Description
This is document describes about blood diamonds.
1.
What are Blood Diamonds? “Blood Diamonds” are a type of stones available in abundance in certain regions which are controlled by rebels that do not acknowledge the globally recognized governments and their laws. The rebels sell these diamonds and earn money which is used to purchase arms or to fund their military actions. The production of these blood diamonds generally takes place through the forced labor of men, women and children. The stones thus found are smuggled into the international diamond trade and sold as legitimate gemstones. Many of the times these diamonds are the main source of funding for the rebels, though, arms merchants, smugglers and dishonest diamond traders enable their actions. The large scale of money involved and the loss of lives lead to the association of “blood” with these gemstones and thus called as blood diamonds.
2.
What ethical norms are violated by the Diamond Industry? Ethical norms violated by Diamond industry: ? Controlling the demand and supply and thus pricing of the diamond ? Leading poor nations into civil wars ? Child Labor ? Illegal trading practices What laws are violated by the Diamond Trading Company? Unlawfully monopolized the supply of diamonds and conspired to fix, raise and control diamond prices. ? Misleading advertising Enlist the various legal issues depicted in the movie. ? Unlawfully monopolized the supply of diamonds and conspired to fix, raise and control diamond prices. ? Misleading advertising What laws do we have at international and national level to tackle these issues? 1] The Kimberley Process Certification Scheme The Kimberley Process was established by the UN, governments, NonGovernmental Organisations (NGOs) and the diamond industry to prevent conflict diamonds from entering the legitimate diamond supply chain. Today, about 99.8% of world diamond production is from countries that participate in the Kimberley Process Certification Scheme (KPCS). 2] The system of warranties ?
3.
4.
5.
The international diamond industry also developed a system of warranties to support implementation of the Kimberley Process. The Kimberley Process is restricted to the trading of rough diamonds between countries. The system of warranties applies to both rough and polished diamonds. It requires companies to implement a system that ensures all invoices for the sale
of diamonds, and jewellery containing diamonds, include a written guarantee that the diamonds are conflict free. Records of all warranty invoices given and received must be kept and externally audited on an annual basis. The Family of Companies was instrumental in developing the system of warranties through its work with the World Diamond Council. The Kimberley Process and the system of warranties are also embodied in the BPPs and our Principles.
6.
What is Kimberley Process? The flow of Conflict Diamonds has originated mainly from Sierra Leone, Angola, Democratic Republic of Congo, Liberia and Ivory Coast. The United Nations and other groups are working to block the entry of conflict diamonds into the worldwide diamond trade. Their approach has been to develop a government certification procedure known as the “Kimberly Process”. This procedure requires each nation to certify that all rough diamond exports are produced through legitimate mining and sales activity. All rough diamonds exported from these nations are to be accompanied by certificates. These certificates state that the diamonds were produced, sold and exported through legitimate channels. The certification process accounts for all rough diamonds, through every step of their movement, from mine to retail sale. Retail customers buying a cut diamond are encouraged to insist upon a sales receipt that documents that their diamond originated from a conflict free source.
7.
What is a class action lawsuit? When one joins a class action lawsuit, one usually has to sign papers declaring that he or she then forfeits the right to sue the company as an individual. A successful class action lawsuit awards damages to the plaintiffs, who are those suing the company, according to greatest damage. In most cases not all members of the suit are entitled to equal compensation. Usually the attorneys work on a contingency basis, which means that they will receive a portion of the award but charge their clients, no fees if the suit is not successful. That portion can be high, ranging from 30 to 50 percent of the total award. Awards from a class action lawsuit are split into two portions: punitive and compensatory damages. Compensatory damages are meant to address the defendants (those being sued), and direct damage. These funds will be used to address actual damages caused by the defendants, such as illness, loss of life, and/or pain and suffering. Punitive damages from a class action lawsuit are a form of punishment for the company committing illegal acts, or causing harm. Punitive damages in large class action lawsuits can be particularly high, when it is demonstrated the company has shown great disregard for the health, safety or emotional well being of the plaintiffs.
8.
What is the Indian equivalent of a class action lawsuit? In India, class action lawsuits may be compared to Public Interest Litigation (PILs) allowed under Civil Procedure Law, wherein an individual or a group of individuals are allowed to file a complaint. Such litigation’s are mainly used in consumer complaints and rising environmental & cultural concerns; generally limited to protection of fundamental rights and are meant for protection of public interest. Such litigation’s can be initiated either by the Court itself or by a public spirited individual/s that represent the victim/s. In such cases, generally victims are unable to approach courts due to financial disability or otherwise. One may find that in India, though the principles of class action suits by shareholders against managements have been upheld by various Courts in the past, these are yet to be reflected in law.
9.
What is de beers diamond law-suit all about? People who have bought diamonds any time between January 1, 1994, and March 31, 2006 may be in for a little return on their purchase. De Beers has settled a class action lawsuit for $295 million. Under the terms of the settlement individual consumers and members of the diamond trade can make a claim. The settlement is the result of a lawsuit which said that the South African company charged anticompetitive prices for the rough diamonds it sold, monopolized the rough diamond market, and disseminated false and misleading advertising. De Beers has not admitted to any wrongdoing. The rewards can be substantial, WNBC reports that a consumer who bought a $2,000 ring could get as much as $640 back. There is a settlement website for claims, which provides details on who might be eligible and those interested in filing must do so before March 19.
10.
Describe your emotional response to the movie. This movie was really heart rendering. It broadens one’s viewpoint and make one see the reality, and the things going on in the world. It tells us about the illegal practices being followed in the world and how they are impacting the lives of many. Even a common man unknowingly becomes a part of the crime, as is shown in the movie through the demand of diamonds.
11.
Describe your rational response to the movie.
The movie clearly shows the illegal practices being carried in this world and how the demand and supply moves the market. Rationally, it can be seen as the trade activities which are being controlled by few rich countries and the sacrifice is to be given by poorer countries and their citizens who have to face the civil wars, etc. The movie clearly shows the demand and supply phenomenon and how the prices are controlled by the few top firms (here, diamond firms in the movie). 12. What kind of trade practices are listed below? Please identify their legal character and comment. a) Monopolization : There is a monopolistic position where one or more business operators have market share and/or total sales revenue exceeding the level prescribed by the Trade Competition Commission under the approval of the
Cabinet and which have been published in the Government Gazette. These business operators are then considered as having "power over the market". b) Collusion a. Formation of cartels: A cartel is an association of manufacturers and suppliers with the purpose of maintaining prices at high level and restricting competition. When Vijay Mallya and Naresh Goyal got together, pundits feared it as cartel. Cartel, basically, gives more power to the firms over the market and as a result, there is fear of lack of competition aka monopoly. This act is known as cartelization. It is practiced in most sectors, but is often just an alliance on purely commercial terms. As we know that the aviation industry is going through a rough phase, and both Vijay Mallya’s and Naresh Goyal’s firm find it hard to maintain the costs, thanks to the rising fuel prices, less passenger traffic and high operational costs. So, logically they made a move to save their own firms. But what makes this cartel interesting is that after this alliance, both firms will control 60% of the market. That will make competition useless as the other airlines will find it hard to keep up with the prices set by the alliance. These kinds of trade practices have their set of rules. One such rule is the Monopolies and Restrictive Trade Practice (MRTP) Act, which prohibits cartels in any industry. Ultimately, it is the consumer who will feel the burden, as he will have to pay the prices set by cartel instead of competitive prices in the case of healthy competition.
b. Price fixing: Price fixing is an arrangement in which several competing businesses make a secret agreement to set prices for their products to prevent real competition. Price fixing also includes secret setting of favourable prices between suppliers and favoured manufacturers or distributors to beat the competition. Vertical price fixing pertains to arrangements between a manufacturer, distributor, supplier or retailer. Horizontal price fixing, which would involve competitors colluding to set prices, remains illegal. Courts have held that vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason. Therefore, suppliers of goods and services don't necessarily violate antitrust laws by setting maximum prices their retailers can charge.
c. Bid rigging: Bid-rigging, also known as collusive tendering is one of the offences prohibited by the Fair Competition Act. Section 36 makes it illegal for two or more persons, in response to a call or request for bids or tenders, to either: (a) agree not to submit a bid; or (b) submit bids or tenders arrived at by their prior agreement. It is particularly likely to be encountered in the engineering and construction industries where firms compete for very large contracts.
Purchasers, who are often government entities, but who may also include private entities, seek to acquire goods and services by soliciting competing bids. Bid-rigging occurs, for example, when the competing suppliers conspire and agree in advance on the bids to be submitted by each, so as to control the outcome of the bid. By so doing the suppliers effectively raise prices, or keep prices high, and reduce or eliminate competition in the market place. Like other anti-competitive offences of its kind, bid-rigging is costly to the economy. It costs the purchasers of the bid, as they end up paying far more than they would have had to pay otherwise. This in turn increases the cost to the consumers, as the higher prices are inevitably passed to them. They end up paying far more than the fair market value of these goods and services. c) Product bundling and tying: Tying is the practice of making the sale of one good (the tying good) to the de facto or de jure customer conditional on the purchase of a second distinctive good (the tied good). It is often illegal when the products are not naturally related, for example requiring a bookstore to stock up on an unpopular title before allowing them to purchase a bestseller. The basic idea is that consumers are harmed by being forced to buy an undesired good (the tied good) in order to purchase a good they actually want (the tying well), and so would prefer that the goods be sold separately. The company doing this bundling may have a significantly large market share so that it may impose the tie on consumers, despite the forces of market competition. The tie may also harm other companies in the market for the tied good, or who sell only single components. Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal or a compilation or an anthology. d) Refusal to deal: Refusal to deal includes any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought. a. Group boycott: In competition law, a group boycott is a type of secondary boycott in which two or more competitors in a relevant market refuse to conduct business with a firm unless the firm agrees to cease doing business with an actual or potential competitor of the firms conducting the boycott. It is a form of refusal to deal, and can be a method of shutting a competitor out of a market, or preventing entry of a new firm into a market. e) Exclusive dealing: Exclusive dealing broadly involves one trader imposing restrictions on another trader’s freedom to choose with whom, or in
what, or where they deal. Some forms of exclusive dealing will only raise concerns under the Trade Practices Act if they substantially lessen competition. One form of exclusive dealing – known as third line forcing – is prohibited per se, meaning that it is prohibited no matter what its effect on competition. Third line forcing involves the supply of goods or services on condition that the purchaser acquires goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.
f) Dividing territories: Dividing territories (also Market division) is an agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories. It is one of several anti-competitive practices outlawed in the India. The term is generally understood to include dividing customers as well. For example, in 1984 FMC Corp. and Asahi Chemical agreed to divide territories for the sale of microcrystalline cellulose, and later FMC attempted to eliminate all vestiges of competition by inviting smaller rivals also to collude.
g) Conscious parallelism: The act of price fixing between competitors without actual discussion or agreement. One competitor would change the price and the others in the market would follow him with an unspoken mutual understanding. This act is a violation of anti-trust laws. h) Predatory pricing: An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat.
i) Misuse of patents and copyrights: Copyright misuse is an equitable defence against copyright infringement based on the abusive or improper conduct of the copyright owner in enforcing the copyright. It is comparable to and draws from precedents under the older doctrine of patent misuse, which dates back to the early years of the 20th century. The doctrine forbids the copyright owner from attempting to extend the effect or operation of the copyright beyond the scope of the statutory right, usually through restrictive licensing practices) that are contrary to public policy. Finding that a copyright owner has engaged in misuse prevents the owner from enforcing her copyright through the securing of an injunction until the misuse has been "purged" -that is, the improper practice has been abandoned and its effects have fully dissipated.
doc_587474691.docx
This is document describes about blood diamonds.
1.
What are Blood Diamonds? “Blood Diamonds” are a type of stones available in abundance in certain regions which are controlled by rebels that do not acknowledge the globally recognized governments and their laws. The rebels sell these diamonds and earn money which is used to purchase arms or to fund their military actions. The production of these blood diamonds generally takes place through the forced labor of men, women and children. The stones thus found are smuggled into the international diamond trade and sold as legitimate gemstones. Many of the times these diamonds are the main source of funding for the rebels, though, arms merchants, smugglers and dishonest diamond traders enable their actions. The large scale of money involved and the loss of lives lead to the association of “blood” with these gemstones and thus called as blood diamonds.
2.
What ethical norms are violated by the Diamond Industry? Ethical norms violated by Diamond industry: ? Controlling the demand and supply and thus pricing of the diamond ? Leading poor nations into civil wars ? Child Labor ? Illegal trading practices What laws are violated by the Diamond Trading Company? Unlawfully monopolized the supply of diamonds and conspired to fix, raise and control diamond prices. ? Misleading advertising Enlist the various legal issues depicted in the movie. ? Unlawfully monopolized the supply of diamonds and conspired to fix, raise and control diamond prices. ? Misleading advertising What laws do we have at international and national level to tackle these issues? 1] The Kimberley Process Certification Scheme The Kimberley Process was established by the UN, governments, NonGovernmental Organisations (NGOs) and the diamond industry to prevent conflict diamonds from entering the legitimate diamond supply chain. Today, about 99.8% of world diamond production is from countries that participate in the Kimberley Process Certification Scheme (KPCS). 2] The system of warranties ?
3.
4.
5.
The international diamond industry also developed a system of warranties to support implementation of the Kimberley Process. The Kimberley Process is restricted to the trading of rough diamonds between countries. The system of warranties applies to both rough and polished diamonds. It requires companies to implement a system that ensures all invoices for the sale
of diamonds, and jewellery containing diamonds, include a written guarantee that the diamonds are conflict free. Records of all warranty invoices given and received must be kept and externally audited on an annual basis. The Family of Companies was instrumental in developing the system of warranties through its work with the World Diamond Council. The Kimberley Process and the system of warranties are also embodied in the BPPs and our Principles.
6.
What is Kimberley Process? The flow of Conflict Diamonds has originated mainly from Sierra Leone, Angola, Democratic Republic of Congo, Liberia and Ivory Coast. The United Nations and other groups are working to block the entry of conflict diamonds into the worldwide diamond trade. Their approach has been to develop a government certification procedure known as the “Kimberly Process”. This procedure requires each nation to certify that all rough diamond exports are produced through legitimate mining and sales activity. All rough diamonds exported from these nations are to be accompanied by certificates. These certificates state that the diamonds were produced, sold and exported through legitimate channels. The certification process accounts for all rough diamonds, through every step of their movement, from mine to retail sale. Retail customers buying a cut diamond are encouraged to insist upon a sales receipt that documents that their diamond originated from a conflict free source.
7.
What is a class action lawsuit? When one joins a class action lawsuit, one usually has to sign papers declaring that he or she then forfeits the right to sue the company as an individual. A successful class action lawsuit awards damages to the plaintiffs, who are those suing the company, according to greatest damage. In most cases not all members of the suit are entitled to equal compensation. Usually the attorneys work on a contingency basis, which means that they will receive a portion of the award but charge their clients, no fees if the suit is not successful. That portion can be high, ranging from 30 to 50 percent of the total award. Awards from a class action lawsuit are split into two portions: punitive and compensatory damages. Compensatory damages are meant to address the defendants (those being sued), and direct damage. These funds will be used to address actual damages caused by the defendants, such as illness, loss of life, and/or pain and suffering. Punitive damages from a class action lawsuit are a form of punishment for the company committing illegal acts, or causing harm. Punitive damages in large class action lawsuits can be particularly high, when it is demonstrated the company has shown great disregard for the health, safety or emotional well being of the plaintiffs.
8.
What is the Indian equivalent of a class action lawsuit? In India, class action lawsuits may be compared to Public Interest Litigation (PILs) allowed under Civil Procedure Law, wherein an individual or a group of individuals are allowed to file a complaint. Such litigation’s are mainly used in consumer complaints and rising environmental & cultural concerns; generally limited to protection of fundamental rights and are meant for protection of public interest. Such litigation’s can be initiated either by the Court itself or by a public spirited individual/s that represent the victim/s. In such cases, generally victims are unable to approach courts due to financial disability or otherwise. One may find that in India, though the principles of class action suits by shareholders against managements have been upheld by various Courts in the past, these are yet to be reflected in law.
9.
What is de beers diamond law-suit all about? People who have bought diamonds any time between January 1, 1994, and March 31, 2006 may be in for a little return on their purchase. De Beers has settled a class action lawsuit for $295 million. Under the terms of the settlement individual consumers and members of the diamond trade can make a claim. The settlement is the result of a lawsuit which said that the South African company charged anticompetitive prices for the rough diamonds it sold, monopolized the rough diamond market, and disseminated false and misleading advertising. De Beers has not admitted to any wrongdoing. The rewards can be substantial, WNBC reports that a consumer who bought a $2,000 ring could get as much as $640 back. There is a settlement website for claims, which provides details on who might be eligible and those interested in filing must do so before March 19.
10.
Describe your emotional response to the movie. This movie was really heart rendering. It broadens one’s viewpoint and make one see the reality, and the things going on in the world. It tells us about the illegal practices being followed in the world and how they are impacting the lives of many. Even a common man unknowingly becomes a part of the crime, as is shown in the movie through the demand of diamonds.
11.
Describe your rational response to the movie.
The movie clearly shows the illegal practices being carried in this world and how the demand and supply moves the market. Rationally, it can be seen as the trade activities which are being controlled by few rich countries and the sacrifice is to be given by poorer countries and their citizens who have to face the civil wars, etc. The movie clearly shows the demand and supply phenomenon and how the prices are controlled by the few top firms (here, diamond firms in the movie). 12. What kind of trade practices are listed below? Please identify their legal character and comment. a) Monopolization : There is a monopolistic position where one or more business operators have market share and/or total sales revenue exceeding the level prescribed by the Trade Competition Commission under the approval of the
Cabinet and which have been published in the Government Gazette. These business operators are then considered as having "power over the market". b) Collusion a. Formation of cartels: A cartel is an association of manufacturers and suppliers with the purpose of maintaining prices at high level and restricting competition. When Vijay Mallya and Naresh Goyal got together, pundits feared it as cartel. Cartel, basically, gives more power to the firms over the market and as a result, there is fear of lack of competition aka monopoly. This act is known as cartelization. It is practiced in most sectors, but is often just an alliance on purely commercial terms. As we know that the aviation industry is going through a rough phase, and both Vijay Mallya’s and Naresh Goyal’s firm find it hard to maintain the costs, thanks to the rising fuel prices, less passenger traffic and high operational costs. So, logically they made a move to save their own firms. But what makes this cartel interesting is that after this alliance, both firms will control 60% of the market. That will make competition useless as the other airlines will find it hard to keep up with the prices set by the alliance. These kinds of trade practices have their set of rules. One such rule is the Monopolies and Restrictive Trade Practice (MRTP) Act, which prohibits cartels in any industry. Ultimately, it is the consumer who will feel the burden, as he will have to pay the prices set by cartel instead of competitive prices in the case of healthy competition.
b. Price fixing: Price fixing is an arrangement in which several competing businesses make a secret agreement to set prices for their products to prevent real competition. Price fixing also includes secret setting of favourable prices between suppliers and favoured manufacturers or distributors to beat the competition. Vertical price fixing pertains to arrangements between a manufacturer, distributor, supplier or retailer. Horizontal price fixing, which would involve competitors colluding to set prices, remains illegal. Courts have held that vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason. Therefore, suppliers of goods and services don't necessarily violate antitrust laws by setting maximum prices their retailers can charge.
c. Bid rigging: Bid-rigging, also known as collusive tendering is one of the offences prohibited by the Fair Competition Act. Section 36 makes it illegal for two or more persons, in response to a call or request for bids or tenders, to either: (a) agree not to submit a bid; or (b) submit bids or tenders arrived at by their prior agreement. It is particularly likely to be encountered in the engineering and construction industries where firms compete for very large contracts.
Purchasers, who are often government entities, but who may also include private entities, seek to acquire goods and services by soliciting competing bids. Bid-rigging occurs, for example, when the competing suppliers conspire and agree in advance on the bids to be submitted by each, so as to control the outcome of the bid. By so doing the suppliers effectively raise prices, or keep prices high, and reduce or eliminate competition in the market place. Like other anti-competitive offences of its kind, bid-rigging is costly to the economy. It costs the purchasers of the bid, as they end up paying far more than they would have had to pay otherwise. This in turn increases the cost to the consumers, as the higher prices are inevitably passed to them. They end up paying far more than the fair market value of these goods and services. c) Product bundling and tying: Tying is the practice of making the sale of one good (the tying good) to the de facto or de jure customer conditional on the purchase of a second distinctive good (the tied good). It is often illegal when the products are not naturally related, for example requiring a bookstore to stock up on an unpopular title before allowing them to purchase a bestseller. The basic idea is that consumers are harmed by being forced to buy an undesired good (the tied good) in order to purchase a good they actually want (the tying well), and so would prefer that the goods be sold separately. The company doing this bundling may have a significantly large market share so that it may impose the tie on consumers, despite the forces of market competition. The tie may also harm other companies in the market for the tied good, or who sell only single components. Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal or a compilation or an anthology. d) Refusal to deal: Refusal to deal includes any agreement which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought. a. Group boycott: In competition law, a group boycott is a type of secondary boycott in which two or more competitors in a relevant market refuse to conduct business with a firm unless the firm agrees to cease doing business with an actual or potential competitor of the firms conducting the boycott. It is a form of refusal to deal, and can be a method of shutting a competitor out of a market, or preventing entry of a new firm into a market. e) Exclusive dealing: Exclusive dealing broadly involves one trader imposing restrictions on another trader’s freedom to choose with whom, or in
what, or where they deal. Some forms of exclusive dealing will only raise concerns under the Trade Practices Act if they substantially lessen competition. One form of exclusive dealing – known as third line forcing – is prohibited per se, meaning that it is prohibited no matter what its effect on competition. Third line forcing involves the supply of goods or services on condition that the purchaser acquires goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.
f) Dividing territories: Dividing territories (also Market division) is an agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories. It is one of several anti-competitive practices outlawed in the India. The term is generally understood to include dividing customers as well. For example, in 1984 FMC Corp. and Asahi Chemical agreed to divide territories for the sale of microcrystalline cellulose, and later FMC attempted to eliminate all vestiges of competition by inviting smaller rivals also to collude.
g) Conscious parallelism: The act of price fixing between competitors without actual discussion or agreement. One competitor would change the price and the others in the market would follow him with an unspoken mutual understanding. This act is a violation of anti-trust laws. h) Predatory pricing: An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat.
i) Misuse of patents and copyrights: Copyright misuse is an equitable defence against copyright infringement based on the abusive or improper conduct of the copyright owner in enforcing the copyright. It is comparable to and draws from precedents under the older doctrine of patent misuse, which dates back to the early years of the 20th century. The doctrine forbids the copyright owner from attempting to extend the effect or operation of the copyright beyond the scope of the statutory right, usually through restrictive licensing practices) that are contrary to public policy. Finding that a copyright owner has engaged in misuse prevents the owner from enforcing her copyright through the securing of an injunction until the misuse has been "purged" -that is, the improper practice has been abandoned and its effects have fully dissipated.
doc_587474691.docx