1) Executive summary
This scenario involves four countries and four separate business transactions. Further, it involves several main legal issues which will be dealt with in the discussion. * The first issue is which law will govern the transactions between the parties – domestic or international law, and the implications of both. * The scenario raises the issue of the selection of incoterms which will best accommodate the interest of both parties in the first and second transaction between WCO and China and WCO and Philippines respectively. * The second issue raised is the difference in currency the parties would like to use again in the first and second transactions. * The third issue in the scenario is with respect to the transportation of goods by sea and the liability which arises thereof. The issue arises out of the third transaction between WCO and Thailand. Carriage of Goods by Sea Act 1992 and its application will be analysed. * Another issue is who is responsible for the manufacture and labour used for the manufacture of goods – WCO or Gubengi? * With regards to the last transactions, the documents of trade and in particular the significance of the Bill of Lading give rise to an issue which will be dealt with. * The use of child labour for the manufacturing of the goods is another main issue. * The imposition by the buyer on the seller of a use of subcontractors who are publicly responsible is another issue. * Sustainability will be looked at through the discussion of each issue and a recommendation will be formed at the end as to its all transactions.
2) The facts
WCO has its parental company based in the UK. It has subsidiaries throughout the world which in itself defines the multinational character of the company. One of its subsidiaries operates in Gubengi – a state on the North Western corner of Africa which has been a colony the French. At post-colonial times, Gubengi had attempted to regain the values and way of life which had been decimated as a result of the French rule and it this capacity it functioned as a self-sufficient and stable agrarian country, however, it is very poor and underdeveloped country which is need of creating a successful industry. There is no coherent labour system in the country and a lack of regulation in the manufacturing sector. This has led to an excessive use of cheap labour in obnoxious working conditions. Additionally, there is a lack of regulation of any CO2, toxins and other pollutants released in the atmosphere which is a big environmental issue on an international level. This scenario involves four countries and four separate business transactions. Further, it involves several main legal issues which will be dealt with in the discussion. WCO has a current strategic business plan, which involves expansion of operations in the Pacific Rim. WCO is entering into three transactions in the Pacific Rim using their factories in Gubengi for the manufacture of the goods for sale. The first transaction is for the sale of 1,000,000 hard disc drivers to Chinese manufacturer EnterLight Ltd. The second transaction is for the sale of videogame consoles to Filipino manufacturer NeoTech Ltd. The use of incoterms is not ascertained, however there is an issue as to the different currencies in each country. Chine deals in Euros and dollars, Philippines deal in Pesos. The third transaction is for the dispatch of 2,000 cars under FOB terms. Portsmouth World Transporters were instructed to load the cars onto the ships, during which 10 cars were completely damaged. The fourth transaction is for the dispatch of 2,000 tonnes of fish from the port of Edinburgh, to the port of Niigata, Japan. A failure to inspect the goods on departure occurred by the Capitan of one of the ships. Despite the bad quality of the fishes the Bill of Lading was issued to state that they are ‘IN APPARENT GOOD ORDER AND...