Question

Compliance measures are used in many cases to ensure the safety, quality and suitability of a product for a given market. However, compliance and certification process is sometimes used to make market entry more difficult for non-host company suppliers.

Provide three examples of compliance being used for any of these "goals" (or more than one of them). Non-US only. Dig a little deeper than page 1. What was the outcome of the compliance requirements in the host market.

Answer 1

Compliance Measures

In general terms, compliance means conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that organisations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations.When it comes to a business and corporate management, compliance refers to the company obeying all of the legal laws and regulations inregards to how they manage the business, their staff, and their treatment towards their consumers.The concept of compliance is to make sure that corporations act responsibily.

Regulations and accreditions vary among fied to fields. for eg; PCI-DSS and GLBA in the financial industry, FISMA for US federal agency,HACCP for the food and beverage industry and JOINt Commission and HIPAA in healthcare. In some cases other compliance framework such as COBIT or even standards NISt inform on how to comply with regulations.

Importance of compliant measures

• Complaince help to grow business
• Better and improved operations and safety
• Reduce legal problems and issues
• Higher employee retention
• Good public relation
• Quality product and services
• Healthy competition

Examples of compliance and issues

1.Nestle's Maggi Banned in India

Nestle's Maggi Banned in India Due to Excessive Chemicals Used. Global food giant Nestle's Maggi instant noodles are banned in many of the Indian states including the Capital city Delhi, due to the presence of Monosodium glutamate (MSG) and impermissible levels of lead.

Maggi noodles safety concerns in India. In May 2015, food safety regulators from Barabanki, a district of Uttar Pradesh, India reported that samples of Maggi 2 Minute Noodles had unexpectedly high levels of monosodium glutamate (MSG), as well as up to 17 times the permissible limit of lead.

Nestle had to withdraw its instant noodles brand Maggi from the market over allegations of high lead content and presence of MSG (monosodium glutamate). The food safety regulator FSSAI had banned Maggi noodles after it found excess level of lead in samples, terming it as "unsafe and hazardous" for human consumption.

2.Volkswagen Violate diesel emmision norms in India

In December 2017, it recalled 340,000 vehicles of 13 models with EA 189 diesel engines for technical updates, becouse of safety issues.   

Volkswagen emission scandal comes in India. The National Green Tribunal (NGT) has penalised car manufacturer Volkswagen with a “conservative” fine of Rs 171.34 crore, for contributing to air pollution in Delhi through excess nitrogen oxide (NOx) emissions and for causing extensive health damage.

3.COCA- COLA- Exploitate of natural resources in India

In 2005, production of COCA- COLA suspended becouse of huge exploitatin of ground water from Pachimada village of Palakkadu district in Kerala, India

Coca-Cola Charged With Groundwater Depletion and Pollution in India. An ongoing drought has threatened groundwater supplies across India, and many villagers in rural areas are blaming Coca-Cola for aggravating the problem. Coca-Cola operates 58 water-intensive bottling plants in India.

How Compliance and certification process is sometimes used to make market entry more difficult for non-host company suppliers.

The global mobility programs, global business entry, supply of goods and services of multinational companies are subject to a wide array of regulations, law, rules, and compliance measures, both home and host countryor in new foriegn business locations. while the logistical and operational challenges are often the focus of intiationg business activity in foriegn markets, in foriegn markets, it is equally important to assess the complaince issues that can arise when sending employees on assignment.

compliance measures in both home and host country laws divided into three

1. Employment Law

2.Immigration and Work Permits

3. Tax and Social Security Withholding and Payment.

Each country have their own laws and regulations.Each area will have its own specific host country authorities that enforce local laws, and in some cases compliance standards will differ due to bi-lateral treaties with the home country government.

Most of the multinational companies understand the need to adhere to local laws and regulations when entering a foreign market, and will not intentionally violate those rules. However, due to the complexity of learning each country’s laws, there may be instances where compliance can become an issue. The implications of non-compliance may be far reaching for a company, and should be evaluated before entering a new jurisdiction.

Employment Law Vilotions  

The majority of multinational business countries have detailed employment laws designed to protect employee rights under local labor laws. Those laws will control the interpretation of employment agreements, notice periods, legal termination reasons and severance pay. In some cases, employees may retain employment rights in the home country as well as the host country, further complicating the assignment.

Following are the common employment law violoation occurs:

• Termination without cause or proper notice
• Illegal non- compete clauses prohibiting related work
• Non-payment of severance
• Failure to provide agreed benefit or allowances
• Failure to provide proper safety measures to employess

.Immigration and Work Permits Vilotions

Immigration laws are used to regulate the length of stay and type of business activity for employees on assignment. For long term assignment, a valid work permit sponsored by a local, legal entity is required to employ foriegn nationals to comp[ly with immigration laws. In some countries, this can be costly and time consuming process.

Following are the common example of immigration violations:

• Overuse of business visas for multiple entries
• Engaging in business activity that required a work permit
• Failure to establish a proper legal entity for work permit sponsorship.

Tax and Social security Violation

Statuary complaince is the local tax and social security withholding requirement for employees in the host country.

Following are the most common example of violations :

• Illegal attempt to run a remote payroll and withholding without a local entity
• Misclassification of an independent contractor
• Failure to withhold taxes and social security in the host country under a dual payroll structure.

Thank you.....