Forests (Wood Pulp Agreement) Act 1996 (Victoria)

This Act ratifies and gives statutory force to a negotiated supply and access agreement between the State of Victoria (represented by the Minister administering the Forests Act 1958) and AMCOR Limited (the "Company"). Section 5(1) of the Act ratifies the Agreement and makes it operate “as if its provisions had been expressly enacted in this Act.” The Schedule contains the full text of the Agreement that the Act gives effect to; the Schedule is therefore the substantive source of rights, duties, discretions and mechanisms that the Act brings into statutory effect.

Mechanically, the Act does three immediate things (all reflected in the Schedule):

It confirms the Agreement’s terms as law (s 5(1)) and empowers the Secretary to implement it (s 5(2)).
It preserves and modifies the relationship between the Company and statutory forest regimes by allowing certain departures from the Forests Act 1958, including a permitted waiver of licence fees despite contrary provisions (s 6).
It repeals the prior Forests (Wood Pulp Agreement) Act 1961 (s 8), replacing the earlier legislative ratification with this consolidated Agreement.

The Schedule (the "Agreement") establishes a multi-decade framework for pulpwood supply, extraction and payment mechanics. The Secretary is bound to make minimum annual supplies of pulpwood available to the Company for specified years and volumes (clauses 14(2), 14(3) and related), including a carve-out requiring at least 300,000 cubic metres from mountain forests annually. The Agreement fixes the Company’s right to extract pulpwood without needing separate Forests Act licences for specified operations (clause 14(1)), subject to Plans of Utilization (clause 13) and the Secretary’s discretions on forest management (clause 6). The Agreement sets out royalty and licence fee arrangements (clauses 17-20), measurement and audit processes (clauses 23-24), reporting obligations (clause 24), and a dispute resolution architecture based on arbitration under the Commercial Arbitration Act 1984 (clause 37).

Victorian Legislation and Parliamentary Documentsi Version No. 001 Forests (Wood Pulp Agreement) Act 1996 Act No. 16/1996 Version as at 30 March 1998 TABLE OF PROVISIONS Section Page

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

SCHEDULE—Amcor Agreement 3 ═══════════════ ENDNOTES 30

General Information 30
Table of Amendments 31
Explanatory Details 32

Victorian Legislation and Parliamentary Documents1 Version No. 001 Forests (Wood Pulp Agreement) Act 1996 Act No. 16/1996 Version as at 30 March 1998 Preamble An Agreement with respect to the supply of pulp wood for the purposes of manufacturing wood pulp was entered into on 24 May 1996 between the Honourable Marie Tehan, Minister for Conservation and Land Management for and on behalf of the State of Victoria and AMCOR Limited A.C.N. 000 017 372. The Agreement provides that it is of no force or effect until ratified and otherwise given effect by Act. 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 between the Minister administering the Forests Act 1958 and AMCOR Limited with respect to the supply of pulpwood for the manufacture of wood pulp and for other purposes.
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.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 2 4. Act to bind the Crown This Act binds the Crown. 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 Natural Resources and Environment is empowered to carry out the Agreement. 6. Waiver of licence fees A licence fee may be waived in whole or in part in accordance with the Agreement despite anything to the contrary in the Forests Act 1958 or regulations under that Act. 7. 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. 8. Repeal The Forests (Wood Pulp Agreement) Act 1961 is repealed.

s. 4

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 3 SCHEDULE AMCOR AGREEMENT THIS AGREEMENT is made the 24th day of May One thousand nine hundred and ninety-six between the Honourable Marie Therese Tehan as Minister for Conservation and Land Management for and on behalf of the State of Victoria administering the Forests Act 1958 (the "Minister") of the first part and AMCOR LIMITED (ACN 000 017 372) (the "Company") a company incorporated in the State of New South Wales whose head office is situate at Southgate, South Melbourne in the State of Victoria of the second part— RECITALS WHEREAS: I. On the twenty-eighth day of March One thousand nine hundred and sixty-one the Honourable Alexander John Fraser in his capacity as the Minister for Forests and Australian Paper Manufacturers Limited, as the Company was formerly called, entered into an agreement (hereinafter called the "original agreement") which was ratified, validated and approved by an Act of Parliament of the State of Victoria known as the Forests (Wood Pulp Agreement) Act 1961. II. The original agreement has been amended by other agreements made between Ministers of the Crown and the Company which were ratified validated and approved by the Parliament of the State of Victoria by the Forests (Wood Pulp Agreement) Act 1966, the Forests (Wood Pulp Agreements) Act 1974 and the Forests (Wood Pulp Agreement) Act 1984. III. The Minister and the Company desire to consolidate into one agreement the original agreement as previously amended and further amendments to the original agreement as previously amended agreed by the Minister and the Company. IV. The Company has been engaged in large scale operations in connection with the manufacture of wood pulp and has established a large paper making industry and the ancillary activities of chemical manufacture and forestry in the State of Victoria. V. The Company is a major contributor to the Australian economy and the national timber industry has benefited significantly from value adding and other initiatives of the Company. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 4 VI. Having regard to the matters hereinbefore recited the parties hereto desire to enter into the following agreement so that upon its ratification by the Parliament of the State of Victoria the Company and the State of Victoria shall become bound by the provisions hereinafter appearing. 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 Act of the Parliament of the State of Victoria by which this Agreement is ratified. "the Agreement" includes this Agreement as from time to time amended. "any Act" means any Act of the Parliament of the State of Victoria. "authorised officer" has the same meaning as in the Conservation, Forests and Lands Act. "Company" means AMCOR Limited (ACN 000 017 372) and if in accordance with clause 5 of this Agreement a subsidiary company is incorporated or the rights of the Company are assigned to any company includes that subsidiary or assignee company. "Commercial Arbitration Act" means the Commercial Arbitration Act 1984 of the State of Victoria as amended from time to time. "Conservation Forests and Lands Act" means the Conservation Forests and Lands Act 1987 of the State of Victoria as amended from time to time. "date of expiration" means the thirtieth day of June in the year Two thousand and thirty. "Department" means the Department of Natural Resources and Environment and any successor department. "Forests Act" means the Forests Act 1958 of the State of Victoria as amended from time to time. "Forest Area" means State forest existing from time to time within the area surrounded by a green verge on the map annexed hereto or if that area is varied in accordance with clause 15 hereof that area as so varied. "forest of regrowth" means any forest in which the majority of the trees are less than sixty years of age. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 5 "forest produce" has the same meaning as in the Forests Act. "the industry" means (a) the manufacture by the Company in the State of Victoria of wood pulp from pulpwood; (b) investigations preliminary to and in connection with such manufacture and the supply and preparation of materials therefor; and (c) the carrying on of processes incidental to such manufacture. "Land Act" means the Land Act 1958 of the State of Victoria as amended from time to time. "mill waste" means edgings and other waste timber cut from logs in the course of sawmilling. "minimum annual supply of pulpwood" means the annual quantities of pulpwood of various types which the Secretary is bound to make available or the Department is bound to deliver from time to time in accordance with clause 14 hereof. "Minister" means the responsible Minister of the Crown for the time being administering the Forests Act. "month" means calendar month. "mountain forest" means any eucalypt forest in which the predominating species is Eucalyptus regnans or Eucalyptus delegatensis or both of them. "original agreement" means the agreement defined in the Forests (Wood Pulp Agreement) Act 1961 of the State of Victoria as amended from time to time. "Plan of Utilization" means any plan of utilization prepared in accordance with clause 13 as modified from time to time in accordance with this Agreement. "pulpwood" means sound wood free from bark rot carroty heart and all other defects that make wood unsuitable for use in making wood pulp and obtained from any species of the genus Eucalyptus from which the Company is able to make wood pulp of merchantable quality. "pulpwood timber" means timber in the log or sawn or split that consists exclusively of pulpwood or contains pulpwood but does not include any timber which the Secretary requires for disposal whether by sale or under a lease licence permit or other authority for sawmilling or fencing timber. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 6 "removed" used in relation to pulpwood timber means taken from the stump (or other place in the forest where the pulpwood timber is lying) to a place where it can be loaded on a vehicle in working order and "removal" has a corresponding meaning. "sawmilling" includes the obtaining of logs or timber for sawing veneering or slicing or splitting by hand or machine or for use as piles or poles or for hewing for engineering construction or public works. "Secretary" means the Secretary to the Department. "State forest" has the same meaning as in the Forests Act. "Trade Measurements Act" means the Trade Measurements Act 1995 of the State of Victoria as amended from time to time. "Water Act" means the Water Act 1989 of the State of Victoria as amended from time to time. "wood pulp" means pulp produced from pulpwood by any process whether chemical or mechanical or by a combination of chemical and mechanical processes. "year" means a period of twelve months commencing on the first day of July. 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. (2) The headings and sidenotes shall not affect the interpretation of this Agreement. 3. This Agreement shall not be of any force or effect until it has been ratified and otherwise given effect by the Act. 4. (1) Upon the date of commencement of the Act this Agreement shall be deemed to have come into operation on 1st July 1996 and the provisions of the original agreement shall be deemed to have ceased to have any effect from 1st July 1996 subject to Clause 4(2). (2) The cessation of the effect of the provisions of the original agreement shall not affect the enforcement of any right obligation or liability acquired accrued or incurred thereunder before 1st July 1996. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 7 5. (1) The Company shall be at liberty at any time with the prior written consent of the Minister to - (a) procure the incorporation of a subsidiary company to exercise as the nominee of the Company all or any of its rights under this Agreement and the Act; and (b) assign all or any of its rights under this Agreement and the Act to such subsidiary company or to any other company. (2) After any such assignment and after written notice thereof given by the Company to the Minister the following provisions shall have effect - (a) the subsidiary or assignee company shall by virtue of the assignment and the Act be subject to the relevant obligations and conditions imposed upon the Company by this Agreement so far as they remain in force and capable of taking effect; and (b) the Company shall remain responsible to the Minister and the Secretary for the performance of all its obligations under this Agreement as if no assignment had been made. 6. In using its powers and applying its discretions whether under this Agreement or the Act or the Forests Act the Minister and the Secretary shall give full recognition to the fact that the Company is engaged in a competitive business and so far as the interests of forest management allow the Secretary (which shall for the purposes of this Agreement be the sole judge of what is proper forest management) shall so act in every reasonable way as to enable the Company to carry on the industry in an economic manner. PART II - OPERATION OF INDUSTRY DIVISION A. - DURATION OF AGREEMENT 7. This Agreement shall remain in force until the date of expiration or until sooner determined in accordance with the provisions hereof and thereupon the rights interests powers and privileges granted by or under this Agreement to the Company its agents and contractors shall determine. 8. The expiration or determination of this Agreement shall not affect the enforcement of any right obligation or liability previously acquired accrued or incurred hereunder. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 8 DIVISION B - TIMBER RIGHTS 9. The Forests Act shall apply to and with respect to all operations of the Company under this Agreement except in so far as that Act may be inconsistent with the provisions of this Agreement. 10. (1) Save as expressly provided by this Agreement or the Act nothing in this Agreement or the Act shall affect the rights powers and privileges acquired by any person (whether before or after the commencement of the Act) under the Forests Act or any other Act. (2) Notwithstanding anything contained in this Agreement or the Act any person who has acquired or acquires any rights powers or privileges as aforesaid shall be entitled to the full and free right of entry to the area in respect of which they were or are acquired. 11. Subject to the Secretary's compliance with the obligations expressed in clause 14 hereof nothing in the Agreement shall operate so as to restrict the Secretary's rights pursuant to the Forests Act to sell forest produce to meet the reasonable requirements of the general public. The Secretary shall be the sole judge as to what are reasonable requirements within the meaning of this clause. 12. In order to ensure the effective management and utilization of the forests within the Forest Area the Secretary shall carry out a review of pulpwood within the Forest Area at least once in each period of five years while this Agreement remains in force and shall make the results available to the Company. 13. (1) The Secretary and the Company have jointly prepared a Plan of Utilization for the supply of pulpwood based on the Company's estimates of its pulpwood requirements for the year 1996-1997 and a provisional plan for the supply of pulpwood for the next two years based on the Company's estimates of its pulpwood requirements. Not later than the thirtieth day of April in each year commencing 30 April 1997 the Secretary and the Company shall jointly prepare a Plan of Utilization for the supply of pulpwood for the following year and a provisional plan for the supply of pulpwood for the next two years based on the Company's estimates of its pulpwood requirements. For that purpose the Company shall by the first day of March in each year commencing 1 March 1997 submit to the Secretary in writing its estimates of its pulpwood requirements for the period to be covered by the Plan of Utilization and the provisional plan. The Plan of Utilization shall (in addition to any other matters which the Secretary and the Company desire to include) prescribe - (a) the areas to be made available under this Agreement for the obtaining of pulpwood; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 9 (b) estimates of yield of each class of pulpwood from the areas to be so made available; (c) organisation of and obligations of the Company or the Department as the case may be with respect to the felling and extraction of pulpwood; (d) road construction and maintenance and responsibility therefor. (2) The Secretary and the Company may during the currency of any Plan of Utilization agree to a modification of the Plan of Utilization. (3) The Secretary and the Company shall conform with each Plan of Utilization or modified or revised Plan of Utilization. (4) The Secretary and the Company may each nominate from time to time two of its officers to form a committee the functions of which shall include - (a) the detailed preparation and revision of Plans of Utilization for submission to the Secretary and the Company for approval; (b) the co-ordination of pulpwood operations; (c) the investigation of any other matters arising from this Agreement which it may be jointly required by the Secretary and the Company to investigate. (5) If the Secretary is satisfied (including on representation by the Company) that pulpwood to be felled under any Plan of Utilization from any area (the original area) would not be obtainable at an economic cost, pulpwood shall not be felled or extracted from that area and the Secretary shall substitute for the original area another area as will enable pulpwood which it would have been entitled to take from the original area to be obtained at an economic cost, including where pulpwood wood is to be felled and delivered by the Department under the Plan of Utilisation taking into account any increased cost of delivery so arising. Any dispute as to what constitutes economic cost will be referred for determination in accordance with Clause 37. (6) If a Plan of Utilization imposes obligations on the Company for the felling and extraction of pulpwood the Company shall complete to the satisfaction of the Secretary and in accordance with that Plan of Utilization the extraction of pulpwood within any area (other than an area in which the Secretary fells or fells and removes pulpwood timber) made available under the Plan of Utilization PROVIDED that the Company shall be deemed to have completed the extraction of pulpwood as aforesaid to the Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 10 satisfaction of the Secretary unless the Secretary if it is not satisfied with the manner in which the extraction of pulpwood from any area is being carried out gives to the Company written notice to that effect within a reasonable time (being not less than fourteen days) before the date on which the extraction as aforesaid should in the opinion of an authorised officer having control of the area be completed and in that event the Company shall within a reasonable period after receipt of the notice complete the extraction as aforesaid to the satisfaction of the Secretary. (7) Subject to sub-clause 22(1) the Company shall be entitled to carry out in State forest works required to enable the extraction of pulpwood by it in accordance with this Agreement from any area prescribed in any Plan of Utilization or modified or revised Plan of Utilization. (8) When a person obtains pulpwood from the Forest Area in accordance with rights granted under the Forests Act or any other Act at the same time as the Company or the Department for delivery to the Company in accordance with the Agreement the Plan of Utilization shall provide that - (i) as far as practicable there will be no discrimination between that person and the Company or the Department as the case may be as to factors affecting costs of felling extracting and loading on to motor trucks of pulpwood; and (ii) subject to proper forest management and the necessity of avoiding waste of merchantable material operations are located so that cartage costs within the Forest Area are minimised for that person and the Company or the Department as the case may be. 14. (1) Subject to the provisions of clause 13 hereof and of the succeeding sub-clauses of this clause the Company without obtaining any lease licence permit or authority under the Forests Act shall have - (a) the right (which shall not be exclusive) to obtain pulpwood timber by its employees agents or contractors from the Forest Area in accordance with any Plan of Utilization; (b) the right (which shall not be exclusive) to obtain pulpwood timber by its employees agents or contractors from the areas outside the Forest Area in accordance with any Plan of Utilization. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 11 (2) The Secretary shall be bound in each year to make available to the Company or to have the Department deliver to the Company as the Plan of Utilization may require from areas of forest as provided in this clause and in accordance with a Plan of Utilization a minimum annual supply of pulpwood which shall be - (a) in each of the years 1996 - 1997 to 2003 - 2004 inclusive - 500,000 cubic metres; (b) in each of the years 2004 - 2005 to 2006 - 2007 inclusive - 450,000 cubic metres; (c) in each of the years 2007 - 2008 to 2009 - 2010 inclusive - 400,000 cubic metres; (d) in each of the years 2010 - 2011 to 2029 - 2030 inclusive - 350,000 cubic metres, of which at least 300,000 cubic metres shall be made available to the Company or delivered by the Department to the Company as the Plan of Utilization may require from mountain forests inside the Forest Area. (3) The Secretary may with the approval of the Minister by written agreement with the Company increase or decrease 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 (2) of this clause for that period and any minimum annual supply so agreed upon may likewise be further increased or decreased. (4) The volume of pulpwood specified in sub-clause (2) of this clause to be made available from mountain forests may not at any time be altered without the consent of the Company. (5) The Secretary in its discretion may whether for extraction by the Company or delivery to the Company by the Department as the case may be - (a) make available in any year at the request of the Company a quantity of pulpwood exceeding the amount of the minimum annual supply of pulpwood; (b) make available to the Company in any year by agreement with it a proportion of the Company's requirements of pulpwood for that year from State forest not forming part of the Forest Area; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 12 (c) in any year whether by agreement with the Company or not, make available to the Company from State forest not forming part of the Forest Area and generally situated within 200 kilometres by road (using the shortest practicable route) from the Maryvale Mill a volume of pulpwood not exceeding - (i) 150,000 cubic metres; or (ii) the volume in excess of 300,000 cubic metres of the minimum annual supply of pulpwood whichever is the lesser, at such royalty rates as may from time to time be determined by the Secretary provided that if the Company is able to show to the satisfaction of the Secretary that the pulpwood so made available from any area would not be obtainable at an economic cost the Secretary shall not require it to take such pulpwood or accept delivery of it by the Department and shall substitute another area as will enable the Company to take or accept delivery of the pulpwood at an economic cost provided always that if the Secretary is not so persuaded the Company by notice in writing to the Secretary may require the dispute to be determined by arbitration in accordance with clause 37 and further provided that all pulpwood which is expected to become available from sawmilling and silvicultural operations in the Forest Area has first been offered to the Company before being offered to any other person. (6) The Company shall be entitled to obtain pulpwood in accordance with a Plan of Utilization from logging residue and standing trees as indicated by an authorised officer in accordance with prescriptions laid down by the Secretary for the harvesting of forest produce. Pulpwood harvesting operations shall be restricted to such parts of the areas of forest as provided in accordance with a Plan of Utilization and shall be conducted in a manner satisfactory to the Secretary and in accordance with the directions of an authorised officer. (7) The Plan of Utilization shall specify whether the organisation and carrying out of the felling and extraction of the pulpwood shall be the responsibility of the Department or the Company. The organisation and carrying out of the felling and extraction of the pulpwood in accordance with the Plan of Utilization for any year commencing on or after 1 July 1997 shall be the responsibility of the Company. However, if by the 15th April in any year including by the 15th April 1997, the Secretary is able to demonstrate to the Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 13 reasonable satisfaction of the Company that the bona fide cost at which the Department could extract and fell the pulpwood to be extracted and felled pursuant to the Plan of Utilization for the next ensuing year commencing 1 July and deliver it upon conditions no less favourable to the Company to the mill gate at Maryvale (the "Department Price") would be less than the price per cubic metre at which the Company could extract fell and so deliver pursuant to such Plan of Utilization, such extraction felling and delivery shall be the responsibility of the Department unless the Company is prepared to equal the Department Price. (8) The following shall apply to any pulpwood to be extracted felled and delivered by the Department in accordance with a Plan of Utilization - (a) Should the Company reject any pulpwood delivered to it by the Department on any of the grounds set out in clause 14(10) the same shall be set aside for inspection on behalf of the Department. (b) If the Company's rejection is accepted by the Department, delivery of substitute pulpwood will be made to the Company as soon as practicable and in consultation with the Company at no additional cost to the Company, the original delivery cost to be charged in respect of subsequent deliveries when received. (9) The Company shall pay to the Secretary - (a) the licence fee payable in each year commencing 1 July, 2004 under the provisions of this Division; and (b) as to pulpwood obtained from pulpwood timber which the Company either by itself or its contractors fells and removes - the royalty payable from time to time under the provisions of this Division; and (c) as to pulpwood obtained from pulpwood timber which the Department either fells or fells and removes - the royalty as aforesaid and the Department's charges for felling or felling and removal as specified in the relevant Plan of Utilization. (10) The Company shall not be bound to accept timber which - (a) will not produce pulpwood of at least 3.0 metres in length; (b) is not sufficiently straight to produce pulpwood suitable for the manufacturing processes for the time being employed in the industry; Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 14 (c) is so defective due to the presence of rot or other faults that pulpwood cannot be produced economically; or (d) in forests of regrowth is less than ten centimetres in diameter under bark and in forests other than forests of regrowth is less than fifteen centimetres diameter under bark. (11) If pulpwood which is expected to become available from sawmilling or silvicultural operations in the Forest Area is offered to the Company during the modification or revision of any Plan of Utilization and the Company advises that it does not require such pulpwood then the Company shall not unreasonably withhold its consent to disposal by the Secretary of such pulpwood to any other person for any purpose whatsoever. (12) If as the result of salvage operations following an occurrence which the Secretary and the Company agree is a major disaster a quantity of pulpwood which the Company advises is beyond its ability to utilise arises within the Forest Area then the Secretary may dispose of such pulpwood to other persons. 15. In order to assure to the Company supplies of pulpwood in connection with any proposed development of the industry it is provided as follows: (a) representatives of the Secretary and the Company shall investigate the development and the pulpwood supplies available in the Forest Area; (b) if as a result of that investigation the Secretary is satisfied that having regard to the Company's future requirements of pulpwood it is reasonable to do so the Secretary may with the approval of the Minister either - (i) increase the Forest Area by the inclusion of additional areas of State forest; or (ii) reduce the Forest Area to an area capable in its opinion of producing adequate supplies of the types of pulpwood required for the economic continuation of the industry, PROVIDED THAT - (i) reasonable allowance shall be made for the possibility of destruction of or damage to forests by fire and other causes; and Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 15 (ii) so far as is consistent with proper forest management the areas from which supplies of pulpwood timber can be most conveniently obtained at the cheapest rates shall be made available or shall remain available to the Company; (c) if- (i) the Company seeks an extension of the operation of this Agreement beyond the date of expiration; and (ii) the Secretary as a result of the said investigation is satisfied that the extension of the operation of this Agreement for the period sought by the Company is necessary for the continuation of the industry - the Secretary shall make a recommendation to the Minister that a Bill be introduced into the Parliament of the State of Victoria as soon as possible to extend the operation of this Agreement for that period. 16. (1) With respect to pulpwood referred to in clause 14 hereof the Company shall be bound in each year in which the quantity comprising the minimum annual supply of pulpwood for that year is available to it either - (a) to take or accept delivery as the case may be pursuant to the Plan of Utilization of not less than eighty five per centum of that quantity; or (b) if it takes or accepts delivery as aforesaid of less than eighty five per centum of that quantity, to pay royalty to the Secretary on the deficiency at a rate equal to the average royalty rate paid for pulpwood for that year. (2) If the Company in respect of any year makes any payment under paragraph (b) of sub-clause (1) of this clause in respect of a deficiency in that year and during either or both of the two years next following that year it takes or accepts delivery of a quantity of pulpwood in excess of eighty five per centum of the minimum annual supply for those respective years then the amount of royalty payable in respect of such excess shall be reduced by an amount not exceeding in the aggregate the royalty paid in respect of the deficiency. (3) (a) In the event of damage to the Company's forests in Victoria by fire drought insects disease or other cause the provisions of this clause shall upon the Company Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 16 giving written notice to the Secretary be modified to the extent that the pulpwood from such damaged forests is salvable. (b) In the event of damage of the kind referred to in the preceding paragraph to State forests within the Forest Area the Company shall to the extent that the pulpwood from such damaged forests is salvable use its best endeavours to use pulpwood from such forests including reducing the supply from the Company's own forests in Victoria to the fullest extent practicable. (c) In the event of damage of the kind referred to in paragraph (a) of this sub-clause occurring to the Company's forests in Victoria and State forests within the Forest Area at or about the same time the provisions of paragraphs (a) and (b) of this sub-clause shall not apply and if damage of that kind occurs to the forests of one party within twelve months of damage of that kind occurring to the forests of the other party the provisions of paragraphs (a) and (b) of this sub-clause may be modified by agreement between the Secretary and the Company or failing agreement as the Secretary may determine. (4) For the purposes of determining whether the Company has taken or accepted delivery of eighty five per centum of the quantity of pulpwood comprised in the minimum annual supply of pulpwood in any year, all pulpwood obtained by the Company or delivered by the Department to the Company in the year from any State forest (whether under this Agreement or otherwise) and on which royalty has been paid to the Secretary shall be taken into account. (5) For the purposes of sub-clause (1) of this clause pulpwood shall not be deemed to be available from an area of forest if by reason of strike lockout fire storm or other unforeseen circumstances the means of supply from that area are interrupted or destroyed. (6) If owing to any change in the economics of the industry (such as competition from other raw materials or products, change in the extent of public demands, change in quality of products required by the public or substitution of other products requiring different types of raw material) the continued performance by the Company of its obligation under sub-clause (1) of this clause or the payment of royalties pursuant to this Agreement would affect it unfairly:- (a) the Secretary on the written request of the Company shall confer with it with a view to agreeing upon such a modification or suspension of the Company's Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 17 obligations under this clause or clause 20 as in view of the altered circumstances will be fair and reasonable; (b) if the Secretary and the Company fail to agree upon a modification or suspension as aforesaid within sixty (60) days of the request in writing made under clause 16(6)(a) the matter shall be determined in accordance with clause 37 hereof; (c) any modification or suspension as aforesaid agreed upon by the Secretary and the Company or determination under clause 37 hereof shall be given effect accordingly, but so that all costs of the Secretary as between party and party of and incidental to any such determination shall be paid by the Company. 17. (1) The provisions contained in sub-clause (2) shall apply with respect to the licence fee payable under this Agreement. (2) (a) The Company shall pay to the Secretary an annual licence fee. However: (i) payment of the licence fee otherwise payable is waived by the Secretary until the year commencing 1 July 2004; (ii) the amount of the licence fee shall be an amount calculated by multiplying the sum of $0.50 (indexed to changes in pulpwood royalty rates since 1 July, 1996) by the volume (specified in cubic metres) of the minimum annual supply of pulpwood in the year in which the licence fee becomes payable. (b) On or before the thirtieth day of each year during the term of this Agreement, or within 30 days of being so advised, whichever is the later, the Company shall pay the annual licence fee to the Secretary. Alternatively the annual licence fee may be paid six monthly in instalments by prior arrangement with the Secretary. If the annual fee is payable in instalments, interest shall be applied for a period of 6 months to the second six monthly payment at the rate for the time being fixed under Section 30 of the Conservation, Forest and Lands Act (or any successor Act to that Act). If without reasonable cause, the licence fee is not paid after becoming overdue the Company shall pay interest on the sum due but unpaid, from the date that sum became overdue at the rate for the time being fixed under Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 18 Section 30 of the Conservation, Forests and Lands Act (or any successor Act of that Act). (c) If the licence fee or an instalment of licence fee remains overdue for more than 14 days then the Secretary or his delegate may by notice in writing to the Company direct that no further timber may be taken under this Agreement until the amount and any interest thereon are paid. 18. (1) The provisions contained in sub-clause (2) shall apply with respect to royalty payable under this Agreement. (2) (a) Accounts for royalty shall be issued monthly by the Department. (b) An account issued for royalty is due for payment by the Company immediately it is rendered and becomes overdue if not paid by thirty (30) days from the days from the date the account is rendered. (c) If royalty is not paid after becoming overdue the Company shall pay interest on the sum due but unpaid, from the date that sum became overdue at the rate for time being fixed under Section 30 of the Conservation, Forests and Lands Act (or any successor Act of that Act). (d) If an account remains overdue for more than 14 days then the Secretary or his delegate may direct by notice in writing to the Company that no further timber shall be taken by the Company until the outstanding amount has been paid in full. 19. (1) For the purposes of determining rates of royalty payable under this Agreement pulpwood shall be in one of the following classes - ash species from within the Forest Area; mixed species from within the Forest Area; pulpwood of whatever class from outside the Forest Area. (2) Royalty on pulpwood obtained by the Company during the period 1 July 1995 to 30 June 1996 is acknowledged to have been payable pursuant to the original agreement at the rates following:- Pulpwood Class Rate in $ Per Cubic Metre Ash species from within the Forest Area $11.05 Mixed species from within the Forest Area $ 8.46 Pulpwood of any class from outside the Forest Area $ 8.46 Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 19 (3) The Secretary and the Company may at any time by agreement vary the classification of pulpwood provided in sub-clause (1) of this clause and the royalty rates applicable to the classes of pulpwood so varied shall be ascertained in a like manner to that provided in clause 20 hereof. Such variation may without affecting the generality of the foregoing be in respect of the species or age of the trees from which pulpwood will be obtained or the locality in which they are growing or the conditions specified by the Secretary under which they may be cut. 20 (1) During each successive period of twelve months from 1 July 1996 the royalty payable shall be: (a) at the rates agreed upon by the Secretary and the Company having regard to: • the Company's need for international competitiveness; • the payment by the Company of the annual licence fee as from the year commencing 1 July 2004; and • the Secretary's need for commercial viability, (those matters being hereinafter collectively called "the objectives"); or (b) failing agreement within 90 days of the commencement of that period at the rates calculated by adjusting the rates previously payable (up or down as the case requires) by one half of the percentage change proved by audit of the Secretary to have occurred during the preceding period of twelve months in the average gross price per tonne charged by the Company bona fide and on an arms length basis to its customers for all paper goods manufactured in Victoria and sold by the Company during that period or in accordance with such other formula as may be agreed between the Secretary and the Company from time to time. (2) The Company shall give the Secretary its employees and authorised agents access to all accounts and papers and shall do all things reasonably required by the Secretary for the purposes of the audit contemplated by sub-clause (1). (3) Any information obtained from the Company under sub-clause (2) or sub-clause (6) below shall be used only for the purposes for which it was obtained shall be treated as confidential and shall only be disclosed if so required by law. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 20 (4) If either of the Secretary or the Company is not satisfied that any of the objectives are likely to be achieved if royalty is paid at the rates determined in accordance with sub-clause (1) and have notified the other accordingly within 30 days of being advised of the calculation of those rates, then the rates in respect of which the Secretary or the Company (as the case may be) are not satisfied shall instead be the rates determined by arbitration in accordance with Clause 37 hereof. (5) The arbitrators appointed in accordance with clause 37 hereof or their umpire shall take into consideration any alteration in circumstances and any other relevant matters which any of the parties to the reference may bring before the arbitrators or the umpire. (6) The arbitrators appointed in accordance with clause 37 hereof or their umpire or some person appointed on their behalf may investigate the Company's affairs and accounts so far as may be necessary to assist them to determine fair rates of royalty and the officers of the Company shall give them full access to all accounts and papers necessary for that purpose and shall afford them full information and assistance. (7) The Company shall continue to pay royalty at the rates previously payable until the adjustment of the rates has been agreed or determined in accordance with this clause 20 whereupon any necessary adjustment retrospective to the commencement of the relevant twelve month period will be made between the parties. 21. With respect to obtaining and transporting pulpwood timber the following provisions shall have effect: (a) the Secretary shall take all reasonable steps in its power to facilitate the obtaining by the Company in exercise of the rights granted under this Agreement of pulpwood timber or pulpwood from Crown lands the subject of any timber cutting licence issued in accordance with the provisions of the Forests Act and in particular to facilitate the supply to the Company by the holder of any such licence of pulpwood from the lands affected by the licence; (b) for the purposes of Section 52 of the Forests Act the Company and persons contracting with the Company for the supply of pulpwood to be obtained under the provisions hereof shall be deemed to have the appropriate licences under that Act. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 21 22. (1) The Company shall not construct any road track passage tramway chute or flume or erect any haulage unit or building within any State forest without the consent of the Secretary or an authorised officer previously obtained. (2) Should the Secretary be unable to complete the program of road construction and maintenance for which it is responsible under the Plan of Utilization in any year it shall make available to the Company a volume of the same class of pulpwood timber and pulpwood from other roaded areas of forests of regrowth equivalent to the volume unavailable to the Company by reason of the Secretary's inability to complete the program. 23. (1) The quantity of pulpwood upon which royalty is payable under this Agreement shall be determined in such manner (allowance being made for timber or other substance that is not pulpwood) as may be agreed upon by the Secretary and the Company or failing agreement as the Secretary may direct. (2) The place at which pulpwood is to be measured shall be as fixed by the Secretary from time to time after consultation with the Company. (3) If the royalty so payable is to be determined by mass - (a) the Company shall provide at its Maryvale mill a weighbridge of a pattern approved by a person for the time being performing the duties of an Inspector under the Trade Measurement Act and shall while this Agreement remains in force have the weighbridge maintained and periodically verified in accordance with the provisions of that Act; (b) at all times while the weighbridge is in accurate working order the quantity of pulpwood upon which royalty is payable under this Agreement shall be determined by weighing the pulpwood on the weighbridge; (c) at all times while the weighbridge is not in accurate working order the quantity of pulpwood upon which royalty is payable under this Agreement shall be determined in such manner as may be agreed upon between the Secretary and the Company or failing agreement as the Secretary may direct. Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 22 24. (1) The Company shall keep records showing in respect of each year - (a) particulars of the respective quantities of pulpwood obtained by it or delivered by the Department to it from - (i) the Forest Area or any subdivisions thereof specified in any Plan of Utilization as aforesaid; (ii) other areas of State forest; (iii) any source other than State forest. (b) particulars in respect of each of the sources mentioned in the last preceding paragraph of the respective quantities of pulpwood obtained by the Company or delivered by the Department to the Company from - (i) ash species from within the Forest Area; (ii) mixed species from within the Forest Area; and (iii) pulpwood of any class from outside the Forest Area. (c) particulars of the quantities of pulpwood obtained from mill waste; and (d) such other particulars of a similar nature as may be prescribed by regulation under the Act. (2) The Company shall make such records available for inspection at all reasonable times by an officer appointed by the Secretary for that purpose. (3) Not later than the fifteenth day of every month the Company shall furnish to the Secretary a return in the form prescribed by regulation under the Act or in any other form approved by the Secretary of all pulpwood received by it during the last preceding month. (4) The Company shall also furnish to the Secretary returns in respect of the matters mentioned in sub-clause (1) of this clause in such form and at such times as from time to time are prescribed by regulation under the Act or in any other form approved by the Secretary. (5) The Secretary or any person appointed by it shall be entitled to require from the officers of the Company such information and explanations as are necessary for the purpose of testing and verifying the completeness and accuracy of the records and returns. The Secretary and its officers and any person appointed Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 23 by the Secretary for the purposes of this sub-clause shall keep strictly confidential any information obtained under this sub- clause. 25. (1) The Secretary shall give to the Company prior to the date on which it is entitled under this Agreement to obtain pulpwood timber from any area written notice of the conditions published by the Secretary in respect of the cutting of pulpwood timber in that area and the Company and any person authorized by it (whether by contract or otherwise) to cut pulpwood timber in that area shall be jointly and severally bound to comply with the said conditions. (2) The Company shall notify the Secretary in writing from time to time of the names of the foremen contractors and other persons who are in charge of or are directing the obtaining of pulpwood timber pursuant to this Agreement. (3) The Company shall supply to each such person for production when required by an authorised officer evidence in a form satisfactory to the Secretary that he is engaged in the obtaining of pulpwood timber pursuant to this Agreement and the Company shall forthwith notify the Secretary in writing whenever such person ceases to be so engaged. (4) Any person contracting with the Company to fell or fell and remove pulpwood timber pursuant to this Agreement whose name has been notified to the Secretary as aforesaid shall until such time as this contract has expired or has been determined or until the Secretary directs the Company in writing to terminate his authority to fell or fell and remove pulpwood timber (whichever first occurs) be deemed to hold an appropriate licence under the Forests Act. 26. The Company and the Secretary agree that the full utilization of wood material felled during integrated harvesting operations is desirable. To this end, the parties will work towards a proportion of the minimum annual supply being supplied, by agreement, as chip rather than roundwood. DIVISION C. - OTHER RIGHTS AND POWERS 27. If any easement or other right in or over private property which is necessary or desirable for the convenient carrying on of the industry can be obtained under the Forests Act or the Conservation Forests and Lands Act:- (a) At the request of the Company the Minister shall on the recommendation of the Secretary pursuant to the Forests Act and the Secretary pursuant to the Conservation Forests and Lands Act shall exercise the powers vested in the Minister or the Secretary as the case may be Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 24 under those Acts for the purposes of obtaining the easement or right which when obtained shall be so exercised as to enable the Company conveniently to carry on the industry. (b) the Company shall pay all expenses incurred by the Minister or Secretary as the case may be in exercising such powers and shall defray all payments to be made to owners of the property affected. 28. The authority having the care and management of any public road street highway tramway or railway (all of which are in this clause included in the word "road") upon application by the Company and upon the report of any qualified engineer or licensed surveyor - (i) that a culvert pipe tunnel flume channel or drain (all of which are in this clause included in the word "work") can be laid or constructed on under or over any such road without any substantial injury to or obstruction of the traffic thereon; and (ii) that the work is necessary for the due and proper carrying on of the industry or for the conveyance of water for its purposes - by order in writing subject to the rights of owners and occupiers of adjoining or contiguous lands and of any persons lawfully having works on under or over any such road may consent to the construction of the work by the Company for the purpose of conveying any water or process water to or from any land upon which the industry is carried on or is proposed to be carried on PROVIDED that - (a) the authority shall not unreasonably refuse its consent to the construction of any work in accordance with such terms and conditions as the authority may determine; (b) every work shall be constructed in accordance with such terms and conditions; (c) the authority may at its discretion carry out the work at the cost of the Company. 29. The powers of the Governor in Council and the Minister administering the Water Act 1989 to grant and issue leases and licences under the Water Act 1989 for pumping sites water easements the diversion of water and the cutting of races and other necessary purposes shall be deemed to extend to the grant and issue to the Company of such instruments (and in the case of bulk entitlements the Company shall be granted a bulk entitlement sufficient to meet the requirements of the Company to carry on the Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 25 industry at the Maryvale Mill during the term of this Agreement as if the Company were an Authority for the purposes of Division 1 of Part 4 of the Water Act 1989) for a period ending on the date of expiration or sooner determination of this Agreement. Subject to any Act for the time being in force, the Company shall have the right to discharge the process water from its mills into the River Latrobe at a point or points on the river frontage adjacent to the Maryvale Mill. 30. The Company shall subject to the approval of the Minister responsible for the administration of the Land Act 1958 (the "Land Minister") be entitled to licences in respect of any strip or strips of unoccupied Crown land along the banks of any stream on which it is necessary to construct outflow drains tunnels and pipe lines for the discharge of process water as aforesaid. 31. (1) Whenever the Land Minister after hearing the Company and any persons interested in any land concerned or having given them an opportunity to be heard is satisfied that it is necessary or desirable that any land (including any easement right or privilege in over or affecting any land all of which are in this clause included in the expression "land") should be compulsorily purchased taken or used by the Company for the purposes of the industry, the Land Minister shall give to the Governor in Council a certificate to that effect under its seal specifying and delineating on a plan the land proposed to be so purchased taken or used and the purposes for which it is required. (2) Upon approval by the Governor in Council of a certificate as aforesaid it shall be lawful for the Company and its agents and workmen and all other persons authorised by it to enter into and upon and to take possession of and appropriate the land specified in the certificate for the purposes so specified in the manner provided for the resumption of land by the Land Minister under the Land Act and subject to all the conditions imposed by that Act. Full satisfaction shall be made by the Company in manner provided by that Act to all persons interested in the said land. DIVISION D. - SUSPENSION OF OBLIGATIONS AND CONDITIONS 32. If any of the forests in the Forest Area or any of the forests identified in any Plan of Utilization which are outside the Forest Area 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 14 hereof or that having regard to the situation of those forests and of the Company's mills and other circumstances relevant to such damage or destruction it is impracticable for the Company to obtain under this Agreement Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 26 supplies of pulpwood of sufficient quantity at reasonable cost whether by extraction by the Company or delivery from the Department to enable production of wood pulp to be carried on in an economic manner then so long as that state of affairs continues - (a) the Company shall have no claim against the Secretary for the non-fulfilment of its obligations under clause 14 hereof so far as non-fulfilment is due to any such cause; (b) the Company's obligations under this Agreement shall be suspended provided that such suspension shall not affect any liability of the Company to make payments due before such suspension occurs; (c) any questions or disputes arising in relation to the operation of this clause 32 and the suspension of the Company's obligations shall be referred for determination in accordance with clause 37. 33. If: (a) the Company's mills or other works used in the production of wood pulp or the means of transport of pulpwood timber are damaged or destroyed by fire or other calamity to a sufficient extent so as not to permit the production of wood pulp in an economic manner; or (b) the continuance of the production of wood pulp in an economic manner is rendered impossible by force majeure by legal obstacles or by unforeseen or unavoidable cause (other than an economic cause) - then until the damage or destruction can be rectified or the manufacture of wood pulp in an economic manner is resumed the Company shall not be liable for the non-fulfilment of any obligation to take, accept delivery of or pay for pulpwood not then delivered provided that the Company can satisfy the Minister that the Company is using its best endeavours to rectify the damage or destruction or resume the manufacture of wood pulp in an economic manner . Any question or dispute as to when the obligations of the Company are to be resumed in accordance with this clause 33 shall be referred for determination in accordance with clause 37. 34. If by reason of war strike lockout or action in the nature of a strike or lockout - (i) the Secretary or Department is prevented from making available or delivering in accordance with the Plan of Utilization pulpwood; or Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 27 (ii) the Company is prevented from obtaining pulpwood or accepting delivery of or carrying on production of wood pulp in an economic manner - the Secretary shall (as the case requires) grant or make a reasonable extension of time in respect of or a reasonable modification of any obligation or condition affected thereby. 35. The Secretary and the Company may by agreement subject to the approval of the Minister and the procedures in the Act from time to time amend this Agreement by such additions, deletions and variations of matters of detail as may be necessary or desirable to facilitate the carrying on of the industry. DIVISION E - DETERMINATION OF COMPANY'S RIGHTS 36. (1) If the Company at any time enters into liquidation (other than a voluntary liquidation for the purpose of reconstruction and assignment of rights under this Agreement) the Minister upon recommendation of the Secretary may determine this Agreement. (2) Subject to clause 36(3) if the Company at any time contravenes or breaches the terms and conditions of this Agreement the Minister on the recommendation of the Secretary may terminate this Agreement by giving notice in writing of intent to terminate in which event this Agreement shall terminate upon the expiry of the 30th day from the date of service of notice unless the right of the Minister to terminate is referred for determination in accordance with clause 36(4). (3) Clause 36(2) is subject to the proviso that the Minister shall only be entitled to terminate this Agreement if the contravention or breach: was not due to mistake, or to circumstances beyond the control of the Company, or if there was otherwise no reasonable cause therefor, and if the State of Victoria has been and will be materially prejudiced by the contravention or breach. (4) If within fourteen days after service of notice in accordance with clause 36(2), the Company serves a notice in writing on the Minister disputing the right of the Minister to terminate this Agreement, based on the considerations set out in clause 36(3) the right of the Minister to determine this Agreement shall be referred by the Minister for determination in accordance with clause 37. Otherwise failing service of any such notice by the Company this Agreement shall determine in accordance with clause 36(2). Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 28 DIVISION F - SUPPLEMENTAL 37. Wherever in any clause of this Agreement it is provided that any matter shall or may be determined in accordance with this clause: (a) that 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 shall apply to the reference; (c) the arbitrators and any umpire appointed for the purpose of the reference shall have regard to all matters set out in the clause of this Agreement which provides for determination of the matter under this clause and shall decide what is fair and reasonable having regard to the term of this Agreement and the circumstances existing at the time of the reference. IN WITNESS whereof the parties hereto have executed this Agreement the day and year first before written. SIGNED by the Honourable Marie Therese Tehan as Minister for Conservation and Land Management for and on behalf of the State of Victoria administering the Forests Act 1958 in the State of Victoria in the presence of ) ) ) MARIE T. TEHAN ) ) NORMA MARSHALL Witness THE COMMON SEAL of AMCOR LIMITED (ACN 000 017 372) was hereunto affixed by authority of the Board of Directors DONALD B MACFARLANE Director GARRY G RINGWOOD Director ) ) L. S ) Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 29 ═══════════════ Sch.

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 30 ENDNOTES

General Information Minister's second reading speech— Legislative Assembly: 30 May 1996 Legislative Council: 19 June 1996 The long title for the Bill for this Act was "to ratify an Agreement between the Minister administering the Forests Act 1958 and AMCOR Limited with respect to the supply of pulpwood for the manufacture of wood pulp and for other purposes." The Forests (Wood Pulp Agreement) Act 1996 was assented to on 2 July 1996 and came into operation on 2 July 1996. Endnotes

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 31 2. Table of Amendments There are no amendments made to the Forests (Wood Pulp Agreement) Act 1996 by Acts and subordinate instruments. Endnotes

Victorian Legislation and Parliamentary DocumentsAct No. 16/1996 Forests (Wood Pulp Agreement) Act 1996 32 3. Explanatory Details No entries at date of publication. Endnotes

1 Forests (Wood Pulp Agreement) Act 1996

Victorian Legislation and Parliamentary Documentsi Version No. 001 Forests (Wood Pulp Agreement) Act 1996 Act No. 16/1996 Version as at 30 March 1998 TABLE OF PROVISIONS Section Page

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

SCHEDULE—Amcor Agreement 3 ═══════════════ ENDNOTES 30

General Information 30
Table of Amendments 31
Explanatory Details 32

Purpose The purpose of this Act is to ratify an Agreement between the Minister administering the Forests Act 1958 and AMCOR Limited with respect to the supply of pulpwood for the manufacture of wood pulp and for other purposes.
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.

The Agreement in the Schedule organises several core concepts and mechanisms that govern supply, payment, operational responsibilities and dispute resolution. These main concepts should be read together because the Agreement makes many of them interdependent.

Ratification and statutory effect: s 5(1) brings the Agreement into statutory force; s 5(2) empowers the Secretary to carry it out. Clause 3 of the Schedule makes the Agreement of no force until ratified; the Act therefore completes that condition.
Minimum annual supply: clause 14(2) imposes a binding obligation on the Secretary to make available specified minimum volumes of pulpwood in set year bands (for example, 500,000 cubic metres p.a. for 1996-97 to 2003-04, stepping down to 350,000 cubic metres p.a. from 2010-11 to 2029-30). Clause 14(2) also requires at least 300,000 cubic metres to be sourced from mountain forests within the Forest Area. This creates a statutory supply guarantee with temporal gradation.
Plan of Utilization and operational coordination: clause 13 requires the Secretary and the Company to jointly prepare an annual Plan of Utilization (and a provisional two-year plan), with fixed timelines: the Company provides estimates by 1 March each year and the Plan is to be prepared by 30 April (clause 13(1)). The Plan prescribes areas, yield estimates, organisation of felling/extraction and road construction/maintenance (clause 13(1)(a)-(d)). The Plan is the central operational instrument governing where and how pulpwood is taken.
Rights to obtain pulpwood and licence question: clause 14(1) gives the Company the non-exclusive right to obtain pulpwood by employees, agents or contractors without obtaining separate lease, licence, permit or authority under the Forests Act; clause 21(b) deems the Company and its contractors to have appropriate licences for the purposes of s 52 of the Forests Act. Nevertheless the Forests Act continues to apply except where inconsistent (clause 9).
Allocation of extraction responsibility: clause 14(7) sets out that from 1 July 1997 the Company will generally be responsible for organisation and carrying out felling and extraction unless by 15 April the Secretary can demonstrate a lower "Department Price" for extraction and delivery, in which case the Department may do the work. This creates a mechanism for determining who performs operational work based on bona fide cost comparisons.
Minimum take obligation and deficiency royalty: clause 16 obliges the Company in each year to take or accept delivery of at least 85% of the minimum annual supply, or pay royalty on the shortfall at the average royalty rate for that year. The clause also allows prospective offsets where excess intake in subsequent years reduces prior deficiency royalty obligations.
Royalties and licence fee: clause 17 sets the licence fee mechanics , the Secretary waives payment until 1 July 2004 (clause 17(2)(a)(i)), and thereafter the fee is calculated by reference to a $0.50 multiplier indexed to changes in pulpwood royalty rates (clause17(2)(a)(ii)). Clause 20 governs royalty calculation: in each 12‑month period royalties are either agreed by Secretary and Company having regard to explicit objectives (including international competitiveness and Secretary’s commercial viability), or, if no agreement within 90 days, an adjustment formula applies tying royalty movement to half the percentage change in the Company’s average gross price per tonne of paper goods sold in Victoria (clause 20(1)(a)-(b)). Clause 20 also authorises Secretary audits, confidentiality protections, and arbitration if either party objects to the calculated rates.
Measurement and audit: clause 23 provides how royalty volumes are determined (by agreed method or Secretary direction); if mass-based, the Company must maintain a weighbridge at the Maryvale mill approved under the Trade Measurements Act (clause 23(3)). Clause 24 imposes record-keeping and reporting obligations with monthly returns and inspection rights for Secretary-appointed officers; the Secretary is to keep audit-derived information confidential (clause 24(5)).
Dispute resolution and arbitration: clause 37 prescribes arbitration for matters referred under the Agreement, appointing two arbitrators (one by each party), applying the Commercial Arbitration Act 1984 and instructing arbitrators to decide what is fair and reasonable having regard to the Agreement’s term and circumstances.
Termination and suspension: clauses 32-36 provide force majeure and suspension provisions (fire, disaster, damage to mills, war, strikes) that suspend obligations temporarily; clause 36 gives the Minister a power to terminate in liquidation or on breach subject to procedural safeguards and the clause 36(3) threshold (not due to mistake or circumstances beyond control and materially prejudicial to the State).
Cross‑statute interoperability: the Agreement expressly interacts with multiple other Acts (Forests Act 1958, Conservation, Forests and Lands Act 1987, Land Act 1958, Water Act 1989, Trade Measurements Act 1995, Commercial Arbitration Act 1984) and prescribes certain deemed powers or exercises by Ministers/authorities where necessary (clauses 21, 27-31).

These concepts together create a statutory, long-term supply-and-pay regime tailored to a vertically integrated paper manufacturer, with built-in operational coordination (Plans), payment formulas tied to market variables, audit rights, and an arbitration-centric dispute-resolution pathway.

The Agreement and Act create binding rules that directly affect a defined set of actors. The primary parties and affected interests are:

The Company: AMCOR Limited is the named beneficiary and obligor under the Agreement (Schedule Recitals and definitions). The Company acquires statutory rights to obtain specified volumes of pulpwood (clause 14(1)-(2)) and concurrently incurs obligations to pay royalties, maintain records, submit estimates and returns, and comply with Plans of Utilization (clauses 16, 17-20, 23-25). Clause 5 permits the Company to assign its rights to a subsidiary with Ministerial consent, but the Company remains responsible for performance after assignment (clause 5(2)(b)).
The Secretary and the Department: the Secretary to the Department of Natural Resources and Environment is explicitly empowered to carry out the Agreement (s 5(2)) and is given duties to make minimum supplies available (clause 14(2)), conduct five‑year reviews of pulpwood (clause 12), jointly prepare Plans of Utilization (clause 13), and exercise discretion about forest management and what is “proper” forest management (clause 6). The Department may itself carry out felling and extraction and deliver pulpwood under Plans where responsible (clause 13(1)(c), clause 14(7)).
The Minister: the Minister has various decision roles: approval of changes to minimum supply (clause 14(3)), authority over certain approvals and recommendations to the Governor in Council (clauses 15(b), 28-31, 31(1)-(2)), and a power to terminate the Agreement on recommendation of the Secretary in specified circumstances (clause 36).
Contractors, foremen and agents: persons contracting with the Company to fell or remove pulpwood who are notified to the Secretary are treated as holding appropriate licences under the Forests Act for the duration of their contracts (clause 25(4) and clause 21(b)). The Company must notify the Secretary of names and must supply evidence of contractual authority when required (clause 25(2)-(3)).
Holders of other forest rights and the general public: clause 10 protects third‑party rights acquired under the Forests Act or other Acts, preserving entry rights and ensuring other licensees retain their entitlements. Clause 11 reiterates the Secretary’s ability to sell forest produce to meet reasonable public requirements and makes the Secretary the sole judge of what is “reasonable,” subject to the Agreement’s obligations to the Company.
Local authorities, landowners and infrastructure authorities: clauses 27-31 engage local easement, road authority and land resumption processes. Affected private landowners may be subject to compulsory acquisition procedures under the Land Act where the Land Minister certifies necessity (clause 31), but the Company must defray expenses and payments to owners where powers are exercised (clause 27(b)).
Consumers and downstream markets indirectly: the royalty adjustment formula links royalty movements to changes in the Company’s average gross price per tonne for paper goods sold in Victoria (clause 20(1)(b)). That interlinkage connects forest payment outcomes to market variables, which has potential downstream effects on pricing choices and competitiveness.

Who pays and who decides

The Company pays royalties on pulpwood (clauses 18-20), licence fees (clause 17), Department charges where the Department fells and removes pulpwood (clause 14(9)(c)), and all expenses for facilitating easements and rights under clause 27(b).
The Secretary decides operational matters such as forest management (clause 6), area substitutions where cost makes original areas uneconomic (clause 13(5)), measurement places (clause 23(2)), and may direct suspension of timber access for unpaid amounts (clauses 17(2)(c), 18(2)(d)). The Minister retains political oversight and termination power (clause 36), and parliamentary notification is required on amendment or termination (s 7).

Distribution of benefits and costs

Benefits concentrate on the Company in the form of guaranteed supply volumes, preferential access to mountain forest pulpwood, and rights to obtain logging residue and standing trees (clauses 14(2), 14(6)). Costs fall primarily on the Company through royalties, licence fees (from 2004), compliance and record-keeping burdens, and possible commercial exposure due to mandatory take obligations (clause 16). The Crown shoulders administrative duties and operational costs for Department extraction where it elects to provide that service, while retaining discretion to prioritise public supply needs (clause 11).

This section enumerates explicit, recurring duties and rights created by the Agreement that practitioners and compliance officers must track. Citations are to Schedule clauses unless otherwise noted.

Rights conferred on the Company

Right to obtain pulpwood from the Forest Area and defined areas outside it by its employees, agents or contractors without separate Forests Act licences (clause 14(1)). This right is expressly non-exclusive.
Priority access and statutory minimum supplies, as the Secretary is bound to make available the minimum annual supply specified for each year-band (clause 14(2)), including the mountain forest floor requirement (at least 300,000 cubic metres).
Right to logging residue and standing trees where identified by authorised officers and harvested under Secretary-prescribed prescriptions (clause 14(6)).
Ability to incorporate a subsidiary or assign rights with prior Ministerial consent; assignments bring assignee within the Agreement while the original Company remains ultimately responsible (clause 5(1)-(2)).
Deemed licence status for specified purposes under s 52 of the Forests Act for the Company and its contractors (clause 21(b)).
Access to roads and infrastructure approvals, water rights and bulk water entitlements where required for the industry (clauses 28-30), with the Water Act powers to be exercised “as if” the Company were an Authority for bulk entitlements (clause 29).

Duties on the Company

Annual planning and forecasting: submit pulpwood requirement estimates by 1 March each year and participate in jointly preparing the Plan of Utilization by 30 April (clause 13(1)).
Minimum take and payment obligations: take or accept delivery of not less than 85% of the minimum annual supply, or pay royalty on any deficiency at the average royalty rate for that year (clause 16(1)). The Company can earn offsets for excess intake in following years (clause 16(2)).
Payment of royalties and licence fees: monthly royalty accounts (clause 18(2)(a)), royalty payment due 30 days after rendering with interest on overdue sums per the Conservation, Forests and Lands Act (clause 18(2)(b)-(c)); licence fee mechanics set out in clause 17 (including the waiver until 2004).
Record keeping and reporting: keep annual records of quantities sourced by location and species, provide monthly returns by the 15th of every month to the Secretary (clause 24(1)-(3)), and make records available for inspection (clause 24(2)).
Provide access for audit and provide accounts and papers to the Secretary for royalty audits (clause 20(2)) and arbitrators (clause 20(6)). Information obtained is to be treated confidentially (clause 20(3) and 24(5)).
Compliance with conditions published by the Secretary for cutting in any area and provision of identities and evidence of authority for foremen and contractors (clause 25(1)-(4)).
Maintain a Trade Measurements Act-approved weighbridge at Maryvale if royalties are determined by mass and ensure verification/maintenance (clause 23(3)).

Duties and discretions on the Secretary and Department

Make minimum annual supplies available and deliver pulpwood as specified in Plans of Utilization (clause 14(2) and clause 13).
Prepare five-year reviews of pulpwood within the Forest Area (clause 12).
Substitute areas where original Plan areas are uneconomic for extraction, with economic-cost disputes subject to arbitration (clause 13(5)).
Decide what constitutes “reasonable requirements of the general public” for forest produce sales (clause 11).
Determine whether Department extraction is the lower-cost option (Department Price) and accordingly carry out extraction or require the Company to equal the Department Price if it chooses to extract itself (clause 14(7)).
Determine measurement places and the manner in which volumes are computed if no agreement (clause 23(2) and (3)).

Other notable procedural duties

The Minister must lay before each House of Parliament a report on any amendment or termination of the Agreement before the 14th sitting day after such amendment or termination (s 7).
The Agreement provides protection for third-party rights and requires the Secretary to ensure no discrimination against other licensees when coordinating operations under a Plan (clause 13(8)).

These rights and duties set up a managed, jointly administered supply regime with clear reporting, audit and payment flows, but with significant Secretary discretion on forest management and substitution of supply areas.

The Agreement does not create a conventional criminal penalty regime; enforcement is primarily contractual and administrative, with suspension and termination mechanisms, financial enforcement through withholding of entitlement, interest on overdue payments, and arbitration as the primary dispute-resolution mechanism.

Financial enforcement and suspension

Interest on overdue licence fees and royalties: clause 17(2)(b) and clause 18(2)(c) require interest on overdue licence fees and royalty accounts at the rate fixed under s 30 of the Conservation, Forests and Lands Act (or successor). The Company is therefore contractually liable for interest, and interest rates are linked to another statutory instrument rather than being set within this Agreement.
Suspension of timber access for overdue amounts: both clause 17(2)(c) (licence fees) and clause 18(2)(d) (royalty accounts) permit the Secretary or delegate to direct, by written notice, that no further timber may be taken under the Agreement until outstanding amounts (and interest) are paid. This is the primary administrative lever to enforce payment compliance.
Departmental cost charges: where the Department fells and delivers pulpwood, clause 14(9)(c) makes the Company liable to pay Department charges as specified in the Plan of Utilization; the Plan thus contains contractual payment obligations enforceable by the Secretary.

Termination and suspension of obligations

Suspension for disaster and force majeure: clause 32 suspends the Company’s obligations where State forests are so damaged or destroyed that the Secretary cannot comply with clause 14 obligations or pulpwood supply at reasonable cost is impracticable. Clause 33 suspends the Company’s obligations where its own mills or transport are rendered incapable of economic operation by fire or calamity, or where manufacture is impossible by force majeure or legal obstacle; clause 34 provides for extensions and reasonable modifications in events like strikes, lockouts or war.
Ministerial termination: clause 36 permits the Minister to determine the Agreement on recommendation of the Secretary where the Company enters liquidation (other than reconstruction liquidation) or breaches terms; however, termination for breach is subject to protections in clause 36(3): the breach must not be due to mistake or circumstances beyond control and must materially prejudice the State. If disputed, the Company can require the Minister’s claimed right to terminate be referred to arbitration (clause 36(4)).

Administrative enforcement of operational compliance

Secretary can substitute areas where extraction from original areas would be uneconomic (clause 13(5)); disputes about what is an “economic cost” must be referred to arbitration under clause 37.
Secretary may require the Company to complete extraction to the Secretary’s satisfaction and can issue written notices if extraction is unsatisfactory; failure to cure can lead to Secretary remedies (clause 13(6)).
The Secretary may direct cessation of further timber taking where licence fees or royalties remain overdue (clauses 17(2)(c), 18(2)(d)).

Dispute resolution

Arbitration is the principal enforcement and dispute-resolution mechanism (clause 37). The Agreement prescribes two arbitrators, the application of the Commercial Arbitration Act 1984, and that the arbitrators must take into account the Agreement’s terms and decide what is fair and reasonable having regard to the Agreement’s term and circumstances (clause 37(c)). Clause 20 further contemplates arbitrators investigating the Company’s affairs and accounts and the Company’s obligation to provide access.

Practical enforcement implications

There are no criminal sanctions specified for breaches; remedies are contractually oriented: suspension of the Company’s extraction rights, interest and possible termination. Administrative enforcement rests substantially on the Secretary’s discretion (for example, to refuse further timber access), and on arbitration for contested matters. Clause 16(6)(c) creates a cost allocation which, subject to its wording, requires the Company to pay all of the Secretary’s costs as “between party and party” of and incidental to a determination under clause 16(6) , an atypical cost allocation that shifts some arbitration cost risk to the Company where the issue relates to changed industry economics.

The Agreement explicitly interfaces with multiple Victorian statutes; it both imports and modifies statutory regimes. The source text repeatedly references other Acts and prescribes specific cross‑statutory outcomes.

Primary interactions

Forests Act 1958: clause 9 provides that the Forests Act applies to all Company operations except where inconsistent with the Agreement. Clause 14(1) grants the Company rights to obtain pulpwood “without obtaining any lease licence permit or authority under the Forests Act,” but clause 21(b) deems the Company and its contractors to have appropriate licences for s 52 purposes. Section 6 of the principal Act also allows waiver of licence fees “despite anything to the contrary in the Forests Act 1958 or regulations” (s 6), meaning the Agreement can displace some Forests Act provisions for the Company.
Conservation, Forests and Lands Act 1987: the Agreement adopts terms such as “authorised officer” with the same meaning as in the Conservation, Forests and Lands Act (Schedule definitions). Clause 17 refers to interest rates “for the time being fixed under Section 30 of the Conservation, Forest and Lands Act” for unpaid fees and instalments, creating a direct link to the interest-setting mechanism of that Act.
Trade Measurements Act 1995: clause 23(3)(a) requires a weighbridge pattern approved by the person performing the duties of an Inspector under the Trade Measurements Act, and maintenance and verification in accordance with that Act. Measurement accuracy and verification therefore cross into the Trade Measurements regulatory regime.
Commercial Arbitration Act 1984: clause 37 makes the Commercial Arbitration Act applicable to references under the Agreement, shaping procedural and substantive consequences of arbitration and enforcement of arbitral awards.
Land Act 1958 and other land acquisition regimes: clause 27 invokes powers under the Forests Act or the Conservation, Forests and Lands Act to obtain easements. Clause 31 contemplates the Land Minister issuing a certificate for compulsory acquisition, after hearing affected parties, and that resumptions will follow the Land Act process. This integrates statutory resumption and compensation processes.
Water Act 1989: clause 29 deems the Water Act’s powers to grant pumping sites, water easements, diversion licences and bulk entitlements to extend to the Company for the Agreement’s term “as if the Company were an Authority.” That produces a statutory pathway for the Company to obtain substantial water rights but within the Water Act’s regimes, subject to any underlying statutory limits.

Amendment, repeal and parliamentary oversight

The Act requires that amendments or termination in accordance with the Agreement’s provisions be the subject of a report to each House of Parliament within 14 sitting days (s 7). Clause 35 permits amendment by agreement between Secretary and Company but subject to Minister approval and the “procedures in the Act” , meaning that while detailed operational amendments can be made administratively, there is a statutory disclosure duty to Parliament for amendments/terminations.

Priority and inconsistency rules

Clause 9 sets the priority rule: the Forests Act applies except in so far as inconsistent with the Agreement. Section 6 of the Act (waiver of licence fees) goes further, allowing licence-fee waiver in accordance with the Agreement “despite anything to the contrary in the Forests Act 1958 or regulations under that Act.” That creates an express carve-out for the Company from some Forests Act obligations or fees, supplanting ordinary statutory application where inconsistent.

Information sharing and confidentiality

Clause 20(2)-(3) obliges the Company to provide accounts for audit and requires that information obtained be used only for the purposes for which it was obtained and kept confidential except where required by law. Clause 24(5) requires Secretary officers and any person appointed to keep strictly confidential information obtained under inspection/verification. These confidentiality rules sit alongside statutory disclosure obligations under other Acts, and release may still be required "if so required by law" (clause 20(3)).

Operational overlap and delegation

The Agreement contemplates both administrative agencies undertaking operational work and private extraction. Clause 14(7) establishes the Department as a potential service provider for felling and extraction if it can demonstrate a lower Department Price. That creates interaction between commercial contracting arrangements and public sector service provision under the Forests Act framework.

In practical terms, the Agreement creates a hybrid statutory-contractual ecosystem. It imports existing statutory instruments for measurement, water and land acquisition, but where conflicts exist it provides for the Agreement to prevail in respect of the Company’s rights and obligations. Practitioners must therefore track both the Agreement’s express terms and the relevant provisions of the referenced statutes because many operational procedures in the Agreement rely on those external statutory standards.

The source includes an endnote explicitly reporting the amendment history available at the time of publication. The Endnotes section states that there are no amendments made to the Forests (Wood Pulp Agreement) Act 1996 by Acts and subordinate instruments (Endnotes, Table of Amendments). The Act itself contains procedures for amendment and parliamentary reporting:

Clause 35 of the Agreement permits the Secretary and the Company, by agreement and subject to Ministerial approval and the procedures in the Act, to amend the Agreement from time to time by additions, deletions and variations of matters of detail as necessary or desirable to facilitate the carrying on of the industry. That clause creates an administrative pathway for changes that are not of a kind which require express parliamentary ratification. However, s 7 requires that 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 Parliament before the expiration of the 14th sitting day of that House after the amendment or termination. The provision therefore provides transparency to Parliament even where amendments are effected by agreement between the parties.
Clause 4(1) of the Schedule deems the Agreement to have come into operation from 1 July 1996 and the provisions of the original agreement be deemed to have ceased from that date, subject to clause 4(2) which preserves rights, obligations and liabilities acquired or accrued under the original agreement prior to 1 July 1996. Clause 4 thus operationally consolidates and supersedes prior arrangements while preserving historical liabilities.
Clause 20(1)(a) requires that royalty rates for each year be set by agreement having regard to the statutory "objectives" (Company competitiveness, payment of licence fee as from 2004, and Secretary’s need for commercial viability). Clause 20(4) permits either party to trigger arbitration if dissatisfied with calculated rates, and clause 20(5) requires arbitrators to consider alterations in circumstances. Those mechanisms together create ongoing potential for rate change by agreement or arbitration.
The Act repeals the 1961 legislative ratification statute (s 8). The Schedule’s recitals refer to subsequent ratifications in 1966, 1974 and 1984, signalling that the 1996 Agreement consolidates prior statutory agreements.

In sum, the Act at publication contained no recorded legislative amendments, but it embeds mechanisms permitting administrative amendment by agreement, coupled with prescribed parliamentary reporting after amendment or termination. Practitioners and custodians of statutory registers should therefore expect potential non-legislative amendments that will nonetheless be reported to Parliament under s 7.

The source document itself records no litigation history. The Endnotes do not list any cases or judicial determinations, and the text of the Act and Schedule makes repeated provision for arbitration rather than litigation as the primary dispute-resolution route (Schedule clause 37). The Agreement prescribes arbitration under the Commercial Arbitration Act 1984 for matters referred under the Agreement and contemplates arbitrators’ powers to investigate the Company’s affairs and accounts where necessary (clauses 20(6), 37).

What the source shows about dispute resolution options

Arbitration is the primary dispute-resolution mechanism built into the Agreement: clause 37 requires disputed matters to be referred to two arbitrators (one appointed by each side), applies the Commercial Arbitration Act, and instructs arbitrators to decide what is fair and reasonable given the Agreement’s term and circumstances. Clause 20 provides for arbitral determination of royalty rates where either party objects to calculated rates and allows arbitrators or their umpire to consider alterations in circumstances (clause 20(4)-(6)).
The Agreement allows internal notice and cure opportunities in several places , for example, clause 13(6) provides that the Secretary must give written notice (not less than fourteen days) if unsatisfied with extraction, giving the Company an opportunity to remedy, failing which further steps may follow.

Because the Agreement prescribes arbitration for covered disputes and confers on arbitrators investigatory powers, the Agreement channels disagreements into a private dispute resolution architecture. The absence of litigation history in the source means there is no record here of arbitral awards, court enforcement proceedings relating to arbitral awards, or judicial interpretation of the Agreement’s clauses. Any searches for later judicial or arbitral decisions must be undertaken outside this source.

This Agreement contains a number of provisions that create operational, financial and discretion-based risks and frictions that parties and advisers should monitor. These are practical “watch points” grounded in the text.

Long-term guaranteed volumes with declining minima

Clause 14(2) locks in minimum annual supply volumes for multiple year bands through to 2029-30, stepping down from 500,000 m3 to 350,000 m3. This long-term guarantee fixes supply expectations but also fixes obligations to take or pay (clause 16). Market changes (substitution of raw materials, demand shifts) may make fixed take obligations cumbersome and may trigger clause 16(6) modification processes, which require Secretary conferencing and, failing agreement, arbitration with costs issues.

85% take-or-pay trigger and royalty on deficiency

Clause 16 requires taking/accepting at least 85% of the minimum annual supply or paying royalty on the deficiency at the average royalty rate for that year. The Company can reduce future royalty via offsets if it over-takes in subsequent years (clause 16(2)), but this creates cashflow exposure and planning complexity, particularly across a multi-decade term.

Secretary's broad discretion on forest management and substitution

Clause 6 requires the Secretary to “give full recognition” to the Company’s competitive business but then qualifies that “so far as the interests of forest management allow the Secretary (which shall for the purposes of this Agreement be the sole judge of what is proper forest management) shall so act….” The Secretary’s status as “sole judge” of proper forest management gives it substantial deference which could be invoked to limit access or impose conditions on extraction, and disputes over “economic cost” for substitutions are sent to arbitration (clause 13(5)).

Deference to Department Price on extraction responsibility

Clause 14(7) hands the Department the power to carry out extraction if it can show a lower “Department Price” by 15 April. The Company must either accept Department extraction or equal that price if it prefers to do the work itself. The clause relies on bona fide cost demonstration and gives the Department a potential role as service provider, creating operational uncertainty around who executes extraction and at what cost.

Royalty formula tied to Company prices and audit obligations

Clause 20(1)(b) ties royalty adjustments, failing agreement, to half the percentage change in the Company’s average gross price per tonne for paper goods sold in Victoria. This requires Company sales accounting to be auditable by the Secretary (clause 20(2),(6)). The Company must therefore make commercially sensitive information available for audit, albeit with confidentiality obligations (clause 20(3)). There is an inherent tension between the Company’s commercial confidentiality and the Secretary’s audit needs.

Fee waiver mechanics and future licence fee

Section 6 of the Act authorises licence fee waiver “despite anything to the contrary” in the Forests Act. The Agreement itself waives the licence fee until 1 July 2004 (clause 17(2)(a)(i)) and then resumes a specifically calculated licence fee (clause 17(2)(a)(ii)). Practitioners must track when the fee becomes payable and the indexation method used.

Measurement and weighbridge obligations

Clause 23(3) requires the Company to provide a Trade Measurements Act-approved weighbridge and maintain verification. If the weighbridge is not in accurate working order, the Secretary may direct alternative measurement methods (clause 23(3)(c)), which can create measurement disputes and revenue uncertainty.

Cost allocation in regulatory determinations

Clause 16(6)(c) states that “all costs of the Secretary as between party and party of and incidental to any such determination shall be paid by the Company.” That language appears to place on the Company the Secretary’s party-and-party costs in certain determinations (specifically determinations under clause 16(6) dealing with changes in industry economics). This is an unusual cost allocation and increases Company risk if it invokes modification processes and loses or if determinations are required.

Secretary's power to direct cessation of timber in event of unpaid sums

Clauses 17(2)(c) and 18(2)(d) authorise the Secretary to direct that no further timber may be taken under the Agreement until overdue amounts are paid. The power to suspend supply is a practical stick; if exercised, it may disrupt mill operations and downstream contracts, but the Agreement contains no market-based compensation for the Company for sudden suspensions arising from payment disputes.

Interplay with public demands and third-party rights

Clause 11 preserves the Secretary’s ability to sell forest produce to meet “reasonable requirements of the general public,” making the Secretary the sole judge of what is reasonable, subject to clause 14’s supply obligations. This creates scope for administrative balancing between public needs and contractual promises to the Company and potential conflicts about prioritisation in constrained supply years.

These “gotchas” are internal to the Agreement’s text and reflect trade-offs between supply security for an industrial operator and administrative discretion to manage public forests and other users. They highlight where careful contractual and regulatory management will be needed to avoid operational and financial surprises.

This section sets out concrete compliance actions and timelines that the Company, the Department and advisers should implement to meet the Agreement’s statutory and contractual requirements. All references are to Schedule clauses or to sections of the Act where noted.

Planning, notice and reporting calendar

By 1 March each year the Company must submit estimates of its pulpwood requirements for the following year and provisional estimates for the subsequent two years (clause 13(1)). Build an internal calendar to prepare and deliver these estimates including liaison with forestry operations and supply forecasting teams.
The Secretary and Company must prepare the Plan of Utilization not later than 30 April (clause 13(1)). Make time for joint technical workshops between Company and Secretary officers to finalise area selections, yield estimates, road construction responsibilities and delivery logistics well before the 30 April deadline.
The Company must furnish monthly returns of pulpwood received by the 15th day of every month for the preceding month (clause 24(3)). Set up standardised reporting templates and data pipelines from weighbridge and mill intake systems to produce the returns in the prescribed form.

Measurement and verification

If royalties are determined by mass, the Company must provide and maintain at Maryvale a weighbridge approved under the Trade Measurements Act and ensure periodic verification (clause 23(3)(a)-(b)). Arrange for approval, calibration, maintenance contracts and scheduled verification checks under Trade Measurements Act procedures, and ensure contingency plans are in place for alternative measurement methods when the weighbridge is out of order (clause 23(3)(c)).

Financial flows and accounting

Implement accounts payable workflows to meet monthly royalty invoices (clause 18(2)(a)-(b)) and to ensure license fee payment obligations are met on time once payable from 1 July 2004 (clause 17(2)(a)(i)-(ii)). Include interest accrual calculations at the rate fixed under s 30 of the Conservation, Forest and Lands Act for overdue sums (clause 17(2)(b) and clause 18(2)(c)).
Track quantities sourced by area and species in compliance with clause 24(1)(a)-(b) and keep detailed records on mill waste usage (clause 24(1)(c)). These data are required for royalty calculation, audit and possible arbitration.

Operational compliance

If the Plan of Utilization assigns to the Company responsibility for felling and extraction (likely for years commencing 1 July 1997 onwards per clause 14(7)), ensure the Company has adequate harvesting crews, contractors, environmental compliance protocols and road maintenance arrangements. Where the Department demonstrates a lower Department Price, be ready to either accept Department extraction or match the Department Price.
Do not commence road construction or erect haulage units in State forest without prior consent of the Secretary or an authorised officer (clause 22(1)). Implement approvals workflows to secure consents and keep written records of such consents.
Where the Company engages contractors, notify the Secretary in writing of contractors’ names and ensure each contractor is provided evidence of authority to produce on demand to authorised officers (clause 25(2)-(3)). Maintain a register of contractors and contract terms to show compliance with the deemed licence status provisions (clause 25(4)).

Audit and confidentiality

Prepare to provide the Secretary and authorised arbitral investigators with access to accounts and papers for royalty audits (clause 20(2), 20(6)), with the understanding that disclosed information is to be treated confidentially (clause 20(3), 24(5)). Put in place privileged document handling procedures, confidentiality protocols and counsel clearance processes to manage sensitive commercial information while ensuring compliance with audit demands.
Anticipate arbitrator requests and gather supporting documentation that demonstrates how royalty or economic cost calculations were prepared if disputes are referred under clause 37.

Governance, assignment and corporate actions

If the Company intends to incorporate a subsidiary or assign rights under clause 5, secure prior written consent of the Minister and deliver written notice of assignment to the Minister as required (clause 5(1)-(2)). Maintain corporate governance records that evidence continued performance obligations since the parent remains liable after assignment (clause 5(2)(b)).

Dispute management and contingency planning

Establish dispute escalation protocols mapping Agreement clauses to internal dispute handlers, external counsel and expert witnesses for arbitration (clause 37). Because arbitration is the primary dispute mechanism, the Company should identify experienced commercial arbitrators and document retention and production plans in advance.
Build contingency plans for force majeure and suspension events contemplated in clauses 32-34. That includes disaster response, salvage operations planning, and an operational playbook for reduced pulpwood availability that aligns with the Company’s obligations under clause 16 (take-or-pay).

Regulatory and statutory liaison

Engage with the Department to ensure clarity on the Secretary’s expectations for forest management, area substitution, and Plan revision processes (clauses 6, 13). Make advance submissions where the Company considers areas uneconomic for extraction to prompt timely substitution or arbitration referral.
Track and prepare for the licence fee changeover in 2004 (clause 17(2)(a)(i)). Compute the indexed licence fee per clause 17(2)(a)(ii) and include budget forecasts for the fee and its instalment options.

Parliamentary reporting and amendment procedures

If an amendment or termination is proposed or occurs, ensure the Minister’s office receives the information necessary to comply with s 7’s parliamentary laying requirement within the 14 sitting days window. Maintain audit trails of any administrative amendments under clause 35 and associated Ministerial approvals.

In short, compliance requires an integrated programme across operations, finance, legal and regulatory affairs to meet reporting and measurement obligations, manage payment and audit risk, coordinate Plans of Utilization with the Secretary, maintain weighbridge and reporting systems, and prepare for arbitration where disputes cannot be resolved by agreement.

Forests (Wood Pulp Agreement) Act 1996

Plain English Summary

Deep Dive

What it does

Current sections

Forests (Wood Pulp Agreement) Act 1996

Source text: opening excerpt

1 Forests (Wood Pulp Agreement) Act 1996

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