WELLINGTON - Finance Minister Michael Cullen is to redraft instructions to the Overseas Investment Commission to make it clear the commission must follow the law when considering applications for overseas investment.
Dr Cullen said Crown Law advice was that the delegation, which allows the commission to approve or turn down foreign investment applications, was outside the law, and he was having the instructions redrafted.
Some international investment houses have criticised the Government's decision to forbid Brierley Investments to sell all its half-share in fishing company Sealord to a foreign buyer, and a further tightening of foreign ownership rules could cause more reverberations in foreign investment circles. Dr Cullen said he wanted to make it clear he was not changing the law, but wanted to ensure the law as it stood was followed.
The change to the delegation was a technical adjustment so thecommission approached each application with an open mind, and without any presumptions in favour of or against any proposal.
"New Zealand will still have one of the most open foreign investment regimes in the world," he said.
The existing delegations had implied every overseas investment application should be approved, unless good reason existed to refuse it. "The law does not presume that. The law presumes that each application may be tested on its merits, against the national interest test."
It was not a question of national test criteria being applied more rigorously and he did not expect significant change to overseas investment.
"My advice from Crown Law is that the delegations may be ultra vires [beyond the powers of] the act, which means that decisions made under them could be challenged legally as they might not stand up," he said.
"I have to respond to that advice. I just can't say, oh well, we'll let things run then ... It's not a question of saying we don't want foreign investment.
"It's a question of saying we must apply the law as it is written."
The national interest test includes whether an overseas entrant is likely to expand job opportunities, introduce new technologies, increase exports, improve efficiencies, or stimulate investment in New Zealand.
Dr Cullen said he also intended to consult colleagues about implementing changes to the law that were passed by a majority in Parliament under the National-New Zealand First coalition Government, but never brought into force.
That amendment would require that any farmland be offered on the open market before being sold overseas, and would impose a stronger national interest test for farmland. It would also lower the trigger point at which national interest criteria applied to foreshore sales, from 0.4ha to 0.2ha.
- NZPA
Cullen redrafts foreign sales orders
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