Proposed Variations to Viterra’s Port Loading Protocols to ... LTAs... · long term agreements -...

Non-confidential version 12 March 2015

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Proposed Variations to Viterra’s Port Loading Protocols to introduce Long Term Agreements

Submission to the Australian Competition and Consumer Commission

1 Introduction

Proposal to vary the Port Loading Protocols

1.1 This submission is made by Viterra Operations Limited (“Viterra”) in support of its application to the Australian Competition and Consumer Commission (“ACCC”) to vary the capacity allocation system contained in its current Port Loading Protocols (“Protocols”).

1.2 Viterra proposes to make a number of changes to the Protocols, including to simplify various provisions (e.g. the Table A requirements) and improve readability for clients. However, the main purpose of the proposed changes is to replace the current capacity allocation system with an opportunity for clients to engage commercially with Viterra and to enter into long term agreements for port terminal services in South Australia.

1.3 Consistent with the Port Terminal Access (Bulk Wheat) Code of Conduct (“Code”), Viterra does not seek the ACCC’s approval for any changes to the Protocols that do not relate to the capacity allocation system.

Introduction of long term arrangements

1.4 As set out in the ACCC’s decision in relation to CBH’s previous access undertaking (26 June 2014), long term agreements provide a number of potential benefits, including:

(a) greater certainty in planning longer-term export programs;

(b) a greater ability to build long term relationships with overseas customers;

(c) a greater ability to align booked capacity more closely with supply chain planning; and

(d) creation of a commercial environment that encourages investment in, and expansion of, infrastructure. This, in turn, can facilitate improvements in the efficiency of port terminal facilities and the availability of additional capacity.

1.5 Feedback from Viterra’s clients has overwhelmingly indicated that they desire the certainty of longer-term contractual arrangements and the flexibility of commercial negotiations in preference to the current auction system. Many of Viterra’s clients have also indicated that the auction system is not meeting their commercial requirements. Cargill has recently stated publicly that a key reason for seeking alternate export paths from South Australia is to reduce its exposure to production risk that exists under the current auction system.

1.6 Viterra’s proposal to introduce an opportunity for clients to enter into long term agreements therefore represents both a direct response to feedback from clients, and a response to its strong desire for greater commercial certainty in relation to the operation of, and its ongoing investment in, port terminal infrastructure serving the South Australian grain industry.

Commercial-in-confidence

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1.7 Viterra notes that clients can already enter into long term arrangements in Queensland, New South Wales and Victoria, and CBH is currently considering the introduction of long term arrangements for exports from Western Australia. The allocation of port terminal services capacity is also unregulated at a growing number of major ports in Australia.

1.8 Viterra considers that removing the current auction system and introducing long term agreements is an important step towards reducing the financial risks faced by exporters in South Australia, removing regulatory distortions and enhancing the ability for South Australian grain to compete with other grain producing regions both in Australia and globally. This will involve significant benefits for South Australian growers.

2 Confidentiality

[Deleted for non-confidential version]

3 The proposed changes reflect Viterra’s requirements as infrastructure owner and also respond to clear feedback from clients

The current auction system

3.1 Viterra introduced the current auction system as the primary method of allocating capacity at its port terminals in 2011 in response to feedback from clients and the ACCC. However, since that time, both Viterra and a number of clients have identified significant shortcomings with, and challenges inherent in the operation of, any revenue neutral auction for the supply of port terminal services capacity.

3.2 Those shortcomings include:

(a) (Increased cost and risk) The auction and rebate system necessitates that large amounts of industry funds are tied up in the auction rebate pool for periods of more than a year (e.g. from when the auction occurs several months prior to the start of the season until after completion of shipping during the season). Table 1 below sets out details of the aggregate auction premiums paid (and the periods until rebate payment) in each of the past 3 seasons.

Table 1 – Auction premiums 2012/13 to 2014/15

Season Aggregate premiums

Tonnage acquired at auction

When premiums paid

When rebate paid

2012/13 – Non-Harvest Period Auction (1)

$32,739,000 814,000 26 November 2012

10 December 2013


$3,304,500 358,000 2 January 2013 10 December 2013

2013/14 – Harvest Period Auction

$3,529,500 1,479,000 16 April 2013 29 October 2014


$8,910,500 877,000 8 May 2013 29 October 2014


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Season Aggregate premiums

Tonnage acquired at auction

When premiums paid

When rebate paid


$499,500 492,000 31 May 2013 29 October 2014

2014/15 – Harvest Period Auction

$19,352,500 1,275,000 16 April 2014 TBD


$39,427,500 1,165,000 14 May 2014 TBD


$66,582,500 1,270,000 23 June 2014 TBD

[Confidential]. This is clearly a large amount of money that is tied up for a significant period of time. This money is not spent on acquiring grain in South Australia (or elsewhere), and does not increase the level of exports from Australia.

In addition, the payment of over $125 million in auction premiums (2014/15 season) involves significant risks for exporters from South Australia (including increased exposure to production and drought risk) that they do not, or will not, face in exporting from other regions in Australia or globally. These risks significantly increase the cost for exporters of conducting business in South Australia relative to other grain producing regions and reduce the competitiveness of South Australian grain globally.

In 2014/15, the rebate system significantly inflated the cost of exporting grain from South Australia with the average cost of participating in the auction being $[Confidential] per tonne (excluding the $5 auction or booking fee). While the ultimate amount paid by exporters for auction slots may be reduced upon payment of rebates, this represents a very significant cost that exporters need to carry for 12 - 18 months.

(b) (Arbitrage opportunities in “chasing the rebate”) The auction and rebate system involves an inherent disconnect between exporters’ requirements for physically executing grain through the South Australian export supply chain and the arbitrage opportunities provided by the payment of auction rebates. This can, and does, result in exporters making bookings in order to maximise rebate payments (or hedge against exposure through the booking of other slots), rather than based on their genuine export requirements. This does not result in any benefits to growers or any increase in grain exports: nor does it aid efficiency.

(c) (Impact on operational efficiency) The auction and rebate system can result in significant operational inefficiencies. Rebates are only paid if a client utilises the slot acquired at auction. Accordingly, clients have a significant incentive to use the slot even if that results in operational inefficiencies in moving grain into and at port. For example:

(i) the auction and rebate system operates as a significant disincentive for exporters to move slots to other port terminals or time periods. This can have a material impact on operational flexibility (both for Viterra and exporters);


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(ii) the auction and rebate system can result in exporters acquiring South Australian grain at inflated and inefficient prices (or selling grain overseas at unnecessarily low prices) in order to ensure that they can execute grain through slots acquired at auction and not lose the auction premium (which would otherwise result in a greater loss for the exporter);

(iii) the auction and rebate system can result in clients maximising the volume of grain exported through slots acquired at auction (i.e. to the full tolerance level), which in turn has an operational impact on other bookings at the relevant port terminal; and

(iv) the auction and rebate system can result in clients choosing to warehouse grain for longer periods (and incur higher storage and other carrying costs) in order to avoid the premiums associated with more highly demanded slots (or to benefit from the rebates payable on lower demanded slots). This can result in distortions in the supply chain.

(d) (Disincentive for commercial engagement leads to a “one-size-fits-all” approach) The rigidity and inflexibility of the auction system significantly limits the ability for Viterra and clients to enter into commercial negotiations which may result in increased grain exports from South Australia, reduced costs or other operational efficiencies. A number of clients have indicated to Viterra that they would value the opportunity to reach commercial agreements more highly than the ability to acquire capacity at auction.

3.3 Over the past 4 seasons, these shortcomings, risks and challenges have resulted in a number of clients deciding not to acquire capacity, or acquire only small amounts of capacity, through the auction process in South Australia. Those clients have either elected to participate primarily in the secondary first-in-first-served system, or have made a commercial decision not to participate in the acquisition of grain in South Australia. Cargill has also publicly stated that a major reason it has recently executed a shipment of grain through alternate ship-loading facilities at Inner Harbour, and is exploring doing so on a regular basis, is to limit its exposure to the production risk associated with the auction system (see the attached article from The Land).

3.4 In addition, Viterra is aware of exporters losing sales to overseas customers because those customers are not prepared to accept terms and conditions that arise as a result of the auction system in South Australia. For example, Viterra understands that in December 2014:

(a) [Confidential]; and

(b) [Confidential].

3.5 This is not what was intended with the introduction of an auction system. In practice, the auction system has restricted the development of new markets for South Australian grain and operated as a barrier to access to South Australian wheat port terminals.

Benefits of negotiated long term agreements

3.6 In contrast, Viterra considers that there are a number of substantial benefits that will flow from introducing an opportunity for exporters to enter into long term agreements. These include the benefits previously identified by the ACCC (see paragraph 1.4 above).

3.7 As an infrastructure owner, [Confidential] it is clearly in Viterra’s interests to obtain greater certainty about the use of that infrastructure. This, in turn, will facilitate further efficient decisions about investment in, and expansion of, the export supply chain for the benefit of Viterra, exporters, growers and the South Australian economy.


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3.8 Having regard to the matters set out above, Viterra also considers that the proposed method of allocating long term and short term capacity will be no less efficient than the current auction system.

3.9 Exporters will continue to be able to trade and move slots freely, as they can under the current Protocols. The existence of this liquid secondary market will significantly ameliorate any adverse impacts that may arise in connection with the initial allocation of capacity.

3.10 Having regard to the matters set out above – and, in particular, the strong industry support for long term agreements - Viterra considers that the proposed variations to the Protocols appropriately balance both the interests of Viterra as infrastructure owner and the interests of existing and new users. The variations will also result in substantial benefits for growers.

3.11 Section 9 of this submission sets out in more detail how the proposed variations address the matters to which the ACCC must have regard under sections 25 and 27 of the Code in approving any changes to the capacity allocation system contained in Viterra’s Protocols.

4 How Viterra will allocate long term capacity

4.1 The proposed new Protocols are as set out in Attachment 2. A summary of the proposed new processes for allocating both long term capacity under long term agreements, and allocating short term capacity via the first-in-first-served system is set out below.

4.2 Given the large number of changes to the capacity allocation system (i.e. removing the auction system and introducing the opportunity for clients to enter into long term agreements), we have not provided a full mark-up showing all changes to the Protocols. However, to assist the ACCC in understanding some of the other proposed changes, Attachment 3 sets out a mark-up of certain discrete sections.

Capacity available as long term capacity

4.3 Viterra will publish on its website details of the long term capacity that is available for contracting under long term agreements at least 15 business days before requiring exporters to submit binding offers for long term capacity. These details will be available in respect of each individual slot at each individual port terminal.

4.4 In determining the amount of capacity that is available for contracting under long term agreements, Viterra will ensure that a minimum amount is retained for booking as short term capacity on a first-in-first-served basis once the shipping stem opens each year. Specifically, Viterra will ensure that a minimum of 500,000 tonnes, spread reasonably across all port terminals, is available each quarter for booking as short term capacity.

4.5 Viterra considers that reserving 500,000 tonnes of capacity each quarter for booking on a first-in-first-served basis is sufficient to meet the needs of smaller exporters, new entrants and any other genuine exporters that may not wish to enter into an agreement to acquire long term capacity. Table 2 below sets out details of the amounts of South Australian port terminal services capacity acquired during each of the past three seasons by:

(a) the five largest exporters (who Viterra anticipates are most likely to be interested in acquiring long term capacity); and

(b) all other exporters.


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Table 2 – South Australian port terminal services capacity acquired 2011/12 to 2014/15

Season Exporter Tonnes acquired Average per quarter

2011/2012 Top 5 exporters 6,498,940.04 1,624,735.01

All other exporters (9) 694,847.73 173,711.93

2012/2013 Top 5 exporters 5,005,760.00 1,251,440.00

All other exporters (8) 678,573.30 169,643.33

2013/2014 Top 5 exporters 4,894,532.99 1,223,633.25

All other exporters (12) 1,507,400.00 376,850.00

2014/2015 Top 5 exporters 4,633,866.00 1,158,466.50

(as at 4 March 2015)

All other exporters (14) 1,461,666.00 365,416.50

Notes:

In Table 2 above:

tonnages are based on all bookings accepted for the periods 1 October 2011 to 30 September 2015 (as at 4 March 2015); and

tonnages for the 2011/12, 2012/13 and 2013/14 seasons do not include cancelled bookings due to the way this data has been recorded in Viterra’s systems. Tonnages for the 2014/2015 season include cancelled or surrendered bookings.

This historical data demonstrates that 2 million tonnes of short term capacity each year (or 500,000 tonnes per quarter) is sufficient to meet the needs of the majority of exporters.

4.6 The 500,000 tonnes of capacity for short term bookings will be retained for all quarters and spread reasonably across all port terminals. This ensures that short term capacity will be available across all periods and port terminals. Viterra considers that it is not operationally practicable to reserve specific amounts of short term capacity at port terminals over a shorter period (e.g. monthly). While mathematically possible, this would be unlikely to result in useful or marketable shipping parcels being made available for exporters, and the resulting lack of flexibility would also adversely affect operational efficiency (and even reduce the amount of grain that is able to be exported each month).

4.7 Viterra also considers that reservation of short term capacity on a quarterly basis is appropriate as exporters are frequently able to move their shipping requirements between months within a quarter while still meeting customer requirements. To the extent that an exporter absolutely needs to ship grain in a particular month, it can choose to enter into a long term contract to secure that slot (which does not involve any minimum slot requirements) or it can acquire capacity through the now well-developed secondary trading market.


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Applying for long term capacity

4.8 Under the new Protocols, clients will have an opportunity to submit an irrevocable offer to acquire long term capacity. Offers will be made on a per slot and per port terminal basis, and will specify both the maximum and minimum amounts of long term capacity that the client would like to acquire.

4.9 The availability of long term agreements is intended to deliver significant benefits and flexibility to clients. Accordingly, there will be:

(a) a flexible duration. The only requirements are a minimum term of 2 years and a maximum term of 5 years (expiring on 30 September 2020). Clients will be able to enter into a long term agreement at any time for capacity that is not already contracted as long term capacity or reserved as short term capacity;

(b) no minimum tonnage requirements;

(c) no minimum port terminal requirements;

(d) no minimum slot requirements (or requirement to spread tonnages across different periods); and

(e) an ability to negotiate the terms of the long term agreement either before or after Viterra accepts the client’s offer to acquire capacity on its published standard terms for long term agreements.

4.10 Clients will also be able to submit offers for long term capacity in respect of any grain.

4.11 To facilitate continued access for a range of different exporters, clients will not be able to submit an offer for long term capacity that is for more than:

(a) 40% of the long term capacity that is initially made available at Outer Harbor or Port Lincoln during the January to March quarter; or

(b) in all other cases, 50% of the long term capacity that is initially made available at any port terminal across any quarter,

(“Initial Nomination Cap”).

4.12 It is possible that commercial negotiations and/or the subsequent release of additional capacity may result in a client being allocated more than the Initial Nomination Cap during a particular quarter (e.g. if that would assist Viterra in accommodating other long term capacity offers at that or another port terminal). However, if a client submits an offer for more than the Initial Nomination Cap at a particular port terminal, Viterra will request the client to rectify its offer within one business day. If the client does not rectify its offer, Viterra may reject the client’s offer for long term capacity at the relevant port terminal and quarter in whole or in part.

4.13 Viterra considers that the Initial Nomination Cap is a reasonable limit on the acquisition of initial long term capacity by any individual exporter. [Confidential]. Accordingly, imposing a limit of less than the Initial Nomination Cap would artificially cap individual exporters’ businesses and potentially have an adverse impact on levels of ongoing investment in South Australian grain by exporters. Against this, the Initial Nomination Cap will ensure that multiple exporters will have access to long term capacity at each port terminal in each quarter (in addition to any short term capacity and traded capacity).

4.14 Importantly, the proposed cap only enables an individual client to acquire up to 50% (or 40%) of the initially available long term capacity at a port terminal. The remaining 50-60% of long term capacity, together with all short term capacity, additional capacity and capacity traded in the secondary market will remain available for other exporters, therefore ensuring a diversity of exporters obtaining access to Viterra’s port terminals.


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4.15 [Confidential] Viterra also considers that the Initial Nomination Cap should be measured across quarters, rather than individual slots. This is important from an operational perspective and to promote flexibility for exporters. It is also more consistent with exporters’ requirements in determining long term future shipping requirements (which would not be undertaken years in the future on a slot-by-slot basis).

4.16 This is supported by Table 3 below which sets out the details of average booking, slot and vessel sizes at each of Viterra’s port terminals in South Australia during the 2013/14 season.

Table 3 – Average booking, slot and vessel size by tonnes – 2013/14 season

Port Terminal Average booking size (tonnes)

Average slot size (tonnes)

Average size per vessel (tonnes)

1 Port Adelaide, Outer Harbor

16,246.57 80,417 29,998.68

2 Port Adelaide, Inner Harbour

10,458.56 28,125 22,960.28

3 Port Lincoln 17,123.08 81,667 31,266

4 Port Giles 17,318.18 34,792 37,100

5 Wallaroo 12,778.47 24,375 24,295.45

6 Thevenard 8,219.27 22,917 20,214.28

Notes:

In Table 3 above:

“average booking size” means the total tonnes acquired at the port terminal in the 2013/2014 season divided by the number of bookings made for that season. This includes bookings that are split or moved throughout the shipping year;

“average slot size” means the total capacity offered to clients (including scheduled slot shutdowns) divided by the number of slots. Please note that clients are permitted to load excess tonnages within a 10% tolerance level; and

“average vessel size” means the average tonnage actually loaded for each ship between 1 October 2013 and 18 September 2014.

4.17 This table clearly shows the lack of direct correlation between slot sizes (available capacity), the size of bookings and the size of actual shipments. These differences reflect a number of operational factors, including vastly differing vessel sizes, different shipment sizes, the prevalence of two-port loads and, in some cases, multiple bookings per vessel. These differences clearly highlight the need from both an operational and commercial perspective to “smooth” the Initial Nomination Cap over a quarter, rather than across individual slots in order to facilitate the supply of marketable parcels of port terminal capacity. Table 3 above also clearly illustrates that, even without the Initial Nomination Cap, there are a limited number of average shipments that can occur within individual slots.


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4.18 The importance of viewing bookings over a longer period (i.e. over a quarter, rather than shorter periods) is also highlighted by data in relation to the number of vessels that currently commence loading outside of their booked slot. This can arise either because the vessel arrives during the grace period (i.e. after the slot) or because of the operational impact of loading preceding vessels. Table 4 below sets out details of the percentage of vessels that commenced loading outside of their booked slot in each of the past three years.

Table 4 – Vessels commencing loading outside of booked slot

Year Number of vessels commenced loading outside of booked slot

Number of vessels commenced loading in booked slot

% of vessels commenced loading outside of booked slot

2012/2013 160 177 47%

2013/2014 145 220 40%

2014/2015 (YTD) 62 53 54%

4.19 This table highlights both the operational flexibility that is required to meet exporters’ requirements and the fact that the timing for (and any constraints in) bookings are not fully reflective of exporters’ actual shipping requirements or existing shipping behaviour. Even when exporters book specific slots, there is a significant level of flexibility in how approximately half of those slots are fulfilled (i.e. even in addition to the bookings that are transferred or moved in accordance with Viterra’s Protocols).

4.20 Tables 5 and 6 in Attachment 5 further highlight the differences that can exist between bookings and actual grain shipments, and the opportunities for further improving utilisation of Viterra’s port terminal facilities through commercial negotiations. Table 5 shows the daily shipping from each of Viterra’s port terminals during the period from 1 November 2014 to 2 March 2015. Table 6 shows the variance between bookings and actual grain shipments at each port terminal during a similar period. Even during this typically peak period, Tables 5 and 6 show:

(a) a large number of days with no vessel loading or only small amounts loaded. As set out above, this is likely to reflect a number of factors including vessels arriving outside of the booked slot, the effect of two-port loading, and vessels failing survey; and

(b) that, although almost completely booked at each port terminal, actual shipments are for less than the amount of available capacity at all port terminals.

4.21 Viterra considers that:

(a) the data in Table 5 highlights the flexibility that exporters have in managing their shipping programs (e.g. in many cases, exporters’ requirements are not linked to the acquisition of capacity in specific slots);

(b) there is a significant ability, both operationally and commercially and for both Viterra and exporters, to be flexible in managing demand, including a significant ability to “spread the peak”; and

(c) commercial negotiations are likely to provide a greater ability than currently exists for Viterra to increase the utilisation of its port terminals by increasing levels of operational and commercial flexibility.


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Allocating initial long term capacity

4.22 After Viterra has received all offers for long term capacity (i.e. at the end of the “Initial Application Period”), Viterra will publish details of the aggregate amount of tonnes for which it has received applications for each quarter at each port terminal. This will both promote transparency and facilitate any subsequent negotiations that are needed in order to accommodate the acceptance of clients’ offers.

4.23 If, after the Initial Application Period, the available long term capacity is sufficient to satisfy all offers by clients, Viterra will allocate that long term capacity. However, if the available long term capacity is not sufficient to satisfy all offers, Viterra will invite clients to submit a revised offer by a date specified on the Viterra Website, and may also enter into discussions with one or more clients to facilitate the matching of available long term capacity.

4.24 If, after the receipt of any revised offers, the available long term capacity is sufficient to satisfy all client applications (including all revised and unchanged offers), Viterra will allocate that long term capacity. However, if it is insufficient:

(a) in respect of slots where long term capacity exceeds or equals demand, Viterra will allocate long term capacity for those slots; and

(b) in respect of all other slots, Viterra will negotiate with each relevant client to determine whether or not alternative allocations may satisfy the client’s requirements. This negotiation period will be subject to a cut-off date being no less than 15 business days after publication of the date.

4.25 These negotiations may involve Viterra determining whether:

(a) it is possible to increase long term capacity for particular port terminals during particular periods (subject to the requirement to retain a minimum amount of capacity for short term bookings). [Confidential] Viterra may be able to “scale up” capacity at particular port terminals and in particular periods (e.g. by engaging additional labour resources, enabling additional rail or road deliveries, requiring 24/7 operations or facilitating greater Department of Agriculture or vessel inspection resources);

(b) alternative slots may satisfy individual client’s requirements;

(c) one or more clients may be willing to reduce the minimum amount of long term capacity specified in their offers (i.e. accept a slightly reduced tonnage allocation); or

(d) a client is prepared to accept an allocation in only some of the years specified in the initial offer.

4.26 If, at the end of this negotiation period, there is still insufficient long term capacity to accommodate client requirements for particular slots, Viterra may allocate the available long term capacity for those slots, taking into account (and, where they conflict, seeking to balance) the following factors:

(a) Viterra’s overarching objective of maximising the amount of long term capacity allocated and maximising the efficiency of the supply chain;

(b) a long term agreement with a longer term will generally be accepted by Viterra in priority to a long term agreement with a shorter term;

(c) offers for long term capacity at multiple port terminals will generally be accepted in priority to offers for long term capacity at fewer port terminals;

(d) offers for long term capacity in more slots in a year will generally be accepted in priority to nominations of long term capacity in fewer slots in a year;


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(e) nominations for larger amounts of long term capacity will generally be accepted in priority to nominations for smaller amounts of long term capacity; and

(f) long term capacity will be allocated in priority to clients who:

(i) have a demonstrated ability to accumulate grain at the relevant port terminal as required to utilise the long term capacity sought;

(ii) can reasonably demonstrate to Viterra that they intend to physically export bulk wheat or other grains themselves and that there is a reasonable likelihood that they themselves will utilise the long term capacity sought; and

(iii) have demonstrated flexibility and responsiveness in negotiating their requirements in respect of over-demanded slots.

4.27 Following feedback from clients, Viterra will not consider past performance or shipping history as factors relevant to the initial allocation process.

4.28 Once Viterra has determined the allocation of long term capacity for the remaining slots in accordance with the process set out above, it will notify each client of the proposed allocations. Clients will be required, within one business day, to either:

(a) offer in writing to acquire some or all of the capacity set out in the Viterra’s notice (“Offer Notice”); or

(b) issue a dispute notice to Viterra for resolution in accordance with the internal dispute resolution procedure.

4.29 Any Offer Notice will be irrevocable, and be expressly subject to any reductions that are necessary to accommodate the outcome of any dispute process.

4.30 If the client does not accept the allocations or issue Viterra with a dispute notice within that period, Viterra may revoke the proposed allocation and re-allocate the long term capacity to other clients. If a client accepts only some of the proposed allocation in their Offer Notice, Viterra may re-allocate the part of the allocation that is not included within the Offer Notice.

4.31 After the conclusion of this process, Viterra will notify each client of the outcome of the allocation process and publish on its website details of the aggregate amount of long term capacity allocated in respect of each slot at each port terminal during each quarter.

Negotiation of long term contracts

4.32 Offers by clients to acquire port terminal services capacity, and any acceptance of those offers by Viterra, will be irrevocable. However, in accordance with the Code, clients will have an opportunity to negotiate the contractual terms relating to the use of that capacity (excluding the Protocols and application of the allocation methodology set out in the Protocols, which will apply to all clients equally). This negotiation process includes recourse to external dispute resolution. If a client chooses not to negotiate a customised long term agreement, or the “negotiation period” ends for any reason in accordance with the Code, Viterra’s standard long term agreement will apply to the use of any long term capacity acquired by that client.

Non-discrimination and compliance with Protocols

4.33 If a client has concerns that the initial long term capacity allocation process involves discrimination in favour of Viterra or its related bodies corporate or non-compliance with the processes set out in the Protocols, it can advise the ACCC. In the case of concerns relating to discrimination, this can result in the ACCC requiring Viterra to appoint an independent auditor (see section 8 below). Any other non-compliance with the Protocols could also result in enforcement action by the ACCC or breach of contract proceedings commenced by individual clients.


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Summary of process

4.34 A summary of the proposed process for applying for, and allocating, long term capacity is set out in the flowchart in Attachment 1.

4.35 Consistent with Viterra’s discussions with clients, the proposed process places a significant emphasis on flexibility and commercial negotiations in order to meet the individual requirements of individual clients. Viterra considers that the proposed process therefore represents an efficient, flexible and fair method of providing the opportunity for clients to obtain longer term certainty for their export programs by entering into long term capacity agreements.

5 Booking and allocating short term capacity

5.1 Any long term capacity that is not contracted at the time the shipping stem opens for the relevant year, together with all capacity that is reserved as short term capacity for that year (see section 4.4 above), will become available for booking on a first-in-first-served basis when the shipping stem opens for that year.

5.2 Viterra will publish details of all short term capacity that is available for booking at least 10 business days before the shipping stem opens.

5.3 To ensure that all clients have an equal and fair opportunity to book capacity through the first-in-first-served system, the Protocols will provide that, during the first 2 business days after the shipping stem opens, each client (together with its related entities - unless the related entity operates a commercially separate export function) will only be able to make one booking each 15 minute period commencing on the hour.

5.4 The Protocols will also provide that no clients will be able to move bookings during this 2 business day period. This will ensure that “moved bookings” do not reduce the opportunities for new bookings in the immediate period after the shipping stem opens (and during which demand for first-in-first-served bookings is likely to be greatest).

6 Additional capacity

6.1 Viterra proposes to amend the Protocols so the situations are clearer in which additional capacity may become available for clients (i.e. capacity that becomes available only after the initial allocation of long term or short term capacity, as the case requires).

6.2 If ongoing or “longer term” additional capacity becomes available for clients, Viterra will apply a similar process to that set out above for long term capacity. Viterra will publish on its website at least 3 business days’ notice of any timing requirements in relation to the application for, negotiation in respect of, or allocation of that additional capacity. Viterra will also publish details of any special conditions that apply to the release of that additional capacity (e.g. limitations on grain type or delivery methodology, additional fees etc).

6.3 However, if the additional capacity only becomes available for booking on a short-term basis, that additional capacity will be allocated as follows:

(a) on a first-in-first-served basis in accordance with the Protocols, if the slot starts between 6 months after the additional capacity is made available and the end of the relevant year; or

(b) at Viterra’s discretion, if the slot to which the additional capacity relates is less than 6 months from the date that the additional capacity is made available for booking.

6.4 This further flexibility in relation to additional capacity that is available for execution within a 6 month period reflects the provisions of the Code (see clause 25(2)).


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7 Other key provisions

Transferring and moving bookings

7.1 Based on experience over the past 4-5 years, Viterra considers that the ability to transfer and move bookings provides both significant flexibility for clients and an important and efficient mechanism for clients to acquire the slots they require (e.g. if their requirements change or they do not acquire the relevant slots at the time of initial allocation). Table 7 below sets out details of the capacity traded by clients in each of the past 3 years.

Table 7 – Slots traded in 2012/13, 2013/14 and 2014/15

Year Slots traded by tonnes Number of bookings traded

2012/2013 [Confidential] [Confidential]

2013/2014 [Confidential] [Confidential]

2014/2015 (to date) [Confidential] [Confidential]

7.2 This data demonstrates that there is a clear ability for clients to acquire slots at the times they need, even if they do not acquire those slots at the time of initial allocation. The existence of this liquid secondary market will further facilitate the efficient operation of the proposed long term and short term capacity allocation system.

7.3 Viterra proposes to continue this flexibility under the new Protocols, with clients able to transfer:

(a) long term capacity to any other client that, unless Viterra otherwise consents, has a long term agreement in place for the relevant marketing year in which the transferred slot occurs;

(b) long term capacity to a client that does not have a long term agreement (or does not have a long term agreement in place for the period in which the transferred slot occurs) after the shipping stem opens for first-in-first-served bookings for the relevant marketing year; and

(c) short term capacity after the shipping stem opens for first-in-first-served bookings for the relevant marketing year.

7.4 Transfers will be subject to minimum notice requirements and the transferee meeting standard prudential requirements (as is currently the case).

7.5 Except with Viterra’s prior consent, clients will not be able to move long term capacity (e.g. to another month or port terminal) unless and until the shipping stem has opened for first-in-first-served bookings in respect of the marketing year to which the long term capacity relates. As set out above, clients will not be able to move bookings during the initial 2 business day period after the shipping stem opens.

7.6 Clients will only be able to move short term capacity and long term capacity bookings to different slots and/or between port terminals where capacity to do so exists. This is subject to minimum notice requirements and bookings will only be able to be moved within the same marketing year.


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Surrendering capacity

7.7 The new Protocols will also continue to contain provisions relating to, and creating incentives for the, early surrender of unwanted capacity.

7.8 Clients that surrender short term capacity:

(a) 12 months or more before the first day of the relevant slot will receive a 75% rebate if Viterra contracts that capacity to another client; and

(b) 6 months, but less than 12 months, prior to the first day of the relevant slot will receive a 50% rebate if Viterra contracts that capacity to another client.

7.9 Clients that surrender long term capacity:

(a) at least 6 months prior to the first day of the relevant slot; and

(b) prior to any short term capacity becoming available for booking on a first-in-first-served basis in respect of the year that the surrendered capacity relates,

will receive a 75% rebate if Viterra contracts that capacity to another client.

7.10 As is currently the case, surrendered capacity may be made available to all clients on a first-in-first-served basis (or at Viterra’s discretion if the slot occurs within 6 months). If surrendered capacity is offered, but not contracted, by another client, there will be no rebate payable (although pro rata rebates will remain available if the capacity is partially re-booked).

Varying the Protocols

7.11 Viterra proposes to amend the Protocols to provide a simplified procedure for future variations. This procedure largely reflects the process set out in the Code.

7.12 Given the lesser regulatory requirements that apply to exempt port terminal facilities, the proposed new Protocols also provide that Viterra can exclude the operation of the Protocols or publish new Protocols if any of its port terminals become exempted under the Code.

7.13 If a port terminal is excluded from the capacity allocation system under the Protocols, this also has the consequence of reducing the amount of reserved short term capacity for future years by the amount of short term capacity initially made available at that exempt port terminal facility during the previous year.

Transition to the new system

7.14 The proposed new Protocols will contain a number of provisions to facilitate transition to the new arrangements for allocating long term and short term capacity. In summary, while it is anticipated that the new Protocols will take effect in early 2015 to enable the allocation of long term and short term capacity for the 2015/2016 season, the current Protocols will continue to apply to all bookings that are both made and executed prior to 30 September 2015. The new Protocols will apply to all bookings that are made in respect of slots that occur after 30 September 2015.

7.15 The proposed variations will take effect once Viterra has complied with the consultation and variation notice requirements in the current Protocols, and the ACCC approves the changes to the capacity allocation system as required by the Code. However, given the relatively tight timeframes, the proposed Protocols also contemplate that Viterra may invite clients to submit offers for long term capacity and enter into negotiations prior to the variations taking effect. Any allocations of long term capacity would then be confirmed and made contractually unconditional after the variations take effect.


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8 Dispute resolution and appointment of independent auditor

8.1 [Confidential].

8.2 As set out above, the allocation process for long term capacity has been designed specifically to respond to clients’ requests, and Viterra’s desire, for greater flexibility and to place a strong emphasis on negotiations to develop genuinely commercial relationships. Client feedback has made it clear to Viterra that there is no “one-size fits all” approach that will meet clients’ different commercial requirements.

8.3 Although it is not possible to include in the Protocols any simple mathematical formula that would specify the outcome of all possible negotiated outcomes, the proposed Protocols provide a clear framework for the allocation process. This includes the communication and publication of key information, clear parameters and timeframes for negotiations, and transparency in relation to the approach Viterra will adopt if, following negotiations, there remains greater demand than availability for particular slots.

8.4 Consistent with Viterra’s overarching objective of maximising the amount of long term capacity allocated and maximising the efficient operation of the supply chain, this approach necessarily involves a level of flexibility and weighing, and where they conflict, seeking to apply and balance the factors set out in clause 3.6(g) of the Protocols. The weight attributed to each of these factors may also differ across port terminals.

8.5 Viterra appreciates [Confidential] that this weighing process may raise certain challenges in terms of assessing whether Viterra has complied with its non-discrimination obligations under clause 10 of the Code. This weighing process, the emphasis on commercial negotiations and clear timing imperatives in relation to the initial allocation of long term capacity also mean that there are very significant practical constraints on the extent to which initial allocations should, or indeed can, be the subject of any external dispute resolution process.

8.6 [Confidential] Viterra has sought to address these potential challenges by including in the Protocols an ability for ACCC to require Viterra to appoint an independent auditor to provide a report to the ACCC in relation to Viterra’s compliance with its non-discrimination obligations under the Code in its allocation of long term and short term capacity to clients. The ability for the ACCC to require the appointment of an independent auditor to report on compliance with the non-discrimination is based on a similar requirement in Viterra’s (and GrainCorp’s and CBH’s) previous access undertakings to the ACCC

1.

8.7 Viterra has also sought to address these potential challenges by ensuring that the independent auditor has sufficient discretion to examine, and form an opinion about, whether negotiated outcomes of the long term capacity allocation process may involve discrimination in favour of Viterra and its related bodies corporate. In particular, in preparing its written report to the ACCC, it is proposed that the independent auditor can have regard to the following matters:

(a) the requirements in clause 10 of the Code (the non-discrimination obligation);

(b) whether Viterra has complied with the Protocols; and

1 The two main changes from the previous access undertaking are: (a) a limit of one audit per year

(the access undertaking previously allowed two audits per year). This reflects that allocations of capacity primarily take place on an annual basis; and (b) deletion of the requirement for Viterra to take any steps directed by the ACCC arising from the auditor’s report within 10 business days. This reflects the fact that, unlike an access undertaking, the Protocols do not represent commitments made by Viterra directly to the ACCC. However, Viterra would expect that any outcomes of an audit report would be the subject of discussions directly with the ACCC.


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(c) if the matter under consideration by the independent auditor relates to the allocation of long term capacity, whether that allocation is reasonable in all the circumstances, having regard to:

(i) the size and significance of Viterra/Glencore Grain as a client that exports grain through the port terminals;

(ii) whether any allocation of long term capacity may involve a systemic, material or unreasonable outcome for Viterra/Glencore Grain as a client (noting that Glencore Grain is entitled to use its own infrastructure and, as a significant client, there are circumstances in which highly demanded long term capacity will justifiably be allocated to Glencore Grain);

(iii) the reasonableness of efforts made by Viterra to accommodate initial demand for long term capacity and to negotiate satisfactory long term capacity outcomes for both Glencore Grain and other clients; and

(iv) Viterra’s reasons for allocating long term capacity in the manner that it did. Viterra will document its reasons for any allocation of long term capacity under clause 3.6(g) of the Protocols at the time of such allocation, and will make those written reasons available to the independent auditor.

8.8 Viterra considers that these considerations will enable the independent auditor to assess Viterra’s compliance with the non-discrimination obligation, while appropriately having regard to the objective of providing commercial flexibility for clients and the fact that Glencore Grain is a large client that will legitimately acquire capacity at Viterra’s port terminals.

8.9 If a client is dissatisfied with the outcome of the initial long term capacity allocation process, it can take the following steps:

(a) invoke the dispute resolution process set out in clause 13.1 of the Protocols. This will result in Viterra meeting with the client to seek to resolve the concerns and, if necessary, escalating the dispute for re-consideration by Viterra’s Director Legal – Australia and New Zealand;

(b) if the client’s concern relates to potential discrimination by Viterra in favour of itself or its related bodies corporate, raise this concern with Viterra and then, if necessary, request the ACCC to require the appointment of an independent auditor to prepare a written report in relation to Viterra’s compliance with clause 10 of the Code. The ACCC has clear enforcement powers in relation to breaches of a mandatory industry code; or

(c) if its concern relates to Viterra’s compliance with the provisions set out in the Protocols (which are not addressed through invoking the dispute resolution procedure set out in clause 13.1), raise those concerns with the ACCC. Clause 26 of the Code requires Viterra to comply with the Protocols.

8.10 Viterra considers that these steps (together with the other “protections” set out in the proposed system for allocating long term and short term capacity) should provide a significant level of certainty for both clients and the ACCC.

8.11 The ability for clients to raise an external dispute about Viterra’s compliance with the non-discrimination provisions set out in the Code [Confidential] or Viterra’s compliance with the Protocols, but not on any other basis, is also similar to the system that existed under the previous access undertakings – namely, while clients have an ability to negotiate the terms of their access agreement (with potential recourse to external dispute resolution), the terms of the Protocols are not negotiable. The key protection for clients is that the capacity allocation system in the Protocols is approved by the ACCC, with a clear obligation for the port terminal provider to act in accordance with the Protocols and not to discriminate in favour of its own operations except in the specific circumstances set out in the Code. This is consistent with


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the framework previously agreed with the ACCC in relation to Viterra’s access undertakings under Part IIIA of the CCA.

8.12 [Confidential] The dispute resolution processes described in paragraph 8.9 are also intended to facilitate the expeditious allocation of initial long term capacity in time for the commencement of the 2015/16 season, and avoid the potential for individual disputes to hold-up capacity allocations to other clients which are necessary to facilitate the exporting of grain.

9 Matters that the ACCC must consider under the Code

9.1 Clause 27(3) of the Code provides that, before approving a proposed variation to Viterra’s Protocols, the ACCC must have regard to the matters set out in clause 25(3) of the Code.

9.2 Viterra has set out in sections 9.3 to 9.11 below how the proposal addresses each of the matters set out in clause 25(3) of the Code.

9.3 The ACCC must consider whether the capacity allocation system will operate efficiently, fairly and consistent with the non-discrimination obligation set out in clause 10 of the Code:

(a) The proposed capacity allocation system will operate efficiently:

(i) The operation of the capacity allocation system will be transparent. Viterra will publish clear information about the capacity that is available for booking, the process for booking and the results of the booking process;

(ii) The focus on commercial negotiations to meet clients’ requirements will promote flexibility and facilitate the efficient allocation and use of port terminal infrastructure (e.g. by implementing a process which more readily enables spreading demand over different periods and port terminals, and the matching of port terminal capacity with clients’ longer term export programs);

(iii) The proposed system for allocating long term capacity is designed specifically to provide flexibility for clients and an efficient mechanism to negotiate their requirements. This includes a flexible duration for agreements, no minimum tonnage requirements, no minimum port terminal requirements, and no minimum slot requirements (or requirement to spread tonnages across different periods). This is a significant difference from other long term agreement proposals on the east and west coasts;

(iv) The efficient operation of the proposed capacity allocation system is strongly promoted and protected by numerous safeguards that Viterra has included, in direct response to issues raised by clients and the ACCC. These safeguards are summarised in Attachment 6;

(v) The proposed capacity allocation system will provide much greater investment and business certainty for Viterra, clients and growers. This increased certainty will facilitate efficient investment decisions and promote the efficiency of the wider supply chain (including underpinning storage and rail transport investment);

(vi) The initial allocation system will continue to be supported by a transparent and well-functioning secondary capacity trading market, ability to move bookings and incentives for the early surrender of unwanted capacity;

(vii) Implementing the proposed new capacity allocation system will remove the costs and distortions associated with the current auction system (see paragraphs 3.1-3.5 above). Viterra considers that the proposed method of allocating long term and short term capacity will be no less efficient than the current auction system.


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(b) The proposed capacity allocation system will operate fairly:

(i) The operation of the capacity allocation system will be transparent. Viterra will publish clear information about the capacity that is available for booking, the process for booking and the results of the booking process;

(ii) Under the proposed capacity allocation systems, clients will all have an equal opportunity to acquire either long term capacity and/or short term capacity in order to satisfy their genuine exporting requirements;

(iii) The proposed system for allocating long term capacity is designed specifically to be fair in the sense that it provides a high level of flexibility for clients to negotiate and acquire services to meet their individual requirements. This includes a flexible duration for agreements, no minimum tonnage requirements, no minimum port terminal requirements, and no minimum slot requirements (or requirement to spread tonnages across different periods);

(iv) The fair operation of the proposed capacity allocation system is strongly promoted and protected by numerous safeguards that Viterra has included, in direct response to issues raised by clients and the ACCC (see Attachment 6);

(v) The fair operation of the proposed capacity allocation system will be further promoted and protected by the ability to appoint an independent person to audit Viterra’s compliance with the non-discrimination provisions under the Code.

(c) The proposed capacity allocation system will operate consistently with the non-discrimination obligations set out in the Code:

(i) The proposed capacity allocation system incorporates Viterra’s obligations under the Code not to discriminate in favour of its related bodies corporate or engage in conduct for the purpose of preventing or hindering an exporter’s access to the port;

(ii) The Protocols will apply equally to Viterra, its related bodies corporate and all other clients. All clients will have an equal opportunity to apply for both long term capacity and short term capacity;

(iii) The Protocols contain an ability for the ACCC to require Viterra to appoint an independent person to audit its compliance with the non-discrimination provisions under the Code. This mechanism is based on, and is similar to, the independent audit provisions contained in port terminal access undertakings previously accepted by the ACCC.

9.4 The ACCC must consider whether the capacity allocation system will operate efficiently and provide sufficient information to exporters about the capacity of port terminal facilities owned or operated by Viterra to help exporters plan activities and acquire required port terminal services:

(a) The proposed capacity allocation system will operate efficiently - see above;

(b) The proposed capacity allocation system will provide sufficient information to exporters;

(i) The Protocols provide substantial transparency about the processes that Viterra will apply in allocating both long term and short term capacity. This includes details of the steps that Viterra will take to inform clients about the capacity that is available for booking, the steps that clients must take in order


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to apply for that capacity (including timing requirements), the processes that Viterra will apply in allocating that capacity, and the information that Viterra will make available about the capacity that has been allocated;

(ii) Specifically, under the Protocols, Viterra will publish details of:

(A) the long term capacity that is available for booking (on a per slot and per port terminal basis), at least 15 business days prior to the application date;

(B) the aggregate demand for capacity received during the application process for long term capacity;

(C) the outcome of any long term capacity allocations on a per slot and per port terminal basis;

(D) the short term capacity that is available to be booked, at least 10 business days prior to the opening of the shipping stem;

(E) details of any special conditions applying to that short term capacity;

(F) the outcome of allocations of short term capacity, and any short term capacity that remains available for booking; and

(G) any available additional capacity (short term or long term) that becomes available for booking;

(iii) Viterra has adopted an extensive communication and consultation strategy in relation to the proposed implementation of long term agreements. Over the past 12 months, Viterra has met with clients to discuss the proposed system for replacing the current auction system with an opportunity for clients to acquire long term and short term capacity. Viterra has made a number of changes to its proposal to reflect the matters raised by both large and small exporters. These meetings have also provided an opportunity for Viterra to discuss the long term agreements proposal in detail with clients in a “one-on-one” setting;

(iv) As part of its process for varying the Protocols, Viterra will publish a Consultation Notice which sets out details of the proposal (including the flow chart attached to this submission), and will also arrange one or two telephone meetings that clients can dial-into in order to discuss and ask any questions about the new capacity allocation system.

9.5 The ACCC must consider whether the capacity allocation system will operate efficiently and provide flexibility and transferability of shipping slots, including the ability to move allocated capacity across times or ports:


(b) The proposed capacity allocation system will provide flexibility and transferability:

(i) The proposed system for allocating long term capacity is designed specifically to provide flexibility for clients. This includes a flexible duration for agreements, no minimum tonnage requirements, no minimum port terminal requirements, and no minimum slot requirements (or requirement to spread tonnages across different periods);

(ii) The initial allocation system will continue to be supported by a transparent and well-functioning secondary capacity trading market, ability to move


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bookings and incentives for the early surrender of unwanted capacity. With the removal of auction premiums, Viterra considers that the new system will also involve fewer barriers to, or distortions associated with, moving bookings. This, in turn, will promote the efficient use of Viterra’s infrastructure.

9.6 The ACCC must consider whether the capacity allocation system will operate efficiently and contains mechanisms to ensure that Viterra takes all reasonable steps to ensure that capacity is not unused during periods of peak use:


(b) The proposed capacity allocation system contains mechanisms to facilitate use during peak periods:

(i) The Protocols provide an open, transparent, fair and non-discriminatory opportunity for clients to acquire capacity across all periods, including periods of peak use;

(ii) The Protocols do not include any requirements that could operate as disincentives to acquire capacity during peak periods (e.g. auction premiums or restrictions on use);

(iii) The commercial negotiation process to facilitate the initial allocation of long term allocation process will further assist in ensuring that clients have access to capacity across a range of port terminals and periods. Viterra anticipates that this process will further assist in “spreading the peak” across a range of slots;

(iv) If capacity is not sold as long term capacity, it will remain available for booking as short term capacity on a first-in-first-served basis when the shipping stem opens for the relevant year. This will further reduce any risk of capacity not being utilised, particularly during periods of peak demand.

9.7 The ACCC must consider the potential effects that the capacity allocation system has on upstream and downstream markets:

(a) Viterra considers that the Protocols provide an open, transparent, flexible, efficient and non-discriminatory opportunity for clients to acquire access to its port terminal services;

(b) This is consistent with the objective of promoting the competitiveness of South Australian grain and the ability for grain exporters to compete with Glencore and each other in relation to the global sales of South Australian grain.

9.8 The ACCC must consider the business interests of Viterra - please see sections 1, 3 and 9 of this submission:

9.9 The ACCC must consider the public interest, including the public interest in having competition in markets:

(a) Please see paragraph 9.7 above;

(b) For the reasons set out in this submission, Viterra also considers that the proposed changes to the capacity allocation system will result in substantial benefits to growers, Viterra and grain exporters;

(c) Creating an environment to support increased opportunities for investment in the South Australian grain industry (arising from greater investment certainty, a reduction


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in financial risks for exporters, the “freeing up” of industry funds, and the spreading of production risk), is a matter of significant public interest.

9.10 The ACCC must consider the interests of exporters wanting access to port terminal services - please see sections 1, 3 and 9 of this submission.

9.11 The ACCC must consider the economically efficient operation and use of, and investment in port terminal facilities - please see sections 1, 3 and 9 of this submission.

10 Conclusion

10.1 As set out above, Viterra considers that the proposed changes to the capacity allocation system in the Protocols will provide a number of substantial benefits to both existing and new users of its port terminal services in South Australia, and will also provide a number of benefits to Viterra as owner and operator of that infrastructure and to South Australian growers.

10.2 These benefits include:

(a) greater certainty for clients in planning longer-term export programs;

(b) a greater ability for clients to build long term relationships with overseas customers;

(c) greater flexibility for clients in aligning their supply chain commitments with client demands;

(d) a greater ability for Viterra to align booked capacity more closely with supply chain planning;

(e) the creation of a commercial environment that encourages investment in, and expansion of, infrastructure. This, in turn, can facilitate improvements in the efficiency of port terminal facilities and the availability of additional capacity; and

(f) greater certainty for Viterra in relation to the use of its infrastructure, including a greater ability to spread demand over the year and increase utilisation of its port terminals. This, in turn, will create clearer investment signals and facilitate further investment in critical export infrastructure.

10.3 For the reasons set out in this submission, Viterra also considers that the proposed method of allocating long term and short term capacity will be no less efficient than under the current auction system.

10.4 In addition to promoting genuinely commercial outcomes through negotiation (which is strongly supported by the majority of clients), the proposed system contains a number of protections for smaller and newer exporters. It also provides for substantial transparency and simplification of Viterra’s processes that will facilitate access by smaller and newer exporters.

10.5 Accordingly, Viterra requests the ACCC to approve the proposed variation to the capacity allocation system contained in the Protocols.

Next steps

10.6 As required under the current Protocols, Viterra proposes to publish its Consultation Notice in relation to the proposed variations as soon as possible.

10.7 If the ACCC has further questions in relation to the proposed variation, Viterra would be pleased to assist.

Viterra Operations Ltd 12 March 2015


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Attachment 1 – Long term capacity allocation flowchart


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Attachment 2 – Proposed Variations


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Attachment 3 – Marked-up sections

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PART A: Definitions and Interpretation

1 Definitions ACCC means the Australian Competition and Consumer Commission.

Access Agreement has the meaning given in the Access Undertaking.

Access Undertaking means the Port Terminal Services Access Undertaking provided to the ACCC by Viterra Operations pursuant to section 24 of the Wheat Export and Marketing Act 2008 (Cth) and Part IIIA of the Competition and Consumer Act 2010 (Cth) and accepted by the ACCC in September 2011 as varied from time to time.

Additional Long Term Capacity means new Capacity which that becomes available for any reason after an Auction in respect of the relevant Period. For the avoidance of doubt, “Additional Capacity” does not include Capacity which has been offered at Auction.booking by Clients, but excludes:

(a) Initial Long Term Capacity;

(b) Short Term Capacity; and

(c) Additional Short Term Capacity.

Additional Short Term Capacity means Capacity that becomes available for booking in respect of a Year after the Shipping Stem is opened for bookings in respect of that Year.

Associated Entity has the meaning given in the Corporations Act 2001 (Cth)and includes any person acting as an agent of the relevant Client.

Auction means the sale by auction of Capacity. in accordance with the Previous Protocols.

Auction Fee means the amount described as the “Auction Fee” in the relevant Pricing Document that is payable in respect of any Auction that is not a Declared Auction.

Auction Period means the period between the start time of an Auction published in the Auction Timetable and the time that Auction ends.

Auction Premium means:

(a) for any Auction that is not a Declared Auction, the total of all amounts paid or payable by a Client that is above the Auction Fee; and

(b) for any Declared Auction, the total of all amounts paid or payable by a Client that is above the Declared Auction Fee.

Auction Premium Rebate means the amount payable to an individual Client calculated in accordance with the formula set out in Schedule 2 of these Protocols.

Auction Provider means Tradeslot Pty Ltd (ACN 092 784 846) or any other person appointed by Viterra Operations from time to time as the provider of the Online Auction System.

Auction Provider Bidder Agreement means the agreement between the Client and the Auction Provider in connection with the use of the Online Auction System by the Client.

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Auction Results Validation Date means the date that all Auction results are finalised by Viterra Operations.

Auction Review Committee means the committee described in clause 11 of the Auction Rules.

Auction Rules means the rules set out in Schedule 1 of these Auction Premium Rebate has the meaning given in the Previous Protocols.

Auction System Website means the auction system website at www.shippingcapacity.com or such other website as published by Viterra Operations on the Viterra Website from time to time.

Auditor means the independent auditor appointed at the direction of the ACCC in accordance with clause 13.3.

Auction Timetable means the auction timetable published on Viterra Operations’ Website.

Booking means:

Booking means (a)an allocation of Capacity acquired at Auction contracted under a Long Term Agreement or made and accepted under the first-in-first-served system, in each case in accordance with these Protocols; and.

(b) which has been accepted on, and remains on, the Shipping Stem.

Booking Form means the electronic form of that name published by Viterra Operations from time -to-time for booking applications through its online booking system.

Bulk Wheat means wheat for export from Australia other than wheat that is exported in a bag or container that is capable of holding not more than 50 tonnes of wheat.

Business Days means a day that is not a Saturday, Sunday or Ppublic Hholiday in Adelaide, South Australia.

Capacity means the capacity that is made available by Viterra Operations to exporters to enable the export of Bulk Wheat, barley and other Grain commodities through a Port Terminal Facility, measured in tonnes.

CCA means the Competition and Consumer Act 2010 (Cth).

Capacity Allocation System has the meaning given in the Code.

Client means :(a) in relation to Bulk Wheat, a person that uses, or wishes to use, the services provided by means of the Port Terminal Facilities, whether under an Access Agreement or in accordance with the Standard Terms; andin relation to other Grains, a person that exports, or wishes to export, Grain through the Port Terminals in accordance with on the terms of a Service Agreement.

(b)Code means the Port Terminal Access (Bulk Wheat) Code of Conduct, declared by

a Storage & Handling Agreement entered, or to be entered, into between Viterra Operations and that person.Code means a code of conduct that applies to Viterra Operations:

(a) in respect of which the Minister has published a notice in the Gazette under section 12(1) of the WEMA; and

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(b) which has been declared by regulations under section 51AE of the CCA to be a mandatory industry code.

Company means Viterra Operations Ltd (ABN 88 007 556 256).

the Competition and Consumer (Industry Code – Port Terminal Access (Bulk Wheat)) Regulation 2014.

Corporations Act means Corporations Act 2001 (Cth).

Credit Support means either:

(a) a guarantee given by a Related Body Corporate of the Client that is acceptable to Viterra (acting reasonably); or

(b) an unconditional and irrevocable bank guarantee, letter of credit, performance or insurance bond issued by a bank holding an Australian banking licence or such other reputable person or institution accepted by Viterra and which is in a form reasonably satisfactory to Viterra.

Dispute Notice has the meaning given in clause 13.1(a).

DAFF DOA means the Commonwealth Department of Agriculture, Fisheries and Forestry.

Declared Auction means any Auction that Viterra notifies to Clients as a “Declared Auction” in accordance with clause 2.2(g) of these Protocols.

Declared Auction Fee means the amount described as the “Declared Auction Fee” in the relevant Pricing Document that is payable in respect of any Declared Auction.

Estimated Load Date means has the meaning given in clause 6.37.3.

ETA means estimated time of arrival.

Export Standard means Viterra Operation’s ’ standard export offering under which Clients have the option to arrange their own transport of commodity to port and site accumulation.

Flinders Ports SA Port Rules means the port operating rules contained at http://www.flindersports.com.au.

Force Majeure affecting a person means anything outside that person's reasonable control including the following events or circumstances (provided they are beyond the person’s reasonable control):

(a) accident, fire, adverse weather conditions, flood, tidal conditions, earthquake, explosion, or like natural disasters, blockages of ports, civil commotion, outbreak of hostilities, terrorist act, declaration of war, war, invasion, rebellion, epidemic, or declarations of a state of emergency;

(b) strikes, stopworks, lockouts, boycotts or any other form of industrial dispute or labour shortage;

(c) breakdown (regardless of cause), accidental or malicious damage or destruction of any of the Viterra’s Port Terminal Facilities or other facilities;

(d) failure, disruption or delay in transportation;

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(e) executive or administrative order or act of either general or particular application of any Government or any official purporting to act under the authority of that Government, prohibitions or restrictions by domestic or foreign laws, regulations or policies, quarantine or custom restrictions or prohibitions on export; or

(f) acts or omissions of any third party (including without limitation Governments, Government agencies, subcontractors or customers).

Grace Period has the meaning given in clause 8.5(a9.5(a).

Grain means the seed of any crop or pasture species of any genus or grade and (for the removal of doubt) includes Pulses but excludes minerals and processed or value added products such as malt.

Grievance means a grievance or complaint in relation to the conduct of an Auction.

Harvest Shipping Period means 1 October to 31 January.

Lot means the Capacity within a Slot at a Port that is offered to Clients at Auction in accordance with the Port Loading Protocols.

Major User means a Client which, as at the date of the proposed variation to these Protocols, has exported an average of 50,000 tonnes of commodity in each of the preceding two seasons.

Initial Application Date means the date specified by Viterra as the last date for submission by Clients of their application for Initial Long Term Capacity.

Initial Application Period means the time period specified by Viterra for provision by Clients of their application for Initial Long Term Capacity.

Initial Application Process means the process for allocating Initial Long Term Capacity to Clients who applied for Initial Long Term Capacity on or before the Initial Application Date.

Initial Long Term Capacity means Long Term Capacity made available to be contracted under Long Term Agreements during the Initial Application Period.

Initial Nomination Cap means:

(a) 40%, at the Outer Harbor and Port Lincoln Port Terminals in the Quarter commencing 1 January and ending 31 March; and

(b) 50%, in all other cases.

Long Term Agreement means an agreement entered into between Viterra and a Client for Long Term Capacity and, to avoid doubt, may also include terms and conditions governing Short Term Capacity allocated in accordance with these Protocols.

Long Term Capacity means Capacity made available by Viterra to contract under Long Term Agreements in accordance with these Protocols for the shipment of Bulk Wheat and other Grains at any time during the period from 1 October 2015 to 30 September 2020 and includes Initial Long Term Capacity and Additional Long Term Capacity (if any).

Material Default means any breach of a fundamental or essential term (including financial or payment terms) or repeated breaches of any of the terms of an agreement between the Client and Viterra.

Naming a vessel means providing the name of the vessel together with all the other information required by Table A to be given at that same time. and “Named” has a corresponding meaning.

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Non-Harvest Shipping Negotiation Period means the period 1 February to 30 September.described in clause 3.8(b).

Non-Technical Grievance means a Grievance that is not a Technical Grievance.

Online Auction System means the online system provided by the Auction Provider for the conduct of Auctions.

Period means either the Harvest Shipping Period or the Non-Harvest Shipping Period.

Port Terminal means, depending upon the context, one or all of Viterra Operations’ seaboard terminals at:

(a) Port Adelaide, Inner Harbour, Berth 27, South Australia;

(b) Port Adelaide, Outer Harbor, Berth 8, South Australia;

(c) Port Giles, South Australia;

(d) Wallaroo, South Australia;

(e) Port Lincoln, South Australia; or

(f) Thevenard, South Australia.

Port Terminal Facility has the meaning given to that term in the Access Undertaking and, in respect of a Port Terminal, means those facilities listed and described in the applicable Port Schedule in the Access Undertaking as being the 'Port Terminal Facilities' for that Port Terminalin the Code.

Port Terminal Services has the meaning given in the Access Undertaking. Code.

Port Terminal Services Agreement means an agreement entered into between Viterra and a Client for Short Term Capacity.

Previous Protocols means the port loading protocols published by Viterra that were in force on the date immediately prior to the Variation Date.

Premium Increment means the amount by that name published in the Pricing Document.

Pricing, Pricing Procedures and Protocols Manual has the meaning given in the Storage & Handling Agreement.

Pricing Document means:

(a) in relation to Bulk Wheat, the Reference Prices; and

(b) in relation to all Capacity for other Grains, the Pricing Procedures and Protocols Manual.

Proposed Auditor means a proposed independent auditor to undertake the independent audit specified in clause 13.3.

Protocols means these Port Loading Protocols.

Prudential Requirements means in respect of a Client that:

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(a) the Client is Solvent;

(b) the Client or an Associated Entity of the Client is not currently or has not in the past 2 years been in Material Default of any agreement with Viterra; and

(c) the Client must be able to demonstrate to Viterra that it has a legal ownership structure with a sufficient capital base and assets of sufficient value to meet the actual or potential liabilities under a Long term Agreement, including timely payment of access charges and payment of insurance premiums and deductibles under the required policies of insurance or otherwise provides Credit Support acceptable to Viterra acting reasonably.

Pulses means chickpeas, lupins, field peas, faba beans, lentils, vetch, broad beans and all other Grain legumes.

Quarter means a 3 month period commencing 1 October, 1 January, 1 April or 1 July.

Rebate Pool Related Body Corporate has the meaning given in Schedule 2 of these Protocolsthe Corporations Act.

Reference Prices has the meaning given in the Access Agreement or Standard Terms. relevant Services Agreement.

Services means “Services” and/or “Reporting Obligations means the reporting obligations imposed by the Code in relation to the provision of Port Terminal Services” provided under a Services Agreement as the case requires by Viterra.

Services Agreement means:

(a) in relation to Bulk Wheat, either an Access Agreement or the Standard Terms; and

(b)in relation to other Grains, a Storage & Handling Agreement entered, or to be entered, into between Viterra Operations and the relevant Client.

(a) a Long Term Agreement;

(b) a Standard Long Term Agreement; or

(c) a Short Term Capacity Services Agreement,

as the case requires.

Shipping Parcel means a portion of a single Booking that may be differentiated from other portions of the same Booking based on commodity type, grade or other characteristics.

Shipping Stem means the stem of ships named by Clients for loading at Viterra Operation’s ’ Port Terminals as published by Viterra Operations.

Short Term Capacity means:

(a) Capacity of at least 500,000 tonnes each Quarter that is reserved for booking by Clients on a first-in-first-served basis once the Shipping Stem is opened in respect of the relevant Year; and

(b) any Capacity in respect of a Year that is initially offered as Long Term Capacity, but is not allocated to a Client as Long Term Capacity at the time the Shipping Stem is opened for Short Term Capacity Bookings for that Year.

Short Term Capacity Services Agreement means:

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(a) in relation to Bulk Wheat, either a Port Terminal Services Agreement or the Standard Terms; and

(b) in relation to other Grains, a Storage & Handling Agreement or other agreement entered, or to be entered, into between Viterra and the relevant Client.

Site Assembly Plan means a plan for assembling stock from one or more storage sites for a ship’s cargo and which includes details of tonnages and grades at each site.

Slot means a half month period of between 14 and 16 days within which a Client may book Capacity at a Port Terminal Facility for the shipment of Grain.

Solvent means that, in the last 5 years, in respect of a Client:

(a) the Client has been able to pay all its debts as and when they become due and has not failed to comply with a statutory demand under section 459F(1) of the Corporations Act;

(b) a meeting has not been convened to place it in voluntary liquidation or to appoint an administrator;

(c) an application has not been made to a court for the Client to be wound up without that application being dismissed within one month;

(d) a controller (as defined in the Corporations Act) of any of the Client’s assets has not been appointed; or

(e) the Client has not proposed to enter into or enters into any form of arrangement with its creditors or any of them, including a deed of company arrangement.

Standard Long Term Agreement means the standard terms and conditions on which Viterra is prepared to provide Long Term Capacity to a Client.

Standard Terms means the standard non-price terms and conditions as set out in Schedule 3 to the Access Undertakingon the Viterra Website from time to time.

STC Cancellation Notice has the meaning given in clause 6.1.

Storage & Handling Agreement means the agreement of that name published by Viterra Operations from time to time.

Table A means the Table A attached as Attachment 1 to these Protocols.

TBN in relation to a vessel means a vessel that is yet to be nNamed.

Technical Grievance has the meaning given in clause 10.1 of the Auction Rules.

Terminal Services Priority means priority over other vessels for the terminal services at a Port Terminal as determined in accordance with these Protocols.

Third Party Site means a bulk commodity storage site operated by a person other than Viterra Operations.

Trading Division means a business unit or division of Viterra Operations or its related bodies corporate which has the responsibility for the trading and marketing of Bulk Wheat and other commodities.

Transferee has the meaning given in clause 05.1(a)(ii).

Transferor has the meaning given in clause 05.1(a).

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Transport Plan means a plan for the movement to a Port Terminal of stocks to be assembled for a ship’s cargo which includes details of transport mode and tonnages by grade and date.

Unallocated Capacity has the meaning given in clause (a).

Variation Date means the date these Protocols take effect in accordance with the variation process set out in the Previous Protocols and the ACCC approval process set out in the Code.

Viterra Operations Viterra means Viterra Operations Ltd (ABN 88 007 556 256) and includes aAssociated eEntities, rRelated bBodies cCorporate and where applicable, their successors and permitted assigns.

Viterra Website means the website www.viterra.com.au.

WEMA means the Wheat Export Marketing Act 2008 (Cth) as amended from time to time.

Year means the period from 1 October to 30 September.

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2 Interpretation (a) In these Protocols, unless the context otherwise requires:

(i) (a)singular words will also have their plural meaning and vice versa;

(ii) (b)a reference to a person includes companies and associations;

(iii) (c)a reference to a consent of a party means the prior written consent of that party;

(iv) (d)headings are for convenient reference only and do not affect the interpretation of these Protocols;

(v) (e)a reference to a clause, Part or a Schedule is a reference to a clause, Part or Schedule of these Protocols;

(vi) (f)a reference to a party includes its successors and permitted assigns;

(vii) (g)notices that are required to be given in writing to Viterra Operations may, if so agreed by Viterra Operations, be provided in electronic form;

(viii) (h)a reference to any Act includes all statutes, regulations, codes, by-laws or ordinances and any notice, demand, order, direction, requirement or obligation under that Act (and vice versa) and unless otherwise provided in that Act includes all consolidations, amendments, re-enactments or replacements from time to time of that Act and a reference to “law” includes a reference to any Act and the common law;

(ix) (i)the words “including”, “for example” or “such as” when introducing an example, does not limit the meaning of the words to which the example relates to that example or examples of a similar kind;

(x) (j)a reference to $ and dollars is to Australian currency;

(xi) (k)a reference to time is a reference to the local time in Adelaide, South Australia (unless otherwise stated); and

(xii) (l)nothing in these Protocols is to be interpreted against a party solely on the ground that the party put forward these Protocols or a relevant part of them.

(b) To the extent of any inconsistency, the terms of a Schedule override the terms of Parts A to F (inclusive) of these Protocols.

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PART D: Dealings with Bookings

3 Movement of Bookings

Note: If a Client moves a Booking in respect of Capacity that it has acquired at Auction, this may affect the amount of the Auction Premium Rebate to which the Client is or may be entitled. See Schedule 2 of these Protocols.

3.1 Requests to move a Booking

(a)In respect of any Capacity allocated to a Client, thate Client may, subject to clause 7(hclauses 4.2(c) and 4.2(d), no later than 45 days prior to the first day of the relevant Booking Slot, submit a request in writing to Viterra Operations to:

(a) (i)move that Booking to a different Slot at the same Port Terminal as the relevant Booking; or

(b) (ii)move that Booking to a Slot at a different Port Terminal to the relevant Booking,

in each case where the new Slot occurs within the same Year (i.e. the period 1 October to 30 September) as the original Slot.

3.2 Response to requests to move a Booking

(a) (b)Viterra Operations will respond to any request made under clause 0 4.1 within 3 Business Days of receiving the request and will either:

(i) subject to clause 04.2(c), accept the Client’s request if there is sufficient Unallocated Capacity available at the relevant Port Terminal to accommodate the Client’s request, having regard to operational considerations and prior Bookings and , pending Bookings by other Clients; or

(ii) not accept the Client’s request if there is insufficient Unallocated Capacity available at the relevant Port Terminal to accommodate the Client’s request, having regard to operational considerations and , prior Bookings and pending Bookings by other Clients.

(b) (c)If Viterra Operations is unable to does not accept the Client’s request in accordance with clause 04.2(a)(ii), Viterra Operations will, subject to clause 0clauses 4.2(c) and 4.2(d), offer to enter into good faith discussions with the Client to determine whether moving the Booking to a different Slot or Port Terminal may be possible (again, having regard to operational considerations and , prior Bookings and pending Bookings by other Clients). Viterra Operations will also advise the Client whether or not this may involve additional costs. Unless and until the Booking is moved in accordance with clause 0 4.3 or pursuant to negotiations in accordance with this clause 04.2(b), the Booking will remain unchanged on the Shipping Stem.

(c) Viterra will not accept any request to move a Booking to a Slot that occurs in a particular Year if the request is submitted prior to the expiry of 2 Business Days from the date that the relevant Short Term Capacity or Additional Short Term Capacity becomes available for booking in respect of that Year.

(d) Upon receipt of a written request, Viterra may agree to move a Booking to a different Slot less than 45 days prior to the first day of the original Booking Slot.

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3.3 Movement of Bookings

(d)If Viterra Operations accepts the Client’s request to move a Booking in accordance with clause 04.2(a)(i):

(a) (i)Viterra Operations will amend the Shipping Stem on the next Business Day;

(b) (ii)the Booking will be deemed to be varied as of the date of Viterra Operation’s ’ written acceptance; and

(c) (iii)it will not be considered a new Booking and no additional booking fee will be payable.

This clause 1 does not affect the operation of clause 6.1(c).

(e) Viterra Operations will not accept any request or agree to move a Booking to a Slot at a Port Terminal where:

(i) that Slot has not been previously offered through an Auction;

(ii) that Slot is in a Non-Harvest Shipping Period and the second Auction in respect of that Non-Harvest Shipping Period has not yet occurred; or

(iii) the Capacity at the Slot to which the Client has requested the Booking be moved has not yet become available for booking on a first-in-first served basis in accordance with clause 2.4(d). For the avoidance of doubt, clause 2.4(g) does not apply to the movement of any Booking.

(f) Viterra Operations may at any time initiate discussions with a Client with a view to agreeing with the Client that the Client will move a Booking to another Slot or Port Terminal.

(g) Notwithstanding any other provision of these Protocols, Viterra Operations may at any time, with the Client’s consent, move a Booking for a Slot at Outer Harbor to a Slot in respect of the same half month period at Inner Harbour (or vice versa), if it facilitates the efficiency of operations at either or both of Outer Harbor and Inner Harbour and Viterra Operations takes reasonable steps to minimise the impact on other Clients at those Port Terminals.

(h)Upon receipt of a written request, Viterra Operations may agree to move a Booking to a different Slot less than 45 days prior to the first day of the original Booking Slot.

4 Transferring Bookings 4.1 Transfer requirements

(a) A Client (“Transferor”) may transfer a Booking if the following conditions are satisfied:

(i) the transfer complies with the requirements of this clause 05;

(ii) subject to clause 05.3(e), the Transferor and the person to whom the transfer is made (“Transferee”) provide a signed notice to Viterra Operations in the form set out in Attachment 1 2 (“Transfer Notice”) executed by both the Transferor and Transferee by no later than:

(A) 60 days prior to the first date of the Slot for the relevant Booking where the original Booking and new booking are different in respect of the requirements set out in Table A; or

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(B) 30 days prior to the first day of the Slot for the relevant Booking where the original Booking and the new booking are identical in respect of the requirements set out in Table A;

(iii) if the transferred Booking is in respect of Long Term Capacity:

(A) subject to 5.1(a)(iii)(B) and unless agreed otherwise by Viterra, the Transferee has a Long Term Agreement with Viterra in place covering the period in which the transferred Booking occurs; and

(B) clause 5.1(a)(iii)(A) does not apply if the Transfer Notice is provided to Viterra after Short Term Capacity is made available for booking on a first-in-first-served basis in respect of the period in which the transferred Booking occurs;

(iv) subject to clause 5.1(a)(iii), (iii)both the Transferor and Transferee have currently in force a Short Term Capacity Services Agreement with Viterra Operations in relation to the usage of the relevant Port Terminal and neither the Transferee nor Transferor is subject to a notice by Viterra Operations that it is in breach of that agreement;

(v) (iv)within 7 days of the date on which the Transfer Notice is provided to Viterra Operations, the Transferee provides to Viterra Operations the fee payable in respect of the transfer and a completed Booking Form in respect of the transferred Booking;

(vi) (v)the quantity of Grain to be exported by the Transferee is not more than the amount of Grain specified in the Transferor’s original Booking;

(vii) (vi)the Transferor has met the requirements set out in Table A (to the extent relevant) as at the date of the Transfer Notice;

(viii) (vii)the Transferor has paid any booking fee, Auction Fee or Auction premiums payable to Viterra Operations in connection with the Grain the subject of the Transfer Notice, and any other fees or charges which are at that time due or payable to Viterra Operations in connection with that Grain; and

(viii) where the Booking relates to a Slot in a Non-Harvest Shipping Period, the second Auction in respect of that Non-Harvest Shipping Period has occurred.

(ix) Viterra does not withhold its consent to the transfer in accordance with clause 3.16(c)(v).

4.2 Acceptance of transfer by Viterra

(a) (b)Subject to the Transferee and Transferor complying with this clause 0, 5 and Viterra Operations not withholding its consent under clause 3.16(c)(iii), Viterra will accept any transfer within 3 Business Days (“Transfer Acceptance Date”).

(b) (c)Viterra Operations will amend the Shipping Stem on the next Business Day after the Transfer Acceptance Date.

(d) For the avoidance of doubt:

4.3 General provisions

(a) (i)the The Transferee will not be required to pay a new booking fee to Viterra Operations in respect of the transferred Booking;.

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(ii) any entitlement to receive an Auction Premium Rebate in respect of the transferred Booking will be transferred to the Transferee;

(b) (iii)any Any purported transfer of a Booking that does not comply with this clause 0 5 shall be of no effect;.

(c) (iv)tThe transfer of a Booking in accordance with this clause 0 5 does not affect the operation of clause 1 4 in respect of that Booking;.

(d) (v)nNo transfer shall be effective until approved by Viterra Operations; and.

(e) (vi)upon Upon receipt of a Transfer Notice less than:

(i) (A)in the case of clause 05.1(a)(ii)(A), 60 days prior to the first day of the Slot for the relevant Booking, Viterra Operations may, subject to the Transferor and Transferee’s compliance with this clause 05, agree to transfer the Booking the subject of the Transfer Notice; and

(ii) (B)in the case of clause 05.1(a)(ii)(B), 30 days prior to the first day of the Slot for the relevant Booking, Viterra Operations may, subject to the Transferor and Transferee’s compliance with this clause 05, agree to transfer the Booking the subject of the Transfer Notice.

5 Conditional refund of booking fee, Auction Fee or Declared Auction Fee for early surrender of Capacity

5 5.1Surrender of Capacity 5.1 Surrender of Short Term Capacity and refund of booking fee

(a) If, by notice in writing to Viterra Operations(“STC Cancellation Notice”):

(i) a Client cancels a Booking for Short Term Capacity; and

(ii) that notice is given no later than 30 days 6 months prior to the commencement of the relevant Slot,

then,:

(iii) Viterra will:

(A) (iii)Viterra Operations will amend the Shipping Stem on the next Business Day with a note that the Booking has been cancelled; and

(B) subject to clause 3.13(b), make the relevant Slot available on a first-in-first-served basis in accordance with Part C of these Protocols; and

(iv) if, in the 14 day period following receipt of the cancellation notice STC Cancellation Notice in accordance with this clause 06.1, Viterra Operations does not receive any new Booking by a Client that is for:

(A) a quantity of Grain that is (in whole or in part) the subject of the cancelled Booking;

(B) export from the same Port Terminal to which the cancelled Booking relates; and

(C) shipment in the Slot to which the cancelled Booking relates,

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then, subject to clause 06.1(b), the Client that made the cancellation under this clause 0 6.1 will not be entitled to any refund of the booking fee, Auction Fee or Declared Auction Fee (as applicable) in whole or in part.

5.2 Refund of booking fee

(b) (a)If, in the 14 day period following receipt of the cancellation notice STC Cancellation Notice in accordance with clause 06.1(a), a new Booking for Short Term Capacity is made by a Client for:

(i) a quantity of Grain that is (in whole or in part) the subject of the cancelled Booking;

(ii) export from the same Port Terminal to which the cancelled Booking relates; and

(iii) shipment in the Slot to which the cancelled Booking relates,

and that booking is accepted in accordance with these Protocols, Viterra Operations will refund to the Client that cancelled the Booking (in accordance with this clause 0) up to 50% of the booking fee, Auction Fee or Declared Auction Fee (as applicable) paid by the Client on a pro rata basis. For example, where up to:

(iv) where the STC Cancellation Notice was given by the Client to Viterra no later than 12 months prior to the commencement of the relevant Slot, 75% of the booking fee paid by the Client on a pro rata basis according to the proportion that the Capacity under the new Booking bears to the total Capacity the subject of the cancelled Booking; or

(v) where the STC Cancellation Notice was given by the Client to Viterra less than 12 months but no later than 6 months prior to the commencement of the relevant Slot, 50% of the booking fee paid by the Client on a pro rata basis according to the proportion that the Capacity under the new Booking bears to the total Capacity the subject of the cancelled Booking.

For example, where the Client gives a STC Cancellation Notice to Viterra 8 months before the relevant Slot and all Capacity the subject of the cancelled Booking is the subject of a new Booking, the Client will be reimbursed 50% of the booking fee, Auction Fee or Declared Auction Fee paid by the Client (as applicable). But, where only 50% of the Capacity the subject of the cancelled Booking is the subject of a new Booking, the Client will be reimbursed only 25% of the booking fee, Auction Fee or Declared Auction Fee paid by the Client (as applicable). For the avoidance of doubt, a booking fee will be payable in respect of the new Booking.

(c) (b)If, in accordance with clause 1.1(a3.13(b), Viterra Operations decides not to publish and offer to Clients all or part of the Capacity that becomes available following a surrender of a Booking in accordance with clause 06.1(a), Viterra Operations will refund to the Client that cancelled the Booking an amount up to 50% of the booking fee, Auction Fee or Declared Auction Fee paid by the Client (as applicable) on a pro rata basis. For example, if Viterra Operations the amounts specified in clause 6.1(b)(iv) and 6.1(b)(v). For example, where the Client gives a STC Cancellation Notice to Viterra 8 months before the relevant Slot and Viterra decides not to re-offer any of the Capacity surrendered by the Client, the Client will be reimbursed 50% of the booking fee, Auction Fee or Declared Auction Fee that it has paid in respect of that Capacity. If Viterra Operations decides not to re-offer 40% of the Capacity surrendered by the Client, then unless the 60% that is re-offered to Clients is the subject of a new Booking in accordance with clause 06.1(b), the Client will be reimbursed only 20% of the booking fee, Auction Fee or Declared Auction Fee that it has paid (representing 50% of the booking fee, Auction Fee or Declared Auction Fee

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paid in respect of the Capacity that was not re-offered to Clients by Viterra Operations).

(d) (c)For the avoidance of doubt:

(i) any amount paid by a Client in excess of the Auction Fee or Declared Auction Fee (as applicable) in respect of Capacity acquired through an Auction, will not be refunded under clause 0;

(i) (ii)any new Bookings under clause 0 6.1(b) will be allocated in accordance with clause 1.1Part C of these Protocols; and

(ii) (iii)if more than one Booking is cancelled in respect of the same Slot, any new Bookings under clause 0 6.1(b) will be applied against the cancelled Bookings in order of their cancellation. ; and

(iii) a Client will remain liable to pay the Lost Capacity Fee in respect of any proportion of booked Capacity that is re-offered by Viterra but is not the subject of a new Booking.

5.2 Surrender of Long Term Capacity

If, by notice in writing to Viterra (“LTC Cancellation Notice”):

(a) a Client cancels a Booking for Long Term Capacity; and

(b) that notice is given no later than 6 months prior to commencement of the relevant Slot,

then:

(c) Viterra will:

6 Slot Bookings (i) 6.1Update of amend the Shipping Stem on the next Business Day with a

note that the Booking has been cancelled; and

(ii) subject to clause 3.13(b), make the relevant Slot available on a first-in-first-served basis in accordance with Part C of these Protocols; and

(d) if, in the period following receipt of the LTC Cancellation Notice in accordance with this clause 6.2, Viterra does not receive any new Booking by a Client that is for:

(i) a quantity of Grain that is (in whole or in part) the subject of the cancelled Booking;

(ii) export from the same Port Terminal to which the cancelled Booking relates; and

(iii) shipment in the Slot to which the cancelled Booking relates,

then the Client that made the cancellation under this clause 6.2 will not be entitled to any refund of the booking fee in whole or in part.

5.3 Refund of Long Term Capacity booking fee

(a) If:

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(i) the LTC Cancellation Notice is given prior to any Short Term Capacity becoming available for booking on a first-in-first-served basis in respect of the Year in which the Booking occurs; and

(ii) in the period following receipt of the LTC Cancellation Notice in accordance with clause 6.2(a):

(A) a new Booking is made by a Client for:

(aa) a quantity of Grain that is (in whole or in part) the subject of the cancelled Booking;

(ab) export from the same Port Terminal to which the cancelled Booking relates; and

(ac) shipment in the Slot to which the cancelled Booking relates; and

(B) that booking is accepted in accordance with these Protocols,

(C) Viterra will refund to the Client 75% of the booking fee paid by a Client on a pro rata basis according to the proportion that the Capacity under the new Booking bears to the total Capacity the subject of the cancelled Booking.

(b) For the avoidance of doubt:

(i) any new Bookings under this clause 6.3 will be allocated in accordance with Part C of these Protocols;

(ii) if more than one Booking is cancelled in respect of the same Slot, any new Bookings under this clause 6.3 will be applied against the cancelled Bookings in order of their cancellation; and

(iii) a Client will remain liable to pay the Lost Capacity Fee in respect of any proportion of booked Capacity that is re-offered by Viterra but is not the subject of a new Booking.

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PART E: Operational Matters

6 Slot Bookings 6.1 Update of Shipping Stem

Viterra will place all Clients’ Bookings on the Shipping Stem as required by the Reporting Obligations then in force.

(a) Within one Business Day of:

(i) the Auction Results Validation Date, Viterra Operations will place the Client’s Booking (acquired at the Auction) on the Shipping Stem;

(ii) receipt by Viterra Operations of a Booking Form in respect of Unallocated Capacity, Viterra Operations will place the Client’s Booking on the Shipping Stem in “pending” status. “Pending” status does not mean that the Booking has been accepted. Viterra Operations will update the Shipping Stem once the booking has been accepted or rejected.

(b) In addition to the requirements set out in clause 2.4(g), the following conditions must be satisfied before a Booking Form submitted in respect of Unallocated Capacity will be accepted by Viterra Operations:

(i) compliance by the Client with the requirements set out in Table A (to the extent they are required at the time of booking); and

(ii) Viterra Operations must have sufficient intake, grain storage and shipping capacity to honour the Booking, taking into account the status of, and prior Bookings or pending Bookings on, the Shipping Stem.

(c) Bookings accepted by Viterra Operations are personal to the Client and are only transferable in accordance with clause 0 of these Protocols.

6.2 Split Bookings

(a) A Client may divide a Booking (i.e. the Client’s primary Booking not including any tolerance levels) into more than one Booking at least 30 days prior to the first day of the relevant Slot, provided that:

(i) each of those Bookings is within the same Booking Slot at the same Port Terminal;

(ii) the total tonnage of all of the “split” Bookings does not exceed the tonnage specified for the original Booking; and

(iii) the Client pays any fees payable and set out in the relevant Pricing Document in connection with the “split” of the Booking.

(b) Viterra Operations will issue separate reference numbers for each of the “split” Bookings. The Client must contact Viterra Operations and update all applicable Booking Forms, including Booking Forms for the original Booking and the “split” Booking.

(c) Tonnages may also be transferred between Bookings in the same Slots (at the same Port Terminal) with the prior written agreement of Viterra Operations.

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(d) For the purposes of this clause, the date of Booking of the Slot for “split” Bookings is the same as the date of Booking of the original “non-split” Slot.

(e) With the consent of Viterra Operations, a Client may divide a Booking into more than one Booking less than 30 days prior to the first day of the relevant Slot.

6.3 Allocation of Estimated Load Date

(a) As soon as reasonably practicable after the Client names its vessel and its ETA (and, in any event, within 2 Business Days), Viterra Operations will assess its operational requirements and notify the Client of the vessel’s estimated load date (“Estimated Load Date”).

(b) The Client acknowledges and agrees that the Estimated Load Date is an estimate of the vessel’s load date and that this load date may be subject to change (see clause 78).

7 Changes in Slots and Estimated Load Dates by Viterra Operations

7.1 Viterra may vary Slot and/or Estimated Load Date

(a)Viterra Operations will endeavour to ensure that the Client’s Bbooked Slot and Estimated Load Date will be held for the Client. However, Viterra Operations may make changes to the Bbooked Slot and/or Estimated Load Date for the following reasons:

(a) (i)if the cargo is not in an export ready and shippable position by the relevant Estimated Load Date;

(b) (ii)if a fForce mMajeure event occurs;

(c) if there is a material unresolved dispute between Viterra and the Client, including but not limited to in respect of a non-payment of any storage or handling charges due and payable to Viterra when they are due (and which are not the subject of a genuine dispute);

(d) (iii)if there is a change of Terminal Services Priority in accordance with these Protocols (see clauses 8- 99 and 10);

(e) (iv)if a vessel fails to pass required marine and/or DOAFF port surveys;

(f) (v)if poor or dangerous weather reasonably requires the scheduled Bbooked Slot or Estimated Load Date to be delayed in the interests of safety;

(g) (vi)if there is a change to the ETAs of the Client’s vessel or others in the vessel queue (see clause 910);

(h) (vii)if necessary to reflect the impact of any changes to Flinders Ports SA Port rRules for Grain Berth Loading Priorities at the relevant port;

(i) (viii)if the Client has failed to comply with the requirements detailed in these Protocols (including the requirements set out in Table A) or its Services Agreement;

(j) (ix)if non-Grain vessels are being loaded at common berths under the Flinders Ports SA Port rRules and this will impact on the Bbooked Slot or Estimated Load Date;

(k) (x)if it is necessary for occupational, health & safety reasons including , for example, fumigation;

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(l) (xi)if it is necessary to clean berths or facilities between the departure and arrival of vessels; or

(m) (xii)if any other event or circumstance arises as a result of circumstances beyond Viterra Operation’s ’ reasonable control including, for example, unavailability of tugs or DOAFF labour.

7.2 Notification of variation

(b)In the event of a change in the Client’s Bbooked Slot or Estimated Load Date, Viterra Operations will provide notification to the Client via the Shipping Stem on the Viterra Operations’ websiteWebsite. The Shipping Stem is updated each Business Day and is available to all Clients.

8 Guiding Principles for determining Terminal Services Priority 8.1 Interpretation

8.1 Order of arrival

For the purposes of this clause 89, in determining the order of arrival of vessels at a Port, where two 2 or more vessels arrive at the same time and there is uncertainty as to which vessel is the first arrived, the vessel that drops its anchor in the anchorage (as defined by the Flinders Ports SA Port Rules) first will be considered to be the first arrived vessel.

8.2 Priority - loading

The following principles will be followed by Viterra Operations in determining the priority of terminal services at port for the loading of vessels:

(a) Viterra Operations will schedule vessels to load in order of arrival to the relevant Port, subject to the Client meeting the following conditions:

(i) the Client has a Booking;

(ii) the Client has provided details of the vessel name and all other details required under these Protocols; including under clause 9.8 (where applicable);

(iii) the Client complies with, and is not in default of , any obligation under its Services Agreement or these Protocols (including the requirements set out in Table A);

(iv) the Client’s vessel has passed marine and DOAFF port surveys (with copies provided to Viterra Operations) and is ready to load;

(v) where the grain berth is congested, the Client has performed an official marine survey at anchorage (for the purpose of being issued with a certificate of fitness to load grain in accordance with applicable legislation) where possible, and has provided a copy of the survey to Viterra Operations;

(vi) cargo for the nNamed vessel is available and in a shipping position;

(vii) the Client has provided Viterra Operations with 14 days’ notice prior to the vessel ETA;

(viii) the vessel arrival time is within the Client’s 14-16 day Booking Slot;

(ix) the Client has not made any changes to load grades and/or quality and/or tonnage requirements within the 14 days prior to the vessel ETA;

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(x) subject to clause 8.2(a)(xi9.2(a)(xi), the vessel ETA has not been varied by more than one day from the date specified at 14 days prior to the original ETA; and

(xi) in the case of a vessel substitution, the vessel ETA has not been varied by more than one day from the original vessel ETA.

(b) If a Client does not meet the conditions set out in clause 8.2(a9.2(a), Viterra Operations reserves the right to re-prioritise and load vessels outside the order of arrival where it is practically achievable and Viterra Operations considers on reasonable grounds (and on an objective and ascertainable basis) that the overall speed and efficiency of the Port Terminal will be enhanced or delays to nNamed vessels will be minimised.

8.3 Priority - services other than loading

(a) Where Viterra Operations is required to determine the priority of terminal services at port other than the loading of vessels (see clause 8.3(b9.3(b) below), it will do so based on the estimated order of vessel arrival, subject to the Client meeting the following conditions:

(i) the Client has been allocated with Capacity;

(ii) the Client has provided details of the vessel name and all other details required under these Protocols;

(iii) the Client complies with, and is not in default of , any obligation under its Services Agreement or these Protocols (including the requirements set out in Table A);

(iv) the Client has provided Viterra Operations with 14 days’ notice prior to the vessel ETA;

(v) the current vessel ETA is within its 14-16 day Booking Slot;

(vi) subject to clause 8.3(a)(vii9.3(a)(vii), the vessel ETA has not been varied by more than one day from the ETA advised in relation to that vessel 14 days prior to the original ETA;

(vii) in the case of a vessel substitution, the vessel ETA has not been varied by more than one day from the original vessel ETA; and

(viii) the Client has not made any changes to load grades and/or quality and/or tonnage requirements within the 14 days prior to the vessel ETA.

(b) For the purposes of clause 8.3(a9.3(a), the provision of “terminal services at port other than loading of vessels” includes, but is not limited to:

(i) inward elevation capacity;

(ii) labour;

(iii) storage capacity; and

(iv) allocation of bin space between multiple vessels.

(c) If Clients do a Client does not meet the conditions set out in clause 8.3(a9.3(a), Viterra Operations reserves the right to re-prioritise Tterminal Sservices at port other than the loading of vessels in a different order to the estimated order of vessel arrival where it is practically achievable and Viterra Operations considers on reasonable grounds (and

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on an objective and ascertainable basis) that the overall speed and efficiency of the Port Terminal will be enhanced or delays to nNamed vessels will be minimised.

8.4 Priority - loading and other services

(a) In determining whether (and how) to re-prioritise vessels if the conditions in clause 8.2 9.2 or 8.3 9.3 are not satisfied, Viterra Operations may consider the following matters (some or all of which may be relevant depending on operational arrangements at the specific Port Terminal) and other relevant considerations:

(i) whether the stock at the Port Terminal can be utilised on alternative vessels that have arrived or are now due to arrive first, or will be now be load-ready first;

(ii) the length of the anticipated delays;

(iii) the practicality of re-positioning terminal stock and the impact any such re-positioning would have on other Port Terminal users;

(iv) the ability for Viterra Operations or Clients to amend accumulation plans;

(v) the ability for the Client to supply transport;

(vi) the associated costs and impact on efficiency of the overall supply chain;

(vii) the extent to which the overall speed and efficiency of the Port Terminal will be enhanced on an objective and ascertainable basis;

(viii) whether it will it reduce the overall wait time over all nNamed vessels; and

(ix) any other considerations which Viterra Operations considers relevant in the circumstances.

(b)Where the Client occupies the berth at a Port Terminal and has stock available but will not work the vessel on a 24 hour / 7 day basis, and another client has stock available and is willing to work the vessel on a 24 hour / 7 day basis, the Client must either work the vessel on a 24 hour / 7 day basis or vacate the berth for the other client.

(b) Unless otherwise agreed by Viterra (and such agreement must not be withheld where there is no other Client which has stock and is willing to work a vessel at the relevant Port Terminal on a 24 hour / 7 day basis), where the Client occupies the berth at a Port Terminal it must work the vessel on a 24 hour / 7 day basis. If the Client does not comply with this clause, where requested by Viterra the Client must vacate the berth immediately.

8.5 Grace Period

(a) Viterra Operations will not cancel a Client’s Booking where the Client’s nNamed vessel arrives outside of the last day of the declared Booking Slot, provided that:

(i) the vessel arrival is no more than 10 6 days outside the last day of the declared Booking Slot (“Grace Period”);

(ii) there is available operational capacity at the Port Terminal; and

(iii) the required stock can be made available.

(b) At the time Viterra makes Capacity available, it may specify a condition that there will be no Grace Period for the Slot to which that Capacity relates.

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(c) (b)Vessels arriving within the Grace Period (or outside the Grace Period but in accordance with clause 8.7(a9.7(a) and subject to the Client complying with clause 8.2(a9.2(a)) will be re-prioritised to the next loading time that is practically available, subject to:

(i) Viterra Operation’s ’ reasonable ability (and Viterra Operations taking reasonable steps) to accommodate the change; and

(ii) Viterra Operation’s ’ reasonable ability (and Viterra Operations taking reasonable steps) to re-prioritise the vessel in a manner that limits the practical impact on other Bookings and taking into account Viterra Operation’s ’ operational requirements. This may require that the vessel is loaded at the end of the queue of nNamed vessels. However, in order to make storage capacity available, it may conversely require that the vessel is loaded earlier.

(d) (c)In determining the next loading time that is practically available (and will reflect the most efficient outcome), Viterra Operations may have regard to the following matters (some or all of which may be relevant depending on operational arrangements at the specific Port Terminal) and other relevant circumstances:

(i) the objective of minimising any impact on all other Bookings;

(ii) the ability to re-allocate stock;

(iii) the objective of minimising the total wait time of all nNamed vessels and Bookings;

(iv) the practical implications (in particular, where stock is already accumulated and cannot be allocated to other vessels);

(v) if stock is or can be made available at port;

(vi) the ability for the Client or Viterra Operations to increase Port Terminal throughput;

(vii) the overall speed and efficiency of the Port Terminal; and

(viii) any other considerations that Viterra Operations considers relevant in the circumstances.

(e) (d)Subject to clause 8.7(a9.7(a), where a Client’s vessel fails to arrive within the Slot or Grace Period, the Booking will be cancelled and removed from the Shipping Stem. :

(i) the Booking will be cancelled and removed from the Shipping Stem; and

(ii) the Client will remain liable to pay Viterra any Lost Capacity Fee in respect of that cancelled Booking,

unless Viterra in its discretion elects not to cancel that Booking.

8.6 Tolerance limits

(a) Viterra Operations will permit a +/-10% tolerance in respect of the execution of Capacity acquired by Clients (whether at Auction or under the first-in-first-served system in accordance with these Protocols). .

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(b) The Lost Capacity Fee and any refunds payable by or to a Client under a Pricing Document will be calculated on the amount of Capacity booked by the Client (excluding any tolerance amounts).

(b) Viterra Operations may, in its discretion and on a case-by-case basis, allow a vessel to load up to 1,000 tonnes in excess of the Capacity (plus tolerance) booked for that vessel. For the avoidance of doubt, this clause 5.6(b) does not entitle Clients to any additional tolerance in respect of the execution of Capacity. It is a discretion that Viterra Operations may exercise if it is necessary or desirable to facilitate the efficient or safe loading and departure of a vessel and/or the efficient operation of a Port Terminal.

8.7 Two-port loading

(a) Where:

(i) the Client is loading a vessel at more than one of Viterra Operation’s ’ Port Terminals;

(ii) the vessel arrives within its original Booking Slot or Grace Period at the first Port Terminal;

(iii) the vessel is subsequently delayed at the first Port Terminal; and

(iv) as a result of this delay, the Client’s vessel arrives outside of its Booking Slot (and Grace Period) at the second Port Terminal,

this will not be considered a new Booking at the second Port Terminal. At the second Port Terminal, priority will be determined in accordance with clauses 8.2 9.2 or 8.39.3.

(b) Terminal Services Priority may be impacted by the berthing requirements of the Flinders Ports SA Port Rules for Grain Berth Loading Priorities in force from time to time for each Port. Viterra Operations may vary Terminal Services Priority to the extent necessary to address these external requirements.

(c) Where the Client is loading a vessel at more than one of Viterra Operation’s Port Terminals, the Client may, with the consent of Viterra Operations:

(i) redistribute the tonnages in respect of those two Bookings across the two Port Terminals within a +/- 10% tolerance provided that the aggregate tonnages across the two Bookings (including tolerance under clause 5.6(a)9.6(a) is not exceeded; or

(ii) allocate the total tolerance that is applicable to the two Bookings in accordance with clause 5.6(a9.6(a) to one of those Bookings.

8.8 Marine surveys

(a) In circumstances where there is vessel congestion or potential vessel congestion at a Port Terminal, Viterra Operations may require Clients to:

(i) (a)engage a qualified marine surveyor to undertake an official marine survey at anchorage (for the purpose of being issued with a certificate of fitness to load grain in accordance with applicable legislation) on arrival of the relevant vessel at the Port Terminal (or, if possible, at an alternate Australian port whilst in transit); and

(ii) (b)provide a copy of the marine surveyor’s report to Viterra Operations.

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9 Failure to Meet Table A Requirements 9.1 Notification of failure

(a) Subject to clause 9(c)10.2, where Viterra Operations identifies that a Client has not met the timeframes set out in Table A, or has failed to pay any storage or handling charges due and payable to Viterra Operations when they are become due (and which are not the subject of a genuine dispute), Viterra Operations will notify the Client in writing within one Business Day of identifying the failure. If the Client does not ensure compliance within the time specified in the notice issued by Viterra Operations, Viterra Operations may withdraw the Booking from the Shipping Stem.

(b) In determining the time to be specified in the notice for the Client to ensure compliance, Viterra Operations will:

(i) have regard to the nature of the default. Minor or “technical” issues which are unlikely to have any discernible impact on the efficient operation of the Port Terminal may attract greater flexibility. Conversely, failure to comply with requirements which have the potential to affect other Clients and failure to comply with commercial terms will attract a shorter period for rectification;

(ii) treat like defaults in a like manner. That is, Viterra Operations will use its best endeavours to treat all Clients equally and apply any flexibility equally;

(iii) use its best endeavours to balance the desirability of providing flexibility to Clients with the need to minimise the impact that such flexibility may have on other Clients or Bookings and the efficient operation of the Shipping Stem; and

(iv) act reasonably and in good faith.

9.2 Failure to name a vessel

(c)Where a Client fails to name a vessel within the Booking Slot or Grace Period, the Booking will be removed from the Shipping Stem and the Capacity associated with that Booking will be forfeited (refer to clause 8.5(a) for an explanation of the “Grace Period”).:

(a) the Booking will be removed from the Shipping Stem and the Capacity associated with that Booking will be forfeited; and

(b) the Client will remain liable to pay Viterra any Lost Capacity Fee in respect of that cancelled Booking.

10 Demonstrating Stock Entitlement 10.1 Stock entitlement

A Client is required by Table A to demonstrate at various points of in time its entitlement to stock. Stock entitlement may be demonstrated by the Client providing:

(a) details of commodity held by the Client at Viterra Operations sites that meets the Client’s Booking (including any tolerance as referred to in clause 9.6(a));

(b) details of commodity held at Third Party Sites (refer to clause 101.2) that meets the Client’s Booking;

(c) adequate evidence of forward purchases and sales commitments going to meeting the Client’s Booking; and

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(d) any other form of evidence of entitlement which shows that the Client will have sufficient stock to load the Client’s vessel at the estimated load dates indicated by the vessel’s priority on the Shipping Stem.

10.2 Stock at Third Party Sites

In order to qualify for stock entitlement for the purposes of satisfying the requirements of Table A, commodities held at a Third Party Site will only be taken into account if:

(a) either:

(i) the Third Party Site has been approved by Viterra Operations (such approval to be provided in accordance with the published approval criteria and not to be unreasonably withheld having regard to appropriate industry standards (e.g. hygiene and quality)); or

(ii) alternative arrangements have been agreed with Viterra Operations;

(b) the Third Party Site is adequately serviced by road or rail;

(c) the Client provides the most recent treatment history of the commodity;

(d) unless otherwise agreed by Viterra Operations, the Client provides a valid fumigation certificate (as outlined in the relevant Services Agreements or in a form otherwise approved by Viterra Operations) for the stock to be exported through a Viterra Operations Port Terminal; and

(e) upon request by Viterra Operations, the Third Party Site operator confirms in writing within two 2 Business Days of Viterra Operation’s ’ request, the Client’s entitlement and that the Client’s stock is available for outturn to meet the Client’s Slot.

11 Export Standard Requirements 11.1 Site Assembly and Transport Plan

(a) In the event that the Client selects Export Standard for the accumulation of the commodity the subject of a Booking, the Client must provide to Viterra Operations:

(i) by no later than 18 days prior to the opening of the first day of the Slot, a Site Assembly Plan that is complete for the purposes of the delivery of stock (including any tolerance as referred to in clause 9.6(a)); and

(ii) by no later than 14 days prior to the vessel ETA, a Transport Plan that is acceptable and complete for the purposes of the delivery of stock (including any tolerance as referred to in clause 9.6(a)).

(b) If the Client fails to provide a Site Assembly Plan and/or a Transport Plan as required under clause 12.1(a), or fails to execute any of these plans, Viterra Operations may re-prioritise the Client’s vessel on the Shipping Stem.

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PART F: Dispute Resolution, Variation of Protocols and Other

12 Dispute Resolution 12.1 Resolution of disputes between parties

In the event that the Client disputes Viterra Operation’s ’ adherence to these Protocols (including, without limitation the acceptance or rejection of a Booking, or the order of provision or re-prioritisation of terminal services but excluding any dispute relating to an Auction), or there is a dispute on the proposed terms of a Service Agreement, the following procedures will apply:

(a) the Client must notify Viterra Operations in writing of the dispute, the reasons for the dispute and the resolution which the Client requests (“Dispute Notice”);

(b) where the dispute relates to the rejection of a Booking Form submitted in respect of Unallocated CapacityViterra’s adherence to these Protocols in relation to the allocation of Long Term Capacity or Short Term Capacity to the Client, the Dispute Notice must be received by Viterra Operations by 5pm on the Business Day immediately following receipt of the notice from Viterra Operations that it does not intend to accept the Booking;specifying the allocation that will be made available for contracting by the Client;

(c) Viterra Operations Viterra must use its best reasonable endeavours to respond to the Client within one 2 Business Days following receipt of the Dispute Notice (“Viterra Operation’s Response”). Viterra Operation’s Response must notify the Client whether Viterra Operations will change its decision and, if not, it must provide an explanation or basis for Viterra Operation’s ’ decision;

(d) if the Client is not satisfied by Viterra Operation’s Response, or if Viterra Operations fails to respond to the Dispute Notice within one Business Day of its the time rspecified in iptclause 13.1(c), the Client may serve written notice to on Viterra Operations within one Business Day of receipt of Viterra Operation’s Response, or within one Business Day of when Viterra Operation’s Response was due (“Escalation Notice”);

(e) upon receipt of the Escalation Notice, Viterra Operations must use all its reasonable endeavours to arrange a meeting between Viterra Operations’ General Manager Storage and Handling ’s Director Legal – Australia and New Zealand and the Client within two 2 Business Days of receipt of the Escalation Notice. Where Viterra Operations’ General Manager Storage and Handling ’s Director Legal – Australia and New Zealand is unavailable for such a meeting within the timeframe specified, Viterra Operations will make available a suitable alternative authorised representative (“Alternate”) to meet with the Client within two 2 Business Days of receipt of the Escalation Notice. To facilitate the expeditious resolution of disputes, the meeting can take place either face -to-face or by telephone;

(f) at the meeting, Viterra Operations’ General Manager Storage and Handling ’s Director Legal – Australia and New Zealand (or Alternate) and the Client will discuss the subject of the Dispute Notice and Viterra Operation’s Response and use all its reasonable endeavours to reach an agreed outcome. Where such agreed outcome cannot be achieved, given the need for clarity, efficiency and certainty in this dispute resolution process, Viterra Operations’ General Manager Storage and Handling ’s Director Legal – Australia and New Zealand (or Alternate) will make a final decision in relation to the Dispute Notice and notify that decision and the reasons for that decision in writing to the Client within one Business Day of the meeting (“Decision Notice”);

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(g) in reaching the final decision set out in the Decision Notice, Viterra Operations’ General Manager Storage and Handling ’s Director Legal – Australia and New Zealand (or Alternate), acting on behalf of Viterra Operations, must take into account the circumstances of the dispute and details set out in the Dispute Notice and, acting reasonably and in good faith, reach a decision that is consistent with the wording, or if that is unclear, the intent of these Protocols (and, in the case of Bulk Wheat, the Access Undertaking). Viterra Operations’ General Manager Storage and Handling . In addition, Viterra’s Director Legal – Australia and New Zealand (or Alternate) may also have regard to the objectives of:

(i) maximising the efficient operation of the Port Terminal;

(ii) minimising the adverse impact on port users;

(iii) (ii)maximising export throughput at the Port Terminal and through Viterra’s Grain export supply chain; and

(iii) ensuring the non-discriminatory treatment of Clients; and

(iv) ensuring consistency of decisions.

12.2 Alternative dispute resolution

(a) Subject to clause 13.2(b) at any time a party may refer a dispute in relation to the negotiation of the terms of a Service Agreement to a mediator (if agreed with Viterra) or to an arbitrator, in each case in accordance with the Code.

(b) Clause 13.2(a) does not apply to disputes relating to the allocation of Long Term Capacity or Short Term Capacity in accordance with these Protocols.

12.3 Non-discriminatory access

(a) The ACCC may by notice in writing require Viterra to appoint an Auditor to provide a report in relation to Viterra’s compliance with clause 10 of the Code in undertaking the Capacity allocation processes set out in Parts B and C of these Protocols. If the ACCC requires Viterra to appoint an Auditor, the provisions set out in Attachment 3 will apply.

(b) The ACCC may authorise any powers under this clause 13.3on behalf of the ACCC.

13 Varying these Protocols Viterra Operations may vary these Protocols at any time:

(a) while the Access Undertaking remains in force, in accordance with clauses 9.3 to 9.4 of the Access Undertaking; and

(b) after the expiry of the Access Undertaking, in accordance with:

(i) any requirements set out in the Code; and

(ii) to the extent not inconsistent with clause 14(b)(i), the process set out in clauses 9.3(b) to (g) of the Access Undertaking, but excluding:

(A) the final sentence in clause 9.3(c)(iv) of the Access Undertaking;

(B) clause 9.3(e)(ii) of the Access Undertaking; and

(C) clause 9.3(f)(ii) of the Access Undertaking.

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13.1 Variation of Protocols

(a) If Viterra is not an “exempt service provider” (as defined in the Code) in respect of Port Terminal Services provided at any Port Terminal Facility, any variations to these Protocols will be made in accordance with the Code.

(b) If Viterra is an “exempt service provider” (as defined in the Code) in respect of Port Terminal Services provided at any Port Terminal Facility, Viterra may vary these Protocols in respect of those Port Terminal Services by publishing on the Viterra Website and notifying Clients with an existing Services Agreement of:

(i) the proposed variations;

(ii) the reasons for the variations;

(iii) the proposed effective date of the variations; and

(iv) that Clients may make submissions on the variations within 10 Business Days,

at least 20 Business Days before the proposed variations are to take effect.

(c) If Viterra decides to change the proposed variation in response to submissions received from Clients under clause 14.1(b), Viterra will, at least 3 Business Days before the commencement of the proposed variation, notify Clients of the changes on the Viterra Website, but will not be required to consult further.

(d) Notwithstanding any other provision of these Protocols, Viterra may unilaterally amend these Protocols on a temporary basis during any period of Force Majeure without complying with clause 14.1(a) or 14.1(b).

13.2 Code no longer applicable to a Port Terminal

(a) If Viterra becomes an “exempt service provider” (as defined in the Code) in respect of Port Terminal Services provided at any Port Terminal Facility (an “Exempt Port Terminal Facility”), Viterra may:

(i) by publishing a notice on the Viterra Website:

(A) exclude the operation of these Protocols in whole or in part to that Exempt Port Terminal Facility; or

(B) if it chooses, publish different protocols for that Exempt Port Terminal Facility,

in each case subject to compliance with the Code; and

(ii) elect to reduce the minimum amount of Short Term Capacity required to be provided under clause 3.12 by the amount of Short Term Capacity offered at that Exempt Port Terminal Facility in the Year immediately preceding the Year in which the Exempt Port Terminal Facility became an “exempt service provider” (as defined in the Code).

(b) Where the amount of Short Term Capacity required to be provided under clause 3.12 is varied by application of this clause 14.2, Viterra will publish details of the variation on the Viterra Website.

14 Viterra Website Where Viterra Operations has an obligation under these Protocols to publish information on the Viterra Website, Viterra Operations will publish that information in a prominent position in the same location as the Shipping Stem.

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15 Use of Information The Client acknowledges and agrees that: (a)Viterra Operations may publish information about the Client, including the identity of the Client, details of any application for Capacity, and any Capacity allocated to the Client and the amount paid for such Capacity; and.

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(b) the Auction Provider will, to the extent and only to the extent required to facilitate Viterra Operations’ compliance with the Access Undertaking and these Protocols, disclose information about the Client and its participation in the Auction to Viterra Operations and that Viterra Operations may publish this information.

Attachment 1: Table A: - Operational requirements

Timeline Vessel Contract /Load Details

Shipping Period

Export Licence (if applicable)

Stock Entitlement

1 Greater than 60 days prior to Slot commencing

TBN For each Shipping Parcel, Clients must advise:

• load Port; and

• tonnage.

14-16 day Slot Information not required at this point

Information not required at this point

21 No later than 60 days prior to the opening of the Slot

TBN

In addition to the obligations in section 1 of this Table, Clients must advise:

• load Port;

• tonnage;

• commodity (by Shipping Parcel);

• grade (by Shipping Parcel);

• tonnage (by Shipping Parcel (min/max));

• destination (if known);

As per section 1 of this table


As per section 1 of this tableInformation not required at this point.

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Shipping Period


Stock Entitlement

• contact insecticide treatment allowance;

• fumigation requirements; and

• phytosanitary requirements.

32 No later than 30 days prior to the first day of the Slot commencing

TBN As per section 2 of this tableAs per section 1 of this table

14-16 day Slot for existing Bookings with 30 day windows



43 No later than 18 days prior to the opening of the first day of the booked Slot

TBN In addition to the obligations in section 2 1 of this Table, Clients must advise:

• required quality specifications (by Shipping Parcel); and

• blend details by grade, Season, tonnage and Shipping Parcel.

As per section 2 of this Table

Viterra Operations may request the Client to provide evidence of any required export licence

Clients must provide: �details of stock entitlement(i.e. demonstrate ability to meet vessel load requirements); and

• a Site Assembly Plan.

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Shipping Period


Stock Entitlement

54 On naming On Naming of vessel (Refer to clause 9(b10.1(b))

Clients must advise details of the nNamed vessel and the vessel’s last three cargoes

Client must provide the vessel ETA

In addition to the requirements in section 4 3 of this Table, Clients must advise destination (if not already provided)and request any, or all, of the following as required:

• blending operations on loading;

• pre shipment and shipping samples; and

• fumigation certificate.

ETA As per section 4 of this table



A Transport Plan (Third Party Sites and Export Standard cargoes only) must be provided 14 days prior to vessel ETA. in accordance with clause 12.1(a).

Notes to Table A:

(1) In the event that the Client requests a Booking Slot later than that required in accordance with Table A, the Client must satisfy all of its cumulative obligations owing and required under Table A for Viterra Operations to accept the Booking.

(2) Changes, alterations and modifications to Table A information (other than the matters set out in clause 1 4 of these Protocols) provided by a Client in support of the Booking can be requested in writing by the Client. Viterra Operations will respond to the request change within 5 Business Days of receipt. The Booking will be deemed to be varied as of the date of Viterra Operation’s ’ written acceptance of the change and, subject to the other provisions of these Protocols, will not be deemed a new Booking. Please note:

• Viterra Operations is not obliged to accept any requested variation and acceptance will depend on whether the requested change would be likely to compromise Viterra Operation’s ’ operational efficiencies taking into account operational constraints (such as grain under fumigation), or unreasonably impact on other Clients. Charges may be applicable to cover the additional cost (if any) of accommodating requests.

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• If a Client does not comply with Table A requirements (as may be varied from time to time by Viterra Operation’s ’ acceptance of information changes), this will be addressed in accordance with clause 9(a10.1(a) of the Protocols. The booking fee is not refundable in these circumstances.

If the Client’s requested change is not accepted by Viterra Operations, the Client must indicate within 5 Business Days of receipt of notice of non-acceptance of the change to either leave the Booking unchanged, cancel the Booking or request a new Booking (if possible under these Protocols). If the Client fails to make this election the Booking will be deemed to be unchanged. The booking fee is not refundable in these circumstances.

(3) Viterra Operations has no obligation to commence accumulation for a Booking until advised by the Client on the Booking Form of a nNamed vessel and a single ETA and the Client is compliant with Table A requirements.

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Attachment 12: Transfer Noticeunder clause 9 of the Port Loading Protocols

Name of Transferor: ……………………………………………………………………

Name of Transferee: ……………………………………………………………………

Date of notice: …………………………………………………………………………..

Original Booking date and SCNO/Auction reference number:

Date of Booking: ……………………………………………………………….

SCNO number/Auction reference number (if applicable) :

…………………………………………………….

Original Booking details:

Port Terminal: …………………………………………………………………..

Commodity type: ……………………………………………………………….

Total Tonnage:………………………………………………………………….

Tolerance (Min/Max):…………………………………………………………..

Treatment details:……………………………………………………………….

Load Grades:…………………………………………………………………….

Shipment period:…………………………………………………………………

(the “Booking Details”)

The Transferor wishes to transfer, and the Transferee wishes to accept the transfer of, the above Booking or part Booking (“Booking”) in accordance with clause 0 5 of the Port Loading Protocols.

The Transferor and Transferee acknowledge and agree that:

1. the Transferee is responsible to Viterra Operations Ltd (“Viterra Operations”) for all fees payable in respect of the Booking.

2. The Transferee’s relevant Services Agreement and the Port Loading Protocols will apply to the execution of the Booking by the Transferee.

3. Viterra Operations is not responsible for, and has no liability in connection with, the arrangements between the Transferor and Transferee in respect of the transfer of the Booking.

4. This notice cannot be revoked once signed by the Transferor and Transferee and provided to Viterra Operations.

5. Words used in this notice have the same meaning as in the Port Loading Protocols.

6. Within 7 days of both parties signing this form, the Transferee must submit a replacement Booking Form to Viterra Operations.


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Note: The replacement Booking form must include the same Booking Details as the original Booking (set out above) or, otherwise, include variations to the original Booking Details which have been agreed to, in writing, by Viterra Operations. For example, if the Load Grades of the replacement Booking differs from the Load Grades of the original Booking, the Transferee must inform Viterra Operations of this variation, and receive agreement from Viterra Operations to the proposed variation in writing.

The replacement Booking Form must be compliant with all requirements in Table A of the Port Loading Protocols.

SIGNED BY ………………………………………… ……………………………………... (Signature) (Signature) …………………………………………… ……….……………………………... (Name) (Name) On behalf of the Transferor On behalf of the Transferee

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Attachment 3: Auditor

1. Audit on outcome of capacity allocation

(a) (Proposed Auditor) If the ACCC issues a notice under clause 13.3(a) of the Protocols, Viterra will, within 5 Business Days, advise the ACCC in writing of the identity of the person that it proposes to appoint as the Auditor, together with such information or documents (including the proposed terms of engagement) that the ACCC requires to assess the skill and independence of the Proposed Auditor.

(b) (Independence of Auditor) The Proposed Auditor must be a person who has the relevant skill to perform the role of Auditor and is independent of Viterra. Without limitation, an Auditor is not independent if they:

(i) are a current employee or officer of Viterra;

(ii) have been an employee or officer of Viterra in the past 36 months;

(ii) in the opinion of the ACCC, hold an interest in Viterra;

(iii) have been a professional adviser to Viterra within the past 36 months;

(iv) have a contractual relationship, or are an employee or contractor of a firm or company that has a contractual relationship, with Viterra;

(v) are a supplier, or are an employee or contractor of a firm or company that is a supplier, of Viterra; or

(vi) are a customer, or are an employee or contractor of a firm or company that is a customer, of Viterra.

(b) (Appointment of Auditor) If, within 5 Business Days of receipt by the ACCC of the information or documents from Viterra referred to in clause 1(a) of this Attachment 3, or such further period as required by the ACCC and notified to Viterra:

(i) the ACCC does not object to the Proposed Auditor, Viterra will appoint the Proposed Auditor as Auditor as soon as practicable thereafter (but in any event within 5 Business Days) on terms approved by the ACCC and consistent with the performance by the Auditor of its functions as set out in these Protocols (including a requirement for the Auditor to consider the matters set out in clause 1(d) below), and forward to the ACCC a copy of the executed terms of appointment of the Auditor; or

(ii) the ACCC does object to a Proposed Auditor, Viterra will as soon as practicable (but in any event within 5 Business Days) appoint a person identified by the ACCC at its absolute discretion as the Auditor on terms approved by the ACCC and consistent with the performance by the Auditor of its functions under these Protocols (including a requirement for the Auditor to consider the matters set out in clause 1(d) below).

(c) (Matters to be considered by Auditor) The terms of appointment for the Auditor must require the Auditor, in preparing its written report, to have regard to the following matters:

(i) the requirements in clause 10 of the Code;

(ii) whether Viterra has complied with the terms of these Protocols;


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(iii) if the matter under consideration by the Auditor relates to the allocation of Long Term Capacity, whether that allocation is reasonable in all the circumstances, having regard to:

(A) the size and significance of Viterra as a Client that exports Grain through the Port Terminals;

(B) whether any allocation of Long Term Capacity may involve a systemic, material or unreasonable outcome in favour of Viterra as a Client (noting that Viterra is entitled to use its own infrastructure and, as a significant Client, there are circumstances in which highly demanded Long Term Capacity will justifiably be allocated to Viterra);

(C) the reasonableness of efforts made by Viterra to accommodate initial demand for Long Term Capacity and to negotiate satisfactory Long Term Capacity outcomes for both Viterra and other Clients; and

(D) Viterra’s reasons for allocating Long Term Capacity in the manner that it did. Viterra will document its reasons for any allocation of Long Term Capacity under clause 3.6(g)of the Protocols at the time of such allocation, and will make those written reasons available to the Auditor.

(d) (Provide report to ACCC) Viterra will, within 30 Business Days of the date on which the Auditor is appointed in accordance with clause 1(c) of this Attachment 3, provide to the ACCC a written report from the Auditor in relation to Viterra’s compliance with its obligations under clause 10 of the Code. This date may be extended by agreement with the ACCC, in particular noting that Viterra must have at least 5 Business Days to review and comment on the draft report prepared by the Auditor.

(e) (Information to Auditor) Viterra will provide to the Auditor any information or documents requested by the Auditor that the Auditor reasonably considers necessary and relevant for fulfilling its obligations in relation to compliance by Viterra with its obligations under clause 10 of the Code or for reporting to or otherwise advising the ACCC.

(f) (Viterra’s obligations) Viterra will:

(i) procure the Auditor to provide information or documents or access to the ACCC, as required by the ACCC to ensure compliance with this Attachment 3;

(ii) direct its personnel, including directors, managers, officers, employees and agents to act in accordance with the obligations set out in this Attachment 3 and ensure such personnel are aware of the Auditor and its role; and

(iii) provide access, information and/or documents required by the Auditor.

(g) (Cost of Auditor) Viterra will maintain and fund the Auditor and will indemnify the Auditor for reasonable expenses and any loss, claim or damage arising from the proper performance by the Auditor of functions required to be performed by the Auditor under these Protocols.

(h) (Limit on audits) The ACCC must not require Viterra to appoint an Auditor to undertake an audit under clause 13.3 of the Protocols more often than once in each 12 month period.


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Attachment 4 – The Land article


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Attachment 5 – Grain terminals shipping summary

[Confidential]

Commercial-in-confidence 12 March 2015

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Attachment 6 – Summary of key protections

Long term capacity

LTC represents only a portion of total available capacity

Transparent process - clear rules, publication of results

Maximises opportunities for participation. No minimum requirements – flexibility to suit a range of clients

Maximum initial nominations per client – 50% of LTC per port per quarter (40% at deep-water ports in peak period). Equates to ~36% (~29%) OHB and LIN relevant period) of total available capacity

Incentive for accurate initial nominations – binding ToP offers. Clients not bound to accept nominations outside their min/max nominations

Clear parameters for negotiation process – focus is to find acceptable alternatives for clients

Clients can walk away from suggested compromise positions to accommodate over-subscribed slots

Long term certainty provides a greater ability for clients to match shipping slots acquired to marketing program (i.e. gives clients greater flexibility in the timing and location of slots they acquire)

Short term capacity

500,000 tonnes per quarter reserved as short term capacity – spread across all port terminals. Available every year for the next 5 years

Over the past 4 years, exporters (excl. top 5) have acquired ~271,405 tonnes on average per quarter

For the first 2 business days after the shipping stem opens, individual clients can only make one booking every 15 minutes

With 135 STC slots across 6 port terminals, this provides ample opportunity for different exporters to obtain STC at all ports and in all periods

No movements of LTC for 2 business days after the shipping stem opens – provides clear opportunity for new bookings

Transparent – clear rules and publication of available capacity

Tradeability and slot flexibility

Strong processes to support secondary market to trade slots. Removes current distortions

Flexibility to move slots based on client requirements and available capacity

Rebate structure to encourage early surrender of unwanted slots, facilitating efficient use by others

Opportunity for clients to request additional capacity on a short and long term basis

Code obligations

Clear non-discrimination obligations, supported by an independent auditor mechanism

Proposed Variations to Viterra’s Port Loading Protocols to ... LTAs... · long term agreements -...

Documents

Transcript of Proposed Variations to Viterra’s Port Loading Protocols to ... LTAs... · long term agreements -...