THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE INDEPENDENT STATE OF PAPUA NEW GUINEA (hereinafter referred to as the Contracting Parties),

RECOGNISING the importance of measures to strengthen their relationship in accordance with the Joint Declaration of Principles Guiding Relations between Papua New Guinea and Australia, including the principle that co-operation and exchange between the two countries shall be mutually beneficial and based on full participation by both countries, with due regard to the capacity, resources and development needs of both countries, and on mutual respect;

RECOGNISING the importance of promoting the flow of capital for economic activity and development and aware of its role in expanding economic relations and industrial and technical co-operation between them, particularly with respect to investment by nationals or companies of one Contracting Party in the territory of the other Contracting Party;

CONSIDERING that investment relations should be promoted and protected and economic co-operation strengthened in accordance with the internationally accepted principles of mutual respect for sovereignty, equality, mutual benefit, non-discrimination and mutual confidence;

ACKNOWLEDGING that investments of nationals or companies of one Contracting Party in the territory of the other Contracting Party would be made within the framework of laws of that other Contracting Party; and

RECOGNISING that pursuit of these objectives would be facilitated by a clear statement of principles relating to the protection of investments and activities associated with investments combined with measures designed to render more effective the application of these principles within the territories of the Contracting Parties,

HAVE AGREED as follows: