The 29 Commandments

With the possible exception of the CIA, no United States invention has stirred more emotion, suspicion and criticism round the world than the modern multinational corporation. Many of the complaints are unjustified and highly exaggerated. Nonetheless, there have been enough genuine episodes of corporate misbehavior to spur demands for bringing the companies under stricter control.

Now, after a year of discussion and hearings, the Paris-based Organization for Economic Cooperation and Development, which represents the governments of the 24 most highly developed non-Communist nations, has drawn up a code of ethics intended to guide the multinationals in the conduct of their far-flung enterprises. To Americans, who are more familiar than most with the concepts behind antitrust law and the idea of corporate disclosure, parts of the code may seem elementary or oddly archaic. Yet in many areas of the world these concepts are little known. Hence, in a sense, the OECD code is an attempt to curb some of the abuses of the multinationals by encouraging the adoption of modern notions of proper business behavior in the less developed world, where most of the multinationals' alleged offenses take place.

The code itself is a list of 29 rules grouped in seven major areas. Among them:

POLITICS: Hands Off. As the recent Gulf, Lockheed and United Brands cases have sadly demonstrated, a few multinationals have used their economic power to influence politicians in a number of countries. The OECD enjoins all multinationals not to meddle in the political processes of the countries in which they operate: no bribes are permissible under any conditions, no donations to political parties are proper unless national law allows them.

INFORMATION: Full Disclosure.

The multinationals are frequently blamed for using secrecy to control vast networks of companies that have different names but belong to the same shadowy combine. The OECD would end all that. In the future, corporations would be required to make public complete descriptions of the activities of their principal affiliates in major areas of the world. Among other things, the multinationals would also have to list the number of their employees, report local sales and profits and disclose the amount of money invested in research and development.

POWER: No Predators. Multinationals should behave abroad as circumspectly as they must in the U.S. and increasingly in Western Europe, where antitrust agencies watch for illegal accumulations of economic power. Further, the companies should refrain from participating in cartels and avoid "predatory behavior toward competitors."

TAXES: Fair Share. Multinationals should pay the proper amount of taxes in the countries in which profits are earned. They should not seek to avoid taxes by switching money through company channels from high-tax countries to low-tax ones.

LABOR: Respect Rights. Multinationals should respect the right of their employees to organize into unions and engage in collective bargaining.

The code is expected to be adopted at the next OECD conference of foreign ministers, scheduled for June 21. The question is: Will the code make any difference? The OECD has no power to enforce its injunctions. Furthermore, the code is written in such turgid bureaucratese that many of the 29 commandments are vague and imprecise.

One of the OECD'S purposes in drafting the code was to head off a possible effort by the developing countries to ram through the United Nations their own tougher strictures on the multinationals. Nonetheless, the code does perform a useful service as the first major statement by the industrialized nations about how they expect their corporations to behave elsewhere. The code may also inspire some developing countries to enact up-to-date business legislation that would outlaw exploitative business practices--just as they have long been forbidden in the nations where the multinationals were born.

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