Victorian Consolidated Legislation

Forests (Bowater-Scott Agreement) Act 1986 - SCHEDULE

Section 3 BOWATER-SCOTT AGREEMENT THIS AGREEMENT is made the twenty-third day
of April, One thousand nine hundred and eighty-six. BETWEEN: The Treasurer.
State of Victoria, of the first part AND The Minister for Conservation,
Forests and Lands of the second part AND FORESTS COMMISSION incorporated by
the provisions of the Forests Act 1958 of the State of Victoria of the third
part AND BOWATER-SCOTT LIMITED a Company incorporated in the State of Victoria
and having its registered office at Ailsa Street, Box Hill of the fourth part
WHEREAS: I. The Company has for some time been engaged in large scale
operations in connection with the manufacture of veneer, plywood, sawn timber,
dressed timber and wood pulp at Myrtleford and ancillary processing at other
locations in the State of Victoria. II. The Company desires to be satisfied
that sufficient softwood will be available to it over a period of time which
will enable it to improve commercial viability. III. The Government desires to
provide a means by which the Company can be assured of its long term supply of
softwood and which also ensures that the public of Victoria receives an
adequate return to cover the costs of certain forest production activities.
IV. The supply after 1990 from Government plantations is planned on clear fall
at approximate age 30 years until the year 2010, minimum small end diameter
under bark of 15 cm. After the year 2010, it is expected that rotation age
will gradually move out to 35 year clear fall. V. The Company will use its
best endeavours to source supply of logs from private plantations to
supplement volumes supplied by the Commission under this Agreement in a manner
which is not inconsistent with law or government policies and without
conditions or qualifications or if subject to conditions or qualifications
then satisfactory to the Company. Such supply is projected to begin in year
2010 and rise to approximately 65 000 m3 by year 2020. The Company will take
steps within the next three years to commence programs which will lead to
sourcing at the levels indicated. VI. The parties hereto desire to enter into
this Agreement so that upon an enabling Act being passed by Parliament and
coming into operation the provisions hereinafter appearing shall have full
force and effect and the Forest (Bowater-Scott Agreement) Act 1971 shall be
repealed as to any future operations from the commencement of the Act. NOW IT
IS HEREBY AGREED as follows: PART I-PRELIMINARY 1. In this Agreement unless
inconsistent with the context or subject-matter- "the Act" means the enabling
Act of the Parliament of Victoria to be passed to give effect to this
Agreement; "this Agreement" includes this Agreement as from time to time
amended; "CDOB" means centre diameter over bark; "CDUB" means centre diameter
under bark; "commencement date" means the latest of the date of this
Agreement, the day of Royal Assent to the Act and (if any) the day the Act
comes into operation as provided in the Act; "Commission" means the Forests
Commission its successors or assigns; "Company" means Bowater-Scott Limited
and upon each assignment to any other company in accordance with sub-clause
(1) of clause 4 hereof means that assignee company; "forest officer" has the
same meaning as in the Forests Act 1958; "forest produce" has the same meaning
as in the Forests Act 1958; "the industry" means the manufacture by the
Company of veneer, plywood, sawn timber, dressed timber, wood pulp, round logs
for preservation treatment and paper from softwood; "minimum annual supply"
means that set out in clause 12; "Minister" means Minister for Conservation,
Forests and Lands; "month" means calendar month; "person" and "persons"
include a body corporate and any association of persons whether or not
incorporated as a company or other body corporate; "SEDUB" means small end
diameter under bark; "veneer log" means softwood meeting the specifications as
set out in the first Schedule hereto or such other specification as is
determined from time to time by the Commission after consultation with the
Company; "year" means a period of twelve months commencing on the first day of
July and includes the period between the commencement date and the 30th day of
June 1987; "Benalla Plantations" means the State Softwood Plantations existing
from time to time within the present Benalla Region of the Department of
Conservation, Forests and Lands; "Koetong Plantations" means the State
Softwood Plantations existing from time to time within the present Wodonga
Region of the Department of Conservation, Forests and Lands; "Ovens
Plantations" means the State Softwood Plantations existing from time to time
within the present Wangaratta Region of the Department of Conservation,
Forests and Lands.
	2.     (1)	In this Agreement unless inconsistent with the context or subject-matter references to any Act shall include all amendments and re-enactments thereof for the time being in force and all supplemental legislation for the time being in force whether by regulation rule proclamation or order made or continuing under that Act or any amendment or re-enactment thereof and references to sections in any Act shall be deemed to include corresponding sections in any amending or re-enacting Act.


(2) The headings and sidenotes shall not affect the interpretation of this
Agreement.
	3.     (1)	This Agreement shall not be of any force or effect until the Act has been passed by the Parliament of Victoria and has come into operation and the passing of the Act and its coming into operation are both conditions precedent to this Agreement having any force validity or effect.


(2) Upon and after the commencement date, this Agreement shall supersede all
previous Agreements, licences, and arrangements for the supply of veneer log,
sawlog and pulpwood to the Company as to the supply of such softwood to the
Company from the commencement date but without prejudice to the obligations of
either the Company or the Commission under any previous agreements, licences
or arrangements for the supply of veneer logs, sawlogs or pulpwood to the
Company which have arisen prior to the commencement date. All representations
and warranties inducing the Company to enter into this Agreement shall merge
into this Agreement.
	4.     (1)	The Company shall be at liberty at any time to assign its rights under this Agreement-


   (a)  to any company with which pursuant to the Companies (Victoria) Code it
        is deemed to be related but notwithstanding any such assignment
        Bowater-Scott Limited shall remain responsible to the Commission for
        the performance of all the obligations and conditions imposed upon the
        Company by this Agreement; or

   (b)  with the prior consent of the Commission to any company, such consent
        not to be unreasonably withheld, and thereupon Bowater-Scott Limited
        (whether or not there has been any previous assignment) shall be
        released totally and forever from all obligations and conditions
        imposed on the Company by this Agreement which are not up to the time
        of the assignment required to have been fulfilled.

(2) Upon each such assignment the assignee company shall by virtue of the Act
be subject to all the obligations and conditions imposed upon the Company by
this Agreement so far as they remain in force and are capable of taking effect
and, save to the extent the contrary may be agreed, which are not required to
have been performed by the Company prior to such assignment. PART II-OPERATION
OF INDUSTRY Division A-Duration of Agreement 5. This Agreement shall remain in
force until the 30th day of June, 2026 or until sooner determination in
accordance with the provisions hereof. 6. The expiration or determination of
this Agreement shall not affect the enforcement of any right obligation or
liability theretofore acquired accrued or incurred. Division B-Softwood Rights
7. Nothing in the Agreement shall affect the rights powers and privileges
already acquired by any person under the Forests Act 1958 or any other Act. 8.
Subject to compliance by the Commission with its obligations under clauses
11(1) and 12 hereof to make available to the Company certain supply of
softwood nothing in this Agreement shall restrict the Commission's rights
pursuant to the Forests Act 1958 to sell or grant licences and permits to
obtain forest produce not detrimental to the Company's rights under this
Agreement.
	9.     (1)	Forthwith in respect of the year 1986-87 and not later than the 31st day of December 1986 in respect of the year 
1987-88 and not later than the 31st day of December in each year thereafter
the Commission in consultation with the Company shall draw up and deliver to
the company a plan of utilization for the supply of softwood for the following
year and a provisional plan for supply of softwood for the further four
following years.

(2) The Company within 60 days after delivery of the plan of utilization under
clause 9(1) may at its discretion request modification of the plan of
utilization with respect to supply for the immediately following year and
provided that such proposed modification can be shown to be to the commercial
benefit of the Company and the Commission and consistent with the principles
of proper forest management the Commission will not unreasonably refuse such
modification and in the event that the Company considers the Commission has
unreasonably refused to consent to such modification the modification shall be
referred to arbitration in accordance with clause 28 hereof.

(3) Subject to the provisions of clauses 12 and 13 hereof, the plan of
utilization shall set out the locations from which softwood may be obtained
during the relevant period and shall specify the specific location area in
hectares and the respective species, quantities, qualities and dimensions of
softwood including the volume of sawlog and veneer log of each of the size and
classes referred to in clause 17(2) hereof which the Commission estimates will
be obtainable in each area, as well as the location and standard of road to be
provided by the Commission and/or with the consent of the Company by the
Company for each location.

(4) The Commission and the Company may during the currency of any plan of
utilization agree to a modification of the plan.

(5) The Company shall conform with each plan or modified plan of utilization.
	10.     (1)	The Company shall comply with the provisions of the Forests Act 1958 and with all regulations for the time being in force under the Forests Act as if the rights granted by this Agreement had been granted by licence.


(2) Unless inconsistent with specific provisions of this Agreement, the
Commission may impose additional covenants terms and conditions (in this
clause called "Conditions") as if this Agreement were a licence issued under
section 52 of the Forests Act 1958. Initially, such Conditions shall be those
set out in the Second Schedule hereto. Within one month of the commencement
date and within thirty days prior to the first day of July in each year of
this Agreement the Commission may deliver to the Company in written form
changed (including additional) Conditions as if on each first day of July the
Company was being granted a further or renewed licence under the said section
52 but such changed Conditions shall be no more onerous on the Company than
those the Commission applies generally throughout the State of
Victoria in corresponding circumstances of forest management to those being so
imposed. Any conditions (whether initially or from time to time changed) shall
remain imposed until replaced by some changed Conditions or further changed
Conditions.
	11.     (1)	Subject to the provisions of this Agreement, the Company shall have the right to cut and remove softwood by its servants agents or contractors as provided in clause 12 hereof.


(2) Subject to the provisions of clauses 12 and 13 hereof, the Company may be
required to obtain softwood suitable from which to satisfy the provisions of
this Agreement from-

   (a)  standing trees indicated by a forest officer;

   (b)  softwood produced in conjunction with a logging operation conducted by
        a person or persons other than the Company; or

   (c)  softwood felled or felled and removed by or on behalf of the
        Commission.

(3) The Commission may in its discretion if so requested by the Company modify
the Company's obligation to take softwood felled or felled and removed by or
on behalf of the Commission which has been included in the plan of utilization
for that year but any of such softwood not taken by the Company shall for the
purposes of clause 12 hereof be softwood made available to the Company by the
Commission.
	12.     (1)	Subject to the provisions of clauses 24 and 26 hereof and to the payment of the licence fee as provided in clause 17 hereof and not taking into account any softwood not accepted according to the provisions of clause 13 hereof the Commission, subject always to the existing entitlement to another person of about 20 000 m3 of softwood sawlogs in the Ovens Plantations, shall make available to the Company from the locations set out below a minimum annual supply of softwood with Radiata Pine as the major species but able to include up to 13 500 m3 of Corsican Pine in any one year and up to 5000 m3 of Douglas Fir in any one year which unless increased pursuant to the provisions of sub-clauses (3) and (4) hereof shall be-


   (a)  sawlogs and veneer logs-

   (i)  for the period year 1986-87 to year 1989-90- 174 000 m3 per annum from
        the Ovens Plantations and to the extent Ovens Plantations cannot
        supply from the Koetong Plantations, and 16 000 m3 per annum from the
        Benalla Plantations;

   (ii) for the period year 1990-91 to year 1994-95- 235 000 m3 per annum from
        the Ovens Plantations and to the extent Ovens Plantations cannot
        supply from the Koetong Plantations; and 25 000 m3 per annum from the
        Benalla Plantations;

   (iii) for the period year 1995-96 to year 1999-2000- 310 000 m3 per annum
        from the Ovens Plantations and to the extent Ovens Plantations cannot
        supply from the Koetong Plantations;

   (iv) for the period year 2000-01 to year 2004-05- 360 000 m3 per annum from
        the Ovens Plantations and to the extent Ovens Plantations cannot
        supply from the Koetong Plantations;

   (v)  for the period year 2005-06 to year 2025-26- 400 000 m3 per annum from
        the Ovens Plantations and to the extent Ovens Plantations cannot
        supply from the Koetong Plantations: PROVIDED THAT the Commission
        gives to the Company the right of first refusal on all volumes of
        sawlog and veneer log available from the Ovens Plantations and subject
        always to the existing entitlement hereinbefore referred to-

   (b)  pulpwood from the Ovens Plantations-

   (i)  for the year 1986-87-21 500 m3;

   (ii) for the year 1987-88-18 000 m3;

   (iii) for the year 1988-89-14 000 m3;

   (iv) for the year 1989-90-10 000 m3;

   (v)  for the year 1990-91-6000 m3;

   (vi) for the year 1991-92-2000 m3;

   (vii) for the years 1992-93 to 2025-26-Nil.

(2) Should the Company take less than the minimum annual supply of sawlog and
veneer log or of pulpwood in any one year, it has the right to carry forward
the deficiency of that type quantity and quality to any of the five years next
following so that such as is carried forward will be used in addition to the
minimum annual supply in the year or years of utilization.

(3) The Commission may in its discretion offer the Company in any year a
quantity of softwood additional to the minimum annual supply.

(4) The Commission and the Company may from time to time agree that in
addition to any other softwood agreed herein to be made available by the
Commission and upon such terms and conditions and at such royalty as may be
offered the Company shall have the right to cut and remove by its servants
agents or contractors softwood in round logs for preservation treatment. The
Company may from time to time seek from the Commission the right to cut and
remove by its servants agents and contractors softwood in round logs for
preservation treatment and upon any such request being made the Commission
shall use its reasonable endeavours to reach an agreement with the Company to
meet that request.

(5) The Commission may by written agreement with the Company increase for any
period commencing from the first day of July next following the date of such
agreement the minimum annual supply referred to in sub-clause (1) hereof for
that period and any minimum annual supply so agreed upon may likewise be
further increased.

(6) The Commission shall ensure that the softwood sawlog or veneer log equal
to and greater than 20 cm CDUB of each standard and grade made available to
the Company is as good in species, size, and quality in any year as that which
is made available by the Commission to any other person or persons in that
year from the Benalla Plantations, the Koetong Plantations and the Ovens
Plantations.
	13.     (1)	The Company shall not be bound to accept-


   (a)  any pulpwood which is not sound, clean and free from rot, doze, blue
        stain and charcoal;

   (b)  any sawlog or veneer log which not being sound, clean and free from
        rot, doze, blue stain, hail damage and the result of Sirex wasp
        infestation is beyond the tolerances provided in the Code of Practice
        Measuring and Allowing for Defect Softwood Sawlogs (Metric Units), a
        copy of which is set out as the Third Schedule hereto, or such other
        code as from time to time may be adopted in lieu thereof but should
        any sawlog or veneer log be accepted by the Company which is not,
        sound, clean and free from rot, doze, blue stain, hail damage and the
        results of Sirex wasp infestation then that sawlog and veneer log
        shall only be accepted when measured and allowed for defect in
        accordance with that code of practice;

   (c)  any sawlog or veneer log which is below the following specification-

   (i)  15 cm SEDUB;

   (ii) for size classes 3 and 4-log length of 3·0 m and sweep equal to or
        less than 20% of CDOB for a 3·0 m log length;

   (iii) for size classes 1 and 2-log length of 3·0 m and sweep equal to or
        less than 10% of CDOB for a 3·0 m log length.

(2) Unless inconsistent with the preceding paragraphs (b) and (c) the defect
allowance and produce specifications which apply generally to the clients,
that is to say the various purchasers and/or licensees and/or persons bound by
agreement to the Commission, shall apply with respect to this Agreement.

(3) During the years 1986-87 to 1989-90, the annual volume of sawlog and
veneer log equal to or greater than 20 cm CDUB shall be at least 160 000 m3,
and of the annual volume less than 20 cm CDUB, the Commission shall endeavour
to make supply available such that-

   (i)  at least 50% of the volume shall have a sweep of equal to or less than
        5% of CDUB for a 3·0 m log length;

   (ii) at least 50% of the volume shall be between 18·0 cm CDUB and 19·9 cm
        CDUB; and

   (iii) knot size and frequency does not render the logs unsuitable for the
        manufacture of lining boards and similar material- and if the Company
        declines from time to time in any one year to take any sawlog and/or
        veneer log below 20 cm CDUB then so declining that sawlog and/or
        veneer log shall not prejudice the Company's right to continue to take
        sawlog and/or veneer log above 20 cm CDUB in that year and if the
        Company declines from time to time in any one year to take any sawlog
        and/or veneer log above 20 cm CDUB and then so declining that sawlog
        and/or veneer log shall not prejudice the Company's right to continue
        to take sawlog and/or veneer log below 20 cm CDUB in that year.

(4) During the years 1990-91 to 2025-26, the annual volume of sawlog and
veneer log equal to or greater than 20 cm CDUB shall be at least 90 per cent
of the minimum annual supply of sawlog and veneer log as provided for in
clause 12 hereof and of the remaining annual volume less than 20 cm CDUB, the
Commission shall endeavour to make supply available such that-

   (i)  at least 50% of the volume shall have a sweep of equal to or less than
        5% of CDUB for a 3·0 m log length;

   (ii) at least 50% of the volume shall be between 18·0 cm CDUB and 19·9 cm
        CDUB; and

   (iii) knot size and frequency does not render the logs unsuitable for the
        manufacture of lining boards and similar material- and if the Company
        declines from time to time in any year to take any sawlog and/or
        veneer log below 20 cm CDUB then so declining that sawlog and/or
        veneer log shall not prejudice the Company's right to continue to take
        sawlog and/or veneer log above 20 cm CDUB in that year and if the
        Company declines from time to time in any one year to take any sawlog
        and/or veneer log above 20 cm CDUB and then so declining that sawlog
        and/or veneer log shall not prejudice the Company's right to continue
        to take sawlog and/or veneer log below 20 cm CDUB in that year.
	14.     (1)	For all softwood obtained by it under this Agreement the Company shall pay-


   (a)  as to softwood which the Company by its servants agents or contractors
        removes or fells and removes the royalty payable from time to time
        under this Agreement; and

   (b)  as to softwood either felled or felled and removed by or on behalf of
        the Commission the royalty as aforesaid and a charge to be agreed upon
        from time to time between the Commission and the Company for-

   (i)  the cost to the Commission of felling or felling and removal of
        softwood in or from the particular area; and

   (ii) the overhead expenses of the Commission in connection therewith.

(2) Failing agreement within fourteen days on the charge referred to in
paragraph (b) of sub-clause (1) hereof subject to the arbitration provisions
in clause 28 hereof the charge shall be determined by the Commission but so
that the charge for the cost of felling or felling and removal of softwood in
or from any area shall not exceed the actual cost to the Company of or the
payment made by the Company to contractors for felling or felling and removal
(as the case may be) of softwood at that time in similar form in or from areas
which are similar with respect to yield of softwood physical circumstances of
extraction and situation in regard to means of transport.
	15.     (1)	Subject to the provisions of clauses 26 and 27 hereof the Company shall be bound in each year in which the minimum annual supply of softwood to which it is entitled in that year is available to it either-


   (a)  to take-

   (i)  not less than 90% of the minimum annual supply of pulpwood; and

   (ii) not less than 90% of sawlog and veneer log equal to or greater than 20
        cm CDUB required to be made available in the plan of utilization; or

   (b)  if it takes less than the quantities set out in the preceding
        paragraph (a) hereof to pay royalty to the Commission on the
        deficiency at a rate equal to the royalty rate payable in that year
        under clauses 18 or 19 (as the case may be) hereof.

(2) If the Company during any of the five years next following any year in
which there is a deficiency obtains a quantity of softwood in excess of the
minimum annual supply the royalty payable on such excess shall be reduced by
the amount of royalty paid in respect of the deficiency and interest accrued
thereon. Interest shall be calculated from the date of payment of the royalty
paid on such excess with daily rests until the date of utilization at a rate
equal to 60% of the 90 day bank bill rate from time to time adopted from date
of payment until the relevant excess has been utilized by the State Bank of
Victoria in Melbourne or failing that by Westpac Banking Corporation in
Melbourne and failing both by arbitration as set out in clause 28 hereof. 16.
The following provisions shall apply with respect to royalty payable under
this Agreement:

   (a)  Royalty shall be payable at such times and in such manner as the
        Commission from time to time determines after the amounts have been
        ascertained by weighing and/or measuring in accordance with this
        Agreement.

   (b)  Without prejudice to the obligations of the Company under clause 15
        hereof if any royalty due by the Company remains unpaid for sixty days
        after the last day of the month following the date of supply the
        Commission may without limiting the obligations of the Company under
        clause 15 hereof by notice in writing to the Company suspend its right
        to obtain softwood under this Agreement until payment is made.

   (c)  If the Company disputes the amount of any payment demanded by the
        Commission it shall make the payment under protest and thereafter
        shall be entitled to take proceedings for recovery of, and recover,
        any amount in excess of the amount it was liable to pay, and interest
        thereon at the rate from time to time provided in the
        Penalty Interest Rates Act 1983.
	17.     (1)	In addition to royalty payable in accordance with clause 14 hereof an annual licence fee shall be paid by the Company to the Commission with respect to the acquisition by the Company of the right to cut and remove sawlog and veneer log as provided in clause 11(1) hereof.


(2) The annual licence fee shall relate to volumes of sawlog and veneer log
size classes 3 and 4, and size class 2 greater than 20 cm CDUB required to be
made available in the plan of utilization referred to in clause 9 hereof.

(3) The annual licence fee will be due and payable first on the commencement
date as provided in clause 3 hereof or the 30th day of June 1986 (whichever is
the later) and in each year thereafter on the 30th day of June with respect to
softwood required to be made available from within the minimum annual supply
in the following year, but shall not apply to softwood made available under
the provisions of clauses 12(2), 12(3), 12(4) and 25 hereof and softwood not
taken under the provisions of clause 13(1) hereof.

(4) The annual licence fee shall be at the rate of $1 per m3 for the period
between the commencement date of this Agreement and the 30th day of June 1987
("the base fee") and for each of the years commencing on the 1st day of July
1987, 1988, 1989 and 1990, the base fee will be adjusted in the same
percentage rate as the rate of change in the royalty rate in the year
preceding the 30th day of June 1987 in the case of any adjustment to be made
for the year commencing the 1st day of July 1987 and in respect of the
remaining years in the same percentage rate as the rate of change in the
royalty rate during the preceding twelve months.

(5) The amount of the annual licence fee will be reviewed between the 1st day
of April 1991 and the 30th day of June 1991 and thereafter between the 1st day
of April and the 30th day of June at five yearly intervals from the 1st day of
April 1991 and so that-

   (a)  a review is to be conducted by the Commission and the Company jointly;

   (b)  the review will establish if a new base fee shall apply and if so at
        what rate, for the succeeding five years;

   (c)  the review will take account of-

   (i)  the ongoing ability of the Company to maintain its competitive
        position in domestic and international sawn timber and plywood and
        related products markets taking into account circumstances not of its
        own making;

   (ii) changes in the average domestic market price of sawn timber and
        plywood relative to general cost increases in the community as
        measured by the consumer price index;

   (iii) changes in the landed price of imported sawn timber and plywood and
        related products, relative to economy wide indices of capital and
        labour costs;

   (d)  the review will last no longer than the 30th day of June in the year
        in which it commenced. In the event that agreement is not reached
        between the Commission and the Company, the matter will be referred to
        arbitration as provided by clause 28 hereof;

   (e)  any new base fee so determined will be adjusted in each of the
        subsequent four years, similarly as set out in sub-clause (4) hereof.

(6) In the event of any difference that can touch upon the calculation of the
annual licence fee which is referred to arbitration the annual licence fee
shall be paid on the 30th day of June as if no such difference had existed;
but if the resolution of the difference (whether by agreement between the
parties or arbitration) causes a different annual licence fee to become
applicable the Company shall pay to the Commission or the Commission shall pay
to the Company forthwith an amount being the difference between the amount of
the annual licence fee so paid and the amount which would have been paid had
the resolution of the difference been achieved on that 30th day of June.
	18.     (1)	During the period between the commencement date pursuant to clause 3 hereof and the 30th day of June 1989 the royalty payable for pulpwood shall be $13.20 per m3.


(2) The royalty payable for sawlog and veneer log shall be the rate as
determined in accordance with the Royalty Equation System and consistent with
general sawlog and veneer log pricing from public forests in the State of
Victoria.
	19.     (1)	During each successive period of three years or part thereof, from the 1st day of July 1989 the royalty payable for pulpwood shall be at the rate agreed upon by the Commission and the Company or failing agreement not later than fourteen days after publication by the Australian Bureau of Statistics of the figures referred to in paragraphs (a) and (b) hereof at the rate calculated by varying the rate payable during the preceding period of three years in the same proportion as the average of the proportional variation in the figures at the beginning and the end of that period in regard to-


   (a)  the Average Weekly Earnings All Males, Weekly Total Earnings Victoria;
        and

   (b)  the Price Index of Materials used in building other than house
        building Weighted Average of six State Capital Cities, Wood and Wood
        Products.

(2) If the Australian Bureau of Statistics ceases to publish the figures
referred to in either paragraph (a) or (b) of sub-clause (1) hereof a new
method of calculating any variation in the royalty rate shall be agreed upon
by the Commission and the Company or failing agreement within thirty days
shall be determined by the Commission subject to the arbitration provisions in
clause 28 hereof.

(3) If any variation in the royalty rate is not determined prior to the
commencement of any new three yearly period the Company shall continue to pay
royalty at the rate payable during the preceding period and as soon as the new
rate has been determined an adjustment shall be made retrospectively to the
commencement of the new period. 20. The Company shall not construct within
State forest any road track or passage or any chute without the prior written
consent of a forest officer and shall not construct within State forest any
tramway flume or building or erect any haulage or conversion unit without the
prior written consent of the Commission, such consent in each case not to be
unreasonably withheld.
	21.     (1)	The quantity of softwood upon which royalty is payable under this Agreement shall be determined in such manner (allowance being made for bark and defect) and at such place as may be agreed upon by the Commission and the Company or failing agreement within thirty days as the Commission may direct subject to the arbitration provisions in clause 28 hereof.


(2) If the royalty so payable is to be determined by mass-

   (a)  the Company shall provide at its plant a weighbridge of a pattern
        which meets the requirements of the Weights and Measures Act 1958 and
        shall while this Agreement remains in force have the weighbridge
        maintained and periodically verified and stamped in accordance with
        the provisions of that Act;

   (b)  at all times while the weighbridge is in accurate working order the
        quantity of softwood upon which royalty is payable under this
        Agreement shall be determined by weighing it on the weighbridge; and

   (c)  at all times while the weighbridge is not in accurate working order
        the quantity of softwood upon which royalty is payable under this
        Agreement shall be determined in such manner as may be agreed upon by
        the Commission and the Company or failing agreement within fourteen
        days as the Commission may reasonably direct subject to the
        arbitration provisions in clause 28 hereof. 22. The Commission may
        from time to time give to the Company written notice of reasonable
        conditions not inconsistent with the provisions and intent of this
        Agreement which conditions are, having regard to the overall
        provisions of this Agreement, of a minor nature and which further are
        of a temporary or passing nature and which shall apply in the areas
        from which the Company is obtaining softwood under this Agreement. The
        Company shall comply with the said conditions.
	23.     (1)	The Company shall inform the Commission in writing once in each year of the names of its servants agents and contractors who are engaged in obtaining softwood under this Agreement.


(2) The Company shall supply to each such person for production when required
by a forest officer evidence in a form satisfactory to the Commission that
such person is engaged in obtaining softwood under this Agreement and the
Company shall forthwith inform the Commission in writing whenever any such
person ceases to be so engaged.
	(3)     (a)	The Company shall include in every contract by it with a contractor for obtaining softwood under this Agreement provisions requiring the contractor to comply with the Forests Act 1958 the regulations made under the Act the conditions referred to in clause 22 hereof which are applicable to that contractor and the conditions referred to in clause 10(2) hereof which are applicable to that contractor.


   (b)  The Company shall upon making any such contract forthwith give to the
        Commission written notice of the contract specifying the name of the
        contractor, the duration of the contract and the quantity of and
        location from which softwood is to be obtained thereunder.
	24.     (1)	If any of the softwood plantations upon which supply is dependent are damaged or destroyed by fire disease or other similar cause beyond the control of the Commission to such extent that it is impracticable for the Commission to comply with the provisions of clause 12 hereof or if by reason of any other cause beyond the control of the Commission it is prevented from complying with those provisions-


   (a)  the Company shall have no claim against the Commission for the
        non-fulfilment of its obligations under those provisions as far as
        non-fulfilment is due to any such cause; and

   (b)  the Commission shall use its best endeavours to provide a supply of
        softwood to the Company which is economically viable to the Company
        and having regard on the one hand to the obligation of the Commission
        under this Agreement to make available to the Company certain supplies
        of sawlog and of veneer log and of pulpwood and on the other hand the
        duty of the Commission to protect State forests and control and manage
        State forests throughout the State of Victoria in a manner which is
        not unduly damaging financially to the Commission or to the revenues
        of the State of Victoria. 25. If, in the opinion of the Commission,
        extensive damage occurs to State forest softwood plantations within
        250 kilometres road distance from the Company's mill at Myrtleford,
        softwood as sawlog and/or veneer log salvaged from these plantations
        may be offered to the Company in addition to the minimum annual supply
        at a royalty after making allowance as determined by the Commission
        for additional harvesting, freight and manufacturing costs necessarily
        incurred.

26. If-

   (a)  any of the softwood plantations upon which supply is dependent are
        damaged or destroyed by fire disease or other cause to such an extent
        that it is impracticable for the Commission to comply with the
        provisions of clause 12 hereof or if by reason of any other cause
        beyond the control of the Commission it is prevented from complying
        with those provisions;

   (b)  the Company's plant or any works used by it for the purpose of the
        industry are damaged or destroyed by fire or other calamity in such
        circumstances as the Company is not reasonably (as to amount and risk)
        indemnified under a policy of insurance (which is not avoided by the
        insurer) having regard to the insurance cover existing at the time of
        entering into this Agreement;

   (c)  by reason of war riot civil commotion strike lockout or action in the
        nature of a strike or lockout ban or limitation on work or restraint
        of labour act or restraint of any Government or semi-government or
        other public or statutory authority (including any amendment to
        legislation currently in force or to the Act which adversely affects
        the Company's position under this Agreement) or any other cause
        substantially beyond the control of the Company the Company is
        substantially impeded from obtaining softwood or carrying on the
        industry; or

   (d)  by reason of any change in the circumstances which exist at the time
        of entry into this Agreement, which are substantially beyond the
        control of the Company, the carrying on of the industry or the
        continued performance by the Company of its obligations under clauses
        14, 15 and 17 hereof become commercially impracticable- then in any of
        those events-

   (i)  the Company may apply to the Commission for termination, suspension or
        a reasonable modification of the extent or operation of its
        obligations under this Agreement or for an extension of time for the
        performance or observance thereof;

   (ii) the Commission upon any such application by the Company shall decide
        to grant or refuse termination, a suspension of the said obligations
        or a reasonable modification of their extent or operation or an
        extension of time for their performance or observance;

   (iii) if the Company is dissatisfied with the decision of the Commission
        upon any such application-
A. arising out of the provisions of the preceding paragraphs (a) and/or (b)
and/or (c); or
B. with the delay (not being less than seven days) in making the decision
arising out of the provisions of the preceding paragraphs (a) and/or (b)
and/or (c); or
C. with the delay (not being less than thirty days) in making the decision
arising out of the provisions of the preceding paragraph (d)- the matter shall
if the Company so elects be determined by arbitration and the arbitrators may
determine the matter with reference to considerations of general justice and
fairness;

   (iv) if the Company is dissatisfied with the decision of the Commission
        upon any such application arising out of the provision of the
        preceding paragraph (d) the Company shall suggest to the Commission
        that the Company and the Commission should negotiate in good faith to
        reach a decision acceptable to the Company and the Commission but if
        the Company and the Commission after negotiating in good faith cannot
        within a reasonable time (and in any event not less than fifteen
        weeks) reach a decision acceptable to the Company and the Commission
        and if it is then after the 1st day of July 1991 the matter shall if
        the Company so elects be determined by arbitration and the arbitrators
        may determine the matter with reference to considerations of general
        justice and fairness. 27. If pursuant to an arbitration founded on the
        provisions of clause 26(d) hereof the Company has been awarded a
        suspension or a modification of this Agreement and if the carrying on
        of the industry or the continued performance by the Company of its
        obligations under clauses 14, 15 and 17 hereof are considered by the
        Commission to have returned to commercial practicability- then-

   (i)  the Commission may apply to the Company for a further reasonable
        modification of the extent or operation of the Company's obligations
        under this Agreement but not so as to exceed the obligations of the
        Company initially imposed by this Agreement;

   (ii) the Company upon any such application by the Commission shall decide
        to grant or refuse a further reasonable modification of this extent;

   (iii) if the Commission is dissatisfied with the delay (not being less than
        thirty days) in making the decision the matter shall if the Commission
        so elects be determined by arbitration and the arbitrators may
        determine the matter with reference to considerations of general
        justice and fairness;

   (iv) if the Commission is dissatisfied with the decision of the Company
        upon any such application the Commission shall suggest to the Company
        that the Commission and the Company should negotiate in good faith to
        reach a decision acceptable to the Commission and the Company but if
        the Commission and the Company after negotiating in good faith cannot
        within a reasonable time (and in any event not less than fifteen
        weeks) reach a decision acceptable to the Commission and the Company
        the matter shall if the Commission so elects be determined by
        arbitration and the arbitrators may determine the matter with
        reference to considerations of general justice and fairness but the
        arbitrators shall not make any award by which the obligations of the
        Company shall exceed those obligations initially imposed by this
        Agreement nor any award which has an effect prior to the date of the
        Commission's application made under the preceding paragraph (i) which
        is referred to arbitration. 28. Wherever it is provided that any
        matter shall or may be determined by arbitration-

   (a)  the matter shall be referred to two arbitrators one to be appointed by
        the Company and one by the Commission;

   (b)  the provisions of the Commercial Arbitration Act 1984 shall apply to
        the reference;

   (c)  each party may be represented in the arbitration process by Counsel
        and Solicitor; and

   (d)  the arbitrators or umpire or some other person appointed on their
        behalf may investigate the Company's or Commission's affairs and
        accounts so far as may be necessary to assist them to determine any
        matter referred to them and the Company and the Commission each shall
        give them full access to all accounts and papers necessary for that
        purpose and shall afford them full information and assistance having
        due regard to confidential nature of investigation.
	29.     (1)	If the Company contravenes or fails to comply with the provisions of this Agreement in circumstances where the failure represents a breach capable of remedy, the following shall apply:


   (a)  The Commission shall give notice in writing in a prompt manner (but
        not more than fourteen days) after either the Regional Manager of the
        Department of Conservation, Forests and Lands or an Assistant Director
        of the said Department has become aware of the same to the Company (by
        handing the same personally to a Director or the Secretary of the
        Company) specifying with specific detail the contravention or failure
        complained of together with details of the date and form in which the
        Regional Manager or the Assistant Director (as the case may be) first
        became aware of the same;

   (b)  If the Company fails to remedy the contravention or fails to cease the
        contravention or failure (as the case may be) within ninety days of
        receipt of the notice referred to in the preceding paragraph (a), then
        with the approval of the Minister the Commission by notice in writing
        under its common seal or over the hand of its Secretary may determine
        this Agreement.

(2) If the Company contravenes or fails to comply with the provisions of this
Agreement in circumstances where such breach is not capable of being remedied,
the following shall apply:

   (a)  The Commission shall give notice in writing in a prompt manner (but
        not more than fourteen days) after either the Regional Manager of the
        Department of Conservation, Forests and Lands or an Assistant Director
        of the said Department has become aware of the same to the Company (by
        handing the same personally to a Director or the Secretary of the
        Company) specifying with specific detail the contravention or failure
        complained of together with details of the date and form in which the
        Regional Manager or the Assistant Director (as the case may be) first
        became aware of the same and requiring it forthwith to desist from
        repeating the contravention or failure;

   (b)  If within a period of ninety days from the service of the aforesaid
        notice the Company has repeated the breach complained of, then with
        the approval of the Minister the Commission by notice in writing under
        its common seal or over the hand of its Secretary may determine this
        Agreement.

(3) If the Company-

   (a)  has had a receiver or a receiver and manager appointed over its
        property who has been in office for not less than sixty days; or

   (b)  enters into any scheme or arrangement for the benefit of its creditors
        generally which has not been totally fulfilled within sixty days-
        then- with the approval of the Minister the Commission by notice in
        writing under its common seal or over the hand of its Secretary may
        determine this Agreement.

(4) Notwithstanding the provisions of the preceding clauses 29(1), (2) and
(3), if the Company enters into liquidation (other than a voluntary
liquidation for the purposes of reconstruction) with the approval of the
Minister the Commission by notice in writing under its Common Seal or over the
hand of its Secretary may determine this Agreement.
	30.     (1)	The Commission and the Company may from time to time amend this Agreement by such additions deletions and variations of matters of detail as may be necessary or desirable to facilitate the carrying on of the industry.


(2) The Commission and the Company may with the approval of the Minister
determine this Agreement upon such terms as they deem fit. 31. The Company
shall not be required to obtain any lease licence permit or authority beyond
this Agreement to cut and remove softwood as provided in clause 12 hereof.
	32.     (1)	In the last three years of this Agreement the Commission shall if the Company seeks a further Agreement to assure to it supply of softwood for the continuance and/or expansion of the industry investigate the development of the industry and if satisfied that the Company needs to have supplies of softwood assured to it by a further Agreement enter into negotiations with the Company for that purpose.


(2) If a further Agreement has been agreed upon and executed the Commission
shall (if necessary) recommend to the Minister that a Bill be introduced into
the Parliament of Victoria as soon as possible to ratify validate approve and
otherwise give effect to it. 33. Nothing in the Agreement shall be construed
or interpreted to require the Company to alter its membership. 34. The
Minister sanctions this Agreement. IN WITNESS WHEREOF the parties hereto have
executed as a deed this Agreement the day and year first before written.
SIGNED SEALED AND DELIVERED by the Honourable. The Treasurer in the presence
of: J. KIDDLE ü ï ý ï þ

R. A. JOLLY (L.S.)



SIGNED SEALED AND DELIVERED by the Honourable. The Minister for Conservation,
Forests and Landsin the presence of: J. KIDDLE ü ï î ì ï þ

JOAN E. KIRNER (L.S.)



THE COMMON SEAL of FORESTS COMMISSION was hereunto affixed in the presence of:
G. GRIFFIN, Commissioner R. P. SMITH, Commissioner ü ý þ

(L.S.)



THE COMMON SEAL of BOWATER- SCOTT LIMITED was hereto affixed by authority of
the Director in the presence of: L. A. WILSON, Director B. J. MORLEY,
Secretary ü î ì þ

(L.S.) _______________