Corporate Code of Conduct Act - Requires U.S. nationals 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, to take necessary steps to implement a specified Corporate Code of Conduct regarding a safe and healthy workplace and internationally recognized environmental, human rights, worker rights, and core labor standards.
Requires executive agencies to grant preference in awarding contracts, or in providing certain foreign trade and investment assistance, to those entities that have adopted and are enforcing the Code.
Prescribes guidelines for investigations of allegations of noncompliance with the Code.
Requires termination of contracts or assistance, and withdrawal, suspension, or limitation of such preference, for any violations determined based on such investigations.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5377 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5377
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 11, 2006
Ms. McKinney 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
_______________________________________________________________________
A BILL
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.
<all>
Introduced in House
Introduced in House
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.
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.
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.
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.
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