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1.2.1 Transnational and multinational corporationsAccording to the UN, the term transnational corporation (TNC) refers to an economicentity operating in more than one country or a cluster of economic entities operating in twoor more countries – whatever their legal form, whether in their home country or country ofactivity, and whether taken individually or collectively. 15 The UN’s documents do not havea published definition of the term “multinational”. However, the International LabourOrganisation (ILO), a UN specialised agency that seeks to promote human and labourrights, has defined multinational corporations (MNC) as “enterprises, whether they are ofpublic, mixed or private ownership, which own or control production, distribution, servicesor other facilities outside the country in which they are based. The degree of autonomy ofentities within multinational enterprises in relation to each other varies widely from onesuch enterprise to another, depending on the nature of the links between such entities andtheir fields of activity and having regard to the great diversity in the form of ownership,size, in the nature and location of the operations of the enterprises concerned.” 16In contrast, the Organisation for Economic Cooperation and Development 17 (OECD)has stated, “[MNCs] usually comprise companies or other entities established in morethan one country and so linked that they may coordinate their operations in various ways.While one or more of these entities may be able to exercise a significant influence over theactivities of others, their degree of autonomy within the enterprise may vary widely fromone multinational enterprise to another. Ownership may be private, state or mixed.” 18Although often used interchangeably, the distinction between a transnational and amultinational corporation is an important one. As Korten explains in his book, WhenCorporations Rule the World:During the transition phase from national to transnational, many corporationsstyled themselves as ‘multinational,’ which meant that they took on many nationalidentities, maintaining relatively autonomous production and sales facilities inindividual countries, establishing local roots and presenting themselves in eachlocality as a good local citizen. Globalized operations might be linked to oneanother, but they were deeply integrated into the individual local economies inwhich they operated. During this phase, many did function to some extent aslocal citizens.As structural adjustment programs and free trade agreements rendered nationaleconomic borders increasingly irrelevant, most corporations that operatePrivate Sector Accountability in Combating the Commercial Sexual Exploitation of Children|9