The Crafar Farms – Why the delay from the OIO?
5 October 2009: Crafar Farms placed into receivership.
22 December 2010: Government blocks bid by Natural Dairy to buy the 16 Crafar farms on ‘good character’ grounds.
27 January 2011: KordaMentha accepts offer from Pengxin International Group Ltd to buy Crafar Farms.
18 April 2011: Shanghai Pengxin lodges application with the Overseas Investment Office (OIO) to buy the Crafar farms.
26 September 2011: Crafar farms receiver KordaMentha rejects a conditional NZ$171.5 million offer for 16 central North Island dairy farms from a group led by controversial former merchant banker Michael Fay.
Since Shanghai Pengxin’s lodgement in April to apply for permission to buy the farms, the Overseas Investment Office (OIO) has not yet arrived at a decision.
This is extraordinary, as the OIO sets a target of 50 to 70 working-days to process applications. It has now been seven months.
As the OIO states on it’s own website,
Estimated decision times
There is no statutory timeframe within which an application for consent must be decided. However applications generally fall into one of three categories according to complexity with category 3 being the most complex. These categories provide a guide for how long it may take for a decision to be made:
- Category 1applications, where the OIO aims to make decisions within 30 working days from the date of registration. Examples include:(a) applications for consent to purchase significant business assets,
(b) “sensitive land” decisions delegated to the OIO by Ministers that don’t fall into the categories below,
(c) variations to existing consents
- Category 2 applications where the OIO aims to make decisions within 50 working days from the date of registration. Examples include:(a) “sensitive land” applications for consent requiring Ministerial consideration e.g. the purchase non-urban land greater than five hectares in size, where it includes or adjoins other sensitive land, such as conservation land, reserves etc
(b) applications for exemptions.
- Category 3applications, where the OIO aims to make decisions within 70 working days from the date of the registration. Examples include:(a) applications to acquire an interest in fishing quota,
(b) applications that involve special land being land that includes foreshore or the bed of a river or lake,
(c) where the applicant intends to establish a purchasing programme such as a series of land acquisitions in a specific area for a specific project,
(d) applications in respect of which a third party submission has been received by the Ministers or the OIO,
(e) applications where the Ministers or the OIO have decided that consultation with third parties is appropriate in considering whether or not to grant consent.
Note that these targets apply to high quality, well prepared and analysed applications, and excludes the time where the OIO is waiting for the applicant to provide further information and the time for Ministers to consider and make decisions on relevant applications.
One cannot help but suspect that, because it is Election Year, that this government has delayed a final decision on Shanghai Pengxin’s application. Accordingly, I have written to Bill English, the Minister in charge of the OIO,
date: Mon, Nov 14, 2011 at 11:27 PM
subject: Crafar Farms
Shanghai Pengxins lodged an application with the Overseas Investment Office (OIO) on or around 18 April, to buy the Crafar portfolio after Natural Dairy’s application was rejected.
Normally, applications take up to 50 to 70 working days to process.
It has now been seven months since Shanghai Pengxins lodged it’s application.
As the Minister responsible for the OIO, is there a reason as to why Shanghai Pengxins’ application has not yet received a decision? Or is the decision being deferred until after the election because of it’s sensitivity?
Information on this matter would be appreciated.
from: B English (MIN) B.English@ministers.govt.nz
date: Tue, Nov 15, 2011 at 12:19 PM
subject: RE: Crafar Farms
Dear Frank Macskasy
On behalf of the Hon Bill English, Minister of Finance thank you for your recent email regarding Crafar Farms. Your letter has been passed on to the Minister for his information.
As the issues you have raised, however, fall within the portfolio responsibilities of Hon Kate Wilkinson, I have also referred a copy of your letter to her for consideration and reply.
Hon Bill English
Deputy Prime Minister
Minister of Finance
Minister for Infrastructure
to: ”B English (MIN)” <B.English@ministers.govt.nz>
date: Tue, Nov 15, 2011 at 3:46 PM
subject: Re: Crafar Farms
Kia Ora Katy,
I am unsure why you have placed this matter before Ms Wilkinson. Her portfolios are,
* Minister of Conservation
* Minister of Labour
* Minister for Food Safety
* Associate Minister of Immigration
The Overseas Investment Office is responsible to the Minister of Finance, Bill English, or Minister for Land Information, Maurice Williamson, as per the official LINZ website, and Parliamentary websites: http://www.linz.govt.nz/overseas-investment/about-oio/legislation-delegations
Considering that the issue of the sale of Crafar farms may fall into “sensitive lands” category, this matter would most likely fall under Bill English’s jurisdiction.
Uh oh… it appears that the Minister’s office has just given me the “brush off”!
from B English (MIN) B.English@ministers.govt.nz
date Tue, Nov 15, 2011 at 3:46 PM
subject Thank you for your email.
On behalf of Hon Bill English, thank you for your email.
Please be assured that all correspondence is read and noted by this office. Where the Minister has portfolio or MP for Clutha-Southland responsibilities for the issues raised, a response will be sent to you in due course.
While the Minister considers all correspondence to be important, if your email falls outside of his portfolio or electorate responsibilities, or expresses a personal view, then your opinion will be noted and your response may be tranferred to another office or there may be no further response to you.
Thank you for taking the time to write.
Authorised by B English, 15 Main Street, Gore.
It is my guess that this government has deliberately stalled Shanghai Pengxin’s application to to OIO, and that consent will not be given until after the Election. National understands that the issue of farm sales to overseas investors is not well-liked by the New Zealand public and that on this issue alone, they could lose the election.
I do not expect a reply from Bill English.
I do expect that permission for the Crafar Farms to be sold to Shanghai Pengxin will be given next year.
This is the government that New Zealanders expect to re-elect…