Sugar Industry (Arbitration for Mill Owners and Sugar Marketing Entities) Amendment Bill 2017

Introduced: 28/2/2017By: Mr T Nicholls MPStatus: 3rd reading failed

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Plain English Summary

Overview

This bill sought to amend the Sugar Industry Act 1999 to require mandatory arbitration when sugar mill owners and sugar marketing entities cannot agree on 'on-supply' contracts for selling a grower's share of sugar. It aimed to give cane growers a genuine choice over who markets their sugar and ensure contracts are finalised before each crushing season. The bill failed at its third reading and did not become law.

Who it affects

Sugar cane growers, mill owners and sugar marketing entities in Queensland's cane-growing regions would have been directly affected, along with the regional communities that depend on the sugar industry.

Key changes

Either party could refer an unresolved on-supply contract dispute to arbitration after a negotiation period of at least 10 business days
Arbitration would be conducted under the Commercial Arbitration Act 2013, with each party paying its own costs
Supply and on-supply agreement disputes could be arbitrated concurrently by the same arbitrator
On-supply agreement terms could not treat an independent marketing entity less favourably than a mill-related entity would be treated
All cane supply contracts and on-supply agreements would have to include a dispute resolution process
Existing contracts and agreements were grandfathered under transitional provisions until they ended or were terminated

How this affects you

Business & Economy

•Sugar mills and marketing entities would have had to go to arbitration if they couldn't agree on an on-supply contract within 10 business daysClause 10 (new section 36)Either party can give notice requiring negotiation within at least 10 business days, after which unresolved disputes are taken to be referred to arbitration under the Commercial Arbitration Act 2013.
•Independent sugar marketing entities would be protected from being treated worse than a mill's own marketing armClause 10 (new section 36(6)-(7))A term of the intended on-supply agreement must not unreasonably treat the marketing entity less favourably than a related body corporate of the mill owner would be treated.
•Every cane supply contract and on-supply agreement would need to include a written dispute resolution processClauses 6 and 10 (sections 33B(2)(f), 38(5)(e))
•Each party would pay its own arbitration costs, making disputes predictable to budget forClause 10 (new section 36(8))

Regional Queensland

•Cane growers would have gained a guaranteed right to nominate who markets their share of sugarClause 10 (new section 36)The grower nominates the GEI sugar marketing entity and the mill owner must negotiate an on-supply agreement with that entity.
•Contracts would be more likely to be settled before crushing season began in regions like the Burdekin, Herbert and MackayPolicy objective states amendments ensure contracts are negotiated and finalised well before the start of each crushing/milling season.
•Growers could take part in their own on-supply agreement if the mill and marketer both agreedClause 10 (new section 38(2))
•The bill failed at third reading, so these protections for cane-growing communities did not become lawBill status is '3rd reading failed'.

Bill Journey

Introduced28 Feb 2017

First Reading

Referenced Entities

Legislation

Sugar Industry Act 1999 Commercial Arbitration Act 2013 Sugar Industry (Real Choice in Marketing) Amendment Act 2015

Roles & Offices

GEI sugar marketing entity arbitral tribunal

Sectors Affected

Agriculture Civil Law Food and Beverage

Classified using AGIFT/ANZSIC Australian government standards