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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - May 2022 Decision
It's That Old Favourite Again: Retrospective Consent
There were quite a few Decisions that could have been highlighted from the May 2022 crop - a trans-Pacific undersea cable project; McDonalds and Coke, both transnationals that are household names globally; a courier company; and a housing project involving Fletcher Residential. Wait, why does Fletchers require OIO consent? Because, although it is 52.31% New Zealand-owned, it is also 47.34% Australian-owned, nearly double the 25% foreign ownership which is the legislative definition of a foreign-owned company. So, note that - Fletchers is not a New Zealand company.
But I've chosen to highlight one of the smaller Decisions, because it illustrates a recurring theme of decades of rubber stamping by the OIO and its predecessor, the OIC (Overseas Investment Office) - namely, the granting of retrospective consents. The OIO approved Seed Force Ltd France (91%), New Zealand (9%) leasing 24 hectares of sensitive land at 1210 and 1216 Shands Road, Christchurch, from Robert Selwyn & Rosemary Jane Paton New Zealand (100%) and John Henry & Helen Sylvia Paton New Zealand (100%).
To quote the OIO: "The Applicant is a seed breeding company which operates across Australasia. The Applicant is ultimately majority owned by widely held French persons and entities. The Land has been leased through two leases since 2018 to allow the Applicant to undertake seed trials and research.... A retrospective consent was required as, at the time the leases were entered, the Applicant was unaware that consent under the Act was required and the leases were entered without the required consent".
"The Applicant satisfied the Overseas Investment Office that the breach was inadvertent and that it did not realise that the Land was sensitive land under the Act. As soon as the Applicant realised consent was required, it contacted the OIO to remedy the situation. The Applicant has paid an administrative penalty imposed under the Act".
And how much was that "retrospective penalty"? $10,000. This is just the most recent example of the OIO dishing out a retrospective consent. For example, I subtitled my writeup of the July 2021 Decision "Retrospective Consent; Pocket Money Penalty". I wrote: "This month it's worth highlighting that the OIO and/or the relevant Ministers routinely grant retrospective approvals. There were three in July alone". I chose one of them, because it made the mainstream national media.
"The (New Zealand) Herald asked my opinion of this retrospective consent and accompanying $20,000 administrative penalties (plus a couple of other such penalties) in the July Decisions. I described them as 'laughable'. Such sums are peanuts to those big boys, plus they get what they want retrospectively approved. They'd just factor it in as 'the cost of doing business'".
And so, the farce goes on. I can't think of any other situations whereby wrongdoing is retrospectively approved. Use the search function on the CAFCA Website, type "retrospective consent" and you will get pages of results. In the days of the OIC, we used to say that its' job could be done by a monkey with a rubber stamp. Maybe the OIO has upgraded that to a robot now. Save on the peanuts bill.
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