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This is a Bill, not an Act. For current law, see the Acts databases.


WOOD PROCESSING (WESFI) AGREEMENT BILL 2000

                      Western Australia


Wood Processing (WESFI) Agreement Bill 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




                                                         page i
                           42--1
                           Western Australia


                      LEGISLATIVE ASSEMBLY



Wood Processing (WESFI) Agreement Bill 2000


                               A Bill for


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.



The Parliament of Western Australia enacts as follows:




1.      Short title
        This Act may be cited as the Wood Processing (WESFI)
        Agreement Act 2000.




                                                               page 1
     Wood Processing (WESFI) Agreement Bill 2000



     s. 2




     2.         Commencement
                This Act comes into operation on the day on which it receives
                the Royal Assent.

     3.         Interpretation
5         (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.
10        (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.
15        (3)   Without limiting or otherwise affecting the Government
                Agreements Act 1979, the Agreement operates and takes effect
                despite any other Act or law.




     page 2
                                   Wood Processing (WESFI) Agreement Bill 2000



                              Wood Processing (WESFI) Agreement            Schedule 1


          Schedule 1 -- Wood Processing (WESFI) Agreement
                                                                               [s. 3(1)]
     THIS AGREEMENT is made this eighth day of August 2000
     BETWEEN
5    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
10   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
15            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
20            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
25            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
30            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
35            considerably in excess of the markets for their products.


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     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) Agreement

     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
5             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
10                    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.
15   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.
20   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
25                    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
30                    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
35            regional areas of Western Australia to assist by extending the supply

     page 4
                               Wood Processing (WESFI) Agreement Bill 2000



                          Wood Processing (WESFI) Agreement            Schedule 1

           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
5          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
10         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",
15         "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
20         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
25         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;
30         "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;



                                                                            page 5
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) Agreement

              "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;
5             "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
10                     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
15                     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
20            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
25            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;
30            "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;

     page 6
                         Wood Processing (WESFI) Agreement Bill 2000



                    Wood Processing (WESFI) Agreement            Schedule 1

     "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;
5    "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;
10   "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
15   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
20   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
25   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
30   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;


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     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) 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
5             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
10            Minister (other than the Dardanup factory) which uses resource
              supplied under this Agreement;
              "year" means a financial year.
     Interpretation
     2.       (1)     In this Agreement -
15                    (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
20                             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
25                             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
30                             the regulations for the time being in force
                               thereunder; and




     page 8
                                  Wood Processing (WESFI) Agreement Bill 2000



                          Wood Processing (WESFI) Agreement              Schedule 1

                    (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
5                             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
10                  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
15                  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
20                  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
25                  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
30                  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
35                  provisions of this Agreement shall operate and take effect
                    notwithstanding the provisions of any Act or law.


                                                                              page 9
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) Agreement

     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.
5    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
10                            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).
15                    (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
20                            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
25                                      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
30                                      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
35                            obtain any permit or licence from the Executive
                              Director) the quantity of resource from the softwood


     page 10
                         Wood Processing (WESFI) Agreement Bill 2000



                 Wood Processing (WESFI) Agreement            Schedule 1

                  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
5                 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
10                           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
15                (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
20                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
25         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
30         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
35         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

                                                                  page 11
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) Agreement

                      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
5                     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
10                    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.
15             (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.
20             (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
25                    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
30             (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
35             (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

     page 12
                                     Wood Processing (WESFI) Agreement Bill 2000



                               Wood Processing (WESFI) Agreement            Schedule 1

                         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
5                        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
10                               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)
15                               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
20                               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
25                               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
30                       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
35                               set out in the First Schedule hereto to such amount or
                                 amounts and for such period or periods as he may
                                 determine;


                                                                                page 13
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) Agreement

                      (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
5                             (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
10                            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
15                                      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
20                                      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
25                            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
30                    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
35                            Commonwealth and "GST" includes GST equivalents
                              made payable by the law of Western Australia.


     page 14
                   Wood Processing (WESFI) Agreement Bill 2000



           Wood Processing (WESFI) Agreement            Schedule 1

     (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
5           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
10          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
15          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
20          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
25                     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
30          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
35          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.

                                                            page 15
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1      Wood Processing (WESFI) Agreement

     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
5                          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
10                         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
15                          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
20                                   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
25                          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
30                          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.




     page 16
                         Wood Processing (WESFI) Agreement Bill 2000



                 Wood Processing (WESFI) Agreement            Schedule 1

     (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
5                  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)
10                 (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
15                 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
20                           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
25                           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
30                           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
35                           Executive Director a return in writing
                             showing the quantity of resource upon
                             which stumpage is payable.



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     Schedule 1      Wood Processing (WESFI) Agreement

                     (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
5                           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
10                                    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;
15                          (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
20                          (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
25                                    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.
30   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
35                   similar to comparable public roads maintained by the
                     Commissioner of Main Roads or a local government as the
                     case may be.

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                             Wood Processing (WESFI) Agreement               Schedule 1

     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
5                              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)
10                             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
15                             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
20                             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
25            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
30            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
35                    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

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     Schedule 1         Wood Processing (WESFI) Agreement

                        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
5                       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 Dardanup
10                      factory to the satisfaction of the Minister:
                        (a)     the State will make reasonable endeavours to use
                                expeditiously provisions contained in the EP Act, the
                                Western Australian Planning Commission Act 1985
                                and other relevant legislation after consultation with
15                              the Company and the relevant local government to
                                define a buffer boundary and apply suitable planning
                                and zoning controls to land within the buffer boundary
                                to preclude land uses and development incompatible
                                with the approved operations of the Dardanup factory
20                              so that the Company will be able to operate on a
                                continuous basis at the Dardanup factory;
                        (b)     the State agrees to have regard to existing noise
                                emission contours shown on plan B attached hereto
                                when creating the buffer boundary; and
25                      (c)     the State agrees that zoning and planning controls that
                                may be put into place pursuant to subclause 9(2)(a)
                                shall not be changed during the term in any manner
                                that is determined by the Minister for Planning after
                                consultation with the Company the Minister and the
30                              relevant local government to be incompatible with or
                                likely to restrict or adversely affect the activities of
                                the Company at the Dardanup factory.
     Resumption for the purposes of this Agreement
               (3)      (a)     The State is hereby empowered, as and for a public
35                              work under the Public Works Act 1902 and Parts 9
                                and 10 of the LA Act, to take or resume for the
                                purposes of this Agreement any land which in the

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           Wood Processing (WESFI) Agreement                Schedule 1

            reasonable opinion of the Company is necessary for
            the operation of the factories and which the Minister
            determines is appropriate to be taken or resumed for
            the operation of the factories and notwithstanding any
5           other provisions of those Acts may grant leases,
            licences or easements in respect of the whole or
            portions of that land to the Company.
     (b)    In applying the Public Works Act 1902 and Parts 9
            and 10 of the LA Act for the purposes of this Clause -
10          (i)         "land" in those Acts shall be read as
                        extending to any land or to any portion of
                        any land or to the subsoil, surface or
                        airspace relating thereto and to any estate,
                        right, title, easement, lease, licence,
15                      privilege, native title right or interest or
                        other interest, in, over, under, affecting, or in
                        connection with that land or any portion,
                        stratum or other specified sector of that land;
            (ii)        sections 170, 171, 172, 173, 174, 175 and
20                      184 of the LA Act do not apply; and
            (iii)       the LA Act shall be deemed modified in
                        section 177(2) by inserting -
                        (A)       after "railway" the following -
                                  "or land is being taken pursuant to a
25                                Government agreement as defined in
                                  section 2 of the Government
                                  Agreements Act 1979"; and
                        (B)       after "that Act" the following -
                                  "or that Agreement may be".
30   (c)    The Company shall pay to the State on demand the
            costs of and incidental to any taking or resumption of
            land pursuant to this Clause including but not limited
            to any compensation payable to any person including
            any holder of native title or of native title rights and
35          interests in the land.


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     Schedule 1      Wood Processing (WESFI) Agreement

     Other
               (4)   If the Minister in his discretion believes it is reasonable to do so
                     he will at the Company's request make submissions to any
                     relevant State agency or instrumentality in respect of applications
5                    made by the Company to obtain relief or exemption from
                     specific legislation or regulations subject to the Company
                     demonstrating to the Minister's satisfaction that the Company is
                     making all reasonable endeavours to comply with the legislation
                     or regulations the subject of the applications.
10   Assignment
     10.       (1)   Subject to the provisions of this Clause the Company may at any
                     time assign mortgage charge sublet or dispose of to any company
                     or persons with the consent of the Minister the whole or any part
                     of its rights hereunder and of its obligations hereunder subject
15                   however in the case of an assignment subletting or disposition to
                     the assignee sublessee or disponee (as the case may be) executing
                     in favour of the State (unless the Minister otherwise determines)
                     a deed of covenant in a form to be approved by the Minister to
                     comply with observe and perform the provisions hereof on the
20                   part of the Company to be complied with observed or performed
                     in regard to the matter or matters the subject of such assignment
                     subletting or disposition.
               (2)   Notwithstanding anything contained in or anything done
                     under or pursuant to subclause (1) the Company shall at all
25                   times during the currency of this Agreement be and remain
                     liable for the due and punctual performance and observance of
                     all the covenants and agreements on its part contained in this
                     Agreement PROVIDED THAT the Minister may agree to a
                     release from such liability where the Minister considers such
30                   release will not be contrary to the interests of the State.
     Variation
     11.       (1)   The parties to this Agreement may from time to time by
                     agreement in writing add to substitute for cancel or vary all or
                     any of the provisions of this Agreement for the purpose of
35                   more efficiently or satisfactorily implementing or facilitating
                     any of the objects of this Agreement.



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                            Wood Processing (WESFI) Agreement            Schedule 1

             (2)     The Minister shall cause any agreement made pursuant to
                     subclause (1) to be laid on the Table of each House of
                     Parliament within 12 sitting days next following its execution.
             (3)     Either House may, within 12 sitting days of that House after
5                    the agreement has been laid before it pass a resolution
                     disallowing the agreement, but if after the last day on which
                     the agreement might have been disallowed neither House has
                     passed such a resolution the agreement shall have effect from
                     and after that last day.
10   Force majeure
     12.     This Agreement shall be deemed to be made subject to any delays in
             the performance of the obligations under this Agreement and to the
             temporary suspension of continuing obligations under this Agreement
             that may be caused by or arise from circumstances beyond the power
15           and control of the party responsible for the performance of those
             obligations including (without limiting the generality of the foregoing)
             delays or any such temporary suspension as aforesaid caused by or
             arising from Act of God force majeure earthquakes floods storms
             tempest washaways fire (unless caused by the actual fault or privity of
20           the party responsible for such performance) act of war act of public
             enemies riots civil commotions strikes lockouts stoppages restraint of
             labour or other similar acts (whether partial or general) acts or
             omissions of the Commonwealth shortages of labour or essential
             materials reasonable failure to secure contractors delays of contractors
25           or inability (common in the panel products industry) to sell profitably
             panel products or factors due to overall world economic conditions or
             factors due to action taken by or on behalf of any government or
             governmental authority (other than the State or any authority of the
             State) or factors that could not reasonably have been foreseen
30           PROVIDED ALWAYS that the party whose performance of
             obligations is affected by any of the said causes shall promptly give
             notice to the other party of the event or events and shall use its best
             endeavours to minimise the effects of such causes as soon as possible
             after the occurrence.
35   Power to extend periods
     13.     Notwithstanding any provision of this Agreement the Minister may at
             the request of the Company from time to time extend or further extend
             any period or vary or further vary any date referred to in this

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     Schedule 1        Wood Processing (WESFI) Agreement

               Agreement for such period or to such later date as the Minister thinks
               fit whether or not the period to be extended has expired or the date to
               be varied has passed.
     Determination of Agreement
5    14.       (1)     In any of the following events namely if -
                       (a)     (i)       the Company makes default which the State
                                         considers material in the due performance or
                                         observance of any of the covenants or
                                         obligations of the Company in this
10                                       Agreement; or
                               (ii)      the Company abandons or repudiates this
                                         Agreement or its activities under this
                                         Agreement
                               and such default is not remedied or such activities
15                             resumed within a period of 180 days after notice is
                               given by the State as provided in subclause (2) or if
                               the default or abandonment is referred to arbitration,
                               then within the period mentioned in subclause (3); or
                       (b)     the Company goes into liquidation (other than a
20                             voluntary liquidation for the purpose of reconstruction)
                               and unless within 3 months from the date of such
                               liquidation the interest of the Company is assigned to an
                               assignee approved by the Minister under Clause 10,
                       the State may by notice to the Company determine this
25                     Agreement.
               (2)     The notice to be given by the State to the Company in terms
                       of paragraph (a) of subclause (1) shall specify the nature of
                       the default or other ground so entitling the State to exercise
                       such right of determination.
30             (3)     (a)     If the Company contests the alleged default
                               abandonment or repudiation referred to in
                               paragraph (a) of subclause (1) the Company shall
                               within 60 days after notice given by the State as
                               provided in subclause (2) refer the matter in dispute to
35                             arbitration.


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                            Wood Processing (WESFI) Agreement               Schedule 1

                     (b)     If the question is decided against the Company, the
                             Company shall comply with the arbitration award
                             within a reasonable time to be fixed by that award
                             PROVIDED THAT if the arbitrator finds that there
5                            was a bona fide dispute and that the Company was not
                             dilatory in pursuing the arbitration, the time for
                             compliance with the arbitration award shall not be less
                             than 90 days from the date of such award.
             (4)     If the default referred to in paragraph (a) of subclause (1) of this
10                   Clause shall not have been remedied after receipt of the notice
                     referred to in that subclause within the period specified in that
                     paragraph or within the time fixed by the arbitration award as
                     aforesaid the State instead of determining this Agreement as
                     aforesaid because of such default may itself remedy such default
15                   or cause the same to be remedied (for which purpose the State by
                     agents workmen or otherwise shall have full power to enter upon
                     lands occupied by the Company and to make use of all plant
                     machinery equipment and installations thereon) and the actual
                     costs and expenses incurred by the State in remedying or causing
20                   to be remedied such default shall be a debt payable by the
                     Company to the State on demand.
     Effect of cessation or determination of Agreement
     15.     On the cessation or determination of this Agreement:
                     (a)     except as otherwise agreed by the Minister the rights
25                           of the Company to in or under this Agreement shall
                             thereupon cease and determine but without prejudice
                             to the liability of either of the parties hereto in respect
                             of any antecedent breach or default under this
                             Agreement or in respect of any indemnity given under
30                           this Agreement;
                     (b)     the Company shall forthwith pay to the State all
                             moneys which may then have become payable or
                             accrued due;
                     (c)     save as aforesaid and as otherwise provided in this
35                           Agreement neither of the parties shall have any claim
                             against the other of them with respect to any matter or
                             thing in or arising out of this Agreement.


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     Schedule 1        Wood Processing (WESFI) Agreement


     Indemnity
     16.       The Company shall indemnify and keep indemnified the State and its
               servants agents and contractors in respect of all actions suits claims
               demands or costs of third parties arising out of or in connection with
5              any work carried out by or on behalf of the Company pursuant to this
               Agreement or relating to its activities hereunder or arising out of or in
               connection with the construction maintenance or use by the Company
               or its servants agents contractors or assignees of the Company's works
               or services the subject of this Agreement or the plant apparatus or
10             equipment installed in connection therewith PROVIDED THAT
               subject to the provisions of any other relevant Act such indemnity
               shall not apply in circumstances where the State, its servants, agents,
               or contractors are negligent in carrying out work for the Company
               pursuant to this Agreement.
15   Subcontracting
     17.       Without affecting the liabilities of the parties under this Agreement
               either party shall have the right from time to time to entrust to third
               parties the carrying out of any portions of the activities which it is
               authorised or obliged to carry out hereunder.
20   Arbitration
     18.       (1)     Any dispute or difference between the parties arising out of or
                       in connection with this Agreement the construction of this
                       Agreement or as to the rights duties or liabilities of either
                       party under this Agreement or as to any matter to be agreed
25                     upon between the parties under this Agreement shall in default
                       of agreement between the parties and in the absence of any
                       provision in this Agreement to the contrary be referred to and
                       settled by arbitration under the provisions of the Commercial
                       Arbitration Act 1985 and notwithstanding section 20(1) of that
30                     Act each party may be represented before the arbitrator by a
                       duly qualified legal practitioner or other representative.
               (2)     Except where otherwise provided in this Agreement, the
                       provisions of this Clause shall not apply to any case where the
                       State the Minister or any other Minister in the Government of
35                     the said State is by this Agreement given either expressly or
                       impliedly a discretionary power.


     page 26
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                              Wood Processing (WESFI) Agreement            Schedule 1

               (3)     The arbitrator of any submission to arbitration under this
                       Agreement is hereby empowered upon the application of any
                       of the parties to grant in the name of the Minister any interim
                       extension of any period or variation of any date referred to
5                      herein which having regard to the circumstances may
                       reasonably be required in order to preserve the rights of that
                       party or of the parties under this Agreement and an award may
                       in the name of the Minister grant any further extension or
                       variation for that purpose.
10   Consultation
     19.       The Company shall during the term consult with and keep the State
               fully informed on a confidential basis concerning any action that the
               Company proposes to take with any third party (including the
               Commonwealth or any Commonwealth constituted agency authority
15             instrumentality or other body) which might significantly affect the
               overall interest of the State under this Agreement.
     Notices
     20.       Any notice consent or other writing authorised or required by this
               Agreement to be given or sent by the State to the Company shall be
20             deemed to have been duly given or sent if signed by the Minister or by
               any senior officer of the Public Service of the said State acting by the
               direction of the Minister and forwarded by prepaid post or handed to
               the Company at its address hereinbefore set forth or other address in
               the said State nominated by the Company to the Minister and by the
25             Company to the State if signed on its behalf by any person or persons
               authorised by the Company or by its solicitors as notified to the State
               from time to time and forwarded by prepaid post or handed to the
               Minister and except in the case of personal service any such notice
               consent or writing shall be deemed to have been duly given or sent on
30             the day on which it would be delivered in the ordinary course of post.
     Term of Agreement
     21.       (1)     This Agreement shall remain in force for a period of 25 years
                       commencing on the date of commencement and expiring on
                       the day next preceding the twenty fifth anniversary thereof or
35                     until sooner determination in accordance with the provisions
                       hereof.



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     Schedule 1       Wood Processing (WESFI) Agreement

               (2)     For the purpose of subclause (1) subsection (2) of section 91
                       of the CALM Act shall be deemed to be modified by the
                       deletion of "15 years" and the substitution of "25 years".
               (3)     The parties will confer 10 years after ratification of this
5                      Agreement and each subsequent 10 years on the Company's
                       intentions with respect to the continuance of the factories'
                       operations.
               (4)     Within 5 years before the expiration of the term the State will
                       confer with the Company with respect to the parties agreeing
10                     to commence negotiations for a new Agreement.
     Applicable law
     22.       This Agreement shall be interpreted according to the law for the time
               being in force in the State of Western Australia.




     page 28
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                         Wood Processing (WESFI) Agreement            Schedule 1


                              FIRST SCHEDULE
                  (Supply and Price of Resource - Clause 5)
     1.   During the several periods set out or referred to in this First Schedule
          the stumpage rates and roading charges referred to in Clause 5(11) of
5         this Agreement shall be payable at the relevant rates set out and
          calculated in accordance with the provisions of this First Schedule
          subject to the conditions and in the manner set out in this Agreement.
          The rates for resource for the Welshpool factory shall continue to be
          agreed or determined and be applicable with respect to the rates for
10        resource for the Dardanup factory notwithstanding that the Company
          may not from time to time be carrying on operations at the Welshpool
          factory.
     2.   Stumpage rates for resource for the Welshpool factory
          (1)     Subject always to the provisions of Clause 5(11)(a) of this
15                Agreement the stumpage rate for resource for the Welshpool
                  factory shall be:
                  (a)     for the period from the date of commencement to
                          30th April 2001:
                                    $12.90 per cubic metre of logs with the price
20                                  for resource of other specifications or
                                    measured by weight being equivalent to this
                                    rate but varied by conversion factors as
                                    agreed from time to time by the Company
                                    and the Executive Director;
25                (b)     for each successive period of 3 years commencing on
                          1st May 2001:
                                    the rate agreed upon by the Executive
                                    Director and the Company pursuant to
                                    subparagraph (4) of this paragraph or failing
30                                  agreement within the time therein provided
                                    at the rate calculated by varying the rate
                                    payable during the relevant preceding period
                                    in the same proportion as the proportional
                                    variation in the relative figures published or
35                                  otherwise provided by the Australian Bureau


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     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1      Wood Processing (WESFI) Agreement

                                       of Statistics as the Consumer Price Index for
                                       Perth (All Groups)(CPI)for the quarter
                                       immediately preceding the commencement
                                       of the relevant preceding period (which, for
5                                      the purposes of any determination to be
                                       made for the period commencing 1 May
                                       2001 shall be deemed to be 1 May 1998) and
                                       for the quarter immediately preceding the
                                       end of the relevant preceding period.
10             (2)   (a)     If the figures for the CPI cease to be published by or
                             to be available from the Australian Bureau of
                             Statistics or become immutable or if the CPI has its
                             reference base changed so that its use becomes
                             inappropriate for the purposes of subparagraph (1)(b)
15                           a new method of calculating any variation in the real
                             value of money over time which most accurately
                             reflects the role performed by the CPI at the date of
                             this Agreement will be agreed between the State and
                             the Company (or failing agreement within 30 days of
20                           one party giving notice to the other invoking the
                             provisions of this paragraph) will be determined by
                             the Minister in his reasonable discretion and such new
                             method will be applied for the purposes of
                             subparagraph (1)(b) in lieu of applying proportional
25                           variations in the CPI;
                     (b)     The provisions of subparagraph (2) (a) will apply,
                             mutatis mutandis, to any new method of calculating
                             variations determined pursuant to such subparagraph
                             from time to time if the use of such new method
30                           becomes inappropriate for the purposes of
                             subparagraph (1)(b).
               (3)   If any variation in the stumpage rate for a period is not agreed
                     or determined prior to the commencement of that period the
                     Company will continue to pay stumpage at the rate payable
35                   during the relevant preceding period and as soon as any new
                     rate has been agreed or determined an adjustment shall be
                     made retrospectively to the commencement of that period.
               (4)   The parties hereto shall confer within 90 days preceding
                     the expiry of each of the periods referred to in

     page 30
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                       Wood Processing (WESFI) Agreement             Schedule 1

                 subparagraphs (1)(a) and (1)(b) of this paragraph in a bona
                 fide effort to reach agreement within such 90 days (or
                 thereafter within such extended time as the Minister may
                 allow as provided in Clause 13 of this Agreement) as to the
5                stumpage rate to be payable for the succeeding period and in
                 so doing shall give full consideration to the economies of
                 growing resource in the softwood plantations and processing
                 and marketing the panel products and all matters incidental
                 thereto including roading and other charges and the extent if
10               any to which during the immediately preceding period the
                 Minister in exercise of his discretion under subclause (11)(a)
                 of Clause 5 of this Agreement or subclause (1)(a) of Clause 7
                 of the 1975 Agreement may have varied any of the several
                 rates of stumpage set out in this First Schedule for a period or
15               periods.
     3.   Stumpage rates for resource for the Dardanup factory:
          (1)    Subject to paragraph 4 of this First Schedule the stumpage rate
                 payable for resource for the Dardanup factory shall be five
                 sixths of the rate from time to time applicable (pursuant to
20               paragraph 2 of this First Schedule) in respect of resource for
                 the Welshpool factory.
          (2)    The provisions of paragraph 2(3) of this First Schedule shall
                 apply mutatis mutandis to stumpage rates payable under this
                 paragraph.
25        (3)    It is acknowledged and agreed by the parties hereto that the
                 stumpage rates provided for in this First Schedule in respect of
                 resource used in the Dardanup factory are of a concessional
                 nature based on the bulk of the panel products manufactured
                 by the Company at the Dardanup factory being delivered
30               beyond the boundaries of the said State.
          (4)    The Company shall if so requested by the Executive Director
                 inform the Executive Director prior to the expiration of the
                 period referred to in paragraph 2(1)(a) of this First Schedule
                 and of each successive 3 year period calculated from
35               1 May 2001 of details of distribution of its panel products.




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     Schedule 1        Wood Processing (WESFI) Agreement

               (5)     If the Executive Director considers in respect of a period
                       reported on by the Company pursuant to paragraph 3(4) of this
                       First Schedule that:
                       (a)     there has been a material reduction in the quantity of
5                              panel products delivered beyond the said State
                               compared to that in the preceding period; or
                       (b)     at the end of the period the Company will be able to
                               compete on an equal footing with its competitors in
                               the markets for its panel products outside the State
10                             without the benefit of concessional rate of stumpage
                               for resource used in the Dardanup factory
                       the parties agree that in determining the stumpage rate to
                       apply in the succeeding period for resource used in the
                       Dardanup factory due regard will be given to determining
15                     whether it is reasonable in the circumstances that such
                       stumpage rate should be aligned with the rate from time to
                       time applicable (pursuant to paragraph 2 of this First
                       Schedule) in respect of resource for the Welshpool factory
                       without the benefit of any concession. Failing agreement on
20                     the withdrawal of the concession the matter shall (if so
                       required by the Executive Director) be determined by
                       arbitration under the provisions of this Agreement.
     4.        Roading Charge
               The roading charge referred to in subclause (11)(e) of Clause 5 of this
25             Agreement shall (subject to subclause (12) of Clause 5) be:
               (1)     for the period from the date of commencement until 30th June
                       immediately following the date of commencement, 52 cents
                       per cubic metre of resource where that resource is measured
                       by volume, or 52 cents per tonne where that resource is
30                     measured by weight; and
               (2)     for each ensuing year at the rate calculated by varying the rate
                       payable during the preceding year in the same proportion as
                       (1+0.5(Ni-Bi)/Bi) bears to 1.0. where Ni refers to the Consumer
                       Price Index for Perth (All Groups) published by the Australian
35                     Bureau of Statistics in respect of the quarter immediately
                       preceding the particular review date and Bi is the Consumer
                       Price Index for Perth (All Groups) published by that Bureau in
                       respect of the corresponding quarter one year earlier.

     page 32
                                    Wood Processing (WESFI) Agreement Bill 2000



                             Wood Processing (WESFI) Agreement               Schedule 1


                                   SECOND SCHEDULE
                           (SPECIFICATIONS - Clause 5(8))
     Log specifications
     1.         Industrial wood logs delivered to the Dardanup factory
5    Species:          Pinus radiata (preferred species), P. pinaster or other Pinus
                       species as available
     Preparation:      Logs shall be freshly cut and have all branches flush trimmed.
     Dimensions:
                       Diameter:         minimum 75 millimetres under bark
10                                       maximum 350 millimetres under bark
                       Length            5.4 metres and such other lengths as agreed
                                         by the Company and the Executive Director:
     Defects (i)       The following defects are not permitted:
                       -        blue stain (except where delivery has been
15                              unreasonably delayed by the Company)
                       -        abrupt changes in diameter
                       -        sharp kinks
                       -        massive knot whorls
                (ii)   The following defects are permitted to the limits shown:
20                     -        Cone holes as they occur.
                       -        Bent or curved logs if they will pass through the
                                debarkers at Dardanup without interfering with
                                production
                       -        The moisture content of the logs at the time of
25                              delivery shall not be less than 75%.
                       -        Burnt bark provided that the timber has not been
                                affected




                                                                                  page 33
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1        Wood Processing (WESFI) Agreement


     2.         Oversized industrial wood logs delivered to the Dardanup factory
     Species:          Pinus radiata (preferred species), P. pinaster or other Pinus
                       species as available
     Dimensions:       Diameter: maximum 550 millimetres under bark
5                      Length:     random length between 3.0 and 7.0 metres
     Defects           All defects will be allowed such that the whole piece can be
                       efficiently chipped with the available chipping equipment.
                       Burnt bark provided that the timber has not been affected.
     3.         Industrial wood logs delivered to the Welshpool factory
10   Species:          P. pinaster (preferred species), Pinus radiata or other Pinus
                       species as available
     Preparation:      Logs shall be freshly cut and have all branches flush trimmed.
     Dimensions:       Diameter: minimum 75 millimetres under bark
                                   maximum 350 millimetres under bark
15                     Length:     A minimum of 4 metres ranging to a maximum of
                                   5.4 metres.
     Defects           The following defects are not permitted:
                       -         blue stain (except where delivery has been
                                 unreasonably delayed by the Company)
20                     -         abrupt changes in diameter
                       -         sharp kinks
                       -         massive knot whorls
                       The following defects are permitted to the limits shown:
                       Cone holes as they occur.
25                     Bent or curved logs if they will pass through the debarker
                       without interfering with production.
                       Burnt bark provided that the timber has not been affected.


     page 34
                                   Wood Processing (WESFI) Agreement Bill 2000



                             Wood Processing (WESFI) Agreement            Schedule 1

     4.         Woodchips delivered to the Dardanup and Welshpool factories
     Species:          Pinus radiata (preferred species for the Dardanup factory), P.
                       pinaster (preferred species for the Welshpool factory) or other
                       Pinus species as available.
5    Chip Size:        Nominal size:
                       Minimum: 16mm x 16mm x 5mm
                       Maximum: 25mm x 25mm x 8mm

                       Sieve size           Proportion of chips delivered
                       >37.5 mm             maximum 10%
                       26.5 - 37.5mm        Maximum 30%, optimum 10%
                       16.0 - 26.5mm        minimum 50%
                       4.0 - 16.0mm         Minimum 10%, optimum 30%
                       <4.0mm               maximum 2%
                       Bark                 maximum 1%
     Quality limits:
                   •    Rot: maximum 0.1% by weight
10                 •    Charcoal (carbon): maximum 0.1% by weight
                   •    Dry (seasoned) wood: maximum 1% by weight
                   •    Blue stain, not accepted except where delivery has been
                       unreasonably delayed by the Company
                   •    Free of sand
15




                                                                              page 35
     Wood Processing (WESFI) Agreement Bill 2000



     Schedule 1       Wood Processing (WESFI) Agreement


     IN WITNESS WHEREOF this Agreement has been executed by or on behalf of
     the parties hereto the day and year first hereinbefore mentioned.


     SIGNED by the said THE HONOURABLE RICHARD }
     FAIRFAX COURT, M.L.A., in the presence of:
                                                }                   RICHARD COURT
                                                             }


5    COLIN BARNETT
     MINISTER FOR RESOURCES DEVELOPMENT




     THE COMMON SEAL of WESFI LIMITED was                    }
     hereunto affixed by authority of the Directors in the
     presence of:                                            }      [C.S]
                                                             }


10   DENIS CULLITY
     Director:


     JAMES MALONE
     Director:




     page 36
                                  Wood Processing (WESFI) Agreement Bill 2000



                           Wood Processing (WESFI) Agreement                  Schedule 1




Note: The existing plantations of softwood timber referred to in the definition of "softwood
plantations" in the Agreement are shown on this plan as CALM Managed State
Plantations - Coniferous and CALM Managed Sharefarms - Coniferous.


                                                                                  page 37
Wood Processing (WESFI) Agreement Bill 2000



Schedule 1        Wood Processing (WESFI) Agreement




Note: The inner noise emission contour is the May 2000 Model.



 


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