Wood Processing (WESFI) Agreement Act 2000 (WA)

Western Australia Wood Processing (WESFI) Agreement Act 2000 Western Australia Wood Processing (WESFI) Agreement Act 2000 Contents 1. Short title 1 2. Commencement 2 3. Interpretation 2 4. Agreement ratified and implementation authorised 2 Schedule 1 — Wood Processing (WESFI) Agreement Notes Compilation table 42 Defined terms Western Australia Wood Processing (WESFI) Agreement Act 2000 An Act to ratify, and authorise the implementation of, an agreement between the State and WESFI Limited relating to the continued supply of plantation softwood for the manufacture of wood based panel products. 1. Short title This Act may be cited as the Wood Processing (WESFI) Agreement Act 2000. 2. Commencement This Act comes into operation on the day on which it receives the Royal Assent. 3. Interpretation (1) In this Act — the Agreement means the Wood Processing (WESFI) Agreement, a copy of which is set out in Schedule 1, and includes that Agreement as varied from time to time, in accordance with its provisions. (2) The notes following plans A and B of the Agreement do not form part of this Act or the Agreement. 4. Agreement ratified and implementation authorised (1) The Agreement is ratified. (2) The implementation of the Agreement is authorised. (3) Without limiting or otherwise affecting the Government Agreements Act 1979, the Agreement operates and takes effect despite any other Act or law. Schedule 1 — Wood Processing (WESFI) Agreement [s. 3(1)] THIS AGREEMENT is made this eighth day of August 2000 BETWEEN THE HONOURABLE RICHARD FAIRFAX COURT, B. Com., M.L.A., Premier of the State of Western Australia acting for and on behalf of the said State and instrumentalities thereof from time to time (hereinafter called "the State") of the first part, and WESFI LIMITED ACN 008 672 740 a company incorporated in the State of Western Australia and having its registered office at 1-27 Somersby Road, Welshpool (hereinafter called "the Company") of the second part WHEREAS: A. The State has established substantial softwood plantations in the vicinity of the Perth Metropolitan area and in the South West of the State. Approved forestry practice requires that these softwood plantations be periodically thinned. Such thinning produces substantial quantities of softwood timber that is not suitable for sawlogs. Softwood thinnings (together with softwood plantation and pine sawmill residues) are raw materials used in the production of wood based panel products of the nature currently manufactured by the Company at its Welshpool and Dardanup factories. B. It is in the interests of the State that plantation softwood thinnings be fully utilised and processed within the State and accordingly the State has encouraged the establishment by the Company of a particleboard factory in the Dardanup area and a medium density fibreboard factory at Welshpool. C. The original design capacity of the factories was predicated on the assumption that the volumes of plantation softwood thinnings (together with softwood plantation residues, sawmill residues and other industrial wood suitable for the manufacture of wood based panel products) available within economic distances of the factories would progressively increase. Accordingly in the interests of economy of operation and in recognition of the need for world-scale competitiveness the factories were built with a design capacity considerably in excess of the markets for their products. D. The Company before establishing the factories required (inter alia) to be assured of the availability of certain facilities and services to operate the factories and that it would be able to procure a continuous supply of softwood resource within economic distances of the factories and requested the State to assist in these matters. E. The State recognising that: (a) the Company's undertaking promotes and assists the State's policy of decentralization of industry; (b) wood based panel products manufacture promotes the efficient development of the softwood plantations; and (c) there are other factors peculiar to the nature of the Company's undertaking which require special rights– agreed to give effect to the Company's requirements by entering into the 1975 Agreement for an initial term of 25 years from 23 May 1975. F. Clause 32 (1) of the 1975 Agreement provides that (subject to the terms of the Clause) the State will if satisfied that the Company needs to have supplies of softwood resource suitable for the manufacture of wood based panel products assured to it by a further agreement enter into negotiations with the Company for that purpose. G. Having satisfied itself that the Company needs to have assured to it: (a) the continued supply of adequate volumes of softwood resource suitable for the manufacture of wood based panel products within economic distances from the factories; and (b) the intentions of the State to use all reasonable endeavours to ensure that a continuous supply of softwood resource suitable for the manufacture of wood based panel products is available within economic distances from the factories throughout the term and that the Company has the opportunity to purchase volumes of softwood resource in addition to those volumes provided for under this Agreement where such softwood resource becomes available, the State desires in pursuance of the obligations undertaken by it in the 1975 Agreement and for the purpose of continuing to promote employment opportunity and industrial development especially in regional areas of Western Australia to assist by extending the supply arrangements under the 1975 Agreement upon and subject to the terms and conditions of this Agreement. H. The Company in recognition of the State's commitment to continue its support for industry in Western Australia based on plantation softwoods has agreed as a discrete agreement (having no impact on the terms and conditions of this Agreement) to negotiate in good faith with the State to secure an arrangement whereby the Company will contribute a minimum of $1,000,000 per annum during the term of this Agreement to a scheme for the creation and management by the State on Crown Reserves of softwood plantations of the species Pinus radiata on commercial terms acceptable to the Company and the State. NOW THIS AGREEMENT WITNESSES: 1. In this Agreement subject to the context - "advise", "apply", "approve", "approval", "consent", "certify", "direct", "notice", "notify", "request", or "require", means advise, apply, approve, approval, consent, certify, direct, notice, notify, request or require in writing as the case may be and any inflexion or derivation of any of those words has a corresponding meaning; "CALM" means the Department of Conservation and Land Management established under the Public Service Act 1978; "CALM Act" means the Conservation and Land Management Act 1984; "Clause" means a clause of this Agreement; "Commonwealth" means the Commonwealth of Australia and includes the Government for the time being thereof; "Company" means WESFI LIMITED ACN 008 672 740 a company incorporated in the State of Western Australia and having its registered office at 1-27 Somersby Road Welshpool and includes its controlled entities; "cubic metre" means cubic metre of resource true volume under bark; "Dardanup factory" means the Company's factory at Dardanup and all necessary ancillary buildings works plant and equipment and services for the production of panel products; "date of commencement" means the date on which the Bill referred to in Clause 3 of this Agreement commences to operate as an Act; "EP Act" means the Environmental Protection Act 1986; "Executive Director" means the Executive Director of CALM; "factories" mean the Dardanup factory and the Welshpool factory and any other factory as may be agreed to by the Minister; "factory sites" means: (i) the Dardanup factory site being Boyanup Agricultural Area Lots 353 and 354 and being part of Lot 2 on diagram 46933 the whole of the land in certificate of title volume 1729 folio 657; and (ii) the Welshpool factory site being Lot 5 on Diagram 77208 the whole of the land in certificate of title volume 1867 folio 996 together with part of Lot 96 on Plan 2653 the whole of the land in certificate of title volume 1549 folio 869; "forest officer" means any officer of CALM designated as a forest officer under the CALM Act; "forest produce and timber" have the same respective meanings as in the CALM Act; "LA Act" means Land Administration Act 1997; "loading points" means such places within the softwood plantations as shall be selected by the Executive Director after consultation with the Company and which so far as possible shall be selected so as to minimise distance between them and the places where the trees are felled whilst providing reasonable access to and use by vehicles transporting the resource to the factories; "local government" means the council of a municipality that is a city, town or shire constituted under the Local Government Act 1995; "Minister" means the Minister in the Government of the State for the time being responsible for the administration of the Act to ratify this Agreement and pending the passing of that Act means the Minister for the time being designated in a notice from the State to the Company and includes the successors in office of the Minister; "Minister for Planning" means the Minister in the Government of the State for the time being responsible for the administration of the Town Planning and Development Act 1928; "month" means calendar month; "panel products" means reconstituted wood based panel products including particle board and medium density fibreboard and such other allied products as the Minister may approve from time to time for the purpose of this definition; "person" or "persons" includes bodies corporate; "public road" means a road as defined by the Road Traffic Act 1974; "related bodies corporate" means bodies corporate related within the meaning of that term under the Corporations Law of the Commonwealth; "resource" means softwood logs and woodchips, suitable for the manufacture of panel products, obtained from softwood plantation harvesting operations; "said State" means the State of Western Australia; "softwood" means timber of the genus Pinus; "softwood plantations" means the existing plantations of softwood timber coloured either green or blue on the CALM map plan A attached hereto and initialled by or on behalf of the parties hereto for the purposes of identification and all future plantations of softwood timber under the control of the Executive Director where those plantations are located on State forest or land which is held or occupied by the Executive Director under the CALM Act or in respect of which an agreement for harvesting and selling softwood from that land has been made between the Executive Director and another person under or pursuant to the CALM Act and all future plantations established by the Executive Director either as principal or agent for which the Executive Director has control over the marketing of resource; "subclause" means subclause of the Clause in or in relation to which the term is used; "term" means the term defined in Clause 21 of this Agreement; "the 1975 Agreement" means the agreement defined in section 2 of the Wesply (Dardanup) Agreement Authorisation Act 1975; "this Agreement" "hereof" and "hereunder" refer to this Agreement (including the Schedules) whether in its original form or as from time to time added to varied or amended; "Trade Practices Act" means the Commonwealth Trade Practices Act 1974; "Welshpool factory" means the Company's factory at 1-27 Somersby Road, Welshpool or such other factory or factories as agreed to by the Minister (other than the Dardanup factory) which uses resource supplied under this Agreement; "year" means a financial year. Interpretation 2. (1) In this Agreement – (a) monetary references are references to Australian currency unless otherwise specifically expressed; (b) power given under any Clause other than Clause 13 to extend any period or date shall be without prejudice to the power of the Minister under Clause 13; (c) Clause headings do not affect interpretation or construction; (d) words in the singular shall include the plural and words in the plural shall include the singular according to the requirements of the context; (e) one gender includes the other gender; (f) reference to an Act includes the amendments to that Act for the time being in force and also any Act passed in substitution therefor or in lieu thereof and the regulations for the time being in force thereunder; and (g) reference to the Executive Director includes the person or body for the time being exercising the statutory powers and functions relevant to this Agreement exercised by the Executive Director at the date of this Agreement. (2) Nothing in this Agreement shall be construed to exempt the State or the Company from compliance with or to require the State or the Company to do anything contrary to, any law relating to native title or any lawful obligation or requirement imposed on the State or the Company, as the case may be, pursuant to any law relating to native title. (3) Nothing in this Agreement shall be construed to exempt the Company from compliance with any requirement in connection with the protection of the environment arising out of or incidental to its activities under this Agreement that may be made pursuant to the EP Act. Ratification and Operation 3. (1) The State shall introduce and sponsor a Bill in the State Parliament of Western Australia to ratify this Agreement and endeavour to secure its passage as an Act prior to 31 December 2000 or such later date as may be agreed between the parties hereto. (2) The provisions of this Agreement other than this Clause and Clauses 1 and 2 shall not come into operation until the Bill referred to in subclause (1) has been passed by the Parliament of Western Australia and comes into operation as an Act. (3) If by 31 March 2001 the said Bill has not commenced to operate as an Act then unless the parties hereto otherwise agree this Agreement shall then cease and determine and no party hereto shall have any claim against any other party hereto with respect to any matter or thing arising out of, done, performed, or omitted to be done or performed under this Agreement. (4) On the said Bill commencing to operate as an Act all the provisions of this Agreement shall operate and take effect notwithstanding the provisions of any Act or law. Termination of 1975 Agreement 4. Upon and subject to the said Bill commencing to operate as an Act the 1975 Agreement is hereby cancelled and the rights and obligations of the parties thereunder are hereby terminated. Supply of resource 5. (1) (a) For each year of this Agreement the State shall ensure that the Executive Director makes available for supply to the Company not less than 330,000 cubic metres of resource to the factories (except to the extent that a lesser aggregate requirement is specified in the statement of the Company's requirements for resource provided by the Company to the Executive Director for any such year in accordance with subclause (5) of this Clause). (b) Except as otherwise agreed by the Minister the Executive Director shall not be obliged to supply to the Company in any year a quantity of resource in excess of 330,000 cubic metres. Nothing in this paragraph prevents the Executive Director in his discretion from supplying to the Company in any year a quantity of resource in excess of 330,000 cubic metres by agreement with the Company. (c) The Executive Director shall: (i) supply to the Company from time to time details of its best estimates of the availability of resource from the softwood plantations for each year of this Agreement; and (ii) notify to the Company prior to 31 December in each year the maximum quantity of resource available for supply to the Company during the next ensuing year. (d) During the term the State shall ensure that the Executive Director shall supply to the Company (without the Company being under any obligation to obtain any permit or licence from the Executive Director) the quantity of resource from the softwood plantations agreed upon or determined in respect of each year pursuant to the provisions of subclause (6) of this Clause. (e) For the purposes of giving effect to the obligations of the State under paragraph (a) of this subclause the State shall ensure that the Executive Director: (i) replants to Pinus radiata or Pinus pinaster such suitable areas of State forest and fee simple land held in the name of the Executive Director which have previously been planted to Pinus species and have been clearfelled, except for those softwood plantations occurring in State forest 65 (Gnangara), 70 (Peel) and 3 (Hamel); and (ii) causes to be planted to Pinus pinaster within as close a proximity to the Welshpool factory as is reasonably possible such areas of available land as may be necessary to endeavour to ensure that sufficient volumes of resource can be made available to the Company. (2) On or before 31 December in each year during the continuance of this Agreement the Company shall deliver to the Executive Director an estimate of its resource requirements for each of the next ensuing 6 years. (3) With due regard for sound forest practice, the Executive Director's other log supply commitments and the aim of minimising the haulage distance to the factories the Executive Director shall by 28 February in each year advise the Company of the softwood plantations from which it is planned to supply the Company's estimated requirements for resource for each of the factories for each of the next ensuing 6 years notified pursuant to subclause (2) of this Clause. (4) Within 60 days of being advised by the Executive Director of the softwood plantations from which resource is planned to be supplied in accordance with subclause (3) of this Clause, the Company may advise the Executive Director if the Company considers the volume weighted average haulage distance from the nominated softwood plantations to the factories to be uneconomic. If the Company advises the Executive Director that it considers the volume weighted average haulage distance is uneconomic then the Executive Director will consider the basis on which the Company has reached that conclusion and if the Executive Director agrees then the Executive Director will use all reasonable endeavours in a responsible manner to reduce the volume weighted average haulage distance. (5) On or before 15 May in each year during the continuance of this Agreement the Company shall provide to the Executive Director a statement of the Company's requirements for resource for each of the factories for the ensuing year. (6) On or before 31 May in each year agreement shall be reached between the Company and the Executive Director as to the quantity of resource to be supplied by the Executive Director to the Company during the next ensuing year. In default of agreement the matter shall be determined by arbitration. (7) The State shall ensure that the Executive Director shall as far as is practicable control the softwood plantations so as to ensure that (consistent with in his opinion approved forestry practice) the quantity of resource agreed between the Executive Director and the Company or determined (pursuant to subclause (6) of this Clause) is available to the Company in priority to other prospective uses of resource of a specification which would ordinarily be intended for supply to the Company. Specifications of Resource (8) The Executive Director shall provide to the Company resource, which is in accordance with the specifications in the Second Schedule which may be varied from time to time by agreement between the Executive Director and the Company. Suspension if plantation damaged (9) If any of the softwood plantations are damaged or destroyed by fire disease or other cause to such an extent that it is impracticable for the State to comply with the provisions of subclause (1)(a) of this Clause or if by reason of anything beyond its reasonable control the State is prevented from complying with those provisions the Company shall have no claim against the Crown in right of the State or the Executive Director for the nonfulfilment of their obligations under those provisions so far as nonfulfilment is due to any such cause. Executive Director's commitments (10) (a) As it is agreed that it is in the best interest of the Executive Director and the Company to encourage economy in felling and extraction to loading points and (where applicable) chipping of resource, the State undertakes that the Executive Director shall from time to time as occasion requires (after consultation with the Company as to the terms and conditions thereof) call tenders for such felling and extraction and chipping. The Executive Director shall not accept any tender for the felling and extraction and (where applicable) chipping of resource that is to be supplied to the Company unless before acceptance the tender has been considered jointly by the Executive Director and the Company. (b) The State shall ensure that the Executive Director will construct and maintain roads suitable for transport of the resource by the Company and its contractors from loading points to the boundaries of land controlled by the Executive Director. Price of resource (11) As to all resource made available to and accepted by the Company, the Company shall pay to the Executive Director in respect thereof: (a) the several rates of stumpages set out in the First Schedule hereto provided always that the Minister may from time to time if he considers it appropriate so to do vary any of the said several rates of stumpages set out in the First Schedule hereto to such amount or amounts and for such period or periods as he may determine; (b) the costs and expenses of felling and extraction of resource to the loading points and chipping of logs at the rates or prices set out in the contracts of sale resulting from tenders called pursuant to subclause (10)(a) of this Clause respectively accepted therefor but if such tender includes logs other than resource then as otherwise agreed or failing agreement as determined by arbitration to be fair and equitable; (c) the cost of haulage from the loading point to the factories where the Executive Director is responsible for the haulage of the resource; (d) 5 per centum of the costs and expenses referred to in subclauses (b) and (c) of this subclause representing: (i) the costs directly incurred in controlling and supervising the work of contractors engaged in the felling and extraction to the loading points and (where applicable) chipping of resource; and (ii) 15 per centum of the costs referred to in subclause (d)(i) of this subclause to cover overheads and other indirect costs associated with such work; and (e) a charge for the construction use and maintenance of roads in the softwood plantations and State forests levied at a rate as set out in the First Schedule hereto. (12) At intervals of not less than three years either party may request that the provisions of either or both paragraphs (d) and (e) of subclause (11) be reviewed. If under the review the parties fail to agree as to whether an adjustment is required or on the amount of the adjustment then the matter shall be referred to arbitration. (13) (a) In this subclause (13) "GST" and "supply" have the meanings given to those terms in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth and "GST" includes GST equivalents made payable by the law of Western Australia. (b) Notwithstanding anything express or implied in this Agreement (other than this subclause (13))to the contrary, if GST is imposed or is payable on or in respect of any supply of goods, services, or other things, (including without limitation the licensing of any right) by the State under or in connection with this Agreement, or if the amount of GST is calculated by reference to any such supply, or if GST is imposed or is payable on or in respect of or by reference to any amount payable to the State under or in connection with this Agreement, then the Company must pay the State an extra amount equal to the amount of that GST. (c) The Company must pay the State all amounts payable under this subclause (13) at the time of the payment to which they relate, or otherwise on demand. (d) The obligations of the Company under this subclause (13) only apply if the State has provided the Company with a valid tax invoice for the relevant supply which:- (i) meets the requirements of the legislation and any regulations governing the GST and any relevant requirements of the Australian Taxation Office (or other relevant administering body or person); and (ii) sets out the amount in respect of which GST is payable and the amount of that GST. (e) If after the date of this Agreement there is any abolition or reduction of taxes duties or statutory charges (including but not limited to sales tax, fuel excise, stamp duty, financial institutions duty, debits tax and any impost in lieu of any of the foregoing under any tax equivalent regime) the amounts otherwise payable by the Company under this subclause (13) will be reduced so that the full benefit of any such abolition or reduction applicable to the performance of this Agreement is passed on to the Company. Company's commitments 6. (1) (a) Subject to the provisions of Clause 12 hereof the Company shall be bound in each year to take delivery of the quantity of resource agreed or determined pursuant to subclause (6) of Clause 5 hereof provided that if it takes less than 90 per centum of such quantity in any year, the Company shall pay stumpage to the Executive Director on the quantity less than 90% (deficiency) at a rate equal to the stumpage rate payable in that year under subclause (11)(a) of Clause 5 hereof; and (b) if the Company during either or both of the two years immediately following any year in respect of which it is required to make a payment to the Executive Director pursuant to paragraph (a) of subclause (1) of this Clause takes resource in excess of the lesser of: (i) 90% of the quantity of resource notified by the Executive Director to the Company pursuant to subclause (1)(c)(ii) of Clause 5 as available for supply to the Company during the relevant year; or (ii) 330,000 cubic metres, then the stumpage payable on such excess (excess) shall be reduced by the amount of stumpage which had been paid in respect of the deficiency, but such that if the amount payable on the deficiency is greater than the amount payable on the excess, then the stumpage payable on the excess will be nil. Under no circumstances will the reduction in stumpage payable on the excess, whether occurring in either or over both of the two years immediately following any year in which the deficiency occurs, be greater than the amount of the payment made in respect of the deficiency. (2) The following provisions shall apply with respect to stumpage rates and costs and expenses payable under this Agreement: (a) the stumpage rates shall be payable at such times after the amounts have been ascertained as provided for in subclause (11)(a) of Clause 5 and in such manner as the Executive Director from time to time determines; and (b) if any sum in respect of stumpage rates or any of the costs and expenses referred to in subclauses (11)(b) (11)(c) (11)(d) and (11)(e) of Clause 5 hereof remains unpaid for 30 days after the due date the Executive Director may, without limiting the obligations of the Company under subclause (1) of Clause 6 hereof by not less than 7 days notice in writing to the Company suspend its right to obtain resource under this Agreement until payment is made. (3) (a) The quantity of resource upon which the stumpage is payable shall be: (i) measured in such manner and by such method (allowance being made for bark) as may be agreed upon from time to time by the Executive Director and the Company provided that such methods are consistent with the Regulations made under the CALM Act; and (ii) accurately recorded in writing by the Company in such manner as the Executive Director reasonably directs and no resource shall be removed from the place referred to in subclause (3)(b) of this Clause until the measurement has been completed and so recorded and within 3 business days following the date of delivery of the resource the Company shall furnish to the Executive Director a return in writing showing the quantity of resource upon which stumpage is payable. (b) The place at which the quantity of resource is to be measured shall be as fixed by the Executive Director from time to time after consultation with the Company and no resource shall be removed therefrom until such measurement has been completed and recorded. (c) If the stumpage so payable is to be determined by weight: (i) the Company shall provide a weighbridge of a pattern which meets the requirements of the Weights and Measures Act 1915 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; (ii) at all times while the weighbridge is in accurate working order the quantity of resource upon which stumpage is payable under this Agreement shall be measured by weighing in on the weighbridge; and (iii) at all times while the weighbridge is not in accurate working order the quantity of resource upon which stumpage is payable under this Agreement shall be determined in such manner as may be agreed upon by the Executive Director and the Company or failing agreement within 14 days as the Executive Director may direct. (4) Save as varied or modified by this Agreement the Company shall comply with the provisions of the CALM Act. Maintenance of public roads 7. (1) The State shall maintain or cause to be maintained those public roads under the control of the Commissioner of Main Roads or a local government which may be used by the Company for the purposes of this Agreement to a standard similar to comparable public roads maintained by the Commissioner of Main Roads or a local government as the case may be. Upgrading of public roads (2) (a) In the event that for or in connection with the Company's activities hereunder the Company or any person engaged by the Company uses or wishes to use a public road (whether referred to in subclause (1) or otherwise) which is inadequate for the purpose, or any use by the Company or any person engaged by the Company of any public road results in excessive damage to or deterioration thereof (other than fair wear and tear) then the Company shall pay to the State or the local government as the case may require an equitable part as reasonably determined by the Commissioner of Main Roads of the total cost of any upgrading required or of making good the damage or deterioration having regard to the use of such public road by others. (b) It is declared and agreed for the purposes of this subclause that the Executive Director supplying resource to the factories pursuant to this Agreement is not a person engaged by the Company referred to in paragraph (a) of this subclause. No discriminatory charges 8. Except as provided in this Agreement the State shall not impose nor shall it permit or authorise any of its agencies or instrumentalities or any local government or other authority of the State to impose discriminatory taxes rates or charges of any nature whatsoever on or in respect of the titles property or other assets, products, materials or services used or produced by or through the factories' operations nor will the State take or permit to be taken by any such authority any other discriminatory action which would deprive the Company of full enjoyment of the rights granted and intended to be granted under this Agreement. Zoning and other issues Zoning 9. (1) The State shall ensure after consultation with the local governments having jurisdiction in respect of the factory sites that the factory sites shall be and remain zoned for use or otherwise protected during the term so that the activities of the Company hereunder may be undertaken and carried out thereon without any interference or interruption by the State or by any State agency or instrumentality or by any local government or other authority of the State on the ground that such activities are contrary to any provision of a regional planning scheme, town planning scheme or local law. Surrounding land (2) Provided the Company implements a reasonable ongoing improvement program in its operations at the Darda