Multinational Corporations, Private Codes, and Technology Transfer for Sustainable Development

By Baram, Michael S. | Environmental Law, January 1994 | Go to article overview
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Multinational Corporations, Private Codes, and Technology Transfer for Sustainable Development

Baram, Michael S., Environmental Law


The struggle to advance human well-being in developing nations is on a collision course with growing efforts to protect the global environment. To prevent foreseeable conflicts, the principle of sustainable development has been proposed and has become widely accepted.(1) Putting this principle into practice will require policies that permit industrial, agricultural, and other developments, yet also protect natural resources and public health for the benefit of future generations.(2)

Technological expertise will play a vital role in sustainable development, fostering the design of new energy, transport, and water supply systems for minimal environmental impact, and enabling performance of hazardous mining and manufacturing activities in a manner that protects natural resources and public health. Technological expertise is crucial in preventing waste disposal problems, in developing biodegradable packaging, and in designing new products that are more compatible with the environment throughout their life cycles, such as substitutes for harmful chemical pesticides.(3)

Continuous advance in technological expertise is necessary for sustainable development because environmental parameters change over time. As developmental activities multiply, regional and global environments will experience greater stress no matter how carefully each activity may have been designed and conducted. As human well-being advances, citizens of developing nations are likely to place greater emphasis on the protection of natural resources and environmental amenities. As environmental sciences progress, new problems will be identified and demand mitigation. Thus, sustainable development policies must promote continuing technical advances and facilitate technology transfer for environmental protection.

Finally, policies for sustainable development must be brought to bear on the major proponents of developmental activities: private multinational firms and public agencies. Multinational corporations (MNCs) are aggressively seeking new resources, markets, joint ventures, and facility sites. Recent studies show that such global expansion is growing significantly because "it pays."(4) Public agencies in industrial countries are under increasing pressure to facilitate MNC activities in poorer nations, and counterpart agencies in those nations are pursuing development opportunities with MNCs. Thus, MNC activities are being "pushed and pulled" toward developing nations at an increasing rate, and policies for sustainable development must ensure that MNCs provide the requisite technical expertise.(5)

This Article addresses the role of MNCs in sustainable development. It evaluates one policy option for promoting the development and transfer of technological expertise: reliance on the private codes of environmental conduct that MNCs and their trade associations are developing. These private codes provide a voluntary "system" for ensuring that such firm provide the requisite technology for sustainable development.(6) Commentators have suggested other policy options for multinationals and technology, including international regulation of MNCs, government programs for transfer of MNC technology, international harmonization of standards or laws applicable to MNCs, and the extraterritorial application of laws enacted by the countries of origin of MNCs.(7)

However, as indicated in Table 1, these public sector initiatives will require substantial public sector efforts to overcome political and economic obstacles, and deserve consideration only to the extent that private voluntary codes prove inadequate.

Section II examines various types of MNC activities in developing nations. Section III surveys private codes of conduct adopted by corporations in the United States and other developed nations. Section IV concludes that corporations generally do not apply these codes in developing nations and examines the effectiveness of three approaches currently used to remedy this situation.

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Multinational Corporations, Private Codes, and Technology Transfer for Sustainable Development


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