New Guinea Timber Agreement Act 1952

Key terms of the deal:

• Timber rights: The Commonwealth promised to use its powers as the governing authority over New Guinea to secure the Timber Company a 10-year exclusive licence to cut up to 100 million "super feet" (a historic unit of timber volume) of pine from 15,000 acres in the Bulolo Valley, with the possibility of a renewal for another 10 years.
• Minimum and maximum cutting quotas were set — the company had to cut at least 7 million super feet per year after two years, and could not exceed 12 million per year.
• Royalties were payable to the Territory's administration, with fixed rates for the first 5 years and annual reviews after that.
• Infrastructure: The Commonwealth agreed to improve the road between Bulolo and Lae (the main coastal port) and to build key bridges before plywood production began.
• Board of Directors: Four directors — two from the Commonwealth, two from Bulolo Gold Dredging. In the event of a deadlock, the Commonwealth had the casting authority, meaning it had ultimate control.
• Customs duty subsidy: If Australian customs duties were imposed on timber products imported from the Territory, the Commonwealth would pay the Timber Company a matching subsidy so the duties didn't eat into its returns.
• Share transfer restrictions: Neither party could sell their shares without the other's consent, though each had a right of first refusal.
• Dispute resolution: Any disputes were to go to arbitration under the laws of the Territory of New Guinea.

Why does it matter?

This Act is a snapshot of post-war Australian colonial economic policy. The Commonwealth was actively using the Territory of New Guinea's natural resources to supply the Australian market with timber and plywood, while simultaneously bringing in private capital and expertise. It reflects an era when the Australian government both governed New Guinea and acted as a commercial investor within it — a dual role that would become increasingly difficult to sustain as independence movements grew in the region. The Territory of New Guinea became part of independent Papua New Guinea in 1975.