INFORMATION SHEET 5

CONTRACTS IN THE MPMA AGREEMENT

The agreement you will enter into by joining the MPMA 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 the MPMA and DEFRA – the Umbrella Agreement.

• one between yourself and DEFRA - the Underlying Agreement

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

The roles of each of these agreements are summarised below.

Umbrella Agreement. This is between the MPMA and DEFRA. It includes all the general terms and conditions that must be met by the MPMA CCLA. It also includes the overall target and milestones for the whole of the MPMA Agreement, as well as sub-sector targets and milestones for the various sub-sectors.

Underlying Agreement. This is between an individual Participant and DEFRA. It reflects all the terms and conditions of the Umbrella Agreement and includes 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 an individual Participant and the MPMA Climate Change Levy Discount Scheme. It specifies the responsibilities of both the Participant and the MPMA in terms of data reporting, payment of fees and the administration of the Agreement.

An important feature of the agreements with DEFRA is that 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.