Regulatory frameworks affecting multinational
Describe about the Comparative Business Sequence Analysis for Business Frameworks.
BHP Billiton is an Australian conglomerate involved in mineral operations. It has also invested in other countries like Brazil, Peru and Colombia. BHP Billiton is an energy exporter and operates seven segments in mineral resources mainly, base metals, diamonds, stainless steel, liquefied natural gas, energy coal and oil (Axelrad and Kagan, 2000). BHP Billiton is in a process of splitting of its core assets in order to concentrate on products such as iron ore, copper, coal, oil and potash. As of March 1, 2016, came into effect a new operating model that will bring together the operations of the firm in three new areas: Oil, Minerals in the Americas and Australia.
It was established in 2001 and is one of the biggest companies in Australia. It is also listed in the Australian stock exchange and several other countries globally establishing itself as one of the biggest mineral exploring company in the mining industry (DeSombre, 2006). It was formed after a merger between BHP and Billiton mining companies and its headquarters are in Melbourne, Australia. As of 2015 the number of employees working in BHP Billiton Australia were 29,670 according to the companies websites, however, the global mark stood at slightly more than 80,000 employees.
Regulatory frameworks affecting multinational
Multinational companies have come to control most strategic sectors of the world economy: energy, finance, telecommunications, health, agriculture, infrastructure, water, media, industries Armament and feeding. The capitalist crisis we live today has done nothing but strengthen the economic role and capacity of policy of large corporations influence, how soon do business with natural resources such as BHP Billiton, utilities and real estate speculation, as futures markets energy and food, patents on life or land (Dieterich, n.d.). With this in mind regulatory frameworks have been put by the various governments including the Australian government.
Tax regulations
The accumulated huge profits by transnational corporations have their origin in the mechanisms of extraction and appropriation of economic wealth that underlie the workings of capitalism (Haccius and OBÌ€rien, 2001). The increasing exploitation of workers and the constant wage devaluation, unlimited pressure on the environment for raw materials and natural resources, financial speculation both the surplus obtained as anything that can be bought and sold, the commodification of more and more spheres of human activities and the priority enjoyed by the mechanisms of reproduction of capital against the processes that enable sustaining life have served effectively to key executives and shareholders of large corporations become billionaires.
Tax regulations
Given the increasing poverty and global inequality and rising social rejection including miners in Australia that have been generated, large corporations seeking to build a story with which it can question its centrality in the global economy. it is convincing that companies are more part of the problem than are part of the solution. Generally speaking, companies rather than governments and civil society, are better prepared to be catalysts for innovation and transformation towards a sustainable world
First, that transnational corporations like BHP Billiton have not contributed to an improvement in the quantity and quality of employment, nor the provision of the services they offer practically have not invested in maintenance, have hardly favored technology transfer processes and, the end of the day, they have not brought hand the progress and welfare for the people of the region, which was what was promised with arrival after privatization and neoliberal reforms of the eighties and nineties (Hornell and Vahlne, 2013).
Second, along with economic considerations there is a whole list of serious social, political, environmental and cultural factors that are associated with the internationalization of business of these companies.
And, thirdly, those who have gained thus have not been precisely the working classes and social majorities, but the owners of those companies, recipients of capital income and politicians and businessmen who have made gold through the revolving doors that connect the public sector and the business world.
Benefits transfer. Sometimes multinationals transfer the benefits of the parent company, based in a European country with high tax burden, to group subsidiaries located in Australia with low or no taxation.. This trap is that a multinational based in the Australia creates a subsidiary in a country with low taxes, which in turn grants a loan to the parent company. Thus the multinational based company ends up paying high interest rates that reduce your tax bill. The directive will limit the amount of interest that a large group can be deduced. This will increase the amount of taxes you pay.
Double taxation of dividends. Dividends entering the EU from third countries are often exempt from taxation to avoid double taxation. Some multinationals exploit this exemption to benefit from double non-taxation, that is, simply to escape the tax. This occurs when a company based in the EU invests in a company located in a non- country with low tax burden.
Transfer of intellectual property- Often, assets such as intellectual property or patents, are not taxed when transferred from one member state to a country. The tax reform requires intellectual property and patent output.
The aggressive tax planning- Multinationals who practice seeking a way around the rules and find loopholes in tax legislation of BHP Billiton policies in countries. For these cases, the new policy includes an anti-abuse clause to unmounts overall fiscal practices not covered by previous cases.
Characterizing the socio-ecological impacts of multinational
Moreover, the Department of Employment, Economic Development and Innovation of the state, through the Inspectorate of Mines, supports the safety and health at the sites, ensuring that they adopt safety standards; forming a board of examiners that sets standards and competencies in mining safety, along with a series of examinations and issuance of certificates of fitness.
This organization seeks to effectively respond to accidents and incidents in the mines, making reports to enable improvements in the industry and thus to prevent future accidents. Guidance Note in the month of this document using, Safe Work Analysis, a tool that helps identify and assess risks within a site is presented.
The Minerals Council of Australia, through the Health and Safety Committee, seeks to end fatalities, injuries and illnesses in the mining work. It uses a program that rewards companies according to their performance in security, and transmits their experiences to other organizations (Jones, Guthrie and Steane, 2001). This body, pursues its objectives through four working groups focused on different areas: leadership, recognition, health and law.
Mining laws
In Queesland, the Health and Safety Regulation of Mines and Quarries was renovated in 2001, emphasizing the work into three parts: identification, assessment and hazard control.
One of the treaties signed by BHP Billiton is called treaty 6 territory, the company signed an opportunities agreement with Saskatchewan that allowed them to participate in the Jansen Potash project. This treaty was signed on January 2014. Some of the benefits of this treaty include commitments by the company to start initiatives meant to build capacity in education , labor force development and training (Ricardo, 2001). The company’s aim is to create as well as maintain a meaningful long term relationship with the communities in which their projects are located. This is one of the many treaties and agreements that BHP Billiton has signed to endear itself to the members of the public. There is a positive effect on the products for the company.
Multi national corporations remain unpunished to their numerous abuses and multiple violations of human rights worldwide. There is apparently no national or global legal and judicial system, able to prosecute them, you can not even speak of a real capacity to regulate their activities. In short, there is a global legal architecture of impunity for Multi National Corporation, the result of a political and legal offensive of Multinational capital of deep draft that has been developed mainly in the last three decades.
Environmental and workers rights regulations
For these reasons, from civil society organizations, it has emerged the idea of ​​responding to a global campaign to medium term cannot be other than the transformation of the legal architecture. Given the global impunity, People have propose the construction of an International Treaty of the Peoples of principles, but fundamentally binding rules governing the power of Multinationals corporations and stop their abuses and human rights violations worldwide.
It is widely recognized that Multinational corporations such as BHP Billiton are responsible for numerous abuses and multiple violations of human rights in all its dimensions and worldwide fact. Likewise are the main agents of environmental destruction; They are guilty of real ecological crimes. And yet, they benefit from a high degree of impunity. There is apparently no national or global legal and judicial system, able to prosecute them. There is no real capacity to regulate their activities. Possibly there are rules in the core countries of capitalism, where generally found their parent companies, which sometimes are effective, but not the case in the peripheral economies where they use their enormous economic, political and even ideological weight for the benefit of their corporate interests (SaÃŒÂez, 2013). The overall effect is to evade any regulation since the characteristic of the Multinational corporation is precisely the mobility and flexibility, its operation worldwide, transcending borders and national jurisdictions.
But this privileged status is not explained by the obsolescence of legal systems or blow off traditional regulatory inefficiencies. On the contrary, it is the result of a real campaign forward by the companies themselves and crowned by successive successes especially since the eighties with the onset and peak of neoliberalism. Campaign has progressed in two ways. On the one hand, the dismantling of all previous attempts at regulation and control, being replaced by a demanding protection framework called “investor rights”. This framework, progressive development, is expressed both in the WTO and many multilateral and bilateral free trade agreements and notably in “bilateral treaties promotion and protection of investments” manner. From the institutional point of view, TNCs have achieved a significant transformation of the philosophy underpinning the global order and its instances and practices, starting with the organization of the United Nations to join as equivalent to national states actors. It is the essence of the known Global Compact or Global Compact was proposed in 1998 and officially launched in 2000. The common practice of large TNCs pressing is thus legitimized within N.U. and all kinds of agencies and multilateral agencies.
Mining laws
This offer, popularized the slogan of “corporate social responsibility” not only does not represent any regulation for MNCs but becomes a way of legitimizing their activities. In practice, a marketing strategy that constitutes a real advertising campaign currently underway worldwide.
In summary, it can be said that the current situation, characterized by a global legal architecture of impunity for TNCs, is the result of a political and legal offensive of Multinational capital of deep draft that has been developed mainly in the three decades. It is for all these reasons, from civil society organizations, has emerged the idea of ​​responding to a global campaign to medium term can not be other than the transformation of the legal architecture (SaÃŒÂez, 2013). In the understanding, of course, it is fundamentally a political campaign because it represents a change in power relations.
The Commitment links the release of progressively more consumers as well as nations with the interdependence of all the members in the world community . Thus it seemed not balanced and the crisis of the seventies have an effect on primarily to developing nations . The development of a completely new international economic order ought to be based on sovereign equality , global cooperation as well as the removal of imbalances .The right of every country to adopt the economic as well as social system that it deems best with complete sovereignty over its own natural resources as well as other economic activities . The regulation and also supervision of the activities of Multinational companies through measures for national economies . Offering guidance to developing nations as well as peoples and territories under colonial domination . The establishment of a reasonable and equitable relationship between the prices of unprocessed materials , primary products , manufactured goods as well as semi-manufactured exporting to developing nations and prices of raw materials , products , manufactured goods , goods capital and equipment imported , in order to achieve continuous improvement in their unsatisfactory terms of trade and the expansion of the world economy .
Conclusion
The treaties signed by Multinational Companies enable the companies not to contravene international laws that have been set for consumer protection. Such treaties enables the company to have a mutual relationship with people in the community they operate in (Treaty series, n.d.). Some of the benefits that accrue from the treaties that BHP Billiton is improving the lives of people by building capacity through training, labor improvement and on the other hand the products of the company are well accepted by the community.
References
Axelrad, L. and Kagan, R. (2000). Regulatory encounters. Berkeley: University of California Press.
Banks, D. (n.d.). The Mining industry.
DeSombre, E. (2006). Flagging standards. Cambridge, Mass.: MIT Press.
Dieterich, C. (n.d.). Comparative sequence analysis and association mining in gene regulation].
Gowrisankaran, G., He, C., Lutz, E. and Burgess, J. (n.d.). Productivity, safety, and regulation in coal mining.
Haccius, C. and OBÌ€rien, P. (2001). Double taxation agreements. Dublin: Institute of Taxation in Ireland.
Hornell, E. and Vahlne, J. (2013). Multinationals. Hoboken: Taylor and Francis.
Jones, L., Guthrie, J. and Steane, P. (2001). Learning from international public management reform. Bingley, U.K: Emerald.
Overview of best practice environmental management in mining. (2002). [Canberra, A.C.T.]: Environment Australia.
Ricardo, D. (2001). On the principles of political economy and taxation. London: Electric Book Co.
SaÃŒÂez, S. (2013). Let workers move. Washington, DC: World Bank.
Smethurst, J. and Carter, P. (2009). Historical directory of trade unions. Farnham, England: Ashgate.
The Australian Government response to the Productivity Commission inquiry report. (2013). [Canberra]: Department of Resources, Energy and Tourism].
Thompson, P. and Macklin, R. (2009). The big fella. North Sydney, N.S.W.: Random House.
Treaty series. (n.d.). .
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