HI5015 Legal Aspects Of International Trade And Enterprise: Research Paper On Nike Assessment Answer

Answer :

RESEARCH PAPER

LEGAL ASPECTS OF INTERNATIONAL TRADE AND ENTERPRISE

Executive Summary

A proper discussion is done on the company Nike. In the overview, all the details of Nike are mentioned. It has been seen that there are 414 employees currently working in Australia. Nike has stores in most of the world’s locations. The Legislative Regulatory Frameworks of Australia is seen. This report shows how the legislation has created an impact on the company. The three legislations considered are product safety law, warranty against defect and competition and consumer act.These showed a positive and negative impact on Nike. It also showed that the company should follow fair trade rules which will give them a healthy competition.There are various agreements and conventions followed in Australia.They include free trade agreement, labour agreement and CITES. Nike does learn from mistakes and agreements. It does have a negative impact that can be managed. The overall legal aspects of international trade and enterprise in Australia are seen.

Overview of Nike

Nike is an American company that was founded in the year 1964 by Bill Bowerman and Phil Knight (Nike.com 2019). The company is having its headquarters at Washington County, Oregon, United States. The revenue of the company according to the year 2018 is US$36.39 billion. There are 73,100 employees working worldwide. The products sold by the company are athletic footwear, recreational products, apparel athletic and sports equipment. Nike operates in Apparel, Accessories and Sports equipment industry.Nike is having 1182 retail stores all over the world. In Australia, the number of employees in Nike is 414 according to the year 2018. The company is ranked 89 in the Fortune 500 list by their total revenue. Nike has a net income of US$1.93 billion and operating income of US$ 4.44 billion ( Nike.com 2019). Earlier the company was known as Blue Ribbon Sports. In the year 1971, it was officially known as Nike and the name came from the Greek goddess of victory.

Legislative regulatory framework affecting Nike that is operating in Australia

In Australia, there are more than 15,000 types of products under multiple brands. Hence it is necessary to have a legislative regulatory framework to protect the products. The country has a product safety system which depends on the consumer’s corporation, government agencies and suppliers. They have a combination of various measures that helps in promoting the safety of the products. It includes suppliers voluntary actions, incentives are given by government law for making the product safe, ban on unsafe products and proper education and information which helps consumers to buy and use the products safely. According to the product safety rules the brands need to follow mandatory standards that are based on the voluntary standards (Product Safety.com 2019). In Australia, there is a ban on risky products only when the product has chances of causing serious injury, death or illness. According to the recall, facility suppliers can follow a voluntary recall to remove unsafe products from the market. Nike has a huge impact on product safety laws in Australia. It gets many benefits as the Australian product safety system restricts the selling of unsafe products. The company becomes alert and always tries selling the best quality product in Australia. The company also has to follow mandatory standards while selling their sports products in the country. However, the company also faces problems due to the product safety system. Australia does not follow safety check for each and every product and hence if there is any problem then it has to look by Nike. The company also gets help from international organisations like ISO, APEC, OECD and ICPHS for product safety and their dealings in different parts of the world. 

Australia is having another legislative regulatory framework of Warranty Against Defects. This is there from January 2012 according to the Australian Consumer Law requirements. This law is given along with the consumer guarantees which cannot be limited or replaced. Warranty against defects states that the good which are defective needs to be replaced or repaired ( ACCC.com 2019). It also has to be resupplied and the compensation has to be given to the customers. However, this can be claimed only when the goods are supplied. There is no formal document for the suppliers in warranty against defects. The consumers need to present all the documents while claiming for warranty against defect. If there is no information provided then according to the ACL regulators it will not be considered. Also, the information that is provided has to be consistent with the packaging statements. Australian governments also ensure that there is no misleading of consumers in warranty against defect in any form of oral representation or in words. This law also has an express warranty against the defects. If the customer has an express warranty then they must look after the requirements which are related to it. In ACL the cases are taken one at a time and they are proportionate to consumers who are linked to non-compliance. ACL will not allow any kind of misleading and false claims. This has to be ensured at the time of oral representations to customers. The company also has to ensure they guide the consumers in the correct manner. Nike is facing problems related to warranty against defects. This is a framework followed by the Australian government. But Nike will have to give compensation to the consumers if any kind of defect is found out. The consumers will be getting the benefit and the company will be losing a large amount of money. Nike is bound to follow the rules laid by ACL. However, they should proper check whether the customer is giving false information on defective product.Nike will also have to bear the repair and replace charges for the product. Such rules are making the company difficult to work in Australia.

A Fair Trade Law is being used as a Legislative Regulatory Framework. Competition and Consumer Act comes under the Fair Trade Law. This law was established in the year 2010 which checks that trading is fair towards the business and customers. Many aspects of the marketplace are covered through the Competition and Consumer Act. It includes wholesalers, dealers, suppliers, competitors, customers and retailers. The main work of this law is to look after the market’s unfair practices, industry codes, acquisitions and mergers, price monitoring and industry regulations. This law is administered by the Australian Competition and Consumer Commission (ACCC). CCA encourages good practices in the business so that the marketplace is fair and efficient (Fair Trading Law.com2019).Competitions are enhanced by this law and consumers are given proper protection. It also covers anti-competitive conducts and issues related to advertising. It has a significant effect on the market as this is an agreement done with the businesses. There cannot be an abuse of a dominated position in the market. This application of the law is limited to section 51 of the Constitution of Australia. CCA also has operations in some different sectors like telecommunication power. Nike had to make an agreement with this law of CCA. They had to follow all the rules and regulation of this law. Any unfair methods of selling products cannot be followed by Nike in Australia. If any such things happen then the company will lose reputation in the country (Carty 2017). This law helped Nike by following a fair and efficient way of doing business in the marketplace. By following the law Nike ensured that consumers are also given proper protection. This created a healthy competition in the marketplace for various companies.Such a law is beneficial for Nike and hence consumers will also keep trust in the company.

Treaties, Conventions and Agreements which have impacted the products or services of Nike

There is a free trade agreement between Australia and the United States. This agreement has a lot of benefits to the companies whose headquarters are in the United States. This agreement has great importance and strengths. It will underlay the economic relationship between the two countries. All trade policies and functions have been discussed. Companies under AUSFTA will get benefits only when their products get qualified for preferential treatment. A visa category is created by the United States so that people become aware of this agreement. AUSFTA has a harmonised code system where the products are classified so that trade measures can be taken and statistics can also be collected (Free Trade Agreement.com 2019). The product description is covered under the category of the harmonised system code. AUSFTA has a staging category where tariffs get eliminated easily. Products can gain tariff elimination if they have an originating group. It also has to meet the needs of AUSFTA's Rules of Origin. The best part is the company do not have to give any kind of origin certificate to take the tariff elimination of AUSFTA. But the company needs to be ready to submit any kind of evidence if asked by Australian Customs or United States customs.Nike has headquartered at the United States and hence it will get benefits from the Free Trade Agreement. They can easily sell their products in Australia. They will also be saving the tariffs of exporting their products in a different country.This will increase the overall sales and profit of the company. However, Nike needs to be careful regarding something. They should have proper product origin certificates. The company needs to be prepared from before-hand by keeping all the evidence ready. The company has followed all the rules and regulations of the agreement.

A labour agreement is followed by Australia for all the companies working in the country. Such agreements do have an impact on the company's products and services. In Australia, it is considered as a negotiation between the Australian Government and the employers (Bolle 2016). The employers are hired on a certain number of agreed skilled from outside of Australia. The agreement looks after the shortage of skills in any type of business and why there is a problem in filling the vacancies by Australian workers (Carty 2017). This agreement looks after the number of workers needed in Australia from outside with proper skill sets. Different requirements like English Language and age are seen in the occupation through this labour agreement. It is seen that semi-skilled occupations are also taken into consideration in the agreement. The companies should make it a point they use a template or negotiate for individual agreement. All the parties should sign the agreement so that it can come into force. This will have a validity of 3 years. The businesses can also work overseas when the needs are not taken care of in the Australian Labor market. There are many terms and conditions in this labour agreement which needs to be followed by departments and employers. The work of the employers is to discuss problems with the stakeholders and trade unions.Nike has to follow the labour agreement in Australia. However, the company is known for hiring a child for their work. This will not be allowed in Australia as the country is very strict with their rules and regulations. The labours are not treated in a proper manner and the company took no initiatives of improving the condition. The company was busy paying for sponsorships whereas the workers were paid low. The labour agreement of Australia was for the betterment of the market. Nike should be careful with such agreements in the country.

Australia looks after their environment and they follow many conventions and agreements. The Convention on International Trade in Endangered Species of wild fauna and flora (CITIES) is under the department of environment and energy. CITES is an international agreement between various governments that ensures that international trade takes place without treating wildlife. This came into force in the year 1975. There are 5,600 species of animals and 30,000 plants under CITES. All the information of the animals and birds are listed with CITES. The export and import of species take place with the help of CITES. The system verifies the movement of species in most of the countries. The CITES requirements are enforced by the national legislation and it has to be legally followed (CITES.com 2019). Australia is having extra measures including CITES and they have higher restriction of export and import in the country. Australia allows limited reasons for trading specimens like elephants, African Lions and Rhinos. This might be related to the research purpose. Special rules need to be followed for import in Australia. Australian Government is following CITES and is implementing the convention. The members of the country are responsible for using CITES and their regulations. All the detailed reports have to be presented to the government on this convention.Nike has to follow the rules of CITES. The company cannot use animal skin for making its products. They will have to follow and conserve the environment. Australia is strict regarding their rules and Nike cannot sustain if they don’t follow them. After setting up their brand in Australia the company is trying to reduce carbon footprints and reuse the material for their products. All the measures taken by Nike should be beneficial for the environment. However such convention creates hurdles for Nike and it becomes difficult for them to change their strategies suddenly.