l- '~t~olcurn (Explorativtt [No. 13 of 1985 ((.rid Productionl

'X'l-IE PETROLEUM (EXPLOR.ATI0.N AND PIIODUCTION) ACT, 1985

PXELIMIXARY

Pecfiorc

I . Bhorst t,it,lr,

2. 1 t~t( ,~p~cl-at ion

3. 'I'it l(, t o petroleum

PAl<?' I1

Psrno~sunl COMMITTEE

4. Estal,lix~lment of Committee and f~mclions

F,. Cornpositioli of Commit1 cc.

t i 'I'onn~.c of orrice

7. \ acnncies

. l'roce~dings of' Comlnittcc

ir. Pccrctarp

I ~ I , I)isc.losn~e of intcrcst

J I . ~ ~ I J ~ I I ~ I T I I ~ ~ of' nic~u~bers

I'.llil' I11

ADRIISIST~ZA IION

2 . Atln~inistratio~l of Act

l:$. 1)clegalion of Slinjstcr's powers

14 Pct~rlcurtr rcgib,l er.

16. lnfot ~ ~ i a l i o n of c:onf,rart s to bc submitted to Provincial Courlchi1.c

9 ~ 1 h g l n c : ~ ~ p i i n v CL/ ttirfa .-!cl ?ihct?j be ribt<&i%.ed from the Covernflrrnl P P . ~ % ~ o P , l ' . ( ) . Lf(b.c :lu L 36. /,,~rnekri. P ~ i c s 81.00)~.

No. 13 of 19851 Pdrolcum (E'xpbration and Production)

PART IV

Sectiw'

17. Right to oonduot petroleum operations

18. Authority t,o contract

119. Statie participation

20. Qualificstlons to cont rsc~

21. Prohibitions

22. Bids

23. Blocks

Conditions of contract

Contents of contract

Obligations of ~ont~ractor

Term of' contract

J(.elinquisliment

Tntnsfers ant1 a~signmenb

'Permination

Duty do indemnify

Conservation anrl worlc prltcticw

AREAS ov C P P E K ~ T ~ I O N AND SURP"I(:P: I)vlai~~s

33. Areas closed to petroleurn operations

34 Zl*estrict,ed areas

l1 1011. 35. Gurtbco right,s and conlpetls* 1'

BB. 0 t h ~ ~ n1incr:kls

Petroleum {Ezploration WO. 13 of 1985 and Production)

PART VXI:

GOVERXMENT REVENUES

Section

37. Irlcorno Tax

38. Employee taxation

39. Royalty or production pylnt:~it

40. Surfam rental8

41. Other fees, charges and levies

12. Exemptions

I .; -1 ti.

57.

(4%.

-19.

.*>(!.

', !

Immunity of public olTic.c*~+

I'fbllibitioti of public.;~t io11 or I li*clnsnre of information to nnt~uthorised 1)1~1~h01is

I)iaj)ut cis I)ct\vcco i . o l r t 1.a c.1 or ; I r r ~ l others

Pefrdezcvr~. (Bxplwrdi61*1 [No. 13 of 1985 and Production\

GOVERNMENT Olr' ZAMBIA

ACT No. 13 of 1985

Datc of Assent: 2nd April, 1985

Ar Act to regulate petroleum exploration, development and production in Zambia; to provide for title to and control of petroleum in Zambia; to provide for the establishment of a Petroleum Committee; to define the functions and powers of the Committee; to regulate contracts relating to petroleum operations; and to pro- vide for matters connected with or incidental to the foregoing.

[12th April, 1986

ENACTED by the Parliament of Zambia. Enactment

PART I

1. This Act may be cited as the Petroleum (Exploration E;~ and Production) Act, 1985.

2. In this Act, unless the context otherwise requires- ~ ~ ~ t s -

" Chairman " means the person designated Chairman of the Committee by section.five ;

" Commercial discovery " means a, discovery of petroleum which can be exploited commrcialy in accordance with accepted practices in the international petroleum industry ;

" Committee " means the Petroleum Committee esta- blished by section four ;

"Contract " means any agreement between the State and a contractor entered into ptirsua,nt. to this Act for the conduct of petroleum operations in the Republic;

" Contrautor " meana m y person with whom the State entem into a contract; and includes his agenb, re- presentatives and assignem ;

"Contract Arw " wucans a geographical area which is covered by u, contract; and includes tho whole of, or such part or parts of, the original area a ~ a r d e d to a contractor as shall remain a t thc disposal of such contractor from Lirne to time pursuant to the terms of the contract ;

" Crude oil " rliearis petroleum which is in liquid state a t the well head or gas/oil separator or which is extracted from natural gas, including any distillate or condensate:

" Development and production period " shall be construed in accordance with section twenty-seven;

" Exploration period " shall construed ilr acmrdanea, with section t w e n t y - s e w n ;

" Member " nieans a member of the Committee; " Minerals " shall have the meaning assigned thereto in

&p. 329 the Mines and .Minerals Act; but shall 11th include petroleum ;

" M u r a l gas " ineana all petroleum which at atmospheric conditions of temperature and pressure is in a gaseous state; and includes wet mineral gas, dry mineral gas, wet gas and residue gas remaining after the extraction, processing or separation of liquid petroleum from wet gas, as well as non-petroleum gas or gases produced in association with liquid or gaseous petroleum;

" Petroleum " means all natural orgarlic substances compo- sed of carbon and hydrogen; and includes crude oil and natural gas, and all other mineral substances, products, by-products and derivatives that are found in conjunction wihh petroleum ;

" Petroleum operations " means the operations related to the exploration, development, extraction, production, field separation, transportation, storage, sale or disposal of petroleum; but does not include any transportation or other operations-

(i) beyond the point of export; or

(ii) in the case of petroleum which is proctssccl within Zarnbia, beyond the point of entry into a refinery or liquefaction or nn trrrnl ga': tnwttnent plant ;

" Register " means thc: putroleurn registcr mttintained pursuant h sectioi~ fourteen of this Act,;

" Vice-Chairman " rrleruiis the person designatecl Virc- Chairmm of the (Tommittec by sc.ct,ion$ue.

TiOb to 3. (1) The entire property in tincl control over all petruleurrr potrolerun and uccolnpanying subtgt t~nc:cs, in wllst c.r cls jthyuic.id h t : ~ : c , ,

locatc?d on or under the tcarritory of tlru fit~puk~lic~ i:3 v(>~jL('ll

esclu,.iivt~ly in the Presi[le~~i on brlralf of tlrc: St;ttth

(2) Notwithstanding the provisions of subsection (I), a contract xnay provide for a person tc acquire property in, title to or control over any petrolourn within the Republic.

(3) Thc provisions of subsectiom (1) and (2) shall hare effect notwvilhst~~rlcling any rights which any other person may possess in or over the soil on or under which petroleum is discovrred .

PART TJ

4. !Chere is hereby established the Petroleum Committee which shall be responsible for the formulation of policies relating to pet,roleum and its development in Zambia and shall perform such other functions as are provided for under this Act

5. The Committee shall consist of the following members : (a) Minister responsible for mines, whn shall be

Cllairman ; (b) four Ministers appointed by the President, one of

wlioin shall be designated Vice-Chairman; ( c ) the Governor of the Bank of Zambia or in his absence

tlie Deputy Govcrnor ; (d) riot ]nore than thrce other persons who shall be

apl~ointed by the Prcsident on such terms and con- dit,ions as he may think fit.

6. ( 1 ) A member appointed under paragraph (d) of section jive shall hold ofice for n period of threc years froin the date of his alipoinf tiicnt :tncl may be re-aypointc:d upon the espirstion 9f F.ll(:h 161'n;l

( 2 ) -1 rriei~lbcr refcrred to in subsection (1) may resign upon gir.ing one month's noticc ~ J I ~wrritii~g to the President and may Lc rt.ino\-cd hy the Prcsirtellt a t any time.

7. (1) A mcmbcr. shall V L ~ C ; L ~ O his oilice if he is absent from twvo colrsec~~tive ~ncatings of the Committee wii;hout reasonable C&I1SU.

(2) TZ7hc.tlevc:r the office o f a member becomes vacant before the cxltiry oi'the term specificcl in section six, the Prcsident may appoirlt ;I rrotllc.1 pc ibo~~ to 1~e ;c iner~ibor :

Establish - ment of Comniittee and funations

Composition of Committoe

Tenure ol' office

I'rovi<ktl tl1:rt srrc~l~ otller person sllall hold offioc ordy for thc r~nc~spiretl t ~ r n \ of t l~c pcrson who ~ i ~ ~ < l l c \ sr~cal~ oflice.

Yloct.edings 8. ( I ) Subject to tlze other pruvisions of this Act, the uf Committee may regula,i,e its o-cvn procedure.

(2) The Cornmittet: sllull meet, as often as is ncccssary to carry out its functions, a t such places and a t such times as the Chhirrnan may decide.

(3) Upon giving notice of not less tlzsn five days, s meeting of the Committee may be called by the Cllairman ancl sllc~ll be calledifllot less than five me~zlbers so request in writing :

Provided that if the 11rgenc-y of :bay p a r t i c * r l ~ r r,iut,rt,r r'ioen not permit the giving of suclz notice, a special meeting rnuy be called upon giving shorter notice,

(4) Five members slzsll form 8 quorurn at suy meeting o f t,lle Committee.

(5) There shall preside a t any meeting of the Comtniltee-

(a) the Chairman ; or

(b ) in the absence of the Chainla~~, the Vice-Chairmim; or

(c) in the absence of tlle Chairin311 aiirl the Vice-Chairrlian, such member as the menlbcrs present may elect for the

purposes of that meeting.

(6) A decision of the Committee on any qnestion silall be by a majority of the members present and voting a t the meeting and, in the event of ara equality- of votes, t l ~ c person presiding c;t the meeting shall have a casting vote in addition tto his deliberative vote.

(7) The Committee may invite any person, whose proscnce is in its opinion desirable, to attend and to participate in the deliberations of a meeting of the Committee but such person shall have no vote.

(8) The validity of any proceedings, act or decision ot' the Committee shall not be affected by any vacancy in the msmber- ship of the Committee or by any defect in the appointment of any member or by reason that any person not entitled so to do took part in the proceedings.

(9) The Committee shall cause minutes to be kept ok the proceedings of every meeting of the Committee.

8ecrcstary 9. ( L ) The Permanent Secretary in the Ministry responsible for mines shall be the fgecretary to tho Committee.

(2) The Secretary shall be rs:,ponaible for thc day to day afftjirs of the Cornmittc?c i~ndar the geueral suporvisioxl of the C!ht~irrnan.

10. (1) If ,z rnembcr is presc~lt nt a mecting of the Committee l $ ~ ~ ~ a t which any matter is thc subject of consideration and in which ~riatter the n~ernber or his spouse is directly or inclirectly interested in a privstc capacity, he shall, as soon as practicable after the comrnencemerlt of the meeting, disclose such interest and shall not, unless the Co~nmittee otherwise directs, take part in arly consideration or disaassion of, or vote on, any question touching such matter.

(2) A disclosure of interest made under this section shall be recorded in the minutes of the meeting a t which it is made.

11. NO action or other proceedii~gs shall lr a or be il~stitutscl Irnmunlty

against any member for or in respect of any act or thing done or ornitted to be done in good faith in the exercise orpurported exercise of his functions under this Act.

12. Subject to the provisions of section ,four thu Minister Adminis-

shall be responsible for the administration of this Act. tration of Act

13. The AJinister may delegate to any public officer any iPfelegation

of his I'unctions under this Act: Minister's powers

Provided that the Minister shall not delegate his power to enter into and terminate or revoke any contract.

14. (1) The Minister shall cause to be maintained a register which shall contain the following information:

(a) in respect of each contract entered into, the names of all persons with whom the contract is made, the namcs of any assignee of any rights under such contract and a brief description of the duration 9f the oxploration period, and of the contract area for such contract;

( 6 ) copies of all instruments of approval of contracts entered into pursuant to subsection (1 ) of section eighteen of this Act;

( c ) the contractor's office address in the Republic and thc nrtrne ot its resident; representative along with a copy of the pourers of attorney establishing such representative's authority to act on behalf of the contractor;

( d ) ~nstrurncnts evidencing the terminslion, revocatioq or oxpiration of contracts;

I nupsotion of register

Information of contraots to bo submitted to Provincial Councils

ltiglit to conduct potroleurn operations

(e) a rnap ofthe Republic iil~wtrating those areas c~lrrently under contract and theso which remain available for award in accordance with this Act;

J ) instruments evidencing- (i) the nature ancl extent of any areas relinquished

or surrendered by a contractor; (ii) the establishmerit of a conirneroial discovery

of petroleurn, the date of declaration thereof, the delimitation of the areas involved and the duration of the development and productioit period ; and

(iii) the grant of' extenaons to the exploratiol ?eriod pursuant to the term3 of %he contract,, and

(g) such other information as the Minister may determine.

(2) Registration shall not,cure any defect in any doc~nnent registered or confer upon i t any effect or validity which it would not otherwise have had.

15. The Minister shall, on application a ~ d upon payrnent of the prescribed fee, allow inspection of the register a t all reasonable times and shall, upon request, give copies or extracts from any entry in such register.

16. The Minister shall forward, in such form und nlanner as he may determine, details of every contract snrl of any instrument transferring, approving or terminating any contract or any interest therein, as may he entered in the register, to the Provincial Council in whose area the contract area in question is situated.

17. (1) The State reserves the right to wrry out petrolentn operations either on its o m or by nicaas of contracts aitll any qualified person.

(2) No petroleum operdions shall be conducted in the Ecpublic by any person other t l ~ a n the State unless such perrjon llas entered into a contraot in accordance with this Act.

18. S~ibject to the other provisions of this Act, the Min~stc;~ llli>y issue invitatiorrs for bids :md, fc~c,lloning the approval of'tho Corr~rnittee as to his selection of Xjitltlrrs for negotiations, may c.onduot negotitttiona arnd en Lsr iuto ccrx~tractr,:

b'r.ovid(?d tll at-

(i) srjcl~ oo~ltracts shall not bct:orne effective until the IT ritten sl~proval thoreto ofthe Co~ninittee is obtained; .11lil

(ii) l$e terms a rd conditiuns embodied in such contracts bhall not lje contrary to orq inconsistent with the ~u~ovisions 01' this Act.

19. Tllc 3linistcr may, with the approval of the Committee, ~~rovicle for tlie Stntc's j)articipatiorl, djrcctly or indirectly, in w n e or &!l stages of the petroleum operation? and suclz parti- clpation n,:~y include Lhc right to 1x11 tic.ip:%to ir? the rights :rnd obligations set out in a contract.

20. (1) A contract shall only be entered into with persons who demonstrate a proven ability t o contribute the necessary Eunds, assets, machinery, equipmcl;nt, tools ancl technical expertise necessary for the effective pcribrmance of the terms ;~ncl condit~ions of the proposed contract.

(2) For the purpose of establishing the ability of a particular pcrson as described in slxbscction (1). the Rlinistcr nlay require the snb~uir,sion of clocunlentation dcinonstrating the expertise ancl technical and economic capability of such person.

21. (1) Except as a nominee of the State, no oiember, elt~ployca or representative of the State or public service shall, clirectly or i~~tlircctly, acquire or hold any right or interest ilncler. any contract and any instr~ment purporting to confer suc1.l riglit or intorcst on any such pcrson sliall be nuU and void.

Prohibitions

(2) Xo pcrson shall acquire by transfer, assignnient or any other rrlenns ally rig114 or interest under any contract which he is ot11eru.i~~ bnrretl from obtaining in his own behalf under the provisions of this Act.

22. (1) Excel~t as other~yise provitied in subsection (3), the Rids selection of' contractors shall he carried out through public competitivt: bidding or such other competitive procedures as may be clcterniined by the Uinister.

(2) The Minister shall publish in the Gazette a description of the areas for which bids are to be trolicited along with the procedures and rules relating to the submission of such bids.

(3) Not~vitlistanding thc preceding subsections, the Minister may, with the approv:tt of the Cornmittcs, select contractor8 other .thalr through compatitive billcling procedures in the followin:: cascs-

({I) wl~erc lib(: lechrricnl or ecornornic circumstances make it sitlois:xl~le; or

(b) itc cl re he de1;crtninerj that, l,l~c oircurnstsnces so require.

Blocks 23. For the purposes of this Act, the territory of the Republic, or parts thereof, shall be divided irlto blocks, ac- corcling to a grid system, in accordance &h regulations to be prescribed by the Minister.

PART V

Conditions 24. (1) Subject to the other provisions of this Act and to any of contrart other condition as may be specified in a contract, a contra,ctor

shall be entit,led for the duration of such contract to tht: ex- clusive right to carry out petroleum operations in a contract area, and to freely lift, dispose of and export the petroleum to which he is entitled under such contract.

(2) Except as may otherwise be provided in a contract, the contractor shall take upon himself all the risks inherent in petroleum operations and shall commit himself to supply exclusively for his account, the technology, capital, equipment, machinery and &ll other investments required for petroleum operations in the contract area:

Provided that--

(i) in the fulfilment of this obligation the contractor shall not have recourse to bank credit from institutions, companies or enterprises operating in the Republic; and

(ii) in the case of termination of a contract due to non- discovery of petroleum, the State shall not be obliged to make any reimbursement to the contractor with respect to the investments made.

Contents 25. Each contract; shall include the following : of contract (a) the procedures for management and control by the

State of petroleurn operations; (b) the duration of the contract; (c) the investment 3nd other obligations of the contracttor; (d) the requirement that a letter of guarantee be sub-

mitted by the conkactor to secure the fulfilment of the exploration obligations undertaken;

(e) provisions regarding the sharing of revenues between the State and tho contractor, and terrns as to the recovery of expenditures made by the contractor, as applicable to the particular contract;

(f) a description of the contract area on the effective date of the contract; and

(g) the procedure for determining the existence of a com- mercial discovery :rnrl for delimiting the a,sea involvlst?,

26. I n additioli to the provisions of scotion twenty-$ve, every Obligations

contract ahdl require the contractor to undertake t,he following z:nbm,,br obligations :

(a) to employ and train Zambian nationals to the fullest extent possible with a view to the replacement of foreign personnel as soon as may be practicable; such training and employment to be carried out in accordarlce with a progrzlixnle approved by the lMinister ;

( 1 ) ) to maintain, and furnish to the Minister, periodic reports, records, returns, ramples and data concerning petroleum operations;

(c) to keep current financial and cost accounting records of petroleum operations, with pertinent records and vouchers; during the term of the oontract, in .accordance with normal accounting practices in the international petroleum induutry ;

(d) to permit the State or its authorised representatives reasonable inspection and audit rights over all petro- leum operations and over all records, reports and returns maintained or submitted to thc Minister;

(8) to purchase Zambian goods and services, if, in terms of price, quality and availability, such goods and services are within such margins of competitiveness wit,h imported goods and services as may be agreed in the contract ;

v) to expend a minimum amount and carry out certain minimum work in the contract area during the exploration period ;

(g) to present annually to the Minister, complete workpro- grammes arid budgets for petroleum operations to be conducted for each year ;

( h ) to report irnnledialjely to the Minister any discovery of petroleum, and supply a sample thereof to the Ministry within a reasonable time after the date of such discovery ;

(i) in t.he case of a commercial discovery of petrolei~m, to delimit the area involved., develop the diecovery and commence production with due diligence;

(j) to appoint, in cases where tlic contractor is a person who is not resident in the Bepublic or whose head office is elsewhere tham in the ICepuhlic, a represonfa- tjve, and in his absence a replacernent therefbr, with full powers to represouc t,lrc contractar in all matters relating to petroleum operations, including the obligations iwnposecl by this Act; and

Term of contsuctt

Relinquish- ment

(k) to supply to t,he Statc out of any petl.oler~l~\ to \I. 11icll he lh ont,itlcd pursuant to the contract hucl1 quantity of pctroleunl as may be required to mcwt tile roquire- ments of the Republic for irlterrlal consumptior~.

Provided that the quantity uf pctrolcl~m t,o he so supplied by any contractor sllall bc clct~~llr urcd on u basis that does not discriminate against ally intlividuttl contractor and that the price tlieref'ore shall bc fau and reasonable,

27. (1) The term of a, contract shall bc divided into an exploration period and a, development :\net j~s:~tlu~.trort .r~i-~-:i ,t l .

(2) The exploration period shaIl not exceed ten years in duration :

Provided that under exceptional circunistances such duration may be extended for such period and upoil such terms and conditions as nlay be specified in a contract, or as may be approved by the Comm~ttee.

(3) Where no com~nerciul discovery is made during an exploration period the contract shall terminate.

(4) Where a com~nercial discovery is nzade the devrloprnent and production period, relating to such discovery, which sliall not exceed twenty-five years in duration, shiill tji~creupon commence.

28. Every contract shall provide fbr the, ~~c.lirrc~uisIl~r~cnt. of part or parts of the contrnct urea a t such tirnc or t in~es as shall bc prescribed therein :

Provided that the obligation to rclinqcdbh pt~l t 01. ~ ' L L ~ S of the contract area shall not apply to any part of' tJie uoritract area encompassing the area of a commercial discovery.

29. Except with the plior approval of' the illi~lister, no cnntractor shall assign, cncunibcr or transfbr. any colltract, or any rights or. obl~gations arising out of ,z contract; and any suoh transfer, assignment or encumberancc? shall bc* llull arid void.

30. XI cry contract shall stipulate the tcrrns ancl c o ~ ~ c l i t i ~ ~ ~ upon mliich the contract nlcly be tertliinated by the rS1:ttc or t l ~ c contractor a ~ i d the effccts of such tcrnii~lniion:

provided that the termination of any contract, f i ) v wltaI,ever renaon, shall not afl'cct ixl any way any liability inctlrreti by a c.ontr.aator before such termination.

$1. I<nch contractor shall a t all ti111es k l d e ~ l l ~ ~ i f ~ thr: State srld it5 representatives :~nd ; ~ g c n l s agi*irlst all and any ciailns n!;zdo by third pi~rtics in respect of ally injury, dan?aKr or loss cyruPct! bp ;>xi wet or vmihrjon of tlllc contractor; his clontr.,bibtors, his subcontr:~caiotn or hi:, agents, employees or. n,~)~*~i~ry it,:^ fives ill tktc aousee o f t he contl~~ct OS petrolrum opcmtiorlr~.

32. (1) h the conduct of petrolepm operations, eaoh contractor, in accordance with generally accepted practices in theinternational petroleum industry, shall-

(a) carry out petroleum operations using the most re- liable. modern and efficient t echn iqu~~;

(b) t&e steps to obtain the maximum e%cient level of production, determined in accordance with the terms and conditions of the qontract, compatible with the nature and extent of the petroleum reservoirs discovered ;

(c) control the flow and prevent the waste or esoap of petroleum, water. cl$&g fluids, or <any mixture thereof;

(d) generally adopt the necessary measures tor the pro- tection of flora, fauna ancl other natural resources ;

(e) avoid the pollution or contarnination of water, atmos- phere or land ;

(f) maintain in good condition and repair all structures, equipment and other property used in petroleum operations ;

(g) e q out petroleum operations in a proper, safe and worknlanlike manner;

(h) take all steps necessary to secure the safety, health and welfare of persona engaged in petroleunl operat- ions ;

(i) upon the tenninahion of the contract, carry out all clean-up op6rations and render the contract area safe ; arid

(j) at any time completely remove any structure or facilitv which has ceased to be used.

(2) The procedures t6r the applimtion and enforcement of such conservation and work praotices shall be prescribed in the regulations and may be developed in the contract.

PART VI

33. The Minister may, with the approval .of the Cammittee, declare certain areas of the Rq~ublic to be closed to some or alI petroleum operations :

Frovided that- (i) such closure shall be with~~ut prejudice to existing

rights to conduct patrolcuxrl operations in the areau conmrned ; aud

(ii) the Minister mug, wilh the approval of the Cornmitt,ee, permit pcxt;role~~rn o)perxj,tior~a to be carried out therdu, subject, to stach fenns and condition8 M he may determine.

Corwrvetiop and work practioee

Areas c1osc.d t<o petrolgum operations

Restricled 34. (1) S o person shall, rvilllout the writtell consent of the a m President, carry out petroleunl operations -

(a) upon any land tleclicated as a place of burial ; ( 6 ) upon ally land contai~liilg any ancient mo~lunle~lt or

cap. 266 national ~ilonu~nent. as definecl in the Sa,tural and I.Iistorica1 JIonun-tcnts and Relics Act ;

(c) upon nu!- larltl nd1ic.11 is the site of or is within one hundred trictrcs of imp bniltling or datn owtlecl by tlw Republic ;

(cl) ultoil ally 1,uitI forming pp:uSt of' a (;overrrincrrt. sero- &p. ~ f d j , dsornc :LS C L ~ E I ~ C ( ~ in the Air Savii~cbtio~r Rcpril'~trolls; p. 13

(e) upon any land occuy)ied as t~ \-illage : or ( j ' ) upon an?- land for.ming 1~t1-t of a defo~ico establishment.

(2) No persol) blia11, witllolit the writtterl col~setlt of tile owner or leqnl occupier thereof or his duly authorised agent, carry out ally petroleum operations -

(a) upon any land wliicli is the site of' or mllicll is within two l~undred itletres of any inhabited. occupied or te~npora,rily nr~occl~pietl ~ O L T S C or bl~ilditlg;

( h ) within fifty ~netres of ally land which has been cleared or plonghecl or otherwise ho)za ,me prepared for the groving of fi1~113 (TOPS or upotl ~vllic11 fwtn c rop we growinc ;

(c) upon any 1mld frol¶l whicll, during the twelve ~izouths immediately preceding, farm crops have been reaped;

Cap. 312

(d) npon any land which is the site of or is .within one hundred metres of ally cattle dip, tank, dam or rtnv private water as defined in the Wratjer Act; or

(e) upon any land forming part of an aerodrome, other than an aerodrome referred to in subsect,ion (L) (a):

Proviclrd that where consent is nnreasonably withheld, tho President may iluthoriso the conduct ofpotroleurnoperatiom i n sl~ch areas srtbject. to s11c1-1 terms and condit.ions nu Ile map determine.

(3) S o person shall. without the written conserlt of the Prosiden t carry out petroleml~ operations upon any Innd-

(a) rwervod for the purposes of ally railway tridc or within Eifhy metre.; of ally rnilxvay track;

(6) ilsed nc; a forest, nursery or plantation or as a timber depot, aamnill or other installaiiorz for work in,^ R

forest ; ( c ) used as a drest, road or highway;

ancl no cuntritotor shall carry out ~)otrolamn opera tiori r upon icrry It~n~l---

( d ) declared to be a h'atica~r;ll 120re.st or a 1,ocal Fore-l,

dehned in the Forests Act witlzout comg1y;lg with Cap. 311

the provisions of sectrions sixteer~ and twenty-four of that Act;

(c) in a National Park, without complying with aection thirty of the National P a r k and Wildlife Act. Cap. 316

(4) Every person carrying out pctroleuin operations shdl, when so requested, produce evidence of the right to carry out such operations to the legal owmr or occupier of the land upr,rr which such operations are being carried out, or to t;be duly authorised agent of such ewntr or occuple~, a i d ill de fa~ l t of such production such person may be treated as a trespasser.

35, (1) Subject to the provisions of this Act or the terms & = f t ~ o rights and and conditions of any contract, and ally other law which Dam-

prohibits, regulates or restricts the entry into any area of the pensation Republic, the contractor may enter into, occupy and carry out activities necessary for the conduct of petroleurn operation8 ul the contract area and whilst engaged therein may:

within the contract area erect temporary or permanent houses, buildings, engines, machinery, plant and other works, and acquire in the prescribed manner such rights of way. easements and other rights of access as may be necessary for the proper execution of petroleum operations ;

(b) take and use water for domestic use and for the pur- poses of petroleum operations in accordance with the provisio~~s of the Water Act; Cap. 312

(c) subject to the provisions of the Roads and Road cap. 766 Traffic Act and the Aviation Act, construct, maintain cap. 740 and operate all such airfields, roads. bridges, com- munication systems and conveniences as may be nerRaqarjr ;

(d) subject t o the provisions of the Water Act, lay water Cap. 312 pipes and make water courses and ponds, darns and reservoirs, lay drains and sewers and construct arid maintain sewage disposal plants;

(c) subject' to the prior approvd of the Minister----

(i) construct, reconstruct, alter and operate pipe- lines, pumping stations and other necessary facilities incidental thereto; and

(ii) operate fhricl rxla,intairi a l any pIace within 111-b(: Republic such other facilities and worlcr, as may be necessary for carrying out pet,mleurn operaticrn~.

(2) The rights conferred by subsection (I) shall be exercised reasonably so as not to aflect adversely the interests of any legal owner or occupier of the land on which such rights are exercised to any greater extent than is necessitated by the reasonable and proper conduct of the operations concerned.

(3) Where the contract area includes an area of land which is owned by or vested i r ~ the State, such land shall, subject to the other provisions of this Act, be a t the disposal of the corltractor to the extent required for petroleurn operations by virtue of the existence of the coiztract.

Cap. 289 (4) (a) Subject to the provisions of the Land (Cont-ersion of Titles) Act, where the contract area includes an area of land over which any person other than the State has a lawful interest or the land is in use by the State, the contractor shall negotiate with such person or the State, as the case may be, for the grant. of a right-of-way, easement or such other right of access as may be necessary for the conduct of petro- leum operations thereon ;

Cap. 2996

(b) Where there is no agreement between such person and the contractor concerning the grant of a right-of- way, ewement or such other right of access, the contractor may apply, through the L?inister, to the President to have the said area compulsorily acquired under the provisions of the Lands Acquisition Act:

Provided that all co~npensations dim for such rights compulsorily acquired by the President on behalf of the contractor shall be borne by the contractor.

(5 ) The acquisition of rights-of-may, easelnents or other rights of access by a contractor over land outside the bounda- ries of the contract area for the purpose of petroleum operations shall be made in accorda~lce with the regulations made here- under and any other applicable law.

(6) Any and all rights acquired or conferred purauant to this section shall automatically expire when the contract to which they relate is terminated.

(7) Without prejudice to the preceding subsections of this section, the contractor shall, on derrrand being made by any person having a lawful interest in land upon or under which pctroicum oyeratiom are being carried out, p3.,v to such person fair and leasonable coinpensation for any disturbance of his s~xrface rights, and for darnage done to the s.t&ace of the land, or to any livestock. crops, trees, buildings or works as a result of pe1aoic:um operations. 'I'he amount of compensation payable shall be tlotorrninod by agreement between the parties or if the ~ R I - ~ ~ C B are unable to reach agreement or the agreed corm- pc~~:~a l io i~ is not paid, sillher party Inay r c : h the rnstk~r to

the E s t e r who shall deal with the same as if the matter had arisen under the provisions of the Minos and Minerak Act. Cap. 329

36, (1) Without prejudice to the provisions of subsection (1) of section twent-four the State shall have the right to grant to persons, other than a contractor, licences pursuant to the Mines and Minerals Act and the Presoribed Minerals and Materials Commission Act for the prospecting and exploration fbr, and mining of, substances other than petroleum d h i n the contract area. In such ever&, the contractor shall afford safe passage for the licensee to that portion of the aontrad area in which such licensee propobes to carry out i tb operations :

Provided that the operations of such licensee shall in no way hinder petroleum operatiom.

(2) If any historical objects, fossils or minerals of economio interest or capable of development are discovered by a oon- tractor during the course of petroleum operations, the con- tractor shall report such discovery and shall supply, in the .case of a discovery of minerals, a sample thereof to the Minister.

PART V11 GOVERNMENT REVENUES

37. A contractor, his contractors and subcontractors shdl be liable for the payment of income tax in accordance with the Income Tax Act with respect to income deriving from petro- leum operations.

38. (1) The income of individuais who are employed by contractors, their contractors and subcontractors, or who hire their services out to such ~rganisa~tiom, shall be subjeot to payment of income tax in accordance with the Income Tax Act.

(2) A contractor, his contractors and subcontractors may be liable to selective employment tax in accordance with the Selective Employment Tax Act;.

(3) A contractor, his contractors and subcontractors shall be obliged to withhold and pay to the State any income tax assessed on the taxable income of such individuah ia accor- dance with and as required by the Income Tax Act;.

39. (1) The Minister shall require a contractor to pay to the Statc a royalty or produotion payment in cash or in kind, at the optlion of the State, upon the gross value or volume, as the case maybe, of crude oil produced m d saved in the contraot area after dedncting the amount of (:rude oil uaed and con- sumed in the conduct of petroleum opurstions.

Other minerals

Cap. 329 Cap. 332

Inoome tax

Cap. 668

Employee taxation

Cap. 668

Cap. 666

Cap. 668

Royalty or produotion payment

(2) The Minister may require a contractor to pay to f;he fitate a royalty or production payment based on the vdue or oolu~rre, lrce the owe may be, of natural g , ~ pm{Qa~d,

Otller fees, oharges end leviee

ImmuniCy of publio ern-m

Prohibibion of pubrioetion or disoloaum of

saved and sold from the contract area after deduoting the amount of natural gas used and commed in the wnduct of petroleum operations.

(3) The amount of such royalties may be prescribed by the regulations or in individual contracts.

40. Every contract s h d require the contractor to make annual surface rental payments in respect of the contract area, and the amount of such surface rental shall be prescribed in t h e regulations.

41. Provision may be made in bhe regulations or in in- dividual contracts for the payment by the contractor of fees, chargm or other levies to the State in connection with the oarrying out of petroleum operations pursuant to this Act.

42. (1) A contractor shall be granted exemptions from customs duties, levies or imposts as may be prescribed by any other law, on the exportation of petroleum which such con- tractor is entitled to export pul.suant to his contract.

(2) A contractor, his contractors and subcontractors may be granted, upon approval by the Minister responsible for the administration thereof, relief from the following-

(a) any tax or customs duties payable on the importation and subsequent exportation of machinery, equipment, materials and other items required for petroleum operatiotw ;

(b) any tax or customs duties payable on the importation and subsequent exportation of reasonabls quantities of household goods and personal effecb by non- Zambian employees of such contraofor, his con- tractors and subcontractors; and

(c) such other taxes, imposta, levies and duties imposed within the Republic, except for income tax as provided for in section thirty -seven.

43. The provisions of section eleven shall apply mutr~ia rnutadis to any public officer.

M. (1) No person shall, without the consent in writing given by or on behalf of the Ministcr, publish or disclose to any person, otherwise than in the course of his duties, the contents of uny ciocrunent, communication or irrrormation whatsoever, which relates to, and whidi has come to his knowledge in the eourm of, his ciuties under this A&.

(2) No pernon hving information which to his knowledge, has bwn pubhhed or disclosed in contravention of sub~ection (1) BaU publiflh C)P o o m m ~ c a t e arky auoh information t& my o h Ipsmon.

45. Contracb may provide for cwrbitration of disputes W m g thereunder between the State and the oontractor in sc(3onZarlce with rules issued and adxluhitercd by recagnised international bodies.

If any dispute, controversy or difference arises between two or more contractors or betwecm a cont,rat;toi dnd any person holding mining rights pursuant tx> the Mines and Minerals Act or the Prescribed Minerals and Materials Com- &ion Act or between a contractor and any other person, the parties to suhh dispute, controversy or difference may jointly or individually apply to the Minister to investigate and resolve the same pursuant to and in accordance with the provigions of Part XIll of the Mines and Minerals Act.

47. (1) Where any contract is entered into and it is sub- sequently found &hat such contract was entered into as a result of any falae or fkaudulent representation or in con- sequence of any incorrect information, the Minister may give written notice to the contractor requiring him to show cause within a specified time why such contract should not be revoked.

(2) Whera any contractor is h breach of any provision of this Act, the Mirdster may give written notice to the contractor requiring him to show cause within a specified tirne why his contract aho~lld not; be revoked.

(3) If the contractor fails to comply with a notice given pur- suant to subs~ct~ion (1) or (2) within the time specified or if the cause shown be deemed inadequate, s~lcll oantract may there- upon be revoked by the Minister, with the approval of the CommMt.ee.

(4) Notice of such revocation shall be published in the Gazette and shall be entered upon the register. A copy of such notice dlall be went to the contractor at his regi~l~ered address in the Republic.

48. (1) The retocation of a contract pursua,nt to section forty-seven xlrall cnknil thc immdiat1r ceaw-t;jon OF all rights and privileges c*onfirrcdl on the conlractor !).y virtlao of such con- tract, the devolution to the State of the contract area and the automatic forfeiture of any guarantees snbrnittetl by the ~ ~ ~ L r a c b r to sectxro the fulfilment of tkie obligafic~sts urrdertaken.

Dispu* between Stew and contractor

Disputes betweon oontrttotor and others. Cap. 329 Cap. 322

Cap. 349

Revocation

Effeot of revooation

(2) Revoc.:stic->n under section fortpaeven shall not in any way affect the lr';ak)D-il,g~ of ar97 pemon coxlcerncd aarising out trf such brttanh bnforu :quc*b revocstisn. and 8haXl not bo a bar to any legal pa~ca~oa>tirr ~t:s relating thereto.

Pen Jty

Non- appliaation of the Mine6 and Minerals Act. Cap 329

49. Any person who contravenes any of the provisions of this Act, and such contravention is not an offence under any other written law, shall be guilty of an offence and sh&ll upon conviction. be liable to a fine not exceeding ten tho11e:rzld kwaoha or to a term of imprisonment not exceeding three yearn, ar to both such h e and imprisonment

50. The Minister may make regulation8 for the better carrying out of the purposes of this Act.

51. Except n R otherwise specifioallg pr ovided in vr undt?~ this Act, the provisions of the Mi~les and Minerals Act shall not apply to pet~oleum or petroleum operations.