| (b) | a person who has entered into a lease agreement under section 27; |
| (c) | a party to a community forestry agreement entered into under section 30; or |
| (d) | the South African Forestry Company Limited. |
may enter into an agreement to sell timber or any other forest produce in or derived from a State forest to an)' other person.":
| (2) | An agreement referred to in subsection(1) must— |
| (a) | allow for termination of the contract at any time after it comes into effect by either party on a period of notice which is not more than five years, unless— |
| (i) | the Minister agrees to a longer period of notice; |
| (ii) | the contract endures for a total period of five years or less, including any periods for which the contract may be renewed; or |
| (iii) | the contract is for a once-off sale of timber or other forest produce which has been harvested at the time of the sale. |
| (b) | not oblige the seller to provide a quantity of timber or other forest produce which is greater than that which the forest to which the agreement relates, yielded on a sustainable basis during the period of the contract, or a cycle within a contract, unless any shortfall was due to negligence by the seller; |
| (c) | not confer rights in conflict with the lease or community forestry agreement referred to in subsection (1)(b) or (c) or an agreement referred to in section 77(2) with the South African Forestry Company Limited. |
| (3) | A term of an agreement which is in conflict with subsection (2) is void and the agreement is deemed to have been entered into on the terms set out in subsection (2). |
| (4) | The Minister must license the activities which the purchaser may carry on in terms of an agreement to sell timber or other forest produce, subject to subsection (5). |
| (5) | An agreement to sell timber or other forest produce in any State forest which is already in force on the date this Act commences, is despite the terms of the agreement, subject to the following: |
| (a) | Either party may elect to terminate the agreement on either of the following bases— |
| (i) | five years written notice to the other; or |
| (ii) | such greater or lesser period of notice as the agreement may provide; |
| (b) | notice in terms of subparagraph (i) of paragraph (a) may be given at any time after the commencement of this Act; |
| (c) | before the seller acts in terms of subparagraph (i) of paragraph (a), the Minister must be of the opinion that— |
| (i) | it will serve one or more of the purposes referred to in section 1; and |
| (ii) | the purchaser will, by the end of the notice period, have had an opportunity of realising a reasonable return on any investments which were made before the commencement of the Act primarily as a result of the agreement; |
| (d) | if either party elects to terminate the agreement in terms of subparagraph (i) of paragraph (a), neither it nor any other person or organ of State has to pay any compensation to, or buy any assets of, any other party, except that the State must compensate the purchaser for any improvements which the purchaser has erected in a State forest in terms of or as a result of the agreement if— |
| (i) | the seller terminated the agreement; and |
| (ii) | the purchaser must vacate the improvements as a result of the termination; |
| (e) | the seller is not obliged to deliver to the purchaser a quantity of timber or other forest produce which is greater than that which the forest yielded on a sustainable basis during the period of the contract, or a cycle within a contract, unless any shortfall was due to negligence by the seller; |
| (f) | an act or omission by either party in terms of this subsection is not a breach of the agreement. |
| (6) | The compensation for improvements referred to in paragraph (d) of subsection (5) is not payable if the agreement— |
| (a) | is terminated no earlier than a date on which the agreement could lawfully have been terminated had this Act not been promulgated; and |
| (i) | compensation for improvements; or |
| (ii) | the purchase by the seller of any assets of the purchaser, |
on termination.
| (7) | A shortfall referred to in subsection (2)(b) or (5)(e) may not be made up from the forest to which the agreement relates. |
