The Need for International Right to Know
The Importance of Disclosure
Disclosure Works
International Right to Know Overview
"Padding the Bottom Line"

The Need for International Right to Know

Here at home, U.S. companies are required to report specific environmental and labor information publicly. However, U.S. corporations have no legally binding obligations whatsoever to disclose comparable information for their operations abroad. This lack of disclosure makes it extremely difficult for governments and communities to determine the scope of environmental and social impacts and whether U.S. corporations are operating responsibly.

The absence of disclosure requirements for U.S. businesses operating abroad has never been more salient in light of the recent onslaught of corporate scandals. This unscrupulous behavior not only points to the need for accurate financial information - but also a factual depiction of a corporation's social and environmental impacts - so investors and the public at-large can know if a company is operating in a responsible manner.

Perhaps the most compelling argument for International Right to Know legislation in our current economic context is to stop U.S. corporations from "padding the bottom line" through "cost-cutting measures" such as using dirty, out-dated technologies and practices, using child labor or being complacent in human rights abuses as they relate to their overseas operations. A critical part of shoring up corporate financial practices means ensuring that U.S. corporations are not boosting their profits through unscrupulous activities on a global stage.

International Right to Know (IRTK) legislation would require all corporations traded on the U.S. stock market with annual revenues of $5 million or more to disclose information concerning environmental, labor, and human rights. By itself, mandating such disclosure might not prevent abuses. But it would at least ensure that investors and the public at-large would have the right to know more about the way corporations are conducting their activities.

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The Importance of Disclosure

"Corporate accountability" means corporations must adhere to regulatory or legal requirements or otherwise be held liable or face sanctions. It follows then that "corporate accountability" requires independent monitoring and an enforcement mechanism to ensure corporations are complying.

The veracity of enforcement and monitoring is entirely dependent on the availability of complete and accurate information. In this respect, disclosure of information is a fundamental pillar of corporation accountability - the other pillar being the clear legal liability in the event of noncompliance.

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Disclosure Works

The most important and well-known of disclosure laws in the United States is the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA) and, more specifically, Section 313 requirements under EPCRA that have come to be known as the Toxic Release Inventory (TRI). The TRI requires disclosure of a facility's releases of specified toxic substances to land, air and water, information that is then provided on-line to the public.

TRI information in the U.S. has provided citizens, communities and investors with critical information, which has led to substantial voluntary reductions of toxic releases and other environmental hazards. For example, information disclosed under TRI has been used by citizens to convince IBM to phase-out use of ozone depleting CFCs; allowed an Akron, Ohio group to obtain a commitment from BF Goodrich to reduce its toxic airborne emissions by 70%; and given activists the needed data to successfully enact a toxics reduction statutes in Oregon and Louisiana (Wolf, Sidney M., "Fear and Loathing About the Public Right to Know: The Surprising Success of the Emergency Planning and Community Right-to-Know Act," Journal of Land Use and Environmental Law, 11:2.).

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International Right to Know Overview

The success of U.S. disclosure requirements have inspired a coalition of U.S. environmental, human rights and labor organizations to campaign for International Right to Know (IRTK) legislation. IRTK would require all corporations traded on the U.S. stock market with annual revenues of $5 million or more to disclose information concerning environmental, labor, and human rights practices for facilities, subsidiaries, and contractors for their overseas operations.

- Environmental reporting would be based on U.S. TRI requirements. It also would include disclosure of hazardous chemicals in the workplace, in accordance with U.S. law under EPCRA.

- Labor reporting would include the application of U.S. Occupational Safety and Health Act (OSHA) reporting requirements, especially concerning serious work-related injuries deaths.

- Human rights reporting would include disclosure of the existence of security arrangements with state police, military forces, or private security companies and disclosure of any displacement of indigenous populations.

It is important to note that IRTK legislation is not a matter of telling corporations how to conduct their business activities or setting standards for other countries. Rather, it would establish disclosure requirements on social and environmental matters, so governments, investors and the public at-large can actually know whether American corporations are conducting their activities abroad in a socially, environmentally and ultimately financially responsible manner.

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"Padding the Bottom Line"

Disclosure would allow investors and consumers to make educated choices - choices that are based on a factual and comprehensive portrayal of a corporation's business activities. Likewise, the veil of secrecy surrounding the overseas operations of American-owned businesses would be lifted. U.S. corporations could not longer "pad the bottom line" by employing so-called "cost-cutting" measures like lowering health and safety standards, using dirty or outdated production methods or using child labor.

Information disclosed under IRTK would enable citizens to more effectively challenge the harmful impacts they face, while consumers and investors in corporations' home countries can choose to redirect their purchases or investments away from harmful corporate practices. It is important to note that an International Right to Know law would not prohibit U.S. corporations from conducting their operations in an irresponsible manner by mandating certain practices or setting standards for other countries.

Cleaning up Corporate America means those U.S. multinational corporations must not only provide accurate financial information, they must be required to report certain environmental and social matters on an international basis.

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