Crafar ruling may affect previous sales

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Thu, 16 Feb 2012 5:22a.m.

Retrospective law changes could be needed to protect previous land sales to foreigners following the High Court ruling on the Crafar farms.

Ministers approved the sale of the 16 dairy farms to China-based Shanghai Pengxin but Justice Forrest Miller on Wednesday set that aside.

He has effectively put a new set of rules in place for the Overseas Investment Office(OIO) which recommended the sale.

Ministers accepted that recommendation and the OIO now has to start again, using the judge's interpretation of the sections of the Overseas Investment Act dealing with the economic benefit of transactions.

Prime Minister John Key says the government is going to get a legal opinion on the status of previous land sales and whether retrospective legislation will be needed to protect them.

"From 2005 every application has been considered on the previous understanding of the law as interpreted by the OIO," Mr Key said.

Asked whether the court ruling could affect the recent sale of Wairarapa farmland to movie mogul James Cameron, Mr Key replied: "Who knows? That's the point."

He later told Parliament the OIO would reconsider Shanghai Pengxin's application under the judge's rules "and it's eminently possible the OIO will come up with exactly the same recommendation and ministers will continue to accept it".

Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman, who made the final decision on the Crafar farms, say they expect a new recommendation from the OIO in a matter of days.

Milk New Zealand Holdings, a Shanghai Pengxin subsidiary, was earlier this month granted approval to buy the North Island farms for a reported $210 million.

A rival consortium, led by businessman Sir Michael Fay, offered $171.5 million and went to the High Court to overturn the ministers' decision.

Shanghai Pengxin spokesman Cedric Allan says the company was "quite astonished" by the court ruling and still expects the transaction to go ahead.

OIO manager Annelies McClure says the ruling potentially affects only four of the 21 factors for assessing benefits to New Zealand.

"We will apply the approach directed by the court in a new recommendation to ministers," she said.

NZN

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Comments

17 Feb 2012 01:07p.m.

Mike wrote:

@Marty, I have a business degree from a NZ university.

The thing about doing everything according to the treaty of Waitangi is it loses focus to the exclusion of everything else.

What does the Treaty do?

Well the treaty gave Maori the rights and responsibilities as british subjects - including the right to own land. Maori say that they can't own land and only a tribe etc can own land. The treaty changed this to allow Maori to own land. Pre-Treaty Maori sold more land than NZ has 2x over and the crown stepping in took the ability to buy land off Maori/Settlers and made the crown the only party that could approve/disprove land deals. What usually happened back then was they sent in the red coats and just siezed a country for the british empire - so the treaty saved a lot of Maori lives.

Today the treaty is being interpreted as give/give/give forever to Maori on the basis of race which is racist. South Africa also had racist legislation which supported Apartied - but they moved on which NZ hasn't. Since the treaty there has been around 7 rounds of settlement giving Maori money and land as an excahnge for treaty claims - like about every 20 years we have another round.

The treaty doesn't give Maori the right to vote, nor the right to welfare, nor the right to healthcare - so shouldn't we stop these if we want to uphold the treaty?

Culture is fine, but when all other cultures are ignored and excluded at the benefit of one culture - thats racist. Chinese were excluded from voting in NZ while woman and Maori were given the vote - should we turn around now and try to have NZ pay today for racism against Chinese when we wouldn't even let them vote?

Take the Land Wars. Today we are told it was a land grab, yet what sparked each land war was settlers being killed. Sometimes they got it wrong and punished the wrong Maori. Should relatives of those dead settlers have claims against Maori as thats why land was siezed?

17 Feb 2012 10:03a.m.

Gary wrote:

This is a business deal not an asset. Assets are owned by the government purchased by tax payers money. However if someone in NZ can afford to buy this then they should get 1st priority so it is a question of price and NZ benefit. The land/farms always remain in NZ and come under NZ law. So it comes down to NZ benefit. Jobs, support from local contractors, export etc. These are all good benefits but need locking into the deal. Also re-investment back into NZ. If all these are part of the deal then there is very little difference as to who the business owner is. 50M difference (20-25%) is quite substantial. If I was selling my business I know which offer I would take.

16 Feb 2012 09:49p.m.

DocJim wrote:

I wonder what they'll do if the purchase does go through. The reason I ask is that, the Chinese appearently own the old Stock/Sales Yard on Deans Ave. in Christchurch. Several acres of prime real estate that has been in ruin for well over 25 years now. Void of developement and shameful in appearance opposite Hagley Park South and near-by Tower Junction. Now equal to the CBD. By the way; if you wish to create a law that covers past transactions, etc, the appropriate word/term is retroactive or Grandfather Clause. Retrospective is more to do with art and literature - but don't take my word for it. The Dictionary will clear things up for you...

16 Feb 2012 01:55p.m.

robin wrote:

Milk New Zealand is well named indeed because that is just whar they want to do.

16 Feb 2012 11:21a.m.

Marty wrote:

Mike has forgotten that China have one thing in mind - to use the farms for one thing only - for their benefit only. They are quick to agree for us to manage the farms as we are the best at farming and the production is efficient, of a high quality and quickly produced.. Shanghai Pengxin group is is sponsored and initially funded by the Chinese government. Any "injection" into the local economy is a token peanuts contribution and there of course are no specifics of where the will be applied. On local industries to fund setting up the farms and then thats it full stop. The stopping of the sale will not hurt imports or exports here as they need our milk products and need overseas companies to continue to import their products. You may have noted that almost everything you buy has "Made in China" on it. Someone compared it to the Shania Twain sale but we were absolutely plain lucky that she set up the countryside for NZ. Also remember she still has a private residence of her own where we can not go in some of the best prime land our country has. Mike you may want to partake of University management studies which include the Treaty of Waitangi, NZ business and foreign business aspects of how the different cultures do business, and their upbringing. Since we are on the Chinese page one aspect of many is their upbringing is it is flattery to copy someone else. On the flip side when they come to study at university here they have to adjust to our culture of not copying others work. You may also study the downfall of IBM in America as the Chinese took their product, reverse engineered it and mass produced it cheaper of course. Patents mean nothing in China's dictatorship run country where they do what they please. They also realised long ago it is cheaper to buy into countries then to war over them. Regardless what culture is wanting to buy we need to tighten it to a few acres at the most.

16 Feb 2012 09:36a.m.

peter ravlich wrote:

nz should adopt like other countries such as mexico,china. you try and buy land there, its not going to happen. we should lease only over a period of years.let the chineese build it up and make money. end of the day its still nz after the lease is done. lets be more patriotic about our land and not sell off the assets.

16 Feb 2012 07:43a.m.

Mike wrote:

So we have the potential for almost 10x as much land sold under Labour that can be challenged? At what cost to NZ. Legal costs, and if sucessfully challenged, then our govt may be liable to pay up damages to overseas parties costing us billions!

So we have close on $40 million difference in purchase price which is no economic benefit for the Crafar sale?

The Chinese also agreed to over $10 mil local investment as part of the deal which Fay was not contributing - no economic benefit. $50 mil cash = no benefit?

China is the biggest market in the world and can take all the milk NZ produces, ie more money for NZ if we get good access. It is short sighted bigotry from our politicians like Winnie and Shearer. China is importing more and more and is the biggest growing importer in the world. This small purchase while sizable wont make a drop in the Chinese market, if anything it will grow demand more in China for our Dairy products. It will take good will both sides for the growth, and Labour/NZ First are showing they have no goodwill but plenty of bigotry.

China cant physically take the land short of sending in troops and taking it from NZ, and if they did that it wouldn't matter if we sold the land or not. Given likes of Helens 'Goodwill' apologising that the USA took offence at her comments, less likely today for the USA to help if something like a land grab by China happened.

OIO I expect will repackage the the sale to meet this new test created by Justice Miller. If the Justice Miller doesn't hear the case, I expect it will be approved.