The executive director of the United Nations Center on Transnational Corporations predicted yesterday that the U.N. Assembly will adopt a voluntary code of conduct this year intended principally for multinational corporations that invest in the Third World.
But the official, Peter Hansen, hedged the prediction, saying that the fate of the code may hinge on whether the United States or Brazil budges from hard-line positions to get a code designed to benefit the multinationals and the nations where they invest.
The code would propose standards of conduct for both parties. For multinationals, the draft includes, for example, guidelines for avoidance of corruption, protection of human rights, and equitable "transfer pricing" among subsidiaries that buy and sell to each other; for host countries, the draft provides guidelines on such matters as the freedom of companies to transfer funds to their homelands and compensation arrangements when a privately owned entity is nationalized.
State Department official Dennis Goodman said the United States has worked "assiduously" for a "balanced" and "sensible" code, that it is certainly "potentially useful," that "very definite disagreements" persist, and that the situation is at "a sort of fish-or-cut-bait point."
Hansen and Goodman joined Ciba-Geigy Corp. Vice President Charles E. Ziegler in a two-hour discussion of the proposed code that the Friends Committee on National Legislation sponsored.
Ziegler, who declined to predict whether or when a code will be adopted, said that "the main parties are still far apart." Speaking "quite bluntly," he added, "business can live with or without a code."
A pending draft of the code, evolved in six years of negotiations, will be considered by the U.N. Commission on Transnational Corporations at a meeting in New York Jan. 20-31. If a draft is approved, it would be taken up first by the Economic and Social Council and then by the General Assembly.
Hansen contended that there is only one genuine and truly important dispute to be negotiated, and that even it is amenable to acceptable compromise. Goodman, the deputy assistant secretary-designate for international organization affairs, and Ziegler said there are several divisive issues. Hansen referred to a dispute in which industrial countries want certain code provisions dealing with the treatment of transnationals by host countries to provide that the companies receive fair and equitable treatment in accordance with international law.
By contrast, socialist and numerous less-developed countries object to the invocation of international law because of its origins three centuries ago, when the LDCs were colonies of the western countries. A French compromise proposal says that countries subscribing to the code "shall fulfill in good faith their international obligations." Goodman and Ziegler said the draft must -- but does not -- treat state-owned transnational corporations exactly as it treats private transnationals. The Soviet Union insists on exempting companies owned by socialist-bloc nations.
Ziegler also said socialist countries and many LDCs remain "formally committed" to a legally binding code, while industrialized countries say a voluntary and legally nonbinding code "is a nonnegotiable position."