INFORMATION SHEET 5

CONTRACTS IN THE MASTER BAKERS AGREEMENT

The agreement you will enter into by joining the Master Bakers scheme is part of a wider set of agreements that have been built up over the last year between industry and government.

As a participant in this scheme you will need to be aware of three agreements:

• one between NAMB/SAMB and DEFRA – the Umbrella Agreement.

• one between yourself and DEFRA - the Underlying Agreement

• one between yourself and the Master Bakers Climate Change Levy Discount Scheme - the Administrative Agreement

The roles of each of these agreements are summarised below.

Umbrella Agreement. This is between NAMB/SAMB and the DEFRA. It includes all the general terms and conditions that must be met by the Master Bakers CCLA. It includes the overall target and milestones for the whole of the Master Bakers Agreement.

Underlying Agreement. This is between an individual Participant and the DEFRA. It reflects all the terms and conditions of the Umbrella Agreement and addresses the following issues:

• Targets and milestones

• Obligations of the Participant and DEFRA

• Confidentiality of information

• How to deal with variations to the Agreement, such as changes in currency, targets, and facilities joining/exiting the scheme

Administrative Agreement. The Administrative Agreement is between an individual Participant and the Master Bakers Climate Change Levy Discount Scheme. It specifies the responsibilities of both the Participant and NAMB/SAMB in terms of data reporting, payment of fees and the administration of the Agreement.

An important feature of the agreements with DEFRA is that they are not legally binding: they are non-contractual. This means that if you fail to hit your target or do something that infringes the agreement, the counter-party (i.e. the government) cannot take legal action – as they might do in a commercial situation. The strongest action they can take is to remove the discount. The Administrative Agreement will be a legally binding contract.