Submission on the Overseas Investment Act amendments
I write to raise my concerns about the relaxation of the Overseas Investment Act, and the implications of that relaxation for public trust in the institutions of the state. I write as the national coordinator of the Regeneration Not Incineration campaign which works with communities to oppose waste incinerators.
My own experience with the existing Overseas Investment Act relates to "Project Kea" a large scale waste incinerator that was proposed for Glenavy/Waimate. The land sale required OIO approval as the incinerator company was 60% owned by China Tianying. We made a submission to the OIO outlining our opposition to the sale and our reasons for asserting it was contrary to NZ's national interest.
In 2024, the Minister approved the sale of the farmland for the incinerator despite advice that it was of 'medium risk' to NZ's national interest. Concerns were wide ranging including the character of the people involved in the project, the potential for it to undermine government policy and the negative impact on the existing business sector in NZ.
What is so stunning about this situation is that the approval was given with this level of risk and uncertainty coupled with the fact that the existing Act does not even allow considerations of the negative implications of a project: in this case, the health impacts, the climate impacts, the impacts on surrounding farms, environmental impacts, or a challenge to the economic claims made, most of which are overstated.
Thus, any further granting of discretionary power to the Minister takes us in the wrong direction in terms of accountability, transparency and reliance on evidence-based decision-making.
The suggestion that due diligence can be carried out in 15 days is frankly absurd, and no sensible commercial operator would enter into what are often multi-million dollar sales with two weeks to make a decision. This is utterly inadequate for agencies to ascertain key information about applicants.
The removal of character and capability assessments is deeply misguided. We already have enough cowboy operations that fail to uphold basic consent conditions or follow relevant laws. We do not need to open the door wider to organised criminal organisations buying into the country. We need business operators who are committed to best practice with a track record of compliance in other jurisdictions.
Finally, it is deeply disturbing that there is no mention of Te Tiriti o Waitangi or engagement with Māori included in the Regulatory Impact Statement. The failure to address the most basic, foundational contractual agreement in this country in an evaluation of this proposal law indicates that the Crown intends to run roughshod over existing rights and obligations. This is completely unacceptable.
Turning to the point about trust in state institutions: we live in a time of rapidly declining trust in the institutions of government. In part this is due to the failure of the state to protect communities from irresponsible, often illegal, behaviour by entire business sectors. We see repeated violations of RMA and commerce laws with few, if any, repercussions. The liberalisation of an already lax and highly permissive Overseas Investment Act will simply add to public distrust while adding nothing to the economic strength or resilience of the country.
1. The 'benefit to NZ test' should be strengthened to include an assessment of the negative impacts of the proposal including human health, climate and environment.
2. The 'benefit to NZ test' should specifically and distinctly require an assessment of impacts upon Māori, Te Tiriti o Waitangi and existing Treaty claims.
3. The Overseas Investment Act should be strengthened to disallow approval where a net increase in CO2 is demonstrated.
4. The Overseas Investment Act should be strengthened to allow approval time of applications to that which is necessary for the agency to fully and appropriately conduct due diligence.
5. The Overseas Investment Act should be strengthened by requiring public notification of applications, a submission process and evaluation of submissions including legal and expert opinion under the 'benefit to NZ test'. These decisions should be made public along with any materials upon which the decision is made including the economic analysis relied upon by the applicant.
6. Ministerial discretion to override the decision of the OIO should be limited, not increased, and all decisions must be made public with an explanatory note outlining the rationale for the decision, including what other considerations were taken into account.
Valerie Morse
Coordinator, Regeneration Not Incineration