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OIO Crafar ruling expected within days

 The Overseas Investment Office is expected to resubmit a recommendation to government ministers about the sale of the Crafar farms within days, not weeks.

Land Information Minister Maurice Williamson said while he did not have a clear timeframe, he expected to receive new advice from the OIO about the sale of the farms to a subsidiary of Chinese company Shanghai Pengxin that was consistent with yesterday's high court ruling within that timeframe.

Justice Forrie Miller's ruling called for a different test to be used by OIO when considering a section of the Overseas Investment Act that looked at the economic benefits of selling farm land to overseas buyers.

“This ruling changes the interpretation of how the economic factors ... should be assessed,” Mr Williamson said.

Yesterday, the government was ordered by the high court to reconsider its decision to allow the sale of the Crafar farms to a subsidiary of Chinese company Shanghai Pengxin.

Justice Forrie Miller set aside the consent for the sale that was granted by Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman.

The ministers announced on January 27 that they had accepted the recommendation of the Overseas Investment Office (OIO) to grant consent to Milk New Zealand Holding, a subsidiary of Shanghai Pengxin Group, to acquire the 16 farms. NZ government-owned Landcorp was to manage the farms.

Mr Williamson said then that it was clear the bid met the relevant sections of the Overseas Investment Act.

More by Colin Wiliscroft

Comments and questions

I have just learn't that Westpac is the mortgagee......I hope they take a good old fashioned hiding and a huge loss after their treatment of others re the financial meltdown, they absolutely deserve it, bring on some more lower bidders and sell to the lowest.

what? like pave the way for the increasingly control on NZ of the UN (labours arguement) and how crafar, for them, worringly, contradicts a-genda2-1?

There is nothing wrong at all with foreign investments IF it is done in the spirit of “Mutual Benefits”. Meaning while utilising the cheap resources or the huge market potential or buying power of the host country, at the same time bringing in capital, technology, know-hows and creating employment for the locals. That is why all countries in the world are trying hard to lure more foreign investors who can positively contribute towards the economic development of their nations.

In fact, what made China an economic powerhouse today is almost entirely due to the influx of the Foreign Direct Investments there for the past 3 decades. If it was not because of the FDI it would have taken China at least a 100 years by herself to be what it is now, rather than only 33 years since its opening to the world in 1978 by Deng Xiaoping, the one who I fondly call “The Grand Old Man” and “The Father of China’s Economic Prosperity and Might”.

This FDI in China was of course undertaken by several different means/strategies and a clever model, plus very cheap and abundant hard working (and overworked) labour force, dubbed as “labour exploitation” in the West. The core of this “Model”, used by the clever Chinese, included: Technology Transfer, Management Know-How Transfer, Creation of Local Employment, and Capital Gain for the host country.

Of course the purpose of this model was to “Ensure” that the FDI could bring additional benefits to China over and above those that could be provided locally and provide the locals with enough expertise and technology that they could take further steps by themselves. And now we can see the result of those far-fetching strategies in today’s China—a prosperous and super-fast developing nation. That is Excellent and that is What It Must Be. Good on them for a work well done.

But as regards to the sale of Crafar farms to Shanghai Pengxin, sadly NONE of the Above Factors Are Existing here! What a Shame for Us, indeed!
There is NO Technology Transfer and NO Dairy Farm Management Know-How Transfer, as the Buyers Do NOT Have Any Clue Whatsoever About Dairying. Astonishingly, they want to Use “Our Own Knowledge and Technology”!!! So, where is the “Knowledge and Technology TRANSFER” Component of this Sale in order to make Our Dairy Industry Better and More Productive Than What It Is Now???

As for the Creation of Local Employment; well, there may be some especially at the beginning. But under the FTA, soon cheap Chinese farm workers will swarm in as it has happened in Tourism industry. So the employment side may be either very little or negligible. And the Capital Gain? Well, it will be there for the buyers of course!

So, what we get?
Almost Nothing At All.
And what we lose?
Another part of New Zealand. As simple as that!

And forget the promise of access to HUGE Chinese market for the New Zealand Milk (of course only for those who can afford it). Let’s simply put it this way: With numerous and continuous Chinese Dairy Scandals even as recent as late last year, Chinese population who can afford to buy imported products will love to have New Zealand milk on their tables and feed their children with. That segment of population even travel from Mainland China to Hong Kong to buy baby formula milk powder for their infants. Also notice the number and proliferation of Chinese websites that are selling New Zealand baby formula. Hence, the Market Is Already There and We CAN surely do it ourselves without anyone’s help. No Sweat! Anyways, what is the FTA for? So, the sale of Crafar farms “Under These Conditions” will NOT add any VALUE whatsoever to New Zealand. Full stop!

To Be Fair and Objective, as I mentioned in several occasions before, we should NOT blame Shanghai Pengxin at all for buying the farms. Purchaser could have been any group from anywhere in the world. We should not also blame the Receivers as they want to maximise gains on the sale of these properties.

The only ones which have to be blamed are our “Inept Government” and the 2 “Sneaky Ministers” who rubber stamped OIO’s recommendations without a second thought, as they had already made their decisions long ago.

Apparently, over 80% of people have raised their concerns about the sale of these particular farms and said NO to it and yet this Government of ours played DUMB & DEAF. They and the OIO (wittingly or unwittingly??) misapplied the Overseas Investment Act for benefiting a foreign company who probably made its assets through opaque business practices and special deals which are common and nothing new over there. Therefore, it could even be an Act of Treachery, IF this sale despite all these oppositions from the New Zealand public (and now Judiciary) to be pushed through!

However, having said that, I for one would not be surprised if this sale will still be pushed through, as we have been pressured for that for quite a while now. Apparently, Chinese government has put their support behind Shaghai Pengxin, the buyer of Crafar farms. Last year their Embassy in Wellington had a press conference to defend and justify the sales of those farms to Chinese interests. Now their “FACE”, is very much involved and “Loosing Face” is one the most shameful things that can happen in Chinese societies and it is indeed a great shame to lose face in public. Because of losing face, some people even commit suicide. Hence, expect every effort to prevent this “Losing Face”, especially for the big guys!

So, don’t be surprised to see our Government to still try any-which-way to somehow find legal loopholes, etc to satisfy their Chinese counterparts. Simply because we NEED their money to support our social welfare programmes, we NEED their support so that they can recognise us as part of Asia (which we are not, as we are part of the Pacific/Oceania), we NEED their markets to justify the so-called FTA and be the only developed country in the world to accept them as a “Market Economy” which they are not (although they call themselves “Socialist Market Economy”, which is like trying to mix water and oil), and of course our Government NEEDS the Vote of Chinese constituencies for the elections. Seems quite complex? Not really! Anyways, New Zealand is really a BANANA REPUBLIC where all these things can easily happen and our governments both Labour and National can take us for a ride at great expense!

Therefore, because of the aforementioned reasons, our Government most probably will not rock the boat and will be as sneaky as they are to put the sale through, except otherwise to WAKE UP and REMEMBER that their ALLEGIANCE is indeed to New Zealand and New Zealand Public Only, Regardless What. That is what every mature and responsible government will do for its country. But, will our government will do it or not, that remains to be seen soon………

In December 2010, acting on the recommendation of the Overseas Investment Office, the Government decided not to approve Natural Dairy NZ's application to buy 16 farms from receivers..
Main Reason:
Bad character of its Directors.

In January 2011, the Shanghai-based company Pengxin International Group Limited made an offer to purchase the 16 North Island farms and applied to the Overseas Investment Office for consent. On 27 January 2012, the Land Information Minister and the Associate Minister of Finance granted consent for Shanghai Pengxin Group Co. Limited to buy the the 16 Crafar farms via their subsidiary Milk New Zealand Holding Limited.
Main resons: Most correct ticks...

However, then,
On 15 February 2012 the High Court set aside the decision and ordered the Government to consider the application again after a judicial review requested by the Crafar Farms Purchase Group.
Main Reason: Not bad characters this time...what will they think of next, any Kiwi mind readers?

Wonder if comparatively poor Sir Michael FAY can afford to match any more unforeseen legal fees should the wealthy Chinese Company (perhaps assisted by the world's richest Chinese Government) realises that it has no other choice but to take this case through to the higher courts.....

Dairy/agriculture in NZ

Mining/minerals in Aussie

What to do with the existing populations?

A: Free range human organs for PRC recipients from 2020.

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