Ethics Shouldn't Stop at the Water's Edge

WHILE President George Bush laudably stresses ethics for his appointees, his administration could use a little of the same determination in moving to curb bribery in international commerce. Opportunities abound: Congress in the 1988 Omnibus Trade Act directed the president to seek an anti-bribery agreement with the Organization for Economic Cooperation and Development (OECD), and two separate proposed United Nations anti-bribery measures are pending. But so far the Bush administration has shown no interest whatsoever in these or other initiatives. The issue cannot be dismissed as merely a byproduct of the current preoccupation with ethics, nor as a relic of past scandals like the Lockheed bribery affair of the mid-1970s, which brought down a Japanese prime minister, gave American business a black eye, and led Congress to pass the Foreign Corrupt Practices Act (FCPA). In May, Goodyear International Corporation pleaded guilty to paying nearly $1 million in bribes to Kuwaiti officials to obtain tire orders.

Despite this successful prosecution, FCPA enforcement has been inconsistent and irresolute. American exporters complain loudly that the legislation puts them at a disadvantage in international business, that no one, certainly no one in Washington, should tell a multinational hard-charger how the rough-and-tumble of international business should be conducted.

If there is anything to this complaint, then the Bush administration could, if it had the vision, offer the perfect response - vigorous pursuit of international measures to raise the level of commercial ethical standards for US trading partners and competitors as well as our own businesses.

There are already two proposals before the UN to curb the use of bribes by international corporations. The Draft International Agreement on Illicit Payments drawn up by the UN's Economic and Social Council, makes it a crime under the laws of subscribing countries for corporations or their officials to offer or accept such payments in transnational business. It would also make companies keep records of their overseas business that would be open to review by designated government agencies.

Second, Article 20 of the proposed Code of Conduct on Transnational Corporations creates voluntary standards for multinational corporations to adopt as a matter of corporate policy, just as the Sullivan Principles, adopted as an act of social conscience by corporations doing business in South Africa, have advanced the cause of justice there.

Partly because the General Assembly has not yet adopted either of these proposals, Congress provided in the 1988 trade bill that the president should pursue negotiations with member governments of the OECD to adopt an agreement banning the use of bribery by corporations in international dealings. It also requires the president to report to Congress within a year (by August 1989) on the progress of those negotiations and on ``other possible actions that could be taken to promote cooperation by other countries in international efforts to prevent bribery of foreign officials, candidates, and parties in third countries.''

The OECD countries, of course, are the leaders in international business, and a multilateral agreement among them would not only cover a high proportion of exporting countries but would also create substantial pressures for other countries to raise standards applicable to their own businesses. Such an agreement might not be negotiable overnight. But these are remarkable times in which reforms long thought fanciful are coming to fruition in the most improbable places. Surely it would make sense for the US to make a start. Useful as such an agreement would be, it cannot substitute for a truly global arrangement, as a few rich countries cannot legislate for the entire international community.

To stimulate action at the UN could be less complicated. Most major industrial countries have deferred to the US in blocking progress on the code. Surely it would make some sense for the US to take the initiative. All that the Bush administration need do would be to instruct the US delegation to the UN to take up the compromise proposals that have been accepted by business, labor, and international experts from all over the world, and Japan and all the West European nations will follow.

Whatever the ultimate results from these first steps, President Bush would have made this issue his own and demonstrated that the United States, the champion of free trade and of fair investment relations, is also determined to see that the emerging global marketplace is safe for honest trade and investment.