New Guinea Timber Agreement Act 1952 (Cth)

NEW GUINEA TIMBER AGREEMENT.

No. 40 of 1952.

A n A c t to approve the Agreement made between

Act 1952.

the Commonwealth and Bulolo Gold

Dredging Limited with respect to the formation of a Company to be known as Commonweal th-New Guinea Timbers Limited, and for purposes connected therewith.

[Assented to 17th June, 1952.]

BE it enacted by the Queen's Most Excellent Majesty, the Senate, Australia, as follows:—

and the House of Representatives of the Commonwealth of

1. This Act may be cited as the New Guinea Timber Agreement Short title.

No. 40. New Guinea Timber Agreement. 1952.

Commencement. 2. This Act shall come into operation on the day on which it

receives the Royal Assent.

Definition.	3. In this Act, " the Agreement" means the agreement a copy of which is set out in the Schedule to this Act.
Approval of

Agreement. 4. The Agreement is approved.

Appropriation. 5. There is payable out of the Consolidated Revenue Fund, which is appropriated accordingly, for the purpose of meeting the liabilities of the Commonwealth arising under or out of the Agreement, the sum of Five hundred thousand and one pounds.

Section 3. THE SCHEDULE.

A G R E E M E N T m ade this twent ieth d a y o f M a y, One thousand nine hundred

and fifty-two, B E T W E E N T H E C O M M O N W E A L T H OF A U S T R A L I A (in this Agreement

called " t h e C o m m o n w e a l t h " ) o f the one par t a n d B U L O L O G O L D D R E D G I N G L I M I T E D a c o m p a n y incorporated in Canada and registered under Part V I. o f the Companies A c t, 1936 o f N e w South Wales, whose registered office in that State is situate at R o o m 4 0 1, F o u r t h F l o o r, "Shell H o u s e ", Carrington Street, S y d n e y (in this

Agreement	called	" t h e C o m p a n y " )	o f the other	part	W H E R E B Y	I T I S A G R E E D	as
f o l l o w s: —

1. This Agreement shall have n o force o r effect and shall n o t be binding on either

par ty unless and until it is a p p r o v e d b y the Parl iament o f the C o m m o n w e a l t h.

2. This Agreement shall c o m m e n c e and c o m e into full force and effect u p o n the

date u p o n which it is so a p p r o v e d.

3. T h e C o m p a n y shall forthwith take all necessary steps t o incorporate and

register in, a n d in accordance with the laws of, the Terr i tory o f N e w Guinea a c o m p a n y (in this Agreement called " t h e T i m b e r C o m p a n y " ) under the name o f " C o m m o n -

w e a l t h - N e w Guinea T imbers L i m i t e d " with l imited l iabil ity.

4 .—(1. ) T h e M e m o r a n d u m o f Assoc iat ion and Articles o f Associat ion o f the

T i m b e r C o m p a n y, and any alteration o f t h e m, shall be sub jec t to the approva l o f the

Com m on wea l t h, and they shall prov ide (inter alia)—

(a) that the ob jec t s o f the T i m b e r C o m p a n y shall i n c l u d e —

(i) the acquisition of timber rights in the Territory of Papua and the

Territory of New Guinea (in this Agreement together called

" t h e T e r r i t o r y " ); and

(ii) the harvesting of logs, the sawing and milling of timber, the peeling

of veneer and the manufacture of plywood in the Territory, the

supply o f battery separator material, the util ization o f t imber

waste, and the market ing o f t imber and t imber p r o d u c t s;

(b) that the nominal capital shall be T w o mill ion pounds (£2,000,000) in shares

o f One p o u n d (£1) e a c h;

(c) that the initial issue of shares shall be five hundred thousand (500,000) shares

and that they shall be allotted as follows:—

(i) two hundred and forty-nine thousand nine hundred and ninety-

seven (249,997) shares to the Commonwealth;

(ii) four (4) shares t o nominees o f the C o m m o n w e a l t h;

(iii) two hundred and forty-nine thousand nine hundred and ninety-

six (249,996) shares to the Company; and

(iv) three (3) shares t o nominees o f the C o m p a n y;

(d) that the first five hundred thousand (500,000) shares issued shall be paid

for in cash;

(e) that the shares subscribed for by and allotted to the Company in any issue after the first five hundred thousand (500,000) shares may be paid for by the

transfer o f assets in accordance wi th clause 6 o f this Agreement t o the

a m o u n t o f the value o f those a s s e t s;

1952. New Guinea Timber Agreement. No. 40.

T H E S C H E D U L E — c o n t i n u e d.

(f) that, sub jec t t o this clause, o n a n y issue o f capital, the Commonwea l th and

t h e C o m p a n y shall be entitled to subscribe for equal ly and shall be

al lotted equal ly all new shares in the T i m b e r C o m p a n y;

(g) that either the Commonwea l th o r the C o m p a n y as members o f the T i m b e r

C o m p a n y m a y d e m a n d a poll on any question submit ted to a General Meeting and that upon a pol l the Commonwea l th and the C o m p a n y shall each be entit led to one (1) v o t e in respect o f each share held by t h e m, b u t the nominees o f the C o m m o n w e a l t h and the C o m p a n y appo inted for the purpose o f paragraph (c) o f this sub-clause shall n o t be entitled to

v o t e in respect o f the shares held by t h e m;

(h) that there shall be a B o a r d o f four D i r e c t o r s;

(i) that, o f the total n u m b e r o f Directors, t w o shall be nominated by and

represent the Commonwea l th, and two shall be nominated b y and represent

the C o m p a n y;

( j ) that the B o a r d o f Directors shall contro l the general po l i cy, including the

market ing po l i cy, o f the T i m b e r C o m p a n y, and that the technical and

commerc ia l management, including e m p l o y m e n t o f labour, planning and market ing, shall be carried out b y the management appointed b y the B o a r d o f Directors in accordance with the general po l i cy, including the

market ing po l i cy, o f the Board o f D i r e c t o r s;

(k) that, in the event o f d isagreement between the Directors representing the Commonwea l th on the one hand and the Directors representing the C o m p a n y o n the other hand on a n y question, the Directors shall not i fy the Commonwea l th and the C o m p a n y o f the disagreement, and that, in that event, the Commonweal th and the C o m p a n y will endeavour to agree on the po in t o f disagreement, b u t that, if they are unable to agree, the B o a r d o f Directors shall dec ide the question as directed by the C o m m o n - w e a l t h;

(l) that the B o a r d o f Directors shall, sub jec t t o this clause, elect one o f their

number, whether a Director representing the Commonweal th or one

representing the C o m p a n y, t o be Chairman (in this Agreement called the

" C h a i r m a n " ) w h o shall have a del iberative b u t n o t a casting v o t e;

(m) that one o f the first Directors nominated b y and representing the C o m p a n y shall be J o h n W o r r o k e r Austin Esquire, a Director o f the C o m p a n y, w h o shall be the first Chairman, b u t shall cease to be. Chairman if he ceases to be a Director representing the C o m p a n y;

(n) that, sub jec t t o this clause, the term o f office o f the first Chairman shall be

such per iod n o t exceeding five (5) years as the B o a r d decides, and that

each succeeding Chairman shall be appointed for such term not exceeding

three (3) years as the B o a r d d e c i d e s:

(o) that a Chairman shall be eligible for r e - e l e c t i on;

(p ) that, in the event o f the first Chairman n o t complet ing a full term o f five ( 5 ) years as Chairman, the Chairman for the balance o f that t e rm shall b e a

Director nominated	b y	the C o m p a n y	and a p p r o v e d	b y	the	C o m m o n w e a l t h;
and

(q) that the T i m b e r C o m p a n y shall n o t dispose o f a n y o f its m a j o r assets wi thout

the j o in t a p p r o v a l o f the C o m m o n w e a l t h and the C o m p a n y.

(2.) T h e C o m m o n w e a l t h, nominees o f the Commonwea l th, the C o m p a n y and

nominees o f the C o m p a n y will app ly for, take u p and p a y for the n u m b e r o f shares o f the initial issue o f shares o f the T i m b e r C o m p a n y which it is p rov ided in para- graph (c) o f sub-clause (1.) o f this clause will be al lotted to t h e m respect ively.

5. T h e assurance o f the supply t o the Australian market o f p l y w o o d and other products similar t o those o f the T i m b e r C o m p a n y is fundamenta l t o this Agreement.

The C o m p a n y will, as part o f its capital contr ibut ion as set o u t in paragraph (e) o f sub-clause (1.) o f clause 4 o f this Agreement, transfer t o the T i m b e r C o m p a n y, at their fair value at the t ime o f transfer, the who le or such port ion as the T i m b e r C o m p a n y requests o f the assets used b y the C o m p a n y in its logging and milling operations in the Bulo lo Val ley.

6.

No. 40. New Guinea Timber Agreement. 1952.

T H E S C H E D U L E — c o n t i n u e d.

7.—(1.) Unt i l suitable alternative arrangements have been made b y the T i m b e r C o m p a n y, the C o m p a n y will, at reasonable charges, prov ide the T i m b e r C o m p a n y with the stores, services ( including work - shop and transport ), te lephone facilities and electric p o w e r required b y the T i m b e r C o m p a n y for carrying out its operat ions,

and will prov ide the T i m b e r C o m p a n y ' s employees with a c c o m m o d a t i o n, medical

services, and hospital and recreational facilities.

(2.) T h e C o m p a n y will n o t w i thdraw the provis ion o f those stores, services,

facilities or power, or any part o f t h e m, wi thout first g iv ing the T i m b e r C o m p a n y the opt ion o f purchasing those stores, services, facilities or power, or that part o f them, o r the means o f providing t h e m, as the case m a y be, at their fair value.

8. I n carrying out its operat ions, the T i m b e r C o m p a n y m a y e m p l o y such labour

as m a y b e convenient ly and pract i cably e m p l o y e d having regard to local condit ions

and the avai labi l i ty o f the different t y p e s o f labour.

9 .—(1. ) T h e C o m m o n w e a l t h will cont inue to i m p r o v e the road between Bu lo l o

and L a e until it is brought to a reasonably trafficable condi t ion, and thereafter will

cont inue t o maintain the road in that condi t ion.

(2.) T h e Commonweal th will use its best endeavours to complete the bui lding o f

the M a r k h a m and M u m e n g Bridges before the T i m b e r C o m p a n y commences the

product i on o f p l y w o o d.

10. Sub jec t t o the legislation in force in and relating to the Terr i tory o f N e w Guinea, the Commonweal th will take all necessary steps and d o all in its p o w e r to

ensure the grant to the T i m b e r C o m p a n y o f a permi t under the Forestry Ordinance

1936-1951 and the Forestry Regu la t i ons o f the Terr i tory o f N e w G u i n e a —

(a) conferring u p o n the T i m b e r C o m p a n y the exclusive right t o cut and remove

over a per iod o f ten (10) years one hundred million (100,000,000) super feet o f H o o p and Kl inki i p ine and a smaller quant i ty, t o be determined by the Administrator o f the Terr i tory (in this Agreement called " t h e A d m i n i s t r a t o r " ), o f cedar and secondary species o f t imbers from within an area or areas totall ing fifteen thousand (15,000) acres o f land owned b y the Administrat ion o f the Terr i tory and situated in the Bulo lo Valley

in the District o f Morobe in the Terr i tory o f N e w G u i n e a; and

(b) containing and sub jec t t o condi t ions substantially t o the effect t h a t —

(i) if the Timber Company is or becomes unable or unwilling to utilise all forest products, including timber waste in the forest and at its manu-

facturing p lant, it shall m a k e available access and reasonable facilities t o persons or bod ies authorised b y the Administrator for the purpose o f removing and utilising those materials if such access will no t prejudic ial ly affect the rights and operations o f the

T imber

C o m p a n y;

(ii) the Timber Company must cut the following minimum quantities of

logs of Hoop and Klinkii pines, namely:—

(A) two hundred thousand (200,000) super feet per month after

six (6) months from the date of commencement of

p r o d u c t i o n;

(B) seven million (7,000,000) super feet per annum after two

(2) years from the date of commencement of production;

(iii) the Timber Company must not cut more than the following maximum

quantities of logs of Hoop and Klinkii pines, namely:—

( A ) twe lve mil l ion (12,000,000) super feet in a n y one y e a r;

(B) one hundred million (100,000,000) super feet during the

currency of the permit;

(iv) the minimum and maximum quantities of logs of cedar and secondary

timbers to be cut by the Timber Company shall be as determined

b y the A d m i n i s t r a t o r; (v) the Timber Company shall pay to the Administration of the Territory

royalties at the rates prescribed in the Forestry Regulations of the Terr i tory o f N e w Guinea together with such additional royalties as, sub jec t t o sub-clauses (v i ) and (vii) o f this paragraph, m a y be determined b y the Adminis trator in accordance with the

Regulat ions after consultation with the T i m b e r C o m p a n y;

1952. New Guinea Timber Agreement. No. 40.

T H E S C H E D U L E — c o n t i n u e d.

(vi) the addit ional royalties payab le b y the T i m b e r C o m p a n y during the

first five (5) years o f the permit shall be as f o l l o w: —

Rate of Additional

Species of Timber. Royalty for each 100

super feet.

s. d.

Araucaria cunninghamii and A. Klinkii—

Logs	4	0
T o p s	Nil

Other	conifers	Nil
Cedrela	toona	3 6

Flindersia pimenteliana ( N e w Guinea

s i lkwood) 2 0

Other hardwoods Nil

(vii) the additional royalties payable by the Timber Company shall be subject to review annually after the expiration of the first five (5)

years o f the p e r m i t;

(viii) all log timber harvested shall be measured on full volume scale, and

the method of scaling shall be as agreed between the Timber

C o m p a n y and the Director o f Forests o f the Terr i tory or, in the

event of disagreement, as fixed by the Director of Forests; and

(ix) the conditions as to replanting shall be as determined by the Admin-

istrator, sub jec t t o the Forestry Ordinance 1936-1951 and the

Forestry Regulat ions o f the Terr i tory o f N e w Guinea, after

consultation with the T i m b e r C o m p a n y.

11. The ownership o f the replanted forest will n o t be transferred to the T i m b e r

C o m p a n y, but the C o m m o n w e a l t h will l o ok favourab ly upon any proposals t o enable

the T i m b e r C o m p a n y to ge t greater assurance o f cont inui ty o f operation and o f the

use o f the yie ld o f the replanted forest.

12. On the expirat ion o f the permit referred to in clause 10 o f this Agreement, the C o m m o n w e a l t h will, sub jec t t o the legislation in force in and relating to the Terr i tory o f N e w Guinea, take all necessary steps and d o all in its power to ensure the grant t o the T i m b e r C o m p a n y o f a renewal o f the permit for a further period o f ten (10) years conferring on the T i m b e r C o m p a n y the exclusive r ight, sub jec t t o such terms and condit ions as the Administrator thinks fit, t o cut and remove during that further per iod from the area or areas referred to in clause 10 o f this Agreement a quant i ty o f one hundred mill ion (100,000,000) super feet o f H o o p and Kl inki i pines a n d such quantities o f cedar and secondary species o f t imber as m a y be determined

b y the Adminis trator.

13. T h e C o m m o n w e a l t h does n o t enter into any c o m m i t m e n t with the C o m p a n y

regarding the pine t imber, est imated at three hundred mill ion (300,000,000) super feet, remaining in the existing forests in the Bulo lo Val ley, b u t will consider a n y proposal o f the C o m p a n y for that t imber to be harvested b y the T i m b e r C o m p a n y

under a further permit, t o operate f rom the expirat ion o f the renewed permit referred

to in clause 12 o f this Agreement, i f the Commonweal th is satisfied that this Agreement

has operated satisfactorily. The C o m m o n w e a l t h is no t aware o f any reason w h y

that t imber should n o t be harvested b y the T i m b e r C o m p a n y under an extension

o f the original p e r m i t. '

14. I f customs d u t y is pa id u p o n the importat ion in to Australia o f the p l y w o o d,

veneers, logs and other produc ts o f the T i m b e r C o m p a n y, a n d is n o t remit ted, the

C o m m o n w e a l t h will p a y to the T i m b e r C o m p a n y a subsidy upon the exportat ion o f those products from the Terr i tory for entry into Australia o f an amount or at a rate determined b y the Commonwea l th f rom t ime to t ime, but the a m o u n t o f subsidy-

paid shall n o t exceed the a m o u n t o f cus toms d u t y paid and not remitted.

15 .—(1. ) Sub je c t t o this clause, neither par ty to this Agreement wil l sell or transfer

its holding o f shares in the T i m b e r C o m p a n y or a n y p a r t o f it w i thout the previous consent in writing o f the other, or, w i thout prior not ice t o the other, mor tgage, pledge or charge its holding or any part o f it.

(2. ) Either party m a y, w i thout the consent o f the other, transfer shares held b y

it in the T i m b e r C o m p a n y to a nominee to ho ld in trust for the transferring par ty,

a n d such nominee shall be entit led to vo te on a pol l held in accordance with paragraph

(g)	of sub-clause (1.) of clause 4 of this Agreement.
F. 4 8 0 7. — 1 4

No. 40. New Guinea Timber Agreement. 1952.

T H E SCHEDULE—continued.

(3.) I f the C o m p a n y ' s interests are d a m a g e d b y reason o f a divergence o f the

T i m b e r C o m p a n y from those o f its ob jec t s set out in paragraph (a) o f sub-clause (1.)

o f clause 4 o f this Agreement, the C o m p a n y will have the right t o sell t o the C o m m o n -

wealth, and the Commonwea l th wil l purchase, the share holding o f the C o m p a n y in

the T i m b e r C o m p a n y at the fair value o f that holding at the date o f the sale.

(4.) I f one p a r t y consents t o the o ther p a r t y selling its ho ld ing in the T i m b e r

C o m p a n y, the consent ing p a r t y shall have the opt i on, t o be exercised within three (3)

m o n t h s after the date o f the consent, o f purchasing the other par ty ' s holding in the

T i m b e r C o m p a n y at its fair value a t the t ime o f the sale, and, in the event o f d ispute,

the fair value o f a party ' s	holding	in the T i m b e r	C o m p a n y	shall be determined b y
arbitration.

16. I n the event o f the T i m b e r C o m p a n y n o t being incorporated within the per iod

o f twelve (12) m o n t h s f rom the date o f this Agreement, either the Commonwea l th

or the C o m p a n y shall be at l iberty b y not i ce in writing t o the other t o terminate

this	Agreement.
17. A n y delay or disabil ity in the carrying out o f this A g r e e m e n t arising direct ly

f r om the ac t o f G o d, war, restraints o f Princes, strikes or lock-outs o f w o r k m e n or other industrial disturbances, shall n o t entitle any party to damages or t o a cancel lation o f this Agreement, b u t this Agreement shall, t o the extent o f the delay or disabil ity, be deemed t o b e suspended and shall forthwith c o m e into full force and effect when the de lay o r disabil ity shall have ceased.

18. I n the event o f a n y dispute arising between the Commonwea l th and the C o m p a n y, o r between the C o m p a n y and the T i m b e r C o m p a n y, as t o the construct ion o f this Agreement, or as t o the rights or obl igat ions o f either o f the parties t o this A g r e e m e n t under or arising f r o m this Agreement, the dispute shall be settled b y arbitration in accordance with the laws relating t o arbitration in force in the Terr i tory

o f N e w 19. A n y not i ce, Guinea.

c ommunica t i on, op in ion, agreement, approva l

or other matter

or thing t o be g iven, m a d e, expressed or done by the C o m m o n w e a l t h under this

A g r e e m e n t shall be deemed t o have been du ly g iven, m a d e, expressed or done i f g iven, m a d e, expressed or done in writ ing signed on behalf o f the Commonwea l th b y or on behal f o f the Pr ime Minister o f the C o m m o n w e a l t h, and del ivered at or sent

b y prepaid pos t t o the registered office o f the C o m p a n y in N e w South W a l e s.

20. A n y not i ce, c o m m u n i c a t i o n, agreement, approva l or other mat ter or thing

to be g iven, m a d e, expressed or done b y the C o m p a n y under this Agreement shall b e deemed to have been duly g iven, m a d e, expressed or done i f g iven, m a d e, expressed o r done in writ ing signed on behal f o f the C o m p a n y b y any Direc tor o r A t t o r n e y o f the C o m p a n y in Australia, and del ivered or sent b y prepaid pos t t o the Secretary o f the D e p a r t m e n t o f Territories o f the Commonwea l th at the Central Office o f that

D e p a r t m e n t in Australia.

21. This Agreement shall be interpreted in accordance with the laws of the

Terr i tory o f N e w Guinea.

I N W I T N E S S whereof the parties hereto have executed this Agreement the d a y

and year first a b o v e wr i t ten.

S I G N E D S E A L E D A N D D E L I V E R E D b y the R i g h t

H o n o u r a b l e SIR A R T H U R W I L L I A M F A D D E N, the

Act ing P r i m e Minister o f the C o m m o n w e a l t h o f A. W. F a d d e n ( L. S. )

Austral ia, for a n d on behalf o f the C o m m o n w e a l t h,

in the presence o f—

J. R. K e l l y.

T h e Official Seal o f the C o m p a n y in Austral ia

was hereunto affixed b y author i ty o f the C o m p a n y

under	its C o m m o n	Seal	b y m e Frederick	Wi l l iam	( L. S. )
( L. S. )

R o s s G o d d e n a Director at S y d n e y in the State o f N e w South Wales on the seventeenth d a y o f

M a y, 1952.

F. W. R. G o d d e n,

Director.