Case Study: Exploring the Fiji Government and FIJI Water Conflict

This case study delves into the complex and strained relationship between the Fijian Government and FIJI Water, particularly since 2008. The core issues revolve around the government's suspicion of FIJI Water engaging in transfer pricing and its persistent efforts to tax the company. The analysis suggests that the Fijian Government holds a stronger negotiating position due to its ability to seek international tenders from other companies willing to comply with its tax structure. Both parties, however, possess leverage: the government can address tax evasion and unfair pricing, while FIJI Water contributes significantly to employment and CSR activities. Improving the relationship requires FIJI Water to address tax evasion concerns and ensure fair pricing, while the government should avoid actions that could destabilize the company's operations. The central conflict stems from disputes over natural resources and tax evasion, highlighting the need for a negotiation that prevents future tax evasions without granting undue tax-free status. Desklib provides a platform for students to access similar case studies and solved assignments.

Running head: CASE STUDY ANALYSIS
Case Study Analysis
Name of the Student
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Author Note

1CASE STUDY ANALYSIS
Answer 1
The relation that the Fijian Government and the FIJI water shares has been very tense and
it has so happened since the year 2008 when the huge exporter came to the knowledge of the
military Government (Ravuvu et al 2017). The major issues that arose were pertaining to the
Fijian Government’s faith on FIJI Water that they are indulging in transfer pricing and also the
Government’s untiring effort to try to tax the company. As a result of the conflict between the
two parties, the tension is also growing. In the given circumstances between the two parties and
in the face of the negotiation, it can be stated that the Fiji Government is in a better position and
also has a position of strength to make negotiations. The reason behind staying in a position of
strength is because if the FIJI water does not operate in Fiji, the Government shall have other
options to opt for. The Fiji Government shall call for international tenders of big companies of
international repute and these companies will function as per the tax structure which is demanded
by the Fiji Government (Reid et al 2017).
Answer 2
In the given scenario, both the parties can leverage power and also force a negotiation to
strike a deal.
Fiji Government
Fiji water is accountable for exploiting the natural resources and is not contributing
enough to taxes. Therefore the Government has a leverage in terms of extraction of money. Fiji
water has indulged in unfair pricing and to save taxes, they have differently priced their products.
Fiji Water has underpriced their water exports and they have been selling their products at a
higher [price in other countries (Chia and Honkawa 2017). If it is found by the Government that

2CASE STUDY ANALYSIS
the company is not paying additional taxes, the Government can seek for better options from
other international companies.
Fiji Water
The company Fiji Waters has been part of various social activities and have contributed
immensely to CSR activities. Fiji water has been of immense help in providing employment to
400 workers in the Government and as a result the workers in the Government has also earned
the salaries in the Government. If Fiji is made to stop working, then the workers who had
benefitted will be left unemployed (Jones, Murray and Overton 2017).
Answer 3
The relationship between the Fiji Government and Fiji Water has been very strained due
to the ongoing issues of tax evasion as well as giving out impounding directives that will end the
legacy that the company has had in the country. The relationship can be worked upon from both
ends and one way that the relationship between the two can be bettered is through making the
company pay the taxes they have evaded. When the issues of tax evasion were made by the
Government, the company threatened that they will not function anymore and therefore they
decided that they will shut down. The company made a declaration that they will stop working in
the territory of Fiji if the taxes are not retracted by the Government. Therefore, instead of making
threatening statements, it is the duty of the company to act fairly and also pay the taxes on time
which has been due on them. Instead of unfairly pricing their products to gain unfair advantage,
the company should price the waters equally in all territories. As a company working in a
reputed domain, it is their sole responsibility to pay the taxes on time and gain the trust of the

3CASE STUDY ANALYSIS
Government (Sroypetch, Carr and Duncan 2018). The relation between the Government and the
company is fiduciary and is based on trust.
Answer 4
The bone of contention between the Fiji Government and Fiji Water is that over natural
resources as well as tax evasion. The negotiation that was initiated by the two parties was
regarding the substantial increase in the extraction taxes which applied mostly to the cases of the
large extractors. The extraction tax should only be applied to the company and not to its
competitors, the tax evasion should only be limited to the company that is evading, that is, the
Fiji Water. In cases of discriminatory pricing, it is essential to point out that the company
decided to shut down the operations but even though the company raised their voice over the
discrimination, they claimed that they will again reopen and thereafter pay the taxes. The
negotiation should be to strike a deal where the company cannot make any tax evasions and also
they should not be made to enjoy any tax free status.

4CASE STUDY ANALYSIS
References
Chia, C. and Honkawa, B., FIJI WATER COMPANY, LLC, 2017. Bottle. U.S. Patent
Application 29/529,536.
Jones, C., Murray, W.E. and Overton, J., 2017. FIJI Water, water everywhere: Global brands and
democratic and social injustice. Asia Pacific Viewpoint, 58(1), pp.112-123.
Ravuvu, A., Friel, S., Thow, A.M., Snowdon, W. and Wate, J., 2017. Protocol to monitor trade
agreement food-related aspects: the Fiji case study. Health promotion international.
Reid, S.A., Rodney, A., Kama, M. and Hill, P.S., 2017. A process for developing multisectoral
strategies for zoonoses: the case of leptospirosis in Fiji. BMC public health, 17(1), p.671.
Sroypetch, S., Carr, N. and Duncan, T., 2018. Host and backpacker perceptions of environmental
impacts of backpacker tourism: A case study of the Yasawa Islands, Fiji. Tourism and
Hospitality Research, 18(2), pp.203-213.