Legal Aspects of Multinational Companies

The assignment discusses how multinational companies like British Petroleum face challenges due to treaties and agreements in Australia, affecting their ability to operate freely. It emphasizes the importance of complying with these regulations to avoid penalties and ensure smooth business operations.

LEGAL ASPECTS

Executive Summary
In this file, the topics which had been covered are related with British Petroleum where
brief introduction has been given related to the company. In second part, all legislative regulatory
framework are discussed which affect the organisation. In the ending segment, various treaties,
agreements has explained which have the impact on product and services of the company. Even
various examples have been also given through which it can be easily understood that how
various aspects do impact on British Petroleum.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1) Brief description of an organisation........................................................................................1
2) Identify any legislative regulatory framework which is affecting BP PLC in Australia.
Discuss in detail that how it is affecting the organisation...........................................................1
3) Identify any treaties, conventions or agreements that have impacted on the products or
services of British Petroleum in Australia. How does it impact the provision of these product
and services?...............................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Legal Aspects can be explained as the indispensable part of a successful business
organisation in any part of the world. It is necessary as it reflects the policies and legal
framework which is designed by the legislative body the government under which any of the
organisation is required to work. In this assignment the chosen organisation is BP PLC, Australia
which deals in the area of oil refineries. This file will include the detail information about the
company with legislative regulatory which impacts on the organisation.
MAIN BODY
1) Brief description of an organisation.
The chosen organisation for the project is BP PLC (British Petroleum). It is one of the
multinational company which deals across the world. This company mainly focus on in the field
of Oil refineries and gases. It is one of the British company. There are around 5700 employees
who working for BP PLC within the territory of Australia (BP Career, 2018). While talking
about the world there are near around 73000 employees who are working for British Petroleum
(BP at a glance, 2019). It is one of the largest company in the world where they deal across 78
different countries to earn maximum amount of profit (BP Annual Report and Form. 2018). The
headquarter of the company is located in London, United Kingdom. This company was first
founded on 14th April 1909 where Helge Lund is the current chairman of the corporation.
2) Identify any legislative regulatory framework which is affecting BP PLC in Australia. Discuss
in detail that how it is affecting the organisation.
There are number of policies and rules which are implemented by the regulatory
framework every year. It is necessary that those policies must be followed by those companies
all those corporate sector business organisation. Even it is important that while making any kind
of law and policies the supreme body must consider the important factors so that both
organisation and nation can take advantages of it. If this policies are commenced for the benefit
of single side then it will not be possible to manage everything in smoother way. While talking
about overall advantages and disadvantages, it mainly creates the problem for organisation
because it doesn't allow to take their decision of own due to which organisation is required to
change their policies as per the changes in legislation. When it comes to Australia, they always
try to commence those law and policies through which environment and local people are not
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being hurt and for that there are number of laws which can be found related to Petroleum and
Gas product. It is mandatory for each and every association that they are working as per the
requirement of law else number of penalties can be imposed at any period of time. There is the
law in Australia that while exploring any of the natural resources company is required to take the
permission from the authorised department of law and if they get the permission then only they
are allowed to work in that specific area. Even none of the organisation is not allow to extend the
limit of exploring the natural resources. The oil and gas regulation of Australia states that any
organisation can perform there task easily still they are not allowed to conduct those business
activities through which cultural heritage get affected. Also, companies are not allowed to setup
there plant near to cultural heritage site (Oil and gas regulation in Australia: overview, 2018).
Oil and Gas plant always falls under the category of Hazardous industry so there is the
rule that any similar form of organisation is not allowed to give employment to those employees
who are not expertise in this filed. It is also necessary that proper training must be given with
proper safety equipments which increases the expenses of organisation. The taxation policies of
Australia says that each and every organisation must pay the tax amount which is equal to 30%
of the total profit generated through out the financial year (Corporate - Taxes on corporate
income, 2019). Some of the additional act and law which must be followed by offshores
petroleum companies are offshore petroleum and greenhouse gas storage (Safety) Regulation,
2009, offshore petroleum and greenhouse gas storage (Resource Management and
Administration) Regulations 2011 and offshore petroleum and greenhouse gas storage
(Environment) Regulation 2009.
Above mention act law and policies must be followed by each and every organisation and
among them British Petroleum is also required to follow all of them which affect their day to day
activities. The company is not allow to take of the decisions of their own because they must
consider each and every rule and regulation while taking any of the decisions. There are many of
the instances where company wants to give employment to those individual who wants to work
for the organisation but here company is not allow to give job opportunity to them because
machines and equipment are of hazardous nature where non expertise are not allowed
(Maniruzzaman, 2017). British Petroleum must think that while conducting any of the business
activities they are required to ensure that they will not harm any of the heritage, even they will
consider each and every environment factors as that should not be affect. This will one of the
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reason that company will be affected. British Petroleum has expanded there business to Australia
because it is one of those rear country which is full of natural resources but due to the plan and
policies of the Corporate law they are not allowing to work as per there plan and policies. It is
one of those reason that company is unable to generate additional number of employment within
the premisses of Australia. Even it is necessary for British Petroleum that they must create
disturbance to any of the domestic company as Australian government always give the priority to
small and local companies.
While talking about corporate tax rate, it is on higher side due to which many of the
business organisation is not allowing to work freely. While talking about British Petroleum, they
are also required to pay 30% tax due to which their annual profit also decreases when it is
compared with other countries in which they operates. Even there are other additional
requirements for this country which includes preparing annuals accounts, fulfilling the
requirements of Corporate Social responsibility, appointing and removal of directors, auditor etc
which increases the expenses of time which also required additional time period as proper
procedure is required to be followed in this condition.
3) Identify any treaties, conventions or agreements that have impacted on the products or
services of British Petroleum in Australia. How does it impact the provision of these
product and services?
There are different tries which have been done between United kingdom and Australia in
the corporate sector so that business activities between both the country can be conducted easily.
In present scenario, UK is Australia's seventh largest trading partner where they have the
agreement of two way trading. It is giving lots of benefits to all those Multinational Companies
which are working in each others country. Both the country have establish the joint trading
Working Group for the betterment in future so that free trade agreements can be done when there
is any requirement. There is the treaty that all the goods and services which any of the nation will
provide must be of super fine conditions through which relation and investment between both the
countries can be enhanced. There is the treaty related to double taxation which incurred
additional burden on any of the business association (Prospective Australia-United Kingdom
Free Trade Agreement, 2019).
There are some of the additional treaties and agreements that if any of the business
organisation tries to conduct business activities in each others country then they are not required
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to work as a monopoly which means they should not hurt any of the small trading organisation.
Even there are many of the section on both the government wants to have certain changes so that
positive results can be achieved where most important is that authorised authority wants to
remove barriers to trade in goods. Also, UK and FTA (Foreign Trade of Australia) wants to
expand services linkage and investment ties through which more profits can be provided to
investors. Even in Australia there are most of the places where all MNCs are not allowed to sale
there product from the specific limit. In addition, it is said there non of the company which is
producing or manufacturing the product which are related to natural resources then they are not
allowed for outsourcing.
This all agreements, treaties and convention do have some sort of impact on British
Petroleum because that are not allowing them to perform their business activities in a smoother
manner. For example: they tries to produce more quantity of gas and petroleum product so that
they can export them to earn more amount of profit just after fulfilling the needs and desire of
local people but in this situation British Petroleum is not allowed to do that as it is against the
law and policies. When it comes to distribute product and services to the market there is the rule
that each and every product which has been manufactured should be check so that actual quality
can be found which is one of the expensive process (Widdows, 2017). It incurred extra expenses
for the company and even through this company will not be allowed to supply its product in the
market on given period of time. This all policies do impact on the company services are unable
to be distributed which created negative impact on day to day affair of a company.
There is the treaty between British Petroleum and other companies of Australia which
deals in the sector of Petroleum and Gases, that their company will not conduct any such activity
due to which one of to suffer from losses and deficit. This is one of those impact on British
Petroleum that they will not be allowed to sell their product and services on cheaper rate to take
grab additional number of customer to the services. Even there is the treaty that, their company
will never try to use any of the natural resources near to the sea area as it can harm the natural
resources of the country and even it can create additional problem for the organisation because
they will not be allowed to utilise natural resources properly through which their working ability
will also decrease and result will be reflected on the revenue of the association. The treaty related
to double taxation also create the problem problem for British Petroleum because they are
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required to pay tax two times: once in Australia and after that they are also required to pay in
United kingdom which doesn't allow company to work freely within the working place.
It is one of the Multinational company which is working since very long period of time
still they have to face various kind of issues because treaties and agreements which have been
commenced in Australia are against them due to which they are not able to take control in the
market place (Loo and Wessel, 2017). It will be crucial for them that how they can overcome
with this treaties and policies from which they can easily perform their task easily to take
additional advantage from the market place. Here, company must try to think that how they can
explore natural resources up to the quantity which has been allotted to them just to meet their
targets on time.
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CONCLUSION
It can be concluded from the above file that legal aspects plays crucial role in each and
every department because every work is required to be managed as per those criteria.
Multinational Companies have lots of work which need to be done while commencing any
activities as heavy penalties can be imposed at any period of time. There are various treaties,
agreement and conventions which need to fulfilled any while commencing any of the business
organisation those must be considered.
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REFERENCES
Book & Journals
Loo, G. V. D. and Wessel, R. A., 2017. The non-ratification of mixed agreements: Legal
consequences and solutions. Common market law review. 54(3), pp.735-770.
Widdows, K., 2017. What is an agreement in international law?. In The Law of Treaties (pp. 73-
105). Routledge.
Maniruzzaman, A. F. M., 2017. International development law as applicable law to economic
development agreements: a prognostic view. In Globalization and International
Investment(pp. 71-126). Routledge.
Online
BP Career. 2018. [Online] Available
Through:<https://www.bp.com/en/global/bp-careers/professionals/locations/
australia.html>
BP at a glance. 2019. [Online] Available
Through :<https://www.bp.com/en/global/corporate/what-we-do/bp-at-a-glance.html>
BP Annual Report and Form. 2018. [Online] Available
Through :<https://www.bp.com/content/dam/bp/business
sites/en/global/corporate/pdfs/investors/bp-annual-report-and-form-20f-2018.pdf>
Oil and gas regulation in Australia: overview. 2018. [Online] Available
Through :<https://uk.practicallaw.thomsonreuters.com/3-531-2165?
transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=
1>
Corporate - Taxes on corporate income. 2019. [Online] Available
Through :<http://taxsummaries.pwc.com/ID/Australia-Corporate-Taxes-on-corporate-
income>
Prospective Australia-United Kingdom Free Trade Agreement. 2019. [Online] Available
Through :<https://dfat.gov.au/trade/agreements/prospective/aukfta/Pages/australia-uk-
fta.aspx>
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