Pigment Factory (Australind) Agreement Act 1986 (Western Australia)

This Act ratifies and authorises implementation of a written agreement between the State of Western Australia and SCM Chemicals Ltd (the Agreement in Schedule 1) and a later variation to that agreement (the Variation Agreement in Schedule 2). Section 4 ratifies the Agreement and authorises its implementation, and s 4A does the same for the Variation Agreement. Both s 4 and s 4A state that the respective agreements "shall operate and take effect notwithstanding any other Act or law", subject only to the Government Agreements Act 1979 being "without limiting or otherwise affecting" its application. Section 4B specifically modifies planning law by declaring that, despite the Planning and Development Act 2005, planning schemes do not apply to or in relation to the Kemerton works site.

Mechanically, the instrument:

Incorporates the full text of the 1986 Agreement as Schedule 1 and the 1987 Variation Agreement as Schedule 2 into statute (see s 3 definitions and Schedules).
Confers statutory primacy on those Agreements over other Acts or laws for their subject matter (s 4, s 4A).
Explicitly removes the application of planning schemes under the Planning and Development Act 2005 to the Kemerton works site (s 4B).
Repeals the Laporte Industrial Factory Agreement Act 1961 (s 5).

The Agreements themselves set out a package of commercial rights, obligations and regulatory carve outs. They allocate capital and operating responsibilities between the State and the Company, fix State payments to the Company for termination and relocation of earlier arrangements (Schedule 1, cl 12; Schedule 2, cl 12A), establish timelines for conversion from sulphate to chloride processes and for construction and commissioning (Schedule 1, cls 6, 7, 8, as varied in Schedule 2), require specified environmental reviews and reporting (Schedule 1, cl 7 and cl 10), and provide the Minister with approval and extension powers (Schedule 1, cls 8, 22). The Variation Agreement relocates the chloride plant to a designated Kemerton works site, increases target production capacity from 36,000 tonnes to 70,000 tonnes per year, provides for an upfront land transfer and sale/leaseback (Schedule 2, cls 2, 6A, 13A), and inserts a clause that, subject to a qualification, relaxes requirements to obtain certain State approvals for development of the Kemerton works site (Schedule 2, cl 18A).

CrestWestern Australia

Pigment Factory (Australind) Agreement Act 1986

Western Australia

Pigment Factory (Australind) Agreement Act 1986

Contents

Short title 1
Commencement 1
Interpretation 1
Agreement ratified and implementation authorised 2

4A. Variation Agreement ratified and implementation authorised 2

4B. Planning laws modified 2

Repeal 2

Schedule 1 — Pigment Factory (Australind) Agreement

Schedule 2 — Variation Agreement

Notes

Compilation table 33

Western Australia

Pigment Factory (Australind) Agreement Act 1986

An Act to ratify and authorise the implementation of an Agreement between the State of Western Australia and SCM Chemicals Ltd., to repeal the Laporte Industrial Factory Agreement Act 1961 and for incidental and other purposes.

1. Short title

This Act may be cited as the Pigment Factory (Australind) Agreement Act 1986 1.

2. Commencement

This Act shall come into operation on the day on which it receives the Royal Assent 1.

3. Interpretation

In this Act —

the Agreement means the Agreement a copy of which is set out in Schedule 1 and includes the Agreement as altered from time to time in accordance with its provisions;

the Kemerton works site means the Kemerton works site as defined by the Variation Agreement;

the Variation Agreement means the Agreement a copy of which is set out in Schedule 2.

[Section 3 amended: No. 28 of 1987 s. 4.]

4. Agreement ratified and implementation authorised

(1) The Agreement is hereby ratified.

(2) The implementation of the Agreement is authorised.

(3) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Agreement shall operate and take effect notwithstanding any other Act or law.

4A. Variation Agreement ratified and implementation authorised

(1) The Variation Agreement is ratified and its implementation is authorised.

(2) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Variation Agreement shall operate and take effect notwithstanding any other Act or law.

[Section 4A inserted: No. 28 of 1987 s. 5.]

4B. Planning laws modified

Despite the Planning and Development Act 2005, planning schemes as defined in that Act do not apply to or in relation to the Kemerton works site.

[Section 4B inserted: No. 38 of 2005 s. 15.]

5. Repeal

The Laporte Industrial Factory Agreement Act 1961 is repealed.

Schedule 1 — Pigment Factory (Australind) Agreement

[s. 3]

[Heading amended: No. 19 of 2010 s. 4.]

THIS AGREEMENT is made the 18th day of November 1986 BETWEEN THE HONOURABLE BRIAN THOMAS BURKE, M.L.A., Premier of the State of Western Australia, acting for and on behalf of the said State and its instrumentalities from time to time (hereinafter called “the State”) of the one part and

SCM CHEMICALS LTD. (formerly called Laporte Australia Limited) a company duly incorporated in the State of Western Australia and having its registered office at Old Coast Road, Australind (hereinafter called “the Company”) of the other part.

WHEREAS:

(a) the State and the Company (pursuant to assignment) are now the parties to the agreement defined in section 2 of the Laporte Industrial Factory Agreement Act 1961‑1982;

(b) the Company has agreed to cancel the agreement and to release the State from its obligations for effluent disposal thereunder in consideration of the payment by the State of the amount hereinafter provided; and

(c) the parties have agreed to provide for the carrying on by the Company of operations on the works site in manner hereinafter contained.

NOW THIS AGREEMENT WITNESSES:

Definitions

In this Agreement subject to the context —

“advise”, “apply”, “approve”, “approval”, “consent”, “certify”, “direct”, “notify”, “request”, or “require”, means advise, apply, approve, approval, consent, certify, direct, notify, request, or require in writing as the case may be and any inflexion or derivation of any of those words has a corresponding meaning;

“approval date” means the date the detailed proposals to be submitted by the Company under Clause 7 hereof have been approved by the Minister under Clause 8 hereof;

“approved proposal” means any proposal approved or determined under this Agreement;

“changeover date” means the 31st day of December 1989;

“chloride effluent” means liquid effluent from the chloride process;

“chloride plant” means the plant to be erected and established by the Company on the works site;

“chloride process” means the process of producing titanium compounds by attacking the raw material with chlorine;

“Clause” means a clause of this Agreement;

“commencement date” means the date the Bill referred to in Clause 3 comes into operation as an Act;

“Commonwealth” means the Commonwealth of Australia and includes the Government for the time being thereof;

“decommissioning period” mean the period of ninety (90) days after the changeover date;

“encumbrance” includes any mortgage, pledge, charge, lien, assignment, hypothecation, security interest, title retention, preferential right or trust arrangement and any other security agreement or arrangement of any kind given or created, in each case, by way of security, and the expressions “encumber” and “encumbrancer” shall be construed accordingly;

“EPA” means the Environmental Protection Authority created by section 9 of the Environmental Protection Act 1971 or upon proclamation of the Environmental Protection Act 1986 as continued in existence by section 7 of that Act;

“EPA Report” means the report which the EPA may prepare and submit to the Minister in respect of the ERMP or upon proclamation of the Environmental Protection Act 1986 pursuant to section 40(1) of that Act;

“ERMP” means the environmental review and management program submitted to the EPA in respect of the chloride plant;

“factory” means the factory which has been erected and established at the works site pursuant to Clause 2 of the 1961 Agreement;

“financial year” means the period from 1 July to 30 June next;

“Minister” means the Minister in the Government of the State for the time being responsible (under whatsoever title) for the administration of the Act to ratify this Agreement and pending the passing of that Act means the Minister for the time being designated in a notice from the State to the company and includes the successors in office of the Minister;

“month” means calendar month;

“notice” means notice in writing;

“person” or “persons” includes bodies corporate;

“said State” means the State of Western Australia;

“State Energy Commission” means The State Energy Commission of Western Australia as described in section 7 of the State Energy Commission Act 1979;

“sub‑clause” means a sub‑clause of the Clause in which the term is used;

“sulphate plant” means that part of the factory which uses the sulphate process;

“sulphate process” means the process of producing titanium pigments by attacking the raw material with sulphuric acid;

“the pipeline” means the pipeline or pipelines presently used to transport the sulphate effluent from the factory into the intermediate pumping reservoir on the Leschenault peninsula which was commissioned in October 1985;

“the 1961 Agreement” means the agreement defined in section 2 of the Laporte Industrial Factory Agreement Act 1961 as amended;

“the sulphate effluent” means the liquid effluent from the sulphate process which shall not alter substantially in composition from that recorded by the Government Chemical Laboratories over the three years from 30th June 1983 to 30th June 1986;

“this Agreement” “hereof” and “hereunder” refer to this Agreement whether in its original form or as from time to time added to varied or amended;

“Water Authority” means the Water Authority of Western Australia established pursuant to section 7 of the Water Authority Act 1984;

“works site” means all that land at Australind and more particularly described as Portion of Leschenault Location 31 and being part of Lot 4 on Diagram 26619 and the whole of the land in Certificate of Title Volume 1637 Folio 689.

Interpretation

In this Agreement —

(1) monetary references are references to Australian currency unless otherwise specifically expressed;

(2) power given under a clause other than Clause 22 to extend any period or date shall be without prejudice to the power of the Minister under Clause 22;

(3) clause headings do not affect the interpretation or construction; and

(4) reference to an Act includes the amendments to that Act for the time being in force and also any Act passed in substitution therefor and in lieu thereof and the regulations for the time being in force thereunder.

Introduction of Bill

The State shall introduce and sponsor a Bill in the State Parliament of Western Australia to ratify this Agreement and endeavour to secure its passage as an Act prior to 31st December, 1986.

Ratification and Operation

(1) The provisions of this Agreement other than this Clause and Clauses 1, 2 and 3 shall not come into operation until the Bill referred to in Clause 3 has been passed by the Parliament of Western Australia and comes into operation as an Act.

(2) If before 31st December, 1986 the said Bill has not commenced to operate as an Act then unless the parties hereto otherwise agree this Agreement shall then cease and determine and no party hereto shall have any claim against any other party hereto with respect to any matter or thing arising out of, done, performed, or omitted to be done or performed under this Agreement.

(3) On the said Bill commencing to operate as an Act all the provisions of this Agreement shall operate and take effect notwithstanding the provisions of any Act or law.

Termination of 1961 Agreement

Upon and subject to the said Bill commencing to operate as an Act the 1961 Agreement is hereby cancelled and the rights and obligations of the parties thereunder are hereby terminated but otherwise the 1961 Agreement shall remain in full force and effect.

Production to the Changeover Date

(1) The Company may continue to use the sulphate process at the factory until the changeover date;

(2) Until the end of the decommissioning period —

(a) subject to this Clause the State shall continue to be totally responsible for the disposal of all sulphate effluent;

(b) unless and until the parties hereto otherwise in writing agree the State shall at the cost of the Company patrol the pipeline and such cost shall include reasonable charges for supervision and administration;

(c) on behalf of the State the Company shall at its own expense maintain, repair and renew the pipeline and its support structure;

(d) the Company shall at its own cost collect the sulphate effluent and pump it into the pipeline under pressure and conditions which will efficiently discharge the sulphate effluent completely through the pipeline. The Company shall provide and maintain adequate pumps sumps machinery apparatus and facilities to provide for and maintain such discharge;

(e) during each financial year the Company shall pay to the State $100,000 (or a pro rata sum thereof if the end of the decommissioning period shall occur during a financial year) as contribution towards costs of disposal of the effluent. Payment of the contribution shall be made by the Company to the State on the 31st March of each year, the next payment shall be made on 31st March 1987 and the last payment shall be made on the end of the decommissioning period.

(3) From and after the changeover date the Company shall: —

(a) within the decommissioning period discharge all sulphate effluent and residual liquor through the pipeline and shall then flush the pipeline with clean water; and

(b) be responsible for and shall pay all costs relating to the treatment and disposal of all effluent and waste products emanating from production at the works site after the changeover date.

Company to Submit Proposals

(1) The Company shall within sixty (60) days of the Company’s acceptance of (which acceptance shall not be unreasonably withheld) any condition which may be recommended in the EPA Report (or thereafter within such extended time as the Minister may allow as hereinafter provided) and subject to the provisions of this Agreement submit to the Minister to the extent reasonably practicable its detailed proposals (having due regard where applicable to the ERMP and the EPA Report) for the construction and the establishment on the works site of a new plant designed to produce and capable of producing not less than 36,000 tonnes of titanium dioxide pigment per annum by use of the chloride process. Except for proprietary confidential information the detailed proposals shall include plans where practicable and specifications, where reasonably required by the Minister, of the location, area, lay‑out, design, quantities, materials and a time program for the commencement and completion of construction plant commissioning and the provision (as the case may be) of each of the following matters, namely —

(a) the chloride plant;

(b) the production of chlorine;

(d) integration of the chloride plant into the factory;

(e) the concurrent operation of the sulphate plant and the chloride plant;

(f) the expected solid and liquid discharges and gaseous emissions and the method and location of disposal;

(g) water supply;

(h) access roads;

(i) use of local labour professional services manufacturers suppliers contractors and materials and measures to be taken with respect to the engagement and training of employees by the Company, its agents and contractors;

(j) chemicals and other supplies for the ongoing process;

(k) an environmental management programme as to measures to be taken, in respect of the Company’s activities under this Agreement, for the protection and management of the environment; and

(l) the security of confidential proprietary information provided to or obtained by the State or any authority of the State to satisfy the provisions of any written law.

(2) With the approval of the Minister or if so required by him the proposals pursuant to sub‑clause (1) may be submitted separately and in any order as to the matters mentioned in paragraphs (a) to (l) of sub‑clause (1).

(3) With the approval of the Minister and that of any third parties concerned the proposals pursuant to sub‑clause (1) may provide for the use by the Company of any existing facilities belonging to the Company or upon reasonable terms and conditions of any other existing facilities belonging to a third party instead of the construction of new facilities of such kind.

(4) When the Company submits the proposals pursuant to sub‑clause (1) it shall furnish to the State’s satisfaction evidence of —

(a) the anticipated amount and value of the works to be carried out hereunder;

(b) the availability of finance necessary to carry out the operations to which the said proposals refer; and

Consideration of Proposals

(1) On receipt of the proposals pursuant to sub‑clause (1) of Clause 7 the Minister shall —

(a) approve of the said proposals either wholly or in part without qualification or reservation; or

(b) defer consideration of or decision upon the same until such time as the Company submits a further proposal or proposals in respect of some other of the matters mentioned in sub‑clause (1) of Clause 7 which are not covered by the said proposals; or

(c) require as a condition precedent to the giving of his approval to the said proposals that the Company make such alterations thereto or comply with such conditions in respect thereto as he thinks reasonable and in such a case the Minister shall disclose his reasons for such conditions.

Advice of Minister’s Decision

(2) The Minister shall within two months after receipt of each of the said proposals pursuant to sub‑clause (1) give notice to the Company of his decision in respect to the same.

(3) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of sub‑clause (1) the Minister shall afford the Company full opportunity to consult with him and should it so desire to submit new or revised proposals either generally or in respect to some particular matter.

Minister’s Decision Subject to Arbitration

(4) If the decision of the Minister is as mentioned in either of paragraphs (b) or (c) of sub‑clause (1) and the Company considers that the decision is unreasonable the Company within two months after receipt of the notice mentioned in sub‑clause (2) may elect to refer to arbitration in the manner hereinafter provided the question of the reasonableness of the decision.

Arbitration Award

(5) An award made on an arbitration pursuant to sub‑clause (4) shall have force and effect as follows:

(a) if by the award the dispute is decided against the Company and the Company within 3 months after delivery of the award has not given notice to the Minister of its acceptance of the award then except for the provisions of Clause 6 hereof which shall remain in full force and effect, this Agreement shall cease and determine on the expiration of that period of 3 months; or

(b) if by the award the dispute is decided in favour of the Company the decision shall take effect as a notice by the Minister that he is so satisfied with and approves the matter or matters the subject of the arbitration.

Effect of Non Approval of Proposals

(6) Notwithstanding that under this Clause any detailed proposals of the Company are approved by the Minister or determined by arbitration award, unless each and every such proposal and matter is so approved or determined by 31st August 1987 or by such extended date or period (if any) as the Minister may grant hereunder then the Minister may give to the Company 12 months notice of intention to determine this Agreement except for the provisions of Clause 6 which shall remain in full force and effect and unless before the expiration of the said 12 months period all the detailed proposals and matters are so approved or determined this Agreement shall thereupon cease and determine except for the provisions of Clause 6 which shall remain in full force and effect.

Implementation of Proposals

(7) The Company shall implement the approved proposals in accordance with the terms thereof so that the chloride plant is constructed and fully commissioned not later than the changeover date.

Extension of Time

(8) If for any reason not attributable to any default or unreasonable delay by the Company the approval date shall be later than 30 June 1987 then, notwithstanding any other provision, the dates referred to in the definition of “changeover date” appearing in Clause 1 hereof and in sub‑clause (6) shall be extended by the number of days which shall have elapsed from the 30th June 1987 until the approval date.

Additional Proposals

(1) If the Company at any time during the continuance of this Agreement desires to significantly modify expand or otherwise vary its activities carried on pursuant to this Agreement beyond those specified in any approved proposals or desires to carry out any operations on the works site in addition to the production of pigment by the chloride process it shall give notice of such desire to the Minister and if required by the Minister within 2 months of the giving of such notice shall submit to the Minister within such period as the Minister shall reasonably allow detailed proposals in respect of all matters covered by such notice and as the Minister may require. The provisions of Clause 7 and Clause 8 (other than sub‑clauses (5)(a) and (6)) shall mutatis mutandis apply to detailed proposals submitted pursuant to this sub‑clause. The Company shall implement the approved proposals in accordance with the terms thereof.

(2) If the Minister does not require the Company to submit proposals under subclause (1) the Company may, subject to compliance with all applicable laws, proceed with the modification, expansion or variation of its activities carried on pursuant to this Agreement.

Protection and Management of the Environment

The Company shall keep the Minister fully informed in respect of, and when and in such form as reasonably required by the Minister from time to time shall report to the Minister on the measures it has taken, is taking or proposes to take for the monitoring, protection and management of the environment in respect of its operations including (without limiting the generality of the foregoing provisions) the following matters —

(a) effluent disposal (solid and liquids);

(b) gaseous emissions and discharges into the air from the works site;

(d) noise and radiation from the works site;

(e) rehabilitation of contaminated ground water emanating from under the works site; and

(f) ongoing risk and hazard auditing as a consequence of the acceptance of the EPA Report by the Company,

and as and when reasonably required by the Minister the Company shall liaise and cooperate with the Minister on measures it is taking and take additional reasonable measures with respect to the monitoring, protection and management of the environment arising from its operations.

Use of Local Labour and Professional Services

(1) The Company shall, for the purpose of this Agreement —

(a) so far as it is reasonable and economically practicable so to do, use labour available within the said State;

(b) so far as it is reasonable and economically practicable so to do, use the services of engineers, surveyors, architects and other professional consultants resident and available within the said State;

(c) when preparing specifications, calling for tenders and letting contracts for works, materials, plant, equipment and supplies, ensure that Western Australian suppliers manufacturers and contractors are given fair and reasonable opportunity to tender or quote; and

(d) give proper consideration and where possible preference to Western Australian suppliers manufacturers and contractors when letting contracts or placing orders for works, material, plant, equipment and supplies where price quality delivery and service are equal to or better than that obtainable elsewhere.

(2) The Company shall require in every contract entered into with a third party for the supply of services labour works materials plant equipment and supplies for the purposes of this Agreement as a condition thereof that such third party shall undertake the same obligations as are referred to in sub‑clause (1) of this Clause and shall report to the Company concerning such third party’s implementation of that condition.

(3) The Company shall submit a report to the Minister at monthly intervals or such longer period as the Minister determines commencing from the date of this Agreement concerning their implementation of the provisions of this Clause together with a copy of any report received by the Company pursuant to sub‑clause (2) during that month.

Consideration for Termination of the 1961 Agreement

(1) Subject to sub‑clause (2) and in consideration of the Company agreeing to cancel the 1961 Agreement and to release the State from its obligations for effluent disposal thereunder the State shall pay to the Company the sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000) as follows:

(a) as to TWO MILLION DOLLARS ($2,000,000) six (6) months after the approval date;

(b) as to TWO MILLION DOLLARS ($2,000,000) nine (9) months after the approval date;

(d) as to the balance on the changeover date together with interest on such balance at the rate hereinafter mentioned for the period from the date twelve (12) months prior to the changeover date to the changeover date. The interest rate shall be the rate equal to the yield on 5 year Commonwealth Treasury Bonds as at the date being twelve (12) months prior to the changeover date which was published in the latest Reserve Bank bulletin issued prior to that date.

(2) The obligation of the State to pay each instalment under sub‑clause (1) shall be subject to:

(a) the Company not being in default hereunder being a default in respect of which notice has been given to the Company pursuant to Clause 23 and which, if capable of remedy, shall have remained unremedied after the period for remedy provided for or otherwise allowed pursuant to this Agreement; and

(b) the Minister being reasonably satisfied as to the progress of the construction of the chloride plant and associated works.

Disposal of Works Site

Upon the Company disposing of any part or parts of the works site all the provisions of this Agreement shall cease to apply to the same which shall thereupon cease to have the benefit of the rights and privileges conferred by this Agreement.

Water

(1) The State and the Company shall agree upon the reasonable amounts and qualities thereof of the Company’s annual and maximum daily water requirements for its purposes hereunder at the works site.

(2) The water requirements referred to in sub‑clause (1) shall be obtained in accordance with the provisions of the Water Authority Act 1984 or other relevant Act.

Electricity

(1) The Company shall confer with the State Energy Commission with respect to the Company’s power requirements at the works site during the currency of the Agreement.

(2) The Company and the State Energy Commission shall enter into arrangements for the provision of power to the works site during the currency of this Agreement on terms and conditions to be negotiated between them.

(3) Subject to its compliance with the provisions of the State Energy Commission Act 1979 the Company may supply electric power generated by any electric power plant erected on the works site to any third party performing work on the works site.

Conversion of Sulphate Plant

(1) During the continuance of this Agreement the Company shall investigate the technical economic and environmental feasibility of converting the sulphate plant to the processing of raw materials and shall endeavour to promote the establishment and operation of facilities to achieve processing of raw materials in the said State, whether by itself or in association with others.

(2) The Company shall when required by the Minister, but not more frequently than once in every 3 years, submit to the Minister detailed reports of its investigations and endeavours to promote processing carried out pursuant to sub‑clause (1).

Road Haulage

(1) The State shall endeavour to ensure that subject to the payment by the Company of appropriate fees, the Minister for Transport under the Transport Co‑ordination Act 1966 will not refuse to grant and issue to the Company (or suppliers to or contractors with the Company and sub‑contractors) a licence to transport by road —

(a) minerals (including coal) for use in the factory anywhere within an area having a radius of 80 kilometres of the factory; and

(b) any goods for use in the factory or manufactured or produced in the factory within an area having a radius of 40 kilometres of the factory.

And will ensure that the appropriate fees charged to the Company for licences under the Transport Co‑ordination Act 1966 will not be such as to discriminate against the Company its suppliers contractors and sub‑contractors.

(2) The Company, so long as it complies and continues to comply with its obligations hereunder —

(a) may use roads providing access from the boundary of the works site to and on any jetty or wharf where ships are berthed;

(b) shall not have imposed on it any discriminatory charge in respect of the use by it of any jetty or wharf referred to in paragraph (a) of this sub‑clause.

Zoning

During the currency of this Agreement the State shall ensure after consultation with the relevant local authority that:

(a) the works site; and

(b) the area of land surrounding the works site as delineated and bordered as on the plan annexed hereto and marked with the letter “A”

shall be and remain zoned for use or otherwise protected so that the operations of the Company hereunder may be undertaken and carried out on the works site without any interference or interruption by the State or by any State agency or instrumentality or by any local or other authority of the State on the ground that such operations are contrary to any zoning by‑law regulation or order.

Assignment

(1) Subject to the provisions of this Clause the Company may at any time assign mortgage charge sub‑let or dispose of with the consent of the Minister the whole or any part of the rights of the Company hereunder and of the obligations of the Company hereunder subject however in the case of an assignment sub‑letting disposition or appointment to the assignee sub‑lessee disponee or the appointee (as the case may be) executing in favour of the State (unless the Minister otherwise determines) a deed of covenant in a form to be approved by the Minister to comply with observe and perform the provisions hereof on the part of the Company to be complied with observed or performed in regard to the matter or matters the subject of such assignment sub‑letting disposition or appointment.

(2) Notwithstanding anything contained in or anything done under or pursuant to sub‑clause (1) the Company shall at all times during the currency of this Agreement be and remain liable for the due and punctual performance and observance of all the covenants and agreements on its part contained herein PROVIDED THAT the Minister may agree to release the Company from such liability where he considers such release will not be contrary to the interests of the State.

Variation

(1) The parties hereto may from time to time by agreement in writing add to substitute for cancel or vary all or any of the provisions of this Agreement or of any lease licence easement grant or other title granted hereunder or pursuant hereto for the purpose of more efficiently or satisfactorily implementing or facilitating any of the objects of this Agreement.

(2) The Minister shall cause any agreement made pursuant to sub‑clause (1) in respect of any addition substitution cancellation or variation of the provisions of this Agreement to be laid on the Table of each House of Parliament within 12 sitting days next following its execution.

(3) Either House may, within 12 sitting days of that House after the agreement has been laid before it pass a resolution disallowing the agreement, but if after the last day on which the agreement might have been disallowed neither House has passed such a resolution the agreement shall have effect from and after that last day.

Force majeure

This Agreement shall be deemed to be made subject to any delays in the performance of the obligations hereunder and to the temporary suspension of continuing obligations hereunder (other than obligations to pay money) that may be caused by or arise from circumstances beyond the power and control of the party responsible for the performance of those obligations including without limiting the generality of the foregoing delays or any such temporary suspension as aforesaid caused by or arising from act of God force majeure earthquakes floods storms tempest washaways fire (unless caused by the actual fault or privity of the party responsible for such performance) act of war act of public enemies riots civil commotions strikes lockouts stoppages restraint of labour or other similar acts (whether partial or general) acts or omissions of the Commonwealth shortages of labour or essential materials reasonable failure to secure contractors delays of contractors or factors due to overall world economic conditions or factors due to action taken by or on behalf of any government or governmental authority (other than the State or any authority of the State pursuant to this Agreement) or factors that could not reasonably have been foreseen PROVIDED ALWAYS that the party whose performance of obligations is affected by any of the said causes shall promptly give notice to the other party of the event or events and shall use its best endeavours to minimise the effects of such causes as soon as possible after the occurrence.

Power to Extend Periods

Notwithstanding any provision of this Agreement the Minister may at the request of the Company from time to time extend or further extend any period or vary or further vary any date referred to in this Agreement or in any approved proposal hereunder for such period or to such later date as the Minister thinks fit whether or not the period to be extended has expired or the date to be varied has passed.

Determination of Agreement

(1) In any of the following events namely if —

(a) (i) the Company makes default which the State considers material in the due performance or observance of any of the covenants or obligations to the State herein on its part to be performed or observed; or

(ii) the Company abandons or repudiates this Agreement or its operations under this Agreement

and such default is not remedied or such operations resumed within a period of 180 days after notice is given by the State as provided in sub‑clause (2) or, if the default or abandonment is referred to arbitration, then within the period mentioned in sub‑clause (3); or

(b) the Company goes into liquidation (other than a voluntary liquidation for the purpose of reconstruction) and unless within 3 months from the date of such liquidation the interest of the Company is assigned to another company or to an assignee approved by the Minister under Clause 19

the State (except for the provisions of Clauses 6 and 24 which shall remain in full force and effect) may by notice to the Company determine this Agreement.

(2) The notice to be given by the State in terms of sub‑clause (1) of this Clause shall specify the nature of the default or other ground so entitling the State to exercise such right of determination and where appropriate and known to the State the party or parties responsible therefor and shall be given to the Company and all such assignees mortgagees chargees and disponees for the time being of the Company’s said rights to or in favour of whom or by whom an assignment mortgage charge or disposition has been effected in terms of Clause 19 whose name and address for service of notice has previously been notified to the State by the Company or any such assignee mortgagee chargee or disponee.

(3) (a) If the Company contests the alleged default abandonment or repudiation referred to in paragraphs (a) and (b) of sub‑clause (1) the Company shall within 60 days after notice given by the State as provided in sub‑clause (2) refer the matter in dispute to arbitration.

(b) If the question is decided against the Company, the Company shall comply with the arbitration award within a reasonable time to be fixed by that award PROVIDED THAT if the arbitrator finds that there was a bona fide dispute and that the Company was not dilatory in pursuing the arbitration, the time for compliance with the arbitration award shall not be less than 90 days from the date of such award.

Effect of Cessation or Determination of Agreement

On the cessation or determination of this Agreement —

(1) Except as otherwise agreed by the Minister the rights of the Company to in or under this Agreement and the rights of the Company or of any of its assignees shall thereupon cease and determine but without prejudice to the liability of either of the parties hereto in respect of any antecedent breach or default under this Agreement or in respect of any indemnity given hereunder or in respect of the provisions of Clause 6 and this Clause.

(2) The Company shall forthwith pay to the State all moneys which may then have become payable or accrued due.

(3) Save as aforesaid and as otherwise provided in this Agreement neither of the parties hereto shall have any claim against the other of them with respect to any matter or thing in or arising out of this Agreement.

Environmental Protection

Nothing in this Agreement shall be construed to exempt the Company from compliance with any requirement in connection with the protection of the environment arising out of or incidental to its activities hereunder that may be made by the State or by any State agency or instrumentality or any local or other authority or statutory body of the State pursuant to any Act from time to time in force.

Commonwealth Licences and Consents

(1) The Company shall from time to time make application to the Commonwealth or to the Commonwealth constituted agency, authority or instrumentality concerned for the grant to them of any licence or consent under the laws of the Commonwealth necessary to enable or permit the Company to enter into this Agreement and to perform any of its obligations hereunder.

(2) On request by the Company the State shall make representations to the Commonwealth or to the Commonwealth constituted agency authority or instrumentality concerned for the grant to the Company of any licence or consent mentioned in sub‑clause (1).

Sub‑contracting

The State shall ensure that without affecting the liabilities of the parties under this Agreement either party shall have the right from time to time to entrust to third parties the carrying out of any portions of the operations which it is authorised or obliged to carry out hereunder.

Arbitration

(1) Any dispute or difference between the parties arising out of or in connection with this Agreement the construction of this Agreement or as to the rights, duties or liabilities of either party hereunder or as to any matter to be agreed upon between the parties under this Agreement shall in default of agreement between the parties and in the absence of any provision in this Agreement to the contrary be referred to the arbitration of two arbitrators one to be appointed by each party the arbitrators to appoint their umpire before proceeding in the reference every such arbitration shall be conducted in accordance with the provisions of the Commercial Arbitration Act 1985 and notwithstanding Section 20 sub‑section 1 of that Act each party may be represented before the arbitrators by a duly qualified legal practitioner or other representative.

(2) Except where otherwise provided in this Agreement, the provisions of this clause shall not apply to any case where the State the Minister or any other Minister in the Government of the said State is by this Agreement given an unfettered discretion.

(3) The arbitrators or umpire (as the case may be) of any submission to arbitration hereunder are hereby empowered upon the application of either of the parties to grant in the name of the Minister any interim extension of any period or variation of any date referred to herein which having regard to the circumstances may reasonably be required in order to preserve the rights of that party or of the parties hereunder and an award may in the name of the Minister grant any further extension or variation for that purpose.

Consultation

(1) The Company shall during the currency of this Agreement consult with and keep the State informed on a confidential basis concerning progress towards reaching the changeover date.

(2) Following the changeover date the Company will use its best business judgement to operate the chloride plant at a capacity appropriate to the demand for titanium dioxide.

(3) Following the changeover date and prior to the Company making a decision to cease production of titanium dioxide at the factory the Company will advise the Minister of its intentions and will enter into bona fide discussions with the Minister to discuss any viable possibility to avoid the same.

Notices

Any notice, consent or other writing authorised or required by this Agreement to be given or sent shall be deemed to have been duly given or sent by the State if signed by the Minister or by any senior officer of the Civil Service of the said State acting by the direction of the Minister and forwarded by pre‑paid post or handed to the Company at its registered office for the time being in the said State and by the Company if signed on its behalf by any person or persons authorised by the Company or by its solicitors as notified to the State from time to time and forwarded by pre‑paid post or handed to the Minister and except in the case of personal service any such notice, consent or writing shall be deemed to have been duly given or sent on the day on which it would be delivered in the ordinary course of post.

Term of Agreement

Subject to the provisions of Clause 23 this Agreement shall expire on 31 December, 2011.

Applicable Law

This Agreement shall be interpreted according to the law for the time being in force in the State of Western Australia.

IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the parties hereto the day and year first hereinbefore mentioned.

SIGNED by the said THE HONOURABLE
BRIAN THOMAS BURKE M.L.A.
in the presence of: BRIAN BURKE

D. PARKER
MINISTER FOR MINERALS AND ENERGY

THE COMMON SEAL OF SCM CHEMICALS LTD.
was hereunto affixed by authority of the Board of
Directors in the presence of: [C.S.]

Director: J. LEACH

Secretary: H. MACIEJEWSKI

[Schedule 1 amended: No. 27 of 1987 s. 6.]

Schedule 2 — Variation Agreement

[s. 3]

[Heading amended: No. 19 of 2010 s. 4.]

THIS AGREEMENT is made the 17 day of June 1987 BETWEEN THE HONOURABLE BRIAN THOMAS BURKE, M.L.A., Premier of the State of Western Australia, acting for and on behalf of the said State and its instrumentalities from time to time (hereinafter called “the State”) of the one part and

SCM CHEMICALS LTD. a company duly incorporated in the State of Western Australia and having its registered office at Old Coast Road, Australind (hereinafter called “the Company”) of the other part.

WHEREAS:

(a) the State and the Company are the parties to the agreement defined in section 3 of the Pigment Factory (Australind) Agreement Act 1986 (which agreement is hereinafter referred to as the “Principal Agreement”);

(b) the parties desire to vary the Principal Agreement as hereinafter provided.

NOW THIS AGREEMENT WITNESSES:

Subject to the context, the words and expressions used in this Agreement have the same meanings respectively as they have in and for the purpose of the Principal Agreement.
The State shall introduce and sponsor a Bill in the Parliament of Western Australia to ratify this Agreement and endeavour to secure its passage as an Act prior to 31st July 1987.
The provisions of this Agreement other than this Clause 3 and Clause 2 shall not come into operation until:

(1) the Bill referred to in Clause 2 has been passed by the Parliament of Western Australia and comes into operation as an Act;

(2) the Company has given notice to the State of its acceptance of the conditions and procedures which may be recommended in the EPA Report as defined in Clause 4(1)(c) of this Agreement and adopted by the Minister for the time being responsible for the administration of the Environmental Protection Act 1986 (which acceptance may only be withheld where the Company considers that compliance with any individual or combination of conditions or requirements will so adversely affect the economic viability of the proposed Kemerton factory that it would be unreasonable for the Company to proceed) provided that if by the 14th day of August 1987 (or such later date as the Minister may reasonably require) the Company has not given notice of acceptance then by the 31st day of August 1987 (or such later date as the State and the Company may agree) the State and the Company will endeavour to mutually agree a satisfactory arrangement which will permit the Company to give the notice of acceptance; and

(3) the State and the Company have executed the agreements for the sale and lease of the works site as contemplated by Clause 13A of the Principal Agreement as amended by this Agreement.

The Principal Agreement is hereby varied as follows: —

(1) Clause 1 —

(a) in the definition of “changeover date” by deleting “31st day of December 1989” and substituting the following —

“30th day of June 1990”;

(b) in the definition of “chloride plant” by deleting “works site” and substituting the following —

“Kemerton works site”;

“ “EPA Report” means the report (Bulletin 275 May 1987) submitted by the EPA to the Minister in respect of the ERMP to the extent that the same remains relevant and any subsequent report the EPA may submit to the Minister in respect of the NOI;”;

(d) by deleting the definition “ERMP” and substituting the following definition —

“ “ERMP” means the environmental review and management program (dated November 1986) which was submitted by the Company to the EPA;”;

(e) by inserting, in their appropriate alphabetical positions, the following definitions —

“ “Kemerton factory” means the factory to be erected and established by the Company pursuant to an approved proposal;

“Kemerton works site” means all that land at Kemerton referred to in paragraph (1) of Clause 6A;

“Finishing Plant” means the plant at the works site which will be upgraded to convert the raw titanium dioxide slurry to produce the finished product;

“NOI” means the notice of intent to be submitted by the Company to the Minister in respect of the chloride plant and the continuing operations on the works site or the more detailed requirements of the EPA pursuant to the Environmental Protection Act 1986;”

(2) By inserting after Clause 6 the following clause —

“6A. (1) The Company desires as its site for the Kemerton works site certain land comprising 55 hectares or thereabouts and being that portion of the land shown hatched subject to survey on the plan marked “X” and initialled by or on behalf of the parties hereto for the purposes of identification.

(2) Subject to Clause 7 the State shall as soon as practicable after the execution hereof transfer and give vacant possession of the Kemerton works site free from encumbrances to the Company upon payment by the Company of one dollar and all costs associated with the survey and transfer of the land.

(3) The State shall to the extent reasonably necessary for the purposes of this Agreement allow the Company to have access to the Kemerton works site prior to the transfer thereof to the Company for the purpose of carrying out surveys and preparatory building works necessary to enable it to finalise the detailed proposals referred to in Clause 7.”.

(3) Clause 7 —

(a) by deleting subclause (1) and substituting the following subclause —

“(1) The Company shall within sixty (60) days of the Company’s acceptance of (which acceptance shall not be unreasonably withheld) any condition and procedure which may be recommended in the EPA Report and adopted by the Minister for the time being responsible for the administration of the Environmental Protection Act 1986 (or thereafter within such extended time as the Minister may allow as hereinafter provided) and subject to the provisions of this Agreement submit to the Minister to the extent reasonably practicable its detailed proposals (having due regard where applicable to the ERMP, NOI, the EPA Report and those conditions and procedures) for —

(a) the construction and the establishment on the Kemerton works site of a new plant designed to produce and capable of producing not less than 70,000 tonnes of titanium dioxide pigment per annum by use of the chloride process and the Finishing Plant on the works site, and

(b) the continuing operations on the works site.

Except for proprietary confidential information the detailed proposals shall include plans where practicable and specifications, where reasonably required by the Minister, of the location, area, lay‑out, design, quantities, materials and a time programme for the commencement and completion of construction plant commissioning and the provision (as the case may be) of each of the following matters, namely —

(d) the production of chlorine at the Kemerton works site;

(e) air separation plant;

(f) the continuing operations on the works site;

(g) the concurrent operation of the sulphate plant and the chloride plant;

(h) the expected solid and liquid discharges and gaseous emissions and the method and location of disposal;

(i) water supply;

(j) access roads;

(k) use of local labour professional services manufacturers suppliers contractors and materials and measures to be taken with respect to the engagement and training of employees by the Company, its agents and contractors;

(l) chemicals and other supplies for the ongoing process;

(m) an environmental management programme as to measures to be taken, in respect of the Company’s activities under this Agreement, for the protection and management of the environment; and

(n) the security of confidential proprietary information provided to or obtained by the State or any authority of the State to satisfy the provisions of any written law.”.

(4) Clause 9 subclause (1) —

By inserting after “works site” the following —

“or Kemerton works site (as the case may be)”.

(5) Clause 10 —

In paragraphs (b), (c) and (d) by inserting after “works site” wherever it occurs the following —

“or Kemerton works site (as the case may be)”.

(6) Clause 12 subclause (2) —

By inserting after “subclause (1)” wherever it occurs the following —

“and Clause 12A (as the case may be)”.

(7) By inserting after Clause 12 the following clause —

“12A. Subject to subclause (2) of Clause 12 and in consideration of the Company agreeing to relocate the chloride plant from the works site to the Kemerton works site the State agrees to pay to the Company (or a related company which is acceptable to the State) the sum of SIX MILLION THREE HUNDRED AND FIFTY THOUSAND DOLLARS ($6,350,000.00) upon and subject to the terms and conditions of this Agreement and such other terms and conditions as the parties may mutually agree and the Minister considers may be beneficial to the State. The payment will be made progressively as follows —

(a) as to ONE MILLION FIVE HUNDRED AND EIGHTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($1,587,500.00) on 31st July 1988;

(b) as to ONE MILLION FIVE HUNDRED AND EIGHTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($1,587,500.00) on 31st October 1988;

(c) as to ONE MILLION FIVE HUNDRED AND EIGHTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($1,587,500.00) on 31st January 1989; and

(d) as to ONE MILLION FIVE HUNDRED AND EIGHTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($1,587,500.00) on 31st July 1990.

(8) Clause 13 —

(a) by deleting the heading “Disposal of Works Site” and substituting the following heading —

“Disposal of Kemerton Works Site”;

(b) by deleting “works site” and substituting the following —

“Kemerton works site”.

(9) By inserting after Clause 13 the following clause —

“13A. The Company agrees to sell to the State the works site at an agreed price and on condition that upon completion of such sale the State will lease to the Company the portion of the works site as the Company may require and otherwise the sale and lease shall be on such terms and conditions as the parties may mutually agree.”.

(10) Clause 14 subclause (1) —

by inserting after “works site” the following —

“or Kemerton works site (as the case may be)”.

(11) Clause 15 —

(a) by deleting the heading “Electricity” appearing immediately above Clause 15 and substituting the following heading —

“Energy”;

(b) in subclauses (1) and (2) by deleting “power” wherever it occurs and substituting in each place the following —

“energy”;

“or Kemerton works site (as the case may be)”.

(12) Clause 17 —

(a) in paragraphs (a) and (b) of subclause (1) by inserting after “factory” wherever it occurs the following —

“or the Kemerton factory (as the case may be)”;

(b) in paragraph (a) of subclause (2) by inserting after “works site” the following —

“or Kemerton works site (as the case may be)”.

(13) Clause 18 —

(a) by inserting after “works site” wherever it occurs the following —

“or the Kemerton works site (as the case may be)”;

(b) by deleting paragraph (b) and substituting the following paragraph —

“(b) the area of land within a radius of two kilometres of the chloride plant”;

“including (without limitation) the erection and use of the Kemerton factory in accordance with approved proposals”;

(d) by deleting “zoning” in the last line and substituting the following —

“town planning scheme”.

(14) By inserting after Clause 18 the following clause —

“18A. (1) Subject to subclause (2) the design, construction, commissioning and operation of the Kemerton factory shall comply with the lawful requirements of and all regulations and bylaws of all relevant local and other authorities of the State and the Commonwealth and all Acts of the State and Commonwealth applicable thereto.

(2) Notwithstanding the provisions of any Act, regulation, bylaw, interim development order or town planning scheme the Company shall not be required to obtain any approval or consent required by or under a law of the State to the development of the Kemerton works site or the construction of the Kemerton factory in accordance with the provisions of this Agreement.”.

IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the parties hereto the day and year first hereinbefore mentioned.

SIGNED by the said THE HONOURABLE BRIAN THOMAS BURKE M.L.A. in the presence of:	View image in the official source	BRIAN BURKE

D. PARKER
MINISTER FOR MINERALS AND ENERGY

THE COMMON SEAL of SCM CHEMICALS LTD. was hereunto affixed by authority of the Board of directors in the presence of:<br>Director: J. LEACH<br>Secretary: H. MACIEJEWSKI	View image in the official source	[C.S.]

Notes

1 This is a compilation of the Pigment Factory (Australind) Agreement Act 1986 and includes the amendments made by the other written laws referred to in the following table. The table also contains information about any reprint.

Compilation table

Short title	Number and year	Assent	Commencement
Pigment Factory (Australind) Agreement Act 1986	92 of 1986	10 Dec 1986	10 Dec 1986 (see s. 2)
Pigment Factory (Australind) Agreement Amendment Act 1987	28 of 1987	29 Jun 1987	29 Jun 1987 (see s. 2)
Local Government (Consequential Amendments) Act 1996 s. 4	14 of 1996	28 Jun 1996	1 Jul 1996 (see s. 2)
*Reprint of the Pigment Factory (Australind) Agreement Act 1986* as at 9 Aug 2002** (includes amendments listed above)
Planning and Development (Consequential and Transitional Provisions) Act 2005 s. 15	38 of 2005	12 Dec 2005	9 Apr 2006 (see s. 2 and Gazette 21 Mar 2006 p. 1078)
Standardisation of Formatting Act 2010 s. 4	19 of 2010	28 Jun 2010	11 Sep 2010 (see s. 2(b) and Gazette 10 Sep 2010 p. 4341)

Defined terms

[This is a list of terms defined and the provisions where they are defined. The list is not part of the law.]

Defined term Provision(s)

the Agreement 3

the Kemerton works site 3

the Variation Agreement 3

Western Australia

Pigment Factory (Australind) Agreement Act 1986

Western Australia

Pigment Factory (Australind) Agreement Act 1986

Contents

Short title 1
Commencement 1
Interpretation 1
Agreement ratified and implementation authorised 2

4A. Variation Agreement ratified and implementation authorised 2

4B. Planning laws modified 2

Repeal 2

Schedule 1 — Pigment Factory (Australind) Agreement

Schedule 2 — Variation Agreement

Notes

Compilation table 33

Western Australia

Pigment Factory (Australind) Agreement Act 1986

1. Short title

This Act may be cited as the Pigment Factory (Australind) Agreement Act 1986 1.

2. Commencement

This Act shall come into operation on the day on which it receives the Royal Assent 1.

3. Interpretation

In this Act —

the Agreement means the Agreement a copy of which is set out in Schedule 1 and includes the Agreement as altered from time to time in accordance with its provisions;

the Kemerton works site means the Kemerton works site as defined by the Variation Agreement;

the Variation Agreement means the Agreement a copy of which is set out in Schedule 2.

[Section 3 amended: No. 28 of 1987 s. 4.]

4. Agreement ratified and implementation authorised

(1) The Agreement is hereby ratified.

(2) The implementation of the Agreement is authorised.

(3) Without limiting or otherwise affecting the application of the Government Agreements Act 1979, the Agreement shall operate and take effect notwithstanding any other Act or law.

4A. Variation Agreement ratified and implementation authorised

(1) The Variation Agreement is ratified and its implementation is authorised.

(2) Without limiting or otherwise affecting the application of the , the Variation Agreement shall operate and take effect notwithstanding any other Act or law.

The Act’s legal architecture is built around three main concepts: statutory ratification of private‑state agreements, contractual/administrative overrides to ordinary regulatory regimes, and detailed implementation mechanics embedded in the schedules.

Statutory ratification and primacy: Sections 4 and 4A expressly ratify the Agreements and authorise their implementation. Both sections declare the Agreements will "operate and take effect notwithstanding any other Act or law". That language expressly elevates the Agreements above conflicting State legislation for the matters they govern, and is the mechanism by which contractual arrangements obtain statutory force. The Government Agreements Act 1979 remains relevant but is not excluded (s 4(3); s 4A(2)).
Regulatory modification and exemption: The Act uses two mechanisms to modify the existing regulatory framework. First, s 4/s 4A provide general primacy over other Acts. Second, s 4B removes application of planning schemes under the Planning and Development Act 2005 to the Kemerton works site. In the Variation Agreement, clause 18A(2) goes further within the contract text by providing that, "Notwithstanding the provisions of any Act, regulation, bylaw, interim development order or town planning scheme the Company shall not be required to obtain any approval or consent required by or under a law of the State to the development of the Kemerton works site or the construction of the Kemerton factory in accordance with the provisions of this Agreement." That is a specific contractual exemption from normal State approval/consent requirements for development at the Kemerton site.
Detailed project implementation package: The schedules contain granular operational requirements. Key elements include:
- Project scope and technical change: Schedule 1 originally envisaged a chloride plant capable of at least 36,000 tonnes tpa (cl 7(1)); Schedule 2 increases this to 70,000 tonnes tpa and adds a Finishing Plant (Schedule 2, cl 4(1)(a) and new definitions).
- Approvals and timing: The Company must submit detailed proposals within specified timeframes, the Minister must decide within two months (Schedule 1, cls 7-8), and the Agreement sets a changeover date (originally 31 December 1989, changed to 30 June 1990 under the Variation Agreement; see Schedule 1, cl 1 definitions and Schedule 2, cl 4(1)(a)).
- Environmental processes: The Company must prepare and have regard to an ERMP and EPA Report (Schedule 1, cll 1 definitions, 7(1)). Clause 25 states that nothing in the Agreement should be read to exempt the Company from compliance with environmental protection requirements made by State agencies under Acts in force. Clause 18A(1) in the Variation requires compliance with lawful requirements of local and other authorities, but clause 18A(2) then provides that the Company shall not be required to obtain State approvals or consents to develop the Kemerton works site in accordance with the Agreement.
- Financial transfers and conditionality: The State agreed to pay $8.5 million to the Company as consideration for terminating the 1961 Agreement (Schedule 1, cl 12), and the Variation adds a $6.35 million payment tied to relocation (Schedule 2, cl 12A), payable in staged instalments and subject to conditions such as non‑default and Ministerial satisfaction about progress (Schedule 1, cl 12(2)).
- Ministerial discretion and extension powers: The Minister has unfettered discretion in some matters (Schedule 1, cl 28(2)), unspecified extension powers (cl 22), and can require changes to proposals as a condition of approval (cl 8(1)(c)).

Conceptually, the Act demonstrates a statutory technique of embedding a negotiated industrial development package into statute, coupled with regulatory overrides to expedite and protect the project. The detailed clauses create a web of obligations, conditional payments, decision points and dispute resolution rules that govern project implementation and provide the State with specific tools to terminate, extend or modify obligations.

The Act and the Agreements affect a compact set of actors in defined ways. Primary parties are:

The State of Western Australia: The State is the contracting party. It is required to make financial payments, to transfer or lease land (as specified in the Variation Agreement), to ensure zoning and licensing arrangements favourable to the Company (Schedule 1, cls 12A, 13A, 17, 18), and to introduce and sponsor the bills necessary to ratify the Agreements (Schedule 1, cl 3; Schedule 2, cl 2). The State also retains termination rights and mechanisms to enforce compliance (Schedule 1, cl 23). The State also acts as the interface to Commonwealth bodies for any Commonwealth licences and consents (Schedule 1, cl 26).
SCM Chemicals Ltd (the Company): The statutoryised counterparty receives specified financial payments, obligations and rights. Under the Agreement the Company must design, construct and commission a chloride plant (Schedule 1, cl 7), provide environmental management programmes (cl 7(1)(k); cl 10), construct to specified capacity, assume responsibility for effluent and waste disposal after changeover (cl 6(3)(b)), use local labour and suppliers where reasonable (cl 11), and provide reports and evidence of finance and readiness (cl 7(4)). The Company also gets rights such as access to roads and jetties (cl 17), zoning protection for operations (cl 18), and may be given approval rights and contractual protection for its proprietary information (cl 7(1)(l)).
State instrumentalities and regulators: Agencies named in the Agreement include the Environmental Protection Authority (EPA) and the Water Authority, the State Energy Commission, the Minister and relevant local authorities. The Agreement requires liaison with and consideration of the EPA's ERMP and EPA Report (Schedule 1, cl 7), although the Agreement includes both an express safeguard that the Company is not exempt from environmental requirements (cl 25) and a provision in the Variation that the Company shall not be required to obtain State development approvals for the Kemerton works site where development is "in accordance with" the Agreement (Schedule 2, cl 18A(2)). The Act also affects planning authorities by removing application of planning schemes to the Kemerton site (s 4B).
Local communities and adjacent landowners: The Agreement requires the State to ensure the works site and area within a specified boundary remain zoned or protected (Schedule 1, cl 18). The Variation narrows the area around the chloride plant to a two kilometre radius to be protected (Schedule 2, cl 4(13)(b)). Local governments and communities will confront changes in development consent pathways, zoning protections and environmental monitoring arrangements, because planning schemes do not apply to the Kemerton works site and the Agreement establishes different processes.
Third parties, suppliers, contractors and financiers: The Company is required to give opportunities to local suppliers and contractors and to include equivalent obligations in its subcontracting arrangements (Schedule 1, cl 11). Assignment provisions require Ministerial consent and a deed of covenant for assignees (cl 19). The Agreement also contemplates the Company demonstrating finance availability and value of works (cl 7(4)) and provides that the Company may supply energy generated on site to third parties so long as it complies with the State Energy Commission Act 1979 (cl 15(3)).

Who pays and who benefits:

The State bears concentrated upfront and staged payments: $8.5 million under the original Agreement (cl 12) and $6.35 million under the Variation for relocation (Schedule 2, cl 12A), subject to conditions. The State also transfers or leases land (Schedule 2, cl 6A; cl 13A) and modifies planning and regulatory application for the site (s 4B; Schedule 2, cl 18A).
The Company receives those payments and regulatory relief, obtains land for a factory and acquires operational protections, while assuming obligations to construct, operate, manage environment and to pay for effluent disposal after changeover.

The Agreements therefore concentrate compensatory financial transfers and regulatory relief in favour of the Company, while dispersing obligations for environmental management, local content reporting and operational compliance across the Company and relevant State agencies. The Act directly affects State agencies’ regulatory scope by relegating planning approval processes for the Kemerton site.

The schedules contain specific duties and rights for the parties. Below is a structured summary tied to clause references.

State duties and rights

Ratify and legislate the agreements: the State must introduce and sponsor the enabling Bill and endeavour to secure enactment (Schedule 1, cl 3; Schedule 2, cl 2). Section 4 and 4A of the Act then ratify and authorise implementation.
Make specified payments to the Company: pay $8,500,000 in staged instalments as compensation for terminating the 1961 Agreement (Schedule 1, cl 12), subject to the Company not being in default and Ministerial satisfaction on progress (cl 12(2)). Under the Variation the State agrees to pay $6,350,000 in staged instalments for relocation (Schedule 2, cl 12A).
Transfer and lease land: under the Variation the State shall transfer the Kemerton works site to the Company for $1 and associated costs, subject to Clause 7 approval (Schedule 2, cl 6A). The Variation also includes a requirement that the Company sell the original works site to the State and that the State lease back portions to the Company (Schedule 2, cl 13A).
Protect town planning zoning or scheme: the State must ensure the works site and the delineated surrounding area remain zoned or otherwise protected so Company operations can proceed (Schedule 1, cl 18; modified in Schedule 2, cl 4(13)).
Facilitate licences: the State will endeavour to ensure Transport Commission licences are issued and not discriminatory in fees (Schedule 1, cl 17).
Make representations to Commonwealth agencies on Company’s behalf for Commonwealth licences/consents (Schedule 1, cl 26(2)).
Termination rights: the State may determine the Agreement on specified defaults or insolvency grounds (Schedule 1, cl 23). On termination, the State retains obligations under Clause 6 (effluent arrangements) and Clause 24 preserves antecedent liabilities.

Company duties and rights

Submit detailed proposals: within 60 days of acceptance of EPA conditions, submit detailed proposals for construction and establishment of the chloride plant, finishing plant and continuing operations on the Kemerton works site, with plans, specifications and an environmental management programme (Schedule 1, cl 7; Schedule 2, cl 4(3)(a)).
Construct and commission: implement approved proposals so the chloride plant is constructed and fully commissioned by the changeover date (Schedule 1, cl 7(7); changeover date amended in Schedule 2, cl 4(1)(a)).
Environmental monitoring and reporting: keep the Minister informed, submit reports on environmental protection measures, and liaise/cooperate with the Minister for additional reasonable measures as required (Schedule 1, cl 10).
Effluent and waste disposal: until changeover, the State remains responsible for sulphate effluent disposal but the Company must collect and pump effluent into the pipeline and pay $100,000 p.a. contribution; after changeover the Company is responsible for all effluent and waste disposal costs (Schedule 1, cl 6).
Local content and reporting obligations: use local labour and professional services where reasonable and economically practicable, require contractors to adopt same obligations, and report monthly on implementation (Schedule 1, cl 11).
Provide evidence of finance and readiness: on submitting proposals, provide evidence of anticipated works value, availability of finance, and readiness to commence (Schedule 1, cl 7(4)).
Assignment: may assign or dispose of rights with Ministerial consent, subject to deed of covenant from assignee; Company remains liable absent release by the Minister (Schedule 1, cl 19).
Use of roads and jetties: may use access roads between works site and jetties and shall not be charged discriminatory fees for wharf/jetty use (Schedule 1, cl 17(2)).
Arbitration and dispute rights: may elect to refer certain Ministerial decisions to arbitration on reasonableness grounds (Schedule 1, cl 8(4)); general disputes go to arbitration under Commercial Arbitration Act 1985 (Schedule 1, cl 28). The Agreement preserves some areas where Ministerial discretion is "unfettered" and not subject to arbitration (cl 28(2)).

Mutual provisions and administrative powers

Ministerial approval and timing: Minister must approve or require changes to proposals; decision due within two months of receipt (Schedule 1, cl 8(1)-(2)). The Minister can extend timeframes at his discretion (cl 22).
Force majeure: delays and temporary suspensions for events beyond control are contemplated and require notice and mitigation (Schedule 1, cl 21).
Arbitration: the Agreement sets out a two arbitrator scheme with an umpire, procedure under the Commercial Arbitration Act 1985, and empowers arbitrators to grant interim extensions in the name of the Minister (Schedule 1, cl 28).

Specific statutory modifications

Planning schemes excluded: s 4B of the Act removes the application of planning schemes under the Planning and Development Act 2005 to the Kemerton works site.
Contractual exemption to approvals: Schedule 2, cl 18A(2) provides the Company shall not be required to obtain any approval or consent required by State law for the development of the Kemerton works site or construction of the Kemerton factory in accordance with the Agreement.

These duties and rights create a mix of statutory and contractual entitlements. The State is obliged to make significant financial transfers and land arrangements and to provide zoning protections. The Company is obliged to construct, manage environmental risks, supply information, and assume long term operating and effluent responsibilities. The Minister has broad discretionary powers over approvals and time extensions, with limited arbitrability in some areas.

The Act itself contains no standalone penalty provisions. Enforcement and remedies are embedded in the Agreement text. The Agreement specifies notice, default, termination, arbitration, and post‑termination consequences which are the principal enforcement mechanisms.

Key enforcement mechanisms in the Agreement (Schedules):

Notice and remedial periods: Clause 23 requires the State to give notice specifying the nature of material default, the responsible parties (if known) and provides a remedial period. Defaults that are not remedied within 180 days after notice may lead to determination by the State (Schedule 1, cl 23(1)(a)). The notice is to be given to the Company and to assignees, mortgagees and chargees as previously notified (cl 23(2)).
Arbitration and stay of termination where disputed: If the Company contests the default, it must refer the dispute to arbitration within 60 days of the State’s notice (cl 23(3)). If the arbitration finds against the Company, the Company must comply with the award within a reasonable time fixed by the award. If the arbitrator finds there was a bona fide dispute and no dilatoriness, the minimum time for compliance is 90 days (cl 23(3)(b)). This structure imposes a process before final termination but permits the State to end the Agreement where material non‑compliance is established and not remedied.
Termination consequences and survival: On cessation or determination, the rights of the Company under the Agreement cease except as otherwise agreed by the Minister; antecedent liabilities, indemnities and the provisions of Clause 6 (effluent arrangements) and Clause 24 remain in force (Schedule 1, cl 24). Clause 24(2) requires immediate payment of all moneys payable or accrued due.
Conditional payments: State payments to the Company are themselves conditioned. Clause 12(2) makes State instalments contingent on the Company not being in default and the Minister being reasonably satisfied with progress. Under the Variation clause 12A, staged payments are subject to the terms and other conditions the Minister considers beneficial to the State. The conditionality operates as an enforcement lever: failure to meet obligations may delay or forfeit payments.
Ministerial powers: The Minister has a suite of powers that can influence enforcement: to approve proposals subject to conditions (Schedule 1, cl 8(1)(c)), to extend dates and vary periods (cl 22), and to release the Company from liability in assignment situations (cl 19). Clause 28(3) empowers arbitrators to grant extensions in the name of the Minister. Clause 28(2) excludes arbitration where a party is given an unfettered discretion. These provisions affect what actions are justiciable and how enforcement can proceed.
Arbitration regime as primary dispute resolution: Clause 28 establishes arbitration under the Commercial Arbitration Act 1985 with two arbitrators and an umpire, allows legal representation and empowers arbitrators to grant interim relief in the name of the Minister. Arbitration is the contractual path for most disputes, subject to some matters being excluded where the Minister has "unfettered discretion" (cl 28(2)).
Environmental compliance and statutory enforcement: Clause 25 says nothing in the Agreement shall be construed to exempt the Company from compliance with environmental protection requirements arising under Acts in force. That clause signals that statutory environmental enforcement remains available. However, the Variation Agreement contains clause 18A(2) that provides the Company shall not be required to obtain any approval or consent required by or under a law of the State for development of the Kemerton works site in accordance with the Agreement. The interaction of these clauses affects the practical availability of administrative enforcement pathways for local approvals. The Act itself reinforces the contractual primacy by stating the Agreement operates notwithstanding any other Act or law (s 4; s 4A).

Practical enforcement implications

The State’s primary enforcement tool is contract termination and withholding of payments. That creates direct financial consequences for non‑performance.
Arbitration creates an internal dispute resolution system that can delay final enforcement action, but it also limits immediate resort to courts for many disputes.
Environmental compliance remains on the books via Clause 25, but the Agreement and Variation contain statutory overrides and specific exemptions that complicate how standard environmental and planning approvals apply to the Kemerton site. Section 4B removes planning schemes for Kemerton; Schedule 2 clause 18A(2) precludes requirement for State approvals for development that conforms to the Agreement. These carve outs reduce the availability of planning enforcement mechanisms while preserving some environmental obligations in form.
The Agreement contemplates insolvency and assignment events with related enforcement options: the State may determine the Agreement if the Company goes into liquidation and assignment or approved assignee is not arranged within three months (cl 23(1)(b)).

No criminal sanctions or fines are introduced by the Act itself. Remedies are contractual: termination, withholding of payments, arbitration awards, and preserved statutory environmental obligations subject to the Agreement’s statutory primacy.

The Act and its schedules interact with other State laws in several explicit and consequential ways. The Act uses express statutory primacy and specific exclusions to reconfigure the regulatory landscape for the works site.

Express statutory primacy

Sections 4 and 4A state the Agreement and Variation Agreement "shall operate and take effect notwithstanding any other Act or law". This creates a statutory override. The Government Agreements Act 1979 is not limited by this declaration but its application is not displaced (s 4(3); s 4A(2)). That means the Agreement operates with statutory effect even if other State laws otherwise would have imposed conflicting requirements.

Planning law

Section 4B modifies the Planning and Development Act 2005 by excluding planning schemes from applying to or in relation to the Kemerton works site. That creates a statutory carve out from ordinary development controls established via planning schemes. The Variation Agreement adds clause 18A(2), which provides that, notwithstanding any Act, regulation, bylaw, interim development order or town planning scheme, the Company shall not be required to obtain any approval or consent required by or under a law of the State to develop the Kemerton works site or construct the Kemerton factory in accordance with the Agreement. Together s 4B and Schedule 2, cl 18A(2) remove conventional State planning approval pathways and replace them with the Agreement’s scheme.

Environmental law and EPA process

The Agreement contemplates environmental assessment procedures in which the Company prepares an ERMP and awaits the EPA Report, and requires the Company to take into account any conditions the EPA recommends (Schedule 1, cl 7(1); definitions of ERMP and EPA Report). Clause 10 obliges monitoring and reporting on environmental matters and cooperation with the Minister. Clause 25 expressly states that nothing in the Agreement shall exempt the Company from compliance with any environmental protection requirement that may be made by the State or a State agency under any Act in force. However, clause 18A(2) in the Variation appears to remove the need to obtain approvals and consents required under State law for development or construction that is "in accordance with the provisions of this Agreement". There is therefore a textual tension between the continued availability of environmental statutory requirements (cl 25) and the Variation's removal of consent pathways (cl 18A(2)). The Act itself reinforces Variation primacy through s 4A.

Commonwealth laws

Clause 26 requires the Company to apply for any Commonwealth licences and consents necessary to permit the Company to enter into and perform the Agreement, and allows the State to make representations to the Commonwealth on the Company’s behalf. The Agreement does not purport to override Commonwealth law; the s 4/s 4A primacy applies to State law. The Company remains subject to Commonwealth law and must obtain any federal licences required.

Administrative law and ministerial discretion

The Agreement grants the Minister decision‑making powers, including the power to approve detailed proposals, to set conditions, and to extend timeframes (Schedule 1, cls 8, 22). Clause 28(2) preserves some Ministerial decisions as outside arbitration where the Minister or other Minister is given "an unfettered discretion". An outcome is that some disputes may be non‑justiciable internally under the Agreement; external judicial review avenues under administrative law are not expressly preserved or excluded by the Agreement or the Act, but the Agreement’s arbitration scheme and statutory primacy change the practical landscape for review of decisions connected to approvals and planning.

Contract versus statutory rules

Because the Agreement is incorporated into statute and given primacy, the usual interaction rules apply: where the Agreement and a State law conflict, the Agreement (and the Act ratifying it) will control for the matters specified. That reallocation of regulatory competence is the instrument’s core legal effect. Clause 25 is a caveat preserving environmental statutory obligations in text, but Clause 18A(2) and s 4/s 4A create exceptions. Legal effect in practice will depend on the precise wording and operation of conflicting provisions and, if tested, on courts’ interpretations concerning the scope of the Agreement’s primacy and any implied or express preservation of statutory duties.

Practical friction points

Local authorities normally exert planning controls via planning schemes. Section 4B and Schedule 2, cl 18A(2) remove those controls for the Kemerton works site, shifting oversight and consenting functions to the Agreement and the Minister. That reduces local government planning jurisdiction for that land.
Environmental standards remain contractually required, and the Agreement requires the Company to have regard to ERMP and EPA Report. However, where approvals and consents would normally be required, the Variation Agreement indicates the Company may not need to obtain them when development is in accordance with the Agreement. This can create a practical enforcement and compliance gap between statutory environmental obligations and development consent processes.
Commonwealth laws, licences and approvals remain necessary where applicable: the Agreement requires the Company to apply for those Commonwealth licences (cl 26), signalling the Agreement does not displace federal jurisdiction.

In sum, the Act interacts with other laws by (1) elevating the contracted arrangements to prevail over conflicting State laws, (2) eliminating planning scheme application for the Kemerton site, (3) creating a mixed contractual/statutory environmental regime, and (4) retaining the need to comply with Commonwealth legal requirements. The net effect is a customised legal regime for the specified works site that reduces the usual operation of State planning law and replaces some approval mechanics with contractually governed processes administered by the Minister.

The compilation table at the end of the Act records the legislative amendments and reprints that changed the Act’s text over time. The source provides the following amendment history:

Pigment Factory (Australind) Agreement Act 1986, No. 92 of 1986. Assented 10 December 1986, commenced 10 December 1986 (s 2) and incorporated Schedule 1 as the principal Agreement.
Pigment Factory (Australind) Agreement Amendment Act 1987, No. 28 of 1987. Assented 29 June 1987, commenced 29 June 1987 (s 2). This amending Act inserted significant provisions, including s 4A (Variation Agreement ratified and implementation authorised), and inserted Schedule 2 as the Variation Agreement (see editorial notes: Schedule 1 amended: No. 27 of 1987 s. 6 and s 3 amended: No. 28 of 1987 s. 4; s 4A inserted: No. 28 of 1987 s. 5).
Local Government (Consequential Amendments) Act 1996, s 4: No. 14 of 1996. Assented 28 June 1996, commenced 1 July 1996. The compilation notes this amendment but the text of the change is not reproduced in the schedule provided beyond listing the amending instrument.
Reprint of the Act as at 9 August 2002, incorporating earlier amendments.
Planning and Development (Consequential and Transitional Provisions) Act 2005, s 15: No. 38 of 2005. Assented 12 December 2005, commenced 9 April 2006. Section 4B was inserted by No. 38 of 2005 s 15 to modify planning laws by excluding planning schemes from applying to the Kemerton works site.
Standardisation of Formatting Act 2010, s 4: No. 19 of 2010. Assented 28 June 2010, commenced 11 September 2010. This amends headings and formatting in the schedules (see notes: schedule headings amended by No. 19 of 2010 s 4).

Material changes introduced by the Variation Agreement (Schedule 2, enacted under the 1987 amendment) include:

A new changeover date: the Variation replaces the changeover date originally defined as 31 December 1989 with 30 June 1990 (Schedule 2, cl 4(1)(a)).
Change of site: the definition of "chloride plant" and the introduction of "Kemerton works site" relocate the chloride plant from the original works site to Kemerton (Schedule 2, cl 4(1)(b) and new definitions).
Increased capacity and scope: the Variation increases the required plant capacity to not less than 70,000 tonnes per annum and adds a Finishing Plant (Schedule 2, cl 4(3)(a)).
Land transfer and sale/leaseback: new clause 6A provides for transfer of approximately 55 hectares of Kemerton land to the Company for $1 and associated costs; clause 13A obliges the Company to sell the original works site to the State and allows the State to lease back portions to the Company.
Additional State payments: the Variation adds clause 12A requiring the State to pay $6,350,000 in staged instalments, subject to contractual conditions.
Planning and approvals adjustment: insertion of clause 18A which asserts compliance with lawful requirements but provides that the Company shall not be required to obtain State approvals for development of the Kemerton works site "in accordance with" the Agreement (Schedule 2, cl 18A(2)).

The compilation notes these legislative steps and the dates of assent and commencement. The Agreement itself contains an explicit expiry of 31 December 2011 (Schedule 1, cl 31), meaning the contractual term ended on that date unless varied. The Act, however, remains on the statute book together with its schedules and the recorded amendments.

Practitioners should note that the compilation table is the primary source for the formal amendment chronology recorded in the Act text. Any other historical changes or administrative actions not recorded in the compilation table are not included in the statutory text provided.

The Act and its schedules, as printed in the source provided, do not include any recorded litigation history. The schedules provide the dispute resolution mechanism for the Agreement: arbitration under the Commercial Arbitration Act 1985 with a two arbitrator and umpire system (Schedule 1, cl 28), and specific arbitration pathways for challenges to Ministerial decisions on the reasonableness of conditions (Schedule 1, cl 8(4)-(5)). Clause 28(2) also specifies that where the State or the Minister is given an "unfettered discretion" by the Agreement, arbitration will not apply to those matters.

The statutory text contains no footnoted or appended entries listing cases, nor does the compilation table record judicial decisions. Therefore, based on the source provided, there is no litigation history recorded in the Act document itself. If a practitioner requires actual case law applying or testing the Agreement, s 4 and s 4A’s "notwithstanding" clauses and Schedule 2 cl 18A(2)’s planning law carve out may have been fertile grounds for litigation or administrative challenges. Those issues would need to be explored in external legal databases and court records, because the Act text does not supply case citations or judicial treatment.

As the instrument embeds arbitration as the primary dispute resolution route between the contracting parties, many disputes may have been resolved privately by arbitration rather than through public court decisions. Arbitration awards are not routinely published in the statute. For public judicial consideration, potential areas that could have been litigated include conflicts between Clause 25 (preserving environmental statutory obligations) and Clause 18A(2) (exempting Company from State approvals for Kemerton development), or challenges to the exercise of Ministerial discretion where the Agreement treats some decisions as non‑arbitrable. None of those adjudications, if they occurred, are recorded in the Act text provided.

This section highlights clauses and interactions that can produce surprising legal or practical outcomes if not noticed. All references are to the schedules and sections in the statutory text.

Statutory primacy and regulatory carve outs
- Sections 4 and 4A declare the Agreements operate "notwithstanding any other Act or law". That gives the Agreements statutory primacy for conflicts with other State laws in the subject matter area. Practitioners should not assume ordinary planning or consent regimes apply for the Kemerton works site: s 4B removes planning schemes (s 4B), and Schedule 2, cl 18A(2) states the Company shall not be required to obtain State approvals for development "in accordance with" the Agreement. The effect is that many standard administrative approval pathways are displaced for that site.
Clause 25 vs clause 18A(2)
- Clause 25 states nothing in the Agreement shall be construed to exempt the Company from compliance with environmental protection requirements made by the State under any Act. By contrast, Schedule 2 cl 18A(2) provides the Company shall not be required to obtain any approval or consent required by a State law to develop the Kemerton works site in accordance with the Agreement. This textual tension may be a source of dispute. The Agreement contains both clauses; the Variation Agreement contains the later, specific provision exempting consent. Careful legal analysis is required to determine which provision governs particular environmental approval requirements, and how courts or administrative authorities would construe these clauses. The Act itself (s 4A) elevates the Variation Agreement, which complicates reliance on statutory environmental consents for enforcement.
Ministerial discretion and limited arbitrability
- Clause 28(2) removes arbitration where the State, the Minister or any other Minister is "given an unfettered discretion". The Agreement contemplates a broad range of discretionary powers to the Minister (for example, approval of proposals, extensions under clause 22, and conditions in clause 8). That means some key decisions may be insulated from arbitration and so may not be contestable under the contractual arbitration route. Administrative law avenues could remain, but the Agreement’s structure and statutory primacy can reduce practical avenues for judicial review.
Conditional payments and State control point
- State payments (Schedule 1 cl 12; Schedule 2 cl 12A) are subject to the Company not being in default and to the Minister being "reasonably satisfied" with construction progress. The Minister’s satisfaction is a condition precedent for payments, which gives the State a lever to influence project execution and cashflow. However, the Agreement also gives the Company arbitration against unreasonable Ministerial decisions in some contexts (cl 8(4)), creating conditionality plus dispute mechanisms. Practitioners should note the alignment of payment timing, approval satisfaction and termination risk.
Temporal expiry of the Agreement
- Clause 31 states the Agreement shall expire on 31 December 2011, subject to Clause 23. The Agreement therefore had a fixed contractual term. The Act remains on statute, but the original Agreement’s operational term ended in 2011. Any residual rights, ongoing covenants or continuations require checking whether the Agreement was extended or whether post‑2011 operations are governed by other arrangements. The Act’s schedules still define the historical obligations and rights.
Transfer, sale and leaseback mechanics
- Schedule 2 inserts clause 6A (transfer of approximately 55 hectares for $1) and clause 13A (sale to the State of the works site and leaseback of required portions). The timing conditions for transfer depend on compliance with Clause 7 proposals and other conditions. The agreements also contemplate cost recovery by the Company for survey and transfer. The transactions thus require careful title, cadastral and transfer condition management, and costs allocation can be a point of negotiation or dispute.
Local content and reporting obligations
- Clause 11 obliges the Company to use local labour and suppliers "so far as it is reasonable and economically practicable" and to report monthly on implementation. Those are obligations of variable enforceability; the phrase introduces discretion and potential contestation about what is "reasonable and economically practicable". The reporting is an ongoing compliance requirement.
Pipeline and effluent arrangements during transition
- Clause 6 creates a period where the State remains "totally responsible" for sulphate effluent disposal until the end of the decommissioning period, while the Company must maintain and operate the pipeline, pump effluent, and contribute $100,000 per year to disposal costs. On changeover, the Company becomes fully responsible for effluent and waste disposal. Practitioners must note the split of operational responsibility and cost during transition, and the requirement to flush the pipeline and discharge all residual liquor within 90 days. Non‑compliance could raise environmental and contractual liabilities.
Assignment and residual liability
- Clause 19 permits assignment or disposition with Ministerial consent and a deed of covenant from the assignee. But the Company remains liable for performance unless the Minister releases it. That means buyers or financiers must negotiate Ministerial consent and potential indemnities, and the Company’s liabilities may continue post‑assignment unless the Minister agrees to release.
Dispute resolution confidentiality
- Arbitration is the primary mechanism for many disputes. Many arbitral awards and proceedings are confidential and may not generate public law reports. That limits the availability of precedents and public scrutiny for contentious interpretations of the Agreement.

Each of these points is grounded in the Agreement text. Practitioners should treat the combination of statutory primacy, planning exclusions, conditional State payments and ministerial discretion as the core features that produce legal surprises unless explicitly accounted for in transaction dampeners and compliance plans.

For both the Company and State agencies, compliance requires closely following the Agreement’s procedural steps, reporting obligations and conditionality. Below are concrete actions, tied to clause references, aimed at operational compliance.

For the Company (SCM Chemicals Ltd or successors)

Acceptance of EPA conditions and timely submission of proposals
- Accept the EPA Report conditions where reasonable, or record in writing the basis for withholding acceptance as permitted by Schedule 2 cl 3(2). Within 60 days of acceptance (or any Ministerial extension), submit detailed proposals addressing the matters enumerated in Schedule 1 cl 7(1) and, as amended, Schedule 2 cl 4(3)(a)-(n). Include plans, specifications, water and energy requirements, environmental management programme and security for proprietary information (cl 7(1)(a)-(l)).
Financial evidence and project readiness
- When submitting proposals, provide evidence of anticipated cost and value of works, availability of finance and readiness to commence per cl 7(4). Maintain documentation and contemporaneous records to demonstrate compliance with the Minister’s reasonable satisfaction on progress for release of State payments (cl 12(2)(b)).
Environmental compliance and reporting
- Prepare and maintain an ERMP in line with the EPA Report (cl 7 definitions). Implement the environmental management programme and report to the Minister in the form and frequency required (cl 10). Liaise with the Minister on additional measures as requested. Despite clause 18A(2) exemptions, continue to observe environmental standards and be prepared to engage with EPA conditions and any Commonwealth environmental requirements (cl 25; cl 26).
Transition and effluent management
- Prior to changeover, ensure pipeline maintenance, pump capacity and discharge conditions meet the Agreement’s requirements (cl 6(2)(c)-(d)). Pay contributions of $100,000 per financial year during the decommissioning period (cl 6(2)(e)). During the decommissioning period, discharge residual liquor and flush the pipeline within the 90 day decommissioning period (cl 6(3)(a)). After changeover, implement waste treatment and disposal systems and assume full costs (cl 6(3)(b)).
Local content and contractor obligations
- Implement procurement processes consistent with cl 11: give local suppliers reasonable opportunity to tender, prefer local suppliers where quality and price are equal, and include equivalent obligations in contractor contracts (cl 11(2)). Prepare and submit monthly reports on implementation (cl 11(3)).
Compliance with notices and disputes
- Monitor for notices from the Minister. If in receipt of a decision or condition the Company considers unreasonable, consider arbitration under cl 8(4) within two months of receipt. If the State alleges default, use the arbitration pathway under cl 23(3) within 60 days to contest. Keep records of communications, notices and remedial steps to preserve rights and to demonstrate good faith.
Assignment and security
- If planning assignment, ensure the assignee executes a deed of covenant acceptable to the Minister (cl 19), and seek formal release from the Minister if wishing to avoid residual liability. Notify assignees, mortgagees and chargees as required for service of notices (cl 23(2)).
Commonwealth licences
- Apply for any required Commonwealth licences and consents and, if necessary, request the State to make representations to Commonwealth agencies per cl 26.

For the State and its agencies

Timely statutory and ministerial actions
- Fulfil the obligation to table any variation agreement executed pursuant to Schedule 1 cl 20(2) in Parliament within 12 sitting days. Provide timely Ministerial decisions on the Company’s proposals within the two month window specified in cl 8(2) or give written reasons and consult with the Company if conditions are imposed (cl 8(1)(c), cl 8(3)).
Conditional payments and progress monitoring
- Before releasing payments under cl 12 or Schedule 2 cl 12A, ensure the conditions precedent are satisfied: the Company is not in default (cl 12(2)(a)) and the Minister is reasonably satisfied about progress (cl 12(2)(b)). Maintain objective records demonstrating why payment conditions are or are not met.
Land transactions
- For transfers under Schedule 2 cl 6A, ensure conveyancing, cadastral survey, clearing of encumbrances and terms are implemented consistent with the Agreement. If the Agreement contemplates sale of the old works site and leaseback (cl 13A), ensure the sale/purchase and lease documents implement the contractual intent and that lease terms meet the Company’s operational requirements.
Planning and zoning obligations
- Implement the zoning protections required under cl 18 and its Variation amendments, subject to the Act’s s 4B removal of planning schemes for the Kemerton works site. Coordinate with local authorities to ensure consistency with the Agreement’s protection objectives and manage local amenity concerns.
Environmental oversight and compliance interface
- Continue to exercise environmental enforcement where permitted by cl 25 and as consistent with cl 18A(1) which requires compliance with lawful requirements of authorities. Use monitoring and reporting obligations under cl 10 as the basis for oversight and require additional measures where necessary.
Notices, termination and dispute management
- If contemplating termination under cl 23, ensure notices identify the alleged default and the party responsible, provide the time period for remedy and contemporaneously serve notices on assignees and secured parties as required by cl 23(2). Follow arbitration pathways if contested and adhere to timeframes.
Licence facilitation
- Provide representations to Commonwealth agencies upon the Company’s request pursuant to cl 26(2), and liaise with the State Energy Commission and Water Authority where infrastructure and supply arrangements are required (cl 14 and cl 15).

Documentation and governance

Maintain centralized project files capturing ERMP submissions, EPA Report, NOI (as relevant), Ministerial approvals, financial evidence, monthly local content reports, pipeline maintenance logs and all notices. These documents establish compliance or default and are the evidentiary basis for payments, enforcement and dispute resolution.

Practical risk controls for both parties

For the Company, secure documented Ministerial agreements or confirmations on critical interpretive points (for example, scope of clause 18A(2) exemptions) to reduce uncertainty about required consents.
For the State, draft and retain clear internal records justifying exercise of "reasonable satisfaction" and decisions affecting payments to reduce the risk of arbitration over decisions on progress.
For both, include explicit contractual protocols in transfer and assignment documents to ensure continuity of obligations and clear recital of any Ministerial releases.

Compliance is a mixture of procedural observance (timing for submissions and approvals), substantive standards (environmental management, effluent disposal) and strategic interaction with the Minister and State agencies (approvals, progress satisfaction and payment conditions). All actions should be documented to support positions in arbitration or to justify ministerial decisions should they be contested.

Pigment Factory (Australind) Agreement Act 1986

Plain English Summary

Deep Dive

What it does

Current sections