strategy

Developing codes of conduct for international business

Synonyms:
Regulating transnational corporations
Restricting influence of multinational enterprises
Providing international regulation of transnational corporations
Increasing effectiveness of international regulation of transnational corporations
Implementation:

In 1992, The UN Centre on Transnational Corporations prepared a proposed Code of Conduct for Transnational Corporations to be submitted to government delegates attending the UN Conference on Environment and Development (UNCED) in Rio. This Code of Conduct was the result of 13 years of work by the UN Centre on Transnational Corporations. However, before this document could be circulated it was withdrawn from the agenda. In the following year, the Centre was essentially dissolved. At the base of this incident was vigorous activity by the International Chamber of Commerce, which argued that there was no need for an independent Code of Conduct or regulatory oversight of TNCs, that the corporate sector could be trusted to voluntarily regulate itself in a socially and environmentally responsible manner.

In 1994 there was a revived interest in the international regulations or guidelines for transnational corporations (TNCs), in view of their growing power under the terms of the Uruguay Trade Negotiations, the North American Free Trade Agreement and the Single European Act. Hence the growing support for a system of international rules governing the activity of TNCs. The OECD is now working on a new investment agreement. Proposals have been made to negotiate international investment rules within the planned World Trade Organization.

Claim:

In a free-enterprise system, the prime goals of all corporations, whether national or foreign-owned, is to maximize their efficiency of operation in order to optimize the return, both short- and long-term, to their shareholders. One corporation cannot afford to act out of step with the others. For this reason, government regulatory bodies are needed to influence the behaviour of all corporations.

 

Subjects:
Data, codes
Influencing
Business enterprises
Multinationals
Restrictions
Regulation
Cybernetics
Development
Change
Type Classification:
D: Detailed strategies