[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2071 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2071

To require the Federal Government, in procuring goods and services and 
 in providing certain foreign trade and investment assistance relating 
 to trade and exports, to give a preference to entities that adopt and 
   enforce a corporate code of conduct and to provide for an annual 
 administrative review and petition process to ensure compliance with 
                               such code.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 25, 1997

Mr. Sanders (for himself, Mr. Evans, Mr. Filner, Mr. Lipinski, and Mr. 
Lewis of Georgia) introduced the following bill; which was referred to 
 the Committee on Government Reform and Oversight, and in addition to 
   the Committees on International Relations, Banking and Financial 
     Services, and Ways and Means, 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 the Federal Government, in procuring goods and services and 
 in providing certain foreign trade and investment assistance relating 
 to trade and exports, to give a preference to entities that adopt and 
   enforce a corporate code of conduct and to provide for an annual 
 administrative review and petition process to ensure compliance with 
                               such code.

    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 ``Good Corporate Citizenship and 
Federal Procurement Incentives Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) For centuries, corporations have been chartered 
        exclusively by governments to serve the public good and to 
        promote the general welfare.
            (2) Many large United States corporations started as small 
        businesses and became economic powerhouses largely because of 
        the hard work and sacrifices, made across several generations, 
        by American working families in hundreds of thousands of 
        American communities.
            (3) The strength and profitability of United States 
        companies is largely derived from the productivity and loyalty 
        of their American employees and the support of local 
        communities and stable markets that nurture and sustain their 
        corporate growth.
            (4) Enlightened corporate leaders in America readily 
        acknowledge their debt to society in general and to their 
        workers and home communities in particular that are crucial to 
        the amassing and perpetuation of great corporate wealth.
            (5) Purely self-interested corporate leaders recognize 
        that, if companies are to survive and expand, working families 
        must earn enough to be good consumers, and home communities 
        must be strong enough to provide profitable markets.
            (6) Unbridled corporate greed and ``robber-baron'' myopia 
        have prompted public backlash among the American people at 
        different times in the Nation's history, resulting in public 
        demand for governmental redress and enhanced public regulation 
        in furtherance of greater corporate accountability.
            (7) After the Great Depression and the Nation's victory in 
        World War II, a new generation of American corporate leaders 
        took it to heart when Fortune magazine called upon them to be 
        ``industrial statesmen'' who looked after the well-being of 
        their workers and communities as well as stockholders.
            (8) More recently, United States corporations since the 
        1970's have had to respond to a new era of global economic 
        integration and unparalleled international competition, 
        resulting in widespread corporate restructuring and 
        necessitating a reexamination of the responsibilities of 
        corporations to their workers, their home communities, and the 
        environment, as well as their stockholders.
            (9) Declining available resources, deficit spending, and 
        rising national debt during the past 25 years make it extremely 
        problematic for government at any level to check and balance 
        expanding corporate influence in America and abroad.
            (10) 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.
            (11) At the same time, public concern is mushrooming about 
        the increasing concentration of unaccountable corporate power 
        and declining corporate responsibility across national borders.
            (12) 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 companies to invest overseas, to create jobs in foreign 
        countries, and to expand their access to foreign markets.
            (13) For the balance of the 1990's and beyond, market-
        driven approaches to public problem-solving may often be 
        preferred to greater corporate regulation.
            (14) Accordingly, top priority should be assigned to using 
        the influence of government, as a powerful customer in the 
marketplace, to reward good corporate citizenship and to avoid doing 
business with corporations that neglect or abandon their workers and 
home communities and despoil the environment.
            (15) Every year the United States Government buys more than 
        $200,000,000,000 in goods and services, ranging from weapons 
        systems to cleaning supplies, making it the largest customer in 
        the American marketplace.
            (16) Harnessing the immense purchasing power that the 
        United States Government wields through its procurement 
        practices to reward good corporate citizenship and to 
        discourage corporate irresponsibility would serve as a powerful 
        inducement for greater corporate accountability at home and 
        abroad.

SEC. 3. PREFERENCE IN AWARD OF CONTRACTS AND IN GRANTING CERTAIN 
              FOREIGN TRADE AND INVESTMENT ASSISTANCE FOR ENTITIES 
              ADOPTING AND ENFORCING CORPORATE CODE OF CONDUCT.

    (a) Preference in Award of Contracts.--
            (1) In general.--In entering into contracts 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 set forth in 
        section 4.
            (2) Standards.--The Federal Acquisition Regulation 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) The Secretary of Commerce 
        shall give preference to an entity that has adopted the 
        corporate code of conduct set forth in section 4--
                    (i) in providing 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
                    (ii) in coordinating trade missions.
            (B) 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 
        providing financing and issuing investment insurance, 
        reinsurance, and guaranties to entities pursuant to the Foreign 
        Assistance Act of 1961, the Overseas Private Investment 
        Corporation shall give preference to an entity that has adopted 
        the corporate code of conduct set forth in section 4.
            (B) The Board of Directors of the Overseas Private 
        Investment Corporation shall promulgate regulations containing 
        standards with respect to the preference required by this 
        paragraph.
            (3) Trade and development agency.--(A) In providing 
        assistance 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 an entity that has adopted the 
        corporate code of conduct set forth in section 4.
            (B) 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.--(A) In providing guarantees, 
        insurance, and credit, and in participating in extensions of 
        credit, the Export-Import Bank of the United States shall give 
        preference to an entity that has adopted the corporate code of 
        conduct set forth in section 4.
            (B) The Board of Directors of the Export-Import Bank of the 
        United States shall promulgate regulations containing standards 
        with respect to the preference required by this paragraph.

SEC. 4. CORPORATE CODE OF CONDUCT.

    It is the sense of Congress that any entity awarded a contract with 
the Federal Government for goods or services or provided assistance in 
a form described in section 3(b) should adopt and adhere to the 
following principles in all its domestic and foreign operations:
            (1) Provide a safe and healthy workplace.
            (2) Ensure fair employment, including the avoidance of 
        child and forced labor; the avoidance of discrimination based 
        upon race, gender, national origin, or religious beliefs; the 
        respect of freedom of association and the right to organize and 
        bargain collectively; and the payment of a living wage to all 
        workers.
            (3) Uphold responsible environmental protection and 
        environmental practices.
            (4) Comply with United States and local laws (whichever are 
        more stringent) promoting good business practices, including 
        laws prohibiting illicit payments and ensuring fair 
        competition.
            (5) Maintain, through leadership at all levels, a corporate 
        culture that respects free expression consistent with 
        legitimate business concerns, and does not condone political 
coercion in the workplace; that encourages good corporate citizenship 
and makes a positive contribution to the communities in which the 
company operations; and where ethical conduct is recognized, valued, 
and exemplified by all employees.
            (6) Require similar behavior by partners, suppliers, and 
        subcontractors under terms of contract.
            (7) Implement and monitor compliance with the principles 
        listed in paragraphs (1) through (6) of this section through a 
        program that is designed to prevent and detect conduct that is 
        not in compliance with such principles by any employee of the 
        entity or of a foreign supplier of the entity and that 
        includes--
                    (A) standards for ethical conduct of employees of 
                the entity and foreign suppliers which refer to the 
                principles;
                    (B) procedures for assignment of appropriately 
                qualified personnel at the management-level of the 
                entity to monitor and enforce compliance with the 
                principles;
                    (C) procedures for reporting violations of the 
                principles by employees and foreign suppliers;
                    (D) procedures for selecting qualified individuals 
                who are not employees of the entity or foreign 
                suppliers to monitor compliance with the principles, 
                and for auditing the effectiveness of such compliance 
                monitoring;
                    (E) procedures for disciplinary action in response 
                to violations of the principles;
                    (F) 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;
                    (G) procedures for providing educational and 
                employment-related counseling to any child employed by 
                the entity or foreign supplier in violation of the 
                principles; and
                    (H) communication of all standards and procedures 
                with respect to the principles to every employee and 
                foreign supplier of the entity--
                            (i) by requiring each employee and foreign 
                        supplier to participate in a training program; 
                        or
                            (ii) by disseminating information in 
                        writing that explains the standards and 
                        procedures.

SEC. 5. ANNUAL COMPLIANCE REVIEW AND REPORT.

    (a) Review of Entities Receiving Preferences.--In the case of each 
entity that received a preference and was awarded a contract or was 
provided assistance under section 3 by an executive agency, the head of 
the executive agency shall conduct an annual review of the entity to 
determine whether the entity is in compliance with the corporate code 
of conduct set forth in section 4.
    (b) Compliance Report to Congress.--Not later than September 30 of 
each year, the head of each executive agency shall prepare and submit 
to Congress a report on the progress of the implementation of the 
requirements of this Act with respect to the agency. The report shall 
include--
            (1) a list of each entity that received a preference and 
        was awarded a contract or was provided assistance under section 
        3 by the agency; and
            (2) the type of contract and the nature of assistance 
        involved.

SEC. 6. LIMITATIONS ON PREFERENTIAL TREATMENT.

    (a) Termination of Contract or Assistance.--The Secretary of 
Commerce shall terminate a contract awarded or assistance provided to 
an entity that received a preference under section 3 in the award of 
the contract or the provision of the assistance if, after an 
investigation initiated under section 7, a decision is issued that the 
contractor or the recipient of the assistance is not adhering to the 
corporate code of conduct set forth in section 4.
    (b) Withdrawal, Suspension, or Limitation of Preference.--The 
designation of an entity as eligible to receive a preference under 
section 3 may be withdrawn, suspended, or limited if, after any 
investigation initiated under section 7, a decision is issued that the 
entity is no longer in complete compliance with the corporate code of 
conduct adopted by the entity pursuant to section 4. Such entity shall 
cease to be eligible for a preference under section 3 on the day on 
which the Secretary of Commerce issues the decision under section 7. 
The Secretary of Commerce shall promptly publish the text of any such 
decision in the Federal Register and shall submit a copy of the 
decision to the Congress. Within 30 days after the date of publication 
of the decision under the preceding sentence, the President shall issue 
an Executive order or Presidential proclamation revoking the 
eligibility of the entity for a preference under section 3, for a time 
period considered appropriate by the President.

SEC. 7. INVESTIGATIONS OF COMPLIANCE WITH CORPORATE CODE OF CONDUCT.

    (a) Petitions.--(1) Any person may at any time file a petition with 
the Secretary of Commerce requesting that action be taken under section 
6 and setting forth the allegations in support of the request. 
Petitions alleging the failure of an entity to comply with the 
corporate code of conduct adopted by the entity pursuant to section 4 
may seek--
            (A) the termination of a contract awarded or of assistance 
        provided to an entity that received a preference under section 
        3 in the award of the contract or in the provision of the 
        assistance;
            (B) the withdrawal, suspension, or limitation of the 
        eligibility of an entity for a preference under section 3; or
            (C) action under both subparagraphs (A) and (B).
    (2) The Secretary of Commerce shall review the allegations in any 
petition filed under paragraph (1) and, not later than 45 days after 
the date on which the Secretary of Commerce receives the petition, 
shall initiate an investigation unless the petition is dismissed under 
paragraph (3).
    (3) The Secretary of Commerce may determine not to initiate an 
investigation with respect to a petition 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 4. 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. If the Secretary of Commerce does find a 
petition to be frivolous, the Secretary of Commerce 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) The Secretary of Commerce may constitute one or more special 
committees to review petitions 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. The 
Secretary of Commerce, any Assistant Secretary of Commerce, or another 
designee of the Secretary of Commerce shall be the chair of any special 
committee constituted under this section. Any special committee that 
reviews a petition containing allegations of noncompliance shall 
include at least one member designated by the Secretary of Labor, the 
Secretary of State, and the Administrator of the Environmental 
Protection Agency.
    (5)(A) The investigation of a petition conducted under this 
subsection shall commence with the Secretary of Commerce publishing a 
summary of the petition in the Federal Register, along with a request 
for any person to submit information relevant to the petition. 
Following publication, the Secretary of Commerce shall conduct an 
independent investigation and gather information from all available 
sources. As part of the review process, the Secretary of Commerce 
shall, as soon as practicable, and in no event later than 90 days 
following the filing of the petition, provide opportunity for the 
presentation of information concerning the issues, including a public 
hearing.
    (B) With respect to any petition alleging noncompliance, the 
Secretary of Commerce shall consult with the Secretary of Labor, the 
Secretary of State, the Administrator of the Environmental Protection 
Agency, or any combination of the foregoing, as appropriate, as to 
whether such violations have occurred or are occurring. Each official 
in the preceding sentence with whom the Secretary of Commerce consulted 
shall provide the Secretary of Commerce with written recommendations 
regarding the disposition of the allegations that shall be entered in 
the record of the investigation. The Secretary of Commerce, or any 
member of any special committee constituted 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) After completion of the investigation, and in no event later 
than 270 days following the date the petition was filed, the Secretary 
of Commerce shall issue a decision whether to grant the relief 
requested in the petition. The decision must 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, any other party that submitted 
information relevant to the petition and be made available for public 
review. A summary of the decision shall be published in the Federal 
Register.
    (b) Initiation of Investigation by Means Other Than Petition.--If 
the Secretary of Commerce determines that an investigation should be 
initiated with respect to any matter in order to determine whether the 
matter requires action under section 6, the Secretary of Commerce shall 
publish such determination in the Federal Register and shall initiate 
such investigation using the procedures of paragraphs (5) and (6) of 
subsection (a).
    (c) 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 (a)(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.
    (d) Judicial Review of Determinations.--(1) Except as provided in 
paragraph (2), any final decision dismissing or denying a petition 
requesting action under section 6(a) may be appealed by the petitioner 
to the United States Court of Appeals for the Federal Circuit for 
review. The decision shall be reviewed as a final agency action.
    (2) Any final decision dismissing or denying a petition requesting 
action under section 6(b) may be appealed by the petitioner to the 
United States Court of Appeals for the District of Columbia Circuit for 
review. The decision shall be reviewed as a final agency action. 
Notwithstanding any provision of section 1581 of title 28, United 
States Code, the denial or dismissal of a combined petition filed under 
subsection (a)(1)(C) may be appealed in its entirety under this 
subsection.
                                 <all>