HI5015: Wesfarmers Limited - Treaties & Legal Aspects of Trade

This report provides an overview of Wesfarmers Limited, an Australian multinational company, and its operations within the context of international trade law. It identifies and discusses the regulatory frameworks affecting Wesfarmers in Australia, including corporate tax, labor laws, food safety regulations, and environmental protection measures. Furthermore, the report analyzes the impact of international treaties, conventions, and agreements on Wesfarmers' goods and services, such as the Australia-New Zealand Closer Economic Relations agreement and anti-counterfeiting trade agreements. The report concludes that compliance with these legal and regulatory frameworks is crucial for Wesfarmers' sustainable development and global expansion.

Running head: WESFARMERS LIMITED 0
Legal Aspects of International Trade and Enterprise

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Table of Contents
Introduction................................................................................................................................2
Wesfarmers Limited...................................................................................................................3
Regulatory Framework affecting Wesfarmers Limited.............................................................3
Treaties, Conventions or Agreements that Influence Goods and Services of Wesfarmers
Limited.......................................................................................................................................5
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
With the advancement of technology and globalisation, the corporations have expanded their
business in multiple countries. Both small and large organisations are offering goods and
services to customers from different countries. The international corporations are required to
examine and comply with various domestic and foreign legal regulations to ensure that they
fulfil the necessary legal requirement. Modern corporations can improve their reputation by
effectively comply with their regulatory framework because it ensures that company is
fulfilling its legal duties in an ethical manner. This report will focus on ‘Wesfarmers Limited’
operations in Australia and the regulatory framework apply to the company. Further, the
report will analyse the impact of various treaties, conventions, and agreements on the goods
and services offered by Wesfarmers limited.

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Wesfarmers Limited
Wesfarmers limited was founded in 1914, and its headquarters is situated in Perth, Western
Australia. Primarily the company focuses on its retailing business, but it also has a
predominant interest in various other sectors including coal mining, fertilisers, chemicals, and
safety products. The company has more than 220,000 employees worldwide, and it has more
than 500,000 shareholders (Wesfarmers, 2017). The corporation has more than 2,000
employees in New Zealand; in case of Asian countries such as Bangladesh, it has around
5,000 stakeholders. Wesfarmers limited had revenue of AU$65.98 billion in 2016; Richard
Goyder is the CEO of the corporation (Wesfarmers, 2016).
The company has various subsidiaries including Coles Supermarket, Cole Express, Bunnings,
Kmart Tyre & Auto Service, Vintage Cellars, and many others (Wesfarmers, 2017). The
subsidiaries of Wesfarmers limited operate in New Caledonia, China, India, Singapore,
Indonesia, Hong Kong, Bermuda, and United Kingdom. The New Zealand headquarters of
the firm is situated in Auckland, New Zealand, while in India the corporation intends to open
their apparel retain chain for expansion opportunities and increase business revenue.
Regulatory Framework affecting Wesfarmers Limited
A regulatory framework is defined as an essential infrastructure that supports the
implementation and directions of various regulations, policies, activities, and law followed by
a corporation (Sheenan, 2009). The regulatory framework of retail industry provides various
rules and regulations that focus on governing the practices and offering of retail products
offered by energy and grocery retailers. The company implements new policies to face
market challenges and continuously satisfy its customers' requirements; these policies are
required to comply with regulatory framework of different counties. The regulatory
framework provides provision regarding various functions of the retailing industry including
safety, health, trade practices, environment, food safety and privacy. The multinational
corporations are subject to 30 percent corporate tax just like local firms (Australian Taxation
Office, 2017). The location of headquarters has a considerable influence on a company’s tax
liability because in some countries there is higher tax rate than compared to other.
Australia and New Zealand have entered into an agreement to regulate double taxation
convention properly. The international organisation usually finds loopholes in regulations to

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avoid paying large amount of tax, therefore, they carefully expand in other countries and
cautiously select the place for their headquarters. Wesfarmers limited is also required to
comply with regulatory framework of labour law; the company complies with various safety,
health, wages, and benefits regulations enacted by the government for protection of workers.
The company complies with Workplace Relations Act 1996 to ensure they maintain equally
in workers and fulfil the necessary requirement for their safety (Cooney, Cooney and
Cooney, 2006). In New Zealand, the company fulfil the requirement of Labour Framework of
Employment Relations Act 2000 to comply with the labour law. Wesfarmers limited value its
employees and considered them a valuable asset, therefore, the corporation also comply with
the regulatory framework of Health and Safety in Employment Act 1992, Equal Pay Act
1972 and Human Rights Act 1993 (Robson, et al., 2007).
Wesfarmers limited pays special attention to its workers that are situated in developing
countries such as Bangladesh; due to lack of education and poverty, living condition of
workers is bad (Afrin, 2014). Therefore, the company provides appropriate training and
salary packages to upgrade the living standards of its workers which also benefit the company
by increasing its reputation. The corporation properly complies with Bangladesh Labour Act
2006 to ensure they fulfil the requirement of the regulatory framework. In the United
Kingdom, the company complies with Employment Rights Act 1996 to comply with
provisions relating to childcare, maternity leave, working hours and others. In Australia, the
company is required to follow the regulatory framework of food safety regulations (Azizul
Islam and Jain, 2013). Wesfarmers limited offers food products to its customers through
supermarkets and departmental stores, therefore, they have to ensure that their products are
not hazardous to consumers’ health.
The products are required to be environment-friendly and safe for the consumption or else the
government can impose penalties on the corporation. Wesfarmers limited is required to
comply with the standard provided by the Food Standards Australia New Zealand (FSANZ)
(Mhurchu, 2007). In recent years, the role of international organisation regarding the
protection of the environment has grown. The corporations are expected to establish a code of
standard to ensure their practices are not polluting the environment, and they are complying
with the environment regulatory framework. From 2000, the government of Australia started
imposing Goods and Services Tax (GST), and Wesfarmers limited has to pay this tax as well.
The current rate of GST in Australia is 10 percent (Australian Taxation Office, 2017).

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The GST provides a uniform tax which reduces the requirement of corporations to file
separate tax for different operations; it establishes uniformity in business policies and
strengthens the taxation regulations. Wesfarmers limited is required to comply with various
mining laws that are implemented by the government for the protection of workers and
environment. In India, the corporation complies with Mines and Minerals (Development and
Regulation) Act, 1999 which provide a regulatory framework that is necessary to be fulfilled
by the corporations for ensuring labour safety. The WorkSafe New Zealand Act 2013 and
Mines Regulation 2014 have implemented by the government of New Zealand and the United
Kingdom respectively; Wesfarmers is required to comply with these regulatory frameworks
and implement them into their business strategies (New Zealand Petroleum and Minerals,
2017).
Treaties, Conventions or Agreements that Influence Goods and
Services of Wesfarmers Limited
Treaty is defined as an agreement under international law in which the parties are two
different counties. Primarily, the treaties are adopted by the countries to promote and support
the trading practices between countries that positively affect their national income and
economic growth. The government of Australia and New Zealand has entered into various
treaties such as Australia and New Zealand Closer Economic Relations, New Zealand Free
Trade and ASEAN-Australia (Barton, Gwynne and Murray, 2007). On the other hand, the
New Zealand government has implemented Anti-Counterfeiting Trade Agreement which
abandoned the trading of counterfeit goods. The coal mining business of Wesfarmers limited
did not negatively influence by this treaty because the firm trades no counterfeit or
exploratory goods. This allowed company to maintain a positive reputation among the
customers because it shows that it ethically performs its operations. Along with retail
industry, Wesfarmers limited focuses on mining and energy operations as well which allowed
them to gain a competitive advantage over its primary competitors — Woolworth and BHP
Billiton (Dagge, 2016).
The subsidiaries of the company also assist them to formulate a collaborative business
contribute to the national income. For example, Bunnings established 15 new sites from
which seven were leasehold trading, six were freehold trading, and two were freehold
development sites. The company allowed Wesfarmers to trade in 11 out of 15 sites so that
their customers can easily access their product and services throughout Australia (Nottage,

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2015). Similarly, Wesfarmers limited can increase its global expansion through the
international initiatives started by its subsidiaries. Additionally, Wesfarmers limited followed
the protocol that was signed between India and Australia in 2011, which demonstrate how
International Corporation can avoid double taxation along with fiscal evasion. Due to this
treaty, the source country only has to pay the cross-border service tax when the company
conducted trading for more than 183 days in 12 months. This approach assists the source
country in gaining profits for their natural resources by trading with another country, these
practices between Australia and India is supported by the legislation called International Tax
Agreement Act 2014.
In case of trading or exporting any hazardous waste or material, the company is required to
take a permit from Ministry of Economic Development that is situated in Australia
(Kuppusamy and Anantharaman, 2014). The subsidiary of the company, Coles, signed a
long-term supply agreement through which they offer competitive prices. Furthermore,
WesCEF mitigates the threat of market demand for products, by incorporating long-term
contracts and establishing price mechanism that focuses on supporting short-term spot
agreements. By establishing this approach, the corporation is able to satisfy the interest of
each associated stakeholder through the business procedure, and it has allowed Wesfarmers
limited to lead the retailing market in Australia. In case of coal and mining operations, the
company has signed a coal supply agreement with the Stanwell Corporation Limited.
The agreement allowed the company to enter into a three-year partnership agreement which
resulted in increasing their association with the indigenous community. Wesfarmers limited
focuses on providing paid maternity leaves, flexible working hours, maintaining the inclusive
culture, keep in tough programs, and on-site vacation areas (Booth and Coveney, 2015).
These programs ensure that corporation is complying with various mining regulations. The
treaties and agreement between various countries assist Wesfarmers in easily expanding its
business at a global stage. Governments implement such treaties to promote and support
international trading because it increases national income and economic growth. Wesfarmers
limited is required to properly assess the regulatory frameworks and other governmental
regulations that influence its business and comply with them while formulating business
policies.

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Conclusion
From the above observations, it can be concluded that international corporations are required
to comply with the regulatory framework of various countries. Wesfarmers Limited is
Australia’s largest retailing corporation; the company also operates in fertilizer, coal mining,
safety products and chemicals industry. The company complies with various domestic and
international regulations that are implemented by the government for safety and protection of
customers, workers, and environment. The corporation is required to pay various tax levied
by the government such as Goods and Services Tax and Corporation Tax. The operations and
performance of the business are influenced by the various treaties, conventions, and
agreements. The free trade treaty established between Australia and New Zealand promotes
and support trading practices between the firms of both industries. Wesfarmers limited enter
into various agreements with its subsidiaries and government from different countries to
expand their business globally. For effective growth and sustainable development, the
corporations are required to assess their regulatory framework and comply it while
formulating business policies.

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References
Afrin, S., 2014. Labour Condition in the Apparel Industry of Bangladesh: Is Bangladesh
Labour Law 2006 Enough?. Developing Country Studies, 4(11).
Australian Taxation Office., 2017. Company tax rates. [Online] Australian Taxation Office.
Available at: https://www.ato.gov.au/Rates/Company-tax/ [Accessed on 30/11/2017]
Australian Taxation Office., 2017. GST. [Online] Australian Taxation Office. Available at:
https://www.ato.gov.au/Business/GST/ [Accessed on 30/11/2017]
Azizul Islam, M. and Jain, A., 2013. Workplace human rights reporting: a study of Australian
garment and retail companies. Australian Accounting Review, 23(2), pp.102-116.
Barton, J.R., Gwynne, R.N. and Murray, W.E., 2007. Competition and co‐operation in the
semi‐periphery: closer economic partnership and sectoral transformations in Chile and New
Zealand. The Geographical Journal, 173(3), pp.224-241.
Booth, S. and Coveney, J., 2017. ‘Big Food’ — The Industrial Food System. InFood
Democracy. Springer Singapore.
Cooney, S., Cooney, S. and Cooney, S., 2006. Time and money under WorkChoices:
understanding the new Workplace Relations Act as a scheme of regulation. UNSWLJ, 29,
p.215.
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biggest Australian. [Online] The Daily Telegraph. Available at:
https://www.dailytelegraph.com.au/business/wesfarmers-overtakes-rival-woolworths-and-
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Mhurchu, C.N. and Gorton, D., 2007. Nutrition labels and claims in New Zealand and
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