International Right to Know Act

Overview: The International Right to Know (IRTK) would require U.S. corporations and foreign multinationals that sell securities in the U.S. to disclose crucial information about their labor, environmental and human rights practices abroad to several U.S. agencies, which would publish this information on the Internet.

Key Provisions: Corporations would be required to report the information listed below concerning their operations abroad and the activities of their overseas subsidiaries, suppliers and contractors. They would also be required to make this information publicly available to local communities. The IRTK provides for civil and criminal penalties, enforceable by either the government or private citizens.

Human Rights:

• Security arrangements with military, paramilitary, or private or public security forces.
  
• Displacement and impact on local communities.
  
• Human rights policies generally, including human rights complaints received.

Labor:

• Serious work-related injuries and deaths, in accordance with OSHA reporting provisions.
  
• Hazardous chemicals in the workplace, in accordance with OSHA Hazard Communication Standard.
  
• Worker rights policies generally, including worker rights complaints received.

Environment:

• Toxic releases, in accordance with domestic Right to Know legislation.
  
• Certain pollutant emissions covered by the Clean Water Act and the Clean Air Act.
  
• Environmental policies generally, including environmental complaints received.

Analysis:

• By insuring greater transparency, the IRTK would empower U.S. consumers and local communities to demand that U.S. corporations act as responsibly abroad as they do at home. As recent legislative initiatives have demonstrated, ensuring public access to information is a powerful -- and deeply democratic -- regulatory tool. Transparency is a necessary precondition to holding corporations accountable to all their stakeholders -- investors, employees, consumers and communities. Moreover, governments routinely enact transparency-forcing measures based on the recognition that the free flow of information is essential to a well-functioning free market.
• Although many U.S. corporations act ethically abroad, some corporations' complicity in labor, environmental and human rights abuses demonstrate that IRTK legislation is sorely needed. India: In December 1984, lethal gasses leaked from Union Carbide's pesticide factory in Bhopal, India, killing over 2,500 people and injuring thousands more. Nigeria: In May 1998 two protestors were killed and 30 injured when Chevron provided company helicopters to the Nigerian army in its crackdown against communities protesting Chevron's oil operations in the Niger Delta. Burma: In September 2000 a U.S. federal court held that U.S.-based oil company Unocal, who was constructing a pipeline through Burma, "knew that forced labor was being utilized and that the Joint Venturers [Unocal, Total SA and the Burmese government] benefited from the practice." Unfortunately, these are just a few examples.
  
• U.S. consumers want to know about the conditions in which the products they use were made. Yet it is inefficient and costly for each individual consumer to research the history of the myriad of household products produced overseas, especially since the identities of U.S. corporations' overseas contractors and suppliers are rarely made public. Moreover, without a standardized, verifiable reporting system, consumers can't compare competitors reliably. The IRTK would give consumers the information they need to make informed choices in accordance with their values.
  
• U.S. investors want to know about the environmental, labor and human rights practices of the corporations they invest in, as evidenced by the dramatic growth in socially responsible investment funds. The IRTK would make socially responsible investing more accessible to individual investors.
  
• U.S. workers want to know about the environmental, labor and human rights practices of their employers and prospective employers. Business leaders have emphasized the importance of high labor, environmental and human rights standards in attracting a talented workforce. The IRTK would provide workers with reliable information about their employers and potential employers.
  
• U.S. citizens want U.S. corporations to be held to high labor, environmental, and human rights standards in their operations overseas. According to a 1999 poll by the University of Maryland, 88% of Americans believe that U.S. companies operating in foreign countries should abide by U.S. environmental standards, while 86% believe that U.S. companies should abide by U.S. health and safety standards. While the IRTK would not require corporations to adopt high standards, it would give the public the information necessary to encourage them to do so.
  
• U.S. corporations with strong environmental, labor and human rights records overseas want the public recognition they deserve, don't want their reputations sullied by the conduct of less scrupulous competitors, and don't want competitors to "free ride" on their social investments. The IRTK would require recalcitrant firms to disclose their practices while enabling progressive firms to shine. Much like prohibitions on unfair trade practices in the U.S., the IRTK would "level the playing field" between firms that respect labor, environmental and human rights and those that do not.
  
• The IRTK builds on the success of domestic Right to Know legislation. The IRTK is modeled on the Emergency Planning and Community Right to Know Act (EPCRA) of 1986, which requires U.S. companies operating in the U.S. to disclose vital information about the toxic chemicals they use. Domestic manufacturers have cited EPCRA's disclosure requirements as the impetus for undertaking voluntary measures to cut toxic emissions by as much as 50%, which in turn has enabled them to operate more efficiently and economically.
  
• The IRTK would not make U.S. firms less competitive and may, in some instances, increase their efficiency. Although U.S. corporations initially feared that the Foreign Corrupt Practices Act (FCPA), which prohibits bribery by U.S. corporations overseas, would render them less competitive than their foreign counterparts, this has not proven to be the case. In addition, industry leaders have praised domestic Right to Know legislation (such as EPCRA) for making them more efficient.
  
• The IRTK is significantly more flexible and less costly than traditional, command-and-control regulation because it does not mandate a particular or "one-size-fits-all" response. Rather, corporations remain free to improve their practices in the manner they deem most appropriate.
  
• The IRTK would set a good example for other corporations. Foreign businesses look to U.S. corporations for "best practices" in all areas, from accounting conventions to anti-corruption measures. By extending domestic transparency norms to their operations abroad, U.S. corporations can encourage foreign businesses to become more accountable as well.
  
• The IRTK would set a good example for other nations. Since its founding, the U.S. has served as a model of freedom and prosperity. Trust in civil society's ability to harness the power of information for the public good has played an important role in our success, and is a value worth exporting. As the presence of U.S.-based multinationals grows around the world, the U.S. gains an excellent opportunity to influence not only how "business" is done but also how important decisions are made in general. It is in the United States' interest to seize this opportunity to promote norms of transparency rather than secrecy.