By NEIL STRAUSS

NEW YORK, June 4, 1997 (NY Times) -- As a rule, the concert business doesn't reward those who don't play by the rules. Circumventing an area's established promoter, ticket agent, vendors and equipment rental companies can be nearly impossible. Look at what happened to Pearl Jam when it tried to take on Ticketmaster: The band suffered major touring setbacks while the ticketing giant remained the same.

The Tibet Freedom Concert, put together by Adam Yauch of the Beastie Boys and scheduled for Saturday and Sunday at Downing Stadium on Randalls Island, is encountering its own set of problems in its declared goal of presenting an ethically responsible festival. Although such big-name acts as U2, the Beastie Boys, the Foo Fighters, Patti Smith, Rancid, Blur, Porno for Pyros and A Tribe Called Quest are to perform on Saturday, ticket sales for that day have been particularly slow. Many tickets also remain for Sunday's concert, which features Bjork, De La Soul, Alanis Morissette, Pavement, Radiohead, Sonic Youth and members of R.E.M.

"We're feeling some pinch," said Jon Voss, who was hired by Yauch solely to research the backgrounds of the companies working on the festival. "We've been watching the Guinness Fleadh, which is on Randalls Island a week after us, and there are ads for that festival everywhere. It's because they have corporate sponsors and we don't. And we are paying a price for not having any."

Besides shutting out sponsors, the other rules the Tibet Freedom Concert has set for itself are to avoid companies affiliated with the U.S.-China Business Council (in protest of China's occupation of Tibet) and to support local businesses whenever possible. The festival, which is chiefly an attempt to raise awareness of Tibetan culture and support for its autonomy, has even written a clause into its contracts asking vendors, suppliers of equipment and others not to sell anything made in China or involve any companies on the Business Council in the event.

Boston Concessions, for example, provides beverages at most concerts in the area, usually selling Coke, Pepsi and Budweiser. Since all three drink manufacturers are on the Business Council, Voss said, festival concession stands will be selling RC Cola and no alcohol. In addition, instead of using traditional T-shirt manufacturers, the festival has hired two local charity groups that employ homeless people and former gang members.

"What we've learned is that is that depending on how much energy you put into the details, you can have that responsible of a production," Voss said.

But there are only so many details that can be controlled. In some cases, the festival has had to make concessions. Nynex and Sun Microsystems, both affiliated with the Business Council, are making the Internet broadcast of the festival possible. And concert security guards said that they could use only walkie-talkies made by Motorola, another business council corporation.

"You can't be completely pure," said Yauch, who plans to hold next year's festival in Washington. "But we try and get as close as we can to working only with business partners that have good ethics."

In cases where the festival ended up working with corporations on the Business Council, the Milarepa Fund, the charity producing the festival, requested an interview with top company executives to argue that supporting human rights through trade embargoes could benefit their business. Most companies granted these interview requests, Joss said, most likely because they wanted the festival's business.

Despite the organizers' scruples, it is inevitable that musicians will turn up wearing clothes made in China. "Last year, Buddy Guy came out on stage with a Reebok headband," Joss said. "Nobody probably noticed, but it stood out for us. I'm sure this year everyone is going to be wearing Nike shoes and T-shirts."