GETTING THROUGH THE DEAL Agribusiness Agribusiness Contributing editors Carol VandenHoek and Wendy Baker QC 2018 Law Business Research 2018 © Law Business Research 2017 Agribusiness Contributing editors Carol VandenHoek and Wendy Baker QC Miller Thomson LLP Publisher Law The information provided in this publication is Gideon Roberton general and may not apply in a specific situation. [email protected] Business Legal advice should always be sought before taking Research any legal action based on the information provided. Subscriptions This information is not intended to create, nor does Sophie Pallier Published by receipt of it constitute, a lawyer–client relationship. [email protected] Law Business Research Ltd The publishers and authors accept no responsibility 87 Lancaster Road for any acts or omissions contained herein. The Senior business development managers London, W11 1QQ, UK information provided was verified between August Alan Lee Tel: +44 20 3708 4199 and September 2017. 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Printed and distributed by First published 2017 Encompass Print Solutions Dan White Second edition Tel: 0844 2480 112 [email protected] ISSN 2398-5895 © Law Business Research 2017 CONTENTS Introduction 5 Malaysia 57 Carol VandenHoek and Wendy Baker QC Azman bin Othman Luk, Pauline Khor, Amelia Koo and Miller Thomson LLP Moy Pui Yee Rahmat Lim & Partners Argentina 6 John O’Farrell and Gonzalo Ballester Mexico 65 JP O’Farrell Abogados SA Alejandro Zeind and Antonio Zeind Zeind & Zeind Australia 14 Carolyn Chudleigh, Kendra McKay and Stephanie Lambert Netherlands 72 HFW Australia Jan van de Ven ABLD Brazil 23 André Ricardo Passos de Souza and Ralph Melles Sticca Romania 76 Passos e Sticca Advogados Associados Otilia Petrescu and Silviu Stratulat Stratulat Albulescu Attorneys at Law Canada 28 Carol VandenHoek and Wendy Baker QC Ukraine 82 Miller Thomson LLP Nazar Chernyavsky and Andrew Zablotskyi Sayenko Kharenko Chile 37 Matías Araya, Sebastián Norris and Milenita Vega United Kingdom 89 Araya & Cía Nicolas Carbonnelle, Sally Shorthose and Joanna Ketteley Bird & Bird China 44 Jan Holthuis, Li Jiao and Shu Liu United States 95 Buren Arleen A Nand DLA Piper LLP India 51 Krishan G Singhania, S N Verma, Ashwin Vasista and Nikita Shankar Singhania & Co 2 Getting the Deal Through – Title 2018 © Law Business Research 2017 AUSTRALIA HFW Australia Australia Carolyn Chudleigh, Kendra McKay and Stephanie Lambert HFW Australia Overview 3 What are the main non-governmental organisations and non-profit organisations in the agribusiness sector in 1 Describe the agriculture and food supply chain in your jurisdiction? your jurisdiction. There are a large number of associations and industry organisations Australia is a very large and environmentally diverse nation continent, in the agribusiness sector in Australia. The Australian Trade and and agribusinesses and rural industries cover around 60 per cent of Investment Committee, among others, makes publicly available indus- Australia’s land mass. There is a mix of dryland farming and irriga- try directories. The AG Institute also maintains a national member tion. Australia produces more food than it consumes, therefore, the directory and a national consultants register. Some of Australia’s agri- export market is very important to Australia’s economy. It is also a large business associations include: employer of people covering a wide variety of skills from horticulture to • Agribusiness Australia; engineering, bioscience research to manual labour and management • Australian Dairy Farmers Federation (ADFF); to finance. • Australian Egg Corporation (AECL); Agricultural produce for consumption locally and for • Australian Forest Growers (AFG); export includes: • Australian Institute of Food Science and Technology (AIFST); • crops; • Australian Institute of Horticulture (AIH); • horticulture; • Australian Meat Industry Council; • animal products (beef, pork, poultry, lamb and dairy); • Australian Water Association (AWA); • viticulture; • Australian Women in Agriculture (AWIA); • cotton; • Cattle Council of Australia; • aquaculture; and • GrainGrowers; • wool. • National Farmers’ Federation; and • WoolProducers Australia. Australian food quality is considered internationally to be very high. Maintaining this high quality is a main driver for the Australian fed- Land acquisition and use eral government departments that regulate rural industries and of significant interest to the federal government’s agency for scientific 4 Identify and summarise the legislation addressing research being the Commonwealth Scientific and Industrial Research agricultural property transactions in your jurisdiction. Organisation (CSIRO). Transporting the food produce around the coun- Outline how farmland is typically held. try and to the export ports in a timely, safe and cost-effective manner There is no single specific piece of legislation addressing agricultural continues to be the main challenge because of the distances involved. property transactions in Australia. The acquisition and disposal of rural land holdings follows the same conveyancing procedures as the 2 What is the regulatory environment for primary agriculture buying and selling of houses, commercial buildings, shopping centres and primary food processors in your jurisdiction? and other real estate assets. This includes general conveyancing laws Australia has a federal government, the Commonwealth, responsible regarding vendor disclosure and purchaser due diligence, and also for lawmaking and governance at the national level. There are also includes land title transfer laws and regulations. What is specific to state and territory governments (New South Wales (NSW), Victoria, agricultural property transactions is the complexity or unusual nature Queensland, Western Australia, South Australia, Tasmania, and the of the subject matter of the transaction. Northern Territory and the Australian Capital Territory) responsible Whether the asset being offered for sale is a small rural holding or for lawmaking in their states or territories. The third tier of govern- a large-scale agricultural enterprise, obligations placed on the seller ment are the local councils that are responsible for managing regions regarding disclosure and prudent behaviour on the part of the buyer and cities. regarding due diligence, can result in a complex terms sheet for a com- The regulatory environment for primary agriculture and primary mercial deal and a complicated set of transaction documents for law- food processors in Australia is complex because of the three tiers of yers to prepare and negotiate. government. That said there is currently a political push to simplify Converting a commercial terms sheet into a legally enforceable, and nationalise the laws and regulations governing agribusinesses and robust and clearly drafted transaction document is not always easy, rural industries. especially with the increasing number of matters that have an impact The federal government’s Department of Agriculture and Water on the conveyance of rural land. Resources is responsible for administering the laws relating to primary Matters to consider regarding agricultural property agriculture and primary food processing. There are more than 24 indi- transactions include: vidual pieces of legislation covering a wide range of issues. • due diligence and disclosure obligations; The federal government then establishes authorities and other • land tenure, access and easements; statutory and non-statutory bodies to operate under specific laws. The • dividing fences; state and territory governments follow the same model of governance • water rights, including water access licences, dam licences and and management. Depending on the production or business type, bore licences; these laws may require approvals, registrations, licences and permits in • stock and crops; order to conduct agribusiness. • plant and machinery including depreciation; 14 Getting the Deal Through – Agribusiness 2018 © Law Business Research 2017 HFW Australia AUSTRALIA • third-party rights, including agistment agreements and management legislation, having been created in 1901 and specifically share-farming; requiring resource management of the land. • forward supply contracts; • management obligations during the transaction term; Native title • warranties regarding environmental issues, including disclosure of Native title in Australia must also be considered when reviewing agri- conservation agreements or notices regarding acid soils and con- cultural property ownership and use. tamination risks; Native title is the recognition of the rights and interests of and • work health and safety issues and employment law; and Torres Strait Islander people in matters of land and water in Australia. • the certainty of commercial terms regarding the consideration to Prior to 1992, Australian common law did not recognise native title be paid by the purchaser to the vendor. in Australia. However, the Mabo case (Mabo and Ors v Queensland (No. 2)) resulted in the recognition of land rights from the time of European Farmland ownership settlement. It is interesting to note that the High Court of Australia The real estate for a family-run rural enterprise is usually held either did not define what native