The number of decisions made by the OIC this month is an exceptional low: just eight. The only other time the number of decisions in a month has been in single figures since we began scrutinising them in December 1989 was seven in January 1994. Yet December is usually one of the busiest months, and January consistently one of the quietest.

A number of circumstances could have contributed to this. Firstly, this is the first month under new Overseas Investment Regulations which exempt from oversight any non-land investment under $50 million – it was previously $10 million. But about two-thirds of applications each month usually involve land, which was unaffected by the change in the regulations, so this is unlikely to account for all of the large drop. Secondly, investors may have delayed applying due to the election or the election result. Thirdly, the change of government may have brought about delays in the Ministerial scrutiny of land applications.

Interestingly, there was one refusal this month – the first since April 1999.

R. and P. Elliott of Australia have been refused approval to acquire a lifestyle property in Canterbury. The application was refused "as it was not considered to be in the national interest". Details of the proposed property and price have been suppressed.

However it is not clear from the information provided by the OIC why many other similar applications should not all also have been refused. The Elliotts had proposed "to make various capital improvements to and additional investment in the land, including the installation of a well and irrigation system to support market gardening/crop farming on the property". The farm would be "run on the basis of a leaseback to local farmers". They also proposed to "construct two dwellings on the land and to make one of the dwellings available for tourist and guest accommodation." They would reside in Aotearoa for "approximately six months of each year" and intended to make further investment in industrial land and buildings in Christchurch.

(Note: the refusal was reversed in February 2000: see our commentary for that month.)

Evergreen Forests Ltd of the U.S.A. has approval to acquire Wairoa Forest and Rawanui Farm Ltd for $20,933,000 from Carter Holt Harvey Forests Ltd, which is 51% owned by International Paper Company Ltd of the U.S.A. The land is 5,225 hectares at Waiau Road, Tokomaru Bay, Gisborne, and 459 hectares at Wairoa Forest, Wairoa, Gisborne. This is the first purchase of forests we have seen by Evergreen since 1997.

Evergreen is owned 49% by Xylem Fund ILP (U.S.A.), 11% by Societe Generale Asset Management Corporation (U.S.A.), 5% by Hambrecht and Quist Guaranty Finance LLC (U.S.A.), a further 13% in the U.S.A., and 22% in Aotearoa.

The sale by Carter Holt is part of a larger divestment and cutback in order to increase its profits. As part of the profit drive, it stopped tree pruning, contracted out much of the forest work its own staff had done, is looking at charging recreational users of its forests, and sold some of its 450,000 hectares of forest (of which only 330,000 is productive). It was also looking at biotechnology, including genetic engineering to increase returns. Its chief executive, forests, Jay Goodenbour, also threatened that a change of government "that led to compulsory unionism would also make it difficult to attract foreign firms to set up mills to process the large forests nearing harvest age in Southland and Otago" (Press, 30/10/99, "CHH sharpens the axe", p.21). He didn’t note that no party was actually suggesting compulsory unionism, nor the lack of wood processing under the existing climate.

Other Carter Holt sales include the 11,000 hectare Pohokura Block east of Taupo adjoining the Whirinaki Conservation Park. The sale of the land, considered to be one of the most ecologically valuable areas of forest in private ownership in the North Island, was criticised by the Royal Forest and Bird Society. Director Kevin Smith said Carter Holt should have placed legal covenants on the title, protecting the area’s outstanding natural values, He said he was "bitterly disappointed with the actions of Carters as the company had previously assured Forest and Bird the block would be given legal protection". He said that "unfortunately the American managers who now run Carter Holt Harvey forests have a hardline attitude on environmental issues. Unlike their kiwi predecessors, they do not wish to work co-operatively with the New Zealand conservation movement" (Forest and Bird Press Release, 2/12/99, "Native Forest Sale Breach of Forest Accord").

In February 1999 Carter Holt had tried to sell a 28,000 pine forest near Nelson to Weyerhaeuser of the U.S.A., but the Commerce Commission prevented it (Press, 6/12/99, "Carter Holt sells forest near Taupo", p.25).

It sold its large Copec holding in Chile, netting $2.5 billion – largely because the International Paper shareholding in Carter Holt caused a fallout with its Chilean partner. According to Merrill Lynch sharebroker, John Whelan, International Paper has instructed Carter Holt to concentrate on Australia and Aotearoa – presumably to minimise competition with its international operations (Press, 19/02/00, "O'seas sellers lop gains from top 10", p.26). However, the cash is unlikely to lead to much new investment in Aotearoa. Although it has started work on a $132 million laminated-veneer lumber mill near Whangarei, the company said it was likely to spend the Chilean proceeds reducing debt and expanding in Australia. In December it announced it would move its packaging division’s head office to Australia, following its tissue division which had moved a year before that. It had recently invested in two Australian packaging facilities (Press, 14/12/99, "CHH arm moves", p.15). In February it announced that in April it would take ownership of CSR’s medium density fibreboard (MDF) particle board businesses and a sawmill, mainly in New South Wales, for $A330 million ($NZ423 million). These facilities will compete with its facilities in Aotearoa such as its Rangiora MDF plant near Christchurch in the Australian and international markets. The acquisition will mean that 25% of Carter Holt’s assets will be in Australia and 40% of its revenue will come from the Australian market (Press, 22/2/00, "Carter Holt spending $423m on Aust plant", p.14).

As a result Carter Holt’s profits soared to the best in over three years in the last quarter of 1999: $89 million, up from $15 million a year earlier. It is paying no tax on the profit (Press, 11/2/00, "CHH earnings soar", p.12).

In August, Evergreen made its first ever operating profit, paying no tax on the $3.09 million made in the year ended 30/6/99. It appears to make most of its money from log exports, with little if any processing. The profit was helped by rising prices for logs in Korea, but it also sold them to Japan and India. It also owns 21.1% of Nuhaka Farm Forestry Fund. Strangely, news reports put the present sale at 3,204 hectares rather than the 5,864 the OIC records (Press, 7/8/99, "Korean sales deliver profit for Evergreen", p.23; 8/10/99, "Strong growth for Evergreen", p.16; 12/2/00, "Korean log orders bolster Evergreen", p.24). For further background on the company, see our commentary on its foundation in the December 1994 decisions, and further major forest purchases by it in May 1997.

Auckland One Ltd, owned by D. and M. Jen of Singapore, has approval to acquire a property on 0.18 hectares of land at 11-12 Clovernook Road, Newmarket, Auckland, from Krukziener Clovernook Ltd of Aotearoa for $3,301,875. Auckland One

L. and M. Mining Ltd subsidiary Mintago Investments Ltd has approval to acquire 33.5 hectares more land at Earnscleugh, near Clyde, Central Otago, part of the Earnscleugh Gold Project. It is being sold by the Department of Conservation for an amount "to be advised" and is "the subject of an agreement for sale and purchase by way of exchange of lands between Mintago and the Department of Conservation".

In November 1999, L. and M. bought Perilya Mines (NZ) Ltd, which was then the owner of the Earnscleugh Gold Project.

L. and M. is ultimately owned 33.34% by Kwok Wai Chiu of Hong Kong, 33.33% by Werner Muller of Switzerland, and 33.33% by Geoff London of the U.K. See the November 1999 commentary for further details.

• The Wang Family Trust, owned by Yak-Pin Wang and Ya-Ping Chang of Taiwan, have approval to acquire in 22 hectares of land at No. 3 Line and Kaukatea Valley Road, Wanganui from the New Zealand Forestry Group Ltd for $132,921. They are members of the Okoia Forest Owners Association, which "has entered into an arrangement with New Zealand Forestry Group to develop approximately 303 hectares of afforested land near Wanganui [including these blocks]". For the last such sale involving Okoia see our commentary on the November 1999 decisions, and for further details see our September 1999 commentary. The New Zealand Forestry Group is owned 76% by Wesley Garratt of Aotearoa and 24% by J. Hong of Taiwan.

• C. A. and G. E. Pancerzewski of the U.S.A. have approval to acquire three hectares of land at Tokerau Beach Road, Doubtless Bay, near Kaitaia, Northland for $438,750 from Tidal Properties Ltd of Aotearoa. The land "comprises one lot of a larger, now abandoned olive grove development undertaken unsuccessfully by a separate party". The Pancerzewskis own "two adjoining lots and [are] in the process of redeveloping the land and re-establishing the commercial olive grove". We have no record of the purchase of the adjoining lots by the Pancerzewskis.
• M. and S. Varner of the U.S.A. have approval to acquire the 195 hectare Rockpool farm, Raincliff, South Canterbury for $1,293,750. They intend "to continue operation of the property as a red deer farm, producing venison and velvet." They also propose "to establish a breeding stock of Elk deer to provide trophy quality animals for the international trophy shooting market and to support trophy hunting on the property. It is also proposed to construct a hunting lodge on the property targeted for the outdoor tourism market and tourists primarily from the U.S.A."