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The second colonisation of New Zealand

1 October 2011 9 comments

This recent story in the media should give us all cause for concern,

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Full Story

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I should start with a disclaimer: I hold no real enthusiasm nor liking for  Michael Fay’s method of operation. He and his colleague, David Richwhite, gutted NZ Rail during their tenure as part-owners of that asset.  (The  New Zealand Securities Commission  investigation into Fay & Richwhite’s alleged insider trading – and whilst no prosecution resulted – did result in an out-of-court settlement, where they paid NZ$20 million to the Securities Commission in June, 2007. )

As taxpayers, we are still paying for the upgrading and  maintenance of railways that was neglected during 15 years of private ownership.

However, the reality is that Michael Fay is leading a New Zealand consortium to buy the 16 Crafar farms. These farms amount to 11,000ha of property throughout the central North Island.   Their transfer into foreign control would be a significant loss to the NZ economy.

There are three  major issues highlighted by this story, and another,  that convincingly illustrate why overseas investors should be permanently denied ownership (or even  leasing) of our productive farmland.

Issue 1:

“Receiver KordaMentha has formally declined the Fay group’s $171.5 million offer for the 16 central and lower North Island farms, saying the conditional offer it has accepted from Chinese group Shanghai Pengxin “was by far the best offer at [that] time and remains so today”…

… “Our offer is at a price we firmly believe makes sense it that we are paying the right price for the long-term farming future of these properties,” the group’s negotiator Steve Bignell said. “ Source

This illustrates the risk of permitting foreign interests to bid for our farms. Foreign investors (generally) have very, very deep pockets. When even a millionaire such as Michael Fay can be out-bid  – we need to ask ourselves how ordinary New Zealanders can compete with foreign investors.

In a bidding war, New Zealanders will always lose. Our sons and daughters have zero chance and nil opportunities to own a slice of our country’s natural wealth, when faced with the near-limitless resources from overseas buyers.

We may not like Michael Fay, but  at least he represents an opportunity to keep the Crafar farms – and the wealth they create – in local ownership. That he is unable to acquire these properties because he has been out-bid to the tune of $38.5 million dollars is disturbing.

I believe it is a sign of things to come.

Issue 2:

“Over a certain price level, these farms don’t work.”Ibid

If true, then the question that begs to be asked is: why? Why are overseas investors willing to pay inflated prices for our productive farmlands?

The answer is not very complicated nor obscure.

The human population on Planet Earth has reached 7 billion.

By 2050AD it is estimated that the population will reach 9 billion.

All 9 billion will require food – lots of it.  And unfortunately for the Human race, there is only a limited amount of arable land on this little planet of ours. With ongoing desertification, arable land is reducing each year. Soil erosion  is another factor in this problem.

On top of that, as populations increase, so does pressure on food supply. In countries such as India and China, as their middle classes grow and become  more affluent, they will demand access to more and better food.

Countries such as New Zealand offer sources of clean, well-processed, safe, reliable, sources of protein.

In other words: supply and demand.

Just as the U.S. has cornered oil supplies in the Middle East, growing economies in the East and elsewhere will look to “cornering” nett-food suppliers. It is interestimng that the Prime Minister, John Key, alluded to this matter at a public meeting in Lower Hutt, on 24 May. He stated that China’s centralised, autocratic government could not afford to risk disruption to their domestic food production; a hungry population; and a subsequent “Arab Spring”-style uprising.

No government on Earth could withstand one billion hungry people in revolt.

Key hinted that China’s acquisition of land in Africa and here in New Zealand was based on a strategic need to secure food sources.

If true, money is no object. After all, you cannot feed money to hungry mouths.

In which case, it is little wonder that Shanghai Pengxin’s offer for the Crafar farms is “over a certain price level“. China is not interested in selling the food for profit. It is seeking the food for it’s own population. Because by 2050, one billion Chinese will have eight billion other competitors seeking the same food source.

This is what ‘Shanghai Pengxin‘ spokesman Cedric Allan said,

“…  while it initially intends to continue supplying Fonterra with raw milk investment plans include working “in partnership” with an existing processor to develop baby formula, ice cream and cheeses suitable for Asian markets.

“We do not intend to be simply a customer of a dairy processor.

“To ensure the processor can produce long term and if they needed to increase their capacity to do so then we could help them with that.

“We have no wish to own or control a processor, other than to make sure they are in a position to provide surety long term.” “ Source

Again, no individual New Zealander(s) can hope to compete against  that kind of long-term acquisition-strategy.

Issue 3:

Shanghai Pengxin has lodged its application with the Overseas Investment Office (OIO) to buy the Crafar portfolio after Natural Dairy’s application was rejected.” – 18 April 2011 Source

The OIO (Overseas Investment Office) usually takes between 30 working days (Category 1 applications) to 70 working days (Category 3 applications). Source.

It has been approximately 115 working days since Shanghai Pengxin  lodged its application with the Overseas Investment Office.

One can only assume that,

(a) the OIO has mis-placed Shanghai Pengxin’s application (have they looked behind their cafetaria sofa?).

(b) the OIO has been “requested” by the Minister-in-charge to “review” Shanghai Pengxin’s application. And to report back sometime after the election.

The sale of the  16 Crafar farms is politically explosive. It would do to National what “Corngate” did to Labour in 2002. National cannot risk this matter affecting their re-election chances in November.

Which is why I am betting that,

1. We will not see a decision from the OIO any time this year.

2. The Fay-led consortium will fail.

3. The Shanghai Pengxin application will be approved.

The sale of New Zealand will accelerate, and with the apathetic acceptance of the majority of New Zealanders.

Just how gullible are we?

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+++ Updates +++

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Source

Fay said the group of farmers had “serious concerns” about the state-owned farming corporation’s role with Shanghai Pengxin, whose bid for the 16 in-receivership dairy farms is conditional on getting Overseas Investment Office consent.

“Landcorp is well known in the farming community for buying farm land in competition with locals – effectively using taxpayers’ money to outbid those same taxpayers,” Fay said.

Fairfax revealed recently that Landcorp was in preliminary talks with Pengxin for the job of managing or sharemilking the farms if the Chinese company is successful in buying them.

It has been nearly seven months since Pengxin applied to the OIO for consent.

Fay said Landcorp seems to have become “utterly confused” about its purpose and could have allowed itself to be used as a pawn in the deal – “just to give the Chinese bids an acceptable local face”.

Fay’s group has offered receivers KordaMentha $171.5 million for the farms. Its bid has been declined as too low but the farmers consider their offer “still live”.

Through its OIA request, the farmer group has asked Landcorp to provide all details of its dealings and correspondence with Pengxin, any correspondence it may have had with the OIO, and all correspondence between Landcorp and an unsuccessful bidder for the Crafar farms, Chinese group Natural Dairy and May Wang’s UBNZ companies.

The farmers say they are making a single bid for the Crafar farms because the receivers require it, but if successful they would split the farms up between them to be owner-operated.

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The Big Questions that need to be asked here are;

  1. Why is Landcorp – a State Owned Enterprise (SOE) – working with overseas interests rather than local investors and taxpayers?
  2. Is this an acceptable use of taxpayers’ money and resources?
  3. What is the government’s position on a SOE working with a foreign company, against New Zealand investors?
  4. Has Landcorp  offered to work with the Fay-led consortium? If not, why not?

Perhaps it is appropriate for these questions to be put to Landcorp’s Chief Executive, Chris Kelly, and Shareholding Minister, Simon Power?

Especially when, amongst it’s various “Mission Statements”, “Statement of Corporate Intent”, etc, we find the find Objectives that Landcorp is committed to,

“1.1

– To exhibit a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accomodate or encourage these when able to do so.

1.4

– To provide the shareholders with maximum sustainable returns by;

Meeting social obligations.

5.4  Opportunities, risks and returns affecting or likely to affect Landcorp,

Returns through,

– stabilisation of rural land values.”

Source: State of Corporate Intent 2011-2014 (PDF)

None of the above seems consistent with supporting a foreign-based investor-takeover of New Zealand farmland, instead of a local initiative.

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from:    [email]
to:         Simon Power <simon.power@parliament.govt.nz>, Chris Kelly <kellyc@landcorp.co.nz>
date:    Thu, Oct 13, 2011 at 12:33 AM
subject:    Landcorp & Shanghai Pengxin

Sir,

According to recent media reports Landcorp  “is in preliminary talks with Pengxin for the job of managing or sharemilking the 16 Crafar  farms if the Chinese company ( Shanghai Pengxin) is successful in buying them.”

Landcorp appears to be supporting Shanghai Pengxin’s bid to purchase the Crafar farms over an offer by a local consortium, led by Sir Michael Fay.

Could you please explain how a New Zealand crown-entity – namely Landcorp, which is owned and resourced by New Zealand taxpayers – can appear to be supporting a foreign bid to gain control of large areas of productive New Zealand farmland; soliciting business from said investors; and thereby undermining a local bid?

Could you please explain how Landcorp can be associated with a foreign investor, instead of local investors, when their Objectives (2011-2014) specifically require Landcorp to be  committed to;

“1.1

– To exhibit a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accomodate or encourage these when able to do so.

1.4

– To provide the shareholders with maximum sustainable returns by;

Meeting social obligations.

5.4  Opportunities, risks and returns affecting or likely to affect Landcorp,

Returns through,
– stabilisation of rural land values.”

In view of the above stated objectives, it would appear to make better sense if Landcorp were to support the Fay-led consortium, rather than overseas interests. Considering that Landcorp is owned by New Zealand taxpayers, it seems to be a fair expectation that Landcorp support local investors rather than overseas individuals and/or corporations.

I await your response to this matter.

-Frank Macskasy
– Blog-author, “Frankly Speaking”

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Chris Kelly responded the following day with this response,

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from:    Chris Kelly kellyc@landcorp.co.nz
to:    [email]
date:    Thu, Oct 13, 2011 at 4:33 AM
subject:    Re: Landcorp & Shanghai Pengxin

Dear Frank M

If and only if Pengxin have OIO approval to buy Crafar farms might Landcorp be involved in managing the farms.
Land corps preferred option was to buy them ourselves.
We would be happy to work with the Fay consortium.We have not been approached by them.
Landcorp has not been in contact with the OIO to assist Pengxin to buy the farms.

Regards, Chris Kelly

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Which begged the obvious question in return,

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from:    [email]
to:    Chris Kelly <kellyc@landcorp.co.nz>
date:    Thu, Oct 13, 2011 at 8:52 AM
subject:    Re: Landcorp & Shanghai Pengxin

Dear Chris,

Thank you for your response.

Has Landcorp considered approaching the Fay-led consortium to offer a joint-bid for the Farms? If not, why not?

Thank you, in advance, for any light you can shed on this issue.

Regards,

-Frank Macskasy

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To which Chris Kelly replied,

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from:    Chris Kelly kellyc@landcorp.co.nz
to:    [email]
date:    Thu, Oct 13, 2011 at 8:15 PM
subject:    Re: Landcorp & Shanghai Pengxin

Dear Frank,
We have not approached Fay.He represents a group of local farmers who want to break up the farms and run them as separate units.Landcorp wants to run them as a combined group.

Regards, Chris Kelly

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Which is interesting. If  Shanghai Pengxin buys the farms, there would be no guarantees how they are operated. Landcorp will have no control over their management whatsoever.

As a partner, in a Fay-led consortium, Landcorp would have a measure of control.

Is this making sense to anyone?

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Further Reading

Fay says xenophobia played no role in Crafar bid

Foreign Ownership of New Zealand’s Land

OIO Application Assessment & Timeframes

Farmland Grab

Shanghai Pengxin

Landcorp may bid for Crafar farms

Landcorp

Labour on farm sales – NOT good enough!

Kiwis against foreign ownership of farms

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State-sponsored voyeurism? No thanks, Mr Key.

The Video Camera Surveillance (Temporary Measures) Bill is perhaps one of the shortest pieces of legislation ever brought before Parliament. The text is barely three paragraphs long.

Yet, the implications of this Bill is far-ranging in it’s impact on our society which supposedly values freedom, privacy, and civil rights.

With this Bill, the government is effectively over-riding a Supreme Court decision, and re-writing law to suit itself – and the Police force.

Many New Zealanders who understanding the ramifications of this Bill are not just unhappy – they are scornful of John Key’s government. That scorn was publicly expressed today (Saturday, 1 October), when a protest closed much of Victoria Street in down-town Wellington, opposite the Central Police Station.

The protest was peaceful and made it’s way to the nearby Wellington waterfront.

Mainstream media – except for the Radio NZ website – did not report any of todays’ protest event.

From Radio NZ,

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Source

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Meanwhile, the Dominion Post fed this to the Happy Folk of Wellington,

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Full Story

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Now don’t get me wrong – I have nothing against the military. (Even if they have mis-spent $20 million of our tax-dollars on advertising and PR campaigns.)  The NZDF generally do a damned good job.

Then, for the media to report on the pomp and ceremony of our Armed Forces – whilst ignoring protest activity  opposing a Bill that is both invasive of our privacy and contemptuous of the Courts – is frightening. And lazy. There is a tinge of subtle “stalinism” in this affair; public displays of our clean-cut, brave boys (and girls) in uniform – whilst in the back-rooms of government offices, politicians are doing sneaky things to undermine our civil rights.

Thankfully, there are those who are not prepared to take such an affront to our freedoms lying down, like sheep-in-a-paddock.

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Something of immediate importance that did make it into the Dominion Post,

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Never under-estimate the media’s priorities in presenting critical, news-worthy stories to the public.

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+++ Updates +++

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Source

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Whilst this is a slight improvement, it still doesn’t resolve serious concerns that are held about this piece of legislation.

New Zealand has become a much-surveilled society in the last 20 years, with cameras everywhere, including your local public library.

If people had seen this coming in 1984, I wonder how they would have reacted? With horror and anger I am guessing.

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+++ Updates +++

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As part of the campaign opposing this atrocious piece of  “1984ish” piece of legislation, this Blog lobbied several ACT and Labour MPs to encourage them to vote against it.  Charles Chauvel (Labour) was one of only two MPs to respond,

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from:    Charles Chauvel Charles.Chauvel@parliament.govt.nz
to:    [email]
date:   Mon, Oct 17, 2011 at 11:40 AM
subject:    RE: Video Camera Surveillance Bill!

Good morning

Thank you for your email regarding the Video Camera Surveillance (Temporary Measures) Bill.

Labour has strongly opposed National’s attempt to push through legislation on this issue under urgency and without giving the public a say. We were instrumental in forcing National to send their original legislation to a Select Committee. We made clear that we could not support the Bill that was introduced by National as it had unacceptable retrospective provisions and appeared to widen the powers available for surveillance.

After hearing evidence from experts and other interested parties the Select Committee has significantly altered the Bill.  This has addressed a number of significant issues:

1. In order to allow the Police to resume covert video surveillance from the date of the Bill’s assent, their powers to do so are affirmed, but only on the basis of the law as it was understood prior to the Supreme Court decision, no more broadly than that (as the draft government Bill did), and only on the basis of the most serious offending. Labour would have liked the Bill to go further, and provide a warranting procedure, but the Government left the drafting exercise needed too late to make this happen;

2. The legislation will apply for a maximum of 6 months only, meaning that legislation that can deal with a proper warranting procedure for surveillance will be passed;

3. Cases currently under investigation, whether or not yet before the courts, will not be interfered with by Parliament. The Courts must be left free to determine under existing law whether evidence gathered in support of any such prosecutions is admissible. The overwhelming evidence before the committee was that s30 Evidence Act and s21 NZ Bill of Rights Act give the courts this power, and that there is no justification for Parliament to try to intervene.

With these significant changes, Labour is able to support the Bill.  We believe we have struck a balance between allowing the Police and other investigating agencies to use video surveillance where it is needed, but not giving them wider power or interfering with cases that are currently before the courts.

Persons convicted in cases where covert video surveillance was used in the past cannot now seek to overturn their convictions, or seek compensation from the Crown for wrongful conviction or imprisonment, only by reason of the use of covert video surveillance.  In other words, the law that applied at the time of conviction must clearly continue to apply, rather than the conviction being measured against a later standard.  

I appreciate that this position might not be all that you want. While it would be good to live in a world where video surveillance by the Police was not necessary, sadly we do not live in that world at the moment. Equally, if we are to give powers, we need to ensure they are used only for the most serious cases, and with the appropriate safeguards and procedures.

Labour believes that we have greatly improved this Bill, and a number of the legal academic experts who appeared before the Select Committee have acknowledged that the changes we insisted on have resolved the main issues (though not quite all) they had with the Bill.  I am attaching links to two of those blogs for your information.

http://pundit.co.nz/content/some-praise-for-parliament-rare-though-that-may-be

http://www.laws179.co.nz/2011/10/covert-surveillance-labours-bottom-line.html

Many thanks for taking the time to write. I appreciate you voicing your views.

Yours sincerely

Charles Chauvel

Labour List MP based in Ohariu
Spokesperson for Justice and the Environment

Lets hope that when the “sunset” clause takes effect, that no government of any hue will attempt to resurrect it. New Zealand is a thoroughly surveilled society without adding more to Big Brother.

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Additional Reading

Welcome to 1984

1 October:  Citizens Marched against the new Police Surveillance Bill

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