CELEX: 51995PC0616
Language: en
Date: 1995-12-05
Title: Proposal for a COUNCIL DECISION concerning the signing and notification of provisional application of the International Natural Rubber Agreement 1995 on behalf of the Community

COMMISSION OF THE EUROPEAN COMMUNITIES
                                            Brussels, 05.12.1995
                                            COM(95) 616 final
                                            95/0310 (ACQ
                             Proposal for a
                         COUNCIL DECISION
concerning the signing and notification of provisional application of the
            International Natural Rubber Agreement 1995
                      on behalf of the Community
                     (presented by the Commission)
 ---pagebreak---  ---pagebreak---                             EXPLANATORY MEMORANDUM
 1.   Negotiations for a Third International Natural Rubber Agreement were concluded
      on 17 February 1995 at the end of the third session of the Negotiating Conference.
      This international commodity agreement was negotiated in the context of the
    • Integrated Programme for Commodities covered by Resolutions 93 (IV),the "new
      partnership for development : Cartagena Commitment" and the relevant objectives
      in the final document "Cartagena Spirit" adopted by the United Nations Trade and
     Development Conference at its eighth session.
2.    The main aims of the Agreement are :
               to promote and strengthen international cooperation in all branches of the
     world natural rubber sector in particular by providing an effective framework for
     the discussion of matters relating to the sectors ;
               to contribute to the stabilization of the world market in natural rubber in
     the interests of both producers and consumers, notably by seeking to avoid
     excessive pricefluctuationsand to ensure a long-term balance between supply and
     demand ;
               to facilitate the expansion of international trade in natural rubber.
3.   Apart from the exchange of basic statistical data, the methods/ envisaged for
     achieving these aims include the setting up of a price protection mechanism
     comprising :
               a price range expressed in Singgit/kg l and automatically readjustable on
     the basis of the volume of buffer stock transactions and / or price levels on the
     world market ;
               a buffer stock of a total capacity of 550.0001 of natural rubber, made up of
     a normal buffer stock of 400.0001 and a contingency buffer stock of 150.000 t.
4.   The principal amendments made by the 1995 Agreement to the 1987 Agreement
     relate to :
              the strengthening of procedures for the revision of the price range by
     increasing the automaticity of the procedure and of any adjustment ;
              the reduction from 15 months to 12 months of the interval at which the
    reference price must be reviewed;
              increase in the Lower Indicative Price from 150 cents/kg to 157 cents/kg ;
              reduction in initial duration from 5 years to 4 years ;
              inclusion of an article on environmental aspects ;
    Singgit : average value of the Malaysian Ringgit and the Singapore dollar.
                                                                                            3^
 ---pagebreak---            inclusion of the post of Deputy Executive Director in the agreement.
5. The sources of finance envisaged remain the same as in the 1987 Agreement
   (contribution by the member countries to the administrative budget and the buffer
   stock).
6. The Agreement has been negotiated by the Community and its Member States in
   accordance with the common position defined by the Council. It is open for
   signature from 3 April 1995 to 28 December 1995. The 1987 Agreement is due to
   expire en 28 December 1995 and, as it has already been extended by 2 years, it
   cannot be extended further. In order to avoid any legal hiatus or any gaps in the
   working of the intervention mechanisms of the two Agreements, the Commission
   proposes that the Community and its Member States should :
           sign the 1995 Agreement as soon as possible ;
           state their intention to apply the said Agreement on a provisional basis.
7. It is important that the Community and its Member States should simultaneously
   sign and give notification of the provisional application of this Agreement, since
   they have both to become contracting parties and act together.
8. The attached proposal, which the Council is asked to adopt, has been drafted to
   this end.
                                                                                      1£
 ---pagebreak---                                              Proposal for a
                                        COUNCIL DECISION
         concerning the signing and notification of provisional application of the
                        International Natural Rubber Agreement 1995
                                  on behalf of the Community
 THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 in connection with Article 228 § 2, thereof,
Having regard to the proposal from the Commission,
Whereas the International Natural Rubber Agreement of 1995 negotiated in the context of
the Integrated Programme for Commodities Resolution 93 (IV), the "new partnership for
development : Cartagena Commitment" and the relevant objectives in the final document
"Cartagena Spirit" adopted by the United Nations Trade and Development Conference at
its eighth session is open for signature from 3 April to 28 December 1995.
Whereas the International Natural Rubber Agreement of 1987 expires on 28 December
1995 ; whereas it is therefore advisable to apply the new Agreement with effect from 29
December 1995 in order to avoid any gap in the working of the intervention mechanisms
of the two Agreements, if the ratification procedures were not completed by that date ;
Whereas the aims of the Agreement are :
-    to promote and strengthen international cooperation in all branches of the world
     natural rubber sector, in particular by providing an effective framework for the
     discussion of matters relating to the sectors ;
-    to contribute to the stabilization of the world market in natural rubber in the interests
     of both producers and consumers, notably by seeking to avoid excessive price
     fluctuations and to ensure a long-term balance between supply and demand ;
-    to facilitate the expansion of international trade in natural rubber.
Whereas, apart from the exchange of basic statistical data, the methods envisaged for
achieving these aims include a price protection mechanism comprising :
-    a price range expressed in Singgit/kg (Singgit : average value of the Malaysian ringgit
     and the Singapore dollar) and automatically readjustable on the basis of the volume of
     buffer stock transactions and / or price levels on the world market ;
                                                                                               ^
 ---pagebreak--- -   a buffer stock of a total capacity of 550.000 t of natural rubber, made up of a normal
    buffer stock of 400.0001 and a contingency buffer stock of 150.0001.
Whereas the aims pursued by the Agreement fall within the bounds of the common
commercial policy ;
Whereas the following sources offinanceare envisaged :
-   contributions by the members of the Agreement to the administrative budget ;
-   contributions by the members of the Agreement to the buffer stock ;
Whereas the application of the said Agreement involves financial contributions by the
Member States ;
Whereas, consequently, it is important that the Community should sign the Agreement
deposited with the Secretary-General of the United Nations and give notification before
29 December 1995 of its intention to apply the new Agreement on a provisional basis,
pending its definitive conclusion,
HAS DECIDED AS FOLLOWS :
                                          Article 1
The Community shall sign the International Natural Rubber Agreement, 1995, deposited
with the Secretary-General of the United Nations, the text of which is annexed to this
Decision, and state its intention to apply the International Natural Rubber Agreement,
1995, on a provisional basis, in accordance with the Articles of the Agreement.
                                          Article 2
The President of the Council is hereby authorized to designated the person empowered to
sign the Agreement and to deposit the notification of provisional application on behalf of
the Community.
Done at Brussels,                                     For the Council,
                                                      The President,
                                                                                        ^
 ---pagebreak---          DECLARATIONS TO BE ENTERED IN THE MINUTES
1. The Council and the Commission declare that this Decision is being adopted in
   order to enable the International Natural Rubber Agreement 1995 to become
   effective on 29 December 1995. It is being taken with the pragmatic aim of
   adhering as closely as possible to existing practices and it does not prejudice the
   basis and nature of future measures concerning commodities, including the
   renewal of this Agreement.
2. The Member States' representatives meeting within the Council declare that their
   governments are prepared to sign the new International Natural Rubber
   Agreement 1995 as soon as possible, together with the Community, and to ensure,
   by common accord with the European Community, its provisional application.
   Those states which cannot decide to apply the Agreement on a provisional basis by
   an act of their Government will begin their parliamentary ratification procedures as
   soon as possible. Pending ratification they will take all measures to ensure that the
   Agreement can be applied as regards the Community's competencies.
 ---pagebreak---                                                          TD/RUBBER.3/11
      UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
                               Geneva
INTERNATIONAL NATURAL RUBBER
          AGREEMENT, 1995
                      UNITED NATIONS
                       New York and Geneva, 1995
                                                                      \l\
 ---pagebreak---             INTERNATIONAL NATURAL RUBBER AGREEMENT,          1995
                                   CONTENTS
                                                                      Page
PREAMBLE                                                                 4
                            CHAPTER I.  OBJECTIVES
Article
 1.   Objectives                                                         5
                           CHAPTER II. DEFINITIONS      '         ~
 2.   Definitions                                                        6
                CHAPTER III.   ORGANIZATION AND ADMINISTRATION
 3.   Establishment, headquarters and structure of the
      International Natural Rubber Organization                . .       8
 4.   Membership in the Organization                                v
                                                                         8
 5.   Membership by intergovernmental organizations                     8
            CHAPTER IV. THE INTERNATIONAL NATURAL RUBBER COUNCIL
 6.   Composition of the International Natural Rubber Council     .      9
 7.   Powers and functions of the Council                                9
 8.   Delegation of powers                                             10
 9.   Cooperation with other organizations                             10
10.   Admission of observers                                           10
11.   Chairman and Vice-Chairman                                        10
12.   Executive Director, Deputy Executive Director, Buffer Stock-
      Manager and other staff                                           11
13.   Sessions . . . . . . . . .                                        11
14.   Distribution of votes                                             12
15.   Voting procedure                                                 13
16.   Quorum                                        .                   13
17.   Decisions                                                        13
18.   Establishment of committees                                       14
19.   Panel of experts                                                  14
                    CHAPTER V.   PRIVILEGES AND IMMUNITIES
20.   Privileges and immunities                                         15
                       CHAPTER VI.   ACCOUNTS AND AUDIT
21.   Financial accounts                                                16
22.   Form of payment                                                   16
23.   Audit                                                             16
 ---pagebreak--- I                                                                       Page
                   CHAPTER VII.    THE ADMINISTRATIVE ACCOUNT
  24.  Approval of the administrative budget and assessment of
       contributions                                                     17^
  25.  Payment of contributions to the administrative budget     . .'    17
                        CHAPTER VIII.    THE BUFFER STOCK
  26.  Size of the Buffer Stock                                          18
  27.  Financing of the Buffer Stock                                     18
  28.  Payment of contributions to the Buffer Stock Account . . .        19
  29.  Price range                                                       20
  30.  Operation of the Buffer Stock      .                              20
  31.  Review and revision of the price range . . . .                    22
  32. . Market indicator price                                            23
  33.  Composition of buffer stocks                . .                   24
  34.  Location of buffer stocks                                        24
  35.  Maintaining the quality of the buffer stocks                      25
  36.  Restriction or suspension of buffer stock operations . . -.      25
  37.  Penalties relating to contributions to the Buffer Stock
       Account                         ,                                 26
  38.  Adjustment of contributions to the Buffer Stock Account      .   26
  39.  The Buffer Stock and changes in exchange rates                    27
  40.  Liquidation procedures for the Buffer Stock Account     ...       28
       CHAPTER IX.    RELATIONSHIP WITH THE COMMON FUND FOR COMMODITIES
  41.  Relationship with the Common Fund.for Commodities      ....       30
           CHAPTER X.    SUPPLY AND MARKET ACCESS AND OTHER MEASURES
  42.  Supply and market access                                          31
  43.  Other measures                                                    31
                CHAPTER XI.    CONSULTATION ON DOMESTIC POLICIES
  44.  Consultation                                                 •;   32
              CHAPTER XII.     STATISTICS, STUDIES AND INFORMATION
  45.  Statistics and information                                        33
  46.  Annual assessment, estimates and studies                          33
  47.  Annual review                                                     33
                          CHAPTER XIII.     MISCELLANEOUS
  48.  General obligations and liabilities of members                    34
  49.  Obstacles to trade                                                34
  50.  Transportation and market structure of natural rubber      . .    34
  51.  Differential and remedial measures * . . . . .                    35
  52.  Relief from obligations                                           35
  53.  Fair labour standards                                             35
  54.  Environmental aspects                                             35
 ---pagebreak---                                                                     Page
                 CHAPTER XIV.    COMPLAINTS A N D DISPUTES
55. Complaints               . . . . . . . . . . . . . . . . . .     36
56. Disputes                                               •...'.    36
                     CHAPTER XV.    FINAL PROVISIONS
57. Signature                                                        38
58. Depositary                                                       38
59. Ratification, acceptance and approval                            38
60. Notification of provisional application                          38
61. Entry into force                                                 39
62. Accession                                      1                 40
63. Amendments                                                       40
64. withdrawal                                                    -  41
65. Exclusion                                                        41
66. Settlement of accounts with withdrawing or excluded
    members or members unable to accept an amendment . . . . .       41
67. Duration, extension and termination     .                        42
68. Reservations                                                     43
                                 ANNEXES
A.  Shares of individual exporting countries in total n e t exports
    of countries, as established for the purposes of article 61      44
B.  Shares of individual importing countries and groups of
    countries in total net imports of countries, as established
    for the purposes of article 61                                   45
C.  Cost of the Buffer Stock as estimated b y the President of
    the United Nations Conference o n Natural Rubber, 1994 . .       46
 ---pagebreak---                                       PREAMBLE
      The Contracting       Parties,
      Recalling    the Declaration and the Programme         of  Action  on  the
Establishment of a New international Economic Order, *
      Recognizing     in particular the importance of the United Nations
Conference on Trade and Development resolutions 93 (IV), 124 (V) and
resolution 155 (VI) on the Integrated Programme for Commodities,* the Cartagena
Commitment and the relevant objectives contained in "The Spirit of Cartagena"
adopted by the United Nations Conference on Trade and Development,
      Recognizing    the importance of natural rubber to the economies of
members, particularly to the exports of exporting members and to supply
requirements of importing members,
      Recognizing   further   that the stabilization of natural rubber prices is
in the interests of producers, consumers and natural rubber markets, and that
an international natural rubber agreement can significantly assist the growth
and development of the natural rubber industry to the benefit of both
producers and consumers,
      Have agreed   as follows:
*     General Assembly resolutions 3201 (S-VI) and 3202 (S-vi) of 1 May 1974
 ---pagebreak---                            CHAPTBR I.    OBJECTIVES
                                   Article 1
                                  Objectives
      The objectives of the International Natural Rubber Agreement, 19 9 5
(hereinafter referred to as this Agreement), in the light of the resolution
93 (IV), of the New Partnership for Development: the Cartagena Commitment and
the relevant objectives contained in "The Spirit of Cartagena" adopted by the
United Nations Conference on Trade and Development, are inter alia as follows:
       (a)  To achieve a balanced growth between the supply of and demand for
            natural rubber, thereby helping to alleviate the serious
            difficulties arising from surpluses or shortages of natural
            rubber;
       (b)  To achieve stable conditions in natural rubber trade through
            avoiding excessive natural rubber price fluctuations, which
            adversely affect the long-term interests of both producers and
            consumers, and stabilizing these prices without distorting
             long-term market trends, in the interests of producers and
            consumers;
       (c)  To help stabilize, the export earnings from natural rubber of
            exporting members, and to increase their earnings based on
            expanding natural rubber export volumes at fair and remunerative
            prices, thereby helping to provide the necessary incentives for
            a dynamic and rising rate of production and the resources for
            accelerated economic growth and social development;
       (d)  To seek to ensure adequate supplies of natural rubber to meet the
            requirements of importing members at fair and reasonable prices
            and to improve the reliability and continuity of these supplies;
       (e)  To take feasible steps in the event of a surplus or shortage of
            natural rubber to mitigate the economic difficulties that members
            might encounter;
       (f)  To seek to expand international trade in and to improve market
            access for natural rubber and processed products thereof;
       (g)  To improve the competitiveness of natural rubber by encouraging
            research and development on the problems of natural rubber;
       (h)  To encourage the efficient development of the       natural rubber
            economy by seeking to facilitate and promote improvements in the
            processing, marketing and distribution of raw natural rubber; and
       (i)  To further international cooperation in and consultations on
            natural rubber matters affecting supply and demand, and to
             facilitate promotion and coordination of natural rubber research,
            assistance and other programmes.
 ---pagebreak---                         CHAPTER II.    DEFINITIONS
                                Article 2
        l
          '                    Definitions
    For the purposes of this Agreement:
1.  "Natural rubber" means the unvulcanized elastomer, whether in solid or
    liquid forms, from Hevea brasiliensis     and any other plant which the
    Council may decide for the purposes of this Agreement;
2.  "Contracting party" means a Government, or an intergovernmental
    organization referred to in article 5, which has consented to be bound
    by this Agreement provisionally or definitively;
3.  "Member" means a contracting party as defined in definition (2) above;
4.  "Exporting member" means a member which exports natural rubber and has
    declared itself to be an exporting member, subject to the agreement of
    the Council;
5.  "Importing member" means a member which imports natural rubber and has
    declared itself to be an importing member, subject to the agreement of
    the Council;
6.  "Organization" means the International Natural Rubber Organization
    referred to in article 3;
7.  "Council" means the International Natural Rubber Council, referred to
    in article 6;
8.  "Special vote" means a vote-requiring at least two thirds^of the votes
    cast by exporting members present and voting and at least two thirds of
    the votes cast by importing members present and voting, counted
    separately, on condition that these votes are cast by at least half the
    members in each category present and voting;
9.  "Exports of natural rubber" means any natural rubber which leaves the
    customs territory of any member, and "imports of natural rubber" means
    any natural rubber which enters the domestic commerce in the customs
    territory of any member, provided that for the purpose^ of these
    definitions, customs territory shall, in the case of a member which
    comprises more than one customs territory, be deemed to refer to the
    combined customs territories of that member;
10. "Distributed simple majority vote" means a vote requiring more than half
    of the total votes of exporting members present and voting and more than
    half of the total votes of importing members present and voting, counted
    separately;
11. "Freely usable currencies" means the deutsche mark, the French franc,
    the Japanese yen, the pound sterling, and the United States dollar;
12. "Financial year" means the period from 1 January to 31 December
    inclusive;
13. "Entry into force" means the date on which this Agreement enters into
    force provisionally or definitively in accordance with article 61;
14. "Tonne" means a metric ton, i.e.     1,000 kilogrammes;
15. "Malaysian/Singapore cent" means the average of the Malaysian sen and
    the Singapore cent at the prevailing rates of exchange;
 ---pagebreak--- 16.   "Time-weighted net contribution of a member" means its net cash
    . contributions weighted by the number of days during which the
     constituent parts of' the net cash contribution have stayed at the
     disposition of the Buffer Stock. In calculating the number of days, the
     day when the contribution was received by the Organization will not be
     taken into account, nor the day when the reimbursement was effected, nor
     the** day when this Agreement terminates;
17.  "First quoted month" means the calendar month of shipment officially
     quoted to the Organization by a market for inclusion in the daily market
     indicator price;
18.  "Established commercial market" means a natural rubber trading centre
     where a rubber trade association or regulatory body exists meeting the
     following criteria:
      (a)    a written constitution which includes sanctions that could be
             taken against erring members;
      (b)    qualification standards,   including financial  standards,  that
            members must maintain;
      (c)   official written contracts that are legally binding;
      (d)    full and binding arbitration to all market participants;
      (e)   publishes official daily prices for physical rubber.
 ---pagebreak---                  CHAPTER III.    ORGANIZATION AND ADMINISTRATION
                                    Article 3
                Establishment, headquarters and structure of the
                    International Natural Rubber Organization
i.     The International Natural Rubber Organization, established by the
International Natural Rubber Agreement, 1979, shall continue in being for the
purpose of administering the provisions and supervising the operation of this
Agreement.
2.     The Organization shall function through the International Natural Rubber
Council, its Executive Director and its staff, and such other bodies as are
provided for in this Agreement.
3.     Subject to the requirement in paragraph 4 of this article, the
headquarters of the Organization shall be in Kuala Lumpur, unless the Council,
by special vote, decides otherwise.
4.     The headquarters of the Organization shall at all times be located in
the territory of a member.
                                     Article 4
                          Membership in the Organization
1.     There shall be two categories of membership, namely,
        (a)  Exporting; and
       (b)    Importing.
2.     The Council shall establish criteria regarding a change by a member in
its category of membership as defined in paragraph 1 of this article, taking
fully into account the provisions of articles 24 and 27. A member which meets
such-criteria may change its category of membership subject to the agreement
of the Council by special vote.
3.     Each contracting     party  shall  constitute  a  single   member    of the
Organization.
                                     Article 5                        ,
                  Membership by intergovernmental organizations
1.     Any reference in this Agreement to a "Government" or "Governments" shall
be construed as including a reference to the European Community and to any
intergovernmental organization having responsibilities in respect of the
negotiation, conclusion and application of international agreements, in
particular commodity agreements. Accordingly, any reference in this Agreement
to signature, ratification, acceptance or approval, or to notification of
provisional application, or to accession shall, in the case of such
 intergovernmental organizations, be construed as including a reference to
signature, ratification, acceptance or approval, or to notification of
provisional    application, or to accession, by such            intergovernmental
organizations.
                                                                       *****
2.     In the case of votes on matters within their competence, such
 intergovernmental organizations shall exercise their voting rights with a
number of votes equal to the total number of votes attributed, in accordance
with article 14, to their member States. In such cases, the member States of
such intergovernmental organizations shall not exercise their individual
voting rights.
 ---pagebreak---             CHAPTBR IV.   THE INTERNATIONAL NATURAL RUBBER COUNCIL
                                   Article 6
          ^Composition of the International Natural Rubber Council
1.    The highest authority of the Organization shall be the International
Natural Rubber Council, which shall consist of all the members of the
Organization.
2.    Each member shall be represented in the Council by one delegate, and may
designate alternates and advisers to attend sessions of the Council.
3.    An alternate delegate shall be empowered to act and vote on behalf cf
the delegate during the latter's absence or in special circumstances.
                                  Article 7
                     Powers and functions of the Council
1.    The Council shall exercise all such powers and perform or arrange for
the performance of all such functions as are necessary to carry out the
provisions of this Agreement, but it shall not have the power, and shall not
be taken to have been authorized by the members, to incur any obligation
outside the scope of this Agreement. In particular, it shall not have the
capacity to borrow money, without, however, limiting the application of
article 41, nor shall it enter into any trading contract for natural rubber,
except as provided for specifically in paragraph 5 of article 30.           In
exercising its capacity to contract, the Council shall ensure that thr terms
of paragraph 4 of article 48 are brought by written notice to the attention
of the other parties entering into such contracts, but any failure to do so
shall not in itself invalidate such contracts, nor shall it be deemed to oe
a waiver of such limitation of liability of the members.
2.    The Council shall, by special vote, adopt such rules and regulations as
are necessary to carry out the provisions of this Agreement and are consistent
therewith. These shall include its own rules of procedure and those of the
committees referred to in article 18, rules for the administration and
operation of the Buffer Stock, and the financial and staff regulations of the
Organization. The Council may, in its rules of procedure, proVide for a
procedure whereby it may, without meeting, decide specific questions.
3.    For the purposes of paragraph 2 of this article, the Council shall, at
its first session after the entry into force of this Agreement, review the
rules and regulations established under the International Natural Rubber
Agreement, 19 87, and adopt them with such modifications as it deems
appropriate. Pending such adoption, the rules and regulations established
under the International Natural Rubber Agreement, 1987, shall apply.
4.    The Council shall keep such records as are required for the performance
of its functions under this Agreement.
5.    The Council shall publish an annual report on the activities of the
Organization and such other information as it considers appropriate.
 ---pagebreak---                                    Article 8
                                                r
                             Delegation of powers
1.    The Council may, by special vote, delegate to any committee established
under article 18 the exercise of any or all of its powers which, in accordance
with the provisions of this Agreement, do not require a special vote- of the
Council. Notwithstanding this delegation, the Council may at any time discuss
and decicfe any issue that may have been delegated to any of its committees.
2.    The Council may, by special vote, revoke any power delegated to a
committee.
                                   Article 9
                     Cooperation with other organizations
1.    The Council may make whatever arrangements are appropriate for
consultation or cooperation with the United Nations, its organs and
specialized agencies, and other intergovernmental organizations as
appropriate.
2.    The Council may also make arrangements for maintaining contact with
appropriate international non-governmental organizations.
                                  Article 10
                            Admission of observers
      The Council may invite any non-member Government, or any of the
organizations referred to in article 9, to attend as an observer any of the
meetings of the Council or of any committee established under article 18.
                                  Article 11
                          Chairman and vice-chairman
1.    The Council shall elect for each year a Chairman and a vice-chairman.
2.    The Chairman, and the vice-chairman shall be elepted, one from among the
representatives of exporting members and the other from- among the
representatives of importing members. These offices shall alternate each year
between the two categories of members, provided, however, that this shall not
prohibit the re-election of either or both, under exceptional circumstances,
by special vote of the Council.
3.     In the temporary absence of the Chairman, he shall be replaced by the
vice-Chairman.     In the temporary absence of both the Chairman and the
Vice-chairman or the permanent absence of one or both of them, the Council may
elect new officers from among the representatives of the exporting members
and/or from among the representatives of the importing members, as
appropriate, on a temporary or permanent basis' as may be required.
4.     Neither the Chairman nor any other officer presiding at a meeting of the
Council shall vote at that meeting. The voting rights of the member he
represents may, however, be exercised in accordance with the provisions of
paragraph 3 of article 6, or paragraphs 2 and 3 of article 15.
                                       10
 ---pagebreak---                                   Article 12
               Executive Director, Deputy Executive Director,
                    Buffer Stock Manager and other staff
1.    The Council shall, by special vote, appoint an Executive Director,
Deputy Executive Director and a Buffer Stock Manager.
2.    The terms and conditions of appointment of the Executive Director,
Deputy Executive Director and the Buffer Stock Manager shall be determined by
the Council.
3.    The Executive Director shall be the chief administrative officer of the
Organization and shall be responsible to the Council for the administration
and operation of this Agreement in accordance with the provisions of this
Agreement and decisions of the Council.
4.    The Deputy Executive Director shall at all times be responsible to the
Executive Director. The Deputy Executive Director shall act as the Executive
Director when the latter is for any reason unable to perform his duties or
when the office of the Executive Director is temporarily vacant-^ in which
event, he shall be directly responsible to the Council for the administration
and operation of the Agreement. The Deputy Executive Director shall be
involved in all matters pertaining to the Agreement.
5.    The Buffer Stock Manager shall be responsible to the Executive Director
and the Council for the functions conferred upon him by this Agreement, as
well as for such additional functions as the Council -may determine. The
Buffer Stock Manager shall be responsible for the day-to-day operation of the
Buffer Stock, and shall keep the Executive Director informed of the general
operations of the Buffer Stock so that the Executive Director may ensure its
effectiveness in meeting the objectives of this Agreement.
6.    The Executive Director shall appoint the staff in accordance with
regulations established by the Council. The staff shall be responsible to the
Executive Director.
7.    Neither the Executive Director nor any member of the staff, including
the Deputy Executive Director and the Buffer Stock Manager, shall have any
financial interest in the rubber industry or trade, or associated commercial
activities.
8.    In the performance of their duties, the Executive Director, the Deputy
Executive Director, the Buffer Stock Manage^ and other staff shall not seek
or receive instructions from any member of from any other authority external
to the Council or to any committee established under article 18. They shall
refrain from any action which might reflect on their positions as
international officials responsible only to the Council. Each member shall
respect the exclusively international character of the responsibilities of the
Executive Director, the Deputy Executive Direction, the Buffer Stock Manager
and other staff and shall not seek to influence them in the discharge of their
responsibilities.
                                  Article 13
                                   Sessions
1.    As a general rule, the Council shall hold one regular session in each
half of the year.
2.    In addition to sessions in circumstances specifically provided for in
this Agreement, the Council shall also meet in special session whenever it so
decides or at the request of:
       (a)  The Chairman of the Council;
                                      11
 ---pagebreak--- 1        (b)
         (c)
         (d)
               The Executive
               A majority of
               A majority of
                              Director;
                              the exporting members;
                              the importing members;
         (e)   An exporting  member or exporting members holding at least 200
               votes; or
         (f)   An importing  member or importing members holding at least 200
               votes.
            ir
  3.    Sessions shall be held at the headquarters of the Organization, unless
  the Council, by special vote, decides otherwise. If on the invitation of any
  member the Council meets elsewhere than at the headquarters of the
  Organization, that member shall pay the additional costs incurred by the
  Council.
  4.    Notice of any sessions and the agenda for such sessions shall be
  communicated to members by the Executive Director, in consultation with the
  Chairman of the Council, at least 30 days in advance, except in cases of
  emergency when notice shall be communicated at least 10 days in advance.
                                     Article 14
                               Distribution of votes
  1.    The exporting members shall together hold 1,000 votes and the importing
  members shall together hold 1,000 votes.
  2.    Each exporting member shall receive one initial vote out of the 1,000
  votes except that in the case of an exporting member with net exports of less
  than 10,000 tonnes annually the initial vote shall not apply. The remainder
  of such votes shall be distributed among the exporting members as nearly as
  possible in proportion to the volume of their respective net exports of
  natural rubber for the period of five^ calendar years commencing six calendar
  years prior to the distribution of votes.
  3.    The votes of importing members shall be distributed among them as nearly
  as possible in proportion to the average of their respective net imports of
  natural rubber during the period of three calendar years commencing four
  calendar years prior to the distribution of votes, except that each importing
  member shall receive one vote even if its proportional net import share is
  otherwise not sufficiently large to so justify.
  4.    For the purposes of paragraphs 2 and 3 of this article, paragraphs 2 and
  3 of article 27 relating to contributions of importing members,, and article
  38, the Council shall, at its first session, establish a table of£ net exports
  of exporting members and a table of net imports of importing members which
  shall be revised annually in accordance with this article.
  5.    There shall be no fractional votes.
  6.    The Council shall, at the first session after the entry into force of
  this Agreement, distribute the votes for that year, to remain in effect until
  the first regular session of the following year, except as provided for in
  paragraph 7 of this article. Subsequently for each year, the Council shall
  distribute the votes at the beginning of the first regular session of that
  year.    Such distribution shall remain in effect until the first regular
  session of the following year, except as provided for in paragraph 7 of this
  article.
  7.    whenever the membership of the Organization changes or when any member
  has its voting rights suspended or restored under any provision of this
  Agreement, the Council shall redistribute the votes within the affected
  category or categories of members in accordance with the provisions of this
  article.
                                         12
 ---pagebreak--- 8.    In the event of the exclusion of a member pursuant to article 65, or the
withdrawal of a member pursuant to article 64 or article 63, resulting in the
reduction of the total trade share of ^those members remaining in either
category below 80 per cent, the Council ^shall meet and decide on the terms,
conditions and future of this Agreement, including in particular the need to
maintain effective buffer stock operations without causing undue financial
burden to the remaining members.
                                  Article 15
                               Voting procedure
1.    Each member shall be entitled to cast the number of votes it holds in
the Council and shall not be entitled to divide its votes.
2.    By written notification to the Chairman of the Council, any exporting
member may authorize any other exporting member, and any importing member may
authorize any other importing member, to represent its interests and to
exercise its voting rights at any session or meeting of the Council.
3.    A member authorized by another member to cast the latter member's votes
shall cast such votes as authorized.
4.    when abstaining, a member shall'be deemed not to have cast its votes.
A member when present and not voting shall be deemed to have abstained.
                                  Article 16
                                     Quorum
1.    The quorum for any meeting of the Council shall be the presence of a
majority of exporting members and a majority of importing members, provided
that such members hold at least two thirds of the total votes in their
respective categories.
2.    If there is no quorum in accordance with paragraph 1 of this article on
the day fixed for the meeting and on the following day, the quorum on the
third day and thereafter shall«be the presence of a majority of exporting
members and a majority of importing members, provided that such members hold
a majority cf the total votes in their respective categories.      ','.
3.    Representation in accordance with paragraph 2 of article 15 shall be
considered as presence.
                                  Article 17
                                   Decisions
1.    All decisions of the Council shall be taken and all recommendations
shall be made by distributed simple majority vote, unless otherwise provided
for in this Agreement.
2.    Where a member avails itself of the provisions of article 15 and its
votes are cast at a meeting of the Council, such member shall, for the
purposes of paragraph 1 of this article, be considered as present and voting.
                                       13
 ---pagebreak--- 1                                    Article 18
                            Establishment of committees
  1.    The following committees established by the International Natural Rubber
  Agreement, 1979, shall continue in being:
         (a)   Committee on Administration;
         (b) <> Committee on Buffer Stock Operations;
         (c)   Committee on Statistics; and
         (d)   Committee on Other Measures.
  Additional committees may also be established by special vote of the Council.
  2.    Each committee shall be responsible to the Council. The Council shall,
  by special vote, determine the membership and terms of reference of each
  committee.
                                     Article 19
                                  Panel of experts
  1.    The Council may establish a panel of experts from the rubber industry
  and trade of exporting and importing members.
  2.    Any such panel would be available to provide advice and assistance to
  the Council and its committees, particularly on buffer stock operations and
  on the other measures referred to in article 43.
  3.    The membership, functions and administrative arrangements of any such
  panel would be determined by the Council.
                                          14
 ---pagebreak---                     CHAPTER V.    PRIVILEGES AND IMMUNITIES
                                   Article 20
                           Privileges and immunities
1. ' The Organization shall have legal personality.         In particular, but
without prejudice to the provisions of paragraph 4 of article 48, the
Organization shall have the capacity to contract, to acquire and dispose of
movable, and immovable property, and to institute legal proceedings.
2.    The status, privileges and immunities of the Organization, of its
Executive Director, Deputy'Executive Director, Buffer Stock Manager as well
as other staff and experts, and of members' delegations shall continue to be
governed by the Headquarters Agreement between the host Government and the
Organization signed on 10 June 1987, with such amendments as might be
necessary for the proper functioning of this Agreement.
3.     If the headquarters of the Organization is moved to another country, the
Government of that country shall, as soon as possible, conclude with the
Organization a Headquarters Agreement to be approved by the Council.
4.     Pending the conclusion of the Headquarters Agreement pursuant to
paragraph 3 of this article, the Organization shall request the host
Government to grant, to the extent consistent with its laws, exemption from
taxation on remuneration paid by the Organization to its employees, and on the
assets, income and other property of the Organization.
5.    The Organization may also conclude, with one or more Governments,
agreements to be approved by the Council relating to such privileges and
immunities as may be necessary for the proper functioning of this Agreement.
6.    The Headquarters Agreement shall be independent of this Agreement.     It
shall, however, terminate:
       (a)   By agreement between the host Government and the Organization;
       (b)   In the event that the headquarters of the Organization is moved
             from the country of the host Government; or
       (c)   In the event that the Organization ceases to exist.
                                       15
 ---pagebreak--- 1                        CHAPTER VI.    ACCOUNTS AND AUDIT
                                    Article 21
                                Financial accounts
  1.    For the operation and administration of this Agreement, there shall be
  established two accounts :
         (a)  The Buffer Stock Account; and
         (b)  The Administrative Account.
  2.    All the following receipts and expenditures in the creation, operation
  and maintenance of the Buffer Stock shall be brought into the Buffer Stock
  Account: contributions from members under article 27, revenue from sales of
  or expenditure in respect of acquisition of buffer stocks; interest on
  deposits of the Buffer Stock Account; and costs relating to purchase and sales
  commissions, storage, transportation and handling, maintenance and rotation,
  and insurance. The Council may, however, by special vote, bring any other
  type of receipts or expenditures attributable to buffer stock transactions or
  operations into the Buffer Stock Account.
  3.    All other receipts and expenditures relating to the operation of this
  Agreement shall be brought into the Administrative Account. Such expenditures
  shall normally be met by contributions from members assessed in accordance
  with article 24.
  4.    The Organization shall not be liable for the expenses of delegations or
  observers to the Council or to any committee established under article 18.
                                    Article 22
                                 Form of payment
        Payments to the Administrative and Buffer Stock Accounts shall be made
  in freely usable currencies or currencies which are convertible in the major
  foreign exchange markets into freely usable currencies, and shall be exempt
  from foreign exchange restrictions.
                                    Article 23
                                       Audit
  1.    Each financial year, the Council shall appoint auditors for the purpose
  of auditing its books of account.
  2.    An independently audited statement of the Administrative Account shall
  be made available to members as soon as possible, but not later than four
  months, after the close of each financial year. An independently audited
  statement of the Buffer Stock Account shall be made available to members not
  earlier than 60 days, but not later than four months, after the close of each
  financial year. The audited statements of the Administrative and Buffer Stock
  Accounts shall be considered for approval by the Council at its next regular
  session, as appropriate. A summary of the audited accounts and balance sheet
  shall thereafter be published.
                                         16
 ---pagebreak---                    CHAPTBR VII.   THE ADMINISTRATIVE ACCOUNT
                                   Article 24
   Approval6,of the administrative budget and assessment of contributions
1.     At its first session after the entry into force of this Agreement, the
Council shall approve the administrative budget for the period between the
date of the entry into force and the end of the first financial year.
Thereafter, during the second half of each financial year, the Council shall
approve the administrative budget for the following financial year. The
Council shall assess the contribution of each member to that budget in
accordance with paragraph 2 of this article.
2.     The contribution of each member to the. administrative budget for each
financial year shall be in the proportion which the number of its votes at the
time the administrative budget for that financial year is approved bears to
the total votes of all the members. In assessing contributions, the votes of
each member shall be calculated without regard to the suspension of any
member's voting rights or any redistribution of votes resulting therefrom.
3.     The initial contribution to the administrative budget of any Government
which becomes a member after the entry into force of this Agreement shall be
assessed by the Council on the basis of- the number of votes to be held by that
member and of the period from the date on which it becomes a member to the end
of the current financial year. The assessment made upon other members for
that financial year shall not,' however, be altered.
                                   Article 25
             Payment of contributions to the administrative budget
1.     Contributions to the first administrative budget shall become due on a
date to be decided by the Council at its first session. Contributions to
subsequent administrative budgets shall become due by 28 February in each
financial year. The initial contribution of a Government which becomes a
member after the entry into force of this Agreement, assessed in accordance
with paragraph 3 of article 24, shall, for the financial year concerned,
become due 60 days after the date on which it becomes a member.
2.     If a member has not paid its full contribution to the administrative
budget within two months after such contribution becomes due in accordance
with paragraph 1 of this article, the Executive Director shall request that
member to make payment as quickly as possible. If a member has not paid its
contribution within two months after such request by the Executive Director,
its voting rights in the Organization shall be suspended unless the Council
decides otherwise. If a member has still not paid its contribution within
four months after such request by the Executive Director, all rights of that
member under this Agreement shall be suspended by the Council, unless the
Council, by special vote, decides otherwise.
3.    -For contributions received late, the Council shall levy a penalty charge
at the prime interest rate in 'the host country from the date the contributions
become due. The Council may waive such penalty charge up to 31 March of the
same financial year on request from a member if, because of its internal laws
and regulations, it is not able to pay the contributions to the administrative
budget by the due date, in accordance with paragraph 1 of this article.
4.     A member whose rights have been suspended under paragraph 2 of this
article shall in particular remain liable to pay its contribution and to meet
any other of its financial obligations under this Agreement.
                                       17
 ---pagebreak--- 1                        CHAPTBR VIII.    THE BUFFBR STOCK
                                     Article 26
                              Size of the Buffer Stock
         In order to achieve the objectives of this Agreement, an international
  Buffer Stock shall be' established. The total capacity of the Buffer Stock
  shall be 550,000 tonnes, including the total stocks still held under the
  International Natural Rubber Agreement, 1987. It shall be the sole instrument
  of market intervention for price stabilization in this Agreement. The Buffer
  Stock shall comprise:
         (a)   The normal Buffer Stock of 400,000 tonnes; and
         (b)   The contingency Buffer Stock of 150,000 tonnes.
                                     Article 27
                           Financing of the Buffer Stock
  1.     Members commit themselves to finance the total cost of the international
  Buffer Stock of 550,000 tonnes established under article 26, it being
  understood that shares in the Buffer Stock Account of the International
  Natural Rubber Agreement, 1987, of those members of the International Natural
  Rubber Agreement, 19 87, which became members of this Agreement shall, with the
  consent of each member, be carried over to the Buffer Stock Account under this
  Agreement in accordance with the procedures determined under the provisions
  of paragraph 3 of article 4 0 of the International Natural Rubber Agreement,
  1987.
  2.     The financing of both the normal Buffer Stock and the contingency Buffer
  Stock shall be shared equally between the exporting and importing categories
  of members. Contributions of members to the Buffer Stock.Account shall be
  apportioned according to their shares of the votes in the Council, except as
  provided for in paragraphs 3 and 4 of this article.
  3.     Any importing member whose share of total net imports as set out in the
  table to be established by the Council under paragraph 4 of article 14
  represents 0.1 per cent or less of total net imports shall contribute to the
  Buffer Stock Account as follows:
          (a)  If its share of total net imports is less than or equal' to 0.1 per
               cent but more than 0.05 per cent, such member shall contribute an
               amount assessed on the basis of its actual share of total net
                imports;
          (b)  If its share of total net imports is 0.05 per cent or less, such
               member shall contribute an amount assessed on the basis of a share
               of 0.05 per cent of total net imports.
  4.     During any period in which this Agreement is" in force provisionally
  either under paragraph 2 or subparagraph (b) of paragraph 4 of article 61, the
  financial commitment of each,exporting or importing member to the Buffer Stock
  Account shall not in total exceed that member's contribution, calculated on
  the basis of the number of votes corresponding to the percentage shares set
  out in the tables to be established by the Council under paragraph 4 of
  article 14, of the totals of 275,000 tonnes falling to the exporting and
   importing categories of members respectively. The financial obligations of
  members when this Agreement is in force provisionally shall be shared equally
  by exporting and importing categories of members.        At any time when the
  aggregate commitment of one category exceeds that of the other, the larger of
   the two aggregates shall be brought equal to the smaller of the two
 ---pagebreak--- aggregates, each member's votes in that aggregate being reduced in proportion
to the shares of votes derived from the tables to be established by the
Council under paragraph 4 of article 14. Notwithstanding the provisions of
this paragraph and of paragraph 1 of article 28, a member's contribution may
not exceed 125 per cent of the amount of its total contribution calculated on
the basis of its share in world trade as indicated in annex A or annex B to
this Agreement.
            <>
5.     The total costs of the normal and contingency Buffer Stock of 550,000
tonnes shall be financed by contributions by members in cash to the Buffer
Stock Account.       Such contributions may, when relevant, be paid by the
appropriate agencies of members concerned.
6.     The total costs of the 550,000-tonne international Buffer Stock shall
be paid from the Buffer Stock Account. Such costs shall include all expenses
involved in acquiring and operating the 550,000-tonne international Buffer
Stock.    In the event that the estimated cost, as given in annex C to this
Agreement, cannot fully cover the total cost of acquisition and operations of
the Buffer Stock, the Council shall meet and make the necessary arrangements
to call up the required contributions to cover, such costs according to
percentage shares of votes.
                                     Article 28
               Payment of contributions to the Buffer Stock Account
1.     There shall be an initial contribution in cash to the Buffer Stock
Account equivalent to 7 0 million Malaysian ringgit.          This amount, which
represents a working capital reserve for buffer stock operations, shall be
apportioned among all members according to their percentage shares of votes,
taking into consideration paragraph 3 of article 27, and shall be due within
60 days after the first Council session after the entry into force of this
Agreement. The initial contribution of a member due in accordance with this
paragraph shall, with the consent of that member, be made wholly or in part
by transfer of that member's share in the cash held in the Buffer Stock
Account under the International Natural Rubber Agreement, 1987.
2.     The Executive Director may at any time, and independently of the
arrangements in paragraph 1 of this article, call for contributions provided
that the Buffer Stock Manager has certified that the Buffer Stock Account may
require such funds in the next four months.
3.     When a contribution is called, it shall be due from members within
60 days of the date of notification. If requested by any member or members
accounting for 200 votes in the Council, the Council shall meet in special
session and may modify or disapprove the call-up based on an assessment of the
need for funds to support buffer stock operations in the next four months.
If the Council cannot reach a decision, contributions shall be due from
members in accordance with the Executive Director's notification.
4.     Contributions called up for the normal and the contingency Buffer Stock
shall be valued at the lower trigger action price in effect at the time such
contributions are called.
5.     The call-up of contributions to the contingency Buffer Stock shall be
handled as follows:
        (a)    At the 300,000 - tonne review provided for in article 31, the
               Council shall make all financial and other arrangements which may
               be necessary for the prompt implementation of the contingency
               Buffer Stock including call-up o'f funds if necessary;
        (b)    If the Council by special vote under article 30, paragraph 2
               decides to bring the contingency Buffer Stock into operation, then
               the Council shall ensure that:
                                         19
 ---pagebreak---             (i)    All members have made all necessary arrangements for
                   financing their respective shares of the contingency Buffer
                   Stock; and
            (ii)   The contingency Buffer Stock has been invoked and is fully
                   primed for action in accordance with the terms of
                   article 30.
                                  Article 29
                                  Price range
1.    There shall be established, for the operations of the Buffer Stock:
      (a)   A reference price;
      (b)   A lower intervention price;
      (c)   An upper intervention price;
      (d)   A lower trigger action price;
      (e)   An upper trigger action price;
      (f)   A lower indicative price; and
      (g)   An upper indicative price.                            ~
2.    On the entry into force of this Agreement, the reference price shall be
the reference price applicable on 28 December 1995.
3.    There shall be an upper intervention price and a lower intervention
price calculated respectively at plus and minus 15 per cent of the reference
price, unless the Council, by special vote, decides otherwise.
4.    There shall be an upper trigger action price and a lower trigger action
price calculated respectively at plus and minus 20 per cent of the reference
price, unless the Council, by special vote, decides otherwise.
5.    The prices calculated in accordance with paragraphs 3 and 4 of      this
article shall be rounded to the nearest cent.
6.    On the entry into force of this Agreement, the lower and upper
indicative prices shall be initially fixed at 157 and 270 Malaysian/Singapore
cents per kilogramme, respectively.
                                   Article 30
                         Operation of the Buffer Stock
1.    If, in relation to the price range provided for in article 29, or as
subsequently revised in accordance with the provisions of articles 31 and 39,
the market indicator price provided for in article 32 is:
       (a)   At or above the upper trigger action price, the Buffer Stock
            Manager shall defend the upper trigger action price by offering
             natural rubber for sale until the market indicator price falls
             below the upper trigger action pricer
       (b)   Above the upper intervention price, the Buffer Stock Manager may
             sell natural rubber in defence of the upper trigger action price;
       (c)   At the upper or lower intervention price, or between them, the
             Buffer Stock Manager shall neither buy nor sell natural rubber,
             except in order to carry out his responsibilities for rotation
             under article 35;
       (d)   Below the lower intervention price, the Buffer Stock Manager may
             buy natural rubber in defence of the lower trigger action price;
                                       20
 ---pagebreak---        (e)  At or below- the lower trigger action price, the Buffer Stock
            Manager shall defend the lower trigger action price by offering
             to buy natural rubber until the market indicator price exceeds the
             lower trigger action price.
2.    when sales or purchases for the Buffer Stock reach the 4,00,000-tonne
level, the Council shall, by special vote, decide whether to bring the
contingency Buffer Stock into operation at:
       (a)   The lower or upper trigger action price; or
       (b)   Any price between the lower trigger action price, and the lower
             indicative price, or the upper trigger action price and the upper
             indicative price.
3.    Unless the Council, by special vote, decides otherwise under paragraph
2 of this article, the Buffer Stock Manager shall use the contingency Buffer
Stock to defend the lower indicative price by bringing the contingency Buffer
Stock into operation when the market indicator price is at a level 2
Malaysian/Singapore cents per kilogramme above the lower indicative price, and
to defend the upper indicative price by bringing the contingency Buffer Stock
into operation when the market indicator price is ât a level 2 Malaysian/
Singapore cents per kilogramme below the upper indicative price.
4.    The total facilities of the Buffer Stock, including the normal Buffer
Stock and the contingency Buffer Stock-, shall be fully utilized to ensure that
the market indicator price does not fall below the lower indicative price or
rise above the upper indicative price.
5.    Sales and purchases by the Buffer Stock Manager shall be effected
through established commercial markets at prevailing prices, and all his
transactions shall be in physical rubber available for shipment not later than
one month after the end of the first quoted month in the market concerned, or
for delivery in a consuming market during the delivery month or months
normally corresponding to such shipment months in that market.         For the
purpose of the efficient operation of the Buffer Stock, the Council may decide
by consensus to allow the Buffer Stock Manager to purchase future contracts
up to a maximum of two months forward on the strict and absolute condition
that tenders are taken up on maturity.
6.    To facilitate the operation of the Buffer Stock, the Council shall
establish branch offices and such facilities of the Buffer Stock Manager's
office, where necessary, in established rubber markets and approved warehouse
locations.
7.    The Buffer Stock Manager shall prepare a monthly report on buffer stock
transactions and the Buffer Stock Account's financial position. Thirty days
after the end of each month, the report for that month shall be made available
to members.
8.    The information on buffer stock transactions shall include quantities,
prices, types, grades and markets of all buffer stock operations, including
rotations effected. The information on the Buffer Stock Account's financial
position shall also include interest rates on and terms and conditions of
deposits, the currencies operated in and other relevant information on the
items referred to in paragraph 2 of article 21.
                                       21
 ---pagebreak---                                   Article 31
                    Review and revision of the price range
                              A. Reference price
1.    Any review or revision of the reference price, including those following
net changes in the Buffer Stock under paragraph 2 of this article, shall be
based on market trends. Immediately before the first meeting of the Council
after the Agreement enters into force and every 12 months thereafter, the
Buffer Stock Manager shall calculate the average daily market indicator price
for the previous six months and compare this value with the two intervention
prices. The date of this calculation shall be fixed at least three months in
advance except for the first review and immediately precede a Council session.
       (a)  If the average of the six-month daily market indicator prices is
            at the upper intervention price, at the lower intervention price,
            or between these two prices, no revision of the reference price
            shall take place.
       (b)  If the average of the six-month daily market indicator prices is
            below the lower intervention price, the reference price shall be
            automatically revised downward by 5 per cent of its level and
            become effective the following day. Normally the Council would
            meet on that day and take note of the revision. The Council may
            review the reference price and may, by special vote, decide on a
            higher percentage adjustment downwards of the reference price.
       (c)   If the average of the six-month daily market indicator prices is
            above the upper intervention price, the reference price shall be
            automatically revised upwards by 5 per cent of its level and
            become effective the following day. Normally the Council would
            meet on that day and take note of the revision. The Council may
             review the reference price and may, by special vote, decide on a
            higher percentage adjustment upwards of the reference price.
       (d)  However, at the first regular session of the Council after the
             entry into force of the Agreement any automatic revision under
             article 31, paragraph 1, subparagraphs (b) or (c) shall be 4 per
             cent.
       (e)   For the purposes of the comparison, the reference price and the
             six-month daily market indicator price will be calculated to two
             decimal places.
2.    Following a net change to the Buffer Stock of .100,000 tonnes since the
last regular session of the Council, the Executive Director shall convene a
special session of the Council to assess the situation. The Council may, by
special vote, decide to take appropriate measures which may include:
       (a)   Suspension of buffer stock operations;
       (b)   Change in the rate of buffer stock purchases or sales; and
       (c)   Revision of the reference price.
3.    If net buffer stock purchases or sales amounting to 300,000 tonnes have
taken place since (a) the last revision under paragraph 3 of article 31 of the
International Natural Rubber Agreement, 1987, (b) the last revision under this
paragraph, or (c) the last revision under paragraph 2 of this article,
whichever is most recent, the reference price shall be lowered or raised,
respectively, by 3 per cent of its current level unless the Council, by
special vote, decides to lower or raise it, respectively, by a higher
percentage amount.
                                       22
 ---pagebreak--- 4.     Notwithstanding the provisions of article 29, paragraph 4, revision of
the reference price shall not result in the trigger action price breaching the
indicative price.
5.     Notwithstanding the provisions of article 31, paragraph 1 and article
31, paragraph 3, revision of the reference price shall not result in the
intervention price breaching the level at which the contingency Buffer Stock
will be brought into operation under article 30, paragraph 3.
                              B.  indicative prices
6.     The Council may, by special vote, revise the lower and upper indicative
prices at reviews provided for in this section of this article.
7.     The Council shall ensure that any revision of indicative prices is
consistent with evolving market trends and conditions. In this connection,
the Council shall take into consideration the trend of natural rubber prices,
consumption, supply, production costs and stocks, as well as the quantity of
natural rubber held in the Buffer Stock and the financial position of the
Buffer Stock Account.
8.     The lower and upper indicative prices shall be reviewed:
        (a)   24 months after the last review pursuant to paragraph 7 (a) of
              article 31 of the International Natural Rubber Agreement, 1987,
              or in the event that this.-Agreement enters into force after 1 May
              1996, at the first session of the Council under this Agreement,
              and every 24 months thereafter;
        (b)   In exceptional circumstances, at the request of a member        or
              members accounting for 200 or more votes in the Council; and
        (c)   when the reference price has been revised (i) downwards since the
              last revision, of the lower indicative price or the entry into
              force of the International Natural Rubber Agreement, 1987, or (ii)
              upwards since the last revision of the upper indicative price or
              the .entry into force of the International Natural Rubber
              Agreement, 1987, by at least 3 per cent under paragraph 3 of this
              article and at least 5 per cent under paragraph 1 of this article,
              or by at least this amount under paragraphs 1, 2 and/or 3 of this
              article, provided that the average of the daily market indicator
              price for the 60 days subsequent to the last revision of the
              reference price is either below the lower intervention price or
              above the upper intervention price, respectively.
9.     Notwithstanding paragraphs 6, 7 and 8 of this article, there shall be
no upward revision in the lower or upper indicative price if the average of
 the daily market indicator prices over the six-month period prior to a review
of the price range under this article is below the reference price.
Similarly, there shall be no downward revision in the lower or upper
 indicative price if the average of the daily market indicator prices over the
 six-month period prior to a review of the price range under this article is
 above the reference price.
                                    Article 32
                              Market indicator price
 1.     There shall be established a daily market indicator price which shall
be a composite, weighted average - reflecting the market in natural rubber -
of daily official prices as defined by the Council on the Kuala Lumpur,
 London, New York and Singapore markets, and such other established commercial
markets as the Council may decide.       Initially, the daily market indicator
price shall comprise RSS 1, RSS 3 and TSR 20 and their weighting shall be in
 the ratio of 2:3:5.        All quotations shall be converted into f.o.b.
Malaysian/Singapore ports in Malaysian/Singapore currency.
                                        23
 ---pagebreak--- 2.     The type/grade composition weightings, method of computing the daily
market indicator price and the number of markets shall be reviewed and may,
by special vote, be revised by the Council to ensure that it reflects the
market in natural rubber. The Council may, by special vote, decide to include
additional established commercial markets in the calculation of the daily
market indicator price if such markets are deemed to influence the
international price of natural rubber.
3.     The market indicator price shall be deemed above, at or below price
levels specified in this Agreement if the average of the daily market
indicator prices for the last five market days is above, at or below such
price levels.
                                   Article 33
                          Composition of buffer stocks
1.     At its first session after the entry into force of this Agreement, the
Council shall name the internationally recognized standard types and grades
of ribbed smoked sheets and technically specified rubbers for inclusion in the
Buffer Stock, provided that the following criteria are met:
        (a)   The lowest types and grades of natural rubber authorized for
              inclusion in the Buffer. Stock shall be RSS 3 and TSR 20; and
        (b)   All types and grades allowed under subparagraph (a) of this
              paragraph which account for at least 3 per cent of the previous
              calendar year's international trade in natural rubber shall be
              named.
2.     The Council may, by special vote, change these criteria and/or the
selected types/grades if that is necessary to ensure that the composition of
the Buffer Stock reflects the evolving market situation, attainment of the
stabilization objectives of this Agreement and the need to maintain a high
commercial standard of quality of buffer stocks.
3.      The Buffer Stock Manager shall make every effort to ensure that the
composition of the Buffer Stock closely reflects the export/import patterns
for natural rubber, while• promoting      the stabilization objectives of this
Agreement.            ' . *
4.      The Council may, by special vote, direct the Buffer Stock Manager to
change the composition of the Buffer Stock if the objective of price
stabilization so dictates. .
                                    Article 34
                            Location of buffer stocks
 1.     The location of buffer stocks shall ensure economic and efficient
commercial operations. In accordance with this principle, the buffer stocks
 shall be located in the territory of both exporting and importing members,
unless the Council, by special vote, decides otherwise. The distribution of
 the buffer stock rubber shall be consistent with attaining the stabilization
objectives of the Agreement while minimizing costs.
 2.     In order to maintain high commercial quality standards, buffer stocks
 shall be stored only in warehouses approved on the basis of criteria
 established by the Council of the International Natural Rubber Agreement,
 19 87, or revised by the Council under this Agreement.
                                        24
 ---pagebreak--- 3.    After the entry into force of this Agreement, the Council shall
establish and approve the,list of warehouses and the necessary arrangements
for their use. The Council may, if necessary, review the list of warehouses
approved by the Council of the International Natural Rubber Agreement, 1987,
and the criteria established by the said Council and maintain or revise them
accordingly.
4.    The Council shall also periodically review the location of the buffer
stocks and may, by special vote, direct the Buffer Stock Manager tô change the
location of the buffer stocks to ensure economic and efficient commercial
operations.
                                  Article 35
                Maintaining the quality of the buffer stocks
      The Buffer Stock Manager shall ensure that all buffer stocks are
purchased and maintained at a high commercial standard of quality. To help
him achieve this, lie may rotate natural rubber stored in the Buffer Stock as
necessary to ensure such standards, taking into appropriate consideration the
cost of such rotation and its impact on the stability of the market. The
costs of rotation shall be brought into the Buffer Stock Account.
                                  Article 36
            Restriction or suspension of buffer stock operations
1.    Notwithstanding the provisions of article 30, the Council, if in
session, may, by special vote, restrict or suspend the operations of the
Buffer Stock, if in its opinion the discharge of the obligations laid upon the
Buffer Stock Manager by that article will not achieve the objectives of this
Agreement.
2.    If the Council is not in session, the Executive Director may, after
consultation with the Chairman, restrict or suspend the operations of the
Buffer Stock, if in his opinion the discharge of the obligations laid upon the
Buffer Stock Manager by article 30 will not achieve the objectives of this
Agreement.
3.    Immediately after a decision to restrict or suspend the operations of
the Buffer Stock under paragraph 2 of this article, the Executive Director
shall convene a session of the Council to review such decision.
Notwithstanding the provisions of paragraph 4 of article 13, the Council shall
meet within 10 days after the date of restriction or suspension arid shall, by
special vote,, confirm or cancel such restriction or suspension.       If the
Council cannot come to a decision at that session, buffer stock operations
shall be resumed without any restriction imposed under this article.
4.    As long as any restriction or suspension of buffer stock operations
decided in accordance with this article remains in force, the Council shall
review this decision at intervals of not longer than three months. If at a
session to make such a review the Council does not confirm, by special vote,
the continuation of the restriction or suspension, or does not come to a
decision, buffer stock operations shall be resumed without restriction.
                                      25
 ---pagebreak---                                    Article 37
       Penalties relating to contributions to the Buffer Stock Account
1.     If a member does not fulfil its obligation to contribute to the Buffer
Stock Account by the last day such contribution becomes due, it shall be
considered to be in arrears. A member in arrears for 60 days or more shall
not count as a member for the purpose of voting on matters covered in
paragraph 2 of this article.
2.     The voting and other rights in the Council of a member in arrears for
60 days or more under paragraph 1 of this article shall be suspended, unless
the Council, by special vote, decides otherwise.
3.     A member in arrears shall bear interest charges at the prime rate in the
host country beginning on the last day such payments become due. Coverage of
arrears by the remaining importing and exporting members shall be on a
voluntary basis.
4.     A member shall not be considered as in arrears if any shortfall in its
contribution is only a result of fluctuations in currency exchange rates in
the 60 days following the call for payments. In this case, no interest will
be charged on the shortfall. However, any such shortfall should be covered
by the member within the 60 days following the payment.
5.     when the default has been remedied to the satisfaction of the Council,
the voting and other rights of the member in arrears for 60 days or more shall
be restored.     If the arrears have been made good by other members, these
members shall be fully reimbursed.
                                   Article 38
            Adjustment of contributions to the Buffer Stock Account
1.     When the votes are redistributed at the first regular session in each
financial year or whenever the membership of the Organization changes, the
Council shall make the necessary adjustment of each member's contribution to
the Buffer Stock Account in accordance with the provisions of this article.
For this purpose, the Executive Director shall determine:
        (a)   The net cash contribution of each member, by subtracting refunds
              of contributions to that member in accordance with paragraph 2 of
              this article from the sum of all contributions paid by that member
              since the entry into force of this Agreement;
        (b)   The total net call-ups, by summing the consecutive call-ups and
              subtracting the total of refunds made in accordance with paragraph
              2 of this article;
        (c)   The revised net contribution for each member, by apportioning the
              total net call-ups among members on the basis of each member's
              revised voting share in the Council pursuant to article 14,
              subject to paragraph 3 of article 27, provided that the voting
              share of each member shall, for the purpose of this article, be
              calculated without regard to the suspension of any member's voting
              rights or any redistribution of votes resulting therefrom.
Where a member's net cash contribution exceeds its revised net contribution,
a refund of the difference minus any outstanding penalty interest on arrears
shall be made to that member from the Buffer Stock Account, where a member's
revised net contribution exceeds its net cash contribution, a payment of the
difference plus an/ outstanding penalty interest on arrears shall be made by
 that member to the Buffer Stock Account.
                                        26
 ---pagebreak--- 2.    If the Council, having regard to paragraphs 2 and 3 of article 28,
decides that there are net cash contributions in excess of funds required to
support buffer stock operations within the next four months, the Council shall
refund such excess net cash contributions less initial contributions unless
it decides, by special vote, either to make no such refund or to refund a
smaller amount. Members' shares of the amount to be refunded shall be in
proportion to their net cash contributions, minus any outstanding penalty
interest on arrears. The contribution liability of members in arrears shall
be reduced in the same proportion as the refund bears to the total net cash
contributions.
3.    At the request of a member, the refund to which it is entitled may be
retained in the Buffer Stock Account. If a member requests that its refund
be retained in the Buffer Stock Account, this amount shall be credited against
any additional contribution requested in accordance with article 28. The
credit retained in the Buffer Stock Account at the request of a member shall
bear interest at the average rate of interest earned on funds in the Buffer
Stock Account, beginning the last day when the amount should normally be
reimbursed to that member until-the day preceding the actual reimbursement.
4.    The Executive Director shall immediately notify members of any required
payments or refunds resulting from adjustments made in accordance with
paragraphs 1 and 2 of this article. Such payments by members or refunds to
members shall be made within 60 days from the date the Executive Director
issues such notification.
5.    in the event that the amount of cash in the Buffer Stock Account exceeds
the value of total net cash contributions of members, such surplus funds shall
be distributed upon termination of this Agreement.
                                  Article 39
               The Buffer Stock and changes in exchange rates
1^    In the event that the exchange rate between the Malaysian
ringgit/Singapore dollar and the currencies of the major natural rubber
exporting and importing members changes to the extent that the operations of
the Buffer Stock are significantly affected, the Executive Director shall, in
accordance with article 36, or members may, in accordance with article 13,
call for a special session of the Council. The Council shall meet within 10
days to confirm or cancel measures already taken by the Executive Director
pursuant to article 36, and may, by special vote, decide to take appropriate
measures, including the possibility of revising the price range, pursuant to
the principles of the first sentences of paragraphs 1 and 6 of article 31.
2.    The Council shall, by special vote, establish a procedure to determine
a significant, change in the parities of these currencies for the sole purpose
of ensuring the timely convening of the Council.
3.    In the event that there is a divergency between the Malaysian ringgit
and the Singapore dollar to the extent that buffer stock operations are
significantly affected, the Council shall meet to review the situation and may
consider the adoption of a single currency.
                                      27
 ---pagebreak---                                    Article 40
              Liquidation procedures for the Buffer Stock Account
1.     On termination of this Agreement, the Buffer Stock Manager shall
estimate the total expense of liquidating or transferring to a new
international natural rubber agreement the assets of the Buffer Stock Account
in accordance with the provisions of this article, and shall reserve that
amount in a.separate account. If these balances are inadequate, the Buffer
Stock Manager shall sell a sufficient quantity of natural rubber in the Buffer
Stock to provide the additional sum required.
2.     Each member's share in the Buffer Stock Account shall be calculated as
follows:
       (a)   The value of the Buffer Stock shall be the value of the total
             quantity of natural rubber of each type/grade therein, calculated
             at the lowest of the current prices of the respective types/grades
             o n markets referred to in article 32 during the 30 market days
             preceding the date of termination of this Agreement;
       (b)   The value of the Buffer stock Account shall be the value of the
             Buffer Stock plus the cash assets of the Buffer Stock Account on
             the date of the termination of this Agreement less any amount
             reserved under paragraph 1 of this article;
       (c)   Each member's net cash contribution shall be the sum of its
             contributions paid throughout the duration of this Agreement less
             all refunds made under article 38; penalty interest on arrears
             paid in accordance with paragraph 3 of article 37 shall not
             constitute a contribution to the Buffer Stock Account;
       (d)   If the value of the Buffer Stock Account is either greater or less
             than total net cash contributions, the surplus shall be allocated
             among members in proportion to each member's time-weighted net
             contribution share under this Agreement.     Any deficit shall be
             allocated among members in proportion to each member's average
             number of votes held during its period of membership.           In
             assessing the share of the deficits to be borne by each member,
             the votes of each member shall be calculated without regard to the
             suspension of any member's voting rights or any redistribution of
             votes resulting therefrom;
       (e)   Each member's share in the Buffer Stock Account shall comprise its
             net cash contribution, reduced or increased by its shares in
             deficits or surpluses in the Buffer Stock Account, and reduced by
             its liability, if any, for .outstanding interest on arrears.
3.     If this Agreement is to be immediately replaced with a new international
natural rubber agreement, the Council shall, by special vote, adopt procedures
to ensure efficient transfer to the new agreement, as required by that
agreement, of shares in the Buffer Stock Account of members which intend to
participate in the new agreement.         Any member which does not wish to
participate in the new agreement shall be entitled to the payment of its
share:
        (a)  From available cash in proportion to its percentage share of the
             total net cash contributions to the Buffer Stock Account, within
             three months; and
        (b)  From the net proceeds from the disposal of the buffer stocks, by
             way of orderly sales or by way of transfer to the new
             international natural rubber agreement at current market prices,
             which must be concluded within 12 months; unless the Council
             decides, by special vote, to increase payments under subparagraph
              (a) of this paragraph.
                                       28
 ---pagebreak--- 4.     If this Agreement     terminates without being replaced by a new
international natural rubber agreement which provides for a buffer stock, the
Council shall, by special vote, adopt procedures to govern orderly disposal
of the Buffer Stock within the maximum period specified in paragraph 6 of
article 67, subject to the following constraints:
       (a)   No further purchases of natural rubber shall be made;
       (b)   The Organization shall incur no new expenses         except  those
             necessary to dispose of the Buffer Stock.
5.    Subject to an election by any member to take natural rubber in
accordance with paragraph 6 of this article, any cash which remains in the
Buffer Stock Account shall be forthwith distributed to members in proportion
to their shares as determined in paragraph 2 of this article.
6.    In lieu of all or part of a cash payment, each member may elect to take
its share in the assets of the Buffer Stock Account in natural rubber; subject
to procedures adopted by the Council.
7. . The Council shall adopt appropriate procedures for adjustment and
payment of members' shares in the Buffer Stock Account. This adjustment shall
account for:
       (a)   Any discrepancy between the price of natural rubber specified in
             subparagraph (a) of paragraph 2' of this article and the prices at
            which part or all of the Buffer Stock is sold pursuant to
             procedures for disposal of the Buffer Stock; and
       (b)   The difference between estimated and actual liquidation expenses.
8.    The Council shall, within 30 days following final transactions of the
Buffer Stock Account, meet to effect final settlement of accounts among
members within 30 days thereafter.
                                      29
 ---pagebreak---       CHAPTER IX.    RELATIONSHIP WITH THE COMMON FUND POR COMMODITIES        )
                                  Article 41
              Relationship with the Common Fund for Commodities
1.    The Organization shall take full advantage of the facilities of the
Common Fund for Commodities.
2.    In respect of the implementation of any project funded under the Second
Account of the Common Fund for Commodities, the Organization, as a designated
International Commodity Body, shall not incur any financial obligation
including for guarantees given by individual members or other entities.
Neither the Organization, nor any member by reason of its membership in the
Organization, shall be responsible for any liability arising from borrowing
or lending by any other member or entity in connection with such projects.
                                      30
 ---pagebreak---            CHAPTER X.    SUPPLY AND MARKET ACCBSS AND OTHER MEASURES
                                    Article 42
                            Supply and market access
1.    Exporting members to the fullest extent possible undertake to pursue
policies and programmes which maintain continuous availability to consumers
of natural rubber supplies.
2.    Importing members to the fullest extent possible undertake to pursue
policies which will maintain access to their markets for natural rubber.
                                    Article 43
                                  Other measures
1.    With a view to achieving the objectives of this Agreement, the Council
shall identify and propose appropriate measures and techniques directed
towards promoting:
      (a)    The development of the natural rubber economy by producing
             members, through expanded-and improved production, productivity
             and marketing, thereby increasing the export earnings of producing
             members while at the same time improving the reliability of
             supply. For this purpose, the Committee on Other Measures shall
             undertake economic and technical analyses in order to identify:
              (i)   Natural rubber research and development programmes and
                    projects of benefit to exporting and importing members,
                    including scientific research in specific areas;
              (ii)  Programmes and projects to improve the productivity of the
                    natural rubber industry;
              (iii) Ways and means to upgrade natural       rubber supplies and
                    achieve    uniformity    in   quality    specification  and
                    presentation of natural rubber; and
              (iv)  Methods of improving the processing,          marketing and
                    distribution of raw natural rubber;
       (b)   The development of end-uses of natural rubber. For this purpose,
             the Committee on Other Measures shall undertake appropriate
             economic and technical analyses in order to identify programmes
             and projects leading to increased and new uses of natural rubber.
2.    The Council shall consider the financial implications of such measures
and techniques and seek to promote and facilitate the provision of adequate
financial resources, as appropriate, from such sources as international
financial institutions and the Second Account of the. Common Fund for
Commodities.
3.    The Council may accept any voluntary contribution in support of approved
projects to implement this article. The management of financial contributions
shall be subject to rules to be established by special vote of the Council.
4.    The Council may make recommendations, as appropriate, to members,
international     institutions   and   other   organizations   to   promote the
implementation of specific measures under this article.
5.    The Committee on Other Measures shall periodically review the progress
of those measures which the Council decides to promote and recommend, and
shall report thereon to the Council.
                                        31
 ---pagebreak---               CHAPTER XI.    CONSULTATION ON DOMESTIC POLICIES
                                  Article 44
                                 Consultation
      The Council shall consult, at the request of any member, on government
natural rubber policies directly affecting supply or demand. The Council may
submit its recommendations to members for their consideration.
                                      32
 ---pagebreak---              CHAPTBR XII.    STATISTICS, STUDIBS AND INFORMATION
                                  Article 45
                         Statistics and information
1.    The Council shall collect, collate and as necessary publish such
statistical information on natural rubber and related areas as is necessary
for the satisfactory operation of this Agreement.
2.    Members shall promptly and to the fullest extent possible furnish to the
Council available data by specific types and grades concerning production,
consumption and international trade in natural rubber.
3.    The Council may also request members to furnish other available
information, including information on related areas which may be required for
the satisfactory operation of this Agreement.
4.    Members shall furnish all the above-mentioned statistics and information
within a reasonable time to the fullest extent possible consistent with their
national legislation and by the ways most appropriate for them.
5.    The Council shall establish close relationships with appropriate
international organizations, including the International Rubber Study Group,
and with commodity exchanges in order to help ensure the availability of
recent and reliable data on production, consumption, stocks, international
trade and prices of natural rubber, and other factors that influence demand
for and supply of natural rubber.
6.    The Council shall endeavour to ensure that no information published
shall prejudice the confidentiality of the operations of persons or companies
producing, processing or marketing natural rubber or related products.
                                  Article 46
                  Annual assessment, estimates and studies
1.    The Council shall prepare an annual assessment on the world natural
rubber situation and related areas in the light of the information supplied
by members and from all relevant intergovernmental and international
organizations.
2.    At least once in every half year, the Council shall also estimate
production, consumption, exports and imports of natural rubber by specific
types and grades, if possible, for the following six months. It shall inform
the members of these estimates.
3.    The Council shall undertake, or make appropriate arrangements to
undertake, studies of trends in natural rubber production, consumption, trade,
marketing and prices, as well as of the short-term and long-term problems of
the world natural rubber economy.
                                   Article 47
                                 Annual review
      The Council shall each year review the operation of this Agreement
including conformity to its spirit and promotion of its objectives. It may
then make recommendations to members regarding ways and means of improving the
functioning of this Agreement.
                                       33
 ---pagebreak---                          CHAPTBR XIII.    MISCELLANEOUS
                                   Article 48
                General obligations and liabilities of members
1.     Members shall for the duration of this Agreement use their best
endeavours and cooperate to promote the attainment of the objectives of this
Agreement and shall not take any action in contradiction to those objectives.
2.     Members shall in particular seek to improve the conditions of the
natural rubber economy and to encourage the production and use of natural
rubber in order to promote the growth and the modernization of the natural
rubber economy for the mutual benefit of producers and consumers.
3.    .Members shall accept as binding all decisions of the Council under this
Agreement and will not implement measures which would have the effect of
limiting or running counter to those decisions.
4.     The liability of members arising from the operation of this Agreement,
whether to the Organization or to third parties, shall be limited to the
extent of their obligations regarding contributions to the administrative
budget and to financing of the Buffer Stock under and in accordance with
chapters VII and VIII of this Agreement and any obligations that may be
assumed by the Council under article 41.
                                   Article 49
                               Obstacles to trade
1.     The Council shall, in accordance with the annual assessment of the world
natural rubber situation referred to in article 46, identify any obstacles to
the expansion' of trade in natural rubber in its raw, semi-processed or
modified forms.
2.     The Council may, in order to further the purposes of this article, make
recommendations to members to seek in appropriate international fora mutually
acceptable practical measures designed to remove progressively and, where
possible, to eliminate such obstacles. The Council shall periodically examine
the results of such recommendations.
                                   Article 50
             Transportation and market structure of natural rubber
       The Council should encourage and facilitate the promotion of reasonable
 and equitable freight rates and improvements in the transport system, so as
 to provide regular supplies to markets and to effect savings in the cost of
 the products marketed.
                                        34
 ---pagebreak---                                   Article 51
                     Differential and remedial measures
      Developing importing members, and least developed countries which are
members, whose interests are adversely affected by measures taken under this
Agreement may apply to the Council for appropriate differential and remedial
measures. The Council shall consider taking such appropriate measures in
accordance with paragraphs 3 and 4 of section ill of resolution 93 (IV) of the
United Nations Conference on Trade and Development.
                                  Article 52
                           Relief from obligations
1.    Where it is necessary on account of. exceptional circumstances or
emergency or force majeure not expressly provided for in this Agreement, the
Council may, by special vote, relieve a member of an obligation under this
Agreement if it is satisfied by an explanation from that member regarding the
reasons why the obligation cannot be met.
2.    The Council, in granting relief to a member under paragraph 1 of this
article, shall state explicitly the terms and conditions on which, and the
period for which, the member is relieved of such obligation, and the reasons
for which the relief is granted.
                                  Article 53
                            Fair labour standards
      Members declare that they will endeavour to maintain labour standards
designed to improve the levels of living of workers in their respective
natural rubber sectors.
                                  Article 54
                            Environmental aspects
      Members shall endeavour to pay due attention to environmental aspects
as agreed at the eighth session of the United Nations Conference on Trade and
Development and the United Nations Conference on Environment and Development,
held in 1992.
                                      35
 ---pagebreak---                      CHAPTBR XIV.   COMPLAINTS AND DISPUTBS
                                   Article 55
                                   Complaints
1.     Any complaint that a member has failed to fulfil its obligations under
this Agreement shall, at the request of the member making the complaint, be
referred to the Cpuncil, which, subject to prior consultation with the members
concerned, shall take a decision on the matter.
2.     Any decision by the Council that a member is in breach of its
obligations under this Agreement shall specify the nature of the breach.
3.     whenever the Council, whether as the result of a complaint or otherwise,
finds- that a member has committed a breach of this Agreement, it may, by
special vote, and without prejudice to such other measures as are specifically
provided for in other articles of this Agreement:
       (a)   Suspend that member's voting rights in the Council and, if it
             deems necessary, suspend any other rights of such member,
             including those of holding office in the Council or in any
             committee established under article 18 and of being eligible for
             membership of such committees, until it has fulfilled its
             obligations; or
       (b)   Take action under article 65, if such breach significantly impairs
             the operation of this Agreement.
                                   Article 56
                                    Disputes
1.     Any dispute concerning the interpretation or application of this
Agreement which is not settled among the members involved shall, at the
request of any member party to the dispute, be referred to the Council for
decision.
2.     In any case where a dispute has been referred to the Council under
paragraph 1 of this article, a majority of members holding at least one third
of the total votes may require the Council, after discussion, to seek the
opinion of an advisory panel constituted under paragraph 3 of this article on
the issue in dispute before giving its_ decision.
3.     (a)   Unless the Council, by special vote, decides otherwise,        the
             advisory panel shall consist of five persons as follows:
              (i)   Two persons, one having wide experience in matters of the
                    kind in dispute and the other having legal standing and
                    experience, nominated by the exporting members;
              (ii)  Two such persons nominated by the importing members; and
              (iii) A chairman selected unanimously by the four persons,
                    nominated under (i) and (ii) of this subparagraph or, if
                    they fail to agree, by the Chairman of the Council.
       (b)   Nationals of members and of non-members shall be eligible to serve
             on the advisory panel.
       (c)   Persons appointed to the advisory panel shall act in their
             personal capacities and without instructions from any government.
                                       36
 ---pagebreak---        (d)  The expenses of    the advisory panel   shall be paid by  the
            Organization.
4.    The opinion of the advisory panel and the reasons therefor shall be
submitted to the Council which, after considering all the relevant
information, shall, by special vote, decide the dispute.
                                     37
 ---pagebreak---                         CHAPTBR XV.    FINAL PROVISIONS
                                  Article 57
                                   Signature
      This Agreement shall be open for signature at United Nations
Headquarters from 3 April 1995 to 28 December 1995 inclusive by the
Governments invited to the United Nations Conference on Natural Rubber, 1994.
                                  Article 58
                                  Depositary
      The Secretary-General of the United Nations is hereby designated as the
depositary of this Agreement.
                                  Article 59
                    Ratification, acceptance and approval
1.    This Agreement shall be subject to ratification, acceptance or approval
by the signatory Governments in accordance with their respective
constitutional or institutional procedures.
2.    Instruments of ratification, acceptance or approval shall be deposited
with the depositary not later than 1 January 1997. The Council may, however,
grant extensions of time to signatory Governments which have been unable to
deposit their instruments by that date.
3.    Each Government depositing an instrument of ratification, acceptance or
approval shall, at the time of such deposit, declare itself to be an exporting
member or an importing member.
                                  Article 60
                   Notification of provisional application
1.    A signatory Government which intends to ratify, accept or approve this
Agreement, or a Government for which the Council has established conditions
for accession but which has not yet been able to deposit its instrument, may
at any time notify the depositary that it will fully apply this Agreement
provisionally, either when it enters into force in accordance with article 61
or, if it is already in force, at a specified date.
2.    Notwithstanding the provisions of paragraph 1 of this article, a
Government may provide in its notification of provisional application that it
will apply this Agreement only within the limitations of its constitutional
and/or legislative procedures and its domestic laws and'regulations. However,
such Government shall meet all its financial obligations to this Agreement.
The provisional membership of a Government which notifies in this manner shall
not exceed 12 months from the provisional entry into force of this Agreement,
unless the Council decides otherwise pursuant to paragraph 2 of article 59.
                                       38
 ---pagebreak---                                   Article 61
                               Entry into force
1.    This Agreement shall enter into force definitively on 29 December 1995
or on any date thereafter, if by that date Governments accounting for at least
80 per cent of net exports as set out in annex A to this Agreement, and
Governments accounting for at least 80 per cent of net imports as set out in
annex B to this Agreement, have deposited their instruments of ratification,
acceptance, approval or accession, or have assumed full financial commitment
to this Agreement.
2.    This Agreement shall enter into force provisionally on 29 December 1995>
or on any date before 1 January 1997, if Governments accounting for at least
75 per cent of net exports as set out in annex A to this Agreement, and
Governments accounting for at least 75 per cent of net imports as set out in
annex B to this Agreement, have deposited their instruments of ratification,
acceptance or approval, or have notified the depositary under paragraph 1 of
article 60 that they will apply this Agreement provisionally and assume full
financial commitment to this Agreement. The Agreement shall remain in force
provisionally up to a maximum of 12 months, unless it enters into force
definitively under paragraph 1 of this article or the Council decides
otherwise in accordance with paragraph 4 of this article.
3.    If this Agreement does not come into force provisionally under paragraph
2 of this article by 1 January 1997,- the Secretary General of the United
Nations shall invite, at the earliest time he considers practicable after that
date, the Governments which have deposited instruments of ratification,
acceptance or approval or have notified him that they will apply this
Agreement provisionally, to meet with a view to recommending whether or not
such Governments should take the necessary steps to put this Agreement
provisionally or definitively into force among themselves, in whole or in part.
If no conclusion is reached at this meeting, the Secretary-General of the
United Nations may convene such further meetings as he considers appropriate.
4.    If the requirements for definitive entry into force of this Agreement
under paragraph 1 of this article have not been met within 12 calendar months
of the provisional entry into force of this Agreement under paragraph 2 of
this article, the Council shall, not later than one month before the end of
the 12-month period mentioned above, review the future of this Agreement and,
subject to paragraph 1 of this article, by special vote, decide:
       (a)   To put this Agreement definitively into force among the current
             members in whole or in part;
       (b)   To keep this Agreement provisionally in force among the current
             members in whole or in part for an additional year; or
       (c)   To renegotiate this Agreement.
If no decision is reached by the Council, this Agreement shall terminate at
the expiry of the 12-month period. The Council shall inform the depositary
of any decision taken under this paragraph.
5.    For any Government that deposits its instrument of ratification,
acceptance, approval or accession after the entry into force of this
Agreement, it shall enter into force for that Government on the date of such
deposit.
6.    The Executive Director of the Organization shall convene the first
session of the Council as soon as possible after the entry into force of this
Agreement.
                                      39
 ---pagebreak---                                    Article 62
                                    Accession
1.    This Agreement shall be open for accession by the Government of any
State. Accession shall be subject to conditions to be established by the
Council, which shall include, inter alia,     a time limit for the deposit of
instruments of accession, the number of votes to be held and financial
obligations.    The Council may, however, grant extensions of time to
Governments which are unable to deposit their instruments of accession within
the time limit set in the conditions of accession.
2.    Accession shall be effected by the deposit of an instrument of accession
with the depositary. Instruments of accession shall state that the Government
accepts all the conditions established by the Council.
                                   Article 63
                                   Amendments
1.    The Council may, by special vote, recommend amendments of this Agreement
to the members.
2.    The Council shall fix a date by which members shall notify the
depositary of their acceptance of the amendment.
3.    An amendment shall become effective 90 days after the depositary      has
received notifications of acceptance from members constituting at least     two
thirds of the exporting members and accounting for at least 85 per cent of  the
votes of the exporting members, and from members constituting at least      two
thirds of the importing members and accounting for at least 85 per cent of  the
votes of the importing members.
4.    After the depositary informs the Council.that the requirements for the
amendment to become effective have been met, and notwithstanding the
provisions of paragraph 2 of this article relating to the date fixed by the
Council, a member may still notify the depositary of its acceptance of the
amendment, provided that such notification is made before the amendment
becomes effective.
5.    Any member which has not notified its acceptance of an amendment by the
date on which such amendment becomes effective shall cease to be a contracting
party as from that date, -unless such member has satisfied the Council that its
acceptance could not be obtained in time owing to difficulties in completing
its constitutional or institutional procedures, and the Council decides to
extend for that member the period for acceptance of the amendment. Such
member shall not be bound by the amendment before it has notified its
acceptance thereof.
6.    If the requirements for the amendment to become effective have not been
met by the date fixed by the Council in accordance with paragraph 2 of this
article, the amendment shall be considered withdrawn.
                                        40
 ---pagebreak---                                    Article 64
                                   withdrawal
1.     A member may withdraw from this Agreement at any time after the entry
into force of this Agreement by giving notice of withdrawal to the depositary.
That member shall simultaneously inform the Council of the action it has
taken.
2.    One year after its notice is received by the depositary, that member
shall cease to be a contracting party to this Agreement.
                                   Article 65
                                   Exclusion
       If the Council decides that any member is in breach of its obligations
under this Agreement and decides further that such breach significantly
impairs the operation of this Agreement, it may, by special vote, exclude that
member from this Agreement.     The Council shall immediately so notify the
depositary. One year after the date of the Council's decision, that member
shall cease to be a contracting party to this Agreement.
                                  Article 66 .
         Settlement of accounts with withdrawing or excluded members
                   or members unable to accept an amendment
1.    In accordance with this article, the Council shall determine any
settlement of accounts with a member which ceases to be a contracting party
to this Agreement owing to:
       (a)   Non-acceptance of an amendment to this Agreement pursuant to
             article 63;
       (b)   Withdrawal from this Agreement pursuant to article 64; or
       (c)   Exclusion from this Agreement pursuant to article 65.
2.    The Council shall retain any contribution paid to the Administrative
Account by a member which ceases to be a contracting party to this Agreement.
3.    The Council shall refund the share in the Buffer Stock Account in
accordance with article 40 to a member which ceases to be a contracting party
owing to non-acceptance of an amendment to this Agreement, withdrawal or
exclusion, less its share in any surpluses.
       (a)   Such refund to a member which ceases to be a contracting party
             owing to non-acceptance of an amendment to this Agreement shall
             be made one year after the amendment concerned enters into force.
                                       41
 ---pagebreak---        (b)  Such refund to a member which withdraws shall be made within 60
            days after that member ceases to be a contracting party to this
            Agreement, unless as a result of this withdrawal the Council
            decides to terminate this Agreement under paragraph 5 of article
            67 prior to such a refund, in which case the provisions of article
            40 and paragraph 6 of article 67 shall apply.
       (c)  Such refund to a member which is excluded shall be made within 60
            days after a member ceases to be a contracting party to this
            Agreement.
4.    In the event that the Buffer Stock Account is unable to settle the
payment in cash due under subparagraph (à), (b) or (c) of paragraph 3 of this
article without either undermining the viability of the Buffer Stock Account
or leading to a call-up of additional contributions from members to cover such
refunds, payment shall be deferred until the requisite amount of natural
rubber in the Buffer Stock can be sold at or above the upper intervention
price. In the event that, before the end of the one-year period specified in
article 64, the Council informs a withdrawing member that payment will have
to be deferred in accordance with this paragraph, the period of one year
between notification of intention to withdraw and the actual withdrawal may,
if the withdrawing member so wishes, be extended until such time as the
Council informs that member that payment of its share can be effected within
60 days.
5.    A member which has received an appropriate refund under this article
shall not be entitled to any share of the proceeds of liquidation of the
Organization. Nor shall such a member be liable for any deficit incurred by
the Organization after such refund has been made.
                                  Article 67
                     Duration, extension and termination
1.    This Agreement shall remain in force for a period of four years after
its entry into force, unless extended under paragraph 3 or terminated under
paragraph 4 or paragraph 5 of this article.
2.    Before the expiry of the four-year period referred to in paragraph 1 of
this article, the Council may, by special vote, decide to renegotiate this
Agreement.
3.    The Council may, by special vote, extend this Agreement by a period or
periods not exceeding two years in all, commencing from the date of expiry of
the four-year period specified in paragraph 1 of this article.
4.    If a new international natural rubber agreement is negotiated and enters
into force during any period of extension of this Agreement pursuant to
paragraph 3 of this article, this Agreement, as extended, shall terminate upon
the entry into force of the new agreement.
5.    The Council may at any time, by special vote, decide to terminate this
Agreement with effect from such date as it may determine.
                                      42
 ---pagebreak--- 6.    Notwithstanding the termination of this Agreement, the Council shall
continue in being for a period not exceeding three years to carry out the
liquidation of the Organization, including the settlement of accounts, and the
disposal of assets in accordance with the provisions of article 40 and subject
to relevant decisions to be taken by special vote, and shall have during that
period such powers and functions as may be necessary for these purposes.
7.    The Council shall notify the depositary of any decision taken under this
article.
                                  Article 68
                                 Reservations
      No reservations may be made with respect to any of the provisions of
this Agreement.
      IN WITNESS WHEREOF the undersigned, being duly authorized thereto, have
affixed their signatures under this Agreement on the dates indicated.
DONE at Geneva, this seventeenth day of February, one thousand nine hundred
and ninety-five, the texts of this Agreement in the Arabic, Chinese, English,
French, Russian and Spanish languages being equally authentic.
                                      43
 ---pagebreak---                               ANNEXES
                              Annex A
           Shares of individual exporting countries in total
              net exports of countries, as established for
                       the purposes of article 61
                                                           Percentage
Bolivia                                                         0.040
Cameroon                                                        0.867
Côte d'Ivoire                                                   1.764
Indonesia                                                     31.108
Malaysia                                                      27.971
Nigeria                                                        2.946
Singapore                                                      0.000
Sri Lanka                                                      2.096
Thailand                                                      33.208
                                             TOTAL           100.000
Shares are percentages of total net exports of natural rubber in the five-
year period, 1989-1993.
                                 44
 ---pagebreak---                               Annex B
        Shares of individual importing countries and groups
          of countries in total net imports of countries,
           as established for the purposes of article 61
                                                            Percentage
Argentina                                                       0.943
China                                                           8.843
Colombia                                                        0.700
Cuba                                                            0.043
Democratic People's Republic of Korea                           0.195
European Community:                                           26.968
    Austria                                                     0.723
    Belgium-Luxembourg                                          1.535
    Denmark                                                     0.067
    Finland                                                     0.221
    France                                                      5.559
    Germany                                                     6.437
    Greece                                                      0.276
    Ireland                                                     0.224
    Italy                                                       3.754
    Netherlands                                                 0.321
    Portugal                                                    0.239
    Spain                                                       3.397
    Sweden                                                      0.292
    United Kingdom                                              3.923
India                                                           0.450
Japan                                                         21.694
Lebanon                                                         0.003
Morocco                                                         0.237
Norway                                                          0.022
Pakistan                                                        0.715
Republic of Korea                                               8.830
Russian Federation                                              1.149
Slovakia.                                                       0.334
Switzerland                                                     0.059
United States of America                                      28.815
                                            TOTAL            100.000
Shares are percentages of total net imports of natural rubber in the
three-year period, 1991-1993.
                                 45
 ---pagebreak---                                                                                v;
                                   Annex C
          Cost of the Buffer Stock as estimated bv the President of
            the United Nations Conference on Natural Rubber, 1994
         Based on the cost of acquiring and operating the Buffer Stock of
roughly 360,000 tonnes from 1982 until March 1987 and 221,000 tonnes from 1990
through December 1994, the cost of acquiring and operating a Buffer Stock of
550,000 tonnes might be calculated by multiplying this figure by the lower
trigger action price and adding a further 30 per cent thereof.
                                      46
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(95) 616 final
                                              DOCUMENTS
EN                                                                       11 03
                                     Catalogue number : CB-CO-95-651-EN-C
                                                             ISBN 92-77-97083-9
Office for Official Publications of the European Communities
L-2985 Luxembourg
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