Federated Farmers backs Labour’s calls for further audits of overseas farm purchases

Federated Farmers has thrown support behind Labour’s Stuart Nash in calls for foreign investors to uphold their commitment to add value to New Zealand assets.

The Napier MP says selling off vital productive land to overseas investors who simply suck the profits out of the country is a “dead end street.”

Mr Nash says figures compiled by the Parliamentary Library show just 1.5% of all applications for sales of sensitive assets have been declined since National took office.

He adds there are clear criteria for the sale of any sensitive land laid out in the Overseas Investment Act (2005).

The act states factor uses for assessing the benefit of overseas investment is sensitive land include if the venture creates new jobs or the retention of existing jobs that might otherwise be lost; the introduction of new technology or business skills; and increased export receipts for New Zealand exporters.

Federated Farmers President William Rolleston says although it supports direct overseas investment, there needs to be demonstrable benefits for sensitive assets.

He says if an investor located overseas can add something that New Zealanders can’t or won’t provide, then there is a benefit to the country

If, however, there is a strategy to simply buy up swathes of farmland and create a vertically integrated enterprise, to take it out of New Zealand control, then "we have a concern," he says.

Asked about value lost when foreign investors don’t uphold their commitments, Dr Rolleston told NBR the figures were not available, meaning it’s difficult to have a decent debate around the strengths and weaknesses

“The trouble is that we don’t have enough information to tell whether conditions are being kept or if a previously undisclosed strategy is being followed,” he says.

Dr Rolleston says once purchases are approved and completed, the OIO requests and considers written information on compliance with approval conditions; but argues these are apparently only desk-top exercises and OIO officers do not, for example, visit the properties to see for themselves. 

Federated Farmers has previously requested the government establish a national register of foreign ownership but so far this has only received a lukewarm response. 

“Stuart Nash is right to question whether there is a serious monitoring deficiency after the overseas investment approvals process,” Dr Rolleston says.

Mr Nash says he will be conducting a random audit of 100 applications that have been approved over the past decade to check whether the overseas investors have met the requirements.