International Business: Legal Framework for BASF in Australia

This report provides an executive summary and detailed analysis of the legal and regulatory aspects impacting BASF's international business operations, specifically in Australia. It identifies key legislative frameworks such as antitrust laws, employment laws, discrimination laws, data protection, and health and safety regulations that affect BASF. The report also explores the impact of various treaties, conventions, and agreements, including the Germany-Australia Tax Treaty, the Germany-Australia Air Treaty, and the Trade Agreement between Germany and Australia, on BASF's business activities. The analysis highlights the importance of compliance with these regulations to ensure successful operations and avoid legal issues within the Australian market. The report covers the chemical industry's regulations, employment standards, and data protection requirements. It also includes an introduction providing background information on BASF's global presence and its operations in Australia.

Legal aspects of international business
and enterprise

Executive Summary:
This report is focussed upon the legal and the regulatory aspects that the businesses can face
in the international business environment and the report deals with the legislative framework
that can affect the operations of BASF in Australia. The antitrust laws in the chemical
industry, employment laws, discrimination laws, data protection cat and health and safety law
tends to affect the operations of BASF in Australia. Also, the report deals with the treaties,
conventions and agreements that affect the operations of BASF in Australia and can pose
challenges or act as a hindrance in the Australian environment.

Contents
Executive Summary:..............................................................................................................................2
Introduction:..........................................................................................................................................4
Legislative Framework that affects BASF:..............................................................................................4
Identification of conventions, agreements and treaties:.......................................................................6
Conclusion:............................................................................................................................................8
References:..........................................................................................................................................10

Introduction:
The legal characteristics of an international business play a significant role in the procedure
of determining the success of the business (Haidar, 2012). The globalization has increased the
number of multinational enterprises that operates throughout the world and BASF which
operates in the chemicals industry with their headquarters based in Ludwigshafen in Germany
incorporated in the year 1865 before 153 years, has number of legal regulations that guides
the organization. BASF has their business established in almost all over the world in 80
countries and Australia is one of them along with other continents that include Asia, Africa,
America and Europe. Though BASF expanded in only 80 countries through joint venture and
subsidiaries, there are 190 countries where the products of the organization are supplied in
various industries. BASF has rich history in Australia and have operated for 90 years in the
country with 12 sites of production and with 501 employees as of the data available from
their Australian website, though the company employs more than 115,400 employees in their
global operations (www.basf.com, 2018).
Legislative Framework that affects BASF:
For an organization that operates in a business environment, there are a few legal and
legislative frameworks that can affect the organization and this can either hinder the
organization or can also help in the growth of the organization as well (Eberlein et al., 2014).
For BASF, there are a few legislative frameworks that affect the organization as cited below:
Chemical industry antitrust laws:
There are many people in Australia that are concerned regarding the chemicals that are
present in the products in the current days and this is due to the reason that chemical can
impact the health of a person of the environment as well. There are a few rules and
regulations that have been set by the government of Australia that guides the chemicals
supply of the country and in order to conduct their business in Australia, BASF should
comply with these rules. It is required that the chemical companies that are working in the
country should register their chemicals so that the duplication of the products can be
minimized and this can also help in the process of avoidance of unnecessary burdens upon
the industry (Kent, 2012). The regulations of the chemical industry cover the medical and the
pharmaceuticals, industry related chemicals and also the chemicals that are used for domestic

purpose, scheduling poisons, transportation of dangerous products, management of chemicals
in environment, veterinary and agricultural chemicals, safety maintenance in the workplace
and so on (Rae, 2016).
There are a few key industries in which BASF supplies their chemicals in Australian and
those include the agricultural industry, construction, mining as well as manufacturing sectors.
Thus, BASF should comply with the rules of Australian government in order to conduct their
business in the country and should provide protection to the employees of the organization
form the hazardous effects of chemicals and should provide them with equipments that can
help in the process of protecting the employees. Moreover, for transporting the chemicals
from warehouse to different buyers of the products, safety transportation process should be
used by BASF as well. Furthermore, chemicals should not be exposed in the open
environment which can cause hazards to the environment and individuals or any form of
living things and lastly, BASF should also keep in mind that they should conduct fair trading
of the chemicals which is mandatory as per the government of the country as well as should
follow the consumer protection laws of Australia.
Discrimination Laws:
This is another law that BASF should keep in mind in order to conduct the business in
Australia and the law states that there should not be any unlawful discrimination based upon
the sex, age, religion, ethnicity, gender and so on. There are a few laws that are included in
the Australian anti-discrimination laws and those include Sex Discrimination Act of 1984
which states that any individual at workplace should not be discriminated upon the basis of
his/her gender (Thornton, 2013). Also, Age Discrimination Act of 2004 states that age should
not be the boundary for any worker, until and unless he/she is capable to perform the work.
Disability discrimination act of 1992 states that no disable persons should be discriminated
by an organization or its management or staffs and racial discrimination act of 1975 states
that no person should be discriminated based upon their race.
Thus, in order to maintain the business in Australia, BASF should follow these laws strictly
which can help the management of the organization to stop discrimination and follows the
rules and regulations of Australia.
Employment Laws:

Employment laws also forms a significant part of the legal system of operating in Australia
and BASF should comply with the employment laws of the country in order to operate in
Australia. Within this law, the maximum weekly hours that an employee can be kept at
workplace by the employers has been mentioned and also the amount of annual leaves that
the employee can avail (Twomey, 2012). Moreover, the public holidays that the employees
are pertained to and parental leaves are also a part of the employment law of Australia.
Thus, in order to operate in Australia, following these laws are a significant part of the
organization and disobeying these laws can bring the organization towards a legal trouble.
Health and Safety Laws:
The latest health and safety law in Australia was amended in the year 2017 and the law states
that the employers are responsible for providing a safe environment at the workplace which
can promote the health of the employees and also that the health of the employees can be
protected.
Being in a chemical industry, BASF employees are exposed to chemicals most of the times
and thus this law is required to be followed by BASF by providing the employees with safety
equipments and gadgets which can protect their health and follow the regulations set by the
Australian government.
Data Protection Laws:
The data protection act of Australia is contained under the privacy laws of the country and as
per this law, it has been stated that the employee data should be protected by the employers at
any cost as losing these data might cause harm to the employees (Howells et al., 2017). Data
breach can bring in legal trouble for the organization and thus the protection of the employee
data is necessary for BASF due to the fact that it can increase the sustainability of the
organization and also help in avoidance of legal trouble.
Identification of conventions, agreements and treaties:
The services or the products of an organization can be affected by the conventions,
agreements and the treaties that have been made between two countries and this can affect the
business of the organization as well along with the sales and the revenue gained from the

products (Terpstra et al., 2012). There are a few treaties, conventions and agreements that can
affect BASF products in Australia are cited below:
Germany and Australia Tax Treaty:
Since 13th December, 2016, the tax treaty between the Australia and Germany came into force
which has affected BASF and this has helped in changing the commercial exercises and the
present treaty policies of the country as well as the domestic system for tax as well. This
treaty has minimized the avoidance of tax by the business, thus BASF will have no scope to
avoid any kind of tax in Australia and the corporate tax rate of Australia being as high as
30%, this has reduced the amount of revenue making of the organization (Maurer et al.,
2017). But this has created a good environment for the business to pay taxes and act in a legal
way by following the regulations of the country.
This treaty has also helped the government of the country to collect the debts form the
businesses and has also created a healthy environment for tax payment in the country. Tax
system integrity has been built with the help of this treaty and this has also improved the
amount of tax transparency.
Germany and Australia Air Treaty:
This treaty was signed in 22nd May in the year 1996 and while this treaty was signed, it had
opened new routes between the airports of Germany and Australia which has created new
business routes and demand for the German products and services in Australia and vice versa
(Bartlik, 2016). With more flights from various airports from Germany carrying goods and
cargos to Australia, BASF enjoys this facility since then and this treaty has helped them to
carry their products to Australia and also has increased the amount of their innovation in the
country. Air treaty between Australia and Germany has also helped in the process of carrying
officials for the purpose of meeting in order to develop new products by BASF in Australia
which are in demand and this has helped in the development of the products demand of
BASF in the country. Also, this treaty has enabled in any combination of air travel through
any routes from Germany to Australia and this has increased in carrying people from all over
Germany to Australia for the official meting which has increased the demand of the BASF
products in Australia.
Trade Agreement between Germany and Australia and agreed Minute:

This agreement came into act in the year 1995 in Commonwealth of Australia and was an act
formed between the government of Germany and Australia. This act states that the parties or
the business from the country that will contract for trade in other country will have to offer
some benefits to the customers and the consumers of the other country and this can help in
the process of diversifying the offerings as well as strengthen the link of trade and relation
between the two countries. Offering benefits to the customers of the country by charging a
low price of the finished goods or raw materials can help the company to exempt the freight
and the cargo charges at the airport and also exportation and importation of goods can be
done at free of cost as per this treaty (Johnson et al., 2012). There are also a few rules and
regulations that will be there linked with the importation and the exportation of the goods and
cargos. Also, the party that will be offering their products to the other countries will receive
favour form the government while importing their products or raw materials from other
countries and requirements, regulations and the laws will vary for them as set by the
government of country while signing this treaty. Moreover, there will be special assistance
received during the distribution of the goods from the government and also for intention to
sale or purchase new materials for the operations purpose.
BASF being a company of Germany and operating in Australia will receive these benefits
and will be able to offer a lower price for their products in the country. They will also get
import and carriage and cargo charges at the airport free of cost when they will import
products or raw materials from their country. The importation as well as exportation of the
products and the cargos can also be done by BASF at free of cost which is as per the rules of
this treaty and thus BASF will receive favour in terms of the products that they sell in
Australia.
Conclusion:
From the discussion above, it can be concluded that legal and regulatory aspect of the
business plays a significant role in the business environment. Also, when the organization
operates in a global environment and is a global player, the legal and regulatory frameworks
are stricter in nature and avoiding these regulatory frameworks of disobeying the laws can
bring in legal trouble for the business (El Kharbili et al., 2008). Thus following the legal and
the regulatory framework can be a significant part of the business to maintain their reputation
and also sometimes following the regulatory frameworks can help in the process of
increasing the sales and revenue.

As stated, following the legal and the regulatory ethics can help BASF to increase their sales
with the help of the treaties and conventions and also following the legislative frameworks in
Australia can help in avoiding the legal troubles as well.

References:
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https://www.basf.com/au/en/company/about-us.html [Accessed 4 Sep. 2018].