Commercial agreements

• What are commercial activity agreements?
• Restriction on entering into agreements
• Content of agreements
• Applying for an agreement
• Other issues to consider

What are commercial activity agreements?

Commercial activity agreements (CAAs) are an alternative method for authorising a commercial activity or tourist program in a departmental-managed area. Agreements can provide commercial operators with longer tenure of access to an area in return for a financial or in-kind contribution to park management.

Generally, the use of agreements is favoured for commercial activities in areas where commercial operator demand exceeds visitor capacity. Two steps need to be undertaken before negotiating an agreement:

1. A capacity survey of the site needs to be undertaken to determine the sustainable level of visitor capacity.
2. In most cases, a competitive expression of interest process will be undertaken to select the most suitable operator or operators before negotiating an agreement. An expression of interest process should be undertaken where new capacity becomes available or for new sites that are likely to attract considerable commercial operator interest.

Restriction on entering into agreements

The objective of agreements is to provide the flexibility for clients and the department to achieve sound conservation outcomes on protected areas as well as to receive administrative and financial benefits that could not be obtained through a standard permit arrangement. CAAs must be consistent with the relevant legislation and the management intent for the area it concerns.

CAAs will not be entered into for national parks, State forest or recreation areas where they create an interest in land (such as a lease) or to authorise the carrying out of major earthworks or the installation of a permanent structure. The same criteria for permits - applicant suitability, application assessment criteria and insurance requirements - apply to commercial agreements.

For CAAs, major earthworks mean earthworks that cause a major disturbance to the cultural or natural resources of the area, such as construction of a road or drainage channels.

Content of agreements

A CAA must be written and include each of the following details:

• The name of the protected area to which it applies.
• The date the agreement is entered into.
• Its term.
• The name of the person with whom it is entered into and, if the person is a corporation, its ABN or ACN
• The person's place of business.
• The activities authorised under the agreement.
• Any conditions of the agreement.
• The amount payable to the State under the agreement, or a way of working out the amount.

Applying for an agreement

Agreements may be entered into by a number of ways:

• Agreements may be entered into by a number of ways:
• Advertising an expression of interest process.
• An application process.
• Entering into an agreement with the holder of a commercial activity permit for the activity for the area.

If you are considering entering into a commercial activity agreement you will first need to contact the department to discuss your proposed activities to see if an agreement is the most suitable option to gain approval for your commercial activity.

Expression of interest process

This process involves formal invitations being sent to holders of a commercial activity permit for the activity for the area and/or to members of the public whom the department chief executive believes would be reasonably interested in submitting an expression of interest. The invitation for an expression of interest will state:

• the commercial activity and the department-managed area subject to the agreement
• if the activity is a prescribed commercial activity of the area, then that this activity may only be conducted under a commercial activity agreement
• if only open to holders of a commercial activity permit holder, then that only holders may submit an expression of interest for the agreement
• how the expression of interest may be submitted
• the day and time by which the expression of interest must be submitted
• the fee prescribed under a regulation that is payable for submitting an expression of interest
• the matters that will be considered before deciding to enter into an agreement, including any proposed conditions of the agreement that are likely to impact on the conducting of the activity.

Application process

Tour operators who are interested in entering into an agreement but are not already a holder of a commercial activity or marine park permit for the activity for the area may lodge an application to enter into a commercial agreement by both:

• submitting an application in writing and
• including the fee prescribed under the relevant regulation.

Changing from a permit to an agreement

All existing operators in premium visitor sites who comply with the EPA's Applicant Suitability Guidelines will be eligible to transition their authority to a CAA. Operators will receive timely notice of the future intention to convert existing authorities to CAAs. While operators are not required to convert to a CAA, those who do not do so will only be allowed to run their operation under their existing permission until it expires.

For holders of existing commercial activity permits not in premium visitor sites who are considering changing to a commercial activity agreement, it is recommended to begin to discuss your proposal before the expiry of your existing permit.

A draft base agreement will be used to list all activities to be authorised under the agreement with conditions and fees payable. Both the department and tour operator will need to agree and sign off on all aspects of the agreement before it can proceed.

Other issues to consider

Agreement term

The term of the agreement is negotiated between the individual or legal entity and the department but must not exceed a term longer than 10 years from the day the agreement begins. A review of the agreement should occur at the 5-year mark.

Public liability insurance

As with other permits, an agreement must not be granted unless the applicant has adequate insurance cover for the activities to be conducted under the agreement. Before an agreement is issued a delegated officer is to sight a copy of the certificate of currency. The principal holder must maintain appropriate insurance cover over the life of the agreement. For more information refer to the Operational policy: public liability insurance, indemnity, release and discharge requirements.

Agreement name

An agreement may be issued only in the name of a legal entity: an individual person, a company, an incorporated association, a statutory authority or a body politic. A legal entity may trade under one or more trading names. The legal entity and any trading name(s) of the legal entity should be stated on the agreement. For more information refer to the Operational policy: Name/s to be entered on licences, permits and other authorities.

Suitability of party

An applicant will only be considered following an assessment of the applicant's suitability to hold a commercial agreement. In deciding suitability, assessing officers can have regard to any matter relevant to the person's ability to carry out the activities for which the permit is sought in a competent and ethical way. For example, does the applicant have the character, knowledge and ability relevant to the activities that may be carried out under the agreement. A person deemed not suitable to hold a commercial activity permit for conducting the activity will also be deemed not suitable to hold an agreement for the same activity.

Transferring agreements

A holder of a commercial activity agreement (seller) may transfer the authorisation under the agreement to another person (buyer). Both the buyer and seller must apply to have the transfer approved and pay the prescribed application fee before this can be occur.

Capacity based pricing

CAA fees are charged on the full capacity for which the agreement is made regardless of whether it is used. During the 5-year review of the CAA, operators at premium visitor sites that have not used more than 25 percent of allocated capacity will be subject to a reasonable use policy. To retain their original capacity tour operators who have carried this level of latency at premium visitor sites will need to demonstrate a genuine future intention to use their site allocations.

Last updated: 24 October 2008

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