AGREEMENT ON SUGAR BETWEEN THE GOVERNMENT OF NEW ZEALAND
AND THE GOVERNMENT OF FIJI

(Nassau, 18 October 1985)

ENTRY INTO FORCE: 1 APRIL 1985

THE GOVERNMENT OF NEW ZEALAND AND THE GOVERNMENT OF FIJI,

NOTING that changes to the structure of the New Zealand sugar industry which are to take place during 1985 and 1986 will have the effect that the New Zealand Sugar Company Limited will in future purchase raw sugar at prices negotiated on a commercial basis,

RECOGNISING the need for Fiji, while it adjusts to supplying the New Zealand Sugar Company Limited with raw sugar on these terms, to receive a remunerative return for raw sugar exported to New Zealand during each of the years commencing on the 1st day of April 1985, 1986 and 1987,

NOTING the intentions of the New Zealand Sugar Company Limited to purchase from the Fiji Sugar Corporation Limited and of the Fiji Sugar Corporation Limited to supply to the New Zealand Sugar Company Limited an annual quantity of 63,000 tonnes of raw sugar in each of the abovementioned years,

HAVING AGREED that the Government of New Zealand will compensate the Government of Fiji for any shortfall in export earnings from an annual quantity of raw sugar, purchased by the New Zealand Sugar Company Limited and supplied by the Fiji Sugar Corporation Limited, in respect of which the commercially negotiated price falls below an agreed amount,

Have, in pursuance of the aforesaid, 

AGREED as follows:

Article I

1. Subject to the succeeding Articles of this Agreement, the Government of New Zealand agrees to make to the Government of Fiji, such compensatory payments in respect of sales of Fiji raw sugar as are provided for in this Agreement.

2. In this Agreement, any reference to raw sugar, or to direct consumption raw sugar shall relate to raw sugar and direct consumption raw sugar of Fiji origin only.

Article II

1. The amount of any compensatory payments to be made by the Government of New Zealand pursuant to this Agreement shall be assessed and payable on the first 32,000 tonnes only of raw sugar of fair average quality purchased by the New Zealand Sugar Company Limited and supplied by the Fiji Sugar Corporation Limited in each of the following years:

1st day of April 1985 to 31st day of March 1986;
1st day of April 1986 to 31st day of March 1987; 
1st day of April 1987 to 31st day of March 1988.

The relevant date for the purpose of assessing whether any raw sugar supplied and purchased forms part of the first 32,000 tonnes shall be the date of the bill of lading document relating to that raw sugar.

2. If in any of the abovementioned years the Fiji Sugar Corporation Limited does not supply raw sugar to the New Zealand Sugar Company Limited, no compensatory payments shall be payable under this Agreement.

3. If in any of the abovementioned years the New Zealand Sugar Company Limited purchases from the Fiji Sugar Corporation Limited a quantity of raw sugar which is less than 32,000 tonnes, the amount of any compensatory payments payable pursuant to this Agreement shall be assessed on such lesser quantity.

4. The quantity of raw sugar on which the amount of compensatory payments is assessed shall include such quantities of direct consumption raw sugar as shall be purchased by the New Zealand Sugar Company Limited and supplied by the Fiji Sugar Corporation Limited and which, by virtue of the dates of the bill of lading documents relating to such quantities of direct consumption raw sugar, fall within the first 32,000 tonnes or part thereof of raw sugar mentioned in this Article. PROVIDED HOWEVER that any direct consumption raw sugar so included shall, for the purposes of this Agreement, be valued as if it were an equivalent quantity of bulk raw sugar and all additional costs associated with processing and packaging such raw sugar for direct consumption shall be excluded for the purpose of assessing the amount of compensatory payments payable under this Agreement.

5. The parties to this Agreement acknowledge that the Fiji Sugar Corporation Limited has appointed the Fiji Sugar Marketing Company Limited to be its sole selling agent in respect of all sales of sugar.

Article III

1. It is agreed that the parties to this Agreement shall take no part in setting the terms or conditions under which the Fiji Sugar Corporation Limited may supply bulk raw sugar and direct consumption raw sugar to the New Zealand Sugar Company Limited.

2. It is expected that the contract price for any raw sugar, purchased by the New Zealand Sugar Company Limited and supplied by the Fiji Sugar Corporation Limited, to which this Agreement applies, shall be a market price as evidenced by a relationship to prices quoted on a recognised international terminal market for raw sugar. In circumstances where such contract price does not show such a relationship, or where it appears to the New Zealand Government that the contract price for the raw sugar has not been agreed on a fair commercial basis, the parties to this Agreement shall consult with a view to setting the amount of any compensatory payment payable in respect of that raw sugar.

Article IV

For the purposes of this Agreement the agreed minimum price for raw sugar shall be US 10.5 cents per pound. This price shall refer to raw sugar purchased in bulk, basis 96 degrees polarisation, free on board and stowed in vessel at Fiji ports and shall not be adjusted by way of premium or penalty for higher or lower degrees of polarisation.

Article V

1. The amount of compensatory payment in respect of any bulk raw sugar or direct consumption raw sugar to which Article II of this Agreement applies shall be the amount by which the agreed minimum price exceeds the contract price (basis 96 degrees polarisation, free on board and stowed in vessel at Fiji ports) for that sugar agreed between the New Zealand Sugar Company Limited and the Fiji Sugar Marketing Company Limited.

2. In the event that the contract price for any bulk raw sugar or direct consumption raw sugar to which Article II of this Agreement applies, equals or exceeds the agreed minimum price no compensatory payment shall be payable under this Agreement in respect of that sugar.

Article VI

The Government of Fiji shall ensure that the Government of New Zealand is furnished with documentation which shall verify the contract price for, and tonnage of, any raw sugar or direct consumption raw sugar for which compensation is payable under this Agreement. Such documentation shall, unless otherwise agreed between the parties to this Agreement, consist of the contract of sale and purchase, account sales document, bill of lading document and Customs invoice relating to that sugar.

Article VII

1. The Government of New Zealand shall make compensatory payments in respect of any bulk raw sugar in relation to which compensation is payable under this Agreement after delivery of each shipment of that raw sugar to the New Zealand Sugar Company Limited, and receipt and verification of the documents mentioned in Article VI of this Agreement, relating to that sugar (with the exception of the account sales document) shall be evidence of such delivery.

2. The Government of New Zealand shall make one compensatory payment in each year of this Agreement in respect of the aggregate amount of direct consumption raw sugar purchased in that year, and in relation to which such payments are payable under this Agreement, either:

(a) After 32,000 tonnes of bulk raw sugar and direct consumption raw sugar have been delivered in the relevant year; or

(b) Where the quantity of bulk raw sugar and direct consumption raw sugar delivered in the relevant year does not amount to 32,000 tonnes; after the final delivery of direct consumption raw sugar in that year and upon receipt and verification of all documents provided for in Article VI of this Agreement relating to the abovementioned direct consumption raw sugar.

Article VIII

1. All compensatory payments by the Government of New Zealand under this Agreement shall be made in New Zealand currency, and shall be paid into the account held by the Government of Fiji with the Reserve Bank of New Zealand, Wellington Branch, or other account as agreed between the parties.

2. The exchange rate which shall be used to calculate the amount of any compensatory payment payable under this Agreement shall be the mid-rate of the US$-NZ$ rate quoted by the Reserve Bank of New Zealand on the date of the relevant bill of lading document.

Article IX

1. Notwithstanding the date hereof this Agreement shall be deemed to have effect from the 1st day of April 1985 and shall terminate on the 31st day of March 1988.

2. During the final year of this Agreement the parties may consult for the purpose of establishing terms and conditions upon which this Agreement may be extended for a further period.

IN WITNESS WHEREOF the undersigned, duly authorised, have signed this Agreement.

DONE in duplicate at Nassau this 18th day of October One Thousand Nine Hundred and Eighty Five.
For the Government of For the Government of 

FOR THE GOVERNMENT OF NEW ZEALAND

David Lange	FOR THE GOVERNMENT OF FIJI

K. K. Mara