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Foreign investment in Aotearoa/New Zealand

Overseas Investment Office - September 2021 Decision

Declined

The Decision I've chosen to highlight this month illustrates the fact that, just occasionally, an application to the OIO gets rejected. The Minister for Land Information and the Associate Minister of Finance declined consent for Gresham House Forest Carbon (NZ) Limited and Gresham House Forest Carbon (NZ) LP United Kingdom (100%) to buy 100% of the shares in NZCF (Invest Holdings) Limited, New Zealand (100%) for a withheld price. To quote the OIO:

"Consent is declined for the Applicants to acquire 100% of the shares in NZCF (Invest1) Limited that owns a freehold interest in approximately 12,356 hectares of existing forest land across New Zealand. The Applicants are part of an investment fund established for the purpose of investing in New Zealand forestry. The Applicants applied for consent to acquire 100% of the shares in NZCF (Invest1) Limited that owns a freehold interest in approximately 12,356 hectares of land, 8,871 hectares of which is existing forest land, across New Zealand that they intend to continue operating as permanent carbon forestry".

"The Applicants intended to invest additional funds and create new jobs by planting an additional 78 hectares with trees, protect around 704 hectares of indigenous vegetation on the forest land, and offer riverbed back to the Crown. The Vendor intended to reinvest part of the sale proceeds in acquiring land to plant additional trees. For consent to be granted, Ministers needed to be satisfied that the Investment would result in substantial and identifiable benefit to New Zealand. Both Minister O'Connor and Minister Woods were not satisfied that the Investment would result in a substantial and identifiable benefit to New Zealand".

This is so rare as to be one of only five applications to be declined consent from January-September 2021 inclusive. That is not quite as spectacular as the good old days of the 1990s when year after year went past with nothing declined but it is safe to say that the OIO and/or Ministers (and we're talking solely Labour Ministers at this stage) approve the vast majority of applications. CAFCA sticks to its claim that the OIO is a rubber stamp and that the "foreign investment oversight regime" is much more theoretical than real.

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