENTS.

(a) REPORTS TO CERTAIN FEDERAL DEPARTMENTS AND AGENCIES- Each entity described in section 4(c) that enters into a contract with an executive agency for the procurement of goods or services by the agency, and each entity described in section 4(c) that receives certain foreign trade and investment assistance from the United States Government (as described in section 4(b)), shall prepare and submit to the Secretary of Commerce, the Secretary of Labor, the Secretary of State, and the Administrator of the Environmental Protection Agency an annual report, which shall be made available to the public, that contains a description of the monitoring program established and carried out by the entity pursuant to section 3(b)(8) and any progress made toward full compliance with the principles described in paragraphs (1) through (7) of section 3(b) by the individuals described in section 3(b)(8).

(b) REPORTS TO CONGRESS- The Secretary of Commerce, the Secretary of Labor, the Secretary of State, and the Administrator of the Environmental Protection Agency shall jointly prepare and submit to the Congress, at the same time the annual Department of State Country Reports on Human Rights Practices is submitted, an annual report, which shall be made available to the public, that contains a compilation of the reports received from each entity under subsection (a) for the prior year (including a compilation of the petitions submitted to the appropriate Federal officials under section 5 for the prior year) and that contains an analysis of the extent to which each such entity is in compliance with the Corporate Code of Conduct described in section 3(b).

SEC. 8. ENFORCEMENT AND ADMINISTRATIVE PROVISIONS.

(a) REGULATORY AUTHORITY- The President shall issue such rules, regulations, licenses, and orders as are necessary to carry out the provisions of this Act.

(b) ENFORCEMENT AND PENALTIES-

(1) IN GENERAL- The President, with respect to his authorities under subsection (a), shall take the necessary steps to ensure compliance (including the monitoring of compliance) with the provisions of this Act and any rules, regulations, licenses, and orders issued to carry out this Act.

(2) LIABILITY- Beginning 2 years after the date of the enactment of this Act, any person who is in violation of any provision of this Act (or any rule, regulation, license, or order issued to carry out this Act) shall be liable for damages in a civil cause of action initiated in an appropriate United States district court to any individual aggrieved by the act or omission of the person in question, or to the heirs, estate, or other legal representative of the individual.

END