Chevron Corporation In Australia - Legislative Regulations, Treaties And Agreements

1. a) The total word limit for the assignment is 2,000 words (+/- 10% allowed). Each question has a specific word counts; please follow these individual word counts. Word count limits are strictly enforced. A deduction of 2 marks will be imposed for every 50 words over the word counts for each individual question and the total word count allowed for the entire report.
2. b) The total word count for the entire report must be clearly written on the cover sheet of the assignment and the individual word counts written after the answer to each individual question. A paper will not be marked if the word counts are not written on the cover sheet. Chosen company:
3. a) This assignment requires you to choose and write about a multinational company (MNC) operating in Australia. Following these instructions is a list of multinational companies to choose from.
4. b) Enter the name of your chosen MNC in Blackboard. a. Go to “Assignments and due dates” > “Individual assignment: choose your Multinational Company”. Choose a company from the list of 100 multinational companies (MNCs) to research and write about.
5. You cannot choose a company that has already been chosen and entered by another student before you.
6. Unless your lecturer advises otherwise, you can work on your chosen MNC as long as it has not been chosen by another student before you.

A 50% deduction automatically applies if you work on a company different from the one you entered in Blackboard, without obtaining prior permission from your lecturer.

Citation and referencing:

1. a) Each answer must have a minimum of 3 scholarly, academic references (minimum of 9 in total for the entire assignment) which are appropriate for a Masters Level assignment.
2. b) Assignments are expected to observe proper referencing in accordance with a generally accepted system of citation (ex, Harvard System; Australian Guide to Legal Citation). A properly referenced assignment showing in-text citation is critical to passing the group assignment.

SafeAssign similarity percentage:

1. a) Plagiarism in any form, shape or manner is unacceptable under any circumstances and will be dealt with according to Institute policy on plagiarism.
2. b) In general, for written reports, a SafeAssign similarity percentage of 25% or below is acceptable. Regardless of the similarity figure, all group reports must use in-text citation and observe proper referencing rules.

About Chevron Corporation

Chevron Corporation was founded in 1879, and it is one of the largest enterprises in the oil and gas field. It is an American corporation which offers its services in more than 180 nations (Chevron, 2018a). The enterprise operates in the oil and gas industry, and it provides products such as oil, geothermal energy, natural gas and others to its clients which are situated all over the world. The company has more than 51,900 employees that manage the operations of the enterprise at a global stage (Forbes, 2018). In case of Australia, the enterprise has hired more than 19,000 employees to handle its operations in the country (Chevron, 2018b). The organisation is known for diversifying its products by involved in alternative energy consumption which includes biofuel, hydrogen, solar, wind power and others. Moreover, the enterprise is a global leader in the production of geothermal energy because it is the world’s largest producer. The headquarters of the company is situated in San Ramon, California, United States.

The purpose of implementation of regulatory framework by the Australian government is to govern the operations of corporations operating the country to create peaceful relationships with them. By complying with these regulations, the companies can ensure that they are not breaching any laws while ensuring that they avoid causing harm to the economic development of the nation along with the safety of the customers. It is mandatory for organisations to comply with these regulations to avoid legal penalties which the Australian government impose on them if they found guilty of breaching such policies. These rules are given regarding various aspects of operations of a company in order to ensure effective compliance with these policies (Fooks, 2017). Chevron Corporation has been established in Australia for more than 60 years, and it is a key contributor to the overall economic growth of the nation. The enterprise has invested more than $60 billion on goods and services in Australia on Gorgon and Wheatstone projects. Chevron Corporation has also paid more than $4.5 billion in taxes in Australia while offering its products and services in the country (Chevron, 2018b). It is one of the largest corporations in Australia in terms of revenue generation, thus, it is a key contributor to the overall economic development of the nation which is one of the main agenda for the government of Australia.

The corporation operates in different territories and states in Australia, and while handling its operations, it has to comply with the rules and regulations provided by the Corporations Act 2001 (Cth). This act provides provisions which corporations have to comply relating to continuous monitoring and disclosure requirements as given by the act (Schultz, Tian and Twite, 2013). The act also provides guidelines related to duties which the board of directors of Chevron Corporation has to comply to ensure that they focus on the interest of the company and its stakeholders while taking business actions. The general duties are given under section 180, 181, 182 and 183 which provides the standard which directors have to maintain while discharging their duties and making business policies. Chevron Corporation is known for performing its operations in a certain way by avoiding causing significant loss to the environment and its resources due to which it has a positive reputation in the oil and gas field. While offering its products, Chevron Corporation has to comply with the guidelines given in the Competition and Consumer Act 2010 which is imposed by the Australian government. The act focuses on providing guidelines and standards which corporations have to maintain while they offer their products or services in Australia (Penney et al., 2012).

Australian Legislative Regulatory Framework for MNCs

The act assists in promoting competition between local and multinational enterprises while at the same time ensuring the safety of customers. The Australian Consumer Law prohibits organisations from misleading consumers to purchase their products or consume their services by making false claims. Section 18 provides that enterprises should not make any claims regarding their products or services which are misleading or deceptive or which are more likely to mislead or deceive the customers. Section 29 imposed the similar restrictions on companies while advertising their products to their customers (Austlii, 2018). These guidelines are important to comply by Chevron Corporation in order to ensure that the enterprise did not mislead its customers by making false claims regarding its products or services. In the case of Australia, gas amounts to 16 percent of the total energy consumption in the country. Chevron Corporation has to comply with the policies given under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) which applies throughout Australia. The act provides various rules and regulations which governs the petroleum activities which happened on the offshore in Commonwealth Waters (Techera and Chandler, 2015). Various fees are imposed by the government on the operations of Chevron Corporation which include fees relating to annual rental, renewable fees, application fees, security deposit, license transfer fee and various other administration fees which are relevant to each jurisdiction.

Furthermore, the enterprise has to comply with various employees related laws which apply on its operations to ensure that it offers a safe working environment to its employees while at the same time provide them facilities as per their rights. The Fair Work Act 2009 is established by the Australian government with an objective to regulate the activities of corporations relating to their employees to ensure that they provide them appropriate safety infrastructure which is important for them (Pocock, Charlesworth and Chapman, 2013). The production and management of oil and gas require Chevron Corporation to take various measures for its employees regarding their safety which is mandatory to be taken by the company. The oil and gas industry is subject to minimum work/expenditure conditions which are imposed by the government based on a petroleum exploration permit. Chevron Corporation has to comply with these regulations; for example, the company has to reinstate the employee who made a racist slur in the organisation based on fair trading regulations (Hilton, 2017). The enterprise is to complete a minimum amount of yearly exploration work which is conducted by the company in relation to the permit given by the government. Thus, compliance with these regulations is necessary for Chevron Corporation to maintain its positive reputation in the market which is crucial for its growth. The Australian government also supports such enterprises which comply with the regulations imposed by them and provide them with the necessary support to ensure that they are able to manage their operations in Australia effectively.

The operations of multinational corporations are affected by the treaties and agreement signed between the two nations in which they offer their products or services. The objective of these treaties is to build new ways of attracting foreign investment into a nation which is crucial for its economic growth. Thus, it creates business opportunities for multinational corporations since the companies can easily expand their operations in different nations based on these treaties. In case of Chevron Corporation, it is a US based corporation which offers its services in Australia as well. There is a peaceful relationship between the government of Australia and New Zealand due to which the companies operating in either nation have the opportunities to expand their operations in new markets (Fooks, 2017). The treaties are formed to make the process of international expansion easier by removing various regulations and legislative policies along with fees which corporations have to pay otherwise while providing their products or services in these countries. The free trade agreements signed between these nations are focused on improving the trade practices between these companies while at the same time increasing the profitability of the enterprise. AUSFTA or Australia United States Free Trade Agreement is a treaty signed by the governments of both nations which is a preferential trade agreement (Moir, 2015).

Treaties, Conventions, and Agreements in Australia which affect products and services of MNCs

The model of this trade agreement is similar to NAFTA or North American Free Trade Agreement. The rules and regulations of the treaty increase the trade practices between the two nations in order to support the economy of both Australia and the United States. The treaty has removed various legal restricts which governments otherwise imposed on multinational enterprises (Chung, 2013). The treaty assists Chevron Corporation in expanding its operations in both markets while complying with relatively fewer legal regulations. It also saves on various fees and expenses which corporations otherwise pay while expanding their operations in overseas markets. The double taxation treaty signed between Australia and United States also assist the company in preventing paying double tax on the income generated by it from its operations in Australia. The company brought its profits to the United States and based on this treaty it is able to avoid the double tax on its income (Faunce, 2015). It encourages the corporation is expanding its operations in both markets which is crucial for its success, and it supports the economy of both countries at the same time. Furthermore, Chevron Corporation also provides its products and services in New Zealand from its subsidiary known as Chevron New Zealand. New Zealand is also a key market for Chevron Corporation and the company focuses on expanding its operations in the market by exploiting new business opportunities.

The treaties signed between the government of Australia and New Zealand result in assisting Chevron Corporation since it can use the resources from both nations while delivering its services while at the same time avoid heavy tariff or excise charges. ANZCERTA or Australia New Zealand Closer Economic Relations Trade Agreement is a good example. This treaty is signed by the governments of both nations with an objective to increase the trade practices between the nations in order to support the overall economic growth of both countries (Shadikhodjaev, 2013). This treaty is formed by the government in order to support the economy of both nations which is crucial for the success of the enterprise. Chevron Corporation is able to expand the operations of its subsidiary situated in New Zealand based on the regulations given in this treaty. Furthermore, ASEAN Australia New Zealand Free Trade Agreement is another good example of the treaty signed between the two nations with an objective to increase trade practices between the enterprises. The objective of this treaty is to ensure that corporations operating in both nations are able to exploit the opportunities in both nations which result in increasing their profitability along with the number of customers.

Chevron Corporation is able to avoid administration fees and tariff charges imposed by the government on the products and services offered by the firm to its customers. Thus, Chevron Corporation is able to expand its operations in the two nations and reach a wider audience by relying on this treaty (Tseuoa, Syaukat, and Hakim, 2012). Thus, for a period of 60 years, the company has attracted many clients while operating in Australia while at the same time expands its operations in neighbouring countries. The company has also exploited the Chinese market through its subsidiaries including Chevron China Energy Company and Unocal Each China Sea Ltd (Chevron, 2018c). Chine is one of the biggest market for Chevron Corporation based on which the peaceful relationships between the Australian and Chinese governments resulted in supporting the operations of Chevron Corporation. ChAFTA or China Australia Free Trade Agreement is signed between both nations with an objective to increase the investment in both nations by building new trade relationships. Both countries have reduced their legislative framework relating to multinational corporations in order to ensure that they attract foreign investment to their countries (Jayanthakumaran and Liu, 2016). The tariff, excise duty and fees paid by the multination corporations have reduced by the governments as well in order to promote trade practices between the two nations. Thus, Chevron Corporation is able to expand its operation in China through its subsidiaries, and it is able to offer its products and services at competitive pricing in both nations which result in increasing its profitability.

References

Austlii. (2018) Competition And Consumer Act 2010 - Schedule 2. [Online] Available at: https://www5.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html [Accessed on 29^th August 2018].

Chevron. (2018a) Highlights of operations. [Online] Available at: https://www.chevron.com/worldwide/united-states [Accessed on 29^th August 2018].

Chevron. (2018b) Chevron's 30+ year economic impact in Australia. [Online] Available at: https://australia.chevron.com/news/2017/our-economic-contribution [Accessed on 29^th August 2018].

Chevron. (2018c) China. [Online] Available at: https://www.chevron.com/worldwide/china [Accessed on 29^th August 2018].

Chung, L. (2013) AUSFTA, Korus FTA and Now TPP: Free Trade Agreements Are Now Reaching Further into Domestic Health Policies Than Ever Before. Currents: Int'l Trade LJ, 22, p.26.

Faunce, T. (2015) How the Australia-US free trade agreement compromised the pharmaceutical benefits scheme. Australian Journal of International Affairs, 69(5), pp.473-478.

Fooks, D. (2017) Oil and gas regulation in Australia: overview. [Online] Available at: https://uk.practicallaw.thomsonreuters.com/w-011-0184?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1 [Accessed on 29^th August 2018].

Forbes. (2018) Chevron. [Online] Available at: https://www.forbes.com/companies/chevron/ [Accessed on 29^th August 2018].

Hilton, J. (2017) Chevron told to reinstate employee who made racist slur. [Online] Available at: https://www.hcamag.com/hr-news/chevron-told-to-reinstate-employee-who-made-racist-slur-236889.aspx [Accessed on 29^th August 2018].

Jayanthakumaran, K. and Liu, Y. (2016) Bi-lateral CO2 emissions embodied in Australia–China trade. Energy Policy, 92, pp.205-213.

Moir, H.V. (2015) The patent price of market access in the AUSFTA. Australian Journal of International Affairs, 69(5), pp.559-576.

Penney, K., Melanie, J., Stark, C. and Sheales, T. (2012) Opportunities and challenges facing the Australian resources sector. Australian Journal of Agricultural and Resource Economics, 56(2), pp.152-170.

Pocock, B., Charlesworth, S. and Chapman, J. (2013) Work-family and work-life pressures in Australia: advancing gender equality in “good times”?. International Journal of Sociology and Social Policy, 33(9/10), pp.594-612.

Schultz, E., Tian, G.Y. and Twite, G. (2013) Corporate governance and the CEO pay–performance link: Australian evidence. International Review of Finance, 13(4), pp.447-472.

Shadikhodjaev, S. (2013) Duty Drawback and Regional Trade Agreements: Foes or Friends?. Journal of International Economic Law, 16(3), pp.587-611.

Techera, E.J. and Chandler, J. (2015) Offshore installations, decommissioning and artificial reefs: Do current legal frameworks best serve the marine environment?. Marine Policy, 59, pp.53-60.

Tseuoa, T., Syaukat, Y. and Hakim, D.B. (2012) The impact of Australia and New Zealand Free Trade Agreement on the beef industry in Indonesia. Journal of ISSAAS, 18(2), pp.70-82.