Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Act 2004

The Company and Guarantor. The Pilbara Infrastructure Pty Ltd (and after permitted assignments, its successors) is the primary addressee. It must submit proposals, obtain all third-party consents (cl 7(3)), construct and operate the railway and port facilities, maintain interoperability, implement approved access regimes, prepare local-participation plans (cl 9A), report quarterly on local content (cl 21(3)), and indemnify the State (cl 33). Fortescue Metals Group Ltd remains guarantor of all Company obligations (cl 39), a guarantee that survives variations (2010 cl 5; 2018 cl 3).

The State and its agencies. The Minister for State Development (or successor) assesses proposals (cl 11), grants or varies the SRL and port tenure (cl 14), approves access regimes (cl 18(2)), and may direct remedial works on default (cl 31(4)). The Minister for Mines grants the SRL and LALs and modifies Mining Act conditions (cl 14(5)). The LAA Minister (post-2018) issues entry authorities under LAA ss 91 or 182 (cl 4). The Port Authority (now Pilbara Ports Authority) grants the Port Lease and licences on non-discriminatory terms (cl 14(7)–(8)). The Regulator under the Railways (Access) Act 1998 approves or determines train-management guidelines, statements of policy, costing principles and over-payment rules once the Code applies.

Third-party miners, rail operators and port users. Any person wishing to ship iron ore, freight or other products gains statutory access rights under the Railways (Access) Act 1998, the Code and the Minister-approved port regime. Pre-Access Date, the Company may contract up to 45 Mtpa of iron-ore capacity; thereafter access is on Code terms. Clause 15(3) and the 2018 amendment to cl 15(8) require the Company to facilitate crossings for other railways, roads, conveyors, pipelines and transmission lines. Clause 16(7) and cl 18(7) oblige the Company to “use all reasonable endeavours to promote access and attract customers”.

Landholders, native-title holders and local governments. Pastoralists, mining tenement holders and other title holders must be consulted and their consents obtained before tenure is granted (cl 7(3), cl 13(3)(d) post-2018). Native-title processes are preserved (cl 2(2), cl 11(2)(c)) and compensation is payable by the Company (cl 23(3)). Local governments must be consulted on community-development plans (cl 9) and local-industry-participation plans (cl 9A).

The broader Pilbara community and economy. The Project is expressly intended to promote iron-ore development, employment and multi-user infrastructure (Recital D). Clauses 9 and 9A, local-content obligations (cl 21) and the access regimes are designed to diffuse benefits. Environmental protections are maintained via the Environmental Protection Act 1986 (cl 3, cl 10(1), cl 11(1)).

Company duties include: (i) submitting comprehensive proposals addressing capacity, interoperability, environment, native title, local content and community benefits (cll 9–13); (ii) obtaining all third-party consents before tenure grant (cl 7(3), cl 13(3)(d)); (iii) constructing and operating the railway and port facilities in accordance with approved proposals, recognised standards and all applicable safety laws (cl 15(1)–(2)); (iv) maintaining interoperability characteristics (cl 15(9)); (v) implementing and complying with an approved port access regime (cl 18(2)–(3)); (vi) facilitating third-party crossings (cl 15(3) as amended 2018); (vii) preparing, implementing and reporting against local-participation plans (cl 9A, cl 21(3)); (viii) promoting access (cl 16(7), cl 18(7)); (ix) not trading in iron-ore products (cl 12); and (x) indemnifying the State (cl 33).

Company rights include: (i) 50-year SRL (cl 14(2)) and corresponding port tenure co-terminous with the SRL; (ii) ability to take construction materials from the SRL corridor after 2010 (cl 14(4b)); (iii) pre-Access Date capacity to contract 45 Mtpa iron-ore rail and port capacity without Ministerial consent (cl 16(4)(b), cl 18(4)(b)); (iv) Ministerial power to extend time limits (cl 30); (v) arbitration rights on reasonableness of Ministerial decisions (cll 11(4)–(5), 35); and (vi) protection against discriminatory taxes or adverse taking of its works (cl 22, cl 24).

State rights include: (i) approval or conditional approval of proposals (cl 11(1)); (ii) power to remedy defaults at Company expense (cl 31(4)); (iii) power to determine the Agreement on material unremedied default or liquidation (cl 31(1)); (iv) ability to take land compulsorily and license it to the Company (cl 23); and (v) ongoing consultation and information rights (cl 36).

Third-party rights are primarily access rights crystallised through the Code (post-Access Date) or Minister-approved port regime. They also enjoy statutory crossing rights (cl 15(3)) and protection from discriminatory port charges (cl 14(8)).

The Act itself contains no offence provisions or monetary penalties. Enforcement is contractual and statutory. Clause 31(1) permits the State to determine the Agreement on material default (after 180 days’ notice or arbitration) or on liquidation. On determination, tenure rights cease, the Port Facilities vest in the Port Authority without compensation, and the SRL railway and other infrastructure vest in the State (cl 32(2)). The Company must remove infrastructure if directed and restore land (cl 32(2)(a)). Clause 31(4) allows the State to perform remedial works and recover costs as a debt. Clause 33 provides a broad indemnity for third-party claims arising from the Company’s works.

The access regimes are enforced through the Railways (Access) Act 1998 and Code mechanisms (arbitration by the Regulator, civil enforcement) and through the Minister-approved port regime (cl 18). Breach of cl 16 or cl 18 obligations may also constitute a material default under cl 31. The Rail Safety National Law (WA) Act 2015 (substituted by the 2018 variation) supplies its own offence and penalty regime for safety breaches. Environmental breaches are enforceable under the Environmental Protection Act 1986. Native-title non-compliance engages the Native Title Act 1993 (Cth) processes preserved by cl 2(2).

The Act is a classic “Government agreement” under the Government Agreements Act 1979 and therefore prevails over inconsistent legislation (s 6(1)–(2)). It expressly modifies the Mining Act 1978 (cl 14(5)), the LAA (cl 4, cl 23), the Railways (Access) Act 1998 and Code (Part 3), and applies the Aboriginal Heritage Act 1972 in a modified form (cl 6). The Environmental Protection Act 1986 continues in full force (cl 3, cl 10(1)); proposals must be referred under Part IV and any conditions incorporated (cl 11(1) proviso).

Post-2018, references to the Trade Practices Act 1974 (Cth) are replaced by the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law), preserving the prohibition on anti-competitive conduct. The Rail Safety National Law (WA) Act 2015 applies without exemption (cl 15(2)). The Port Authorities Act 1999 governs the form of the Port Lease and licences but is constrained by non-discrimination obligations (cl 14(8)). Part IIIA of the Australian Consumer Law remains available for declaration of the railway or port services (cl 16(6), cl 18(6)), although the Company must consult the State before taking such steps.

Land tenure interacts with the Mining Act 1978 miscellaneous-licence regime, the LAA pastoral-lease and Crown-land provisions, and native-title law. The validation provision (s 7A) operates retrospectively to cure pre-2010 title defects. Compulsory acquisition under cl 23 is deemed a public work but compensation is borne by the Company.

The 2010 variation (ratified by the Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Amendment Act 2010) was driven by the Company’s need to construct Train Loading Infrastructure and Train Unloading Infrastructure outside the original Railway Corridor and to resolve title defects that had emerged after grant of the initial SRL. It expanded the definition of Additional Infrastructure, deemed amendments to the SRL conditions (new cl 14(4a)), permitted extraction of construction materials (cl 14(4b)), widened the Railway Corridor definition, and adjusted proposal and access provisions. The changes were necessary to accommodate the Christmas Creek–Cloudbreak spur and Investigator spur while maintaining the open-access philosophy.

The 2018 variation (ratified by the Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Amendment Act 2018) responded to three policy shifts: (i) modernisation of safety legislation (substitution of Rail Safety Act 1998 with the Rail Safety National Law (WA) Act 2015); (ii) alignment with contemporary local-content policy (new cl 9A local industry participation plan); and (iii) simplification of land-entry processes (new cl 4 using LAA ss 91 and 182). It also expanded crossing rights, updated port-authority nomenclature, replaced the Trade Practices Act references, and made minor procedural adjustments to proposal timelines. The changes reflect a maturing project moving from greenfield construction to steady-state operation while reinforcing local economic benefits.

No further variations appear in the compilation table; any future variation would require parliamentary ratification under cl 28.

The source text contains no reported court challenges. Clause 35 mandates arbitration under the Commercial Arbitration Act 2012 (WA) for disputes “arising out of or in connection with this Agreement”. Ministerial decisions on proposal approval are reviewable only for reasonableness (cl 11(4)–(5)); the proviso to cl 11(1) prevents arbitration of EP Act conditions. No arbitration awards are recited. The validation of pre-2010 licences (s 7A) was presumably inserted to pre-empt litigation over title defects. Controversies likely centre on access-price disputes (resolved under the Code), native-title negotiations (preserved by cl 2(2)), and the balance between the Company’s 45 Mtpa pre-Access Date capacity and third-party demands. The 2010 expansion of material-extraction rights and the 2018 local-participation plan have attracted stakeholder commentary in the Pilbara but no litigation is recorded in the Act or its schedules.

Most practitioners assume the SRL is a standard miscellaneous licence; it is not. Clause 14(5) rewrites large parts of the Mining Act 1978 (ss 91, 92, 94, 96 and regulations 37, 41, 42). Surrender requires Ministerial consent (cl 14(4)); the 50-year term is subject to earlier determination under cl 31 or cl 32. The 2010 deemed amendment to the SRL schedule (cl 14(4a)) imposes a five-year surrender obligation for unused portions—many title searches still show the original wider corridor.

The pre-Access Date 45 Mtpa “safe harbour” (cl 16(4)(b), cl 18(4)(b)) is not a volume cap on the railway itself but a cap on capacity the Company may contract without Ministerial consent. Once the Access Date passes, those contracts must be varied to comply with the Code (cl 16(5)(e)). The interoperability obligation (cl 15(9)) is an ongoing “reasonable endeavours” duty that survives construction; failure to maintain characteristics enabling connection to other Pilbara railways could constitute material default.

Clause 9A (2018) is easily overlooked. It requires a standalone local-industry-participation plan within three months of the second variation date, with mandatory implementation and pre-proposal reporting. Non-compliance is a breach of the Agreement even if proposals are otherwise approved. The indemnity (cl 33) carves out only State negligence “in carrying out work for the Company”; it does not cover regulatory decisions or third-party claims arising from approved proposals.

The port non-discrimination rule (cl 14(8)) contains subtle exceptions for “commercially justified” differences and legacy legally-binding obligations existing at the 2004 date. Port users frequently misread this as absolute equality; the Company (and Port Authority) retain pricing flexibility where cost causation or historic contracts differ.

Finally, cl 32(2) effects an automatic vesting of port assets in the Port Authority and rail assets in the State on determination. There is no compensation mechanism. A lender taking security over the Company’s assets must ensure the deed of covenant required by cl 27(1) expressly addresses this forfeiture risk.

Due-diligence checklist. (1) Confirm the exact version of the Agreement: original Schedule 1 as varied by Schedule 2 (2010) and Schedule 3 (2018). (2) Map all land the subject of the SRL, LALs, Port Lease and Port Additional Infrastructure Licence against the Plan referred to in the 2010 variation and any subsequent endorsements under cl 14(6)–(6b). (3) Verify that all title-holder consents required by cl 7(3) and cl 13(3)(d) are unconditional, irrevocable and in the form approved by the Minister. (4) Ensure the local-industry-participation plan required by cl 9A has been provided to the Minister and is being implemented; update it before any new proposals under cl 12, 12A or 13.

Proposal preparation. Every proposal under cl 10, 12, 12A or 13 must: address the 15 matters listed in cl 10(1); demonstrate 70 Mtpa rail capacity and interoperability (cl 10(2)); be accompanied by evidence of financial capability, rail-safety accreditations, access arrangements and readiness (cl 10(5)); and be preceded by an updated community plan (cl 9) and local-participation information (cl 9A(6)). Submit separately if the Minister so requires. Allow two months for Ministerial response plus EP Act and native-title lead times (cl 11(2)).

Access compliance. Before the Access Date, limit pre-access iron-ore contracts to 45 Mtpa in aggregate and ensure each contract contains the precedence, prevailing-law and variation clauses required by cl 16(5). From six months before scheduled completion, keep the Minister informed of construction progress (cl 16(2)(b)). Submit all Code documents within seven days of the Code applying (cl 16(8)). For port access, obtain Ministerial approval of the regime before first shipment (cl 18(2)); the regime must be reviewed periodically and must not permit shipping of Government Agreement Product without consent (cl 18(9)).

Tenure and land. Do not surrender any part of the SRL or port tenure without Ministerial consent (cl 14(4), cl 14(9)). When applying for inclusion of additional land under cl 14(6b) or variation of port tenure under cl 14(10)–(11), furnish fresh cl 7(3) consents. For crossings, obtain Ministerial opinion that the grant will not “unduly prejudice” operations (cl 15(3) as amended).

Ongoing obligations. Maintain the railway and port facilities in “good repair and working order” (cl 20), implement approved proposals (cl 11(7)), report quarterly on local content (cl 21(3)), consult under cl 36 before any Part IIIA application, and keep the State informed of any proposed legislative or regulatory changes that could affect the Project. If default is alleged, respond within 60 days or arbitrate (cl 31(3)).

Transaction structuring. Any assignment, mortgage or charge requires Ministerial consent and a deed of covenant (cl 27(1)). Lenders should obtain a direct deed from the State addressing step-in rights before determination. On any sale of capacity, ensure the purchaser’s contract is varied to comply with the Code from the Access Date.

Compliance is not a box-ticking exercise; it requires continuous alignment between operational decisions, proposal amendments (cl 11(8)), access-regime updates and local-participation reporting. Annual internal audits against cl 9A, cl 15(2), cl 16(8) and cl 21 are prudent.