27 December 2017

Chief Reporter

Overseas Investment Office Needs To Pull Finger On "Not Of Good Character" Complaints

The Campaign Against Foreign Control of Aotearoa (CAFCA) is pleased that the Overseas Investment Office (OIO) has rejected the application from China's HNA Group to buy finance company UDC Finance.

The reason given was that the OIO could not determine from the information provided who is the "relevant overseas person" intending to make the purchase.

And therefore the OIO cannot apply the test in section 18 in the Overseas Investment Act to determine whether that person is of good character.

But what if the OIO had been able to determine who is "the relevant overseas person" behind HNA Group and could therefore apply the good character test?

The OIO's record on good character is not reassuring.

It is one of the few conditions imposed on foreign buyers in the Overseas Investment Act. It only applies to individuals owning or controlling a company; the corporate misdeeds of the company itself are not covered.

That sounds good in theory but CAFCA is at pains to point out that we have been making “not of good character” complaints for 20 years and not one of them has ever been upheld by the OIO (or its predecessor the Overseas Investment Commission [OIC]). Click here and and you’ll find pages of links to numerous Foreign Control Watchdog articles on the subject over many years. It's a roll call of transnational corporate villains. Here is an extract from one such article, which gives a small taste of the scale of the problem:

"For the details on this see 'Good Fellas: The OIO And The Nature Of Being A ‘Good Character' by Quentin Findlay, in Foreign Control Watchdog 124, August 2010 and his earlier article in Watchdog 123, May 2010, 'Monkeys With Rubber Stamps: The Overseas Investment Office'. Also in that same issue: 'Waste Management: Another ‘Good Character' Case From The CAFCA Archives', Murray Horton, and 'Tommy Suharto: One Who Was Never Put To ‘Good Character' Test', Murray Horton). Nor was it only CAFCA that was getting the run around from the country's foreign investment rubberstampers. Back in 2000 Ministers in the Labour government overrode advice from the OIC and refused permission for Brierley's to sell its stake in Sealord to foreign fishing companies. We got the whole file from the OIC and Government, which revealed that the OIC consistently rejected advice and evidence from relevant Ministries that several of the applicants did not meet the good character provisions ('Sealord Sale: OIC Exposed', Bill Rosenberg, Watchdog 95, December 2000). So there is a long, long history of the OIC and OIO rejecting any complaints (which were always backed up with evidence) about the lack of good character of various applicants. In the early 1990s the OIC approved Tommy Suharto, a notorious criminal, to buy Lilybank Station in the Mackenzie Country. Whenever CAFCA raised this subject their only 'defence' was that they approved him before the good character requirement was included in the Overseas Investment Act".

The OIO has consistently defended the "good character" of all the various "characters" who have applied to it. Kim Dotcom is the most high profile recent example (this was written up, in great detail, by James Ayers in Watchdog 129, August 2012: “Kim Dotcom And The Good Character Test: Money Versus Power”)

CAFCA's complaints are neither “frivolous” or “vexatious”. Furthermore, there is no legal obligation on the OIO to respond to such complaints by any deadline (in contrast to the Official Information Act). Our latest such complaint was lodged in December 2016 – as of December 2017 we have received no response (we don’t mean “no decision”, we do mean “no response”). So, if our complaints are not rejected, they are simply ignored.

So, when it comes to the "not of good character" test, the OIO needs to get its act together. Or, better still, the Government need to get its (Overseas Investment) Act together.

Murray Horton


Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258