Legal Aspects of International Trade and Enterprise ASE

Question: Discuss about theLegal Aspects of International Trade and Enterprisefor ASE. Answer: Overview of Company and Industry Western Australian farmers cooperative was established in 1914 as cooperative for providing services and products to western Australian farmers. The same got listed on ASE in 1984 and took form of a major retail conglomerate. Wesfarmers operate in three industries Chemical, Energy and Fertilizers; Safety into Industrials division and Resources. The main objective of each industry is to recognize the growth in the scale of the group. Capabilities have been presented by all the operations which are group in Chemical in both domestic and international markets. The value of fertilizer industry to Australian economy is of great importance as the value additions provides boost to the agriculture sector. It is continuously growing in accordance with demand of the season. The main issue faced by this industry is that approx 20% of acre cropping industries have been declined along with 2/3 of grazing industries. The same factors have affected the company to a major extent. Wesfarmers resource s are one of the significant export miners, with investment in two-world scale open cut coal mines. It includes Curragh mine in Queens land Bowen Basin and 40% interest in Bengalla mine in Hunter Valley of New South Wales. The company operates in areas such as supermarket; liquor; home improvement; energy and fertilizers; office supplies; hotel and convenience stores and industrial and safety products coal. Coles provides services relating to supermarket and also provide services through online stores through which services are provided all the time with an ease. In 2016 total revenue of $66,216,000,000 was earned including sales and revenue. It has 220000 employees in Australia comprising employees under all the subsidiaries under companys control. The countries in which company operates are Australia, Bangladesh, Ireland, New Zealand and United Kingdom. The headquarter of company is in Australia at 40 The Esplanade Perth, Western Australia. Regular Framework Affecting the Company International Law It can be said as a body of rules and norms for the activities that are carried outside the legal boundaries of a state (Badescu, 2016). Generally three international relationships are governed under this i.e.: Between states and states. Between states and person. Between persons and persons. International tribunals generally are treat municipal law as subservient to international law and make efforts for bringing municipal law in compliance with international norms. In most of the countries customary international law is adopted in accordance with the doctrine of incorporation. In any situation, once municipal courts determine that international law is to be applied to a specific case than the same is treated as a law and not fact. According to the views of Buckley and Casson (2016) MEAs are important environmental standards applicable to multinational corporations and that too are dependent on national laws. In case any MNC fails to apply required law on a local level the same would be liable for state liability and government is having power to impose strong stimulus on polluters. General absence of provisions relating to international environment liability is reflected by assessing the failure in including provision relating to liability for most major multilateral environment agreements between countries. The growth of international environmental law is treated as separate area of public international law from 1970 with Stockholm Conference on the Environment in 1972. The main objective behind the same was to emphasize adequate environmental responsibility on multinational corporations. Therefore, for renouncement from future legal obligation is a precondition for MNCs for ensuring a stable investment environment (Cavusgi and et.al. 2014). OECD The organisation of Economic Co-operation and Development was established in 1961 for providing a platform through which government can work together in order to share experience and resolve the common problems. According to its provisions enterprises should act within the framework of laws, regulations and policies in the countries in which they are operating (Dunning, 2014). For considering the relevant international agreements, objectives and principals companies are required to protect environmental, health and safety of general public for operating activities in order to contribute for a wider goal of sustainable environment. The specific norms which have to be followed by multinational companies are: It is necessary that an enterprise should contribute to environmental, economic and social progress with the object of achieving sustainable development. Encourage development of human capital through providing facilities and opportunities relating to employees (Hamilton and Webster, 2015). Make effort to refrain from discriminatory actions against workers who inform the practices adopted by organisation contravening the applicable law to management or other authorities. Developing plans for preventing, mitigating and controlling serious damage to environmental due to their operations comprising policies for immediate reporting for competent authorities. While addressing decision of the company, the foreseeable environmental, safety and health relating impacts evolved with the procedures and operations of company should be considered during their full life cycle with a view of avoiding them (Hufbauer, Jung, Moran and Vieiro, 2015). Impact of International Law on Wesfarmers Australias anti-dumping provisions have not been used by the company for protection against legitimate import competition. In case the same was being followed by company consumer price as well as business input cost would have increased but as proposal for reverse the onus has been given; the same represent that the importer is obliged to prove that dumping is not occurring. The same also prove that the provisions are not in contrary with the rules of World Trade Organization. Generally, GST of 10% is paid over most of the goods but on the goods which are exported outside Australia; no GST is paid and even the company are having right to claim credit for the GST which have been included in the purchase price of goods and services. The same benefit is availed by the company in case the goods are exported to the other international stores. However, the same benefit is available only if the goods are exported within 60 days. The company has prepared its books of accounts in accordance with Corporation Act 2001, AAS and pronouncements of AASB and International Financial Reporting Standards issues by IASB for complying with the provision of international law (Annual Report. Wesfarmers, 2016). Treaties, Conventions or Agreement Impacted Products and Services of Multinational Companies Existing tax treaties have provided a good measure of protection against double taxation and avoidance of fiscal evasion. The new bilateral tax treaty have been completely amended and revised current existed treaty through which improved integrity measures will be achieved. As per the views of Kaczorowska (2015), it has been specifically revised in areas like updated rules for exchange information relating to taxation and anti-avoidance and particularly limitation of benefits rule. Due to the renegotiated treaty effective outcome will be provided to stake holders and the same would contribute to Australia ageing treaty network. Corporate Tax A company is resident in Australia for the purpose of income tax purpose in following cases: Incorporated in Australia. Control management from Australia and carries on business in Australia or in other country An Australia corporate has to pay 30% general corporate tax for its worldwide assessable income (Lloyd, 2014). Taxation of Foreign Arrangements These are the measures which specify the manner in which foreign exchange gain and loss are evaluated and provide details relating to strict timing rules for ascertaining when foreign exchange gains and losses are to be recognised for the purpose of tax purpose (Mingst and Arregun, 2013). Environmental Law: State and Territories are mostly responsible for regulation and management of natural resources, pollution, and land used and developed State and Territories are mostly responsible for regulation and management of natural resources, pollution, land used and developed and cultural heritage. The authorities are having power for investigation and remediation of contaminated sites. According to Picciotto (2017), even severe penalties and compensations are imposed on the organisations, directors and employees for pollution as well as contamination offences. Provisions are also available for organizations which have made attempt to destruct native fauna and native vegetation as the same is prohibited on private land. Regulation of subdivisions relating to commercial industries, building construction and other areas are available in State legislation and the same is compulsory to be followed by all the corporations including MNCs. Other Provisions Enterprise should not contribute to adverse affect on matters covered by OECD guidelines; through their own activities and in case any such impact occurs, it should be addressed appropriately (Radebaugh, 2014). An effort should be made by organisations for mitigating negative impact which is directly related to operation, services and products provided by organisation or through business relationships (Roberts and et.al. 2016). As per the views of Subedi (2016), it is necessary that organisation ensure appropriate information disclosure relating to material matters relating to structure, financial position, ownership and governance. The information should be provided in accordance with the nature, size location and by considering business confidentiality and other competitive concerns. Impact of these Conventions and Policies on Product and Services of company Wesfarmers have contributed and promoted international best practices and principles relating to competition policy provided in Business Council of Australia. The purpose of competition law is to protect competition for the benefit of customer. The company is a diverse group of companies which thrive on competition, thus the same support those competitive policies and not protect the business from competition (SUSTAINABILITY REPORT. Wesfarmers, 2016). Ethical sourcing audit program has been adopted by the company for the purpose of mitigating risk relating to unethical practices occurring in procedure followed for goods and services provided by it. Bunnings material ethical sourcing is relating to acquiring sustainable timber and wood products (Submission from Wesfarmers to Competition Policy Review Issue Paper, 2014). It has been made sure that all the products are confirmed as originated from low risk sources comprising plantation, verified legal or certified responsible source for est. All the timber products have been sourced from independently verified forest. The same are verified from Forest Stewardship Council and PEFC. The criterion which is being adopted by Boards assessment of independence for ascertaining materiality of facts is in regard with ASX principals. The same is being applied in correspondence with Australia Accounting Standards and International corporate governance standard. The main focus is made by the company on sustainability in ethical sourcing and the same is done through increasing transparency of products across the supply chain of product whether domestic or international. The company is aware regarding the importance of environment and the critical efforts which are being made for reducing the greenhouse gas emissions. Some of the business is actively evolved in managing contaminated sites and the company indulge the remediation of those contaminated sites which were owned by Wesfarmers. Management appropriately monitors compliance with the risk management system and processes on a continuous basis for assessing the effectiveness in the system. The Coles Farm program is made available for the customers and suppliers so that it can improve accessibility and monitor environmental operations and support best- practices relating to farming. The company has adopted policies for reducing environmental impact for due to the store system of organisation though energy efficiency initiatives, waste diversion. The environmental responsibilities are appropriately understood by the office works. The same is operated beyond the products are being dispatched from the stores by continuing the circular economy by performing recycling programs. It can be accessed through analysing the increase in no. of printer cartridges from fifty thousand to approximately ninety eight thousand. Improvement has also been done by the management in energy efficiency by rollout of LED lighting in additional forty stores. Continuous improvement programs have been upgraded for reducing the overall impact of operations on the environment. Preference has been given to hundred percent recycled content which assures that wood products are used to the minimum extent. For reducing the impact of organisation on environment investment is done in the resources so that energy consumption can be reduced. Efforts are made to increase in the volume of waste recycled in the stores and even customers are encouraged to recycle to t he maximum extent. All the conventions and provision relating to environment has been followed by the company and the same has been appropriately reported in the sustainability report. References Books and Journal Badescu, V.S., 2016. European Business Law Challenges in the Global Economy. Knowledge Horizons. Economics, 8(1),P.164. Buckley, P.J. and Casson, M., 2016. The future of the multinational enterprise. Springer. Cavusgil S.T. and et.al. 2014. International business. Pearson Australia. Dunning, J.H., 2014. The Globalization of Business (Routledge Revivals): The Challenge of the 1990s. Routledge. Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University Press, USA. Hufbauer, G.C., Jung, E., Moran, T. and Vieiro, M., 2015. The OECD's' Action Plan'to Raise Taxes on Multinational Corporations. Kaczorowska-Ireland, A., 2015. Public international law. Routledge. Lloyd, I., 2014. Information technology law. Oxford University Press, USA. Mingst, K.A. and Arregun-Toft, I.M., 2013. Essentials of International Relations: Sixth International Student Edition. WW Norton Company. Picciotto, S. 2017. Taxing multinational enterprises as unitary firms. Radebaugh, L.H., 2014. Environmental factors influencing the development of accounting objectives, standards and practices in Peru. The international Journal of Accounting Education and Research. Urbana, 11(1). Pp.39-56. Roberts, P., Sykes, H. and Granger, R. eds., 2016. Urban regeneration. Sage. Subedi, S.P., 2016. International investment law: reconciling policy and principle. Bloomsbury Publishing. Online Annual Report. Wesfarmers. 2016. [PDF]. Available through https://www.wesfarmers.com.au/docs/default-source/reports/2016-annual-report.pdf. [Accessed on 27th April 2017] SUSTAINABILITY REPORT. Wesfarmers. 2016. [PDF] Available through https://sustainability.wesfarmers.com.au/media/1835/edited-extract-of-wesfarmers-2016-sustainability-report.pdf. [Accessed on 27th April 2017] Submission from Wesfarmers to Competition Policy Review Issue Paper. 2014. [PDF]. Available throughttps://competitionpolicyreview.gov.au/files/2014/06/Wesfarmers_Limited. . [Accessed on 27th April 2017]