The understanding of the legal aspect of the targeted country is able to
help the IBL SDN BHD to avoid legal risks. Legal risk can cause the business to
suffer a lot in term of reputation and financially. A fail to provide the guide
toward the legal perspective will lead the business to easily fail in the
foreign country. In term of business, legal issue cover several aspects from
document to distribution. With law, it was also a method to protect the benefit
of IBL SDN BHD in term of the using right and intellectual property right.
Hence, it was very important for IBL SDN BHD to be aware of all the potential
There are several legal risks or issue that might face by IBL Sdn. Bhd.
One of the issue is about the environmental issue. The main focus of the issue
is the standards and requirement to protect the environment of China and reduce
pollutions. Next, it is the distribution issue in China. Here, we concern about
China’s distribution agreement such as its payment methods, and territory given
to distributer. Marketing and advertising is also an important part because it
may cause legal risk. After that, we will then look into the labour issue. In
this issue, we will focus on China’s. And lastly, it is the product safety and
its packaging and labels requirements. Product safety concerns on the product
hygiene and quality according to Law. We also understand the requirement of the
label package of the product so that the information provided is sufficient.
On the general measure to solve all the issues, we have suggested to pay
excessive discharge to control pollution and prevent legal liabilities caused
by the law. Next, legal advisor should be needed when IBL Sdn. Bhd. is entering
a distribution agreement. Then, our marketing strategies should always follow
to the regulations of China and do pre-checking to prevent making confusing
words in the advertisement. For the labour issue, we would recommend performing
consistent with the terms of the agreement, and the agreement should be updated
at least annually. Lastly, final checking should be done to make sure the label
of the package is in the standard and the information is accurate.
A distribution agreement is known as a form
of commercial contract where giving the right to the distributor to distribute
the good or services of another party (supplier) in certain area. In China, the
distribution agreement was protecting in the Law which provide the legal
enforceable rule toward the potential agree between the foreign company and
Chinese company in China (Damiano 2015).
Generally the Chinese company will try to convince the foreign company
to join into a joint venture arrangement whereby the foreign company will be
able to participate in the conduct of the distribution business in China
the China distribution agreement, it usually provide the information about the
payment term, exclusivity, the territory that given to the distributor, type of
product and so on. IBL
Sdn Bhd need to take into account of some major term before entry into
distribution agreement with the Chinese company. China have certain major
interpretations toward some of the important element in the application of
contract law (Huang et al 2014).
presenting the document as an evidence, even the legally enforceable contract
can be voidable, void by the both party, thus the document will not be having
power in China. Country like United States have help the distributors with
providing them some level of legal protection, thus it was cost consuming when terminate
a contract. However, in China, the distributor are lack of the protection from
China, there have no strict legal requirement for any form of compensation to a
distributor due to the cancel of the distribution agreement (Harris 2010). One
of the biggest different between the standard distribution agreement and the
Chinese distribution agreement is that the signature line in the Chinese
distribution agreement have to provide a place for the distributor to affix the
company seal (Harris 2010). A distribution agreement that without the seal or
is an unsealed distribution contract will be treated as not valid contract
under the Chinese law (Harris 2010).
the intellectual property issue was also one of the main concern under the
distribution agreement. A further protection term like, distributor will not be
granted the right to use the trademark are important for IBL SDN BHD to prevent
he legal issue.
order to avoid certain unnecessary problem that related to distribution, I
would suggest IBL SDN BHD to look for the legal advisor in China first before
entering into any distribution agreement with the Chinese Party. The legal term
of China and Malaysia are different, thus, a local people who able to interpret
the Chinese law well able to help IBL SDN BHD to avoid from falling into the
trap and prevent misunderstanding toward the contract. Next, in order to
protect the intellectual property right of the product, a further protection
action have to be carry out by IBL SDN BHD. Action like register the trademark
in China is a must to prevent risk of the unethical distributors from using the
IBL SDN BHD trademark. IBL SDN BHD have to use the good faith mode in
exercising their right and focus on fairness when carry business in China to
avoid the risk of the distribution agreement from getting terminated.
the law in China, the advertisement about the food must be 100% match the
requirement for the public health. According to the article 9 state that the
word like the national, the best or any comparative word are prohibited in the
advertisement. IBL SDN BHD should not be using the comparative word when carry
the marketing or advertising campaign to avoid the legal issue. In China, the
food advertisement have to giving the true information and cannot contain any
form of wrong information (Global Agricultural Information 2015).
Law of China (2015), the food advertisement cannot contain any incorrect
information toward the claiming of any disease prevention and treatment
functions. In China, a new advertisement law that carry the protection toward
the consumer have been carry out in 1 September 2015 (Levells 2015). Under the
new advertisement law, the meat company are forcing to revisit their marketing
budget and strategy. Furthermore, marketing campaign that claim that the meat
able to provide certain amount of nutrition have to provide the scientific
that concern toward the meat from endangers species are prohibited in China. Advertisement of food that fail to match the public
health requirement from IBL SDN BHD will get the sanction from the Chinese
government. Sanction like that down the advertisement will be carry out to IBL
SDN BHD who fail to follow the rule.
False advertisement law have been strictly put into the legal
framework. For example, the regulator recently fined for false advertising
because the company use the computer software to whiten a celebrity endorser
teeth. This case show that even the colour itself can be a severe legal problem
to the company. The colour of the meat is the main concern issue under this
In order to avoid from receiving the legal responsibility,
IBL SDB BHD have to make sure their advertisement and marketing strategy are
following the rule and regulation of China. Action like sending the meat sample
to the Chinese authority to have a pre-checking before start to conducting the
business at China. This measure is to prevent further loss after set up the company.
Moreover, it also help in identifying the potential risk that bring along with
the meat industry. IBL SDN BHD should use the word which clearly deliver the
message to the customer rather than using the word that will cause confusing.
This measure can help IBL SDN BHD to better deliver the message and gain the
trust from Chinese government and customer. Joint venture with a local
advertisement and marketing company to help promote the meat. This action
enable IBL SDN BHD to better focus on their core business, meat rather than
focus on the size business, the advertising and marketing. Hire the local
company to do the advertisement is because the local company will have a better
understanding toward the advertisement and marketing rule and regulation of
China. Hence, error can be reduce and the legal risk also can be reduce for IBL
In the meat industry, the product safety is very important and the
company must pay a lot of attention on it. As for IBL Sdn. Bhd., its main
responsibility is to control the product quality, hygiene and safety is needed.
In order to avoid legal risk, understand and follow the rules of the import
country is very important.
While exporting meat to China, there are a few regulations regarding to
product safety is shown in the Law of China (1983). In the Law, it stated that
the food (include meat) must be not toxic and harmless. The product should also
conform to proper nutritive requirements and should have appropriate sensory
properties such as fragrance, colour and taste. Any poneultry, livestock that
have died due to diseases, toxic or some unknown reason
are also not allowed for the use of marketing. These two points mean that IBL
Sdn. Bhd. should be careful when buying raw meat and must confirm that the meat
is healthy. Next, in the aspect of the food additives, which means the
flavouring, colouring and the preservatives are also being mentioned in the Law.
The law states that the food additives must meet the quality standard and be
produced by factories who have the authorities to do so. The use of the food
additives must also meet the hygiene standard which is shown in the hygiene
management regulations. The use of substandard or lower quality food additives
are not allowed.
In order to keep quality assurance of the meat, several external factors
or environment should also be taken care of such as the container that used for
transportation and its package. Under the law, it said that containers and
equipment that are used for the purpose of transportation, loading and
unloading of meat must meet the hygiene requirements and standards in order to
prevent food hygiene and quality problems. Besides, packaging of the meat that the
material are made by paper, plastic, rubber or other material as well as paints
and coatings must be manufactured by authorized factories. This is because the
package has a direct contact with the meat itself. Unclean or toxic package may
affect the quality and hygiene issues to the meat and the company’s products.
If the IBL Sdn. Bhd. did not achieve and do as the rules and regulations
states, it will face legal responsibility such as penalties by fine with not
less than 20 yuan and not more than 30,000 yuan or even the revocation of the company’s
There are a few measures that can help give confirmation and legitimate
assurance to IBL Sdn. Bhd. concerning the item security issue. To start with,
IBL Sdn. Bhd. ought to allot their creation office to twofold check so as to
ensure that the measure of added substances inside the meat is still with the
standard. Next, buy office ought to send a group to visit the provider and
furthermore do some checking with the animals. This is to ensure that the
supply of the crude meat is in quality affirmation. IBL Sdn. Bhd. ought to
likewise ensure the compartment and the ship to be utilized for send out is
being cleaned each day and great in cleanliness. In conclusion, provider of the
bundling material should demonstrate to us the report which demonstrates that the
material of the bundle is nontoxic and unharmed to the buyers.
is an imperative and IBL Sdn. Bhd. should likewise dependably put a great deal
of consideration in this issue. Bundle marking empowers the IBL Sdn. Bhd. to
share and give important data to the purchasers. Giving data to the shopper is
a mean of regard to the human rights and guard the buyer while utilizing the
item. In the bundle of meat, it could be plastic bundle or can.
As per USDA
(2017), it has expressed that keeping in mind the end goal to send out meat to
China, the outside name ought to incorporate Chinese and English. Inside the
outside mark, it is expressed that few components must be incorporated, which
are Product name, Country of starting point, Establishment number, Production
date, Expiration date, stockpiling period or time span of usability, Storage
temperature, Country of goal, Net weight (English), Inspection legend
(English), Name and address of Company (English), Production Lot number (as
characterized by the exporter), Specification (alludes to bundling write).
The China mark
prerequisites has no confinements on the name size, shading, and size of the
wording as long as it is intelligible and simple to peruse (USDA 2017).
This is a
critical data for meat exporters who need to fare to China. The reason is on
account of they may preclude the passageway of the item because of not
following the marking prerequisite of China and cause the issue of vague data.
So as to evade or keep this to happen, some broad measures could be
taken so as to reduce or dispose of this legitimate hazard. Before stacking the
freight (meat) installed, IBL Sdn. Bhd. ought to appoint a group of laborers to
do the last checking of the item and decide if the item names in as take after
to the necessity of China. The group needs to put more consideration on
checking the creation parcel number, expiry date, generation date, and the
details. Making a last checking can diminish the odds that IBL Sdn. Bhd. in
confronting this sort of lawful hazard, and this would help IBL Sdn. Bhd. to
abstain from paying additional cost or face misfortune.
In the current years, the China’s administration has implemented solid
natural laws and controls on meat generation. This is mostly because of the
rural practices of meat industry having been found to have an assortment of
consequences for the earth. A portion of the huge ecological impacts that have
been related with meat generation are contamination through non-renewable
energy source use, creature methane, gushing waste, and water and land
The units of meat industry that reason natural contamination and other
open risks (Beyer 2006). The put forward a few sorts of toxins that are denied
and confined from release into the waters of China (Weiss 1992). Where squander
releases are limited, the confinement for the most part essentially requires
that the misuse of creature or domesticated animals be dealt with to meet
pertinent release norms or adjust to relevant water quality measures previously
The benchmarks for emanation of toxins into the air, requires the units
of meat industry to create air contamination release constrains as per the
national encompassing air quality norms and the nation’s financial and
mechanical conditions (Wang et al. 2003). Commonplace level individuals
government can set up release limits for toxins more stringent than those set
for a given poison in as far as possible and may set cutoff points for
contaminations not secured by as far as possible.
China additionally has set of clamor release norms. The Standard builds
up five classifications of commotion locale, contingent upon the utilization
and attributes of region (Canfa 2006). Clamor norms and how to gauge commotion
levels are set for each of the classes. Likewise, as far as possible,
successful at the office limit, have been built up for meat modern undertaking
delivering clamor through utilization of settled types of gear and instruments
in meat generation.
IBL Sdn Bhd must actualize compelling measures to avoid and control the
contamination and damages caused to the earth by creature squander, squander
water, squander gas, commotion, arrive utilization and clean create over the
span of meat generation and different exercises. IBL Sdn Bhd should pay an
expense for exorbitant release as per state arrangements and might accept
accountability for disposing of and controlling the contamination to anticipate
legitimate liabilities over the span of infringement of the laws.
representing work and modern relations to a great extent originate from the
sanctioning of in China (Brown 2009). All together for IBL Sdn Bhd to go into
business contract in China, it is essential to consider different regulatory
controls at the focal and nearby levels as these laws represent the arrangement
and end of work contracts, work gauges, extra time pay and maternity take off.
These laws apply to all elements that utilize occupant and non-inhabitant
China, work contracts are administered by the which applies to all
undertakings. Under composed work contracts are important to set up work
connections (Cooney 2006). Work contracts must be given in composing and in a
dialect that is comprehended by the two gatherings taking part in the agreement
(Lee 2002). In the event that the business neglects to give a composed contract
to a worker for in the vicinity of one and a year, the business is obliged to
pay the representative twice his compensation for each long stretch of length
(Josephs 2008). In the event that there is no composed contract for over a
year, the agreement is considered as an open-finished contract (Brown 2009).
contracts must incorporate, at least, the accompanying terms (Josephs 2008):
name, residence and lawful illustrative of the business
name, residence and inhabitant ID number of the worker
length of the business contract
set of working responsibilities and area of work
hours and leave arrangements
and any advantages
assurance and working conditions
different issues are stipulated by laws or nearby directions
work of remote nationals is directed by the Law (Allard and Garot 2010).
Outside nationals must get consent from the significant specialists previously
they are permitted to work in China. Basic to this is the application for a
work visa (single section Z visa) which is ordinarily embraced by the planned
business (Zhao 2008). Organizations should likewise apply for a business permit
when they utilize an outside national.
give confirmation and legitimate security as far as work law to IBL Sdn Bhd, it
is basic for the organization to perform reliable with the terms of the
assention. While the agreement is the beginning stage for a joint manager
examination, courts will ignore it when it neglects to reflect with the gatherings’
genuine business practices and every day exercises. It is likewise critical to
tailor the consent to the business relationship, and refresh it yearly. This is
a result of the noteworthy dangers related with going amiss from the terms of
an assention influencing joint business status. Additionally, in light of the
fact that business connections and lawful and administrative necessities
advance and change after some time, the composed assention ought to be
refreshed at any rate every year to guarantee its adequacy. Eventually, the
composed understanding will be critical proof in a joint manager claim.
Nonetheless, it isn’t only the dialect of the composed assention, yet rather,
the activities of the gatherings, that will decide risk.
China offers numerous open doors for
worldwide sustenance exporters hoping to enter a huge and beneficial market. In
any case, the nation’s nourishment import process can be difficult to explore
for first time exporters, because of its divided and confined framework. Through
the report, different legitimate issues that should have been concerned have
accommodated IBL Sdn. Bhd. keeping in mind the end goal to be prevail in China.
The way toward sending out meat into China is convoluted and tedious when
contrasted and the others nations, alluding to the legitimate issues
illustrated and measures suggested above can make the procedure smoother and
At the phase of pre-sending out, the
archives and licenses required can decide the viability of following exportation
steps which give the privilege to offer in China for IBL Sdn. Bhd. Other than
that, the wellbeing and cleanliness issues are the significant worry of experts
in sustenance items exchanging. The general and particular principles on naming
and item handling are increasing increasingly consideration the same number of
sustenance wellbeing issues have emerged and caused diseases in China over
recent years. Specifically, the sustenance wellbeing issues will make danger to
shoppers and furthermore chance IBL Sdn. Bhd. for potential lawful procedures.
Also, amidst exportation, the business
related laws and controls required profoundly consideration from IBL Sdn. Bhd.
as the organization should team up with neighborhood workforce. What’s more,
the organization with nearby merchants is likewise a basic advance for the
organization, via completing successful understandings to dodge legitimate
dangers later on. The laws and directions respect promoting and publicizing is
the key component deciding the supportability of IBL Sdn. Bhd. In China.
In generally, IBL Sdn. Bhd. ought to
conform to the directions all through the exportation procedure to guarantee
the organization’s achievement in one of the world’s biggest buyer markets.