By James Murray
A bid for Crafar Farms by the Chinese Shang Hai Pengxin Group Co. Limited has been accepted by the Government and the Maori Party are “outraged”.
The move follows the recommendation of the Overseas Investment Office (OIO) to grant consent.
"It is clear that all criteria under sections 16 and 18 of the Overseas Investment Act 2005 have been met, therefore we accept the recommendation of the OIO to grant consent," Mr Williamson said.
The 16 farms will be bought by Milk New Zealand Holding Limited, a subsidiary of Shanghai Pengxin.
Maori Party co-leader Pita Sharples said “our land should stay in our hands”.
“We are totally outraged that the Overseas Investment Office would approve the sale of this massive land holding to foreign investors,” said Dr. Sharples
“The Maori Party is absolutely against the sale of our land to overseas interests. Iwi are natural partners of the Crown, with cultural traditions of intergenerational ownership and protection of land and natural resources. They should have a right of first refusal, in accordance with Treaty principles, as our election policy stated.”
According to the party’s other leader, Tariana Turia, the Maori Party asked the National Government to include a clause in the OIO’s regulations requiring them to check whether the seller “had consulted with, and/or offered land to the appropriate iwi before offering it on the open market”.
“Our view has always been that we must protect and preserve our land to keep it from falling into foreign ownership. We do not believe selling off our land to offshore investors such as Shanghai Pengxin is an act of good faith in iwi as Treaty partners.
“This sale fails the test, because it places a significant chunk of our land, and the economic benefits derived from it, into foreigh ownership and control,” said Ms Turia.
“Today a great wrong has been done to New Zealanders,” said Mr Sharples.
“Our land is not just a commodity, it is a living, breathing part of our history, our culture, and our people. We just sold a piece of ourselves.”
The Maori Party’s relationship with National came under strain during the last Parliament, with ex-member Hone Harawira splitting away to form the Mana Party.
One of Mr Harawira’s criticisms was that the Maori Party had become too close to National and was ignoring the demands of its core support.
The 2011 election was relatively unsuccessful for the Maori Party as they fell from holding five electorate seats to three.
According to the Government, the acquisition will “further support the supply of high quality dairy products into the Chinese market and help set the foundations for further economic and export opportunities with China”.
The decision to grant consent is controversial with a New Zealand-owned bid by a Sir Michael Fay-led consortium currently going through a court process seeking to block the sale.
They were in court yesterday but no orders were given as the two sides had reached agreement on three issues.
Belly Gully lawyer David Cooper, representing the Fay consortium, said the application for approval had been provided to his client and the OIO's recommendation made to the ministers would be made available when the decision was made.
It had been agreed with Pengxin's Milk New Zealand Holdings that it would not take steps to settle the transaction before 5pm on Friday, February 3.
The Fay consortium still intends to seek a judicial review if the Chinese consortium gets approval.
However, The $171.5 million bid from the Fay-led consortium, including Maori trusts, is believed to be some $30 million below Pengxin's bid.
The Fay group had its bid for the farms declined by receiver KordaMentha, who called the price "unacceptable".
Mr Coleman and Mr Williamson pointed out that neither they or the OIO were involved in the decision by KordaMentha to not approve the Michael Fay bid.
They declined to comment on the bid as it is currently a matter before the court.
The New Zealand public have been widely reported as being against the sale of the farm to the Chinese with UMR poll last November showed 82 percent of respondents as being against the sale to Pengxin.
However, the same poll did show support for a sale which entailed combined Chinese and New Zealand interests.
As part of the deal Milk New Zealand has agreed that the farms will be managed by Landcorp Farming Limited.
The Government hope this will guarantee expected benefits to the New Zealand economy from the sale to occur.
If Milk New Zealand renege on the deal to use Landcorp they will be require to sell the farms as part of the consent.
Shanghai Pengxin have been granted consent under the following conditions:
- The individuals with control of Milk New Zealand must continue to be of good character
- Milk New Zealand must invest a minimum of NZD $14m in the properties to make them more economically and environmentally sustainable
- Milk New Zealand and their associates must not acquire an ownership or control interest in milk processing facilities in New Zealand unless a 50% or more ownership or control interest in those facilities is held by non-overseas persons
- Milk New Zealand must establish an on-farm training facility for dairy farm workers and must meet the capital cost of establishing this facility
- Milk New Zealand must give two scholarships of not less than NZD $5,000 each year to students of the on-farm training facility with the first two scholarships to be awarded by 31 December 2013
- Milk New Zealand must use reasonable endeavours to assist Landcorp to extend its business to, and market its products, in China Milk New Zealand must provide public walking access over Benneydale Farm and Taharua Station, in consultation with the Department of Conservation and the New Zealand Walking Access Commission
- Milk New Zealand must take reasonable steps to protect and enhance existing areas of significant indigenous vegetation and significant habitats of indigenous fauna and flora on the properties
- Milk New Zealand must register a heritage covenant in respect of the Te Ruaki pa site on Tiwhaiti Farm
- If required by the Office of Treaty Settlements, the Applicant must transfer the Nga Herenga pa site (approximately 1.6ha located on Benneydale Farm) to the Crown for nil consideration.
Read the OIO’s recommendation
Read the OIO’s decision summary
OIO background information
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