Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 (Victoria)

The Act (ss 1-6) ratifies and gives statutory effect to a private Agreement between the State (the Treasurer, the Minister for Natural Resources and the Secretary to the Department of Conservation and Natural Resources) and S.E.A.S. Sapfor Limited, copying the Agreement into the Schedule and declaring it to have the force of law (s 5(1)). The Act comes into operation on Royal Assent (s 2) and binds the Crown (s 4). The Secretary is expressly empowered to carry out the Agreement, including any amendments made in accordance with the Agreement (s 5(2)). If the Agreement is amended or terminated in accordance with its own provisions, the Minister must cause a report to be laid before each House of Parliament within 14 sitting days (s 6).

Mechanically, the Schedule sets out detailed reciprocal commitments. The Company (S.E.A.S. Sapfor Limited) undertakes an investment programme (First Schedule) to establish, by specified deadlines, a sawmilling complex capable of processing specified minimum annual volumes, and to install ancillary value‑adding plant by a later deadline. In exchange, the Secretary is required to make available defined minimum annual supplies of softwood sawlog from the Portland Softwood Management Area (Clause 12), subject to the Secretary’s pre‑existing obligations to others and to events beyond the Secretary’s control (Clauses 7, 8, 23). The Agreement includes price and payment mechanisms: royalties are to be set by the Secretary according to the Royalty Equation System (Clause 18(1)); roading and production charges are set out and may be determined by the Secretary (Clauses 14, 18). An annual licence fee is payable and its calculation and periodic joint review process are specified (Clause 17).

The Agreement converts many procedural and administrative matters into binding contractual‑statutory obligations. It places duties on the Company for record keeping, compliance with the Forests Act 1958 and relevant Codes of Practice (Clause 10), staff and contractor licensing (Clause 3 of Second Schedule and Clause 22), weighbridge operation and measurement regimes where mass pricing is used (Clause 20), and security deposits (Second Schedule, Clause 11). It sets dispute resolution and enforcement mechanisms, including arbitration under the Commercial Arbitration Act 1984 (Clause 27) and Secretary‑led notices of breach and termination with Ministerial approval (Clause 28). The Agreement has a defined duration to 30 June 2030 (Clause 5(1)) and contains procedures for negotiation of any further agreement in its final three years (Clause 31).

Victorian Legislation and Parliamentary Documentsi Version No. 001 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 Act No. 32/1993 Version as at 16 September 1999 TABLE OF PROVISIONS Section Page

Purpose 1
Commencement 1
Definition 1
Act to bind the Crown 1
Ratification of Agreement 2
Amendment or termination of Agreement 2

SCHEDULE—S.E.A.S. Sapfor Limited Agreement 3 SCHEDULE 1—Investment programmes to be undertaken by S.E.A.S. Sapfor Limited 22 SCHEDULE 2—Softwood sawlog licence 23 SCHEDULE 3—Code of practice 28 ═══════════════ ENDNOTES 30

General Information 30
Table of Amendments 31
Explanatory Details 32

Victorian Legislation and Parliamentary Documents1 Version No. 001 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 Act No. 32/1993 Version as at 16 September 1999 Preamble The Treasurer, the Minister for Natural Resources, the Secretary to the Department of Conservation and Natural Resources and S.E.A.S. Sapfor Ltd have agreed to certain arrangements for the supply of softwood for certain operations by S.E.A.S. Sapfor Ltd and it is expedient to ratify the Agreement: The Parliament of Victoria therefore enacts as follows:

Purpose The purpose of this Act is to ratify an agreement with S.E.A.S. Sapfor Ltd for the supply of softwood sawlogs from the State Softwood Plantations in the Portland Softwood Management Area.
Commencement This Act comes into operation on the day on which it receives the Royal Assent.
Definition In this Act, "Agreement" means the agreement a copy of which is set out in the Schedule.
Act to bind the Crown This Act binds the Crown.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 2 5. Ratification of Agreement (1) The Agreement is ratified and takes effect as if its provisions had been expressly enacted in this Act. (2) The Secretary to the Department of Conservation and Natural Resources is empowered to carry out the Agreement, or the Agreement as amended from time to time. 6. Amendment or termination of Agreement If the Agreement is amended or terminated in accordance with its provisions, the Minister must cause a report giving details of the amendment or termination to be laid before each House of the Parliament before the expiration of the 14th sitting day of that House after the Agreement is amended or terminated.

s. 5

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 3 SCHEDULE Section 3 S.E.A.S. SAPFOR LIMITED AGREEMENT This Agreement is made on 14 April 1993 between: The Treasurer, State of Victoria, of the first part and: The Minister for Natural Resources of the second part and: The Secretary to the Department of Conservation and Natural Resources, a body corporate established by the provisions of the Conservation, Forests and Lands Act 1987 of the State of Victoria of the third part and: S.E.A.S. Sapfor Limited A.C.N. 004 289 730 a Company incorporated in Victoria and having its registered office at Penola Road, Tarpeena, SA 5277 of the fourth part. WHEREAS: I. The Government of the State of Victoria desires to provide a means by which the Company can be assured of its long term supply of softwood sawlog and which also ensures that the public of Victoria receives an adequate return on its investment in softwood plantations and certain forest production activities. II. The Company desires to be satisfied that sufficient softwood sawlog will be available to it over a period of time which will enable it to establish a sawmill complex capable of sawing and value adding a minimum of 180,000 cubic metre per annum of softwood sawlog. III. On the basis of invited Expression of Interest submitted to the Secretary, 28 March 1988 and subsequent entering into of a Memorandum-of- Understanding on 3 May 1990 which includes reference to the Expression of Interest and the Preliminary Design and Financial Statement a significant quantity of softwood sawlog is to be made available till 30 June 2030. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 4 IV. This Agreement is conditional upon the establishment in the Portland Softwood Management Area of a new sawmilling complex capable of sawing and processing into value-added products a minimum of 180,000 cubic metre of softwood sawlog each year at the mill and the processing of softwood sawlog made available by this Agreement at the mill. V. The development of the sawmilling complex is to proceed only on the basis that it is viable and sustainable in its own right without the need for recourse to any form of government financial assistance subsidies or concessions. VI. The parties hereto desire to enter into this Agreement so that upon an enabling Act being passed by Parliament and coming into operation the provisions hereinafter appearing shall have full force and effect. Now it is hereby agreed as follows: PART I—PRELIMINARY

In this Agreement unless inconsistent with the context or subject matter— "the Act" means the enabling Act of the Parliament of Victoria to be passed to give effect to this Agreement; "this Agreement" includes this Agreement as from time to time amended, supplemented or novated and includes Schedules hereto and conditions which the Secretary shall from time to time determine to apply pursuant to Clause 10.(2) and 21; "CDOB" means centre diameter over bark; "CDUB" means centre diameter under bark; "commencement date" means the latest of the date of this Agreement, the day of Royal Assent to the Act and (if any) the day the Act comes into operation as provided in the Act; "Company" means S.E.A.S Sapfor Limited and upon each assignment to any other Company in accordance with sub-Clause (1) of Clause 4 means that assignee company; "Conditions" means the additional covenants terms and conditions from time to time imposed on the company pursuant to Clause 10.(2); "cubic metre" means cubic metre gross volume under bark; "forest officer" means a person appointed as an authorised officer under the Conservation, Forests and Lands Act 1987 for the purposes of the Forests Act 1958; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 5 "forest produce" has the same meaning as in the Forests Act 1958; "the industry" means the manufacture by the Company of sawn timber, dressed timber, and further processed products from softwood sawlog; "minimum annual supply" means that set out in Clause 12; "Minister" means Minister responsible from time to time for State forests and forest management; "month" means calendar month; "person" and "persons" include a body corporate and any association of persons whether or not incorporated as a company or other body corporate; "Portland Plantations" means the State Softwood Plantations existing from time to time within the present Portland Softwood Management Area as classified by the Secretary; "production charge" means that set out in Clause 14. (1) (b) "roading charge" means the charge determined by the Secretary which is levied from time to time on all forest produce extracted from forests to cover the cost of maintenance improvement and construction of forest logging roads; "Royalty" means all charges and levies on softwood sawlog; "Royalty Equation System" means the system used by the Secretary for fixing royalty rates for softwood sawlog from time to time; "Secretary" means the body corporate established by the Conservation, Forests and Lands Act 1987; "SEDUB" means small end diameter under bark; "softwood sawlog" means sawlog timber (as defined in the Forests Act 1958) of Pinus radiata or other coniferous species meeting with specifications as determined from time to time by the Secretary provided that such specifications are consistent with Clause 13 of this Agreement; "State forest" has the same meaning as in the Forests Act 1958; "year" means a period of twelve months commencing on 1 July and includes the period between the commencement date and the 30 June 1993. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 6 Act References and Assignation 2. (1) In this Agreement unless inconsistent with the context or subject matter references to any Act shall include all amendments and re-enactments thereof for the time being in force and all supplemental legislation for the time being in force whether by regulation rule proclamation or order made or continuing under that Act or any amendment or re-enactment thereof and references to sections in any Act shall be deemed to include corresponding sections in any amending or re-enacting Act. (2) The headings and side notes shall not affect the interpretation of this Agreement. (3) A reference to a "Schedule" shall be a reference to a Schedule to this Agreement. A reference to a "Division" shall be a reference to a Division of this Agreement. 3. (1) This Agreement shall not be of any force or effect until the Act has been passed by the Parliament of Victoria and has come into operation and the passing of the Act and its coming into operation are both conditions precedent to this Agreement having any force validity or effect. (2) Upon and after the commencement date this Agreement shall supersede the Memorandum of Understanding. 4. (1) The Company shall be at liberty at any time to assign its rights under this Agreement— (a) to any company with which pursuant to the Corporations Law it is deemed to be related but notwithstanding any such assignment the Company shall remain responsible to the Secretary for the performance of all the obligations and conditions imposed upon the Company by this Agreement; or (b) with the prior consent of the Secretary to any company, such consent not to be unreasonably withheld, and thereupon the Company (whether or not there has been any previous assignment) shall be released totally and forever from all obligations and conditions imposed on the Company by this Agreement which are not up to the time of the assignment required to have been fulfilled. (2) Upon each such assignment the assignee company shall by virtue of the Act be subject to all the obligations and conditions imposed upon the Company by this Agreement so far as they remain in force and are capable of taking effect and, save to the extent the contrary may be agreed, which are not required to have been performed by the Company prior to such assignment. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 7 PART II—OPERATION OF INDUSTRY Division A—Duration of Agreement 5. (1) This Agreement shall remain in force until 30 June 2030 or, until sooner determination in accordance with the provisions of this Agreement. (2) The expiration or determination of this Agreement shall not affect the enforcement of any right obligation or liability which was acquired accrued or incurred prior to expiration or determination. Division B—Investment Programme 6. (1) In consideration for the Secretary entering this Agreement the Company agrees to carry out the investment programmes referred to in the First Schedule hereto. (2) This Agreement is conditional upon the establishment completion and commissioning of the sawmilling complex referred to in paragraph (a) of Clause (1) of the First Schedule by 31 July 1994. (3) Until the condition specified in Clause 6. (2) is satisfied Division C will have no effect and the Secretary's rights pursuant to the Forests Act 1958 or any other Act shall not be limited in any way by Division C. (4) If the investment programme referred to in paragraph (b) of Clause (1) of the First Schedule is not completed by 31 January 2000 this Agreement may be terminated by the Secretary pursuant to Clause 28. (3). Division C—Softwood Sawlog Rights 7. Nothing in the Agreement shall affect the rights powers and privileges acquired by any person under or pursuant to the Forests Act 1958 or any other Act prior to the commencement date. 8. Without limiting the Secretary's obligations under Clauses 11 (1) and 12 hereof to make available to the Company certain supply of softwood sawlog, nothing in this Agreement shall restrict the Secretary's rights pursuant to the Forests Act 1958, to sell or grant licences and permits to obtain forest produce not detrimental to the Company's rights under this Agreement. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 8 9. (1) Not later than the 31st day of March each year the Secretary in consultation with the Company shall draw up and deliver to the Company a plan of utilisation for the supply of softwood sawlog for the following year and a provisional plan for supply of softwood sawlog for the further two following years. (2) The Company within 30 days after delivery of the plan of utilisation under Clause 9. (1) may request modification of the plan of utilisation with respect to supply for the immediate following year and provided that such proposed modification can be shown to be to the commercial benefit of the Company and the Secretary and consistent with the principles of proper forest management, the Secretary will not unreasonably refuse such modification and in the event that the Company considers the Secretary has unreasonably refused to consent to such modification, the modification may be referred to arbitration in accordance with Clause 27 hereof and the Arbitrators shall determine whether the Secretary has unreasonably withheld consent. (3) The plan of utilisation shall set out the locations from which softwood sawlog may be obtained during the relevant period and shall specify the specific location area in hectares and the respective species, quantities and qualities of softwood sawlog which the Secretary estimates will be obtainable in each area, as well as the location and standard of road to be provided by the Secretary. (4) The Secretary and the Company may during the currency of any plan of utilisation agree to a modification of the plan. (5) The Company shall conform with each plan or modified plan of utilisation. 10. (1) The Company shall comply with the provisions of the Forests Act 1958, with all regulations for the time being in force under the Forests Act as if the rights granted by this Agreement had been granted by licence under the Forests Act and with the Code of Forest Practices for Timber Production and any other relevant Code of Practice for the time being in force under the Conservation, Forests and Lands Act 1987. (2) The Secretary may impose additional covenants terms and conditions (called the "Conditions") which are not inconsistent with the provisions of this Agreement as if this Agreement were a licence issued under Section 52 of the Forests Act 1958. Initially, such Conditions shall be those set out in the Second Schedule excepting where inconsistent with specific provisions of this Agreement. Within one month of the commencement date and within thirty-days prior to the first day of July in each year of this Agreement the Secretary may deliver to the Company in written Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 9 form changed (including additional) Conditions as if on each first day of July the Company was being granted a further or renewed licence under the said Section 52 but such changed Conditions shall be no more onerous on the Company than those the Secretary applies generally throughout the State of Victoria in corresponding circumstances of forest management to those being so imposed. Any Conditions (whether initially or from time to time changed) shall remain imposed until replaced or deleted. 11. (1) Subject to the provisions of this Agreement, the Company shall have the right to take softwood sawlog by its servants agents or contractors as provided in Clause 12 hereof. (2) The Company may be required to obtain softwood sawlog suitable from which to satisfy the provisions of this Agreement from; (a) standing trees indicated by a forest officer; (b) softwood sawlog produced in conjunction with a logging operation conducted by a person or persons other than the Company; or (c) softwood sawlog felled or felled and removed by or on behalf of the Secretary. (3) The Secretary may in its discretion if so requested by the Company modify the Company's obligation to take softwood sawlog felled or felled and removed by or on behalf of the Secretary which has been included in the plan of utilisation for that year but any of such softwood sawlog not taken by the Company shall for the purpose of Clause 12 hereof be softwood sawlog made available to the Company by the Secretary. Minimum Annual Supply 12. (1) Subject to the provisions of Clauses 23 and 25 hereof and to the payment of the annual licence fee as provided in Clause 17 hereof the Secretary, subject always to the existing entitlement of other persons to softwood in the Portland Plantations, shall make available to the Company a minimum annual supply of softwood sawlog with Radiata Pine as the major species which unless increased pursuant to the provisions of sub-clause (4) hereof shall be— (i) for period year 1994/95—60,000 cubic metre; (ii) for the period year 1995/96 to year 1999/2000—142,000 cubic metre each year; (iii) for the period year 2000/01 to year 2029/30—180,000 cubic metre each year. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 10 (2) (i) Should the Company take less than the minimum annual supply of softwood sawlog in any one year commencing after 30 June 1994 and concluding 30 June 1999, it has the right to carry forward the deficiency to 30 June 2000 and the Secretary shall make the deficiency available in addition to the minimum annual supply provided that the total volume taken does not exceed 770,000 cubic metre for period years 1994/95—1999/2000. (ii) Should the Company take less than the minimum annual supply of softwood sawlog in any one year commencing after 30 June 1999, it has the right to carry forward the deficiency to any of the three years next following so that such as is carried forward will be used in addition to the minimum annual supply in the year of utilisation. (3) The Secretary may in its discretion offer the Company in any year a quantity of softwood sawlog additional to the minimum annual supply. (4) The Secretary may by written agreement with the Company increase, for any period commencing from the first day of July next following the date of such agreement, the minimum annual supply referred to in sub-clause (1) hereof for the period and any minimum annual supply so agreed upon may likewise be further increased. (5) The Secretary shall ensure that the softwood sawlog of each standard and grade made available to the Company is as good in species, size, and quality in any year as that which is made available by the Secretary to any other person or persons in that year from the Portland Plantations. 13. (1) In each year the volume of softwood sawlog equal to or greater than 20 cm CDUB shall be at least 95% of the minimum annual supply. (2) The Company shall not be bound to accept— (a) any sawlog which not being sound, clean and free from rot, doze, blue stain, hail damage and the result of Sirex wasp infestation beyond the tolerances provided in the Code of Practice Measuring And Allowing For Defect Softwood Sawlog which is set out in the Third Schedule or such other code as from time to time may be adopted by the Secretary in lieu thereof but should any sawlog be accepted by the Company which is not sound, clean and free from rot, doze, blue stain, hail damage and the results of Sirex wasp infestation, then that sawlog shall only be accepted when Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 11 measured and allowed for defect in accordance with that code of practice; (b) any sawlog which is below the following specification— (i) 15 centimetre SEDUB; (ii) log length of 3·0 metre and sweep equal to or more than 20% of CDOB for a 3·0 metre log length. (3) Except to the extent that they are inconsistent with Clause 13. (2) the produce specifications which apply generally to purchasers licensees or other persons aquiring softwood sawlogs from the Secretary shall apply with respect to this Agreement. (4) The softwood sawlog made available to the Company by this Agreement shall be processed at the sawmilling complex referred to in the First Schedule except that with the prior consent of the Secretary and such consent not to be unreasonably withheld the Company may process up to 20 per cent of the minimum annual supply in any one year at a sawmilling complex other than that described in the First Schedule provided that the Company processes in that year at the sawmilling complex described in the First Schedule an equivalent volume of softwood sawlog that has not been made available to the Company by this Agreement. Records of the annual volume of softwood sawlog that is processed by the sawmilling complex described in the First Schedule shall be maintained by the Company and made available from time to time in a form and manner acceptable to the Secretary. 14. (1) For all softwood sawlog obtained by it under this Agreement the Company shall pay— (a) as to softwood sawlog which the Company by its servants agents contractors or otherwise removes or fells and removes the royalty and roading charge as provided for in Clauses 16 and 18 of this Agreement; (b) as to softwood sawlog either felled or felled and removed by or on behalf of the Secretary the royalty and roading charge as aforesaid and a production charge to be agreed upon from time to time between the Secretary and the Company for; (i) the cost to the Secretary of felling or felling and removal of softwood sawlog in or from the particular area; (ii) the overhead expenses of the Secretary in connection therewith; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 12 (iii) a profit component expressed as a percentage of the aggregate of the amounts referred to in sub paragraphs (i) and (ii). (2) Failing agreement within fourteen days on the production charge referred to in paragraph (b) of sub-clause (1) hereof the production charge shall be determined by the Secretary but so that the production charge for the cost of felling or felling and removal of softwood sawlog in or from any area shall be comparable to the production charge generally incurred by the Company for felling and felling and removal (as the case may be) of softwood sawlog at that time in similar form in or from areas which are similar with respect to yield of softwood sawlog physical circumstances of extraction and situation in regard to means of transport. 15. (1) Subject to the provisions of Clauses 25 and 26 hereof the Company shall be bound in each year from 1 July 1994 in which the minimum annual supply of softwood sawlog to which it is entitled in that year is available to it either— (a) to take not less than 90% of softwood sawlog required to be made available in the plan of utilisation; or (b) if it takes less than the quantities set out in the preceding paragraph (a) hereof to pay royalty and roading charge to the Secretary on the deficiency at a rate equal to the royalty and roading charge rate payable in that year under Clause 18 hereof. (2) If the Company during any of the three years next following any year in which there is a deficiency obtains a quantity of softwood sawlog in excess of the minimum annual supply the royalty and roading charge payable on such excess shall be reduced by the amount of royalty and roading charge paid in respect of the deficiency. 16. Notwithstanding any contrary provisions contained in the Conditions the following provision shall apply with respect to royalty, roading charge, and production charge payable under this Agreement: (a) Royalty, roading charge, and production charge shall be payable at such times and in such manner and on such terms as the Secretary from time to time determines and until otherwise determined shall be payable at such times and in such manner and on such terms as are specified in the Conditions after the amounts have been ascertained in accordance with this Agreement. (b) If any account remains overdue for more than 14 days the Secretary may without limiting the obligations of the Company under Clause 15 hereof by notice in writing to the Company Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 13 suspend its right to obtain softwood sawlog under this Agreement until payment is made in full. (c) If the Company disputes the amount of any payment demanded by the Secretary it shall make the payment under protest and thereafter shall be entitled to take proceedings for recovery of, and recover, any amount in excess of the amount it was liable to pay. 17. (1) In addition to royalty, roading charge, and production charge payable in accordance with Clause 14 hereof an annual licence fee shall be paid by the Company to the Secretary with respect to the acquisition by the Company of the right to take softwood sawlog as provided in Clause 11 (1) hereof. (2) The annual licence fee will be due and payable in each year on the 30th day of June with respect to the minimum annual supply of softwood sawlog required to be made available in the following year. The Secretary may in his discretion determine that the annual fee may be paid in six monthly instalments. (3) The annual licence fee will be determined annually by multipying the minimum annual supply by the base rate which is to be determined by adjusting the preceding base rate by the same proportion by which royalty was adjusted in the year that the preceding base rate was the applicable base rate provided that— (a) with respect to the 30 June 1992 the base rate shall be deemed to be $3.37 per cubic metre; (b) with respect to determining the annual licence fee payable on 30 June 2000 and thereafter, at five yearly intervals sub- clause (4) of this Clause shall apply. (4) The amount of the annual licence fee will be reviewed between 1 April 2000 and 30 June 2000 and thereafter between the 1st day of April and the 30th day of June at five yearly intervals from 1 April 2000 and in the following manner: (a) A review is to be conducted by the Secretary and the Company jointly; (b) The review will establish if a new base rate shall apply; (c) The review will take account of— (i) changes in the average domestic market price of sawn timber; (ii) changes in the landed price of imported sawn timber and related products, relative to economy wide indices of capital and labour costs; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 14 (iii) the benefit of the special rights granted to the Company under this Agreement; (iv) the premium offered in the Expression of Interest to aquire the right to take softwood sawlog as provide by Clause 11. (1). (d) The review will last no longer than the 30th day of June in the year in which it commenced. In the event that agreement is not reached between the Secretary and the Company, on or before that date the matter will be referred to arbitration as provided by Clause 27 hereof. (e) Any new base rate so determined will be adjusted in each of the subsequent four years, similarly as set out in sub-clause (3) hereof. (5) In the event of any dispute that can touch upon the calculation of the annual licence fee is referred to arbitration the annual licence fee shall be paid on the 30th day of June as if no such dispute had existed; but if the resolution of the dispute (whether by agreement between the parties or arbitration) causes a different annual licence fee to become applicable the Company shall pay to the Secretary or the Secretary shall pay to the Company forthwith as the case requires an amount being the difference between the amount of the annual licence fee so paid and the amount which would have been payable had the resolution of the dispute been achieved on that 30th day of June. 18. (1) The royalty payable from time to time for softwood sawlog shall be at the rate as determined in accordance with the Royalty Equation System and consistent with general softwood sawlog pricing from State forest in the State of Victoria. (2) The roading charge payable on all softwood sawlog removed under this Agreement shall be determined by the Secretary from time to time and will take account of projected expenditure on timber extraction roads accessing Portland Plantations and the advice of the Softwood Management Area Roading Advisory Committee on which the Company may at its option be represented. 19. The Company shall not construct within State forest any road track or passage or any chute without the prior written consent of a forest officer and shall not construct within State forest any tramway flume or building or erect any haulage or conversion unit without the prior written consent of the Secretary, such consent in each case not to be unreasonably withheld. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 15 20. (1) The quantity of softwood sawlog upon which royalty, roading charge, and production charge is payable under this Agreement shall be determined in such manner and at such place as may be agreed upon by the Secretary and the Company or failing agreement within thirty days from negotiations commencing as the Secretary may direct. (2) If the royalty, roading charge, and production charge so payable is to be determined by mass— (a) the Company shall provide at its plant a weighbridge of a pattern which meets the requirements of the Weights and Measures Act 1958 and shall while this Agreement remains in force have the weighbridge maintained and periodically verified and stamped in accordance with the provisions of that Act and shall operate the weighbridge in accordance with the reasonable requirements of the Secretary; (b) at all times while the weighbridge is in accurate working order the quantity of softwood sawlog upon which royalty, roading charge, and production charge is payable under this Agreement shall be determined by weighing it on the weighbridge; (c) at all times while the weighbridge is not in accurate working order the quantity of softwood sawlog upon which the royalty, roading charge, and production charge is payable under this Agreement shall be determined in such manner as may be agreed upon by the Secretary and the Company or failing agreement within fourteen days as the Secretary may reasonably direct. 21. The Secretary may from time to time give to the Company written notice of reasonable conditions not inconsistent with the provisions and intent of this Agreement which conditions are, having regard to the overall provisions of this Agreement, of a minor nature and which further are of a temporary or passing nature and which shall apply in the areas from which the Company is obtaining softwood sawlog under this Agreement. The Company shall comply with any such conditions. 22. (1) The Company shall inform the Secretary in writing once a year of the names of its servants agents contractors or otherwise who are engaged in obtaining softwood sawlog under this Agreement. (2) The Company shall supply to each person who is engaged from time to time in obtaining softwood sawlog under this Agreement whether as servant agent contractor or otherwise for production when required by a forest officer evidence in a form satisfactory to the Secretary that such person is engaged in obtaining softwood sawlog under this Agreement and the Company shall forthwith Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 16 inform the Secretary in writing whenever any such person ceases to be so engaged. (3) (a) The Company shall include in every contract entered by it with a contractor for obtaining softwood sawlog under this Agreement provisions requiring the contractor to comply with the Forests Act 1958 the regulations made under the Forests Act 1958, the conditions referred to in Clause 21 hereof which are applicable to that contractor, the conditions referred to in Clause 10 (2) hereof which are applicable to that contractor, and with the Code of Forest Practices for Timber Production, and any other relevant Codes of Practices for the time being in force under the Conservation, Forests and Lands Act 1987. (b) The Company shall upon making any such contract forthwith give to the Secretary written notice of the contract specifying the name of the contractor, the duration of the contract and the quantity of and location from which softwood sawlog are to be obtained thereunder. Division D—Miscellaneous 23. (1) If any of the Portland Plantations upon which supply is dependent are damaged or destroyed by fire disease or other cause beyond the control of the Secretary to such an extent that it is impracticable for the Secretary to comply with the provisions of Clause 12 hereof or if by reason of any other cause whatsoever beyond the control of the Secretary it is unable to comply with those provisions— (a) the Company shall have no claim against the Secretary for the non-fulfilment of its obligations under those provisions as far as non-fulfilment is due to any such cause; and (b) the Secretary shall use its best endeavours to provide a supply of softwood sawlog to the Company having regard on the one hand to the obligation of the Secretary under this Agreement to make available to the Company certain supplies of softwood sawlog and on the other hand the duty of the Secretary to protect State forests and control and manage State forests throughout the State of Victoria in a manner which is not unduly damaging financially to the Secretary or to the revenues of the State of Victoria and the obligations of the Secretary under other agreements and licences to other persons. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 17 24. If, in the opinion of the Secretary, extensive damage occurs to State forest softwood plantations within 250 kilometres road distance from the Portland Softwood Management Area, softwood sawlog salvaged from these plantations may be offered to the Company as part of the minimum annual supply and at a royalty, roading charge, and production charge as determined by the Secretary. 25. If— (a) any of the softwood plantations upon which supply is dependent are damaged or destroyed by fire disease or other cause to such an extent that it is impracticable for the Secretary to comply with the provisions of Clause 12 hereof or if by reason of any other cause beyond the control of the Secretary it is prevented from complying with those provisions; (b) the Company's sawmill complex referred to in First Schedule is substantially damaged or destroyed by fire or other calamity in such circumstances as the Company is not reasonably (as to amount and risk) indemnified under a policy of insurance; (c) by reason of war riot civil commotion strike lockout or action in the nature of a strike or lockout ban or limitation on work or restraint of labour act or restraint of any Government or semi- government or other public or statutory authority the Company is substantially impeded from obtaining softwood sawlog or carrying on the industry at the sawmill complex referred to in the First Schedule; then in any of those events— (i) the Company may apply to the Secretary for termination, suspension or a reasonable modification of the extent or operation of its obligations under this Agreement or for an extension of time for the performance or observance thereof; (ii) the Secretary upon any such application by the Company shall decide to grant or refuse termination, a suspension of the said obligations or a reasonable modification of their extent or operation or an extension of time for their performance or observance; (iii) if the Company is dissatisfied with the decision of the Secretary upon any such application— A. arising out of the provisions of the preceding paragraphs (a) and/or (b) and/or (c); Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 18 B. with the delay (not being less than ten working days from the date of application) in making the decision arising out of the provisions of the preceding paragraphs (a) and/or (b) and/or (c); then the matter shall if the Company so elects be determined by arbitration and the arbitrators may determine the matter with reference to considerations of general justice and fairness and may grant a suspension modification or extension of time on such terms and conditions as the arbitrator so determines but such suspension modification or extension of time shall be subject to review in accordance with Clause 26. In no event shall a suspension modification or extension be for an unlimited period of time. 26. If this Agreement has been suspended or modified or an extension of time has been granted in accordance with Clause 25 and if afterwards the carrying on by the Company of the industry or the continued performance by the Company of its obligations under Clauses 14, 15 and 17 hereof are considered by the Secretary to be practicable then— (i) the Secretary may apply to the Company for a further reasonable modification of the extent or operation of the Company's obligations under this Agreement but not so as to exceed the obligations of the Company initially imposed by this Agreement; (ii) the Company upon any such application by the Secretary shall decide to grant or refuse a further reasonable modification of this extent; (iii) if the Secretary is dissatisfied with the delay (not being less than thirty days) in making the decision the matter shall if the Secretary so elects be determined by arbitration and the arbitrators may determine the matter with reference to considerations of general justice and fairness; (iv) if the Secretary is dissatisfied with the decision of the Company upon any such application the Secretary shall suggest to the Company that the Secretary and the Company should negotiate in good faith to reach a decision acceptable to the Secretary and the Company but if the Secretary and the Company after negotiating in good faith cannot within a reasonable time (and in any event not less than fifteen weeks) reach a decision acceptable to the Secretary and the Company the matter shall if the Secretary so elects be determined by arbitration and the arbitrators may determine the matter with reference to considerations of general justice and fairness but the arbitrators shall not make any award by which the obligations of the Company shall exceed those obligations initially imposed by this Agreement nor any award which has an effect prior to the date of the Secretary's application Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 19 made under the preceding paragraph (i) which is referred to arbitration. 27. Wherever it is provided that any matter shall or may be determined by arbitration— (a) the matter shall be referred to two arbitrators one to be appointed by the Company and one by the Secretary; (b) the provisions of the Commercial Arbitration Act 1984 shall apply to the reference; (c) the arbitrators or umpire or some other person appointed on their behalf may investigate the Company's or Secretary's affairs and accounts so far as may be necessary to assist them to determine any matter referred to them and the Company and the Secretary each shall give them full access to all accounts and papers necessary for that purpose and shall afford them full information and assistance. (d) the parties agree that the purpose of the provision of information or accounts of either party to the other party or to the arbitrators, umpire or their appointee is for the sole purpose of the conduct of the arbitration and such information or accounts is not to be used or disclosed in any manner or for any purpose not connected with the arbitration proceedings in the course of which it was provided. 28. (1) If the Company contravenes or fails to comply with the provisions of this Agreement in circumstances where the failure represents a breach capable of remedy, the following shall apply: (a) The Secretary shall give notice in writing to the Company specifying with reasonable detail the contravention or failure complained of together with details of the date and form in which the Secretary became aware of the same; (b) If the Company fails to remedy the contravention or fails to cease the contravention or failure (as the case may be) within ninety days of receipt of the notice referred to in the preceding paragraph (a), then with the approval of the Minister the Secretary by notice in writing under its common seal to the Company may determine this Agreement. (2) If the Company contravenes or fails to comply with the provisions of this Agreement in circumstances where in the reasonable opinion of the Secretary such breach is not capable of being remedied, the following shall apply: (a) The Secretary shall give notice to the Company specifying with reasonable details the contravention or failure complained of together with details of the date and form in which the Secretary became aware of the same and requiring Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 20 it forthwith to desist from repeating the contravention or failure; (b) If within a period of two years from the service of the aforesaid notice the Company has repeated the breach complained of, then with the approval of the Minister the Secretary by notice in writing under its common seal may determine this Agreement. (3) Notwithstanding sub-clauses (1) and (2) of this Clause 28 if the Company— (a) fails to complete any of the investment programmes as contained in the First Schedule of the Agreement within the times specified therein or within any extension of time granted to the Company by the Secretary; (b) is the subject of an order made or a resolution passed or a petition presented or an application made for the winding up or dissolution without winding up of the Company (except for the purpose of reconstruction or amalgamation with the consent in writing of the Secretary first had and obtained) or if any person enters into possession of the property of the Company or any part thereof or if a receiver or receiver and manager of the Company's undertaking or assets or income or any part thereof shall be appointed by any person; (c) enters into any scheme or arrangement for the benefit of its creditors generally or any of them or any class of them which has not been satisfied in full within sixty days or if an application is made to any court for an order summoning a meeting of the creditors of the Company pursuant to the Corporations Law; (d) ceases to carry on the industry at the sawmilling complex referred to in the First Schedule; then with the approval of the Minister the Secretary by notice in writing under its common seal may in its absolute discretion determine this Agreement. 29. (1) The Secretary and the Company may from time to time by agreement in writing amend this Agreement by such additions deletions and variations of matters of details as may be necessary or desirable to facilitate the carrying on of the industry. (2) The Secretary and the Company may with the approval of the Minister determine this Agreement upon such terms as they deem fit. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 21 30. Notwithstanding anything in the Forests Act and the Conservation, Forests and Lands Act the Company shall not be required to obtain any lease licence permit or authority beyond this Agreement to take softwood sawlog as provided in Clause 12 hereof. 31. (1) In the last three years of this Agreement the Secretary shall if the Company seeks a further Agreement to assure to it supply of softwood sawlog for the continuance and/or expansion of the industry investigate the development of the industry and if satisfied that the Company needs to have supplies of softwood sawlog assured to it by a further Agreement and taking into account the performance of the Company under the Agreement and the Company not being at the time in breach of any of its obligations under the Agreement enter into negotiations with the Company for that purpose. (2) If a further Agreement has been agreed upon and executed the Secretary shall (if necessary) recommend to the Minister that a Bill be introduced into the Parliament of Victoria as soon as possible to ratify validate approve and otherwise give effect to it. 32. The Minister approves this Agreement. Sign and Seal In witness whereof the parties hereto have executed as a deed this Agreement the day and year first before written. Signed and sealed and delivered by the Honourable, the Treasurer in the presence of: PETER COATMAN ALAN STOCKDALE L.S. Signed and sealed and delivered by the Honourable, the Minister for Natural Resources in the presence of: RAY PAGE GEOFF COLEMAN L.S. The common seal of Secretary to the Department of Conservation and Natural Resources was hereunto affixed in the presence of: K. J. WAREING ALAN THOMPSON L.S. The common seal of S.E.A.S Sapfor Limited was hereto affixed in accordance with the Articles of Association of the Company in the presence of: A. de BRUIN, Director D. S. KERR, Secretary L.S.

Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 22 FIRST SCHEDULE INVESTMENT PROGRAMMES TO BE UNDERTAKEN BY S.E.A.S. SAPFOR LIMITED (1) The Company undertakes covenants and agrees to: (a) establish complete and commission by 31 July 1994 within the Portland Softwood Management Area, State of Victoria a new softwood sawmilling complex capable of processing a minimum of 180,000 cubic metre of softwood sawlog per annum; and (b) to install and commission in the complex by 31 January 2000 ancillary equipment and technology to further value add the sawn product for either the domestic or export market. (2) The sawmilling complex is to be developed substantially in accordance with the information provided in the Expression of Interest, as modified in the document dated 1 August 1989 titled "Preliminary Design and Financial Statement" and further information provided to the Secretary for final approval. (3) The information provided by the Company and accepted by the Secretary as adequate shall take effect to amend supplement and vary the Expression of Interest and Preliminary Design and Financial Statement, and together with the Expression of Interest and Preliminary Design Statement shall constitute the final proposal ("the Proposal") for the development of the sawmilling complex. (4) The development of the sawmilling complex undertaken by the Company must be in substantial accordance with the Proposal provided that the Company may submit amendments to the Proposal to the Secretary for approval by the Secretary, which approval may be granted or withheld in the sole discretion of the Secretary. (5) The security referred to in the Memorandum of Understanding shall be returned to the Company on the day that the Act of Parliament which ratifies the Agreement receives the Royal Assent.

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Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 23 SECOND SCHEDULE SOFTWOOD SAWLOG LICENCE Allocation

(a) In its operations the licensee shall follow each plan of utilisation or modified plan, and shall ensure forest operations are confined to the area of supply and are conducted in accordance with specifications operational procedures and prescriptions as directed by the Secretary. (b) From time to time during this licence, the Secretary or a forest officer shall specify whether timber to be taken by the licensee shall be taken from trees to be felled by the licensee or shall be taken from timber produced or to be produced by the Secretary or others. Any timber produced by the licensee from trees felled by or on behalf of the licensee may be directed by the Secretary for supply to others. (c) The Secretary or a forest officer may also specify any or all of— (i) what trees shall be felled by the licensee; (ii) the kinds of timber which may be taken by the licensee; (iii) from what places the licensee shall take timber produced or to be produced by the Secretary or others. Operational
(a) The licensee shall comply with any lawful directions given by a forest officer for the purposes of this licence. (b) The licensee shall carry out, at the cost of the licensee such post logging rehabilitation works during and on completion of a forest operation as directed by a forest officer. Where two or more licensees undertake joint logging operations the Secretary may require those licensees to lodge joint security to provide for reasonable costs of post logging rehabilitation should the contractor(s) engaged by those licensees fail to undertake post logging rehabilitation works as directed by a forest officer. Work performed as directed by a forest officer in additional to that specified in any applicable code of practice or licence conditions shall be reimbursed to the licensee by the Secretary. (c) The Secretary will establish and maintain a network of major extraction roads within State forest to facilitate logging during typical seasonal conditions. The licensee may be required to construct and maintain such major extraction roads as may be Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 24 agreed upon between the licensee and the Secretary. Reasonable costs of such work shall be reimbursed to the licensee by the Secretary. 3. (a) All persons employed by the licensee to obtain forest produce under the authority of this licence shall be licensed by the Secretary to operate in State forests. (b) The licensee shall ensure that each person employed by the licensee in cutting trees and taking timber under this licence is— (i) licensed for the particular operation or operations for which the person is employed or engaged under an approved training scheme; (ii) properly equipped with all requisite safety equipment; and (iii) properly supervised to ensure compliance with proper operational procedures. Royalty, Roading Charge, and Production Charge 4. Royalty, roading charge, and production charge shall be determined by the Secretary from time to time and paid by the licensee to Secretary pursuant to the licence. The Secretary shall advise the licensee in writing of such royalty, roading charge, production charge no less than 14 days prior to the application of such rates and charges in accounts issued under the provisions of Condition 8 hereof. 5. Royalty, roading charge, and production charge payments shall be calculated on the kind and quantity of timber taken. Measurement of the quantity of timber shall be made in such a manner as is determined by the Secretary and at such locations as are indicated by the Secretary. If the licensee considers that the defect allowances, measurements or log grades recorded in respect of any particular log are incorrect, the log concerned may be set aside for inspection by a forest officer, whose decision shall be final. No additional allowance shall be given if sawing operations have been commenced on that log. 6. Royalty, roading charge, and production charge shall be charged on all timber taken under this licence. Where in the opinion of a forest officer, timber which the licensee is authorised to take under this licence remains in any tree felled by or on behalf of the licensee, royalty, roading charge, and production charge may be charged on such timber at rates applicable to the kind or kinds of the timber not removed and the quantity of timber equivalent to that remaining in the trees shall be included in the quantity taken pursuant to this licence. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 25 7. Royalty, roading charge, and production charge shall be subject to variation at any time: (a) Variation in individual rates may be made on account of a change in any of the factors used in the determination of that rate; (b) A general review shall take place annually, and shall reflect— (i) changes in the costs of production as reflected in commercial accounting systems developed by the Secretary; (ii) utilisation standard for various species and grades of timber; (iii) market prices for timber products; and (iv) the findings of timber pricing studies. 8. (a) Account for royalty, roading charge, and production charge shall be issued monthly. (b) An account issued for royalty, roading charge, and production charge is due for payment immediately it is rendered and becomes overdue if not paid by thirty (30) days from the date the account is rendered. (c) If royalty, roading charge, and production charge is not paid after becoming overdue the licensee shall pay interest on the sum due but unpaid, from the date that sum became overdue at the rate for the time being applicable under Section 30 of the Conservation, Forests and Lands Act 1987. (d) If an account remains overdue for more than 14 days then the Secretary may direct by notice in writing to the licensee that no further timber shall be taken on credit by the licensee under this licence until the outstanding amount has been paid in full. Fire 9. For the purpose of ensuring, so far as possible, the availability of timber which is permitted to be taken by the licensee, the licensee shall— (a) take all reasonably practicable action to avoid the occurrence of any fire which may occur within the area of supply or adjacent to the area of supply and for the purpose of suppressing any fire which may occur; (b) if called upon by the Secretary or any forest officer the licensee shall make available all assistance in the form of personnel, plant and equipment, to the Secretary for the purpose of suppressing any fire which may occur in the area of supply or adjacent to the area of supply; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 26 (c) the licensee shall free any contractor and any or all of the personnel, plant or equipment of such contractor engaged by the licensee from all contractual obligations towards the licensee for use by the Secretary for the purpose of fire suppression; (d) except as hereinafter provided, the Secretary shall reimburse the licensee for reasonable costs in making any personnel, plant or equipment available to the Secretary for the purposes of fire suppression. The rate of reimbursement to be paid by the Secretary shall be based upon a schedule of rates which shall be revised annually by the Secretary; (e) the Secretary shall indemnify the licensee for loss incurred with respect to any personnel, plant or equipment while engaged in fire suppression including associated travelling. Without affecting the generality of the foregoing, such loss shall include— (i) any claim for compensation or damage to equipment by employees or contractors made available by the licensee due to accident resulting from such fire suppression activities; (ii) any insurance premium increase which results from claims made due to loss or damage suffered during such fire suppression activities, provided such increase is clearly related to a particular such activity and that alone; (f) the Secretary shall not be liable to pay compensation to the licensee for any loss of production or profit occasioned by the licensee making available its employees, plant or equipment for fire suppression; (g) no compensation or reimbursement shall be made by the Secretary to the licensee with respect to a fire when in the opinion of the Secretary there was sufficient evidence to establish beyond reasonable doubt that the fire was knowingly or negligently lit, caused or maintained by the licensee or any of its employees or contractors in the course of their employment or contractual obligations; (h) no compensation or reimbursement shall be made by the Secretary to the licensee for any loss or damage caused by any fire which breaks out within 800 metres of its logging operations or sawmill within the Fire Protected Area unless the Secretary is satisfied that the licensee or any of its employees on being informed or on becoming aware of the fire took prompt and effective steps to engage in fighting the fire; (i) reimbursement made to the licensee by the Secretary under sub- section (d) hereof shall be made within 30 days of the last day of the month of supply of the service. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 27 Other Contracts 10. The licensee shall include in every contract made by it with a contractor for cutting trees and/or taking away of timber for the purposes of this licence, Clauses which incorporate similar obligations to those referred to in Clauses 1 (a), 2 (a), 2 (b), 3 (a), 3 (b), and 9 as if the contractor were the licensee. Securities for Monies Outstanding 11. The Company shall lodge with the Secretary each year a security as prescribed by the Secretary but such prescription shall be no more onerous on the Company than those the Secretary has applied to others throughout the State of Victoria in corresponding circumstances.

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Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 28 THIRD SCHEDULE CODE OF PRACTICE MEASURING AND ALLOWING FOR DEFECT SOFTWOOD SAWLOG PORTLAND SOFTWOOD MANAGEMENT AREA This code is intended to cover— (a) tree lengths, trimmed and headed off but not crosscut to long lengths; (b) logs cut to length for cartage. In reference to (b) above, it is assumed that some of the defects present in tree lengths will be docked out by judicious crosscutting into log lengths for cartage.

Measurement and preparation of softwood sawlog shall be made at such locations as determined by the Secretary and shall be made in such a manner as determined by the Secretary.
All measurements shall be taken under bark unless specified otherwise or inconsistent with the Agreement hereto.
An allowance of 10 cm for all recorded lengths shall be given for cross cutting.
Diameters shall be recorded to the backward whole centimetre.
In determining the inclusion of defect, or supervising the docking out of defect, it should be assumed that a wide range of log lengths is acceptable to the sawmiller irrespective of the log lengths actually cut. "Wide range" in this context means 3⋅0 metre and up but may also include lengths shorter than 3⋅0 metre in every case where it is the normal practice of the particular Licensee to cut short lengths for any purpose.
Allowance shall not be given for falling or snigging damage except where in any particular case the forest officer is satisfied that such damage was completely unavoidable.
Allowance for blue stain, fire damage, hail damage, sirex treatment etc., shall only be made on specified approval from the Director General. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 29 8. Where a fork occurs the section of the tree affected by twin heart and bends in the limbs at their junctions with the trunk shall be allowed for. The limbs (if merchantable) of the tree above and the bole below the defective section shall be measured as it they were separate trees. 9. Knots exceeding 75mm in diameter, measured across the shorter axis, shall be subject to allowance. The allowance to be given shall be determined by multiplying the length of log affected (angular projection of the knot into the log) by the proportion of the cross-section of the log affected and expressing the result as a length allowance to the nearer 0⋅1 metre. 10. An allowance of the full length affected shall be given where two or more whorls of cone holes occur within any 0⋅9m length of log. For the purpose of this Clause whorl of cone holes means three or more cone holes within 0⋅1m length of log. 11. Miscellaneous defects subject to allowance are: (i) Twisted stem and break resulting them stem. The allowance shall be the length of log visibly affected. (ii) Rot, dry side, fire scar and previous mechanical damage. The allowances shall be determined by multiplying the length of log affected by the average cross sectional area of the log affected and expressing the result as a length allowance to the nearer 0⋅1 metre. ═══════════════ Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 30 ENDNOTES

General Information Minister's second reading speech— Legislative Assembly: 24 April 1993 Legislative Council: 12 May 1993 The long title for the Bill for this Act was "A Bill to ratify an agreement with S.E.A.S. Sapfor Ltd and for other purposes." The Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 was assented to on 25 May 1993 and came into operation on 25 May 1993. Endnotes

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 31 2. Table of Amendments There are no amendments made to the Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 by Acts and subordinate instruments. Endnotes

Victorian Legislation and Parliamentary DocumentsAct No. 32/1993 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 32 3. Explanatory Details No entries at date of publication. Endnotes

1 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993

Victorian Legislation and Parliamentary Documentsi Version No. 001 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 Act No. 32/1993 Version as at 16 September 1999 TABLE OF PROVISIONS Section Page

Purpose 1
Commencement 1
Definition 1
Act to bind the Crown 1
Ratification of Agreement 2
Amendment or termination of Agreement 2

General Information 30
Table of Amendments 31
Explanatory Details 32

Purpose The purpose of this Act is to ratify an agreement with S.E.A.S. Sapfor Ltd for the supply of softwood sawlogs from the State Softwood Plantations in the Portland Softwood Management Area.
Commencement This Act comes into operation on the day on which it receives the Royal Assent.
Definition In this Act, "Agreement" means the agreement a copy of which is set out in the Schedule.
Act to bind the Crown This Act binds the Crown.

The Act’s principal legal mechanism is statutory ratification of a private contractual arrangement and conversion of contractual terms into enforceable statutory obligations (s 5(1)). The Agreement in the Schedule is the operative document; the Act operates primarily by making the Agreement enforceable as if enacted. Key concepts within the Agreement include supply assurance, investment obligations, pricing mechanisms, management and operational conditions, measurement and accounting systems, dispute resolution, and termination regimes.

Supply assurance and minimum entitlements are central. Clause 12 fixes staged minimum annual supplies of softwood sawlog with Radiata Pine as the major species: 60,000 m3 for 1994/95, 142,000 m3 for 1995/96-1999/2000, and 180,000 m3 for 2000/01-2029/30, with mechanisms to increase these by written agreement (Clause 12(1), (4)). Carry‑forward of shortfalls is permitted on limited terms: deficiencies between 1994/95 and 1999/2000 may be carried forward only to 30 June 2000 and subject to a cap of 770,000 m3 (Clause 12(2)(i)); for years after 30 June 1999 deficiencies may be carried forward to any of the next three years (Clause 12(2)(ii)). The Secretary may also offer additional quantities in any year at its discretion (Clause 12(3)).

Investment obligations on the Company are precise and time‑bound (First Schedule): the Company must establish, complete and commission a sawmilling complex capable of processing a minimum of 180,000 m3 per annum by 31 July 1994 and install ancillary value‑adding equipment by 31 January 2000. The Agreement conditions commencement and some parts of the Agreement on those investments , e.g. Division C has no effect until the investment condition is satisfied (Clause 6(2)-(3)).

Pricing is multi‑tiered. Royalty is to be set under the Royalty Equation System consistent with general State pricing (Clause 18(1)); roading charge is determined by the Secretary and may consider projected expenditure on extraction roads and advisory committee input (Clause 18(2)); a production charge applies where the Secretary felled or removed logs and includes cost, overheads and a profit component (Clause 14(1)(b)). An annual licence fee is payable (Clause 17), calculated by multiplying the minimum annual supply by a base rate and subject to periodic reviews between Secretary and Company (Clause 17(3)-(4)).

Compliance and operational concepts include application of the Forests Act 1958 and relevant Codes of Practice as if the rights were issued under s 52 of the Forests Act (Clause 10(1)), Secretary power to impose additional Conditions (Clause 10(2)) with an initial set in the Second Schedule, and measurement and defect allowances set out in the Third Schedule code of practice. Measurement regimes include mandatory weighbridge provisions where mass determination is agreed (Clause 20), with statutory references to the Weights and Measures Act 1958 for verification and stamping of weighbridges (Clause 20(2)(a)).

Dispute resolution and enforcement are conceptualised through arbitration and administrative notice procedures. The Agreement prescribes arbitration under the Commercial Arbitration Act 1984 with a two‑arbitrator framework (Clause 27). For breaches capacity to cure triggers a ninety‑day remedy window before termination may be effected with Ministerial approval (Clause 28(1)). For irreparable breaches, the Secretary issues a notice and termination follows if the breach is repeated within two years (Clause 28(2)). The Secretary also exercises a discretion to terminate for failures such as non‑completion of investment milestones or insolvency events (Clause 28(3)).

Interplay with statutory regimes is explicit: the Agreement operates alongside and refers to the Forests Act 1958, the Conservation, Forests and Lands Act 1987, the Weights and Measures Act 1958, the Commercial Arbitration Act 1984 and the Corporations Law (see Clause 2 references). Clause 30 removes any additional requirement for a lease, licence, permit or authority beyond this Agreement for the Company to take softwood sawlog as provided in Clause 12. The Agreement also preserves the Secretary’s existing statutory powers and other parties’ pre‑existing rights (Clauses 7-8).

Primary parties: the Company (S.E.A.S. Sapfor Limited) and the Secretary to the Department of Conservation and Natural Resources are the contracting parties whose obligations and entitlements the Act gives statutory force (Schedule preamble; Clause 1 definitions). The Treasurer and the Minister for Natural Resources are named parties to the Agreement and signatories (Schedule signatories), and the Minister has specified oversight rights such as approving termination decisions (Clauses 28(1)(b), 28(2)(b), 28(3)). The Secretary is both a party and the operational manager with powers to determine conditions, plan of utilisation, charges and to issue notices (Clauses 5(2), 9, 10, 14-18, 21, 28).

Industry participants and operators are affected. The Agreement creates a statutory right to a specified supply of State softwood sawlog for the Company and, in return, imposes obligations on the Company with respect to investment, processing location and adherence to forest practice codes (Clause 12 and First Schedule). Contractors, agents and employees engaged by the Company are brought within the Agreement’s scope by obligations placed on the Company to supply names and evidence of engagement, and to include contract terms requiring contractors to comply with the Forests Act and codes of practice (Clause 22, Second Schedule Clause 10). The Second Schedule requires contractors and personnel operating in State forest to be licensed (Second Schedule Clause 3), thereby implicating contractors and their compliance obligations.

Other licence‑holders and purchasers of State softwood are affected indirectly. Clause 12(1) is qualified “subject always to the existing entitlement of other persons to softwood in the Portland Plantations” and Clause 8 reiterates that nothing in the Agreement shall restrict the Secretary’s rights under the Forests Act 1958 to sell or grant licences and permits provided the Secretary’s actions are not detrimental to the Company’s rights. Those existing holders retain their statutory entitlements. The Agreement therefore alters relative allocation and administrative priority but does not extinguish pre‑existing legal rights. Where salvage or offset supply from plantations beyond the Portland area is offered, Clause 24 allows the Secretary to include salvaged logs from plantations within 250 km as part of the Company’s supply on terms the Secretary determines.

The State and its departments bear fiscal and management responsibilities: the Secretary remains responsible for forest management obligations across Victoria and must balance provision to the Company with other statutory duties and revenue considerations (Clause 23(1)(b)). The Agreement obliges the Secretary to provide road infrastructure and to consult the Company on utilisation plans (Clause 9, Second Schedule Clause 2(c)). The Secretary may also reimburse reasonable costs for certain road construction or fire suppression assistance and indemnify for some losses in connection with fire suppression (Second Schedule Clause 2(b), 9(d)-(e)).

Parliament and public accountability mechanisms are engaged: any amendment or termination of the Agreement in accordance with its provisions must be reported to both Houses within 14 sitting days (s 6). The Secretary’s power to impose Conditions that apply generally in Victoria is circumscribed by a requirement that new Conditions not be more onerous than those applied generally in corresponding circumstances (Clause 10(2)).

Finally, downstream markets are affected economically: the Company’s right to a high volume of State sawlog, and the location requirement that processing occur at a specified sawmilling complex (Clause 13(4), First Schedule), are likely to shape local employment, supply chains, downstream timber value‑adding activities, and regional infrastructure requirements, because the Agreement effectively secures a long‑term primary input for the Company’s processing operations.

Statutory ratification (s 5) converts contractual promises into enforceable duties and rights. The Secretary’s primary duty is to make available to the Company the minimum annual supply of softwood sawlog as specified in Clause 12, subject to existing entitlements and events beyond the Secretary’s control (Clauses 7-8, 23). The Secretary must also prepare an annual plan of utilisation in consultation with the Company by 31 March each year, specifying locations, quantities and road standards, and deliver provisional plans for the subsequent two years (Clause 9(1)-(3)). The Secretary may determine royalties, roading charges and may set production charges where the Secretary supplies felled logs, and must advise the Company of those rates in accordance with the Agreement (Clauses 14, 16, 18, Second Schedule Clauses 4-5).

The Company’s primary duties are to complete the investment programme in the First Schedule (establish and commission the sawmilling complex by 31 July 1994 and ancillary equipment by 31 January 2000), to process Agreement‑supplied sawlog at that complex (Clause 13(4), First Schedule), and to comply with laws, regulations and Codes of Practice as if its rights were issued under s 52 of the Forests Act 1958 (Clause 10(1)). The Company must conform to each plan or modified plan of utilisation (Clause 9(5)), take softwood sawlog by servants, agents or contractors as provided in Clause 11 (Clause 11(1)) and ensure contractors comply with the Forests Act, licence Conditions and Codes (Clause 22(3), Second Schedule Clause 10).

Financial duties: the Company pays royalty, roading charge and production charge as applicable (Clause 14). These charges are payable at times and on terms the Secretary determines, with initial terms specified in the Conditions (Clause 16(a)). An annual licence fee is payable on 30 June each year as consideration for the right to take the minimum annual supply, with calculation tied to a base rate and subject to periodic joint review (Clause 17). If any account remains overdue for more than 14 days the Secretary may suspend the Company’s right to obtain sawlog (Clause 16(b)). If the Company disputes an amount demanded it must nevertheless pay under protest and pursue recovery subsequently (Clause 16(c)).

Operational duties include measurement and reporting obligations. If mass measurement is used the Company must provide a weighbridge meeting the Weights and Measures Act 1958 requirements, maintain it and permit verification and stamping; the weighbridge, when working accurately, determines payable quantity (Clause 20(2)). The Company must maintain records of annual volumes processed at the main sawmilling complex (Clause 13(4)). The Company must also lodge an annual security as prescribed by the Secretary in amounts that are no more onerous than those the Secretary applies to comparable holders statewide (Second Schedule Clause 11).

Dispute resolution and enforcement duties: both parties must participate in arbitration in matters referred to arbitration, with each side appointing an arbitrator and the Commercial Arbitration Act 1984 applying (Clause 27). The arbitrators may investigate accounts and affairs and the parties must provide access to papers; disclosure of information in arbitration is limited to connection with the arbitration (Clause 27(c)-(d)). For breaches capable of remedy the Secretary gives notice and allows 90 days to remedy before seeking Ministerial approval to determine the Agreement (Clause 28(1)). For breaches deemed irremediable the Secretary gives notice and may terminate if the breach is repeated within two years (Clause 28(2)). In other enumerated circumstances, including failure to complete investment programmes, insolvency, winding up or cessation of operations at the specified sawmill, the Secretary may determine the Agreement with Ministerial approval (Clause 28(3)).

Discretions and protections: the Secretary has discretion to offer additional sawlog in any year (Clause 12(3)), to agree to increase minimum supply by written agreement (Clause 12(4)), and to impose Conditions not inconsistent with the Agreement (Clause 10(2)). However, Conditions initially are the Second Schedule and any changed Conditions must not be more onerous than those generally applied in corresponding circumstances statewide (Clause 10(2)). Clause 30 expressly removes any need for the Company to obtain additional leases, licences or permits beyond the Agreement for taking the specified sawlog, altering the usual administrative overlay for that activity.

The Agreement creates a structured enforcement regime centred on administrative notices, suspension for non‑payment, financial penalties via interest, and termination powers, with Ministerial oversight on serious steps.

Suspension for overdue accounts: if any account remains overdue for more than 14 days the Secretary may suspend the Company’s right to obtain softwood sawlog under the Agreement until payment in full (Clause 16(b)). The Second Schedule complements this with an explicit credit control regime: accounts for royalty, roading charge and production charge are issued monthly; they are due immediately and become overdue 30 days after rendering (Second Schedule Clause 8(a)-(b)); overdue sums attract interest pursuant to the Conservation, Forests and Lands Act 1987 rate (Second Schedule Clause 8(c)); after an account is overdue for more than 14 days the Secretary may direct the licensee that no further timber be taken on credit (Second Schedule Clause 8(d)). These mechanisms function as cash flow enforcement tools and immediate operational sanctions.

Interest and payment under protest: the Company must pay monies demanded even if disputing them; the Company’s remedy is to make payment under protest and then seek recovery as a debt (Clause 16(c)). This imposes a liquidity obligation on the Company and shifts the short‑term financial risk of disputes onto the Company pending resolution.

Termination for breach: Clause 28 sets a graduated termination regime. For breaches capable of remedy, the Secretary must issue a written notice specifying details; if the Company fails to remedy within 90 days the Secretary may, with Ministerial approval, determine the Agreement (Clause 28(1)). For breaches deemed not capable of remedy the Secretary gives notice requiring cessation of repetition and may terminate with Ministerial approval if the breach is repeated within two years (Clause 28(2)). For certain enumerated events , failure to complete investment programmes within prescribed times (First Schedule), insolvency events, schemes for creditors, receivership, cessation of the sawmilling complex operations , the Secretary may, with Ministerial approval, determine the Agreement in its absolute discretion (Clause 28(3)). The requirement for Ministerial approval to terminate in these contexts introduces an executive political check on unilateral termination by the Secretary.

Arbitration and dispute resolution: many categories of dispute are directed to arbitration under the Commercial Arbitration Act 1984 (Clause 27). The arbitration procedure is two arbitrators (one appointed by each party) with the option of an umpire; the arbitrators may investigate the parties’ affairs and accounts, and are bound by confidentiality requirements restricting the use of information provided in arbitration to purposes connected with the arbitration (Clause 27(c)-(d)). Arbitration is the principal private mechanism for resolving commercial and operational disputes that the parties cannot settle.

Financial review and remedy: the annual licence fee review (Clause 17(4)) includes a joint Secretary-Company review process and a fallback to arbitration if agreement is not reached within the review period (Clause 17(4)(d)), ensuring a prescribed forum to resolve fee disputes. Payments made pending arbitration are reconciled once dispute resolution occurs (Clause 17(5)), which creates a provisional payment obligation with retrospective adjustment.

Other sanctions and administrative control: the Secretary has operational control, such as specifying what trees shall be felled and where (Second Schedule Clause 1(b)-(c)), directing compliance with forest officer directions (Second Schedule Clause 2(a)), and imposing Conditions generally applicable statewide under Clause 10(2), subject to the requirement that they not be more onerous than generally applied Conditions. The Secretary also has discretion over the quantity measurement regime and may direct how quantities are determined if the parties cannot agree (Clause 20(1)-(2)(c)). These powers, combined with financial enforcement, give the Secretary robust administrative means to regulate operations.

Reporting to Parliament: where the Agreement is amended or terminated in accordance with its provisions, the Minister must lay a report before both Houses within 14 sitting days (s 6). That parliamentary reporting requirement functions as a public accountability mechanism where amendments or termination occur pursuant to the Agreement’s own processes.

The Agreement is drafted to operate alongside and within existing statutory regimes, expressly incorporating and deferring to other Acts while also creating specific carve‑outs. Clause 2(1) provides that references to any Act include amendments, re‑enactments and supplemental legislation, signalling the parties’ intention to keep interplay with changing statutes. Specific statutory interactions are set out.

Relationship with the Forests Act 1958 and Conservation, Forests and Lands Act 1987: Clause 10(1) requires the Company to comply with the Forests Act 1958 and regulations and Codes of Practice under the Conservation, Forests and Lands Act 1987 “as if the rights granted by this Agreement had been granted by licence under the Forests Act.” This imports the regulatory regime into the Agreement and makes compliance with forest law and codes a contractual/statutory duty for the Company. Clause 7 preserves rights, powers and privileges acquired by any person under or pursuant to the Forests Act 1958 prior to the commencement date and Clause 8 affirms that nothing in the Agreement shall restrict the Secretary’s rights under the Forests Act 1958 to sell or grant licences and permits provided they are not detrimental to the Company’s rights. Clause 30, by contrast, removes the Company’s obligation to obtain any lease, licence, permit or authority beyond the Agreement to take sawlog as provided in Clause 12, which creates a statutory exemption relative to normal licensing requirements.

Arbitration law: disputes are to be determined by arbitration with the Commercial Arbitration Act 1984 applying (Clause 27(b)). The Agreement prescribes two arbitrators and permits investigative powers for arbitrators over parties’ accounts (Clause 27(a), (c)). Clause 27(d) limits the use of information disclosed in arbitration; this overlays statutory arbitration rules with a confidentiality agreement.

Weights and measures: where royalties and charges are determined by mass, Clause 20 requires the Company to provide a weighbridge compliant with the Weights and Measures Act 1958, to maintain and verify it, and to operate it to the Secretary’s reasonable requirements (Clause 20(2)(a)). That integrates statutory metrology standards into measurement and billing.

Corporations Law and insolvency: Clause 4(1)(a) contemplates assignment to a related company “pursuant to the Corporations Law” and Clause 28(3)(b) and (c) set out insolvency and creditors’ scheme events (orders, resolutions, petitions, receivership, winding up, schemes for creditors) as trigger events that may permit the Secretary to terminate with Ministerial approval. Those provisions embed corporate and insolvency law consequences into the Agreement’s termination framework.

Other statutory rates and penalties: Second Schedule Clause 8(c) sets overdue interest at the rate applicable under section 30 of the Conservation, Forests and Lands Act 1987. The Agreement therefore references other statutory instruments for calculation of financial penalties.

Ministerial and parliamentary oversight: the Act requires the Minister to lay a report to each House within 14 sitting days following amendment or termination of the Agreement in accordance with its provisions (s 6). This imposes a parliamentary oversight obligation triggered by changes to the Agreement under its own processes.

Limits and carve‑outs: Clause 30 is significant as a carve‑out: notwithstanding the Forests Act and the Conservation, Forests and Lands Act, the Company is not required to obtain any lease, licence, permit or authority beyond this Agreement to take sawlog as provided in Clause 12. That provision narrows the application of other statutory permitting regimes to the Company for the specified supply. At the same time, Clause 10(2) preserves the Secretary’s ability to impose Conditions as if the Agreement were a licence under s 52 of the Forests Act 1958, which in practice imports many regulatory constraints into the Agreement while removing the formal need for separate licences under Clause 30.

Overall, the Agreement is designed to fold private commercial commitments into the public statutory framework: it imports regulatory obligations, uses existing statutory pricing and measurement standards where appropriate, embeds corporate and insolvency law events as termination triggers, and overlays arbitration procedures supplied by statute. The Act’s ratification then makes this calibrated interaction part of Victoria’s statutory order by declaring the Agreement to operate as if its provisions had been expressly enacted (s 5(1)).

The Act’s endnotes state that there are no amendments made to the Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993 by Acts and subordinate instruments as at the version date (endnotes, Table of Amendments). The Act was assented to and commenced on 25 May 1993 (Endnotes 1). The Agreement itself contains built‑in mechanisms for amendment, variation and termination: Clause 29(1) permits the Secretary and the Company to amend the Agreement in writing for matters of detail necessary or desirable to facilitate the industry; Clause 29(2) allows the Secretary and Company, with Ministerial approval, to determine the Agreement on agreed terms. Clause 6(2) and (3) treat commencement conditions and provide that Division C (softwood sawlog rights) has no effect until the Company meets the investment precondition; Clause 6(4) provides a termination right for failure to complete a particular investment programme by a specified date. Clause 12(4) allows for increases in the minimum annual supply by written agreement between the Secretary and Company. Clause 10(2) contemplates the Secretary imposing additional Conditions from time to time and specifies the timing and constraints on doing so (initial Conditions are the Second Schedule).

The Act requires parliamentary notification of amendment or termination effected in accordance with the Agreement (s 6). That reporting requirement is procedural: if the Agreement is amended or terminated in accordance with its own provisions, the Minister must lay a report with details before each House before the 14th sitting day after the amendment or termination (s 6). The Act itself does not provide a parliamentary role in approving amendments ex post beyond that reporting duty, nor does it prescribe a parliamentary veto of amendments; instead the Minister reports after the internal amendment/termination process has occurred in accordance with the Agreement.

On the embedded administrative side, Clause 17 builds a periodic mechanism to review the annual licence fee: a joint review between Secretary and Company is required between 1 April 2000 and 30 June 2000 and thereafter at five‑yearly intervals, with arbitration as a fallback if agreement cannot be reached by the end of the review period (Clause 17(4)). That built‑in review mechanism prescribes procedure for one category of amendment to financial terms.

Practical consequences of the Agreement’s own amendment provisions include: the Secretary’s power to change Conditions annually within specified notice windows (Clause 10(2)), the capacity to increase the minimum annual supply by agreement (Clause 12(4)), and Clause 29 permitting amendment in writing for necessary details to facilitate industry operations. Because the Agreement is ratified by statute (s 5(1)), amendments made pursuant to Clause 29 will be changes to a statutory instrument by operation of the Agreement’s own amendment clauses, and s 6 requires a parliamentary report if such amendments occur. The Act does not show any later statutory alterations to the Agreement or the Act itself in the published endnotes.

Users should therefore treat the Agreement as statutorily primed for limited administrative amendment under its own clauses and for periodic joint reviews of fees but without a record of subsequent legislative amendment in the consolidated instrument as published at the date of the available version.

The Act and Agreement as provided contain no judicial decisions or litigation history. The text itself references arbitration as the primary private dispute resolution mechanism (Clause 27), and prescribes arbitration under the Commercial Arbitration Act 1984, with two arbitrators (one appointed by each party), investigatory powers for the arbitrators over the parties’ accounts and a confidentiality limitation on the use of information disclosed in arbitration (Clause 27(c)-(d)). The Agreement also provides specific arbitration referrals in several contexts: plan modification refusals (Clause 9(2)), annual licence fee review disputes (Clause 17(4)(d)-(e)), disputes over production charges failing agreement within 14 days (Clause 14(2)), suspension/modification/extension of time disputes (Clauses 25-26), and any matter that the Agreement provides shall be determined by arbitration (Clause 27(a)). Arbitration is thus the default private adjudicative route set out by the parties for commercial and operational disagreements.

The absence of named cases in the Act means the instrument does not itself include any precedent or reported enforcement histories. The endnotes in the published Act confirm there are no entries in explanatory details and that no statutory amendments have been made to the Act at the time of the version published (Endnotes 2-3). Because the Agreement authorises arbitrators to access and inspect Company and Secretary accounts “so far as may be necessary” (Clause 27(c)), parties to the Agreement must be prepared for account‑level scrutiny during arbitration procedures and for confidentiality constraints on using that material outside arbitration (Clause 27(d)).

Litigation in courts is not prohibited by the Agreement text; however, many disputes are directed to arbitration and the Agreement provides express administrative remedies (notice, cure periods, Ministerial approval for termination). Where statutory remedies exist (for example collections, recovery of debts, or insolvency events), those external statutes (Corporations Law, Conservation, Forests and Lands Act) would operate alongside the Agreement. Clause 16(c) requires the Company to pay disputed amounts under protest and then sue for recovery. That procedural requirement shifts the immediate enforcement mechanism to payment with later litigation/arbitration for recovery, which can affect cash flow and may influence strategy for dispute resolution.

Absent publicly reported judicial decisions in the Act text, readers should assume that enforcement and interpretation of the Agreement’s provisions , for instance, the scope of the Secretary’s discretion to impose Conditions, the meaning of “not unreasonably withheld” for assignment consent (Clause 4(1)(b)), the assessment of whether a breach is remediable for Clause 28, or the arbitration panel’s latitude in awarding remedies , would primarily be exercised in arbitration with fallback to court proceedings only where arbitration permits or where court intervention is necessary to enforce arbitral awards or deal with insolvency and statutory enforcement issues. The Agreement’s explicit arbitration regime and confidentiality clause will shape dispute posture and the evidentiary record, and the requirement to pay under protest for disputed sums creates a practical imperative to engage arbitration or proceedings promptly after payment.

Several operational and drafting features create asymmetries and specific operational risks that parties should monitor carefully.

Conditional commencement of supply rights: Division C (softwood sawlog rights) has no effect until the Company has completed the investment precondition (Clause 6(2)-(3)). If the Company fails to establish and commission the sawmilling complex by 31 July 1994 (First Schedule) then the Company’s supply rights under Division C will not be in force, and the Secretary’s rights under the Forests Act remain intact. This makes performance of the initial investment milestone a gateway to the Company’s long‑term supply entitlements.
Carry‑forward caps and timing: the carry‑forward mechanism is time‑limited and capped. Deficiencies from 1994/95-1999/2000 may be carried forward only to 30 June 2000 and subject to a total cap of 770,000 m3 (Clause 12(2)(i)), whereas deficiencies after 30 June 1999 may be carried forward to any of the next three years (Clause 12(2)(ii)). This creates differing entitlements depending on the timing of any under‑take of supply and limits the Company’s flexibility to make up deficits over an extended horizon.
Processing location and substitution limits: Clause 13(4) requires that the softwood sawlog be processed at the sawmilling complex in the First Schedule, except that up to 20 per cent of the minimum annual supply may be processed at another complex with the Secretary’s consent not to be unreasonably withheld, provided the Company processes an equivalent volume at the main complex in that year. The Company must keep records acceptable to the Secretary. The mixed consent standard and the back‑to‑back processing equivalent requirement constrain outsourcing and relocation flexibility.
Payment under protest requirement: Clause 16(c) mandates that disputed payments be paid under protest and then recovered by proceedings. This places short‑term liquidity risk on the Company; it cannot withhold payment to enforce a claim without potentially triggering suspension for overdue payment under Clause 16(b). The practical consequence is that the Company must fund disputed payments while pursuing recovery.
Secretary discretion on Charges and Conditions: royalties and roading charges are to be determined by the Secretary under statutory‑style systems (Clause 18(1) references the Royalty Equation System). Clause 10(2) permits the Secretary to impose Conditions as if issuing a licence under s 52 of the Forests Act, and changed Conditions may be delivered annually. Although changed Conditions must not be more onerous than those applied generally in corresponding circumstances, the Secretary nonetheless retains substantial administrative control over operational terms, raising regulatory compliance risk.
Termination requires Ministerial approval: while the Secretary holds enforcement and termination powers, many termination steps require Ministerial approval (Clause 28(1)(b), (2)(b), (3)). Ministerial approval introduces a political/executive variable into termination outcomes, which can delay or influence finality.
Insolvency and assignment traps: Clause 28(3) permits the Secretary to determine the Agreement if the Company becomes subject to winding up, receivership, or creditor schemes. Clause 4 allows assignment to related companies or to others with Secretary consent not to be unreasonably withheld. The interaction of assignment and insolvency provisions can complicate corporate restructuring: assignment may relieve the assignor of some obligations (Clause 4(1)(b)), but insolvency events may nonetheless permit termination despite assignment options.
Measurement and weighbridge obligations: where mass measurement is agreed, the Company must install, maintain and verify a weighbridge compliant with the Weights and Measures Act 1958 (Clause 20(2)(a)). When the weighbridge is inoperative the Secretary may direct an alternative measurement method (Clause 20(2)(c)); such changes can materially affect billings and reconciliation.
Fire suppression and indemnities: the Second Schedule requires the licensee to participate in fire prevention and to make personnel and equipment available for suppression. The Secretary reimburses reasonable costs and indemnifies certain losses, but reserves the right to withhold compensation where fires are “knowingly or negligently lit” by the licensee (Second Schedule Clause 9(d)-(g)). The Secretary will not compensate for loss of production or profit resulting from making resources available for fire suppression (Second Schedule Clause 9(f)). These provisions create operational obligations with limited financial protection.
Confidentiality and arbitration evidence: Clause 27(d) restricts information produced in arbitration to purposes connected to the arbitration. That limits the parties’ use of accounting and operational discovery outside arbitration but also raises evidentiary implications if court enforcement or related litigation occurs.
Parliamentary reporting requirement: s 6 requires the Minister to lay a report before each House within 14 sitting days after amendment or termination carried out in accordance with the Agreement. That reporting duty creates a short administrative trigger and potential political exposure.
No legislative amendment history recorded: endnotes show no subsequent amendments to the Act at the version date. Practitioners should verify whether later versions or unreported practices have altered commercial or statutory contexts since the version in hand.

These “gotchas” are concrete operational levers and deadlines that create risks for a company dependent on State supply and for the Secretary balancing public forest management duties. Each should be considered in project planning, cash‑flow modelling, contract drafting, and risk allocation for contractors and financiers.

Compliance requires active governance, record‑keeping, contract management and procedural observance across operational, financial and regulatory domains. Key steps and timings follow directly from the Agreement.

Investment milestones and documentary proof. Complete, commission and evidence the sawmilling complex as specified in the First Schedule by 31 July 1994, and install and commission ancillary value‑adding equipment by 31 January 2000. Prepare documentary evidence tied to the Proposal, Expression of Interest and Preliminary Design and Financial Statement, because the Agreement makes the Proposal the contractual baseline (First Schedule Clauses 1-4). Seek Secretary approvals for any material amendments to the Proposal early, since the Secretary may withhold approval in its sole discretion for amendments (First Schedule Clause 4).
Plan of utilisation participation. Engage with the Secretary each year in the plan of utilisation process: the Secretary must deliver the plan by 31 March (Clause 9(1)). The Company has 30 days to request modifications for the immediate year; modifications must be commercially beneficial to both parties and consistent with proper forest management (Clause 9(2)). Keep commercial evidence and forest management data ready to support any modification requests and, if necessary, prepare for arbitration if the Secretary is alleged to have unreasonably withheld consent.
Financial obligations. Establish cash‑flow procedures to pay royalties, production and roading charges and the annual licence fee on the required schedule. The annual licence fee is due on 30 June for the following year and may be paid in six‑monthly instalments at the Secretary’s discretion (Clause 17(2)). Calculate the licence fee using the stipulated base rate methodology, maintain records of base rates and indexing calculations, and prepare for five‑yearly joint reviews starting in 2000 (Clause 17(3)-(4)). For any disputed amounts, be prepared to pay under protest and pursue recovery thereafter (Clause 16(c)), and to manage working capital constraints resulting from that payment obligation.
Measurement and metrology compliance. If quantities are determined by mass, acquire and operate a weighbridge that meets the Weights and Measures Act 1958 requirements, ensure periodic verification and stamping, and keep calibration and verification records (Clause 20(2)(a)). Implement alternative measurement protocols to rely on when the weighbridge is out of order and agree these with the Secretary to avoid protracted disputes (Clause 20(2)(c)).
Operational and regulatory compliance. Treat the Agreement as if it were a licence under s 52 of the Forests Act 1958 and comply with the Forests Act, Conservation, Forests and Lands Act Codes of Practice and any Conditions the Secretary imposes (Clause 10(1)-(2)). Maintain up‑to‑date copies of all relevant Codes and Conditions, and ensure operational procedures align with the Third Schedule code of practice for measurement and defect allowances.
Contractor management. Include specified clauses in contracts with contractors to ensure third parties comply with the Forests Act, relevant conditions and codes of practice (Clause 22(3), Second Schedule Clause 10). Maintain records of all contractors and employees engaged in obtaining sawlog and supply these annually or on request to the Secretary (Clause 22(1)-(2)). Ensure contractors hold the necessary licences and training certifications required under Second Schedule Clause 3.
Record keeping and reporting. Keep detailed records of annual volumes processed at the main sawmilling complex (Clause 13(4)); maintain weighbridge logs, shipment records, defect measurement and allowance calculations per the Third Schedule, and evidence of compliance with codes and forest officer directions. Be prepared to produce accounts and papers in arbitration (Clause 27(c)).
Security and insurance. Lodge prescribed security annually with the Secretary (Second Schedule Clause 11) and maintain insurance coverage to indemnify against destruction or damage to the sawmill complex and to cover the obligations in Clause 25(b) where required. Ensure insurance policies and indemnities are structured to manage the risk of fire, calamity and interruption and match the Agreement’s expectations regarding indemnity and reimbursement (Second Schedule Clause 9(e)-(f)).
Fire prevention and suppression obligations. Implement fire prevention plans, maintain resources for suppression, and formalise procedures to make personnel and plant available to the Secretary if requested; keep logs of assistance given and invoices for reimbursement where applicable (Second Schedule Clause 9(a)-(e)). Maintain documentary evidence demonstrating prompt firefighting action where required to avoid denial of compensation (Second Schedule Clause 9(h)).
Dispute readiness and arbitration. Build an internal dispute protocol aligned with the Agreement’s arbitration framework: appoint legal, accounting and operational representatives to compile evidence, preserve documents and ensure confidentiality of arbitration material as Clause 27(d) requires. Note the procedural features: two arbitrators (one appointed by each party), application of the Commercial Arbitration Act 1984 and the arbitrators’ investigatory powers (Clause 27(a)-(c)). Keep records of all communications with the Secretary about disputed matters, deadlines for cure, requests for extensions and any Ministerial decisions referred to in Clause 25-26.
Ministerial and parliamentary reporting awareness. Monitor processes for amendment and termination and prepare for the public reporting requirement under s 6 should the Agreement be amended or terminated in accordance with its provisions. Retain documentary roadmaps of approvals and Ministerial communications to facilitate timely reporting.
Assignment and corporate events. If a corporate reorganisation or sale is contemplated, follow Clause 4: an assignment to a related company is permitted and assignment to other companies requires the Secretary’s consent not to be unreasonably withheld. Prepare to secure Secretary consent early and to remain responsible for obligations unless expressly released under Clause 4(1)(b). Monitor corporate insolvency covenants and avoid triggers listed in Clause 28(3) that could permit termination.

Complying with the Agreement therefore requires an integrated compliance programme spanning capital project delivery, forest and environmental law compliance, accounting and metrology fidelity, contractor contract governance, insurance and contingency planning, liquidity management for payment under protest scenarios, and arbitration readiness. Each compliance action should be documented with dates and approvals per the timeframes set out in the Agreement to mitigate risk of administrative or termination triggers.

Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993

Plain English Summary

Deep Dive

What it does

Current sections

Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993

Source text: opening excerpt

1 Forests (S.E.A.S. Sapfor Ltd Agreement) Act 1993

Main concepts

Who it affects

Key duties and rights

Penalties and enforcement

How it interacts with other laws

Amendment history

Litigation history

Gotchas

How to comply