I
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 admin-
istrative 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 in-
vestment 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 com-
pliance with such code.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Good Corporate Citi-
zenship and Federal Procurement Incentives Act’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) For centuries, corporations have been char-
tered 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 Amer-
ican working families in hundreds of thousands of
American communities.
(3) The strength and profitability of United
States companies is largely derived from the produc-
tivity 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 par-
ticular that are crucial to the amassing and perpet-
uation of great corporate wealth.
(5) Purely self-interested corporate leaders rec-
ognize that, if companies are to survive and expand,
working families must earn enough to be good con-
sumers, 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 gov-
ernmental redress and enhanced public regulation in
furtherance of greater corporate accountability.
(7) After the Great Depression and the Na-
tion’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 ‘‘indus-
trial statesmen’’ who looked after the well-being of
their workers and communities as well as stockhold-
ers.
(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 reexam-
ination of the responsibilities of corporations to their
workers, their home communities, and the environ-
ment, as well as their stockholders.
(9) Declining available resources, deficit spend-
ing, and rising national debt during the past 25
years make it extremely problematic for government
at any level to check and balance expanding cor-
porate influence in America and abroad.
(10) Public confidence has declined substan-
tially in the capacity and effectiveness of government
at all levels to counteract unfair economic competi-
tion and to command greater corporate responsibil-
ity inside and outside of the marketplace.
(11) At the same time, public concern is mush-
rooming about the increasing concentration of unac-
countable corporate power and declining corporate
responsibility across national borders.
(12) Yet every year the United States Govern-
ment provides a wide array of taxpayer-financed
services and financial subsidies as well as special tax
breaks as assistance to United States-based multi-
national corporations, especially to enable such com-
panies to invest overseas, to create jobs in foreign
countries, and to expand their access to foreign mar-
kets.
(13) For the balance of the 1990’s and beyond,
market-driven approaches to public problem-solving
may often be preferred to greater corporate regula-
tion.
(14) Accordingly, top priority should be as-
signed to using the influence of government, as a
powerful customer in the marketplace, to reward
good corporate citizenship and to avoid doing busi-
ness with corporations that neglect or abandon their
workers and home communities and despoil the envi-
ronment.
(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 irresponsibil-
ity 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 IN-
VESTMENT 
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 cor-
porate 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 con-
duct set forth in section 4—
(i) in providing United States exporters
with introduction to contacts in foreign coun-
tries pursuant to section 2301(b)(4) of the Om-
nibus 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 promul-
gate regulations containing standards with respect
to the preference required by this paragraph.
(2) OVERSEAS PRIVATE INVESTMENT CORPORA-
TION.—(A) In providing financing and issuing in-
vestment 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 Develop-
ment Agency shall promulgate regulations contain-
ing standards with respect to the preference required
by this paragraph.
(4) EXPORT-IMPORT BANK.—(A) In providing
guarantees, insurance, and credit, and in participat-
ing in extensions of credit, the Export-Import Bank
of the United States shall give preference to an en-
tity that has adopted the corporate code of conduct
set forth in section 4.
(B) The Board of Directors of the Export-Im-
port 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 serv-
ices 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 ori-
gin, or religious beliefs; the respect of freedom of as-
sociation and the right to organize and bargain col-
lectively; 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 busi-
ness practices, including laws prohibiting illicit pay-
ments and ensuring fair competition.
(5) Maintain, through leadership at all levels, a
corporate culture that respects free expression con-
sistent 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 employ-
ees.
(6) Require similar behavior by partners, sup-
pliers, 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 in-
cludes—
(A) standards for ethical conduct of em-
ployees of the entity and foreign suppliers
which refer to the principles;
(B) procedures for assignment of appro-
priately qualified personnel at the management-
level of the entity to monitor and enforce com-
pliance with the principles;
(C) procedures for reporting violations of
the principles by employees and foreign suppli-
ers;
(D) procedures for selecting qualified indi-
viduals 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 viola-
tions 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 en-
tity—
(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
PREF-
ERENCES.—In the case of each entity that received a pref-
erence and was awarded a contract or was provided assist-
ance 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 execu-
tive 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 pref-
erence 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 as-
sistance 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 con-
tractor 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 sec-
tion 3 on the day on which the Secretary of Commerce
issues the decision under section 7. The Secretary of Com-
merce 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 sen-
tence, the President shall issue an Executive order or
Presidential proclamation revoking the eligibility of the en-
tity for a preference under section 3, for a time period
considered appropriate by the President.
SEC. 7. INVESTIGATIONS OF COMPLIANCE WITH COR-
PORATE 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 alle-
gations 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 pref-
erence 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 sec-
tion 3; or
(C) action under both subparagraphs (A) and
(B).
(2) The Secretary of Commerce shall review the alle-
gations 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 inves-
tigation 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 peti-
tion, if true, fail to make out a prima facie case, or if
a petition contains only conclusory allegations with no alle-
gation of supporting facts, shall a petition be dismissed
as frivolous. If the Secretary of Commerce does find a pe-
tition to be frivolous, the Secretary of Commerce shall
issue a written decision indicating the specific reasons
therefor and shall publish notice of the determination, to-
gether with a summary of such reasons, in the Federal
Register. A copy of the decision shall be sent to the peti-
tioner and shall be made available for public review.
(4) The Secretary of Commerce may constitute one
or more special committees to review petitions under in-
vestigation and make written recommendations with re-
spect to each petition. The written recommendations shall
be available to the public. The members of the special com-
mittees may be drawn from other agencies within the exec-
utive 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 Sec-
retary of Commerce shall be the chair of any special com-
mittee constituted under this section. Any special commit-
tee that reviews a petition containing allegations of non-
compliance 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 Sec-
retary of Commerce shall, as soon as practicable, and in
no event later than 90 days following the filing of the peti-
tion, provide opportunity for the presentation of informa-
tion concerning the issues, including a public hearing.
(B) With respect to any petition alleging noncompli-
ance, the Secretary of Commerce shall consult with the
Secretary of Labor, the Secretary of State, the Adminis-
trator of the Environmental Protection Agency, or any
combination of the foregoing, as appropriate, as to wheth-
er 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 pro-
tection, 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 investiga-
tion.
(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 Sec-
retary of Commerce shall promulgate regulations to imple-
ment this section. The regulations may include—
(1) procedures for the creation of special com-
mittees under subsection (a)(4);
(2) coordinating investigations with other agen-
cies;