Congratulations! You have just been hired by Diversified Worldwide Industries (DWI), Inc., as the Vice President of Risk Management. DWI is headquartered in West Palm Beach, Florida, and has over 150 offices in 30 countries. DWI is incorporated in the State of Delaware; its ships are flagged by Liberia and the Bahamas.
The Corporation's principal activities are grouped into the following areas:
? ENVIRONMENT: Water and water treatment, waste management;
? OIL & ENERGY: Exploration, production, transport, refining, wholesale marketing, alternative fuels research;
? COMMUNICATIONS: Telecommunications, Internet, audiovisual activities, publishing and multimedia;
? LEISURE & RECREATION: Hotels, casinos, cruise ships;
? REAL ESTATE: Builds homes and manages properties in active adult, age-restricted communities;
? FINANCIAL: Brokerage for capital market investments in Russia, Eastern Europe, China, and emerging markets;
? MANUFACTURING: Produces, distributes, markets, exports and imports spirits and wines.
Your duties as the VP for Risk Management will require that you develop knowledge and expertise in all areas of business law, consult with corporate and outside counsel on legal matters, and advise the board as to available options to reduce or minimize the risk and liability of DWI in its ongoing activities.
For the past ten years, DWI has wanted to develop the lucrative Iraqi oil reserves for its exploration, drilling, refining, and transport division; DWI's Oil Division has been limited to Siberia and the South China Sea up to this date, and was precluded from entry into business in Iraq by United States law and U.N Sanctions.
Discuss whether the present situation in Iraq presents new opportunities for DWI to expand its market share into Iraq, the legal and ethical risks and benefits, both short term and long term, of attempting to do so, and identify the government(s) and/or organization(s) with whom DWI should deal should the company embark on a business venture in Iraq.
1. The present situation in Iraq presents new opportunities for DW1 to expand its market share into Iraq:
2. Currently a new law has been passed in Iraq under which 'production-sharing' agreements with large companies can be signed for a period up to 30 years to extract Iraq's oil.
3. The country Iraq will continue to retain legal ownership of its oil but will give a split of profits to international companies that are prepared to spend in infrastructure and operations of the well, refineries and pipelines.
4. Under the new Iraqi law DW1 can agree to invest in the oil infrastructure and can enter into a long term ...
Legal and Ethical Risks are discussed in great detail in this solution.