EXHIBIT 23
FACILITIES MANAGEMENT CONTRACT
INTEROIL LIMITED
and
PETROFAC NIUGINI LIMITED
[FREEHILLS LOGO]
101 Collins Street Melbourne Victoria 3000 Australia
Telephone 61 3 9288 1234 Facsimile 61 3 9288 1567
www.freehills.com DX 240 Melbourne
SYDNEY MELBOURNE PERTH BRISBANE HANOI HO CHI MINH CITY SINGAPORE
Correspondent Offices JAKARTA KUALA LUMPUR
Liability limited by the Solicitors' Limitation of Liability Scheme, approved
under the Professional Standards Act 1994 (NSW)
Reference DAO:JRM
TABLE OF CONTENTS
Clause Page
1 DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Interpretation 10
2 CONDITIONS PRECEDENT 11
3 TERM 11
3.1 Initial Term 11
3.2 Extended Term 11
4 PERFORMANCE AND PAYMENT 11
4.1 Services 11
4.2 Payment 11
4.3 Good Faith 12
5 CONTRACTOR RESPONSIBILITIES 12
5.1 Delivery of Services - General 12
5.2 Notice of Commissioning 13
5.3 Site and Facility 13
6 LEGISLATIVE REQUIREMENTS 14
6.1 Compliance 14
6.2 Changes 14
6.3 Mitigation 15
6.4 Assistance of the Principal 15
6.5 Documents evidencing approvals of Authorities 15
6.6 Prohibition of corrupt practices 15
7 ENVIRONMENTAL COMPLIANCE 16
8 QUALITY 16
8.1 Quality assurance 16
8.2 Non-compliance 17
8.3 Acceptance of non-compliance or lesser standard 17
8.4 Defects of the EPC Contractor 17
9 DISCREPANCIES 17
10 PLANS 18
10.1 Preparation of Plans 18
10.2 Review of Plans 19
10.3 Further development of Plans 19
10.4 Compliance with Plans 20
PAGE 1
10.5 Incorporation of Plans into Operation and Maintenance Manuals 20
11 DELIVERABLE DOCUMENTS 20
11.1 Contractor supplied documents 20
11.2 Operation and Maintenance Manuals 21
12 REPORTING 22
12.1 Contractor Reports 22
12.2 Withholding payment 22
13 COMMITTEE AND REVIEW MEETINGS 22
14 SECURITY 23
14.1 Form of Performance Security 23
14.2 Conversion of Performance Security 23
14.3 Release of Performance Security 24
14.4 Deed of Guarantee 24
14.5 Withholding payment 24
15 ANNUAL OPERATING BUDGETS AND KEY PERFORMANCE INDICATORS 24
15.1 Annual Operating Budgets 24
15.2 Amendments to Annual Operating Budgets 24
15.3 Setting the Annual Operating Budget and Key Performance Indicators 25
16 ADDITIONAL CAPITAL EXPENDITURE SERVICES AND VARIATIONS 26
16.1 Forecast and budget for Additional Capital Expenditure Services 26
16.2 Additional Capital Expenditure Services 27
16.3 Variations 28
16.4 Valuation 28
17 MANAGEMENT FEE, REIMBURSABLE COSTS, ADDITIONAL CAPITAL EXPENDITURE AND PAYMENT 29
17.1 Management Fee and Reimbursable Costs 29
17.2 Time for payment of Management Fee, Reimbursable Costs and Additional Capital Expenditure 29
17.3 Fixed and firm pricing 31
17.4 Costs not reimbursable 31
17.5 Tax on payments 32
17.6 No additional payments 32
17.7 Interest on overdue payments 32
18 REBATE AMOUNTS AND INCENTIVE AMOUNTS 33
19 RECORDS AND AUDITING 33
19.1 Records 33
19.2 Auditing 33
PAGE 2
20 MATERIALS AND EQUIPMENT 34
21 FORCE MAJEURE 34
21.1 Notice 34
21.2 Impact of Force Majeure 34
21.3 Mitigation of Force Majeure 34
21.4 Adjustments 35
22 INTELLECTUAL PROPERTY RIGHTS 35
22.1 Ownership of Principal's Background Materials 35
22.2 Licence to use Principal's Background Materials 35
22.3 Ownership of Contract Materials 35
22.4 Licence to use Contract Materials 36
22.5 Delivery of Contract Materials 36
22.6 Moral Rights 36
22.7 Warranty by the Contractor 36
22.8 Indemnity 36
22.9 Use of infringing material 37
22.10 Survival 37
23 CONFIDENTIAL INFORMATION 37
23.1 Non-disclosure of Principal's Confidential information 37
23.2 Non-disclosure of Contractor's Confidential Information 37
23.3 Permitted disclosure 37
23.4 Confidentiality undertakings 37
23.5 Return of Confidential Information 38
23.6 Media 38
24 ASSIGNMENT AND SUB-CONTRACTING 38
24.1 Assignment 38
24.2 Subcontracting generally 38
24.3 Contractor's responsibility 39
25 PRINCIPAL 39
25.1 Principal's Directions 39
25.2 Principal's Representative 40
26 CONTRACTOR'S REPRESENTATIVE 41
27 CONTRACTOR'S EMPLOYEES AND SUBCONTRACTORS 41
27.1 Employees and Subcontractors 41
27.2 Organisation Structure and Key Personnel 41
28 DAMAGES TO PERSONS AND PROPERTY 42
28.1 Protection of people and property 42
28.2 Urgent protection 42
28.3 Occupational health and safety 43
PAGE 3
29 INDEMNITY AND LIMITATION AND EXCLUSION OF LIABILITY 43
29.1 Indemnities 43
29.2 No consequential losses 44
29.3 Limitation on liability 44
30 Insurances 45
30.1 Principal's Insurance 45
30.2 Contractor's Insurance 45
31 INSPECTION AND PROVISIONS OF INSURANCE POLICIES 46
31.1 Proof of insurance 46
31.2 Failure to produce proof of insurance 46
31.3 Notices from or to the insurer 46
31.4 Notices of potential claims 47
31.5 Care of the Services and settlement of claims 47
31.6 Cross liability 48
31.7 Deductibles 48
32 PAYMENT OF WORKERS AND SUBCONTRACTORS 48
32.1 Workers and subcontractors 48
32.2 Withholding payment 49
32.3 Direct payment 49
33 WORKING HOURS 49
34 SUSPENSION 49
34.1 Principal's suspension 49
34.2 Contractor's suspension 50
34.3 Recommencement 50
34.4 Costs of suspension 50
35 DEFAULT OR INSOLVENCY 51
35.1 Preservation of other rights 51
35.2 Contractor's default 51
35.3 Principal's notice to rectify 51
35.4 Principal's rights 51
35.5 Take out 52
35.6 Principal's default 52
35.7 Contractor's notice to rectify 52
35.8 Contractor's rights 53
35.9 Termination 53
35.10 Insolvency 53
35.11 Termination for convenience 53
35.12 Employment of personnel 53
36 TERMINATION PLAN 54
36.1 General 54
36.2 Termination Plan to be approved and updated 54
36.3 Withholding payment 55
36.4 Implementation of Termination Plan 55
PAGE 4
37 SET-OFFS BY THE PRINCIPAL 55
38 NOTIFICATION OF CLAIMS 56
38.1 Notice of claim 56
38.2 Updating Notice of Claim 56
38.3 Time bar 56
39 DISPUTE RESOLUTION 57
39.1 Notice of Dispute 57
39.2 More than one Dispute 57
39.3 Response 57
39.4 Without Prejudice meeting 57
39.5 Arbitration 58
39.6 Litigation 58
39.7 Continued performance of Contract 58
39.8 Condition precedent to arbitration and litigation 58
39.9 Injunctive or urgent relief 59
40 GENERAL 59
40.1 Costs and expenses 59
40.2 Service of notices 59
40.3 Waiver of conditions 60
40.4 Prohibition and enforceability 60
40.5 Variation 60
40.6 Cumulative rights 61
40.7 Counterparts 61
40.8 To the extent not excluded by law 61
40.9 Attorneys 61
40.10 Survival of obligations 61
40.11 Warranties 61
40.12 Entire agreement 62
40.13 Governing law and jurisdiction 62
40.14 VAT 63
ANNEXURE PART A - SCOPE OF SERVICES
ANNEXURE PART B - FORM OF UNCONDITIONAL UNDERTAKING
ANNEXURE PART C - FEES AND BUDGET, RATES, KPIS
ANNEXURE PART D - DEED OF GUARANTEE
ANNEXURE PART E - DEED OF NOVATION
ANNEXURE PART F - ORGANISATION STRUCTURE AND KEY PERSONNEL
ANNEXURE PART G - PRECONTRACT MEETING MINUTES
ANNEXURE PART H - CONTRACTOR'S PROPOSAL
ANNEXURE PART I - INSURANCES
ANNEXURE PART J - CONSENT DEED
PAGE 5
THIS CONTRACT
is made on 2003
between the following parties:
1. INTEROIL LIMITED
a company incorporated in the Independent State of Papua New
Guinea of Level 6, Defens Haus, Port Moresby, Papua New Guinea
(PRINCIPAL)
2. PETROFAC NIUGINI LIMITED
a company incorporated in the Independent State of Papua New
Guinea of 12th Floor, Deloitte Tower, Port Moresby, National
Capital District, Papua New Guinea
(CONTRACTOR)
RECITALS
A. The Contractor is experienced in the performance of services
of the same nature as the Services and has offered to provide
the Services.
B. It has been agreed that the Contractor will provide the
Services in accordance with and subject to the provisions of
the Contract.
C. The Principal is legally entitled to enter into the Contract
and provide access to the Site and the Facility for the
purposes of the Contract.
THE PARTIES AGREE
in consideration of, among other things, the mutual promises
contained in the Contract:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In the Contract, except where the context otherwise requires:
ADDITIONAL CAPITAL EXPENDITURE means the actual direct costs
reasonably and properly incurred by the Contractor in performing the
Additional Capital Expenditure Services without profit or margin;
ADDITIONAL CAPITAL EXPENDITURE SERVICES means:
(a) any Major Repairs and Replacements; and
(b) any Improvements and Expansions;
ANNUAL OPERATING BUDGET means:
(a) in respect of the Services from the Commencement Date until
the last day of the first Operating Year, the budget set out
in Annexure Part C;
(b) in respect of the Services for each Operating Year after the
first Operating Year, the budget determined in accordance with
clause 15.3;
PAGE 1
ANNUAL OPERATING BUDGET REPORT means the detailed report prepared by
the Contractor setting out the details of the Annual Operating
Budgets and the Indicative Annual Operating Budgets;
BACKGROUND MATERIALS means all Documents owned or licensed by a
party that existed prior to the Execution Date and any Modifications
subsequently made to those Documents at any time;
BUSINESS DAY means a day that is not a Saturday, Sunday or Public
Holiday;
CAPITAL EXPENDITURE means expenditure for equipment, machinery,
fixed assets, real property and improvements which under current
accounting practice is regarded as capital expenditure;
CENTRAL BANK means the Bank of Papua New Guinea of ToRobert Haus,
Douglas Street, Port Moresby, Papua New Guinea;
CLAIM includes any claim:
(a) concerning or arising out of or in connection with or relating
to:
(1) the Contract;
(2) the Services; or
(3) the Facility; and
(b) whether in tort, in equity, pursuant to any applicable
domestic or international statute or law, or of any other kind
under any applicable law;
COMMENCEMENT DATE means the later of the Execution Date and the date
the Contract becomes unconditional under clause 2;
COMMITTEE means the committee established under clause 13, which
comprises:
(a) the Principal's Representative;
(b) the Contractor's Representative; and
(c) any other person reasonably required by the Principal's
Representative or the Principal from time to time;
CONFIDENTIAL INFORMATION means, in relation to any party to the
Contract, information relating to a party's business, computer
systems or affairs and includes any:
(a) trade secrets, know-how, scientific and technical information;
(b) product, customer, marketing or pricing information;
(c) information in relation to the Contract; and
(d) any other information which a party notifies the other is
confidential, or which the other party knows or ought to know
is confidential;
CONSENT DEED means the deed of that name between the Principal, the
Contractor and the Financier dated on or about the Execution Date in
the form of Annexure Part J;
CONTRACT means this document and all annexures to this document;
CONTRACT MATERIALS means:
PAGE 2
(a) all Documents created or developed by or on behalf of the
Contractor during the Term in connection with the Contract;
and
(b) all of the Contractor's Background Materials which the
Contractor makes available for use in connection with the
Contract;
CONTRACTOR means Petrofac Niugini Limited, a company incorporated in
the Independent State of Papua New Guinea;
CONTRACTOR GROUP means the Contractor, its subcontractors, its and
their respective Related Bodies Corporate and its and their
respective employees, agents and consultants, but does not include
any member of the Principal Group;
CONTRACTOR'S INSURANCE means the insurance specified in, and in
accordance with, Annexure Part I.
CONTRACTOR'S PROPOSAL means the Contractor's proposal set out in
Annexure Part H;
CORPORATIONS ACT means the Corporations Act 2001 of the Commonwealth
of Australia;
DATE OF PRACTICAL COMPLETION means the date evidenced in a
Certificate of Practical Completion under the EPC Contract or, where
another date is determined in any arbitration or litigation, that
other date;
DEED OF GUARANTEE means the deed of guarantee and indemnity in the
form of Annexure Part D;
DEED OF NOVATION means the deed of novation in the form of Annexure
Part E;
DELIVERABLE DOCUMENTS means all Documents required to be submitted,
delivered, supplied or otherwise given by the Contractor to the
Principal under the Contract, including as referred to in the Scope
of Services and including Reports and Plans;
DIRECTION includes agreement, approval, assessment, authorisation,
certificate, decision, demand, determination, explanation,
instruction, notice, order, permission, rejection, request or
requirement;
DISPUTE means any dispute, difference or issue between the parties
concerning or arising out of or in connection with or relating to
the breach, termination, validity, repudiation, rectification,
frustration, operation or interpretation of the Contract or the
subject matter of the Contract including, without limitation, any
Claim;
DOCUMENTS includes any material in any form (tangible or intangible)
including, without limitation, documents, Operation and Maintenance
Manuals and other manuals, Reports, data, drawings, diagrams,
charts, software, software tools, know-how, technology or processes;
ENVIRONMENTAL MANAGEMENT AND MONITORING PLAN has the meaning in the
Scope of Services;
ENVIRONMENTAL REPORT has the meaning in clause 7(b);
EPC CONTRACT means the engineering, procurement and construction
contract between the Principal and the EPC Contractor dated 26 March
2002 for the engineering, procurement and construction of the
Facility;
EPC CONTRACTOR means Clough Niugini Limited, a company incorporated
in the Independent State of Papua New Guinea;
PAGE 3
EXECUTION DATE means the date on which the Contract is executed by
the parties;
FACILITIES MANAGEMENT BEST PRACTICE means the exercise of that
degree of skill, care, prudence, foresight and operating and
maintenance practice which could reasonably and ordinarily be
expected from a skilled and experienced contractor engaged in the
operation, maintenance and management of facilities and refinery
processes having similar characteristics to the Facility and the
Refining Process under the same or similar physical (but not taking
into account financial) circumstances;
FACILITY means the refinery facility at Napa Napa, Port Moresby,
Papua New Guinea owned by the Principal, including all refining,
processing, storage and administrative infrastructure, marine and
camp facilities, internal access roads and security fencing;
FINAL TERMINATION PLAN has the meaning in clause 36.2(b)(3);
FINANCIER means Overseas Private Investment Corporation, an agency
of the Government of the United States of America;
FORCE MAJEURE means acts of war, revolution, riots, civil commotion,
acts of a public enemy, embargo, acts of government in its sovereign
capacity, strikes or other industrial action (other than strikes or
industrial action taken by some or all of the party's employees),
earthquakes, floods or other natural disasters but only where the
above listed acts, events or conditions:
(a) are beyond the reasonable control of the party claiming relief
for Force Majeure; and
(b) could not be avoided by the use of reasonable diligence by
that party;
FOREIGN CORRUPT PRACTICES ACT means the Foreign Corrupt Practices
Act of 1977 15 USC ss78dd-1 (USA)
GOVERNMENT AGENCY means any government or governmental,
semi-governmental, administrative, fiscal or judicial body,
quasi-judicial or administrative entity, agency or authority having
jurisdiction over any part of, or in connection with the Services;
GROSS NEGLIGENCE means any act, omission or failure to act (whether
sole, joint or concurrent) by Operations Personnel which was
intended to cause or which was in reckless disregard of or wanton
indifference to, harmful and avoidable consequences which such
person knew, or should have known, such act, omission or failure to
act would have had on the safety or property of another person or
entity but shall not include any error of judgement or mistake in
the exercise of any function, authority or discretion in good faith
and specifically vested in such Operations Personnel by the
Principal and which is justifiable for the safeguarding of life,
property or the environment or due to emergency;
GUARANTOR means Petrofac Facilities Management Limited, a company
incorporated in Scotland with registered number 75047;
IMPROVEMENTS AND EXPANSIONS means any Modification, addition or
upgrading of the Facility or the Refining Process which requires
Capital Expenditure (including Technological Innovations) other than
items of Capital Expenditure which:
PAGE 4
(a) are contemplated in the Annual Operating Budget or the
Operations and Maintenance Manuals; or
(b) would be regarded, by a skilled and experienced contractor
engaged in the operation, maintenance and management of
facilities having similar characteristics to the Facility, as
routine or preventative maintenance or repairs or otherwise an
operating expense;
INCENTIVE AMOUNT means an amount payable by the Principal to the
Contractor in excess of the Management Fee for exceeding a Key
Performance Indicator calculated in accordance with the formulae
determined under clause 15.3 and Annexure Part C;
INDICATIVE ANNUAL OPERATING BUDGETS means the indicative annual
costs budgets for the Services for the second, third, fourth and
fifth Operating Years set out in Annexure Part C;
INSOLVENCY EVENT means where:
(a) either party informs the other party or any of its creditors
that it is insolvent or unable to pay its debts as they fall
due or either party reasonably suspects the other party is
insolvent or unable to pay its debts as they fall due;
(b) either party enters into a composition or arrangement with its
creditors or calls a meeting of creditors to entering into a
composition or arrangement;
(c) a mortgagee seeks to exercise a right of possession or control
over the whole or a substantial part of a party's property;
(d) either party takes or has instituted against it an action or
proceedings whether voluntary or compulsory with the object
of, or which may result in, the winding-up of that party;
(e) either party has a winding-up order made against it or passes
a resolution for winding-up; or
(f) either party goes into liquidation, has appointed, or is a
party to the appointment of, an official manager,
administrator, receiver, provisional liquidator or liquidator
to the whole or part of its property or undertaking;
INTELLECTUAL PROPERTY RIGHT means any patent, registered design,
trademark or name, copyright or other protected right;
KEY PERFORMANCE INDICATORS means the key performance indicators
designed to capture the level to which the Contractor has performed
a certain obligation as determined by the parties under clause 15.3
and Annexure Part C to be critical to the Contractor's performance
of the Services under the Contract.
KEY PERSONNEL means the personnel of the Contractor listed in
Annexure Part F;
LEGISLATIVE REQUIREMENT includes:
(a) Acts, Ordinances, regulations, by-laws, orders, awards and
proclamations of the jurisdiction where the Services or any
part thereof are being performed;
(b) certificates, licences, consents, permits, authorisations,
approvals and requirements of organisations having
jurisdiction in connection with the performance of the
Services; and
PAGE 5
(c) fees and charges payable in connection with the foregoing;
MAJOR REPAIRS AND REPLACEMENTS means all repairs to and replacements
of any part of the Facility or the Site which require Capital
Expenditure other than items of Capital Expenditure which:
(a) are contemplated in the Annual Operating Budgets or the
Operations and Maintenance Manuals (including spare parts); or
(b) would be regarded, by a skilled and experienced contractor
engaged in the operation, maintenance and management of
facilities having similar characteristics to the Facility, as
routine or preventative maintenance or repairs or otherwise an
operating expense;
MAJOR REPAIRS AND REPLACEMENTS BUDGET means the annual budget for
Major Repairs and Replacements to the Facility and the Site as
revised from time to time;
MANAGEMENT FEE means the management fee set out in Annexure Part C
payable by the Principal to the Contractor in respect of the
Contractor's profit margin and overhead and corporate
administration;
MANAGEMENT PLAN has the meaning in the Scope of Services;
MATERIALS AND EQUIPMENT includes the materials, supplies, machinery,
tools, apparatus, equipment, buildings, computer hardware, computer
software, roads, right-of-ways, services, spare parts and other
items of whatever nature specified and supplied by the Contractor to
provide the Services;
MOBILISATION PLAN has the meaning in the Scope of Services;
MODIFICATIONS means any enhancements, adaptations, changes,
alterations or variations;
MONTH means:
(a) each period of one month from the Commencement Date (and from
the same day of each subsequent month) until the Date of
Practical Completion; and then
(b) each period of one month from the Date of Practical Completion
(and from the same day of each subsequent month) during the
Term;
MORAL RIGHTS means the rights conferred on authors of literary works
by Part IX of the Copyright Act 1968 (Cth);
NOTICE OF COMMISSIONING means a notice from the Principal to the
Contractor advising when the EPC Contractor intends to commence the
commissioning of the Facility under the EPC Contract;
NOTICE OF DISPUTE has the meaning in clause 39.1;
OCCUPATIONAL HEALTH AND SAFETY PLAN has the meaning in the Scope of
Services;
OPERATING YEAR means each period of one year from the Date of
Practical Completion (and each anniversary of the Date of Practical
Completion) during the Term;
OPERATION AND MAINTENANCE MANUALS means the manuals referred to in
clause 11.2 (as amended and updated from time to time in accordance
with clause 11.2)
PAGE 6
which describe the policy, practices and procedures for the
operation and maintenance of the Facility;
OPERATION AND MAINTENANCE PLAN has the meaning in the Scope of
Services;
OPERATIONS PERSONNEL means any person employed by the Contractor or
the Principal, as the case may be, as a technician or in any more
senior level, as the case may be, with direct responsibility for the
conduct of operations or the performance of the Services and other
obligations under this Contract;
OPIC LOAN AGREEMENT means the loan agreement between the Principal
and the Financier dated 12 June 2001;
OPIC ENVIRONMENTAL REQUIREMENTS means the requirements set forth in
the OPIC Environmental Handbook, April 1999;
ORGANISATION STRUCTURE means the organisation structure for the
Facility set out in Annexure Part F;
OTHER CONTRACT DOCUMENTS means:
(a) Precontract Meeting Minutes; and
(b) Contractor's Proposal;
OTHER CONTRACTOR means any of the contractors of the Principal
(other than the Contractor) in relation to the Facility and the
Site, any subcontractors of such contractors, its and their
respective Related Bodies Corporate and its and their respective
employees, agents and consultants;
PERFORMANCE SECURITY has the meaning in clause 14.1;
PLANS includes the plans referred to in the Scope of Services, as
each such plan may be updated, amended and developed under clause
10;
PRECONTRACT MEETING MINUTES means the minutes of meeting set out in
Annexure Part G;
PRINCIPAL means InterOil Limited, a company incorporated in the
Independent State of Papua New Guinea;
PRINCIPAL GROUP means the Principal, its Other Contractors, its and
their respective Related Bodies Corporate and its and their
respective employees, agents and consultants, but does not include
any member of the Contractor Group;
PRINCIPAL'S INSURANCE means the insurance specified in, and in
accordance with, Annexure Part I.
PRINCIPAL'S REPRESENTATIVE means a person appointed in writing by
the Principal under subclause 25.2;
PRODUCTS means all refined petroleum products produced by the
Facility from time to time;
PUBLIC HOLIDAY means a day gazetted as a public holiday in the
Independent State of Papua New Guinea by the Government of Papua New
Guinea;
QUALITY PLAN has the meaning in the Scope of Services;
RATES means the rates set out in Annexure Part C;
RAW MATERIALS means the crude oil made available by the Principal
for the Refining Process;
PAGE 7
REBATE AMOUNT means an amount payable by the Contractor to the
Principal as a rebate of the Management Fee for a failure by the
Contractor to achieve a Key Performance Indicator calculated in
accordance with the formulae determined under clause 15.3 and
Annexure Part C;
RECORDS means proper and fully detailed records and books of account
relating to the performance of the Services and the Contractor's
other obligations under the Contract, including all relevant details
of:
(a) all costs, prices and charges in contracts with any
subcontractors and costs breakdowns as required by the
Principal;
(b) the Contractor's personnel costs;
(c) other management and administrative costs and overheads;
(d) performance of the Facility;
(e) production costs; and
(f) quantity and quality of Product;
REFINING PROCESS means the process of refining the Raw Materials to
produce the Products including the transportation of Raw Materials
and Products to and from and within the Site and the Facility;
REIMBURSABLE COSTS means the actual direct costs reasonably and
properly incurred by the Contractor in performing the Services
without profit or margin but excluding Additional Capital
Expenditure;
RELATED BODY CORPORATE has the same meaning as set out in the
Corporations Act;
REPORTS means the reports referred to in clause 12, the
Environmental Report and any other report referred to in the Scope
of Services;
SCOPE OF SERVICES means the summary of the Principal's requirements
for the Services set out in Annexure Part A;
SERVICES means:
(a) the services referred to in the Scope of Services;
(b) any Additional Capital Expenditure Services;
(c) any Variations; and
(d) all other services necessary for the safe and efficient:
(1) operation and maintenance of the Facility; and
(2) management of the Facility, the Refining Process and the
Site,
in accordance with Facilities Management Best Practice;
SITE means all land and sub-sea areas within the boundaries of the
Site Leases where the Services are to be performed and includes:
(a) all access roads to and within the Facility; and
(b) where the context so requires, anything on the Site;
SITE LEASES means:
PAGE 8
(a) State Lease No. 03116/0510 in respect of land described as
Portion 510, Milinch Granville, Fourmil Moresby;
(b) State Lease No. 49/714/1130 in respect of land described as
Portion 1130, Milinch Granville, Fourmil Moresby;
(c) State Lease No. 04116/1499 in respect of land described as
Portion 1499, Milinch Granville, Fourmil Moresby; and
(d) State Lease 04116/1500 in respect of land described as Portion
1500, Milinch Granville, Fourmil Moresby,
in each case as granted to the Principal pursuant to the Land Act
(Chapter No. 185) and any state lease or leases in replacement
thereof;
SPILL PREVENTION CONTROL AND COUNTERMEASURE PLAN has the meaning in
the Scope of Services;
TAX means:
(a) any tax, levy, charge, impost, duty, fee, deduction,
compulsory loan or withholding; or
(b) any income, stamp or transaction duty, tax or charge,
that is assessed. levied, imposed or collected by any Government
Agency and includes any interest, fine, penalty, charge, fee or
other amount imposed on or in respect of any of the above;
TECHNOLOGICAL INNOVATIONS means innovations or advancements of a
technological nature for the purpose of improving the performance
capabilities of the Facility or the Refining Process and require
Capital Expenditure;
TERM means the period from the Commencement Date until the expiry or
termination of the Contract;
TERMINATION PLAN has the meaning in clause 36.1; and
TRAINING PLAN has the meaning in the Scope of Services;
VARIATION means any increase, decrease or omission to the Scope of
Services, excluding:
(a) any Additional Capital Expenditure Services; and
(b) any Direction by the Principal to perform the Services in
accordance with the Contract;
VAT means the value added tax levied under the VAT Act;
VAT ACT means the Value Added Tax Act 1998 (No. 51 of 1998) (PNG);
WORLD BANK GUIDELINES means:
(a) the World Bank 1998 Pollution and Abatement Handbook for:
(1) Petroleum Refining;
(2) General Environmental Guidelines; and
(3) Monitoring Guidelines;
(b) the International Finance Corporation General Health and
Safety Guidelines; and
PAGE 9
(c) the "Techniques for Assessing Industrial Hazards" included in
the September 1985 World Bank Guidelines for Identifying,
Analysing and Controlling Major Hazard Installation in
Developing Countries with respect to environmental and safety
issues associated with explosions, fire and other accidents.
1.2 INTERPRETATION
In the Contract:
(a) references to days means calendar days and references to a
person include an individual, firm or a body, corporate or
unincorporated;
(b) references to a month from a particular date means the period
from that date until and including the day before the same
date of the following calendar month;
(c) unless otherwise stated, time for doing any act or thing under
the Contract will, if it ends on a Saturday, Sunday or Public
Holiday, be deemed to end on the day next following which is
not a Saturday, Sunday or Public Holiday;
(d) clause headings and subclause headings in the Contract do not
form part of the Contract and will not be used in the
interpretation of the Contract;
(e) words in the singular include the plural and words in the
plural include the singular, according to the requirements of
the context. Words importing a gender include every gender;
(f) communications between the Principal and the Contractor must
be in the English language;
(g) measurements of physical quantities must be in legal units of
measurement of Queensland;
(h) unless otherwise provided, payments of Reimbursable Costs and
Additional Capital Expenditure shall be in the same currency
or currencies as the relevant actual costs were incurred by
the Contractor and otherwise in the currency of the
Independent State of Papua New Guinea;
(i) the law governing the Contract, its interpretation and
construction, is the law of Queensland;
(j) no provision of the Contract will be construed adversely to a
party solely on the ground that the party was responsible for
the preparation of the Contract or that provision;
(k) a reference to a statute, regulation, proclamation, ordinance
or by-law includes all statutes, regulations, proclamations,
ordinances or by-laws amending, consolidating or replacing it,
and a reference to a statute includes all regulations,
proclamations, ordinances and by-laws issued under that
statute;
(l) a reference to a document includes all amendments or
supplements to, or replacements or novations of, that
document;
(m) a reference to a party to a document includes that party's
employees, agents, contractors, successors and permitted
assigns; and
PAGE 10
(n) a reference to a body, other than a party to the Contract
(including, without limitation, an institute, association or
authority), whether statutory or not:
(1) which ceases to exist; or
(2) whose powers or functions are transferred to another
body,
is a reference to the body which replaces it or which
substantially succeeds to its powers or functions.
2 CONDITIONS PRECEDENT
The Contract will be of no legal force and effect unless and until
(a) requisite regulatory approval has been received from the
Central Bank; and
(b) the Principal, the Contractor and the Financier have executed
and delivered the Consent Deed.
3 TERM
3.1 INITIAL TERM
The Contract:
(a) commences on the Commencement Date; and
(b) subject to clause 3.2, shall continue for a period of 5
Operating Years from the Date of Practical Completion, unless
terminated in accordance with clause 35.
3.2 EXTENDED TERM
Unless the Contract has been terminated in accordance with clause
35, the Principal may give notice (in its sole and unfettered
discretion) to the Contractor no later than 3 Months before the
expiry of the fifth Operating Year that the Principal has elected
that the Contract will automatically continue and, if the Principal
gives a notice under this clause, the Contract shall continue until
the Contract is terminated in accordance with clause 35.
4 PERFORMANCE AND PAYMENT
4.1 SERVICES
The Contractor must perform the Services in accordance with:
(a) the Contract; and
(b) the Directions of the Principal in accordance with the
Contract.
4.2 PAYMENT
The Principal must pay the Contractor:
(a) the Management Fee;
PAGE 11
(b) the Reimbursable Costs; and
(c) any Additional Capital Expenditure,
in accordance with the Contract.
4.3 GOOD FAITH
The Principal and the Contractor must act honestly and in good faith
in the performance of their respective obligations under the
Contract.
5 CONTRACTOR RESPONSIBILITIES
5.1 DELIVERY OF SERVICES - GENERAL
(a) When providing the Services, the Contractor must:
(1) engage personnel to perform the Services who are both
competent and professional;
(2) provide, operate and maintain Materials and Equipment
sufficient to perform the Services;
(3) provide the Services in a professional manner; and
(4) comply with all Legislative Requirements.
(b) The Contractor must:
(1) provide the Services in accordance with:
(A) Facilities Management Best Practice; and
(B) the Operation and Maintenance Manuals; and
(C) any other requirements of the Contract; and
(2) continuously improve operation and maintenance standards
and systems to reflect Facilities Management Best
Practices, including performance standards and
management and control systems.
(c) In complying with its obligations under the Contract and
particularly Facilities Management Best Practice, the
Contractor must perform the Services:
(1) so as not to:
(A) cause or contribute to any defect in the Facility;
or
(B) have any adverse impact on the good working order
of the Facility; and
(2) so that the Facility:
(A) meets the Key Performance Indicators; and
(B) maximises output and quality of Product.
PAGE 12
5.2 NOTICE OF COMMISSIONING
(a) No later than 28 days prior to the date on which the EPC
Contractor anticipates commencing the commissioning of the
Facility, the Principal must give the Contractor a Notice of
Commissioning.
(b) The Contractor must commence and continue to perform the
Services from the Commencement Date to ensure that the
Contractor does not cause any delay to the Date of Practical
Completion.
(c) The Contractor must prior to the Date of Practical Completion:
(1) co-operate with the Principal and with the EPC
Contractor in complying with all timelines, directions
and instructions of the EPC Contractor; and
(2) not through any act or omission on the part of the
Contractor or its subcontractors, employees or agents
cause:
(A) any delay or interference to the activities of the
EPC Contractor; or
(B) any delay to the Date of Practical Completion.
5.3 SITE AND FACILITY
(a) Without limiting clause 5.3(b), the Contractor acknowledges
that it has:
(1) had access to;
(2) carried out a general inspection of; and
(3) conducted its own enquiries in respect of,
the Site and the Facility in order to establish, understand
and satisfy itself as far as practicable as to:
(4) the nature and status of; and
(5) all risks and contingencies associated with,
the Site and the Facility.
(b) The Contractor acknowledges and agrees that the Services
include all responsibility and risks related to the physical
conditions and characteristics, location and employment
conditions of the Site and the Facility and include all costs
associated with:
(1) removal of any material required to be removed for
reasons of removing hazardous materials or conditions
from the Site and the Facility or for the Services to be
completed as required by the Contract;
(2) the location and adequacy of existing services,
including all pipes, cables and plumbing;
(3) the adequacy and position of all load bearing and
support structures;
(4) all other physical conditions and characteristics of the
Site above, on or below the surface which may affect the
performance by the Contractor of its obligations under
the Contract (other than latent
PAGE 13
conditions which a contractor, exercising Facilities
Management Best Practices, would not reasonably be aware
of);
(5) any adverse impact the Services may have on any adjacent
or adjoining land;
(6) the availability and reliance of commercial airlines,
ship operators, tug and stowage operators and other
suppliers of logistical support;
(7) the equipment, facilities and resources needed for the
performance of the Services and the remedying of any
defect including accommodation, transportation, handling
and storage;
(8) the availability of labour, equipment, parts,
consumables, procurement items, fuel, water, electricity
and other utilities;
(9) the local laws, regulations and customs including fiscal
and social legislation and practices, import and export
regulations and conditions of employment of foreign
personnel in Papua New Guinea;
(10) local community and security conditions; and
(11) any other local conditions that may affect the
performance of the Services,
and the Contractor acknowledges that:
(12) the Management Fee, the Rates and the Annual Operating
Budget include or shall include an allowance for all
costs associated with the Contractor's risk and
responsibilities under clause 5.3; and
(13) the Contractor is not entitled to make any Claim and
there shall be no increase to the Management Fee or the
Rates or amendment to the Annual Operating Budget in
respect of those risks and responsibilities.
6 LEGISLATIVE REQUIREMENTS
6.1 COMPLIANCE
(a) The Contractor must comply with all Legislative Requirements.
(b) The Contractor, upon finding that a Legislative Requirement is
inconsistent with a provision of the Contract, must promptly
give the Principal written notice of the inconsistency.
(c) The Contractor is not entitled to make any Claim and there
shall be no increase to the Management Fee or the Rates or
amendment to the Annual Operating Budget for any inconsistency
between a Legislative Requirement and any provision of the
Contract.
6.2 CHANGES
If a Legislative Requirement:
(a) necessitates;
PAGE 14
(1) a change to the Services; or
(2) a change in a fee or charge; or
(3) payment of a new fee or charge;
(b) has effect after the Execution Date but could not reasonably
have been anticipated before the Execution Date by a competent
and experienced contractor performing services in the nature
of the Services; and
(c) causes the Contractor to incur more or less cost than
otherwise would have been incurred,
the difference shall be assessed by the Principal's Representative
under clause 16.4 and shall be deemed to constitute a Variation and
the relevant Annual Operating Budget shall be amended accordingly.
6.3 MITIGATION
The Contractor must use all reasonable endeavours to minimise or
mitigate the effects of a change in Legislative Requirements.
6.4 ASSISTANCE OF THE PRINCIPAL
The Principal must provide all reasonable assistance required by the
Contractor to obtain all consents, licences, permits or authorities
necessary for the Contractor to perform the Services.
6.5 DOCUMENTS EVIDENCING APPROVALS OF AUTHORITIES
The Contractor must give the Principal copies of documents issued to
the Contractor by municipal, public or other statutory authorities
in respect of the Services and, in particular, confirming the
compliance (or otherwise) of the Contractor with Legislative
Requirements.
6.6 PROHIBITION OF CORRUPT PRACTICES
The Contractor represents, warrants and agrees that:
(a) The Contractor's directors, officers, employees, agents and
representatives are not now and will not during the Term be a
candidate for office or an employee, officer or representative
of the government of Papua New Guinea or of any government
agency, government instrumentality or political party of Papua
New Guinea;
(b) The Contractor will not use any part of any payment by the
Principal under the Contract to make any payment or gift,
either directly or indirectly, to any employee, officer or
representative of any government, including the government of
Papua New Guinea;
(c) The Contractor shall at all times ensure that it complies with
the Foreign Corrupt Practices Act;
(d) The Contractor maintains and will continue to maintain
appropriate systems and internal accounting controls to
monitor and ensure compliance with its obligations under this
clause; and
PAGE 15
(e) The Contractor shall ensure that all subcontracts include
terms that require subcontractors to comply with the same
obligations as are contained in clauses 6.6(a), (b), (c) and
(d).
7 ENVIRONMENTAL COMPLIANCE
(a) The Contractor must perform the Services in compliance with:
(1) the World Bank Guidelines;
(2) the OPIC Environmental Requirements;
(3) the Environmental Management and Monitoring Plan; and
(4) all applicable Legislative Requirements.
(b) The Contractor must, one month prior to each anniversary of
the date of the OPIC Loan Agreement, submit to the Principal a
self-monitoring environmental report in a form acceptable to
the Principal (ENVIRONMENTAL REPORT).
(c) The Environmental Report must include, without limitation,
regular testing results for any emissions standards, effluent
standards, noise, reports of material non-compliance with
relevant environmental guidelines and requirements and
remedial actions required to meet relevant environmental
guidelines and requirements.
(d) The Contractor must prior to the expiry of the second
Operating Year submit to the Principal an acceptable
assessment, by a suitably qualified independent engineer, of
the current status of the Facility's compliance with the
guidelines, requirements and plans referred to in clause 7(a).
(e) Within 24 hours of its occurrence, the Contractor must submit
to the Principal an acceptable written notice of any accident
impacting on the environment or resulting in the loss of life.
8 QUALITY
8.1 QUALITY ASSURANCE
(a) The Contractor must:
(1) plan, develop, establish and maintain the quality
assurance system/s which are referred to in the Scope of
Services; and
(2) ensure that the Principal has access to the quality
assurance system/s of the Contractor.
(b) The quality assurance system/s of the Contractor shall be used
only as an aid to achieving compliance with the Contract and
such system/s will not in any way:
(1) relieve the Contractor of any of its liabilities or
responsibilities to the Principal under the Contract or
otherwise according to law; or
PAGE 16
(2) lessen or affect the Principal's rights against the
Contractor under the Contract or otherwise according to
law.
8.2 NON-COMPLIANCE
(a) If the Principal becomes aware of any Services (including any
Materials and Equipment) which do not comply with the
Contract, the Principal will as soon as practicable give the
Contractor written details thereof and the Principal may
Direct the Contractor to remedy the non-compliance, including
the manner and reasonable time for doing so.
(b) If:
(1) the Contractor fails to comply with a Direction under
the clause 8.2(a); and
(2) the failure has not been made good within a reasonable
time after the Contractor receives written notice that
the Principal intends to have the relevant Direction
complied with by others,
the Principal may instruct others to comply with the Direction
and the costs incurred shall be moneys due from the Contractor
to the Principal.
8.3 ACCEPTANCE OF NON-COMPLIANCE OR LESSER STANDARD
A Direction pursuant to clause 8.2 may:
(a) Direct the Contractor that the Principal elects to accept the
non-compliance; or
(b) Direct the Contractor to perform the Services to a lesser
standard than required by the Contract,
in which case the Direction shall be deemed to constitute a
Variation and the Annual Operating Budget shall be amended
accordingly.
8.4 DEFECTS OF THE EPC CONTRACTOR
(a) The Contractor must inspect the Facility regularly during the
first Operating Year and in accordance with the Operation
Maintenance Manuals for the purpose of identifying any defects
in the Facility for which the EPC Contractor is or may be
responsible under the EPC Contract.
(b) The Contractor must promptly notify the Principal of any
defects the Contractor detects in the Facility, including any
impact or potential impact (including timing) on the Refining
Process and any recommendation (including timing and cost or
likely cost) to ensure there is no adverse impact on the
Refining Process or the Facility.
9 DISCREPANCIES
(a) The Contractor acknowledges that it has reviewed the documents
forming the Contract and other documents prepared for the
purpose of performing the Services and is satisfied with the
adequacy of those documents to
PAGE 17
perform its obligations under the Contract, including the
performance of the Services.
(b) If either party discovers any conflict, inconsistency,
ambiguity or discrepancy in any document prepared for the
purpose of performing the Services, that party must give the
other written notice of it and the Principal's Representative
will then Direct the Contractor as to the interpretation and
construction such that where the conflict, inconsistency,
ambiguity or discrepancy:
(1) relates to the standard of performance of the Services,
the higher standard shall apply; and
(2) is between any two or more of the following documents,
the following order of priority shall apply:
(A) this document, excluding the annexures;
(B) the Scope of Services;
(C) the annexures to this document, other than the
Scope of Services and the Other Contract
Documents;
(D) the Other Contract Documents; and
(3) otherwise, as the Principal in its sole and unfettered
discretion directs.
(c) The Contractor is not entitled to make any Claim and there
shall be no increase to the Management Fee or the Rates or
amendment to the Annual Operating Budgets as a result of:
(1) any ambiguity or discrepancy in or between any document
or documents forming part of the Contract or other
documents prepared for the purpose of performing the
Services (whether prepared before or after the Execution
Date and whether prepared by or for the Principal or the
Contractor); or
(2) any Direction by the Principal's Representative under
clause 9(b).
10 PLANS
10.1 PREPARATION OF PLANS
(a) The Contractor must prepare the Plans to provide a detailed
description of how the Contractor intends to perform the
Services and its other obligations under the Contract in
accordance with the Contract with respect to the subject
matter of each Plan.
(b) The Contractor acknowledges and agrees that the Plans will
require ongoing development, amendment and updating throughout
the duration of the Services and performance of the
Contractor's other obligations under the Contract to take into
account:
(1) Variations and Additional Capital Expenditure Services;
(2) changes in Legislative Requirements; and
PAGE 18
(3) any other events or circumstances which occur or come
into existence and which have, or may have, any effect
on the manner in which the Contractor performs the
Services and its other obligations under the Contract.
10.2 REVIEW OF PLANS
(a) The Principal may:
(1) review any Plan submitted under this clause 10; and
(2) if the Plan submitted does not comply with the Contract,
notify the Contractor of that non-compliance within 14
days of the submission of the Plan.
(b) If the Contractor receives a notice under clause 10.2(a)(2),
the Contractor must promptly submit an amended Plan to the
Principal.
(c) The Principal owes no duty to the Contractor to review any
Plan submitted by the Contractor for errors, omissions or
compliance with the Contract.
(d) Any acknowledgement, approval, acceptance, receipt,
recommendation or review of, comment on, or Direction in
respect of, any Plan by the Principal (including a request
under clause 10.3(b)) will not in any way:
(1) relieve the Contractor of any of its liabilities or
responsibilities to the Principal under the Contract or
otherwise according to law;
(2) constitute acceptance by the Principal of the
performance of the Contractor's obligations under the
Contract;
(3) be considered to be an acknowledgment by the Principal
that the relevant documents comply with the Contract; or
(4) lessen or affect the Principal's rights against the
Contractor under the Contract or otherwise according to
law.
10.3 FURTHER DEVELOPMENT OF PLANS
(a) The Contractor:
(1) warrants that each Plan will be fit for its intended
purpose; and
(2) must continue to develop and promptly amend or update
the Plans to take into account:
(A) the circumstances and events referred to in clause
10.1(b) as those circumstances and events occur or
come into existence; and
(B) any breach or potential breach of the warranty
referred to in clause 10.3(a)(1),
and promptly submit each further Plan to the Principal
as it is further developed, amended or updated.
(b) If the Principal believes that:
(1) any Plan does not comply with the requirements of the
Contract; or
PAGE 19
(2) the Contractor has not further developed, updated or
amended any Plan in accordance with the requirements of
clause 10.3(a),
the Principal may by written notice request that the
Contractor further develop, update or amend the Plan
specifying:
(3) the reasons why such development, updating or amending
is required (or why the Plan does not comply with the
Contract); and
(4) the time within which such development, updating or
amending must occur (which must be reasonable, having
regard to the amount of work required),
and the Contractor must:
(5) further develop, update or amend the Plan as requested
by the Principal; and
(6) submit the further developed, updated or amended Plan to
the Principal within the time specified under clause
10.3(b)(4).
10.4 COMPLIANCE WITH PLANS
The Contractor:
(a) must comply with its obligations as set out in each Plan which
has been submitted to the Principal under this clause 10 and
in respect of which the Principal has not given a notice under
clause 10.2(a)(2); and
(b) agrees that compliance by it with any Plan will not in any
way:
(1) relieve the Contractor of any of its liabilities or
responsibilities to the Principal under the Contract or
otherwise according to law; or
(2) lessen or affect the Principal's rights against the
Contractor under the Contract or otherwise according to
law.
10.5 INCORPORATION OF PLANS INTO OPERATION AND MAINTENANCE MANUALS
To the extent that they are relevant to the operation, maintenance
or management of the Facility, all Plans must be incorporated into
the Operation and Maintenance Manuals.
11 DELIVERABLE DOCUMENTS
11.1 CONTRACTOR SUPPLIED DOCUMENTS
(a) The Contractor must supply to the Principal the Deliverable
Documents and the number of copies thereof as stated in the
Contract or, if not stated, as Directed.
(b) If the Contractor submits documents to the Principal, then:
(1) the Principal is not be required to check such documents
for errors, omissions, inconsistencies, ambiguities,
discrepancies or compliance with the Contract;
PAGE 20
(2) any acknowledgement, approval, acceptance, receipt,
recommendation or review of, comment on, or Direction in
respect of such documents by the Principal will not:
(A) relieve the Contractor of any of its liabilities
or responsibilities under the Contract or
otherwise according to law;
(B) constitute acceptance by the Principal of the
performance of the Contractor's obligations under
the Contract;
(C) be considered as an acknowledgment by the
Principal that the relevant documents comply with
the Contract; or
(D) lessen or affect the Principal's rights against
the Contractor under the Contract or otherwise
according to law; and
(3) if the Contract requires the Contractor to obtain the
Principal's Direction about such documents, the
Principal shall give, within 14 days after receiving
such documents, the appropriate Direction, including
reasons if the documents are not suitable.
(c) Deliverable Documents supplied by the Contractor will be the
Principal's property.
11.2 OPERATION AND MAINTENANCE MANUALS
(a) The Contractor must:
(1) be available to comment on and review the development of
the Operation and Maintenance Manuals to be produced by
the EPC Contractor under the EPC Contract; and
(2) maintain the Operation and Maintenance Manuals in
accordance with the requirements of the Contract.
(b) The Principal owes no duty to the Contractor to review the
Operation and Maintenance Manuals or any draft submitted by
the Contractor for errors, omissions or compliance with the
Contract.
(c) Any acknowledgement, approval, acceptance, receipt,
recommendation or review of, comment on, or Direction in
respect of, any Operation and Maintenance Manuals (or any
draft Operations and Maintenance Manuals) by the Principal
will not in any way:
(1) relieve the Contractor of any of its liabilities or
responsibilities to the Principal under the Contract or
otherwise according to law; or
(2) constitute acceptance by the Principal of the
performance of the Contractor's obligations under the
Contract;
(3) be considered as an acknowledgment by the Principal that
the Operation and Maintenance Manuals comply with the
Contract; or
(4) lessen or affect the Principal's rights against the
Contractor under the Contract or otherwise according to
law.
(d) The Contractor warrants that:
PAGE 21
(1) the Operation and Maintenance Manuals will be fit for
their intended purposes; and
(2) compliance with the Operation and Maintenance Manuals
will enable it, during the Term, to fulfil its
obligations under the Contract.
(e) The Contractor:
(1) must comply with the Operation and Maintenance Manuals
as submitted to the Principal; and
(2) agrees that compliance by it with the Operation and
Maintenance Manuals will not in any way:
(A) relieve the Contractor of any of its liabilities
or responsibilities to the Principal under the
Contract or otherwise according to law; or
(B) lessen or affect the Principal's rights against
the Contractor under the Contract or otherwise
according to law.
12 REPORTING
12.1 CONTRACTOR REPORTS
The Contractor must deliver the Reports to the Principal in
accordance with the Contract, including the Scope of Services.
12.2 WITHHOLDING PAYMENT
If the Contractor fails to deliver the Reports in accordance with
this clause 12 then, until the Contractor provides the Reports
containing the information required by this clause 12, or otherwise
fails to remedy the relevant default to the reasonable satisfaction
of the Principal, amounts otherwise due to the Contractor in respect
of the Management Fee may be withheld by the Principal.
13 COMMITTEE AND REVIEW MEETINGS
(a) The parties must ensure that the Committee is established
promptly and within 14 days after the Commencement Date.
(b) The Committee will:
(1) meet weekly to review management issues relating to the
provision of the Services and at other times required by
the Principal's Representative; and
(2) review and discuss:
(A) the implementation of the Services;
(B) any Reports, Deliverable Documents or other
information delivered by the Contractor to the
Principal;
PAGE 22
(C) achievement of performance standards and Key
Performance Indicators;
(D) the continuous improvement of operation and
maintenance standards and systems to reflect
Facilities Management Best Practices, including
performance standards and management and control
systems.
(c) The Principal's Representative must convene and chair all
meetings of the Committee and prepare and promptly provide
minutes of the meetings of the Committee to the Principal and
the Contractor.
(d) The parties acknowledge that the minutes of meeting prepared
under this clause 13 or matters reviewed or discussed at any
meeting of the Committee will not constitute Directions to the
Contractor for the purpose of the Contract.
14 SECURITY
14.1 FORM OF PERFORMANCE SECURITY
The Contractor must provide to the Principal, within 28 days after
the Execution Date, an unconditional and irrevocable undertaking of
10% of the Annual Operating Budget for the first Operating Year
which must be:
(a) in the form of Annexure Part B;
(b) in favour of the Principal and the Financier; and
(c) given by a financial institution approved by the Principal,
(PERFORMANCE SECURITY).
14.2 CONVERSION OF PERFORMANCE SECURITY
(a) Without limiting the unconditional nature of the Performance
Security, the Principal and the Financier may have recourse to
the Performance Security for any amount that, in the opinion
of the Principal or the Financier, the Principal is entitled
to claim from the Contractor under or in connection with the
Contract, including Rebate Amounts.
(b) The Contractor agrees that:
(1) it will not institute any proceedings or exercise any
rights to restrain or injunct:
(A) the financial institution that issued the
Performance Security from paying money to the
Principal or the Financier under the Performance
Security; or
(B) the Principal or the Financier from:
(i) making a demand for payment;
(ii) receiving payment; or
(iii) using the money received,
under the Performance Security; and
PAGE 23
(2) damages will be an adequate remedy for the Contractor
where the Principal or the Financier has recourse to the
Performance Security in breach of the Contract.
14.3 RELEASE OF PERFORMANCE SECURITY
Within 30 days after the end of the Term of the Contract, the
Principal must release the Performance Security or any remaining
portion of the Performance Security.
14.4 DEED OF GUARANTEE
The Contractor must deliver to the Principal the Deed of Guarantee
executed by the Guarantor within 30 days after the Execution Date.
14.5 WITHHOLDING PAYMENT
If the Contractor fails to deliver the Performance Security or the
Deed of Guarantee in accordance with this clause 14, until the
Contractor provides the Performance Security and the Deed of
Guarantee required by this clause 14, amounts otherwise due to the
Contractor may be withheld by the Principal provided that the total
of the amounts withheld do not exceed 10% of the Annual Operating
Budget for the first Operating Year.
15 ANNUAL OPERATING BUDGETS AND KEY PERFORMANCE INDICATORS
15.1 ANNUAL OPERATING BUDGETS
Within 30 days after the Execution Date, the Contractor must provide
to the Principal the Annual Operating Budgets Report providing
details of:
(a) the Annual Operating Budgets; and
(b) the Indicative Annual Operating Budgets.
15.2 AMENDMENTS TO ANNUAL OPERATING BUDGETS
(a) The Contractor may request that an Annual Operating Budget be
amended in respect of any:
(1) additional costs reasonably and properly incurred as a
result of any:
(A) Additional Capital Expenditure Services (but
excluding Additional Capital Expenditure);
(B) Variation;
(C) unforeseeable emergency relating to health and
safety or damage to the Facility (except to the
extent caused or contributed to by the
Contractor); or
(D) breach by the Principal of an express term of the
Contract; or
(2) Reimbursable Costs not contemplated in the Annual
Operating Budget.
PAGE 24
(b) If the Contractor requests that an Annual Operating Budget be
amended, it must submit a redraft of the relevant Annual
Operating Budget to the Principal's Representative, noting the
amendments requested and containing a summary of the reasons
for seeking those amendments.
(c) The Principal's Representative must reasonably and promptly
consider any proposal to adjust an Annual Operating Budget
under clause 15.2(b) and:
(1) if the Principal's Representative agrees to approve such
amendments to the relevant Annual Operating Budget, the
amended Annual Operating Budget will become the relevant
Annual Operating Budget; and
(2) until the Principal's Representative agrees to approve
such amendments or, if the Principal's Representative
does not approve such amendments, the current Annual
Operating Budget will continue to apply.
(d) Despite clause 15.2(c), the Contractor must continue to
perform the Services necessary to satisfy the requirements of
the Contract, including the Key Performance Indicators, and
any consideration, approval or disapproval of amendments to an
Annual Operating Budget in accordance with clause 15.2(c) will
not in any way:
(1) relieve the Contractor of any of its liabilities or
responsibilities to the Principal under the Contract or
otherwise according to law;
(2) constitute acceptance by the Principal of the
performance of the Contractor's obligations under the
Contract;
(3) be considered as an acknowledgment by the Principal that
the relevant documents comply with the Contract; or
(4) lessen or affect the Principal's rights against the
Contractor under the Contract or otherwise according to
law.
(e) Even if the Contractor is not entitled to or has not requested
an increase in the Annual Operating Budget, subject to the
Financier's consent, the Principal's Representative may, in
its absolute discretion and without obligation to the
Contractor to do so, increase the Annual Operating Budget
where the Principal's Representative has reasonable grounds to
do so.
15.3 SETTING THE ANNUAL OPERATING BUDGET AND KEY PERFORMANCE INDICATORS
(a) No later than 3 months prior to the commencement of each
Operating Year (other than the first Operating Year), the
parties must meet and negotiate in good faith, in respect of
the next Operating Year:
(1) the Annual Operating Budget;
(2) any Variations;
(3) the Key Performance Indicators or adjustments to the Key
Performance Indicators; and
(4) the Incentive Amounts and/or Rebate Amounts, in
accordance with the formulae under Annexure Part C.
PAGE 25
(b) The parties must determine the revised Annual Operating
Budget:
(1) by having regard to:
(A) the Scope of the Services at that time, including
any Variations and the measurement of the
performance of the Services or Key Performance
Indicators under clause 18;
(B) the Reimbursable Costs reasonably and properly
incurred by the Contractor in the preceding
Operating Year as independently audited (and, for
the purpose of this clause 15.3(b)(1)(B), if the
parties cannot agree on the identity of the
auditor, then the parties will request the
President of the Institute of Chartered
Accountants in Australia to nominate an
independent auditor);
(C) any information or fixed estimate of future
operating and maintenance costs provided by the
Contractor to the Principal and, in respect of the
second, third, fourth and fifth Operating Years,
the Indicative Annual Operating Budget; and
(D) to the extent it is reasonable to do so, a
comparison of the Reimbursable Costs (as
independently audited) over the previous Operating
Year against verified actual operation and
maintenance costs of prudent, competent and
experienced operators of refineries similar to the
Facility; and
(2) on the basis that:
(A) the Contract remains in full force and the
Contractor continues to fully comply with its
obligations under the Contract; and
(B) the Services and the Contractor's other
obligations under the Contract will be performed
in a timely and cost efficient manner.
(c) If the parties are unable to reach agreement on the revised
Annual Operating Budget and any Variations (as contemplated by
clause 15.3(a)) prior to the commencement of the next
Operating Year (other than the first Operating Year), the
Annual Operating Budget applicable to the next Operating Year,
will be the Annual Operating Budget that applied during the
previous Operating Year until such time as agreement can be
reached or any relevant Dispute resolved or determined.
16 ADDITIONAL CAPITAL EXPENDITURE SERVICES AND VARIATIONS
16.1 FORECAST AND BUDGET FOR ADDITIONAL CAPITAL EXPENDITURE SERVICES
The Contractor must deliver to the Principal's Representative, in a
form which the Principal's Representative reasonably requires and no
later than 2 months prior to the end of each calendar year during
the Term:
PAGE 26
(a) a forecast and recommended program for Additional Capital
Expenditure Services which the Contractor proposes be
undertaken in the next calendar year; and
(b) a 5 year program of expected Additional Capital Expenditure
Services,
including details of how the Contractor has taken into account the
Major Repairs and Replacements Budget and any recommendations of the
Principal.
16.2 ADDITIONAL CAPITAL EXPENDITURE SERVICES
(a) The Principal's Representative may, at any time during the
Term, give a written Direction to the Contractor to perform
any Additional Capital Expenditure Services.
(b) The Contractor must, within such time as may be reasonably
Directed or otherwise agreed by the parties, provide a
detailed proposal including:
(1) the terms, scope, timing and proposed price of any
Additional Capital Expenditure Services; and
(2) the effect of any Additional Capital Expenditure
Services on the Key Performance Indicators and the
Annual Operating Budget.
(c) If the parties agree on the terms, scope, timing, price and
effects of any Additional Capital Expenditure Services set out
in the Contractor's proposal pursuant to clause 16.2(b) then:
(1) the Contractor must perform those Additional Capital
Expenditure Services as agreed and in accordance with
Facilities Management Best Practices; and
(2) the Principal must pay the Contractor the Additional
Capital Expenditure as agreed and in accordance with
clause 17.2.
(d) If the parties cannot agree on the terms, scope, timing and
price for the performance of any Additional Capital
Expenditure Services pursuant to clause 16.2(c), the
Principal's Representative may:
(1) Direct the Contractor to perform those Additional
Capital Expenditure Services; or
(2) arrange for the performance of those Additional Capital
Expenditure Services by other contractors, in which
event the Contractor must:
(A) if requested by the Principal's Representative, as
part of the Services, do all things that are
within the Contractor's responsibility and are
reasonably necessary to allow those contractors to
carry out the Additional Capital Expenditure
Services; and
(B) not unreasonably obstruct, delay or interfere with
the work of those contractors.
(e) The Contractor must continue to perform the Services necessary
to satisfy the requirements of the Contract and the Key
Performance Indicators and will not be relieved of any
obligation under the Contract as a result of any
PAGE 27
arrangement by the Principal for the provision of any
Additional Capital Expenditure Services by other contractors
under clause 16.2(d).
(f) The Contractor must not perform any Additional Capital
Expenditure Services except as Directed by the Principal's
Representative in writing.
16.3 VARIATIONS
(a) The Principal's Representative may, at any time during the
Term, give a written Direction to the Contractor to perform
any Variation.
(b) The Contractor must, within such time as may be reasonably
Directed or otherwise agreed by the parties, provide a
detailed proposal including:
(1) the terms, scope, timing and proposed price of any
Variation; and
(2) the effect of any Variation on the Key Performance
Indicators and the Annual Operating Budget;.
(c) If the parties agree on the terms, scope, timing, price and
effects of any Variation set out in the Contractor's proposal
pursuant to clause 16.3(b) then:
(1) the Contractor must perform that Variation as agreed and
in accordance with the Contract; and
(2) the Principal must pay the Contractor as agreed and in
accordance with clause 17.2.
(d) If the parties cannot agree on the terms, scope, timing and
price for the performance of any Variation pursuant to clause
16.3(b), the Principal's Representative may Direct the
Contractor to perform that Variation.
(e) The Contractor must not perform any Variation except as
Directed by the Principal's Representative in writing.
16.4 VALUATION
(a) If the parties are unable to agree:
(1) the price for the performance of any Additional Capital
Expenditure Services, then the Principal's
Representative must determine the value; or
(2) the price for the performance of any Variation or an
amendment to the relevant Annual Operating Budget in
respect of a Variation, then the Principal's
Representative must determine the value or the amount of
the amendment (if any) to the Annual Operating Budget
having regard to the cost of the work and materials to
be added to or omitted as a result of the Variation,
on the following basis:
(3) if applicable rates or prices are set out in the
Contract, those rates or prices will be used;
(4) if clause 16.4(a)(3) does not apply, the rates or prices
in the Contract will be used to the extent that it is
reasonable to do so;
(5) to the extent that neither clauses 16.4(a)(3) or (4)
apply:
PAGE 28
(A) in respect of Variations and Major Repairs and
Replacements, the reasonable direct cost to the
Contractor without margin or profit will be used;
and
(B) in respect of Improvements and Expansion, the
reasonable direct cost to the Contractor with
margin or profit will be used; and
(6) to the extent that clauses 16.4(a)(3),16.4(a)(4) and
16.4(a)(5) do not apply, a reasonable assessment shall
be made by the Principal's Representative.
(b) For the purpose of a valuation made under clause 16.4(a)(5),
the Principal will have reference to the Records of the
Contractor in respect of the cost incurred or saved, as the
case may be, and the Contractor must maintain in a complete
and accurate form and submit detailed summaries of such
Records in the relevant statement submitted under clause 17.
17 MANAGEMENT FEE, REIMBURSABLE COSTS, ADDITIONAL CAPITAL EXPENDITURE AND
PAYMENT
17.1 MANAGEMENT FEE AND REIMBURSABLE COSTS
Subject to clause 17.2(e), the Principal must pay to the Contractor
the Management Fee, the Reimbursable Costs and any Additional
Capital Expenditure in accordance with the Contract.
17.2 TIME FOR PAYMENT OF MANAGEMENT FEE, REIMBURSABLE COSTS AND
ADDITIONAL CAPITAL EXPENDITURE
(a) The Contractor must submit to the Principal's Representative
within 5 Business Days after the end of each Month a statement
in a form approved by the Principal's Representative of:
(1) the Reimbursable Costs stated in PNG Kina;
(2) the equal monthly portion of the Management Fee
(including any addition or reduction for any applicable
Incentive Amounts and/or Rebate Amounts) stated in PNG
Kina;
(3) any Additional Capital Expenditure stated in PNG Kina;
and
(4) the applicable currency exchange rates in accordance
with clause 17.2(f),
for the preceding Month in respect of the Services performed
during that Month.
(b) The Contractor must, at the time of submitting a statement in
accordance with clause 17.2(a), also submit to the Principal's
Representative, on a full open-book accounting basis, all
Records evidencing the Contractor's expenditure in performing
the Services to allow the Principal's Representative to verify
each claim to its reasonable satisfaction.
PAGE 29
(c) The Principal's Representative must, within 10 Business Days
after receiving a statement and the Records in accordance with
clauses 17.2(a) and (b):
(1) reasonably determine the amount payable in respect of
the statement having regard to the Records and the
Rates; and
(2) issue a certificate to the Contractor and the Principal
of:
(A) the assessment by the Principal's Representative
of the Reimbursable Costs claimed by the
Contractor in the statement;
(B) any money which is due or which may become due
from the Contractor to the Principal in respect of
the Contract or the Services;
(C) the amount certified as payable in PNG Kina to the
Contractor by the Principal, or to the Principal
by the Contractor, as the case may be; and
(D) the applicable currency exchange rates in
accordance with clause 17.2(f).
(d) Subject to clause ERROR! REFERENCE SOURCE NOT FOUND., where an
amount is payable by the Principal to the Contractor in
respect of a certificate issued by the Principal's
Representative under clause 17.2(c), and subject to the
provisions of the Contract, the Principal must pay the
Contractor the amount certified as payable by the Principal's
Representative under clause 17.2(c) by the later of:
(1) 10 Business Days after the Principal's Representative
issues the certificate under clause 17.2(c);
(2) the end of the Month in which the Principal's
Representative issues the certificate under clause
17.2(c);
(3) the receipt by the Principal's Representative of a
statutory declaration, waiver of lien or documentary
evidence of moneys duly paid to and received by
subcontractors;
(4) the receipt by the Principal's Representative of all
Deliverable Documents falling due for delivery during
the Month covered by the statement to which the
certificate applies; and
(5) compliance by the Contractor with all Directions by the
Principal to remedy any breach of the Contract required
during the Month covered by the statement to which the
certificate applies.
(e) The Contractor acknowledges that in no circumstances will the
Contractor be entitled to payment of any amount in excess of
the Annual Operating Budget (as amended in accordance with
clause 15.2) in respect of the performance of the Services
during the relevant period.
(f) [deleted for confidentiality].
(g) Where the Contractor has incurred an obligation to pay but has
not yet paid Additional Capital Expenditure, the Contractor
may at any time provide such details as the Principal's
Representative may reasonably
PAGE 30
require of the relevant amounts and the basis on which the
obligation to pay has been incurred and the time by which
payment is due, including all supporting documentation, in
which event:
(1) the Principal's Representative must reasonably
determine, and issue a certificate to the Contractor and
the Principal certifying, the amount that will be
payable by the Contractor in respect of the Additional
Capital Expenditure and the date by which that amount
will be payable;
(2) subject to clause ERROR! REFERENCE SOURCE NOT FOUND.,
the Principal must pay the Contractor the amount
certified under clause 17.2(g)(1) on the business day
before the date by which that amount will be payable by
the Contractor.
17.3 FIXED AND FIRM PRICING
(a) The Rates under the Contract are fixed and firm until the end
of the first Operating Year.
(b) Subject only to clauses 16.4(a)(5)(B) and 17.3(c), the
Management Fee is fixed and firm until the end of the fifth
Operating Year.
(c) The amount of the Management Fee for each Operating Year after
the first Operating Year shall be increased by an amount
calculated as follows:
MF x (CPI/CPI Base) - MF
Where:
MF is the Management Fee for the previous Operating Year;
CPI is the most recent index entitled "Australia - All Groups"
catalogue number 6401 published by the Australian Bureau of
Statistics prior to the end of the previous Operating Year;
CPI BASE is CPI for the Base Quarter; and
BASE QUARTER is the last calendar quarter before the end of
the Operating Year immediately prior to the previous Operating
Year.
17.4 COSTS NOT REIMBURSABLE
The Contractor acknowledges that the following costs, if incurred by
the Contractor, will be borne by the Contractor and will not form
part of the Reimbursable Costs:
(a) the costs of rectifying any breach of the Contract by the
Contractor (including the costs of rectifying any
non-compliant Services or Materials and Equipment);
(b) any damages payable by the Contractor pursuant to the
Contract;
(c) any amounts payable by the Contractor under any indemnities in
the Contract;
(d) in respect of any litigation or dispute resolution process
between the Contractor and its subcontractors:
PAGE 31
(1) any legal costs incurred by the Contractor in relation
to that litigation or dispute resolution process; or
(2) any loss incurred by the Contractor in relation to that
litigation or dispute resolution process as a result of,
or in connection with, a breach by the Contractor of its
obligations under the Contract or a breach of any
subcontract by the Contractor;
(e) any income tax payable by the Contractor on the Contractor's
gross earnings;
(f) any penalties, unless caused by a breach of the Contract by
the Principal;
(g) any amounts payable in relation to any litigation or dispute
resolution process between the Contractor and the Principal,
except to the extent that there is an order for the Principal
to pay any such amount; and
(h) subject only to clause 15.2(a)(1)(C), any costs incurred by
the Contractor in performing Variations or Additional Capital
Expenditure Services which have not been Directed by the
Principal's Representative in writing.
17.5 TAX ON PAYMENTS
If, pursuant to any Legislative Requirement, the Principal is
required to make a deduction or withholding in respect of Tax from
any payment to be made to the Contractor under the Contract, then:
(a) the Principal must pay the amount deducted or withheld to the
appropriate Government Agency as required by the Legislative
Requirement; and
(b) the Principal must use all reasonable endeavours to obtain
official receipts or other documentation from the Government
Agency and, within 4 Business Days after receipt, deliver a
copy of those documents to the Contractor.
17.6 NO ADDITIONAL PAYMENTS
If:
(a) the Principal is required to make a deduction or withholding
in respect of Taxes from any payment to be made to the
Contractor under the Contract; or
(b) the Contractor is required to pay any Taxes in respect of any
payment it receives from the Principal under the Contract,
then, the Principal is not obliged to make, and the Contractor is
not entitled to claim, any additional payment in respect of the
deduction or withholding in respect of Taxes or for the payment of
Tax.
17.7 INTEREST ON OVERDUE PAYMENTS
If any money due to either party remains unpaid after the date on
which (or the expiration of the period within which) it should have
been paid, interest is payable on the money from, but excluding, the
date on which (or the expiration of the period within which) it
should have been paid, to and including the date on which the money
is paid, at [deleted for confidentiality].
PAGE 32
18 REBATE AMOUNTS AND INCENTIVE AMOUNTS
(a) The Principal will measure the performance of the Contractor
in providing the Services according to the extent to which the
Contractor has and is meeting the Key Performance Indicators.
(b) If the Contractor fails to perform to the standard required by
a Key Performance Indicator and that failure was not caused by
an act or omission of the Principal, the Principal may be
entitled to claim a Rebate Amount.
(c) The parties agree that Rebate Amounts do not limit the
Principal's right at general law to recover damages:
(1) in excess of the respective Rebate Amount for the
Contractor's failure to achieve any Key Performance
Indicator; or
(2) in respect of the Contractor's failure to perform the
Services in accordance with the Contract.
(d) If the Contractor exceeds a Key Performance Indicator in
performing the Services, the Contractor may be entitled to
claim an Incentive Amount in respect of the relevant Key
Performance Indicator.
(e) The liability of the Contractor to pay Rebate Amounts and the
liability of the Principal to pay Incentive Amounts do not
arise in respect of any Services performed prior to the
commencement of the second Operating Year.
19 RECORDS AND AUDITING
19.1 RECORDS
(a) The Contractor must keep and maintain all Records for a period
of 7 years.
(b) All Records shall be available and accessible at all times to
the Principal and its authorised agents, on a full open-book
basis, without limitation.
19.2 AUDITING
(a) The Principal may, on the provision of ten (10) Business Days
written notice to the Contractor, conduct detailed audits of
the Contractor's performance of the Services to determine
whether or not the Contractor is performing the Services to
the Key Performance Indicators.
(b) The Contractor must, at the request of the Principal, provide
sufficient Records on a full open-book basis to the Principal
(including for examination and copying) so that the Principal
may verify the contents or amounts included or referred to in
any statement provided by the Contractor under clause 17 or
other information provided by the Contractor pursuant to the
Contract.
(c) The Contractor must allow the Principal and its authorised
agents unrestricted access to all Records, premises, equipment
and personnel
PAGE 33
reasonably necessary for the Principal to conduct any audit
referred to in clause 19.2.
20 MATERIALS AND EQUIPMENT
The Contractor will supply all Materials and Equipment necessary for
the proper performance of the Contractor's obligations and discharge
of the Contractor's liabilities, and the direct costs reasonably and
properly incurred by the Contractor in doing so will be Reimbursable
Costs.
Property and ownership in Materials and Equipment purchased by the
Contractor shall automatically vest in the Principal on the
reimbursement by the Principal of the relevant cost.
Subject to clause 35.5, on the expiry of the Term or in the event of
termination of the Contract, the Contractor shall deliver up or make
available all Materials and Equipment in accordance with the
directions of the Principal, at no further cost to the Principal
(except to the extent that the relevant cost has not been
reimbursed).
21 FORCE MAJEURE
21.1 NOTICE
Any party who is, by reason of Force Majeure unable to perform any
obligation under the Contract must notify the other party in writing
as soon as possible, specifying:
(a) the cause and extent of the non-performance;
(b) the date of commencement of the non-performance; and
(c) the means proposed to be adopted to remedy or abate the Force
Majeure.
21.2 IMPACT OF FORCE MAJEURE
Subject to clause 21.3, a party shall have no liability in respect
of any failure to perform its obligations under the Contract to the
extent that the failure to perform is due to Force Majeure.
21.3 MITIGATION OF FORCE MAJEURE
A party who is, by reason of Force Majeure, unable to perform any
obligation under the Contract must:
(a) use all reasonable diligence and employ all reasonable means
to remedy or abate the Force Majeure as expeditiously as
possible (provided however that neither party shall, by virtue
of this clause, be required against the will of such party to
terminate or settle any strike or other industrial action);
(b) resume performance as expeditiously as possible after the
Force Majeure or, if the Force Majeure has abated resume
performance to the extent possible; and
(c) notify the other party when the Force Majeure has ceased or
abated to an extent which permits the resumption of
performance.
PAGE 34
21.4 ADJUSTMENTS
If the Contractor is, by reason of Force Majeure, unable to perform
any of the Services:
(a) if the Services are substantially unable to be performed then,
during that period, the Management Fee to which the Contractor
would otherwise be entitled shall be reduced if and to the
extent that the Principal's Representative reasonably
considers appropriate; and
(b) the Annual Operating Budget for the relevant period shall be
amended,
to reflect the affect of the Force Majeure on the Services performed
by the Contractor.
22 INTELLECTUAL PROPERTY RIGHTS
22.1 OWNERSHIP OF PRINCIPAL'S BACKGROUND MATERIALS
Subject to clause 22.2, the Contractor agrees that:
(a) the Principal owns and retains all right, title and interest
in the Principal's Background Materials (including
Intellectual Property Rights in the Principal's Background
Materials); and
(b) the Contractor will obtain no interest in the Principal's
Background Materials solely by its access to or use of those
Background Materials in relation to the Contract.
22.2 LICENCE TO USE PRINCIPAL'S BACKGROUND MATERIALS
The parties agree that all the Principal's Background Materials
which the Principal makes available to the Contractor in connection
with the Contract will be deemed to be licensed to the Contractor on
a non-exclusive, royalty free basis to use, adapt, modify,
reproduce, maintain, operate, rectify or rebuild solely for the
purpose of performing its obligations, exercising its rights or
taking the benefit of its rights under the Contract until
termination or expiration of the Contract.
22.3 OWNERSHIP OF CONTRACT MATERIALS
Subject to clause 22.4(a) and except in respect of any Contractor's
Background Materials licensed by the Contractor from a third party,
the parties agree that:
(a) the Principal will own all right, title and interest in the
Contract Materials (including Intellectual Property Rights in
the Contract Materials);
(b) to the extent necessary, the Contractor must assign to the
Principal all rights, if any, it has or obtains to the
Contract Materials; and
(c) the Contractor will obtain no interest in the Contract
Materials solely by its development of, access to or use of
those Contract Materials in relation to the Contract.
PAGE 35
22.4 LICENCE TO USE CONTRACT MATERIALS
(a) The Principal grants to the Contractor a non-exclusive,
royalty free licence for the Contractor to use, adapt, modify,
reproduce, maintain, operate, rectify or rebuild any Contract
Materials referred to in clause 22.3 in performing its
obligations under the Contract until termination or expiration
of the Contract.
(b) In respect of any Contractor's Background Materials licensed
by the Contractor from a third party, the Contractor must
procure for the Principal a non-exclusive, perpetual,
sub-licensable, royalty free licence for the Principal to use,
adapt, modify, reproduce, maintain, operate, rectify or
rebuild such Background Materials for the operation,
maintenance and management of the Facility and the Refining
Process.
22.5 DELIVERY OF CONTRACT MATERIALS
Upon termination or expiration of the Contract, the Contractor must
deliver to the Principal:
(a) all Contract Materials;
(b) all the Principal's Background Materials made available to the
Contractor;
(c) any other Documents and Records determined by the Principal as
being required for the operation, maintenance and management
of the Facility and the Refining Process; and
(d) provide access to personnel to explain the operation of any
Contract Materials.
22.6 MORAL RIGHTS
The Contractor must ensure that all of its consultants,
subcontractors and personnel:
(a) acknowledge that their Moral Rights are not infringed by; and
(b) consent to,
all acts or omissions of the parties in relation to their Moral
Rights in respect of the Contract Materials.
22.7 WARRANTY BY THE CONTRACTOR
The Contractor warrants that the Intellectual Property Rights
granted to the Principal under this clause 22 and the use by the
Principal pursuant to clause 22 will not infringe any Intellectual
Property Rights owned by any third person.
22.8 INDEMNITY
The Contractor must indemnify and hold harmless the Principal
against any action, claim, demand, cost, loss, damage or expense
arising from:
(a) any infringement or alleged infringement of Intellectual
Property Rights owned by a third person in respect of any
Contract Materials; and
(b) any breach of the warranty in clause 22.7.
PAGE 36
22.9 USE OF INFRINGING MATERIAL
If the use of any item of Contract Materials is determined to
constitute an infringement of Intellectual Property Rights of any
third person and its use is enjoined, the Contractor must, at its
own expense, either:
(a) procure for the Principal the right to continue using the item
of Contract Materials;
(b) replace the item of Contract Materials with a non-infringing
item; or
(c) modify the item of Contract Materials or its uses so it
becomes non-infringing.
22.10 SURVIVAL
The rights and obligations of the parties under this clause 22
survive expiry or termination of the Contract.
23 CONFIDENTIAL INFORMATION
23.1 NON-DISCLOSURE OF PRINCIPAL'S CONFIDENTIAL INFORMATION
Subject to clauses 22.2, 22.4 and 23.2, the Contractor may not
disclose Confidential Information of the Principal without the prior
written consent of the Principal (which consent must not be
unreasonably withheld).
23.2 NON-DISCLOSURE OF CONTRACTOR'S CONFIDENTIAL INFORMATION
Subject to clause 22.3, the Principal may not disclose Confidential
Information of the Contractor without the prior written consent of
the Contractor (which consent must not be unreasonably withheld).
23.3 PERMITTED DISCLOSURE
Either party may disclose Confidential Information of the other
party which:
(a) at the time of disclosure is in the public domain, but not as
result of a breach of clauses 23.1 or 23.2, as the case may
be;
(b) is required to be disclosed for the purposes of performing its
obligations under the Contract;
(c) is required to be disclosed to its professional advisers,
bankers or financial advisers; or
(d) is required by Legislative Requirements to be disclosed.
23.4 CONFIDENTIALITY UNDERTAKINGS
Subject to clauses 22.2 and 22.4, if the Contractor requires further
disclosure of Confidential Information of the Principal to be made
to its subcontractors or suppliers or others under clause 23.3(b)
for the purposes of performing its obligations under the Contract,
the Contractor must procure confidentiality undertakings (on terms
satisfactory to the Principal) from its subcontractors or suppliers
in relation to that disclosure.
PAGE 37
23.5 RETURN OF CONFIDENTIAL INFORMATION
Either party must return to the other party any Confidential
Information of the other party on demand.
23.6 MEDIA
(a) The Contractor must not disclose any information concerning
the Services for distributing through any communications media
without the Principal's prior written approval, which may
place conditions on such approval.
(b) The Contractor must refer to the Principal any enquiries from
any media concerning the Services.
24 ASSIGNMENT AND SUB-CONTRACTING
24.1 ASSIGNMENT
(a) Subject to clause 24.1(b), neither party shall, without the
prior written consent of the other party (which consent shall
not be unreasonably withheld), and except on such reasonable
terms and conditions as may be determined in writing by the
other party, assign this Contract or assign any payment or any
other right, benefit or interest under this Contract.
(b) The Principal may assign this Contract or assign any payment
or any other right, benefit or interest under this Contract to
any person or entity as required by the Financier under the
Consent Deed without the Contractor's consent.
24.2 SUBCONTRACTING GENERALLY
(a) The Contractor must not without the Principals' prior written
approval (which may not be unreasonably withheld):
(1) subcontract or allow a subcontractor to subcontract any
work ; or
(2) allow a subcontractor to assign a subcontract or any
payment or any other right, benefit or interest under
the subcontract.
(b) With a request for approval, the Contractor must give the
Principal written particulars of the work to be subcontracted
and the name and address of the proposed subcontractor.
(c) The Contractor must give the Principal other information which
the Principal reasonably requests, including the proposed
subcontract documents and documentation which confirms the
qualifications of the officer and employees of the proposed
subcontractor who will be undertaking the work.
(d) Within 14 days of the Contractor's request for approval, the
Principal must give the Contractor written notice of the
approval or rejection of the Contractor's request for approval
to subcontract.
(e) Any subcontract whether entered into as at the Execution Date
or in the future by the Contractor must contain:
PAGE 38
(1) provision that the subcontractor must not assign or
subcontract without the Contractor's written consent;
(2) provisions that require subcontractors to comply with
the same obligations as are contained in clauses 6.6(a),
6.6(b), 6.6(c) and 6.6(d);
(3) provisions reasonably necessary to enable the Contractor
to fulfil the Contractor's obligations to the Principal;
and
(4) provision that if the Contract is terminated, the
Contractor and the subcontractor must after the
Principal has done so, promptly execute a Deed of
Novation.
(f) The Contractor irrevocably appoints the Principal as the
Contractor's attorney with authority to execute any Deed of
Novation necessary to give effect to the novation referred to
in clause 24.2(e)(4) and to bind the Contractor accordingly.
24.3 CONTRACTOR'S RESPONSIBILITY
(a) The Contractor is liable to the Principal for the acts,
defaults and omissions of subcontractors and employees and
agents of subcontractors as if they were those of the
Contractor.
(b) Approval to subcontract does not relieve the Contractor from
any liability or obligation under the Contract.
(c) The Contractor must not, and has no authority to, incur
any liability on behalf of the Principal or enter into
any agreements or commitments in the name of, or on
behalf of, the Principal and must take no step to bind
or commit the Principal.
25 PRINCIPAL
25.1 PRINCIPAL'S DIRECTIONS
(a) Except where the Contract otherwise provides:
(1) the Principal or the Principal's Representative may give
a Direction orally but shall as soon as practicable
confirm it in writing;
(2) compliance by the Contractor with any Direction issued
by the Principal or the Principal's Representative will
not in any way:
(A) relieve the Contractor of any of its liabilities
or responsibilities to the Principal under the
Contract or otherwise according to law;
(B) lessen or affect the Principal's rights against
the Contractor under the Contract or otherwise
according to law; or
(C) entitle the Contractor to:
(i) make any Claim;
(ii) any increase in the Management Fee or the
Rates; or
PAGE 39
(iii) any amendment to the Annual Operating
Budget.
(b) If the Contractor considers that a Direction given by the
Principal or the Principal's Representative is a Direction to
perform Additional Capital Expenditure Services or a
Variation, the Contractor must give written notice to the
Principal's Representative of the Direction which must include
the effect the Contractor anticipates the Additional Capital
Expenditure Services or the Variation will have on:
(1) the Plans;
(2) the Key Performance Indicators; and
(3) the Annual Operating Budget.
(c) If the Contractor does not give the notice referred to in
clause 25.1(b) before complying with the Direction, the
Contractor will not be entitled to have the value of the
Additional Capital Expenditure Services or the Variation
determined under clause 16.4 and compliance with the Direction
will not in any way:
(1) relieve the Contractor of any of its liabilities or
responsibilities to the Principal under the Contract or
otherwise according to law;
(2) lessen or affect the Principal's rights against the
Contractor under the Contract or otherwise according to
law; or
(3) entitle the Contractor to:
(A) make any Claim;
(B) any increase in the Management Fee or the Rates;
or
(C) any amendment to the Annual Operating Budget.
25.2 PRINCIPAL'S REPRESENTATIVE
(a) The Principal may from time to time appoint individuals to
exercise delegated Principal's functions, provided that:
(1) no aspect of any function shall at any one time be the
subject of delegation to more than one Principal's
Representative;
(2) delegation shall not prevent the Principal exercising
any function; and
(3) the Principal forthwith gives the Contractor written
notice of respectively:
(A) the appointment, including the Principal's
Representative's name and delegated functions; and
(B) the termination of each appointment.
(b) The Principal must immediately notify the Contractor in
writing of the name of the Principal's Representative and of
any subsequent changes.
(c) The Principal's Representative must act reasonably in relation
to any function of assessment or certification of the
Contractor's entitlements under the Contract.
PAGE 40
26 CONTRACTOR'S REPRESENTATIVE
(a) The Contractor must supervise the Services personally or, may
from time to time appoint an individual to exercise any
functions of the Contractor under the Contract and to
supervise the performance of the Services.
(b) The Contractor must immediately give the Principal written
notice of the Contractor's Representative and any subsequent
changes.
(c) The appointment of the Contractor's Representative does not
prevent the Contractor from exercising any function.
(d) The Contractor's Representative will represent the Contractor
for all purposes of the Contract, unless the Contractor
advises the Principal in writing that some other person is to
be the Contractor's Representative.
(e) The Contractor's Representative is authorised to negotiate
with the Principal on behalf of the Contractor and to bind the
Contractor contractually in respect of matters arising from
the performance of the Services.
(f) Matters within the knowledge of the Contractor's
Representative (including Directions received) are deemed to
be within the knowledge of the Contractor.
(g) If the Principal makes a reasonable objection to the
appointment of a Contractor's Representative, the Contractor
must terminate the appointment and appoint another
Contractor's Representative.
27 CONTRACTOR'S EMPLOYEES AND SUBCONTRACTORS
27.1 EMPLOYEES AND SUBCONTRACTORS
(a) The Contractor must employ in activities connected with the
Services only persons or subcontractors who are competent,
careful, skilled and experienced in their respective trades
and professions.
(b) The Principal may direct the Contractor to have removed,
within a stated time, from the Facility or the Site or from
any activity of the Services, any person employed on the
Services who, in the Principal's reasonable opinion, is
incompetent, negligent or guilty of misconduct.
27.2 ORGANISATION STRUCTURE AND KEY PERSONNEL
(a) The Contractor must effect and maintain the Organisation
Structure for the Term unless:
(1) the Principal, in its sole and unfettered discretion,
approves a change to the Organisation Structure; or
(2) the Principal gives a notice to the Contractor
instructing the Contractor to change the Organisation
Structure.
(b) The Contractor must engage the Key Personnel in the
performance of the Services, unless:
PAGE 41
(1) the Principal, in its sole and unfettered discretion,
approves the substitution of a member of the Key
Personnel;
(2) the Principal gives a notice to the Contractor
instructing the Contractor to remove a member of the Key
Personnel; or
(3) a member of the Key Personnel dies, retires or resigns,
except to accept other employment with another related
entity of the Contractor, or otherwise suffers from ill
mental or physical health.
(c) The Contractor must promptly fill any vacancy in the Key
Personnel with a person approved of in writing by the
Principal.
28 DAMAGES TO PERSONS AND PROPERTY
28.1 PROTECTION OF PEOPLE AND PROPERTY
(a) The Contractor must:
(1) take all reasonable and necessary measures to protect
people and property including complying with the
Principal's requirements in respect thereof and, in
particular, comply with all occupational health and
safety legislation and take full responsibility for the
adequacy, stability and safety of all operations of the
Facility and on the Site;
(2) establish, maintain and comply with emergency safety and
security procedures applicable to the Services, the
Facility and the Site as notified to the Contractor by
the Principal from time to time;
(3) avoid unnecessary interference with the passage of
people and vehicles;
(4) prevent nuisance and unreasonable noise and disturbance.
(b) If the Contractor damages any property of a third party,
including, but not limited to, public utilities and services
and property on or adjacent to the Facility and the Site, the
Contractor must promptly rectify the damage and pay any
compensation which the law requires the Contractor to pay.
(c) If the Contractor fails to comply with an obligation under
this clause, the Principal, after giving reasonable written
notice to the Contractor and in addition to the Principal's
other rights and remedies, may have the obligation performed
by others and the cost incurred will be moneys due from the
Contractor to the Principal.
28.2 URGENT PROTECTION
(a) If urgent action is necessary to protect the Services, the
Facility, the Site, other property or people and the
Contractor fails to take the action:
(1) in addition to any other remedies of the Principal, the
Principal may take the necessary action; and
(2) if the action was action which the Contractor should
have taken at the Contractor's cost, the reasonable cost
incurred shall be moneys due from the Contractor to the
Principal.
PAGE 42
(b) If time permits, the Principal must give the Contractor prior
written notice of the intention to take action pursuant to
this clause.
28.3 OCCUPATIONAL HEALTH AND SAFETY
(a) The Contractor must comply with:
(1) all Directions in regard to the application of the
Principal's occupational health and safety policy and
procedures for the Site; and
(2) the Occupational Health and Safety Plan.
(b) If the Contractor fails to comply with an obligation under
this clause the Principal, after the Principal has given
reasonable written notice to the Contractor and in addition to
the Principal's other rights and remedies, may have the
obligation performed by others. The cost incurred will be
moneys due from the Contractor to the Principal.
29 INDEMNITY AND LIMITATION AND EXCLUSION OF LIABILITY
29.1 INDEMNITIES
(a) Subject to clauses 29.2 and 29.3, the Contractor is
responsible for and must indemnify and hold harmless the
Principal Group, and the Principal is responsible for and must
indemnify and hold harmless the Contractor Group (each of the
Contractor and the Principal being the "INDEMNIFYING PARTY" as
appropriate and each of the Principal Group and the Contractor
Group being the "INDEMNIFIED PARTY" as appropriate) from and
against any and all claims, liabilities, costs, losses,
damages and expenses of every kind and nature (including
extra-judicial settlements and compromises) in respect of:
(1) sickness, injury or death of any employee, agent or
consultant of the Indemnifying Party's Group (which
means, in the case of the Contractor, the Contractor
Group, and in the case of the Principal, the Principal
Group); and
(2) loss of, damage to or destruction of the property or
equipment owned, hired, leased, chartered or otherwise
belonging to or provided by the Indemnifying Party's
Group, including, for the avoidance of doubt, loss of
Raw Materials or Products,
arising from or as a result of the performance, inadequate
performance or non-performance of the Contract from any cause
whatsoever, and notwithstanding the negligence or breach of
duty (statutory or otherwise) of the Indemnified Party or any
other person and irrespective of any claim in tort, under
contract or otherwise at law, provided that this indemnity
does not apply or is reduced proportionally to the extent that
the Gross Negligence of the Indemnified Party contributes to
the sickness, injury, death, loss, damage, destruction, cost
or expense.
(b) Subject to clauses 29.2 and 29.3, the Contractor is
responsible for and must indemnify and hold harmless the
Principal Group and the Principal is
PAGE 43
responsible for and must indemnify and hold harmless
Contractor Group (each of the Contractor and the Principal
being the "INDEMNIFYING PARTY" as appropriate and each of the
Principal Group and the Contractor Group being the
"INDEMNIFIED PARTY" as appropriate) from and against any and
all claims, liabilities, costs, losses, damages and expenses
of every kind and nature (including extra-judicial settlements
and compromises) in respect of the sickness, injury or death
of any third party and the loss of, damage to or destruction
of any property of any third party, including environmental or
pollution damage, arising from or as a result of the
performance, inadequate performance or non-performance of the
Contract and caused by the negligence or breach of duty
(statutory or otherwise) of the Indemnifying Party's Group
(such term having the same meaning as in clause 29.1(a)),
provided that this indemnity does not apply or is reduced
proportionally to the extent that the negligence or breach of
duty (statutory or otherwise) of the Indemnified Party
contributes to the sickness, injury, death, loss, damage,
destruction, cost or expense.
29.2 NO CONSEQUENTIAL LOSSES
(a) For the purposes of this clause 29.2, "CONSEQUENTIAL LOSS"
means loss of use, contract, production, product or revenue,
profit or expected profit and any consequential, special or
indirect loss or damage arising out of or in connection with
the Contract or the Services, and whether or not such losses
were foreseeable at the time of entering into the Contract.
(b) Notwithstanding any other provisions to the contrary elsewhere
in this Contract, the Contractor shall save, indemnify, defend
and hold harmless the Principal Group from the Contractor
Group's own Consequential Loss (even if caused wholly or
partly by the negligence or Gross Negligence of the Principal
Group) and the Principal shall save, indemnify, defend and
hold harmless the Contractor Group from the Principal Group's
own Consequential Loss (even if caused wholly or partly by the
negligence or Gross Negligence of the Contractor Group).
29.3 LIMITATION ON LIABILITY
(a) Where the Contractor is liable to the Principal or any other
person under clause 29.1(a), and:
(1) none of the Principal's Insurances nor the Contractor's
Insurances are applicable (other than as a result of a
failure by the Contractor to effect or maintain the
Contractor's Insurances); or
(2) one or more of the Principal's Insurances or the
Contractor's Insurances is applicable but the
Contractor's liability exceeds the proceeds received by
the Principal under the Principal's Insurances or the
Contractor's Insurances, as the case may be,
then, except where the Contractor Group is Grossly Negligent,
the liability of the Contractor in any Operating Year (beyond
the applicable proceeds of insurance) is limited to five
million United States Dollars (US$5,000,000), and the
Principal shall save, indemnify, defend and hold harmless the
Contractor Group from any such liability in excess of five
million United States Dollars (US$5,000,000).
PAGE 44
(b) Where the Contractor is liable to the Principal or any other
person under clause 29.1(b), and:
(1) none of the Principal's Insurances nor the Contractor's
Insurances are applicable (other than as a result of a
failure by the Contractor to effect or maintain the
Contractor's Insurances); or
(2) one or more of the Principal's Insurances or the
Contractor's Insurances is applicable but the
Contractor's liability exceeds the proceeds received by
the Principal under the Principal's Insurances or the
Contractor's Insurances, as the case may be,
then, except where the Contractor Group has been Grossly
Negligent, the liability of the Contractor in any Operating
Year (beyond the applicable proceeds of insurance) is limited
to twenty million United States Dollars (US$20,000,000), and
the Principal shall save, indemnify, defend and hold harmless
the Contractor Group from any such liability in excess of
twenty million United States Dollars (US$20,000,000).
30 INSURANCES
30.1 PRINCIPAL'S INSURANCE
(a) Prior to the anticipated date for commissioning, the Principal
must effect and maintain the Principal's Insurances in
accordance with Annexure Part I.
(b) The insurances must:
(1) be in the names of the Principal, the Contractor and the
Financier;
(2) include a non-vitiation clause to the effect that acts,
omissions and misrepresentations by one assured which
would otherwise vitiate any claim under the policy or
render the policy void can only affect the right of that
particular assured and cannot prejudice the rights and
interests of the other assured under the policy;
(3) include a waiver of the insurers' rights of subrogation
against the Contractor and any of the Contractor's
subcontractors;
(4) cover the parties and all subcontractors whenever
performing the Services for their respective rights,
interests and liabilities; and
(5) be in terms approved in writing by the Financier.
30.2 CONTRACTOR'S INSURANCE
(a) The Contractor must effect and maintain the Contractor's
Insurances in accordance with Annexure Part I.
(b) The insurances must:
(1) except in relation to workers' compensation insurance,
be in the names of the Principal, the Contractor and the
Financier;
(2) include a waiver of the insurer's rights of subrogation
against the Principal; and
PAGE 45
(3) cover the parties whenever performing the Services for
their respective rights, interests and liabilities.
31 INSPECTION AND PROVISIONS OF INSURANCE POLICIES
31.1 PROOF OF INSURANCE
(a) Before the Contractor commences the Services and whenever
requested in writing by a party, the other party must provide
satisfactory evidence of the insurance required to be effected
and maintained by the other party under the Contract
(including policies, renewal certificates and endorsement
slips).
(b) Insurance does not limit liabilities or obligations under
other provisions of the Contract.
(c) Any insurance policy to be effected or maintained under the
Contract by the Contractor must be in a form acceptable to the
Principal and the Financier and with an insurer authorised to
carry on business in Papua New Guinea and:
(1) with at least a Standard and Poor's "BBB+" rating; or
(2) with at least a Best Insurance Reports rating of "A-";
or
(3) otherwise acceptable to the Principal and the Financier.
31.2 FAILURE TO PRODUCE PROOF OF INSURANCE
(a) If a party makes a request under clause 31.1 and the other
party fails to promptly provide satisfactory evidence of
compliance with clause 31.1, then without prejudice to any
other rights or remedies, that party may insure and the cost
thereof shall be moneys due and payable from the other party
to that party.
(b) If the Contractor fails to provide proof of the insurance
effected and maintained by the Contractor in accordance with
clause 30.2 then, until the Contractor provides the proof of
the insurance required by clause 31.1, amounts otherwise due
to the Contractor in respect of the Management Fee may be
withheld by the Principal.
31.3 NOTICES FROM OR TO THE INSURER
Each party must ensure that each policy that it is required to
effect and maintain under the Contract contains provisions
acceptable to the other party and the Financier that will:
(a) provide that, whenever the insurer gives the Principal, the
Contractor or a subcontractor a notice of cancellation
concerning the policy, such cancellation shall not be
effective against the Financier for 60 days except whenever
the Contractor or the Principal, as the case may be, fails to
renew the policy or to pay a premium then clause 31.3(c)
applies;
(b) provide that a notice of claim given to the insurer by the
Principal, the Financier, the Contractor or a subcontractor
will be accepted by the insurer
PAGE 46
as a notice of claim given by the Principal, the Financier,
the Contractor and the subcontractor; and
(c) require the insurer, whenever the Contractor or the Principal,
as the case may be, fails to renew the policy or to pay a
premium, to give 10 days written notice of the failure
immediately to the Principal, the Financier and the Contractor
before the insurer gives any notice of cancellation.
31.4 NOTICES OF POTENTIAL CLAIMS
The Contractor must, as soon as practicable, inform the Principal in
writing of any occurrence that may give rise to a claim under an
insurance policy required to be effected and maintained by the
Contractor under clause 30 and shall keep the Principal informed of
subsequent developments concerning the claim. The Contractor must
ensure that subcontractors in respect of their operations similarly
inform the parties.
The Principal must, as soon as practicable, inform the Contractor in
writing of any occurrence that may give rise to a claim under an
insurance policy required to be effected and maintained by the
Principal under clause 30 and shall keep the Contractor informed of
subsequent developments concerning the claim.
31.5 CARE OF THE SERVICES AND SETTLEMENT OF CLAIMS
(a) The Contractor is responsible for the care of the Services,
the Facility and the Site from and including the Date of
Practical Completion until the expiry or termination of the
Contract.
(b) Without limiting the Contractor's obligations under clause
31.5(a), the Contractor:
(1) is responsible for:
(A) the care of all Materials and Equipment;
(B) items entrusted to the Contractor by the Principal
for the purpose of performing the Services;
(C) items brought onto Site by subcontractors for that
purpose; and
(D) items in the course of transportation or delivery
to the Site; and
(2) must provide the storage and protection necessary to
preserve those items.
(c) If loss or damage occurs to the Services, the Facility or the
Site during the period for which the Contractor is responsible
for the care of the Services, the Facility and the Site:
(1) the Contractor must, subject to clauses 29 and
31.5(c)(2), rectify such loss or damage so that the
Services, the Facility or the Site, as the case may be,
conform in every respect with the provisions of the
Contract; and
(2) on settlement of a claim under the insurance required by
clause 30 and subject to the consent of the Financier:
PAGE 47
(A) to the extent that reinstatement has been the
subject of a payment or allowance by the Principal
to the Contractor, if the Contractor has not
completed such reinstatement, insurance moneys
received must, if requested by either party, be
paid into an agreed bank account in the joint
names of the parties and as the Contractor
reinstates the loss or damage, the Principal must
sign against the joint account for the reasonable
cost of reinstatement; and
(B) to the extent that reinstatement has not been the
subject of a payment or allowance by the Principal
to the Contractor, the Contractor is entitled,
immediately, to receive from insurance moneys
received, the amount of such moneys so paid in
relation to any loss suffered by the Contractor.
31.6 CROSS LIABILITY
Any insurance required to be effected in accordance with the
Contract must include a cross liability, clause which states that:
(a) the insurer agrees to waive all rights of subrogation or
action against any of the persons constituting the insured and
for the purpose of which the insurer accepts the term
"insured" as applying to each of the persons constituting the
insured as if a separate policy of insurance had been issued
to each of them (subject always to the overall insured not
being increased); and
(b) failure by any insured to comply with the terms of the policy
does not prejudice the insurance in relation to any other
insured.
31.7 DEDUCTIBLES
(a) The policies of insurance referred to in clause 30.2 which the
Contractor is required to effect and maintain under the
Contract must not have deductibles greater than the
deductibles specified in Annexure Part I for each policy.
(b) The Contractor must pay any deductible payable under the
policies of insurance referred to in clause 30.2 unless and to
the extent that the relevant claim is as a result of an act or
omission of the Principal.
32 PAYMENT OF WORKERS AND SUBCONTRACTORS
32.1 WORKERS AND SUBCONTRACTORS
(a) The Contractor must give in respect of a statement provided in
accordance with clause 17.2, a statutory declaration by an
authorised officer declaring, and documentary evidence of, the
payment of moneys due and payable to:
(1) workers of the Contractor and of the subcontractors; and
(2) subcontractors,
in respect of performance of the Services the subject of that
statement.
PAGE 48
(b) If the Contractor is unable to give such statutory declaration
or documentary evidence, the Contractor must give other
documentary evidence of the moneys so due and payable to
workers and subcontractors.
(c) Documentary evidence, except where the Contract otherwise
provides, must be to the Principal's reasonable satisfaction.
32.2 WITHHOLDING PAYMENT
(a) Subject to clause 32.2(b), the Principal may withhold moneys
certified as due and payable to the Contractor in accordance
with clause 17.2 until the Contractor complies with clause 32.
(b) The Principal must not withhold payment of such moneys in
excess of the moneys evidenced pursuant to clause 32 as due
and payable to workers and subcontractors.
32.3 DIRECT PAYMENT
(a) The Principal may pay unpaid moneys the subject of clause 32
directly to a worker or a subcontractor where:
(1) permitted by a Legislative Requirement;
(2) given a court order in favour of the worker or
subcontractor; or
(3) requested in writing by the Contractor.
(b) A payment made to a worker or subcontractor under clause
32.3(a) will be deemed to be paid in part satisfaction of the
Principal's obligations to pay pursuant to clause 17.
33 WORKING HOURS
(a) If the working hours and working days on the Site are not
stated elsewhere in the Contract, they shall be as notified by
the Contractor to the Principal before commencement of the
Services on the Site.
(b) The working hours shall not be varied without the Principal's
prior written approval, except when, in the interests of
safety of persons or property, the Contractor finds it
necessary to perform the Services otherwise, whereupon the
Contractor shall give the Principal written notice of those
circumstances as early as possible.
34 SUSPENSION
34.1 PRINCIPAL'S SUSPENSION
The Principal's Representative may direct the Contractor to suspend
the performance of the whole or part of the Services for such time
as the Principal's Representative thinks fit, if the Principal's
Representative is of the opinion that it is necessary:
(a) because of an act, default or omission of:
PAGE 49
(1) the Principal or its employees, consultants, agents or
other contractors (not being employed by the
Contractor); or
(2) the Contractor, a subcontractor or either's employees or
agents;
(b) for the protection or safety of any person or property;
(c) to comply with a court order; or
(d) for the convenience of the Principal.
34.2 CONTRACTOR'S SUSPENSION
(a) If the Contractor wishes to suspend the performance of the
whole or part of the Services, otherwise than pursuant to
clause 35.8, the Contractor must obtain the Principal's prior
written approval.
(b) The Principal may approve the suspension and may impose
conditions of approval.
34.3 RECOMMENCEMENT
(a) As soon as the Principal becomes aware that the reason for any
suspension no longer exists, the Principal must direct the
Contractor to recommence suspended Services as soon as
practicable.
(b) The Contractor may commence the Services suspended pursuant to
clause 34.2 or 35.8 at any time after reasonable notice to the
Principal.
34.4 COSTS OF SUSPENSION
(a) The Contractor must bear all costs incurred by the Contractor
in respect of, or arising out of, any suspension pursuant to
clause 34.1(a)(2) and clause 34.2 and the Management Fee shall
be adjusted on a pro rata daily basis to reflect the period of
the suspension.
(b) The Contractor must bear all costs incurred by the Contractor
in respect of, or arising out of, any suspension pursuant to
clauses 34.1(b) or (c) if the Contractor made the protection,
safety or court order necessary and the Management Fee shall
be adjusted on a pro rata daily basis to reflect the period of
the suspension.
(c) Without limiting any other rights of the Principal under the
Contract, in respect of a suspension referred to in clauses
34.4(a) or 34.4(b), the Contractor must reimburse the
Principal for all costs incurred by the Principal that would
not have been incurred but for the suspension.
(d) In the event of any other suspension (other than as referred
to in clauses 34.4(a) or (b)), if the Contractor incurs more
or less cost than otherwise would have been incurred:
(1) the difference shall be assessed by the Principal's
Representative and shall be deemed to constitute a
Variation and the relevant Annual Operating Budget shall
be amended accordingly; and
(2) if the suspension occurs prior to the Date of Practical
Completion, the Management Fee shall be assessed by the
Principal's Representative and adjusted to be the lesser
of:
PAGE 50
(A) US$[deleted for confidentiality] per month; and
(B) the amount reasonably assessed by the Principal's
Representative.
35 DEFAULT OR INSOLVENCY
35.1 PRESERVATION OF OTHER RIGHTS
If a party breaches (including repudiates) the Contract, nothing in
this clause prejudices the right of the other party to recover
damages or exercise any other right or remedy.
35.2 CONTRACTOR'S DEFAULT
(a) If the Contractor commits a substantial breach of the
Contract, the Principal may, by hand or by registered post,
give the Contractor a written notice requiring the Contractor
to rectify the breach.
(b) Substantial breaches include, but are not limited to:
(1) failing to:
(A) provide Performance Security or the Deed of
Guarantee;
(B) provide evidence of insurance;
(C) comply with a Direction of the Principal pursuant
to clause 8.2; or
(D) use the Materials and Equipment required by the
Contract;
(2) wrongful suspension of Services;
(3) in respect of clause 17.2(d), knowingly providing
documentary evidence containing an untrue statement;
(4) failing to meet any Key Performance Indicator or any
Minimum Performance Level for a period of 6 consecutive
months; and
(5) breach of an express term of the Contract.
35.3 PRINCIPAL'S NOTICE TO RECTIFY
A notice under clause 35.2 must:
(a) state that it is a notice under clause 35.2 ;
(b) specify the alleged substantial breach; and
(c) specify a reasonable date and time by which the Contractor
must rectify the breach (which must not be less than 7 clear
days after the notice is received by the Contractor).
35.4 PRINCIPAL'S RIGHTS
If the Contractor fails to rectify the breach by the stated date and
time, the Principal may by written notice to the Contractor:
PAGE 51
(a) take out of the Contractor's hands the whole or part of the
Services to be performed and suspend payment of moneys due and
payable;
(b) exercise its rights in respect of the Performance Security or
the Deed of Guarantee;
(c) terminate the Contract by a further written notice.
35.5 TAKE OUT
(a) The Principal must perform the Services taken out of the
Contractor's hands and may:
(1) use Materials and Equipment and other things intended
for the Services; and
(2) without payment of compensation to the Contractor:
(A) take possession of, and use such of the Materials
and Equipment and other things on or in the
vicinity of the Site as were used by the
Contractor; and
(B) contract with such of the Contractor's
subcontractors and consultants,
as are reasonably required by the Principal to facilitate
performance of the Services.
(b) If the Principal takes possession of Materials and Equipment
for which the Principal has not reimbursed the Contractor, the
Principal shall maintain them and, on completion of the
Principal performing the Services, shall return such of them
as are surplus or reimburse the Contractor for the relevant
costs.
(c) The Principal shall keep records of the cost of performing the
Services.
35.6 PRINCIPAL'S DEFAULT
(a) If the Principal commits a substantial breach of the Contract,
the Contractor may, by hand or by registered post, give the
Principal a written notice to rectify.
(b) Substantial breaches include, but are not limited to, failing
to make a payment due and payable which is not the subject of
a Dispute and which is due under the contract in accordance
with the Contract.
35.7 CONTRACTOR'S NOTICE TO RECTIFY
A notice given under clause 35.6 must state:
(a) that it is a notice under clause 35.6;
(b) the alleged substantial breach; and
(c) the date and time by which the Principal must rectify the
breach (which shall not be less than 7 clear days after the
notice is received by the Principal).
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35.8 CONTRACTOR'S RIGHTS
(a) If the Principal fails to rectify the breach by the stated
date and time, the Contractor may, by written notice to the
Principal, suspend the whole or any part of the Services.
(b) The Contractor may by written notice to the Principal remove
the suspension if the Principal remedies the breach.
(c) The Contractor may, by written notice to the Principal,
terminate the Contract, if within 28 days of the date of
suspension under this clause, the Principal fails:
(1) to remedy the breach; or
(2) if the breach is not capable of remedy, to make other
arrangements to the reasonable satisfaction of the
Contractor.
(d) The Contractor may also be entitled to damages suffered by
reason of the suspension.
35.9 TERMINATION
If the Contract is terminated under clause 35.4(b) or 35.8, the
parties' remedies, rights and liabilities shall be the same as they
would have been under the law governing the Contract had the
defaulting party repudiated the Contract and the other party elected
to treat the Contract as at an end and recover damages.
35.10 INSOLVENCY
(a) If the Contractor commits an Insolvency Event, the Principal
may, without giving a notice to rectify, exercise the rights
under clause 35.4.
(b) If the Principal commits an Insolvency Event, the Contractor
may, without giving a notice to rectify, exercise the rights
under clause 35.8.
(c) The rights and remedies given by this clause 35.10 are
additional to any other rights and remedies and may be
exercised even though that there has been no breach of the
Contract.
35.11 TERMINATION FOR CONVENIENCE
(a) Either party may terminate the Contract for any reason at any
time by giving not less than 6 months written notice to the
other party and termination will become effective at the end
of that notice period.
(b) If the Principal gives a written notice to the Contractor
under this clause 35.11 then the Principal shall, within 14
days after the date on which the termination becomes
effective, pay the Contractor one of the following amounts (as
applicable):
(1) [deleted for confidentiality].
35.12 EMPLOYMENT OF PERSONNEL
(a) For the duration of this Contract and, in the event of
termination under clause 35.11 during the Initial Term, for a
period of one year after that termination, the Principal shall
not directly or indirectly employ or
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otherwise engage the Contractor's personnel who were at the
time of termination involved in the operation of the Facility.
(b) For the duration of this Contract and, in the event of
termination under clause 35.11 during the Initial Term, for a
period of one year after that termination, the Contractor
shall not directly or indirectly employ or otherwise engage
the Principal's personnel who were at the time of termination
involved in the operation of the Facility.
36 TERMINATION PLAN
36.1 GENERAL
The Contractor acknowledges that the Services include the
preparation of a fully detailed and effective plan providing for all
relevant services (including the services listed in clause 36.2) to
be provided by the Contractor to the Principal:
(a) on the expiry or termination of the Contract under clauses 3
or 35; or
(b) where the Principal takes the Services out of the hands of the
Contractor under clause 35.5,
to ensure the efficient and effective transition of the Services
from the Contractor to the Principal, or the Principal's nominee,
during a period of not more than 4 months and without any adverse
impact on the Facility, the Refining Process or the Product
(TERMINATION PLAN).
36.2 TERMINATION PLAN TO BE APPROVED AND UPDATED
(a) The services to be provided by the Contractor to the Principal
and specified in the Termination Plan must include:
(1) all appropriate and required training;
(2) delivery of Materials and Equipment in accordance with
clause 22.5;
(3) any other Materials and Equipment as determined by the
Principal as being required for the services to be
provided by the Contractor;
(4) delivery by the Contractor to the Principal of
resources, plant and equipment used in respect of the
Services;
(5) delivery by the Contractor of Deeds of Novation in
accordance with clause 24.2; and
(6) cooperation by the Contractor with the Principal and/or
the Principal's nominee.
(b) The Contractor must:
(1) within 6 months after the Commencement Date, submit a
draft Termination Plan to the Principal;
(2) during the period of 2 months after submitting the draft
Termination Plan under clause 36.2(b)(1), meet with the
Principal as often as may reasonably be required by the
Principal to review
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the draft Termination Plan and receive comments from the
Principal on the draft Termination Plan;
(3) within 3 months after submitting the draft Termination
Plan under clause 36.2(b)(1), submit a final Termination
Plan to the Principal which takes into account any
issues identified by the parties (FINAL TERMINATION
PLAN); and
(4) within 7 days of each anniversary of the submission of
the Final Termination Plan:
(A) if reasonably required, submit an updated and
improved Termination Plan to the Principal; or
(B) confirm in writing to the Principal that the most
recently submitted Termination Plan does not
reasonably require updating.
36.3 WITHHOLDING PAYMENT
If the Contractor fails to comply with the requirements of this
clause 36 then, until the Contractor complies with the requirements
of this clause 36, Management Fees otherwise due to the Contractor
may be withheld by the Principal.
36.4 IMPLEMENTATION OF TERMINATION PLAN
If:
(a) the Principal does not give the Contractor the notice referred
to in clause 3.2 that the Term of the Contract will not be
extended;
(b) either party gives notice of termination under clause 35;
(c) the Contract expires or is otherwise terminated; or
(d) the Principal takes the Services out of the hands of the
Contractor under clause 35.5,
then, subject to any Direction by the Principal to the contrary, the
Contractor must:
(e) if clause 36.4(a) or (b) applies, commence the implementation
of the most recently submitted Termination Plan so as to
ensure that the Termination Plan is fully implemented by the
date the Contract will expire or be terminated;
(f) if clauses 36.4(c) or (d) applies, immediately commence the
implementation of the most recently submitted Termination
Plan; and
(g) in any event, continue to implement the most recently
submitted Termination Plan until all activities required by
the Termination Plan have been performed by the Contractor.
37 SET-OFFS BY THE PRINCIPAL
(a) The Principal may set-off or deduct from money due to the
Contractor any money due from the Contractor to the Principal
(including Rebate Amounts) arising under or in connection with
the Contract or the Services,
PAGE 55
save that the amount that may be set-off or deducted pursuant
to this clause shall at no time exceed an amount equal to 10%
of the Annual Operating Budget for the Operating Year.
(b) The Principal's entitlement to set-off or deduct is not
affected by the existence of a Dispute, including any dispute
as to the Principal's right to set-off or deduct, or as to the
amount which the Principal has set-off or deducted or intends
to set-off or deduct.
38 NOTIFICATION OF CLAIMS
38.1 NOTICE OF CLAIM
If the Contractor wishes to make a Claim it must give the Principal:
(a) a written notice within 14 days of the Contractor becoming
aware of the Claim arising which states:
(1) that the Contractor proposes to make a Claim; and
(2) identifying the general nature, basis and extent of the
Claim; and
(b) a written submission, within 28 days of giving the written
notice under clause 38.1(a), which must include:
(1) the basis for the Claim, including whether based on a
term of the Contract or otherwise and, if based on a
term of the Contract, clearly identifying the specific
term;
(2) the facts relied on in support of the Claim, in
sufficient detail to permit critical assessment,
investigation and/or verification; and
(3) details of the amount claimed and itemisation of how the
amount has been calculated.
38.2 UPDATING NOTICE OF CLAIM
The Contractor must continue to update the information required by
clause 38.1(b) every 28 days after the written submission under
clause 38.1(b) was submitted until no further update is required.
38.3 TIME BAR
If the Contractor fails to comply in all respects with clause 38.1
in respect of a Claim then:
(a) the Principal shall not be liable (so far as it is possible to
exclude liability) in respect of the Claim;
(b) the Contractor is absolutely barred from making the Claim; and
(c) the Contractor shall be deemed to have waived, and shall have
no entitlement in respect of the Claim.
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39 DISPUTE RESOLUTION
39.1 NOTICE OF DISPUTE
Subject to clause 38.3, in the event of a Dispute, either party
shall deliver a written notice to the other party (NOTICE OF
DISPUTE) which:
(a) states that it is a Notice of Dispute under this clause of the
Contract;
(b) identifies the Dispute;
(c) states the alleged relevant facts relied on;
(d) identifies any documents common to the parties which are
relied on and refers to any relevant parts;
(e) identifies and encloses a copy of any other document relied on
and refers to any relevant parts; and
(f) states the terms on which it is alleged the Dispute should be
resolved.
39.2 MORE THAN ONE DISPUTE
A Notice of Dispute may deal with more than one Dispute.
39.3 RESPONSE
Within 14 days after a Notice of Dispute has been delivered by a
party, the other party must deliver a written response (RESPONSE)
which attempts to narrow and clarify the scope of the relevant
Dispute and to explain the position of the responding party. A
Response should attempt to:
(a) identify areas of agreement;
(b) identify any relevant documents not referred to in the Notice
of Dispute;
(c) refer to any relevant parts of documents not referred to in
the Notice of Dispute; and
(d) identify and enclose a copy of any document referred to in the
Response which is not common to the parties.
39.4 WITHOUT PREJUDICE MEETING
(a) If a Dispute referred to in a Notice of Dispute has not been
wholly resolved within 28 days of delivery of the relevant
Notice of Dispute, the party which delivered the Notice of
Dispute shall give the other party not less than 7 days and
not more than 14 days notice of the time (which shall be
within normal business hours) and place (which shall be at or
reasonably proximate to the place of the Services or otherwise
at a place reasonably convenient to both parties) for a
without prejudice meeting.
(b) At a without prejudice meeting convened pursuant to this
clause, both parties must use their best endeavours to:
(1) settle the whole of the Dispute; or
(2) settle so much of the Dispute as may be possible; and
PAGE 57
(3) to the extent that the Dispute is not wholly resolved:
(A) identify any relevant facts, documents and parts
of documents which are agreed;
(B) identify relevant facts, documents or issues which
are of genuine disagreement;
(C) agree an appropriate process by which to resolve
the matters of disagreement; and
(D) if appropriate, agree to extend the period after
which either party may take action under clause
39.5.
(c) Communications between the parties during a without prejudice
meeting, whether oral or written, shall not be admissible as
evidence in any legal process unless in writing and signed by
both parties.
39.5 ARBITRATION
Subject to clause 39.8:
(a) If a Dispute does or may involve the EPC Contractor, then the
Principal shall, within 35 days after delivery of the relevant
Notice of Dispute, give written notice to the Contractor to
this effect, in which case the parties acknowledge and agree
that the Dispute shall, if not resolved, be referred to
arbitration at Brisbane, Queensland before an arbitrator who
shall be agreed by the parties or, if no agreement is reached
within 14 days, by an arbitrator appointed by the President
for the time being of the Australian Dispute Centre.
(b) The arbitration shall be conducted in accordance with the
UNCITRAL Model Law on International Commercial Arbitration
current as at the date of execution of the EPC Contract.
39.6 LITIGATION
Subject to clause 39.8, if the Principal does not give a written
notice to the Contractor in accordance with clause 39.5, then either
party may issue proceedings in respect of the Dispute.
39.7 CONTINUED PERFORMANCE OF CONTRACT
Despite the existence of a Dispute, the parties must continue to
perform their obligations under the Contract.
39.8 CONDITION PRECEDENT TO ARBITRATION AND LITIGATION
It shall be a condition precedent to either party commencing
litigation in respect of a Dispute, or the Principal referring a
Dispute to arbitration, that:
(a) a Notice of Dispute has been delivered in relation to the
Dispute; and
(b) the party has complied, to the extent reasonably possible,
with its obligations under clause 39.4.
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39.9 INJUNCTIVE OR URGENT RELIEF
Nothing in this clause 39 prejudices either party's right to
institute proceedings in respect of a Dispute where the only relief
sought is injunctive or other urgent interlocutory relief.
40 GENERAL
40.1 COSTS AND EXPENSES
Each party must pay its own legal costs and expenses in respect of
the negotiation, preparation, completion and stamping of the
Contract.
40.2 SERVICE OF NOTICES
(a) Any notice or other communication including, but not limited
to, any request, demand, consent or approval, to or by a party
to the Contract:
(1) must be legible and in writing and in English addressed
as shown below:
(A) if to the Principal:
Address: Level 6, Defens Haus, Port Moresby,
Papua New Guinea;
Attention: Managing Director ;
Facsimile: + 67 5 320 2601;
(B) if to the Contractor:
Address: 12th Floor, Deloitte Tower, Port
Moresby, National Capital District,
Papua New Guinea;
Attention: General Manager;
Facsimile: To be advised,
or as specified by any party to the sender by notice;
(2) where the sender is a company, must be signed by an
authorised representative or under the common seal of
the sender;
(3) is regarded as being given by the sender and received by
the addressee:
(A) if by delivery in person, when delivered to the
addressee;
(B) if by post, 5 Business Days from and including the
date of postage; or
(C) if by facsimile transmission, whether or not
legibly received, when received by the addressee,
but if the delivery or receipt is on a day which is not
a Business Day or is after 4.00 pm (addressee's time) it
is regarded as received at 9.00 am on the following
Business Day; and
(4) can be relied on by the addressee and the addressee is
not liable to another person for any consequences of
that reliance if the
PAGE 59
addressee believes it to be genuine, correct and
authorised by the sender.
(b) A facsimile transmission is regarded as legible unless the
addressee telephones the sender within 24 hours after
transmission is received or regarded as received under clause
40.2(a)(3) and informs the sender that it is not legible.
(c) In this clause 40.2, a reference to an addressee includes a
reference to an addressee's officers, agents or employees.
40.3 WAIVER OF CONDITIONS
(a) Waiver of any right arising from a breach of this Contract or
of any right, power, authority, discretion or remedy arising
upon default under this Contract must be in writing and signed
by the party granting the waiver.
(b) A failure or delay in exercise, or partial exercise, of:
(1) a right arising from a breach of this Contract; or
(2) a right, power, authority, discretion or remedy created
or arising upon default under this Contract,
does not result in a waiver of that right, power, authority,
discretion or remedy.
(c) A party is not entitled to rely on a delay in the exercise or
non-exercise of a right, power, authority, discretion or
remedy arising from a breach of this Contract or on a default
under this Contract as constituting a waiver of that right,
power, authority, discretion or remedy.
(d) A party may not rely on any conduct of another party as a
defence to exercise of a right, power, authority, discretion
or remedy by that other party.
(e) This clause may not itself be waived except by writing.
40.4 PROHIBITION AND ENFORCEABILITY
(a) Any provision of, or the application of any provision of, the
Contract or any right, power, authority, discretion or remedy
which is prohibited in any jurisdiction is, in that
jurisdiction, ineffective only to the extent of that
prohibition.
(b) Any provision of, or the application of any provision of, the
Contract which is void, voidable, illegal or unenforceable in any
jurisdiction does not affect the validity, legality or
enforceability of that provision in another jurisdiction or of the
remaining provisions in that or another jurisdiction.
(c) If any provision of this Contract is deemed to be or become void,
voidable or enforceable, it shall be read down, or if incapable of
being read down, severed and the remaining provisions of this
Contract shall continue to have full force and effect.
40.5 VARIATION
A variation of any term or amendment of the Contract must be in
writing and signed by the parties.
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40.6 CUMULATIVE RIGHTS
The rights, powers, authorities, discretions and remedies arising
out of or under the Contract are cumulative and do not exclude any
other right, power, authority, discretion or remedy of any party.
40.7 COUNTERPARTS
(a) The Contract may be executed in any number of counterparts.
(b) All counterparts, taken together, constitute one instrument.
(c) A party may execute the Contract by signing any counterpart.
40.8 TO THE EXTENT NOT EXCLUDED BY LAW
The rights, duties and remedies granted or imposed under the
provisions of the Contract operate to the extent not excluded by
law.
40.9 ATTORNEYS
Each of the attorneys executing the Contract states that the
attorney has no notice of the revocation of the power of attorney
appointing that attorney.
40.10 SURVIVAL OF OBLIGATIONS
(a) If the Contract is terminated then, except where the Contract
provides otherwise:
(1) the parties are released from their obligations to
continue to perform the Contract except the obligations
which are expressed to or, by their nature, survive
termination;
(2) each party retains the rights and Claims it has against
the other party for any past breach of the Contract; and
(3) the provisions of the Contract survive termination to
the extent necessary to give effect to clause
40.10(a)(1).
(b) The indemnities in the Contract are:
(1) continuing, separate and independent obligations of the
parties from their other obligations and survive
termination of the Contract; and
(2) absolute and unconditional and unaffected by anything
that might have the effect of prejudicing, releasing,
discharging or affecting in any other way the liability
of the party giving the indemnity.
40.11 WARRANTIES
(a) Each party represents and warrants for the benefit of the
other party for the Term that:
(1) it has full power and authority to execute the Contract
and to perform its obligations under the Contract;
(2) the Contract has been duly executed by it;
PAGE 61
(3) the obligations undertaken by it and set out in the
Contract are enforceable against it in accordance with
their terms;
(4) it subsists and is properly constituted; and
(5) the execution and delivery of the Contract and the
performance of its obligations under the Contract do
not:
(A) violate its constituent documents or any law,
regulation, treaty, judgement, ruling, order or
decree of any court or official directive which is
binding on it;
(B) violate any other document or agreement to which
it is expressed to be a party or which is binding
on it or any of its assets; or
(C) cause a limitation on its powers or the powers of
its directors or other officers to be exceeded.
(b) The Contractor:
(1) warrants that all information and reports provided to
the Principal:
(A) are true and accurate in all material respects and
not misleading, whether by omission or otherwise;
and
(B) contains forecasts and opinions all of which have
been made or formed after due and careful
consideration on the part of its relevant officers
based on the best information available to it and
are fair and reasonable; and
(2) acknowledges that the Principal has relied on such
information and reports and any other representations
made by the Contractor in making its decision to enter
into the Contract.
40.12 ENTIRE AGREEMENT
(a) The Contract supersedes all previous agreements in respect of
its subject matter and embodies the entire agreement between
the parties.
(b) Subject to the express warranties contained in this Contract,
no reliance shall be placed by either party on any
representation, promise or other inducement made or given or
alleged to have been made or given by the other party prior to
the Execution Date.
(c) Information or documents of any nature made available to the
Contractor by the Principal do not constitute a warranty or
representation of any kind by the Principal. The Contractor is
not entitled to make any Claim and there shall be no increase
in the Management Fee or the Rates and no amendment to the
Annual Operating Budgets on account of any alleged statement,
warranty, representation, information or documentary material
made or provided by the Principal.
40.13 GOVERNING LAW AND JURISDICTION
The Contract is governed by the laws of Queensland. Subject to
clause 39.5, the parties irrevocably submit to the exclusive
jurisdiction of the courts of Queensland. This clause 40.13 survives
termination of the Contract.
PAGE 62
40.14 VAT
(a) To the extent that any supply made under or in connection with
this deed is a taxable supply, the recipient must pay, in
addition to the consideration to be provided under the
Contract for that supply (unless it expressly includes VAT) an
amount (ADDITIONAL AMOUNT) equal to the amount of that
consideration (or its VAT exclusive market value) multiplied
by the rate at which VAT is imposed in respect of the supply.
(b) The term TAXABLE SUPPLY has the same meaning as in the VAT
Act.
(c) If either party is entitled under the Contract to be
reimbursed or indemnified by the other party for a cost or
expense incurred in connection with the Contract, the
reimbursement or indemnity payment must not include any VAT
component of the cost or expense to the extent that the cost
or expense is the consideration for a creditable acquisition
made by the party being reimbursed or indemnified, or by its
representative member.
40.15 WORKERS' RIGHTS
(a) The Contractor undertakes not to take any action to prevent
its employees from lawfully exercising their right of
association and their right to organise and bargain
collectively and to observe applicable laws relating to
minimum wages, hours of work and occupational health and
safety, and not use forced labour. In addition, the Contractor
agrees that:
(1) it will not employ any person under the age of 14 years
and that it will not employ any person under the age of
16 years in the performance of any hazardous activity;
and
(2) every person employed has the right to remove himself or
herself from dangerous work situations without
jeopardising his or her continued employment in
connection with the Facility and the Services,
(the WORKER RIGHTS REQUIREMENTS); and
(3) it will cause its subcontractors performing work in the
Facility and as part of the Services to comply with the
Worker Rights Requirements.
(b) The Principal shall use commercially reasonable efforts to
monitor the compliance of the Contractor and its
subcontractors with the Worker Rights Requirements. In the
event information concerning non-compliance or potential
non-compliance with the Worker Rights Requirements with
respect to employees of the Contractor or its subcontractors
comes to the attention of the Principal's Representative, the
Principal shall give prompt notice thereof to the Financier
and shall investigate the circumstances of such non-compliance
or potential non-compliance.
(c) In the event of non-compliance, the Principal shall, or, if
applicable, shall cause the relevant company to:
(1) cure such non-compliance or use its best efforts to
cause the relevant company to cure, or to cause its
subcontractor to cure,
PAGE 63
such non-compliance, in either case to the satisfaction
of the Financier; and
(2) terminate this Contract or cause the Contractor to
terminate the relevant subcontract, unless such
non-compliance is cured to the satisfaction of the
Financier within 90 days after such notice or notice
from the Financier to such company, whichever first
occurs.
(d) Notwithstanding the foregoing, neither the Principal nor the
Contractor is responsible for non-compliance with the Worker
Rights Requirements resulting from the actions of a
government.
PAGE 64
EXECUTED AS AN AGREEMENT:
THE COMMON SEAL of
INTEROIL LIMITED
is fixed to this document
in the presence of:
Secretary/Director Director
Name (please print) Name (please print)
THE COMMON SEAL of
PETROFAC NIUGINI LIMITED
is fixed to this document
in the presence of:
Secretary/Director Director
Name (please print) Name (please print)
PAGE 65