The concession means a long-term leasing agreement made between and by the State and a concessionaire for the purpose of making foreign investments, exploitation of natural resources and doing business related thereto. Special conditions of concession shall be provided in concessional agreements.
§2 Fundamental Principles of Concession
Fundamental principles of concession are as follows:
a) Longevity of concessional rights to use land and natural resources and to conduct specific business activities;
b) Competitive approach to the selection of concessionaires, based on the assessment of tenders, specific regulations of which will be provided by the legislation of the Hutt River Province Principality;
c) Compliance with the legislation of the Hutt River Province Principality.
§3 Subject and Scope of Concessional Agreement
The subject of concessional agreement may be rights to the land, the search for, processing and exploitation of Hutt River natural resources as well as to the conducting, with the participation of foreign investors, for the definite terms, of business, scientific, technological and exploitation activities on the territory of the Hutt River Province Principality. The Hutt River legislation will identify the spots, facilities and the fields and types of business of which will be limited or prohibited.
§4 The Parties of Concession
Foreign investors shall make concessional agreement with the Cabinet of the Hutt River Province Principality or a special organ designated by the Cabinet for this purpose.The concessionaries may be foreign legal and natural persons, foreign states and international organizations.
§5 Legal Protection and Guarantees of foreign Investors Rights
The rights of foreign investors, acting on the basis of concessional agreements, are protected and guaranteed by the " Foreign Investment Act", Appropriate decrees and concessional agreement. The products and profits of concessionaire gained through performance of concessional agreement, which will be left after paying all taxes, shall be the property of concessionaire. All articles, facilities and other valuables which have not been subject to concession and are produced or procured by the concessionaire with the consent of owner shall be the property of concessionaire. The concession shall not be construed as the transfer of ownership of natural resources and manufacturing facilities to the concessionaire.
§6 Settlement of disputes
In case of a dispute during the conclusion of a concession contract, it will be settled by a court agreed upon in the contract itself.
The concessional agreement shall include:
a) the parties of Agreement;
b) terms of effect and concessional dues;
c) Subject of concessional agreement, property to be transferred to the concessionary and the terms of transfer;
d) Limits, within which the conclusion of concessional agreement is allowed, including environment requirements;
e) terms of alienation;
f) Rule of giving back of land spots;
g) Concessionary`s obligation to comply with the law of the Hutt River Province Principality;
h) guarantee of concessionary`s solvency.
The concessional agreement may also include:
a) Concessionary`s obligations to make additional constructions; provide for and maintain equipment; provide for the quality of manufactured goods, labour and environment protection; procure raw materials; and provide for the reproduction of resources which are subject to concession;
b) Terms of putting into operation of enterprises;
c) General organizing plan of natural resources treatment;
d) issues related to the development of infrastructure, training of personnel, introduction of advanced technologies;
e) Minimal amount of capital;
f) Amount of parties shares of the profits gained from the performance of project;
g) Mode of reimbursement of underpreciated part of concessional conditional.
§8 Register
The Cabinet of the Hutt River Province Principality shall establish a special Register of concessional agreements.
The party which has authorized concession shall have obligations to:
- protect foreign investments; comply with the law of the Hutt River Province Principality; not to admit a unilateral change of concession’s conditions; within its terms of reference establish favorable conditions for the implementation of concession;
- take responsibility in sense of property in the event of damages that may occur as result of abuse of power by public organs ;
- not interfere in concessionary`s business, except causes provided by agreement.
§10 Obligations of Concessionaire
The concessionaire shall have obligations to :
- comply with the law of the Hutt River Province Principality;
- comply with concessional agreement; reimburse damages in the event of overmuch exploitation losses of raw materials; overmuch clogging of environment, etc.
§11 Concessionals Dues
The concessional agreement shall specify all dues that shall be paid by the concessionary. These dues may include: payment for concession, rent, royalties, bonuses and other payments as parties agree. The payment for concession may be performed in money, in kind ( part of concessional enterprise manufactured products), in both or in shares. The concessionaire shall pay taxes and duties according to the actual legislation or as agreed in the concessional agreement.
§12 Duration of Concession
The duration of concession shall be determined according to its nature and conditions.
§13 Prolongation and Termination of Concession
The concessional agreement may provide the conditions of prolongation of agreement In the event of prolongation the conditions of agreement may be changed at the parties will. The change, prolongation of agreement should be performed in accordance with "Foreign Investments Act" of the Hutt River Province Principality as well as other legislative acts. In the event of prolongation of concessional term an additional examination, specially the ecological one, shall be carried out by taking into consideration changes which may occur. The conditions of concessonal agreement may be changed only by the consent of both parties. The termination of concessional agreement is possible either by both parties in event of breach of concessional agreement.