Legal Aspects of International Trade

This report explores the legal aspects of international trade, focusing on the Australian multinational corporation BHP Billiton. It examines the legislative regulatory framework affecting the company, including environmental conservation, workplace safety, taxation, consumer laws, and national electricity regulations. The report also analyzes the impact of different treaties, conventions, and agreements on BHP Billiton's operations, highlighting the importance of bilateral and multilateral agreements in facilitating international trade. Desklib provides past papers and solved assignments for students.

Legal Aspects of International
Trade and Enterprise

EXECUTIVE SUMMARY
The report discussed about the legal aspects about the international trade. The
international trade law includes all the important and applicable laws, customs, rules and
regulations which are to be followed by the companies for handling the trade between two or
more countries. The report discussed about the MNC of Australia which is BHP Billiton. It
discussed that the company was formed as a merger between two companies that are Broken Hill
Proprietary (BHP) and Billiton in the year 2001. it also displayed that The tax laws affect the
operations of BHP in Australia since the company has no option to make a choice on whether to
cooperate with the tax authorities orders or not. The company pays the 30 percent corporation tax
as paid by other local firms in Australia. At last the report concluded that the legal aspect plays a
very important and crucial role in the global market.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1 Brief description of BHP Billiton.............................................................................................1
2 Legislative regulatory framework affecting the company........................................................1
3 Impact of different treaties, convention and agreements on the company...............................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
The international trade law includes all the important and applicable laws, customs, rules
and regulations which are to be followed by the companies for handling the trade between two or
more countries. The international trade law is an aggregate of the different types of legal rules of
the international legislation and the regulating the relations in international trade. The report will
outline a brief description of the Australian MNC BHP Billiton. Further it will discuss the
different legislative regulatory framework governing the company. At last the report will
highlight the different treaties, agreements and convention and its impact on the company.
MAIN BODY
1 Brief description of BHP Billiton
The BHP Billiton is the worlds the biggest resource and mining company with roughly
100,000 in around 25 countries (BHP Billiton 2019). In 2001, BHP Billtion was established by
merging the two big companies which are Billiton and Broken Hill Proprietary (BHP). The
Billiton company firstly originated as a tin mine on Indonesia's Belitung island in the 1860's.
While the BHP was firstly introduced in the year 1885 as a lead, zinc and silver producer in the
broken hill (Prinsley and Johnston, 2015). By this merger the company became the largest
producer of aluminum, manganese, iron ore, uranium, silver, titanium, copper and many more.
The market capitalization of the company is around US $166 billion and the revenue is around
US $52.8 billion. In the global market this company is situated in around 26 countries like Japan,
China, India, Manila, Philippines, United Kingdom, Colombia, Singapore and many more
countries (Lodhia and Martin, 2014).
2 Legislative regulatory framework affecting the company
A legislative framework is an accumulation of all the applicable laws relating to the
province. The legislative framework includes all the types of laws, different types of acts
applicable on the company, rules and regulations which are to be followed by the company and
various procedures and policies which are made by the company which are to be compulsorily to
be followed by the company and their employees for successful conducting of its business
operations. The laws are made by the government and the policies and regulations are made with
a motive that the organization and its employees will abide and follow the rules and regulations
to meet the objectives, goals and standards which the company has to achieve. The various types
of legislative framework affecting the company are discussed below -
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 Environmental conversation and workplace safety laws - The Australian government
has made many strict laws, rules and regulations that always have an impact on the
company's performance and working in the market. The company deals in the mining
sector where the working brings in many factors which leads to pollution in the
environment which may leads to tough situation which may increase different types of
hazards and risk which may deteriorate or degrade the society's environment and the
people living there may also get affected bu this damage to the society. In order to reduce
this damage to the environment the company needs to take licenses from the government
and also needs to fulfill the criteria relating to the usage of the different hazardous
chemicals and liquids and also should maintain the level of contamination of the
chemicals. Also the organisation must include the use of such products which prevents
the environment from decaying and degrading (Roche and Mudd, 2014). As a result of
this factor it affects or impacts the productivity level of BHP. This is so because of the
reason that the company has to produce the products in order to reduce environmental
pollution. Also, the management of the company is forced to invest in environmentally
friendly manufacturing equipment which are very costly and expensive in acquiring,
installing and operating in the business.
In addition to this the government of Australia has also made a provision for the
companies that the different organizations dealing in the mining sector has to develop
some health and safety measures and policies at the workplace including some preventing
and precautionary measures in order to protect the employees from the hazards and risk
present at the workplace and also must have provision to deals with any contingencies.
Alsong with this the Australia's government has also made a condition that the enterprises
dealing in the mining sector needs to record all the data and also to make sure that the
company provides health and safety training to the employees and the workers so that
there is no problem of any misshapening.
 Taxation - The company BHP Billiton has now become a well known global brand in the
sector of mining and carries its business and many countries. The tax policy is a type of
policy made by the government of Australia which includes certain fixed amount of
money which is charged or levied on the company's income and profits. The tax is a type
of fixed and compulsory financial charge which to be paid by all the companies to the
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government so that the government uses that money to fund different types of public
expenses. The company is under the tax rate of 30 percent which means that the company
has to pay 30 % tax on the income or the profit earned by the BHP Billiton. The
Australian government's policy are very strict and needs to be followed by all the
companies strictly. As the organization does not have any option to avoid the taxes so it
affects the operations and the working of the business very much. In any condition the
firm has to work together and needs to cooperate with the government. It is so because if
the business enterprises does not follow the government policies then the government
might cancel its licenses and might refrain the company from carrying on its operations.
 Consumer laws- The laws made by the Australian government for protecting the
consumers and their rights comes under the consumer laws. The law relates to many
issues which the consumers may face such as product safety law, unfair contract terms,
unasked customers, penalties etc. These factors might create a pressure or damage to the
company's business and the operations in the workplace and the market. For protecting
the consumers the Australian government makes provision that at time of dealing with
the consumers the company must communicate with the customers with an open and
friendly attitude and gestures (Fifka, 2013). There are many strict laws and legislations
being made in the respect of protecting the consumers which are to be strictly followed
by the different companies and these enterprises must provide the customers with high
and premium quality products in a non discriminative way to all its customers and clients.
 National electricity law and rules - Since the company deals in the mining sector and
involves use of many different machinery and equipment. The company needs electricity
to run all these machineries and equipment to complete the business operations. Also, the
company tries constructing the additional electricity transmission lines to improvise the
production, also the company uses electricity in making a co generation plant and a new
power plant which is a gas fired plant (O’Faircheallaigh, 2015). Also, in addition with
this the company also uses many other different types of electrical infrastructures such as
use of transformers, substations, different types of cabling and many more structures. For
checking the electricity usage there is an authoritative and regulating body is established
by the Australian government which is Department for Transport, Energy and
infrastructure (South Australia). For fulfilling the requirements of this law the company
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needs to be a registered participant under this law. This is necessary because if the
company will be a registered participant than the company can operate, control and also
own the electricity transmission system along with the generation plant.
 Environment protection act, 1993 - The reason behind the establishment of the
environment protection act is provide the security measures and protection for the
environment and the surroundings and another reason for the existence of this law is to
develop an environmental protection authority. This act is planned and designed in order
to protect, conserve, promote and boost the environment. Also, this act aims at
developing a sustainable environment and this is done because of the reason that the
resources are scarce in quantity so in order to use these scarce resources optimally and
efficiently this law is applicable to all the companies. This law takes into consideration
the facts that the business organistions are taking care of the environment while doing
their business or not and it also makes sure that whether the company is taking and
following the measures to protect and retain the environment and also in maintaining the
quality of the environment. Also, the company has to follow all the prescribed activities
which are listed in the Schedule 1 of the act.
3 Impact of different treaties, convention and agreements on the company
A treaty or convention is an agreement under the international laws which are entered
into by the parties at time of the doing of the international or global business. A treaty may also
be discussed as an official representation that expresses the agreement in terms of words and it
also specifies the different objective of the outcome of the event which is communicated and
acknowledged to the parties and their predetermined relationships (Filer, Burton and Banks,
2017). The treaties are of two different types which are bilateral treaty and the multilateral treaty.
In the following points there is an explanation of international treaties and agreements and their
impacts on the products and services provided by multinational company BHT Billiton in the
Australian market.
Bilateral treaty- this a type of treaty or agreement which is strictly signed between the two
different states or countries or parties. These two parties can either be any two states or any two
international organization or one state and one international organization. By allowing both the
parties to trade with each other they get the access to each others market and this increases the
quantum of the trade and also fosters the economic growth of both the countries.
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Australia and its companies like BHT Billiton has bilateral agreements with other
countries like Thailand, Denmark, Poland, Turkey and among others countries as well (Gardiner,
2015). One of the most crucial bilateral treaty of the company is selling uranium to China. The
China has started developing its nuclear business. In this the major raw material is uranium and
BHP Billiton is the largest company dealing in the uranium. So China requires uranium and BHP
Billiton wants to sell their uranium production so they both fulfill each others' requirement. So
they come into a bilateral contract. Also, after this contract becoming successful, the company
also has good trade relation with other countries for uranium to customers like in France,
Sweden, Finland, Japan, South Korea, Belgium, Taiwan, the United States United Kingdom and
many more countries.
Multilateral treaty- A multilateral treaty is a type of treaty in which three or more countries
come together and sign a contract with one another in order to do trade with one another. Each
country signing the treaty has some obligations towards another country. The multilateral trade
helps the participating countries to increase the trade of each country. Also, the use of
multilateral treaties helps BHP Billiton in standardizing the regulations for all the partners. A
multilateral treaty is a type of treaty in which three or more countries come together and sign a
contract with one another in order to do trade with one another. Each country signing the treaty
has some obligations towards another country. The multilateral trade helps the participating
countries to increase the trade of each country. Also, the use of multilateral treaties helps BHP
Billiton in standardizing the regulations for all the partners. The different examples of the
multilateral treaty of the BHP Billiton is that the company is planning to develop a 2000 MW
aluminium smelter in the city of Democratic Republic of Cargo. Along with this the BHP
Billiton also holds seven mining estalishments and enterprises consisting of 355,000 hectares
area in Central Khalimantan. Another example of this type of treaty is the one of Australian-New
Zealand Free Trade Area (ASEAN) whose members include Brunei, Indonesia, Laos, Malaysia,
the Philippines, Thailand, Myanmar, Vietnam, Cambodia, and Laos.
As a result of this treaty the goods and services in Australia have become more affordable
and also the quality of the products and the services have increased and it satisfies the customer
base within the country.
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CONCLUSION
The legal aspect plays a very important and crucial role in the global market. The
international law is referred to as different rules, regulations and principles which governs that
how the states may restricts or regulates the international trade in the goods and the service. The
report outlined a brief description of the BHP Billiton which is an Australian MNC. Further it
discussed about the different types of legislative regulatory framework governing the company.
At last the report highlighted the different treaties, agreements and convention and its impact on
the company.
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REFERENCES
Books and journals
Billiton, B.H.P., 2014. BHP billiton.
Cleveland, S.H. and Dodge, W.S., 2014. Defining and Punishing Offenses Under Treaties. Yale
LJ, 124, p.2202.
Filer, C., Burton, J. and Banks, G., 2017. The fragmentation of responsibilities in the Melanesian
mining sector. In Earth Matters (pp. 163-179). Routledge.
Gardiner, R.K., 2015. Treaty interpretation. Oxford University Press, USA.
Lodhia, S. and Martin, N., 2014. Corporate sustainability indicators: an Australian mining case
study. Journal of Cleaner Production. 84. pp.107-115.
Millar, T.B., 2015. Current International Treaties. Routledge.
O’Faircheallaigh, C., 2015. Social equity and large mining projects: Voluntary industry
initiatives, public regulation and community development agreements. Journal of
Business Ethics. 132(1). pp.91-103.
Prinsley, R. and Johnston, E., 2015. Transforming STEM teaching in Australian primary
schools: everybody’s business.Canberra, Australia: Australian Government, Office of
the Chief Scientist.
Roche, C. and Mudd, G., 2014. An overview of mining and the environment in Western
Australia. In Resource Curse or Cure? (pp. 179-194). Springer, Berlin, Heidelberg.
Online
BHP Billiton 2019 [Online]. Available through : <https://www.thebalance.com/company-profile-
bhp-billiton-2340279>.
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