An Act to amend the Sugar Industry Act 1999 for particular purposes The Parliament of Queensland enacts— 1 Short title This Act may be cited as the Sugar Industry (Arbitration for Mill Owners and Sugar Marketing Entities) Amendment Act 2017 . 2 Act amended This Act amends the Sugar Industry Act 1999 . 3 Amendment of ch 2, hdg (Supply contracts and cane access rights) Chapter 2, heading, after ‘contracts’— insert— , on-supply agreements, 4 Omission of ch 2, pt 2, div 1 hdg (Cane supply is governed by supply contracts) Chapter 2, part 2, division 1, heading— omit. 5 Amendment of s 33A (Arbitration of disputed terms of intended supply contract) (1) Section 33A(2)(b), ‘(5) to (9)’— omit, insert— (4) to (9) and section 37 (2) Section 33A(3), after ‘(9)’— insert— and section 37 (3) Section 33A(11), definition arbitral tribunal— omit. 6 Amendment of s 33B (Terms of supply contract about sale of on-supply sugar) (1) Section 33B, heading, from ‘Terms’ to ‘sugar’— omit, insert— Particular terms of supply contract (2) Section 33B(2)(c)(i)— omit, insert—

(i) a term stating the way in which the mill economic interest sugar is to be worked out and requiring the mill owner to bear the sale price exposure for the sale of the mill economic interest sugar;

(3) Section 33B(2)(c)(ii), from ‘remaining’ to ‘sugar)’— omit, insert— grower economic interest sugar (4) Section 33B(2)(d)(i), from ‘agreement’ to ‘interest sugar’— omit, insert— on-supply agreement with a stated entity (the GEI sugar marketing entity) for the sale of the grower economic interest sugar (5) Section 33B(2)— insert—

(f) a term providing for a process for dispute resolution including arbitration and requiring the grower and mill owner to attempt to resolve any dispute about a term of the supply contract by using the process.

7 Replacement of s 34 (Parties must use dispute resolution process stated in supply contract) Section 34— omit, insert— 34 Contracting out prohibited A supply contract is void to the extent to which it—

(a) is contrary to this Act; or

(b) purports to annul, exclude, restrict or otherwise change the effect of a provision of this Act.

8 Omission of ch 2, pt 2, div 2 hdg and s 36 Chapter 2, part 2, division 2, heading and section 36— omit. 9 Relocation and renumbering of s 37 (No final offer arbitration) Section 37— relocate to chapter 2, part 3A as inserted by this Act, and renumber as section 42. 10 Insertion of new ch 2, pts 3 and 3A After section 35— insert— Part 3 On-supply agreements 36 Arbitration of disputed terms of intended on-supply agreement (1) This section applies if—

(a) either—

(i) a supply contract between a grower and a mill owner includes a term providing for an entity (the relevant marketing entity) nominated by the grower to be the GEI sugar marketing entity; or

(ii) the following apply—

(A) a GEI sugar marketing term is a proposed term of an intended supply contract between a grower and a mill owner;

(B) the grower has nominated an entity (also the relevant marketing entity) to be the GEI sugar marketing entity for the intended supply contract;

(C) the entity has agreed to be the GEI sugar marketing entity; and

(b) the relevant marketing entity is not the mill owner or a related body corporate of the mill owner; and

(c) the relevant marketing entity or the mill owner is negotiating, or has attempted to negotiate, an on-supply agreement (an intended on-supply agreement) with the other party; and

(d) the relevant marketing entity or mill owner gives the other party a notice requiring the other party to use all reasonable endeavours to negotiate an on-supply agreement within a stated period (the negotiation period) of at least 10 business days; and

(e) at the end of the negotiation period, the relevant marketing entity and mill owner dispute a proposed term of the intended on-supply agreement.

(2) The relevant marketing entity and mill owner are taken to have made an agreement (the referral agreement)—

(a) to refer the dispute to arbitration; and

(b) for the dispute to be arbitrated under the Commercial Arbitration Act 2013 subject to subsections (4) to (8) and section 37.

(3) If the relevant marketing entity or mill owner refers a dispute about a proposed term of the intended on-supply agreement to arbitration, the Commercial Arbitration Act 2013 applies to the arbitration subject to subsections (4) to (8) and section 37. (4) Despite the Commercial Arbitration Act 2013 , section 7, the referral agreement is taken to be an arbitration agreement under that Act. (5) The arbitral tribunal appointed for the arbitration may decide the dispute about the proposed term only by deciding the term. (6) A term of the intended on-supply agreement must not have the effect of unreasonably treating the relevant marketing entity less favourably than a related body corporate of the mill owner would be likely to be treated if the related body corporate were to be the GEI sugar marketing entity. (7) Without limiting subsection (6), a term of the intended on-supply agreement would have the effect of unreasonably treating the relevant marketing entity less favourably for the subsection if the effect were that the entity would unreasonably incur a higher cost to supply a service under the agreement than a related body corporate of the mill owner would incur if the related body corporate were the GEI sugar marketing entity. (8) Each party must bear the party’s own costs of the arbitration. (9) If the arbitral tribunal decides each dispute about the proposed terms of the intended on-supply agreement, the relevant marketing entity and the mill owner are taken to have made an on-supply agreement including—

(a) any terms agreed between the parties; and

(b) the terms decided by the arbitral tribunal.

37 Concurrent arbitration of supply contract and on-supply agreement disputes (1) This section applies if—

(a) it is a proposed term of an intended supply contract between a grower and a mill owner that the mill owner is required to have an on-supply agreement (also an intended on-supply agreement) with a GEI sugar marketing entity to be nominated by the grower; and

(b) the grower or mill owner has referred a dispute about the proposed GEI sugar marketing term (the supply contract dispute) to arbitration under section 33A; and

(c) the arbitral tribunal appointed for the arbitration (the supply contract arbitrator) has started but not finished dealing with the supply contract dispute; and

(d) under section 36(1)(a)(ii), a relevant marketing entity has been nominated by the grower and has agreed to be the GEI sugar marketing entity for the intended on-supply agreement; and

(e) the relevant marketing entity or the mill owner has complied with section 36(1)(c) and (d) and the parties dispute a proposed term of the intended on-supply agreement (the on-supply agreement dispute); and

(f) the mill owner or relevant marketing entity refers the on-supply agreement dispute to the supply contract arbitrator to be arbitrated concurrently with the supply contract dispute.

(2) Section 36(2) to (9) applies in relation to the arbitration of the on-supply agreement dispute, subject to subsection (3). (3) The supply contract arbitrator must conduct the arbitration for the on-supply agreement dispute concurrently with the arbitration for the supply contract dispute in the way it considers appropriate. (4) Without limiting subsection (3), the supply contract arbitrator may—

(a) deal with a matter relating to the on-supply agreement dispute at the same time as a matter relating to the supply contract dispute or at another time as it may order; or

(b) defer dealing with a matter relating to the on-supply agreement dispute or supply contract dispute until a matter relating to the other dispute is dealt with.

(5) In this section— matter includes an aspect of a matter. 38 Particular terms of on-supply agreement (1) This section applies to an on-supply agreement between a GEI sugar marketing entity and a mill owner for the sale of grower economic interest sugar unless the GEI sugar marketing entity is a related body corporate of the mill owner. (2) An eligible grower may be a party to the on-supply agreement if the GEI sugar marketing entity and mill owner give their approval. (3) If an approval is given under subsection (2), it cannot—

(a) be subject to conditions; or

(b) be varied or revoked.

(4) The on-supply agreement must be made for a period including, at least, the crushing seasons to which the original supply contract for the agreement relates. (5) The on-supply agreement must include each of the following—

(a) a term requiring the mill owner to deliver for sale the grower economic interest sugar as directed by the GEI sugar marketing entity within a stated reasonable period;

(b) a term providing for the quality of the grower economic interest sugar required to be delivered for sale under the agreement;

(c) a term otherwise providing for the way in which the grower economic interest sugar is to be delivered to or for, and stored by or for, the GEI sugar marketing entity;

(d) a term stating the way in which the sale price of the grower economic interest sugar is to be worked out;

(e) a term providing for a process for dispute resolution including arbitration and requiring the parties to attempt to resolve any dispute about a term of the agreement by using the process.

(6) Without limiting subsection (5)(a), the stated period must be reasonable having regard to the likely period in which the mill owner could deliver the grower economic interest sugar for sale to a related body corporate of the mill owner. (7) In this section— eligible grower means a grower who, under the original supply contract for the on-supply agreement, is required to bear the sale price exposure for the grower economic interest sugar. original supply contract, for the on-supply agreement, means the supply contract including the GEI sugar marketing term requiring the mill owner to have the on-supply agreement with the GEI sugar marketing entity for the sale of the grower economic interest sugar. 39 Contracting out prohibited An on-supply agreement is void to the extent to which it—

(a) is contrary to this Act; or

(b) purports to annul, exclude, restrict or otherwise change the effect of a provision of this Act.

Part 3A Dispute resolution under contract 40 Application of pt 3A This part applies if a dispute arises between any or all of the parties to a supply contract or an on-supply agreement about its terms. 41 Using dispute resolution processes under contract or agreement (1) The parties to the contract or agreement must attempt to resolve the dispute by using the processes for dispute resolution provided for in the contract or agreement. (2) If, under subsection (1), the parties use arbitration to attempt to resolve a dispute, the Commercial Arbitration Act 2013 applies to the arbitration subject to subsection (3) and section 42. (3) Each party must bear the party’s own costs of the arbitration. 11 Amendment of s 237 (Collective contracts) (1) Section 237(1)— insert—

(c) the terms on which on-supply sugar to which the collective contract relates is to be sold under an on-supply agreement between the mill owner and a GEI sugar marketing entity.

(2) Section 237(4), definition settlement— insert—

(d) a GEI sugar marketing entity.

(3) Section 237(4)— renumber as section 237(5). (4) Section 237— insert— (4) For subsection (3)(a) or (b), the making or variation of the collective contract includes the making or variation of a GEI sugar marketing term of the contract or a term mentioned in section 33B(2)(e). 12 Amendment of s 238 (Sale of on-supply sugar) (1) Section 238, heading, from ‘Sale’ to ‘sugar’— omit, insert— Supply and sale of on-supply sugar and related things (2) Section 238(a), from ‘a grower’ to ‘making’— omit, insert— the making or variation of (3) Section 238(b)— omit, insert—

(b) the making or variation of an on-supply agreement for the sale of grower economic interest sugar in compliance with a GEI sugar marketing term;

(ba) a grower negotiating with a mill owner or GEI sugar marketing entity the terms, or a variation of the terms, of an on-supply agreement to the extent the terms of the agreement relate to the terms of a supply contract between the grower and mill owner;

(4) Section 238(c), ‘agreement mentioned in paragraph (b)’— omit, insert— on-supply agreement (5) Section 238(ba) to (d)— renumber as section 238(c) to (e). (6) Section 238— insert—

(f) a mill owner and a GEI sugar marketing entity being taken to have made an on-supply agreement under section 36(9);

(g) any 2 or all of a grower, mill owner and GEI sugar marketing entity making, varying or giving effect to a contract relating to any of the following—

(i) a supply contract made, or an intended supply contract to be made, between the grower and mill owner;

(ii) an on-supply agreement made, or an intended on-supply agreement to be made, between the mill owner and GEI sugar marketing entity.

(7) Section 238— insert— (2) Subsection (1)(c) applies whether or not the grower is, or becomes, a party to the on-supply agreement. (3) In this section, a reference to a grower may be taken to include—

(a) a reference to a group of growers; and

(b) a reference to a group of growers for whom a bargaining representative is acting.

13 Insertion of new ch 10, pt 1 hdg After chapter 10 heading— insert— Part 1 Sugar Industry (Real Choice in Marketing) Amendment Act 2015 14 Insertion of new ch 10, pt 2 After section 298— insert— Part 2 Transitional provisions for Sugar Industry (Arbitration for Mill Owners and Sugar Marketing Entities) Amendment Act 2017 299 Existing cane supply contract (1) This section applies to a contract (an existing cane supply contract) that, immediately before the commencement, was a supply contract in force under chapter 2. (2) Section 33B(2)(f) does not apply to the existing cane supply contract. (3) Pre-amended section 34(1) applies to the existing cane supply contract. (4) Subsections (2) and (3) stop applying—

(a) when the current contract period for the existing cane supply contract ends; or

(b) if the existing cane supply contract is terminated.

(5) Despite subsections (2) and (3), the existing cane supply contract is taken to be a supply contract. (6) To remove any doubt, it is declared that section 34(a) does not apply to the existing cane supply contract only because subsections (2) and (3) apply to the contract. (7) In this section— current contract period, for the existing cane supply contract—

(a) means the period stated in the contract as the period for which it is in force; but

(b) if the contract is extended or renewed on or after the commencement, does not include a period to which the extension or renewal relates.

pre-amended section 34 means section 34 as in force immediately before the commencement. 300 Existing on-supply agreement (1) This section applies to an agreement (an existing on-supply agreement)—

(a) for the sale of raw sugar that has been manufactured, or is to be manufactured, from the cane supplied, or to be supplied, under a relevant cane supply contract; and

(b) that was in force immediately before the commencement.

(2) Section 38(4) to (6) and chapter 2, part 3A do not apply in relation to the existing on-supply agreement. (3) Subsection (2) stops applying—

(a) when the current agreement period for the existing on-supply agreement ends; or

(b) if the existing on-supply agreement is terminated.

(4) To remove any doubt, it is declared that section 39(a) does not apply to the existing on-supply agreement only because subsection (2) applies to the agreement. (5) In this section— current agreement period, for the existing on-supply agreement—

(a) means the period stated in the agreement as the period for which it is in force; but

(b) if the agreement is extended or renewed on or after the commencement, does not include a period to which the extension or renewal relates.

relevant cane supply contract means a contract that, before the commencement, was a supply contract in force under chapter 2. 15 Amendment of schedule (Dictionary) (1) Schedule, definition on-supply sugar— omit. (2) Schedule— insert— arbitral tribunal see the Commercial Arbitration Act 2013 , section 2. grower economic interest sugar—

(a) to which a supply contract relates—means the proportion of the on-supply sugar, other than the mill economic interest sugar to which the contract relates, for which the grower is required to bear the sale price exposure under the contract; or

(b) to which an intended supply contract relates—means the proportion of the on-supply sugar, other than the mill economic interest sugar to which the intended contract relates, for which it is proposed the grower will be required to bear the sale price exposure under the supply contract as made.

intended on-supply agreement see sections 36(1)(c) and 37(1)(a). intended supply contract see section 33A(1)(a). mill economic interest sugar—

(a) to which a supply contract relates—means the proportion of the on-supply sugar for which the mill owner is required to bear the sale price exposure under the contract; or

(b) to which an intended supply contract relates—means the proportion of the on-supply sugar for which it is proposed the mill owner will be required to bear the sale price exposure under the supply contract as made.

on-supply agreement—

(a) for the sale of grower economic interest sugar, means a written agreement made between a GEI sugar marketing entity and a mill owner to sell the quantity of the on-supply sugar to which a supply contract relates that is at least equal to the quantity of the grower economic interest sugar; and

(b) includes an on-supply agreement taken to have been made under section 36(9).

on-supply sugar—

(a) to which a supply contract relates, means the raw sugar manufactured, or to be manufactured, from the cane supplied, or to be supplied, under the supply contract; or

(b) to which an intended supply contract relates, means the raw sugar proposed to be manufactured from the cane proposed to be supplied under the supply contract as made.

(3) Schedule, definitions bargaining representative, group of growers and interested third party, ‘, for chapter 2, part 2,’— omit. (4) Schedule, definition supply contract, paragraph (a), ‘division 1,’— omit.