Victorian Consolidated Legislation

Forests (Wood Pulp Agreements) Act 1974 - SCHEDULE 2

SOFTWOOD TIMBER AGREEMENT THIS AGREEMENT is made the seventeenth day of
December One thousand nine hundred and seventy-three Between FORESTS
COMMISSION incorporated by the provisions of the Forests Act 1958 of the State
of Victoria of the one part and AUSTRALIAN PAPER MANUFACTURERS LIMITED a
company incorporated in the State of New South Wales whose head office is
situate at South Gate, South Melbourne, in the State of Victoria of the other
part- WHEREAS- Recitals
I. The Company has established in the said State within the area of supply as
hereinafter defined the industry of manufacturing wood pulp from softwood
timber obtained from plantations controlled by the Commission.
II. The Company desires to be satisfied that sufficient softwood timber will
be made available from the area of supply to enable it to carry on the
industry. III. The Commission has conifer plantations in the area of supply
which it is expanding at the rate of 700 hectares annually and the Commission
desires to be satisfied that it will have a market for softwood timber
produced in those plantations. IV. The parties hereto desire to enter into
this Agreement so that upon its ratification validation and approval by
Parliament the provisions hereinafter appearing shall have full force and
effect. NOW IT IS HEREBY AGREED as follows: PART I-PRELIMINARY
1. Definitions In this Agreement unless inconsistent with the context or
subject-matter- "the Act" means the Act of the Parliament of Victoria to be
passed to ratify validate approve and otherwise give effect to this Agreement;
"this Agreement" includes this Agreement as from time to time amended; "area
of supply" means the area within the boundaries of the Erica Neerim Mirboo and
Yarram forest districts surrounded by a purple verge on the map annexed
hereto; "Commission" means the Forests Commission and if that Commission
ceases to exist means the body corporate or persons for the time being charged
with the duties or substantially the same duties now performed by the Forests
Commission; "Company" means Australian Paper Manufacturers 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
within the area of supply of wood pulp from softwood timber; "minimum annual
supply" means the annual quantity which the Commission is to make available
from time to time under clause 14 hereof; "month" means calendar month;
"softwood timber" means timber free from bark of the species Pinus radiata
Pinus nigra Pinus ponderosa Pseudotsuga menziesii and other coniferous species
suitable for the manufacture of wood pulp but does not include any timber
which the Commission requires for sale as logs poles or fencing timber; and
"year" means a period of twelve months commencing on the first day of July.
2. Interpretation

(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.

(2) The headings and sidenotes shall not affect the interpretation of this
Agreement.
3. Agreement to be ratified by Act of Parliament This Agreement shall not be
of any force or effect until it has been ratified validated approved and
otherwise given effect by an Act of the Parliament of Victoria.
4. Operation of industry by assignee company

(1) The Company shall be at liberty at any time with the prior written consent
of the Commission to assign its rights under this Agreement to any other
company.

(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.

(3) Notwithstanding any such assignment Australian Paper Manufacturers Limited
shall remain responsible to the Commission for the performance of all the
obligations and conditions imposed upon that Company by this Agreement.
5. Commission to recognise that business is competitive, &c. In using its
powers and applying its discretions whether under this Agreement or the Act or
the Forests Act 1958 the Commission shall give full recognition to the fact
that the Company is engaged in a competitive business and so far as the
interests of forest management allow the Commission (which shall for the
purposes of this Agreement be the sole judge of what is proper forest
management) shall so act in every reasonable way as to enable the Company to
carry on the industry in an economic manner. PART II-OPERATION OF INDUSTRY
Division A-Duration of Agreement
6. To cease 30 years from 1st July 1974 or upon sooner determination This
Agreement shall remain in force for a period of thirty years from the first
day of July 1974 or until sooner determination in accordance with the
provisions hereof.

7. Saver of rights 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-Timber Rights
8. Rights of lessees &c. Nothing in this Agreement shall affect the rights
powers and privileges acquired by any person (whether before or after the
commencement of the Act) under the Forests Act 1958 or any other Act.
9. Sale of forest produce or grant of licences not restricted Subject to the
right of the Company under sub-clause (1) of clause 12 hereof to obtain
softwood timber in the area of supply and compliance by the Commission with
its obligations under clause 14 hereof to make available to the Company the
minimum annual supply of softwood timber nothing in this Agreement shall
restrict the Commission's rights pursuant to the Forests Act 1958 to sell or
grant licences to obtain forest produce.
10. Plan of utilization

(1) Not later than the thirty-first day of July 1974 the Commission shall draw
up and deliver to the Company a plan of utilization for the supply of softwood
timber for the year 1974-75 and not later than the thirty-first day of March
1975 and the thirty-first day of March in each year thereafter the Commission
shall draw up and deliver to the Company a plan of utilization for the supply
of softwood timber for the following year and a provisional plan for the
supply of softwood timber for the next two years.

(2) The plan of utilization and the provisional plan shall set out the areas
of the area of supply from which softwood timber may be obtained during the
relevant period and shall specify the location and area of each area and the
respective quantities of softwood timber which the Commission estimates will
be obtainable in each area.

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

(4) The Company shall conform with each plan or modified plan of utilization.

11. Company to comply with Forests Act &c. The Company shall comply with the
provisions of the Forests Act 1958 and with all regulations for the time being
in force under the Act.
12. Company's right to softwood timber

(1) Subject to the provisions of this Agreement the Company without obtaining
any lease licence permit or authority shall have the right to obtain softwood
timber by its servants agents or contractors from the area of supply.

(2) The Company shall obtain softwood timber from-

   (a)  heads and other parts of trees remaining from logging and pole and
        post cutting operations;

   (b)  all standing trees indicated by a forest officer; and

   (c)  as required by the Commission from timber 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 timber felled or felled and removed
by or on behalf of the Commission but any of such timber not taken by the
Company shall for the purposes of clause 14 hereof be softwood timber made
available to the Company by the Commission.
13. Purpose for which timber is to be used The Company shall use the softwood
timber made available to it under this Agreement for the purpose of the
industry.
14. Commission's obligations to supply softwood timber

(1) Subject to the provisions of clause 26 hereof the Commission shall make
available to the Company from the area of supply a minimum annual supply of
softwood timber which unless increased or decreased pursuant to the provisions
of sub-clauses (3) (4) (5) or (6) hereof shall be-

   (a)  During the years 1974-1975 to 1978-1979 inclusive-8500 cubic metres;

   (b)  During the years 1979-1980 to 1983-1984 inclusive-30 000 cubic metres;

   (c)  During the years 1984-1985 to 1988-1989 inclusive-50 000 cubic metres;

   (d)  During the years 1989-1990 to 1993-1994 inclusive-60 000 cubic metres;

   (e)  During the years 1994-1995 to 1998-1999 inclusive-90 000 cubic metres;

   (f)  During the years 1999-2000 to 2003-2004 inclusive-100 000 cubic
        metres;

(2) The Commission may in its discretion make available to the Company in any
year a quantity of softwood timber from the area of supply additional to the
minimum annual supply.

(3) The Commission may by written agreement with the Company increase or
decrease 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 or decreased.

(4) In the event of softwood timber on the plantations of the Company within
Victoria being damaged by fire drought insects disease or other cause the
Commission shall upon receipt of written notice from the Company containing
full particulars thereof and requesting a reduction in the minimum annual
supply investigate the damage and thereupon reduce the minimum annual supply
to the extent that the Company can use the softwood timber damaged as
aforesaid for the purpose of the industry provided that the reduction shall
not be more than 50 per centum in any year.

(5) In the event of softwood timber on the plantations of the Commission
within the area of supply being damaged as provided in sub-clause (4) hereof
the Commission may by written notice to the Company increase the minimum
annual supply to the extent that the softwood timber damaged as aforesaid is
salvable and may forthwith amend the plan of utilization to ensure that
priority is given to the use of softwood timber damaged as aforesaid provided
that the increase shall not be more than 50 per centum in any year.

(6) In the event of softwood timber on the plantations of the Company within
Victoria and on the plantations of the Commission within the area of supply
being damaged as provided in sub-clause (4) hereof at or about the same time
the provisions of sub-clauses (4) and (5) hereof shall not apply and if the
plantations of one party are damaged as provided in sub-clause (4) hereof
within twelve months of damage as provided therein occurring to the
plantations of the other party the provisions of sub-clauses (4) and (5)
hereof may be modified by agreement between the Commission and the Company or
failing agreement as the Commission may determine.
15. Specifications of softwood timber The Company shall not be bound to accept
any softwood timber which-

   (a)  is not sound and free from rot doze blue stain and charcoal;

   (b)  is not sufficiently straight for the manufacturing processes for the
        time being employed in the industry;

   (c)  is less than two metres in length or such other minimum length as is
        agreed to from time to time by the Commission and the Company; or

   (d)  is less than 10 centimetres or more than 40 centimetres in sectional
        dimension.
16. Price of softwood timber

(1) For all softwood timber obtained by it under this Agreement the Company
shall pay-

   (a)  as to softwood timber 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 timber 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 timber in or from the particular area; and

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

(2) Failing agreement within fourteen days on the charge referred to in
paragraph (b) of sub-clause (1) 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 timber 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 timber at that
time in similar form in or from areas which are similar with respect to yield
of softwood timber physical circumstances of extraction and situation in
regard to means of transport.

(3) If the Commission by arrangement with the Company enters into a contract
with any person for the felling or felling and removal of softwood timber to
be taken by the Company under this Agreement the Company shall pay to the
Commission or if the Commission so directs to the person with whom the
contract is made all sums payable by the Commission under the contract and
shall indemnify the Commission against all liability under the contract.
17. Company's obligations to take or pay for softwood timber

(1) Subject to the provisions of clause 27 hereof the Company shall be bound
in each year in which the minimum annual supply of softwood timber to which it
is entitled in that year is available to it either-

   (a)  to take not less than 90 per centum of the minimum annual supply; or

   (b)  if it takes less than 90 per centum of the minimum annual supply to
        pay royalty to the Commission on the deficiency at a rate equal to the
        average royalty rate which would have applied in that year had all the
        softwood timber been taken as provided for in the plan of utilization.

(2) If the Company during either or both of the two years next following any
year in which there is a deficiency obtains a quantity of softwood timber in
excess of the minimum annual supply the royalty payable on such excess shall
be reduced by an amount not exceeding in the aggregate the amount of royalty
paid in respect of the deficiency.

(3) After the expiration of the tenth year from the first day of July 1974 "90
per centum" in paragraphs (a) and (b) of sub-clause (1) hereof may from time
to time be modified by agreement between the Commission and the Company but
shall not be reduced below 75 per centum.
18. Payment of royalty The following provisions shall apply with respect to
royalty payable under this Agreement:

   (a)  Royalty shall be payable at such times after the amounts have been
        ascertained and in such manner as the Commission from time to time
        determines.

   (b)  If any royalty due by the Company remains unpaid for sixty days after
        the Commission has demanded payment thereof the Commission may without
        limiting the obligations of the Company under clause 17 hereof by
        notice in writing to the Company suspend its right to obtain softwood
        timber under this Agreement until payment is made.

   (c)  If the Company disputes the amount of any payment demanded by the
        Commission it may make the payment under protest and thereafter shall
        be entitled to take proceedings for recovery of any amount in excess
        of the amount it was liable to pay.
19. Royalty during first period During the period of two years from the first
day of July 1974 the royalty payable shall be at the rates provided for in the
Schedule to this Agreement.
20. Review of royalty

(1) During each successive period of three years from the first day of July
1976 the royalty payable shall be at the rate agreed upon by the Commission
and the Company or failing agreement not later than thirty days after
publication by the Commonwealth Bureau of Census and 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 (except the period
of three years from the first day of July 1976 which shall be at the rate
calculated by varying the rate payable during the preceding period of two
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 per Employed Male Unit; Victoria; and

   (b)  the Wholesale Price Index of materials used in building other than
        house building: Melbourne: Timber, Board and Joinery.

(2) If the Commonwealth Bureau of Census and Statistics ceases to publish the
figures referred to in either paragraphs (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 sixty days
shall be determined by the Commission.

(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.
21. Construction of roads, tracks &c. by Company The Company shall not within
the area of supply construct any road track or passage or any chute or erect
any haulage unit without the prior consent of a forest officer and shall not
within the area of supply construct any tramway flume or building or erect any
conversion unit without the prior written consent of the Commission.
22. Determination of quantity of softwood timber

(1) The quantity of softwood timber 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 thirty days as the
Commission may direct.

(2) The place at which softwood timber is to be measured shall be as fixed by
the Commission from time to time after consultation with the Company.

(3) If the quantity of softwood timber upon which the royalty is payable is to
be determined from its mass-

   (a)  the Company shall provide at its plant within the area of supply 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 and is
        currently verified in accordance with the Weights and Measures Act
        1958 the quantity of softwood timber upon which royalty is payable
        under this Agreement shall be determined by weighing it on the
        weighbridge;

   (c)  weighing shall be carried out by a person currently licensed as a
        weighman under the Weights and Measures Act 1958;

   (d)  the Company shall periodically provide to the Commission evidence that
        the weighbridge is currently verified and that each weighman is
        currently licensed in accordance with the Weights and Measures Act
        1958; and

   (e)  at all times while the weighbridge is not in accurate working order
        the quantity of softwood timber 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 direct.
23. Company to comply with conditions The Commission may from time to time
give to the Company written notice of conditions which shall apply in the
areas from which it is obtaining softwood timber under this Agreement and the
Company shall comply with the said conditions and ensure that any contractors
who are engaged in obtaining softwood timber under this Agreement have notice
thereof.
24. Requirements in regard to servants, &c. of the Company

(1) The Company shall inform the Commission in writing from time to time of
the names of its servants and contractors who are engaged in obtaining
softwood timber 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 he
is engaged in obtaining softwood timber 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 timber under this Agreement provisions requiring the contractor to comply with the Forests Act 1958 the regulations made under the Act and the conditions referred to in clause 23 hereof.


   (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 area
        from which softwood timber is to be obtained thereunder.

(4) The Company shall if so required by the Commission terminate the contract
of any contractor who in the opinion of the Commission has failed to comply
with the Forests Act 1958 the regulations made under the Act or the conditions
referred to in clause 23 hereof.
25. Further Agreement

(1) In the first three months of the last year of this Agreement the
Commission shall if the Company seeks a further Agreement to assure to it
supplies of softwood timber for the continuance and expansion of the industry
investigate the development of the industry and if satisfied that the Company
needs to have supplies of softwood timber assured to it by a further Agreement
enter into negotiations with the Company for that purpose.

(2) When a further Agreement has been agreed upon and executed the Commission
shall (if necessary) recommend to the Minister of Forests that a Bill be
introduced into the Parliament of Victoria as soon as possible to ratify
validate approve and otherwise give effect to it. Division C-Suspension of
Obligations and Conditions
26. Suspension if forests damaged &c. If any of the softwood plantations in
the area of supply 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 14 hereof or if by reason of anything beyond the control
of the Commission it is prevented from complying with those provisions the
Company shall have no claim against the Commission for the non-fulfilment of
its obligations under those provisions so far as non-fulfilment is due to any
such cause.
27. Damage or destruction of plant &c.

(1) If-

   (a)  the Company's plant or any works used by it for the purpose of
        manufacturing wood pulp from softwood timber within the area of supply
        are damaged or destroyed by fire or other calamity to an extent
        sufficient to prevent the Company from manufacturing at more than 80
        per centum of the said plant's capacity;

   (b)  the continuance of the production of wood pulp in an economic manner
        is rendered impossible by unforeseen or unavoidable cause; or

   (c)  by reason of war strike lockout or action in the nature of a strike or
        lockout the Company is prevented from obtaining softwood timber or
        carrying on production of wood pulp in an economic manner; then in any
        of those events-

   (i)  the Company may apply to the Commission for suspension or a reasonable
        modification of the extent or operation of its obligations under
        clause 17 hereof or for an extension of time for the performance or
        observance thereof;

   (ii) the Commission upon any such application by the Company may grant 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; and

   (iii) if the Company is dissatisfied with the decision of the Commission
        upon any such application the matter shall if the Company so elects be
        submitted to arbitration.

(2) Arbitration pursuant to the preceding sub-clause shall be effected as
follows:

   (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 Arbitration Act 1958 shall apply to the
        reference.

   (c)  The arbitrators and any umpire appointed for the purpose of the
        reference shall decide what is fair and reasonable having regard to
        the terms of this Agreement and the circumstances existing at the time
        of the reference.

(3) The arbitrators or umpire or some person appointed on their behalf may
investigate the Company's affairs and accounts so far as may be necessary to
assist them to determine any matter referred to them and the Company shall
give them full access to all accounts and papers necessary for that purpose
and shall afford them full information and assistance. Division
D-Determination of Agreement by Commission
28. Commission may determine Agreement in certain events If the Company-

(1) enters into liquidation (other than a voluntary liquidation for the
purpose of reconstruction and assignment of rights under this Agreement); or

(2) contravenes or fails to comply with the terms and conditions of this
Agreement- the Commission may thereupon determine this Agreement. Division
E-Supplemental
29. Amendment or determination by agreement The Commission and the Company may
by agreement-

   (a)  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; and

   (b)  at any time determine this Agreement upon such terms as they deem fit.
        IN WITNESS whereof the parties hereto have executed this Agreement the
        day and year first before written. SCHEDULE Royalty Rates (Clause 19)

   (i)  For areas not more than 50 kilometres by road from the Company's pulp
        mill at Maryvale, travelling by the shortest practicable route-$3.46
        per cubic metre. (ii) For areas more than 50 kilometres by road from
        the Company's pulp mill at Maryvale, travelling by the shortest
        practicable route, an allowance of 1.91 cents per cubic metre shall be
        deducted from the royalty rate in (i) above for each kilometre in
        excess of fifty kilometres, provided that no royalty rate shall be
        less than $2.31 per cubic metre.





The Common Seal of FORESTS COMMISSION was hereto affixed in the presence of:
(Sgd.) F. R. Moulds, Commissioner (Sgd.) A. J. Threader, Commissioner ü ï ï ý
ï ï þ



L.S.



The Common Seal of AUSTRALIAN PAPER MANUFACTURERS LIMITED was hereto affixed
by authority of the Board of Directors: (Sgd.) J. G. Wilson, Director (Sgd.)
E. R. Beattie, Director (Sgd.) Geo. H. Nicholson, A/Secretary ü ï ï ï ý ï ï ï
þ





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