Legal Aspects of International Business and Enterprise

This document discusses the legal aspects of international business and enterprise, with a focus on Royal Dutch Shell. It explores the legislative framework, data privacy laws, and various treaties, conventions, and agreements that impact the company's operations in Australia. The document provides insights into the legal obligations and compliance requirements for Shell in relation to corporate, environmental, taxation, and employment laws.

legal aspects of international business and enterPRISE

ROYAL DUTCH SHELL PLC 1
Executive Summary
With the increased globalisation, and enhancement in the technological reforms, the
companies are increasingly expanding their business activities across the borders.
However, the aim to internationally expand comes with a responsibility to follow the
international business practices laid down by the various organisations in this regard.
Further, the companies have a mandatory responsibility to stick to the regional
statutes and laws as pronounced in the home country as concerning the business
and industry of the particular entity.
The focus of the work is the business operations of the company Royal Dutch Shell
which is a global gas and oil producing company. The various legal aspects are
highlighted for the company in context of Australia corporate climate and the
international legal regimes.

ROYAL DUTCH SHELL PLC 2
Contents
Introduction.................................................................................................................3
Legislative Framework...............................................................................................3
Data Privacy Laws......................................................................................................3
Treaties, Conventions and Agreements.......................................................................4
Conclusion..................................................................................................................6
References...................................................................................................................7

ROYAL DUTCH SHELL PLC 3
Introduction
Royal Dutch Shell is an Anglo-Dutch company that has it’s headquarter located in
the Netherlands (Nobes, 2014). However, the company was incorporated in the UK
in the year 1907. In order to discuss the business activities of the company, this is to
state that the company is engaged in the practices of exploration, refining, power
generation, and renewable energy activities. It belongs to the gas and oil industry
(Petroleum.co.uk, 2019). This company has measured as the fifth largest company
in terms of annual revenue across the globe. The same is also known as Shell. As
per the data available on the official website of the company, in 2018 the same had
86000 employees globally (Shell.com, 2019). The company is active in more than 70
countries.
The company has its operations in Australia also. Royal Dutch Shell is operating in
Australia with the help of its subsidiary company named Shell Australia Pty Ltd. It is
a company incorporated in Australia.
Legislative Framework
As the company is operating through its Australian Subsidiary company, many of the
Australian legislation are applicable to the same. It includes laws of different areas
such as environmental laws, Corporation law, employment law, taxation laws, and
many others. In the following section of this report, the laws of Australia will be
discussed that influence the working in this nation.
Corporations Ac 2001 (Cth):- Corporations Act 2001 is the corporation law legislation
of Australia. This act provides all the provisions related to a company such as
obligations of directors, rights of members, liquidators, creditors, and other parties.
This act further states annual reporting requirements and requirements of the board
and members meeting for different types of companies. In this manner, it affects the
working of the companies. In addition to this, the duties of directors are another area
where this act plays an important role. It consists of general and special duties of
duties. It states the manner in which directors and officers are required to behave in
cases of insolvency and other incidents. Further penalty provisions are also there. It
means the provisions stipulated under this act are mandatory to follow for companies
of this nation and in case of breach of any provisions, companies have to pay related
fines and penalties. In this manner, while working in Australia Shell has to consider
the provisions of this act as any breach can affect its financial position by way of
monetary penalties.
Data Privacy Laws
As the company is a UK based company, hence the same is required to follow
provisions of the Data Protection Act 1998 that is applicable throughout Europa.
Nevertheless, as the company is working in Australia, the same has to adopt the
provision of Privacy Act of this nation also. Privacy Act 1988 is the privacy protection
law of Australia and while dealing with Australian suppliers and clients, the company
has to act according to this act. This legislation provides the manner in which data
related to individuals can be collect and use. This act provides 13 Australian Privacy
Principles, which every company working in Australia has to follow. If a company
collect or use private information of individuals outside of the manner provided under
this act, then the same seems to be in breach of Privacy Act 1988 and in this manner
the same becomes responsible to pay penalties. Shell also consider these privacy

ROYAL DUTCH SHELL PLC 4
principles and other provisions of the subjective act while managing and sharing
personal information of individuals in relation to its Australian business affairs and in
this way, the act affects the working of the company as it enhances the level of
compliance for the same.
The Environment Protection and Biodiversity Conservation Act 1999:- As mentioned
above the company is active in the Oil and gas industry hence it affects the
environment in a significant way. Exploration and refining are lead activities of the
company, which affect natural surroundings. Government of every nation remains
concern about the environment and therefore every nation has its environmental
laws. To ensure that Shell will generate and provide the energy in a reasonable and
responsible manner, the Environment Protection and Biodiversity Conservation Act
1999 (EPBC Act) is applicable to the same. This act is a federal act, which provides
a framework related to Australian environmental protection (Environment.gov.au,
2019). Because of the applicability of this act, the company has to give its report on
safety, social, health, security, and environmental performance outcomes. Carbon
emission is another area where the company has a great responsibility. Shell
developed its environmental protection policy considering the provisions EPBC Act.
Further, the company is also becoming responsible for environmental issues such as
carbon emission and economic footprints.
Taxation Laws: - Direct and indirect, both types of taxes are applicable to Australian
business of shell. Starting from the direct tax, this is to state that being a multi-
national company, working in Australia, Shell is liable to pay corporate tax on its
revenue earned from Australian business by the rate of 30%. In addition to this direct
tax, the company is also required to pay Goods and Service Tax to the Australian
Government on the total amount of goods and services provided in the territory of
Australia. The rate of GST is 10% on most of the goods and services. As tax is an
important part of finance of any company hence in this manner, the same affect the
Australian operations of the shell.
Fair Work Act 2009:- This act is the lead legislation, which governs and manages the
relationship between employer and employee. As the name implies the working of
employers to be conducted in a fair manner. Further the same outlines rights and
obligations of the employer as well as employees. This act provides minimum
standards related to salary, entitlements, leaves, and other benefits of employees.
Companies in Australia are liable to work according to this act and Shell in respect to
its Australian employees has to manage the policies accordingly. Fair Work
Regulations 2009 are equally applicable to this company. In order to discuss the
manner in which this act and regulation affect the working of the company this is to
state that while developing employment contracts with employees, the company
need to consider provisions and requirements of this act that increases its legal
obligations.
All the above-mentioned acts are applicable to the company and affect its working.
These are few lead legislation and in addition to these, there are many other legal
aspects which are there to influence the working of Shell in Australia.

ROYAL DUTCH SHELL PLC 5
Treaties, Conventions and Agreements
The treaties, conventions, and international agreements govern the business
operations of the entity, when the same are conducted across the borders. When the
international customer base is catered, it is imperative for the entities to abide by the
global rules of the trade as laid down by the various international regulators. Some of
the treaties as applicable to the entity Shell are elaborated as follows.
2003 Australia-UK Double Taxation Convention
The Dutch Shell company being incorporated in the UK and having the worldwide
business, which include the region of Australia. As stated above, the company
operates in Australia by the means of subsidiary known as Shell. The operations of
subsidiary are taxed in Australia as per the Australian tax regimes. In order to avoid
the double taxation of income while reconciliation, the company falls under the
purview of the Australia-UK Double Taxation Convention. By virtue of the said
convention, the preserves the right of Australia to tax the capital gains and
additionally the other reforms propose better FDI flow in between the both the
countries (UK Government, 2019). Thus, the said convention not only keeps intact
the rights of the country in which the company is operating other than the home
country, but also is beneficial for the company and its clients. The company Shell’s
profit would no longer be subjected to the double tax in UK as well as Australia, and
the company can take the rebate or the credit of the taxes paid in the Australia while
reporting the income to the UK regulators. The said convention is in interest of the
consumers as the same prevents the increment in the cost of the goods sold by
virtue of tax and enables the provision of the products at the competitive prices.
United Nations Global Compact
Being the global energy producer of gas and oil, the company is bound by the
principles of the UN Global Compact. By the virtue of these principles, the entity
Shell is required to consistently enhance the company’s value system, and develop a
principle base approach of doing business. The company Shell is a signatory of the
said compact since 26 July 2000 (UN Global Compact, 2019). In response to the
said participation, out of ten principles of the corporate sustainability practices, the
company is bound to follow the UN Goal 7 on “Affordable and Clean Energy,” UN
Goal 8 on “Decent Work and Economic Growth,” and UN Goal 13 on the “Climate
Action.” Thus, it is the responsibility of the company to abide by the said global
principles and align their business strategies and operations with the principles to
render the sustainable returns to the stakeholders connected with the company.
However, the pact is non-binding on the companies, but companies sign it voluntarily
to streamline their reporting and to disclose the practices, which in turn build up their
corporate image. The company Shell must establish a culture of integrity, uphold its
basic ethical responsibilities towards the people and the planet, and set the stage for
long-term success.
Paris Agreement
The United Nations Framework Convention on Climate Change (UNFCCC) further
influences the operations of the global multinational enterprises operating in
Australia. The Paris Agreement was signed by the Parties to the UNFCCC to
facilitate the actions and investments that are required for the sustainable low carbon
future. The convention has been enacted to address the climate change issues

ROYAL DUTCH SHELL PLC 6
across the globe and encouragement of the environment protection. By the virtue of
the Paris Agreement the signatories have a respo9nsibility to contribute to the
climate efforts through the nationally determined contributions” (NDCs). This is in
further addition to strengthening these efforts in the years ahead. It is significant to
note that the company Shell has been taking an active part in the reduction of its
carbon footprints by the devising of policies and enhancement of the business
operations on the said lines. The company was a part of the International Emissions
Trading Association, which had further participated in the writing of the Paris
agreement.
Global Reporting Initiative Index Principles
The global reporting initiatives are designed by the +GRI, which is an independent
international organization that has initiated the principles of the sustainability
reporting since the year 1997. The companies are required to comply with the said
principles and present the report on the corporate social responsibility practices, in
the identification and the management of the risks, and further facilitate the
organizations to seize new opportunities. The company Shell is required to employ
the sustainable reporting and business practices to disseminate the useful
information about the future business policies of the company with regards to the
environment and community development.
Conclusion
As per the discussions conducted in the previous parts, it can be stated that an
international business entity is required to abide by a range of regional as well as the
global statutes. The assignment shed light on the various regional laws, as
applicable to the company Royal Dutch Shell’s subsidiary in Australia. The
assignment further highlighted the various treaties, conventions, and international
agreements, which are required to be complied with, by the entities.

ROYAL DUTCH SHELL PLC 7
References
Corporations Ac 2001 (Cth)
Environment.gov.au. (2019) Environment Protection and Biodiversity Conservation
Act 1999 (EPBC Act). [Online] Available at: https://www.environment.gov.au/epbc
[Accessed on 09/05/2019].
Fair Work Act 2009
Nobes, C. (2014). International Classification of Financial Reporting: Third Edition.
Oxon: Routledge.
Petroleum.co.uk. (2019) Royal Dutch Shell. [Online] Available at:
http://www.petroleum.co.uk/royal-dutch-shell [Accessed on 09/05/2019].
Privacy Act 1988
Shell.com. (2019) Who We Are. [Online] Available at: https://www.shell.com/about-
us.html [Accessed on 09/05/2019].
The Environment Protection and Biodiversity Conservation Act 1999
UK Government (2019) Australia: tax treaties [Online] Available at:
https://www.gov.uk/government/publications/australia-tax-treaties
UN Global Compact (2019) Royal Dutch Shell plc. [Online] Available at:
https://www.unglobalcompact.org/what-is-gc/participants/8082-Royal-Dutch-Shell-
plc[Accessed on 09/05/2019].