HI5015 Legal Aspects of International Business: Unilever Analysis

This report provides a comprehensive analysis of the legal aspects influencing Unilever's international business operations, specifically within the Australian market. It begins with an executive summary and an introduction to Unilever, detailing its industry, global presence, and employee statistics. The core of the report examines the legislative regulatory framework impacting Unilever, including taxation regulations, the Corporations Act 2001, the Competition and Consumer Act 2010, and various food regulations. The report then investigates the impact of international treaties, conventions, and agreements on Unilever's products and services, focusing on the China-Australia Free Trade Agreement (ChAFTA), the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), the ASEAN-Australia-New Zealand FTA (AANZFTA), and the Australia – United States Free Trade Agreement (AUSFTA). The report highlights how these agreements facilitate trade, reduce legal complexities, and impact Unilever's ability to offer products in different markets, ultimately influencing its profitability and competitive advantage.

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Legal Aspects of International Business

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Executive Summary
This report analysed the example of Unilever to understand the legal aspects that affect its
operations in the international market. The information regarding its headquarters and
industry is analysed in this report. The number of employees which Unilever has hired in
Australia and worldwide are also analysed in this report. This report also evaluated the
legislative regulatory framework of Unilever to analyse its legal obligations. The formation
of treaties, conventions and agreements and their impact on products offered by Unilever
in the international market is also analysed in this report.

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Contents
Introduction of Unilever..........................................................................................................3
Legislative Regulatory Framework of Unilever......................................................................3
Impact of Treaties, Conventions and Agreements on Unilever.............................................5
References.............................................................................................................................8

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Introduction of Unilever
Unilever operates in the consumer goods industry, and it is a leading brand that operates
around the globe. It was founded in September 1929, and since then the company has
acquired a number of leading brands that offer different products to its customers
(Unilever, 2019). It has acquired leading brands such as Ben & Jerry’s, Lipton and many
others. It offers clearing agent, food and beverages and a diverse range of beauty
products to its customers. It is a British-Dutch corporation, and its headquarters is situated
in London, United States. The company has hired many employees around the world to
manage its operations. Currently, it has over 172,000 employees that oversee its
operations globally (Statista, 2018). The company has also established its operations in
Australia, and it manages its operations with the assistance of around two thousand
employees (Unilever, 2015).
Legislative Regulatory Framework
The provisions imposed by the government in Australia are enforceable on the operations
of Unilever. Compliance with these guidelines is mandatory for the corporation, or else it
becomes difficult for the organisation to continue with its operations. There are serious
legal consequences which could be faced by Unilever in case the company did not comply
with these guidelines (Maier, 2015). There are different objectives for the implementation
of these policies. Mainly, the government wanted to make sure that companies did not
violate the rights of stakeholders when they conduct their operations. Unilever is bound by
these guidelines, and the violation of these policies affects the operations of the company.
Taxation Regulations.
Unilever is subject to the taxation policies which are implemented by the Australian
government. There are different taxes which are imposed by the government on the
products and services of Unilever to make sure that the company pay taxes which goes to
the economic development of the organisation. The company has to make sure that it pays
the Goods and Services Tax (GST) to the government. This tax is imposed on the
company since it offers products and services in the country. The rate of this tax can be
fluctuated by the government, and currently, it is imposed at the rate of 10 per cent
(Avalara, 2019). Along with this tax, the company is also bound to pay corporate tax to the
government. This tax is imposed by the government on the companies that operations in

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Australia. The rate of this tax can be changed by the government as well, and currently, it
is charged at the rate of 10 per cent.
Corporations Act 2001 (Cth) (CA).
The companies that are operating in Australia are governed and bound by the policies
given under the CA. The provisions regarding registration and management of the
company are given under this act. These provisions are followed by Unilever as well to
make sure that the company did not breach its duties. As per these provisions, the
company has to make sure that it conducts regular director meetings and the annual
general meeting of its shareholders (Bottomley, 2016). The company also has to issue
reports and accounts to the Australian Securities and Investments Commission (ASIC).
The ASIC is the key regulator that is responsible for enforcing the provisions of the CA on
companies operating in Australia.
Competition and Consumer Act 2010 (Cth).
The Australia government supports the promotion of competition in the country. It also
focuses on protecting customers from violation of laws or provisions. Therefore, this act is
implemented by the government which covers two main areas which include competition
and consumer rights. The competition laws make sure that companies such as Unilever
did not use their resources to avoid competition in Australia. Unilever has to make sure
that it did not eliminate competition from the market since it could hinder the growth of the
economy of the country (Wallbank, MacKenzie and Beggs, 2017). In the second part,
provisions are imposed in regards to ensuring that customer rights are protected. As per
this law, the rights of consumers are recognised and protected by the courts.
Organisations that violate these provisions have to face legal penalties which are imposed
by regulators or courts.
Food Regulations.
Compliance with food laws is mandatory for companies that offer them to customers. Many
brands of Unilever offer food products to customers. Thus, the company is bound by the
guidelines including the food regulations of Australia. A good example is the Food
Regulations 2016 which provides specific standards which are necessary to be maintained
by companies such as Unilever. In this regulation, the company has to apply for food
licence and also license for the display of its products (Tonkin et al., 2016). Various fees
and charges are also imposed under this Act on the operations of Unilever to make sure

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that it avoids violating the rights of customers. Another relevant provision is the Food Act
2006 which is implemented by the Australian government. This act applies to the
operations of the company in Queensland, Australia. The guidelines given under this act
are focused on ensuring that Unilever did not misuse any of the rights of its customers by
reducing the quality of its food products.
Since many of the products of Unilever are offered in New Zealand as well, the Food
Standards Australia New Zealand Act 1991 also applies to the operations of the company.
The government has provided various food safety standards under this act to maintain the
quality of food products which are offered by the companies to customers (Berry and
Gribble, 2017). As per these standards, the company has to make sure that it did not offer
low quality food products to its customers that could adversely affect their health. The
guidelines given under these acts are implemented on the operations of Unilever based on
which the company has to make sure that it did not harm the interest of its customers by
its operations. Compliance with these food standards is important for Unilever to make
sure that its customers receive high quality food products and their rights are not adversely
affected by its operations or else it could face legal penalties.
Impact of Treaties, Conventions and Agreements on Unilever
Unilever has to comply with provisions included under different treaties, conventions and
agreements which are formed between countries in which the company manages its
operations. Governments form these treaties and agreements in order to build trading
relationships between two and more nations that open new trading opportunities for
countries. Various regulatory compliances are removed under these agreements and
treaties that assist organisations in removing legal complexities when they expand their
business operations in foreign countries (Castle, Le Quesne and Leslie, 2016). In the case
of Unilever, there are various treaties, conventions and agreements which affect the
products and services which the company offers to its customers. These treaties make it
easier for Unilever to expand its operations in different markets which is beneficial for the
sales of products and services of the company.
China-Australia Free Trade Agreement (ChAFTA).
One of a key treaty that affects the products of Unilever is the Free Trade Agreement
(FTA) that is formed between Australia and China. This is a major treaty that affects the
products of Unilever when it offers them in the Chinese market. Under this treaty, the

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company is not subject to various regulatory policies which are imposed by the Chinese
government (Kingshott et al., 2019). The products of Unilever are popular in the Chinese
market; however, the prices of these products increase when the company exports them to
China. However, the FTA formed between these two nations resulted in removing a
number of legislative regulatory compliances which are imposed on Unilever. The
government has removed various legal provisions and duties which are imposed on the
products of Unilever under this FTA. It resulted in making it easier for the company to
quickly offer its new products to the Chinese market without paying high fees which did not
increase their prices (Kingshott et al., 2019). Thus, it benefits the company by increasing
its profitability and providing it a competitive advantage.
Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA).
Australia and New Zealand are important markets for Unilever due to which the treaties
which are formed between these two countries affect the products of the company.
ANZCERTA is a relevant treaty that is formed between the two countries that assist
companies in conducting their operations in both nations. Under this treaty, provisions and
trading policies are implemented by the countries to build policies that support the
economic growth of these countries (Castle, Le Quesne and Leslie, 2016). Due to the
growth of the trading relationship between these two countries, economic growth is
promoted. This treaty affects the operations of Unilever since the company is able to
effectively offer its products in both countries without facing complex legal formalities. The
guidelines for maintaining food standards are similar in both nations and this treaty
Unilever in easily export its product to New Zealand after passing the food standards in
Australia (Castle, Le Quesne and Leslie, 2016). The costs which are incurred in the
payment of duties and fees are also removed under this treaty due to which the prices of
Unilever remain affordable in New Zealand which enables the company to expand its
customer base in both nations.
ASEAN-Australia-New Zealand FTA (AANZFTA).
This is another relevant FTA which is formed between these two countries that affect the
products and services of Unilever. In this treaty, the government has implemented a free
trade area which benefits multinational corporations. When they export their products
through this free trade area, it becomes easier for them to avoid legal complexities that
increase the efficiency of the exports of the company. Due to these policies, the company
is able to make sure that its products remain available throughout New Zealand without

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difficulties relating to legal complexities (Chaisse and Jusoh, 2016). As per these
provisions, the government has also removed various fees and duties which are
implemented on companies; thus, it resulted in benefiting the company. The products of
the company are available in New Zealand at reasonable prices due to this treaty since the
company did not face legal and financial difficulties while exporting them.
Australia – United States Free Trade Agreement (AUSFTA).
Unilever also offers many of its products in the United States, and it is a major market for
the company. The FTA which is formed between the government of the United States and
Australia benefits the organisation. The legal complexities imposed by the government of
the United States resulted in making it difficult for multinational corporations to establish
their operations in the country (Mitchell, Sheargold and Voon, 2017). Unilever is no
exception since the company is also able to offer its products in the market of the United
States due to this treaty. In this treaty, the provisions and standards which companies
have to maintain are reduced substantially. Along with these provisions, the duties and
charges which are imposed on multinational companies are reduced as well. Since there is
a positive trading relationship between Australia and the United States, it becomes easier
for Unilever to ensure that its products are available for its customers in the US market.
Thus, it treaty positively affect the products offered by Unilever in the market of the United
States.

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References
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https://www.avalara.com/vatlive/en/vat-rates/international-vat-and-gst-rates.html
[Accessed 30/04/2019].
Berry, N.J. and Gribble, K.D. (2017) Health and nutrition content claims on websites
advertising infant formula available in Australia: A content analysis. Maternal & child
nutrition, 13(4), p.e12383.
Bottomley, S. (2016) The constitutional corporation: Rethinking corporate governance.
Abingdon: Routledge.
Castle, M., Le Quesne, S. and Leslie, J. (2016) Divergent paths of state-society relations
in European and trans-Tasman economic integration. Journal of European
Integration, 38(1), pp.41-59.
Chaisse, J. and Jusoh, S. (2016) The ASEAN comprehensive investment agreement: The
regionalisation of laws and policy on foreign investment. Cheltenham: Edward Elgar
Publishing.
Kingshott, R., Sharma, P., Hosie, P. and Davcik, N. (2019) Interactive impact of ethnic
distance and cultural familiarity on the perceived effects of free trade agreements. Asia
Pacific Journal of Management, 36(1), pp.135-160.
Maier, C.B. (2015) The role of governance in implementing task-shifting from physicians to
nurses in advanced roles in Europe, US, Canada, New Zealand and Australia. Health
Policy, 119(12), pp.1627-1635.
Mitchell, A.D., Sheargold, E. and Voon, T. (2017) Regulatory autonomy in international
economic law: the evolution of Australian policy on trade and investment. Cheltenham:
Edward Elgar Publishing.
Statista. (2018) Total number of Unilever employees worldwide 2003-2018. [Online]
Available from: https://www.statista.com/statistics/254366/total-number-of-unilever-
employees-worldwide/ [Accessed 30/04/2019].

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Tonkin, E., Webb, T., Coveney, J., Meyer, S.B. and Wilson, A.M. (2016) Consumer trust in
the Australian food system–the everyday erosive impact of food labelling. Appetite, 103,
pp.118-127.
Unilever. (2015) Unilever Invests $50 million in NSW operations. [Online] Available from:
https://www.unilever.com.au/news/press-releases/2015/unilever-invests-50-million-in-nsw-
operations.html [Accessed 30/04/2019].
Unilever. (2019) Our History. [Online] Available from: https://www.unilever.com/about/who-
we-are/our-history/ [Accessed 30/04/2019].
Wallbank, L.A., MacKenzie, R. and Beggs, P.J. (2017) Environmental impacts of tobacco
product waste: International and Australian policy responses. Ambio, 46(3), pp.361-370.