Coal for Australia Pty Limited CEO Report - Case Study Example

CEO REPORT Student’s Name Course Professor’s Name University City (State) Date CEO Report Dear Shareholders, This report is an account of the major legal and ethical issues that our company was facing during the year 2015-16. The report is intended for the internal use of the Coal for Australia Pty Limited (CFA) Board of Directors and all the other relevant stakeholders in the company who might be interested in knowing the flow of our business. Among the highlights of the period, 2015-16 are legal issues such as breach of contract and tort; others are the ethical matters such as conflicting interests among the staff. This firm has faced diverse issues during the last year of operation in the new Blackstone coal mine. From the government, the community, the contractors, to the employee's many problems have raised, and that sincerely question the legal and ethical foundation of CFA. As you all know our company, CFA, is among the mining companies that are publicly listed on the Australian Stock Exchange (ASX). Also, you also understand that it was tough to obtain the permit to operate in the new open cut coal mine in the Blackstone area of Central Queensland due to the many environment and health hazards that the inhabits were exposed. As a result, we pledged many promises to the community, investors, the government, and the employees so as to achieve the production in this factory. Among our pledges was the ability to invest in the housing and other infrastructures within the area so that facilitating the economic growth of the population. Additionally, we were top build a reserve in the south-eastern parts of the coal mining real so as to prevent the company from causing environmental hazards. Furthermore, we persuaded that our products were meant to be exported to the countries that still had the major necessity of these commodities since most of the countries including Australia are shifting away from the use of the products due to the climate change. Finally, we made contracts with different stakeholders who are employees, distributors, and transporters in our country and the importing ones. Below is an identification of the legal and ethical issues encountered and also the possible solutions that the company should undertake to ensure that the firm achieves the long-run set goals. Identification and Explanation of the Legal Issues The Law of Contract The first legal matters are the breach of contract by the shipping company, the Indonesia by Sea Pty Limited (IBS) that we recruited at the beginning of the branch so that it can help us to transport our products from the port. Initially, you all know that the company was supposed to carry the products with three ships per week. However, since March 2015, the company only started operating two ships instead of three, and by September, the number had reduced to one. Explanation A contract is an agreement that is either made orally or in a written form to bind the parties involved legally. The IBS is therefore supposed to carry our goods for three times a week as stated in our first agreement (Kubasek, Brennan, and Browne 2016, p. 101). Solution IBS has already breached the condition of our contract, and therefore, we have the right to take whichever action we find good through for our company. We can sue IBS for contractual damage, or we can also dismiss the business and undertake another one that we use to carry out our work. IBS knows that they have already breached the contract, but none of them is making any action to save the situation. The Law of Tort The act of Jack injuring the Irene in work is an act of negligence. Richard seems to share the information I gave him about our company in the Coal Industry Association (CIA) because the President of CIA ridicules CFA for its unstable situation. Additionally, there are defamation issues about my character because everybody believes that I am having an affair with Jennifer and that is why we are unable to help our company to rise to the better financial position. Instead, we are busy focusing on each other. Explanation The law of tort is broad and covers many aspects of human interactions. Among the major ones is reputation damage, negligence, economic losses among others. Specifically, a tort is a civil wrong that led to injuring of the plaintiff and which calls for compensation ((Kubasek, Brennan, and Browne 2016, p. 80). Jack is liable for intentional tort since he carelessly drove the forklift which ended up damaging Irene. Apart from the personal injury jack should also be sued for property damage. Additionally, Richard acted negligently by disclosing my personal information which does not only cause harm to me but also to the company. As a result of these actions, there are pure economic losses to the enterprise. The pieces of equipment were destroyed and therefore require repair. Furthermore, the information that Richard gave to the public about having an affair with Jennifer is not right. Solution The company and Irene hold sue Jack for acts of negligence that causes Irene personal injury and the company property loss. I will sue Richard prove in the court that the statements given to me by the Tribunal are not right. I have gone through unfair public ridicule of the issues that I do not remember committing. This form of defamation is slander. The President of CIA should also be sued for the defamatory information that he states about the company through the slander. Environmental Protection There is also a letter from the native Darumbal people who are demanding that our business is interfering with natural rights to fish and also do hunting in their area due to our business activities. In fact, I received the letter from the solicitors in November 2015. As a fact, I know most of you have heard about the Paris Climate Change Summit which seeks to drive the countries from use of coal and other products that are harmful to the environment, to the utilization of the renewable energy. As a result, our revenue has significantly depreciated due to the ever falling coal prices in the whole world market. As for now, we are only receiving half of the revenues that we expected in the market (Lacey and Lamont 2014, p. 835). Explanation The inhabitants of an area always have the right to access the water and space for personal gain. As a corporation, we are expected to ensure that we do not violate their rights by making sure that we let the society get these amenities. As a result, stocking our coal products at the ports and other areas reduces the chances. Additionally, you all know coal releases harmful gasses into the air. Solution Contract another shipping company to carry our products to the preferred destinations Employment Ordinance (EO, Cap 57) Legal Issues Another breach of contract is to our business and the employees that are employed in the dockside. As the CEO I promised these workers that they would be paid for three ships each week, although the CFA’s employment contract stated that they would be paid for each ship they load apparently. As a result, since September, they have only been receiving payment for that only ship that they have been loading. As you all know, there are tensions build up by these employees demanding that they should be given the opportunities that they were promised. Explicitly, the mine employees starting from February have been having issues with the airport that the company has for their transportation. Apparently, they require that the company expands it so that it can cater for their needs. However, we do not have the funds for construction, and the only option is to sublet the activities to the Queensland Aviation Pty Limited (QA) since we need the employees. Additionally, the only part we can lease for the construction is around the southeast corner that was set aside for the reserve. The company already has an obligation signed in the Memorandum of Understanding between the company and the Blackstone Chamber of Commerce that starts that the corporation should focus on housing rather than the airport construction. Additionally, our company is faced by a proceeding in the court that Jack sued us in pursuit of unfair dismissal from the job employment. Explanation As you all know the EO is the most powerful law that protects the employees of any company and applies to all workers whether full-time or part-time. Additionally, the employees can be in the contract of or for services depending on the form of contract. Furthermore, the contract of employment can either be written, oral, or both but whichever position it is it is very binding. So in this case, despite the fact, the employment contract for the dockside shows that are paid for the ships they load, my word of mouth that they will be given for three ships per week is also binding. The workers at the dockside are entitled to the three ships salary a week which is not possible due to the financial situation. Additionally, we promised the workers that we would construct an airport that would facilitate their movement from our company to their places of residence. Under the EO S.32K, the company has to dismiss any employee who has failed to meet their several issues. One of them is the proper conduct. However, it is the duty of the employer to be able to show that that the reason for dismissal is valid under this section. For instance, in the Vincent v SCMP[2003] 4 HKC119, a journalist was dismissed from the job because the firm was able to show that they had committed plagiarism despite the fact that they were two weeks to complete their five years contract (Carroll and Buchholtz 2014, p.69). Solution I would suggest that we write to the employees of the dockside about our situation and for how long that the situation that is expected to continue. The official communication will let them decide whether or not they will agree to live regarding conditions of the work or will look for greener areas. As per Jack, the company had the right to terminate him under Sec. 32K of EO due to his conduct. Jack intentionally drove the forklift so as to destroy it together with the container. The company should be able to show that Jack deliberately drove that forklift and it was not an accident. As a result, the forklift condition before the crash should be clearly presented in the records so that he does not claim that it had functional defects. Moreover, if they are any witness that can support this issue, they should be prepared to give the explanation. Intellectual Property Rights (IPRS) The Asian Coal rebranding strategy that is supposed to take part in India has designed a new trademark for the company to use in the new market. Interestingly, the brand that has made strictly resembles that of CFA which makes it possible for the consumers to confuse the two logos. Explanation The intellectual property rights (IPRs) of Hong Kong shows that an individual or firm have property rights given to them to ensure that their original product is protected from people who intend to benefit from the creativity. This rule prohibits people from using the one’s trademark, design, work, layout drawings, among other patents for individual benefits. This law is critical since t formulates the boundary between two logos, brand names, programs among others. Furthermore, such laws protect the designers, firms, investors among another talent that around the world (Kubasek, Brennan, and Browne 2016, p. 150). As a result, the original manufacturers can enjoy their hard work and flourish. In our case, we are dealing with the Asian Coal trying to take our trademark sign and using it in the new market in India. Our trademark is already registered in the Intellectual Property Department, and therefore we do not expect it to be utilized by any other firm. Since our mark is recorded, we have exclusive rights not to allow other companies to use identical or similar marks since that tampers with our reputation. Solution As a company, we should sue the Asian Coals for using our trademark so as to save the future reputation of the enterprise. If they go ahead and use the logo, we might lose the battle in future, and therefore we should do it as a soon as possible so that they can change their logo to whichever they want. Our company products and consumers depend on the trademark so that they can be differentiated from those of the competitors. Board of Directors Finally, the Board is expected to make concrete decisions about whether or not to allow the Queensland Aviation to invest on expanding the airport at the expense of the other shareholders. Explanation Under the Company Ordinance, any company must have directors to take care of the affairs that they carry out. As a result, the common law emphasizes that the Board of Directors should be the primary organ that should manage the power of the company activities. For instance, through the general meeting, the Board is the one that appoints the new directors. The law of property in Hong Kong defines any property as “the title to, the right off, ownership of goods and services. Consequently, the General Clauses Ordinance (Cap 1) classifies the properties to either immovable or movable properties (Crane and Matten 2016, p. 40). Another feature in the construction of the airport the Board of Directors should understand that it was just an invitation to treat, so the company is not bound whatsoever to allow the QA to build the airport. For instance, the case of the Harvey V. Facey (1893) A.C. 552, the Court declared that the defendant had no obligation to sell the Bumper Hall Pen since the offer was just an invitation and did not bound the plaintiff in any way. Solution The Board is responsible for making such strategic decisions for the sake of the firm and therefore should discuss and come up with the best option in regards to the Memorandum of understanding and all the other documents that were used in the discussion of the direction of the company investments. Identification and Explanation of the Ethical Issues The ethical issues arise in different forms. The first form is the situation where the dockside workers are abusive encounters. One prevalent incidence is when one of the workers Jack intentionally drove a forklift into the container in pursuit of destroying both of the equipment but ended up injuring one of the port managers Irene in the process. Irene got a broken leg and concussion in the process (Chaney and Martin 2013, p. 50). Explanation The employees are expected to respect each other at the workplaces. Impact and Solution Lack of respect causes loss of teamwork and coordination, thus slowing down the company operations and also efficiency. At times such actions cause a destruction of property and personal injuries such as in the case of Jack and Irene. As a result, the company should come up with ways of respecting each other. Corporate Social Responsibility (CSR) Additionally, there is the delay of the coal products in the port. Since our shippers are not holding the part, our products are left to lie in the harbor for many days than expected as stipulated in our initial agreement (Barnes et al. 2015, p. 30). The company has a corporate social responsibility towards the people of Blackstone area to ensure that the company facilitates the local economy by taking up the projects that promote the growth of the economy which is building more houses at the expense of the airport that will discourage the employees from living in far places from the airport. Explanation The building of the airport will facilitate the movement of the workers from various locations which will not allow them to build or invest in the Blackstone area. As a result, this will deprive the people the infrastructural development that they were promised during the signing on the construction of the coal mine. Additionally, the southeast corner was supposed to be reserves of the company not for the building of the airport. If the airport is constructed in that area, then the community must give the company more area for reserve so as to prevent population (He and Lai 2014, p.250). Solution The company pledged to the local government that it could invest in the infrastructure, and therefore, should hold on to that so as to fulfill the CSR. Additionally, apart from that, the southeast corner is leased for the reserve and not the construction of the airport and therefore, it will be difficult allow the QA to build the airport as they enquire. As a result, the company if at any time will be expanding the airport should carry it in the designated areas. Disclosure of Company Information In pursuit of mitigating the possible financial insolvency of the business, our management team has been doing everything in their power to ensure the company remains successful. One of the issues is the Chief Operating Officer (COO), Jennifer, interacted with Richard, one of our former employees, a COO in Asian coal Exports Pty Limited which is one of our largest competitors in Western Australia. Apart from the job relation, we also have the personal relationship which allows us to share the experiences in our lives and employment. I discuss the company plans to shift the shipping operations from the Indonesian shipping contractors to India with my friend Richard from a competing company which is against the company law. Interestingly, I also forgo the chance of investing in India so that the Asian coal can invest there, thereby saving Richard’s job and his stay in India where he has relocated with his family. Richard begs me not to take up the India tender for coal since that would lead to their company insolvency, redundancy, and a possible transfer to another are which is not fair for his family. As a result, together with Jennifer, we decline the necessity to engage in the Indian market. Explanation Richard being my long-term friend I was bound by the moral pluralism situation where I could act on his behalf or the behalf of the company. If I acted on his behalf, I knew I was failing the company, if I worked for the benefit of the business I would permanently destroy his career. Additionally, I also knew I had the power to interfere with the decision that would be undertaken by the enterprise. I assumed that since we did not lack a market in Indonesia, it is only that the shipping company was failing us, I would give Richard a chance to at least have his job. Therefore, I advised the company against investing in that country. As the CEO, I interfered with the act of bona fide in the interests of the enterprise by allowing Richard and his company to invest in India (Albanese 2015, p. 23). I was not honest when I advised the company against investing in India; I was influenced by the chief financial officer, Jennifer together with Richard to allow his company to invest in the new market so that he could have a chance to live in that country where he had relocated with his family. The behavior was unethical since I put someone else’s interests before those of the company. As a result, my powers were not used in proper purpose according to the company needs. Solution I would like the company to go ahead and invest in India so that we can open up a larger market for our products so that we can be able to raise enough capital to maintain our employees and other investments that we have as a company. As per for Jennifer and me, we surrender to the board to take any just step due to sharing of information about our business to an employee from a competing company. Additionally, the board should take any affirmative action against Richard as a former employee of the company because he seems to be sharing the business information and even trademark with his new business. References Albanese, J.S., 2015. Professional ethics in criminal justice: Being ethical when no one is looking. Pearson. Barnes, B.R., Leonidou, L.C., Siu, N.Y. and Leonidou, C.N., 2015. Interpersonal Factors as Drivers of Quality and Performance in Western–Hong Kong Interorganizational Business Relationships. Journal of International Marketing, 23(1), pp.23-49. Chaney, L. and Martin, J., 2013. Intercultural business communication. Pearson Higher Ed. Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education. He, Y. and Lai, K.K., 2014. The effect of corporate social responsibility on brand loyalty: the mediating role of brand image. Total Quality Management & Business Excellence, 25(3-4), pp.249-263. Kubasek, N.K., Brennan, B.A. and Browne, M.N., 2016. The legal environment of business: A critical thinking approach. Pearson. Lacey, J. and Lamont, J., 2014. Using social contract to inform social licence to operate: an application in the Australian coal seam gas industry. Journal of Cleaner Production, 84, pp.831-839. Read More