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Multinational enterprises: international codes and the challenge of `sustainable development'

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For more content, see International Community Law Review.

This paper starts from two propositions. First, there is a growing trend of the ``globalisation of poverty'' which has its roots in the polarisation of incomes both within nations and between them; the rich are getting richer and the poor poorer. Secondly that multinational enterprises (MNEs) or tansnational corporations (TNCs) have played and are playing a significant role in that process. Despite the proliferation of international Guidelines and Codes ``the aim of reforming international law so as to reduce the relative weakness of capital-importing countries in their relations with MNEs has not been achieved. Nor has a new `international law of multinational enterprises' resulted''. The importance of companies in the market place means that the way in which they play their part in the political economy needs to be understood in the light of general morality. Since it is clear that companies reflect the moral basis of society and its dominant philosophy, any calls on them to adopt a morality at odds with that system are doomed to failure. Thus simple appeals to companies to abide by Codes of Conduct which contradict their profit maximising underpinnings are doomed to failure. However, it may be possible to escape from the most extreme understandings of the free-market system by using regulatory methods which avoid external exhortation to `get a conscience' and concentrate instead on feeding into corporate governance regulatory standards which have been decided on as attainable and desirable standards. The morality of a company is reflected in its governance systems, change can therefore only be sustained when the governance system is expected to reflect this morality, when the moral norms are internalised rather than imposed from outside by codes. This exercise requires an escape from the amoral teachings of the modern Hegelians and a return to the Marxist understanding of the `reality of equality' together with the necessity for a conception of justice as a driving force in the economy.

Affiliations: 1: Department of Law, University of Essex, Wivenhoe Park, Colchester, CO4 3SQ, UK (E-mail:


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