Green Marketing Legislation

Multinational corporations also face a growing variety of legislation designed to address

environment issues.47 Global concern for the environment extends beyond industrial pollution,
hazardous waste disposal, and rampant deforestation to include issues that focus directly on
consumer products. Green marketing laws focus on environmentally friendly products and on
product packaging and its effect on solid waste management.
Germany has passed the most stringent green marketing laws that regulate the
management and recycling of packaging waste.48 The new packaging laws were introduced in
three phases. The first phase required all transport packaging, such as crates, drums, pallets, and
Styrofoam containers, to be accepted back by the manufactures and distributors for recycling.
The second phase required manufacturers, distributors, and retailers to accept all returned
secondary packaging, including corrugated boxes, blister packs, packaging designed to prevent
theft, packaging for vending machine applications, and packaging for promotional purposes. The
third phase requires all retailers, distributors, and manufacturers to accept returned sales
packaging, including cans, plastic containers for dairy products, foil wrapping, Styrofoam
packages, and folding cartons such as cereal boxes. The requirement for retailers to take back
sales packaging has been suspender as long as voluntary green dot program remains a viable
substitute. A green dot on a package identifies manufacturers that have agreed to ensure a regular
collection of used packaging materials directly from the consumer’s home or from designation
local collection points.
Reclaiming recyclables extends beyond packaging to automobiles. By 2006,
manufacturers based in European Union nations must take back any cars they produced that no
longer have resale value and pay for proper disposal. Further, by the same years, 85 percent of a
scrapped car’s material must be recovered for future use.
Many European countries also have devised schemes to identify products that comply
with certain criteria that make them more environmentally friendly than similar products.
Products that meet these criteria an awarded an “Eco label” that the manufacturer can display on
packaging to signal to customers that it is an environmentally friendly product. The EC is
becoming more aggressive in issuing new directives and in harmonizing Eco labeling and other
environmental laws across all member states. Eco labeling and EU packaging laws are discussed
in more detail in the chapter on consumer products.

Antitrust

With the exception of the United States, antitrust laws were either nonexistent or not enforced in
most of the world’s countries for the better part of the 20th century. However, the European
Union, Japan, and many other countries have begun to actively enforce their antitrust laws
patterned after those in the United States. Antimonopoly, price discrimination, supply
restrictions, and full-line forcing are areas in which the European Court of Justice has dealt
severe penalties. For example, before Procter & Gamble was allowed in buy VP-Schickedanz
AG, a German hygiene products Company, it had to agree to sell off one of the German
company’s divisions that produced Camellia, a brand of sanitary napkins. P&G already marketed
a brand of sanitary napkins in Europe, and the commission was concerned that allowing P&G to
keep camellia would give the company a controlling 60 percent of the German sanitary products
market and 81 percent of Spain’s in another instance, Coca-Cola was fined $1.8 million for
anticompetitive practices by France’s antitrust authority.
 The United States also intervenes when non-U.S. companies attempt to acquire American
companies. Nestlé’s proposed $2.8 billion acquisition of Dreyer’s Grand Ice Cream hit a
roadblock as U.S. antitrust officials opposed the deal on grounds that it would lead to less
competition and higher prices for gourmet ice cream in the United States. At times, companies
are subject to antitrust charges in more than one country. Microsoft had a partial victory against
antitrust charges brought in the United States only to face similar anticompetitive charges against
Microsoft’s Windows 2000 operating system in the EU. The probe is based on possible
competitive benefits to European software concerns if legal limits are placed on Microsoft.
American companies have faced antitrust violations since the trust-busting days of President
Theodore Roosevelt but much less in other parts of the world. Enforcement of antitrust in Europe
was almost nonexistent until the early stages of the European Union established antitrust
legislation.
Competitive methods illegal in the United States can be legal in another country. If you
go to one of the 15 Tony Roma franchises in Mexico, the only beer you can buy is Modelo,
brewed by Group Modelo SA, maker of the top-selling imported beer in the United States,
Corona Extra. “We used to have 28 different kinds of beer, including American beers”, says the
general manager of Tony Roma’s, “but Modelo gave us money to sell only its beer.” A Modelo
distributor paid one town to ban stores from selling any other beer in exchange for cash, school
uniforms, lighting for public parks, and free beer at city parties. That kind of tie-up, illegal in the
United States, is common in restaurants, corner stores, and stadiums throughout Mexico. Such
tactics have given Modelo and its rival, Foment Economic Mexicans SA, 99 percent of the
market. Such tactics, legal in Mexico but illegal in the United States, gives Modelo and other
Mexican brewers an advantage in the U.S. market, where Corona accounts for 40 percent of all
U.S. beer imports and 11 percent of the overall U.S. beer market compared to just 1 percent of
the Mexican market for U.S. beer. Ironically, Pepsi-cola and Coca-cola Dominate the Mexican
soft drink market and have used similar tactics to complete with one another-that is, until a
recent ruling that Coke is no longer allowed to make such tie-ins because it prevents Pepsi from
competing. Worldwide antitrust enforcement or lack thereof is just one more important areas of
law that each multinational firm must consider in tis strategic decision making.

Regulatory Framework in India: A Framework by Ministry Of Commerce, Department of

Industrial Policy and Promotion. (Jan, 2008)

(A) Setting up of a Company

The principal forms of business organization in India are:

• Companies--- both public and private
• Partnership
• Sole Proprietorship

Companies incorporated in India and branches of foreign corporations are regulated by the
Companies Act, 1956(the act). The Act, which has been enacted to oversee the functioning of
companies in India, draws heavily from the United Kingdom’s Companies Acts and although
similar, is more comprehensive. The Registrar of companies (ROC) and the Company Law
Board (CLB), both working under the Department of Company Affairs, ensure compliance with
the Act.
(B) Foreign Companies

Foreign investors can enter into the business in India either as a foreign company in the form of a
liaison office/representative office, a project office and a branch office by registering themselves
with Registrar of Companies (ROC), New Delhi within 30 days of setting up a place business in
India or as an Indian company in the form of a Joint Venture and wholly owned subsidiary. For
opening of the foreign company specific approval of Reserve Bank of India is also required.”
For starting a new project, a numbers of approvals/clearances are required from different
authorities such as Pollution Control Board, Chief Inspector of Factories, Electricity Board,
Municipal Corporations, etc.

(c) Foreign Exchange Management Act (FEMA)

Indian Parliament has enacted the Foreign Exchange Management Act, 1999 to replace the
Foreign Exchange Regulation Act, 1973. This Act came into force on the 1st day of June 2000.
The object of the Act is to consolidate and amend the law relating to foreign exchange with the
objective of facilitating external trade and payments and for promoting the orderly development
and maintenance of foreign exchange market in India.
This Act extends to the whole of India and will also apply to all branches, offices and
agencies outside India owned or controlled by a person resident in India. It will also be
applicable to any contravention committed outside India by any person to whom this act is
applicable.

(D) Taxation In India

Since the onset of liberalization in the country, tax structure of the country is also being
rationalized keeping in view the national priorities and practices followed in other countries.
Foreign nationals working in India are generally taxed only on their Indian income. Income
received from sources outside India is not taxable unless it is received in India. The Indian tax
laws provide for exemption of tax on certain kinds of income earned for services rendered in
India. Further, foreign nationals have the option of being taxed under the tax treaties that India
may have signed with their country of residence.
Remuneration for work done in India is taxable irrespective of the place of receipt.
Remuneration includes salaries and wages, pensions, fees, commissions, profits in lieu of or in
addition to salary, advance salary and perquisites. Taxable payments include all allowances and
tax equalization payments unless specifically excluded. The stock options granted by the
employer are taxable as capital gains at the time of sale of shares acquired due to exercise of
options.

(E) Intellectual Property

India is a signatory to the agreement concluding the Uruguay Round of GATT negotiations and
establishing the World Trade Organization (WTO). This Agreement, inter-alia, contains an
Agreement on Trade related Aspects of Intellectual Property Rights (TRIPS), which came into
force from 1st January 1995. It lays down minimum standards for protection and enforcement of
Intellectual Property Rights in member countries. Which are required to promote effective and
adequate protection of Intellectual Property Rights with a view to reducing distortions and
impediments to international trade. The obligations under the TRIPS Agreement relate to
provision of minimum standards of protection within the member country’s legal systems and
practices.
As regards the status of various Intellectual Property laws in India and standards in
respect of various areas of intellectual property, a law on trade marks has been passed by
Parliament and notified in the gazette on 30.12.1999. This law repeals and replaces the earlier
Trade & Merchandise Act, 1958. A new law for the protection of geographical indications viz..,
the geographical indications of goods act, 1999 has also been passed by the parliament and
notified on 30-12-1999. A law called the designs act, 2000 relating to industrial designs which
repeals and replaces the earlier. Designs act, 1911 has also been passed by parliament in its
budget session,2000. The act has been brought into force from 11-05-2001. A bill on patents to
amend the patents act, 1970 was introduced in Rajya Sabha on 20-12-1999 and the bill was
passed on 14-05-2002.