Bill: Proposed Corporate Social Responsibility Act

[Tonga1]

Author: Mr. Latutupou MP
Sponsor: Mr. Adisa MP
Type: Act of Parliament

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BILL
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Codify Standard Business Practices

Preamble: This Act aims to establish a foundation for standard business practices, ensure regulation in the private sector, and begin a culture of Corporate Social Responsibility in Azalea.

1. Corporate Responsibility

1. A corporation has the responsibility to maximize profit for its shareholders. Any decision made by a corporation, public or private, must always have this directive in mind and as its driving mission.
2. To ensure shareholders are valued fairly, all corporations, public or private, must have a minimum of three directors on their boards. The shareholders elect these directors.
3. Corporations may only have one class of shares; each share is worth one vote in the event of an election for its Board of Directors.
4. A corporation must hold an election for its Board of Directors at a minimum interval of once every three months.
5. In addition to a profit responsibility to its shareholders, a corporation must act in good faith to its community and nation. No corporation may intentionally conduct practices that knowingly harm the environment, unjustly pollute the landscape, or unnecessarily endanger wildlife.

2. Fair Employment Rights

1. A corporation must make hiring decisions regardless of political affiliation unless it can prove its practice is inherently biased toward one political belief or another.
2. Tenured employees are classified as those who perform regular work with standard deliverables over a recurring period and communicate regularly with their employers. Depending on their preference, tenured employees must be paid either weekly or monthly.
3. If advertising a tenured employment position, the corporation hiring must include the compensation, whether or not political affiliation will be considered, and the expected responsibilities of the role.
4. Tenured employees working in similar roles with similar responsibilities must be compensated equally. Employers may not, under any circumstance, discourage communication between employees regarding compensation, benefits, or conditions.
5. Employers may not, in any way, interfere with an employee’s attempt to unionize or organize with other employees inside or outside of the corporation.

3. Corporate Liability

1. To ensure that corporations are held liable for damages to their clients, employees, and communities, the below codes of collection and regulation are set forth:
   1. Should a corporation incur damages that need to be paid or rectified, the corporation may not seek to shift the burden of compensation from itself to anyone. This includes, but is not limited to, Employees, Shareholders, Clients, etc.
   2. Should a corporation incur damages that outweigh its ability to pay, it has to file for bankruptcy with the Ministry of Commerce. Bankruptcy will force the corporation to liquidate all cash and cash-equivalent assets and use them to pay out liabilities in the following order of priority:
      1. Employee Wages, Court-Ordered Settlements, Creditor Debts, Else
   3. Following the distribution of all available funds, further liabilities are nullified, and the corporation has to undergo internal restructuring to continue operations post-bankruptcy.

4. Corporate Regulation

1. The Ministry of Commerce is equipped to audit corporations for legal compliance with the following enumerated powers:
   1. Communication Audits - If given a court order from a judge, the MoC may request any corporate communications to provide sufficient reasoning for the audit. If a corporation considers the audit invalid, it may argue it in court before turning over any communications. MoC auditors are not entitled to view direct communication platforms, be it that the corporation provides auditors with the communications in some other way. The MoC is not entitled to communication between the corporation and a customer; only communication is within the corporation itself.
   2. Ministry Questioning - The Ministry of Commerce may request a corporation representative to appear before them on a panel for questioning, and the corporation may not lie or deceive ministry auditors during this process.
   3. Document Seizure - The Ministry of Commerce may request a court order from a judge demanding a corporation turn over internal documents should it pertain to an active investigation the ministry is conducting. The ministry must disclose to the corporation the reasoning for the document seizure and how the document relates to the investigation. The corporation is entitled to refuse the initial request, argue the issue in court, and redact any sensitive information that could reveal details about its clients, customers, or operations.
2. Noting the sensitivity of many corporate communications, the use of Non-Disclosure Agreements and Non-Compete Agreements is permitted, provided the Non-Disclosure Agreement does not cover any illegal activities.
   1. A Non-Disclosure Agreement cannot be enforceable for more than one hundred eighty days, and a non-compete agreement cannot be enforceable for more than ninety days.
   2. Should a Non-Disclosure Agreement be overturned by an emergency injunction or other court order, only for the actor being sued to be found not liable or guilty of the alleged conduct, the defense is entitled to just compensation that may be due, titled Disclosure Compensation.
3. Given the importance of their operations to the citizens of Azalea, financial institutions that take deposits are subject to heightened regulation, scrutiny, and audits. Cited below are the regulations regarding tax code, client transparency, and government audits:
   1. Deposit-Taking Financial Institutions (hereafter DTI(s)) will be exempt from ordinary balance taxes given the disproportionate amount of cash they will have on hand relative to other corporations. Rather, DTIs will be subject to the following tax structure:
      1. 25% of monthly profits will be payable to the Ministry of Commerce.
      2. A sum equal to 0.25% of total insured deposits will be paid to a fund managed by the Ministry of Commerce titled “Deposit Restitution Reserves.”
         1. The fund shall be invested in minimal-risk instruments that steadily grow the reserve.
         2. The fund shall only be partially or wholly liquidated if the MoC determines a DTI failure has occurred and there is a shortfall between available DTI assets and deposits due.
         3. The fund shall not be used to pay anyone besides depositors.
         4. The MoC must release a publicly available report on the fund on the last day of every month.
         5. The fund is shared, and all money paid into it can be allocated indiscriminately regardless of where it came from.
         6. The fund shall insure up to $10,000 of lost deposits per deposit account.
      3. MoC auditors must request the required information for tax processing before the end of the month; otherwise, the tax period will be null and void.

Enactment: This Act comes into force immediately upon passage