Shark Bay Solar Salt Industry Agreement Act 1983

The Agreement defines several key terms that structure its operation. “Evaporites” is the central mineral concept: it means minerals, chemicals, elements, salts and substances deposited from aqueous solutions through extensive or total evaporation or temperature change, including chlorides, sulphates, carbonates, bromides and iodides of sodium, potassium, magnesium, lithium and boron, and double or complex salts, metamorphic products, and any elements, gases or organic substances contained in evaporite salts. This broad definition covers the primary product (salt) but also permits extraction of by-products from residual brines. “The mining lease” refers specifically to the lease for evaporites granted under clause 5(1)(a), in the form scheduled to the Agreement, with a term of 21 years from the commencement date and two successive 21-year renewal rights (clause 5(3)(a)). “Project site” means any land leased to and held by the Joint Venturers under the Agreement. “Associated company” is defined in two limbs: first, a company with paid-up capital of at least $2,000,000 incorporated in the UK, USA, Japan, Australia or another approved country that is promoted by the Joint Venturers and in which they or an approved holder hold at least 25% interest (or a lesser approved interest), or is related under the Companies (WA) Code to a Joint Venturer or such a holder and is notified to the Minister; second, any company approved in writing by the Minister. This definition is critical for assignment rights under clause 30, which allows as-of-right assignment to an associated company. The “commencement date” is when the ratifying Act comes into operation. The Agreement contains a standard “notwithstanding” clause in clause 4(3)(a): on commencement, all Agreement provisions operate and take effect despite any Act or law. The term of the mining lease is subject to the overall duration of the Agreement: if the Agreement ceases or determines, the mining lease and all ancillary tenures terminate (clause 27(b)(i)). The Joint Venturers’ obligations include a minimum production requirement of 200,000 tonnes of salt per year after 30 June 1985, with a default trigger if that year’s shipment is below 200,000 tonnes and the average of that year and the previous three years is also below 200,000 tonnes (clause 27(a)). The royalty structure is tiered per tonne, and clause 23 provides for escalation: from commencement to 18 November 1989, rentals and royalties are increased by 256%, and thereafter further increases occur if the salt price on specified review dates exceeds $5.16 per tonne. “Company road” and “public road” are distinguished for maintenance and liability purposes, and clause 13(6) deems the Joint Venturers to be a municipality and their roads to be streets for determining liability to third parties. The concept of “town” and “townsite” is central to the social infrastructure obligations: if the Joint Venturers establish a town, they must provide housing, services, roads, and public buildings at their own cost, subject to by-laws and to making facilities available to the State free of charge for certain services.

The primary parties are the State of Western Australia, acting through its Ministers, and the Joint Venturers. The Joint Venturers are three entities: Agnew Clough Limited (a WA company), Mitsui Salt Pty Ltd (a WA company, a subsidiary of Mitsui interests) and Australian Mutual Provident Society (AMP), a New South Wales statutory body corporate. The Agreement binds their “respective successors and permitted assigns and appointees” (preamble). The Joint Venturers’ obligations are joint and several, as stated in the mining lease schedule. The Agreement directly affects their directors, shareholders and financiers, particularly because clause 30 permits assignment to associated companies as of right, and clause 27(a) requires notice of default to be given to any approved mortgagee with a Perth registered office. The State’s Ministers are heavily involved: the Minister for Mines grants and administers the mining lease and general purpose leases; the Minister for Lands handles special leases and occupancy rights; and the “Minister” (the Minister administering the Act) manages environmental proposals, town development, and overall compliance. State instrumentalities such as the Commissioner of Main Roads (road upgrading and maintenance), the State Energy Commission (electricity generation approvals), and local government authorities (rating under the Local Government Act 1960) are also affected. The public is indirectly affected: the Joint Venturers must grant “reasonable access” to the State, pastoral lessees and others over leased lands (clause 18(9)); company roads may be closed to public use (clause 13(3)); and the State may resume company roads for public use (clause 13(5)). Third-party contractors, suppliers and professional consultants in Western Australia are beneficiaries of the local content obligations in clause 20, which require the Joint Venturers to use local labour, professional services and give preference to WA suppliers where price, quality, delivery and service are equal. The Commonwealth is relevant for export licence requests (clause 25) and for the salt price escalation formula (which deducts Commonwealth export duties). Pastoral leaseholders (e.g. the holder of Pastoral Lease No. 3114/590) are affected because the mining lease includes land surrendered from that pastoral lease. Employees and their dependants are the intended beneficiaries of the town and housing provisions, and the State provides education, health and police services subject to the Joint Venturers bearing capital costs. The Agreement also contemplates “any person or persons designated by the State” who may use the Joint Venturers’ facilities (clause 18(8)), and “third parties” whose improvements may be damaged by levee removal (clause 26). Arbitration umpires and valuers may be appointed under clauses 27(c)(ii) and 31. The general public of Western Australia is affected through the by-law mechanism under section 4 of the Act, which can create enforceable local laws for the townsite.

The Joint Venturers have extensive duties. They must maintain and carry on a solar salt industry on the project site (clause 18(2)), produce and ship not less than 200,000 tonnes of salt per annum (clause 18(4)), and maintain dredging of Denham Channel and the ship berth (clause 18(3)). They must construct and provide permanent school facilities within 18 months of commencement and maintain them to the Minister’s reasonable standard (clause 18(5)), and provide and maintain all roads within the project site, water, electricity, power and other services (clause 18(6)). They must maintain wharf facilities and service craft (clause 18(7)) and make facilities available to designated persons on reasonable terms if it does not unduly interfere with operations (clause 18(8)). They must grant reasonable access to the State, pastoral lessees and others (clause 18(9)). On environmental matters, they must submit detailed proposals within six months of commencement (clause 7), then implement approved proposals and carry out continuous monitoring and research, with yearly interim reports and three-yearly detailed reports (clause 11). The Minister may require additional proposals (clause 11(3)-(4)). If a town is established, the Joint Venturers must provide housing, services, public roads and buildings at their own cost, and ensure they are available to employees and the associated population at fair and reasonable prices (clause 12(1)). They must equip buildings to at least State standards (clause 12(2)), provide adequate staff housing for education, hospital, medical and police staff (clause 12(3)), and maintain the airport (clause 19). They must pay royalties on salt shipped (clause 22) and on other evaporites under the Mining Act (clause 22(3)), and permit inspection of records (clause 22(4)). They must use local professional services, labour and materials where reasonable and economically practicable (clause 20), and include equivalent obligations in contracts with third parties. They must use best endeavours to obtain the best possible salt price (clause 23(3)) and to have salt available for Australian use at competitive prices (clause 28). They must consult with and keep the State informed confidentially about actions affecting State interests (clause 39). They have a right to surrender any reasonably substantial part of the project site no longer required (clause 40(2)), and to determine the Agreement if matters make continuance impracticable or uneconomic (clause 40(1)). The State’s key duties include granting the mining lease, general purpose leases, miscellaneous licences and special leases as outlined in clauses 5 and 6, subject to certain conditions (e.g. surrender of the old special lease). The State must maintain or cause to be maintained public roads to a comparable standard (clause 13(2)), and provide and maintain navigation aids as reasonably agreed (clause 17(1)). The State must grant water licences under the Rights in Water and Irrigation Act 1914 (clause 14(1)), and on application grant jetty licences under the Jetties Act 1926 (clause 15). The State must not resume project site land that would unreasonably impede operations, nor create roads, rights of way or easements over the project site that unduly prejudice operations without the Joint Venturers’ consent (clause 29(a)). The State must not impose discriminatory taxes, rates or charges on the Joint Venturers’ titles, property, products, materials or services (clause 29(b)), and must ensure that for rating purposes all project site lands (except residences and commercial undertakings not directly related to salt production) are valued on unimproved value and are not subject to discriminatory rates (clause 29(c)). The State must assist in procuring easements for electricity transmission if the Joint Venturers cannot obtain them on reasonable terms (clause 21(2)), and must make representations to the Commonwealth for export licences if required (clause 25). The State may also itself remedy defaults by the Joint Venturers and recover costs (clause 27(a)).

The primary enforcement mechanism is the default and termination regime in clause 27. The State may determine the Agreement and all rights thereunder if the Joint Venturers fail in any year after 30 June 1985 to ship at least 200,000 tonnes of salt and the average over that year and the previous three years is below 200,000 tonnes. Alternatively, if the Joint Venturers make default in any covenant, agreement or obligation under the Agreement or any ancillary tenure, and fail to remedy that default within 180 days after notice specifying the default is given by the State to the Joint Venturers and to any approved mortgagee with a Perth registered office, the State may determine the Agreement. If the default is contested and promptly submitted to arbitration, the time runs from the arbitration award where the question is decided against the Joint Venturers, but only if the arbitrator finds a bona fide dispute and no dilatory conduct. Default also includes the Joint Venturers abandoning or repudiating operations, or any Joint Venturer going into liquidation (other than a voluntary reconstruction) unless within three months the liquidating venturer’s interest is assigned to another Joint Venturer or an approved assignee. On determination, all rights in the mining lease and other tenures cease, and the Joint Venturers must transfer or surrender the land to the State without further consideration, and the State may appoint an attorney to execute surrenders (clause 27(b)(i)). All moneys owed become immediately payable (clause 27(b)(ii)). Improvements (other than machinery, equipment, the flume structure other than earthworks, and linings to ponds) become the absolute property of the State without compensation (clause 27(c)(i)). The Joint Venturers may remove their machinery and removable buildings, but must first notify the State, which has a three-month option to purchase them at a valuation (clause 27(c)(ii)). Any items not removed within six months after cessation become State property without compensation (clause 27(c)(iii)). The State may also, instead of determining the Agreement, remedy the default itself, entering the Joint Venturers’ lands and using their plant and equipment, and the costs become a debt payable on demand (clause 27(a)). Under the Act itself, section 4(c) provides that by-laws made for the townsite may prescribe penalties not exceeding $100 for a breach. There is no other criminal penalty under the Act. The Agreement also contains an indemnity clause (clause 36): the Joint Venturers must indemnify the State against all third-party claims arising from work carried out under the Agreement or from construction, maintenance or use of the Joint Venturers’ works or plant. Failure to pay royalties may be addressed through the default regime, and the Minister for Mines has inspection rights to verify royalty calculations under clause 22(4). The arbitration clause (clause 31) provides a mechanism for resolving disputes over reasonableness of conditions or other matters, and the arbitrators or umpire may grant interim extensions of time. Importantly, clause 31(2) excludes from arbitration any matter where the State or Minister is given a discretionary power expressly or impliedly , those decisions are not reviewable by arbitration.

Section 3(3) of the Act provides that the Agreement “shall operate and take effect notwithstanding any other Act or law.” This overriding effect is reinforced by clause 4(3)(a) of the Agreement, which states the same. The Agreement expressly modifies several specific statutes. Under clause 5, the mining lease is granted “notwithstanding the provisions of the Mining Act 1978.” The term of 21 years with two renewal rights of 21 years each overrides the standard maximum term for mining leases under the Mining Act. Clause 5(5) exempts the Joint Venturers from expenditure conditions imposed by or under the Mining Act. The form of the mining lease set out in the Schedule to the Agreement includes provisions that the lease shall not be determined or forfeited otherwise than in accordance with the Agreement, overriding the forfeiture provisions of the Mining Act. Clause 10 modifies the Land Act 1933 for the purposes of the Agreement: it substitutes a new subsection (2) for section 45A (removing the requirement for a further approval step), deletes sections 116 (proviso), 135 and 143, and includes powers to grant occupancy rights over land on terms determined by the Minister for Lands, to offer land for leasing in or near the townsite even before it is constituted a townsite under section 10 of the Land Act, and to grant leases or licences for terms and conditions consistent with the Agreement in lieu of those in the Land Act. The Rights in Water and Irrigation Act 1914 applies to water licences granted under clause 14, except where inconsistent with the Agreement (clause 14(4)). The Jetties Act 1926 governs jetty licences under clause 15, but the Agreement mandates that the State shall cause the licence to be renewed from time to time during the Agreement’s continuance, overriding any discretion in that Act. The Electricity Act 1945 and the State Energy Commission’s requirements apply to electricity generation and transmission under clause 21. The Local Government Act 1960 is modified by clause 29(c): for rating purposes, project site lands (except residences and commercial undertakings not directly related to salt production) must be valued on unimproved value and not subject to discriminatory rates. However, the proviso allows the Joint Venturers to elect under section 533B of the Local Government Act 1960 (which deals with certain rating options). The Government Agreements Act 1979 is mentioned in section 3(3) of the Act as not being limited or otherwise affected; the Agreement is a government agreement within the meaning of that Act, which provides for parliamentary scrutiny of variations. The Interpretation Act 1918 is disapplied for by-laws made under section 4 of the Act (section 4(d) of the Act). The Companies (Western Australia) Code is referenced in the definition of “associated company” for the purpose of determining corporate relationships. The Petroleum Act 1967 is reserved in the Fourth Schedule to the mining lease: all petroleum is reserved to the Crown with access rights. Clause 35 clarifies that nothing in the Agreement exempts the Joint Venturers from compliance with any environmental protection requirements under any Act from time to time in force. Clause 37 requires the Joint Venturers to comply with all laws for the time being in force in Western Australia, subject to the Agreement. The Commonwealth’s export licensing regime is addressed by clause 25, which obliges the State to make representations for export licences. The Arbitration Act 1895 governs any arbitration under clause 31. Overall, the Act and Agreement create a self-contained statutory code for the Shark Bay salt project, displacing or modifying numerous general laws to provide certainty and flexibility for the long-term operation.

The Act was originally enacted as the Shark Bay Solar Salt Industry Agreement Act 1983 (WA Act No. 67 of 1983). It received Royal Assent on 22 December 1983 and commenced on the same day. The Act has been amended only once by the Standardisation of Formatting Act 2010 (No. 19 of 2010), section 4, which came into operation on 11 September 2010. That amendment made minor formatting changes to the Act , specifically, it amended the heading to the Schedule by inserting “[Heading amended: No. 19 of 2010 s. 4.]”. The substantive provisions of the Act were not altered. The Agreement itself may be varied without further legislation: clause 32 permits the parties to add to, substitute for, cancel or vary any provisions of the Agreement or of the mining lease or other tenures by written agreement. However, any such variation is subject to parliamentary scrutiny: the Minister must cause the agreement to be laid before each House of Parliament within 12 sitting days, and either House may pass a resolution disallowing the variation within 12 sitting days after that. If not disallowed, the variation takes effect from and after the last day on which it could have been disallowed. The Agreement also contains a power for the Minister to extend periods or vary dates under clause 41, at the request of the Joint Venturers, without Parliamentary approval. Clause 23(4) gives the Minister power, after consultation, to vary the review dates for royalty escalation to later dates consistent with other government agreements. The compilation table in the Act notes that a reprint (Reprint 1) was produced as at 4 July 2003. The Interpretation Act 1918 is noted as having been repealed by the Interpretation Act 1984, which does not affect the operation of section 4(d) of this Act (which states by-laws are not subject to section 36 of the 1918 Act). The Act’s marginal notes in the Agreement have been represented as bold headnotes in the reprint but retain their status as marginal notes only, not part of the operative provisions.

The source text does not refer to any litigation concerning the Shark Bay Solar Salt Industry Agreement Act 1983 or the scheduled Agreement. There is no mention of court cases, tribunal decisions, or disputes that have been determined by judicial or arbitral proceedings. The Agreement itself contains a comprehensive arbitration clause (clause 31) for disputes arising out of or in connection with the Agreement, its construction, or the rights, duties or liabilities of the parties. However, clause 31(2) excludes from arbitration any matter where the State, the Minister or any other Minister is given a discretionary power expressly or impliedly. This means that many decisions , such as approval of proposals (clause 9), determination of reasonable standards (e.g. clause 18(5)-(7)), and the Minister’s power to extend time (clause 41) , are not arbitrable. Any dispute that is arbitrable would be conducted under the Arbitration Act 1895 (WA), which has since been replaced by the Commercial Arbitration Act 2012 (WA) but the Agreement’s reference to the 1895 Act would be interpreted as a reference to the current legislation under clause 2(d). The default provisions in clause 27(a) contemplate that a default may be contested and submitted to arbitration, with the arbitral award setting a time for remedy. The Agreement also provides for valuation disputes over machinery and removable buildings on cessation (clause 27(c)(ii)), to be resolved by mutual agreement or by a single valuer or two valuers with an umpire. The clause 9(4) arbitration mechanism allows the Joint Venturers to refer to arbitration the reasonableness of a condition precedent imposed by the Minister on environmental or town proposals. There is no public record in the source of any such arbitration having occurred. The absence of litigation history may reflect the long-term stability of the agreement and the preference for negotiated outcomes, but it is not possible from the source alone to confirm whether disputes have arisen. The existence of the arbitration clause and the detailed default mechanism suggests the parties intended to avoid court proceedings. The State’s obligation under clause 29(b) not to take discriminatory action, and the Joint Venturers’ indemnity under clause 36, could potentially give rise to litigation with third parties, but no such cases are cited. A practitioner would need to search court databases independently for any unreported decisions.

Several provisions in the Agreement can trap unwary readers. The deemed municipality rule in clause 13(6) is a significant liability exposure: for determining liability to third persons (not the State) for death, injury or property damage arising from use of roads the Joint Venturers maintain, the Joint Venturers are deemed to be a municipality and the roads deemed to be streets under the care, control and management of a municipality under the Local Government Act 1960. This strips the Joint Venturers of any common law distinction between a private road owner and a public authority and imposes municipal-level liability. The limitation of liability in clause 26 is striking: if the Joint Venturers remove or fail to maintain a levee or other works on the project site, and a third party subsequently makes improvements on adjacent land and suffers damage, the Joint Venturers are not liable notwithstanding any Act or rule of law or equity. This effectively reverses the normal tortious duty of care for those circumstances. The modification of the Land Act in clause 10 is drastic: it deletes sections 135 and 143 of that Act entirely for the purposes of this Agreement, and deletes the proviso to section 116. These deletions remove safeguards that would otherwise apply to Crown leases , for example, section 116’s proviso limited the term of leases under that section to 50 years, and section 135 dealt with forfeiture. The Joint Venturers’ obligation to make available facilities to persons designated by the State under clause 18(8) is broad: it applies on “reasonable notice” and “such terms and conditions as shall be reasonable in the circumstances” but must not “unduly interfere” with operations. The Joint Venturers cannot refuse outright; the only safeguard is that the interference must be “undue.” The State’s right to resume without compensation under clause 8(2) for the townsite: the State may at any time and from time to time exclude from the lease or occupancy rights any part of the townsite land on which no building, structure or substantial improvements have been erected, for any public purpose, without compensation. This is a powerful reservation. The default trigger in clause 27(a) for failure to ship 200,000 tonnes per year is cumulative: it requires both a shortfall in the current year and a four-year rolling average below 200,000 tonnes. However, this is subject to force majeure relief under clause 34, which includes “inability (common in the salt export industry) to profitably sell salt” , a very broad force majeure event. The definition of “evaporites” is so wide that it could capture almost any substance that can be obtained from sea water concentrates or brines, including, by the literal text, “any elements gases or organic substances contained in evaporite salts.” This means the mining lease covers not just salt but potentially lithium, boron, bromine, iodine and other valuable chemicals that may become economically recoverable. The royalty on salt is fixed (subject to escalation) but the royalty on other evaporites is at rates prescribed under the Mining Act, which can change. The Joint Venturers must also comply with the Mining Act’s reporting requirements for those other evaporites. The State’s covenant not to impose discriminatory taxes (clause 29(b)) does not apply to taxes, rates or charges that are not discriminatory , for example, general taxes applying to all industries are not prohibited. The rating provision (clause 29(c)) has an exception for residential parts and for commercial undertakings not directly related to salt production, so the local government can levy improved value rates on, say, a hotel or shop operated at the townsite. The assignment right to an associated company is “as of right” but the Joint Venturers remain jointly and severally liable for all obligations unless the Minister agrees to release them (clause 30(2)). The arbitration clause excludes discretionary decisions from review (clause 31(2)), so many important ministerial decisions , such as whether a standard is “reasonable” , are not arbitrable. Finally, section 4(d) of the Act provides that by-laws are not subject to section 36 of the Interpretation Act 1918, which would have required them to be published in the Gazette and subject to disallowance; instead, the Act sets its own disallowance mechanism in section 4(d) and (e), with a six-sitting-day timeframe.

Compliance with the Shark Bay Solar Salt Industry Agreement Act 1983 and the scheduled Agreement requires the Joint Venturers to follow a detailed, multi-stage process. First, the Joint Venturers must apply for the mining lease and ancillary tenures within three months of the commencement date, after surrendering the old special lease (clause 5(1)). Within six months of commencement, they must submit detailed environmental proposals to the Minister (clause 7). If they wish to establish a town, they must first give notice and obtain approval to submit detailed proposals, then submit those proposals within six months of that approval (clause 8(1)). The Minister considers proposals and may approve them wholly or in part, or require alterations as a condition precedent (clause 9). If the Joint Venturers consider a condition unreasonable, they may refer it to arbitration within two months (clause 9(4)). Approved proposals must be implemented according to their terms (clause 9(6), clause 11(5)). For ongoing compliance, the Joint Venturers must maintain the solar salt industry and ship at least 200,000 tonnes of salt per annum after 30 June 1985, subject to the four-year averaging test (clause 18(4), clause 27(a)). They must pay royalties quarterly: within 21 days after each quarter day (31 March, 30 June, 30 September, 31 December), they must furnish a return of salt shipped, and pay the royalty within one month of the return due date (clause 22(2)). They must permit the Minister for Mines or nominee to inspect relevant books and records (clause 22(4)). They must submit yearly interim environmental reports and three-yearly detailed reports to the Minister (clause 11(2)), and if the Minister requires additional proposals within two months of a detailed report, they must submit them within two months (clause 11(3)-(4)). For the town (if established), they must provide and maintain housing, services, roads and public buildings as approved, and ensure they are available at fair and reasonable prices (clause 12). They must also make by-laws for the townsite if required, which the Governor may make on their recommendation (clause 12(5)). The Joint Venturers must maintain company roads at their own cost (clause 13(1)), and if their operations require upgrading of public roads or cause excessive damage, they must pay the Commissioner of Main Roads’ reasonable costs (clause 13(4)). They must maintain the airport to a reasonable standard approved by the Minister (clause 19). They must comply with all Western Australian laws (clause 37) and with any environmental requirements under any Act (clause 35). They must use their best endeavours to obtain the best possible salt price (clause 23(3)), and to have salt available for the Australian market at competitive prices (clause 28). They must consult with and keep the State informed confidentially on actions affecting State interests (clause 39). Any proposal to assign rights or appoint an associate must follow clause 30: assignment to an associated company is as of right (subject to a deed of covenant), but assignment to others requires ministerial consent. The Joint Venturers remain liable unless the Minister releases them. If they wish to vary the Agreement, they must execute a written variation agreement under clause 32, which is subject to parliamentary disallowance. They must also ensure that any notice to the State is signed and given by pre-paid registered post to the Minister at his Perth office (clause 38). In case of force majeure, they must promptly notify the other party and minimise the effects (clause 34). Finally, if they decide to cease operations or determine the Agreement, they must follow clause 40 (notice to the State if continuance becomes impracticable or uneconomic) or the default provisions in clause 27, and must then comply with the surrender and removal obligations regarding improvements and machinery. The key to compliance is maintaining meticulous records of production, shipments, royalty calculations, environmental monitoring data, and infrastructure maintenance, and engaging proactively with the Minister on proposals and approvals.